Government did well in holding pulses of nation

Much as India seems to have won the battle, a war might be a worst thing to experience,” this threatening line is from the article ‘India Import Ban on Tanzania Pigeon peas: When a Winner Looses All’ by Zirack Andrew, National Coordinator of Tanzania, Pulses Network in Dar Es Salaam.

He also says “And this won’t be the first time. It happened in the year 1254, when young Marco Polo travelled to China where he found spaghetti. In no place on earth other than China spaghetti was produced. But young Marco changed the game after coming back to Italy. He introduced the produce and many people joined the bandwagon. Now, Italy is the leading producer of pasta followed by United States, Brazil, Russia and Turkey. Complacency didn’t leave China on the safe side; today it is not even in the top five leading countries in producing the product. Can it happen to India also?

It is not important to discuss the relevance of the example or the threat by Zirack Andrew. What is important is to understand why the National Coordinator of Tanzania, Pulses Network is writing these lines. Let us understand from his article, where he writes:

What happened in that last season is that we mobilized our farmers (to increase pigeon peas production) and India produced a lot; so that was the problem. They (Indians) convinced us (to produce pigeon peas). Now after being self-reliant, they imposed a ban on countries which had no bilateral agreement with, but (surprisingly) they did the same to Tanzania while we have a bilateral agreement which we entered into with them in 2000, and so we told them,” said Charles Mwijage, Minister for Industry, Trade and Investment while addressing the press on September 4, 2017, soon after coming back from New Delhi on Tanzania-India Joint meeting where he met his counterpart and discussed the possibility of lifting the ban.

He also quotes a threat of “a case must be lodged to the International Court of Arbitration for breach of contract.”

There is an article “Indian Tariffs Unhelpful to Pulse Trade” by Pulse Australia, which states:

On Thursday 21 December, the Indian Government announced a 30% tariff on imports of chickpeas and lentils, effective immediately. This will hit Australia’s two most important pulse crops hard, right in the middle of our harvest and when much of our export trade is getting under way for the year. This move follows hot on the heels of the 50% tariff impost on field peas announced about a month ago.

 “There are two impacts,” said Pulse Australia Chairman, Ron Storey. “First, there is the product on the water, for which Pulse Australia believes the Indian Government ought to provide a tariff exemption.

 Initial indications are that some 200,000 tonnes (around A$150 million) of Australian chickpeas and lentils are in transit to India and may be affected.

“The Indian Government should provide an exemption for Indian importers for product contracted and shipped prior to the new tariff being announced,” said Storey. “Indian buyers and Australia sellers have contracted in good faith, and the prior conditions should apply to permit smooth execution of those contracts.”

Pulse Australia has already made this request via Australian Government channels in India and is also working with Canada, whose position will be similar to Australia, to clarify this matter.”

In the same issue in the article “A Path Forward For Pulses”, Gordon Bacon, of Canada Pulse writes:

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 2018-2019 crop year.

Each country’s response is directly proportional to the financial and social hit it will take due to growth in pulse production in India. Tanzanian economy may go back by few years hence the strong reaction.

International Trade Centre, a joint agency of the United Nations and the World Trade Organisation is implementing a five year project called ‘Supporting Indian Trade and Invest for Africa’ (SITA). With the intention of encouraging farmers and providing stable price for the farmers, Mahindra & Mahindra came out with innovative idea of Minimum Assured Price (MAP) in pulses segment to be piloted in Arusha, Tanzania. This is first of its kind concept in pulses segment, which guarantees farmers a minimum price based on the cost of production plus a fair profit margin. Under SITA, Kingori SACCOS, a Tanzanian farmers’ organization is shortlisted for this pilot project. Under this unique model, Mahindra and Kingori SACCOS have agreed on a minimum price based on the cost of production plus a fair profit margin. So it is not that India left the farmers of Tanzania in a lurch.

The pulse exporting countries have completely forgotten that they used to monitor the Indian market conditions closely and happily jack up the export prices the moment they use to figure out low production of pulses in India.

Coming back to pulse production, it is important to understand what happened in 2018 that the pulse producers are up in arm against India?

Following table listing the pulse production and pulse import over the years, has the answer.

 

Pulses Production Vs Imports (million tonnes)
Financial Year Production Imports
2000 – 01 11.06 0.35
2005 – 06 13.38 1.70
2010 – 11 18.24 2.70
2013 – 14 19.25 3.66
2014 – 15 17.15 4.58
2015 – 16 16.35 5.80
2016 – 17 23.13 6.61
2017 – 18 24.51 5.65

 

The pulse production in India has grown by 50% in last two years, which is leading to cut in imports. In the year 2018-19, the reduction in imports will be visible more starkly and one will be able to understand why pulse exporters to India are up in arms.

In the 2015-16 crop year (July-June), a mere 1.19 lakh tonnes (lt) of pulses were procured under the Price Stabilisation Fund set up by the Narendra Modi government: 50,422.53 tonnes during kharif and 69,049.08 tonnes in the rabi marketing season.

In 2016-17, procurement by the National Agricultural Cooperative Marketing Federation (NAFED), Food Corporation of India and Small Farmers’ Agribusiness Consortium rose over 13 times to 15.62 lt. That included 14.74 lt of kharif pulses (11.66 lt tur, 2.20 lt moong and 0.89 lt urad) and 0.87 lt of rabi pulses (0.60 lt chana and 0.27 lt masur).

 

In the current year, procurement, which is ongoing, is set to further double. NAFED, the only government agency now procuring under the so-called Price Support Scheme (PSS), has till now bought 14.59 lt of chana, 8.58 lt of tur, 2.95 lt of moong, 2.03 lt of urad and 1.36 lt of masoor. That adds up to around 29.50 lt. The final figure could well cross 30 lt – unprecedented as far as pulses go.

But unlike for wheat and paddy for which there are time tested established systems the actual process of procurement has been far from smooth in the case of pulses. But one can be rest assured that the government will solve this issue also as early as possible.

India has a large number of vegetarians and pulses are biggest source of protein. So high pulse production means availability of the same at cheaper rate i.e. pulses will be available to the poor which, in turn will contribute to reducing malnutrition in India and building a healthy India.

Recently when the Prime Minister of Canada, Trudeau, visited India the issue of pulse trade was high on agenda. Now India is in a position to dictate terms to a few nations on foreign policy. So, in the end, India is not only winning the pulse war but lot of other wars along with it.

(By Sandeep Singh. Views expressed are personal)

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