Offal and beef demand in Indonesia and Australia's trade prospects (a case study of Makassar City)

Understanding meat demand and its characteristics are important in giving a more accurate evaluation of the factors that govern consumers’ willingness to pay for meat products, and in understanding the relationship and responsiveness between variables. Demand for meat, including beef and beef offal is continuously increasing in Indonesia, and studies in meat demand have been conducted extensively. However, most of those studies did not consider offal products. This study focuses only on the consumption of offal and beef, considering that domestic production has not met the domestic demand. In addition, some problems still appear as the beef self-sufficiency program has not yielded the maximum desired results. This study has five main purposes. Firstly, it provides up to date information about the determinants of social-demographic factors for offal and beef expenditures with probit model analysis. Secondly, it estimates the demand elasticities for offal and beef (local and imported) by using the linear approximate of almost ideal demand system (LA/AIDS) model with the inclusion of Inverse Mill Ratio (IMR). Thirdly, this study estimates the potential impact of socioeconomic and demographic factors, product attributes (quality and affordability) and market factor (availability) on the willingness to pay (WTP) for imported offal with the hedonic price model approach. Fourthly, this study examines the actual WTP for imported offal and calculates the marginal implicit price (marginal willingness to pay) by using the hedonic price model approach. Finally, this study explores Australia’s trade prospects for imported offal in Indonesia based on the LA/AIDS, WTP and descriptive analyses. Research findings show that several important factors such as age, income, ethnicity, occupation, family size and level of education significantly affect the expenditure for local and imported offal, and local and imported beef. Offal and beef are classified as necessity goods in Makassar, and consumers rely heavily on offal and beef products. This result is supported by the positive expenditure elasticity of the study, where consumer income increases the demand for local and imported offal and beef. The WTP analysis reveals that if the price of imported offal on the market increases, the willingness to pay for the product will decrease. Therefore, the availability of the products in the market should be a large focus of the Indonesian Government, including local and international firms. Maintaining the sustainability of meat products in the country, including with efficient trade policies of imported offal and beef is crucial. Australia as a major exporter of live cattle and beef products in Indonesia could gain more insight from this perspective. The research contributes to the literature of the demand and practice studies, especially in assisting producers, marketers and policy makers in developing effective supply, including the market share of offal and beef in Makassar City. The results of this study will have important implications and better understanding of beef and offal industries in Indonesia

Identifikasi niche marketing produk jeroan sapi di Indonesia

Jeroan sapi secara luas telah dikonsumsi pada berbagai kelompok masyarakat di Indonesia. Berbagai hidangan masakan tradisional menggunakan jeroan sapi sebagai bahan utama seperti coto makassar, sop saudara, rendang, pallubasa, dan soto. Kebutuhan jeroan sapi di Indonesia masih harus dicukupi dengan produk impor dimana produksi dalam negeri belum mencukupi. Selain itu, peningkatan harga daging sapi dari tahun ke tahun menyebabkan konsumen memilih beralih untuk membeli jeroan sapi. Hal ini merupakan peluang yang dapat dimanfaatkan oleh produsen dan pedagang. Penting untuk melakukan strategi pemasaran yang tepat agar konsumen dapat membeli jeroan sapi dengan kuantitas, kualitas dan atribut yang mereka inginkan. Tulisan ini bertujuan untuk mengidentifikasi niche marketing atau ceruk pasar jeroan sapi di Indonesia dengan melihat strategi yang dapat diterapkan oleh pedagang dalam menjual produk jeroan sapi. Studi literatur khususnya tentang pasokan jeroan sapi, konsumsi dan niche marketing jeroan sapi digunakan dalam studi ini. Studi ini menunjukkan bahwa untuk pemasaran jeroan sapi di Indonesia perlu melihat latar belakang sosial ekonomi konsumen, budaya makanan lokal, dan preferensi konsumen khususnya kualitas, harga dan jenis jeroan sapi yang diinginkan

Beef and offal market in Indonesia – evaluation of import trade policy

Indonesian market has a great potential for meat products due to a large population. This condition has been a good market opportunity for producers, investors, and suppliers. Recently, domestic production has not been able to meet demand, so import is still needed. Moreover, the Indonesian government program for self-sufficiency in livestock products has not shown the maximum results. This study focuses only on the market of beef and offal considering that domestic production has not met the domestic demand. In addition, some problems still appear as beef self-sufficiency program that has not yielded the maximum results. Therefore, Indonesian trade policy for beef and offal will be evaluated in this regard, and several recommendations will be made. This paper is divided into four main parts. The first part is the introduction which delivers the background of the study. The second part discusses beef and offal market and consumption in Indonesia. The third part evaluates the import trade policy for beef and offal in Indonesia. Finally, the last part is the conclusion

Factors affecting consumers' willingness to pay for imported offal in Indonesia: a case study for Makassar City

This study explores the factors that affect consumers’ willingness to pay (WTP) for imported offal in Makassar, Indonesia. The primary data derived from a field survey and hedonic price model are used for obtaining the estimated results. The paper finds that age, occupation (OFFICER), level of education (UNIVERSITY GRADUATE), ethnicity (BUGIS), NON-AFFORDABILITY, and ACCESSIBILITY significantly affect the WTP for imported offal in Makassar. Also the marginal implicit price (MIP) calculation shows that the willingness to pay of higher prices for imported offal decreases for older consumers. It is also found that if the price of imported offal in the market increases, the willingness to pay for the product will decrease

Socio-economic and demographic factors of beef offal demand in Indonesia: a case study for Makassar City, Indonesia

This paper examines the effects of socio-economic and demographic factors on beef offal demand in Makassar city, Indonesia. Makassar is purposively selected as the study area for this research. This selection is based on local offal food traditions, the number of population and the city as the center of trading activities in South Sulawesi Province. For the empirical study, a consumer survey was conducted at traditional markets and supermarkets throughout Makassar city. A Probit model is used to analyse the socio-economic factors affecting beef offal expenditures. Our findings suggest that income (high income), ethnicity (Bugis and Makassar) and level of education (university graduates) are significant factors for local offal expenditures. For imported beef offal, age, level of education (senior high school), income (high and medium) are found to be statistically significant. With regard to consumers’ attitudes on imported beef offal, it is found that product quality and price affordability are positive and statistically significant factors in the model estimated