Income

Income calculation begins with *Indigofera* productivity, with total production calculated based on *Indigofera* leaf productivity per unit area. In 1 ha with a spacing of 100 × 100 cm, there will be 10,000 plants. Each individual plant produces an average of 35 g of *Indigofera* leaves per harvest. Harvesting on Timor Island can be done twice a year. Therefore, in

1 year, the production of *Indigofera* leaves is 700 kg ha−1. Based on the productive age of the plant, the Indigofera cultivation cycle is 4 years. Thus, the productivity and total production of *Indigofera* leaves in one business cycle for 4 years is 2800 kg ha−1.

The next step in the income calculation process is to calculate the yield of paste. Based on the results of the study, it was found that when 300 g of *Indigofera* leaves were added to 6 g of lime (2%) and 3 l of water, this yielded 177 g of paste (Agustarini et al. 2021). The calculation of paste yields based on the research activities is presented in Table 6.

**Table 6.** Indigo paste production from 1 hectare of *Indigofera* plant.


The productivity of paste yields per hectare per year is 273 kg (Table 6). The price of indigo paste is relatively inelastic due to both the supply and demand for indigo paste being relatively stable. Thus far, there has been no substitution of natural blue dye apart from *Indigofera*, and production competition is still limited. There is no large industry that produces an indigo paste that will potentially monopolize the market price. The price used for income analysis was the price of indigo paste in 2021, based on the selling price of indigo paste in the market place (IDR 110,000 kg−1, or USD 7.75). Therefore, the income derived from producing indigo paste is IDR 30,030,000 ha−1year−<sup>1</sup> (or USD 2117) and income during the cultivation cycle is IDR 120,120,000 ha−<sup>1</sup> (or USD 8469).

#### Results of the Financial Analysis

In conducting a financial feasibility analysis, it is necessary to consider changes in the value of currency over time. The cash flow on which the calculation of the investment eligibility criteria is based runs over a fairly long period of time (4 years). A calculation of the changes in the value of money over this period is calculated by including discounts in the analysis. Discounts are needed to convert the expected future flow of resources into an estimated present value (Riyanto 2018). The results of the financial analysis for the production of indigo paste are presented in Table 7, based on an assumption of a discount factor of 8%, based on the Bank Rakyat Indonesia credit interest rate in 2021. This follows (Nurmalina et al. 2018), who state that one of the factors for determining the discount rate is loan interest rates.

**Table 7.** The results of the financial analysis into the production of indigo paste with a factor discount of 8% over a 4-year business cycle.


The results of the analysis demonstrate the feasibility of indigo paste production. This is shown by the values of the investment parameters, with the NPV showing a positive value, with the BCR above 1, with the IRR above the discount rate, and the BEP within the period of the business cycle. The analysis shows that the production of indigo paste has the potential to yield profits of IDR 4631,501.50 ha−<sup>1</sup> year<sup>−</sup>1, or USD 326,536 (exchange rate: USD 1 = IDR 14,183.73).

El Nino events impacted Timor Island in 2006–2007 (Kieft and Soekarjo 2007), with further impacts from La Nina in 2009 (Kota and Adiningtyas 2010), with these climatic anomalies having a severe impact on Timor's agricultural sector and on community welfare. The results of research related to the cultivation of *Indigofera* spp. show that climatic conditions are one of the most important factors for the cultivation of this plant, with significant implications for productivity. Thus, it can be concluded that the climatic anomalies associated with El Nino and La Nina would impact the productivity of agricultural crops.

With El Nino conditions resulting in extreme dry seasons, when these conditions occur, it is essential to water plants so that they do not die. To determine the impact of this on the cultivation of *Indigofera* spp., a sensitivity analysis was conducted, taking into account factors including decreased productivity and the increased production costs resulting from the need for watering.

The analysis involved two scenarios for decreased productivity, with the first assuming a 10% decrease (a reduction in income of IDR 3,003,000 year<sup>−</sup><sup>1</sup> or USD 211.72 year<sup>−</sup>1) and with the second assuming a 20% decrease (a reduction in income of IDR 6,006,000 year<sup>−</sup><sup>1</sup> or USD 423.44 year<sup>−</sup>1). The two scenarios involving increased production costs are respectively based on the need for watering activities with an intensity of 1 month in 1 year (resulting in an additional cost of IDR 3,741,497 year<sup>−</sup><sup>1</sup> or USD 263.79 year<sup>−</sup>1) and on an intensity of 2 months in 1 year (resulting in an additional cost of IDR 7,482,993 year<sup>−</sup><sup>1</sup> or USD 527.58 year<sup>−</sup>1), as shown in Table 8.

