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The Status of Beef Cattle Industry in Nusa Tenggara Timur, Indonesia
Field Study Abstract:
The main objective of the study was to determine the status of the beef cattle industry, its performance and its prospects in Nusa Tenggara Timur. The specific objectives were to (1) determine and analyze the market for beef cattle produced by Nusa Tenggara Timur, (2) assess the business performance of smallholder beef cattle production in Nusa Tenggara Timur, and (3) recommend ways to improve the beef cattle agribusiness in Nusa Tenggara Timur.
There were several factors influencing the beef cattle in Nusa Tenggara Timur. There were two major markets for the industry, namely: home demand or local consumption and inter-island trade, mainly with Jakarta and Surabaya. The home consumption of cattle increased because of the awareness of the nutritional benefit of beef and its potential to increase income.
Local and inter-island market of cattle was growing at a rate of about 10 percent per annum. On the other hand, cattle population was increasing at 2.5 percent per annum. Exporting beef was not permitted but importation of beef was allowed because of the quality. The demand for beef was high and can be partially met by increased import. Eventually, laws were passed for import control. With the local demand and inter-island demand, there was a secure market for cattle. Thus, cattle production was a very lucrative source of livelihood. In Nusa Tenggara Timur, the 1996 statistics indicated that 22,582 slaughtered cattle were marketed locally. In 1995, statistics showed that 58,735 live cattle were sold mostly to Java.
There were 79,120 existing smallholder firms in the provincial cattle industry, hence the current rivalry among them. To meet the demand for beef cattle, smallholder industries usually had a very different time increasing the volume of their production because of limitation in capacity and capital. However, the new entrants (949 firms) had tried to capture the beef cattle market in the province.
There were 31 firms, which were ready to buy cattle from the smallholder firms in the local and inter-island trading. The key players among them were the firms which can afford to handle a big amount of cattle export such as PT Kemah Lestari, PT Bumitirta, and PT Panca Sarana. The government police played an important role in regulating trade from Nusa Tenggara Timur.
Threats from substitute industries in the province came from the swine industry, which provided 36 percent of the total meat supply. On the other hand, buffalo provided 15 percent; and chicken, 5 percent of the total meat supply.
Beef cattle also played an important role in meat production nationwide. Beef cattle comprised 46 percent of the total meat produced nationwide while poultry came in a weak second with 17 percent. Buffalo comprised 14.5 percent; pork, 7.3 percent; goat, 6.3 percent; sheep, 3.8 percent; and horse, 2.5 percent.
Cattle feeds came from cut grass and legumes planted in the fields. The livestock service office of Nusa Tenggara Timur provided veterinary medicine to the calves distributed by the program. Other aspects of beef production to be considered were the promotion of technology transfer like artificial insemination, cross-breeding, and distribution of beef cattle among the smallholder farmers.
Cattle were sold on a live weight basis normally in the range of 300 to 400 kg and these were normally 3-5 years old. Most of them were transported by trucks carrying 8-10 cattle or mature bulls. The price of live cattle in Nusa Tenggara Timur Province was IDR3,500 per kg (liveweight) while national price was IDR3,960 per kg (liveweight).
The results of the financial analysis of Smallholder Beef Cattle Fattening in Nusa Tenggara Timur showed two situations. In the optimistic situation, NPV was positive with IDR5.6M; IRR was 76 percent; and payback period was two years and 20 days. On the other hand, the pessimistic situation showed that NPV was negative with IDR18,631; IRR was 28 percent; and payback period was four years, seven months and 17 days.
The beef cattle enterprises in Nusa Tenggara Timur will continue to grow. They can make an industrial revolutionary capture of a big chunk in the market share simply because their products are efficient (i.e., low priced but good quality compared with the national price). The status of the beef cattle industry was favorable. Competition among the beef cattle industries in Nusa Tenggara Timur was not a problem.
A program on Developing Beef Cattle Enterprises of smallholder farmers as an important farm model of beef cattle production should be developed to increase the production of beef cattle enterprises in Nusa Tenggara Timur. There is a need to organize, assist, and empower the existing as well as the new beef cattle enterprises so they can produce more beef cattle in Nusa Tenggara Timur.
