Decoding Indo's Japan move

Indonesia has imported beef from Japan before, but in quantities better fitted to eskies

THE ABC's announcement, with some small fanfare, that Indonesia will start importing beef from Japan is noteworthy as a non-event.

Japan isn't cattle country. Its beef exports are climbing, certainly, but in 2013 those exports hit a grand total of 909 tonnes - to 19 countries. That includes 6kg of beef to Jordan.

Indonesia has imported beef from Japan before, but in quantities better fitted to eskies than shipping containers. In 2009, Japan sent 38kg to Indonesia; in 2008, 4.3 tonnes.

Weigh that against forecasts that Indonesia might be looking for 900,000 head of live cattle in 2014.

It's probably futile reading anything into a trade that would only service a few good sized-pubs, but for the heck of it, let's toss some thoughts around.

If this really does represent an "up yours" gesture from Indonesia to Australia, it says two things - Indonesia genuinely wants to dilute its dependence on Australian beef; and that it doesn't have many options.

It's not news that Indonesia would like to lessen its dependence on Australian cattle. Politics aside, it's not healthy for an rapidly developing economy to be sourcing an essential commodity from a single source.

But if Indonesia wants to import beef with a low disease risk of (it does), from a country with rigorous supply chain quality and traceability systems (ditto), and from a market that's reasonably close (likewise), what are its options?

Australia and Japan. And because Japan is so full of people and rice fields that there isn't much room for cattle, that leaves Australia.

(Animal welfare activists who want to offshore their concerns about beef production should take a closer look at Japan. "Freedom to roam" is a luxury for most Japanese cattle. Sometimes, as with a dairy I visited, cows are tied to a pole most of their working lives.)

If Japan doesn't represent much of a threat to Australia's cattle trade to Indonesia, sledgehammer politics does.

Indonesia wants to be treated with the dignity befitting a nation that has spent decades building a new identity following Dutch colonialism, and which is now developing into one of the world's top economies.

Decanting illegal refugees into lifeboats and pushing them back onto Indonesia is not an act of respect. If the "turn back the boats" situation was reversed, Australians would not be applauding Indonesia's steely resolve to address its refugee problems.

Hopefully, business pragmatism will operate independently of political pointscoring on both sides of the water.

This will be a watershed year for the live cattle trade.

Australian politics, an Indonesian election, and Indonesia's tacit acknowledgement last year that it needs to import beef, and a lot of it, are all part of a brew that could turn out very well, or very badly.

If it comes out well, it could set up the Australian beef industry for a long time to come. If badly, the entire business will need a profound rethinking.

A matter of opinionA selection of editorials from around the Fairfax Agricultural Media group covering the issues of the week.


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