An expert in Australian-Indonesian relations has added his voice to warnings that this week’s quota announcements from Indonesia should not be seen as a major breakthrough in long-term gains for the trade.
Ross Taylor, the chair of the WA-based Indonesia Institute, said Australian politicians needed to be careful about “jumping the gun” in predicting that previous quota levels were close to being restored.
He said comments from politicians in relation to Indonesian quota announcements had indicated an understandable desire to see market access returned, but risked further undermining important long-term relationships with the region.
The mainstream media has widely reported Indonesia has made significant increases to beef and cattle import quotas this week, which followed the release of a media statement by federal trade minister Craig Emerson and federal agriculture minister Joe Ludwig on Tuesday.
However the reality of the announcement fall a long way short of substantial increases to quota at this point.
The new arrangements include the removal of quota restrictions on the relatively small trade in air-flown chilled prime cuts of beef for Indonesia’s high-end restaurant trade, the potential for increases in boxed beef sales into Indonesia under new quota issued to the Bulog government agency, but no volumes have yet been discussed. The announcement also included a decision to bring second half quotas forward by one month, but at this point contain no mention of additional live cattle quota.
Mr Taylor said Australian trade minister Craig Emerson had applauded the new quota arrangements as a 'refection of the strong relations between Australia and Indonesia'.
He also noted that, following their meeting with Indonesian agriculture minister Suswono in Jakarta three weeks ago, NT primary industries minister Willem Westra van Holthe and Queensland agriculture minister John McVeigh had stated that Indonesia was set to increase quotas for Australian cattle by 25,000 head starting mid-year.
"It is completely understandable that anyone who seriously cares about primary industry and our people on the land want to see the live-cattle industry fully restored,” Mr Taylor said.
“However, given the damage already done to this industry by bad politics and given the nature of Indonesian culture – and their upcoming national election – we need to be very careful in not jumping the gun in predicting that quotas are on the way back to being fully restored.”
Mr Taylor, who is also a former national vice president of the Australia-Indonesia Business Council, said it was not unusual for Indonesia to announce temporary increases in beef intakes in the approach to Ramadan, a month of fasting by Muslims followed by celebratory feasts, and much work still had to be done for Australia to secure a genuine long-term solution to the quota crisis.
"Short and quick-fix ministerial trips to Indonesia very seldom get you anywhere in Indonesia, or Asia in general,” he said.
"Indonesian culture simply doesn't work like that, despite the warmth of the welcome and nice words.
"What is needed is a strategic and well considered approach, not just to restore our live cattle export market to Indonesia, but also to develop partnerships within the supply chain to ensure a win-win for both countries, and to use these partnerships to develop new and stronger agricultural opportunities-particularly involving selling onto third market countries."
However, Mr Taylor predicts that with two-way investment in agriculture, including Indonesian investors taking a shareholding in Australian cattle stations, it should be possible for Indonesia and Australia to eventually develop a market for live cattle imports that would be 30pc larger than the size of the market when Australia banned exports to Indonesia without notice in June 2011.
For economic and social reasons it was much better for Indonesia to source cattle from Australia where breeding conditions were perfect and then to release highly-fertilised grazing land in Indonesia for the growing of much-needed food crops.
"Indonesia has a massive lower and middle-class who need our beef,” he said.
“But also there are significant opportunities to jointly manufacture and process Australian beef – dairy and other fresh foods – in Indonesia for re-export to third-party regional countries, resulting in a highly beneficial outcome for both Australian and Indonesian businesses and communities.
"It has to be a deeper relationship than one simply based on us wanting Indonesia to buy our cattle."