On the occasion of the XXIV Agrifood conference in Bandung that happened in December, I had the opportunity to explore the countryside, notably a dairy farm, during a group tour. Since I study agri-environmental governance in the dairy farming sector in New Zealand, I was naturally interested in the topic. I want here to share my visit and thoughts on this matter, as well as the broader context of Indonesian dairy farming.
Historically, dairy farming in Indonesia is very recent. While there are traditional dairy products consumed in various parts of the country (e.g. ghee or minyak samin, butter produced in the region of Aceh; or dali ni horbo, a cheese-like product from local buffaloes’ milk, see Surono 2015) a more systematic dairy production initiated in the 1970s by a government initiative that included massive imports of Holstein cows from Australia (ASG 2009). Since then, dairy farming developed on the heights of Java, with cooler temperature fit for dairying. After the 1997 Asian crisis, the support for production offered by the government was abolished following the IMF adjustment programme and dairy farmers suffered from a lower milk price. Since then, the sector experienced stagnation (ASG 2009).
The farm I visited was located in the district of Pangalengan, 50km south of Bandung, in West Java, the second most important dairy producing region in the country after East Java. The island of Java is the most populated region and economic centre of Indonesia, where 98% of dairy farms are situated. Here is an overview of the country’s sector’s profile in 2010:
Source: IFC 2011
The vast majority of dairy farms in Indonesia are small. The farm I visited has five cows, which is slightly above average, and they were being milked twice a day. Indonesian dairy farms are managed by smallholders above all; the farmers possess 3 cows on average and the milk production reaches 10-12 litres per cow per day, or even less.
Interestingly, the Indonesian dairy farming context shows much contrasted pathways. While the majority of farmers are smallholders, they compete with companies owning large farms with several thousands of cows. For example, PT Ultra Jaya based in Bandung owns a 60 hectares complex with no less than 3000 cows. Another example is PT Greenfields which is on its way to own 9000 cows; it operates in Malang, East Java. The juxtaposition of such capital-intensive large scale producers (often resulting from foreign investments) and smallholder farmers is thought-provoking. There is an asymmetrical competition between two ways of producing milk, for example, being able to cope with rules such as biosecurity requirements.
Let’s go back to the farm where the farmer explained to us the main aspects of her daily activity. A standard day would start just after the Morning Prayer around 4.30am with the feeding of the cows. It would be then followed by the milking, the supply for the local cooperative and the cleaning. One particular aspect of the farm and many Javanese dairy farms is the feeding process: as our host explained, feed is taken daily from a nearby land owned by the government. Farms within a certain area share a piece of land, where grass is gathered from. In the farm I visited, the husband would go everyday on the field to collect the needed amount of feed – and manage their piece of land, while the wife would stay on the milking platform to take care of the cows. They would use manure as a fertilizer and give away the surplus for free.
Also, the farmers were also producing coffee, explaining that they could not only rely on milk production.
Except from the pet monkey that tried to jump on us on our arrival (on a friendly basis, though), the first farm feature we could see (and smell) was the large fumes that were coming out from a burning pile of straw, near the cow shed. The reason, which was also the first issue pointed by the farmer, is the numerous flies preventing the animals from rest and causing injuries.
Speaking about her propospect, our host was quite confident about the future of her farm. Ideally, she wants to expand it and hire employees.
We continued our dairy tour with a privileged visit of a processing cooperative named KPBS (as for South Bandung farm cooperative) which is collecting milk from farmers’ groups in the region. Their processing plant produces mainly pasteurized milk, yoghurt and mozzarella. KPBS is a major KUD (Koperasi Unit Desa, a village cooperative) among 23 in West Java. Besides their local market, they also sell the milk to bigger international processing companies (IFC 2011).
Indonesian dairy farms produce approximatively 20% of the total milk consumed in the country (850,000 tons). The other 80% are imported from Australia, the European Union, the United States and, of course, New Zealand, the world’s first dairy exporter; their market share is respectively 13% (AUS), 32% (EU), 21% (USA) and 23% (NZ) (IFC 2011). The sector faces challenges concerning its low production while there is increasing demand for dairy products (milk, cheese, yoghurts, cream) stemming from an equally increasing middle class. Roughly speaking, this demand can be linked to a Westernisation of food consumption that characterizes in a consumer request for wheat-based and dairy products such as cheese (notably mozzarella), yoghurts, etc. The causes of a demand shift are an interesting topic, being aware of dairy companies’ influence on school programs (FAO 2004).
In conclusion, this visit itself of the dairy farm and the cooperative was a formidable experience. It underlined the difficulties and challenges faced by smallholder dairy farmers in Indonesia, notably the feed supply issue and the competition against powerful actors. Today, the government aims to lift the consumption of Indonesian milk to 41% by 2021. Wishful thinking or feasible objective? It will be anyway interesting to follow the inclusion or not of smallholders in a context of rising dairy consumption. Also, an increased reliance on local dairy products will also have an impact on international markets for the leaders of dairy exports such as New Zealand.
Articles and reports:
- Animal Science Group. 2009. Dairy Sector Development Indonesia – Options for cooperation with The Netherlands.
- FAO. 2004. Paper presented at School Milk Workshop, FAO Intergovernmental Group on Meat and Dairy Products – Winnipeg, Canada, 17-19 June 2004.
- International Finance Corporation. 2011. Dairy Industry Development in Indonesia – Final report May 2011.
- Surono, Ingrid S. 2015. Traditional Indonesian dairy foods. Asia Pac J Clin Nutr, vol. 24(1), p.26-30.