January 5, 2010

 

Indonesia in need of feed mills

 

 

Fish farmers in Indonesia are suffocating from high feed costs, and the government must build local feed mills to bring the prices down.

 

Feed prices had increased to IDR256,000 (US$27.4) per 50kg bag, below the break-even level for farmers, according to Suhana, a marine biologist at the Bogor Institute of Agriculture (IPB).

 

Fish farmers will incur losses if the price exceeds IDR200,000 (US$21.4) per bag. Feed accounts for 80% of production costs.

 

Shrimp farmers are also complaining that shrimp feed is selling for IDR10,000 (US$1.07) per kg, about 15% higher than the price on the international market, Suhana said.

 

To cope with high feed prices, the government should build local feed mills to bring down prices because about 40% of feed ingredients such as soymeal are imported. Growers in Riau built their own feed mills and their feed are sold at the much more affordable price of IDR100,000 (US$10.7) per 50kg bag.

 

The Ministry of Maritime Affairs and Fisheries proposed reducing import duty on feed ingredients. Syamsul Maarif, the ministry's secretary general, said the tariff was burdening domestic fish and shrimp cultivators by making feed more expensive.

 

But Suhana said cutting the 5% import duty was not a solution because the price remained high and was vulnerable to currency fluctuations.