Economic evaluation of shoot-grafting cocoa cultivation: a profitability study in the tropical zone of Indonesia

Cocoa output in Indonesia has greatly decreased in recent years due to climate changes, pest and disease outbreaks and limited empowerment of improved cultivation technologies. Using cost-benefit analysis (CBA), this study will assess the profitability of cocoa farming systems using shoot-grafting in the tropical regions of Indonesia. The research, conducted in Parigi Moutong Regency, using structured questionnaires along with focus group discussions to gather data from 80 cocoa farmers. The findings show that cocoa farming systems using shoot-grafting resulted in a gross margin of IDR 9,626,383/ha/year and net farm income of IDR 8,619,717/ha/year. Average NPV was IDR 8,374,245/ha/year, and BCR was 1.99 (so that IDR 1 invested provides a benefit of IDR 1.99). A 29.56% IRR indicates strong profitability and the need of investments from conventional credit sources at slightly higher interest rates. While the system requires substantial initial investment, the results clearly indicated that shoot-grafting is a cost-effective technology that can contribute to higher household income, improved financial risk bearing and sustainable agricultural intensification.