FINANCIAL FEASIBILITY OF MEDICINE CULTIVATION OF RHIZOME GROUP IN

BOGOR CITY DURING THE COVID-19 PANDEMIC

Prima Gandhi1*), Nindyantoro2), Raden Ladityarsa 3), Yusuf Ryadi4)

1
IPB University Vocational School and Center for Disaster Studies, Jl. Kumbang No.14 Kota Bogor, 16128 –
Indonesia.
23
Faculty of Economics and Management IPB University, Jl. Raya Dramaga Kabupaten Bogor, 16680–
Indonesia.
Faculty of Medicine IPB University, Jl. Raya Dramaga Kabupaten Bogor, 16680– Indonesia.
*e-mail: yusufryadi27@apps.ipb.ac.id

ABSTRACT
The agricultural sector is one of the supporting sectors of the Indonesian economy during the Covid-19
pandemic. The horticulture sub-sector is one of the agricultural sub-sectors that contributes significantly to
the national economy, both in the provision of food, health products, cosmetic products, trade, the creation of
a gross domestic product, and employment. Biopharmaceutical plants are part of the horticulture sub-sector
and are used as raw materials for health and cosmetic products. Biopharmaceutical plants are types of plants
that have functions and are efficacious as drugs and are used for healing and preventing various diseases.
Ginger, turmeric, galangal, kencur, and temulawak are five biopharmaceutical plants of the rhizome group
that can be used as herbal medicines to anticipate some of the symptoms of Covid-19. One of the cultivators of
these five biopharmaceutical plants is Taman Sringganis. Taman Sringganis is located in Cipaku Village,
Bogor City. There are 450 types of medicinal plants cultivated by Taman Sringganis. The problem faced by
Taman Sringganis is that the cultivation of medicinal plants in the rhizome group is not optimal due to the
many types of medicinal plants being cultivated. This research was conducted to determine the feasibility of
cultivating medicinal plants in the rhizome group. As a result, rhizome cultivation is still feasible for Taman
Sringganis during the Covid-19 pandemic. Cultivation of rhizome medicinal plants supports the 8th SDGs.

Keywords: Biopharmaceuticals, cultivation, horticulture, the 8th SDGs, Financial Feasibility.

INTRODUCTION
The agricultural sector is one of the important sectors in supporting Indonesia's economic
growth. The reason is because the agricultural sector has been proven capable of dealing with
various conditions of economic instability. During the Covid-19 pandemic, the agricultural sector
showed positive performance and became Indonesia's mainstay sector until the third quarter of
2021. Based on business sector, the food crops, horticulture and plantation sub-sectors have an
important role in achieving positive economic growth in the agricultural sector. The agricultural
sector has a great opportunity to continue to be relied on to lift the economy so that it does not
fall too badly during the economic recession as a result of the Covid-19 pandemic (Purba, 2021).
The horticulture is one of the agricultural sub-sectors that makes a real contribution to
supporting the national economy, both in the provision of food products, health, cosmetics,
trade, creation of gross domestic product and employment (BPS, 2018). Biopharmaceuticals are
part of the horticulture sub-sector which provides health and cosmetic products.
Biopharmaceutical plants are plants that have various effects on the body's metabolic system
and are used to cure diseases (Hemani, 2011). Biopharmaceutical plants consumed come from
plant parts in the form of leaves, fruit, and tubers or roots. The development of harvested area
and productivity of biopharmaceutical plants in Indonesia can be seen in Table 1.

Table 1. Harvested area and productivity of biopharmaceutical plants in 2016–2020

