Australia's lucrative live cattle exports to Indonesia is under question, after a shipment of more than two-thousand Australian cattle was last weekend declared to have an invalid import permit. Australia denies there was a permit problem but Indonesia's agriculture ministry has warned Australia not to treat Indonesia's customs laws lightly. Australia's main meat and livestock organisation says the action was political and is seeking more certainty from Indonesia to protect what it says is a mutually advantageous trade.
Presenter: Linda Mottram
Speakers: Suswono, Indonesia's agriculture minister; Allister Lugsdin, Meat and Livestock Australia; Dayan Antonius, Indonesian Meat and Feedlot Producers Association
MOTTRAM: Australia's live cattle exports to Indonesia were worth 480 million Australian dollars last year with 770,000 head shipped. Ninety per cent of cattle produced in northern Australia are destined for Indonesia. Once there, the animals are fattened in Indonesian owned commercial feedlots and traded further. The major Australian industry body, Meat and Livestock Australia, calls it a mutually beneficial arrangement. But when a ship carrying more than two-thousand cattle arrived at the port of Tanjung Priok recently Indonesian authorities said the import permit covering the animals wasn't valid. Officials stress the animals were quickly offloaded and placed into quarantine and are receiving proper care. But the case has highlighted Indonesia's concern that their market is being flooded with imports, as the country's agriculture minister Suswono explained to Radio Australia's Indonesia service.
MOTTRAM: The demand for imports last year reached 1.1 million cattle, and we imported about 600,000, when the real need is only 400,000, the minister said.
MOTTRAM: We are trying to limit the amount of imported cattle into Indonesia, he said. We had a moratorium. Since April we've opened up again, he said, but again the volume is being limited because local farmers have protested about falling prices for their product.
Australia's government is aware of the issues and says it respects the desire of Indonesia to refine its import system. But there's also concern the uncertainty now being created will damage the industry, with implications some fear for Indonesia's food security, as well as for Australia's export earnings.
Australia has made representations to Indonesian officials in Jakarta. The issue was also raised during talks in March between the Australian and Indonesian agriculture ministers.
The industry though continues to have concerns. Allister Lugsdin is from Meat and Livestock Australia.
LUGSDIN: The market in Indonesia is soft as we'd say at the moment. There's a large number of cattle in the market and local cattle prices have dropped and the minister has made statements that he's trying to help the local farmers so yes there is politics involved. Australian industry is looking for some certainty on the availability of import permits and for them to be able to plan ahead, to get their ships right to get the cattle ready and to export to the market. So there's some uncertainty being created over this issue of the import permits.
MOTTRAM: Uncertainty is compounded by the tone of an Indonesian agriculture ministry announcement that those in the industry should not treat Indonesia's customs laws lightly. The ministry also announced an inspection of local importers, a decision backed by Dayan Antonius from the Indonesian Meat and Feedlot Producers Association, who also spoke to Radio Australia's Indonesia service.
MOTTRAM: A firm step needs to be taken for any violation, he said, going on to call for fair play between stakeholders.
In the specific case of the shipment stopped recently, Australia has backed the industry's position that the exporter involved acted in good faith, having no reason to suspect the import permit might not be valid. And Australia says Indonesian authorities will now work with the importer to resolve the issue.
In the meantime, Australia will raise the wider questions at the annual meeting of officials and industry representatives from both sides that's taking place in Darwin next week. Meat and Livestock Australia's Allister Lugsdin again.
LUGSDIN: This'll be an opportunity for us to explain and put a case to the Indonesians about the need for some certainty and planning and to emphasise the close relationship our northern industry has with the Indonesian buyers and Indonesian market and we'd just like that to continue in a way that people can plan ahead.