Jakarta (6/12) - The Chairman of the Indonesia Competition Commission (ICC), Prof. M. Afif Hasbullah, submitted a letter of advice and consideration to the Minister of Agriculture on November 30, 2023, for various improvements in policies related to chicken and poultry farming. This emerged after ICC conducted an evaluation of government policies on chicken and poultry farming to follow up on various inputs and information from the public. The evaluation was conducted on Regulation of the Minister of Agriculture No. 32/PERMENTAN/PK.230/9/2017 of 2017 on the Supply, Distribution, and Control of Broiler Chickens and Consumption Eggs, particularly on the Circular Letter on Early Culling and Cutting Hatching Eggs issued by the Directorate General of Livestock and Animal Health.

In the evaluation, ICC concluded that the agreement on early culling and cutting of fertile hatching eggs, as well as cross-monitoring, has been ineffective. The circular letter also does not address the problem of disparity between the live bird selling price of farmers and the purchase price (carcass) of consumers, which is strongly indicated to be regulated by brokers. ICC also considers that various innovations and bio-technologies in poultry around the world continue to develop and create a progression of more productive broiler breeds with a decreasing mortality rate, making it difficult to regulate the balance of supply and demand for broiler and layer breeds. The circular policy, which has been implemented for two years, is also ineffective in overcoming the bankruptcy of independent chicken farms. Meanwhile, the Ministry of Agriculture cannot address the issue of managerial guidance for small and medium enterprises and the rescue of industries located in other agencies.

In addition, ICC also concluded that the excess supply of chicken meat and eggs can be used to overcome stunting or malnutrition in the community. Therefore, ICC hopes that there will be a social programme by the government to purchase chicken meat and eggs from independent farmers to be distributed to the lower middle class so that it can contribute to overcoming stunting and pursuing the target of per capita consumption of animal protein while saving independent livestock businesses.

Noting various findings in the policy evaluation, ICC submitted several recommendations to the government. Primarily, ICC suggests that the Ministry of Agriculture focus on opening up broad opportunities to investors in the feed and livestock production facilities (sapronak) business in order to break the market concentration in the sector. For information, the poultry market from upstream to downstream is concentrated among several integrated business actors. Even in the feed market, five players control 65.9% of the market share.

To overcome market concentration upstream in terms of the provision of Grand Parent Stocks (GPS), ICC recommends that the Ministry of Agriculture return the GPS fulfilment plan to the selection mechanism (competition for the market). In particular, through a transparent and competitive selection/assessment process of prospective GPS importers according to predetermined criteria, Furthermore, the first come, first served mechanism can be prioritised over the current GPS import quota allocation mechanism, as long as the cage capacity and managerial capabilities of the prospective GPS importers meet the requirements.

Meanwhile, to help independent farmers with small-scale businesses, ICC recommends that the Ministry of Agriculture consider state intervention through affordable and targeted input provision policies. For example, providing cold storage facilities from the government for independent farmers as an alternative solution to overcome production surpluses through further processing of live birds into frozen chicken meat.