**Table 8.** Results of sensitivity analysis for the decreased leaf production of *Indigofera* spp.


The results of the sensitivity analysis for the decreased leaf production of *Indigofera* show that the production of *Indigofera* paste would remain feasible if the production of *Indigofera* leaves decreased by a figure not exceeding 10%. However, if the decrease is greater than 10%, then the production of indigo paste is not feasible. Sensitivity analysis is conducted if there is an increase in costs due to watering activities. It is carried out in 2 scenarios, namely 1 and 2 months of watering in a 1 year planting period (Table 9).


 1.07

 38%

 Third year −441.1122

−19%

 0.94

 Not achieved

**Table 9.** Results of sensitivity analysis to the increase in costs due to watering activities.

> IDR 6,135,695 or USD 432.5868

The results of this sensitivity analysis indicate that indigo paste production activities remain feasible if watering is required for a maximum of 1 month in 1 year. However, when watering is required for longer periods than this, indigo production becomes unfeasible.

3.5.2. Potential Economic and Social Value to Be Derived from the Development of *Indigofera* spp.

The potential economic value of *Indigofera* development is from the indigo paste selling activities in which its raw material is harvested from *Indigofera* potential cultivation areas. Based on the results of the various analyses, a number of findings related to the

NPV

BCR

IRR

BEP

development of *Indigofera* on Timor Island were obtained, including the following: the potential area to be prioritized for development covers ± 163 thousand ha; *I. suffruticosa* Mill. can generate production yields of 700 kg ha−1; resulting in yields of indigo paste of 273 kg ha−1, with the potential to generate profits of IDR 4,631,501.50 ha−<sup>1</sup> year<sup>−</sup><sup>1</sup> or USD 326.54 (exchange rate: 14,183.73). The potential economic value to be derived from the development of *Indigofera* on Timor Island is distinguished based on three plantings scenarios: 100% targeted area development with intercropping (scenario 1); 50% targeted area development with intercropping (scenario 2); and 25% targeted area development with intercropping (scenario 3). A comprehensive outline of the potential economic and social value to be derived from the development of *Indigofera* can be seen in Table 10.

**Table 10.** Potential economic and social value to be derived from the development of *Indigofera*.


The potential social impact to be derived from the development of *Indigofera* takes the form of employment, given that the processes involved are labor-intensive. This potential is demonstrated in Figure 7, which shows that wages account for the largest proportion of the operational costs associated with the development of *Indigofera* (70%). The wage component for 4 years of *Indigofera* production cycle absorbs 1023 labor day (years 1: 348 labor day, years 2–4: 225 labor day) consists of the cultivation of *Indigofera* and the producing of indigo paste. In the first year, we need more labor for the cultivation activities. In the second to fourth year we only have maintenance and indigo paste production. In the cultivation of *Indigofera*, the wage component reaches 84% of the total cost of wages, while the proportion of the manufacture of indigo paste reaches 16%. Thus, this sector is suitable to be developed as it is able to absorb many workers in the rural sector.

**Figure 7.** Composition of costs related to the development of *Indigofera*.

*Ikat* weaving also has economic potential as a tourist attraction. Weaving from this region has significant aesthetic value and plays a major role in establishing cultural identity (Susanti 2021). Thus, it has the potential to act as a form of cultural tourist attraction that could create value for NTT as a market for tourists.

As shown by a study conducted by (Muda and Suwito 2019), *ikat* weaving could drive increased tourist visits to the region, with significant potential economic benefits for the community. The development of weaving crafts has the potential to generate significant employment and to reduce the unemployment rate. Thus, this innovation has the potential to generate strong positive social value (Salma et al. 2018). There is good potential to develop the *ikat* weaving business, given that most craft people work individually, with very few working together in groups (Muda and Suwito 2019). Weaving has strong market potential due to its recognition as an environmentally friendly art product by upper-middle consumers. According to (Samadara 2018), both national and international tourists prefer to buy *ikat* from Sumba with natural dye compared to synthetic dyes.

Together with increasing public awareness of the negative effects of synthetic colors on health and the environment, the market for natural dyes has good prospects (Salma et al. 2018). Therefore, *ikat* weaving can be regarded as a form of cultural heritage that could be developed through a community empowerment approach to generate significant positive economic and social benefits for members of communities in rural areas.

