IndoDairy

Improving milk supply, competitiveness and livelihoods in smallholder dairy chains in Indonesia.

Demand for milk in Indonesia is rapidly growing, with an 5% increase each year. However, domestic production accounts for less than 20% of milk consumed in Indonesia and the sector faces a multitude of constraints to improve quantity and quality of milk produced locally.

A whole-of-chain approach is needed to improve capacity and performance in the Indonesian dairy sector, which includes dairy farmers, traders, village level dairy cooperatives (‘koperasi unit desa’ – KUDs), processors, retailers and consumers. Additionally, it is important to consider external factors affecting the dairy sector, (e.g. incentive schemes, programs, policies, global markets).

The Government of Indonesia (GoI) is investing substantial resources into the nation’s dairy sector, aiming to increase domestic production. The high priority the Indonesian government has placed on the dairy industry aligns closely with the research priorities of the Australian Centre for International Agricultural Research (ACIAR), including strengthening livestock management and marketing systems in Indonesia as well as improving smallholder access and competitiveness in rapidly transforming markets.

In June 2016, ACIAR and GoI approved the research project titled ‘AGB/2012/099: Improving milk supply, competitiveness and livelihoods in smallholder dairy chains in Indonesia’, also known as IndoDairy.

Objectives

Identify and recommend strategies and policies to support development of sustainable, profitable and smallholder-inclusive dairy supply chains in North Sumatra and West Java
Identify barriers to adoption of profitable management practices and farm business models and develop strategies to inform development of extension programs in West Java and North Sumatra
Develop, pilot and evaluate best-bet dissemination to improve adoption of innovative dairy management practices by smallholder farmers in West Java.

Collaborators

Funding

The Australian Centre for International Agricultural Research (ACIAR)

Commissioned organisation

The Centre for Global Food and Resources, University of Adelaide

Collaborator institutions

Australasian Dairy Consultants / Subtropical Dairy
The Indonesian Centre for Animal Research and Development (ICARD)
The Indonesian Centre for Agricultural Socio-Economic Policy Studies (ICASEPS)
Bogor Agricultural University (IPB)

Project activities

IndoDairy Smallholder Household Survey (ISHS)
During August and September 2017, a baseline household survey of 600 dairy farming households was conducted in West Java, Indonesia.

This survey was called the IndoDairy Smallholder Household Survey (ISHS) and is the primary focus of Objective 2 of the IndoDairy project: ‘Identify barriers to adoption of profitable management practices and develop strategies to inform development of extension programs in West Java and North Sumatra’.

This activity was led by the University of Adelaide, and the Indonesian Center for Agricultural Socio Economic Policy Studies (ICASEPS). A team of experienced enumerators carried out the survey using the digital data collection application called ‘CommCare’.

Five dairy co-operatives (KUD) in West Java were identified to collaborate with and a purposive proportional random sampling method was used to select 600 dairy households

After extensive interviews with key stakeholders in the dairy sector, including national and local government, universities, milk processing companies, and dairy co-operatives, the ISHS was designed to collect a wide range of useful information from dairy farming households. The information allows the research team (and interested stakeholders) to understand the current socio-demographic and farm characteristics of dairy farming households in West Java as well as issues affecting and limiting smallholder profitability and opportunities to improve smallholder livelihoods.

Survey themes

The survey covered more than 20 themes, including the following:

Household characteristics of dairy farmers

Information on livestock and land assets

Individual animal information

Management of dairy farm animals

Access to credit

Information on inputs and labour

Costs and expenses of managing dairy farm operations

Information on household income

Information on milk production

Sales and marketing information

Information on adoption of dairy farming technologies

Group membership of dairy farmers

Farmers’ attitudes and perceptions

Information on role of women by using the ‘Women’s Empowerment in Agriculture Index’ (WEAI)

Information on household food security by using the ‘Household Food Insecurity Access Scale’ (HFIAS)
Value chains
The IndoDairy project aims to provide information on programs, policies and innovative institutions that can help smallholder farmers, without sacrificing the efficiency and competitiveness of the dairy supply chains. Therefore, a whole-of-chain approach is required. This includes investigating market and supply chain investment opportunities that are most likely to lead to the development of new and sustainable smallholder dairy supply chains in North Sumatra and improve the functioning of dairy supply chains in West Java.

Value chain analysis

The project examined dairy supply chains in West Java and North Sumatra, which included farmers, cooperatives, processors and retailers. Semi-structured interview were conducted to gather both qualitative and quantitative data. This information is being used both to assess issues and opportunities in the provinces.

A set of case studies outlining the success factors in developing existing partnerships between processors and smallholder dairy producers or cooperatives will also be conducted (e.g. for example Cimory in West Java).

