Socio-economic analysis of the slaughtering systems in the poultry ...

Socio-economic analysis of the slaughtering

systems in the poultry meat sector

in Greater Jakarta Area

By: Arief Daryanto, Diederik de Boer, Dikky Indrawan, Ferry Leenstra,

Huub Mudde, Idqan Fahmi, Peter van Horne

Study in the framework of the Inception Phase of the Dutch-Indonesian

Program on Food Security: Poultry & Dairy Sector Components

March 2014

Socio-economic analysis of the slaughtering systems in the poultry meat sector

in Greater Jakarta Area – March 2014 of 66

Contents

Executive Summary ....................................................................................................................................... 3

1. General introduction ................................................................................................................................. 6

2. Research methodology ............................................................................................................................. 7

3. Desk research ............................................................................................................................................ 9

4. Research findings on the slaughtering systems ...................................................................................... 14

4.1 Slaughter point and wet market chain ............................................................................................. 14

4.2 Small slaughterhouse chain .............................................................................................................. 16

4.3 Industrial slaughterhouse chain ........................................................................................................ 17

4.4. Economic comparison of the three slaughtering systems ............................................................... 19

4.5 Rules and regulations ........................................................................................................................ 21

4.6 Access to finance ............................................................................................................................... 24

4.7 Markets (and consumers) ................................................................................................................. 25

4.8 Constraints for upgrading ................................................................................................................. 26

5. Conclusions and recommendations ........................................................................................................ 30

5.1 Conclusions ....................................................................................................................................... 30

5.2 Recommendations ............................................................................................................................ 31

6. References .............................................................................................................................................. 33

Annex 1. Terms of Reference of the study ............................................................................................. 35

Annex 2. List of interviewees .................................................................................................................. 41

Annex 3. Questionnaires socio-economic situation of slaughtering systems ........................................ 43

Annex 4. Map of Greater Jakarta Region with locations of semi-automated and fully automated

slaughtering houses ................................................................................................................................ 49

Annex 5. Relevant governmental regulations ......................................................................................... 57



Executive Summary

Maastricht School of Management (MsM), the Management Program of the Bogor Agricultural

University (IPB-MB), and Wageningen UR Agricultural Economic Research Institute (LEI) and Livestock

Research executed jointly in the period November 2013 – January 2014 a socio-economic analysis of the

three dominant trading and slaughtering systems of the poultry sector in Greater Jakarta Area. This

study was executed as part of the Inception Phase of the Livestock development program on Food

Security, as proposed by a consortium lead by the Animal Sciences Group of Wageningen University and

Research. A quick scan has been executed using desk research, site visits and semi-structured interviews

with chain partners and stakeholders in poultry production chains, company visits and two group

sessions. The study resulted in a qualitative description of the different poultry supply chains in which

three slaughtering systems are part: i) the small-scale slaughter points; ii) the semi-automated

slaughterhouses; and iii) the fully automated slaughterhouses. And it resulted in an overview of

constraints and recommendations for upgrading the poultry slaughtering system towards more food

secure processing.

Slaughter points

In the Jakarta Greater Area, the most important poultry meat chain is through slaughter points. It is

estimated that 80 to 85% of the broilers are slaughtered this way. A typical slaughter point can handle

up to 1000-2000 birds per night with 5 workers.The birds are grown at small-scale farms and through

traders the birds are transported to collecting farms. From collecting farms small numbers of birds are

transported to slaughter points. After slaughter the carcass is directly transported to the traditional

market. The slaughter point is close to the market in order to deliver the carcass fresh (read: warm) to

the consumer. The birds are slaughtered manually, mainly during the evening and night and the

carcasses with feet, head and all organs are sold the same night, next morning at the wet market. In

Jakarta collection of blood and feathers is obligatory. In Bogor only feathers are collected. Waste water

and (in the case of Bogor) blood goes directly into the river. Crates are not cleaned at the slaughter

point. The slaughter point is in general paid after 24-36 hours, mostly immediately after the vendor has

sold the carcasses.

Small slaughterhouses

A small portion of the broilers is slaughtered in small slaughterhouses with a capacity from 5,000 to

25,000 chicken/day. In the Greater Jakarta Area, around 36 of these slaughter houses exist, of which 5

owned by the government. The birds are grown at small to medium scale farms and directly transported

to the slaughterhouse, sometimes owned by a group of farmers. Directly after slaughter the carcasses

are cooled and packed by piece in a plastic bag. In general stunning (water bath) and plucking are

automated, the birds are transported by shackles, but all other work is done manually. Cooling is in

water in large containers. Purchased ice blocks are used to cool the water. Small slaughter houses tend

to focus on out-of-home market, small supermarket, vendors and very limited kiosks at the wet market.

Feet, head and organs (intestines included) are marketed separately. The slaughter houses determine

the quantities to be slaughtered on the price of slaughter ready birds. If they have own farms, these are

treated as a separate business unit with hard bargaining on price of live birds. Most small slaughter

houses harvest blood and feathers separately (gives revenues), but there is no waste water treatment.

The small plants work with Indonesian copies of slaughter equipment. It is questionable if crates are

cleaned.



Industrial slaughterhouses

A minor part (10 to 15%) of the broilers is slaughtered in industrial slaughterhouses (> 80,000 per day).

The birds are grown at medium scale to large farms and directly transported to the slaughterhouse.

Directly after slaughter the carcasses are cooled and packed. Due to a lack of uniformity in some plants

only stunning and plucking is automated. Degutting, cutting head and feed is often by hand. The large

slaughter plants produce for the main supermarket chains, out-of-home market and also further

processing (nuggets) is an important part of the business. The large plants do have HACCP and ISO-

certificates. Not necessarily the quality of the process is better than with plants that have the state

certificate (NKV). The whole chain is cooled with also delivering of a cooled final product to the

customers. The large slaughter plants often have international equipment. It is questionable if crates are

cleaned.

Conclusions and recommendations

The Indonesian poultry industry is on a cross-road. Both hygiene and prices are becoming important

factors in the years to come demanding for up scaling in the sector. The slaughter points have many

constraints for upgrading contrary to the industrial slaughterhouses whereby the semi-automated

slaughterhouses are facing a mixture of constraints.

In order to increase the hygiene level of small slaughter points, the business owners have to invest in

hygiene knowledge, practice and machines. In order to improve the efficiency of their production the

business needs to upscale. Both issues are difficult. No banks are providing loans to facilitate up-scaling.

And in terms of hygiene, the low effort of enforcement of the government in controlling food-safety of

the numerous slaughter points does not contribute to better food-safety. For the semi-automated

slaughterhouses it can be concluded that up scaling interventions seem to be less costly as less

businesses are involved but also because with a bit of additional support these businesses can become

more hygiene conscious and can also develop more efficient production systems. It can be concluded

that there is no difference in total costs for a slaughter point and a small slaughter house; an efficient

and good managed small slaughter house could compete on price with the slaughter points. The larger

industrial slaughterhouses do not need a lot of support as they are often working according to the latest

efficiency and hygiene standards.

Interventions should be focused on three main areas. First, access to finance needs to be improved to

enable up-scaling aspirations. Next infrastructure needs to be upgraded (roads). Finally, the business

and government need to work more together in developing and maintaining the required hygiene levels

and in obtaining economies of scale in the production processes. Tax exemptions might be helpful in this

process of upgrading. Concretely, it is recommended to:

1. Strengthening public-private cooperation at district level

In order to address infrastructural, institutional and business constraints public-private partnerships

should be developed. There is a need for increased cooperation among public and private parties in the

sector. The aim would be to facilitate trust building among the key actors, to come up with scenarios,

and to agree upon pilots that also involve private partners (B2B).

2. Upgrading semi-automated slaughter houses to become small integrators

The smaller slaughter houses are essential for meeting the growing market needs and for creating a

geographical net of slaughterhouses around Jakarta. Currently, they are too small to meet the growing



demand, the increasing competition (ASEAN) and have too little resources for the needed investments.

Hence, the semi-automated slaughter houses will need to grow and innovate.

3. Slaughter house innovation

Invest in designing new types of slaughter houses that are more cost effective and environmentally

sustainable. Current systems for cooling and cleaning require a lot of water and (purchased) ice, and in

many (smaller) slaughter houses coops and waste water are not cleaned. Intake of good quality water is

another issue to consider and stunning of poultry according to Halal rules.

4. Availability of investment capital

Explore the possibility for large investors and eventually the set-up of a security fund for the poultry

sector. This might be completely public, but a public–private partnership is also feasible. Investments

are required in both the primary production of poultry (housing) and processing (slaughter plants).

5. Support to District and Provincial governments

The district governments have a key role in law enforcement and economic development. The Provincial

governments have an important coordinating role, and can co-fund district-level activities. Specific

attention could be given to support districts to fulfil their pertinent role more adequately, through

training, strategic plan development, monitoring mechanisms, and benchmarking.



1. General introduction

Maastricht School of Management (MsM), the Management Program of the Bogor Agricultural

University (IPB-MB), and Wageningen UR Agricultural Economic Research Institute (LEI) and Livestock

Research executed jointly in the period November 2013 – January 2014 a socio-economic analysis of the

three dominant trading and slaughtering systems of the poultry sector in West Java.

This study was executed as part of the Inception Phase of the Livestock development program on Food

Security, as proposed by a consortium including the Animal Sciences Group, Centre for Development

Innovation, and the Agricultural Economic Research Institute of Wageningen University and Research

Centre, the Bogor Agricultural University, Maastricht School of Management, and Advance Consulting

BV. This program aims to develop viable models for domestic production and supply of affordable,

nutritious and safe animal-based products in Indonesia. With the development and testing of these

models the program will contribute towards higher income levels of Indonesian smallholders and

improved access to affordable and safe animal protein products among urban consumers. The focus will

be on West Java as main production and sourcing area of dairy and poultry meat products for Jakarta

and other main urban centres (Wageningen University and Research Centre, 2013).

The slaughtering points and -houses play a pivotal role in the poultry sector. Professionalization and/or

restructuring of the chain actors are vital in the process of improving food safety and hygiene standards.

Besides the required technical capacity development, more clarity is needed on the economic and

financial functioning of the slaughterhouses: what are the key incentives and hurdles for change? The

executed socio-economic analysis of the three dominant trading and slaughtering systems provides this

information. The study aims to get more information on opportunities for upgrading of the slaughtering

practices from an economical and food safety point of view.

This document is reporting the findings of this socio-economic study with the purpose to help give

direction to the implementation of the foreseen livestock development program. It entails information

on slaughtering practices, economics, food safety and environmental risks and government policies. It

concludes with suggestions for project interventions.



2. Research methodology

The study executed was aimed at identifying the drivers and constraints for change towards more food

secure poultry meat processing in West Java. The expected results of the study as formulated in the

research outline (Maastricht School of Management, Bogor Agricultural University, Wageningen

University and Research Centre, 2013) are:

1. Qualitative description of the present situation of different poultry supply chains in which 3

slaughtering systems are part. These systems are: i) the small-scale slaughter points; ii) the semi-

automated slaughterhouses; and iii) the fully automated slaughterhouses. This gives insight in:

2. Overview of drivers and constraints for upgrading the poultry slaughtering system towards more food

secure processing.

For the Terms of Reference of the study including a detailed work plan, see annex 1.

In December 2013 and January 2014, a quick scan has been executed using desk research, site visits and

semi-structured interviews with key chain partners and stakeholders in poultry production chains,

company visits and two group sessions. See annex 2 for the full list of interviewees and site visits and

annex 3 for the questionnaires.

Table 2.1 Categorization and number of people interviewed, group sessions, and site visits

Groups sessions In depth Interviews Site visits

4 persons from integrators /

industrial slaughterhouse chain

4 representatives of the

banking sector

1 company integrator / Industrial

slaughterhouse

2 persons from small slaughter

houses

2 government officials 2 small slaughter houses

1 representative of a farmer

association

2 representatives of farmer

associations

1 collecting farm

2 academia 1 farmer

1 slaughter point / wet market

1 specialty store

Although initially it was the intention to focus the study on Jakarta only, it was decided to broaden this

to the Greater Jakarta Area with a focus on the Bogor District. Greater Jakarta also includes Bogor,

Depok, Tangerang and Bekasi and is also referred to Jabodetabek. The rationale for this decision was

twofold:

1. The fully automated slaughterhouses are located outside Jakarta, as well as most of the semi-

automated slaughterhouses. See annex 4 for a map of the Greater Jakarta Area on which these semi-and

fully automated slaughterhouses are indicated.

2. Government regulations and practice differ per province which may impact on possible interventions.



The findings and draft report have been validated by senior experts:

Dr Hartono, Chair of PINSAR (Poultry Farmer Association)

Mr Don P. Utoyo, Chair of FMPI (Federation of the Indonesian Poultry Society).

The study has been implemented and coordinated through the Bogor-based IPB-Centre for Sustainable

Business Competitiveness (CSBC), a joint-venture of IPB and MsM1.

1 CSBC is about bringing different (international) partners together to work towards concrete sustainable economic

development in the Indonesian agricultural sector from a business perspective, based on cluster and value chain

approaches.



3. Desk research

Poultry sector in Indonesia

The poultry sector in Indonesia is a growing business fully geared towards the domestic market. The

increase of personal income leads directly to higher meat consumption. In Indonesia that is mainly

chicken meat given the predominant Muslim population and the high prices for beef: 87% of Indonesia’s

fresh meat consumption is chicken (OSK, 2012). Other sources estimate this at around 54% (PT Japfa

Comfeed Indonesia Tbk, 2013). Given the low chicken meat consumption of around 6 kg per capita,

lower compared to other countries in South East Asia, there are huge growth potentials (OSK, 2012)

(Daryanto, 2011) (Indonesian Commercial Newsletter, 2011) (Pefindo, 2009). Between 2011 and 2015

the poultry meat production is estimated to grow from 600,000 tonnes towards 1,600,000 tonnes

(Rabobank, 2011). More recent information from the Federation of the Indonesian Poultry Society FMPI

(personal interview, 2014) indicate that the total chicken meat production has already grown to 2 mln

tonnes, equals around 8 kg per capita. This figure is based on the number of day-old-chicks (DOC) sold.

