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Indonesia confirms plan to buy northern land

ABC Rural
Brahman cattle in the Kimberley

The Indonesian Government has approved a plan to buy a million hectare of grazing country in northern Australia.

Olivia Garnett

The Indonesian government has approved a plan to buy a million hectares of grazing land in northern Australia, to breed its own cattle.

It's an idea that's been floating around for some months, and has now been approved by the Indonesian Cabinet.

The decision has been motivated by the Indonesian drive to self-sufficiency in food production, particularly for beef.

Indonesia's decision to cut import quotas from countries such as Australia has seen the price of beef skyrocket to as much as $10 per kilo, in a country where 120 million people live on $2 or less per day.

Quotas have recently been raised to allow more Australian beef into the market, in an attempt to bring those prices down.

"The Indonesian Government is under pressure from two fronts," ABC Jakarta correspondent George Roberts said.

"One, to protect its own industry, and to be seen that it can provide for its people, and on the other hand, to stick to this self-sufficiency policy.

"This in a way gets around saying that it's just going back to the old quota system and buying from foreign countries, it would be able to say we're growing our own beef in Australia and bringing it to Indonesia.

"Just increasing quotas could be seen as backflipping on the policy, and also as an acknowledgement that the policy had failed, and there is a certain level of losing face by having to backtrack on a policy that clearly hasn't worked, but which they've been adamantly sticking to."

While foreign investment has been a hot topic during the Australian federal election campaign, the Northern Territory Cattlemen's Association's Luke Bowen, who is currently in Jakarta, says news of the possible purchase is no cause for alarm.

"Foreign ownership has been a part of northern Australia's cattle industry for over 100 years and it's something we're not frightened of... it's a very constructive way of bringing in capital," he said.

"It's nothing new for us and we think it's a very important part of northern Australia's production systems."

Top End station agent Russell Wolff agrees.

"Foreign investment's been around for 100 years and I don't think too much has changed. There just seems to be a bit more focus on foreign investment at the moment," he said.

"With Indonesia talking about doing something in Australia, I guess that'll hit the headlines because of the [live export] ban a couple of years ago.

"But I don't think the last few years has been much different from the last decade [in terms of foreign investment in northern Australia], so I'm not sure why it's getting more publicity."

Mr Wolff says there are some properties on the market now that have been unable to find buyers from within Australia so far, and as a result, pastoralists who are keen to sell would in fact welcome investment from overseas.

"The old saying is, the country will always stay in Australia, it can't be taken anywhere.

"Through history, these stations aren't owned by one owner for hundreds of years. They do seem to change hands and we do seem to go through phases like this, and I'm sure it's not the first phase like this in the past 20 years," he said.

The Indonesian Government has not said this time how much money it would be prepared to spend to buy a million-hectare property in northern Australia, but earlier this year a figure of AUD$30 million was suggested.

The sale of two good quality northern properties in recent months - the 500,000 hectare Northern Territory station 'Calvert Hills' for $15 million, and $4.3 million for the 200,000 hectare 'Margaret River Station' in Western Australia's Kimberley - suggest that $30 million for a million hectares could be reasonable.

Mr Wolff says that if the Indonesian government wants to invest in the best land, it might have to spend more than that.

"Anyone who's going to invest in a million hectares, they're probably going to be looking at the better quality country. If they're looking at that part of the Northern Territory or northern Australia, the better quality country would be in excess of $80 million."

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