Dairy Farming In Indonesia: How to Start, Industry, Market, and Breeds

Dairy farming is a branch of agriculture involving the rearing, rearing, and production of dairy animals and the use of various dairy products derived from it. Several Indonesian ministries have plans to help increase milk production. All of these projects recognize the need to enhance dairy genetics through imports of live dairy heifers.

Dairy Farming In Indonesia
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The government is also encouraging the country’s milk processing industry to increase its commitment to invest, especially in the development of integrated dairy cattle farms, to reduce its dependence on imported milk raw materials. Dairy farming in Indonesia is dominated by small dairy farms. People’s dairy farming is a dairy business owned by farmers on a small scale. Thus, information about the characteristics of dairy farmers and dairy farms is very relevant for dairy development in Indonesia, especially in West Java.

West Java ranks third in milk production after East Java and Central Java. About 97% of all dairy cows are located on the island of Java in the provinces of East Java, Central Java, and West Java. These three provinces produce 97% of Indonesia’s milk and East Java is the largest milk producer, accounting for 57% of Indonesia’s milk production. Let’s check out more information on dairy farming in Indonesia.

Improving dairy productivity in Indonesia

Dairy consumption in Indonesia is on the rise. Rising per capita income, urbanization, the emerging middle class, and the westernization of food have significantly increased the demand for milk and milk products. However, dairy production in Indonesia is regionally stable. The island of Java has the largest number of dairy farmers in Indonesia. The Government of Indonesia (GoI) is investing significant resources in the country’s dairy sector to increase domestic production. 

The main challenges in the Indonesian dairy supply chains are the highly variable quantity and quality of food resources, low animal productivity, poor mastitis management, dairy farming dominated by small farmers (approximately 2-3 cows), and lack of understanding across the value chain of market dynamics, including price signals. 

The Government of Indonesia has made the development of the dairy industry a top priority, in line with the research priorities of the Australian Center for International Agricultural Research (ACIAR), strengthening the livestock management and marketing system in Indonesia, as well as access to smallholders. And it’s about improving competition in rapidly transforming markets.

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Dairy Farming
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Sustainable intensification of dairy production Indonesia 

Dairy production in Indonesia is challenged due to its low productivity and high impact on the environment. This is due to poor fertilizer management, poor nutrition, poor reproduction, and animal health problems. In West Java, where a large part of Indonesia’s dairy farms is concentrated, dairy production is on small-scale dairy farms (approximately 2-4 cows), with low farm production. Because most farms have little or no land for forage production, year-round forage supply is a challenge, and waste management is poor.

Fertilizer is polluting water and streams badly while only a small portion is used for crop production. Sustainable Intensification of Dairy Production Indonesia (SIDPI) project is a process-based research project aimed at increasing the productivity of small dairy farms in West Java while improving food safety and reducing greenhouse gas emissions. The project will do this by developing and implementing better strategies for fertilizer, food, and animal health and management.

Objectives of dairy farming in Indonesia

The Sustainable Intensification of Dairy Production in Indonesia (SIDPI) project aims to develop new knowledge and solutions tailored to the needs of small dairy farmers in West Java;

  • Sustainable increase in agricultural production
  • Reducing greenhouse gas emissions
  • Improve resource utilization efficiency
  • Improving farmers’ incomes and livelihoods in the long term

Indonesia’s dairy industry

Indonesia’s dairy industry needs to work harder to meet local demand. Consumption of milk and dairy products is growing rapidly in Indonesia, making it an attractive market for local producers and foreign exporters. Although inadequate road and rail links and a lack of cold storage facilities still pose logistical challenges to transporting wrecked goods by land, the expansion of modern retail across the island by providing access to more consumers access to fresh dairy products.

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Dairy Cows
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The growing appetite of the Indonesian people for milk and its derivatives is a good sign for milk consumption to move forward. Western food in the country’s large market potential and fast-growing Southeast Asian region could make Indonesia an attractive center for dairy manufacturing, provided that enough raw materials can be sourced from local dairy farms. 

Almost all of Indonesia’s milk comes from the island of Java, which is the country’s main island in terms of population and economic activity. The number of dairy cows and the dairy industry in East Java has grown significantly in recent years. Domestic milk production is dominated by smallholders who usually do not own more than five cows and are members of the Dairy Cooperative.

The latter collect milk and sell it to processing companies. In Indonesia, most milk is produced by small-scale farmers. The milk of small farmers goes to the Dairy Cooperative. This is about 90% of the milk collected by cooperatives in Java. The Dairy Cooperative plays a role in marketing and facilitating smallholder farmers.

Dairy breeds in Indonesia

Buffalo (river and swamp), Hissar cattle, and Etawah grade (PE) goats are three possible breeds of livestock that can be developed as dairy animals in Indonesia to increase national milk production. Riverine buffalo (Murrah) are found only in the province of North Sumatera. Hissar cattle are found in relatively small numbers in Sumbawa, West Nusa Tenggara, and North Sumatera provinces.

