The livestock sector is an important segment within the economy of Indonesia, providing almost all meat and eggs and part of the milk for domestic consumption. The government of Indonesia is keenly aware of the importance of the livestock sector as a supplier of animal protein for human consumption, raw material for industry, and manure fertilizer for agriculture. In addition, the livestock industry has the potential to generate employment, increase rural income and result in the productive use of land.
Rising per capita incomes and changes in the demographic composition of the population have led to changes in food consumption patterns that place increasing demands on the development of food processing and the livestock industry. During 1996, per person consumption of meat, egg and milk increased by 6.7 per cent, 5.8 per cent and 3.8 per cent, respectively. Improvement in nutrition levels suggest that the consumption of animal protein is within reach of the standard 6.0 gram per person per day. In 1996, for example, it was 5.8 per cent higher than in 1995. Continued growth in the livestock industry, as well as in the general agricultural sector, helps absorb Indonesia’s increasing labor force and plays a part in the country’s transition to an industrialized economy.
This chapter provides information on the processing and the marketing of livestock products in Indonesia. The information on the processing sector includes the development of slaughterhouses, and the processing and handling of meat. The discussion of marketing will focus on the marketing patterns and the structure of marketing from the farm level to the final product.
PROCESSING Slaughterhouses
There are four classes of slaughterhouse in Indonesia based on the role the slaughterhouse plays in meat distribution:
- Enterprise A slaughterhouses supply meat for export;
- Enterprise B slaughterhouses supply meat for residents in the provinces;
- Enterprise C slaughterhouses supply meat for residents in regencies within the provinces, and
- Enterprise D slaughterhouses supply meat for residents within the regency.
Under Indonesian law these four types of slaughterhouse can be managed by any person with Indonesian citizenship or by a corporate body. Operators of slaughterhouses have to hold a permit depending on the slaughterhouse class. For slaughterhouses A and B, the permit is issued by the Directorate General for Livestock Services (DGLS); operators of C class slaughterhouses require a permit issued by the Provincial Governor; and those operating D class slaughterhouses need to hold a permit issued by the local government of the regency. It needs to be noted that if the slaughterhouse was developed under the investment program based on Ordinance Number 1, 1967 of the foreign Investment Program or Ordinance Number 6, 1968 of the local Investment program, the Head of the Department of Coordination for Investment (BKPM) had to give permission according to the Decree of the President of the Republic of Indonesia number 33, 1981 and the Decree of President of the Republic of Indonesia Number 54, 1977.
To set up a processing facility, certain procedures have to be followed. These include the submission of a feasibility study together with details of the sourcing of raw materials; a marketing plan; and technical aspects of the project. Acceptance by the local community is also a part of this process. The Department of Animal Husbandry has to certify that the location of the slaughterhouse will not create environmental pollution. This means that they are usually located outside centres with low population density, near to a river; or at the lowest altitude of the urban centre. The availability of transportation facilities is also important.
The meat processing industry in Indonesia encompasses over 900 slaughterhouses (Table 7.1). The slaughterhouses are divided into three categories based on species slaughtered. Thus there are slaughterhouses for large ruminants, for pigs and for poultry. They are classified into three types by the daily slaughter capacity:
- type A for more than 100 heads slaughtered per day;
- type B for 50-100 heads slaughtered per day; and
- types C or D for 5-50 heads slaughtered per day.
Based on the facilities available in them, there are three types of slaughterhouses: public slaughterhouses; modern slaughterhouse with mechanized line dressing facilities; and private slaughterhouses. Public slaughterhouses are operated by the local government under the supervision of the provincial meat inspector and under the control of the DGLS of the Ministry of Agriculture.