Growth
Indicators 2016 2017 2018 2019 2020
rate (%)
Panel area
29.009,89 27.898,04 29.258,62 27.953,90 27.914,35 -0,89
(Ha)
Productivity
694.469,39 601.735,60 676.535,47 640.727,24 686.140,05 0,21
(ton)
Source: Badan Pusat Statistik (2020)
 Table 1 shows that the harvested area and productivity of biopharmaceutical commodities
in Indonesia from 2016 to 2020 have fluctuated. As seen from the growth rate from 2016 to
2020, the harvested area for biopharmaceutical commodities in Indonesia has decreased by 0.89
percent. Despite the decline, productivity increased by 0.21 percent.
Based on the unit of harvested area and the yield form, biopharmaceutical plants can be
divided into rhizome and non-rhizome plants. The rhizome plant group consists of ginger,
galangal, aromatic ginger (kencur), turmeric, bitter ginger (lempuyang), curcuma, curcuma
aeruginosa (temuireng), fingerroot (temukunci), and calamus (dringo). The top four production
of rhizome biopharmaceutical plants in Indonesia are ginger, galangal, aromatic ginger (kencur),
and turmeric. Regarding data on the area of harvested land and the productivity of the four
rhizome biopharmaceutical plants can be seen in Table 2.

Table 2. Harvested area and productivity of several biopharmaceutical plants in the rhizome group in
2019–2020
Harvested area (Ha) Productivity (ton)
Plant type
2019 2020 Growth (%) 2019 2020 Growth (%)
Ginger 8.076,55 7.451,20 -7,74 174.380,12 183.517,79 5,24
Galangal 8.100,35 8.141,93 0,51 190.909,20 193.582,82 1,4
Aromatic ginger 2.563,78 2.266,19 -11,61 75.384,90 68.658,64 -8,92
Turmeric 2.436,16 2.623,86 7,7 35.296,21 44.823,79 26,99
Curcuma 1.483,07 1.499,55 1,11 26.742,72 29.637,11 9,77
Source: Badan Pusat Statistik (2020)

The Central Bureau of Statistics (Badan Pusat Statistik) (2020) states that ginger, galangal,
aromatic ginger, turmeric and curcuma plants control 90% of the harvested area and 92% of the
productivity of all biopharmaceutical plants in the rhizome group in Indonesia in 2020. West
Java Province occupies the third position in terms of harvested area and productivity the highest
ginger, aromatic ginger and turmeric plants in Indonesia after East Java and Central Java. Bogor
City occupies the first position with the highest harvested area and productivity of galangal
plants in West Java and always occupies the top five positions for four other crops. Taman
Sringganis is one of the companies in the Cipaku Village, Bogor City, which cultivates medicinal
plants. This medicinal plant cultivation business began in 1992.
"Back to nature" has become one of the habits of Indonesian people today to maintain a
healthy body and always be primed because traditional medicines generally have relatively few
side effects compared to modern medicines. Traditional medicinal plants are one of the people's
choices, with the consideration that medicinal plants can be used as medicine that is safe, does
not contain chemicals, is cheap, and is easy to obtain (Ministry of Health 2020). Indonesia has
various species of medicinal plants that have long been known and used by their ancestors to
treat health problems. The use of medicinal plants has been passed down from generation to
generation. However, the wealth of natural resources which has so many benefits has not been
fully utilized and developed in depth (Nurmalasari, 2012)
Medicinal plants are very popular plants that can be used as raw materials for traditional
medicine and herbal medicine, which when consumed will increase the body's immunity
(immune system). The Ministry of Agriculture in this case the Directorate General of
Horticulture as a government institution that handles the production of medicinal plants states
that what is meant by medicinal plants are plants that are useful for medicine, cosmetics and
health which are consumed or used from plant parts such as leaves, stems, fruit, tubers
(rhizome) or roots. Diseases that fit these criteria such as toothache, fever, headache, cough,
diarrhea, nausea, intestinal worms, anemia and so on that have a small risk in treatment.
(Muktiningsih et al, 2001)
There are many types of plants that can be used, it is known that there are 31 medicinal
plants (18 cultivated and 13 mining) which amount to more than 1,000 tons of wet herb/year
for the traditional medicine industry, non-herb industry, spices and exports. As an exsamples
obtained from ex situ collections that the medicinal plants used are bawang hantu, daun dewa,
daun sawang, daun surap, jariangau, karamunting kodok, karamunting padang, kunyit akar,
mayama dewa, pasak bumi akar, penawar bisa, penawar sampai, penawar seribu, salayar,
sambung urat, sembung, simpur, taya, tawasut, ujung atap. Its utilization is used as a medicine for
dizziness, fever, stomach ache, toothache, tonic medicine, herbal medicine after giving birth,
herbal concoctions. The parts of the plant that are processed are roots, rhizomes, stems and
leaves. Utilization is used for self and commercialized. (Krismawati & Sabran, 2004)
The types of medicinal plants cultivated are too diverse because they are more focused on
the agro-tourism preservation and educational aspects of these medicinal plants rather than
their cultivation. Economically this is less efficient in the use of land owned. Especially if you
look at the prospects for medicinal plants in the rhizome group during the Covid-19 pandemic.
Therefore, it is necessary to analyze the financial feasibility of cultivating medicinal plants in the
rhizome group at Taman Sringganis. The limitation in this study is the cultivation of medicinal
plants in the rhizome group studied are the five plants with the highest productivity, namely
ginger, turmeric, aromatic ginger, galangal and curcuma.

