Indonesia taking us to the cleaners through NT land purchases

While Indonesian interests seek to extend their vertical integration through owning large areas of Australian pastoral land, there is no reciprocal access.  There is little chance, for example, of Australian companies being allowed to open their own feedlot, abattoir or distribution network in Indonesia.  An illustration of Indonesia's attitude to foreign ownership occurred in 2012, when the Indonesian government announced that foreign mining companies in Indonesia would have to sell at least 49 per cent of their shares to local interests.

PM Abbott has indicated that Australia would welcome any investment by Indonesia (government or private) in Australian cattle stations.  Even Barnaby Joyce, who previously condemned Indonesian foreign investment in cattle stations as "not in Australia's national interest" has backtracked.  He now reckons that he has since spoken to Territory cattle producers, who are in favour of the sale because it will assist cattle prices.  Many commentators doubt that Joyce has genuinely changed him mind, and put his changed public position down simply to a need for Cabinet solidarity.

The expressed industry support for the Indonesian buyout reflects that this currently is the only available light at the end of the tunnel for northern producers.  The industry had gone through a relatively prosperous period prior to the interruption to the live cattle trade and the prospects are good, provided the trade gets back to its former level.  Producer revenue, however, crashed when access to the Indonesian market was restricted, and producers faced the prospect of going broke in greater numbers if nothing changed.

It seems obvious that the lack of official concern about what is happening in the Northern cattle industry is due to the Australian Government giving priority to "stopping the boats" above all other issues in our bilateral relationship with Indonesia.  Facilitating an unconscionable buy-up of Northern cattle stations seems to be a price being extracted by Indonesia for its promised assistance on this issue.  I believe that, if PM Abbott is placing much faith in Indonesian assistance in solving the asylum seeker problem, then is he deluded.  The facts instead suggest that Indonesian cooperation with Australia on people trafficking is on a par with Pakistan's commitment in the war against the Taliban in Afghanistan.

Australia gives the appearance of being a very poor negotiator in its dealings with Indonesia (despite having a potential lever in the vast sums we provide in aid assistance).  In regard to live-cattle, while Indonesia may have power as the dominant buyer, Australia has just as much market power as the dominant seller, provided we are prepared to organise ourselves.

The plight of our Northern cattle industry is the fault of both the Gillard Government as well as Indonesia, and producers are deserving of much more public assistance.  The Live Exports Assistance Package, worth a paltry $30 million in total, did little to offset the losses endured.  The Australian Government should be assisting its own industry in a time of crisis instead of playing the role of cheer-leader, while Indonesia buys its pick of our northern lands at never-to-be-repeated prices. 

The prognosis is that the Northern cattle industry will return to profitability through quota to Indonesia being fully restored or increased fairly soon.  The price that is likely to be paid is that much of the supply chain in this country is about to become Indonesian owned, something that future generations are destined to blame us for.

All this was started by animal activists complaining about alleged cruelty in Indonesian abattoirs.  The big irony is that, instead of their campaign closing the live export trade, it now looks like resulting in the people being complained about ending up in control of their Australian supply chain as well.