Hyderabad: The Telangana and Andhra Pradesh high court on Wednesday vacated a stay on a Telangana government order to slash the royalty fee of Mahyco-Monsanto Biotech (India) Ltd’s (MMBL’s), genetically modified Bt cotton seeds from 90 to 50.
The Telangana government issued the order on 11 May reducing the royalty fee or trait value of Bollgard-II (BG-II) seeds of MMBL, to 50 from ₹ 90 and increasing the procurement component to 330 from 290 making the maximum sale price (MSP) at 930 on a 450-gm packet.
The order was stayed by a single judge of the Telangana and Andhra Pradesh high court.
MMBL challenged the Telangana government order on the grounds that the government had wrongly enforced a reduction in trait fees by overriding mutually agreed private contracts between MMBL and the seed companies.
The Telangana government appealed before a bench comprising acting chief justice Dilip B. Bhosale and justice P. Naveen Rao, to vacate the stay on the grounds that it was state government’s responsibility to protect the interests of the farmers by controlling the monopoly of the company in fixing the selling price of Bt cotton seeds.
“We are yet to receive a copy of the court order and will be able to comment only after we go through the same in detail," said MMBL in a statement.
“Bollgard technology has transformed India from being a net importer of cotton in 2002 to becoming the second largest producer of cotton globally. It has also helped farmers increase cotton yields from 302 kg/hectare lint in 2002-03 to 552 kg/hectare lint in 2013-14 thereby helping generate an additional farm income of over 110,000 crores," the statement added.
MMBL said a well-established mechanism for trait fee has been in place for years. Trait fees in India are the lowest for these technologies across cotton growing countries in the world.
MMBL, a joint venture between Mahyco Seeds Ltd and Monsanto Co., licenses its patented Bollgard II Bt cotton seed technology to 49 seed companies in India in exchange for a royalty fee. More than 90% of the cotton grown in India is based on this technology.
The central government on 10 March cut prices of genetically modified cotton seeds and slashed royalty fees by 74%, disregarding global seed major Monsanto Co.’s threat to re-evaluate its India business if such a move is considered.
The maximum sale price of genetically modified Bollgard II cotton seeds was reduced to 800 (per 450gm packet) from 830-1,000 earlier. The sharpest cut is on royalty or trait fees. They were reduced by 74%, from 163 per packet to 43 (excluding taxes). The latest prices will come into effect from the next kharif crop season, sowing for which begins in June.
MMBL has challenged the central government order in the Delhi high court.