METHODS
This research was conducted at Taman Sringganis which is located in Cipaku Village,
South Bogor District, Bogor City, West Java Province. The location of this research was chosen
purposively with the consideration that Taman Sringganis is one of the medicinal plant
cultivators in Bogor City which has been cultivating biopharmaceutical plants for a long time.
Primary data collection was carried out in August 2021.
The data used in this study are primary data and secondary data. Primary data was
obtained through direct observation and interviews with decision makers and Taman Sringganis’
daily workforce including revenue components and costs incurred by the company, namely
investment costs and operational costs. Secondary data was obtained from the relevant
government agencies, including the Central Bureau of Statistics (Badan Pusat Statistik), the
Ministry of Agriculture, and through literature studies from several related journals or articles,
reports and books.
The collection of samples in this study was carried out by: direct interviews with
respondents who were chosen deliberately with the consideration that respondents must have
the highest level of decision making regarding the field to be studied, in this case the owner of
Taman Sringganis and the Chairperson or Secretary of the Taman Sringganis; direct observations
of daily labor activities at Taman Sringganis; and collecting data in the form of literature studies
related to research.
The data obtained was processed using qualitative and quantitative methods. The
qualitative data is presented by explaining and describing the data obtained, while the
quantitative method is by analyzing the data by transferring data, editing data, processing data
using the Microsoft Excel, and interpreting it descriptively. Financial feasibility is assessed by
identifying aspects of financial feasibility.
The financial feasibility aspect is an aspect used to assess the company's overall finances.
Assessment of feasibility in the financial aspect through the calculation of total revenue analysis
using the formula:

Information:
TR = Total revenue (Rp)
P = Price (Rp)
Q = Total production output (Rp)
Total Revenue is found by multiplying the amount of production outout (Q) with the
selling price (P). Then carry out a profit and loss analysis describing the amount of income
earned from one period to the next. This projection illustrates the types of costs incurred and the
amount in the same period. In carrying out profit and loss analysis we need several components,
such as sales or revenue, cost of goods sold, gross profit, operating expenses, gross operating
profit, depreciation, net income, other income, EBIT, interest, EBT, taxes, and EAIT (Kasmir,
2014). Operational costs include all production, maintenance and other costs that describe
expenses to produce production used for each production process in a period of production
activity. Operational costs consist of two main components, namely, variable costs and fixed
costs.c
Variable costs are costs whose size is in line with the development of production or sales
every year or one unit of time, while fixed costs are costs whose amount is not affected by the
development of the amount of production or sales in one year or one unit of time (Nurmalina et
al.,2014).
In analyzing profit and loss, the total cost (TC) and total revenue (TR) must be known. The
formula for calculating TC is:

Information:
TC = Total cost (Rp)
TFC = Total fixed costs (Rp)
TVC = Total variable costs (Rp)
Costs incurred by companies to produce products by adding total fixed costs (TFC) to total
variable costs (TVC). Furthermore, to determine whether a business obtains profit or loss can be
determined by the following formula:

