Poultry feed manufacturing remains costly
Poultry feed manufacturing remains costly
JAKARTA (JP): The government's package of reform measures for
the poultry feed industry has failed to lower feed prices because
it has not been supported by efficiency improvements on the part
of producers, a senior official says.
The agriculture ministry's Director General for Animal
Husbandry Soehadji said yesterday that poultry feed producers
need to improve their performance and boost efficiency in order
to lower prices.
"The ideal ratio of raw material costs and other expenses is
90 to 10. Presently, however, most poultry feed producers have a
ratio of 70 percent for raw materials, 27 percent for operational
costs and three percent for other expenses," he told a hearing
between the House of Representatives' Commission IV, which
oversees agricultural and forestry affairs, and Minister of
Agriculture Sjarifudin Baharsjah.
Soehadji said that the government's deregulatory measures,
introduced in May and June, should have helped to reduce prices.
"But the low efficiency of producers, in addition to
unfavorable prices on the international market, has kept prices
of poultry feed high," he said.
Soehadji said the government has encouraged private poultry
feed producers to improve their efficiency by minimizing
operating expenses and bringing down their proportion from 27
percent to 10 percent.
"Efficiency will become an increasingly important factor in
the international trade liberalization era under the World Trade
Organization," he said.
Measures
The government's deregulatory measures, introduced in May,
covered the aspects of investment, import tariffs and trade in
the poultry-breeding industry.
Import tariffs on corn, for example, were reduced from five
percent to zero and corn gluten meal from 10 percent to zero.
A further deregulation in June allowed poultry feed an
imported soymeal content of up to 80 percent, up from the
previous ratio of 70 percent. Beginning next April, the
government will even allow feed producers to import all of their
soymeal requirements.
In spite of deregulation, however, prices of poultry feed have
remained high and have soared still higher from time to time.
House members said that, while deregulation should have cut Rp
1.5 (less than one U.S. cent) per kilogram, prices have in fact
increased by Rp 20.6 per kilogram. In August, prices rose by Rp
29 (1.3 U.S. cents) per kilogram to Rp 873 per kg for starters
and to Rp 825 for finishers, compared with their levels in the
previous month.
Sjarifudin said that his office, in cooperation with the
ministry of transportation, is attempting to reduce red tape in
the fishing industry.
"It is possible to drastically reduce the 31 steps which are
currently needed to obtain permits to operate," he told
reporters.
House members also questioned Sjarifudin over the possibility
of allowing the importation of second-hand fishing vessels, which
remains prohibited.
He said the government is formulating regulations on the
importation of fishing vessels.
Sjarifudin said that small vessels, measuring between 30 and
60 gross tons, are already manufactured in Indonesia and do not,
therefore, need not be imported.
"This is the size of vessels that our fishermen need. The
requests to allow large vessels of over 100 tons come from large-
scale businesses," he said, adding that large vessels could be
produced by PT PAL, a state-owned shipbuilding company. (pwn)