Indonesia making Aus farmers pay

11 Mar, 2013 01:00 AM
Comments
8
 

ONE of Australia's most respected and insightful Buddhist leaders, Abbot Ajhan Brahm, once said that the problem with seeking revenge is that you become a "victim of your own war", in that you can often suffer as much "damage" as the person to whom you are directing your revenge.

It was good advice and something we all, at sometime, have been guilty of intentionally forgetting.

It is also advice that is ironic given that Ajhan Brahm is highly admired and respected in Indonesia, where he holds many seminars and retreats, at a time when Indonesia's agricultural officials are seeking and carrying out revenge on Australia's cattle industry for our appalling handling of the live-cattle export crisis in 2011.

As the Indonesian Government recently announced further reductions in the quota for live cattle from Australia, the cattle industry in Australia continues to slip further into despair with numerous stations now up for sale.

Australian Agricultural Company managing director David Farley said recently that the reduction in quotas by Indonesia would result in even greater bankruptcies and job losses for an industry already in serious trouble following our government's impulsive decision to ban the export of live cattle to Indonesia.

The impact of these latest cuts will be dramatic.

Prior to the cattle ban being imposed last year, Australia exported in excess of 520,000 head-of-cattle to Indonesia annually.

This year the revised annual quota will be reduced to just 230,000.

Notwithstanding the appalling treatment of these animals, Indonesia had every right to feel aggrieved over the handling of this issue.

Beef makes up a very important part of the Indonesian diet, and to have the Australian agriculture minister announce a total ban on the export of live cattle to Indonesia without any consultation with our near neighbour sent shock waves through the entire supply chain and left Indonesian officials and ministers embarrassed and seething.

It also played into the hands of 'special interest groups' within the power elite of Indonesia who have, for many years, looked for a valid reason to kick Australian suppliers out of the lucrative Indonesian meat market.

As a result, Indonesia announced that it intended to become 'self sufficient' in live cattle that can be used for slaughter.

This maybe a noble objective but it is also not achievable, and nor is it sensible.

Indonesia has some of the finest horticulture land in the world; rich soils with plenty of rainfall along with warm and humid conditions that allows its people to grow a huge variety of crops and effectively become Asia's food bowl.

It does not make any sense to turn over pristine food growing land for the purpose of breeding cattle.

Those in the cattle industry have known for years that, as the outgoing WA trade director, Martin Newbery said last month, "Australians are the best cattle breeders and Indonesians, the best cattle feeders." He is right.

For this reason, to have cattle bred in Australia, where we have the land, infrastructure and expertise, then export them to Indonesia where they are placed in feedlots and 'bulked-up' not only makes sense, it is almost the prefect supply chain structure whereby all parties win.

The Australian live cattle trade should be booming on the back of Indonesia's strong economy and population growth, with the industry being used as a model for the development of other major agricultural partnerships between Australia and Indonesia.

Instead, we now have a relationship that is untrustworthy and fractured, where Indonesia seeks to 'payback' Australia for what it did to a trusted friend, while simultaneously harming its own supply network and inflicting shortages and increased prices on its own community.

The price of beef at the wet markets within Indonesia has effectively doubled since the quota reductions in Australian beef as Indonesia struggles to meet demand from its internal supplies and the black market is booming.

So why does Indonesia now want to reduce the quota of Australian cattle even further?

The answer is complicated but includes Indonesia's desire to be self-sufficient in beef supply and thus ensure Australia can never again hold Indonesia to ransom by cutting off a major food supply source without warning.

But there are other more darker reasons behind Indonesia's actions, including self-interest groups seeking to make enormous profits from such a ban, the rise of nationalism and a distrust in some quarters of Australia's agenda in developing the much lauded Comprehensive Economic Partnership Agreement (CEPA) that will provide both countries opportunities to develop far greater business and trade opportunities.

What is even more disturbing however, is that Australia's Agriculture Minister, Joe Ludwig seems helpless in addressing this progression into mutual economic self-harm at a time when Indonesia-Australia government relations are said to be at an all time high.

Within Indonesia, the internationally popular president Susilo Bambang Yudhoyono is nearing the end of his term.

