0.88 To Output and Input

competitive advantage indicators. The unit of investment spent to feedlot industry in Lampung give greater benefit than in Banten and West Java. They are benefited with low domestic factor cost such as land, building, machinery, and feeder cattle. Therefore, existing policy should be maintained. c. Feedlots in West Java spent the largest feed cost among all which affecting their overall profitability. Feedlots used a huge amount of high cost concentrate. An alternative high protein sources from industrial by product will help to reduce this expense. Thus, government could help the feedlots through establishing partnership program of which they can utilize cheaper feed cost from by-product. 4. The exchange rate change gave a little impact to the comparative advantage of the industry, as long as the domestic component is dominating production activity. Limitations Despite covering three key area of beef industry, this study could not be generalized as a whole of Indonesian feedlots competitiveness. One of the main reasons is that the other 30 provinces may have allocate their resource for another commodity, each feedlot has different production efficiency, or having a different regional policy which may also affect industry’s comparative and competitive advantage. The composition of import and local feeder for each feedlot is unknown so it is hard to distinguish whether the comparative and competitive advantage is from the imported or local cattle. The data is yearly basis, not per period of production while each feedlot could operates in different production frequency for each year. Thus, it might not reveal the true level of competitiveness of feedlot industries in Indonesia. Moreover, most of the variables in the input and output costs are approached through aggregate measurement. To this extent, the source of profitability or divergence becomes imprecise. For instance, medicines used are classified into biological, pharmaceutical, and premix. The unit of measurement and information about the kind of each medicine category is unknown. Thus, the assessment of medicine cost is the expenditure on medicine per head of cattle basis and might not reflect the absolute cost. As for capital, life-span estimation of machinery and equipment did not employed in the research due to the missing information. Another issue is related to the distribution cost. In general, the distribution cost covers all the payment from port to feedlot and from feedlot to market, i.e. Loading-unloading cost, quarantine cost, expedition cost, retribution of abattoir, fuel consumption, import license cost, etc. This research only taken into account the expedition cost and government retribution cost along the supply chain. As it was only rough estimation, the cost might be higher or lower. 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Analisis Tingkat Keuntungan, Keunggulan Kompetitif, Keunggulan Komparatif, Dan Dampak Kebijakan Impor Pada Usaha Peternakan Sapi Potong Di Provinsi Jawa Barat. Agripet, P.32-38. APPENDICES Appendix 1. National and Provincial Regulation related to Beef and Trade No. Policy Group Policy Information and Details Decree Number National Level 1 Import Regulation for Carcass, Meat, and Edible Offal to Indonesia - Import Ban for selected agricultural product from Japan and ban for Foot and Mouth Disease FMD carrier from RRC - List of allowed Bovine of Carcass, Meat, Fancy meat, and edible offal to enter Indonesia - Imported carcass, meat, edible offal, and its derivatives allowed only for industry, hotel, restaurant, catering, and special circumstances. Ministry of Agriculture Regulation MAR No. 38 year 2010; No. 51 year 2013; No. 2 year 2009; No. 96 year 2013 2 Maintaining Food Safety - Carcass, Meat, Edible Offal, and Animal have to free of FMD, Rift Valley Fever RVF, Bovine Spongiform Encephalopathy BSE, and Contagious Bovine Pleuropneumonia CBP - Imported Feeder specification: a. Fulfilling the health requirement and certificate of origin.

b. Growth Hormone use and

antibiotics residue c. Maximum age is 60 months with weight 350 kg upon arrival in Indonesia’s port. d. Minimum fattening period is 60 days after quarantine. - If meat comes from high-risk country, the cattle cannot be fed with ruminant feed, no stunning, and max. 30 months old. - Import allowed in 4 place:

a. Soekarno-Hatta International

Airport, Jakarta b. Tanjung Priok Port, Jakarta c. Juanda International Airport, Surabaya

