Indonesia slashes import permits

Indonesia will slash import permits for Australian live and boxed beef next year, as the Asian country continues its bid to move towards self-sufficiency by 2014.

The number of permits for live cattle will almost be halved from 520,000 to 283,000, while there will be permits for just 34,000 tonnes of boxed beef from all countries. This is down from 48,500 tonnes.

It's an enormous blow to the industry and one that WA Agriculture Minister Terry Redman estimates will hit the State to the tune of tens of millions of dollars.

The move isn't being heralded by the State Government as payback for suspending the trade in June, but some are laying the blame squarely on the shoulders of Federal Agriculture Minister Joe Ludwig, and his bungled handling of the issue.

Despite the Federal Government touting support for live trade, it's a position that remains tenuous within the Labor Party. At its recent conference, Labor's fragile support for the trade was revealed, with 215 delegates narrowly defeating the 173 in favour of phasing live trade out.

The tide of anti-live trade sentiment that swept through the country since cruelty in Indonesian abattoirs was revealed through the Four Corners program has not subsided, but according to Cattle Council of Australia executive director David Inall, there is only so much the industry can do to change that.

"Is there more that we can do? We've already done an enormous amount," he said.

"The trade all the way through the supply chain is doing a much better job in terms of providing as much information about the highs and the lows, but animal welfare right across the board is becoming a bigger issue everywhere."

Both industry and Government are looking at new markets, and Mr Redman said he hoped to head to the Middle East early next year where he could discuss options for increased live trade to the region.

But the question is whether other export markets will baulk at relations with a country that only shows a wavering support for live export.

Mr Inall did not believe Australia's reputation had been damaged by Indonesia slashing the number of permits available, but others were not so sure.

Kimberley pastoralist Ruth Webb-Smith said the lengths animal liberationists were prepared to go to disrupt the industry created doubt for other countries.

"People just don't want to deal with a nation that can't be bothered selling its product," she said.

"The writing is on the wall now as to how good we are as a trading partner when we see what a government can do just because of the whim of a few radical people - they can wreck an industry.

"The apprehension and lack of security between countries and Australia as a trading nation and food producer, it's all leaving a lot of doubt for producers."

Mr Redman conceded Australia's reputation was tarnished to an extent by the suspension of live trade earlier in the year, but said the recent cut in permits had done no damage in the market.

"The international market is aware that Indonesia has a stated policy of seeking self-sufficiency in beef supply," he said.

"The State Government will be working hard to ensure that overseas markets continue to regard us as a reliable supplier in the live export trade."

But even if other markets are found for Australia's northern cattle herd, Mr Inall said losing the Indonesian trade would still hurt.

He said no other country was as ideally positioned as Indonesia to take Australian live cattle exports.

"They are our closest neighbour, 240 million people with a growing middle income class who would like to buy more red meat," he said.

Hopes for northern cattle producers now hinge on whether Indonesia will be able to wean itself from a reliance on Australian cattle within two years - the industry has its doubts.

"It's going to be a significant challenge for Indonesia to attain absolute self-sufficiency," Mr Inall said.

"Their cattle are smaller, people are selling them one or two at a time and hence we believe there is a place for Australian cattle.

"We've known for some time that Indonesia has had an ambition to be self-sufficient with beef, however, what we have always put to them … is that self-sufficiency in our view doesn't necessarily mean that they would need to breed all of their own.

"Australia has the land mass to breed cattle relatively cheaply and Indonesia has the supplies to feed cattle relatively efficiently.

"The advice we've got from government is the dialogue between the Australian embassy in Jakarta (regarding that matter) and Indonesian officials is ongoing."