Economic feasibility analysis of service business of agricultural equipment and machinery in Kubu Raya Regency, Indonesia

Abstract

Abstract Agricultural equipment and machinery have become the main farmer’s need as technically it can accelerate and improve the quality of soil cultivation, water supply, increase the cropping index, reduce lost yields and preserve the environmental functions. Economically, it can increase the added values through product processing, productivity, and resource efficiency. Institutional service business of agricultural equipment and machinery (UPJA) needs to develop to facilitate farmers’ access to the use of affordable agricultural equipment and machinery in order to increase the sustainable food production. The sustainability of the service business is influenced by many aspects including economic aspects. This study aimed to analyze financial feasibility of UPJA in Parit Keladi village, Sungai Kakap subdistrict, Kubu Raya Regency. Analysis of R/C ratio and B/C ratio was applied. Based on R/C ratio of feasibility analysis, all kinds of agricultural equipment and machinery including transplanter, water pump, rice thresher, mini combine harvester, and hand tractor provided by the service business were feasible, shown by R/C ratio> 1.52 and B/C ratio >0.52. Whereas, The R/C value of water pump of 2.5; hand tractor 2.0; 1.81 transplant machine and 1.67 mini combaine and 1.31 power thresher machine, respectively.