Indonesian Government plans to buy Australian cattle breeding country have reignited debate over foreign investment in agriculture and highlighted contrasting views on the issue between the National Farmers Federation and Nationals parliamentarians.
Indonesia first signaled its intentions to buy cattle breeding country in northern Australia back in March to improve the security of its cattle supply, which was badly shaken when the Gillard Government controversially cut off Australian cattle exports to the market based on animal welfare concerns in June 2011.
Further confirmation of those plans last week saw Nationals MP Barnaby Joyce, the man widely tipped be named the agriculture minister in Tony Abbott’s new ministry today, call on Australians to ‘make a big noise’ to help him convince the new Government to reject the plan.
“I cannot possibly see how it is in the national interest, what benefit is it to Australian farmers, to Australian taxpayers, if another entity buys our land to breed their cattle, exports them to their own facilities and pays tax in another country,” he said in comments to the Guardian’s Australian edition.
“We want to be a partner in the growth of the food economy in northern Australia, not just the location of it.
“I have real concerns about this and the public really need to start making a noise about it because they don’t believe me in Canberra that this is a real issue out here.”
However Australia’s peak farmer body said Indonesian investment was important for Australia's struggling agriculture sector.
"Our sector will not survive without a level of foreign investment," National Farmers Federation chief executive officer Matt Linnegar told SBS TV last Thursday night.
"If it's part of a broader solution where the trade is continuing and they invest in that property and in infrastructure, that could in fact mean more jobs for Australians."
As confirmed at the recent IndOz Trade Forum in Brisbane, Indonesia has appointed a state-owned enterprise to buy up to 1m hectares of Australian land, with cattle to be bred in Australia and then shipped to Indonesia for lot feeding and processing.
At the forum the secretary of Indonesia’s Ministry of State Owned Enterprises Wahyu Hidyat said due-diligence studies had confirmed that ‘cattle farming should be conducted in Australia and cattle fattening and processing should be conducted in Indonesia’. This was because it was cheaper to breed cattle in Australia and cheaper to feed and process them in Indonesia.
Another group backing Indonesia’s plans is the WA based Indonesia Institute.
Institute chair Ross Taylor, who earlier this year was selected by the Indonesian Government as "Australia's Presidential Friend of Indonesia-2013", said he was very disappointed by Mr Joyce’s reaction to Indonesia’s plans.
'This announcement by Indonesia is an 'olive branch' extended to us as part of the healing process after the disastrous handling of the live cattle export industry," Mr Taylor said.
"Both counties have been polarised by this issue and this has resulted in enormous damage and missed-opportunities to not only build our cattle and meat trade, but to develop new partnerships with our neighbours in Indonesia in horticulture".
Mr Taylor said that Indonesia's agriculture industry was 'much larger' than in Australia, but comparatively unproductive and under-developed.
"And here lies the opportunity for our two countries to form business partnerships. And the beef trade should lead the way.
"Not only should we welcome Indonesian investment into our live cattle industry, but we should be developing investments within Indonesia. We are natural partners".
NT Cattlemen's Association director Luke Bowen cautioned against hysteria.
"We shouldn't get this out of proportion as some people ringing the alarm bells appear to be doing," Mr Bowen said in comments to the Australian newspaper.
"A million hectares in northern Australia is just two average-sized pastoral properties in the NT; that might at best just turn off 5000 to 6000 head of young cattle a year, so we are only talking a toe in the water by Indonesia at this stage."