Indonesia’s Minister for Agriculture H.E. Suswono is close to determining the fate of the Australian cattle industry.
It looks like we will pay an enormous price for the arrogance the federal government showed towards our nearest neighbour and Australia is now seen in the region as a country that carries sovereign risk.
Suswono appears set to teach Australians a lesson about respect for your neighbour that we will never forget.
When I set out the danger two weeks ago it was still possible to avoid a catastrophe for the Australian cattle industry and the nation but now that Suswono has dug in it will be very difficult.
Worse still for Australia, Suswono is in the right and we are in the wrong.
He and Indonesia were just as appalled as Australians by the killing practices revealed in the Four Corners program.
Suswono is a good minister. We needed to work with him to solve the problem and there is little doubt it would have been fixed because it was an isolated incident.
Instead, without any consultation with Indonesia, we banned live cattle exports near Ramadan, the most sensitive time on the Muslim calendar and Suswono was justifiably very angry.
As a result much of Indonesia now looks set not to have beef during and after Ramadan, and unless there is a last minute back-down Indonesians seem prepared to pay that price to teach Australians to respect their nation.
Suswono is too polite to declare Australians racists but that’s the tag we will get on the streets of the major cities and in his country’s centres that have feedlots and high-standard slaughtering facilities based on Australian cattle imports.
Indonesia takes three-quarters of its cattle from Australia and Indonesians thought they could trust us as reliable suppliers.
They were wrong and when Tony Abbott becomes prime minister he will have an enormous task to repair the bad blood.
Federal cabinet must have realised when they banned exports to Indonesia that it was likely that some cattle would have to be shot but shootings obscure a much deeper tragedy for Australia.
It’s likely that most of the cattle will simply not be mustered and will eventually become feral, doing damage to inland Western Australia, the Northern Territory and Queensland.
And it’s not just cattle stations that will suffer huge losses. There are hundreds if not thousands of sub-contractors who will likely see their businesses bankrupted.
The cattle industry has been a major employment area for Aboriginal communities and this will set back Aboriginal employment progress a long way.
We are now in a very weak negotiating position and reflecting that we have already dropped the requirement for stunning cattle.
When Suswono thinks we have suffered enough he will give us a meaningless compromise. The cattle industry hopes that will come quickly but current signs are not good.
In the meantime Suswono is pushing full steam ahead to make Indonesia self-sufficient in cattle production so there will be no need for cattle exports to our major market.
It will take a long while to find other markets.
This article first appeared on Business Spectator
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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