COST-BENEFIT ANALYSIS OF RISK MANAGEMENT PROGRAM ON FOOD SAFETY IMPLEMENTATION IN INDONESIA MILK FORMULA INDUSTRY

• Main Author: Fahmi Hikmatiyar, Akhmad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/63029
• Institution: Institut Teknologi Bandung

Indonesian FDA issued Head of Indonesian FDA Regulation Number 14 of 2015 concerning the Implementation of the Risk Management Program (RMP) on Food Safety in the Milk Formula Industry. This regulation mandatory requires all milk formula manufacturers in Indonesia to implement a risk-based food safety self-regulatory. Since RMP was issued in 2015, there has never been conducted an economic aspect evaluation of the implementation of this program. This can be seen from the Policy Quality Index for Food commodities which is still behind compared to other commodities in Indonesian FDA. Based on Indonesian FDA Performance Report 2020, the index achievement in the 4th position out of 5th. Even exceeded the target, which was 81.04 of 73 target index. Another symptom that could become the urgency of conducting an evaluation of the RMP can be seen from the growth industry implemented RMP which has decreased by 50% from 2016 to 2020. The objective of this study is to analyse the program feasibility, major costs, major problems, and benefits in the implementation of Risk Management Program on Food Safety in Milk Formula Industry in Indonesia and formulated appropriate solution to improve assistances strategy for implemented RMP. This study used a descriptive quantitative and qualitative approach that analysed primary data to determine the feasibility of program and identify the major costs and benefits experienced in implementing and operating RMP by the industry. Calculated NPV and BCR conducted to determine the program feasibility while Analytical Hierarchy Process (AHP) was conducted to identify the rank of major cost and benefit in implementing and operating RMP. The result show that NPV value is IDR 94,105,577,262 while the BCR is 3.09. This conclude that the RMP program is feasible to implement in the milk formula industry or industries that have a good initial level of food safety. Furthermore, the operating cost in record-keeping was the most significant operational cost increased, while investment in new machinery, technology, and equipment was the largest implementation cost. In the other hand, the major benefits are a fast-tracked scheme in product registration (MD) and certification (HS, CPPOB, and Export Certification). Based on system thinking and analysis developed in this study, it can be concluded that there are three main variables that can be intervened: Increasing and optimizing benefits of RMP through the fast-track scheme; Increasing RMP branding to the public to developed public awareness and developed a good market image for products that produced by industries that have implemented RMP; and Increasing assistances program in the early stage of implementation of RMP.