August 13, 2015


Miscalculated? Indonesia shelves beef self-sufficiency for now



Indonesia has bowed to market forces as it announced it would issue permits to import additional 50,000 cattle after beef prices soared to as high as 130,000 rupiah (US$10.16) per kilogramme in some areas including Jakarta from just the normal 90,000 rupiah ($6.56).


Chief Economics Minister Sofyan Djalil said late Monday that he had given consent for the state logistics bureau to import 50,000 live cattle as a "short-term" measure. The Bureau of Logistics deals with food distribution and price control.


Last month Indonesia announced it was cutting cattle imports from Australia during the period July-September to just 50,000, or 20% of the total number of heads imported during the previous three-month period, as part of its self-sufficiency program. Australia, however, suspected that the drastic cut was an offshoot of the recent diplomatic spat between the two countries after Indonesia executed two Australian drug traffickers in April and Australian officials allegedly paid the crew of a people-smuggling boat to head back to Indonesia.


Indonesia's decision to cut cattle imports from Australia led to a steep rise in the cost of beef in the country, sparking public anger and triggering Indonesian butchers to start a four-day strike last weekend.


It was understood that the additional imports would be coming from Australia, which is the source of much of Indonesia's beef imports.


Bill Byrne, agriculture minister of the Australia's state of Queensland, who was visiting Jakarta, welcomed the announcement Tuesday, saying he was "very pleased that we've got an additional quota of 50,000 heads".


Alison Penfold of the Australian Live Exporters Council said the issuance of the special permit to import was nothing new as this also occurred last year and in 2013. "This isn't new… Releasing permits on a spot basis and expect exporters to fill it within weeks is a big logistical challenge", she said as she batted for annualised permits.


The Indonesia Beef Association, meanwhile, described as "miscalculated" the government's policy on beef self-sufficiency, which includes the slashing of cattle imports. Ilham Akhmadi, chair of the association's Yogyakarta chapter, claimed that Indonesia's cattle population had shrunk by 30% over the past two years, as farmers have slaughtered breeding and even dairy cows to fulfill domestic demand.


When Indonesian Trade Minister Rachmat Gobel announced the reduced live cattle quota last month, he said 50,000 was enough to supply the market for the next three months (October-December) while the local stock was being counted. (Latest reports said Gobel was relieved from his post by Indonesian President Widodo on Thursday, August 13, and replaced by Thomas Lembong.)
Indonesia is the No. 1 importer of Australian live cattle. Last year Australia's cattle exports to Indonesia rose 63% to 730,257 head.
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