The chicken farmers do not seem to have come out of the problem yet. The latest is coming from the poultry industry. The government is rumored to be allowing imports of Brazilian chickens even though prices have just stabilized after being plummeted in June-July.
When prices fell two months ago, farmers asked for government assistance to control the supply and consumption of chickens. This method proved useful, especially at the level of independent breeders.
Well, not yet a month to enjoy the success, a storm came from Brazil. The Indonesian government cannot help but loosen the provisions on the import of chicken meat. It is because Indonesia has lost the trial of chicken importation dispute with Brazil in the World Trade Organization (WTO) in 2017.
Trade Minister Enggartiasto Lukita said Indonesia could not refuse the import of Brazilian chicken meat. “There is no other choice. We have lost, what else can we do? Rules must be changed,” he said in Tangerang, Wednesday (8/14).
According to him, the import still has a long process. Brazilian chickens must have halal certification and meet health and hygiene (sanitation) requirements. The government still has to revise the regulations from the Trade Minister and the Agriculture Minister regarding the import of horticultural products.
This problem stems from the Brazilian government’s lawsuit. They asked for the formation of a panel to the Dispute Settlement Body (DSB) of the World Trade Organization with a case number BS484 entitled “Indonesia-Measures Concerning the Importation of Chicken Meat and Chicken Products” on October 16, 2014.
Based on the lawsuit, 18 other countries were acting as third parties, including the US, European Union (EU), Japan, South Korea, China, New Zealand, Norway, Vietnam, Paraguay, Thailand, Canada, Argentina, India, Australia, and Russia.
After going through a series of trials, as quoted by Antara, the WTO issued a final decision on May 10, 2017. Indonesia won three provisions because Brazil was deemed to have failed to prove the ones that contradicted the WTO agreement. However, Brazil won four others.
Indonesia decided not to appeal with the consideration that some conflicting provisions had been amended and simplified. However, the government still requires technical regulations related to sanitary requirements and food security.
Breeders Reject Plans to import Brazilian Chickens
The chicken farmers became restless. Secretary General of the National Poultry Breeders Association (Gopan) Sugeng Wahyudi said the entry of Brazilian chickens could bring down the price of chickens from local breeders in traditional markets. “This has the potential to stop the production of smallholder farmers,” he told Katadata.co.id.
It is not an excessive concern, given the cost of producing local chickens is higher than in Brazil. According to his calculations, the difference in price could reach Rp 6,000 per kilogram (kg), with the cost of local chicken production reaching Rp 18,000 per kg.
Therefore, he said the government should help improve the quality of the local chicken industry before allowing imports. The trick is to adjust the selling price of livestock production facilities (Sapronak).
The price of corn needs to be reduced because it is the main ingredient of feed and covers 70 percent of the cost of chicken farming. “If the price of feed goes down, the price of chicken certainly follows,” he said.
The Association of Indonesian Poultry Slaughterhouses (Arphuin) also rejected the planned import of chicken meat. As well as being able to shut down the business of poultry farming, Brazilian chicken meat is also not necessary. “This import does not have a multiplier effect on the Indonesian economy,” Arphuin Head of Legal and Public Relations Cecep M Wahyudin.
Based on data from Statistics Indonesia (BPS), chicken carcass production reached 3.38 million tons in 2018, exceeding the projected needs of only 3.05 million tons. Meanwhile, the amount of broiler chicken meat production is reflected in the following Databoks chart.
He asked the government to consider the case of Brazilian chicken meat containing salmonella bacteria and harmful to health. This incident prompted the EU to investigate slaughterhouses owned by Brazilian exporters.
Besides, Indonesia also needs to learn from the Philippines, which is currently having difficulty controlling chicken imports from the US, Brazil, and other countries. “Once the imported products enter, it will be difficult to stop,” he said.