Jakarta Poultry Market Restructuring

as part of the Avian Influenza Control

Programme (Indonesia)
By
R. Dikky Indrawan

Preface

Jakarta became the largest poultry market

destination and has poultry business services
across all regions.
Jakarta is potentially in danger of HPAI
Jakarta Provincial Government issued two
legislations, the Governor Regulation No..
15/2007 and Regional Regulation No. 4/2007.
Jakarta Governor set to undertake the
relocation of poultry business services in four
phase.

Preface (2)

Phase 1 (2007) policy activities, socialization,

preparation and followed by coordination of the
implementation of the arrangement poultry
Phase 2 (2008) in addition to socialization is also
paved with land acquisition, construction of a new
slaughter house, poultry coordination arrangement,
followed by evaluation and monitoring.
Phase 3 (2009) is filled with the completion of
construction activities, procurement of equipment and
the development of marketing of poultry meat with
cold chain system,
Phase 4 (2010) in the form of fully implementing
relocation.

Preface (3)

It is difficult to proceed the process of

market restructuring without understanding
the effect of regulation on various activities
related to poultry transactions both positive
and negative impacts, including Avian
Influenza
It is necessary to respond the situation. The
assessment includes economic aspects,
social benefits which can be mapped and
the tangible and intangible costs.

Research Purposes

To validate the Data of number of poultry

imported into Jakarta, and key stakeholders
involved
To analyze socio economics impacts on
market restructuring to the poultry supply
chain actors
To analyze public perspectives on business
environment surrounding the poultry business
Recommended strategic activities to reduce
negative impact on market restructuring

Methodology

July-November 2009
Data Validation
Desk study
Updating data : primary data from field of five

Kotamadya in DKI Jakarta

Data extrapolation

Socio Economics Impact and public

perspectives on environment
In-depth interview to related stakeholder
Correlation analysis

Multi stakeholder Forum (FGD)

Sampling Frame

Survey was conduct in two phase : validation phase and indepth interview phase.

Validation phase sampling in Jakarta Timur, Jakarta

Selatan, Jakarta barat, Jakarta Pusat and Jakarta Utara.
Government Data on Collectors in DKI was 210 and sample
was decide on 110 peoples.
FAO Data on Slaughter point was 1300 or could be twice if
the smallest slaughter included and sample was decide of
500 peoples.

In-depth interview in jakarta Timur, Jakarta Selatan dan

Jakarta Barat.
The sample number 114

Sampling Frame
No

Stakeholders

1 Validasi
Collectors
- Large
- Medium
- Small
Slaughterers

Sub Total

Responden
Target
Realisasi

110
107
2
2
14
11
94
94
500
530
610
637

2 Indepth Interview (Stake Holders)

Collectors
Slaughterers
Market Vendors
- Pedagang/pengecer
- Modern Market
- Hotel dan restaurant
Suppliers/ brokers
Transporters

Surrounding communities

10
45
40
28
6
6
6
10
22

9
46
42
28
8
6
6
3
17

Sub Total
Grand Total Questionnaires

114
724

123
760

Results: Simple Jakarta Supply Chain

Management

Results: Supply Chain and Customer

Preferences

Collectors Validation
Dirjennak
Category

Government Data

Penampung

Temuan Lapang

Scale
Daily Capacity

Large

Medium

>10,00
0

5,000 10,000

Collectors

Daily
Capacity

Sample

Estimation

Daily Installed

Daily Capacity

Capacity

Realization

16,000

8,000

8,000

14

5,613

11

14

6,200

4,473

146

3,075

2,280

82 (listed on
Government
database)
Small

Total

< 5,000

129

145

1,757

12 (not listed
on
government
database)

162

Results: Collectors

Criteria :
Experienced in the poultry business (8-26

years)
Enterprises have a shelf life of chicken
shelters an average of 1 day
Supply to a large collectors came from
Outside DKI vs small collectors (outside and
inside of DKI)
A Challenge to shutting down small farmer
inside DKI as supplier for small collectors

RESULTS:
Estimation Data on Broiler Supply and Collectors
Based on Real Capacity
Collectors
Type
Large

Total

Real

Broiler

Extra

Capacity

Supply

Capacity

Total
With
Extra

8,000

16,000

171

16,171

14

4,473

62,618

1,825

64,443

Small

144

2,280

329,294

13,799 343,093

160

407,912

15,796 423,707

Medium

RESULTS:
Estimation Data on Broiler Supply and Collectors
Based on Installed Capacity
Collectors
Type
Large
Medium
Small

Total

Installed

Broiler

Extra

Capacity

Supply

Capacity

7,500

Total
With
Extra

15,000

161

15,161

14

6,200

86,800

2,530

89,330

144
160

3,075

444,220
546,020

18,615
21,306

462,835
567,325

Results: Slaughter

Five types of slaughter business

Each type represent type of business
and customers preferences

RESULTS:
Estimation Data on Broiler Supply and
Slaughter Based on Real Capacity
Slaughter Type

Total
Number

Average
Capacity

Daily Supply

Large

638

400

255,049

Medium

789

152

119,937

Small

685

53

36,329

2,112

411,315

Results: Impact of Market

Restructuring (1)
1.

poultry supply disruptions from various areas in West Java,

Central Java and Banten

2.

changes in the circulation of the poultry which was originally

from the form of life, and then be already cut and frozen will
fundamentally change the trade routes in Jakarta

3.

there are many business units will be closed and the type is very
diverse and the amount is relatively large, then the application of
Regulation No 4 will be effected on different intensities on
business types

4.

large number of labor force will be unemployed or lose their jobs

and their livelihoods

5.

