The move by Elders to put out a statement to the ASX putting a figure the cost to its business of the live cattle ban will crank up the pressure on the minister for agriculture Joe Ludwig to resign or be sacked.
Elders shares slumped more than 1.3 per cent to 39 cents on a day when the market was flat on the grim news that the Gillard Government’s decision to suspend live cattle exports to Indonesia could cost it up to $7.3 million.
For a business that lost $14.6 million in the first six months to March 31, on revenue of $1.08 billion, it is a cost it can ill afford.
Elders said the direct impact of the suspension on the company in June was $1 million and it would cost a further $2.2 million with the flow-on effects on northern Australian trading and lower prices, taking the total cost in June to $3.2 million.
Other companies, including the listed Australian Agricultural Company, have come forward and downgraded profits, but the killer punch is the damage it has done – and will do – to relations with one of our most important trading partners, Indonesia, which is also a big importer of wheat and cotton. That is yet to play out, but the longer a resolution is not found, the bigger the cost will be.
While the nation was horrified at the video of animal cruelty in some Indonesian abattoirs exposed by Four Corners, the industry has become a political football, with the welfare of animals left unloaded at Port Hedland one of the last things on politicians' minds.
The Gillard government needs to act fast to reopen abattoirs that are of an acceptable standard. There also needs to be a rapid increase in the quality of some of the B-grade abattoirs to an accredited standard. And it needs to sack Ludwig if he isn’t willing to resign.
adele.ferguson@fairfaxmedia.com.au
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