There is a growing chorus of voices calling on the Indian government to reinstate a duty on imported pulses.
Earlier this year, India’s food ministry came out in favour of a 7.5 percent duty. That was down from the 10 percent suggested by the Commission for Agriculture Costs and Prices.
The latest government sector to join the fray is India’s department of agriculture, which is pushing for a duty of between 10 and 20 percent.
The decision rests with India’s cabinet and the finance department, said Stat Publishing editor Brian Clancey.
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“There is no signal from the government that they’re going to bring duties in,” he said.
There is an existing five percent duty on pulses, but every year since the 2007-08 world food crisis the government has exempted pulse importers from paying any duty.
Clancey thinks the coming 2014 general election in India is generating momentum for a reversal in that policy.
“It’s a play for the farm vote.”
A duty would raise the price of imported product and encourage domestic production of the crops.
Some observers feel a duty could be re-introduced as soon as the next budget in early 2014.
“The trade in India thinks that given the amount of chatter, how many departments are weighing in on this, that this may become inevitable.”
However, any change in agricultural policy won’t be made without a wide-ranging debate in a country where agriculture makes newspaper headlines daily.
“Pushback is developing all over the place, so we’ll see,” said Clancey.
The argument in favour of a duty is that it is needed to encourage do-mestic production and to boost prices farmers receive.
“The counter argument is that we need this like a hole in the head because it’s going to drive up the cost to the poor who are undernourished as it is,” said Clancey.
He said it’s possible that the government may hike import duties to protect farmers and then turn around and help out impoverished consumers through increased food program subsidies, but that would be an expensive proposition.
India is Canada’s top pulse customer. Clancey said a duty doesn’t necessarily mean India would buy less, but it would likely mean consumers would have to pay more and the majority can’t afford it.