Table 7.1. Number of slaughterhouses by province in Indonesia
Province |
Ruminant slaughterhouse
|
Pig slaughterhouse
|
Poultry slaughterhouse
|
Total
| ||||||
A
|
B
|
C/D
|
A
|
B
|
C/D
|
A
|
B
|
C/D
| ||
Aceh |
-
|
-
|
21
|
-
|
-
|
1
|
-
|
-
|
-
|
22
|
North Sumatra |
-
|
1
|
37
|
-
|
1
|
45
|
1
|
-
|
-
|
85
|
West Sumatra |
-
|
-
|
10
|
-
|
-
|
-
|
-
|
-
|
-
|
10
|
Riau |
-
|
-
|
4
|
-
|
-
|
8
|
-
|
-
|
-
|
11
|
Jambi |
-
|
1
|
2
|
-
|
-
|
1
|
-
|
-
|
-
|
4
|
Bengkulu |
-
|
-
|
2
|
-
|
-
|
-
|
-
|
-
|
-
|
2
|
South Sumatra |
-
|
-
|
13
|
-
|
-
|
13
|
-
|
-
|
-
|
26
|
Lampung |
-
|
-
|
2
|
-
|
-
|
1
|
-
|
-
|
-
|
3
|
Jakarta |
1
|
-
|
2
|
1
|
-
|
-
|
1
|
-
|
-
|
5
|
West Java |
1
|
1
|
157
|
-
|
1
|
14
|
4
|
3
|
-
|
181
|
Central Java |
2
|
2
|
79
|
-
|
1
|
24
|
-
|
-
|
-
|
108
|
Yogya |
-
|
1
|
18
|
-
|
-
|
3
|
-
|
-
|
-
|
21
|
East Java |
1
|
1
|
229
|
-
|
-
|
31
|
-
|
-
|
-
|
262
|
West Kalimantan |
-
|
-
|
23
|
-
|
-
|
15
|
-
|
-
|
-
|
38
|
Central Kalimantan |
-
|
-
|
34
|
-
|
-
|
6
|
-
|
-
|
-
|
40
|
South Kalimantan |
-
|
-
|
9
|
-
|
-
|
15
|
-
|
-
|
-
|
24
|
East Kalimantan |
-
|
-
|
7
|
-
|
-
|
14
|
-
|
-
|
-
|
20
|
North Sulawesi |
-
|
-
|
4
|
-
|
-
|
4
|
-
|
-
|
-
|
8
|
Central Sulawesi |
-
|
-
|
7
|
-
|
-
|
1
|
-
|
-
|
-
|
8
|
South Sulawesi |
-
|
1
|
42
|
-
|
-
|
6
|
-
|
-
|
-
|
49
|
South-east Sulawesi |
-
|
-
|
3
|
-
|
-
|
1
|
-
|
-
|
-
|
4
|
Bali |
-
|
1
|
2
|
-
|
-
|
1
|
-
|
-
|
-
|
5
|
West Nusa Tenggara |
-
|
3
|
6
|
-
|
-
|
-
|
-
|
-
|
-
|
9
|
East Nusa Tenggara |
-
|
1
|
2
|
-
|
-
|
-
|
-
|
-
|
-
|
3
|
Maluku |
-
|
-
|
2
|
-
|
-
|
-
|
-
|
-
|
-
|
2
|
Irian Jaya |
1
|
-
|
5
|
-
|
-
|
-
|
-
|
-
|
-
|
6
|
East Timor |
-
|
-
|
1
|
-
|
-
|
-
|
-
|
-
|
-
|
1
|
Total |
6
|
13
|
721
|
1
|
4
|
203
|
5
|
4
|
0
|
958
|
Notes:
Type A > 100 head/daySource: DGLS, 1996
Type B 50 - 100 head/day
Type C/D 5 - 10 head/day
Of those slaughterhouses managed by the local government, some are not up to standard because they have been operating for more than 50 years. A major improvement program is needed to rebuild them based on current requirements. For this to happen, foreign and private investors are needed to stimulate the activities of meat business. Almost 87 per cent of meat production in 1997 (876 kt of this is poultry), came from traditionally managed private slaughterhouses. Poultry slaughterhouse only provided a small portion of around 12 per cent. Furthermore, poultry slaughterhouses need to improve technical specifications, including the development of accreditation and certification procedures to guarantee the quality of livestock products. There is also the need to develop Hazard Analysis Critical Control Point (HACCP) and labelling. Most slaughterhouses outside of Jakarta operate under this system. The number of animals slaughtered at public facilities varies depending on the demand from adjacent larger towns and cities for fresh meat. Table 7.2 shows the number of recorded slaughterings of animals in Indonesia from 1990 to 1995.
Table 7.2. The number of recorded slaughters of animal in Indonesia, 1990 - 1995
Year |
Cattle
(head) |
Buffalo
(head) |
Goat
(head) |
Sheep
(head) |
Pig
(head) |
1990 |
1262781
|
201305
|
1165167
|
507482
|
1125565
|
1991 |
1277323
|
216064
|
1140315
|
598485
|
1000427
|
1992 |
1446901
|
204550
|
1375188
|
483425
|
1362731
|
1993 |
1686896
|
232880
|
1423713
|
640803
|
1539289
|
1994 |
1551375
|
211282
|
1628811
|
721548
|
1475939
|
1995 |
1601370
|
219988
|
1714501
|
793874
|
1613,924
|
Source: DGLS, (1996).