#### *3.6. Development Strategy the Sustainable Use of Indigofera Leaves to Produce Natural Dyes*

A development strategy for the sustainable use of *Indigofera* leaves to produce natural dye was formulated through a quantitative SWOT analysis. A quantitative SWOT analysis may be used to conduct an evaluation according to specific desired parameters and to develop managemen<sup>t</sup> strategies (White et al. 2015). The main advantage of the SWOT approach is to show current and possible future constraints related to implementing a proposed initiative (Johnson et al. 1989). The SWOT analysis approach is an effective technique to formulate strategies (Hill and Westbrook 1997) because it categorizes factors related to the proposed initiative as either *internal* (strengths, weaknesses) or *external* (opportunities, threats) (Shrestha et al. 2004). Therefore, the approach can provide insights into how to transform threats into opportunities and offset weaknesses into strengths (Wang 2010; Liu 2013).

The SWOT diagram for the development of the use of *Indigofera* leaves as a natural dye in a sustainable manner on Timor Island, Indonesia, was constructed according to interviews with experts. Strengths and weaknesses are categorized as internal factors, and opportunities and threats are categorized as external factors (Table 11).

The determination of weights in the SWOT-AHP model is based on the results of comparisons between SWOT components using pairwise comparisons. The results of the analysis show that the value of the consistency ratio (Cr) is 0.03 for external factors and 0.04 for internal factors. This value is still below the maximum allowable Cr of 0.1, following the recommendations of (Saaty 2008). The results of the SWOT-AHP analysis show that the coordinate value for the internal factors stands at 2.10, while the external factor stands at 2.32 (Tables S5 and S6). Based on the position and action evaluation matrix strategy, there are four quadrant strategies: aggressive, competitive, defensive, and conservative (David et al. 2019).

These results indicate that the strategy for the production of *Indigofera* spp. on Timor Island lies in quadrant I, indicating that the strategy should be implemented aggressively. An aggressive strategy's leverage is the existing strengths and opportunities, rather than using defensive options to minimize weaknesses and threats (Rauch 2007).

Local wisdom relates not only to providing livelihoods and sustaining the lives of local communities but as also as a means to strengthen ecological sustainability and to leverage the community's unique resources to stimulate the sustainability of local wisdom itself (Lake et al. 2018). The strategy for the development of *Indigofera* spp. on Timor Island involves leveraging the community's culture and wisdom related to the use of this plant

acquired over generations, as a result of which it has developed the appropriate cultivation techniques, which consist of knowledge of the right time for planting, following good cultivation practices, and using appropriate planting materials. This provides a strong basis for leveraging the development of indigo paste in suitable areas to capture significant economic and social opportunities.

**Table 11.** Diagram of the SWOT analysis for the sustainable development of *Indigofera* to produce natural dyes.


Based on the SWOT-AHP analysis, it would be possible for the regional governmen<sup>t</sup> of NTT to formulate a number of strategies for the development of *Indigofera* spp. on Timor Island, including the introduction of *Indigofera* spp. as an agro-industry commodity and its use for the rehabilitation of critical lands. These strategies could be implemented by developing partnerships with the private sector to increase the potential sale of indigo paste,

to expand markets, and to increase community capacity is to cultivate and process the plant. A number of stakeholders and actors could be involved in this initiative, including women's farmer groups, *Dewan Kerajinan Nasional Daerah/Dekranasda* (the Regional National Crafts Council), the Industry and Trade Office, the Women's Empowerment Service, the Agriculture and Plantation Service extension agencies, and private companies. Support for women's capacity building in terms of education is needed for the regeneration or further development needs. This is reinforced by (Chisamya et al. 2012), which states that by being educated, girls experienced a transformation of the inequitable gender relations they faced in society. Related to agriculture, although in Indonesia it is dominated by men, women appear to have equal access to productive resources, such as land and inputs, and greater control over household income than men (Akter et al. 2017). Funding and financing for these strategies could be sourced from related agencies, gran<sup>t</sup> funds, business service agency (*Badan Layanan Umum*, BLU), and mutual cooperation funds managed by farmer groups.

Thus far, neither the NTT provincial governmen<sup>t</sup> nor district governments have promulgated regulations related to the preservation of *ikat* or the use of natural dyes. Regional regulations could play a significant role in supporting strategies to develop the commodity, to create predictability and legal certainty, and to demonstrate a clear commitment to the development of cultural industries in NTT (Setiawan and Suwarningdyah 2014). In addition, local regulations related to weaving and tourism could play a strong role in facilitating the achievement of SDG 8 targets.

