Govt. to Fix Poultry Prices, Clip Wings of Volatile Market
Jakarta. The price of chickens and meat will be fixed in an attempt to curb volatility in the market and raise incomes among independent farmers, the government announced Tuesday (06/12).
Under a revision of a 2016 Agriculture Minister regulation that came into effect from Wednesday, the government will peg day-old chick price at Rp 4,800 (36 cents) a chick, the price of a chicken at Rp 18,000 from a farmer's pen and chicken meat price for end-consumer at Rp 32,000 a kilogram.
Prior to the regulation day old chicken price hovered between Rp 5,000 to Rp 6,000 a chick, while ranged chicken meat price average at Rp 29,900 a kilogram in the past month, data from the Trade Ministry showed.
"This revision is a step to overcome problems in our poultry sector, especially in regards to ranged chicken farming," Agriculture Minister Amran Sulaiman said, as quoted by Antaranews.com.
The minister said farmers associations and companies had agreed to implementing the fixed price mechanism, as the government seeks to ensure no parties bear losses due to the policy.
"We made this agreement to stabilize prices at the consumer and farmer level. So, we wanted to narrow wide prices disparity," he said.
Farmers had complained the day-old chicken price is controlled by large companies like Charoen Pokphan Indonesia, Japfa Comfeed Indonesia and Malindo Feedmill — which are also the largest supplier of chicken feed and often the biggest buyer of the farmers' chicken.
The revision also requires companies to sell day-old chicks in equal proportion to independent farmers and those who exclusively sell chicken to companies. Previously, as low as one in ten chicks sold was from an independent farmers.
Lat year, the local industry was forced to destroy millions of chickens to ease supply volatility after President Joko "Jokowi" Widodo's beef self-sufficiency drive spilled over into the poultry market. The government then curbed beef imports and created a shortage in local markets, skyrocketing beef prices and substitutes, including chicken meat.
Persuaded by high prices, farmers rushed to bring more chickens to market despite an apparent oversupply, which eventually collapsed due and forced many small farmers out of business.
In the aftermath, Business Competition Supervisory Commission (KPPU) sanctioned 11 poultry companies, including Charoen, Japfa and Malindo, for taking advantage of the situation and colluding to sell day-old chick at high price to farmers.
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