PROGRAMS TO INCREASE LIVESTOCK NUMBERS

Live cattle

Indonesia has had programs to import live cattle for at least the last two decades. For much of the period 1980 to 1990, breeding cattle were imported as draft cattle and as breeding cattle for the transmigration programme.[15] More than 118000 head were imported from Australia (Linnebar and Maher 1994). More recently, live cattle imports were predominately for feedlots although some breeder cattle were still being imported. Since the financial crisis hit Indonesia, live cattle imports have all but stopped. It is generally thought that once stability returns to the Indonesia economy, live cattle imports will resume.

The idea of the breeder cattle program is that the farmer will be able to increase cattle numbers through breeding from a female. Most of the animals imported for the breeder program have come from the north of Australia and have been Bos Indicus type. A difficulty with this is that cattle are dispersed to small farmers, many of whom have been primarily engaged in crop production. This means that they may regard the animal as an intermediate input into crop production. The cattle from northern Australia are unlikely to be particularly suited to this because they have not had much handling. Farmers used to feeding a draft animal during the period when it is used for draft purposes may not understand the need to provide supplementary feed to maintain the animal’s condition at other times.

Up until 1989, imports of feeder cattle into Indonesia were strictly controlled by the Ministry of Agriculture through the Directorate General of Livestock Services. In 1989, policies were revised so that importing became easier. This was done to meet a production shortfall and to reduce pressure on the national herd (Linnebar and Maher 1994). Live feeder cattle imported into Indonesia and weighing less than 350 kg are now not subject to import tariffs. Slaughter cattle on the other hand face a tariff of 15% while beef has a tariff of 20% (Box 1). Importers of feeder cattle are required to obtain import permits. These were previously provided on a yearly basis but they are now released on a ship by ship basis to stop out of specification, heavy cattle from entering Indonesia and to maintain a healthy trade. Permits are based on performance criteria such as feedlot space, cattle specifications and weight (Schick 1997).

Box 1 Specification for live cattle imports

Tariffs slaughter cattle 15% Import permits required for all cattle types Specifications feeder cattle - preferred minimum 50% Bos Indicus content primarily steers, but also heifers (entire or speyed) and entire males average shipment weight < 350 kg no older than 36 months

The feeder cattle program involves placing imported cattle on feedlots, which could be as small as three head or large capital intensive operations. The production capacity of this industry has grown from 60200 animals per year in 1992 to 275000 animals in 1995 (Table 44). There were 19 companies involved in the feedlot industry in 1995, and as Table 45 shows, most of the industry’s capacity was in the provinces of Lampung (34%) and West Java (33%).

Table 44. Live cattle imports, 1990 to 1995

Year	Feeders	Feedlot capacity of Indonesia	Breeders
1990	3599	na	5611
1991	12293	na	298
1992	24842	60200	25
1993	58534	96400	0
1994	120574	124350	2204
1995	na	275000	na

Source: Association of Indonesian Feedlot and Beef Producers (nd) for 1990 to 1994 data

Table 45. Production capacity of feedlots operated by members of the Indonesian Beef Producers and Feedlot Association, 1995

Province	Company	Nucleus pen capacity	Smallholder capacity	Beef production capacity	Production capacity
		(head)	(head)	(t/yr)	(head/yr)
Lampung	Great Giant Livestock Co.	6000	4600	900	20000
	Tipperary Indonesia	14000	2100	8960	56000
	Hayuni Mas Lestari	1500	200		6000
	Suryamatra Ardhatama	1000	500	3600	9000
West Java	Kariyana Gita Ultama	4000	1500	2000	24000
	Lintas Nusa	1700	120	1920	9600
	Kresna Nandi Arsetama	1000	1000	5000	20000
	Agro Nusa Perdana	2000	800		9600
	Dharma Jaya	2400	200	33394	4800
	Karma Madayuna	1300			9000
	Lembu Jantan Perkasa	3100		500	8700
	Lembu Satwa Prima	2000		1800	800
Central Java	Andini Pati Mandiri	1300	150		6000
	Murih Mardi Lestari	1200	400		6000
	Pakar Nusabangun Indonesia	2000	400		8000
Yogyakarta	Binakarunia Alamnusantara	3000			12000
East Java	INDUK KUD	700	600	1700	13200
	Sekar Bumi	3000	600	2000	12000
	Suryadi Feedlot	1200	350
East Kalimantan	Celebes Agro Perdana	1200		864	4400
South Kalimantan	Jorong Agro Lestari	3500	150
Riau	Tri Bakti Sarimas	6000	4000		20000
Total		63100	17670	68638	259100

Source: Association of Indonesian Feedlot and Beef Producers (nd)

Credit programs

Kristanto (1982) reviews a number of programs that have been used in Indonesia. Two of these - introduced in the 1970s - will be outlined here.

• The Credit Program to assist smallholders with the fattening of cattle (Panca Usaha Ternak Pot.g) was introduced in 1977. It gave the farmer a credit package for the purchase of one cow, feed, labour, health care and a small yard. Repayment had to be made within six months, at an interest rate of 1.25% per month. It was assumed that this period was sufficient to fatten the animal, sell it and make a profit. It was also assumed that after three successful loans, the farmer would have made enough profit to purchase an animal. The program was canceled after two years because of lack of smallholder involvement. The program failed in the opinion of Kristanto because it did not recognize that farmers keep cattle as a store of wealth and as a source of draft power. Also, farmers were uncertain about their ability to repay the loan because of the small market for fattened cattle.
• The Credit Program for Breeding Cattle (Panca Usaha Ternak Bibit) was also introduced in 1977. It gave the farmer credit to purchase five animals, erect a yard, and buy feed, medicines and labour. At the end of three years, the farmer must return three cattle and another two at the end of the fifth year. The program has been successful since all offers of credit have been taken up. It allows the farmers flexibility in their decision making.