Do calls for a cap on live exports stack up?

31 May, 2016 08:05 AM
Live cattle trade costs jobs in Australia's processing industry, meatworkers say.
Live cattle trade costs jobs in Australia's processing industry, meatworkers say.

CALLS for a cap on live cattle exports have been louder than ever in 2016 against a backdrop of tight cattle supply fuelling cutbacks across Australia’s meat processing sector.

Meatworkers from as far afield as Townsville to New England are marking the five-year anniversary of the monumental suspension of trade with Indonesia by claiming the trade jeopardises jobs in Australia.

They argue that as the national herd sits at its lowest point in 23 years, the volume of live exports steadily increases, putting pressure on the number of cattle available to the local processing sector.

“For every additional head of cattle loaded onto ships bound for foreign markets more local jobs are lost,” said Grant Courtney, Australasian Meat Industry Employees Union.

Meatworkers questioned whether the Federal Government had ‘fallen to the narrow interests of an industry that contributes nothing to the broader community’.

Whether driven by the desire to protect jobs on home ground or by animal welfare concerns, arguments have been continually made since 2011 for a ban or cap on live trade.

Do any stack up?

Executive director at the Australian Farm Institute Mick Keogh says no.

“Globally the trade in live animals is rapidly increasing as agriculture trade barriers are reduced and nations become specialised in livestock production systems and integrated into multinational supply chains,” he said.

“For Australia to abandon live exports would simply hand major markets over to competitors, none of which have anywhere near equivalent animal welfare standards or programs.”

In fact, that has already happened with Australia’s reduced sheep exports, where Somalia, Sudan and Romania have taken over as major supplies of live sheep to the Middle East.

It would happen very quickly for live cattle exports if Australia closed down, Mr Keogh believes.

He points out it is also the case that live exports are a very useful ‘market development’ tool that creates an entree to the processed meat market over time - witness the growth of Australian sheepmeat exports to the Middle East on the back of involvement in live sheep exports.

In 2015, the value of Australian livestock exports was around $1.6 billion.

That means live exports as a commodity rank above canola, cotton, sugar, fruit, vegetables, sorghum, rice and cheese, to name just a few.

“If live exports are economically insignificant, then so are all those,” Mr Keogh said.

“From the perspective of northern Australia, live exports are the leading and fastest growing export commodity and the wealth generated is a major factor in the economic development of that region.”

Fellow Australian Agriculture Institute writer Gaetane Potard, in 2013 following new footage of what was claimed to be cruelty to cattle going to Egypt, said the value of the trade extended well beyond the front gates of cattle stations in northern Australia.

“The live export trade issue is more complex than just the direct contribution the trade makes to national income,” she wrote.

“At the very least, the welfare of communities in regional Australia needs to be considered.”

That was something the groups saying the trade was expendable failed to do, she said.

Economically, a cap on live trade doesn’t stack up either, based on the inherent dangers to free markets of government intervention.

“In a market where producers, and processors for that matter, are free to chase the highest value, intervention takes that value away,” said agriculture economist at Deliotte Access Economics Daniel Terrill.

It also raised sovereign risk issues, and indeed ‘the legacy problems of 2011 persist today’, he said.

Northern Territory Cattlemen’s Association’s Tom Ryan said most NT properties were completely reliant on the live export market

“Australia needs both the processing and live export sector to be healthy and robust,” he said.

Australian Livestock Exporters Council chief executive officer Alison Penfold said live trade and boxed beef trade should never be an either/or proposition.

“The economics of the trade is an important story to be told - it employs over 13,000 people, makes a $1.6b contribution and is in the top ten agricultural export commodities in the country,” she said.

“This industry makes a difference at the farmgate, it provides producers another sell option and that provides a better return.”

Shan Goodwin

Shan Goodwin

is the national beef writer for Fairfax Agricultural Media.
Date: Newest first | Oldest first


31/05/2016 9:10:18 AM

If we had a cap then processors need access to the global labour market at global rates !Market distortion has no place in Australia
angry australian
31/05/2016 9:50:11 AM

Union subs down Mr Courtney, feeling nervous about your job? Will having the beef processed in Australia add a single $ to the farmgate price or do you want farmers to subsidise Australian jobs? We saw how well that went in the motor industry where governments used taxpayers money! Australian slaughtermen earn far more and are allegedly less productive than those in the USA,NZ,Argentina and then there are all the extra "taxes", in the form of redtape that our governments place on production here, for example what does a DPI Inspector cost per hour?
31/05/2016 7:19:41 PM

If this further socialist control of the cattle industry occurs, why no go the whole hog and fix the farmgatecattle prices. Let's have a fully socialist system . Take socialist control of the whole lot, do not regulate bits and pieces because socialist labour costs are exorbitant in the current Australian socialist system!
1/06/2016 10:24:44 AM

Yep cap the numbers and also cap the hourly rate as well!!
Sue Head
1/06/2016 1:16:26 PM

What isn't mentioned is that our biggest live export market Indonesia capped live cattle imports in 2010 at 500,000 head. Obviously the people commenting in this article, who by the way benefit financially from the live export, need a reality check. Indonesia continues to cap animals by issuing quotas every trimester. At least Indonesia knows how to protect their local farmers and local workers, unlike our shortsighted govt. Not everyone who sends live export is reliant solely on the trade and after all it is a small market, about 10% of turnoff. Over 30,000 jobs have been lost to LiveEx.
1/06/2016 6:00:36 PM

Sue there is a very big difference between 500 000 & zero . What ever jobs have been lost have been lost because of the non- competitiveness of Australian meatworks .They are not being asked to compete with the third world , just the US , NZ, Canada & the EU .Indonesia is not trying to protect their beef industry , they are trying to stop the masses from running amok .
1/06/2016 11:10:50 PM

Sue , Indonesia is not the only live export market and overall demand is looking good- Vietnam, Israel, China etc
2/06/2016 9:36:18 AM

What BS is this rubbish , driven by .processes and unions who never miss out on there wages no matter what prices farmers get and let me tell you for a life time farmers have been so far underpaid neither the processor or unions would work for such money !! Well at last we can actually afford to pay our selves and try to upgrade machinery and facilities and guess what all our money is spent in Australia unlike mining companies !! Greedy processors and unions had shared some off the money they ripped us off over the last 40 years then the supply would be larger!! So go restructure whiners
2/06/2016 9:39:15 AM

I actually cant believe this story gets oxygen , obviously the journo has no real incite or history of the beef industry and should come and ask and print a real truth and one with all the facts no a slanted one sided load of BS
2/06/2016 9:44:18 AM

Also wha'ts the history of manufacturing here ??/ Oh that's right we cannot compete with labour costs lol Ask all our car industry workers or food canning, or clothing enterprises !! Also guess who actually works in slaughter houses ?? Visa workers or migrants not lazy Aussies FACT. Go do a balanced sotry who ever wrote this rubbish !!
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