TWO live cattle importers are banking on forecasts Indonesia will need to accept 1 million head by 2017 to supply the country’s rising population and increasing affluence.
Greg Pankhurst and Dicky Adiwoso, who have run a feedlot business in Indonesia for 21 years, told delegates at BeefEx on the Gold Coast yesterday that simple supply and demand would require more live cattle to the archipelago over the next five years.
Their assessment comes after last year’s month-long suspension of shipments to Indonesia over animal cruelty allegations and recently intensified campaigns by animal activists in concert with the Greens and several Labor Government MPs to have the trade banned.
The two men admit they are locked in the fight of their lives to resurrect their business and remain angry at ABC Television and the Australian Government for igniting the furore and undermining the beef supply chain and eroding diplomatic relations with a close trading partner.
“For Indonesia it was shock, humiliation and anger,” Mr Adiwoso said.
“How could a trade partner do this to us, especially when we built a trade that benefits both countries? It is a bridge between rural life in Australia and rural life in Indonesia.”
The feedlot operation run by the two men in a joint venture with Australia’s Consolidated Pastoral Co was also featured in ABC TV’s now infamous Four Corners program ‘A Bloody Business’, which depicted harrowing scenes of animal mistreatment filmed covertly by animal activist operatives.
Mr Pankhurst said the ABC crew asked for permission to film their operation on the premise they were shooting a “good news story” about the live cattle trade. After careful consideration of their proposal the two men granted access to their facilities where an estimated 10 hours of footage was obtained.
When the program screened last year about two minutes of footage appeared in the final cut.
Mr Adiwoso said the reason the ABC used such a small portion of the footage was because they could find nothing wrong.
“They saw a typical feedlot with happy cattle converting agricultural by-products to protein for a hungry country,” he said.
“It’s a magnificent synergy which complements Northern Australia’s pastoral industry. At the time, we didn’t know that they had obtained footage of some Australian cattle being processed incorrectly in Indonesia.”
Mr Pankhurst said that while the live export business may take up to four years to salvage, the preference of Indonesian consumers for freshly killed beef meant the trade had a long and healthy future despite its recent troubles.
“Indonesia is a country with 260 million where only 15 per cent of the population have a fridge,” Mr Pankhurst said.
“Currently they consume about 2 kg of meat per year per capita. Even if they increase consumption by a kilogram that will require a significant increase in the supply of cattle, somewhere in the order of an extra 750,000 head.”
Mr Pankhurst and his business partner Mr Adiwoso were the first Indonesian based importers to receive cattle from Australia last year after the trade ban was lifted last July.
Since then they have received 22 shipments of 55,000 head of cattle for induction into their two feedlots at Lampung and Medan, both still operating well below capacity.
They estimate their business has spent more than A$1.2 million in infrastructure upgrades, staff training and other modifications, including the installation of closed circuit television at their 10 processing facilities to ensure their operations comply with international standards on animal welfare.
Mr Pankhurst said the biggest cost to their business was now compliance with Australian Government regulations, with audit fees this year close to A$250,000.
While they acknowledge the cost to their operations, the two men are also fully supportive of the Federal Government’s Export Supply Chain Assurance System (ESCAS), developed in the wake of the trade ban to appease a public outcry over the treatment of Australian livestock overseas.
Mr Adiwoso said the rebuilding of their business involved many “heart to heart” conversations with their Indonesian clients. He said some have since been dropped because they still refuse to stun their animals before slaughter citing religious and cultural reasons.
Mr Pankhurst said one of the biggest obstacles to reform in Indonesia was convincing people they had to adapt and change their practices quickly.
“We do not deal with anyone who refuses to stun their cattle and we will not tolerate anyone who breaches the new regulations in any way,” he said.
“The bottom line is that we have had to downsize our business to match those who are prepared to work with us while our costs have increased.
“But we still feel hopeful about the future. Indonesia is a massive market and they need our meat.”
BeefEx, the national conference of the Australian Lot Feeders Association, continues today. RSPCA CEO Heather Neil is due to speak this afternoon.