SHRIMP FARMING AND ITS BUSINESS FACING PRODUCTION RISKS IN KALIWUNGU DISTRICT, INDONESIA
Production factors are important components in the operation of a business, and these variables always fluctuate following the conditions experienced by shrimp farmers. Generally, the majority of aquaculture business players in several developing countries rely heavily on production results before determining the factors of production they want to set in the next production period. Therefore, this research using the Cobb-Douglas function wanted to find out whether vannamei shrimp farming in Kaliwungu District, Kendal Regency, had followed the Returns to Scale (RTS) practice using production factor analysis. Apart from that, the characteristics of the cultivating community and their relationship with the blue economy will also be studied through a business risk analysis to provide a point of view regarding the status of business sustainability to strengthen the economic resilience of the community in the research location. This study found that with an R/C ratio of 1.7>1, the status of the vannamei shrimp farming business at the research location has proved to be successfully doable because it has made a profit. This finding is supported by the total regression coefficient (bn) of the five production factors (1,375>1) which indicates that the production scale of vannamei shrimp in the research location shows increasing returns to scale index. However, based on risk analysis, this study found a considerable risk coefficient (0.29>0.5), implying that the risk of production loss that will be faced by the vannamei shrimp business at the research location will be quite immense in the next harvest. Although currently all business players in the research area are said to have benefited and are classified in the increasing return to scale index category, the risk of production loss that will be faced by the vannamei shrimp business in the research location is projected to be quite significant in the next harvest period. Therefore, all actors of the vannamei shrimp business in the research location are strongly advised to optimize the production factors currently used in the next harvest by anticipating market prices of inputs, management, and sales values. Besides, it is important to take into account the perspective of the blue economy, economic efficiency, and skillful shrimp cultivators with better education for embracing future business sustainability.
Production factors, Returns to Scale, vannamei shrimp, economic efficiency