SMALL SCALE DAIRYING IN THREE FARMING SYSTEMS IN EAST JAVA II. ECONOMIC ANALYSIS OF DAIRYING

The indonesian government wishes to increase farmers' by encouraging dairy farming. Since 1980, imported dairy cattle have been distributed on credit. Survey data from 1990 were used to study the average milk sales per cow and the economic parameters of dairy production of a sample of farm households on seven milk cooperatives East Java Province, in three agro-ecological areas, oriented to sugar cane, cassava and horticulture, respectively. in general, dairy production proved not to be economically attractive as returns to labour were similar to the rates for agricultural labour. The returns showed marked differences among the three areas studied. They were highest in the horticultural area. Analysis of the dairy units according to size showed a tendency for inputs as well as revenue per cow to decline as herd size increased. It is argued that a further increase in milk production in East Java can be stimulated by raising the farm gate price of milk, or by expanding dairy production into suitable, new areas.