Analysis adding value and profit margin on smallholder dairy farming at Batu City, East Java

Abstract

Study was held on the smallholder dairy farming at Batu City, East Java. This research addressed to examine dairy farming value added and profit margin. Multistage sampling method was a technique to select 33 farmers who grouped into 3 scales involving scale -1 (having 5–5.5 Animal Unit (AU), n = 9), scale-2 (owning 6–7 AU, n = 7), and scale-3 (controlling 7.5–8.5 AU, n = 17). Primary and secondary data collection was about two months (April–June 2019). Descriptive analysis using economic formulation method was employed to analyse the data. Results reported that respondents were male farmers aged 50–59 years old with secondary school education and length experience (21–30 years) in raising dairy cattle and they came from medium family member (4–5 persons). Farmers who raised 6–7 AU (scale-2) achieved the highest value added about 45.23%, followed by 43.30% for scale-3 and 37.46% for scale-1. Similarly, profit margin was best-performing in scale-2 (25.33%) compared to scale-3 (24.75%) and scale-1 (22.27%).