Abstract
The gap of growth in milk consumption that is not in line with the growth of milk production has resulted in the need for imports. Indonesian government intervenes in import regulation through the implementation of import tariff policy and strategic programs to increase domestic milk production. The study aimed to analyze the impact of the integration of both interventions on accelerating the growth of fresh milk production in Indonesia. The research method is a descriptive method that uses BPS, Pusdatin, and other second-hand data published in previous studies. A comparative study of producer and consumer surplus and a modeling analysis of strategic policies to increase the production of domestic fresh milk was used. The results of the analysis revealed that the impose of 5% import tariff on milk has an impact on increasing producer surplus, decreasing consumer surplus and public welfare, also increasing the government’s revenue. The results of model simulation showed that the recommended combination scenario of increasing milk productivity, calf rearing, and broodstock import is the best scenario. Hence, the import tariff policy recommendations combined with the strategic programs can accelerate the increase in the supply of fresh milk in Indonesia.
Highlights
The demand for milk in Indonesia is increasing along with the increase in population growth and public awareness of the animal protein consumed
The analytical approaches carried out in this paper were: (a) graphical and quantitative approaches, referring to the theory of producer surplus and consumer surplus to get the amount of social welfare to analyze the impact of milk import tariffs on dairy farmers; and (b) Model simulations to analyze the impact of implementing strategic policies to increase milk production on fresh milk availability in Indonesia
The implementation of a 5% tariff policy on milk imports has an impact on increasing producer surplus, reducing consumer surplus, and reducing public welfare
Summary
The demand for milk in Indonesia is increasing along with the increase in population growth and public awareness of the animal protein consumed. The level of milk consumption is still lower than some other ASEAN countries, such as Malaysia (36.2 liters/capita/years), Myanmar (26.7 liters/capita/year), Thailand (22.2 liters/capita/year), and the Philippines (17.8 liters/capita/year), the prospect of developing the dairy industry in Indonesia is still open widely. This is due to the increase in population (1.25% per year from 2010 to 2020) and per capita milk consumption (0.49% per year from 2000 to 2020) [2]. Fresh milk produced in Indonesia is still unable to keep up with the national demand for milk
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