The federal opposition says the Labor government is to blame for Indonesia's plan to cut Australian live cattle imports almost by half.
The Indonesian agriculture ministry has confirmed plans to cut the cattle import quota from more than 520,000 head to only 280,000 next year.
Australia's cattle industry was surprised by the size of the cut, but the move was foreshadowed in July when it was revealed Indonesia was more advanced than previously thought in its drive to become self-sufficient in beef production by 2014.
The scaling back of live cattle imports is based on the latest census of domestic cattle available for slaughter in Indonesia. It shows Indonesia has increased its stocks to about 14.4 million - well in excess of the 14.2 million Jakarta believes is needed for Indonesia to become self-sufficient.
But Opposition Leader Tony Abbott says Labor is to blame for the reduction and called it "very, very bad news indeed for the cattle producers of the Northern Territory".
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The Liberal leader, visiting Darwin on Friday, said Jakarta's decision was linked to Australia's suspension in June of live animal exports to Indonesia.
The temporary ban came after video evidence on ABC television showing the mistreatment of animals in Indonesian abattoirs.
Exports only resumed after an agreement was reached on new standards for the treatment of animals bound for slaughter.
Mr Abbott told reporters Prime Minister Julia Gillard had bungled Australia's response by sending "incompetent" Agriculture Minister Joe Ludwig to Indonesia earlier this year. "He plainly made a bad situation worse," he said.
"If this was a functional government, as opposed to a dysfunctional government, Julia Gillard would have been prepared to send (foreign affairs minister) Kevin Rudd.
"So, the cattle producers of the territory are in this jam, in large measure, because Julia Gillard wasn't prepared to let Kevin Rudd do his job."
Nationals leader Warren Truss was even more blunt, saying, "The Indonesian government has retaliated by accelerating moves towards self-sufficiency.
But Australian producers may not be in as big a jam as they think. Joni Liano, executive director of the Indonesian Meat Producers and Feedlot Association, told AAP the number of live cattle that would be needed for slaughter next year was still close to 500,000 head. He said Jakarta's census figures were optimistic.
"The quota request for cattle imports has been submitted, and in 2012 there should be 480,000 to be imported from Australia."
The Cattle Council of Australia says the large import quota cut outlined by the Indonesian government on Friday would, if realised, have a significant impact on northern beef producers.
"It's quite a large reduction and more than we expected," vice-president Andrew Ogilvie told ABC TV.
Animals Australia, which was instrumental in exposing cruelty at Indonesian slaughterhouses, says Friday's announcement isn't a reprieve for livestock.
More and more animals were being sent to other markets such as the Middle East, Egypt and Turkey "where, like Indonesia, animals are permitted to be brutally slaughtered while fully conscious," executive director Glenys Oogjes said in a statement.
Queensland Premier Anna Bligh says the reduction in Indonesian imports is a devastating blow for producers but she can see one positive aspect.
"It does spur us on to ... continue the work we're doing to look at an abattoir at Cloncurry to give these producers the option of domestic production," she told reporters in Brisbane.
An abattoir could get top quality Queensland beef from north Queensland to the domestic market in a more commercially viable way and diversify options for producers, she said.
