Financial performance of small scale dairy farming in East Java Indonesia

Milk consumption is growing faster by the year and it is mostly supplied by smallholder dairy farming that is more prevalent in rural areas. Small scale dairy farmers who raise less than five cows have relied on this farming as the main source of income because dairy farming can enhance job opportunity, providing daily income, and it leads to improving farmer’s welfare. It was interesting to insight the potential role of dairy farming for sustaining the livelihood among rural communities. Thus, the research objectives were to: (a) determine the earnings pursued by dairy farmer; and (b) investigate Revenue:Cost ratio (R/C ratio) ofsmallholder dairy farmers based on stratum. The research was done in Banjarejo Village, Ngantang Sub-District, East Java, Indonesia. 30 respondents were selected using total sampling method and categorised into three strata, stratum 1 (raised: < 4 AU, n=19), stratum 2 (owned: 4-8 AU, n = 7), and stratum 3 (controlled : > 8 AU, n = 4). Survey method using a structured questionnaire was employed to gather data and was carried out from 1^stSeptember to 1^stOctober 2014. Descriptive method with economic equation was performed to analyse the data.

Farmers who raised dairy cattle with less than four animal units were more profitable than other strata in terms of obtaining more income (Rp.18,248,-/AU/day or US$1.52/AU/day) and achieving somewhat higher (1.66) of R/C ratio. Therefore, smallscale dairy farming can be useful in generating household income and enhancing household labour opportunity for rural society.