November 27, 2013
A recent international scandal involving allegations of Australian spying activities on Indonesian officials, including the nation's president, Susilo Bambang Yudhoyono, will not have a significant impact on both countries' cattle trade, according to Alison Penfold, the chief executive of Australian Live Exporters Council (ALEC).
Penfold's comments came even as Indonesia's trade minister, Gita Wirjawan, announced that the country is considering the reduction of Australian beef imports in the wake of controvesial revelations.
"At the end of the day, we're a bunch of businesses exporting cattle to Indonesia," Penfold said. "We shouldn't be used as a litmus test for diplomatic relations between Australia and Indonesia."
She also added that there has been no discernible effect being reported on cattle businesses.
Meanwhile, federal agriculture minister, Barnaby Joyce, declared that Australia remained committed to strengthening ties with Indonesia on the beef cattle trade, despite diplomatic strains. He stated the importance of the ASEAN member state as a market for live cattle exports and other Australian commodities, and the crucial task of strengthening the market for producers, especially in northern Australia.
Earlier, Joyce had spoken of a visit to Indonesia to follow up an earlier visit by Prime Minister Tony Abbott, building on the momentum gained over recent months with announcement of a quota for 75,000 more slaughter cattle.
However, after ongoing discussions with Indonesian counterparts, Australia has agreed, due to current circumstances, to postpone the proposed visit, according to a spokesman for the minister.
Revelations of the spying incident have seriously hampered the relationship between Indonesia and Australia as President Yudhoyono suspended military and intelligence cooperation with the latter.
In addition, state-owned Indonesian firm, RNI, has halted talks with the Australian cattle industry last week, with chief executive Ismed Hasan Putro announcing that the suspension will stay until Canberra issues an apology to Indonesia. Prime Minister Tony Abbott had sent a letter of explanation to President Yudhoyono in an effort to restore diplomatic ties.
Presently, communications between the countries over broader bilateral trade issues had ceased, trade minister Wirjawan revealed. Multilateral forums, such as the World Trade Organisation, are possibly the only available channels for discussions for both parties.
Wirjawan had also called for the Indonesian parliament to consider the adjustment of legislation, allowing Indonesia to import beef from other countries. Although the country has provisions which restrict imports from countries where diseases like the foot and mouth disease exist, the minister is confident that the country can negotiate around such limitations, referring to Malaysia's importations from unaffected parts of India as an example.
According to Wirjawan, India and Brazil are among some of the possible sources of beef supply, in replacement of Australia. Agriculture minister Joyce said that he respects Indonesia's right to choose its source of food imports even as he plans to continue promoting Australia as a reliable exporter of live cattle and food.
Indonesia is a major importer of wheat, live cattle and beef from Australia which is also the former's tenth largest export market. Australia, which is free of foot and mouth disease and the number three beef exporter in the world, reportedly has a live cattle exports trade worth US$174 million yearly.
Canberra had previously suspended cattle exports in 2011 after a video footage exposed the harsh treatment of animals in Indonesia. While the ban was lifted, Jakarta imposed restrictions on Australian beef and cattle imports in an attempt to become self-sufficient.
Eventually, the policies began to have an adverse effect on both sides. Shortages and higher prices were reported in Indonesia, while Australia's northern cattle industry suffered a continual crisis due to weak meat prices, plunging land values and a drought which occurred last summer.
In July 2013, Indonesia was considering the acquisition of Australian cattle estates to secure meat supplies and promote ranching skills. The planned investment, which happened during the remaining term of Australian PM, Kevin Rudd, was expected to improve ties between Jakarta and Canberra.
