Most Read Contributor in Australia, September 2016
The Australian beef industry has been buoyed by the recent news
that Indonesia will more than double Australia's quota of live
cattle imports over the next quarter (amounting to an extra 53,000
cattle), a move which has been called "vitally important for
Australian agricultural outcomes" by federal Agriculture
Minister Barnaby Joyce.
The announcement closely follows an Australian delegation to
Indonesia led by Prime Minister Tony Abbott and has restored a
sense of optimism to the sector after the previous Government's
ban on live cattle exports to Indonesia in 2011 (triggered by
public concern over practices in Indonesian abattoirs) led to
Indonesia subsequently imposing tough quotas on Australian cattle
once the ban was lifted.
Prior to the Gillard Government's ban, Australian cattle
exports to Indonesia numbered up to 600,000 head of cattle
annually, but once the ban was lifted, Indonesia responded by
applying quotas on Australian cattle, limiting live export numbers
to about 260,000.
Beef prices are continuing to soar in Indonesia, and with
domestic consumption expected to exceed production by 21,000 tons
per year within 2 years, Australia's beef industry would likely
benefit substantially if quotas continue to rise, or are removed
The recent increase in the quota coincides with the Indonesian
Government revealing its intention to secure Australian land to
breed its own cattle and Santori, Indonesia's biggest importer
of live cattle, buying two of the Northern Territory's most
well known cattle stations (comprising more than 5,500 square
kilometres of pastoral land and 40,000 cattle).
In relation to the former, federal Trade Minister Andrew Robb
has commented that the Indonesian Government should consider joint
ventures as a good way to learn more about the industry from local
farmers, and in relation to both, this has lead (as to be
expected), to further debate on foreign investment, to which Craig
White, the CEO of Australia's biggest beef producer, AACo, has
commented that the beef industry "needs foreign
investment" given that the "pools of capital that are
available [in Australia] are limited". Keith Warren, the CEO
of Consolidated Pastoral, Australia's largest exporter of live
cattle to Indonesia and who holds property near the
Santori-acquired land, has stated that the agricultural house is
"very supportive of [the] transaction".
Tony Abbott has also noted that restoring the cattle trade with
Indonesia meant an inevitable increase in foreign investment in the
Australian agricultural sector, which would be welcomed by an
Abbott Government so long as foreign investment criteria were met.
While the Government has announced its intent to move towards
lowering FIRB thresholds, it has also reiterated that Australia is
very much open for business.
Calls have also been made for Australia to establish a beef
industry taskforce to ensure that Australia capitalises on the boom
in global demand for protein. The country only consumes about
one-fifth of total beef produced and given the excellent reputation
of Australian beef abroad, Australia is in prime position to take
advantage of the beef boom.
Indonesia is an integral part of the Government's plan for
Australia to become the "food bowl of Asia" and both
countries stand to gain if restrictions are eased.
Meanwhile, Western Australia is set to commence exporting cattle
to Zhejiang province in China after the signing of a deal involving
a joint feasibility study, but which could see beef cattle
shipments from WA start as early as next year. Australia's live
cattle exports to China in recent times have predominantly been
dairy cattle. Exports of Australian beef to China have grown almost
1,000% over the past 12 months and the ground-breaking WA-Zhejiang
deal could lead to similar agreements with other Australian states
and territories, and encompassing other livestock including
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