Montana’s pulse growers look to the weeks ahead, hoping that a new round of negotiations will remove trade barriers that have nearly halved the value of their crops.
Earlier this week, Montana Senator Steve Daines reviewed his efforts during a trade mission to India, to encourage that country to reduce its tariffs on the importation of U.S.-grown lentils, peas dry edible and chickpeas. These tariffs, which in some cases exceed 70%, are the result of both the protectionist policies of Indian Prime Minister Narendra Modi and a international trade war which warmed up during the Trump administration.
“At the moment India has tariffs ranging from 22% to 70% on lentils, peas and chickpeas from Montana, which is higher than Indian tariffs on these same products from other countries,” Daines said Tuesday. “The goal here is to work to reduce these tariffs and improve the trade relationship between Montana and India.”
Just five years ago, Montana growers were riding the crest of a profit wave in pulse production. The state had recently overtaken North Dakota as the nation’s largest producer of dry edible peas, lentils and chickpeas, pulse values ââwere reaching record highs, and international attention focused on it. expanding global pulse production to help feed a hungry world.
Then India, which the US Department of Agriculture says buys nearly half of all pulses grown in the US, shut the door on US imports.
Montana Farmers Lost Over $ 150 Million Due To Indian Tariffs
In 2016, US growers shipped over 322,000 metric tonnes of pulses to India. Last year the total was just over 25,000 metric tonnes. For Montana farmers, the elimination of India as a major trading destination has resulted in the loss of over $ 150 million in pulse sales per year, from a high of over $ 329 million in 2016 to $ 177 million in 2020.
âIn 2016, global pulse prices peaked,â said Jeff Rumney, vice president of marketing for the US Dried Peas and Lentils Council. âBoth supply and demand were very high, and exporters around the world shipped a huge amount of product to India. at high prices. This has driven up retail prices in India and lowered profits for their farmers. “
Rumney, who grew up in Cascade, MT, said the first set of tariffs were global and not specifically aimed at the United States.
âModi stepped in to try to support the Indian farmer and get some stability in the retail food prices,â he explained. âSo in November 2017, he applied this global tariff and quotas on pulses imports. This has caused a lot of turmoil in the world legume market. “
The immediate impact on pulse production in the United States was manageable, as all of the major pulse producers in the world felt the pressure the same way.
Then international trade disputes stuck an unwelcome foot in the door.
Beginning in June 2018, the Trump administration imposed tariffs of 25% and 10% on steel and aluminum imports from nearly every country in the world, including India.
At first, India’s response was silent. Over the following months, trade delegations from the United States and India attempted to avoid any escalation of the trade war, but with little success.
In March 2019, U.S. Trade Representative Robert Lighthizer announced that the United States was ending India’s favored nation status, a move that imposed additional tariffs on a wide range of Indian exports to United States. Not surprisingly, India responded by imposing its own set of new tariffs, mostly on US agricultural products, including wheat and barley. It has also increased its tariffs on American pulses, making them largely unsalable in the Indian market.
New round of India-U.S. Trade Policy Forum talks scheduled for late November
Daines said during his trip to India last week, he spoke directly with India’s Minister of Commerce and Industry Piyush Goyal about improving US-India trade relations, but that the two had not directly addressed the issue of US tariffs on Indian steel and aluminum.
âThe minister and I did not come up with a detail on the trade of 232 tariffs (aluminum and steel) versus tariff relief on pulses,â Daines said. “This will be discussed in more detail at the end of the month.”
The senator said, however, that US tariffs on steel and aluminum should be targeted more strategically on China.
âThe biggest steel producer is China,â Daines said. “They produce 10 times more steel than India. I think we need to continue to work more closely with India. We share common values ââof democracy and freedom. I think it is strategically very important that the United States and India are developing a closer relationship. “
A new round of trade negotiations is expected to open at the end of November at the Indo-American Trade Policy Forum (TPF). This will be the first time that India and the United States have engaged in trade negotiations of this level since 2017.
Yet even if the two countries manage to resolve the long-standing trade dispute, it is unlikely that pulse export volumes to India will immediately recover to 2016 levels.
“India’s demand for US pulses is not expected to return to pre-tariff levels during the current marketing year or next year,” the US Department of Agriculture said in a September 2019 press release. Instead, exports are expected to improve slightly, largely based on expected sales growth to a combination of historically smaller markets for US lentils, chickpeas and dry peas, including Pakistan, Sudan and China. “
Until then, Montana’s pulse growers will continue to wait for better days.
David Murray is a natural resources and agriculture reporter for the Great Falls Tribune. To contact him with comments or ideas for articles; email [email protected] or call (406) 403-3257. To preserve quality and in-depth journalism in north-central Montana subscribe to the Great Falls Tribune.