Swamp buffaloes and Etawah grade goats are mainly found in Java. Under the traditional management system in Indonesia, the potential milk production of buffaloes is 0.5-2.25 liters per day, while Hissar dan PE goats produced 2-5 liters per day and 0.5-2 liters per day, respectively. These animals adapt well to local environmental conditions, so they become a biological strength. 

The dairy cattle in Indonesia are known as Holstein Friesian cows, the highest milk-producing cow in the world. The cow has good adaptation from subtropical-to-tropical climates and from highlands to lowlands. FH cows grow quite well in areas with an altitude of more than 700 m above sea level, as well as in low-land areas with an altitude of 0-300 m above sea level, such as in Sumedang (West Java), Pasuruan (East Java), and Kampar (Riau).

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Cow Housing
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The FH cow produces between 3000-4000 liters per lactation or an average of 10.7 liters/head/day. With a population of approximately 240 million people in Indonesia, the dairy industry has great potential to develop. With the economic and per capita income of the Indonesian people increasing, milk consumption increases. Domestic milk production has reached only 30% of the national demand. The production center of the dairy population has been concentrated in Java (99%), although it has limited land availability and food resources.

Therefore, there is a need to support the development of the dairy industry outside of Java because of the available resources such as the market potential for fresh milk, climate adaptation, and local food resources. The central and provincial governments will have to step up the role of facilitation and regulation, including easy access to financial resources, to assume responsibility for commercial loans for farming businesses. 

Most cows in Indonesia are owned by individual farmers. In East Java, for example, 94% of cows are owned by individual farmers. However, corporate dairy farmers are playing a major role in East Java, where total milk production from corporation-owned cows is growing faster than that of individual farmers. In the last five years, milk production from cows owned by individual farmers and corporations has increased by an average of 19% and 42% respectively. 

Cattle breeds in Indonesia 

  • Aceh – Aceh is a breed of cattle indigenous in the province of Aceh, North Sumatra, Indonesia. 
  • Madura – Madura cattle are a stable, ethnic hybrid of Zebu and Banteng. They originated on the island of Madura. 

Issues affected in dairy farm development in Indonesia

  • Lack of forage and high cost of fodder and concentrates
  • Small farm size for dairy cattle farming
  • Low dairy cow productivity that is an average of about 10 liters of milk per cow per day
  • Low milk quality with 12 percent of milk production meeting the minimum standard
  • Poor farm and herd management practices
  • Lack of technology for milk processing
  • Limited access to high-quality genetics
  • Limited access to bank loans and finance 
  • Limited farmer education

The research pointed to an opportunity to provide consulting services to the IFC to help develop Indonesia’s dairy sector, focusing on dairy farmers. Advisory services can be provided through a major dairy industry development project. Overall, the project aims to improve the efficiency of Indonesia’s dairy value chain and to adopt better production technology and post-farm gateway methods. This approach will include the following five key project activities. 

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  1. Improving the performance of dairy cows through fodder and herd management strategies and access to improved genetics 
  2. Improving youth stock management 
  3. Improving the performance of post farm gate dairy value chain 
  4. Indonesia business performance benchmarking on dairy farms 
  5. Capacity building in Indonesia’s dairy industry

Major dairy animal diseases

  • Anthrax – bacterial disease, vaccinated if confirmed
  • Brucellosis – infection of the reproductive organs, prevention by vaccination 
  • Mastitis (dairy) – Treatment with antibiotics; 
  • Internal parasites – worms, drug treatment, and pasture management 
  • External parasites – on skin and feed, with medicines and insecticides 

Dairy farm practices in Indonesia

The goal of good dairy farming practice is to produce quality, safe milk from healthy animals in generally acceptable conditions. 

Animal health

Poor animal health is one of the main obstacles to increasing milk production on a small scale, as it results in more disease and less productivity. Overcoming this constraint can significantly improve productivity and result in real and direct benefits to producers. Preventing the disease from entering the farm; establishing effective herd health management; and use of all chemicals and veterinary medicines as directed. 

Milking hygiene

Most small-scale dairy farmers milk their animals by hand, often in the presence of a calf to accelerate milk production. Where enough labor is available, hand-feeding allows milk to be extracted with minimal investment, equipment maintenance, and cleanliness. Good dairy farming practices for milk hygiene are ensuring that lactation practices do not harm animals or contaminate milk. That milking is done under hygienic conditions. 

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Dairy Cow Shelter
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Nutrition (feed and water)

The health and productivity of a dairy animal, as well as the quality and safety of its milk, depend largely on the provision of proper food and water. Good dairy farming practices for nutrition are securing food and water supply from sustainable sources. Ensuring adequate quantity and quality feed and water supply; controlling feed storage conditions; and ensuring tracking of feedstuffs brought to the farm. 

The future of the Indonesian dairy industry

As it stands, the only way for the Indonesian dairy industry to move forward is to expand its national dairy herd. This clears the way for Australia’s livestock exporters, such as premium livestock exporters, to fill the gap. Exporting livestock to Indonesia is a complex process that requires stringent approvals and permits. Therefore, interested parties should work with an export specialist if they want to take advantage of the shortage of Indonesian cattle.


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