Information asymmetry and economic concentration: The case of hens and eggs in eastern Indonesia

Abstract

Eggs have been important elements of cooking and nutrition in Indonesia for centuries, mostly supplied from ducks and backyard chickens. Consumption of layer eggs has increased 12-fold over the past 30 years, and prices are lowered in central areas of the country. In the outer islands, however, layer egg prices are high and eggs are of lower quality. This report aims to discuss why concentration of chicken feed and egg production is maintained in the central areas of the country, while malnutrit ion, poverty and unemployment are high and increasing in areas without commercial feed and egg production. The difference is great between those who know and those who do not in the Indonesian poultry industry. Potential gains from information acquisition are not reflected in efficient markets for information, knowledge and skills. Information markets are not established because there are neither suppliers of nor any substantial demand for the competence that could be used by new commercial egg producers at peripheral sites of production. Lowering entry barriers into poultry feed and layer egg production is mainly a question of competence, and policy recommendations include improved dissemination of information and knowledge through schooling systems and local government extension services.