When Canada’s prime minister is in India February 17-23, pulses will most certainly be on the menu. Pulses will also be on the agenda for meetings between Prime Minister Justin Trudeau and Prime Minister Narendra Modi. It would be both appropriate and symbolic if our prime ministers, representing the interests of the world’s pulse super powers, discuss pulse trade policy and the broader trade interests of our nations while dining on India’s famous dal.
India is the world’s largest pulses producer and consumer. What is not as well known is that Canada is the world’s largest exporter of pulses and the largest supplier to India. When leaders of the biggest pulses players in the world arrive at a shared understanding of the importance of pulses to farmers in both countries, it will augur well for the nations’ trade relations.
Social value
India has launched agricultural policies designed to increase self-sufficiency in pulses and support farmers, having long recognised the broader social value of pulses to the environment and to human health. Many Canadians recognise that pulses are an essential part of affordable diets. Prime ministers will need to savour the intricacies of pulses in domestic food policy and their role in food security and the contribution of food trade.
Their challenge will be to balance the importance of ensuring adequate returns to farmers with the necessity of delivering adequate supplies of affordable pulses to consumers 365 days each year.
In a time of concern over climate change, a plan for food security that accounts for variable production is an essential element of sound government policy and a responsibility of both governments on the global stage.
India introduced import duties of 50 per cent on peas, and 30 per cent on chickpeas and lentils in late 2017. Earlier in 2017 India imposed quota restrictions on other pulse crops. These measures are intended to provide support to farmers and foster self-sufficiency in pulses. At the same time, import duties and quota restrictions on India’s pulses imports have changed how farmers in most other countries are looking at pulses. Planting of pulses in 2018 is forecast to plunge in nearly all pulse-producing nations. India does not yet have a long-term record of self-sufficiency in pulses and a decline in global pulse plantings ought to raise some important concerns.
Import duties
Transparency in how India will determine when it is time to reduce pea import duties, and the conditions under which import duties for masoor or chickpea would rise further, or fall, need to be understood in the marketplace. Predictability and transparency in what will trigger a change to government policy will not only provide some assurance to farmers and the trade on the terms on which India may return to the markets and the costs of completing a trade, but also provide consumers with confidence that rising prices for pulses will, at some point, result in a lowering of import duties so consumers aren’t paying higher prices compounded by government duties of 50 per cent, or more.
Under WTO rules, India has the right to impose these import duties. As part of a commitment to global food security, India may also have the responsibility to ensure that domestic policy does not unnecessarily impact pulse production on a global basis and undermine confidence in future trade with India. In addition to a shared understanding of how import duties will be set and modified, India could ensure that pulses loading and en route to India would not be subject to higher duties on arrival. India may also want to take some of the measures now in place for the imposition of duties on oil imports and apply these good practices to the administration of duties on pulses.
Few farmers in Canada or India would have imagined that two prime ministers might share a meal where pulses were both on the menu and on the meeting agenda. And few people in the areas of emerging trade might have imagined that finding a shared understanding over dal might be a metaphor for the future of trade between Canada and India.
Opportunities can be realised through rules-based, predictable and mutually beneficial approaches to business. These same principles must be applied to trade challenges when they arise.
The writer is the CEO of Pulse Canada