Implementation of Local Farmer Partnership Model in Probiotic Chicken

partnership model which is considered to give      level of dryness and temperature level, as well
disadvantages to local ...
Table 1. Broiler chicken performance in 6             2.3 Probiotic Chicken: Environmental and
   weeks using 0% and 0,25%...
Table 4. ADG (Average Daily Gain) data on             3.   Partnership Model
probiotic broiler – 30 days                  ...
poultry venture will regulate almost all aspects     4.   Model Implementation
from market to the pricing structure of the...
additional income, but also could make their            give total return of approximately 20-25%
daily habit even more pr...
On top of the fact that farming is part of
most Metro citizen’s lifestyle, explanation on     Nugroho, Eko (2007),: ―Feasi...
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Implementation Of Local Farmer Partnership Model In Probiotic Chicken Business Final Edited 210709


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Implementation Of Local Farmer Partnership Model In Probiotic Chicken Business Final Edited 210709

  1. 1. Implementation of Local Farmer Partnership Model in Probiotic Chicken Business Jakarespati Wiradisuria1, Muchlido Apriliast2 1 Faculty of Industrial Technology, Bandung Institute of Technology (ITB), Indonesia 2 Faculty of Veterinary Medicine, Bogor Institute of Agriculture (IPB), Indonesia Abstract In recent days, there are growing needs of a venture that could develop both the awareness of choosing healthier consumable livestock and the wealth of Indonesia rural society. This review put emphasize on meeting those needs by utilizing local farmer partnership model in producing probiotic chicken. The expectation is to establish integrated end-to-end solutions from production to community development. Common issues on current partnership model are that they only focus on middle/large scale farmers with the size of >3000 chickens per stable and do not directly solve local farmers’ financial difficulties. This writing shares the learning of partnership model that we implement in micro/small scale local farmers in Metro, Lampung. The venture utilizes probiotic technology, ‘direct-farming’ mechanism, advanced cash payment, and profit sharing model to give added value to both local farmers and Indonesian consumers. In the long term, the model gives additional benefit in local farmers’ loyalty level by developing sense of belonging, ownership, and leadership. As a result, the partnership model implementation in probiotic chicken in Metro, Lampung increases the productivity level shown by the improved quality of the chicken and production incremental up to 800% within 15 months with sustainable total profit margin of approximately 20-25%. Key words: partnership, probiotic chicken, society-based economics 1. Introduction income per capita could be reduced Poverty is one of Indonesia’s most significantly. common society issues that need to be One of the prominent ventures in eradicated thoroughly. Based on the 2007 data Indonesia that has significant impact to the of Board of National Planning and society is agriculture business, approximately Development (Bappenas), there are more than 23.97% of total Indonesian society source of 37.17 millions of people (16.58% of total income (based on 2005 BPS – Central Bureau population) who are living below the poverty of Statistics – data). This mostly involves large line based on the cut off standard set by numbers of Indonesian farmers. Although they Central Bureau of Statistics (BPS) of Rp. are being part of this industry, the majority of 186.636 per person per month. The these farmers are still living below the poverty circumstance is even worse if the poverty line line. Typically because they are only involved is being adjusted to World Bank’s standard in the operational side of the business, thus do (Rp. 337.500 per person per month). not get the most of the benefit. Utilizing the fact above as main basis of The writers are start-up business owners the research, there is growing need in the that produce probiotic chicken by using nation to create a venture that could develop partnership (kemitraan) model with local nation’s economy level via local society farmer in Metro, Lampung to reach the goal of development so that the numbers of Indonesian economic development. In this venture, we that is living an unrighteous life with very low address two common issues on current
