Poultry breeders lament high feed prices

JAKARTA (JP): Small-scale poultry breeders, many of whom are facing bankruptcy as a result of increasingly high feed prices, are asking the government to help them shift to other businesses to avoid manipulation by feed-producer cartels.

Chairman of the Association of Indonesian Poultry Breeders Alie Aboebakar was quoted by Antara as saying in Cirebon, West Java, over the weekend that the businesses of small-scale poultry breeders, most of which are chicken-breeders, have been badly affected by the prices of poultry feed, which recently rose by Rp 29 (1.3 U.S. cents) per kilogram to reach Rp 873 per kg for starters and to Rp 825 per kg for finishers.

Aboebakar was doubtful that the soaring prices were caused by corresponding increases in the price of corn, which is a main ingredient in poultry feed, and said that, if any price hikes had occurred on the international market, "the information has never been clear".

He said that the government has so far been unable to control feed-producing businesses and has simply allowed the cartel to bring down small-scale poultry breeders.

"The (feed producing) cartel, which has been increasing the prices of their products, has caused both the bankruptcy of small breeders and a rise in the country's inflation rate," he said.

Aboebakar said that the present level of corn imports was "irrational".

In 1993, he said, imports reached 500,000 tons and doubled to one million tons in 1994. Imports for this year are expected to reach 1.1 million tons.

He pointed out that the large amount of corn imports could actually be considered an opportunity to encourage corn farmers to boost their production.

"Its a pity that the Ministry of Agriculture has disregarded the association's bid to boost corn-farming efforts and reach self-sufficiency in corn," he said.

Aboebakar estimated that by cutting back this year's corn imports -- of 1.1 million tons -- Indonesia could save up to $220 million.

This sum, he said, would be more useful if it were given to domestic farmers, who could use it to increase their incomes and create self-sufficiency in the country's corn production.

Prices of day-old chicks (DOC) have been increasing over the last eight months, from Rp 825 in January to the current price of Rp 1,075.

Aboebakar said there should be no reason for the increase in feed prices because the government recently introduced deregulatory measures which removed tariffs on corn imports and increased the proportion of soybean cake imports from 70 percent to 80 percent of the demand for raw materials.

Locally-made soybean cake, which is an important ingredient in cattle feed, is sold at Rp 650 per kg, while imports are sold at about Rp 570 per kg.

Aboebakar said the government should remove cartel practices, especially in light of the proximity of the advent of free trade in Southeast Asia, under the ASEAN Free Trade Area, in 2003 and in the Asia-Pacific region, under the Bogor Declaration of the Asia Pacific Economic Cooperation forum, in 2010.

He said that if the government was reluctant to take concrete steps to enforce Law No. 6/1967 on investments in the poultry- breeding business, the sector should be limited to big companies.

In such a situation, he said, small-scale companies should be assisted to move into other animal husbandry businesses, preferably those that received little competition from big companies.

"Rather than being knocked out by cartel practices, I think it would be better if small-scale poultry breeders considered businesses other than chicken-breeding. But it must be guaranteed that, once they become strong, they will not be hit again by big businesses," he said. (pwn)