The poultry supply industry upstream of broiler growers in Indonesia is characterized by its oligopolistic

nature with a few large players that control the market of day-old-chicks and feed. The two largest

companies are Charoen Pokphand Indonesia and Japfa Comfeed, estimated to command more than half

of the feed and breeding industry (OSK, 2012) (Rabobank, 2011). Both companies are integrators (up-

and down-stream) involved in most levels of the value chain, from feed production, hatching day old

chicks, slaughter and further processing. Broiler farmers are involved through contract farming with

these integrators (Rabobank, 2011). The same integrators dominate the market for DOCs and feed

supplied to the independent small and medium scale farms. Given the fact that feed and DOC account

for around 70% of the broiler costs (Embassy of the Kingdom of the Netherlands, 2013), this illustrates

the powerful position of the big integrators. According to the Indonesian feed mill association GPMT,

the capacity of the 68 biggest feed companies in Indonesia reaches to 18.5 million ton per year (Agrina,

2013).

Broiler grandparent stock comes from the standard international breeding companies. Cobb and

Aviagen (Ross broilers) share the market, as they do worldwide. The feed mills have to buy feed

ingredients and the (grand)parent stock on the world market. According to Faiz Ahmad (Director of the

Food Industry, Sea Product and Fisheries of the Ministry of Industry), the self-sufficiency in feed

ingredients for poultry in Indonesia is about 20% (Indonesia Finance Today, 2013).

Table 3.1 Indonesia animal feed and DOC production: capacity share of largest companies

Animal feed DOC production

Charoen Pokphand Indonesia 33% 31%

Japfa Comfeed 21% 21%

Cheil Jedang Feed Indonesia 8% 1%

Malindo Feedmill 6% 8%

Sierad Produce Tbk 5% 6%

Wonokoyo 4% 5%

Source: Rabobank International FAR research and industry sources (April 2013)



The large integrators are less dominant in the slaughtering process as 85% of all chicken is slaughtered in

slaughter points. From the six DOC and feed suppliers listed in table 3.1, only Charoen Pokphand

Indonesia, Japfa Comfeed and Sierad Produce have slaughter plants; Charoen Pokphand is the biggest

and Sierad Produce the smallest. The large slaughter houses and the medium-sized, semi-automated

slaughter houses together cater for around 15% of all chickens slaughtered.

In their study on local power relations in relation to animal health policies, Charnoz and Forster (Charnoz

& Forster, 2011) analyse the poultry sector in Indonesia as “frozen in a stage of ‘half modernization’”.

Daryanto refers to the dualistic sector, both modern and traditional (Daryanto, 2011). At one hand large

modern companies enhance the scale of poultry farming, working with numerous small holders some

times in a contract farming system, but also as independent source of slaughter ready broilers. This so-

called nucleus – plasma model is common in many Indonesian agricultural industries, initiated by the

Indonesian Ministry of Agriculture in 1978 to expand perennial crop production. It provided large

companies with subsidized loans and long-term land lease contracts under the condition of providing

inputs, credit, and services to smallholders (OECD, 2012). The sector is further characterized by too few

and mostly pre-industrial slaughter houses, inappropriate transport systems, and live markets (Charnoz

& Forster, 2011).

Table 3.2 presents the key figures above indicating the size of the sector with more than one million

chicken slaughtered daily in the (semi) automated houses. It is an estimate on national, Indonesian level.

Table 3.2 Chicken meat consumption and slaughter capacities in Indonesia, rough estimates

Estimated total chicken meat production in Indonesia (kg)

(FMPI, 2014)

2,000,000,000 kg/year

Consumption per person in Indoensia (250 mln inhabitants)

8.00 kg/capita

15% of chicken slaughtered by (semi) automated houses

(kg)

300,000,000 kg/year

number of chicken slaughtered/year (slaughtered weight =

70% of live bird)

333,333,333 chicken/year

number of chicken slaughtered per day by (semi)

automated houses, effective 300 days/year

1,111,111 chicken/day

capacity 1 big slaughter house/day at least 80,000 chicken/day

capacity semi-automated slaughter house/day 5 - 25,000 chicken/day

Poultry sector in Greater Jakarta Area

The largest concentration of broiler farms in Indonesia is in the Greater Jakarta Area because of the

largest consumer market, with sales averaged more than 1,125,000 chickens daily (2009) (Indonesian

Commercial Newsletter, 2011). Table 3.3 presents an overview of the growth in annual chicken sales per

year.



Table 3.3 Chicken sales in Greater Jakarta Area, number of chickens slaughtered per year

2005 2009 2010

Jakarta 96,265,000 171,574,000 200,742,000 *)

Bogor 40,880,000 76,650,000

Tangerang 40,150,000 74,095,000

Bekasi 60,650,000

Depok 27,740,000

Total 410,709,000

Source: Indonesian Commercial Newsletter, August 2011

*) estimation

Poultry chain characteristics

The poultry chain can be characterized by using the types of governance value chains as identified by

Gereffi et al. (Gereffi, Humphrey, & Sturgeon, 2005):

1. Market value chains whereby the costs of switching to new partners is low

2. Modular value chains, whereby products are made by a customer specification

3. Relational value chains with complex relations between buyers and sellers

4. Captive value chains in which network suppliers are dependent on large buyers

5. Hierarchical value chains; this is a vertical integrated chain.

The characteristics of these types of value chains are based on three factors:

A. The complexity of information and knowledge transfer that is required to sustain a particular

transaction, particularly with respect to product and process specifications;

B. The extent to which this information and knowledge can be codified and, therefore, transmitted

efficiently and without transaction-specific investment between the parties to the transaction; and

C. The capabilities of actual and potential suppliers in relation to the requirements of the transaction.

The poultry sector in Indonesia is a market driven chain whereby the complexity of the transactions is

low and the ability to codify transactions and the capabilities in the supply chain are high. It is

interesting to note that if regulations would be enforced more, the complexity of the information and

knowledge required will increase and the chain will be become a modular value chain. In these types of

chains there are often less actors involved as the transactions become more complex. These chains are

also easier to regulate.

Pefindo (2009) identifies four key success factors for the poultry industry from a business perspective:

• Market position and scale of production are important for increasing competitiveness: economies of

scale are essential

• Vertical integration is beneficial for reducing risks of oversupply and enables for lower production

costs

• Diversification in terms of suppliers, locations, markets, and customers are essential to prevent

concentration and stabilize the revenue and profitability. Given the importance of proximity with

the final consumer, and minimizing freight costs, this asks for regionalization

• Operating management to be improved for controlling costs and expenditures.



Slaughtering

In the report on poultry value chains in the Jakarta region (Sudarman, et al., 2008) it was concluded that

the traditional market retailers see little threat from processed chicken due to their lower price and

because their chicken is perceived to be ‘fresher’ than product ex modern slaughterhouses. The latter is

countered in the findings of the 2014 consumer survey executed in parallel to this study, stating that the

perception for wet markets and modern markets are indifferent for performance on safety and selling

safe poultry meat (Tacken, Immink, Indrawan, Snoek, & Sumarwan, 2014 (forthcoming)). In the same

report, Sudarman et all conclude that slaughter points in traditional markets play a dual role of

butchering and retailing poultry products. The slaughter points keep live poultry, slaughter it directly in

the market, and dispose the waste abruptly with poor application of sanitary procedures. The slaughter

points are a high risk for Avian Influenza transmission (Sudarman, et al., 2008).

Governmental context

The government encourages self-sufficiency in meeting the country’s poultry needs. This limits the

threat of import (OSK, 2012), but likewise limits the incentives for change. When working in Indonesia

the relation between the government and the larger society needs to be understood. This is well

explained by Paul Forster in the context of the Avian Influenza (Forster, 2009). He explains the little trust

in government because of Indonesia being a young democracy emerging from decades of autocratic

rule, the tendency to compromise, hence little is changing, and the robust reality on the ground.

The poultry sector in Asia

The chicken meat production in Indonesia is less cost-effective than in surrounding countries, like

Malaysia and Thailand. Indonesia needs to address hygiene levels in the poultry sector and need to

produce more efficient in order to keep up with competition from abroad. Currently, the Indonesian

poultry industry cannot compete on price and quality with imported products. By January 2016, the

ASEAN economic integration will start to materialize, although conditions are still being negotiated. It is

highly unlikely that import restrictions on agricultural products will disappear easily, but the principle

remains that the sector is vulnerable for international competition. In addition, it should be stated that

the majority of the poultry sector in Indonesia is currently traditional, selling non-frozen chicken. Thus,

in case of an increase of (frozen) imported chicken meat, it will affect mainly the industrial cold chain in

Indonesia.

Food safety

Given the importance of poultry meat consumption for Indonesia and the expected growth in meat

consumption within the next couple of years, food safety and animal health issues are of extreme

importance. Environmental, food safety and veterinary health risks are present in the small slaughter

points and wet market chain which is by far the biggest chain as explained above. According to several

studies (Embassy of the Kingdom of the Netherlands, 2013), 80% of the chicken collector yards were

contaminated with live H5N1 HPAI. This poses both human and veterinary health risks. Avian influenza

and other infectious diseases are a continuing risk, especially due to close contact between humans and

poultry (collector farms, slaughter points). During production, the routine treatment with three different

antibiotics for 3 days each week during the first 3 weeks of a broiler live (slaughter at 4-5 weeks of age),

Is a potential risk for the development of antibiotic resistance. Microbiological quality of poultry

products is probably not a huge problem, due to cooking habits and food knowledge of the Indonesian

population, with exception of bacteria resistant to antibiotics.



Concluding, we can state that the Indonesian chicken industry as it stands now is on a cross-road. Both

hygiene and prices are becoming important factors in the years to come. The ASEAN economic

integration will force Indonesia to eventually open up its poultry market. Neighbouring countries like

Thailand and the Philippines can produce chickens cheaper and an influx of cheap frozen import

chickens from abroad is eminent. At the same time the pressure for a more hygienic poultry chain from

the government, ASEAN and consumer groups and donors becomes an important force demanding for

change. Both hygiene and price will demand for up scaling in the sector whereby up scaling of the semi-

slaughter houses seems to be most realistic as they are already in the process of becoming more

hygienic and becoming also more industrialized.



4. Research findings on the slaughtering systems

Three types of production chain can be distinguished in the Greater Jakarta region, characterized by the

slaughtering and marketing system:

• Slaughter points and wet market chain

• Semi-automated slaughter houses

• Industrial slaughter plants, part of integrated poultry production

The slaughter points and the semi-automated slaughter houses are part of a complicated network of

several chain actors. In this chapter the three chains are described in more detail after which a

comparison is given on the cost flow in each chain. Further, information is presented on the role of the

government in regulating the sector, and credit facilities offered by banks. Last, an overview is given on

possible drivers and constraints for upgrading of the slaughtering sector in Greater Jakarta region.

4.1 Slaughter point and wet market chain

In the Jakarta Greater Area, the most important poultry meat chain is through slaughter points. It is

estimated that 80 to 85% of the broilers are slaughtered this way. The birds are grown at small-scale

farms and through traders the birds are transported to collecting farms. From collecting farms small

numbers of birds are transported to slaughter points. After slaughter the carcass is directly transported

to the traditional market. The slaughter point is close to the market in order to deliver the carcass fresh

(read: warm) to the consumer. Figure 4.1 gives the overview of the chain.

Figure 4.1 Overview of slaughter point and wet market chain

FARMERS

CONSUMERS

SLAUGHTER POINT

RETAILER: traditional market

COLLECTING FARM

TRADERS



Deviations to this chain occur, often increasing the complexity. In many cases, more than one trader is

involved (hence a trader selling to another trader), and also traders may operate between the collecting

farm and the slaughter point: this trader could be the same person as the slaughter, but not per se. In

case of immediate need for cash, a farmer may transport chicken directly to a collector farm (hence

shortening the chain).

Poultry farmers

There are no poultry farmers in DKI Jakarta Province; most of the supply comes from poultry farms

located outside DKI Jakarta of which the majority is located in West Java, Banten, and South Sumatra

Provinces. Poultry farmers can be independent, contracted by a slaughter plant, or owned by an

integrator. Some interviewee state that the independent farmers seem to disappear. They tend to

organize themselves in groups for negotiations on day old chicks (DOC’s), feed and medication.

Independent small farmers tend to come into financial problems, due to the volatile prices of slaughter

ready chickens. A farmer with slaughter ready chickens has to sell and cannot wait for better prices. He

needs cash to buy DOC’s and feed for the next round. Farmers that cannot manage to finance the next

round of broiler production are either incorporated into a group (taken over by another farmer) or the

location is taken over by an integrator.

In general, traditional broiler farms (bamboo, slatted floors, and natural ventilation) have one or more

houses with a maximum of about 2000 birds/house.

Traders or brokers

When (independent) poultry farmers have a slaughter ready flock, they need immediate payment to be

able to invest in a next round of DOC’s, feed and medication. This is where brokers or traders come in.

They do not physically interfere with the birds, but function more or less as a banking system. They

provide the farmer with cash payment, and receive the payments from the slaughter point or slaughter

house about two to four weeks later. One interviewee states that the average interest for this cash flow

system is 3.5-4% per month. Most brokers work with a limited number of farmers (6-10). More is not

possible because of the amount of money and the risk involved.

Collector farm

From the farm the birds can either go directly to a slaughter point or slaughter house or to a collector

farm in DKI Jakarta Province. The latter comes in for delivering live chickens to smaller slaughter points.

At the collector farms the birds are housed in floor pens and from these pens they are sold the same or

the other day in quantities of 30-60 (60 is the maximum number that can be transported on a motor

cycle). In general the birds at the collector farm can come from small to medium scale farms. A collector

farm handles mostly broilers. However on the collector farm we visited we also saw broiler parent stock

and spend layers. The collector farm often has slaughter facilities, but in general the birds are

slaughtered at other locations.

A typical collector farm can handle 20 – 30.000 birds a day. The birds arrive with small trucks, the

majority leaves in bundles on a motorcycle. A trial by FAO to clean and disinfect trucks was abandoned,

as the drivers were not willing to wait for cleaning. What we did see is that crates are not cleaned at the

collector farm and very likely not at all before re-use.

Slaughter point

A slaughter point is a facility where broilers are slaughtered for the traditional market (wet market). The

slaughter points often appear in groups, at the board of the river and close to market places. The birds

are slaughtered manually, mainly during the evening and night and the carcasses with feet, head and all



organs are sold the same night, next morning at the wet market. A typical slaughter point can handle up

to 1000-2000 birds per night with 5 workers. The slaughter point we did see was at the base floor of the

house of the owner. The workers are often family members or neighbors. In a neighborhood with a

number of slaughter points almost all inhabitants are connected to the slaughter points and

consequently there is no complaining on the presence of the slaughter points in a residential area.

