Economic Value of Dairy Cattle Business in the Lowlands Outside Java

Abstract

The distribution of dairy cattle population in Indonesia is still concentrated in Java, almost 98.62%. However, milk consumers are evenly in Java and outside Java. In addition, outside of Java has high availability of land as well as the source of the feed. Therefore, the government tries to develop a dairy cattle business outside Java. Dairy cattle development activities were carried out in the highland and also in lowland areas. Whereas, it is well known that the productivity of dairy cattle is optimal in the highland areas. The purpose of this research was to assess the feasibility of a dairy business in the lowland areas outside Java in terms of its productivity and economic analysis. Research was done in the farmer group of "Talago Sakato" Nagari Kayu, Padang Pariaman, West Sumatra Province. Data collection was done by 2015 in the form of location characteristics as secondary data and milk production as well as the value of the input-output dairy businesses as primary data. Descriptive data was used to analyse the location characteristic and non-parametric t test was used to compare milk production in different area. The result shows the average milk production dairy cattle in lowland area of Padang Pariaman 10 litres/head/day was not significantly ifferent from the average milk production in Java (P 0.173). However, it was significantly lower compared to milk production in the highland areas in Java. It has a value of B/C 0.30 regardless of labor cost. If labor variable was taken into account, it required the addition of milk productivity at least 1056 liters/head/lactation period in order to be accomplished BEP. These values indicate that a dairy business in the lowland areas outside Java are rated quite feasible to be developed as seen from milk production values which do not vary markedly with milk production in the lowland areas in Java, but needs to be improved, among others, through the introduction of applied technology.