Canadian pulse producers eye improving trade with India as hefty tariff suspension extended

A growing demand for imported lentils in India could be a boon for Canadian farmers, as the two countries continue trade talks.

In late July, India issued a notice to extend a suspension of a tariff on imported lentils through spring 2023 — an opening for major pulse producers like Canada after years of steep, fluctuating tariffs.

"I'm optimistic that that's a good sign, that they're starting to come around and they'll be looking for our good quality Canadian pulses," said pulse producer Kevin Auch, who is also chair of industry-advocacy group Pulse Canada.

A type of legume, pulses are edible, dried seeds including lentils, chickpeas, dried peas and dry and faba beans. 

Producers like Auch, who farms near Lethbridge, Alta., have added pulses to their crop rotations because of their ability to naturally pull nitrogen into the soil.

About 20 per cent of what Auch plants are pulses — mostly yellow peas. With the upcoming harvest shaping up to be average or above average, the news out of India is positive, he said.

For nearly 20 years, India was Canada's biggest customer for lentils and other pulse crops, said Mac Ross, Pulse Canada's director of market access and trade policy.

Canada exports over 80 per cent of the pulses it grows, and, for a time, more than half of the pulses India imported came from Canada, Ross said.

But India is also the world's largest pulse producer. In 2017, the country started imposing restrictive tariffs on imported pulses, in a bid to increase self-sufficiency and improve the incomes of its own farmers.

What India was trying to do was understandable, Ross said, but it made for an abrupt and unpredictable situation for the Canadian pulse industry.

India is often trying to balance affordable prices for its consumers, with good prices for its farmers. Meanwhile, Canada, as a trading partner, is seeking more predictability and long-term guidance on how India's trade policy will operate in the long term, Ross explained.

In the years since India started imposing tariffs, China has become a bigger customer for Canadian pulses. But Pulse Canada is happy to see the ongoing suspension of the Indian tariff on lentils, as well as the progress in broader trade negotiations between India and Canada, Ross said.

The resumption of Canada-India Comprehensive Economic Partnership Agreement negotiations is an important opportunity for advancing food security for both countries, a spokesperson for Agriculture and Agri-Food Canada, the federal ministry in charge of agriculture, told CBC News in an email.

"Our government is confident that it will be able to reach an agreement with India, which would be a major breakthrough for Canada's economy and our agriculture and agri-food sector," the spokesperson said.

Global food crisis

The negotiations with Canada are a reciprocal opportunity for India, said Kristen Hopewell, an economist at the University of British Columbia's School of Public Policy and Global Affairs.

Already dealing with significant poverty, India has become increasingly active in negotiating free trade agreements with many countries, not just Canada, said Hopewell, who is also the Canada research chair in global policy.

"We're in the midst of a global food crisis right now," she said. "There's been a big spike in global food prices and that's threatening to significantly increase the number of people in poverty and the number of people suffering from hunger worldwide."

Opening up more trade with Canada could help India address inflation and food insecurity, and reciprocal trade could provide more opportunity for Indian farmers, she said.

"This is certainly an important sensitivity in any trade negotiations with India on agriculture. But I think there are certainly some aspects of the trading relationship where there are opportunities for mutual gains," Hopewell said.

Calls for Indo-Pacific office

In the face of supply chain troubles and worries about protectionism, Canadian pulse producers are looking for ways to access new markets across the Indo-Pacific region — not just in India.

Pulse Canada has teamed up with other major agricultural groups to call on the federal government to open an Indo-Pacific office, to help make headway in markets there.

Competing pulse producers, such as Australia and the United States, are already on the ground, doing a better job of making connections in the region, Ross said. 

When asked about the proposed office, the Agriculture and Agri-Food Canada spokesperson said there are a number of initiatives underway to promote Canadian trade in the Indo-Pacific region.