POULTRYINDONESIA, Jakarta – A difficult situation is currently affecting broiler farmers across various regions. Day-old chicks (DOC) are becoming increasingly scarce and expensive, while feed prices have yet to show any meaningful decline. These cost pressures have forced many independent smallholder farmers to temporarily halt production. This decision is not driven by a lack of willingness to work, but rather by the fact that their operations have lost economic rationality.

The Chairman of the Indonesian Independent Smallholder Farmers Association (Perhimpunan Rakyat Mandiri Indonesia), Kusnan, stated that DOC prices at the farm level are often far above economically viable levels, while feed—which accounts for approximately 65–70% of total production costs—has not shown a significant downward trend. Under such conditions, independent smallholder farmers are caught in a dilemma: resuming production means risking financial losses, while stopping production means losing their livelihood. This reality indicates that today’s poultry sector challenges go beyond normal market fluctuations and reflect deeper structural problems.

“One of the root causes lies upstream, particularly in policies governing the management of broiler Grand Parent Stock (GPS). GPS represents the starting point of the entire national poultry supply chain. From GPS comes Parent Stock (PS), followed by Final Stock (FS) that produces DOC. Any decision made at the GPS level directly impacts DOC availability, live bird prices, and farmers’ incomes,” he explained in a written statement on Friday (23/1).

He added that, in practice, import quotas and GPS management have largely been dominated by large corporations. The technical, capital, and administrative requirements imposed effectively exclude medium-sized enterprises, cooperatives, and farmer-based entities from the outset. As a result, DOC production and distribution are concentrated among a small number of players with substantial market power.

“This kind of situation creates an imbalanced market structure. When DOC supply is tightened, prices rise and smallholder farmers are further squeezed. DOC distribution follows corporate business interests rather than the production needs of farmers in the regions. Unintentionally, policies intended for stabilization instead contribute to tendencies toward price monopolization and DOC distribution control,” he said.

According to Kusnan, the situation becomes even more burdensome when combined with rising feed prices. Near-total dependence on commercial feed makes smallholder farmers extremely vulnerable. They have no bargaining power against feed manufacturers, while alternative local feed sources have not been seriously and systematically developed by the state. In such an ecosystem, efficiency is enjoyed only by large players, while small farmers bear all the risks.

“Therefore, policy correction is urgently needed. GPS quotas should not be granted exclusively to large corporations under a business-as-usual approach. The government must open opportunities for GPS management by state-owned enterprises (SOEs), regional government-owned enterprises (ROEs), and new private players oriented toward serving smallholder farmers, under strict supervision by independent institutions such as the Chamber of Commerce (KADIN) and poultry associations. This step is crucial to break market concentration and ensure DOC is evenly available at affordable prices,” he added.

Furthermore, he emphasized that the state must play a tangible role upstream by establishing or strengthening DOC hatcheries and feed mills specifically dedicated to smallholder farmers. The state’s presence in these strategic sectors is not intended to eliminate the market, but rather to create fair price benchmarks and maintain a balance of economic power. Without such instruments, smallholder farmers will remain in a weak position against the market.

“The government needs to establish an independent, data-driven poultry task force. This task force should ensure policies are implemented as intended, monitor policy capture by dominant players, and prevent market distortions that harm small farmers. Transparency in DOC production, distribution, and pricing must become an integral part of national poultry governance,” he added.

On the other hand, Kusnan noted that investment in research and development of alternative feed based on local ingredients can no longer be postponed. The state must encourage applied research to produce simple feed formulations that can be manufactured at the cooperative and farmer-community level. Diversification of feed sources is key to reducing dependency and strengthening food sovereignty.

“Looking ahead, the expectation is for DOC to be available and affordable, feed prices to be rational, and chicken prices to remain affordable for consumers while still staying above farmers’ production costs. If this ecosystem is established, the poultry sector will once again become a labor-intensive industry that creates widespread employment, particularly through farmer cooperatives and food-related MSMEs,” Kusnan added.

He concluded that the state does not need to control the entire value chain. However, the state must be present at strategic points when the market fails to deliver fairness. Without policy correction, smallholder farmers will continue to be marginalized, and national food security will rest on a fragile foundation. Affordable and available DOC, reasonably priced feed, and a fair market are not utopian ideals—what is needed is the courage of the state to genuinely side with the people’s economy.

Get more updates on the Indonesian poultry industry by joining our WhatsApp Channel Poultry Indonesia