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The Relevance of a Rules-based Fresh Milk Price Structure Policy in East Java: An Evidence Based Assessment

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  • Bambang Ali Nugroho

Abstract

At present, Indonesia is still lack of fresh milk supply, domestic fresh milk production is covered only 30% national fresh milk processing industry needed and is about 70% milk industry material should be imported, mainly from New Zealand, Australia, EU and USA. The following actors are active in the formal dairy supply chain in Indonesia: (1) Milk producers, (2) The primary dairy/ village cooperatives (KUD), (3) The overall dairy cooperative (GKSI), (4) The milk processors/ dairy industry, (5) Based on that situation, and to improve the development of small scale dairy farming activities in east java, this paper have an objective to examine the relevance of a rules-based fresh milk price structure policy in east java. East java dairy supply chain inefficiencies are reflected in a relatively large difference between farm gate milk price and consumer prices of milk products. Factors like the dependency on imported milk powder and the strongly fluctuating world market prices, the lack of protection against world market fluctuations for the local milk producers, the scale and structure of dairy farming, and poor raw milk quality affect the development of east java dairy supply chain.

Suggested Citation

  • Bambang Ali Nugroho, 2011. "The Relevance of a Rules-based Fresh Milk Price Structure Policy in East Java: An Evidence Based Assessment," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society, vol. 1(2), pages 50-55.
    • Handle: RePEc:asi:ajosrd:v:1:y:2011:i:2:p:50-55:id:480
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    Cited by:

    1. David Vanzetti & Rina Oktaviani & Nur Rakhman Setyoko, 2016. "Drink More Milk: Policies Supporting the Indonesian Dairy Industry," World Scientific Book Chapters, in: Ray Trewin (ed.), CRUCIAL AGRICULTURAL POLICY Analysis of Key Threats to Food Security, chapter 5, pages 115-134, World Scientific Publishing Co. Pte. Ltd..

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