Enhancing Beef Supply through Beef Self-Sufficiency Policy in Indonesia: An Econometric Approach

Abstract

Enhancing beef production is important to meet the increasing beef demand. However, beef demand has outpaced domestic beef production, resulting in a gap between beef demand and domestic beef production. The beef self-sufficiency policy is one of the flagship policies aimed at enhancing beef supply in Indonesia. This study aims to assess the impact of the beef self-sufficiency policy on beef supply in Indonesia. The study used time series data from 1990 to 2019, sourced from BPS, Ministry of Agriculture, Ministry of Trade, BI, and FAO. The analysis method employed an econometric approach through a simultaneous equation system model and estimated using the Two Stage Least Square (2SLS) method. The research findings showed that the beef self-sufficiency policy has a positive and significant effect on domestic beef production (p-value < 0.15) and beef demand (p-value < 0.05). Conversely, the beef self-sufficiency policy has a negative and significant effect on the import of fattening cattle (p-value < 0.05). The results showed that the beef self-sufficiency policy through the artificial insemination program had an impact on increased calf population by 3.819%, cattle population by 1.202%, and domestic beef production by 2.528%. These programs also showed an impact on the decreased import of fattening cattle by 13.727% and the import of beef by 24.972%. It can be concluded that the beef self-sufficiency policy has significant impacts on the beef supply in Indonesia.