Indonesian minister urges boycott of Australian beef over spying row

Indonesia's agriculture minister has urged his nation's cattle importers to boycott Australian beef as a result of the phone-tapping row.

The call comes as the 2014 import permits for live cattle from Australia are due to be announced next week.

Agriculture Minister Suswono — who was responsible for the disastrous beef self-sufficiency policy that drove the price of beef in Indonesia to well over $A10 per kg — has appealed to importers to cut ties with Australia.

"When it comes to cattle and beef imports, the deals are made within a business-to-business framework. We can only appeal to importers to act in line with the government's stance until everything is completely normalised," Suswono said.

The government's stance is that Australia should be punished for tapping the phones of President Susilo Bambang Yudhoyono, his wife and inner circle in 2009.

The minister said the Indonesian government would "review" the amount of Australian beef imported if "the president is not satisfied with Australia's response to the recent diplomatic tension".

But Mr Suswono has very little power over beef and cattle imports after the responsibility was removed from his department and given instead to the relatively liberal Trade Ministry.

It's unknown if that ministry will seek to punish Australia. Industry players concede it's possible, but one said it was unlikely, because Dr Yudhoyono was adamant that the beef price should fall, and a big increase in import permits may achieve this.

As for Minister Suswono's call for a boycott by importers, the source said that would simply be ignored.

"Not one of the importers will back off importing — they've got businesses to run and they don't give a f--- what the diplomatic relationship is," the source said.

New live cattle import permits will be issued next week.

It's the first full year without the burden of strict quotas, which were introduced by the Agriculture Ministry after 2011 revelations of slaughterhouse cruelty, and as part of a beef "self-sufficiency" policy designed to appeal to Mr Suswono's conservative rural constituency.

Some in the industry are predicting that for 2014 the Trade ministry will issue import permits for a record number of live cattle — perhaps up to 800,000 head — as Indonesia tries to drive down stubbornly high prices.

This would beat the previous record of 768,000 in 2009, and compares to the original quota for 2013, which only allowed 267,000 head to be imported. This was later eased.

Trade Minister Gita Wirjawan has previously said Indonesia would look elsewhere for its beef imports, including foot-and-mouth free zones in India and Brazil, in retaliation for the phone-tapping row.

Indonesian state-owned company PT Rajawali Nusantara  has also put on hold a proposal to buy Australian grazing land to run cattle.

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