Financial feasibility analysis of cardamom plantation (Elettaria cardamomum L) in Koto Parik Gadang Diateh District Solok Selatan Regency

Abstract This study aims to describe the financial aspects and analyze the financial feasibility of cardamom plantations in Koto Parik Gadang Diateh District, Solok Selatan Regency. The results show that cultivation techniques carried out by farmers, including making raised beds, planting holes, fertilizing, maintaining, and controlling pests and diseases, could be more optimal. Hence, they are not following the Standard Operating Procedures (SOP) from the Decree of the Ministry of Agriculture Number 141/Kpts/HK.150/M/2/2019. The financial analysis with investment criteria has a B/C ratio of 1.44 (B/C > 1), an NPV of IDR 38,113,851 (NPV > 0), and an IRR of 33.12% (IRR > OCC 9%). It means that the cardamom plantation business is feasible to implement. Sensitivity analysis shows that the cardamom plantation business is still feasible to run if there is a cost increase of 7.5%, a decrease in the average selling price of 14%, and a cost increase of 7.5% with a decrease in the average selling price of 14%. The study suggests that farmers should cultivate cardamom based on the Standard Operating Procedures (SOP) following the Decree of the Minister of Agriculture in 2019, and the farmers were suggested to continue developing the cardamom plantation business.