This is unfortunate timing for both countries as SBY- as he is affectionally known - has a deep and warm respect for Australia, but internally Indonesians see SBY as a president who has already 'run his race' and perhaps what we are now seeing is a small taste of things to come as Indonesia heads towards electing a new president in 2014.

There exists significant opportunities for our two countries to work together to build extensive and mutually beneficial partnerships as we move into 'The Asian Century'.

The live cattle export industry should have been an example of how we can develop these partnerships, yet sadly this industry has become an example of what can go terribly wrong when international diplomacy is conducted 'on the run' by a minister who had little understanding of Indonesia or the extent of the long-term opportunities that would be lost as a consequence of his impulsive decisions.

Meanwhile, Indonesia continues to remind Australia about what it did and to seek revenge for the shabby treatment from its neighbour; even if this means higher prices and shortages for its own people.

This is one trade outcome where everyone loses.

p Ross Taylor is the chairman of the WA-based Indonesia Institute (Inc) and a former national vice-president of the Australia-Indonesia Business Council

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READER COMMENTS

jaydin
11/03/2013 5:23:42 AM, on The Land

It's somewhat extreme to say that the Indonesian government is carrying out "revenge" on Australia's cattle industry. If they wanted to beef could be sourced from other markets. The fact is that Australia still makes up the bulk of imports to Indonesia, just total permitted volumes are lower. They could have issued quotas to other countries - but didn't do this.
agribiz
11/03/2013 7:01:29 AM, on Queensland Country Life

This makes no commercial sense. A short trip and our cattle enter the Indonesian value chains. They may get stock from NZ and South America, but the Kiwi animals will not be acclimatised and the SA stock has to be shipped vast distances. Superficially, these animals from distant supply bases will cost more to finish and may present comparative quality issues. Then there is a disease risk for the whole region. Finally, there’s the potential of losing a well established supply channel and damaging our regional relationships, which have been built on defending and helping our neighbours.
Deregul8
11/03/2013 8:52:36 AM, on Farm Weekly

Make no mistake, OUR GOVERNMENT has declared war on meat producers. They are simply following global agenda to reduce meat consumption and move more land into grain production. The world can't afford the 3rd world to develop a taste for meat.
Sodbuster
11/03/2013 11:28:16 AM, on Queensland Country Life

Deregul8 writes - "...The world can't afford the 3rd world to develop a taste for meat" Seems cattle are the go... "Imagine, shooting 40,000 elephants to prevent the land in Africa from going to desert because scientists thought the land couldn’t sustain them, only to find the effort was for naught and the idea as to why was totally wrong. That alone was a real eye opener..." http://wattsupwiththat.com/2013/0 3/08/a-bridge-in-the-climate-deba te-how-to-green-the-worlds-desert s-and-reverse-climate-change/ (cell grazing redux)
The Serf
11/03/2013 12:27:57 PM, on North Queensland Register

Lets put this into perspective;Its ESCAS that's the issue; here we have Government and a Minister who has extended the arm of the Australian Government to “Prescribed” Licensed Live Export Companies to apply, enforce and administer a set of Australian Government Regulations, on behalf of the Australian Government under the Export Control Act, an Australian statute, to extend that Regulation so that it controls business and the internal affairs of a foreign country(s), inside that foreign country(s), way outside of the territorial limits of Australia. That's why the export to Indo ceased!!
Ted O'Brien.
12/03/2013 5:58:06 PM, on The Land

It would be a big mistake to asssume that consumers rule in the Indonesian marketplace. The scarcity caused by removing this beef from the Indonesian marketplace would cause prices to rise which in turn would enable traders to increase their margins. Don't expect this new problem to go away. Appeal to Indonesia's consumers, not to their traders.
JB
13/03/2013 3:20:42 AM, on The Land

How very sad for those producers in the north of this country to again be kicked in the teeth. The Australian Government has a lot to answer for with their irresponsible actions right at the beginning of all this debacle.
Fairsnotfair
13/03/2013 2:56:08 PM, on The Land

@ deregul8: The most effective way to increase grain production is to make the returns to growers higher. This will make grain growing more attractive & cattle growing less than it is now. Raise grain prices to at least above production cost.

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