Indonesia’s government has approved a plan to buy one million hectares of Australian land to breed its own cattle, as beef prices in the country soar.
The Jakarta Post reports the ranch will be used to raise calves. The animals will then be shipped to Indonesia.
State-owned enterprises minister Dahlan Iskan said it would be much cheaper to breed cattle in Australia than in Indonesia, according to the Jakarta Post.
“We hope this measure will go some way to resolving the issue of beef availability in Indonesia,” he said.
ABC News reports the cattle station would be managed by one of Indonesia’s state-owned enterprises, such as Rajawali Nusantra Indonesia.
Breeding cattle in Australia has been described as a political fix for Indonesia. The country set “self sufficiency” targets which it is unlikely to meet.
Rather than change the targets, it has “borrowed” from future import quotas. Breeding the calves in Australia, and shipping the animals, would allow Indonesia to say it was providing its own beef.
The deal is still subject to approval by Australia’s Foreign Investment Review Board.
Early tests to FIRB review
Prime Minster-elect Tony Abbott’s has said he plans to overhaul the Foreign Investment Review Board, though this is likely to face a couple of early tests.
Last week, Abbott said he supported full foreign ownership of Australian properties, “with extra safeguards”.
The Coalition’s policy would be to lower the $244 million threshold at which the Foreign Investment Review Board would scrutinise private bids for land to $15 million.
Yesterday, The Australian reported that Australia’s oldest dairy producer was also being circled by the state-owned Chinese Investment Corporation.
New Zealand’s biggest company, the global dairy group Fonterra, wants to partner with CIC to buy the Tasmania-based Van Diemen’s Land, or VDL.
VDL controls 25 dairy farms and 30,000 dairy stock in the northwest of Tasmania.
Negotiating both deals could strain the relationship between Mr Abbott and his soon-to-be deputy, Nationals Leader Warren Truss, who publicly argues that foreign takeovers endanger Australia’s control over its own destiny.
There’s more here.
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