Anzco Foods chairman Sir Graeme Harrison says the NZ beef trade has been impeded by the Indonesian Government’s decision to introduce quotas.
“My own company Anzco Foods is New Zealand’s second largest beef exporter,” Sir Graeme told the Indonesia Forum. “We, along with others in the meat industry, have benefitted from rapid growth in shipments to Indonesia during the decade to June, 2010. Indonesia had by then become New Zealand’s third largest export market by volume for beef and secondary cuts behind the United States and South Korea.”
“While Indonesia has in the past made similar declarations for other foods and achieved the objective, beef has
particular challenges.”
In 201o, the Indonesian Government added beef and secondary cuts to a list of foods in which the country should be self-sufficient.
Sir Graeme pointed to poultry as a comparative example. He said the Indonesian Government maintains the local cattle herd now numbers 14.8 million head which it believes, should ensure self-sufficiency. But industry sources believe the actual number is below 10 million.Unlike poultry, with a short production cycle of around 45 days, beef production is a long cycle of up to two years. Such a period makes it difficult for small holders to sustain themselves.In the absence of continuous supplies of imported product and growing consumer demand, beef shortages have had unintended consequences in Indonesia. Farmers have been selling large numbers of female cattle to abattoirs. This in turn has worked against the Government’s goal of achieving self-sufficiency.The beef import issue highlights some important elements of international trade, including the principle of comparative advantage.New Zealand is an efficient beef producing country, with 80 per cent of annual production exported to a range of markets around the world. Yet in a global context New Zealand is a small producer.We account for just one percent of world beef production and seven percent of world beef exports.
Sir Graeme stressed New Zealand is not a threat to Indonesian agriculture, yet we do have production expertise we can offer Indonesia.
Anzco Foods, through the Five Star Beef cattle feedlot in Mid Canterbury, operates the only large scale cattle feedlot in New Zealand. The production systems on this feedlot are more akin to the future cattle finishing methods Indonesia is likely to adopt.
We are happy to share our knowledge with Indonesian decision makers. However, this should be part of a total relationship where beef and secondary cuts from New Zealand’s predominantly grass fed beef production is afforded continuous access to Indonesia.
Looking to the future
While trade access, along with investment in relationships and the availability of technical expertise, lie at the centre of the future positioning of New Zealand beef and related products in Indonesia, the question for all of us is whether collectively we are doing enough to ensure New Zealand as a whole understands the Indonesian opportunity.
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