  2. 2. partnership model which is considered to give level of dryness and temperature level, as well disadvantages to local farmers, which are: (1) as optimum response in specific dosage period. the business is exclusive to large farmer – The most widely used probiotic strains are focus only on middle/large scale farmers of the genus Lactobacillus, which is also the (>3000 chickens/stable), (2) all pricing and dominant genus of the proximal intestine of profit sharing related matters is 100% regulated chickens early in life (Barnes et al., 1972). by the partner company. On top of that, utilization of Probiotic chicken technology in the model also touches the needs of 2.2 Probiotic chicken vs. regular broiler introducing healthier type of chicken as one of chicken Indonesian primary choice of livestock and In the current intensive livestock (regular consumable food using probiotic technology. broiler chicken) industry the gut flora can be In this paper, the writers aims to give a disturbed as a result of several stressors that brief picture on how partnership model in affect the intestinal tract. New food safety probiotic chicken business could help regulations demand to replace antimicrobial developing Lampung’s local farmers economic additives in poultry feed and still produce situation and its possibility of healthy poultry. This is a common issue that reimplementation in other area in Indonesia. occurs in regular broiler chicken farming. Probiotic micro-organisms like lactic acid bacteria administered with the feed may 2. Probiotic Chicken contribute to a strategy to comply with these 2.1 What is Probiotic demands. Experts have debated how to define In the venture that we manage in Metro, probiotics. One widely used definition, Lampung, the type of bacteria that is being developed by the World Health Organization used is Lactobacillus probiotic. Gunawan and and the Food and Agriculture Organization of M.M.S. Sundari (2003) defined that probiotic the United Nations, is that probiotics are "live is a colony of microbe seed (from cow’s colon) microorganisms, which, when administered in that is packed within a mixture of soil and adequate amounts, confer a health benefit on grassroots with degenerated leaves and the host." (Microorganisms are tiny living branches. Probiotic is an-aerobic enzyme organisms—such as bacteria, viruses, and generating Lactobacillus which function is to yeasts—that can be seen only under a separate the component of carbohydrate microscope.) (cellulose, hemicelluloses, lignin), protein and ―Probiotic‖ word comes from Greek fat. which meaning is ―to live‖ and initially being The benefit of probiotic in livestock used widely by Lilley and Stillwell in 1965 to ransom is to increase the digestive level, explain a substance that is created by an nutrition absorbance level, and the efficiency organism that stimulates the growth of another of consumed ransom. Probiotic could also organism. Fuller (1989) defined probiotic as a eliminate the ammoniac/waste stench from living microbial that is added as ransom either Rumah Potong Hewan (RPH) or septic- supplement, to give benefits to the livestock by tank, by dissolving chemical substance of C-H- improving the microbe population in colon. O-N-S (Suharto et al., 1993). Related to above, Crawford (1979) defined probiotic as a culture of living micro-organism that is being added into livestock from ransom mixture to guarantee the population availability for organism in the colon. The culture contains specific bacteria, which could withstand certain
  3. 3. Table 1. Broiler chicken performance in 6 2.3 Probiotic Chicken: Environmental and weeks using 0% and 0,25% probiotic on Revenue Impact ransom rough fiber level of 4.5; 6.0; and 8.0% Nowadays, current broiler chicken Ransom farming is facing considerable hindrance from ADG Treatment (g/unit) Consumption FCR the local society in relation to environmental (g/unit) matters. Their concern comes from production Probiotic Level waste of broiler chicken in a form of fesses and 0% 1709a 3158a 1.85a ammoniac stench which created negative 0.25% 1750b 3180a 1.82a impact for the surrounding society from both odor and hygiene issue. These issues force this Rough Fiber Level kind of farming model to be located relatively 4.50% 1728a 3167a 1.83ab far away from residential area. 6.00% 1769b 3186a 1.80a 8.00% 1792b 3154a 1.87b Thanks to the implementation of probiotic Probiotic x Rough Fiber technology as an additive element that could significantly reduce ammoniac level in total 0% x 4.5% 1719ab 3165a 1.84b b a metabolism process. The probiotic bacteria 