There are six modern slaughterhouses with mechanized line dressing facilities in Indonesia. These are in Jakarta and in various parts of Central Java. These relatively new facilities were built to cope with the rapidly increasing demand for meat in Jakarta. Environmental considerations, primarily waste disposal, was another reason for their construction. Under normal conditions, a slaughterhouse in Jakarta would handle 500 to 750 head of cattle and buffalo per day. During the holy days or Idul Fitri, as many as 2,000 to 2,500 cattle and buffalo are slaughtered each day. The slaughterhouse charge varies between Rp. 15,000 to Rp. 25,000 per head, including the overnight chilling of carcasses and refrigerated transport of carcasses to the markets. After resting animals for one night in pens, slaughtering starts at 1.00 pm. After bleeding, the carcasses are hoisted and move along an overhead rail system where dressing takes place on a line. Carcasses are generally chilled overnight and delivered to the meat market early the next day.
PT Ciomas Adisatwa, a modern poultry slaughterhouse in Jakarta, has a commitment to produce not only high quality products needed by consumer but also halalcertified food. Slaughtering of domesticated animals has to be carried out by Moslem officials according to the approved method issued by the Indonesian Islamic Council (MUI) to meet the demand of the moslem majority. The halal meat has two criteria:
- halal at slaughter, and
- halal at processing.
To achieve the halal process, the birds should be in healthy condition and in a clean environment. The butchers are trained to slaughter the animals halal. Hence, they have an important moral responsibility. The slaughter process must be done quickly using very sharp knife by cutting the three gutters - the respiratory tract oesophagus, the vena and artery blood vessels. In addition the butcher has to say “basmallah” before starting to cut the birds. The process should be done properly to avoid stressing the poultry. Otherwise, the quality of the carcass will not meet the standard.
Since 1990, PT Ciomas Adisatwa has been able to supply McDonald’s Family Restaurants. Moreover, in 1993 PT Ciomas Adisatwa has become a prime supplier of McDonald’s for all of Indonesia. McDonald’s International has given HACCP certificate to verify food safety standards. With the increasing number of McDonald’s outlets in Indonesia, - there were 75 in 1997 - PT Ciomas Adisatwa has developed very quickly. They have plans to build two new processing plants in Lampung and Surabaya by the end of 1997.
Most private slaughterhouses operate on a small scale and mainly process goats, sheep and some pigs. Again, slaughtering generally takes place in the early hours of the morning. Warm carcasses or hot deboned meat, bones and offal are transported to the meat markets for sale on the same day. Although regulations often require hanging meat at least eight to ten hours before distribution to the markets, a lack of facilities precludes hanging in many cases. Most consumers are unaware of the benefits of hanging, and are more concerned with obtaining fresh meat.
Fees for the use of public slaughterhouse facilities and services are set by the local government and these vary substantially. The services include livestock inspection managed by specialists from the DGLS. Table 7.3 shows inspection fees in a public slaughterhouse in Bogor in mid 1997.
Table 7.3. Slaughtering and transportation fees at Bogor slaughterhouse, June 1997
Species |
Slaughter and inspection fees
|
Transportation fees
|
(Rp./head)
|
(Rp./head)
| |
Cattle/buffalo |
24000
|
2400
|
Sheep/goat |
4,000
|
400
|
Pig |
12000
|
1200
|
Source: Field survey
The supervision of the slaughterhouses to meet international standards of hygiene is carried out by the Local Department for Livestock Services (Dinas Peternakan) under the control of the DGLS. The local inspection staff is associated with the DGLS, but they are under the administrative control and are paid by local authorities. Consequently, the livestock specialists at slaughterhouse are not very keen to implement and to enforce standards, especially where expenditure by local authorities is necessary to resolve problems.
Meat Processing
Slaughtering of domesticated animals and handling procedure for meat and offals are regulated under the Decree of Minister for Agriculture number 413/Kpts/TN.310/1992. Before slaughtering the animals, the inspecting officer has to carry out an antemortem inspection of standing and moving position of the animals from all directions, mouth ephitelium, eyes and nose, skin, sub maxillaries, lymph node, paratidea, pre scapularis and inguinal, sign of hormonal treatment and body temperature. At the end of the inspection the animals is classified into one of the following categories:
- the animal may be slaughtered without further requirements;
- the animal may be slaughtered if certain requirements are met;
- the animal is not allowed to be slaughtered and the slaughter process is delayed; or
- the animal is not allowed to be slaughtered at all.
