May 8, 2013

 

Indonesia plans to invest in Australian cattle stations

 

 

Indonesian businesses are ready to spend tens of millions of dollars buying or investing in Australian cattle stations as a delegation of officials will visit Australia next month to look at a number of stations.

 

The Indonesia Institute's Western Australia (WA)-based chairman, Ross Taylor, says the plan is to secure supplies.

 

"There's significant interest from Indonesia to secure their supply chain to ensure there is long term supply of meat into their market, which has a middle class now approaching 80 million people," he said.

 

"Essentially they would be interested in buying properties but the preference, we feel, would be an investment would be a better way to go where they form a partnership with an Australian company."

 

Indonesia was buying cattle valued at US$320 million a year from Australia when the federal government banned live exports in June 2011 after the ABC broadcast footage of animal cruelty. Taylor says the ban sent shock waves through Indonesian officials and businesses.

 

"I think they were completely dismayed when Indonesian officials found out from a local newspaper that the Australian Government had banned the export of cattle. It really sent shock waves through not only the industry, but the government of Indonesia as well. It was not handled well and what we are now seeing is Indonesia trying to ensure that there is never again a repetition of these actions."

 

In the wake of the incident, Indonesia retaliated by slashing its imports of Australian cattle in half which crippled the operations of some pastoralists. It also threatened to increase its own supply of beef production but Taylor says that is highly unlikely.

 

"The reality is that despite the desire to be self-sufficient in cattle breeding in Indonesia it simply cannot happen," he said.

 

"Indonesia should not be looking at turning some of the pristine food growing areas in the world into land for breeding cattle. That is better done in Australia and let the food growing take place in Indonesia."

 

WA Pastoralists and Graziers Association president Rob Gillam is welcoming potential foreign investment in northern cattle properties.

 

Gillam says investing in WA's cattle industry should give Indonesia a voice on Australia's live export policy.

 

"They would like to probably have investments in Australia which gives them a lot stronger toe-hold to be able to then have a bit of a say in government policy in Australia as to live export," he said.

 

Taylor says the plan could be a lifeline for struggling pastoralists. "Our cattle industry is in absolute crisis," he said.

 

"If this investment was to come it could certainly save a number of families that have been completely devastated by a combination of events, but particularly led by the loss of something like half a million cattle a year going to Indonesia."

 

He says the delegation will visit stations in Western Australia and the Northern Territory.

 

"Indonesia is interested in taking a stake in cattle operations where they can bring their expertise, combine that with Australians which means it's a classic win-win for both countries," he said.