0.25% x 4.5% 1737 3169 1.83b ab a eliminate the ammoniac stench which implies 0% x 6.0% 1723 3157 1.83b c a in the reduction of possibility having 0.25% x 6.0% 1814 3214 1.77a unhygienic substance carried by flies or other 0% x 8.0% 1686a 3151a 1.87b insects in the stable. This guarantees our ab a 0.25% x 8.0% 1698 3157 1.86b possibility in managing our chicken farm in the Note: Different superscript in a same column shows significant differences between two or more numbers residential area without any negative side (P<0,05) effect to the society. This would definitely Source: Zainuddin et al. (1995) become one essential aspect in establishing sustainable and environmental friendly society- based economy (ekonomi berbasis Lactobacilli have been shown to stimulate kerakyatan). immunity, increase colonisation resistance and Refering to table 3 and 4, probiotic increase competitive exclusion. In a field trial bacteria usage in broiler livestock will increase with broilers (refer to table 1), probiotics the ADG (average daily gain ratio), which has treatment resulted increasing in broiler direct impact the duration of weight gaining. productivity based on an index taking into This definitely will shorten the period of account daily weight gain and feed efficiency herding the chicken by 2-3 days. by the parameter of FCR (Feed Conversion Rate). FCR is defined as the measurement ratio of the feed needed to increase certain amount Table 3. ADG (Average Daily Gain) data on of the livestock’s weight. regular broiler – 35 days Coop Capacity Initial Terminal ADG Weight Weight (g/day Table 2. General comparison between Regular (g/unit) (kg/unit) /unit) and Probiotic Broiler Chicken 1 100 40,5 2,53 78,5 2 200 41,9 2,30 70,6 Controlled Probiotic 3 200 40,6 2,51 77,2 broiler Parameter broiler Weighted average 74,82 chicken chicken High Ammoniac stench Very low Lower ADG Higher Higher FCR Lower Higher % Fat Lower
  4. 4. Table 4. ADG (Average Daily Gain) data on 3. Partnership Model probiotic broiler – 30 days 3.1 Overview Coop Capacity Initial Terminal ADG Weight Weight (g/day Partnership (kemitraan) is one well- (g/unit) (kg/unit) /unit) known venture model in Indonesia. It is an 4 200 40,6 2,48 81,3 alternative strategy in business development. 5 100 40,2 2,35 77,2 6 200 38,3 2,52 82,7 Partnership concept that endorses mutualism Weighted average 81,04 symbiosis principle is expected to give benefit to many aspects in the society (Nugroho, FCR and mortality rate also have 2007). Fundamentally, the model is a synergy significant decrease on group of chicken between small-scale ventures with middle to utilizing probiotic technology. Based on the large scale ventures. As an agricultural based FCR figures in table 5 and 6, it is noticeably nation, Indonesia has so many partnership shown that in order to reach certain weight models for each of the commodities with more within the same period food required for or less identical characteristic. raising probiotic chicken is a lot less than In general, the synergy in partnership regular broiler chicken. The low numbers of model is structured in a form of task delegation mortality rate also maximize the cultivation between the larger venture as the capital owner result. – who responsible for all strategic business development matters from initial funding to production, sales, and marketing aspect – and Table 5. FCR (Feed Conversion Ratio) data on small farmers who own the asset for business regular broiler – 35 days place and production site provider. Additional Coop Capacity FCR important component for this model is the 1 100 1,7 existence of management team who assume the 2 200 2,3 role of supervision for day-to-day production 3 200 1,9 process. Weighted average 2,02 The revenue of the venture will be split among participated parties based on initial Table 6. FCR (Feed Conversion Ratio) data on agreement. probiotic broiler – 30 days Coop Capacity FCR 4 100 1,5 3.2 Partnership Model Mechanism 5 200 1,7 The partnership model that we operate is 6 200 1,4 being implemented in production of broiler Weighted average 1,54 chicken. As a commodity in agricultural based nation, the model is not uncommon and has The improvement on both ratios based on already been vastly used by so many ventures. probiotic bacteria implementation in chicken Common partnership model in broiler farming increases the number of cultivated chicken production is in middle to large scale chicken (by the reduction of mortality rate) and with the amount of more than 3000 chickens reduce the cost for the food. At the end of the per stable or coop. In this model, investor day, not only that probiotic technology provides the initial fund via management team implementation could give positive impact to before it is being allocated to the farmers in a the environment, but also give uptrend form of production facilities for certain periods outcome to the revenue gained. of production cycle. The margin of the venture is therefore being distributed to the investor, management, and farmers. In this kind of general partnership model, the large scale
