The Indonesian government says it is considering running its own cattle farming operation in Australia to address supply problems.
Indonesia's State Owned Enterprises Minister Dahlan Iskan has reportedly raised the idea of setting up a cattle breeding farm in Australia to help Indonesia achieve its goal of self sufficiency in beef production.
The minister said the cost of breeding cattle in Australia was a fraction of what it was in Indonesia, the Jakarta Globe reported on Tuesday.
"But the fattening is indeed best done in Indonesia. Increasing the weights of cattle in Indonesia is cheap and quick," he was quoted as saying.
The plan comes as the price of beef continues to rise in Indonesia as supplies run short after cuts to the country's cattle import quota.
At the same time, Australian cattle producers say they are still hurting from the 2011 ban on live exports to Indonesia.
The Australian government suspended live exports after footage was aired on the ABC's Four Corners of animal cruelty in Indonesian abattoirs.
The trade is not expected to recover to pre-suspension levels and Australian producers have said they believe Indonesia no longer sees them as reliable suppliers.
Mr Iskan said Jakarta would look to delegate the responsibility of running the breeding operations in Australia to Indonesian companies already involved in the industry.