Price Game Harming Chicken Farmers

Writer: Safrezi Fitra

Editor: Safrezi Fitra

3/7/2019, 19.22 WIB

Agriculture Ministry said chicken cartel is playing with prices at the farmer level.

KATADATA | Ajeng Dinar Ulfiana

Chicken farmers complained about expensive feed price a few months ago. In 2018, the price of chicken feed rose threefold due to limited supply of corn. But now, farmers are complaining that they have suffered losses due to the low selling price of chicken.

Based on the Minister of Trade Regulation No. 96/2018, the reference price for live birds was actually set at Rp 18,000 - Rp 20,000 per kilogram (kg). However, the farmer’s prices in Central and East Java have reached Rp 8,000 – Rp 10,000 per kg, even though the average price of chicken meat at the consumer level was around Rp 35,000 – Rp 40,000 per kg.

As a consequence, chicken farmers suffered losses. The Association of the National Chicken Farmer Organizations (Gopan) Secretary General Sugeng Wahyudi estimates the losses due to the price decline are reaching Rp 700 billion per month. The incurred cost is Rp 18,000 per kg, but they are forced to sell at a much lower price. In Bogor, the current number of chicken farmers has decreased to 30 from 150 farmers in 2017.

Chicken farmers eventually protested the declining chicken price. The Indonesian Poultry Association (Pinsar) even distributed tens of thousands of free chickens to people in a number of areas in Central Java, such as Semarang, Klaten, Solo, and Yogyakarta.

Pinsar Chairman for Central Java region Pardjuni said the distribution of free chickens is a charity from farmers and a form of protest to the government. The reason is that the current selling price at the farmer level is very low. “There are too many day-old-chicks [DOCs] circulating, resulting in oversupply and price plummeting. Instead of throwing the chickens away, it's better to donate it to the people as a charity,” he said when distributing the chickens in Jebres Sub-district, Solo, Central Java.

Based on Pinsar’s analysis, the price drop was a result of oversupply of DOCs. As quoted by, Pinsar Chairman Singgih Januratmoko said the government is currently opening import taps that exceed the quota of previous years. According to him, quotas should still be given so that there is no oversupply of DOCs like what is happening now.

The drop in chicken price has been happening since last year. In March 2019, the price at the farmer level has dropped to Rp 16,000 per kg from the normal price of Rp 20,000 - Rp 22,000 per kg. The farmers then held a strike in front of the Presidential Palace, Jakarta, Tuesday (3/5).

At the time, the Agriculture Ministry stated that the price had dropped due to falling demand. “There was no oversupply of DOCs. This happened solely because of falling demand this month,” Agriculture Ministry’s Livestock and Animal Health Director General I Ketut Diarmita said on Wednesday (3/6).

Likewise, the Poultry Breeding Association (GPPU) Achmad Dawami said the decline in people’s purchasing power has triggered a fall in the price of chicken meat. After Eid al-Fitr (Lebaran), consumers began to recalculate their financial condition. “There are many chicken meat buyers after Lebaran, but then people start thinking about rearranging their finances. This means that purchasing power is declining,” he told, Thursday (6/20).

But then the Agriculture Ministry changed its statement to be the same as the farmer’s analysis. The government is now dare to say that chicken cartel is playing with prices, which kills the business of independent farmers or people’s farmers.

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