Feed meal prices cut to help ailing industry

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)