The Ministry of Agriculture of Indonesia has announced a transformative investment initiative: over US$1 billion allocated to build state-of-the-art feed mills, aiming to boost poultry feed production and secure the country’s growing poultry sector. This ambitious plan addresses rising demand, regional imbalances, and the need for stable supply chains ahead of a significant production surge expected in 2026.
Investment plan
- The project is structured in two phases.
- Initially, the government will construct 12 feed mills.
- This will be followed by an expansion to include 18 more facilities, bringing the total to 30 mills nationwide.
- Construction is tentatively scheduled to begin in 2026, following site selection and planning.
- The state-owned Danantara Investment Management Agency will likely fund the initiative, with support from the Agricultural Ministry.
Regional focus: addressing disparities
A central goal of the investment is regional equity. Priority will be given to Kalimantan, Sulawesi, and Papua, where feed shortages are common. Java and Sumatra, by contrast, already have established feed production infrastructure and will receive fewer new facilities. The strategy is designed to balance feed availability, reduce regional price volatility, and support local poultry farmers.
Price stabilisation measures
In addition to building feed mills, the Ministry plans to implement two key pricing policies: a fixed purchase price for corn from farmers, and a maximum retail price for livestock feed. These regulations aim to stabilize market prices, protect farmer income, and ensure fair costs for poultry producers and consumers.
Expected production & demand surge
- By 2026, Indonesia’s poultry feed production is projected to rise dramatically—from 26–28 million tonnes in 2024 to 35–40 million tonnes.
- This comes amid forecasts that the national chicken population (broilers and layers combined) will reach 4.8–5 billion heads.
- Broilers are expected to consume about 15.6 million tonnes of feed, while laying hens will require roughly 20.2 million tonnes.
Broader objectives and strategic impacts
The investment supports broader goals: increasing domestic livestock productivity, strengthening food security, and bolstering smallholder farmers’ stability. By improving feed supply, the initiative will help reduce dependency on expensive imports and expand Indonesia’s capacity to meet rising domestic and regional poultry demands.
Challenges ahead for Indonesia
Despite its promise, the plan faces several risk factors:
- Domestic corn price volatility and potential currency fluctuations.
- Global trade dynamics, notably tensions between the U.S. and China affecting commodity prices.
The project’s success will depend on effective coordination among the Agricultural Ministry, Danantara, and local stakeholders—as well as adaptability to fluctuating economic conditions.
This strategic investment positions Indonesia to meet its growing poultry feed needs, reduce regional inequalities, and reinforce its long-term agricultural resilience.
Sources: Available upon request