Canadian PM Justin Trudeau is scheduled to visit India shortly.
As pulse is a significant commodity for both the countries, trade policies regarding pulses are expected to be in focus.
How significant is Pulse Trade?
While India is the world’s largest producer and consumer of pulses, Canada is the world’s largest exporter of pulses and the largest supplier to India.
Hence, pulse is an important commodity for economy, and trade for both countries and for their farmers.
The challenge will be to balance the importance of ensuring adequate returns to farmers along ensuring undisrupted affordable supply for consumers.
Finding a shared understanding over dal might even prove to be the engine for the future of trade between Canada and India.
These opportunities can be realised through rules-based, predictable and mutually beneficial approaches to business.
What are the significant aspects of India’s pulse policy?
The Situation - India has launched agricultural policies designed to increase self-sufficiency in pulses and to ensure an assured income for pulse farmers.
There is also a wide recognition of the broader social value of pulses to the environment and to ‘human health and dietary patterns’.
Hence, the details of pulses in domestic food policy and their role in food security and the contribution to food trade needs to be worked out.
While climate change concerns are emerging in every field, a plan for ensuring food security that accounts for variable production is essential.
Market Uncertainty - India imposed quota restrictions on pulse imports and also increased import duties to arrest the dip in local prices.
While these measures are intended to support local farmers and foster self-sufficiency in pulses, these are having ramifications on worldwide production.
Pulses production in 2018 is forecasted to plunge significantly due to lack of demand surety due to unpredictable government policy.
As India does not yet have a long-term record of self-sufficiency in pulses, a decline in global pulse production ought is of concern.
What is needed?
Under WTO rules, India has the right to impose these import duties, to safeguard its farmers, but it also has a commitment to global food security.
Hence, it should be ensured that domestic policy does not unnecessarily impact global pulse production.
A transparent policy is to be evolved on how India will determine its import duties and export restrictions regarding pulses at various junctures.
If this is not done, there is the risk of Indian market losing credibility in the eyes of the importers and will consequently affect supply further.
Predictability in government policy will also provide assurance to farmers and traders on the terms on which Indian markets may move.
Consequently, it will be ensure that consumers are protected as rising prices for pulses will, result in lowering of import duties and enhance local supply.
Also, it should be ensured that pulses ‘loaded and en route’ to India would not be subject to higher duties on arrival.
