Economic Feasibility Analysis of Organic and Conventional Rice Farming in Sleman Regency

Department of Agribusiness, Faculty of Agriculture, Muhammadiyah University of Yogyakarta Brawijaya Street, Kasihan, Bantul 55183, Yogyakarta, Indonesia

^* Corresponding author: rahma_wati_mf@umy.ac.id

Abstract

This study aims to analyze the economic feasibility of organic and conventional rice farming in Sleman Regency, Indonesia. The analysis compared production costs, revenues, income, profits, and overall economic feasibility between the two farming systems. The research was conducted purposively in Widodomartani and Sumberharjo Villages. A census method was employed to include all 30 organic rice farmers, while 33 conventional farmers were selected using a proportional random sampling method. Data were analyzed using a quantitative descriptive approach on a 1,000 m² land basis. The results showed that organic rice farming incurred higher production costs than conventional farming but also generated greater revenue, income, and profit. The analysis revealed that both systems were economically feasible, as reflected by R/C ratios greater than one, with values of 1.55 for organic and 1.50 for conventional rice farming. In terms of capital, land, and labor productivity, both systems outperformed local economic references, such as interest rates, land rent, and minimum wage, with organic farming achieving relatively higher values across all indicators. Therefore, encouraging the broader adoption of organic farming through policy support, farmer training, and sustainable agricultural initiatives is essential to enhance profitability while maintaining the environment and promoting long-term agricultural sustainability.