CHAPTER III

RESULT & CONCLUSION

A. Program Description
Food Estate Development Program is an investment project in a sub-

sector food crops in the form of activities large-scale plant cultivation

business (> 25 Ha) namely the rice commodity that is carried out with

science-based industrial concepts knowledge, capital, and modern

organization and management. The construction of this investment project

starts with land clearing and the printing of rice fields and the construction

of agricultural infrastructure in the form of irrigation and farming roads

(JUT).

This development investment is carried out in stages which begins with

opening and printing of 4,482.39 hectares of paddy fields, 991.79 km of

irrigation network construction, 3.78 km of farm road construction,

construction of storage warehouses and office construction which began in

2011. Planting activities began in 2012 with planting area 1,407.59 Ha in

the first year then increased to 1,586.86 Ha in the second year up to an area

of 4,482.39 Ha in the year third and fourth year with planting index 3 times

the planting season in a year. The age of an economic project is 20 years,

from 2011 to 2029 which is determined based on the infrastructure

capability. The Food Estate Project Location is located in Ketapang

Regency which includes South Matan Hilir Subdistrict, North Matan Hilir

District, Delta Pawan and Muara Pawan on the grounds that the potential of

agricultural land is very adequate.

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 This development project is carried out with the aim of creating food

security by involving farmers and local communities directly so as to create

employment opportunities for farmers and local communities. The system

of cooperation involves collaboration between the government, BUMN and

farmers where, BUMN plays the role of an investor and managing this

activity completely, the government plays a role in facilitating land

acquisition and supporting partially infrastructure development while

farmers are involved as land owners and involved as labor.

B. Identification of Benefits and Costs

The benefits of this study consist of tangible benefits (tangible

benefits) and non-tangible benefits (intangible benefits). These benefits aim

to influence profitability and costs directly, while benefits will not make

money (Murphy and Simon 2002). The loss that is felt at this time is

production (rice) which is a direct benefit from the Food Estate Program,

As for the benefits associated with work.

1) Production output

Production output in this study are the amount of rice

produced by the project multiplied by the price of rice per

kg. Amount the rice produced is the amount production for

three years, namely from year one to third year. Planting

pattern rice in this program uses 300 % planting intensity by

managing integrated crop farming systems. Technical

cultivation of plants based the right time span for planting

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 rice plant growth where is the way tillage, use of varieties

superior, dose based fertilization prescribed

recommendations and condition the land to reach optimal

productivity and full mechanization.

Tabel. 3.1 Production Result of Foof Estate program

Program Price Amount of Result of

Period production production
Year 1 5.066 1.662.261 8.421,01
Year 2 6.259 746.542 46.735,35
Year 3 6.012 20.845.766 125.324,75

2) Increased of employment opportunities

Job opportunities in this study assessed from the outpouring

of the farmer's working time which is calculated in units of

People's Day of Work (HOK). According to Bahasoan

(2010) opportunity work can be seen from how big the use

of labor absorbed by project with a time-consuming

approach work for each workforce. Benefit from increased

employment opportunities rated based on time difference

working farmers before the food project estate and after a

food estate project which is calculated based on wages

accepted per HOK. The amount of labor needed on This rice

farming depends on the area of land cultivated and cropping

intensity carried out. Overall rice farming activities the

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 project absorbs the total workforce amounting to 50 HOK

per Ha per planting season with wages that apply to the

region research is IDR 50,000 per day for male workforce

and Rp. 45,000 per day for women with working hours for

7-8 hours a day Increased employment opportunities are

based on the respondent's answer namely local people who

are directly involved as labor in rice farming Increased

employment opportunities are assessed based on the

respondent's answer namely local people who are directly

involved as labor in rice farming.

Tabel 3.2 Increased Employment Opportunities Before

and After the Food Estate Program

Program Before After Increased

Period Value
Year 1 4.823,63 6.890,91 2.067,27

Year 2 4.278,71 6.112,44 1.833,73

Year 3 12.640,37 18.057,67 5.417,30

C. Economic Feasibility

Economic feasibility of the Food Estate Program prepared in the

form of cash flow which consists of revenue streams and expenses as

described in Table 7. Cash flow records cost transactions and benefits with

the scale of land cultivation planted with rice with an area of 1,586.86 ha

year one, 1,407.59 Ha in the second year up to 4,158.36 Ha in the third year

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to the program ends. Net benefits in year zero and year One is negative

caused by zero year has not done surgery or production but only do

investment so there is no acceptance who entered. Whereas in the first year

has already carried out operations or production but the first planting

occurred harvest failure caused by an attack pests and diseases with high

intensity so that rice growth is disrupted causing its productivity to be

hampered.

This causes greater expenditure than incoming revenue. On second

and third year net value is obtained positive benefits mean acceptance

obtained in the second and third years more large than expenditure that is

equal to amounting to Rp31,964.86 billion in the second year and Rp.

40,533.67 billion in the third year. Whereas in the following year revenue

is assumed to increase by 15 percent every five years from total

revenuepreviously due to price increases rice. The price used to judge output

or rice production from years one until the third year is different every time

year, this is due to the price used is the price of the shadow (shadow prices),

which are prices that reflect the true economic value.

The price of rice shadow is higher compared to market prices

because rice is a tradable item so it uses CIF prices (cost insurance freight)

coupled with the cost of trading first converted into value srupiah exchange.

Likewise with input prices such as fertilizer and labor determination the

price uses shadow prices. Fertilizer prices in this study are different with

real prices because of fertilizer is an export item, namely urea fertilizer and

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 also imported goods, NPK. While shadow prices for more labor low of the

prevailing wage rate, because in developing countries there are still a lot of

unemployment, causing levels the wages paid do not reflect true value (not

marginal value labor) and must be lower than market wage level. Shadow

price workforce assigned to labor Uneducated work such as labor coming

from this research area is subtle unemployment. Determination of wages

shadow labor is 80 percent of the prevailing price. While for the price of

seeds and pesticides, market prices and the price of the shadow is the same.

Economic feasibility of the Food Estate Program in this study based

on results calculation with the criteria of NPV, BCR, IRR and Pay Back

Period and sensitivity analysis. The feasibility calculation is done with pay

attention to the net benefits assessed in the present value. Present Value is

obtained by multiplying benefits clean additional with its discount factor.

Tabel 3.3 Criteria on Investment Food estate program in West

Kalimantan

Description Economic Analysis Result

B/C 1,26 Feasible

NPV 150,56 Feasible
IRR 62 Feasible
Pay back period 8 Investment return
period

D. Conclusion

1. Food Estate Investment according to NPV, BCR, IRR and Pay Back

Period criteria shows the project is economically feasible, and is able

to increase employment opportunities for local communities.

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2. The results of sensitivity analysis with a simulation of changes in

output prices and input prices indicate that investment in food estate

is very sensitive to changes price but the program is still feasible and

profitable.

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