The case study examines Indonesia's dairy value chain, highlighting the country's aim to increase domestic milk production from about 20% to 50% by improving herd productivity and efficiency. Key challenges include sub-optimal herd productivity, manure management issues, and insufficient land for forage, leading to environmental concerns. Recommendations include enhancing feed quality, improving animal health, and promoting sustainable waste management practices to achieve productivity gains without negative trade-offs.

1. ADB ESLAP case study
‘dairy value chain in Indonesia’
Marion de Vries, Wageningen Livestock Research, the Netherlands
June 28, 2021
Webinar ADB Sustainable Livestock

2. Demand for dairy in Indonesia
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• World's fourth most populous nation
• Java: >50% Indonesia’s population, 98-99% of dairy cows
• Increasing demand for dairy:
• Rising per capita dairy consumption (growing population,
dietary shifts)
• National ambition to increase domestic milk production
from ~20% to 50% of consumption*, by:
• increases in national cattle population
• Increases in productivity
*Roadmap Indonesian dairy sector 2015-2025

3. Indonesian dairy sector
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• Domestic milk production 1.0 Mt/y
• 0.6 M heads, ~192.000 dairy farms
• Urban/peri-urban
Smallholder farms (~90% cattle, ~77% milk)
• 3-4 cows, 8-10 L per cow/d, long calving intervals
• Zero-grazing, 0.2-0.3 ha of land
• Feed ration: forage, concentrates, industrial by-products,
crop residues
Large scale farms (~10% cattle, ~23% milk)
• >1000 head, ~20 L per cow/d, shorter calving interval

4. Key sustainability issues
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1. Sub-optimal herd productivity and efficiency, causing:
• low milk and meat output, high feed cost, low margins
• relatively high GHG emissions per kg milk
• low resource use efficiency (feed, nutrients)
De Vries et al., 2019; Apdini and Zahra et al., 2021;
Zahra, et al. 2021

5. Key sustainability issues
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1. Sub-optimal herd productivity and efficiency, causing:
• low milk and meat output, high feed cost, low margins
• relatively high GHG emissions per kg milk
• low resource use efficiency (feed, nutrients)
2. Manure discharging (60-90%) and overfertilization, causing:
• pollution of local ecosystems and drinking water sources
• biodiversity loss
• increased GHG emissions
• local nuisance
De Vries et al., 2019; Apdini and Zahra et al., 2021;
Zahra, et al. 2021

6. Manure discharging & overfertilization
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7. Manure management

8. Disconnection of land and milk production
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• Scarcity of land on Java:
• Insufficient forage supply (~10% of
farms can provide enough forage for
their herd)
• Insufficient land to apply manure
• Distance between land and cow barn:
• Difficult to utilize wet cattle manure
as fertilizer (handling, transport)
• Much time spend on collecting forage
(>3h per day)
USDA 2019; Zahra et al., 2021; De Vries
and Wouters, 2017; De Vries et al., 2020.

9. Options for improving sustainability
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Category Intervention
Feeding Improve feed quality:
- Compound concentrate feed
- Minerals and vitamins
- High quality by-products
Improve forage supply and quality:
- Expand land for forage production
- Improve forage management
- Alternative fodder species
- Whole plant maize silage
Improve feeding practices:
- Balancing rations
- Sufficient drinking water
- Increase feeding frequency
Animal health and husbandry Improve animal health
Improve genetic potential
Improve fertility and reproduction
Manure management Utilization in the dairy sector:
- Daily spread
- An. digester maintenance, manage digestate
- Match fertilizer use w plant requirements
Utilization in other sectors:
- Drying cattle feces
- Utilization of cattle urine

10. Sustainably increasing milk production
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• Increasing domestic milk production via increases in
productivity vs. cattle population
• Potential benefits farmer income and livelihoods, AW
• Interventions with expected high impact on productivity
(e.g. feeding higher quality feed ingredients such as
compound feed, by-products, maize silage; increasing
forage supply, for example by expanding land)
• Large risk of trade-offs:
• GHG (high carbon footprint of cultivation/processing
feeds, land use change, increased N loss)
• Water/air/soil quality, biodiversity (land use, N loss)
• Food-feed competition (use of arable land)

11. Sustainably increasing milk production
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• To avoid or reduce trade-offs:
• avoid land expansion on arable land or nature
• avoid feeding primary arable crops; instead use high-
quality by-products or crop residues
• avoid forages and feeds with a high carbon footprint
from cultivation or processing
• ensure good feeding practices (e.g. balanced rations)
• recycle manure as a fertilizer
• No-regret options, e.g.:
• balancing rations, providing sufficient drinking water,
improving animal health, improving forage management

12. Manure recycling
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• Few incentives for dairy farmers: often not or little
profitable and limited enforcement, competition synt. fert.
• Utilization in dairy sector:
• Landbased dairy farming (land consolidation), daily
spread: easiest, cheapest, and lowest-emission solution
• Fertilization practices; risks of overfertilization, storage
emissions
• Utilization outside the dairy sector (e.g. horticulture):
• Requires cost-effective storage, processing and delivery
systems
• Farmer to farmer, and large-scale processors
• Urine
IPCC, 2019; Pronk et al., 2020; Zahra et al.,
2021; De Vries et al., 2020

13. Recommendations
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• Support research and development of practices to increase
productivity, but avoid trade-offs (GHG, water/air/soil quality,
biodiversity, food-feed competition)
• Support research and development of animal waste management,
provide incentives
• Provide (long-term) education and training to farmers and extension
workers about good on-farm practices
• Provide access to credit, particularly for animal waste management
• Establish monitoring and evaluation
• Key stakeholders: farmers, dairy cooperatives, feed companies,
other ag sectors, governments

14. Thank you
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Marion.deVries@wur.nl
WindiAlZahra@apps.ipb.ac.id
https://www.wur.nl/nl/project/Sustainable-Intensification-
of-Dairy-Production-Indonesia.htm