Commercial Models Attract Investor and Government Interest

Backed by three years of monitoring and assessment, the Indonesia-Australia Commercial Cattle Breeding (IACCB) Program has demonstrated the commercial viability of four breeding models that have been piloted by seven Indonesian partner enterprises.
  • Cattle rotation in one of IACCB SISKA partners PT Kalteng Andinipalma Lestari in Central Kalimantan
  • Herd of cattle grazing open pasture in PT CAP South Kalimantan
  • Feeding cattle within a cut and carry system in Lampung
  • Calves and their mothers in a new breedlot owned by PT Superindo Utama Jaya in Lampung

“We now have evidence that Indonesia can produce feeder cattle at a comparable price to that of the cost of imported Australian feeder cattle.”

That is the unequivocal assessment of Mr Sugiono MP, Director of Livestock Breeding and Production at Indonesia’s Ministry of Agriculture, during an IACCB webinar held on the 4th of June 2020. 

Mr Sugiono was joined by Dr Atien Priyanti Sudarjo Putri, the acting head of the Center for Livestock Research and Development; Mr Paul Boon, IACCB’s Strategic Adviser; and representatives from partner enterprises involved in piloting the breeding models. 

Presentations were made on the results and lessons learnt from three years of piloting four cattle breeding models across seven partner enterprises.

The four breeding models covered were Sistem Integrasi Sapi-Kelapa Sawit (SISKA) or integrated oil palm and cattle production; open grazing; smallholder farmer cut and carry; and a combined SISKA breedlot model. These models were implemented across five Indonesian provinces.



Indonesia has 14.3 million hectares of oil palm plantations. There is a great opportunity to increase the productivity of this land through the careful introduction and breeding of cattle—a business model known in Indonesia as SISKA.

Oil palm plantations can be a source of cheap forage used to breed beef cattle, reducing Indonesia’s reliance on imported cattle and beef. 

Meanwhile, the cattle act as ‘biological mowers’ for the plantation, lowering weed control costs, reducing dependence on herbicides and other chemicals, and providing organic fertiliser in the form of dung.

The IACCB partners piloting the SISKA model—PT Buana Karya Bhakti (BKB) in South Kalimantan, and PT Kalteng Andinipalma Lestari (KAL) in Central Kalimantan—presented their commercial results and lessons learned. 

While both partners cited the mutual benefits for cattle breeding and plantation productivity, they also recognised that SISKA requires a delicate balance between cattle and plantation management.

“In the beginning, we were a little worried with the increasing number of cattle, as their management requires extra human resources,” said Bambang Suswanto, Agronomy and Pasture Assistant with PT BKB. “We needed to ensure the continued focus on palm tree maintenance and productivity.”

“The IACCB team helped us with practical measures to integrate cattle and oil palm production systems,” explained Zainuddin, PT BKB’s General Manager of Agronomy. “As a result, we are now able to manage both the cattle and palm operations very efficiently.”

Both IACCB partners reported strong commercial results using the SISKA cattle breeding model.

“We started with 300 heifers and 20 bulls,” said Wahyu Darsono, Cattle Manager at PT BKB. “Now, we have almost all cattle types, from breeder cattle to calves. We have growers, feeder cattle, and almost 150 offspring ready to sell, and all weighing above 450 kilograms.”

Fahruddin, General Manager at PT KAL, echoed these sentiments.

“We now have approximately 500 cattle and are looking at increasing this to 1,000 head, through breeding and cattle purchases. The outlook looks very bright for us,” he said. 



Indonesia has many regions with strong open grazing potential for cattle, including West Nusa Tenggara, East Nusa Tenggara, Sulawesi, and Kalimantan.

One of the advantages of breeding cattle under the open grazing model is very low feed cost. The improved pastures (grasses mixed with legumes) provide quality feed for the cattle, and there are no costs associated with harvesting pasture, unlike the cut-and-carry model.

PT Cahaya Abadi Petani (CAP) discussed their experience in managing their free-grazing herd on 120 hectares of South Kalimantan grasslands.

“In terms of commercial aspects, over the last three years we have been very pleased,” said Husni Thamrin, Director at PT CAP. “We started with a total of 111 head, comprised of 102 cows and nine bulls. Now our cattle herd is over 241.”

Receiving technical guidance from the IACCB team, PT CAP has improved the productivity of their open grazing operations. A large focus has been on improving their pastures by planting high biomass-yielding grasses and legumes that support the nutritional needs of the grazing herd and thereby improve growth rates. 

IACCB has also provided PT CAP with Brahman Cross cattle which have higher calf birth weights, shorter weaning periods, and higher average daily gains, compared to local cattle.

PT CAP concedes that one challenge under the open grazing system has been the limited availability of feed during the dry season, when additional feed concentrates need to be provided to maintain cattle productivity.

However, the overall cost to produce cattle in an open grazing system can be 15% to 25% lower than that for Australian imported feeder cattle landed in Indonesia.  



About 90% of cattle in Indonesia are owned by smallholder farms or farming households, with these smallholder farmers supplying only about 45% of the beef consumed in the country. 

Each farming household generally has between one and five cattle, which they often sell when they need cash, for example to pay school fees or for celebrations. 

To support the Government of Indonesia’s efforts to increase the national cattle herd, IACCB is working with its three smallholder cooperatives to pilot commercial-scale cattle breeding using the cut-and-carry model. Under this model farmer cooperatives collectively own and manage the cattle and facilities. Cooperative members (smallholder farmers) cut and/or procure forage daily and carry it to a breedlot where mating, calving and growing occur.

In addition to helping partners develop their cattle businesses, IACCB is fostering collaborations with surrounding communities, allowing the cut-and-carry enterprises to procure grass and agricultural by-products which are used as cheap sources of cattle feed.

The feedback provided by IACCB smallholder partners is very encouraging. 

“Now we have an effective farmer partnership and land-leasing system, which means we can cut and bring home enough grass to feed our cattle to meet their nutritional requirements,” said Suhadi, head of Koperasi Produksi Ternak Maju Sejahtera (KPT MS).

The IACCB partners have demonstrated that commercially viable cattle breeding can be achieved under the cut-and-carry system. Smallholder farmer cooperatives have maintained good productivity, cattle herds have significantly increased in size, and breeders have provided progeny that have sold for good profits. 

“In total, we received 108 head of cattle, comprised of 100 heifers, five bulls, and three calves,” Suhadi said. “Within three years, our herd has increased to 215 head and we have held two cattle auctions, selling 169 progeny, resulting in fantastic sales totalling Rp1.7 billion.”

The cut-and-carry partners did however note that the key to their success was maintaining strong professional management of the farmer cooperative. The cooperative is generally comprised of several smallholder farmer investors who often need to juggle competing demands on their time and finances. As a result, some of the partners have struggled to maintain an optimal herd condition. 



For palm oil plantations with limited land area, or in very high rainfall zones, cattle breeding will often be more successful when combined with a breedlot system. 

IACCB is supporting PT Superindo Utama Jaya (SUJ) in Lampung to implement a SISKA Breedlot model in their 2,600-hectare oil palm plantation. Weaners, cows in early gestation, and barren cows, graze in the palm understory pastures, providing a very low-cost production system. Cows in late pregnancy through to weaning, and any sick cattle, are kept in breedlot pens for more intensive care.

For PT SUJ, this model has resulted in increased conception and calving rates and lower calf mortality rates and a faster body condition recovery of cows after calving.

“The breedlot makes it much easier for us to handle the calving cows and weaning calves, and also to look after any sick cattle,” said Sihono, Program Manager at PT SUJ.

“They are well managed in the pen, although the costs are slightly higher compared to when they are grazing freely in the plantation.”

PT SUJ’s robust recording system has highlighted the commercial potential of the SISKA Breedlot model. The business, which started with 247 Brahman Cross cattle in 2017, has grown to nearly 900 cattle.

“Our commercial results are good and we are optimistic that cattle breeding using this model is commercially sustainable,” Sihoni said. “That is why we are putting additional investment into pens.”

“This year we will build four additional calving units with a total 160 calving rooms.”



During the IACCB webinar partners highlighted that strong management is required to achieve sustainable commercial outcomes. 

They added that a professional management team also needs to be complemented by skilled stock people with a passion for cattle breeding. 

Other factors vital to commercial success include a robust monitoring and data recording system that drives effective decision making, productivity analysis, and cost control, particularly for feed.

The provision of quality feed is also essential. Poor feed will diminish cattle condition, increase calf mortality, and decrease average daily gains, ultimately decreasing grower productivity and profitability. 

Dr Sudarjo Putri stated that production of cheap feed using agricultural by-products and optimising the use of locally available natural resources will be critical to the future expansion of the industry.   

Despite the challenges, Mr Sugiono said that, based on the experiences of IACCB partners, cattle breeding in Indonesia is very promising. 

“It has great prospects,” he said. ”Indonesia is rich in feed resources and has regions with enormous potential for cattle breeding expansion.”

For more information on each breeding model and the IACCB Program, visit