Live export still high risk for farmers and animals

15 July 2015

We should not be too surprised that Indonesia has made a decision to cut imports of Australian cattle allowing only 50,000 head of cattle to be imported this September quarter, down from 250,000 in the June quarter.

All sorts of reasons will be advanced for this decision, including reasons related to the state of the bilateral relationship between Indonesia and Australia.  In reality Indonesia is just pursuing its own interests.

Among its national interests is its longstanding desire to become self-sufficient in cattle production, which it has determined as its ability to satisfy 90 per cent of domestic consumption from its own cattle herd, with only 10 per cent of beef requirements sourced from overseas.  An initial target date for this goal was set for 2005, which was then moved to 2012, and then again to 2014.

Reportedly President Jokowi Widodo said early in January this year, when making a cash grant to village cattle farmers in South Sumatra, ‘I want to have our own farming and not be dependent on imports” (Beef Central, 13 January 2015), following concerns expressed by the Ministry of Trade that the imposition of a reference price system that tied import levels directly to the price of beef in “wet” markets was not working and the issuance of quotas would be reviewed.

Self –sufficiency may indeed be possible but it is not likely to happen anytime soon.  ANZ modelling conducted in 2012 showed that Indonesia could achieve its target level of self-sufficiency in 2020 if the national cattle herd grew from an estimated 16 million in 2012 to 20 million in 2020, rising to 28.3 million in 2030, and if there were substantial improvements in productivity, including through increased rates of calving and reduced rates of calf mortality.

Indonesian producers have long argued for cattle to be produced in Australia and finished in Indonesia.  They have long had aspirations to become an exporter of beef, seeing Indonesia as a natural gateway for the export of Australian bred, Indonesian fed and processed beef, arguing the economics of Australian cattle shipped to Indonesian feedlots and processed in Indonesian abattoirs.  They have made it clear, as have Indonesian politicians, that they expect more direct investment from Australia to support this model.  Australian investors have responded cautiously to this “invitation”.

A risky business

Indonesia’s recent decision on live cattle imports vindicates World Animal Protection’s long argued view that that the live export trade is a high risk business – to livestock producers whose business models rely on foreign markets manipulated and controlled by foreign government for their own political purposes, and to the animals involved, who endure cruel sea voyages and often face an inhumane death, as has been demonstrated recently in Vietnam.  Destination countries are unable to ensure security of demand and when difficulties occur there are often no immediate alternatives.  And yet the same countries demand continuity of supply.  Who cannot remember Bahrain’s rejection in August 2012 of a consignment of some 20,000 sheep that ultimately were re-routed to Pakistan where they were subject to the most horrendous slaughter?

Add to this the risk of market trends, i.e. the long established pattern in developing countries where growing economies and rising personal incomes reflect in community preference for higher quality meat products sold in convenient ways in modern retail outlets.  Add again the growing awareness of animal welfare issues internationally by major food companies and retailers, who are themselves responding to pressure from their constituencies and stakeholders.  Is it any wonder that World Animal Protection and more and more people advocate for domestic processing in Australia of Australian animals and the export of meat in the form of boxed meat or carcasses, especially when it has been demonstrated that domestic processing creates employment and is economically better for Australia…………and more humane for Australia’s animals.