In Jakarta collection of blood and feathers is obligatory. In Bogor only feathers are collected. Waste

water and (in the case of Bogor) blood goes directly into the river. The slaughter point is in general paid

after 24-36 hours, mostly immediately after the vendor has sold the carcasses.

Crates are not cleaned at the slaughter point.

4.2 Small slaughterhouse chain

A small portion of the broilers is slaughtered in small slaughterhouses. In the Greater Jakarta Area,

around 36 of these slaughter houses exist, of which 5 owned by the government. The birds are grown at

small to medium scale farms and directly transported to the slaughterhouse, sometimes owned by a

group of farmers. According to statistics of the government of West Java, up to 11% of chicken may die

in transport due to the heat, long distance between the farm and the slaughter house, and traffic jams.

Directly after slaughter the carcasses are cooled and packed by piece in a plastic bag. Figure 4.2 gives

the overview of the chain.

Figure 4.2 Overview of small slaughterhouse chain

Small slaughter house

The capacity of small slaughter houses is from 5,000 to 25,000 chicken/day. In general stunning (water

bath) and plucking are automated, the birds are transported by shackles, but all other work is done

manually. Due to large variation within flocks the use of automated degutting gives too many losses.

Cooling is in water in large containers. Purchased ice blocks (from ices factories and transported by

truck) are used to cool the water. Small slaughter houses tend to focus on out-of-home market, small

FARMERS

SMALL SLAUGHTER HOUSE

RETAILER: small supermarket, out of

home, vendor

CONSUMERS



supermarket, vendors and very limited kiosks at the wet market. Both small slaughterhouses we did visit

did also cut up birds and marinated whole birds or parts according to client specification. Feet, head and

organs (intestines included) are marketed separately.

The small slaughter houses we did visit did try to combine the slaughter with cold store. In that case

fluctuations in price of live birds can be balanced. When the birds are cheap the store is filled, when

they are expensive the cooling system is used reversed to thaw carcasses from the cold store to sell as

fresh.

Further processing and cold store is the live line for slaughter houses, because margins in slaughtering

are too low to become profitable. They do not work according to capacity, but determine the quantities

to be slaughtered on the price of slaughter ready birds. If they have own farms, these are treated as a

separate business unit with hard bargaining on price of live birds. This was the case for the two small

slaughterhouses we did visit were both owners were also involved in broiler farming. To our impression

most small slaughter houses harvest blood and feathers separately (gives revenues), but there is no

waste water treatment. Transport of the final produce can be with cooled transport which can be

owned by the slaughter plant. The small plants work with Indonesian copies of slaughter equipment.

It is questionable if crates are cleaned.

4.3 Industrial slaughterhouse chain

A minor part (10 to 15%) of the broilers is slaughtered in industrial slaughterhouses. The birds are grown

at medium scale to large farms and directly transported to the slaughterhouse. Directly after slaughter

the carcasses are cooled and packed. Figure 4.3 gives the overview of the chain.

Figure 4.3 Overview of industrial slaughterhouse chain

FARMERS

SLAUGHTER HOUSE

RETAILER: large supermarket, fast

food restaurants

CONSUMERS



Poultry farmers

The large integrators normally work with bigger farms (e.g. for CP more than 5,000 birds). The farms can

be either contracted (nucleus – plasma model) or completely owned by the integrator. Production on

contract means that the farmer gets the DOC’s and feed from the integrator and delivers the slaughter

ready to the same integrator. The integrator owns the birds and the farmer is paid a compensation for

doing the work and supplying the poultry house. Some interviewee state that the number of contract

farmers appears to diminish. Dependent on the market price and the demand from the integrator,

farmers also supply to the other two slaughtering chains.

Due to volatility in prices of slaughter ready birds the willingness of slaughter plants to have long term

appointments is reduced. Especially the integrators tend to work more and more with farms with

climate controlled housing. With this modern system the performance is better and also the uniformity

(in final weight) of the birds is improved (which is important for automated slaughter). Farms with

closed houses have in general two stories, closed floors and mechanical ventilation. The standard farm

with closed housing has 25,000 birds.

The integrations and larger farmers are in general able to finance this cash flow themselves, so traders

and brokers are not part of the production chain.

Industrial slaughter houses

The number of industrial slaughter houses (> 80,000 per day) is small. Only the large integrators have

such facilities. According to several sources, these slaughter plants do frequently not use their full

capacity as a mechanism to influence prices for live chicken.

Due to a lack of uniformity in some plants only stunning and plucking is automated. Degutting, cutting

head and feed is often by hand. The large slaughter plants produce for the main supermarket chains,

out-of-home market and also further processing (nuggets) is an important part of the business. The

large plants do have HACCP and ISO-certificates. Not necessarily the quality of the process is better than

with plants that have the state certificate (NKV). The whole chain is cooled with also delivering of a

cooled final product to the customers. The large slaughter plants often have international equipment. It

is questionable if crates are cleaned. The large processor we did visit had water cleaning facilities for

cleaning the incoming water and the waste water.



4.4. Economic comparison of the three slaughtering systems

Based on the information collected during our visits (interviews, visits, and group sessions) we did

compare the cost of the three production chains: slaughter point, small slaughterhouse and large

slaughterhouse. This is an indicative model to illustrate the differences in costs at the different links in

the production chain and presenting an average. However in every stage there is a wide variation

between companies. Table 4.4 gives the results.

Table 4.4 Economic comparison of three slaughtering systems in Greater Jakarta region (prices in Rps)

The comparison is based on slaughter points in which 1,000 to 2,000 birds per day are slaughtered. For a

small slaughter house the scale is 5,000 to 25,000 birds per day. The large slaughter houses slaughter

more than 50,000 birds a day. For all systems the calculations are based on the slaughter of 1.3 kg

broiler. This is the average weight of broilers for the whole birds market in Jakarta. Large slaughter

houses also slaughter broilers at higher live weight. However, these birds are used for cut-up and further

processing (e.g nugget etc). In the comparison we strictly focus on the market of whole birds in either

the wet market (slaughter points), mini market/kiosk/vendors (small slaughter houses) or super-

/hypermarket (large slaughter houses).

The slaughter points and small slaughter houses deliver a carcass with head and feet to their customers.

The large slaughterhouses deliver, in general, a carcass without head and feet. Because of this difference

the assumption for carcass yield for the large slaughterhouses is lower.

slaughter Point Small Slaughter House Large slaughter house

1000-2000 birds/day 5000-15000 birds/day over 50000 birds/day

assumptions unit *

Live weight at farm (kg) 1.3 1.3 1.3

yield carcass (%) ** 0.75 0.75 0.68

carcass weight (kg) 0.975 0.975 0.884

live birds, costs per kg live weight:

Price/kg Live weight LW 15000 15000 15000

transport from farm LW 500 500 500

Collecting Farm fee LW 600 0 0

transport to slaughter place LW 300 0 0

A: total cost at gate slaugher house LW 16400 15500 15500

carcass, costs per kg carcass weight:

costs carcass weight CW 21867 20667 22794

Slaughter costs *** CW 1500 2000 2500

Revenues organs, int **** CW 1200 1100 1000

B: Net Slaughter costs CW 300 900 1500

Profit/finance/risk CW 0 500 1000

packing CW 0 200 400

C: total cost leaving sl.house 22167 22267 25694

Transport to market CW 200 500 800

market fee (estimate) 1800 2500 5000

D: total calculated costs at consumer level CW 24167 25267 31494

*_LW is live weight; CW is carcass weight

**_the yield in large slaughterhouses is lower because the final product is different (carcass without head and feet).

***_ Differences between companies. Large slaughterhouses have e.g higher costs for labour and waste/water treatment.

****_revenues are higher for slaughter points/houses close to the wet markets



The total costs at the gate of the slaughter place are higher in the first production chain. See line A in

table 4.4. This is a result of a longer production chain. Birds are transported from the farm to a collecting

farm and later (in small numbers) transported to the slaughter point. The additional costs for the

slaughter points are estimated to be 900 Rps per kg live weight. The interviewees mention costs in a

range from 500 to 1,500 Rps.

The net slaughter costs per kg carcass weight (cw) for the three chains are respectively 300, 900 and

1,500 Rps per kg CW. See line B in table 4.4. The net slaughter costs are the difference of the slaughter

costs and the revenues of organs and intestines. The costs for small and large slaughter houses are

higher due to higher costs for building, equipment and labor wages. Large slaughter houses also have

additional costs for waste- and water treatment. At the same time slaughter points have higher

revenues for organs and intestines. With a close and direct connection to the wet market slaughter

points get a higher price for intestines. Although most interviewees agree on this it was difficult to

estimate the difference in price. Another interviewee stated there is no difference in revenue between

the three slaughter systems.

The next step is to calculate the total costs leaving the slaughterhouse. See line C in table 4.4. Compared

to the slaughter points the small and large slaughter houses have additional cost for finance/risk,

meeting national qualifications standards, and for packaging. At the gate leaving the slaughter house the

additional cost for a small slaughterhouse is 100 Rps per kg and 3,537 Rps per kg carcass weight for the

large slaughterhouse. It can be concluded that there is no difference in total costs for a slaughter point

and a small slaughter house. Taking into account the large number of assumptions and the variation in

estimates by the interviewees we can state that an efficient and good managed small slaughter house

could compete on price with the slaughter points. This is confirmed by an interviewee who stated that

the breakeven point for a small slaughter house is at 4,000 birds per day.

In the last part of table 4.4 (see line D) we estimated the total cost at consumer level. Based on the costs

at the slaughter house, the costs of transport to the market and a market fee are added. It should be

noted that in this comparison the three slaughter systems have different markets. The slaughter points

deliver the carcass to the traditional/wet market. The small slaughter houses deliver the carcass to mini

market/kiosk/vendor and the large slaughterhouses deliver the carcass (without head and feet) through

a cold chain to super- and hypermarkets. The price at the wet market is the lowest because the

slaughter points are close to the wet market (low transport costs) and the market fee is low. The

consumer price is the highest in super-/hypermarket because of higher costs at the slaughter house,

transport in a cold chain and a higher market fee.

This comparison of the costs and the conclusion that the consumer price at the wet market is the

lowest, is the more relevant because the consumer research that has been executed in parallel to this

study, concluded clearly that price (together with health) is the most important food choice motive for

poultry meat (Tacken, Immink, Indrawan, Snoek, & Sumarwan, 2014 (forthcoming)).

Asymmetric price transmissions

It is important to understand that the calculation of the production costs as presented in table 4.4

cannot be copied directly to the day-to-day pricing in the market. There is an asymmetric relation

between the off-farm price and the market/retail price in the large slaughter house chain (asymmetric

price transmission). Positive or negative changes in the off-farm price for live chicken are not directly



leading to price changes for the consumers. This may lead to huge price differences in the same day in

the different chains.

4.5 Rules and regulations

The regulatory environment is complex because of the three governmental levels that impact on the

poultry meat chains. As a consequence of the dekonsentrasi powers are divided between the national,

provincial and district government (as laid down in Government Regulation No. 38 – 2007). With

different political parties that may be in power at different level, coordination and consistency are the

more difficult.

The most relevant national laws and provincial and local regulations in Greater Jakarta Area are listed in

table 4.5. A brief summary of each of these is presented in Annex 5 of this report.

Table 4.5 Overview of relevant laws and regulations

No. Type of regulation Regulation number / subject

1 Law of the Republic of Indonesia No. 7 of 1996 on Food

2 Law of the Republic of Indonesia No. 18 Year 2009 on Animal Husbandry and Animal Health

3 Law of the Republic of Indonesia No. 18 of 2012 on Food

4 Regulation of the Minister of

Agriculture

Number 381/Kpts/OT.140/10/2005 on Guidelines for

Certification of Veterinary Control Business Unit Food of

Animal Origin

5 West Java Provincial Regulation Number 18 of 2008 on Fees Animal Disease Testing Services,

Materials of Animal Origin and Quality Feed / Raw Feed

6 West Java Provincial Regulation No. 22 of 2012 on the Implementation of Animal Husbandry

and Animal Health

7 Local Regulation Bekasi No. 9 of 2012 on Retribution

8 Bekasi District Regulation Number 6 of 2007 on Fees Animal Husbandry, Fisheries and

Marine

9 Bogor Regency Regulation No. 29 of 2011 on Business Services Levy

10 Local Regulation Bogor Number 5 of 2012 on Business Services Levy

11 Local Regulation Bogor No. 3 of 2009 on Levy Investigation and slaughtering

12 Local Regulation Depok Number 22 of 2003 on fisheries permits, ranches and

slaughterhouses

13 Local Regulation Depok No. 7 of 2011 on Levy Slaughterhouse

14 Jakarta Provincial Regulation No. 4 of 2007 on Control Maintenance and Poultry Peradaran

15 Jakarta Governor Regulation No. 146 of 2007 on Guidelines for the Implementation of

Regional Regulation no. 4 of 2007

16 Jakarta Governor Regulation No. 147 of 2007 on the Provincial Committee for Avian

Influenza Control and pandemic preparedness

17 Tangerang District Regulation Number 7 of 2009 concerning maintenance and Poultry

Disease Control Flu (Avian Influenza)



The national framework for quality assurance and control is that all slaughtering houses have to hold a

NKV certificate (Nomor Kontrol Veteriner). The NKV is formulated by the Ministry of Agriculture. In

addition, Halal certification is required, formulated and issued by the national religious leaders (MUI:

Majelis Ulama Indonesia) in cooperation with the Ministry of Religious Affairs. The Halal slaughtering

process is described in the Ministerial Guidelines on chicken slaughtering (Ministry of Agriculture,

Indonesia, 2006):

• The animal needs to be alive, healthy and clean; stress prior to slaughtering should be avoided. The

head of the animal needs to face Mekka

• The butcher has to be a Moslem, adult and has a sound mind, and has to say the correct Koran

phrases before slaughtering (‘basmallah’)

• The throat and main veins of the chicken needs to be cut with one incision by a sharp and clean

knife, after which blood need to flow freely; conducting subsequent process only after bleeding has

stopped

• Proper and hygienic slaughtering needs to be conducted and environment’s sanitation to be

maintained.

