Bayer AG: Can't introduce Bt cotton tech in India due to royalty issues

German chemical and pharma major Bayer AG, which has acquired biotech company Monsanto, Tuesday said it cannot introduce new Bt cotton seed technology in India as it has become difficult to make money in the south Asian nation because of royalty issues.

In June this year, Bayer completed the $63 billion mega deal to acquire US-based Monsanto to create the world's biggest agro-chemical and seed company. The acquisition of Monsanto has been completed globally but it is still in process in India.

Monsanto has been selling genetically modified (GM) cotton seeds in India for more than a decade through its joint venture Mahyco Monsanto Biotech that has sub-licensed Bt cotton seed technology to various domestic seed companies.

However, the company is now involved in a legal case where it has appealed against the Indian government's decision to fix cotton price along with trait value (royalty) under the Cotton Seed Price Control Order.

Separately, it is fighting a legal case with Indian firm Nuziveedu Seeds over patent right of its technology.

Asked about Monsanto's threat of not introducing any new technology in India due to royalty issues, Bob Reiter, Global head of R&D, Crop Science Division of Bayer, emphasised that the company needs to be compensated for investment made in R&D to come up with innovative products.

"The issue around Bt cotton in reality is that as a company we cannot serve a market if that market does not pay for the invention we are trying to bring in. The challenge in India has been that the government has stepped into, I would say, a conflict that started between licensees and become more complex," Reiter said.

Reiter was previously the Global Vice President of R&D and Integration Strategy at Monsanto.

"The reality is that now nobody can make any money in the trait market and even make less money in seed market in India, which in my opinion is not suitable for the market and customers as well," he said at Bayer's annual event on 'Future of Farming Dialogue' here.

He further said: "It has forced a situation where if this is the way we are going to be compensated for technology and innovation, we just fundamentally cannot do it.

This, he said was a "great disappointment."

Meanwhile, Bayer India spokesperson said, "Post the integration in India, the combined company will continue to bring innovation in seeds, chemistry, biologicals and digital tools. A predictable regulatory system and IP regime would be very critical for the future."

On efficacy of Bt cotton technology in India, Reiter said the company has new products in the lab that can address the issue but unfortunately that cannot be introduced because of financial viability.

"Nature is a powerful force. We are marvelling that eventually the products that we have launched to be replaced as nature will figure out ways to survive against something that is not designed for it.

"We have technology in the lab that we know will be helpful in the Indian market but we cannot afford to bring them to the market that does not service our business and ultimately serve our customers," he said.

Reiter said the cotton production in India grew and growers made money on the back of Bt technology.

"Now because we eliminated an important technology, the production is now beginning to decline. This is an unfortunate situation," he said.

Bayer AG said its US-based subsidiary firm The Climate Corporation will launch next year in India a mobile platform "FarmRise" that will provide agronomical information and advice to help farmers sustainably improve crop yields.