Days before the first India-Australia virtual summit, India announced its 33 per cent tariff would be slashed to 11 per cent until the end of August.
Highlights:
- India announced its 33 per cent tariff would be slashed to 11 per cent until the end of August.
- These tariffs were introduced in 2017 and had left Australian growers sitting on large stockpiles.
- Australian lentil exports had grown between 2012 and 2017.
These tariffs were introduced in 2017 and had left Australian growers sitting on large stockpiles following a bumper season.
Australian lentil exports had grown by 2,003 per cent, worth $196 million between 2012 and 2017, according to an ABC report.
On June 2, the Indian Government announced a tariff of 10 per cent (plus 10 per cent tax) would be applied to red lentils until August 31. The change applies to all countries except the United States.
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Grain Growers Ltd CEO David Mckeon says it is a positive outcome.
“It is really positive news to say changes in the tariffs’ situation for Australian lentil going into the Indian market. This is a really positive outcome for a lot of Australian farmers who just finished planting their lentils for the 2020 winter cropping season,” Mr Mckeon said.
Cost of the tariffs on the Australian lentil industry over the past four years has been significant. In the last three years, there has effectively been a 55 per cent tariff rate on lentils that went to India.
Although the recent changes are temporary off the back of a change in seasonal conditions in India which has created a need to supplement some of the local production of lentils from other sources like Australia.
However, David Mckeon says it is a sign that things are heading in the right direction.
“It has been reflected directly in the farmgate price received by farmers. So what we have seen is the small price received by Australian farmers has gone up around 10% just in the last week on the back of this is positive news,” he said.
Mr Mckeon understands that India being an agrarian economy of small farmers is determined to protect its farmers. However, he hopes that an open and transparent market would benefit all.
“As Australian farmers, we understand the complex situation of many nations who are trying to do the best for their farmers. We recognise that open and transparent trading market access and international trading systems are the best way forward to help the efficient flow of goods internationally.
Ultimately tariffs do not provide confidence for farmers in to continue to book crops in. And they don’t provide confidence for farmers in countries like Australia to continue to put crops in.”
Australian farmers are hoping for similar steps from India in the case of chickpeas.
“Currently for chickpeas out of Australia there is still around 77% tariff, and over the last couple of years that has absolutely decimated the crop that was worth about a billion dollars a year for Australian farmers,” said Mr Mckeon.