In its operations with the poultry sector, the government is referring to these formal requirements as

ASUH (Aman, Sehat, Utuh, Halal) which stands for Safety, Healthy, Intact, and Halal. In the Province of

West Java with its predominant Moslim population, the acronym HAUS is used instead given the highest

priority to Halal. Small slaughter points – which constitute the largest part of the slaughtering capacity -

have nor NKV nor Halal certification and are not subject to NKV inspection; the slaughter houses do.

The Provincial government (in this case the provinces of Jakarta, Java Barat, and Banten) has the

responsibility to develop and implement annual livestock development plans, to monitor over- and

undersupply and trying to stabilize prices, to coordinate the districts, to act as facilitator among key

stakeholders in the province, to act upon disease outbreaks, to inspect cross-provincial transport/trade,

and to execute quality controls. Instruments are:

• Monthly meetings with all the districts representatives

• Financial support to district government initiatives2

• Regular meetings with poultry sector stakeholders

• Assessing NKV applications and issuing the certificates

• An animal husbandry website on which the daily prices are published. The Government of West Java

website is http://disnak.jabarprov.go.id

• A – mobile – lab and veterinary officers that sometime go in the field, accompanying district officers

for on-situ animal health quality control

• A 9-step action plan against Avian Influenza

• Provincial border control.

A 9-steps procedure is in place in case there will be an Avian Influenza outbreak. This procedure (set-up

after the 2003 outbreak) is the responsibility of the provincial government. Environmental regulations

are part of the NKV / ASUH, and inspections fall under the responsibility of the districts. The province

2 An example is the Pasar Hewan Higenis initiative (Hygienic Animal Market), piloted in Bogor and Sukabumi in

2009/2010. This Indonesian government project was focusing on ayam kampung in the framework of the AI

National Prevention Program.



gives no specific attention to this. According to the informant of the Province of West Java, NKV / ASUH

is in order for all the registered slaughter houses. Otherwise they are not allowed to operate. Inspection

however is not their authority.

In Jakarta the regulation states that it is not allowed to have live chicken in town. This implies that if

enforced, the small-scale slaughter points need to disappear. In this study, the research team assumes

that this regulation will not change after the upcoming Presidential elections.

After the Avian Influenza outbreak in 2003, the government started to build slaughter houses just

outside residential areas in designated places (Jakarta and direct surrounding provinces). These houses

are rented by private parties. The government policy is to slowly withdraw from this business, to be

taken over by private companies.

The actual enforcement of the law is the responsibility of the districts. However, the districts lack

capacity (or commitment?) to actually implement this. Staff works at regular office hours, whilst the

moving around with live chicken, the slaughtering, and selling takes place in the middle of the night. So

far, government officials only seem to move when there is an outbreak of a disease (AI).

For the Bogor district it is the policy to get good quality Halal chickens, to create in each sub-district one

slaughter house (in the Bogor district alone there are already 40 sub-districts), and to ensure that each

traditional market has a semi-automated slaughterhouse. This plan has yet to be realized.

The district regulations are:

• The location of a slaughterhouse should be suitable for industry not housing

• A site-plan needs to be submitted (40% building-60% open air)

• Building permit needs to be in order

• Water treatment permit needs to be in order

• Waste treatment permit needs to be in order

• 70% of the work force should be local workers

• Preferably a well should be available

• The slaughterhouse needs to have a valid NKV (audit every 5 years)

• A contract with a veterinarian for regular inspection should be in place

• The financial administration needs to be in order: each year a financial self-assessment has to take

place and sent to the tax office

• Halal certification needs to be in order

• If sales takes place outside of the district, then a “Animal health product safety certificate” is needed

• Animal welfare certificate is needed

• In case the slaughter house is government property, a retribution fee of 50 Rps per chicken needs to

be paid (also the amount of 100 Rps is mentioned in a regulation, see annex 5)

• There is a corporate tax of 30% over profit.

In addition, before being able to obtain a business permit, one needs to have an AMDAL certificate

(Indonesian Environmental Feasibility Assessment). These certificates are issued by district authorities,

but according to informants this is not a transparent and fair process.



The implementation and enforcement of all the regulations, whether by the provincial government or

district authorities, is often cumbersome and in most cases non-existent. Regulations are mainly

focusing on issuing new permits and handling emergencies. There is no policy let alone implementation

to deal with existing unwanted practices like slaughtering points and a vision on transition policies.

Concluding, the provincial governments are of importance for their coordinating, planning, and

monitoring role. In addition, issuing NKV certificates gives them a powerful instrument for regulating the

sector. No specific attention is given to environmental issues (like water and waste management). When

it comes to concrete improvements of the slaughtering practices, the district governments are more

important giving their responsibility to enforce the law.

4.6 Access to finance

It is difficult for slaughter point or – house owners to get credit because all permits should be in order

which is never really the case. In the case of slaughter points, basic criteria for loans like collateral, a

bank account, and financial book keeping are not in place. As a way to overcome this situation, some

banks are also active in micro credit. BRI is the biggest bank in Indonesia for micro credit, whilst for

instance Rabobank is not offering micro-credit.

We can state that only the big companies that own the fully automated slaughtering houses are

bankable. In addition, the more risky, the higher the interest up to a level that is not feasible for a small

company (23 – 25%). This hampers the possibility for upgrading and enlarging of existing slaughtering

practices.

All banks have categories of financial products dependent on the amount of the loan, see table 4.6 for a

comparison between BRI and Rabobank (according to one source Mandiri Bank is also becoming active

in the poultry sector).

Table 4.6 Financial products of BRI and Rabobank Indonesia: loans and interest rates (January 2014)

BRI Rabobank Indonesia

Micro credit up to 100 million Rps (23%) -

People based credit 0 – 500 million Rps (23%) -

SME / retail 100 million to 5 billion Rps (15 %) 500 million Rps - 10 billion (14%)

Commercial loans 5 billion to 50 billion Rps (15 %) 10 – 100 billion Rps (12/13%)

Corporate 50 billion + Rps (13%) 100 billion + Rps (12/13%)

We can conclude that innovative financing instruments will be needed to back-up the desired upgrading.

Or to seek for non-commercial funding mechanisms as offered by a diversity of foundations. The

Rabobank Foundation is supporting only smallholder cooperatives and/or farmer groups in the rural

area of Indonesia through small grants (up to 20 million Rps), technical assistance, a guarantee for a

loan, and a soft loan. The slaughtering business is not within their mandate.

Another foundation operational in Indonesia, Ford Foundation, has previous experience with supporting

micro credit institutes in Indonesia. The current emphasis of the foundation is focusing on rural

development in East Indonesia; however a program to also support urban development is being

explored. In any case, the focus is on small holders /SMEs.



4.7 Markets (and consumers)

The Jakarta Greater Area composes out of more than 27 million consumers. In and around Jakarta

several markets can be distinguished. Consumers buy whole chickens at the traditional wet market, in a

kiosk, or in small or large supermarkets. Each marketing channel has its own sourcing. In general the

traditional market gets the birds from a slaughter point and the large supermarkets get the whole birds

from the large slaughterhouses.

Traditional market

Most consumers prefer to buy their chicken at the traditional market. There are no reliable data about

the total number of wet markets, but it is understood that at least one wet market exist per

village/community. A chicken should be warm (= fresh). Cool chicken is associated with too long dead,

not healthy. In most of the cases poultry is purchased to prepare immediately, the same day. This

system (slaughter point and wet market) is responsible for 80-85% of poultry production and

consumption (Personal note Indrawan, 2013). Broilers entering the wet market can come from all types

of farms.

Kiosk / vendor

From the slaughter point the carcasses go directly to vendors or to a kiosk, which distributes them to

vendors. In both cases cash flow has to be arranged. Vendors sell the carcasses from a stall at the street

or at a covered market. Prices are to some extent negotiable. The later after slaughtering, the lower the

price. Carcasses that are not sold in time are traded to ready to eat stalls (after preparation shelf life is

extended significantly) or treated with formalin for sales the next day, from under the counter.

Supermarket and other cooled outlets

Supermarkets have a shelf with different types of poultry and also parts. Sales of poultry through

supermarkets are rather limited. Supermarkets can use ‘left over’ poultry in their ready to eat products.

One of the integrators (Sierad) is experimenting with own shops (Bel Mart, 14 in 2013), providing

poultry meat, eggs and some long shelf food products (rice, spices). They aim with these cooled

products and personal service on higher middle class. CP also has its own outlets for poultry (Prima

Freshmart) of which 94 in Jakarta Greater Area.

Some consumers use the supermarket to check for prices of chicken. The (consumer) market price for

chicken is set at the wet market.

Table 4.7 gives the main characteristics of the three marketing channels.

Table 4.7 Comparison of the different markets

Slaughter Point Small Slaughter House Large slaughter house

temperatur warm cooled cooled

product with head and feet with head and feet without head en feet

packing none plastic bag per bird consumer package, labeled

slaughter manual partly-automated partly/ful ly automated

enviroment not controlled semi controlled waste/water cleaning

market, main outlets wet market local supermarket super/hypermarket



The main difference for the small and large slaughterhouses is the cooling of the carcass and the

packaging. Part of the slaughter process is automated with birds on shackles resulting in a more hygienic

way of the slaughtering (not on the floor like in slaughter points). Some small slaughterhouses have

waste water control and all large slaughterhouses have some kind of waste control and water cleaning

system.

4.8 Constraints for upgrading

There are several constraints in the value chain whereby the focus of this paragraph is on the current

production systems of poultry meat slaughtering. Per system (slaughter points, semi-automated

slaughterhouses, and the fully automated slaughterhouses) there are differences in level of constraints.

The categorization of Kaplinski and Morris (2002) is used, identifying these value chain constraints in:

1. Access to finance

2. Access to markets

3. Access to knowledge

4. Access to infrastructure

5. Access to institutions.

These constraints are defined as follows:

Ad 1. The access to finance is defined as: The level of access to formal financial instruments (loans):

having (or in potential able to have) collateral, a bank account, professional book keeping.

Ad 2. The level of access to the end consumers, in this case the people living in the Greater Jakarta Area.

Ad 3. The level of access to knowledge on i) food safety, ii) environmental sustainability (waste

management), and iii) running a business.

Ad 4. The level of access to in particular i) roads, ii) electricity, iii) clean water, IV) facilities, and v)

information communication technology.

Ad 5. The level of access to policy, rules and regulations as well as the actual presence of chain-

supportive institutions like associations.

Below the findings are put in table 4.8. The operationalization and explanation is described below the

table.

Table 4.8 Constraints for upgrading per slaughtering system

Slaughter points Semi-automated

slaughterhouses

Fully automated

slaughterhouses

Constraints in access to finance YES +/- NO

Constraints in access to markets NO NO NO

Constraints in access to knowledge PROBABLY YES MAYBE NO

Constraints in access to

infrastructure

i) Roads NO YES YES

ii) Electricity YES NO NO

iii) Clean water YES +/- NO

iv) Facilities YES +/- NO



v) ICT +/- +/- NO

Constraints in access to

institutions

YES +/- NO

1. Access to finance

Cash flow is an important factor in the poultry chain. Most small slaughter point owners cannot wait for

payments more than a day. Here brokers come in. They are not matchmakers but financers. For

entrepreneurs that want to scale up, getting money is difficult. Almost all banks work according to the

western system. Sharia banking is very rare. Currently banks only provide loans if there is security (a

building, land or any real estate) and the business is formally licensed. Almost all slaughter points are

informal and therefore have no access to capital from banks. To a lesser extent also small

slaughterhouses face these problems but often the larger the business the easier it gets to obtain

financing. Industrial slaughterhouses do not face any problems in obtaining financing.

2. Access to markets

Access to the final consumers in the greater Jakarta area is not considered as a constraint for none of

the slaughtering systems. The sector is market driven with a growing demand, and end-consumers that

can be reached easily via a meshed network of wet markets or retail.

3. Access to knowledge

The level of access to knowledge on i) food safety, ii) environmental sustainability (waste management),

and iii) running a business is more difficult to analyze.

The analysis has not resulted in a clear picture on whether the level of knowledge is actually a

constraint. The findings are however clear that in many cases the day-to-day practice is questionable,

for sure at the slaughter points, but also at the semi-automated slaughterhouses. If knowledge exists, it

is often not applied. The risks of environmental pollution (river water, chemical and microbiological

contamination) are huge, just as the risks for chemical contamination of the meat through the live

broiler (no drug withdrawal period in broiler production) or due to (mis)use of disinfectants and

formaline to treat carcasses.

The large number of slaughter points, their micro level of operations, and (most likely) minimal

educational background from the people involved, are constraining training or other capacity building

opportunities. Access to such options is easier for staff of small and industrial slaughterhouses, because

of the more restrictive and organized number, and – in case of the industrial slaughterhouses –

professional organizations.

4. Access to infrastructure

A good physical infrastructure of roads is of eminent importance for the poultry sector. An increase of

the economy of scale will need roads that can handle larger (quantities of) trucks. However, most

country roads can only take small trucks (up to 3 ton of bagged feed, 2000 broilers). Larger vehicles are

for most farms out of the question because of the poor state of infrastructure. Industrial slaughter

plants, where 20.000-80.000 birds/day are handled, are located close to high ways to handle the

multitude of logistical dealings and traffic.

For the small slaughter points the roads are less a constraint because they have adapted to the network

of small roads, operating with small quantities and with motor cycles and small trucks.

Access to electricity is important as a precondition for upgrading to a cold chain. Electricity is not

available at slaughter points, and cannot be guaranteed in near future either. Electricity is available at



the small and industrial slaughterhouses; sometimes even generators are present to take over electricity

supply in case of power cuts.

Upgrading the slaughtering practice towards a more food secure and environmentally sustainable

operation needs clean water and a (waste) water management system. Farms, slaughter points and

slaughter plants have all their own water system (surface water or deep well ground water). The large

slaughter plants have a water treatment system, and (some) quality control on the water. Access to

clean water for slaughter points and small slaughter plants is a risk factor.

Regarding access to facilities it is relevant to note that the big integrators, who own the fully automated

slaughterhouses, also own feed mills and (grand)parent stocks. As a result, the integrators are in the

position to influence the input up-stream and are able to influence the sector. Due to the vertical

integration, they can control the distribution of costs and profits through the production chain. They

also sell feed and day-old-chicks to independent farmers. Feed caters for around 70% of the on-farm

costs.