Relocation must be carried out simultaneously and in groups.

This is especially in terms of the social and institutional activities
of slaughters.

6.

the possibility of the outbreak of the pattern of bond relationship

between actors and will encourage resistance if not addressed in
a 0 comprehensive way

Results: Impact of Market

Restructuring (2)
decrease the volume of demand for collectors, slaughter, as well
as the traditional market with a range of demand 39% to 52% of
the average before relocation
8. Increased chicken product prices due to increased costs of both
transportation costs, storage costs, cost cutting and even the
possibility of other costs that are not official and poultry shortages
9. possible accumulation of chicken at one point transportation
10. Relocation will cause the value of loss in total business activity
(Collectors and slaughter) around Rp. 1.75 billion per day, not
including the value of losses due to the number of workers lost
their livelihoods and their work values and business facilities
owned will be idle or abandoned
11. environmental pollution will be greater if the region is
concentrated by the number of chickens at an average of 150.000
to 200.000 birds per day is not handled and managed well.
7.

Results: Key finding

Restructuring The Market is facing

difficulties because of:
The indication of unique relationship between a

supplier and slaughter business

Relations / social ties of slaughter-supplier-merchant
The socialization and restructuring process should
pay attention to the patterns of social ties between
these actors
The complexity of the supply chain and consumer
preferences will largely determine the restructuring
process

Results: Key finding (2)

Collectors Willingness to be relocated

Willingness
Yes
No

Collectors
Jakarta Timur
Jakarta Selatan
Jakarta Utara
Total
Jakarta Timur
Total

Small
1
2
1
4
2
2

Scale
Larg
Medium
e
1
2
0
0
0
0
1
2

Total
4
2
1
7
2
2

Results: Key finding (3)

Slaughter Willingness to be relocated

Results : Key finding (4) Reason of

unwillingness to be relocated

58,3 percent of respondent said

relocation will not effecting the
business
Implications: unwillingness to be
relocated is not caused by the
business turnover but may be caused
by other factors.

Results: Key finding (5) Reason of

unwillingness to be relocated
Business
Experience

Correlation

Labor
Absorption

Business
Development
Poultry Market
Restructuring

The implications of the poultry market restructuring will have a wide impact
on business development and labor absorption. Most of the supply chain
actors have connected many years in business, and they are depending on
BOSS decision. Therefore Government need to approach the agent of
stakeholders who is the "relatively" have influence (and can control the
poultry market).

Results: Key finding (6) Customers

Perspectives

Another implication of the relocation

is the possibility of increased product
prices caused by an increase in
transportation costs.
A change form of product (from fresh
to frozen) would not be suitable for
customers needs
The government needs to look at the
interests of consumers.

Results: Key finding (7) Public

Perspectives

Public perception of the existence of collectors and

slaughter point :
Create jobs
The existence of spill-over effects in the form of a
relatively cheap price of chicken products
The existence of social responsibility in the form social
assistance for communities
There is a mutually beneficial conditions. Collector and
slaughter point resulting in "negative externalities"-the
environment, air pollution and health problems compensate with spill-over effects and social
responsibility.
But in general the public suggested that the location
container / cutting is slightly not too close to residential
areas.
Benefits to moved in the same municipality: more clean,

Results: Key finding (8) Limited Effect

from Local Government Regulation

Change of Poultry Product into

Jakarta Market from Life form into
Frozen will not effective
At Jakarta Border with Bekasi, Bogor
and Tangerang is surrounded by
small farmer and slaughter point,
which separated only by the side of
the road.

Recommended strategy on Market

Restructuring
1.

2.

3.

4.

Extra efforts on coordination with the farmers, container,

slaughters, brokers, suppliers and the local government officials
who in fact are outside Jakarta.
Jakarta local government needs to establish lines and
transportation routes are equipped with checkpoints but free of
congestion, and other charges that could lead to high costs.
socialization, assistance and advocacy which gives the possibility
that the relocation be done in groups and ensure that the
transfer of this group does not cause harm or losses on social
capital.
relocation process takes longer period of time to make it work
because the social cost will be very expensive if the process is
unsuccessful, so the government need a mass movement start
from the lowest hierarchy of government bureaucracy level into
public figures

Thank You
The project
Cooperation between
International Center for Applied Economics and Finance
(Inter CAFE)
Institut Pertanian Bogor
With
FAO