Roping in Canada for food security
Indo-Canadian agriculture and food relationship has to move beyond a mere buyer-seller framework.
Recent spurts in food prices suggest that a purely domestic strategy will not suffice for India’s food security, where food security refers to assured supply at stable prices.
There is, thus, clearly a need to find international partners in the agri-food segment, given the sheer volumes required going forward, and the diversity of this sector. Now, while an India-Canada energy relationship seems a natural tie and is much talked about, it is less apparent that the North American country can play an equally significant role in aiding India generate enough food for its populace. In fact, in some ways Canada does already play a real role in helping India increase the availability of food for its population, through its supply of pulses and fertilizer.
Despite Canada being mainly a services economy, the agri-food segment has emerged as a major driver of economic growth in Canada in recent years. Food processing and beverage industries are actually Canada’s largest manufacturing estate and also its greatest industrial employers. Given Canada’s relatively small population compared to the size of its agri-food sector one can imagine that the country has a rather lot of surplus produce that is available for export.
It is not surprising therefore, that Canada’s chief exports to India at the moment come from the agri-food segment. In the past few years, Canada has emerged as a major source for pulses which, for a multitude of Indians is their main source of protein. Annual imports of pulses from Canada have typically hovered in the half-a-billion dollars range in recent times. Now although the Indian government is working towards boosting domestic pulse production through higher support prices, it is also simultaneously promoting consumption of the same, with a view to restoring average consumption of pulses to 50 grams per person per day.
Playing a Major role
As such, despite being the world’s largest producer of pulses, India will in all likelihood continue to also be its largest importer. And it is here that Canada, which now accounts for 35 per cent of the world’s pulses trade, being the second largest producer, will continue to score especially given a zero tariff regime. By some accounts Canadian pulses are playing a major role in stabilising wholesale prices of lentils such as Masoor across India.
Canadian imports are also playing an input side role in boosting agricultural productivity in India. India after all imports a major share of its potash requirements from Canadian entities like the Potash Corporation of Saskatchewan which is incidentally the world’s largest producer of potash. Now as India seeks to increase average yield for food grains from the 1,750 kg/ha today to 2,900 kg/ha by 2030 demand for agrominerals such as potash found in relatively thin and shallow deposits that formed millions of years ago from the sediments of lagoons and used to build bulk fertilizers is only going to increase given their agri-nutritional content.
In the future greater potash supplies from Canada will also reach Indian shores via investments being made by companies like Rashtriya Chemicals and Fertilisers Limited which is looking to acquire a 40 per cent stake worth a billion US dollars (USD) in a joint venture with Western Potash Corp for a new mine in Saskatchewan. Other fertilisers too will be increasingly sourced from Canada in the years to come. IFFCO announced earlier this year that it is setting up a 1.27 million tonnes urea plant in Quebec’s Becancour Waterfront Industrial Park with a local partner and an investment of 1.2 billion USD. The plant which is expected to come online by 2017 will notably use shale gas as its feedstock.
But an Indo-Canadian agriculture and food relationship has to move beyond a mere buyer-seller framework. Under a memorandum of understanding (MoU) signed in 2009 between the agriculture ministries of both countries, India and Canada agreed to set up knowledge sharing mechanisms in the three thematic areas of emerging technologies, agricultural marketing and animal development under a joint working group mechanism with a sub-group for each of the aforesaid areas.
At the other end, one of the best ways to acquire Canadian expertise would be to attract investments from Canada into improving India’s agricultural logistics. As a country that has a wastage rate as high as 40 per cent for fruits and vegetables and 20 per cent for grains, India will certainly welcome investment from Canadian firms towards creating a modern storage and bulk handling system for food transportation, including cold chains, warehousing, material handling, consolidation and data management.
Heading further into the 21st century we find an evolving India-Canada agricultural relationship. The true institutionalisation of this co-operation will of course be achieved once the CEPA, which is being currently negotiated, is finalised and parliamentary approval for the India-Canada Foreign Investment Protection Act is received.
(The writer is secretary general, FICCI)