The performance of credit program for smallholder’s dairy cattle development in Indonesia

The research aims to study the performance of credit program on smallholder dairy cattle covering the scheme of credit, its implementation, and the financial feasibility of the dairy farming. The research adopts survey method with 136 respondents who were smallholder dairy farmers in milk production centers in West Java, Central Java, Special Region of Yogyakarta and East Java taken with multistage sampling methods. The primary data from the respondents were collected with questionnaire. Qualitative analysis was carried out to study the process of credit implementation, while cash flow analysis, NPV and B/C ratio were carried out to determine the financial feasibility of the dairy farmers. The research concludes that there are four credit schemes of smallholder dairy cattle development: (1 ) the lending of three months pregnant cows with return of two adult female at 15 months old, (2) lending of money for purchasing three months pregnant cows with a return of monthly cash money , (3) similar to first scheme but it was non pregnant t cows , which is ready to be mated, with return of two females at 15 months old, (4) similar to second scheme but the cows purchased have not been pregnant, however ready to be mated. Cooperatives and groups of dairy farmers play the biggest role in obtaining and dropping the credit. Based on the cash flow analysis, NPV and B/C ratio using technical and economical parameters which has been achieved by the respondents, on the interest rate of 8 % in 4,5 - 5 years period of credit, it was shown that financially, scheme 1, 2 and 3 were feasible or profitable to be implemented, nevertheless scheme 3 has relatively small profit whereas scheme 4 is not feasible. Generally, the improvement of technical and economical parameters on the dairy cattle farming is expected to be able to increase the profit of the dairy farmers