This paper examines the financial feasibility of a household-scale brown sugar production industry in Batu Putih Village, East Kolono District, Indonesia. The study uses primary data from eight brown sugar producers. Financial feasibility is evaluated using Revenue-Cost Ratio (R/C), Return on Investment (ROI), Payback Period (PP), and Break-Even Point (BEP) metrics. Annual production averages about 2,634 kg, yielding an average annual revenue of around IDR 89.8 million. When accounting for all costs, including the imputed cost of family labor and firewood fuel, the R/C ratio is 1.01 and ROI is 0.57%, indicating a barely break-even operation. Excluding these imputed costs, profitability improves substantially (R/C 2.34, ROI 133.8%). The break-even output is approximately 2.62 tons/year when all costs are included, which is almost equal to the current production level, whereas it drops to 1.13 tons/year if labor and firewood costs are excluded. These findings suggest that the brown sugar home industry is financially feasible in terms of cash flow, but its economic profit is minimal once family labor and resource use are valued. The study discusses implications for rural entrepreneurship and suggests that improving production efficiency and access to finance could enhance sustainability.
Fatwah et al. (2025) studied this question.