Determinants of Broiler Production and its Economic Impact: Panel Data Evidence from Indonesia's Core Provinces
DOI:
https://doi.org/10.38035/gijea.v3i3.612Keywords:
Production Cost, Domestic Investment, Bank Credit, Gross Regional Domestic Product, Panel Data AnalysisAbstract
The broiler chicken industry is a vital component of Indonesia's agricultural sector, possessing significant potential for economic growth and food security. However, it is constrained by challenges including high capital requirements, price volatility, and structural inefficiencies within its core-plasma partnership model. This study aims to analyze the primary determinants of broiler production and quantify its subsequent impact on regional economic output. Using a balanced panel dataset from 2000 to 2023 across five key provinces in Java—which collectively represent the national production hub—this research employs panel data regression analysis to examine the influence of the number of core farmers, price, bank credit, and domestic investment on broiler production volume. A subsequent model assesses the impact of production on Gross Regional Domestic Product (GRDP). The findings reveal that the number of farmers, bank credit, and domestic investment are significant positive drivers of production. Conversely, price exhibits a significant negative relationship, a counter-intuitive result attributed to structural market failures within the core-plasma system where input costs are controlled by output buyers. Furthermore, the analysis confirms that broiler production has a significant and positive impact on GRDP, underscoring the sector's role as an engine for regional economic growth. The study concludes that unlocking the industry's full potential requires policy interventions focused on reforming partnership models and enhancing access to capital for farmers.
References
Abor, J., & Biekpe, N. (2009). How do we explain the capital structure of SMEs in sub?Saharan Africa? Evidence from Ghana. Journal of Economic Studies, 36(1), 83–97.
Akpan, S. B., Udoh, J., & Nkanta, V. S. (2023). Agricultural Credit Policy and Livestock Development in Nigeria. Zeszyty Naukowe SGGW w Warszawie - Problemy Rolnictwa ?wiatowego, 23(3), 45–60.
Al-Abd Alaali, H. J. A., & Mahmood, Z. H. (2021). An Economic Research Of Broiler Projects For Some Provinces In The Middle Of Iraq In 2019. Iraqi Journal of Agricultural Sciences, 52(4), 1019–1030.
Alifiandri, P. (2021). ANALISIS PENGARUH SUKU BUNGA KREDIT, INVESTASI PORTOFOLIO, FDI, DDI, DAN UPAH RIIL TERHADAP PERTUMBUHAN EKONOMI INDONESIA TAHUN 2010Q1-2019Q4. Fakultas Ekonomi Dan Bisnis Universitas Brawijaya Malang.
Atah, U. I., Mohammed, M. O., Adeyemi, A. A., & Adawiah, E. R. (2024). A proposed Bay-Salam with Takaful and value chain model for financing agriculture in Kano State, Nigeria. Islamic Economic Studies, 32(1), 2–21.
Bell, D. D., & Weaver, W. D. (2012). Commercial Chicken Meat and Egg Production. Springer Science & Business Media.
Blanchard, O., & Johnson, D. R. (2017). Macroeconomics. Pearson.
Brooks, C. (2019). Introductory econometrics for finance. Cambridge University Press.
Carlberg, M. (2010). Monetary and fiscal strategies in the world economy. Springer.
Carlton, D. W., & Perloff, J. M. (2000). Modern industrial organization. Addison-Wesley.
Cecchetti, S. G., & Schoenholtz, K. L. (2015). Money, banking, and financial markets. McGraw-Hill Education.
Chang, M., Liu, J., Shi, H., & Guo, T. (2022). The Effect of Off-Farm Employment on Agricultural Production Efficiency: Micro Evidence in China. Sustainability, 14(6), 3385.
Chen, Q., Saatkamp, H. W., Cortenbach, J., & Jin, W. (2020). Comparison of Chinese Broiler Production Systems in Economic Performance and Animal Welfare. Animals, 10(3), 491.
Daryanto, A., & Saptana. (2009). Global Value Chain Governance (GVCG) pada Broiler di Indonesia: Memadukan Pertumuhan, Pemerataan dan Keberlanjutan. In Orange Book: Pembangunan Ekonomi Bekerlanjutan dalam Menghadapi Krisis Ekonomi Globlal. IPB Press.
Dornbusch, R., Fischer, S., & Startz, R. (2011). Macroeconomics. McGraw-Hill/Irwin.
Ekwere, G., & Edem, I. (2014). Effects of agricultural credit facility on the agricultural production and rural development. International Journal of Environment, 3(2), 192–204.
Fabozzi, F. J. (2025). Capital Markets, sixth edition Institutions, Instruments, and Risk Management. MIT Press.
