Jakarta Poultry Market Restructuring as part of the Avian Influenza Control Programme (Indonesia)

Jakarta Poultry Market Restructuring as part of the Avian Influenza Control Programme (Indonesia)ByR. Dikky IndrawanPrefaceJakarta became the largest poultry market destination and has poultry business services across all regions.Jakarta is potentially in danger of HPAIJakarta 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 poultryPhase 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 InfluenzaIt is necessary to respond the situation. The assessment includes economic aspects, social benefits which can be mapped and the tangible and intangible costs.Research PurposesTo validate the Data of number of poultry imported into Jakarta, and key stakeholders involvedTo analyze socio economics impacts on market restructuring to the poultry supply chain actorsTo analyze public perspectives on business environment surrounding the poultry businessRecommended strategic activities to reduce negative impact on market restructuring MethodologyJuly-November 2009Data ValidationDesk studyUpdating data : primary data from field of five Kotamadya in DKI JakartaData extrapolationSocio Economics Impact and public perspectives on environment In-depth interview to related stakeholderCorrelation analysisMulti stakeholder Forum (FGD)

Sampling FrameSurvey was conduct in two phase : validation phase and in-depth 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 114Sampling FrameNoStakeholdersRespondenTarget Realisasi1Validasi Collectors 110107Large22Medium1411Small9494Slaughterers 500530Sub Total6106372Indepth Interview (Stake Holders)Collectors 109Slaughterers 4546 Market Vendors 4042Pedagang/pengecer2828Modern Market68Hotel dan restaurant66Suppliers/ brokers 66 Transporters 103Surrounding communities 2217Sub Total114123Grand Total Questionnaires 724760Results: Simple Jakarta Supply Chain Management

Results: Supply Chain and Customer Preferences

Collectors Validation ScaleDirjennakCategoryGovernment DataPenampungTemuan LapangDaily CapacityCollectorsDaily CapacitySampleEstimationDaily Installed CapacityDaily Capacity RealizationLarge>10,000216,000228,0008,000Medium5,000 10,000145,61311146,2004,473Small< 5,0001291,75782 (listed on Government database) 12 (not listed on government database)1463,0752,280Total145162Results: CollectorsCriteria : Experienced in the poultry business (8-26 years)Enterprises have a shelf life of chicken shelters an average of 1 daySupply 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 collectorsRESULTS:Estimation Data on Broiler Supply and Collectors Based on Real CapacityCollectors TypeTotalReal CapacityBroiler SupplyExtra CapacityTotal With ExtraLarge 28,00016,00017116,171Medium144,47362,6181,82564,443Small1442,280329,29413,799343,093160407,91215,796423,707RESULTS:Estimation Data on Broiler Supply and Collectors Based on Installed CapacityCollectors TypeTotalInstalled CapacityBroiler SupplyExtra CapacityTotal With ExtraLarge 2 7,500 15,000 161 15,161 Medium14 6,200 86,800 2,530 89,330 Small144 3,075 444,220 18,615 462,835 160546,02021,306567,325Results: SlaughterFive types of slaughter businessEach type represent type of business and customers preferences

RESULTS:Estimation Data on Broiler Supply and Slaughter Based on Real CapacitySlaughter TypeTotal NumberAverage CapacityDaily SupplyLarge638400255,049Medium789152119,937Small6855336,3292,112411,315Results: Impact of Market Restructuring (1) poultry supply disruptions from various areas in West Java, Central Java and Bantenchanges 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 Jakartathere 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 typeslarge number of labor force will be unemployed or lose their jobs and their livelihoodsRelocation must be carried out simultaneously and in groups. This is especially in terms of the social and institutional activities of slaughters.the possibility of the outbreak of the pattern of bond relationship between actors and will encourage resistance if not addressed in a 0 comprehensive wayResults: 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 relocationIncreased 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 shortagespossible accumulation of chicken at one point transportation 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 abandonedenvironmental 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.Results: Key findingRestructuring The Market is facing difficulties because of:The indication of unique relationship between a supplier and slaughter businessRelations / social ties of slaughter-supplier-merchantThe socialization and restructuring process should pay attention to the patterns of social ties between these actorsThe complexity of the supply chain and consumer preferences will largely determine the restructuring processResults: Key finding (2)Collectors Willingness to be relocatedWillingnessCollectors ScaleSmallMediumLargeTotalYesJakarta Timur1124Jakarta Selatan2002Jakarta Utara1001Total4127NoJakarta Timur22Total22Results: Key finding (3)Slaughter Willingness to be relocated

Results : Key finding (4) Reason of unwillingness to be relocated58,3 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 relocatedThe 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).Business ExperienceLabor AbsorptionPoultry Market RestructuringBusiness DevelopmentCorrelationResults: Key finding (6) Customers PerspectivesAnother 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 PerspectivesPublic perception of the existence of collectors and slaughter point :Create jobsThe existence of spill-over effects in the form of a relatively cheap price of chicken productsThe existence of social responsibility in the form social assistance for communitiesThere 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, no smell, convenient location and affordable pricing relative increaseResults: Key finding (8) Limited Effect from Local Government RegulationChange of Poultry Product into Jakarta Market from Life form into Frozen will not effectiveAt 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 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 figuresThank You The project

Cooperation betweenInternational Center for Applied Economics and Finance(Inter CAFE)Institut Pertanian Bogor

With

FAOPasar TradisionalFarmRestaurant/HotelBrokerCollectorsSlaughter PointSupplier/Slaughter Point Slaughter and Sales at MarketplaceSlaughter Services/Fee BasedMarket ModernMarketTraditionalMarket Vegetables TraderCustomersSlaughter at home or Slaughter PointSeasoned Chicken Trader

Raw materials With coordination No coordination truck