Program planned to lower poultry feed prices

BOGOR, West Java (JP): The government is planning a crash program to bring down soaring poultry feed prices, which will involve boosting corn production -- a main ingredient in poultry feed -- and reducing corn imports.

Director General of Animal Husbandry Erwin Soetirto said yesterday that although corn production last year showed an increase, it was unable to meet the demand from feed producers and poultry breeders.

Thus, feed prices remained hovering at high levels, which were unaffordable to small-scale poultry breeders.

"Poultry feed consists of so many imported components... Problems arise because on the one hand, poultry feed producers need corn. On the other hand, however, farmers are reluctant to grow the commodity for fear of not being able to sell it," Erwin said.

Earlier reports showed that Indonesia's corn production increased by 19.7 percent to 8.2 million tons last year over 1994.

Corn makes up about 60 percent of poultry feed.

Erwin, who was speaking at a gathering of academicians and students from Bogor Agricultural University's School of Animal Husbandry, explained the government's policies and plans to develop the country's animal husbandry sector.

Erwin said yesterday that the government may, in future, require feed producers to buy domestic corn for their raw material supply from places outside Java and southern Sumatra.

"Currently, producers buy corn only from Java, Lampung and South Sumatra because of their proximity. But if they are required to buy from places such as Sulawesi and Maluku, farmers will be more willing to plant and Indonesia will be able to save on the expenses it uses for imports," Erwin said.

The government last year introduced a number of deregulatory measures for agricultural products, including one which removed tariffs on corn imports. This induced poultry feed producers to opt for imports rather than domestic yields.

Erwin said the government was also conducting efforts to boost soybean cake and fish meal production, both of which are also ingredients in poultry feed.

He said that self-sufficiency in the raw materials of poultry feed (soybean cake and corn) will help bring down prices to a level which is affordable to small-scale breeders.

The issue of soaring prices of poultry feed has been a lengthy one.

Last year, many small-scale poultry breeders faced bankruptcy as a result of steady increases in feed prices.

Producers said the increases were caused by the corresponding rise in the price of imported corn, but the breeders felt this was not the issue.

Instead, they accused the large -- yet small number of -- producers of controlling the market and, in turn, the feed prices.

The breeders considered there should have been no reason for the increase in feed prices, because the government had earlier introduced deregulatory measures which removed tariffs on corn imports and increased the allowed proportion of soybean cake imports from 70 percent to 80 percent of the demand for poultry feed raw materials.

Last month, small-scale breeders were even more affected when large supplies of day-old chicks (DOC) produced by large-scale breeders flooded the market, causing oversupplies of up to 20 percent, or about 2.8 million DOCs.

In turn, prices went down to between Rp 600 (26 U.S. cents) and Rp 900 per chick, while feed prices went up to Rp 860 to Rp 890 per kilogram. (pwn)