With its vast land area and growing population, Indonesia offers promising opportunities for local investment in the cattle sector. The country's rich natural resources and favorable climate provide favorable conditions for cattle farming. Additionally, the growing middle-class population's increasing demand for beef and dairy products presents a potential market for local investors in the cattle sector. However, successful investments in cattle farming require careful planning, management, and understanding of the local context, including regulations, market dynamics, and cultural practices.
Local Partner Enterprises
A smallholder collective led a successful local investment in cattle farming in South Lampung. They developed cut-and-carry programs. Also known as zero grazing, the cut-and-carry system involves the daily cutting of fresh grass, fed to cows kept in housed conditions instead of allowing them to graze in pastures.
Koperasi Petani Ternak Maju Sejahtera (KPT MS) developed their cut-and-carry breeding model for more than two years. They demonstrated that key performance indicators, such as conception, calving, and weaning rates, as well as cost-efficient average daily gains, can be achieved through effective management.
As per the agreement with the Indonesia-Australia Commercial Cattle Breeding (IACCB) Program, the cattle ownership was formally transferred to the smallholder collective after meeting the commercial viability assessment process. Paul Boon, IACCB Strategic Program Advisor, confirmed KPT MS's successful efforts in improving livestock productivity, controlling costs, and creating a conducive business environment.
Local Investments in Cattle Breeding
KPT MS, which comprises 37 breeder groups in South Lampung, joined the IACCB Program in April 2017 and has received 100 Brahman Cross heifers and six bulls from Australia. By December 2019, they had produced 239 calves, with more expected from pregnant cows, totaling an estimated 260 calves to be born within three years. Of the calves born, 169 were sold at a value of 1.7 billion Indonesian rupiahs. KPT MS officially received ownership of the Brahman Cross cattle on September 30, 2019. The Regent of South Lampung, H. Nanang Ermanto, expressed pride in the cooperative's success in making KPT MS of the most profitable livestock cooperatives in the region.
IACCB also supported a partner enterprise, Buana Karya Bhakti (BKB), in establishing a SISKA (cattle under oil palm) training and consultancy business in South Kalimantan. SISKA breedlot is cattle that are kept in a breedlot during the production cycle for better supervision and a more efficient calving process. Once the calves and cows are strong enough, they are allowed to join the grazing herd on the plantation. The grazing herd practices rotational grazing of understory forages for the remainder of the year.
BKB now offers consultancy services, internships, and training courses to promote SISKA knowledge throughout Indonesia. Additionally, BKB has signed a Memorandum of Understanding with the University of Brawijaya in Malang, East Java, to serve as the institution's SISKA training provider. They are also set to provide training to smallholder farmers through the Resource Development Program of the Palm Oil Fund Management Agency.
Being able to achieve commercial sustainability for our partner enterprises highlights the positive outcomes of the IACCB Program in improving livestock productivity, generating income for local farmers, and contributing to the development of profitable cattle breeding businesses in Indonesia. To learn more about potential investments in cattle breeding in Indonesia, visit our Investor Toolkit.