Information:
= Provit (Rp)
TR = Total revenue (Rp)
TC = Total cost (Rp)
Business feasibility investment criteria can be used as a consideration in determining
whether a business is feasible or not to be carried out and each eligibility criterion can be used to
determine sequences of various business alternatives from the same investment. NPV (net
benefits or net cash flow) is the difference between the total present value of benefits and the
total present value of costs over the life of the business (Nurmalina et al.,2014). A business is
declared feasible if the NPV is greater than 0 (NPV> 0), which means that the business is
profitable or provides benefits. Calculation of NPV systematically can be formulated as follows:

Information:
Bt = Benefit in year t (Rp)
Ct = Cost in year t (Rp)
T = Year of business activity (t=0, 1, 2, 3, …, n), the initial year can be year 0 or year 1
depending on the characteristics of the business (year)
i = DR rate (%)

= discount factor (DF) in year t (%)

Net B/C ratio is the ratio between positive net benefits and negative net benefits. A
business can be said to be feasible if the Net B/C ratio is greater than one (Net B/C > 1) and is
said to be feasible if the Net B/C is less than one (Nurmalina et al. 2014). Systematically can be
written with the formula:

Information:
Bt = benefit in year t (Rp)
Ct = Cost in year t (Rp)
i = Discount rate (%)
t = Year
A business is said to be feasible if the IRR value is greater than the opportunity cost of
capital (DR). Here's the IRR formula:

Information:
i1 = Discount rate that produces a positive NPV
i2 = Discount rate that results in a negative NPV
NPV1 = positive NPV
NPV2 = negative NPV
Businesses with short payback periods or quick returns are likely to be selected. The
weakness of this method is that it ignores the time value of money and ignores cash flow after
the payback period. A business can be said to be feasible if the payback period is less than the
age of the business. Payback period can be formulated as follows (Situmorang & Dilham, 2007):

Information:
N = the last year in which the cash flow has not been able to cover the initial investment
a = amount of initial investment
b = qualitative sum of cash flows in the nth year
c = cumulative amount of cash flows in the n+1 year

RESULTS AND DISCUSSION

A financial feasibility analysis was carried out to determine the costs and benefits as well
as the cashflow of the rhizome group of medicinal plant cultivation activities in Taman
Sringganis. The cash flow referred to consists of a component of the flow of benefits as (inflow)
and a component of the flow of costs as cash out (outflow). The aspects studied to determine
financial feasibility are Net Present Value (NPV), Net Benefit Cost Ratio (Net B/C Ratio), Internal
Rate of Return (IRR), and Payback Period (PP). In research at Taman Sringganis, the outflow of
medicinal plant cultivation activities in the rhizome group was in the form of investment costs
and operational costs. Investment costs are costs incurred in the first year or at the start of
cultivation, and their lifetime can last a long time. Operational costs are costs incurred during the
project life cycle. Investment costs or capital costs in cultivating medicinal plants of the rhizome
group incurred in the first year consist of tangible assets and intangible costs. Tangible
investment costs incurred include equipment, machinery, and vehicles. Intangible investment
costs incurred include business quality improvement costs and marketing costs. Details of the
investment costs of cultivating medicinal plants in the rhizome group can be seen in Table 3.

