MEDAN, Indonesia, June 14, Reuter - Feathers fly, guts spill out and the afternoon air fills with the sounds of snapping, ripping and chomping as crocodiles munch on half a tonne of freshly killed chickens.

In a house next to stinking pits thrashing with reptiles, Lo Kie Yoe nurses a washing-up bowl full of needle-toothed babies, the latest additions to his North Sumatra crocodile farm.

"It's crazy. Here they all are eating up 200,000 rupiah (110 dollars) a day, twice that in the wet season. I'm running out of space, and I can't sell a single one," Lo complains.

Strict export controls try to stamp out a thriving illegal trade in Indonesian crocodile skins and Lo, one of a handful of ranchers operating outside the jungle province of Irian Jaya, 3,000 miles (5,000 km) to the east, has yet to get an export licence.

Some in the industry say that is because a small group in Irian Jaya has the lucrative trade firmly in its grip.

Lo himself offers no explanation other than a shrugged "That's life."

The farm began 30 years ago with 12 squiggling newly hatched salt-water crocodiles trapped locally. Those have now grown into 10-foot (three metre) monsters with skins like armour plating, not the stuff of elegant footwear.

"They can be valuable too, though. There's this fad for big items, suitcases, golf bags," said an industry source.

And the old-timers have bred and bred and bred. Lo now cares for 1,600 reptiles, the younger of which compete with his wife and children for space in the house.

Clearly, trapping crocodiles in the wild and selling their pelts for 15 or 20 dollars a belly inch, the widest part, is more economical than keeping them well-fed in specially built pits for five years until they are big enough to skin.

"But there are hardly any left in the wild around here. The smugglers can't come up with more than 150 a year," Lo said.

In Irian Jaya, with its vast mangrove swamps and virtually untouched inland lakes, there are still lots of crocodiles around and the potential for smugglers is greater.

A Food and Agriculture Organisation project there tries to stem the flow by teaching local people to keep hunting in the wild within limits to avoid wiping out the crocodiles and with them a valuable source of income.

An international agreement on wildlife trade allows Indonesia to export 5,000 saltwater crocodiles a year, 3,000 of them from the wild.

There is no quota for freshwater crocs, but the industry estimates 20,000 left the country legally last year and perhaps as many again found their way out illegally.

Indonesia, angered by Singapore's refusal to recognise the agreement covering trade in crocodiles, has stopped exporting any wildlife products to its neighbour but many Indonesian skins still find their way there, ecologists say.

"In the last month alone Indonesian customs agents have discovered nearly 3,000 crocodile, iguana and snake hides masquerading as textile exports to Singapore," one said.

Another new rule to try and keep the lid on crocodile hunting requires all skins to be at least partly processed before they leave the country.

Fine for farms and hunters in Irian where there are several tanneries, says Lo. "But what about me? I'm the only one here and those machines cost 500 million rupiah (275,000 dollars)," said Lo. "Where do I get that capital? What can I do?"

And then, with the resignation of a man who has seen feathers fly every day for 30 years: "Just keep feeding them, I suppose."