Strategic Modernization of Indonesia's Poultry Sector: Integrating Taiwan's Smart Agriculture Technologies to Support the Makan Bergizi Gratis Initiative

The inauguration of President Prabowo Subianto's administration has signaled a definitive paradigm shift in Indonesia's domestic policy, centered on the ambitious Makan Bergizi Gratis (MBG) or Free Nutritious Meal program.

This initiative, designed to provide daily balanced meals to more than 82.9 million citizens by 2029, represents a fundamental investment in the nation’s human capital, aiming to eradicate stunting and fulfill the "Golden Indonesia 2045" vision. However, the program’s massive scale—targeting nearly one-quarter of the national population—has placed unprecedented strain on domestic agricultural and livestock supply chains.

Specifically, the poultry and egg sectors have emerged as the primary bottlenecks in the realization of this national mandate. To bridge the gap between current production capacities and the surge in protein demand, the Indonesian government is actively pursuing a modernization strategy that leverages international technological partnerships. Taiwan, a global leader in smart agriculture and automated livestock management, has become a pivotal partner in this effort. This report analyzes the institutional, fiscal, and technological framework of the MBG program, evaluating how the integration of Taiwanese precision farming ecosystems can mitigate supply risks, enhance biosecurity, and support Indonesia’s quest for comprehensive food sovereignty.

Institutional Architecture and the Strategic Mandate of the MBG Program
The Makan Bergizi Gratis program is not a traditional social safety net but a multi-sectoral intervention that merges health, education, and economic development goals. At its core, the program addresses the "triple burden of malnutrition"—the coexistence of undernutrition, micronutrient deficiencies, and obesity. By ensuring that every school-age child, toddler, and expectant or breastfeeding mother has access to high-quality protein, the government seeks to improve cognitive outcomes and physical resilience across the population.

The Centralization of Power: The National Nutrition Agency (BGN)
To manage the complexity of this initiative, the government established the National Nutrition Agency (Badan Gizi Nasional or BGN) in 2024 through Presidential Regulation No. 83. Unlike previous nutrition programs that were dispersed across the Ministry of Health, the Ministry of Education, and the National Food Agency, the MBG is centralized under BGN, which reports directly to the President. This structure allows for vertical control over resource distribution and the rapid formulation of strategic policies without the delays typical of legislative approval processes.

BGN serves as the "brain" of the operation, responsible for drafting technical guidelines, setting nutrient composition standards for different age groups, and establishing protocols for food safety and kitchen certification.[9] The operational delivery mechanism centers on the Satuan Pelayanan Pemenuhan Gizi (SPPG), or Nutrition Fulfillment Service Units. These are institutionalized community kitchens designed to prepare and distribute meals locally. BGN’s performance framework includes rigorous monitoring of coverage, quality, and efficiency indicators, managed through a digital data architecture that links nutrition surveys with real-time program execution data.

Human Capital and Management Recruitment
The scale of the program necessitates a new class of professional administrators. The government has initiated the recruitment of Indonesian Development Driving Graduates (Sarjana Penggerak Pembangunan Indonesia or SPPI) to ensure professional management at the regional level and maintain policy compliance. These graduates are tasked with overseeing the logistics of SPPG units, ensuring that 95% of raw materials are sourced from local farmers, and managing the local workforce, which is expected to include up to three million newly created jobs by 2026.

Fiscal Foundations and Macroeconomic Management
The financial commitment required for the MBG program is of a magnitude rarely seen in Indonesian social policy. The government’s fiscal strategy centers on ensuring "safe, sustainable, and measurable" implementation without relying on external foreign aid, a stance that distinguishes Indonesia's current approach from post-war international food assistance models.[14, 16, 17]

Budgetary Scale and Reallocation Dynamics
For the 2026 fiscal year, the Indonesian government has allocated a staggering Rp 335 trillion (approximately US20.7 billion) for the MBG program. This represents a significant increase from the 2025 allocation, which ranged from Rp 71 trillion to Rp 121 trillion depending on the breadth of the initial rollout.

The budget for 2025 follows a specific split: 80% is sourced from the national education budget and 20% from health allocations. In 2026, while the primary funding source remains the State Budget (APBN), the reallocation of Rp 24.7 trillion from various sectors has raised concerns about the potential displacement of other vital services. Civil society groups have noted that nearly 44.2% of the education budget in 2026 will be dedicated to MBG, which could delay funding for School Operational Assistance (BOS) and teacher salaries in remote regions.