Inclusive business models

Inclusive business principles in the agricultural sector provide smallholder farmers access to information, improved inputs and technology, land, better markets, and shortens the longer chains of intermediaries. Using these principles, the IndoDairy project evaluated a series of examples dairy chains in West Java and East Java.

This analysis identified successful relationships between these players, and the reasons for success and how these can be built upon. These key drivers are framing the analysis of key opportunities and barriers for expansion and scaling of the models.

Trialing ‘Whole-of-Chain’ approaches to impact milk quality

Using the findings from the value chain analysis and inclusive business models principles, the IndoDairy project is piloting a ‘Whole-of-Chain’ approach to improve the milk supply from smallholder farmers in West Java.

With milk quality, in particular microbial contamination, being a significant issue facing the Indonesian dairy sector the project will focus on working with stakeholders throughout the chain to improve total plate counts (TPC).

The project team will first identify the critical control points along the chain where microbial levels increased most to identify the relative contributors to TPC. This will be followed by an incentive-based study, which will measure the change in farmer behaviour and TPC levels when individual farmers are paid on their milk’s quality.
Policy
Reviewing policies and engagement with policy makers and industry stakeholders is important aspects of this project.

Policy review

This activity provides a better understanding of regulatory framework affecting dairy supply chains at different levels, the degree of competition in the dairy industry, contractual relationships between agents along the value chains and areas where inefficiencies occur. The improved understanding will contribute to more informed policies and programs that will better engage stakeholders.

Policy dialogue
The IndoDairy project is actively engaging with policy makers and industry to work towards a more effective and inclusive dairy sector in Indonesia. Multiple policy forums and roundtable discussions have been hosted by the project.

Key stakeholders include representatives from the Coordinating Ministry for Economic Affairs, Ministry for Agriculture, Directorate General of Livestock and Animal Health Services, Ministry for Industry, Ministry for Cooperatives and Small to Medium Enterprises, Indonesian Dairy Farmers Association. Additionally, the project has engaged with industry forums, such as the Indo Livestock Expo to present the findings from the IndoDairy project.

Find out more about each event here:

Policy working group

Heifer importation workshop

Policy roundtable discussion

Indo livestock expo
Dairy extension

The extension activities of the IndoDairy project aim to improve the adoption of innovative dairy management practices of smallholder farmers in West Java.

These practices include areas of feeding management and nutrition, animal husbandry and reproduction, milk quality and business management. A number of methods, including development of resources, training workshops, farmer discussion groups and Focus Farms, were established to deliver extension across the topic areas in West Java.

Development of technical resources

A number of resources have been developed and made available to farmers and farm advisors to support field level activities and training. Valuable resources include the IndoDairy Farming Factsheets, posters and newsletters.

Newsletter #1 Newsletter #2

Service provider training

Service provider training was organised over a 12 month period to build capacity of advisors and milk cooperative staff in the regions. A group of approximately 20 advisors were trained intensively in the topic areas of feed management and nutrition, animal reproduction and calf rearing, milk quality and business management. An additional training workshop was provided in extension and facilitation techniques to the core group of service providers, enabling them to effectively to delivery the technical content.

This training has helped farm advisors to better deliver support to farmers through extension activities in the five field sites in West Java.

Additionally, an intensive week-long training was also delivered to 20 service providers in North Sumatra addressing the four technical areas.

Discussion groups

Discussion groups were established across the five regions involving a total of 186 farmers with 10 to 15 participating farmers in each group. This also included a women’s discussion group in Cijeruk, Bogor.

Each farmer group had a planning session to choose six technical topics of most interest to discuss during meetings over 12 months supported by the local village level researcher (facilitator) and extension staff. There was a final review session to evaluate and provide feedback for each of the groups.

Hear from some of the farmers participating in the discussion groups in a short video, titled “Voices from the Field”.

Voice from the Field

Focus farmers

Focus Farms were piloted as an extension activity in West Java. A Focus Farm is an example of a real life farmer who has specific goals and aspirations to improve the production and profitability of their farm. Over 12 months the Focus Farmer is supported by a group of advisors and farmers during regular meetings.

The goals of the farmer are prioritised and activities are trialed or discussed throughout the meetings with the support of the facilitator.

Two focus farms were established in Cijeruk, Bogor. Find out more about Pak Ma’mur and Pak Yunus and their journeys.

Pak Ma'mur

Read more

Pak Yunus

Read more
Capacity building
Capacity Building is cross-cutting theme in the IndoDairy project. This includes development skills and capabilities of farmers, dairy cooperatives staff, researchers, students and policy makers.

