The Role of Arabica Coffee in Local Economic Development in Highland of Simalungun District, North Sumatera, Indonesia

Coffee is very important commodity in the global trade. Arabica coffee is superior commodity for farmers in Simalungun highland, North Sumatera, Indonesia. Productivity of arabica coffee in the region is only 50%-65% of the expected productivity. Therefore, there is a 35% to 50% productivity difference between actual and expected productivity. As a superior commodity, arabica coffee development requires adequate policy and program. This research analyzed the role of arabica coffee farm in local economic development. The role is measured with three indicators, that is farmers income, employment, and increased local economic activities. These indicators are analyzed with Share Analysis and Scenario Analysis. Arabica coffee farming has a 1.70% contribution to regional income, 3.34% to agricultural sector income, and 5.61% to income of smallholder plantation. In employment aspect, arabica coffee farming roles about 8.26%, 13.32%, and 25.84%, to district, agricultural sector, and smallholder plantation employment, consecutively. Economic activity as a result of backward linkages of arabica coffee farming will increase by 30% in 2020 and 85% in 2025, such as productive area and input factors. Local government policy is good enough to develop arabica coffee commodity, but relevant technical office program is not optimum even it is less focused. This research recommend local programs to support better arabica coffee development. Keywords--arabica coffee; local economy development; local policy; Simalungun-Sumatera

• Publication year

  2019

• Venue

  Proceedings of the 1st International Conference on Life, Innovation, Change and Knowledge (ICLICK 2018)

• Publication date

  2019-07-01

• Fields of study

  Agricultural and Food Sciences, Geography, Economics

• Identifiers
  DOI 10.2991/ICLICK-18.2019.53
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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