UNAIR NEWS – Dairy producers in Central and East Java have recently drawn attention by discarding their milk supplies. The issue stems from local milk being underutilized by milk processing industries (IPS) due to restrictive quotas.
In Boyolali, Central Java, dairy farmers and milk collectors protested by staging a “milk bath,” using surplus milk that could not be processed. A similar demonstration took place in Pasuruan, East Java, where a milk collection company protested the imposed limits on milk shipments to processing plants.
Addressing the controversy, Professor Rossanto Dwi Handoyo, SE, MSi, PhD, an expert at the Faculty of Economics and Business (FEB), Universitas Airlangga (UNAIR), characterized the milk disposal issue as part of a broader “iceberg phenomenon” involving local farmers and the milk processing industry.
Underlying challenges: quality and pricing
Professor Handoyo identified two main factors driving the issue: quality and pricing. He explained that the problem originates from farming techniques, milking processes, and post-milking storage systems that fail to meet the stringent standards required by the industry.
“Only 30% of cooperatives manage to maintain milk quality that aligns with industry requirements. The rest fail to meet these benchmarks, and subpar quality milk cannot be accepted by the processing industry,” Prof. Handoyo explained.
The second challenge lies in pricing. Local farmers sell milk at approximately Rp9,000 per liter, while imported milk offers consistent quality at a lower cost. Free trade agreements with countries like New Zealand and Australia allow tariff-free imports, making imported milk more competitively priced.
“The influx of cheaper imported milk has led industries to prioritize imports over local milk,” he added.
Professor of FEB UNAIR, Prof Rossanto Dwi Handoyo SE MSi PhD. (Photo: By courtesy)
Advocating for local farmers
Indonesia’s annual demand for cow’s milk is projected to reach 4.6 million tons by 2024, yet domestic production meets only 18% of this demand. The remaining 82% is fulfilled through imports. The bulk of local milk production comes from cooperatives, which supply 70% of the nation’s domestic output, while the remaining 30% comes from modern milk processing facilities.
In light of these challenges, Prof. Handoyo called for government measures to safeguard and bolster the domestic dairy sector by ensuring local milk is fully absorbed into the supply chain.
Collaborative efforts for improvement
Prof. Handoyo stressed the importance of training and technological support to enhance milk quality. Key areas for improvement include milking systems, hygienic storage practices, and post-milking processing that adheres to industry standards.
“To improve quality, farmers need training and access to better facilities and technology. Dairy cooperatives must play a pivotal role in guiding farmers, while the government could establish state-owned enterprises (BUMN) focused on milk processing in high-potential regions,” he proposed.
Lastly, Prof. Handoyo urged collaboration between the government, cooperatives, industries, and local farmers. “Without timely intervention, reliance on imports will continue to grow, jeopardizing the survival of local dairy farmers,” he concluded.
Author: Tsaqifa Farhana W
Editor: Khefti Al Mawalia
