The vast majority of cattle in Indonesia are held by small-holders in integrated crop-livestock systems. In some areas there is specialisation (cow-calf or fattening) but “mixed” systems predominate, where breeders produce calves that are grown out to slaughter weight. Few animals are now kept for draught value. Crops residues are a source of feed in all areas but the relative importance in the diet varies by agro-climatic conditions.
At the most extensive end of the continuum are areas in Eastern Indonesia like Sumba, where rainfall is low and concentrated in a short wet season. Farmers plant one crop of corn per year, and the silage and stubble is used for cattle feed but only as an occasional supplement to grazing on open savannah grasslands.
In semi-intensive systems in areas like West Timor and Sumbawa, farmers can plant one to two crops per year. Cattle spend much of the year grazing on grasses and shrubs on unused land and roadsides and on stubble on fallow fields. However cattle are confined to pens at night or parts of the year where grazing provides inadequate nutrition or when grazing damages crops.
The pressures on land are most intense for East Java, where 74% of land is already used for agriculture and where the poor have small land areas that can be suited to intensive cattle production. East Java has by far the largest and most densely populated cattle herd in Indonesia with 102 head per sq. km. Cattle production in EJ is intensified, commercialised, and mechanised (Priyanti et al. 2012).
At the most intensive end of the continuum, lowland areas of East Java (similar to Bali and Central Lombok) have a long wet season and fertile, irrigated land. Farmers plant two to three crops per year of corn and rice, but high population densities result in very small cropping areas (0.4 ha). These crop residues are cut and carried to cattle tethered in pens, with only small windows of time for grazing stubble. These on-farm feed resources support just a few head of cattle per household. To limit feed demands, farmers in lowland areas like Probolinggo are increasingly specialised in cow-calf production. In recent years there has been a rapid increase in the trade of even low value rice straw by large numbers of feed traders (Priyanti et al., 2012).
In the less intensive rainfed and seasonally dry upland areas of East Java like Malang, farmers only plant two crops per year, have lower yields than lowland areas and larger land areas. Farmers also hold cows that produce calves, but the vast majority are fed to slaughter weight in mixed systems.
Small-holder cattle production systems are unproductive when measured through key indicators (calving rates, growth rates, turnoff rates etc.). However, productivity has to be seen as a function of output per unit of inputs (land, feed, labour, capital). Cattle production is low input, so low output indicators can be expected. Nevertheless, numerous researchers and projects have sought to better utilise existing resources in a strategic way through simple, low cost and integrated measures. These include the supplementary feeding of cows, better detection of oestrus, early weaning and calf management, improved feed management and improved pens/sanitation and water.
Budgeting by Waldron et al. (2013) suggests that in “low productivity systems” gross profits from cattle production are positive, but net profits become marginal if the capital costs of the cattle inventory are valued, and negative if family labour is valued. In the “improved productivity systems” gross and net profits are both positive, even if family labour is valued. The budgeting also finds that there are higher returns to cattle “owner-keepers” than “keepers” in either low or higher productivity systems, suggesting that measures to increase cattle ownership is an important way of increasing rural incomes and the uptake of improved production practices.
Indonesia has the longest established feedlot sector in the region, especially in the north of the country (Sumatra) with access to plantation residues. For Indonesia as a whole, feedlots contributed up to 570,000 head of cattle or approximately 5% of the total inventory in 2008 (DGLAHS, 2010, cited in Deblitz et al. 2011). However, there has been substantial investment in the sector in recent years and is said (by the manager of a large feedlot group) to have a turnoff capacity of one million head per year. Import restrictions have a large impact on capacity utilisation in the sector (although feedlot capacity exceeds even peak cattle import levels). Feedlots vary from joint ventures with a capacity of tens of thousands of imported steers from Australia, to small feedlots with a few hundred head in East Java, to small-holder households contracted or linked to feedlots, feed companies or cattle importers.