Table 3. Details of investment costs for cultivating medicinal plants in the rhizome group
Amount
Type of cost Unit cost (Rp) Total cost (Rp)
(unit)
Equipments
Plastic tub 5 50.000 250.000
Cutting scissors 4 10.000 40.000
Polybag plastic 24 10.000 240.000
Biopore stick 2 160.000 320.000
Hoe 3 75.000 225.000
Winnowing tray 7 50.000 350.000
Sieves 7 15.000 105.000
Scale 5 350.000 1.750.000
Knife 7 15.000 105.000
Scissors 8 10.000 80.000
Frying pan 7 250.000 1.750.000
Stove 4 350.000 1.400.000
 Oven 4 2.000.000 8.000.000
Pan 10 250.000 2.500.000
Container box 24 55.000 1.320.000
Machine
Instant machine 1 27.000.000 27.000.000
Material pressing machine 1 1.500.000 1.500.000
Milling machine 1 1.800.000 1.800.000
Mixing machine 1 5.000.000 5.000.000
Sealing machine 6 1.000.000 6.000.000
Vehicle 1 58.500.000 58.500.000
Land 1 150.000.000 150.000.000
The cost of improving the quality of
business
MUI Halal Certification 2 3.800.000 7.600.000
IPR logo certification 1 5.000.000 5.000.000
Ministry of Health production
1 100.000 100.000
certification
Clinical practitioner license 1 100.000 100.000
Marketing costs
Standard website 1 300.000 300.000
Website upgrades 1 500.000 500.000
Design 1 460.000 460.000
Total     282.295.000
Source: Primary data (2021)
Table 3 shows that the total investment costs that must be incurred in the first year of
the rhizome group medicinal plant cultivation business is Rp. 282,295,000. The biggest
investment cost is obtained from land costs of Rp. 150,000,000. The operational costs incurred
consist of fixed costs and variable costs which are calculated every month. Fixed operational
costs incurred include labor costs, electricity costs, water costs, and office stationery costs.
Variable operational costs incurred include logistics costs, marketing costs, and production costs.
In the cultivation of medicinal plants of the rhizome group in Taman Sringganis, land rental costs
are not included in operational costs because the land is privately owned by the business owner.
In detail, the operational costs of cultivating medicinal plants in the rhizome group can be seen in
Table 4.
Table 4. Details of the operational costs of cultivating medicinal plants in the rhizome group
Cost/month
Type of cost Details Cost/month (Rp)
(Rp)
Labor
Secretary Pak Sapto 1.900.000 22.800.000
Finance Manager Pak Asep 1.900.000 22.800.000
Production of medicinal
Pak Sutisna 1.500.000 18.000.000
plants
Pak Ubaidillah 1.500.000 18.000.000
Production of processed
Pak Adi 1.500.000 18.000.000
products
Ibu Erna 1.500.000 18.000.000
Capsule factory Ibu Kokom 800.000 9.600.000
Pak Sutisna 800.000 9.600.000
Simple warehouse Pak Wawan 1.500.000 18.000.000
Finished product
Pak Rusin 1.500.000 18.000.000
warehouse
Overheads
Electricity Monthly 2.500.000 30.000.000
Water Monthly 800.000 9.600.000
Office stationery Monthly 1.200.000 1.200.000
Logictics Gasoline 13.5 liters per month 1.032.750 12.393.000
Marketing
Maintenance website Monthly 300.000 3.600.000
Cable phone Monthly 250.000 3.000.000
Print flyer 4 copies 750.000 9.000.000
Production
Kudu Laos 10 times production per month 7.213.670 86.564.040
Jahe Sereh 4 times production per month 3.725.468 44.705.616
Kunyit Asem 3 times production per month 2.374.101 28.489.212
Beras Kencur 2 times production per month 2.302.734 27.632.808
Temulawak 10 times production per month 7.213.670 86.564.040
Total   42.962.393 480.988.716
Source: Primary data (2021)

In Table 4 it can be seen that the total operational costs that must be incurred each
month are Rp. 42,962,393. The largest operational costs are obtained from labor and production
costs with a total cost of Rp. 14,400,000 and Rp. 22,829,643. The total operating costs above are
the costs in the first year of the establishment of medicinal plant cultivation in the rhizome
group. The increase in employee salaries caused the total monthly operational costs in the
second year to increase to Rp. 43,962,393 and in the third year and so on it increased to Rp.
44,962,393. Annual fixed wages are converted at 80% of the actual wage rate to determine the
shadow price because the employee does not work the full 8 hours of the day.433
Inflows from the cultivation of medicinal plants in the rhizome group in Taman
Sringganis come from sales of simplicia or medicinal plant products that have not undergone any
processing, sales of tea or medicinal plants that have been dried and coarsely ground, instant
sales or extracts from medicinal plants that have been processed into powders, sale of capsules
or herbs that have been processed into easy-to-consume products, as well as the residual value
of equipment and machinery that can still be used after the project ends. Details of the benefits
derived from selling simplicia products can be seen in Table 5.

