Indonesia remains 80% dependent on imported milk as government targets local production

Imports dominate national milk supply

Indonesia continues to import 80% of the milk needed by its domestic market, leaving local producers responsible for only a fifth of national supply. Deputy Coordinating Minister for Food Hanif Faisol Nurofiq disclosed the figure after visiting dairy production at the SAE Pujon Cooperative in Malang Regency on July 16, 2026, according to detik.com.

Hanif said the Indonesian market absorbs approximately 4.5 million to 5 million liters of milk annually. He described the imbalance between demand and domestic availability as a threat to national food sovereignty, arguing that Indonesia must strengthen both dairy farming and processing if it wants to reduce its exposure to foreign suppliers.

The official also linked limited supply to low per-capita consumption. Based on a population of 288.3 million and the figures he presented, Hanif said current availability was equivalent to only one spoonful per person per day. He contrasted this with a Food and Agriculture Organization recommendation of two to three glasses daily.

Government plans expansion of dairy herd

The Ministry of Agriculture has prepared a roadmap that includes importing feeder cattle and high-quality dairy breeding cows to increase the domestic herd. The plan focuses on expanding upstream capacity, but Hanif warned that adding animals alone would not deliver self-sufficiency unless the government also addresses purchasing practices in the processing industry.

Indonesia’s dairy supply chain is divided across different administrative authorities. Primary production falls under the Ministry of Agriculture, while downstream processing is overseen by the Ministry of Industry. Hanif identified the absence of coordination between these two parts of the chain as a central reason why previous self-sufficiency efforts had failed over several decades.

Processors can currently select their raw materials without controls directing them toward domestic milk. According to Hanif, imported products remain substantially cheaper because supplier countries already have established dairy ecosystems. That cost gap makes imports attractive to industry but leaves Indonesian farmers vulnerable because their production costs prevent them from competing directly.

Nutrition program could reshape demand

The government intends to use its Free Nutritious Meals program, known as MBG, to improve children’s diets and encourage a broader habit of drinking milk. Its extensive reach could create additional demand for dairy products, making reliable procurement and production planning more important for farmers, cooperatives and processors.

For domestic producers, the policy creates an opportunity only if rising institutional demand is connected to local supply. Herd expansion takes time, while processors require consistent volumes, quality and pricing. Without coordination between these requirements, additional consumption could increase import demand instead of strengthening Indonesia’s dairy industry.

Hanif said the government’s economic policy was shifting from a primary focus on headline growth toward greater self-sufficiency in locally produced goods. For the milk market, implementation will depend on whether cattle imports, farmer economics and processor sourcing rules are managed together. The current 80% import share shows the scale of capacity that domestic suppliers would have to replace.