Cattle export quotas in focus

06 Mar, 2015 03:00 AM
ALEC's Simon Crean and Alison Penfold.
We understand, share and are committed to Indonesia’s objective of food security
ALEC's Simon Crean and Alison Penfold.

NEW Australian Livestock Exporters’ Council (ALEC) chair Simon Crean has urged governments to work on delivering greater business certainty for the Indonesian live cattle export market.

Mr Crean and beef cattle industry members held talks this week with Indonesia’s Ambassador to Australia, Nadjib Riphat Kesoema, about the uncertainty caused by recent reductions in beef import quotas.

In January, Indonesia announced it had approved import permits of 100,000 head of cattle for the first quarter of 2015; down from permits for 160,000 head issued for the same period the year before.

However, in the first half of 2014 about 350,000 head of cattle were exported from Australia to Indonesia.

The reduction also comes after last year's Indonesian elections resulted in the new administration headed by President Joko Widodo.

Trade is nervous

Mr Crean said the industry understood and accepted Indonesia’s push to deliver greater beef self-sufficiency but wanted to avoid sudden business disruptions in future.

“I think the trade is nervous because arbitrarily, the Indonesian government suddenly restricted the boxed beef market just before Christmas and also signalled, which has now come to fruition, it was going to reimpose some quotas on the live cattle trade,” he said.

“That in our view is going to lead to problems there (Indonesia) but also it certainly doesn’t add to the level of certainty here with investments.”

Mr Crean said the live export trade had been strengthened in recent times due to increased market diversity, with alternative selling points now being opened up.

But he said strong investment was still being made into the Indonesian market which required business planning certainty.

“We understand, share and are committed to Indonesia’s objective of food security,” he said.

“But we’ve really got to hammer the message that this objective can only be achieved if the integrated nature and the complementary nature of industries in both countries are allowed to continue and not be subject to suddenness and unannounced and unconsulted decisions.

“I think there’s a view that Indonesia has made progress on what they call the self-sufficiency stakes and there are real different interpretations to what the statistics show.

“I think it’s really important we get a solid factual base.

“But talking to the Indonesian ambassador, he (understands) they can’t just do it on their own just through their own resources and they require Australia,” he said.

“We’re prepared to contribute and assist but it’s very hard to get the commitment from industry if there’s no certainty.”

Bipartisan approach

Mr Crean was appointed ALEC chair last October and this week made his first trip to Canberra in his new leadership role.

His first return to the nation’s capital, after retiring from 23 years in federal politics, was in December 2013 to witness the first speech in the House of Representatives by his replacement in the federal seat of Hotham - Labor’s Clare O’Neil.

In the previous parliament, Mr Crean was Regional Australia Minister and has also held senior ministerial roles in Agriculture and Trade during Labor governments.

He said this week’s bipartisan briefings in Canberra arrived on the back of a recent visit to Jakarta with ALEC CEO Alison Penfold to review the live export industry’s progress in the Indonesian market.

Meetings were held with Agriculture Minister Barnaby Joyce, Shadow Agriculture Minister Joel Fitzgibbon, the Agriculture Department and the Indonesian Ambassador.

Big tick for ESCAS

Mr Crean said the visit also coincided with live export industry gaining a “very positive tick” via the first report into the Exporter Supply Chain Assurance System’s (ESCAS) performance which the Coalition handed down in January.

He said health protocols for the live cattle export market into China are still being worked out but it was “another exciting new market opportunity”.

“What it’s really saying to the industry here is, ‘there’s no doubt that there’s growing demand for a quality, nutritional and safe product that delivers protein into a growing middle class as incomes rise and diets change and therefore there’s strong demand not just for beef and meat but also dairy’,” he said.

“But if the demand is there the challenge for us is getting the supply part of the equation right too but that can only be properly done if we build certainty.

“So in terms of managing the Indonesian relationship at the moment, it’s about trying to re-establish that certainty at the same time as diversifying those markets.”

Industry lessons and initiatives

According to Meat and Livestock Australia (MLA) statistics, Australia exported 1.13 million head of live cattle in 2013-14 valued at $1.05 billion with Indonesia the biggest market, importing more than 624,000 head.

Ms Penfold said Indonesia announced import permits for 100,000 head of cattle for the first quarter of 2015 but the number likely to be issued for the second quarter remained unknown.

Despite some uncertainty in Indonesia, Mr Crean said the overall industry had transformed greatly since the Indonesia market was suspended due to animal welfare concerns, in mid-2011.

He said the industry was striving to overcome its social licence issues around animal welfare and also resolved its previous over-reliance on live cattle exports to Indonesia.

“Industry has learnt a couple of important lessons; firstly it has to deal with social licence and secondly it’s about diversification of the markets,” he said.

“But the opportunities that are there in Asia and us making a real contribution to the food security solution are exciting but they are not easy paths forward.

“However, if we can identify the objective and then deal with the problems we can overcome them.”

As Regional Australia Minister, Mr Crean was also actively involved in supporting the infrastructure needs of the Australian Agricultural Company (AACo) abattoir facility near Darwin, for building approval, which was formally opened by Prime Minister Tony Abbott late last month.

Mr Crean said the AACo facility was also “an important step” in the industry’s diversification strategy - post the 2011 Indonesian suspension - which he would be visiting in coming weeks to assess its operations.

He said the abattoir was also one of the initiatives of the Northern Australia Ministerial Forum which operated between 2010 and 2013.

“It’s good to see some of those initiatives come to fruition too,” he said.

Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media


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Why do they forget the small producers they are the backbone of the industry. What. Did this
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Good these guys will be able to help the farmers they are treating like second class peasants.
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Lets' hope Troy Grant doesn't Delforce's website or it will be yet another NSW