IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Home grown: cattle and beef self-sufficiency in Indonesia

Listed author(s):
  • David Vanzetti
  • Nur Rakhman Setyoko
  • Ray Trewin
  • Risti Permani

Following the global spike in food prices in 2008, there has been a renewed interest in food security. A modest increase in prices over long-term trend in 2009, and some forecasts of higher commodity prices in the longer term, have reinforced concerns. In addition to the concerns with relatively high prices, export bans imposed by some countries in 2008 after prices spiked lent support to the view that the international market can no longer be relied upon to deliver adequate supplies at reasonable prices. Supposedly in response, many countries are attempting to reduce reliance on imports and achieve self-sufficiency where possible. However, in Indonesia, policies are being implemented to increase domestic production of not only staples such as rice, but of non-staple products such as sugar and soybeans. Furthermore, policies have been introduced to reduce the country's dependence on beef imports, with the objective to move to becoming 90 per cent self sufficient by 2014. Achieving self-sufficiency across a range of commodities including beef may be technically feasible, but the cost of such policies is considerable. In addition, while moderating the price effects of external shocks, such as those experienced in 2008, a self-sufficiency policy with minimal reliance on trade leaves the domestic market exposed to internal shocks such as those caused by floods, droughts or disease. A computable general equilibrium model, GTAP, is used to analyse the impacts of moving towards self-sufficiency in live cattle and beef. A lower estimated Armington elasticity of substitution between domestic and imported cattle for Indonesia is used in the scenarios rather than those provided. Annual welfare would be reduced by an estimated US$458 million if cattle and beef imports were reduced by 90 per cent. A $40 million annual subsidy Indonesia has introduced to cattle producers is a transfer that creates fewer distortions and welfare losses. Under current industry performance, a subsidy of up to $5 billion over 5 years might be needed to achieve 90 per cent selfsufficiency. A policy of funding research and development would provide greater gains, although these could take some additional time to show benefits. Greater integration between northern Australia's live cattle trade and Indonesia's cattle feeding and processing industries through investment and technology transfer, offers the potential of not only better meeting Indonesia's food security desires in relation to beef but also strong processed meat export opportunities in rich neighbouring ASEAN members to the benefit of both countries.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by International and Development Economics in its series International and Development Economics Working Papers with number idec10-04.

in new window

Length: 26 pages
Date of creation: 2010
Handle: RePEc:idc:wpaper:idec10-04
Contact details of provider: Postal:
Crawford Building, Lennox Crossing, Building #132, Canberra ACT 2601

Phone: +61 2 6125 4705
Fax: +61 2 6125 5448
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. M. Chatib Basri & Hal Hill, 2008. "Indonesia - Trade Policy Review 2007," The World Economy, Wiley Blackwell, vol. 31(11), pages 1393-1408, November.
  2. Hélène Erkel-Rousse & Daniel Mirza, 2002. "Import price elasticities: reconsidering the evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 35(2), pages 282-306, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:idc:wpaper:idec10-04. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tom Kompas)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.