As part of the dairy extension activities, the IndoDairy project delivered an integrated training program to service providers and farm advisors in the technical areas relating to dairy managements.

Farmers in the extension activities = 186 across 5 cooperatives

5 VLRs and 2 Researchers from IAARD agencies travelled to Australia

CommCare training for key Institutions ICASEPS, ICARD and IPB, streamlining data collection methods.

Ongoing training and mentoring of researchers in survey design and research methods

Research papers and conference presentations, undegraduate and postgraduate students.

The recruitment of 5 Village Level Researchers (VLRs); recent graduates from Animal Science, Padjajaran University, Bandung

End of project review (EOPR)

Despite challenges due to COVID-19 global pandemic since March 2020, the project team was able to complete the remaining activities. End of Project Review (EOPR) was conducted in March-April 2022 to reflect on the key achievements and lessons learnt from the project.

The EOPR was conducted online via Zoom. The power point slides and pre-recorded presentations prepared by the project team members are available below.

1	Challenges along Indonesia’s dairy value chain	Slide presentation	Pre-recorded presentation
2	Indonesia’s dairy policy environment update: Dairy inputs, investment and access to credit for key players in the dairy industry	Slide presentation	Pre-recorded presentation
3	Indonesia’s dairy policy environment update: Milk price and importation regulation of dairy products and cattle	Slide presentation	Pre-recorded presentation
4	The dynamic of ISHS samples: A comparison of 2017 baseline survey vs 2021 end-line survey	Slide presentation	Pre-recorded presentation
5	Understanding Indonesia’s smallholder dairy farmers: Facts from the household surveys	Slide presentation	Pre-recorded presentation
6	Smallholder farmers’ multilevel challenges to adopt improved dairy technologies and practices	Slide presentation	Pre-recorded presentation
7	Hazard analysis and critical control points (HACCP) study - on-farm and at the dairy cooperative	Slide presentation	Pre-recorded presentation
8	Results and lessons from the HACCP and price incentive study	Slide presentation	Pre-recorded presentation
9	Improved dairy feed technologies to increase smallholder farmers milk production	Slide presentation	Pre-recorded presentation
10	Participatory extension approaches: Increased adoption of technologies	Slide presentation	Pre-recorded presentation
11	Changes in technology adoption after project intervention	Slide presentation	Pre-recorded presentation
12	Issues, trends, and opportunities in tropical dairy farming	Slide presentation	Pre-recorded presentation
13	Voices from the field, passionate about supporting dairy farmers	Slide presentation	Pre-recorded presentation
14	Book launching - The voice of youth: The future of dairy industry in Indonesia		Pre-recorded presentation
15	Reflection from students involved in IndoDairy project		Pre-recorded presentation

Resources

Policy review

This report discusses several regulations issued by the Government of Indonesia (GoI) related to (1) Dairy Inputs, (2) Price of Domestic and Imported Dairy Products, (3) Investments in the Domestic Industry, (4) Access to Credit, (5) Importation Regulation of Live Dairy Cattle, and (6) Importation of Dairy Products.

Last updated – 5 April 2022.

Policy review of dairy industry in Indonesia
Focus farm handbook

The IndoDairy piloted innovative extension approaches in West Java. One of the approaches trialled is called a ‘Focus Farm’.

This handbook outlines the stages of establishing a Focus Farm based on the approach used in the IndoDairy project in Tajurhalang Village, Cijeruk District, Bogor Regency, West Java in 2019. The handbook is aimed at supporting extension staff and service providers to establish a Focus Farm in any agricultural industry.

Last updated - 17 December 2020.

How to establish a focus farm (English) How to establish a focus farm (Indonesian)

IndoDairy Smallholder Household Survey (ISHS) 'Farm-to-Fact' series

To better understand the state of dairy farming in West Java, the IndoDairy project surveyed 600 dairy households in West Java between August and September 2017, called the IndoDairy Smallholder Household Survey (ISHS).

Information collected and presented in the ISHS Factsheet series provides a broad overview of many aspects of dairy smallholders in West Java, Indonesia. This insight is helping the research team to better understand issues faced by the households, including barriers to adoption of technology and profitable management practices. The information is helping to identify opportunities to improve adoption rates and address issues with dairy production and management.

In these factsheets, comparisons are made, firstly, between districts (Bogor, Cianjur, Bandung and Garut), then secondly, by profit quartiles.

Last updated - 4 May 2020.

