Mozambique: India’s restrictions may threaten Mozambican farmers

The livelihoods of many thousands of Mozambican farmers may be at at risk following last week’s decision by the Indian government to restrict the import of pigeon peas (dal), a pulse widely used in Indian cuisine.

Just over a year ago, in July 2016, during a visit by Indian Prime minister Narendra Modi to Maputo, India and Mozambique signed an agreement whereby India would import 375,000 tonnes of pigeon peas from Mozambique between 2016 and 2019.

But the Indian authorities have now imposed quotas on pigeon pea imports, moving this crop from the “free” to the “restricted” category of imports. The new rules state that only 200,000 tonnes of pigeon peas can be imported in any one fiscal year. In the 2016/2017 fiscal year, which ended on 31 March, India imported 703,540 tonnes of pigeon peas, from many countries.

These imports come on top of a bumper pigeon pea crop in India, and are blamed for depressing the prices paid to Indian producers.

“After the bumper production, a restriction on the imports was necessary to support local prices”, claimed Pravin Dongre, chairperson of the India Pulses and Grains Association, cited by the Reuters news agency.

“In the current fiscal year traders have so far imported more than 160,000 tonnes of pigeon peas. In August 40,000 tonnes is likely to land in the country. So there is no scope for new import contracts,” said a Mumbai-based importer who insisted on anonymity.

Under last year’s agreement, India promised to import 100,000 tonnes of pigeon peas from Mozambique in the 2016/17 agricultural year, rising to 125,000 tonnes in the following year, and to 150,000 tonnes from the 2018/19 harvest.

If India honours this agreement, imports from Mozambique would amount to more than 50 per cent of the 200,000 tonne cap on imports.

It is possible that Mozambique may escape: a report carried by the Press Trust of India (PTI) states that the restrictions will not apply to the government’s import commitments under any bilateral or regional agreement.

But companies that buy pigeon peas from Mozambican farmers and then export the crop to India are not convinced that the business will remain viable.

Cited in Tuesday’s issue of the Maputo daily “Noticias”, Shrikanth Naik, manager of the food processing company ETG, said that the Indian government’s decision would force ETG to stop buying pigeon peas from farmers.

ETG has two Mozambican pigeon pea processing plants, in Beira and Nacala. Mozambican President Filipe Nyusi inaugurated the Nacala factory in February, precisely because of the expected increase in pigeon pea exports. Naik put the investment in the two factories at about 13 million US dollars.

He said ETG could not risk making further purchases from farmers “because we still have considerable amounts of pigeon peas in our warehouses, which we bought from produces in the previous agricultural campaign”.

95 per cent of ETG’s exports go to India. Naik added that, if the Indian government were to change its policy, “that will be determinant for our position on the market”.

Pigeon peas are grown throughout northern and central Mozambique. The restrictions announced by India come as a unpleasant surprise to farmers in these provinces, who have been increasing their production of pigeon peas, on the assumption that India is a guaranteed market.

Source: AllAfrica