The Indonesian Independent Smallholder Poultry Farmers Association\n(Permlar) is pushing for improvements in the management of feed raw\nmaterial imports and the supply chain to stabilise chicken prices and\nensure the sustainability of smallholder poultry farming. The General\nChairman of Permindo, Kusnan, stated that the prolonged low prices of\nlive birds (LB) cannot be explained solely by oversupply.<\/p>\n
\u201cBehind the drop in chicken prices at the farmer level, there are\ninterconnected structural issues, ranging from the management of feed\nraw material imports and liquidity pressures in the feed industry to the\nweakening bargaining position of smallholder farmers,\u201d he said in a\nstatement received in Jakarta on Wednesday (24\/6\/2026).<\/p>\n
Currently, live bird prices in various production centres range\nbetween Rp 15,000 and Rp 17,000 per kilogram, whereas the cost of\nproduction (HPP) has reached approximately Rp 22,000 per kilogram.\nMeanwhile, the price of feed, which is the largest cost component, has\nincreased to between Rp 8,600 and Rp 9,500 per kilogram, an increase of\nabout Rp 1,000 per kilogram compared to the previous period.<\/p>\n
This situation causes smallholder farmers to suffer losses of\napproximately Rp 5,000 to Rp 7,000 per kilogram of chicken sold, or\nroughly Rp 8,000 to Rp 10,000 per bird, based on an average harvest\nweight of 2 kilograms.<\/p>\n
Permindo describes this situation as a \u2018cost-price squeeze\u2019, where\nproduction costs continue to rise while selling prices decrease, thereby\neroding profit margins and threatening business sustainability.\nAccording to Kusnan, smallholder farmers are facing not only a chicken\nprice crisis but also a margin crisis due to uncontrolled increases in\nfeed prices.<\/p>\n
Permindo believes the root of the problem is also triggered by\nchanges in the procurement mechanism for imported feed raw materials,\nwhich are becoming increasingly concentrated through a single gateway\nusing a \u2018cash before delivery\u2019 (CBD) system. This mechanism increases\nthe working capital requirements for the feed industry, particularly for\nsmall and medium-sized factories facing liquidity constraints.<\/p>\n
This pressure subsequently drives accelerated debt collection from\nfarmers, forcing many to sell their chickens more quickly to meet the\ncosts of feed, day-old chicks (DOC), medicines, labour, and coop\noperations. The resulting \u2018panic selling\u2019 occurring simultaneously\nacross various production centres has further weakened the farmers\u2019\nbargaining position, driving live bird prices below government reference\nprices.<\/p>\n
Permindo views this condition as a reflection of the \u2018bullwhip\neffect\u2019 theory in the supply chain, where disruptions in the upstream\nsector result in much larger impacts in the downstream sector. The\norganisation is calling on the government to evaluate the management of\nfeed raw material imports, provide supply chain financing, establish a\nnational buffer stock, strengthen live bird and carcass absorption\nprogrammes, and build a more transparent poultry data system to maintain\nthe sustainability of smallholder farmers and national food\nsecurity.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/chicken-prices-below-production-cost-permindo-calls-for-import-feed-governance-review-1782287614", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }