Conversion of Rubber Commodities into Palm Oil Based on The Economic Analysis in Banyuasin Regency

Abstract

Conversion of agricultural commodity planting, such as the conversion of rubber crops to palm oil crops is significantly increased in Indonesia, especially in Banyuasin Regency. In some cases, this increase in conversion is due to the annual decline in rubber prices, which has led to lower farmer incomes and regional economic growth. This research aims to determine and analyze the conversion of rubber crop commodities to palm oil in Banyuasin Regency based on price, productivity, and financial ratio analysis. The method used was descriptive analysis focusing on three main variables: price trends, productivity, and financial ratio analysis for the two commodities, including comparing production costs, income, and profitability. The results show that rubber prices have decreased significantly over the last ten years, while palm oil prices have not. The financial ratio analysis shows that palm oil has a better ratio value than rubber, which means that the palm oil business can continue to survive and develop consistently and promisingly.