Indonesian live cattle cut-backs no surprise to Australian Government: Australia subsidises its future competitor

Posted by AFN Staff Writers on 16th December 2011

The announcement yesterday by the Indonesian Government of drastic cuts to the live cattle export quota from Australia in 2012 should come as no surprise.

The Australia Government and its industry partner Meat & Livestock Australia (the MLA) have been providing technical assistance to Indonesia’s growing beef feedlot industry for some time.

The Indonesian Government has announced it is halving the quota of Australia’s live cattle exports to 280,000 cows in 2012. Indonesia intends to shut down the whole trade by 2014 under its national food self-sufficiency program.

The export cuts are a blow to Australia’s A$8 billion beef industry, which is a major contributor to the Australian economy. In 2010, 60 per cent of all Australian live cattle exports were to Indonesia.

Australian producers subsidising competing Indonesian feedlot operators

Australian beef producers, through their industry contribution to the MLA have, in effect, been subsidising the MLA’s program of technical assistance to their competitors.

The MLA is a producer-owned company which promotes and provides research for the meat and livestock industry in Australia. It works in partnership with the Australian Government. That partnership has become involved in providing the technical assistance to the Indonesian beef industry, despite knowing the clear adverse consequence this would have for the Australian industry.

In June 2011, in an interview with ABC Radio, CSIRO’s Chief of Livestock Industries, Professor Alan Bell said that the MLA had been “very active” in providing technical support to Indonesia feedlot operations.

Meat & Livestock points out on its website that, since 2009, through its live export program, it has been “providing assistance to Indonesia’s beef industry in the form of upgrades to infrastructure, feedlots and processing facilities to help Indonesians produce their own meat”.

Executive Director of the Cattle Council of Australia, David Inall told Australian Food News today, “We’ve known for some time that Indonesia is looking towards being self-sustainable in beef production. However, the cuts are deeper than expected.

“As a country with a lot of experience with cattle we’ve been a good a neighbor to Indonesia. We still believe that Australia does have a role to play in helping Indonesia move towards self-sufficiency,” Mr Inall said.