AGRICULTURE and Food Minister Ken Baston is proposing to send 10,000 breeding heifers to Indonesia in return for a quota of 500,000 head of trade cattle.
The plan would see $5 million in breeding cattle sent to help lift Indonesia's domestic cattle herd.
The heifers would be part of a managed program on the remote eastern islands of Indonesia.
"We need cattle trade aid, not food aid," Mr Baston said.
"A new trade relationship approach is needed with Indonesia."
Mr Baston said 40 million farmers and one in three voters in Indonesia have strong links to the land.
"There is very strong political support for their farmers which translates into strong protectionist tendencies and a push for self sufficiency," Mr Baston said.
"The old model of us sending cattle and them sending us US dollars has gone."
Indonesia gets $650m in aid each year and that could be boosted even higher with Kevin Rudd's promise of $60m to bolster Indonesia's domestic beef industry.
In May, Queensland farmers also proposed that the Federal Government buy 100,000 cattle to assist with drought and give them to Indonesia.
But Mr Baston said Indonesia did not want more aid.
"They are proud people, they want trade and agricultural self sufficiency," he said.
"My job is to find a new diplomatic solution that will suit both countries."
If Mr Baston's plan works it would be a major political coup for him and the Barnett Government.
"As more of their 245m people get to be able to afford beef and dairy they will increase their demand from their current 2kg per person towards Australia's 30kg," he said.
"Australia currently has double the number of cattle, 30m compared to Indonesia's 15m.
"If Indonesia doubled their current consumption, which they will do by 2020, they won't have enough land to breed enough cattle to satisfy demand.
"They will either continue to restrict trade which is resulting in illegal imports from other countries, or they will import cheaper boxed beef from the United States and Brazil."
Mr Baston said WA would even consider supporting the program by funding 1000 head a year for the next three years if the Queensland, and Northern Territory governments and the Commonwealth also supported the program.
"For an investment of $5m a year we would be locking in a $250m a year business," he said.
"The facts are that to do business in Asia it has to be win-win for both countries.
"If we don't support their cattle industry they will simply continue to lock us out.
"Their Minister for Trade and Agriculture were very clear they want two-way trade, or investment or support.
"If we play this smart we can be inside the paddock trading cattle, grains and dairy but if we play it like Canberra...there will be a padlock on the gate."
- Last week, it was also announced that permits were issued for 12,000 head of cattle, as part of the 25,000 head increase in live cattle import permits announced two weeks ago.