Fontana, G., & Sawyer, M. (2024). The macroeconomics of near zero growth of GDP in a world of geopolitical risks and conflicts. Journal of Environmental Management, 351, 119717.
Garza-Gil, M. D., Varela-Lafuente, M., & Caballero-Miguez, G. (2009). Price and production trends in the marine fish aquaculture in Spain. Aquaculture Research, 40(3), 274–281.
Gharib, H. B., El-Menawey, M. A., & Hamouda, R. E. (2023). Factors Affecting Small-Scale Broiler Chicken Farm Profitability and Challenges Faced by Farmers in Egyptian Rural. Tropical Animal Science Journal, 46(2), 261–268.
Hayati, H. N. (2019). ANALISIS USAHA TERNAK AYAM BROILER KEMITRAAN DI KABUPATEN KARANGANYAR. SEPA: Jurnal Sosial Ekonomi Pertanian dan Agribisnis, 15(2), 156.
Hendika, K. M., & Setyowati, E. (2022). Analysis The Effect Of Credit Interest Rates, Gross Domestic Product, And Inflation On Domestic Investment In Indonesia In 2000-2021. International Journal of Islamic Economics, 4, 49–59.
Jhingan, M. L. (2012). Ekonomi Pembangunan Dan Perencanaan (1st ed.). Rajagrafindo Persada.
Kamruzzaman, M., Islam, S., & Rana, M. J. (2021). Financial and factor demand analysis of broiler production in Bangladesh. Heliyon, 7(5), e07152.
Kuncoro, M. (2012). Ekonomi pembangunan: teori, masalah, dan kebijakan. Unit Penerbit dan Percetakan, Akademi Manajemen Perusahaan YKPN.
Leeson, S., & Summers, J. D. (2009). Commercial Poultry Nutrition (3rd ed.). Nottingham University Press.
Madura, J. (2021). Financial markets and institutions. Cengage.
Mankiw, N. G. (2022). Macroeconomics. Worth Publishers.
Meier, G. M., & Rauch, J. E. (2005). Leading issues in economic development. Oxford University Press.
Monacelli, T., Sala, L., & Siena, D. (2023). Real interest rates and productivity in small open economies. Journal of International Economics, 142, 103746.
Nachrowi, D., & Usman, H. (2002). Penggunaan Teknik Ekonometrika. Rajagrafindo Persada.
Parkin, M. (2018). Macroeconomics. Pearson.
Ramcharran, H. (2017). Financing Small and Medium-Sized Enterprises in Thailand: The Importance of Bank Loans and Financing Diversification. The Journal of Entrepreneurial Finance, 19(2), 2.
Reilly, F. K., Brown, K. C., & Leeds, S. J. (2019). Investment analysis & portfolio management. Cengage Learning Asia Pte Limited.
Samuelson, P. A., & Nordhaus, W. D. (2010). Economics (19th ed.). McGraw-Hill Irwin.
Saqib, S. E., Ahmad, M. M., Panezai, S., & Ali, U. (2016). Factors influencing farmers’ adoption of agricultural credit as a risk management strategy: The case of Pakistan. International Journal of Disaster Risk Reduction, 17, 67–76.
Soekartawi. (2003). Teori ekonomi produksi (Revisi, Vol. 3). Rajagrafindo Persada.
Sukirno, S. (2019). Pengantar teori ekonomi (3rd ed.). PT RajaGrafindo Persada.
Todaro, M. P., & Smith, S. C. (2006). Economic development. Pearson Addison Wesley.
Xu, S., Tang, H., Lin, Z., & Lu, J. (2022). Pricing and sales-effort analysis of dual-channel supply chain with channel preference, cross-channel return and free riding behavior based on revenue-sharing contract. International Journal of Production Economics, 249, 108506.
Yadav, I. S., & Rao, M. S. (2024). Agricultural credit and productivity of crops in India: field evidence from small and marginal farmers across social groups. Journal of Agribusiness in Developing and Emerging Economies, 14(3), 435–454.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Samuel Alkadri, Ahmad Rodoni, Elmiwati
This work is licensed under a Creative Commons Attribution 4.0 International License.
Copyright :
Authors who publish their manuscripts in this journal agree to the following conditions:
- Copyright in each article belongs to the author.
- The author acknowledges that the GIJEA has the right to be the first to publish under a Creative Commons Attribution 4.0 International license (Attribution 4.0 International CC BY 4.0).
- Authors can submit articles separately, arrange the non-exclusive distribution of manuscripts that have been published in this journal to other versions (for example, sent to the author's institutional repository, publication in a book, etc.), by acknowledging that the manuscript has been published for the first time at GIJEA.
