Feed meal prices cut to help ailing industry

JAKARTA (JP): The government has lowered feed meal prices to Rp 1,400 (14 U.S cents) per kilogram from between Rp 1,500 and Rp 1,800 per kilogram to help the country's ailing poultry industry, a senior official at the Ministry of Agriculture said Tuesday.

Director General of Animal Husbandry Erwin Soetirto said Tuesday that the new price would be effective by the end of this month after Bank Indonesia, the central bank, disbursed special credit facilities to poultry farmers.

"Feed meal producers have to sell their products at Rp 1,400 per kilogram. It is an ideal price, it's not too much of a burden on farmers, and producers can still profit," he was quoted by Neraca business daily as saying.

He added that the government would punish feed meal producers found guilty of selling products over the standard price.

Early this year, Bank Indonesia decided to provide special credit facilities to help the country's financially troubled poultry farmers.

The central bank said that each farmer would be entitled to two loan packages, worth Rp 25 million each, which was to be used to buy broiler chickens, feed meal and medicine.

The currency crisis, which has slashed the rupiah's value by about 75 percent, has more than doubled the price of feed meal as most of its raw materials is imported.

The skyrocketing prices have forced at least 80 percent of the country's 17,600 poultry farmers out of business.

The secretary-general of the Association of Indonesian Poultry Producers Heru Ananto said the government's recent decision to impose a 10 percent value-added tax on sales of feed meal concentrate and poultry products, and to increase fuel and power tariffs further weakened the industry.

The new tax and the rise in fuel and power tariffs had almost doubled the price of broiler meat due to higher production and transportation costs, he said.

He said the high meat prices had also caused a sharp drop in demand.

Last month, poultry production was only 20 percent of the production level before the economic crisis hit the country in August, he said.

He said that in March, production was about 40 percent of the precrisis level.

The country's poultry farmers could produce over 12 million chickens per month early last year. (gis)