PRIME Minister Kevin Rudd and Indonesian President Susilo Bambang Yudhoyono have announced the establishment of an Indonesia-Australia Red Meat and Cattle Forum.

Speaking at the annual Australia-Indonesia Leaders’ Meeting in Bogor last week, Rudd also confirmed a $60 million funding package to be provided over 10 years for increasing agricultural cooperation and boosting investment in the red meat agribusiness sector in Indonesia.

The leaders hope the forum will enhance engagement and investment between the Australian and Indonesian beef industries and the governments of both countries.

Rudd said it would also improve prospects for long-term trade and investment in beef in Indonesia.

Speaking at an Indonesian breakfast on Friday, Rudd said the agreement could do more than simply satisfying rising domestic demand and ensuring a steady supply of beef for Indonesia.

“We can build a value chain to satisfy the markets of the world,” he said.

“Consider our complementary strengths. Indonesia is already a world leader in fattening and finishing cattle, with some of the very best intensive feedlots.

“And Australia’s extensive grazing lands and tradition of pastoral excellence allow us to breed high-quality beef cattle at a competitive price.”

But Rudd said there needed to be a relaxation of supply constraints for the Indonesian beef market.

“This alone could provide the necessary kick-start for further investment and cooperation,” he said.

By 2015 Indonesian beef consumption of 530,000 tonnes will exceed domestic production.

Rudd said he discussed cattle exports to Indonesia extensively with Yudhoyono, as well as the continuing challenges of animal welfare.

While no objectives have yet been outlined, Rudd emphasised that the two countries had a shared interest in the area of food security and that both leaders agreed to further explore trade and investment cooperation in the agriculture sector, including in the beef and cattle industry.