Program planned to lower poultry feed prices

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)