There has been some attention-grabbing news out of Indonesia over the weekend with relevance to trade policies and restrictions applied to agricultural imports.
Indonesia has announced it will scrap quantity limits on imports of horticultural products.
The development follows a World Trade Organisation challenge by the United States against the restrictions Indonesia applies to a range of agricultural imports.
The US has argued that the import quotas imposed by Indonesia are not consistent with WTO rules, and unfairly restrict imports of horticultural and animal products, including beef.
In a decision seen as a move to head off a looming WTO spat with the US, Indonesia has now announced it will remove restrictions on horticultural imports.
“There will be revisions on trade ministry regulations and agriculture ministry regulations on horticulture importation,” Trade Minister Gita Wirjawan said, as quoted by Reuters.
“We will not impose quantity restrictions on import anymore.”
The development has triggered some hopes in Australia’s beef and cattle industries that Indonesia may also revisit the substantial quota restrictions it applies to beef and cattle imports.
Mr Wirjawan indicated that while it will not lift quantity restrictions on beef, the allocation of additional permits is possible.
“We will keep imposing a quota system but the quantity will be flexible,” he said.
“If the domestic market still needs imported beef, the government will issue extra import permits.”
Reuters also reported that Indonesia has also banned the import of poultry and poultry products from China, in response to the recent escalation of a bird flu outbreak in eastern China.
Another article in the most recent edition of the Indonesian investigative news magazine Tempo has drawn attention to the high slaughter of productive cows occurring in Indonesia.
The report quoted data from Indonesia’s Agriculture Ministry indicating that the slaughter of productive cows and even dairy cattle is endangering cattle supply nationwide.
Indonesian law prohibits the slaughter of productive cows in order to maintain reproduction levels. Breaches of this law are punishable with a prison sentence.
However Tempo reports that as productive beef cows and dairy cattle flow into Indonesian meatworks in response to high beef prices, most provincial governments are yet to create the implementing rules required to enforce the anti-cow slaugther regulation.
Tempo reported that the Ministry of Agriculture established a fund in 2010 to rescue productive cows from abattoirs. The program, part of the self-sufficiency drive, was designed to help abattoirs that received productive females from farmers to save them from slaughter, and to buy ready-for-slaughter cattle to replace them.
The productive cows were then to be raised at government-owned breeding facilities, with proceeds from their eventual sale returned to the rescue program to save more productive females.
However an audit by Indonesia’s Supreme Audit Board (BPK) recently found that the program had been ineffective, and was discontinued after about one year.
Tempo reported that many abattoirs appeared to be unaware of the policy, those that were aware had found difficult to police in practice, and ultimately the funds intended for rescuing breeding cattle in abattoirs were spent on a number of activities not in accordance with intentions of the program.
Provincial authorities also told the magazine that the program was still being ‘socialised’ and actual penalties for slaughtering productive female cattle would not be imposed until 2014.
In the meantime, high beef prices are cutting further into the national herd, and are also encouraging farmers to sell dairy cattle for slaughter, Tempo reports.
“Meat prices continue to rise, while milk prices remain the same,” Robby Iskandar, the head of the Association of Indonesian Cattle and Buffalo in West Java, said.
“In the end, ranchers decided to sell their dairy cattle too.”