Proper pricing of Bt Cotton seed
by K P Prabhakaran Nair on 03 Jul 2016 1 Comment
Some months ago, Union Agriculture minister Radha Mohan Singh said, rather caustically, “We are not here to enrich any person or company, we are here to protect the Indian farmer”. This was taken as a tough stand by the Modi government to bring in a scheme of rigorous price control of the much hyped Bt seeds, in particular, Bt cotton, which is the focal point for much discussion in the country’s agriculture sector.


Going back in time to the advent of the green revolution from late 1960s onwards, where the dwarf wheat and rice varieties, popularly known as “miracle” high yielding crop varieties (HYV) came to dominate agriculture, there was no talk or discussion of seed price. The seed sector was exclusively in the public domain, under the administrative control of either the Indian Council of Agricultural Research (ICAR) or State Agricultural Universities (SAU).


Thus, if a specific plant breeder, the central researcher, involved in evolving a specific crop variety for any specific trait, such as enhanced yield – the common goal of all plant breeders – or resistance to a specific disease like rust in wheat or blast in rice, a team of scientists collaborated. An agronomist who would examine the yield potential of the new variety through carefully planned statistical procedures and growing the specific variety in the field, a soil scientist would look into the suitability of the variety in different soils of India, a plant pathologist would study the disease resistance and an entomologist would look into the resistance to insect pests. Concurrently, an economist would evaluate the economic benefits of the new variety.


Only after testing the new variety for a minimum of three years in the field, would it be recommended for the central varietal release committee’s approval for commercial cultivation in the country. The central authority which controlled all these activities is the Coordinated Project Committee, a Project Coordinator with supporting scientific staff, doing the job.  


Once released, it can go for commercial cultivation in farmers’ fields. The seed price was fixed by the mass seed producing agencies, and the best example in the country was the Tarai Development Corporation (TDC) affiliated to the GB Pant University of Agriculture and Technology, Pantnagar, now Uttarakhand. There was a money back guarantee on the TDC seeds. There was no haggling about the “trait” value nor the seed price.


All this changed with the advent of biotechnology in the 1990s when a crop variety with a specific trait was licensed to another seed producing company. An example is Monsanto’s efforts to impart its “trait” of combating the American Pink Bollworm in cotton, through the recombinant technique of “gene transfer”. The specific gene from the soil bacterium Bacillus thuringiensis (Bt) was transferred to the cotton cell and the plant acted as its own insecticide.


Thus, the Bt seed was born, and the best example was Bt Cotton which was released for commercial cultivation in India through the Monsanto-Maharashtra Hybrid Seed Company (Mahyco) combine, with the technical approval of the Genetic Engineering Approval Committee (now Genetic Engineering  Appraisal Committee, GEAC) in 2002.


The Bollgard Bt cotton seed was priced Rs 1950/500 gm packet in India in 2002. The same year this author visited China and found to his dismay that the same seed was selling at US $2/500 gm packet, that is, under Rs 100.


Monsanto’s Indian licencees – domestic seed companies which use Monsanto technology in their own hybrid cotton seeds – have been claiming that the trait value the company charged was extortionist. Over the years, several States have backed the domestic seed industry by issuing executive orders fixing Bt Cotton seed prices, which was challenged by Monsanto. Andhra Pradesh took the lead in this effort.


On May 18, the confrontation came to a flash point when the Union Ministry of Agriculture and Farmers Welfare notified the Licensing and Formats for GM Technology Agreements Guidelines 2016. These clearly targeted Monsanto and were sweeping in their reach. The notification unambiguously said, “the licensor shall not refuse granting of a licence” to any eligible seed company, which should be given within 80 days of application to companies wishing to incorporate the GM trait into its own hybrids.


FRAND, “fair, reasonable and non discriminative”, also capped the royalty at 10 per cent of the maximum retail price. The order has gone out of the way to assuage the US government which thought that India’s stand on intellectual property rights was below par of its expectations, though it was in accordance with the WTO mandate.


As expected, the above order did not go well with the biotechnology enterprises which are heavily into seed business. It was felt that the government’s move would discourage innovation in biotech research and development. This view was spearheaded by the Association of Biotechnology Led Enterprises in Agriculture (ABLE), constituted mainly by multinational seed giants.


Within five days of issue of the order, it was withdrawn, and it was notified that it will be put in the public domain for 90 days for comments from all stake holders. The earlier bravado of the Agriculture Minister fizzled out though he claimed that the notification was not a roll back, but meant for “wider negotiations”.


It is important to note in this context  that while during the past decades, the tussle over Bt Cotton seed price has principally been between States like Andhra, which invoked the Monopolistic Trade Practices Act to put a cap on Bollgard price at just Rs 750/500 gm packet, a steep decline of more than 61 per cent, now the tussle is directly between the Modi Government and the MNC on the question of extracting an exponential increase in the trait value from farmers.


The minister’s statement reflects this sentiment. Up to now, there has been an inquiry by the Competition Commission of India into Monsanto’s licensing practices, and, more significantly, a Cotton Price Seed Control Order issued in December 2015, which slashed the royalty payable to the biotech company by 74 per cent. This has been prompted by the enormous profits the agribusiness giant made in 2013 which came to Rs 685 core in trait fees.


Nation alist fervour has been the main driving force against the agribusiness giant. At the forefront of the struggle are the Bharatiya Krishak Samaj, BJP Kisan Morcha, and Swadeshi Jagran Manch. Additionally, domestic seed business companies like Nuziveedu Seeds has been in the lead to push for the FRAND terms, the company being the top franchisee of Monsanto.


What is the way forward?


The only tangible solution to this unhealthy pecuniary exploitation of Indian cotton farmers can happen if public sector enterprises like the ICAR and SAU, also the National Cotton Research Centre come to the fore to make available a desi variety of the Bt seed. What this author noted in China in 2002 was that the Chinese Academy of Agricultural Sciences put in a vigorous research effort to bring out its own Bt cotton which gave the Monsanto variety a run for its money. Can our cotton scientists rise to the occasion? That is the million dollar question. 

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