Postmortem inspection is carried out by the inspector as soon after completion of slaughtering as possible. This takes place in a special room or other approved place with sufficient lighting. The postmortem inspection involves a simple procedure such as a smell test and a visual test of meat colour. The purpose of postmortem inspection is to guarantee the hygiene and suitability of the product for human consumption. At the end of the inspection, the meat is classified as (i) meat able to be distributed for human consumption, (ii) meat suitable for human consumption provided certain requirements are met before distribution, (iii) meat that may be distributed for human consumption provided certain requirements being met during distribution; or (iv) meat that is not permitted to be distributed and not recommended for human consumption.
Meat should conform to approved handling method. These include at least eight hours hanging on a deboning rail in a chiller room at low temperature, having good air ventilation, and clean and hygienic conditions. In addition meat can not be treated with other materials or chemicals that can change its natural color.
Over the five year period up to 1997, the development of a cattle feedlot industry was followed by an increasing number of companies establishing their own meat processing plants. Since then, international standards have been implemented for slaughterhouses, boning rooms storage, and meat cutting standards. The trucking of meat is also of an international standard. Many of the feedlot operators that are members of the Indonesian Beef Producer and Feedlot Association (APFINDO) have sent staff to learn international standards of meat processing in the USA and Australia. As a result, meat cutting standards have improved significantly. However, to produce standard meat products and to give it a chance to compete with imported beef, an Indonesian National Standard on meat products is required urgently.
Meat processing enterprises in Indonesia are small scale and follow traditional methods due to a lack of skill and financial support. Common processed meats are meat balls (bakso), sun-dried beef (dendeng), dry shredded beef (abon), sausages (beef, pork or chicken), bacon, ham and beef chips (made from lung, endloins, cartilage, etc.). Processed meats are made in small scale facilities for local consumption or prepared in small, semi-mechanised factories.
Fresh warm meat is preferred for making bakso because of its high binding properties. Dendeng is a dried sweetened meat, cured with sugar, salt and spices. Abon is fried shredded meat, similar to flaked coconut in consistency, that is sprinkled on top of rice dishes. Some processed meat products have a short life if not refrigerated, and there is no inspection of these products.
The meat industry in general is fragmented and uncoordinated in terms of capacity. Authority and responsibility for regulation is decentralized. Generally, demand is for fresh slaughter-warm meat, and even in large cities people often prefer fresh meat to chilled or frozen meat.
MARKETING
Beef marketing is dominated by wet markets with second and third grade products. Only a small portion of prime grade beef required especially by hotel and restaurants is produced. Meat used in most hotels and restaurants is imported beef of a certain quality and with a guaranteed level of hygiene. It is higher priced than the local product. Most Indonesian beef is sold at local market or sent to Jakarta for both the wet and the institutional markets. Imported feeder cattle, after spending 14 days in quarantine, are fattened for 60 to 90 days on grain. This is done to produce better beef quality. At the end of the fattening period, all finished cattle are slaughtered, processed and stored in Jakarta before being distributed to hotels, restaurant, and supermarkets (Figure 7.1).
Increasing beef demand has occurred at a time when a number of constraints are influencing the development of the cattle feedlot industry in Indonesia. These constraints are as follows:
- an insufficient supply of indigenous feeder steers, particularly in relation to the increase in beef demand and the number of cattle needed for the feedlot industry;
- the bargaining power of buyers allows them to select any beef products to improve their competitive position;
- threats of substitution with imported beef, chicken, lamb, goat and pork;
- bargaining power of suppliers especially for imported feeder steers. In the latter part of the 1990s, the Indonesian feedlot industry is heavily dependent on Australian suppliers and the Indonesian industry also competes with other ASEAN countries to buy feeder cattle; and
- the currency situation of the late 1990s which disadvantages economic development, particularly in the cattle business. This has increased production costs which in turn affects the prices of final products.
Figure 7.2. Market structure for small ruminants
Source: Knipscheer et al, (1987)
A simplified picture of the marketing for small ruminants in West Java is illustrated in Figure 7.2. The main market outlets for farmers are the village collectors and the local markets. In isolated areas, farmers generally have access to at least one village collector. In Java, although farmers have easy access to daily or weekly markets, farmers more commonly trade through the local village collector(s).