Fiscal Year	Budget Allocation (Trillion IDR)	Estimated Beneficiaries (Millions)	Primary Funding Source
2025	71 - 121	17.9 - 55.1	APBN (80% Education, 20% Health)
2026	335	82.9	APBN (Domestic Taxes & Debt)
2027 (Target)	>400	83.0	APBN (State-led Sovereignty)

Revenue Mobilization and Debt Strategy
To fund this massive expenditure, the government plans to rely on tax revenues and the issuance of government bonds (SBN) rather than immediate tax hikes. For 2026, the government aims to raise Rp 832.2 trillion in new debt to support the overall state budget, including the MBG expansion. Despite the scale of spending, the Coordinating Ministry for Economic Affairs maintains that the fiscal deficit will be kept within the mandatory 3% of GDP limit.

The Stimulus Effect and Grassroots Economic Turnover
The MBG program is engineered to act as an economic catalyst. The operational structure of the SPPG units involves upfront payments for meal production, which provides certainty for local operators and encourages small-scale investment.[14, 17] BGN estimates that nearly Rp 80 trillion will be disbursed to the grassroots level every quarter, exceeding previous national stimuli. This injection of capital is projected to boost national economic growth by up to 3% in 2026 alone, as increased consumption and production cycles take hold in rural areas.

The Poultry and Egg Supply Chain Crisis
While the fiscal framework is robust, the physical availability of food is the program’s most critical vulnerability. Eggs and chicken meat are the centerpieces of the MBG menu due to their high nutritional value and relative ease of local production. However, the current livestock infrastructure is incapable of meeting the projected demand surge.

The Magnitude of Egg Demand
The scale of the "protein gap" is illustrated by the daily requirements of the beneficiary pool. To provide a single egg daily to 82.9 million people, Indonesia requires an additional 30 billion eggs per year. At the unit level, a single SPPG serving 3,000 children requires 200 kg of eggs per meal; if eggs are served just twice a week, a single unit consumes 1.6 tons of eggs per month.

BGN's internal modeling suggests that if the program is to reach its full target by the end of 2026, the country will face a severe shortage unless 6 million new layer farmers and 1 million new broiler farmers are integrated into the national production ecosystem.[12, 21]

Danantara and Strategic Capital Injections

To address this deficit, the government has mobilized the Danantara Sovereign Wealth Fund. In late 2025, the fund announced a Rp 20 trillion (US$1.2 billion) injection into the poultry sector. This capital is intended to finance the construction of integrated broiler and layer farms in supply-deficient regions, particularly in Kalimantan, Sulawesi, and Papua.

The strategy emphasizes a "hub-and-spoke" model where state-owned enterprises (SOEs) like ID Food manage the upstream (breeding and hatcheries) while small-scale local farms manage the downstream (grow-out and egg collection). This integrated poultry ecosystem aims to maintain price stability by preventing shortages that would otherwise lead to hyper-inflation of protein costs.

The Feed Security Challenge
Poultry production is inextricably linked to the availability of affordable feed, which accounts for over 70% of total production costs. Indonesia currently faces regional imbalances in feed production, with excess capacity in Java and Sumatra but significant shortages in eastern regions.

The Ministry of Agriculture has unveiled a US$1 billion plan to construct 30 state-of-the-art feed mills nationwide by 2026. This project aims to achieve regional equity and price stabilization through two key policies: a fixed purchase price for corn (the primary raw material) and a maximum retail price for finished feed.

Commodity	2024 Est. Production	2026 Projected Demand	Strategic Mitigation
Poultry Feed	26 - 28M Tonnes	35 - 40M Tonnes	30 New Mills ($1B Investment)
Broilers	3.5 - 4B Heads	4.8 - 5B Heads	1M New Meat Farmers
Layer Hens	~45M Birds	~70M+ Birds	6M New Layer Farmers

Technological Modernization: The Transition to Smart Poultry
The current reliance on traditional farming methods—characterized by open-sided housing and manual feeding—is insufficient for the MBG program’s requirements for volume, safety, and efficiency.[28] Indonesia’s tropical climate poses significant risks of heat stress and disease, which can decimate flocks in a matter of days. To combat this, the government is incentivizing a transition to closed-house, environmentally controlled systems.[28, 29]

Closed-House Dynamics and Thermal Management
In a closed-house system, the internal environment is isolated from external climate fluctuations. These facilities use negative pressure ventilation systems, where exhaust fans at one end of the house pull air through cooling pads (evaporative water curtains) at the other.[28, 29] This creates a wind-chill effect that maintains the temperature within the birds' thermoneutral zone. The thermal efficiency of these systems is critical for minimizing the Feed Conversion Ratio (FCR):
By maintaining an optimal temperature of , energy that the bird would otherwise spend on thermoregulation (panting or shivering) is redirected toward growth or egg production. Advanced Taiwanese systems have demonstrated the ability to lower FCR in broilers from a traditional 1.8 to below 1.5, representing massive savings in corn consumption.

