Jakarta, Indonesia — Indonesia’s poultry industry is facing mounting pressure as live chicken prices have dropped sharply, leaving small-scale farmers vulnerable to financial collapse.
In several regions, particularly Central Java, prices have fallen to Rp 15,000 per kilogram, far below the government’s reference price of Rp 19,500/kg.
Market Shock and Farmer Losses
The steep decline in live chicken prices has triggered alarm among independent farmers, who are now selling at a loss.
Production costs, including feed and maintenance, exceed current market prices, eroding profit margins and threatening livelihoods.
While large poultry companies with stronger capital reserves can absorb the downturn, small scale farmers risk bankruptcy if the situation persists.
Oversupply and weak demand are cited as the primary drivers of the collapse.
Farmers complain that despite government-set reference prices, buyers continue to push rates lower, worsening the imbalance between production costs and market returns.
Government Intervention
In response, the Ministry of Agriculture has moved to stabilize the market. The Directorate General of Livestock and Animal Health (Ditjen PKH) convened a coordination meeting with the Association of Poultry Slaughterhouses (ARPHUIN) and major industry players.
Suspension of new permits for poultry-related businesses until prices return to reference levels.
Appeals to slaughterhouses to refrain from purchasing below Rp 19,500/kg.
Monitoring compliance to ensure industry players uphold commitments to protect farmers.
Officials emphasized that collective adherence to the reference price is essential to prevent further erosion of farmer incomes.
Industry Commitments
Despite the challenges, industry representatives pledged support.
ARPHUIN Chairman Sigit Pambudi stated that slaughterhouses continue absorbing supply, even during holidays, to ease farmer burdens.
Charoen Pokphand Indonesia, one of the country’s largest poultry firms, reported maximizing slaughter capacity, deploying nearly 400 trucks daily to stabilize supply.
Yet, rising production costs remain a sticking point. Companies acknowledge the difficulty of maintaining government-set prices but insist they will cooperate to prevent deeper market instability.
The crisis underscores the fragility of Indonesia’s poultry sector, where small farmers form the backbone of supply but lack the resilience of larger corporations.
If prices remain depressed, widespread bankruptcies could disrupt rural economies and food security.
Government intervention, combined with industry cooperation, may provide temporary relief.
However, long-term stability will depend on structural reforms to balance supply and demand, improve farmer bargaining power, and ensure fair pricing mechanisms.
The plunge in live chicken prices has exposed vulnerabilities in Indonesia’s poultry market.
While government action and industry pledges offer hope, the immediate future remains uncertain for thousands of small-scale farmers.
Without swift stabilization, the sector risks deeper turmoil, threatening both livelihoods and national food security.
