Australian live cattle representatives have flown to Jakarta for talks amid fears a proposed new trade rule could threaten the viability of the industry.
No cattle were exported to Indonesia in September. Photo: Michel Bunn
Australian Livestock Exporters' Council chairman Simon Crean was scheduled to meet with Indonesia's trade minister on Monday. Photo: Arsineh Houspian
Jakarta: Australian live cattle representatives have flown to Jakarta for talks amid fears a proposed new trade rule stipulating one in every six cattle imported to Indonesia must be for breeding could threaten the viability of the industry.
Indonesian Trade Minister Enggartiasto Lukita shocked the beef industry when he announced last month the quota system for importing cattle would be abolished but companies would only receive permits if they complied with the new breeding rule.
No cattle were exported to Indonesia in September due to delays in the issue of permits amid negotiations over the new domestic breeding program, which Indonesia hopes will assist in its drive to achieve food self-sufficiency.
"Delays in further permits and reduced volumes to Indonesia are expected until the issue is resolved," Meat and Livestock Australia warned in its Livelink statement.
Australian Livestock Exporters' Council chairman Simon Crean was scheduled to meet with Mr Lukita on Monday.
It is hoped the issue will be resolved before Indonesian President Joko Widodo visits Australia next month.
Tensions over the live cattle trade have dogged the bilateral relationship.
In 2011 a temporary live cattle export ban ahead of Ramadan following the release of footage of cattle being mistreated in Indonesian abattoirs strained the friendship between the neighbouring countries.
It is feared the proposed new breeding rule would drive up the cost of importing cattle for Indonesian feedlot operators and could lead to a reduction in the number of cattle imported.
Indonesian Cattle Farmer Association executive director Joni Liano told Fairfax Media feedlot businesses could not afford to keep the cattle for the 14 months required for the breeding program.
He said feedlots currently only kept cattle for four months to fatten them before slaughter.
"Fourteen months is not feasible for us and it is not profitable for banks," Mr Joni said.
"Banks would not lend us any money and therefore there would be a threat of bankruptcy on our side."
He said it would also take time to build the pens and develop the skills needed for a breeding program.
"The government wants us to have a breeding industry but it won't happen instantly.
"What's also important is that we haven't seen the regulation, it's not there yet."
Mr Joni said while there had been no live cattle from Australia in September, some had started to come in October after the government issued some import permits.
Jakarta-based veterinarian consultant Dr Ross Ainsworth wrote in Beef Central on October 7 that with zero imports during September and only a limited number of permits issued so far, the number of cattle on hand in feedlots was alarmingly low.
"Assuming further delays in import permit allocations, feedlots are expected to essentially run out of fat cattle around January."
He wrote that in the past when feedlots were empty the focus for fresh beef had shifted to the domestic herd.
"With no other alternatives and prices for these local cattle at very attractive rates, the sale of these breeders for slaughter becomes an extremely attractive proposition," he said.
"And crash goes the domestic herd once again."
On October 20, Agriculture Minister Barnaby Joyce announced 300 Australian cattle had arrived in South Kalimantan – the first shipment of cattle under the Indonesia-Australia commercial cattle breeding program.
"As the demand for beef in Indonesia continues to increase, this project is another example of Australia's commitment to co-operate with the Indonesian industry to increase productivity through the transfer of skills and expertise in breeding cattle," Mr Joyce said at the time.
Mr Crean told Fairfax Media ahead of Monday's meeting the live trade between Australia and Indonesia was a partnership built on years of significant collaboration and strategic alignment.
"The opportunity to spend time in Indonesia this week has galvanised my belief that the export of both feeder and breeder cattle from Australia to Indonesia has an economically sustainable and mutually beneficial future," he said in a statement.
This was "underpinned in the long term by our shared objectives around ongoing economic development and working co-operatively to build Indonesia's beef and cattle capacity".
Australian Trade Minister Steve Ciobo said he had spoken to Indonesia's Trade Minister Lukita over the new cattle import protocols for breeding cows.
"We had a warm and cordial conversation and agreed on the importance of industry engagement and advice on this matter," he said.
"Indeed, this week's meeting is a key part of this conversation. Australia and Indonesia will continue to work together on this issue of importance to both countries."
– with Karuni Rompies
The story Simon Crean to hold talks in Jakarta amid concerns over new cattle breeding rule first appeared on The Sydney Morning Herald.
Source: Simon Crean to hold talks in Jakarta amid concerns over new cattle breeding rule
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