Information communication technology (ICT) is important for running a professional business with fully

up-to-date market information (supply, demand, and prices), monitoring of key performance indicators,

and running modern processing equipment. For small slaughterhouses, investing in ICT is costly, and

would need additional resources. For slaughter points the picture is mixed: they do not have the

resources for investing in ICT, but also do not need to do so. Access to market prices is important, but

can be obtained easily via mobile phones.

5. Access to institutions

Access to institutions is concerning the level of access to policy, rules and regulations as well as the

actual presence of chain-supportive institutions like associations.

The rules and regulations in itself are not constraining, neither the information on these rules and

regulations, but the fact that they are hardly enforced by the respective authorities. The district

governments have a key role in law enforcement and the Provincial governments have an important

coordinating, planning, and monitoring role. The implementation of these roles needs attention.

In addition, transparent mechanisms for market-oriented policy development, implementation and

monitoring are absent. Certification requirements for starting-up a new slaughterhouse are known,

however in practice not required for the slaughter points.

Part of these regulations is the tax system. The big, fully automated slaughtering houses pay a corporate

tax of 25% over profit. All the other companies and small holders are not paying tax, but small

slaughterhouses pay a fee per bird slaughtered. Upon the moment scaling up takes place, these

businesses will become more visible hence taxes are to be paid, if profit is made. By keeping it small (or

informally networked) one stays ‘below the radar’. This factor contributes significantly to the uneven

competition between slaughter points and more mechanized, more hygienic larger scale

slaughterhouses.

An association of the large companies does exist: ARPHUIN, Asosiasi Rumah Potong Hewan dan Unggas

Indonesia/Indonesian Slaughterhouse Association. Also some of the smaller slaughterhouses are

member. The main chain actors in the sector do not sufficiently cooperate for the benefit of the sector



as a whole. As a result, no strategizing and coordinated planning is taken place. It also results in large

short term fluctuations in prices of poultry. Charnoz and Forster state that these price fluctuations are

caused on purpose by the big companies for speculation by fluctuating the level of production (Charnoz

& Forster, 2011). This is causing problems for farmers and slaughterhouses. When prices are high

slaughterhouses take a lower number of birds because the higher costs cannot be transferred to the

market. Production in the chain is not efficient in this way and is hampering modernization and

upgrading. Also prices of DOCs can vary highly, again controlled by the same big companies. This is

causing problems in the planning of breeder flocks and hatcheries.

The slaughter points are not organized formally but informally, often intertwined with family or other

social networks. In the wet market system in Jakarta there are 60.000 to 65.000 people involved (IPB,

2013), that generate a daily income. Most of them not have a full time job, but the income is sufficient

to survive with a family. The number of people that make serious money in this system is difficult to

estimate. Between all players in the system there are close connections, either as family or as business

partners. To replace such a system requires at least alternatives for the ones now having an income

from the system.

On international level, the relevant institution is ASEAN. By January 2016, the ASEAN economic

integration will start to materialize, although it is unlikely that import restrictions on poultry products

will disappear easily. But the principle remains that the sector is vulnerable for international

competition. In case of an increase of (frozen) imported chicken meat to Indonesia, it will affect mainly

the industrial cold chain with the industrial slaughterhouses. It is expected that the large (multinational)

companies that own the industrial slaughterhouses have access to the political leaders, lobbying for

their business interests.

In summary one can state that the slaughter points have many constraints for upgrading contrary to the

industrial slaughterhouses whereby the semi-automated slaughterhouses are facing a mixture of

constraints.



5. Conclusions and recommendations

5.1 Conclusions

Indonesia is growing rapidly. With an increase of on average 6% of GPD per year also the purchasing

power of the average Indonesian is growing. As a result domestic poultry meat production will double in

the next 5-6 years. In addition the society is becoming gradually more food-cautious and food-safety is

increasingly becoming an issue. However, a primary motive of consumers of what kind of poultry to buy

remains price (source consumer survey). Improvement of both hygiene levels and efficiency in the

production system in order to reduce price is therefore required. This study concentrated on the

possibility of upgrading poultry slaughtering processes. Three systems were identified: slaughtering

points, semi-automated slaughtering houses and large, fully automated slaughter industries.

Small informal slaughter points are characterized by the fact that it is often an informal part-time

business of individual households. The number of chickens slaughtered per day is small and food-safety

regulations are often not adhered to. In order to increase the hygiene level, the business owners have to

invest in hygiene knowledge, practice and machines. In order to improve the efficiency of their

production systems the business needs to upscale. But as these businesses are informal no banks are

providing loans to facilitate up-scaling. And in terms of hygiene, the low effort of enforcement of the

government in controlling food-safety does not contribute to better food-safety. Moreover, there are

also many small slaughter points which are often dispersed all over the Greater Jakarta Area which

makes control difficult especially as slaughtering is occurring during night hours, the time government

officials are resting.

Upgrading seems to be only possible if these informal businesses can become formal and are willing to

upscale. Both issues are found to be difficult. Many businesses are part-time and are not willing to

upscale and even if they would like to do so they lack the finance and or the space and as a result they

are also not investing in better hygiene processes. Changing the attitude of the owners as well as

changing the status of the businesses would be very costly, just because there are so many. Moreover, if

they change, it is still no guarantee that they will be successful as a small slaughterhouse because that

would require additional business and technical skills.

The semi-automated slaughterhouses are limited in number (36) and are often characterized by the fact

that these are formal businesses, full-time in operation and that the managers are having more business

and technical skills than the slaughter points. However, access to capital remains often difficult which

has implications for both up scaling possibilities and improved hygiene level. In general it can be

concluded that up scaling interventions at this system seems to be less costly as less businesses are

involved but also because with a bit of extra support these businesses can become more hygiene

conscious and can also develop more efficient production systems.

The larger industrial slaughterhouses do not need a lot of support as they are often working already

according to the latest efficiency and hygiene standards. As a model for best practice they are of interest

for the smaller slaughter houses.



Finally if the constraints are observed more closely it can be concluded that interventions should be

focused on three main areas. First of all access to finance what is a key driver for change. To improve the

access to finance it is required to develop further up-scaling aspirations.

Next infrastructure needs to be upgraded; especially narrow roads are an obstacle for trucks to

transport large quantities of chickens affecting the production process.

Finally, the business and government need to work more together in developing and maintaining the

required hygiene levels but also in obtaining economies of scale in their production processes. Tax

exemptions might for example be helpful in this process of upgrading.

5.2 Recommendations

In line with the conclusions as formulated above, it is recommended that possible interventions should

focus on specific aspects to be successful:

1. Strengthening public-private cooperation at district level

In order to address infrastructural, institutional and business constraints public-private partnerships

should be developed. There is a need for increased cooperation among public and private parties in the

sector. Given the importance of geographical diversification and the important role of district

authorities, it is suggested to help bring together public and private parties on district level. The aim

would be to facilitate trust building among the key actors, to come up with scenarios, and to agree upon

pilots that also involve private partners (B2B).

Scenarios that could be developed in these district platforms could be on requirements for hardware

(poultry houses, slaughter houses, parent stock, hatcheries, feed production, etc.), software (capacity

building in the private and public sector) and orgware/infrastructure (hard: infrastructure: building plots,

road access, water availability and quality and soft: building permits, organisation among public and

private sector, veterinary infrastructure, etc.). Scenarios may focus on different scales of production

(based on small holders to large farms and slaughter plants) and different organisation models

(independent producers, integrated situation).

2. Upgrading semi-automated slaughter houses to become small integrators

The smaller slaughter houses are essential for meeting the growing market needs and for creating a

geographical net of slaughterhouses around Jakarta. In the current situation however, they are too small

to meet the growing demand, the increasing competition (ASEAN) and have too little resources for the

needed investments. Hence, the semi-automated slaughter houses will need to grow and innovate. The

way forward is to support the semi-automated slaughter houses to become small integrators, able to

have control of input, throughput and output.

This could be combined with:

3. Slaughter house innovation

It is worthwhile investing in designing new types of slaughter houses that are more cost effective and

environmentally sustainable. Slaughter houses in Indonesia use in general international equipment, but

with quite a lot manual labour. Besides, systems for cooling and cleaning require a lot of water and

(purchased) ice. In many (smaller) slaughter houses coops and waste water are not cleaned. Intake of



good quality water is another issue to consider and stunning of poultry according to Halal rules. Also

different systems are used for climatising the slaughter plant.

4. Availability of investment capital

It is recommended to explore the possibility for large investors and eventually the set-up of a security

fund for the poultry sector. This might be completely public, but a public–private partnership is also

feasible. Availability of capital for investments is a crucial factor for further development of the poultry

sector in Indonesia. Many smaller entrepreneurs mention the availability of capital against affordable

interest as a major problem for investments they would like to do. Investments are required in both the

primary production of poultry (housing) and processing (slaughter plants). In several countries the

poultry (agricultural) sector was and is supported by loans at a reduced interest rate. The reduced

interest rate is obtained by facilitating the bank sector with a security ‘safety net’ fund. This security

fund reduces the risk for the financial sector and promotes further business development in the poultry

sector.

5. Support to District and Provincial governments

The district governments have a key role in law enforcement and district specific economic

development. The Provincial governments have an important coordinating role, and can co-fund district-

level activities. Specific attention could be given to support districts to fulfil their pertinent role more

adequately, through training, strategic plan development, monitoring mechanisms, and benchmarking.



6. References

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Potentially-Decelerates

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Studies.

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Centre. (2013). Dutch-Indonesian Program on Food Security: Poultry & Dairy Sector Components

Work Plan Inception Phase; Work packages 1 and 2. Proposal.



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in small scale chicken slaughterhouses. Jakarta: Ministry of Agriculture, Indonesia.

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Maastricht School of Management.

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http://dx.doi.org/10.1787/9789264179011-en

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November 2011. Rabobank.

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chain study and avian influenza risk assessment in Jakarta surrounding area. Final report. Bogor:

Center for Tropical Animal Studies (Centras), Bogor Agricultural University, for the Food and

Agricultural Organization (FAO).

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Wageningen: Wageningen University and Research Centre.



Annex 1. Terms of Reference of the study

Goal

To identify the drivers and constraints for change towards more food secure poultry processing in West

Java. Strategies will be developed to support such a transition.

Results of the Inception Phase

1. Qualitative description of the present situation of different poultry supply chains in which 3

slaughtering system are part (small-scale, semi-automated and fully automated). This gives insight in:

2. Overview of drivers and constraints for upgrading the poultry slaughtering system towards more food

secure processing.

Methodology

Desk research

Qualitative survey among chain partners and stakeholders in and around Jakarta

Number of semi-structured interviews: 30

Activities

1. Define and agree upon work plan, planning and task division

2. Desk research: collect and analyse previously executed research and chain partners and

stakeholders mapping

3. Design research methodology, research questions, units of analysis, sampling, identification of

selection criteria

4. Identify relevant chain partners and stakeholders for each of the supply chains

5. Research operationalization: design and pre-test 3 questionnaires & translation EN -> bahasa

Indonesia

6. Conduct chain actors & stakeholder interviews

7. Identifying drivers and constraints for upgrading the poultry slaughtering system

8. Validation

9. Analyzing and reporting

Roles

MsM IPB LEI ASG

• Coordination

and

management

• Liaison with IPB

• Desk research

• Research

methodology

• Research

operationalizatio

n

• Chain partners

and stakeholders

interviews

• Desk research

• Research

methodology

• Chain partners

and

stakeholders

identification

• Research

operationalizati

on

• Testing and

organizing

interviews

• Desk research

• Research

methodology

• Research

operationaliza

tion

• Chain partners

and

stakeholders

interviews

(support)

• Analysis

• Desk research

• Research

methodology

• Chain partners

and

stakeholders

interviews

(support)

• Analysis



(support)

• Validation

• Analysis

• Reporting

• Translations

• Chain partners

and

stakeholders

interviews

• Validation

• Analysis

Missions (5 working days + 2 travel days)

1. MsM/Huub Mudde: Project management

2. MsM/Diederik de Boer: Validation and analysis

3. LEI/Peter van Horne: Support in chain actor interviews

4. ASG/Ferry Leenstra: Support in chain actor

of 66 Version February 7, 2014

Socio-economic analysis (work package 2.1)Outputs & activities Oct November December January February

MsM IPB LEI ASG I II III IV I II III IV I II III IV V I II III IV

1 Define and agree upon work plan, planning

and task division

X X*)

2 Desk research: collect and analyse

previously executed research and chain

partners and stakeholders mapping

2 4 2 2 X X

3 Design research methodology, research

questions, units of analysis, sampling,

identification of selection criteria

3 3 4 1 X X

4 Identify relevant chain partners and

stakeholders for each of the supply chains

2 5 2 1 X X X

5 Research operationalization: design and pre-

test 3 questionnaires & translation EN ->

bahasa Indonesia

3 15 5 3 X X X X

6 Conduct chain actors & stakeholder

interviews

2 10 7 7 X X

7 Identifying drivers and constraints for

upgrading the poultry slaughtering system

5 5 2 2 X X

8 Validation 1 4 0 0 X

9 Analyzing and reporting 5 4 3 2 X X

Coordination and management, incl liaison

with IPB

4 0 0 0 X X X X X X X X X X X X X

Total days 27 50 25 18

*) Details to sort out with IPB management

during mission

**) Christmas / new year break in the

Netherlands

Responsible


Detailed work Plan

1. Define and agree upon work plan, planning and task division

This work plan is developed in this phase of the project. The theoretical models (relevant for the

research questions), that are the base for the consumer study in the inception phase of the project are

selected and the research objectives are defined. At the start, a working session will be organized at

MsM with the key Dutch experts.

2. Desk research: collect and analyse previously executed research and stakeholder mapping

Result: Recommendations / guidance for research / conceptual framework

Action: IPB, LEI, ASG, MSM

3. Desk research: collect and analyse previously executed research and chain partners and stakeholders

mapping

In this phase of the project the results of the desk research are translated to a research methodology. In

this methodology, the goal of the socio-economic analysis will be further detailed defined, the sample

will be determined, and the locations will be selected based on agreed criteria.

