Indonesian ministry encourages businesses to buy farmers’ chickens as prices fall

The Agriculture Ministry is collaborating with businesses to encourage them to purchase farmers’ chickens, improving the current oversupply and prices as breeding season unfolds.

The ministry on Monday officially formed a partnership with the National Poultry Breeders Organisation (Gopan), the Poultry Farmers Association and Information Center (Pinsar) and animal feed company PT Universal Agribisnisindo.

“The partnership was formed as the government’s effort to help support independent breeders so they can absorb live bird production and is part of the efforts to improve marketing of livestock products,” the Agriculture Ministry’s press statement reads.

Eight companies will be joining the existing 23 enterprises that have committed to absorbing around 4 million live birds across Indonesia, according to the ministry’s statement. Of the figures, 15 companies will focus on Java.

The country’s supply of chicken meat was estimated to exceed the demand by 204,632 tonnes between March and May, according to ministry data, leading to a sharp decline in farmers’ selling prices.

In Bogor and Depok in West Java, the average price of chicken fell to between Rp 10,000 (S$0.90) and Rp 12,000 per kilogram, around 34 per cent lower than the production cost, according to Pinsar data on April 18.

Chicken farmers are facing oversupply on top of logistics problems caused by the government’s measures to handle the Covid-19 outbreak.

Regions such as West and East Java, both the national centre of chicken production and the hardest-hit provinces, are imposing travel and social restriction measures to contain the fast-spreading virus.

“Amid the Covid-19 outbreak, we are seeking innovative measures to protect independent farmers and ensure a smooth distribution of chicken meat to the hands of consumers,” the ministry’s animal husbandry director general I Ketut Diarmita said.