Indonesia eyes Oz land for cattle breeding

PLANS by the Indonesian government to purchase a million hectares of Australian land for cattle breeding have been welcomed by farmers.

Amid growing demands for beef, the southeast Asian nation will turn to Australia where breeding is about one fifth of the cost, Indonesia's State-Owned Enterprises Minister Dahlan Iskan said.

"It's specified only for breeding," Mr Dahlan said of the plan.

"After they're born, a few months afterward, (the cattle) must be brought to Indonesia for feedlot."

In contrast to breeding costs, feedlot expenses are three times cheaper in Indonesia, Mr Dahlan said.

National Farmers' Federation boss Matt Linnegar said the Indonesian investment would provide a much-needed injection to Australia's struggling agriculture sector.

"Our sector will not survive without a level of foreign investment," he told SBS TV on Thursday night.

"If it's part of a broader solution where the trade is continuing and they invest in that property and in infrastructure, that could in fact mean more jobs for Australians."

Incoming coalition government MP Barnaby Joyce, who holds the rural NSW seat of New England, was more wary of the plan.

"This is like selling somebody (a portion of land equal in size to) the ACT, so it's quite a substantial chunk of Australia," Mr Joyce said.

He said Australia has plenty of cattle to sell but live trade was suspended by the federal government in 2011 amid animal cruelty allegations.

Indonesia's purchase of Australian land could be blocked by the federal government or the Foreign Investment Review Board.

But farmers say the number of cattle bred on a million-hectare property would not pose a threat of market domination and there are suitable land holdings available for sale.

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