Result: Detailed research methodology and protocol

Action: IPB, LEI, MSM

4. Identify relevant chain actors (direct/indirect) and stakeholders for each of the slaughtering systems

Result: list of relevant stakeholders to interview

Possible chain actors (direct/indirect):

• Owners / managers of small scale slaughtering facilities, semi-automated slaughterhouses and

fully automated slaughterhouses

• Farmers and Farmers Associations (a/o GOPAN)

• Middlemen and traders

• Private sector (a/o Pt. Sierad, Pt. Charoen Popkhand)

• Providers of feed, DOC and credit

• Retail (Hypermarket, Indomarket)

• Investors / banks

• Inspectorate

• Provincial and national government

• Members of the Indonesian Poultry Advisory Council.

For each of the slaughterhouse systems a detailed description of persons involved, their role will be

made.

Action: IPB

5. Research operationalization: design and pre-test 3 questionnaires & translation EN -> bahasa

Indonesia

In this phase of the project separate semi-structured questionnaires will be developed for farmers,

traders and slaughter facility owners are designed and tested on basis of the developed research

methodology. If the questionnaires are completed they are translated from English to Bahasa Indonesia

and tested in Bogor region, whether it is workable.


Result: Validated questionnaires

Action: IPB, LEI, MsM

6. Conduct chain actors & stakeholder semi-structured interviews, around 30 in total

In all three slaughtering systems persons in the different links will be interviewed with a prime focus on

the slaughterhouse actors:

• Small scale slaughtering: total around 10 interviews with slaughter man, traders and farmers

• Small semi-automated slaughterhouse: total 10 interviews with slaughter man, traders and

farmers

• Automated Slaughterhouses: total 3 interviews with integrated company and farmers.

Besides about 7 interviews will be carried out with inspectorate, provincial and national government,

retail and credit providers.

In the interviews with the farmers the focus will be on the following aspects:

- Size of the farm

- Supply of day old chicks and feed

- Disease control

- Conditions on delivering the broilers ( batch size, quality, transport)

- Method of payment (conditions, credit, personal contacts)

In the interviews with the slaughter man the focus will be on the following aspects:

- Size of the company, structure and organization, ownership, part of integration etc.

- Supply of birds (transport, logistics, bird quality, live weight)

- Method of slaughter (stunning, scalding, offal disposal, water cleaning)

- Storage (cooling facilities, quality control)

- Method of payment

- Food safety

Action: IPB, MsM, LEI, and ASG

IPB will hold the interviews in all links in the three supply chains. Researchers of LEI, ASG, and MsM will

join in the fieldwork. In total 3 persons of MsM, LEI and ASG will cooperate for each 1 week (5 working

days) with an IPB researcher to get an impression of the actual field situation.

7. Identifying drivers and constraints for upgrading the poultry slaughtering system

Based on the results of the interviews a number of potential incentive mechanisms to improve food

security and food safety for the different parts of the supply chain will be developed.

Result: list of most potential options for upgrading in the different slaughtering systems

Action: IPB, MsM

8. Validation

The tentative results of the interviews will be validated among a selection of experts

Result: validated results

Action: IPB, MsM

9. Analyzing and reporting

Final analysis of the results and formulation of possible scenarios for upgrading of the slaughtering

systems during project implementation


Result: Scenarios for upgrading

Action: MsM, LEI, IPB, ASG

Experts

• Diederik de Boer, MsM (lead)

• Arief Daryanto, IPB (IPB-lead)

• Peter van Horne (WUR/LEI-lead)

• Ferry Leenstra / Adriaan Vernooij/ Sander Lourens (WUR/ASG)

• Idqan Fahmi, IPB

• Dikky Indrawan, IPB

• Huub Mudde, MsM

• Ron Bergevoet, WUR/LEI


Annex 2. List of interviewees

Monday December 16th 2013, market visits and 2 workshops

Morning, market visits

Visit Pasar Bogor

Supermarket Giantin Bogor

Afternoon Session / workshop with integrators at Bogor University

- Mr. Aryo Widiwardhono, Managing Director - Foods Division PT. Sierad Produce, TBK

- Mr. Daud, Director PT. Sierad Slaughterhouse

- Mr. Ferdiansyah Gunawan Tjoe, Director PT. Charoen Pokphan Indonesia, Tbk

- Mr. Ahmad Dawami, Senior Vice President Director PT. Japfa Comfeed. Chairman of ARPHUIN (Asosiasi

Rumah Potong Hewan dan Unggas Indonesia/Indonesian Slaughterhouse Association)

Evening Session / workshop with small slaughterhouses at Bogor University

- Mr. Nono Tri Kesowo, Director of Inasa –

Farmers and Small slaughterhouse (rents a local government facility)

- Mr. Asep Syaeful, Director of CV. Jambu Raya –

Farmers and Small slaughterhouse at CIpaku Bogor

- Mr. Tri Hadianto - Farmers - Chairman of GOPAN (Gabungan Organisasi Peternak Ayam

Nasional/Association of National Broiler Farms Organization)

Tuesday December 17, 2013. Farm, trader, 2 small slaughterhouse and slaughter point

- Farmer. Small broiler farm

- Small slaughterhouse of Mr Nono + cooling and freezing facilities

- Mr. Wayan, Broker/Trader of Broiler in Jakarta Greater Area (lunch time)

- Small slaughterhouse of Mr Asep Syaeful, Jumbo Raya.

- Mr. Anto, Small slaughter point at Kebon Pedes Bogor (at night

Wednesday December 18, 2013 , Large slaughterhouse

Morning visit to Sierad industrial poultry slaughterhouse in Bogor and interview with:

Mrs Indra, Quality Control and Purchase Manager at PT. Sierad Slaughterhouse

Mrs Meta, Public Relation at PT. Sierad Slaughterhouse

Afternoon visit to Collector farm in Jakartha

- Mr. Asrori Gagarin, Manager of PD Dharma Jaya (Jakarta owned enterprise. Manager of Collecting

Farm Area at Pulo Gadung, DKI Jakarta

Thursday December 19, 2013. Interview and shop

Dr. Denny Lukman, Lecturer of Faculty of Veterinary IPB

Visit to poultry store, Bell Food

Saturday December 20, 2013. Interview

Mr. Eddy Heutink, Head poultry production Pt. Charoen Pokphand Jaya Farm

Wednesday January 16, 2014

Project meeting with Ivo Claassen and Frank Joosten

Thursday January 17, 2014

Interview with Mr. Sutrisno, Director Animal Health and Fishery Agency, Bogor District


Friday January 18, 2014

Interview with Prof. Dr. Sjamsulbahre, Professor in the Toxicology, IPB, coordinator A I.

Monday, January 20 , 2014

Interview with Mrs. Liestiowaty, Deputy President, Corporate Clients, BRI

Tuesday, January 21, 2014

Interview with Dr. Hartono, President, PINSAR

Wednesday January 22, 2014

Interview with Mrs. Agung, Branchmanager, BRI Bogor

Interview with Prof. Dr. Arief Sunanto, IPB

Thursday January 23

Project meeting with Dr. Fahmi, IPB

Mrs Windy Sarawati, Head of Branch, Rabobank International Indonesia, Bogor Branch

Friday January 24

Mr. Stephen Widjaja, Project Manager Rabobank Foundation Indonesia (Jakarta)

Saturday January 25/Sunday January 26/ Monday January 27

Desk study and report writing

Tuesday January 28

Meeting with Arief Daryanto, IPB-MB

Report writing

Wednesday January 29

Dr Hartono, Chair of PINSAR (Poultry Farmer Association): validation meeting

Final meeting with Arief Daryanto, IPB-MB

Report writing

Thursday January 30

Mr Kusmayadi, former Head of Livestock Department of the Province of West Java (till January 24, 2014)

Mr Rafiuddin Palinrungi, Ford Foundation Indonesia (by phone)


Annex 3. Questionnaires socio-economic situation of slaughtering systems

Method

Is semi structured interview. Based on chain with farmer, trader, slaughter and market.

Questionnaire divided in general, input, output, costs, food safety/disease control, strategy/future.

A Slaughtherplace / small slaughterhouse

General

Company name:

Location of place:

Interview with: name, position

Number of birds slaughtered per day (average):

How many days per year: (any season fluctuations?)

Number of workers:

Process

Describe the process of the slaughter (see annex):

Arrival/Stunning/killing/bleeding/scalding/plucking/washing/evisceration/ grading/weighing/

cooling/portioning/ packing….…..

Final product is: whole carcass/parts/…. Delivered ‘warm’ (not cooled), cooled (0-4 oC), deepfrozen (< -

20 oC).

Input

Supply:

How many birds supplied today/yesterday:

From how many different flocks/farms? Flock size ranges from … to ..

Fluctuations in supply in range: …. to …..

Method of supply: crates, boxes, ……

Weight of the birds, in average:

Variation in weight in range from …. to …..

Are there any quality conditions on the birds supplied?

In weight (certain range), full fed, foot pads,………

Type of birds?

International breeds, native breed, dual purpose, spend hens…..

Prices:

Buying price of the birds (per bird or per kg live weight)…..Rp (at this moment)

Is there any market price published of the live weight bird (is this an accurate and reliable price).

Any quality payments on the live birds?

Bonus or discount ……. (specify)

Method of payment: cash/other

Output

Product:

How many birds are sold today/yesterday:

In how many batches

Average weight of the bird (carcass weight)


Describe the dressed bird: (photo)

With feet and head on, …….

Warm, cooled or frozen

Do you deliver the products to selling points, or does the buyer do the logistics?

Revenue

Revenue price per bird: …. Rp

Other revenues:

Intestine…………..

Blood………………..

Head/feet…………

Feathers……………

Eatable organs……

Method of payment: cash/other

Environment:

Describe method of disposal of water, blood, intestine

Costs

Costs: estimate the costs per day (later we will divide the cost by the number of slaughtered birds or the

weight of the carcass weight)

Costs of workers:

Number of workers:

Daily working hours per worker:

Cost of a working day (payment to the worker):

Other costs per worker/day (tax, social tax etc)

Building:

Size of the building for slaughter (including storage): m2

Investment of the building (replacement in 2013) per m2

Equipment:

Investment of the all equipment in the slaughterhouse: ….. RP

Interest rate for loans on building and equipment

Other variable costs (in R per day or month or year):

Electricity: kwh / Cost of electricity

Heating (building, water): Rp

Water: amount, price, source (own well, tube)……….

Offal: any cost for disposal of offal, intestine, waste water…..

(any revenues are already mentioned in output)

Food safety

Are samples taken from the birds for analyses on microbes? Salmonella, other.., how often? Can you

show results?

Are blood samples collected for analysis on AI and/or other diseases? How often?

When and how is the slaughter plant cleaned?

Do you sample the slaughter plant after cleaning for microbes? How often Can you show results?

Strategy

What are the main problems for the companies:

Scale of production, regulations, consumer demand, high input prices, low output prices, environment,

food safety, logistics (get live birds in time and deliver products in time), getting loans for investments,….


What are the future plans for the company:

Grow in size, increase quality (food safety certificates), invest in cooling, …….

Expand the chain, i.e. contract farms, own farms, or contracts with buyers (supermarkets, others …)

Invest in training and quality of farmers

Cooperation with other parties (DOC, feed mill, …)

What are the weak point in the current situation of the company”?

What are the strong point in the current situation of the company”?

What are the treats for the company?

What are the opportunities for the company?

B Farmer

General

Farm name:

Location of farm:

Interview with: name, position (owner, manager, worker)

Number of birds housed (average):

Number of poultry houses:

Number of workers:

Type of farm: contract or independent………(describe)

Farm

Describe the farm:

Type of housing (natural ventilation, mechanical ventilation/ type of heating/ slats, litter, cages, …)

Position of poultry houses

Other agriculture/fish on farm

Number of flocks per year

Depopulation: how many birds per day……. Describe

Input

Supply of day old chicks (doc):

Method of transport, breed, quality…..

Always from the same hatchery? Which one?

Supply of feed:

Type of feed, supply in bags, ….

Which supplier? Always the same? On a contract?

Veterinarian service and medication:

By who, specify vaccinations, medications

Method of payment doc and feed (cash, conditions, credit)

Output

Final weight (gram)

Batch size

Catching: who , how often, method

Method of transport

Sales to trader, middle man or direct to slaughterhouse

Is the price dependent on quality of the chickens (how?)

Quality: foot pads, cleanness, ……


Do you get information from the slaughter plant on the quality of your chickens?

Method of payment (cash, conditions, credit)

Performance

Feed conversion (kg/kg)

Mortality (% of number at day 1)

Number of days (to final weight)

growth rate (gram/day)

EPI performance index?

empty days between flocks

Costs

Costs in general of last flock (mention month)

Costs of doc (RP per piece)

Cost of feed (Rp per kg)

Other costs (Rp per flock)

Electricity

Heating

Vet/ medication (antibiotics)

Cleaning and disinfection

Litter

Manure disposal

Catching

Workers:

Cost of a worker per day. Including any social tax or other costs.

Investment:

Investment in building

Investment in equipment

Interest rate on loan for investment

Revenues:

Manure sales…

Sales selected birds

Disease control / food safety

What hygienic measures are taken (specific clothing and/or boots for the farm, for each house? Dip tank

for boots? Hand washing?)

How is the farm cleaned after a flock?

How long is the farm (house) empty before new DOC’s enter?

Are samples taken for disease control, by whom? Can you show results?

How do you dispose of dead birds? (buried, incineration, composted)

Do you report excessive mortality? To whom?

Strategy

What are the future plans for the farm:

Increase size

Improving quality of the birds

Housing systems/ equipment upgrading

Cooperation with feed mill, hatchery, slaughter plant (integration, contracts, ..


What are the main constraints in farming:

Money to invest

Supply of doc or feed

Market demand for live birds

Find good workers

Environmental regulations

Other…..

C Trader

General

Company name:

Location of place:

Interview with: name, position

Number of birds traded per day (average):

How many days per year: (any season fluctuations?)

Number of workers:

Input (from farmers)

How many birds collected today/yesterday

From how many farms:

Method; crates, boxes,

Method of transport: moped, small truck, large truck

Weight of the birds, on average:

Variation in weight in range from …. to …..

Are there any quality conditions on the birds supplied?

In weight (certain range), full fed, ………

Type of birds?

International breeds, native breed, dual purpose…..

Prices:

Price of the birds (per bird or per kg live weight)…..Rp (at this moment)




Method of payment: cash/credit/other

Output (sales to slaughter-point/houses)

To what slaughter points/houses the birds are delivered:

Batch size

Quality conditions

Always the same slaughter point? If more than one, why?