Farmers rely on village markets to sell animals. Hence, the main determinants of marketing efficiency are the road condition, transport availability and distance from local markets. The location of the local market depends largely on the geographic distribution of animals in a given region. Large ruminants and small ruminants follow almost the same marketing channels. However, small ruminants are easier to transport and have a relatively higher turnover compared to large ruminants.
Most farmers sell animals to village collectors or traders. Only a small proportion of animals are sold directly to final consumers and about 10 per cent of the animals sold in local markets are bought by local farmers as replacement stock (Soedjana et al., 1984). The village collector is an important link in the small ruminant marketing system. For some local traders, this is a part-time activity. In Central Java, the local trader often becomes a respected member of the village society, while in North Sumatra was not found to be case.
In Java, a relatively stable relationship seems to exist between trader and farmer, which is characterized as the traditional market system with a cash/credit payment arrangement. A similar system was found in Aceh, but in North Sumatra no credit system seems to exist between the farmers or producers and traders (Carlson and Scholz, 1991). In addition, a distinction is made between a village collector and a broker. A broker does not have full ownership of the animals, while the village collector does.
The broker operates in the marketplace, and three types of brokers are common: the commission broker, the floor-price broker, and the price-fixing broker (Soedjana et al., 1992). The commission broker sells animals for a flat fee, the floor-price broker arranges a floor price with the farmer and then tries to sell the animals above that; and the price-fixing broker pays a percentage of an agreed upon price to the farmer and then tries to sell the animals. When this occurs the balance is paid.
A market structure that is made up of only a few buyers does not necessarily imply that the market is not efficient as other factors such as volume of sales should also be considered, (Soedjana, 1993). The volume of sales may be insufficient to support other buyers in the market. Also, the large investment in the facilities required for an efficient operation may not justify more than a few buyers. For example, a single buyer with a large facility providing significant economies of scale, may operate much more efficiently and at a lower cost than a large group of small, less efficient buyers. Market performance, the most important criterion for judging efficiency, is considered to be particular unsatisfactory where there is evidence of excessive or dominant concentration of particular market participants. For example, when there are few buyers, high profits for traders, and possible collusion between buyers, then there are strong indications that the market is not operating efficiently from the producers’ perspective.
Poultry marketing
The commercial poultry industry is the fastest growing segment of the livestock sector in Indonesia. It accounts for the major proportion of the eggs and broiler meat consumed by the population, especially in the cities. The market for the intensive poultry business (layers and broilers) is well organized. Large poultry farmers may develop their own outlets directly to wholesalers and retailers, but smaller ones have to depend on traders who collect from a number of producers. A simplified market structure for egg and poultry meat sales is shown in Figure 7.3. The importance of the poultry shop as an input supplier is particularly true for smaller commercial farms.
Figure 7. 3. Market structures for egg and broiler products
The egg and broiler industries have grown in parallel with the development of the commercial livestock feed industry. This relationship is very close, since many of the large feed mill industry own breeder flocks and hatcheries and distribute day-old-chicks (DOC) as well as poultry feed, equipment and supplies. Both feed products and DOC are distributed to small producers through poultry shops in and around the major cities. Both of these inputs are sold direct to large poultry producers.
Poultry co-operatives are one form of operation that has evolved to solve farmer’s problems. Through this organization, farmers may substantially reduce their dependency on other agents for inputs. However, poultry co-operatives that were pioneered by the government can not survive. Hence there is a need to revitalize farmer groups and poultry co-operatives through a better strategy and approach. It is important to create synergy in equal and parallel development with the development of the large scale poultry company through partnerships. Poultry co-operatives should not only focus on the raising animals, but should also become involved in post-production marketing.
The global market should be an international market, free from government intervention. This means that every country should be open to imports and the local products should be able to exports. Materials and services will flow according to market forces. Therefore every country has to be prepared so that local products can at least share in the local market, and also compete in the world market. In the case of poultry products, these are world products and not products of a limited number of countries because technology gives every country the opportunity to supply eggs and broilers. In the last ten years, Indonesia has been spectacularly successful in becoming self-sufficient in broiler and egg production although the poultry industry is not ready yet to face globalization.
