Economic Feasibility Analysis of Carbonic Maceration Fermentation Technique Implementation for Ijen-Raung Arabica Coffee

Halil Halil (), Kurniawan M. Nur and Driyanto W. Wicaksono
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Halil Halil: Jember University
Kurniawan M. Nur: Politeknik Negeri Banyuwangi
Driyanto W. Wicaksono: Politeknik Negeri Banyuwangi

A chapter in Proceedings of the 4th International Conference on Economic, Business, and Accounting Studies (ICEBAST 2025), 2025, pp 154-167 from Springer

Abstract: Abstract Carbonic maceration (CM) is a promising post-harvest technique for enhancing speciality coffee quality, yet its financial viability for small-scale farmers, particularly in Indonesia, remains unexamined. This study addresses this gap by evaluating the economic feasibility of CM for Arabica coffee farmers in the Ijen-Raung region. Using a discounted cash flow analysis that included NPV, IRR, payback period, and B/C ratio, the research demonstrated that the method is highly feasible. The results showed an average NPV of IDR 19 million, an IRR of 44.1%, a payback period of 1.68 years, and a B/C ratio of 1.15. The adoption of CM led to a 51.9% increase in green bean selling prices, boosting average farmer income by 60.0%. Furthermore, the sensitivity analysis confirmed the project’s resilience, with the NPV remaining positive under both cost increases and price declines. These findings suggest that CM is an economically sustainable innovation for smallholders. The study concludes that the favourable 0.5% MSME tax policy supports such technology adoption and suggests that shifting incentives from input subsidies to post-harvest development could significantly improve the competitiveness of Indonesian speciality coffee.

Keywords: Economic Feasibility; Carbonic Maceration; Arabica Coffee; Investment Analysis; Agricultural MSMEs (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-956-8_13

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DOI: 10.2991/978-94-6463-956-8_13

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