Revived call for ‘level playing field’

Jon Condon, 06/06/2011


Export beef processors have seized on the latest animal welfare episode in Indonesia to revive their long-standing campaign to see a ‘level playing field’ applied in competition for northern Australian cattle between live export and processing sectors.

In a private report prepared on behalf of a group of Queensland processors by economic and policy consultants SG Heilbron, it was claimed that expansion over the previous few years in live export in Queensland had often been characterised as ‘reflecting free market forces in operation.’

“If that is the case, then why is it that in Indonesia, imports of certain beef cuts are banned outright or greatly limited by permit from Australia – cuts which are critical to Australian exporters and protect Indonesian processors, lotfeeders and livestock importers?” the report asks.

A range of other trade restrictions and subsidies benefitting the live trade to the disadvantage of processing were also described in the Heilbron report:

  • An escalating tariff applies for other chilled and frozen beef whereby higher tariffs are applied to beef than to live cattle imports by Indonesia
  • Many Indonesian abattoirs are unlicensed and accordingly operate at costs which are not possible in Australia, given requirements for workplace health and safety, animal welfare, environmental management and food safety
  • Feedlots in Indonesia receive subsidies in order to develop, reportedly including grants of land, subsidised utilities and other inputs
  • In Australia, live exporters receive substantial subsidies through infrastructure support provided by governments
  • Live exports also receive subsides through foreign aid and trade promotion
  • The live trade faces significantly lower government-influenced taxes and charges. Export inspection charges, for example, are a multiple of those for live exports.

“As these examples indicate, the live trade is far from ‘free’. The deep-seated nature of these distortions and the deadweight costs to the Queensland economy strongly suggest that the live cattle trade needs to be discouraged,” the Heilbron report urged.

  • A Beef Central assessment of the content of the Heilbron report can be seen here.


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