Terms of trade: live cattle exports in the Asian Century

AUSTRALIA IN THE ASIAN CENTURY – A series examining Australia’s role in the rapidly transforming Asian region. Delivered in partnership with the Australian government.

Today, Professor Clive Phillips takes on the debate around Australia’s live cattle trade with Asia.

Australia is currently one of the world’s food exporters. Last year, exports were valued at over $27 billion. However, the population is growing – will we still export at the end of the century?

Meat is presently the most important agricultural export commodity, worth about $5 billion. In the early days most of our meat exports went processed to Europe and the USA. Now about 20% is exported live to Asia, with cattle going mainly to Southeast Asia and sheep to the Middle East.

Some in the industry have taken steps to improve the welfare of these animals, but the length of the journey “from paddock to plate” and the lack of control in recipient countries means welfare issues are inevitable.

Surveys show that most Australians do not support the live export trade. In our liberal, democratic country, Australians have the opportunity to express concerns, and this has had an impact on government and industry management of the trade.

But while creating policy change by being vocal in Australia is possible, many Asian people may not be able to speak out or effect change in the same way if they are offended. In Asia there is also little opportunity or desire to buy meat that has been produced under guaranteed high welfare standards.

Different cultures

Exporting livestock created an opportunity to extend and improve trade relations with countries such as Indonesia and Saudi Arabia which have very different cultures to our own.

But the differences in welfare standards are profound. For example, in these Muslim countries there is a requirement to kill animals by a cut to the throat, which prevents pre-slaughter stunning, whereas in Australia nearly all animals are stunned before slaughter, rendering them senseless before they bleed to death.

Thus, rather than providing opportunities to enhance trade relations, the export of livestock has created divisions. Frequently, the trade has had to be suspended by the Australian government because of animal welfare issues.

This encourages recipient countries to source their meat from other countries or develop their own production capacity. Increasing meat production capacity in Asia means destruction of rainforest and may even reduce staple crop production for the ever expanding human population.

These cultural sensitivities threaten Australia’s dominance of the world’s meat trade, which evolved because of its natural advantages in raising livestock.

Choices ahead

The changes in commodity trade that will take place over the course of this century are hard to predict, especially for sensitive commodities like livestock. But one choice is clear – Australia can remain a small but wealthy economy in a distant corner of the world or it can share its resources and development with its neighbours.

We already have major skills shortages in areas of sensitive exports, mining and agriculture in particular. Developing a skilled labour force, sharing resources and co-operation with our neighbours will be vital for success in the 21st century.

Australia is well placed to progress along these lines, having already developed a multicultural framework for a nation that demonstrates considerable tolerance compared to other countries.

This need to share our resources and development with our neighbours is all the more pressing as Asian population growth is foreshadowing major food shortages. This, coupled with climate change, could further widen the economic gap between Australia and the Asian continent.

A new strategy

If we grow our own society using our agricultural resources locally, accepting immigrants from Asia to help us develop our skills base, our livestock will not need to be exported to Asia.

We could use our resources sustainably to produce food locally for an expanded multicultural population. Australia can process and slaughter its cattle here, avoiding the ethical issues of live animal export.

As the century progresses it is likely that raising cattle and sheep extensively on range-lands will diminish in importance, as our food production technologies develop so that we can produce large quantities of high quality food from crop farming. The carbon footprint of our agriculture would vastly decline as we replace animal products with crops and consume them locally, remembering that agriculture is a major contributor to global climate change.

This transition in the types of agricultural production is most likely in parts of the tropical north of Australia, where there is water supply and adequate temperatures for year-round crop growth.

Already we see the popularity of vegetable-based milk and meat replacements growing significantly. In Europe, soya milk sales are currently growing at more than 20% per year, and Asian people have a strong and growing demand too.

The Asian century will bring opportunities for Australia to develop into a modern multicultural society that will be the shape of future successful nations. Australia’s good fortune in having the resources to develop locally in this way has remained largely unrealised.

This is part sixteen of Australia in the Asian Century. You can read other instalments by clicking the links below:

Part One: Want to get ahead this century? Learn an Asian language

Part Two: Australia’s great, untapped resource … Chinese investment

Part Three: Beyond China: Australia and Asia’s northern democracies

Part Four: More than a farm on top of a mine: Australia’s soft power potential in Asia

Part Five: Australia can lead the fight against Asia’s lifestyle disease epidemic

Part Six: Why Australia needs an Asian Century Institute

Part Seven: Taming the tigers: tourism in Asia to become a two-way street

Part Eight: Australia will need a strong constitution for the Asian Century

Part Nine: A focus on skills will allow Australia to reap fruits of its labour

Part Ten: Engaging with Asia? We’ve been here before

Part Eleven: China, India and Australian gas – who controls energy in the Asian Century?