Analysis of Yield Volatility and Identification of Production Risk Sources of Arabica Coffee (Coffea arabica L.) In Karo Regency

Abstract

The sustainability of Arabica coffee farming in Karo Regency is confronted with yield volatility arising from technical, biological, and environmental factors. This study aims to identify sources of production risk using a quantitative Z-Score approach and to analyze the level of relative risk using the Coefficient of Variation (CV) and standard deviation. This mixed-methods study was conducted in Simpang Empat District and involved 200 coffee farmers (100 PT Olam partner farmers and 100 traditional non-partner farmers). The results show that, at the aggregate level, the relative risk of Arabica coffee farming in Karo Regency is low and stable, with an average CV of 8.85% and an operational loss probability of only 14.12%. Based on the Z-Score analysis of 25 risk indicators, a deconstruction of the conventional risk paradigm was identified, whereby the main risk sources categorized as occurring very frequently were dominated by downstream market requirements. These included strict requirements for packaged products, with an occurrence probability of 85%, and the requirement for products to have trademarks, also with an occurrence probability of 85%. In contrast, upstream risks such as declines in selling prices (11%) and pest and disease attacks (11%–12%) had the lowest probabilities and were therefore categorized as very rare. The study concludes that although farming activities generally remain within a safe zone, farmers need to strengthen their adaptive capacity to modern market regulations in the downstream sector.