Transforming Tropical Apple Agribusiness: Socio-economic Drivers of Farmer Continuity and Exit in Batu, Indonesia

Abstract

Apple farming in Batu City, Indonesia, is experiencing structural decline due to falling productivity, aging trees, pest and disease pressure, climate change, and weak economic returns. This study examines the socio-economic factors shaping farmers’ decisions to continue, hesitate, or abandon apple cultivation, with implications for agribusiness transformation in tropical bioresources. Primary data were collected from 361 farmers in five apple-producing villages in Bumiaji District, Batu City. An ordered probit model was estimated using three outcome categories: not continue, uncertain, and continue. Explanatory variables included education, farming experience, number of apple trees, non-apple cultivated land, apple prices, price increases, pest and disease attacks, price fluctuation, production decline, inheritance, and climate change. The results show that farming experience, number of apple trees, current apple prices, price increases, and inheritance significantly increase the likelihood of continuing apple farming. In contrast, non-apple cultivated land, pest and disease attacks, production decline, and climate change significantly reduce farmers’ willingness to continue. A notable finding is that price fluctuation has a positive and significant effect, suggesting that some farmers remain in apple farming when market volatility is still perceived as offering upside opportunity. Economic evidence reinforces this pattern: apple farming records an R/C ratio of 0.97 and negative annual profit, far below citrus, potato, and carrot. These findings indicate that apple revitalization requires not only technical support, but also stronger business incentives, climate adaptation, and institutional strengthening to restore competitiveness and sustain local livelihoods.