  5. 5. poultry venture will regulate almost all aspects 4. Model Implementation from market to the pricing structure of the The venture that we own has already been chicken. set-up since 2008. In terms of partnership model participation, the numbers has also shown positive figure of 800% incremental from the first time the venture was established. Initially, it was only 3 farmers that joined in our model. Based on the latest data of May 2009, the level of participation is increased up to 24 farmers with average number of 400 chickens per stable. Hence, our current effective capacity per month is approximately 8000-9000 chickens. This section reviews the implementation result on the partnership model in probiotic chicken farming venture. There are four major categories that are significantly impacted by Figure 1. Partnership Model this initiative, which are: environmental, social, economic, and financial. In Metro, Lampung, we are producing probiotic broiler chicken using a modified 4.1 Environmental Impact Analysis partnership model that support low tier venture Probiotic bacteria utilization in chicken with less than 1000 chickens per coop. This is breeding guarantees the venture’s where the main difference comes in. Not only environmental friendly level. It reduces the that our partnership model in probiotic chicken discomfort from ammoniac stench that attracts justifies the market price for the farmers, but it and increases the possibility of having also creates the opportunity to put the price unhygienic or contaminated pest (such as flies) above the market due to the niche market in farming area. positioning. 4.2 Social Impact Analysis 3.3 The Advantages of Probiotic and Small- scale Partnership Model The venture gives significant impact to the society by these following areas: By utilizing partnership model, our business process gives significant impact to the Society affection: Since partnership model farmers in Metro, Lampung. These are the is developed under business processes that urge facts on those venture advantages: (1) the importance of synergy between the Utilization of Probiotic technology which farmers, togetherness become one major improves the venture profitability by ADG cultural advantage. Practically, it is being improvement and FCR reduction, (2) direct- implemented in a form of periodic review farming mechanism – encourage small farmers meeting (monthly) between management and to be more productive by involving their asset farmer that ideally could bring up the harmony in the partnership model with the average of one area. number of 450 chickens per stable per farmer, Reduce procrastination habit of the and (3) clarity in profit sharing mechanism and society in the rural area of Metro, Lampung by easy payment scheme for DOC, ransom, and encouraging local society to set up small other supporting substances purchasing. venture in chicken farming. At the end of the day, not only that the venture could give them
  6. 6. additional income, but also could make their give total return of approximately 20-25% daily habit even more productive by having a which some part of it will goes to local farmers farm in their backyard that become one of the based on pre-alignment between investor, sources of income for the family. management, and local farmers. Nutrition fulfillment. The implementation of probiotic technology gives positive Table 8.Margin profit comparison composition to the produced chicken. As Type of chicken FCR COGS Margin shown by table 7, probiotic chicken has lower Profit cholesterol and fat containment, and higher Regular broiler 2.02 12,500- 12-15% protein. It also shows negative appearance of chicken 13,000 Antibiotic, Salmonella, and E. Coli bacteria. Probiotic chicken 1.54 10,000- 24-25% Other chemical substances such as Lead, 11,000 Note: Utilize the FCR number on table 5 and 6 Mercury, and Arsenic also have very low figures. In terms of profitability between regular broiler and probiotic chicken, table 8 