The live export industry has called for part of Australia’s significant foreign aid budget to Indonesia to be redirected into funding supply chain upgrades to fast-track the re-establishment of volume live exports into the country.

Australia's investments in foreign aid to Indonesia last financial year exceeded the entire value of the annual cattle trade to the market.

Foreign aid to Indonesia totalled $458.7 million in 2010-11, according to the Department of Foreign Affairs and Trade, which ranked the country as the single largest recipient of Australian aid.

By comparison Australia’s total live cattle exports to the market in 2010 were worth $320 million.

The embattled industry is now facing estimated costs of $20 million to bring Indonesian supply chains up to new Federal Government standards before volume exports can resume, and many operators are now on their knees financially as a result of the ban.

Calls have now emerged for foreign aid funding to be redirected towards bringing Indonesian supply chains up to new Federal Government animal welfare assurance standards.

It was suggested at yesterday's Senate inquiry hearing into live exports in Darwin that the foreign aid budget was an appropriate source of funds for the task given that animal welfare was a national interest issue, and the expenditure would represent assistance to a foreign country recognising the importance of the live export trade to Indonesia's food supply.

In its submission to Senate Standing Committee on Rural Affairs and Transport's inquiry into live exports , the Australian Live Exporters Council proposed that industry contribute 25pc of the $20 million that it estimated was required to bring supply chains up to standard, and Australia’s foreign aid budget fund 75pc.

“The ability for industry to wear that burden is going to be extreme to say the least, but we believe through foreign aid… there is definitely scope for us to deliver what we need to deliver over the next three years,” ALEC executive director Lach McKinnon told the inquiry.

Nationals senator Fiona Nash said she believed the concept should be considered by Government. “Given the nature of this particular issue, that makes a lot of sense,” she said.

Meat and Livestock Australia spokesman Peter Barnard said the organisation had planned to spend $9m in Indonesia. That was based primarily on training and advisory work in the market such as conducting needs analyses, positioning animal welfare experts , training supply chain staff and designing improved animal handling and traceability systems.

Very little of MLA’s planned expenditure was intended to be spent on actual infrastructure, he said.

Mr Barnard said that while $20 million was not MLA’s figure, a funding injection of that amount would “help enormously” in getting supply chains up to new requirements more rapidly than they otherwise would.

MLA managing director Scott Hansen said the commercial sector was investing significant amounts of its own money to bring supply chains up to the standard required to maintain business with Australia.

Mr Barnard said work already completed in the market meant that as of today about 80,000 cattle a year– or an estimated 16pc of the typical 500,000 head annual throughput in Indonesia – could now be handled through supply chains that use stunning.

“The playing field that everybody was operating under until May 30 – continual improvements in animal welfare standards – now is about meeting OIE standards, and commercial players understand that and they’re rapidly moving to meet new regulations,” he told the inquiry.