Canadian and Indian prime ministers reach a deal that will see countries resolve the issue by the end of the year
The prospect of a resolution to India’s pulse fumigation requirements this calendar year is good news for Canadian pulse growers and exporters, says Pulse Canada chief executive officer Gordon Bacon.
An agreement reached last week during a meeting between Indian Prime Minister Narendra Modi and Canadian Prime Minister Justin Trudeau promises the two countries “will work closely together to finalize an arrangement within 2018 to enable the export of Canadian pulses to India free from pests of quarantine importance, with mutually acceptable technological protocols,” said a statement released by both countries.
That would end a system of on-going short-term exemptions from mandatory fumigation requirements that have been available to Canada since 2003.
The current exemption is in place until June 30.
“I think that what we have got in this prime ministers’ statement is what we are due, and that is a science-based approach to look at it,” Bacon said just hours after returning from India.
Canada has long argued that the nematode of concern to India is not found in Canada and that the required fumigation product doesn’t work in the country’s cold weather. The Canadian Food Inspection Agency submitted documents more than a year ago outlining how Canada’s regulatory system could alleviate India’s concerns.
Bacon said industry had been told for some time that the way to resolve the issue was to raise it at the prime ministerial level because of the political importance of pulses in India.
Agriculture Minister Lawrence MacAulay and International Trade Minister Francois-Philippe Champagne have also travelled to India within the last year to raise the issue.
MacAulay said in an emailed statement that Canadian exporters still face trade issues in India, including a penalty of five times the normal inspection fee.
“We are actively working with senior Indian officials, including through a direct discussion on the issue between the PMs Trudeau and Modi, and remain in close contact with the Canadian pulse industry to resolve this issue and obtain a long-term solution,” he said.
Bacon said the Canadian industry didn’t expect that India would remove duties on imported peas, chickpeas and lentils as a result of last week’s meetings.
Indian domestic policy has set the market support price at 38 cents a pound. Bacon said it can’t then have an open border for pulses to enter at 18 or 22 cents.
“India has a very clearly articulated agriculture policy to increase farm support, and when you know that Indian farmers are some of the poorest people in the world, it’s understandable why the Indian government is taking the approach that it is,” he said.
Saskatchewan Pulse Growers chair Corey Loessin said Canada was correct to focus on fumigation rather than tariffs because India has the right to apply them under WTO rules.
“I know farmers are frustrated with that,” he said.
“It’s just not a simple problem to solve from our end.”
The fumigation agreement, on the other hand, will alleviate at least one uncertainty in that marketplace, he said.
Some farmers have said Canada should look at retaliatory measures to combat the tariffs of 50 percent on peas, 44 percent on chickpeas and 33 percent on lentils. However, Bacon said international trade rules allow India to place tariffs up to 100 percent on chickpeas and lentils, making retaliation unfeasible.
He added that Pulse Canada is asking for transparency and predictability in trade with India. Canada and other countries met at the India Pulse and Grain Association meeting prior to Trudeau’s visit and all agreed they need to know what is driving India’s decisions.
He said India’s domestic policies are sending negative messages to the market.
Yet, the country is far from self-sufficient in pulse production and while it might not require six to 6.5 million tonnes of imports, Bacon said, there is still a market of 3.5 to four million tonnes.
Loessin said it’s understandable that exporters would be nervous about dealing with fluctuating policies.
“That is an ongoing concern that we certainly have,” he said.