Total Economic Value of Smallholder Dairy Farm in Java Island Indonesia

Tri Kusumastuti, Mohammad Abidin and Rini Widiati

Background and Objective: Determining the total economic value in terms of direct value and indirect use value of dairy farming can be used as a consideration for formulating policies and evaluations related to environmental economic assessment and developing business areas based on the potential of local livestock resources. This study aims to estimate the total economic value of dairy cattle in four provinces on Java Island that are centers of dairy cattle production in Indonesia, including West Java, Central Java, East Java and Yogyakarta. Materials and Methods: The study uses primary and secondary data. Primary data sourced from the respondents (439 farmers) and secondary data was sourced from the books Livestock and Animal Health Statistics, Livestock in Numbers and Structure of Ruminant Livestock Costs. The analysis was carried out descriptively and quantitatively and the results of the analysis were written in table form. The total economic value was determined using the direct and indirect use value approach. Results: The direct use value calculation of the value of live dairy is IDR 11.06100 trillion/year. The added value of dairy is IDR 4.26846 trillion/year; the value of milk production is IDR 3,554,793,911.00 year and the value of manure is IDR 18,097,025,760.00/year. The indirect use value of employment opportunities is IDR 3.06849 trillion/year and the multiplier effect in terms of population is IDR 19,318,876,544.00/year. The province with the highest total economic value is East Java. Conclusion: In summary, dairy cattle assets on smallholder farms must be increased, especially milk production and the use of livestock manure.

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