Table 5. Details of the benefits of simplicia products from the cultivation of medicinal plants in
the rhizome group
Number of production Inflow (amount x
Simplisia product type Unit price (Rp)
(units/year) price)
Galangal 120 7.000 840.000
Ginger 48 28.000 1.344.000
Turmeric 36 14.000 504.000
Aromatic ginger (kencur) 24 50.000 1.200.000
Curcuma 120 7.000 840.000
Total   4.728.000
Source: Primary data (2021)

The five Taman Sringganis products that have the most demand are products processed
from medicinal plants in the rhizome group of galangal, ginger, turmeric, aromatic ginger, and
temulawak. The five processed products are named kudu laos, jahe sereh, kunyit asem, beras
kencur, and temulawak respectively. Details of the benefits derived from the sale of processed
products can be seen in Table 6.

Table 6. Details of the benefits of products processed from the cultivation of medicinal plants in
the rhizome group
Number of
Type of processed
production Unit price (Rp) Inflow (amount x price)
product
(units/year)
Kudu Laos 9600 22.000 211.200.000
Jahe Sereh 3840 25.000 96.000.000
Kunyit Asem 2880 25.000 72.000.000
Beras Kencur 1920 25.000 48.000.000
Temulawak 9600 20.000 192.000.000
Total     619.200.000
Source: Primary data (2021)

These five products have fulfilled 40% of the total demand for products processed from
medicinal plants in Taman Sringganis each year. The average sale proceeds of the five processed
medicinal plants from the rhizome group at Taman Sringganis reached Rp. 619,200,000 per year
from sales of 9,600 bottles of kudu laos products, 3,840 bottles of jahe sereh products, 2,880
 bottles of kunyit asem products, 1,920 bottles of beras jencur products, and 9,600 bottles of
temulawak products
In addition to selling simplicia and processed products from medicinal plants, Taman
Sringganis has additional inflows from residual value. The residual value is the additional inflow
obtained at the end of the year, namely the value of capital goods that are not used up during the
life of the cultivation. The residual value of medicinal plant cultivation in the rhizome group
comes from machinery, equipment and vehicles. Equipment and machines include hoes, cutting
shears, biopori sticks, plastic tubs, winnowing tray, sieves, scales, knives, scissors, frying pans,
stoves, ovens, pans, container boxes, instant machines, material press machines, milling
machines, mixer machines, and sealing machine. The average residual value obtained from the
cultivation of medicinal plants in the rhizome group is Rp. 37,425,000. Details of the calculation
of the residual value of equipment, machinery and vehicles can be seen in Table 7.

Table 7. Details of the calculation of the residual value of the cultivation of medicinal plants in
the rhizome group
Physical input Unit price Total price Econom Remaini Depreciation Residual
Units
type (Rp) (Rp) ic age ng year /year (Rp) value
Cultivation
activity
equipment
Hoe 3 75.000 225.000 3 0 45.000 0
Cuttings scissors 4 10.000 40.000 2 0 8.000 0
Polybag plastic 24 10.000 240.000 0 0 48.000 0
Biopore stick 2 160.000 320.000 3 0 64.000 0
Processed
product
manufacturing
equipment
Plastic tub 5 50.000 250.000 1 0 50.000 0
Winnowing tray 7 50.000 350.000 1 0 70.000 0
Sieves 7 15.000 105.000 3 0 21.000 0
Scale 5 350.000 1.750.000 3 0 350.000 0
Knife 7 15.000 105.000 2 0 21.000 0
Scissors 8 10.000 80.000 2 0 16.000 0
Fryiong pan 7 250.000 1.750.000 3 0 350.000 0
Stove 4 350.000 1.400.000 5 0 280.000 0
Oven 4 2.000.000 8.000.000 5 0 1.600.000 0
Pan 10 250.000 2.500.000 2 0 500.000 0
Container box 24 55.000 1.320.000 3 0 264.000 0
Machine
Intant machine 1 27.000.000 27.000.000 8 3 3.375.000 10.125.000
Material pressing
1 1.500.000 1.500.000 8 3 187.500 562.500
machine
Milling machine 1 1.800.000 1.800.000 8 3 225.000 675.000
Mixing machine 1 5.000.000 5.000.000 8 3 625.000 1.75.000
Sealing machine 6 1.000.000 6.000.000 8 3 750.000 2.250.000
Vehicle 1 58.500.000 58.500.000 8 1 7.312.500 21.937.500
Total             37.425.000
Source: Primary Data (2021)

Calculation of outflows (costs) and inflows (benefits) can determine the financial
feasibility of medicinal plants of the rhizome group in Taman Sringganis. In the research method
that has been presented, the investment criteria used in this economic feasibility analysis are Net
Present Value (NPV), Net Benefit Cost Ratio (Net B/C Ratio), Internal Rate of Return (IRR), and
Payback Period (PP). The four investment criteria will describe the results of the cultivation of
medicinal plants in the rhizome group for a technical age of 5 years.

