The Distribution of Gains from Cattle Development in a Multi-Stage Production System: The Case of the Bali Beef Industry

Beef production in Bali is dominated by small-holders, like the majority of Indonesian agriculture. A number of different policies have been implemented to enhance development of this and other parts of the Bali beef industry. Knowledge about the returns from these options for the development of the cattle and beef industry, and their distribution among producers, consumers and others, would better inform policy decision making. This paper examines the benefits from cattle development in a multi stage production representation of the Bali beef industry using equilibrium displacement modelling (EDM). For a 1 per cent exogenous shift in the relevant market, improved productivity of Bali cattle production has the largest total benefits (Rp 3.02 billion, about A$ 0.6 million), over a time horizon of 2-3 years. Bali cattle producers receive a substantial share (35 to 71 per cent) of the total returns from any cost reduction or improved efficiency scenario.