Profit Volatility of Small Laying Hens Poultry Farm and Rice Farming Relation to Capital Productivity
Profit Volatility of Small Laying Hens Poultry Farm and Rice Farming Relation to Capital Productivity

Summary/Abstract: Rural area business is divided to high risk and profit business promising such as laying hen poultry and little risk and profit business such as rice farming. Intensive small laying hen poultry farm has a high risk because eggs and feeds price fluctuation, uncertain productivity and mortality. This uncertainty caused profit volatility. This research aimed to collate probabilistic model relation between profit volatility and capital productivity. High profit volatility and low capital productivity business is categorized as high risk business and avoided by villagers. This study was done at egg central production l Banyumas Regency. The respondent was laying hen poultry farmers that rear 2,000 birds of hens and 1.5 ha farm land. The respondent is total population on that range business (was 8 poultry farms and 12 farmers). The respondents were determined by equality of both capitals used. The research data was taken at 2014 – 2016. Data analyzed using Monte Carlo simulation. Simulation result showed that rice farming capital productivity is higher than laying hen poultry capital productivity and laying hen poultry profit volatility is higher than farming profit volatility. Low capital production and high profit volatility on laying hen poultry farming showed that it is portfolio lower than rice farming. The result showed that the villagers more likely choose certain and low risk business even if the profit is lower.

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