The broiler and layer industry are key providers for the Malaysian diet, with chicken meat and chicken/duck egg being the leading protein sources based on per capita consumption per year (DOSM, 2023). However, the industry is suffering from undesirable market outcomes such as rising prices (Bernama, 2021), accusations of anti-competitive behaviour (Juani Munir Abu Bakar, 2022), and market supply shortages (The Star/Asia News Network, 2022). Further, the solution for tackling rising prices has been market intervention through price ceilings since 2021, which subsequently triggered subsidies for chicken meat and egg producers, adding to the financial burden of the government (KPKM, 2023).
The broiler and layer supply chain is complex with a multitude of components (MyCC, 2014). Therefore, this study seeks to examine and understand the relationship between supply chain actors and how their interactions affect one another in the context of the present regulatory environment. Hence, the qualitative approach was adopted, beginning with a supply chain analysis, followed by semi-structured interviews and focus group discussions with broiler and layer supply chain actors and relevant government stakeholders.
This study finds that policies that affect enterprise cash flow, whether by limiting profit potential or demanding high expenditures to meet regulatory demands, inflict negative effects on the industry. Further, such policies affect supply chain actors differently depending on their scale and power position in the supply chain. Thus, the government should make efforts to remove constraints to cash flow (in the case of the price ceiling), ease regulatory burdens (in the case of Kebenaran Merancang), and alleviate power imbalances (in the case of contract farmers vis-a-vis integrators). The government can also take other approaches to make the industry more robust, such as speeding the digitalisation of broiler and egg production data collection and pursuing future crisis mitigation measures such as locally sourced inputs.