Tony Abbott vows to get beef trade with Indonesia back on track

http://www.theguardian.com/world/2013/oct/01/abbott-vows-boost-beef-trade-indonesia

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Tony Abbott has pledged to get Australia's beef trade with Indonesia back on track after Labor's decision to shut down live cattle exports, insisting that Indonesian abattoirs were "quite comparable" to those in Australia.

The prime minister also welcomed the "desire to invest in Australia – including in agriculture", after reports that Indonesian state-owned enterprises were looking for 1.5m hectares of grazing land in northern Australia, in part to stabilise their beef supply chain.

Abbott's strong statement could cause ripples among his National party colleagues, notably his agriculture minister, Barnaby Joyce, who has flagged his opposition to foreign state-owned enterprises buying Australian agricultural land.

But Luke Bowen of the Northern Territory Cattlemen's Association welcomed the high-level trade talks and said live export numbers continued to rise, with the total numbers of live cattle sent to Indonesia expected to reach 300,000 this year, from a peak of 750,000 in 2009 before the 2011 suspension.

Live cattle exports were suspended for a month in 2011 after a Four Corners report showed footage of the mistreatment of animals in Indonesian abattoirs. The then Labor agriculture minister, Joe Ludwig, placed conditions on export permits but the affair caused the Indonesian government to reassess its reliance on Australian beef.

The ban sparked a supply crisis among cattle producers in northern Australia, as the industry was then geared to supply 500,000 cattle a year to Indonesia. The industry is still recovering from the crisis and the subsequent drop in prices, which has been exacerbated by drought in Queensland.

"Indonesia doesn't have a capacity to breed cattle cheaply and efficiently but they can fatten, whereas we can breed but we can't fatten so there is a natural synergy," Bowen said.

"The reverberations from the live cattle suspension continued to rattle through the system. It caused a plunge in cash flows, with falling land values and increased debt levels. It is a potent mix, which left a lot of properties officially or unofficially on market.

"Right now a kick in trade will bring more confidence."

Bowen said there was a beef crisis in Indonesia with the price of food pushing up inflation.

Livestock agent Tony Bowen (no relation) of Landmark, in Charters Towers in north Queensland, said there had been increased activity out of Townsville in the past 10 days, including two shipments of 4000 cattle to Indonesia and one shipment of 2800 cattle to Malaysia.

"It's hard to say what's normal, but we have had three boats in a month and the first boat before that was in January."

Bowen said the increased release of export permits, on-going negotiations between importers and exporters and increased demand for protein were all contributing to the steady rise in trade.

In his first overseas visit, the prime minister told a business breakfast in Indonesia on Tuesday that the rise in the middle class and the increasing demand for protein could create opportunities for Australian cattle producers and Indonesian beef production facilities.

"We can work together – but it will take some effort, especially after the shock of the former Australian government cancelling the live cattle export trade in panic at a TV programme," Abbott said.

"Nothing like this can ever be allowed to happen again.

"Last year, I visited abattoirs in Indonesia which were quite comparable to those in Australia and reject any notion that Indonesian standards are lower than Australia's."

Abbott said Indonesian growth would continue to improve beef consumption in the world's third largest democracy, where there were still 100 million Indonesians living on less than $1000 a year.

"Within two decades though, there will be 135 million middle class Indonesians whose demand for goods and services – including financial services, health services, educational services, infrastructure and food – will be backed by purchasing power," Abbott said.

Within the next two years, Indonesian beef consumption is expected to exceed domestic production by about 21,000 tonnes a year.

The chief executive of the National Farmers' Federation, Matt Linnegar, said both countries were working to grow red meat consumption so there were increased opportunities for Indonesia and Australia.

"We can grow the live cattle trade and the boxed meat [processed] trade from our end, from their end boost their capabilities in production and processing. Ideally all three can happen at the same time."

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