Vast Changes Made to Australian Live Exports 12 Months On

ANALYSIS - Twelve months on since the government brought the live export industry to a halt, Charlotte Johnston, TheCattleSite editor looks at how things have changed and what impacts the suspension of live exports had on the Australian cattle industry.
calendar icon 13 June 2012
clock icon 5 minute read

Twelve months ago the Australian government imposed a live export ban on cattle to Indonesia.

In early 2011, undercover footage of Indonesian slaughter houses caused a public outcry. The government suspended live exports to Indonesia at the end of May 2011, and in early June suspended all live exports after pressure was applied from the public and animal welfare groups.

Although live cattle exports resumed to Indonesia in July 2011, the first shipment didn't leave until 11 August 2011.

Twelve months later things have drastically changed. There is a new operating environment under which cattle are exported, Indonesia has imposed quotas on imports in a bid to increase self-sufficiency and the Australian industry is still feeling the impacts of the live export suspension.

New Operating Rules

Following on from an independent review of Australia's Livestock Export Trade conducted by Mr Bill Farmer AO and recommendations from the Industry Government Working Group (IGWG) Reports, the government announced that Australia livestock exporters must establish an exporter supply chain assurance system (ESCAS) to ensure compliance with the requirements of the new regulatory framework for livestock exported for slaughter purposes.

There are two key independent audit report documents that a licensed exporter is required to submit to the department as part of the ESCAS requirements.

  • The independent initial audit report (IIAR) is an evaluation provided by an independent auditor of whether the exporter's ESCAS complies with the regulatory requirements. The IIAR must be submitted as part of the exporter's application to export livestock and is part of the information that is considered by the department when determining whether or not to grant approval to export.

  • The independent performance audit report (IPAR) is an evaluation provided by an independent auditor of the performance of the exporter's ESCAS after animals have entered the supply chain. The outcomes of the independent performance audits are considered by the department when making decisions on future applications to export livestock by the exporter.

Addressing non-compliance

Recently, an Australian government investigation into footage of animal cruelty in four Indonesia abattoirs concluded that two of the abattoirs were part of an approved ESCAS for two exporters. The two abattoirs were guilty of not fully complying with the ESCAS rules, although not on animal cruelty grounds.

The investigation recommended that regulatory action be taken against the two exporters.

Appropriate actions were taken immediately by both companies involved.

CEO of the Australian Livestock Exporters’ Council, Alison Penfold said: "The industry remains committed to ESCAS and the wellbeing of the animals as they pass through the supply chain. While any instances of non-compliance are regrettable, what this DAFF report highlights is how just quickly industry responds to isolate and fix problems when they arise in order deliver the required standards of animal welfare.”

She also said that the new export arrangements have helped transform the way Australian animals are managed through the export supply chain. Standards have been raised and the welfare processes and practices that sit behind the new regulatory system, ESCAS, continue to improve.

The industry's response to this report of breaches has been positive, with it being acknowledged that the new system is working and issues are being addressed.

In May 2012, the Australian government released the first independent performance audit report summaries for livestock exports to Indonesia. They will now be released on a monthly basis for the public to view.

Indonesia Restricting Imports

Last year, in a bid to increase their self-sufficiency, the Indonesian Ministry of Agriculture agreed to pull back on Australia's 2012 import permits from 500,000 head a year to just 280,000 head.

This restriction on quotas has forced Northern producers to look for alternative, and generally less profitable, domestic and export markets for their cattle, despite the Australian government assuring the industry that it is negotiating with Indonesia to lift its quota.

Rabobank general manager Food & Agribusiness Research and Advisory Luke Chandler says Indonesia's strongly-growing economy and increasing consumption of beef suggests self-sufficiency goals may be difficult to achieve and there is likely to be an ongoing need for live imports to complement the country's domestic production.

"This may provide an opportunity for live cattle quotas to recover over time and the northern Australian cattle industry is well positioned to capture additional demand and supply low-cost disease-free beef to the Indonesian market. There appears a mutual benefit in the trade in both countries," he says.

Meat and Livestock Australia predicts that live cattle exports will fall by 31 per cent to Indonesia in 2012, and be almost 500,000 head less than the record year in 2009.

At the moment there appears to be no clear alternative market for the surplus cattle.

Mr Chandler says the development of a northern Australian processing facility is one option that is being explored to diversify demand and complement the live trade by providing an alternative local domestic market for the northern pastoral zone.

A study carried out in Queensland looks at the viability of a northern outback Queensland meat processing facility. The report concluded that an abattoir would reduce live transport, minimise animal welfare and improve the outlook for regional graziers.

Impacts of Live Export Suspension

Western Australian Farmers Federation President Jeff Murray said that suspending the live export trade was a blow from which many Northern producers may never fully recover.

“The annual income lost through this period will never be retrieved. The losses felt by producers and small businesses are irreversible.”

Mr Chandler says the northern cattle industry has been dealing with a period of immense change and uncertainty since the suspension.

“The impacts of the live export suspension, were not just felt by cattle producers but cut off the life blood for mustering contractors, helicopter pilots and countless small businesses that are dependent on the trade,” concluded Mr Murray.

Charlotte Johnston, Editor

Charlotte Johnston - Editor

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