Risk Perception Management and Development Challenges in Micro and Small-Scale Dairy Cattle Farming in West Java
Abstract
This study addresses the increasing risks faced by dairy farming systems, driven by climate change, supply chain disruptions, price volatility, and productivity constraints. It examines the differences in risk perception, business development challenges, and financing scheme intentions among micro and small-scale dairy farmers. A cross-sectional survey was conducted using convenience sampling involving 200 dairy farmers from Bogor (46 micro and 52 small farms) and Bandung (67 micro and 35 small farms) in Indonesia. Risk perception was measured using Likert scales and analyzed using a risk matrix approach to generate risk priority numbers. Differences across farmer segments were assessed using the Kruskal–Wallis test. Business development challenges were assessed using the Friedman ranking and post hoc Wilcoxon tests, while financing intentions were analyzed using multinomial logistic regression. The findings revealed that the most critical risks across all segments were feed price increases, climate change, and infectious diseases (including mastitis). Significant differences in risk perception were observed for the following six variables: feed price, heifer procurement, input availability, milk market absorption, production (mastitis) and infection (foot and mouth disease, bovine viral diarrhoea) disease risk. Despite variations in challenge prioritization, capital constraints and heifer availability consistently appear to be primary barriers to business expansion. Farmers showed optimism regarding prospects (86%), yet face structural limitations in scaling their operations. Financing intentions showed moderate interest in affordable credit (56%), profit-sharing schemes (51.5%), and livestock insurance (65.5%). The multinomial logistic regression results indicate that insurance intention, age, and sex significantly influence financing preferences. This study contributes to the literature by integrating risk matrix analysis, challenge prioritization, and financing behavior modeling to reveal heterogeneous risk perceptions and financial preferences among smallholder dairy farmers in tropical contexts.
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