AIoT and Precision Monitoring
The "Smart Poultry" paradigm involves the integration of Artificial Intelligence (AI) and the Internet of Things (IoT). These systems utilize a array of sensors to monitor every variable in the barn :

Environmental Monitoring: Sensors for temperature, humidity, light intensity, and gas concentrations (, , ) alert the farm manager to conditions that could trigger respiratory distress.
Precision Feeding Systems: Automated augers deliver specific nutrient mixes based on the age and weight of the flock, with real-time tracking of consumption patterns to detect early signs of illness.
Behavioral AI: High-resolution cameras and motion sensors analyze the movement and distribution of birds within the barn. AI algorithms can identify "clustering" behavior, which indicates cold stress, or excessive lethargy, which may signal a disease outbreak.

The Taiwan-Indonesia Strategic Partnership
Taiwan has emerged as a preferred technology partner for Indonesia's agricultural modernization due to its unique combination of ICT expertise and its focus on small-to-medium scale intensive farming—a model that mirrors the needs of the SPPG and local MSME networks.

New Southbound Policy and Institutional Cooperation
The cooperation between Taipei and Jakarta is facilitated by Taiwan's New Southbound Policy, which promotes substantive bilateral engagement in agriculture, education, and technology. Since 2016, the two nations have signed 20 MoUs, with a focus on talent cultivation and food safety.

In late 2025, high-level agricultural consultations in Taipei resulted in a consensus to strengthen agricultural resilience against climate change. Key projects for 2026 include corn seed production in South Sulawesi and the modernization of vegetable marketing systems in West Java, which will provide the necessary raw materials for the MBG kitchens.

Taiwan Smart Agriweek and Industrial Matchmaking
The Taiwan Smart Agriweek and AgriLivestock & Feed Taiwan expo have become the primary platform for technological transfer. These events feature over 400 exhibitors and attract thousands of international buyers, including significant delegations from the Indonesian poultry industry.

The 2026 expo which will be held in Taipei will focus on AI-driven feed innovations and livestock automation.[41] Indonesian buyers participating in these forums are specifically targeting technologies such as:

Modular Environmental Controllers: Scalable systems that can be retrofitted into existing Indonesian barns.
Smart Egg Grading and Washing: Automated systems that ensure eggs are free of Salmonella and other致病菌 before delivery to schools—a critical requirement given the recent mass poisoning incidents.
Digital Management Dashboards: Cloud-based platforms that allow regional BGN officials to monitor the supply levels and health status of thousands of decentralized farms simultaneously.

Case Study: Dawushan Farm and Automated Hygiene
Dawushan Farm Technology in Taiwan serves as a benchmark for the integrated systems Indonesia seeks to adopt. Their facility utilizes five-star closed-house equipment where every stage of production—from the bird laying the egg to the final packaging—is completely hands-free.[29, 42, 43] The facility includes:

14-Step Washing Process: Including UV disinfection and automated crack detection.
State-level Quality Control Labs: Real-time monitoring for Salmonella and aflatoxins in the feed.
Traceability: Every egg is linked to a specific barn and production time, allowing for rapid recalls if a safety issue is detected.

Logistics, Food Science, and Archipelagic Distribution
Distributing millions of fresh meals daily across 17,000 islands is a logistical challenge unparalleled in global school feeding history. The National Nutrition Agency is exploring advanced food technologies to mitigate the risks of spoilage in transit.

The Role of Freeze-Drying and Food Tech
BGN Chairman Dr. Dadan Hindayana has called for the adoption of freeze-drying (lyophilization) technology to support the MBG rollout. Freeze-drying removes moisture through sublimation, preserving the nutritional integrity and taste of the food while making it shelf-stable for months without refrigeration. This technology is particularly vital for remote areas in Papua and Kalimantan where cold-chain infrastructure is nearly non-existent.

Indonesia is currently seeking Taiwanese partners to develop regional "Sentra Pengolahan Pangan Gizi" (Nutrition Food Processing Centers) equipped with high-capacity freeze-drying units.

