The debate over a proposal by the Indonesian Chamber of Commerce and Industry (Kadin) to open permits for foreign investors in the layer chicken subsector has emerged amid the implementation of the Free Nutritious Meal (MBG) Program. This discourse should be approached with clarity and grounded in data, as it concerns a strategic food sector that directly affects the livelihoods of smallholder farmers and national food security.
Based on available data, national egg production in 2024 was approximately 6.34 million tons and is projected to exceed 6.5 million tons in 2025. Meanwhile, national consumption demand stands at around 6.22 million tons, indicating that Indonesia is not experiencing a supply shortage but rather a structural surplus.
UGM Professor and Dean of the Faculty of Animal Science (Animal Science UGM), Professor Budi Guntoro, stated that Indonesia is currently in an egg production surplus and that the entry of foreign investors would pose risks and affect local farmers.
He explained that the main challenges in the layer chicken subsector lie in imbalances in market structure, price volatility at the producer level, high production costs that are not always matched by selling prices, and the weak bargaining position of smallholder farmers within the value chain.
Guntoro said that small- and medium-scale farms are the backbone of national egg production, carrying both economic and social value. These farms absorb labor, drive local economies, and ensure that production is not concentrated among a small number of large business actors.
“The layer chicken subsector is not merely a business arena, but part of the regional development ecosystem. Therefore, the entry of foreign investors must be approached with great caution,” he said on Tuesday (April 28).
He further explained that demand for eggs in the MBG program is relatively small. With an estimated requirement of around 700 million eggs per year, equivalent to approximately 42 thousand tons, it accounts for only about 0.6–0.7 percent of total national egg production. This shows that MBG does not require additional national production capacity, but rather a more effective absorption and distribution mechanism.
According to Guntoro, the MBG program has the potential to serve as a state instrument for absorbing surplus production, stabilizing egg prices, and providing market certainty for smallholder farmers. Through medium-term purchase contracts, strengthening cooperatives or farmer clusters, and regional logistics support, MBG’s needs can be fully met from existing domestic production.
“This approach is not only economically efficient but also aligned with the goal of equitable development,” he said.
He added that if the MBG program instead becomes an entry point for foreign capital, its orientation risks shifting, from an instrument to strengthen the people’s economy into merely a mechanism for channeling contracts to large capital owners.
In the long term, this could erode the independence of the strategic food sector and weaken the position of domestic producers.
“In the context of layer chicken farming, Indonesia already has sufficient production capacity and human resources. The challenge ahead is not to add new players, but to recalibrate policies to better support a fair and sustainable economic structure,” he concluded.
Author: Jesi
Editor: Gusti Grehenson
Post-editor: Zabrina Kumara
Photo: Freepik