Impact of integration of import tariff policy and strategic programs to increase milk production on the availability of fresh milk in Indonesia

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.