Abstract
Keynote paper presented at the International Leucaena Conference, 1‒3 November 2018, Brisbane, Queensland, Australia.Research and government agencies in eastern Indonesia have identified 2 systems with potential to increase productivity and incomes of small-holder cattle producers: improved cattle feeding practices through forage tree legumes (FTL); and the development of more efficient and specialized cattle-fattening systems. Extensive research has been conducted on production and technical aspects of FTL-fattening systems, but there is a gap in research on economic incentives for households to adopt the systems. This paper provides an economic analysis of a leucaena-fattening system in a village in West Timor. It draws on trial data from associated technical research projects and detailed semi-structured interviews with farmers and other stakeholders to populate a bio-economic model built for the research. Under all measures of profitability, leucaena-fattening systems in representative households are profitable in the wet season. Importantly, ’returns to person days’ are higher than off-farm incomes. The activity generates cash income, increasingly required to meet cash expenses in modern rural Indonesian society. However, returns vary considerably between households, are considerably lower in the dry season and, as would be expected, are sensitive to relative prices of feeder and finished cattle.
Highlights
The province of Nusa Tenggara Timur (NTT) in eastern Indonesia faces substantial development challenges
The province is one of the least developed in Indonesia, with a per capita GDP one-quarter of the national average
In 2017 incomes of 25% of the rural population of NTT were below the poverty line (Rp 329,136 or AU$ 32 per month), compared with the national average of 13% (BPS 2018)
Summary
The province of Nusa Tenggara Timur (NTT) in eastern Indonesia faces substantial development challenges. The province is one of the least developed in Indonesia, with a per capita GDP one-quarter of the national average. In 2017 incomes of 25% of the rural population of NTT were below the poverty line (Rp 329,136 or AU$ 32 per month), compared with the national average of 13% (BPS 2018). Agriculture is a central economic activity in NTT, and livestock production makes up 16% of agricultural GDP. There are 60,000 livestock producers in NTT, the majority of whom own cattle (DGLAHS 2013), threequarters of which are small-holders with 1‒10 head (Mullik 2012). In particular parts of NTT, cattle sales can represent more than 80% of the family’s cash income (Nimmo-Bell and ICASEPS 2007). Cattle play a social role for ceremonies and as a source of ’savings’ that can be cashed-in to meet large cash outlays including housing, school fees, health and transport
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