Prices:

Price of the birds (per bird or per kg live weight)…..Rp (at this moment)




Method of payment: cash/credit/other


Costs

Investment in transport vehicles (replacement 2013)

Cost of fuel

Bird losses

Interest on Capital input (‘running money’)

Costs of any collecting place (building, area)

Margin per bird (in average)

Food safety / disease control

Do you take samples for Salmonella, AI, other purposes? How often? Can you show results?

Strategy

What will be the policy when slaughterhouse will improve quality standards or upscale their size?

Disease control?

How can food safety be improved?

D Large scale automated Slaughterhouse / Integrator

Basically same questions as under A.

Annex (slaughter process in general)

Receiving areas

The inlet to the plant is normally designed in such a way that fluctuations in bird deliveries can be dealt

with adequately. This is necessary since the processing capacity has a fixed maximum. At regular

intervals birds are unloaded onto the holding areas and attached by their feet to a conveyor belt,

transported to the slaughter area.

Slaughtering and packing

The birds are suspended from the conveyor after which the following actions take place:

- Stunning;

- Killing and bleeding by cutting the jugular veins;

- Collection of blood. The conveyor travels through a blood collection tunnel at a preselected travelling

speed;

- Scalding. To loosen the feathers, the birds are held in water of temperatures ranging from 50°C to 60

°C;

- Defeathering. Feathers are mechanically abraded from the scalded birds, usually by rotating rubber

fingers. Removed feathers drop in underlying troughs;

- Washing. The defeathered carcasses receive a spray wash prior to evisceration;

- Opening of the carcass by cutting manually;

- Inspection of the viscera;

- Evisceration, removal of head, feet and viscera;

- Sorting of the viscera to recover heart, liver and gizzard;

- Final washing to remove blood and to loosen tissues;

- Chilling of the carcasses in a waterbath;

- Draining;

- Grading, weighing and packing; and

- Chilling and freezing.


Annex 4. Map of Greater Jakarta Region with locations of semi-automated and

fully automated slaughtering houses

Source: Authors’ compilation based on KESMAVET, Veterinary Public Health Laboratory; MUI, Majelis

Ulama Indonesia


JAKARTA

Rumah Potong Unggas Rawa Kepiting (Public Governance Slaughterhouse)

jalan rawa Kepiting, Kawasan Industri Pulo Gadung, Kelurahan Jatinegara RT 09 RW 10, Kecamatan

Cakung, Kota Administrasi Jakarta Timur

Rumah Pemotongan Unggas cakung (Public Governance Slaughterhouse)

Jalan raya Penggilingan, Kecamatan cakung, Kota administrasi Jakarta Timur

Rumah Pemotongan Unggas Petukanganan Utara (Public Governance Slaughterhouse)

Jalan Mochtar (Kawasan Kebun Bibit Petukangan Utara), Kelurahan petukangan Utara, Kecamatan

Pesanggarahan, Kota Adminsitrasi Jakarta Selatan

Rumah Pemotongan Unggas PT Kartika Eka Dharma (Small / Semi Automated Slaughterhouse)

Jalan swadarma Raya No. 69, Kelurahan Srengseng, Kecamatan kembangan, Kota Administrasi Jakarta

Barat.

Rumah pemotongan Unggas Pulogadung (Public Governance Slaughterhouse)

Jalan Palad No.2 (Kawasan RPH Pulogadung), Kelurahan Pulogadung, Kecamatan Pulogadung, Kota

Administrasi Jakarta Timur Kode Pos: 13260 Phone: 021 4704706

Sari Niaga Pacific (SNP) Subanga (Small / Semi Automated Slaughterhouse);

Jl Kamboja 2-E RT 005/01

Tomang, Grogol Petamburan

Jakarta Barat 11440 DKI Jakarta

Telepon Lainnya: (021) 56968794, 56960511

RPA PT Unggas Prakarsa (UP) (Small / Semi Automated Slaughterhouse)

Jalan Kalibaru Timur Iv A 14 No. - Rt.003/001

Kel : Kali Baru,

Kec : Cilincing, JAKARTA UTARA

DKI JAKARTA - INDONESIA 14110

021.44836465


BOGOR

PT Belfoods Indonesia. (Automated Slaughterhouse)

(Slaughter House & Processing).

Citra Indah Complex Kav. PA1-2, Jl. Raya Jonggol Km. 23.3, Jonggol

Tel : +(62-21)-7182419.

Fax : +(62-21)-7196443.

RPA Putra Mandiri /Starfood (Small / Semi Automated Slaughterhouse)

Jl Branta Citeureup, Kab Bgr.

Fax: +62251-8755845

Suwandi.

HP1 : +628138874944.

HP2 : +6281387273838

PT Ciomas Adisatwa (JAPFA) (Automated Slaughterhouse)

Jalan Raya Parung Km. 24, , Gang Sawo No 25, Desa Jampang, Bogor, Jawa Barat.

Agri Mustika Indonesia (AMI) (Small / Semi Automated Slaughterhouse)

Jl.Raya Alfalah .Gg.Damai Rt.01/09 no.10,Cikaret.Kel.Harapan Jaya- Cibinong, Kota Bogor 16914


RPHU SK Cibinong (Public Governance Slaughterhouse)

Gg H Ashari, Cibinong, Jawa Barat 16911

UPTD. RPH DINAS PERTANIAN (Public Governance Slaughterhouse)

Jl. KH . Abdullah Bin Nuh RT 02/01 Kel . Bubulak Kec. Bogor Barat Kota Bogor

UD. SEJAHTERA (Small / Semi Automated Slaughterhouse)

Cibarengkok RT 05 / 04 Ds. Pengasinan Kec. Gunung Sindur Kab. Bogor

PT. RAJA JEVA NISI (Small / Semi Automated Slaughterhouse)

Gg. Belibis No. 62 RT 01/07 Kebon Kepi Pengasinan Gunung Sindur Kab. Bogor

Mina Samudra (Small / Semi Automated Slaughterhouse)

Kp Lengis , Ds Warung Menteng, Cijeruk, Kab Bogor

Jambu Raya (Slaughter Point)

Jl Pamoyanan Sari 9 RT 002/01

Cijeruk

Bogor 16740 Jawa Barat

0251-8212873


Telepon Lainnya: (0251) 8211980, 8211950

Fax: (0251) 8212873

CV. BUANA (Small / Semi Automated Slaughterhouse)

Jl. Raya Kemang, Parung Km. 26 Kab. Bogor

CV. DUIKIAN JAYA (Slaughter Point)

Jl. Ds. Cihauk Jl. Sukabakti RT 01/01 Parung Kab. Bogor

PT. PUTERA HASTA KARSA SWADAYA (Slaughter Point)

Jl. H. Nawi No. 42 RT 06/02 Ds. Waru Kec. Parung Kab. Bogor

CV. TRI TUNGGAL SEJAHTERA (Slaughter Point)

Kp. Lebak Wangi No. 54 RT 03/02 Ds. Parung Kec. Parung Kab. Bogor

PT. RAJA JEVA NISI (Slaughter Point)

Gg. Belibis No. 62 RT 01/07 Kebon Kepi Pengasinan Gunung Sindur Kab. Bogor

UD. SEJAHTERA (Slaughter Point)

Cibarengkok RT 05 / 04 Ds. Pengasinan Kec. Gunung Sindur Kab. Bogor

RPA. PAK EDI (Slaughter Point)

Jl. Tapos Kranji Barat no. 25 Cibinong Bogor

Sentra Pemotongan Ayam :

RPA tradisioanal di daerah Pondok Rumput, Kebon Pedes Bogor

NUR CHICKEN (Slaughter Point)

Jl. Manunggal Bakti I No. 34 RT 06/08 Kel. Kebon Pedes Kec. Tanah Sareal, Kota Bogor

PEMOTONGAN AYAM H. Ir. SONY (Slaughter Point)

Jl. Manunggal Bakti I No. 19 RT 06/08 Kel. Kebon Pedes Kec. Tanah Sareal, Kota Bogor

PEMOTONGAN AYAM H. SAIMAN (Slaughter Point)

Kebon Anggrek Lebak RT 04/02 Kel. Kebon Pedes Kec.Tanah Sareal Kota, Bogor

PEMOTONGAN AYAM H. SURATNO (Slaughter Point)

Jl. Manunggal Bakti Jaya No. 4 Kel. Kebon Pedes Kec. Tanah Sareal, Kota Bogor

PEMOTONGAN AYAM KALIJO (Slaughter Point)


Pondok Rumput Gg. Tambak 2 A RT 06/11 Kel. Kebon Pedes Kec. Tanah Sareal, Kota Bogor

PEMOTONGAN AYAM MULYONO (Slaughter Point)

Pondok Rumput RT 0 3/11 Kel. Kebon Pedes Kec. Tanah Sareal, Kota Bogor

PEMOTONGAN AYAM SUTARNO (Slaughter Point)

Jl. Manunggal Jaya No. 9 RT 02/02 Kel. Kebon Pedes Kec.Tanah Sareal, Kota Bogor

PEMOTONGAN AYAM SUYATMI (Slaughter Point)

Jl. Manunggal Bakti I No. 4 3 RT 06/0 8 Kel. Kebon Pedes Kec. Tanah Sareal, Kota Bogor

DEPOK

Komp. Rumah Pemotongan Hewan (RPH) Tapos (Public Governance Slaughterhouse)

Jl. Raya Tapos - Cimanggis-Depok-Jawa Barat

Amindo Mina Sejahtera (Small / Semi Automated Slaughterhouse)

Jl KSU RRI Kampung Serab RT 001/05, Kel Kuala Kencana , Kec Sukmajaya Depok

Bichick PT - Rumah Pemotongan Hewan (Small / Semi Automated Slaughterhouse)

Perumnas Depok II

Jl Flamboyan 10 Perumnas Depok II Tgh

Sukamaju, Sukmajaya

Depok 16415 Jawa Barat

021-7775362

PT Ayam Prima Esa (Small / Semi Automated Slaughterhouse)

alan Pemuda No. - Rt.006/

Kel : Sawangan Baru,

Kec : Sawangan, DEPOK

JAWA BARAT - INDONESIA 16511


TANGERANG

PT. Japfa Santori Indonesia (Automated Slaughterhouse)

Office: Jl Raya Serang Km 20,2. Cikupa - Tangerang.

Tel : +(62-21)-59400610.

Tel : +(62-21)-5961284.

Fax : +(62-21)-5961285.

Fax: +(62-21)-59400613.

PT CITRA GUNA LESTARI (Small / Semi Automated Slaughterhouse)

Jalan Talaga Mas Raya No. 29

Kel Bojong Kec Cikupa, Tangerang 021 59402662

RPA PT Bangkit Setia Sentosa Primatama (BSSP) (Small / Semi Automated Slaughterhouse)

Jalan Bumi Mas Raya No. 5, Kawasan Industri Cikupamas

Kel : Cikupa,

Kec : Cikupa, Tangerang

BANTEN - INDONESIA 15710

+62-21-59403022

PD. Petra Food (Small / Semi Automated Slaughterhouse)

Jalan Raya Serpong Km.7

Komplek Multiguna Blok F19

Serpong – Tangerang

Sawung Prima (Small / Semi Automated Slaughterhouse)

Jl Aria Putera 22 Ciputat


BEKASI

Rumah Pemotongan Unggas “Duta Makmur” (Small / Semi Automated Slaughterhouse)

Jl. Raya Pasar Babelan kec. Babelan – Bekasi 17610

Rumah Potong Unggas Skala Kecil – RPU SK Pusaka Unggas (Small / Semi Automated Slaughterhouse)

ds Segara makmur, Kec. Taruma Jaya, Bekasi


Annex 5. Relevant governmental regulations

No. Regulation

Types

Rule Number / Subject Summary

1 Law of the

Republic of

Indonesia

No. 7 of 1996 on Food Regulates about food safety, nutrition and quality of food,

income and expenditure of food into and out of the territory

of Indonesia, the responsibility of the food industry, food

security, public participation and oversight,

2 Law of the

Republic of

Indonesia

No. 18 Year 2009 on Animal

Husbandry and Animal Health

Among other things regulates the provision of seeds /

seedlings / feeder, feed, cultivation, harvest, postharvest,

marketing, and farm product processing industry, control and

prevention of animal diseases, veterinary public health and

animal welfare,

3 Law of the

Republic of

Indonesia

No. 18 of 2012 on Food Revision of Law No. 7 of 1996

Scope of regulation include: food planning, food availability,

food accessibility, food consumption and nutrition, food

safety, food labeling an ad, supervision, food information

systems, research and development of food, food

institutions, public participation and investigation

4 Regulation of the

Minister of

Agriculture

Number

381/Kpts/OT.140/10/2005 on

Guidelines for Certification of

Veterinary Control Business

Unit Food of Animal Origin

Certificate of veterinary control of animal-based food

business unit is a written certificate as valid proof of the

fulfilment of the requirements of hygiene and sanitation as a

basic feasibility of animal-based food safety assurance

business unit of food of animal origin

5 West Java

Provincial

Regulation

Number 18 of 2008 on Fees

Animal Disease Testing

Services, Materials of Animal

Origin and Quality Feed / Raw

Feed

Regulation aimed at controlling animal diseases and ensure

the quality of feed circulating in West Java in an attempt to

avoid the loss of farmers and communities.

Also regulated tariff structure and charges

6 West Java

Provincial

Regulation

No. 22 of 2012 on the

Implementation of Animal

Husbandry and Animal Health

Implementation arrangements based livestock and animal

health as:

a. reference in the determination of policy

implementation livestock and animal health;

b. pelaksanaankegiatan guidelines in livestock and

animal health, and

c. guidelines for district / city in establishing local

regulations or policies in the field of animal

husbandry and animal health.

The scope of the implementation of livestock and animal

health, include:

a. planning;

b. farm area;

c. management;


No. Regulation

Types


d. animal health;

e. Veterinary Public Health and animal welfare;

f. veterinary authority;

g. empowerment of farmers;

h. human resource development;

i. research and development of animal husbandry and

animal health

7 Local Regulation

Bekasi

No. 9 of 2012 on Retribution Retribution is a regional levy as payment for specific services

or special permits provided and / or administered by the local

government for the benefit of a private person or agency.

