Jakarta: Indonesia could begin importing cattle from countries that have foot and mouth disease as part of a new economic stimulus package aimed at lowering beef prices and reducing its reliance on Australia.
Coordinating Economic Minister Darmin Nasution said that under the new package cattle could be imported from a zone or area that had been declared disease-free even if diseases such as foot and mouth were present in other parts of the country.
The price of Australian beef would take a hit in Indonesia if the market was flooded with cheap beef or buffalo meat from countries such as India, which has foot and mouth disease.
Australian beef industry sources expressed frustration at the announcement, saying it added to the uncertainty surrounding exporting to Indonesia and raised biosecurity concerns.
The industry has long argued that introducing an annual permit for live cattle exports to Indonesia would end the price fluctuations and provide more certainty.
Australia is now the only country to export live slaughter and feeder cattle to Indonesia and is the dominant boxed beef supplier, with about 80 per cent market share.
An existing law in Indonesia requires livestock to be imported only from countries that have secured disease-free status from the World Organisation for Animal Health.
"The government has prepared a government regulation to widen the possibility of supplying cattle or beef to (Indonesia) from (other) countries," Mr Darmin said.
"So a certain country which may be considered as not free from certain harmful diseases but ... there is a zone in that country (that) meets the health criteria, such as India, then we can have a supply from that area."
Indonesian Trade Minister Thomas Lembong said Indonesia had been overly dependent on one source of cattle imports: "If we can open up other alternatives ... it will reduce dependency. Hopefully, it will create competition between importers."
Australian Livestock Exporters' Council chief executive Alison Penfold said Australia was an efficient, reliable exporter of live cattle and boxed beef that can reach Indonesia within hours and days, not weeks.
"We are also free of foot and mouth disease.The question I would ask is why diversify when you have a committed trading partner next door?"
She said other countries had banned buffalo meat from India when it was found to contain foot and mouth disease.
Northern Territory Livestock Exporters' Association chief executive Stuart Kemp said diversifying beef suppliers had been a subject of talks in Indonesia for several years.
"This sort of stimulus package has been announced before but it has always been a hard one to get through as bona fide legislation," Mr Kemp said.
"I imagine a lot of water will go under the bridge before we're likely to see any real competition. Let's hope whatever gets through doesn't compromise biosecurity of their nation and herd."
The live cattle trade with Indonesia has periodically been rocky. Indonesia was angered by Australia's sudden live cattle export ban just before Ramadan, following the release of footage of cattle being mistreated in Indonesian abattoirs.
And Indonesia shocked the Australian beef industry when it slashed the number of live cattle imports in the third quarter of 2015 in an attempt to move towards self-sufficiency.
Earlier this month Agriculture Minister Barnaby Joyce - who visited Indonesia last year - welcomed the Indonesian government's recommendation that up to 200,000 head of cattle be imported from Australia in the first four months of 2016.
Import permits were previously issued quarterly rather than on a trimester basis.