Digital Traceability and Blockchain Integration
To ensure the safety of the 82.9 million daily meals, the government is implementing a digital traceability system. Using IoT-enabled QR codes on every food tray, BGN can monitor the temperature and transit time of meals from the SPPG kitchen to the school.[2, 9] Taiwan’s experience with the Traceable Agricultural Product (TAP) standard and its AIoT platforms like AgriTalk provide the technical architecture for this level of oversight.[27, 44]

Socio-Economic Spillovers and National Resilience
The integration of technology into the poultry sector is expected to yield benefits far beyond the immediate goals of the MBG program.

Job Creation and the New Generation of Farmers
Modernizing poultry farming creates high-value jobs for technically skilled workers. The MBG program is projected to absorb three million workers, including agricultural instructors and technology managers. Through the "Young Farmer Internship Program," Indonesian youth trained in Taiwan are returning to lead these new smart farms, ensuring that the technology is not just imported but deeply integrated into the local culture.[45]

Carbon Reduction and Circular Agriculture
The modernization of poultry housing also offers opportunities for climate mitigation. Taiwanese companies often integrate solar panels into the roofs of closed-house barns, using the revenue from electricity production to offset the costs of cooling the birds. Furthermore, advanced waste management systems can convert poultry manure into organic fertilizer or biomass energy, reducing the sector's carbon footprint and supporting circular agricultural models.

Systemic Risks and Strategic Mitigation
Despite the robust framework, several critical risks could derail the MBG initiative and its associated agricultural modernization.

Inflationary Pressures and Price Volatility
The sudden increase in demand for corn and poultry could lead to a localized inflation spike if supply does not ramp up immediately. To mitigate this, the government is using the "Red and White Market Operation" to stabilize prices and prevent hoarding.[46] Furthermore, the fixed purchase price for corn aims to protect farmers from the volatility of global commodity markets.

Food Safety and Hygiene Certification
The December 2025 and January 2026 mass poisoning incidents—affecting over 1,000 children in Grobogan and other regions—highlight the catastrophic potential of hygiene failures.[20] As of early 2026, only about one-third of the SPPG kitchens were formally certified for hygiene.[11] The rapid adoption of Taiwanese automated washing and grading equipment is the primary strategy to mitigate this risk, as it removes the human factor from the early stages of the supply chain.

Geopolitical and Trade Tensions
Indonesia’s poultry sector is sensitive to global trade dynamics, particularly the prices of imported feed additives and vitamins.[24] Tensions between major global powers can disrupt the supply chains for the semiconductors and specialized components required for Taiwanese smart farming systems. Indonesia is addressing this by diversifying its technology partners and focusing on regional cooperation through the New Southbound Policy.

Synthesis and Strategic Outlook
The Makan Bergizi Gratis program is the most significant social and economic experiment in modern Indonesian history. Its success or failure will likely define the legacy of the current administration and determine the nation’s trajectory toward the 2045 "Golden Indonesia" targets.

The decision to modernize the poultry and egg sectors through the integration of Taiwanese technology is a strategic response to a fundamental supply-demand imbalance. By moving away from traditional, high-risk farming and toward automated, biosecure, and data-driven closed-house systems, Indonesia is not only securing the meals of 82.9 million people but also building a globally competitive agricultural sector.

The Rp 335 trillion fiscal commitment, paired with the Danantara fund's US$1.2 billion injection into poultry infrastructure, provides the necessary capital. The Taiwan-Indonesia partnership provides the technical and human capital. Together, these elements form a comprehensive strategy to achieve "massive food sovereignty" within the next five years.

For the partnership to reach its full potential, the following technical and policy priorities should be maintained:

Mandatory Certification: All SPPG units and their poultry suppliers must be integrated into a digital traceability network, utilizing Taiwanese AIoT standards to ensure real-time health and safety monitoring.
Regional Production Hubs: Capital should continue to be prioritized for eastern Indonesia to reduce inter-island logistical costs and ensure regional protein equity.
Advanced Processing Scale-up: The government must prioritize the transfer of freeze-drying technology from Taiwanese experts to solve the spoilage issues inherent in archipelagic distribution.

By effectively translating Taiwan's technological strength into Indonesian production capacity, the government can transform the challenge of a national school lunch policy into a catalyst for a high-tech agricultural revolution. This collaboration serves as a model for international cooperation in the pursuit of food security, health, and sustainable economic growth.

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