Assessment of the attractiveness of a region for coffee production: the case of Karo Regency

Syahbudin Hasibuan, Zulkarnain Lubis, Sri Ariani Safitri, Zahraturrahmi Zahraturrahmi and Marizha Nurcahyani

Agricultural and Resource Economics: International Scientific E-Journal, 2025, vol. 11, issue 2

Abstract: Purpose. This research aims to identify and evaluate the agronomy, cultural, economic, and marketing aspects of Karo coffee as a new coffee centre in North Sumatra. Methodology / approach. This research used a descriptive qualitative method complemented by quantitative data. The study, conducted from April to December 2024 in four coffee-producing sub-districts of Karo Regency, analysed coffee potential from an agronomic, cultural, economic, and marketing aspects. Data were collected using interviews, structured questionnaires, and field observations. A total of 110 respondents participated, including farmers, community members, and agribusiness actors. Sampling techniques included purposive, simple random, stratified, and snowball sampling. Data analysis involved descriptive statistics, gross margin analysis, and SWOT analysis using IFAS and EFAS matrices to formulate strategic recommendations. Results. The study reveals that the four sub-districts of Barus Jahe, Merek, Simpang Empat, and Tiga Panah in Karo Regency possess agronomic potential for Arabica coffee cultivation, with suitable sandy clay Andisol soil and high cation exchange capacity. However, several limiting factors were identified, including acidic pH (4.48–4.99), low nitrogen and calcium levels, and insufficient organic matter on steep lands. Land suitability analysis indicates that flat and sloping lands are moderately suitable (S2), while steep lands are marginally suitable (S3) due to chemical and topographic constraints. Culturally, coffee remains integral to Karo society, with over 85% of respondents recognising its role in tradition and daily life, supporting its value beyond economic function. Economically, polyculture systems combining coffee with vegetables offer the highest profitability and stability across all regions. In marketing, farmers primarily sell parchment coffee through multi-tiered channels involving collectors, wholesalers, and exporters, though limited bargaining power and market dependency persist. Coffee prices vary from IDR 15 thsd/kg for cherry coffee to IDR 120 thsd/kg for green beans. These findings highlight the need for targeted interventions in soil management, cultural revitalisation, economic diversification, and market strengthening to support sustainable coffee development in Karo Regency. Originality / scientific novelty. This study highlights comprehensive aspect of the potential coffee centre that has not been adequately studied in previous research. This study presents a new perspective that enriches the discussion in previous studies that only focused on the land suitability without exploring the culture aspect, economic aspect and marketing aspect to analyse the potential of the Karo Region as a coffee production centre in North Sumatra, Indonesia. Practical value / implications. This can be a basis for the Karo Regency government to formulate a fertiliser subsidy policy to support soil fertility and sustainable coffee-vegetable farming. The cultural aspect opens up opportunities to strengthen the branding of Karo coffee as a local product with traditional value to compete in national and international markets. Polyculture planting patterns can diversify farmers’ income while improving the supply chain, creating a fairer distribution of profits, and supporting Karo as a leading coffee centre in North Sumatra.

Keywords: Agribusiness; Crop Production/Industries (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:areint:364316

DOI: 10.22004/ag.econ.364316

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