India and Canada are the two global superpowers of the pulse world.
India is the world’s largest producer and the largest consumer of pulses. Canada is the world’s largest exporter of pulses.
India’s growing population, strong economic growth, and inevitable variability in production and harvest quality (weather dependent) all point towards the need for a more comprehensive policy approach that recognizes that food security relies on trade.
The current challenges with pulse trade in India signal that the time has come for the pulse superpowers to come to one view on how to address both the short-term and long-term commercial and political realities of pulse trade.
Both countries have a lot at stake. No government will benefit if actions end up creating unintended consequences like reduced pulse plantings in 2018.
The wrong signals from pulse superpower India could drive farmers in countries like Canada to sharply reduce pulse plantings, setting the stage for a potential shortage of pulses for the 2018-19 crop year.
Affordable pulse protein plays a huge role in food security for India and increasingly for the rest of the world. This is why it is so important that India’s handling of the immediate issue of depressed prices and large stocks of government-owned pulses is also mindful of how India’s policy will have a global reach affecting global pulse production and stocks available for trade well into 2019 and beyond.
Recent meetings between Canadian ministers and ministers in the Indian government have opened the door for collaboration on a longer-term approach. That is welcome news. Now governments need to act quickly and in a way that works in concert with the global open market in pulse trade.
There are two areas of focus for Canada and India to address in order to return pulse trade to mutually beneficial solid ground.
Import duties are one way for India to provide domestic price protection. Transparency in how and when duties are applied, increased and decreased is essential to both production and trade decisions worldwide. Duties linked to both market support prices in India and the commercial price for pulses in India can provide protection to farmer incomes in times of low prices, and be reduced or eliminated to ensure pulses remain affordable when prices rise.
Plant protection policies cannot and should not be used as non-tariff trade barriers. Blanket policies requiring fumigation would only make sense if all countries presented a uniform level of threat that could effectively be addressed by fumigation. This is not the case.
Phytosanitary policy will be country specific, reflecting the degree of risk of introduction of pests of quarantine concern. Regulatory requirements to use fumigants must be based on science-based assessments specific to the origin of the shipment.
Use of regulation to require use of any fumigant, especially ones like methyl bromide which is known to be extremely harmful to the environment, has to be based on a high level of risk. All countries, including Canada, should challenge misuse of fumigants as a matter of public interest and sound science-based policy.
Canada and India will continue to be valued pulse trade partners for the foreseeable future in part because the variability of crop production and crop quality in both countries is beyond the control of today’s technology. Governments will always have an interest in policy that supports local farmers and supports food security through trade, and will need to make sure that support policies don’t exacerbate price volatility.
A predictable trade policy including transparent processes for establishment of duties and adherence to a science-based approach to sanitary/phytosanitary issues aligns with Prime Minister Modi’s significant push towards improving the climate for doing business in India and attracting investment.
Strong business ties with India align with Prime Minister Trudeau’s policies and commitment to build economic ties with India.
Governments in Canada and India must adjust sound policy to ensure that it contributes to the stability of pulse values in India in the short term, and food security for 2018, 2019 and beyond.
Success will be judged by successfully balancing the outcomes for India’s farmers in the short term, and the impact on the global pulse trade over the longer term.
The eyes of the world are on the pulse superpowers. Let us be confident that we are travelling down the right path.
Gordon Bacon is CEO of Pulse Canada, the national association representing growers, traders and processors of Canadian pulse crops.