Table 8. The value of the results of the economic feasibility of cultivating medicinal plants in the
Taman Sringganis rhizome group based on cash flow
 Feasibility Feasibility
Type of cost Value
indicators results
Net Present Value (Rp) 258.213.256 ≥0 Feasible
Net Benefit Cost Ratio 1,79 >1 Feasible
Internal Rate of Return (%) 36 >10,1 Feasible
Payback Period (year) 3 years 4 months <5 Feasible
Source: Primary Data (2021)

Based on the calculation results, the NPV value obtained from the cultivation of medicinal
plants in the rhizome group in Taman Sringganis is Rp. 258,213,256. This NPV value means that
the cultivation of medicinal plants of the rhizome group in Taman Sringganis during the life of
the business generates a net benefit of Rp. 258,213,256. The magnitude of the NPV value
indicates that the cultivation of medicinal plants in the rhizome group is feasible because it
produces an NPV ≥ 0 (positive).
Based on the results of cash flow calculations, it is known that the Net B/C Ratio value
obtained from the cultivation of rhizome medicinal plants in Taman Sringganis is 1.79. This
shows that for each additional fee of Rp. 1.00 will generate an additional benefit for Taman
Sringganis of Rp. 1.79. From the eligibility criteria it can be said that the cultivation of medicinal
plants in the rhizome group in Sringganis Park is feasible because it produces a Net B/C Ratio >
1.

To calculate the feasibility of cultivating medicinal plants of the rhizome group in Taman
Sringganis, the IRR level requires a comparison between the prevailing interest rate and the IRR
value. The prevailing interest rate value used as a comparison and an indicator of the feasibility
of the IRR is the social discount rate of 10.1%. This value is determined from calculations of
social interest rates for international monetary funds (IMF) and data from the world bank's real
interest rates for 2020. The IRR for cultivating medicinal plants for the rhizome group in
Sringganis Park is 36%. The figure of 36% is the rate of return on investment from the
cultivation of medicinal plants in the rhizome group. Therefore, it can be said that the cultivation
of medicinal plants in the rhizome group in Taman Sringganis is feasible because the IRR value
obtained is based on the calculation results > the predetermined social interest rate of 10.1%.
Based on the calculation results, the Payback Period (PP) for the cultivation of medicinal
plants in the rhizome group in Taman Sringganis is 3 years and 4 months. PP is compared to the
age of cultivating medicinal plants in the rhizome group, which is 5 years, so the cultivation of
medicinal plants in the rhizome group in Sringganis Park is feasible because the PP of cultivation
activities is faster than the age of the business.

CONCLUSION
Financially, the cultivation of medicinal plants of the rhizome group in Sringganis Park
can be declared feasible based on the results of the investment feasibility criteria that have been
met, namely the Net Present Value (NPV) is positive or more than equal to zero, which is Rp.
258,213,256, the Net Benefit Cost Ratio (Net B/C Ratio) is more than one, which is 1.79, the
Internal Rate of Return (IRR) is more than the predetermined social interest rate (10.1%), which
is 36%, and Payback Period (PP) is faster than the age of the business (5 years) which is 3 years
4 months. In the future, the medicinal plant cultivation business in Sringganis Park is expected to
focus more on cultivating medicinal plants in the rhizome group in order to achieve maximum
production results.

ACKNOWLEDGEMENTS
 The author would like to thank the leadership of IPB University and all parties who have
provided input, criticism, and support so that the author can complete this journal as well as
possible. The author hopes that this journal can be useful for readers.

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