Complete set of factsheets

Complete set of factsheets (English) Complete set of factsheets (Indonesian)

Individual factsheets

Background information
1.	Introduction to the “IndoDairy” Project & The IndoDairy Smallholder Household Survey	English	Indonesian
2.	IndoDairy Smallholder Household Survey Sampling Design and Survey Roll-out	English	Indonesian
Overview and comparisons by districts
3.	Overview of Household and Farm Characteristics	English	Indonesian
4.	Overview of Individual Cow Characteristics and Farm Management Practices	English	Indonesian
5.	Dairy Farm Inputs	English	Indonesian
6.	Dairy Farm Labour	English	Indonesian
7.	Milk Productivity, Price and Quality	English	Indonesian
8.	Costs, Revenue and Profit	English	Indonesian
9.	Technology Adoption	English	Indonesian
10.	Farmers’ Attitudes, Perceptions of Change and Future Aspirations	English	Indonesian
11.	Gender Inclusiveness in Decision Making	English	Indonesian
12.	Gender Inclusiveness in Asset Ownership, Access to Credit and Group Membership	English	Indonesian
Comparison based on profitability
13.	Introduction to Profitability Comparison	English	Indonesian
13.1	Household and Farm Characteristics	English	Indonesian
13.2	Individual Cow Characteristics and Farm Management Practice	English	Indonesian
13.3	Dairy Farm Inputs	English	Indonesian
13.4	Dairy Farm Labour	English	Indonesian
13.5	Milk Productivity, Quality and Price	English	Indonesian
13.6	Technology Adoption	English	Indonesian
13.7	Farmers’ Attitudes, Perceptions of Change and Future Aspirations	English	Indonesian
13.8	Gender Inclusiveness	English	Indonesian

Extension and training resources
To support extension activities delivered under the IndoDairy project, this series of technical factsheets and posters were developed to support the project team as well as extension officers and service providers in the following areas:

Feed and nutrition: nutritional requirements of calves, weaned heifers, milking cows; production of high quality forages and silage making.

Calf rearing and animal husbandry: calf health and rearing, breeding adult cows, animal heath, heat stress management, housing dairy stock and body condition scoring

Milk quality and mastitis: mastitis and its prevention, and producing quality milk

Farm business management: how to calculate profit

Last updated - 9 April 2020

'Essential farming facts' technical factsheets

'Essential Farming Facts' technical factsheets - English version

'Essential Farming Facts' technical factsheets - Indonesian version

Poster: milk quality and mastitis

Poster: Milk Quality and Mastitis - English version

Poster: Milk Quality and Mastitis - Indonesian version

Poster: feeding and nutrition

Poster: Feeding and Nutrition - English version

Poster: Feeding and Nutrition - Indonesian version

Poster: calf rearing and animal husbandry

Poster: Calf Rearing and Animal Husbandry - English version

Poster: Calf Rearing and Animal Husbandry - Indonesian version

Poster: farm business and recording

Poster: Farm Business and Recording - English version

Poster: Farm Business and Recording - Indonesian version
Heifer importation guidelines
Increasing the size of the Indonesian dairy herd is fundamental to increasing national milk supply from smallholder dairy farms. Increasing the number of heifers imported annually is one option to achieving this outcome.

This guideline (Version 2) covers several topics relating to:

An overview of Indonesia’s dairy industry and the potential increase in productivity through increasing the size of the national dairy herd;

Government of Indonesia policies relating to dairy development in Indonesia and heifer importation;

Heifer importation processes and logistics;

Critical success factors relating to heifer importation;

Identification of potential sources and models of government, private and farmer investment to support heifer imports;

Key breed attributes that will lead to greater heifer productivity and longevity in small holder systems;

Opportunities to import heifers from other tropical and subtropical dairying regions, such as northern Australia.

Much of the information presented in these guidelines are the outcomes from a workshop held on 28 September 2017 in Bogor, West Java. These guidelines will be reviewed annually with the last edition being published in January 2020.

Last updated - 24 June 2020.

Download (Eng) Download (Ind)
Review of extension approaches

Reviews of existing technical material and successful extension methods both in Indonesia and internationally were undertaken to help inform project design and pilot delivery.

Review of Extension Methodologies (used internationally)

The approach taken in the review was to explore and analyse a range information sources culminating in identification of best-bet extension methodologies for the project. The review commenced with analysis of extension methodologies to establish relevant frameworks, theory and principles, then explore technical focus, audience characteristics, value chain and delivery support, to enable a customised extension approach.

Last updated - 24 July 2018

Download (Eng)

Literature Review of Dairy Extension in Indonesia

A review was undertaken of dairy extension in Indonesia, including by government and university programmes. The primary focus of the review was on dairy extension materials. Other relevant extension material was also considered in the review (e.g. beef production).

Last updated - 11 October 2017

Download (Eng)