## **4. Conclusions**

The people of Timor Island are familiar with a range of plants that can be used to produce natural dyes, one of which is *Indigofera* spp. (*I. tinctoria* L. and *I. suffruticosa* Mill.), which is generally used to produce a black dye for *ikat* fabrics made by the community.

The cultivation of *Indigofera* is conducted in three stages: germination, seeding, and planting. Sowing media plays an important role in increasing the germination rate, with the best sowing media for the germination of *I. tinctoria* L. being sand media. At the seedling stage of *I. tinctoria* L, a mixed media consisting of soil, cocopeat, and rice husk charcoal (1:2:2) and placed in an unshaded area (0%) and mixed media consisting of soil and rice husk charcoal (1:2) and placed in 50% shade resulted in the highest biomass and the best quality index. At the planting stage of *I. suffruticosa* Mill., a spacing of 100 × 100 cm resulted in the best increases in height, diameter, and number of branches, while the use of fertilizer (100, 150, and 200 g plantings) resulted in better growth than without the use of fertilizer. Providing 100 g of fertilizer per plant results in the best results in terms of height, diameter, and number of branches.

Indigo paste is produced by adding quicklime CaO equivalent to 2% of the weight of the leaves and water equivalent to 10 times the weight of the leaves. This technique is more time-efficient and results in the production of a higher quality paste with a longer shelf life than through the techniques currently applied by the community.

The potential area suitable for the development of *Indigofera* spp. on Timor Island covers ±163,000 ha. The results of the financial feasibility analysis showed that the processing of *Indigofera* spp. to produce indigo paste is feasible. The results of the sensitivity analysis show that the tolerable decrease in production levels is only 10%, with a maximum of one month of watering in a year for the production of indigo paste to remain feasible. The total potential supply of raw materials to produce indigo paste from Timor Island stands at 11–44 tons/year, with the economic potential standing at USD 13–53 million/year. The cultivation and processing activities are labor-intensive, requiring a workforce of 1032 person/ha during the *Indigofera* spp. production cycle (4 years).

Strategies to develop the cultivation and processing of *Indigofera* spp. on Timor Island could be conducted aggressively by leveraging the identified strengths related to the cultivation of *Indigofera* spp. In particular, this would involve deleveraging local wisdom and cultural traditions related to the use of *Indigofera* spp. over generations by applying the appropriate cultivation techniques, together with innovations in the indigo

paste production process and the development of suitable areas to capture economic opportunities.

**Supplementary Materials:** The following are available online at https://www.mdpi.com/article/10 .3390/economies10020049/s1, Figure S1: Steps for Indigofera Land Suitability—Land Availability Analysis; Table S1. Effect of scarification and media on the percentage of germination of *Indigofera* spp. seeds; Table S2. The effect of media on germination percentage; Table S3. Effect of shade and media on growth parameters of height, diameter, number of branches, leaf production, and percent survival of *Indigofera* spp. seedlings; Table S4. The effect of spacing and manure application on increasing growth in height, diameter, and number of branches of *Indigofera* spp. four (4) months after planting; Table S5. Internal strategic factors based on weights, ratings, and scores; Table S6. Internal strategic factors based on weights, ratings, and scores.

**Author Contributions:** Each author (R.A., Y.H., Y.A., W.C.A., D.Y., R.A.F., G.E.S., A.H., H.L.T., W.I. and A.P.) has equal work as the main contributor who equally conceived and designed the outline of the manuscript, collected and contributed data, performed the analysis, provided constructive feedback for each section, and wrote and edited the manuscript. All authors have read and agreed to the published version of the manuscript.

**Funding:** This research was funded by ACIAR, Kanoppi Project, FST/2016/141.

**Institutional Review Board Statement:** As the study does not involve any personal data and the respondent was well aware that they can opt-out anytime during the data collection phase, any written institutional review board statement is not required.

**Data Availability Statement:** The associated dataset of the study is available upon request to the corresponding author.

**Acknowledgments:** We are grateful to the anonymous reviewers and academic editors for helpful comments on the manuscript. We also thank project collaboration between The Standardization of Sustainable Forest Management (Indonesia Ministry of Environment and Forestry) and World Agroforestry (ICRAF). We thank Dani Pamungkas, Marthen Tualaka, and Melky for their assistance in collecting data in the field.

**Conflicts of Interest:** The authors declare no conflict of interest.
