Market Access Work Ongoing for Canadian Pulses

The Canadian pulse industry is working hard to mitigate market access issues in India

by Delaney Seiferling

There is still a lot of uncertainty around market access for Canadian pulse exports to India this year. 

But the Canadian pulse industry has been working closely with the Federal Government to do everything in its power to address and remove the constraints the Indian government has created in the last year.

“The pulse industry has come together to do everything we can to help sort out these issues,” says Gord Kurbis, Pulse Canada’s Director of Market Access and Trade Policy.

India’s treatment of Canadian pulses has been a focus for the Pulse Canada team for some time now.

In December of 2016, Pulse Canada contributed to a dossier of scientific information that was sent by the Canadian government to the Indian government, documenting in great detail how Canadian pulse exports do not create plant health concerns that would warrant fumigation.

In February of 2017, this information was re-submitted with updates, including information about the rigorous procedures Canadian exporters and Canadian government agencies, such as the Canadian Food Inspection Agency (CFIA) and the Canadian Grain Commission, follow to prevent phytosanitary risks of exported crops.

Last year, members of the pulse industry and government travelled to India twice to discuss market access issues with Indian officials, and continue ongoing discussions to find a long-term trade solution.

The second of these trips, last November, included International Trade Minister Francois-Philippe Champagne, Transport Minister Marc Garneau, and Innovation Minister Navdeep Bain.

Prime Minister Justin Trudeau also led a mission to India in February. After the visit, the Canadian and Indian governments released a joint statement saying that they would work together to finalize an arrangement by the end of 2018 to enable the export of Canadian pulses to India free from pests of quarantine importance, with mutually acceptable technological protocols. The statement also noted that transparency and predictability of market access conditions are key in advancing the food security goals of both countries.

Since this statement was released, Pulse Canada has continued to press the Canadian government to take actions to ensure the commitments outlined are met, with emphasis on policies that are predictable, transparent, and that can be implemented with sufficient advance notice to respect contractual commitments between Indian and Canadian companies. 

Pulse Canada also emphasized that Canada and India must affirm their support for science-based approaches to plant health, food safety, and environmental protection.

However, the big question is, how much of an impact will this work have?

There is general consensus that the motivation behind the Indian government’s heavy regulation of imported pulses is motivated by domestic politics rather than scientific safety concerns. After their trip to India last fall, Federal Agriculture Minister
Lawrence MacAulay and International Trade Minister Francois-Philippe Champagne issued a joint statement noting their disappointment in this unfair treatment. 

“The Government of Canada is deeply concerned and disappointed with the recent regulatory and tariff decisions made by the Government of India affecting the Canadian pulse trade,” the statement read.

Also lending to the current problem is the fact that India’s domestic pulse production has seen higher-than-usual volume for the last two seasons, meaning the country was less reliant on Canadian exports.

“India increased its Minimum Support Prices (MSP) for pulses, and Indian growers did what growers all over the world do, which was to increase plantings in response to higher pulses prices,” Kurbis says. “They also had favourable weather, so they do not need imported pulses as much right now. The question is for how long.”

One school of thought is that above-average production may be the start of a longer-term trend towards a more sustainable agricultural system in India.

In 2016, India released a report outlining a goal of becoming self-sufficient in pulses by producing 24 million tonnes of the crops domestically by 2020. The report also noted that pulses are a major source of dietary protein in India, especially for the majority of low-income households, and observed that demand had increasingly outstripped the supply at the time, resulting in rapid price increases, costing the Indian treasury over $1 billion annually.

Among the report’s recommendations was that the Indian government “incentivize the pulse producers through attractive (substantially high) MSPs and a robust procurement network.”

India has since increased its MSP twice and amassed 1.5 million tonnes of government stocks.

But some industry insiders are skeptical. G. Chandrashekhar, a journalist and global agribusiness specialist based in India, does not foresee this becoming a longer‑term trend.

“Indian agriculture is fragile and vulnerable,” he says. “India is only one bad monsoon away from a major farm disaster. So it would be sensible to … keep the import window open by following a dynamic trade and tariff policy and not alienate traditional suppliers who have supported India’s quest for nutrition security.”

However, he cautions that the market access issues will not be alleviated any time soon.

“Given that the current domestic price situation is still not favourable for growers and good prospects for the impending rabi harvest, I do not foresee a quick easing of the current market access issue that Canadian pulses encounter at present. The Indian government is surely faced with domestic socio-economic and political compulsion to be seen to be supporting growers.”

Background on the Market Access Issues

Market access issues for Canadian pulse exports to India officially began in 2003, when India created a regulation requiring that all imported pulse crops be fumigated in their country of origin with methyl-bromide.

Canada has since been given exemptions to this regulation, for a variety of reasons including that Canadian temperatures are too cold for the fumigation to be effective. The latest exemption expired last September and was not renewed, putting Canada at a competitive disadvantage to other countries that were granted further extensions.

Adding further challenges, in November India unexpectedly introduced a 50 per cent tariff on dry pea imports — the highest pulse duties have ever been for the country — and in December also applied a 30% tariff on lentil and chickpea imports, followed by later increases to 33 per cent for lentils, and 60 per cent for chickpeas. The justification for these tariffs is to provide support for local pulse growers, according to the Indian government.