The 8th Partnership Meeting: Promoting Strategic Dialogue in Responding to Digital Transformation in the Red Meat and Cattle Sector

The 8th Partnership Meeting was held in Bali, Indonesia on 4 November 2019. The meeting was co-chaired by Wisnu Wijaya Soedibjo of BKPM Indonesia and Jodie McAlister of Department of Agriculture, Water and the Environment Australia. Partnership members from both countries, representing the Government and Industry participated in the meeting.

Co-chairs Mr Wisnu Wijaya Soedibjo and Ms Jodie McAlister welcomed members to Bali and acknowledged the achievement of Partnership over the last twelve months. “This year alone, the Partnership has trained over 74 Indonesians in commercial cattle breeding and management, and has produced software and tools to help potential investors plan for cattle business. This is an important milestone to help accelerate the commercial viability of cattle breeding business in Indonesia,” said Mr Soedibjo.

Ms Jodie McAlister emphasized the completion of Program Design Development and the establishment of five industry-led Reference Groups as proposed in the Program Design Document, to guide future activities of the Partnership. The Reference Groups are: Investment; Supply Chain; Innovation and Exports; Capacity Building; and Communications. “This meeting promotes direct engagement between reference group members to identify Partnership’s future priorities ,” said Ms McAlister.

The Co-chairs also emphasized that one of important highlights of the meeting is to facilitate strategic dialogue between industry & government of the two countries on how the industry responds to digital transformation in the sector.

To inspire members on the topic, the meeting invited Indonesian Partnership member, Mr. Juan Permata Adoe, Deputy Chairman for Food and Cattle Industry of the Indonesian Chamber of Commerce and Industry – KADIN to share Indonesian Beef Cattle Industry Roadmap; and Mr Pamitra Wineka, the President and Co-Founder of TaniGroup, an agriculture-focused start-up working on agriculture’s supply chain, e-commerce and crowdfunding to share how digital technologies will change the way agriculture industry operates.

Mr Adoe presents a comprehensive approach to developing Indonesia’s cattle and red meat sector, including strategies to promote the per capita consumption of beef in the country, while Mr Wineka provided an overview of digital technologies in the Indonesian agriculture sector, their success and challenges, as well as future trends.

Members discussed how the introduction of these digital technologies are changing the way the industry operates and how the Australian and Indonesian industries are responding to these changes, and how the Partnership can promote the innovation within the sector through its programs. The meeting also discussed the Partnership’s ongoing projects, such as the findings of the Unlocking Business and Investment Opportunities in Indonesia’s Red Meat and Cattle Sector Project; the progress of the Joint State of the Industry Report; and the outcomes of the commercial viability assessment of the three breeding models tested under the Indonesia Australia Commercial Cattle Breeding Program (IACCB).

IACCB presentation received positive response from the members for outlining the financial and commercial opportunities of the three breeding models based on partners’ experiences after three years engagement with IACCB.   Mr Boon highlighted that cattle under palms (SISKA) is a promising model with an Internal Rate of Return (IRR) of 10 – 16%. SISKA has a positive cashflow starting from year 4. The second model, open grazing, requires low initial investment and operational costs, but achieving the necessary growth rates of cattle requires development of improved pastures. This model is producing feeder cattle (cattle of about 320kg as imported from Australia) at lowest cost ($3.2/kg). The IRR at 10% could be attractive for ex-mining land and non-used land permits. Higher IRR can be generated from additional pasture development. The third model, smallholder breedlots, provides excellent KPIs for calving and weaning rates, promising IRR at 12% and positive cashflow by year 3, but there are risks around the communal systems and technical challenges.

Mr Wisnu Soedibjo noted that Indonesia potentially has three breeding system choices, all of which can be profitable. Mr Soedibjo suggested that the Communications, Investment and Supply Chain Reference Groups collaborate to promote the opportunities of cattle breeding in Indonesia.

The 8th Partnership Meeting concluded with agreed priorities for each reference group to implement activities in 2019-20. The meeting also agreed that the ninth meeting of the Partnership will take place in Canberra, Australia in early March 2020.