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Feedlot worried new import rule will hamper business
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Indonesia's Cattle Imports from Australia (International Trade Center/File)
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s the Trade Ministry gears up to abolish the quota system for cattle imports, feedlots say that the plan may hamper instead of help their businesses.
Reuters reported on Monday that the ministry sought to allow companies to ship in livestock, provided that they committed to the country’s domestic breeding program.
A trade rule introduced in August stipulated that one out of every six imported head of cattle must be used for breeding purposes. “It’s gone. There are no more quotas,” Trade Minister Enggartiasto “Enggar” Lukita said on Monday.
“If [companies] want to import, they will likely be allowed to, provided they import breeding [stock] because this country needs a [cattle] population.”
However, feedlots claim that it will be more cost efficient to import cattle and fatten them up for four months to be ready for slaughter than to take care of breeder cows for three years until they start reproducing.
Indonesian Feedlot Association (Apfindo) executive director Joni Liano said there was insufficient land to accommodate the goal and it would cost businesses a lot of money to take care of the cattle.
An imported breeder from Australia costs at least Rp 20 million (US$1,540) and needs 15 square meters to live compared to a feeder, which costs about Rp 16 million and only needs 3 sqm.
“The breeders should be kept for at least three years. They will drain our capacity and eat up the space for slaughter cattle, so this business would close down,” he said over the phone.
Joni added that banks considered cattle breeding a risky business, making it hard for them to obtain financing.
Apfindo consists of 39 feedlots spread across West Java, East Java, Banten, Lampung, South Sumatra and North Sumatra. Their combined plots of land cover about 1 million sqm and can support up to 350,000 feeders.
Meanwhile, Reuters also reported that three companies had been granted approval to import a combined total of 300,000 feeder cattle through to the end of 2018 and more were expected.
The companies had agreed to import 60,000 cattle for breeding and the ministry had said it expected Indonesia to import about 700,000 cattle for slaughter in 2017.
“There isn’t any ministerial regulation for this but there is commitment from businesspeople. If they fail to do so, we’ll confiscate the cattle,” Enggar said as quoted by kompas.com.
He argued that the goal of expanding the cattle population was to achieve food self-sufficiency during this administration. The cattle population is reportedly stable at 14.7 million and is spread across Bali, Nusa Tenggara Islands and Sulawesi.
The government has launched efforts to expand the population by opening a new cattle center in the Bangka Belitung Islands, as well as by revamping sea logistics to reduce the shipment cost of cattle from Nusa Tenggara to Jakarta.
Separately, unlike Apfindo, Traditional Market Vendors Association (APPSI) head Ngadiran lauded the new rule, saying that the government needed to enforce it well to protect cattle farmers in the regions and to make businesses use domestic cattle.
“We still have other places outside Java that have the potential for cattle breeding. Why worry about land shortage?” he said.
“Moreover, the government is improving the infrastructure to cut transshipment costs. So please think about the interests of the nation, not only some people’s business interests.”
Economist Enny Sri Hartati from the Institute for Development of Economics and Finance (INDEF) shared Ngadiran’s view and said business interests must to be synched with the national interest in the long term.
