Tuesday, June 28, 2011

Australia, Indonesia & the live cattle imbroglio

On 8 June I wrote Problems in Indonesian live meat exports. This helped lead to another post on the same day, GetUp's mistletoe role.

I wrote these posts against the background of a long-running concern about the way public policy is being set, including a concern about the way that pressure groups affected policy. I have given a number of examples over the last few years about the damage done by badly thought out and reactive policies.

It is going to be very hard for the Federal Government to recover from its knee-jerk reaction to problems in the Indonesian live cattle trade. In reporting over the last few days:
  • Elders, a major Australian pastoral firm, has complained that it can't even send cattle to its own Indonesian abattoir
  • Indonesia has apparently refused permission for Australian vets to inspect Indonesian abattoirs in retaliation to the Australian Government's action
  • A large number of cattle remain in limbo on agistment. The Government has announced compensation to some Australian meatworkers, but fights continue over other compensation issues
  • Landmark, another pastoral firm, has shifted the purchase of diary cattle for China from Australia to New Zealand. These are breeding cattle. Apparently the Chinese buyers have concluded that Australia is too much of a sovereign risk because of policy instability.
This is not a post about the role of the bodies and public responses that pushed the Australian Government to its decision, nor is it about the rights and wrongs of that decision. My focus is on process.

It's hard to see a positive outcome from the current imbroglio from the Government's viewpoint. It's actually become a hostage to Indonesia, for its best chance of an acceptable result depends upon that country's response.

I stand to be corrected, but I don't think that it's practical in political or economic terms to ban the live animal trade, so it can't satisfy the most devout proponents of that position. If Indonesia simply refuses to cooperate and buys elsewhere, then it has dissatisfied producers. Even if Indonesia moves to improve slaughter while buying elsewhere, it will be hard to sell any positives.

The best the Government can hope for is that Indonesia will cooperate in a face saving solution. I am sure that a lot of very bright people are working on this at the present time. I wish them luck.

I think that the key lesson is don't do something for domestic political reasons when you have no real control over the response of others. Or, if you are going to, at least take the responses into account!


This story in today's Sydney Morning Herald indicates the type of problems the the Australian Government is getting into.

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