shows that probiotic chicken could give certain higher Table 7.Nutrition composition on Probiotic vs. profit margin. This is mainly due to the regular broiler reduced FCR numbers (as well as increase in Regular ADG) which will reduce the total ransom Probiotic Broiler needed to raise the chicken up to certain level Composition chicken chicken of weight. Cholesterol 59.7 mg/100gr 80-100 mg/100gr Fat 9.15% 21-25% Protein 19% 17% 4.4 Economic Opportunity Analysis Water 64.90% 68-74% On top of the development on Salmonella & environmental, social, and financial aspect, E. Coli Undetected Detected rural area economic in Metro has also been a Antibiotic Negative Positive significant opportunity for developing the Lead <0.05 Max. 0.05 mg partnership model in probiotic chicken Mercury <0.0005 Max. 0.03 mg farming. Arsenic <0.0002 Max. 0.05 mg Source: PT. PRONIC Solution website ( Opportunity creation: Start from small Based on BPS (Central Bureau of 4.3 Financial Analysis Statistics) data in 2005, approximately 23.97% society’s source of income came from In partnership model, there is a choice for agriculture sector. And from the same source not putting any upfront fixed-asset investment, of data, it is shown that more than 50% of i.e. farm/stable or slaughterhouse. The fixed Javanese immigrant has chosen or most likely asset for the stable is mainly owned by local will choose to be farmers. The numbers have farmers. Most of the initial investment will be been a strong ground to drive the spent for operational expense, especially for implementation of probiotic chicken farming the ransom and any other additional substance using partnership model. such as vaccine and probiotic strain. The venture create chances for the society Since we play in the field of broiler who owns only a relatively limited farm field chicken, the average selling weight is within and capital resource. The partnership model the range of 1,2-1,5 kg. Based on the financial encourages the small farmers to start producing calculation on that particular circumstances, value from their limited resource by combining every investment placed on the venture will asset with other farmers in that particular area.
  7. 7. On top of the fact that farming is part of most Metro citizen’s lifestyle, explanation on Nugroho, Eko (2007),: ―Feasibility Study of the environment aspect on previous section has Cattle Fattening Partnership (Case: Cattle been a justification to any kind of farm field Fattening in Sako District Palembang),‖ owner to start the venture with relatively Master Theses from MBIPB. minimum asset, e.g. small backyard farming of approximately only 50 chickens. Suharto, Winantuningsih, and Rosanto (1993). ―Dua Dosen UNS Temukan starbio untuk Penggemukan Ternak Sapi‖. Harian Jawa Pos. 5. Conclusion 8 September 1993. The combination of partnership model and probiotic technology implementation in Suryana and Hasbianto, Agus (2008), ―The chicken farming could give significant impact local chicken farming in Indonesia: its to the society from 3 key aspects of constraints and challenges.― Jurnal Litbang environment, social, and financial, and Pertanian, 27(3), pp. 75-83, 2008. opportunity in economic aspect. From this review, it could be concluded Zainuddin, D., K. Dwiyanto, dan Suharto that probiotic chicken farming with partnership (1995). ―Utilization of a probiotic starbio in model is a strong mechanism in agriculture broiler diet with different levels of crude fibre.‖ business to improve the standard of living in Bull. of Animal Sci. Special Ed. The Faculty of Lampung province rural area. This has been Animal Husbandry. Gadjah Mada Univ., done by improving the quality of the livestock Yogyakarta. and increasing the chance of small farmers to have quality farming method. By then, re- application in other area in Indonesia is a huge o=1 opportunity, not only for rural area development, but also for boosting probiotic chicken market in Indonesia. ?id=2008122619405945 References Crawford, J.S. (1979). Probiotics in animal nutrition. Arkansas Nutr. Conf.: 45−55. Fuller, R (1989). History and development of probiotics. In: Probiotics The Scientific Basis. FULLER. (Ed.). Chapman & Hall. London, New York, Tokyo, Melbourne, Madras. Gunawan and M.M.S. Sundari (2003). ―Pengaruh Penggunaan Probiotik dalam Ransum terhadap Produktivitas Ayam,‖ WARTAZOA, vol.13, no. 3, pp. 92-98. 2003. Hardjono (2003), ―Pengembangan Kawasan Agribisnis Berbasis Peternakan di Propinsi Lampung,‖ Pemerintah Propinsi Lampung, Dinas Peternakan dan Kesehatan Hewan.