The paper is made for both learning and publication purposes of our venture, PT. Amertawangsa Arthanusantara

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. 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. 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. 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. 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. 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
(http://www.pronic.co.id/) 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. 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- http://www.metrokota.go.id/statis_detail.php?n
application in other area in Indonesia is a huge o=1
opportunity, not only for rural area
development, but also for boosting probiotic http://www.lampungpost.com/cetak/berita.php
chicken market in Indonesia. ?id=2008122619405945
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Gunawan and M.M.S. Sundari (2003).
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Ransum terhadap Produktivitas Ayam,‖
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