Expert Criticises Plan for Foreign Investment in Layer Chickens, Reveals Root Problems for Farmers

Professor of Livestock Socio-Economics at Universitas Gadjah Mada (UGM) in Yogyakarta, Prof Budi Guntoro, assesses that the potential entry of foreign investment into layer chickens in Indonesia requires careful examination. “The discourse on opening up foreign investment in the layer chicken subsector is deemed necessary to be examined carefully amid the national egg production conditions that are actually experiencing a surplus,” Budi stated in Yogyakarta on Thursday. According to Budi, data shows that national chicken egg production in 2025 will reach 6.34 million tonnes and is projected to increase to more than 6.5 million tonnes in 2026. That figure exceeds the national consumption needs, which are around 6.22 million tonnes. “This means Indonesia is not short of eggs, but rather facing a structural surplus,” he said. Market Imbalances, Price Fluctuations, and Weakness of Farmers He stated that the main challenges in the layer chicken subsector currently are not a lack of production, but issues of market imbalances, price fluctuations at the farmer level, and the weak bargaining position of smallholder farmers. “Smallholder farming has so far been the backbone of national egg production. In addition to playing an economic role, this sector also has social impacts through job absorption and driving the local economy,” he said. Therefore, he warns that the entry of foreign investment into the livestock sector could increase market concentration and pressure small businesses if not accompanied by strong regulations. Meanwhile, regarding the Free Nutritious Meals Programme (MBG), Budi assesses that the egg needs for the programme are relatively small, namely around 700 million eggs per year or only about 0.6 to 0.7 percent of total national production. “The MBG programme should be an opportunity to absorb surplus production and stabilise prices, rather than becoming a reason to increase production capacity through new investments,” said the Dean of UGM’s Faculty of Animal Science. He stated that strengthening farmer cooperatives, medium-term purchase contracts, and distribution support could be solutions to ensure the programme’s needs are met, while also strengthening local farmers. Prof Budi also stated that food sovereignty is not just about the amount of production, but also about who produces it and how policies favour small businesses. “In the current surplus condition, the more appropriate step is to strengthen smallholder farming, not to open up space for domination by large capital, including foreign,” he said.