d. Tanjung Perak Port, Surabaya

- Period of Feeder Quarantine: 14 days - Statement of Indonesia free of BSE MAR No 85 year 2013, No 87 year 2013; No 97 year 2013, No 84 year 2013; No 96 year 2013; No 62 year 2006; No 113 year 2013; Ministry of Agriculture Decision No. 667 year 2002 4 Feed Regulation - Feed requirement arrangements, control the circulation of feed, setting limit for feed contamination, other technical Laws No. 18 year 2009; MAR No 19 year 2009; No. 65 year 2007; Minister and administrative requirements, i.e. packaging - The monitoring applied on the manufacturers level, distributors, retailers, etc. - Tariff application of 0 on premix and worm control of Finance Regulation MFR No. 213 year 2011 5 Breed - Slaughtering Productive Cow is prohibited except for research purpose, disease control and prevention. - Livestock breeding, Semen, and genetic resource is documented Laws No. 18 YEAR 2009 in Article 12 and 13; Government Regulation No. 48 year 2011; MAR No 19 year 2012 6 Tariff and Trade - Import Quota application. 2013: 80.000 tons live cattle: 267.000 heads = 48.000 tons of beef - Application of 0 import tariff for fresh chilled frozen carcass from Australia and New Zealand - Application of 0 for beef cattle and 5 for feeder. The 5 tariff also apply for meat fresh, chilled, frozen, whole-carcass, half-carcass, with bone, or boneless. MAR No. 50 year 2011, MFR No. 208 year 2013, No. 213 year 2011, Presidential Regulation No. 26 year 2011 7 Price Regulation - The quota permitted for each importer depends on capacity of pen, inventory, slaughter place, proof of cattle’s procurement and delivery. - Feedlot have to provide proof of importer’s identification, standard pen and contract with standard abattoir, accredited animal welfare and export supply chain certificate - Abattoir: similar regulation applied for feedlot. In addition, the abattoir must have carcass chiller, cold sorage, and cooling truck. MTR no. 699 year 2013 Provincial Level 1 Regional Retribution in DKI Jakarta Tariff setting for service in the region is at least at least 5050 IDRAnimal for Health-checking, pen rent, unloading fee, and animal keeping rent. The recommendation letter is necessary to exchange cattle or meat in-and- outside region. The fee for permission is vary: a. to enter meat from other region: 150.000 IDRrecommendation b. to enter meat from foreign country: 400.000 IDRrecommendation c. to release meat within region: 250.000 IDRrecommendation d. to enter the animals from other region: 50.000 IDRrecommendation Regional Regulation of DKI Jakarta No. 1 in the year 2006 2 Regional Retribution in Kabupaten Serang, Banten Tariff setting for service in the region is at least 15.000 IDRcattle for Health checking, Pen-rent, Abattoir Service Charge, Post-Mortem Check, and Meat withering. Regional Regulation of Kabupaten Serang No. 2 in the year 2011 3 Abattoir Retribution in Kabupaten Bandung Barat Tariff setting for service in the Abattoir is at least pay 15.000 IDRcattle for steersbull for Health checking, Pen- rent, Abattoir Service Charge, Post- Mortem Check, and Meat withering. The Unproductive Cows’ slaughtering charged 30.000 IDRcow Regional Regulation of Kabupaten Bandung Barat No. 6 in the year 2010 4 Abattoir Retribution in North Lampung Tariff setting for service in the abattoir is at least 15.000 IDRcattle for Health checking and Abattoir Service Charge. Regional Regulation of North Lampung No. 11 in the year 2011 5 Abattoir Retribution in South Lampung Tariff setting for service in the abattoir is at least 60.000 IDRcattle for Health checking, Pen-rent, Abattoir Service Charge, and Meat withering. The post-mortem checking fee is 500 IDRkg Regional Regulation of South Lampung No. 9 in the year 2012 Appendix 2. Valuation of Shadow Exchange Rate SER 2011 Description Unit Value Value of ExportXt 1 IDR 1.787.650.781.483.000 Value of ImportMt 1 IDR 1.556.597.431.357.000 Export taxTXt 1 IDR 25.266.000.000 Import tax and admission charge TMt 1 IDR 28.856.000.000 Rupiah Exchange Rate to US Dollar OERt 2 IDRUSD 8 779.49 SCFt - 1,00 SERt IDRUSD 8 779.50