Slaughterhouse levy user charges levied on the provision of

services at the facilities activities slaughtering cattle

slaughterhouses including animal health inspection service

before and after the cut, provided, owned and / or managed

by the Local Government

Slaughterhouses which are used to cut the animal must meet

the following requirements:

• located in an area that does not cause disruption or

environmental pollution, far from residential areas,

near streams or lowest part of the city and is easily

reached by car or near the highway;

• The building complex slaughterhouses have

complete facilities and equipped with adequate

equipment and enough clean water

• complex slaughterhouses must be fenced for

security and avoid external visibility of the cutting

process

• at the slaughterhouse should be employed

someone who has expertise in the field of

veterinary public health

In appendix 7 of this rule, set the structure and amount of

levy rates abattoir.

8 Bekasi District

Regulation

Number 6 of 2007 on Fees

Animal Husbandry, Fisheries

and Marine

These regulations, among others, set things up as follows:

• Cutting Poultry place is a building or place used for

the temporary poultry slaughtering activities

• Cutting cattle meat is generating activities consist of

activities: livestock inspection before being cut,

slaughter, slaughter completion, and medical

examination after the cut

• Principles and objectives in the tariff setting

livestock inspection results is to consider the cost of

the organoleptic and laboratory examinations, the

cost of media and chemical Regensi, the cost of


No. Regulation

Types


inspection / maintenance, servicing and calibration

of equipment and administrative costs.

• Retribution farm is comprised of Animal Health

Inspection Service charges and levies, farm business

license,

9 Bogor Regency

Regulation

No. 29 of 2011 on Business

Services Levy

In connection with the farm, this rules among other things

the following:

• Slaughter House (RPH) is a building or complex of

buildings with designs and certain terms that are

used as a slaughterhouse for general public

consumption.

• Slaughter is an activity that produces meat which

consists of ante mortum, slaughter, slaughter and

completion of post mortum examination.

• Objects Levy Slaughterhouse is the provision of

livestock slaughterhouse facilities including animal

health inspection service before and after the cut,

provided, owned and / or managed by the local

government unless the provision of facilities

livestock slaughterhouses supplied, owned, and / or

managed by state-owned companies, enterprises,

and private parties.

• Tariff structure for Poultry Slaughter House Rp 50, -

/head

10 Local Regulation

Bogor

Number 5 of 2012 on

Business Services Levy

In connection with the farm, this rules among other things

the following:

• Slaughterhouse hereinafter abbreviated RPH is

owned facilities and Local Government with the

design requirements specified in accordance with

the applicable provisions are used as a place of

slaughtering animals for public consumption.

• Investigation and slaughtering levy which is

hereinafter referred to levy fees charged to those

who use its equipment and facilities RPH and

veterinary and meat inspection services.

• Ante-mortem inspection is the implementation and

testing before the livestock or cut.

• Post mortem examination is the examination and

implementation or testing after the animal

slaughtered.

• Animal shelter / animal is accommodating business

activities or livestock animals in the courtyard of the

shelter or enclosure RPH shelter.

• Re-examination is the examination of meat and

other ingredients of animal origin coming from

outside of the slaughterhouse and / or have not

been examined from the area of origin.


No. Regulation

Types


• Spending animals / livestock are activities bring

animals / livestock out of RPH after veterinary

examination.

• Object RPH Levy referred is the provision of

livestock slaughter facilities including animal health

inspection service before and after the cut,

provided, owned and / or managed by the Local

Government

• The level of use of services is measured based on

the type of service and the type and number of

cattle slaughtered

• Tariff structures for inspection and slaughtering

poultry is: where cutting costs Rp 50/head, Rp

25/head ante mortem, post mortem examination Rp

25/head.

11 Local Regulation

Bogor

No. 3 of 2009 on Levy

Investigation and

slaughtering

This regulation has been improved and refined with the

Regional Regulation No. 5 of 2012 on Business Services Levy

12 Local Regulation

Depok

Number 22 of 2003 on

fisheries permits, ranches

and slaughterhouses

In connection with farms and slaughterhouses, these

regulations among others define the following matters:

• Livestock Permits are granted written permission by the

Mayor or other designated official, which gives the

Company the right to carry out cutting Poultry Ranch

house is a building or complex of buildings with designs

and certain terms that are used as a cut of poultry for

general public consumption.

• Cutting Poultry Place is a place / building design and

specific requirements by the competent authorities

designated as a place to cut poultry for public

consumption is limited in a particular district or in the

market with a Maximum capacity of chicken slaughter

of 500 head per day.

• Slaughtering business are the activities carried out by

individuals or legal entities that carry out the slaughter

of poultry in a poultry slaughterhouse / poultry

slaughtering their own or belonging to another party, or

sell poultry cutting services.

• Livestock enterprises can be organized in the form of the

People's Company Ranch or Ranch.

Type of Farming Corporate Farms

(the minimum

number of animals

in one plot)

Individual Farms

(Number of

animals below)

Laying Chicken 10,000 breeding 10,000 breeding

Broiler 15,000 head / cycle 15.000 head /

cycle


No. Regulation

Types


• Each organizer farm business, are required to have

business licenses Ranch of Mayor or appointed official.

• Farm business license is given in the form:

a) Permission Ranch Business Principles, Principle

Approval (valid 1 year) given to livestock enterprises

to conduct physical preparation and administration

including related licensing

b) Permits Animal Husbandry; business license granted

to the Company Ranch Ranch that has been ready to

enter production activities, including for livestock.

Permits are valid for Livestock Ranch Company

conducts its business activities in question and shall

re-register every 5 (five) years.

c) Registration Ranch. To conduct farm business,

People Livestock Livestock Registration is required

to have the People of the Mayor or appointed

official. People Livestock Registration Certificate is

valid for the farm business people walking and must

re-register every 5 (five) years. People Ranch

resident registration certificate or equivalent with

Business License Ranch. To get a registration

certificate Ranch, each farm must be incorporated

in the farm.

• According to the type of activities, businesses cutting

animal / poultry consists of four (4) categories:

a) business slaughterhouses / poultry category I, ie

slaughtering business / poultry should be executing

activities slaughterhouses / owned own poultry

slaughterhouse / poultry own;

b) business slaughterhouses / poultry category II, ie

slaughtering business / selling activity in the form of

poultry slaughterhouses services / poultry

slaughtering and implement / poultry belonging to

someone else;

c) business slaughterhouses / poultry category I and II

combined, ie slaughtering business / poultry should

be executing activities slaughterhouses / owned

own poultry slaughterhouse / owned own poultry

slaughtering and selling services / poultry

slaughtering and implement / poultry owned others;

d) business slaughterhouses / poultry category III, ie

slaughtering business / activities carry a poultry

slaughterhouse / abattoir poultry / birds belonging

to another party

• Any person or entity conducting business Butchering /

Poultry required to obtain a license from the Mayor or

appointed official. Business license as referred to


No. Regulation

Types


consists of:

a. Permission principle;

b. Permits Slaughterhouse / Poultry.

13 Local Regulation

Depok

No. 7 of 2011 on Levy

Slaughterhouse

Among other regulations governing the amount of levy of

poultry slaughtering services, poultry inspection services and

transport services carcass as follows:

Poultry slaughtering

services

Rp 100/head

Poultry inspection

services

Rp 100/head

Carcasses

transportation

services

Distances below 10

KM

Rp 2.500/10

head

Distance 10 s / d 30

KM

Rp 7.500/10

head

Distance above 30 s /

d 60 KM

Rp 10.000/10

head

14 Jakarta Provincial

Regulation

No. 4 of 2007 on Control

Maintenance and Poultry

Peradaran

These regulations, among others, set about the following

things:

• Poultry is the supervisory control over the

maintenance and distribution of birds in order to

prevent Avian Influenza.

• Every person and / or legal entities who keep poultry

food in the Region shall have a permit.

• Every person and / or legal entities who maintain pet

birds and poultry for research, education and

conservation are required to have certification of

animal health and special signs; animal health

certification and special signs referred to is given by the

Department of Animal Husbandry, Fisheries and

Marine.

• Owner shelter and food poultry slaughterhouse that had

existed before the enactment of this area is required to

carry out the transfer of cutting poultry shelters and food

to the location specified by the Regional Governor or out

gradually over a maximum period of 3 (three) years since

the enactment of the Local Rules ;

• Every person and / or legal entities that enter into

regional poultry shall include a document stating the

health of poultry and explain the origin and destination

of dispatch issued by the competent authority or


No. Regulation

Types


region of origin of poultry veterinarian

• Control over the maintenance and distribution

arrangements and the impact made by the poultry:

a. Mayor and Regent Administration;

b. Department of Animal Husbandry, Fisheries and

Maritime Affairs;

c. Public Health Service, and

d. Department of Public Protection / Civil Service Police

Unit.

• Society can do direct supervision immediately report

to the board of RT / RW or the Village or the District

Officer Livestock and Fisheries, Health Center and

Officer Livestock and Fishery Sub-Department local

presence if found sick or dead birds infected with the

H5N1 virus indicated that avian influenza can cause

• Foreclosure / retrieval poultry is done in an attempt

to break the chain and prevent the spread of avian

influenza which can lead to death for the sufferer and

should be done immediately without waiting for the

criminal proceedings.

15 Jakarta Governor

Regulation

No. 146 of 2007 on

Guidelines for the

Implementation of Regional

Regulation no. 4 of 2007

This regulation is the Regional Implementation Guidelines

Regulation no. 4 of 2007.

It sets forth the Governor include:

• Obligation of the person or entity who has had a permit

raising poultry for food:

a. Cleaning cages and equipment every day

b. Disinfection of cages at least 7 days

c. Always keep the base enclosure in the dry state

d. Cleaning food and drink every day, and vitamins on a

regular basis

e. Cleaning the rest of the food and drink

f. Dispose of waste at waste treatment facilities

g. Vaccination in accordance with the applicable

provisions

h. Apetugas kepad reported if found sick or dead

poultry

i. The number of domestic poultry cage adapted to the

capacity of

j. The new birds came to be separated for 7 days

k. Willing destroyed when the birds are found in the

examination indicated Avian Influenza or Avian

Influenza


No. Regulation

Types


• Phasing procedure displacement shelters and / or cutting

poultry food (gradually start out 2007 to 2010)

16 Jakarta Governor

Regulation

No. 147 of 2007 on the

Provincial Committee for

Avian Influenza Control and

pandemic preparedness

• Establishment of Provincial Committee for Avian

Influenza Control (Avian Influenza) or referred to in this

regulation aims to accelerate FBPI Komprov pengedalian

Avian Influenza and increased preparedness to confront

pandemic influenza

• Chairman Komprov FBPI is Assistant Public Welfare

• FBPI Komprov task is to implement the control of avian

influenza and pandemic influenza preparedness to

confront

• FBPI Komprov function is:

a. The preparation mechanism and work program

b. Determination of strategic steps

c. Coordinating implementation activities

d. Control, monitoring and evaluation of

implementation strategies

e. Settlement of problems arising

f. Mobilization of community participation

g. The collection, processing and reporting of data and

information avian influenza control and

preparedness to confront pandemic influenza

• To facilitate the implementation of the tasks and

functions of the Task Force was formed Komprov FBPI

job descriptions of the objects on the terms of the

following tasks:

a. Control of avian influenza in poultry

b. Control of Avian Influenza in humans

c. Facing an influenza pandemic preparedness

d. Risk communication, education and awareness

raising

e. Restrictions pandemic epicenter

• In carrying out the duties and functions, Komprov FBPI

coordination and / or cooperation funds, logistics,

personnel, data and information to:

a. Regional Working Units/ related UKPD

b. Central Government

c. Indonesian National Army

d. Indonesian National Police

e. National Commission FBPI

f. Business and industry

g. Non-governmental organizations

h. Professional organizations


No. Regulation

Types


i. College

j. International organizations

k. An individual

17 Tangerang

District

Regulation

Number 7 of 2009 concerning

maintenance and Poultry

Disease Control Flu (Avian

Influenza)

Purpose of this enactment is to guide the maintenance and

control of poultry diseases Avian Influenza in Tangerang

region

• The purpose of this enactment is to:

a. Prevent the introduction and spread of Avian

Influenza

b. Ensure that poultry and poultry products are

produced safely, quality and free from Avian

Influenza virus

c. Preventing the spread of disease Avian Influenza

from animal to animal or from human to human

d. Controlling Avian Influenza in humans with proper

management of human cases

• Maintenance and distribution of poultry

a. Any person conducting business with commercial

poultry (chickens laying population ≥ 10 000 heads

or broiler farms with a population of ≥ 15 000 head

/ cycle) must have a permit issued by the Regents on

the terms of a recommendation from the

b. Prohibited established businesses raising poultry for

commercial purposes in a residential neighborhood /

settlement

c. Poultry raised for commercial purposes, the business

side, the interests of research, education and

conservation must have a Certificate of Animal

Health (SKKH)

d. SKKH is written evidence issued by authorized

veterinarian, stating that the animal has met the

requirements of safety, health, and based on the

results of clinical examination or laboratory testing

and is valid for a certain period.

e. Veterinary Certificate is a certificate issued by a

competent veterinarian stating that the animal

product meets the requirements

f. Any person who shall enter the area to complement

poultry and recommendation SKKH expenditure of

region of origin

g. Any person who imports of poultry products from all

regions are required to complete the Veterinary

Certificate and recommendation expenditure of

region of origin


No. Regulation

Types


h. Every person who issued poultry must complete

SKKH and expenditure recommendations of the

Department of

i. Every person who issued the original poultry

products are required to complete the Veterinary

Certificate and recommendations of the

Department-related

j. Birds that are sold must come from farms that are

not being affected by or at least 30 days there was

no incidence of Avian Influenza and accompanied by

SKKH

k. Origin of poultry products sold must come from

farms that are not being affected by or at least 30

days there was no incidence of Avian Influenza and

accompanied by a Certificate of Veterinary

• Control of Avian Influenza includes prevention of Avian

Influenza disease, eradication of avian influenza in

poultry diseases, prevention and control of Avian

Influenza in humans.

• Precautions include:

a. Everyone should report any cases of suspected fraud

or Avian Influenza outbreak or spread of the Office

b. Any person utilizing poultry and poultry products

from strict biosecurity must perform at a place

where poultry and poultry products from being

c. Everyone has to sell and cut healthy birds

• Eradication actions, among others:

a. Combating Avian Influenza is done through

depopulation and disposal in accordance with

applicable regulations

b. In the implementation of the eradication of the

disease, people can carry out the monitoring officer

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