Indonesia optimistic on trade and cattle quotas

But both countries have backed the industry’s future and ongoing importance, despite recent moves by Indonesia to improve self-sufficiency and ease local price pressures, by allowing buffalo meat imports from India.

Australian Trade Minister Steven Ciobo visited Jakarta this week to increase momentum on potentially signing the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) by the end of 2017.

Mr Ciobo spoke to media after the trade talks along with the new Indonesian Trade Minister Enggartiasto Lukita and the man he replaced, Thomas Lembong.

Mr Lembong – who was also central to the negotiations held last year aimed at implementing an annual cattle quota system - is now Investment Coordinating Board Chair.

Asked about introducing annual quotas for live cattle imports, Mr Lukita said, “Yes, yes we are going to see re: quotas”.

“We calculate how much (the quota is) because we have to get the data and evaluate the data, how much we can have from Australia,” he said.

Mr Ciobo said the conversations held between the senior government officials yesterday indicated that Indonesia and Australia would keep working closely together on the beef and cattle trade.

“In relation to beef cattle, Australia unfortunately, several years ago, I think made a very politically misguided decision when we stopped live cattle exports,” he said.

“The government that I’m a member of has worked to restore that relationship and we’ve taken it forward together strongly.

“So, I’m very confident that we’ll be able to continue to work to the mutual interests of both Australia and Indonesia into the future.”

Indonesia has reportedly started importing boxed and frozen buffalo meat from India this year which will test the local market in view of expanding future supplies, competing against the quality of Australian beef.

But past concerns have also been ventilated about live Indian buffalo being sold into Indonesia, sourced from areas where foot and mouth disease is present which could pose a threat to Australian biosecurity standards.

In 2014-15, Indonesia was Australia’s largest live cattle export market importing about 746,000 head or 54 per cent of the 1.38 million exported for that financial year, valued at $601 million.

But business stability has been tested by political argument at both ends of the export supply chain in recent years, played out in cattle permits.

High local beef prices in Indonesia, and political concerns waving between the interests of consumers and farmers, have proved to be almost as sensitive and volatile as animal welfare considerations in Australia.

Asked about Indonesia’s plans on beef or meat supply ahead of the Eid al-Adha or Festival of Sacrifice next month, Mr Lukita said the, “simplest market law is supply and demand”.

“We will know exactly when we sit down with the Minister of Agriculture and we consider the BPS (statistical) data, what our actual needs are which is the two things that Bapak President requested, society, stable prices and secondly, we also have to improve the economy of our society,” he said.

“We cannot harm it, we have to find a solution and there is definitely a solution.

“We certainly have domestic needs that we need to fulfil - from anywhere - and of course the priority is domestic.

“But we cannot close our eyes and we have to be realistic about all of it.”

On the back of the Jakarta visit, Mr Ciobo also announced the expansion of the Skills Development Programme under the Indonesia-Australia Partnership on Food Security in the Red Meat and Cattle Sector.

He said the short courses delivered under the program had proven to be “incredibly successful” at strengthening bonds between the two countries in the red meat and cattle sector.

Mr Ciobo said last year 70 Indonesians were trained in the cattle sector in Australia through short courses run by Australia Awards in Indonesia and the Northern Territory Cattlemen’s Association Pastoral Industry Student Program which will hit 86 this year.

He said next year the number will be expanded to at least 100 and the government would commit at least $2 million to ensure that happens.

“This demonstrates we are committed to increasing the level of cooperation with the Indonesian red meat and cattle industry and to help in whatever ways we can to improve Indonesia’s capacity in this important sector,” he said.

“Past graduates of the Skills Development Programme have been highly sought after by employers in Indonesia, including by Indonesian industry and government, as well as Australian-based companies operating in Indonesia.

“The programme has delivered significant and ongoing mutually beneficial outcomes for our cattle industries.

“We look forward to continuing our close working relationship with the Indonesian red meat and cattle industry, and to build on this even further by strengthening our broader trading relationship through the IA-CEPA.”

Mr Ciobo said his first trade related travel in the new government was to Indonesia as he wanted to prioritise concluding the IA-CEPA.

“I'm finding that there’s a lot of goodwill on Indonesia's part, as there is on Australia's part towards being able to secure, we hope, this comprehensive agreement in the very near future,” he said.

Mr Lukita said Indonesia was also “optimistic” the trade deal could be completed in 18-months.

According to ABARES, Australian agricultural exports to Indonesia were valued at $3.385b for 2014-15, up from $3.046b the year before.

That total comprised; $1.423b for grains, oilseeds and pulses; $519m for sugar; $214m for dairy; $136m for cotton; $233m for beef and veal; $75m for horticulture; and $1.201b in overall livestock exports.

Assistant Minister for Trade, Tourism and Investment Keith Pitt also visited Port Moresby to discuss with ministers and business leaders in Papua New Guinea ways to enhance trade and investment links.

He said in 2015 Australian investment in Papua New Guinea was $18.4 billion and two-way trade totalled $4.7 billion.

“With a strong background in agriculture, small business and engineering before entering politics, I am keenly aware of the opportunities for jobs and economic growth available to Australia through increased trade, tourism and investment with our neighbours near and far,” he said.