Application of System Dynamics Modelling in Evaluating Sustainability of Beef Cattle Production and Business System in Smallholder Farmers in South Sumatera, Indonesia
Application of System Dynamics Modelling in Evaluating Sustainability of Beef Cattle Production and Business System in Smallholder Farmers in South Sumatera, Indonesia
Aulia Evi Susanti1*, Rudy Priyanto2, Muladno2, Dewi Apri Astuti3, Lucia Cyrilla2
ABSTRACT
Beef cattle production and business model as a complex and dynamic concept requires understanding from a production, nutrition, and economic perspective. This study aims to analyze production systems, evaluate smallholder beef cattle businesses, and stimulate business development scenarios to increase income for sustainable business corporations with a dynamic system approach. Data were collected through interview methods to obtain data on production systems and business models, reproductive and economic parameters, and feed applications to obtain production parameters at the Field Station-School for Smallholder Community (FS-SSC) Maju Bersama, Musi Banyuasin Regency in 2021. The feed application experimental design used a factorial 3x2 Randomized Block Design (RBD) with 10 replications. A descriptive analysis was conducted to evaluate the corporate model’s production system and business management. Production analysis was analyzed using ANOVA and data were processed using R studio software version 4.1.2. Furthermore, the observed parameters include average daily gain (ADG), dry matter intake (DMI), pregnancy rate, the ratio of male and female calf births, mortality rates, production costs and income. A business feasibility analysis is calculated by the value of net present value (NPV), benefit/cost (B/C ratio), and internal rate of return (IRR). Vensim software and powersim studio version 10 were used to compile causal loop (CLD) and flow chart diagrams, followed by dynamic system analysis. Based on the simulation results, the existing production model has not been declared feasible as a business with an NPV value of IDR. 683,350,309.27. The simulation results with improved feed and increased marketing showed that the best scenario in corporate business development is semi-intensive breeding. Intensive fattening cattle are given an additional marketing frequency concentrate twice with an interest rate of 6%. The feed application experimental design used a factorial 3x2 Randomized Block Design (RBD) with 10 replications. A descriptive analysis was conducted to evaluate the corporate model’s production system and business management. Production analysis was analyzed using ANOVA and data were processed using R studio software version 4.1.2. Furthermore, the observed parameters include average daily gain (ADG), dry matter intake (DMI), pregnancy rate, the ratio of male and female calf births, mortality rates, production costs and income. A business feasibility analysis is calculated by the value of net present value (NPV), benefit/cost (B/C ratio), and internal rate of return (IRR). Vensim software and powersim studio version 10 were used to compile causal loop (CLD) and flow chart diagrams, followed by dynamic system analysis. Based on the simulation results, the existing production model has not been declared feasible as a business with an NPV value of IDR. 683,350,309.27. The simulation results with improved feed and increased marketing showed that the best scenario in corporate business development is semi-intensive breeding. Intensive fattening cattle are given an additional marketing frequency concentrate twice with an interest rate of 6%. It was concluded that the beef cattle business in smallholder farming system was feasible with improved feed, increased marketing and a maximum interest rate of 6% per year. It was concluded that the beef cattle business in smallholder farming system was feasible with improved feed, increased marketing and a maximum interest rate of 6% per year.
Keywords | Cattle business, Dynamic model, Financial feasibility, Sustainability
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February 2023
Vol. 11, Iss. 2, Pages 189-354
