Dairy farmers

Most of Indonesian dairy farmers are smallholder dairy farmers in rural areas in mountainous regions. Farm size is typically small with around 2-4 milking cows. The dairy cattle which are from Friesian Holstein breed or its crossing with local breed are reared in a small confinement

9 Dinas Peternakan Jawa Barat (2008a); Dinas Peternakan Jawa Tengah (2007a); Dinas Peternakan Jawa Timur (2008b); Direktorat Jendral Peternakan (2008); Badan Pusat Statistik (2009).

on the yard of the farmer’s house. Forage grasses are gathered in a ‘cut and carry’ system:

cutting and collecting grasses from the farmer’s land, as well as along the sides of roads, irri-gation ditches, forests or other such places¹⁰. Dairy farming is managed as a family business with 2-3 people working in the farm. Most dairy farmers are cooperative members¹¹, as they are dependent on cooperative services particularly for business linking to DPI. Besides sup-plying DPIs dairy farmers or cooperative sometimes also sell small amounts of fresh milk to small home industries, food hawkers or street vendors, and directly to local end consumers.

Currently, there is no official data on aggregate level about the quality of milk produced by dairy farmers, how many percents are classified into the respective milk grading-system im-posed by the DPIs. However, according to Meylinah (2008, p. 3) fresh milk with lower bacte-ria content – or higher quality – is combined with imported SMP to produce full cream liquid milk and powdered milk; whereas those with higher bacteria content is processed into sweet-ened condensed milk.

In 2003 there were around 112,000 smallholder dairy farmers in Indonesia: around 24,000 in West Java; 37,000 in Central Java; 49,000 in East Java, and 2,000 outside Java (Direktorat Jendral Peternakan 2008). Assuming that at least 2 persons working in the farm and a typical family consists of 4 persons (parents and 2 children); the dairy sub-sector provides employ-ment for at least around 224,000 workers¹² and a source of livelihood for around 448,000 people.

In view of livestock population Indonesia had in 2007 around 374,000 dairy cattle (see Figure 7-5). The largest population of around 139,000 cattle was in East Java, accounting for around 37% of the total population in Indonesia. Interestingly, the second largest population is in Central Java– instead of in West Java – with around 116,000 cattle (31%), despite the fact that Central Java produced only 12.5% of Indonesian total milk production. West Java ranked third ranked third with around 103,000 cattle (28%).

10 See Hutabarat et al. (1994) for further discussion on the general characteristics of Indonesian smallholder dairy farmers.

11 According to Direktorat Jendral Peternakan (2008), in 2004 there were 341 private companies producing milk that are not member of any dairy cooperative.

Figure 7-5 Development of dairy cattle population in Indonesia and Java Island (2002 – 2007) Source: compiled and estimated from various sources¹³

The population of dairy stock in Indonesia did not changed much during 2002-2007, only less than 5% over a 6-year period. In 2003 – 2005 dairy stock even declined and picked up again afterwards. On the province level, only in East Java dairy population had increased constantly on average by around 1,500 heads per year or equal to 5% during the period 2002-2007. In the same period dairy population in West Java increased on average yearly by around 2,500 heads – albeit the moderate decrease in 2005 – or equivalent to 13% during the whole time period.

On the contrary, population number in Central Java was, more or less, stagnating.

12 According to Wagner et al. (2006, p. 4) 241,800 people were involved in on-farm fresh milk production.

13 Dinas Peternakan Jawa Barat (2008b); Dinas Peternakan Jawa Tengah (2007b); Dinas Peternakan Jawa Timur (2008a); Direktorat Jendral Peternakan (2008); Badan Pusat Statistik (2009).

Comparing the development of production (Figure 7-4) and of livestock population (Figure 7-5), it becomes obvious that productivity increase has taken place in Indonesian dairy sub-sector: while the production has grown by 9%, the population increase was only to less than 5%. The production increase in West Java (13% in 2002-2007) can attributed to the increased population number also by 13%; whereas in East Java the growth of dairy population by 5%

has resulted in a production increase by 26% and thus signalising improved animal productiv-ity. A peculiar case is Central Java in which production dropped by 10% and dairy population slightly decreased by 3%.

Drawing on the statistical data in the previous sub-chapters, the characteristic of dairy farm business in Indonesia is delineated in Table 7-3, comparing the situation in 2002 and 2007 (with the simplifying assumption: the number of dairy farms in 2002 and 2007 are the same).

Table 7-3 Characteristic of dairy farms in Indonesia on average values (2002 and 2007) Cattle per farm

[head]

Daily milk production per

farm [litre/farm] Annual production per animal [litre/animal/year]

Source: own calculation based on cited sources

At this point it is, again, important to emphasise, that due to the fact that the statistical data were not drawn from a single, official source but rather compiled from various sources (with sometimes contradicting figures) through meticulous triangulations, such numerical descrip-tion of the reality should be treated as a delicate matter. Frequently there is no explicit defini-tion about the parameter and the measurement method used: for example, the numbers of dairy cattle would include non-producing young stock, so that the so-called “average” produc-tion is underestimated¹⁴. Moreover, the amount of milk given to young stock is not considered in the “milk production” or reported to the cooperative staff during milk collection and thus causing the distortion of the data for animal productivity.

14 Cf. Moran (2007, p. 6)