SOUTH-EAST Asia’s palm oil plantations could offer Australian cattle producers a new and valuable live export market, Ross Ainsworth believes.
Fattening cattle on grass grown beneath oil palms is “the world’s most efficient beef production system”, the Indonesia-based market consultant told the LIVEXchange conference in Darwin this week.
Because of the low productivity of native Indonesian cattle, and the availability of cheap slaughter cattle from Australia, the incentives for Indonesia to produce its own beef in mixed palm oil-beef enterprises hasn’t been strong.
But with Australian feeder cattle prices high, and likely to remain high, Dr Ainsworth thinks that’s about to change.
And if ambitions to build a high-productivity cattle herd in Indonesia’s palm plantations are realised, it could see a trade in Australian breeders that individually fetch much better prices than feeder stock.
Dr Ainsworth, a vet and former chief of the Northern Territory Live Exporters Association, has toured extensively in Kalimantan, the 544,000 square kilometre Indonesian portion of Borneo that is home to about 15 million people.
About three million hectares of Indonesia’s 10m ha of palm oil plantations are in Kalimantan. Malaysia has another 5m ha.
Producing beef under palms is a no-brainer, In Dr Ainsworth’s estimation. Palm oil is already a profitable business; beef production adds another enterprise to use the grass that is now either killed off with herbicide, or attracts unwelcome fire.
Under optimum conditions - which take time to develop - Dr Ainsworth’s assessment is that palm plantations are capable of carrying a beast per hectare.
The Kalimantan government has an ambition to run a million cattle in its palm plantations.
Dr Ainsworth reported on plans to test the suitability of Australian stock for the project with the importation of about 10,000 Brahman breeders for distribution to 200 smallholder co-operatives.
Ownership of Indonesia’s palm oil plantations is a complicated mosaic, ranging from large-scale, multinational enterprises to smallholder co-operatives, in which co-op families each own a hectare or two of palms.
The trial will distribute about 50 head of Australian breeders per co-op to about 200 of these co-operatives.
Indonesia has an ancient cattle culture, but it revolves around the small, fertile Balinese cattle that have calves Dr Ainsworth described, only partially joking, as “about the size of a Jack Russell terrier”.
Because these cattle have been bred to be thrifty users of scarce resources, growth is slow.
To Indonesian eyes, Brahman heifers shipped from Australia are huge and masculine, but their growth rates make a persuasive case for their importation.
Dr Ainsworth gave the example of a two-year-old bull born from an Australian Brahman cow shipped to Sulawesi and joined, via artificial insemination, to a Simmental bull.
At a weight of 500kg, the bull was sold to provide meat for a festival for the equivalent of a year’s smallholder wages.
Initially, smallholders are keeping imported cattle in sheds, going out each day to cut grass and palm fronds from the plantations and feeding stock in one place.
Dr Ainsworth thinks this is the cautious initial response of smallholders to highly valuable animals that are not as domesticated as their own stock. However, they are learning about the management advantages of electric fences, which Dr Ainsworth expects will eventually be used by default to graze stock directly under palm trees.
Some projects are described as “win-win”. In Dr Ainsworth’s estimation, high-growth Australian cattle run in Indonesian palm plantations provide multiple wins.
For Australian cattle producers, the system provides a new market for breeders.
For the various owners of Indonesia’s palm oil plantations, running cattle on plantation grass means stacking two enterprises in the same hectare.
Where plantation owners are poor rural families, cattle have the potential to earn them the income that gives them access to education and healthcare in a country where these things are not free.
Composted cattle manure provides fertiliser, or biogas for electricity production, and is a breeding ground for insects that feed extra chickens - another source of income.
And not least, given that huge tracts of Indonesia are currently on fire, grazing cattle greatly reduces fire hazard in equatorial regions that receive 2000-3000 millimetres of rain a year.