Mahyco Monsanto challenges Indian govt’s move to regulate price

Mahyco Monsanto Biotech (MMB), a joint venture between Maharashtra-based Mahyco and US-based Monsanto, has approached the Delhi High Court against the agriculture ministry’s move to bring genetically modified (Bt) cotton seeds under price control.

The court is slated to hear the case on Wednesday.

According to a notification issued by the agriculture ministry last month, the decision to put Bt cotton seeds under price control was taken in view of farmers finding the seeds ‘to be highly priced’ and the need to bring ‘uniformity’ in their prices across the country.

“Mahyco Monsanto Biotech has been compelled to file a writ petition before the high court against certain provisions of the Cotton Seeds Price (Control) Order that seek to regulate the licensing of cotton seed technology,” a spokesperson of  MMB  told FE.

The spokesperson said such regulation, besides being contrary to various laws, is also against the long-term interests of farmers and the government’s admirable vision to promote ease of doing business and innovation.”We repose complete faith in the courts and remain confident that the government will take into account views of all stakeholders in the spirit of comprehensive consultation and will revise the contentious clauses to encourage innovation in Indian agriculture,” the spokesperson said.

Bt cotton was first introduced in India in 2003 and in a couple of years it expanded to most parts of the country. About 90% of the country’s cotton area of 11.8 million hectares in 2015-16 is under the Bt coverage, according to an industry estimate.

The agriculture ministry invoked the Seed (Controls) Order, 1983, issued under the Essential Commodities Act, to impose price control on Bt cotton seeds, but hasn’t fixed a pan-India maximum selling price (MSP) for now. Taking a cue from states like Maharashtra and Andhra Pradesh, it, however, stated that the MSP would mean the “maximum price inclusive of Seed Value, License Fee, Trade margin and local taxes or duties, at which the cotton seeds or transgenic varieties of cotton seeds are sold to the farmers”.

The agri-biotech major, along with Mahyco, is currently fighting “non-payment of around Rs 450 crore” in royalty fees (trait value) by nine Bt cotton seed manufacturers. The current price of Bt cotton seeds to farmers, as fixed by the Maharashtra government, is around Rs 900 per packet.

The country’s cotton production has risen manifold since the introduction of the Bt seeds — from 13.6 million bales in 2002-03 to a projected 36.5 million bales in 2015-16. Even yield has improved from 302 kg per hectare in 2002-03 to a projected 484 kg per hectare in 2015-16 despite a deficient monsoon this year. The Cotton Advisory Board has projected production of cotton to touch 36.5 million bales in the current season, down from 38 million bales a year earlier, due to an expected drop in area under the crop.