The best partnership pattern occurs by reorganising the national poultry industry, making use of comparative advantage and creating products of good quality. Therefore, the national poultry industry has to be a vertically integrated industry with streamlined operations. The objectives of national policy are to determine the minimum and the maximum sizes of each farm, consistent with availability of feed ingredients and local agricultural products.
The development element in the partnership operation includes technical aid that will increase the productivity of the small-holder farmers. Increase in productivity is indicated through in a good feed ratio. The smallholder’s increased productivity will then be conducive for the formation of a partnership, because such a partnership will create efficiency. Smallholders in Indonesia have been the backbone of livestock production, specifically in the rearing business. Therefore, if there is a target to build an efficient livestock production system, smallholders need to be in partnership with large, modern companies.
The period 1972 to 1980 is referred to as the broiler and layer growth phase. Furthermore, because of competition in production between the small poultry businesses and large businesses, a number of government regulations were issued: (a) Presidential Decree Number 50/1980 limited the broiler and layer business: (b) Presidential Decree Number 22/1990 expanded the scale of smallholder business, and set other rules for big poultry companies. Based on the decree, the nucleus scheme partnership in the broiler business was established with the following principles for both parties:
- the nucleus company is responsible for providing production inputs, guaranteeing the price at harvest, supporting capital requirements, providing guidance and technical services, and paying for chicken product within fourteen days;
- the smallholder is responsible for providing land and housing for 5,000 to 15,000 chickens, providing equipment, following production processes with special parameter targets that have been agreed upon, and selling all production to the nucleus company.
To guarantee that the smallholder bears the smallest business risk, a safety regulation is made in the agreement. Namely (a) an income guarantee of 5.8-6 per cent of the total costs, and (b) a fixed price based on the components of production costs and income guarantee. If the market price of production is higher than the fixed price, the farmer receives a bonus of 20 per cent of the balance. If the market price of production is lower than the fixed price, the buying price is the price guarantee. For example, in a broiler business where production averages 1.7 kg per chicken:
- the farmers’ investment for housing area of 500 m2 and equipment is almost Rp. 13 million for 5,000 broilers. Based on this cost, the depreciation of one chicken is Rp. 51 and the bank interest (16 per cent per annum) is Rp. 69 per chicken.
- the farmer’s income per cycle is almost Rp. 1.9 million. With an average of 5.7 cycle per year, an estimated annual income in a broiler business is around Rp. 10 million.
An alternative partnership pattern of poultry business is given in Figure 7.4. The partnership in poultry has so far involved 67 nucleus companies and 2,000 farmers.
CONCLUDING COMMENTS
In order to produce hygienic and wholesome products for customers, the establishment of meat processing plant in Indonesia should be in line with The Decree of Minister of Agriculture Number 555/Kpts/TN.240/9/1986 on the Requirement for Abattoir and Abattoir Enterprise as well as the Decree of Minister for Agriculture Number 413/Kpts/TN.310/7/1992 on Slaughtering of Domesticated Animals and Handling Procedure for Meat and Offal.
Source: Yusdja and Saptana (1995)
Slaughterhouse management can be improved by transferring public slaughterhouse management to private enterprise with the exception that meat inspection regulations and control over slaughterhouse hygiene and sanitation must rest with the local government under the technical supervision of the DGLS. The alternative policy is to up-grade selected slaughterhouses to modern standards of hygiene and public health. The majority of slaughterhouses could be turned over to private sector management with the DGLS retaining authority over slaughterhouse hygiene, sanitation and meat inspection as well as the food safety and inspection services programs. The profit motivated private industry would gain more incentive to maintain quality standards, thereby improving the product quality. Private industry, concerned with meat quality, could help to modernize the transport of slaughter animals (cattle, buffalo, sheep, goats, and pig) from the farmers/markets to their holding grounds. As profit depends on marketing techniques, the consumer will benefit through increased competition between the markets.
Livestock product marketing is in general satisfactory and conditions for competition between traders exists in most markets. Depending upon market volume, new market sites could be established. The market information position of the farmers vis-a-vis the middlemen should be improved by developing a reliable livestock market information system which routinely would yield market price data and production projections that should be based on the periodic verification of livestock numbers and production. Market prices should be broadcast and published daily. With respect to national poultry industry, it has to become vertically integrated with up to date facilities.
REFERENCES
Carlson, C. and Scholz, S. (1991) “The effect of increased supply of sheep on producer revenue”, SR.CRSP Working Paper No. 126, Balai Penelitian Ternak, Sei Seputih, North Sumatra.
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