New Delhi: After a reduction in the retail price and royalty fees of genetically modified (GM) Bt cotton seeds last year, the agriculture ministry has kept prices unchanged for the upcoming Kharif crop season.
According to a notification issued by the farm ministry on 10 March, maximum sale price of BG-II Bt cotton will be Rs800 per 450gm packet of seeds. This includes a trait or royalty fee of Rs49 per packet which domestic seed companies will pay to the technology developer.
The decision follows a series of consultation with stakeholders where some representatives of the seed industry wanted the retail price to be raised by Rs50 per packet due to increasing costs of production, while others asked for raising royalty fees.
“The ministry did not reduce royalties any further as that would dampen the interests of multinational technology providers and lead to further litigation," said an industry official aware of the developments.
Last year, a nine-member committee constituted by the agriculture ministry to recommend cotton seed prices slashed prices to Rs800 per packet—compared to Rs830-1,000 charged earlier—and cut royalty fees sharply by 74%, from Rs163 per packet to Rs43 (excluding taxes).
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While the move benefitted close to 8 million cotton farmers, it raised questions on India’s intellectual property rights regime.
In India, Monsanto Mahyco Biotech (India) Ltd (MMBL), a joint venture of Mahyco Seeds Ltd and Monsanto, licenses its patented Bollgard II cotton seed technology to domestic seed companies in exchange for a royalty fee.
Following the price control order last year, MMBL petitioned the Delhi high court to quash the government’s move to determine royalty fees. The court is still hearing the case.
The move to regulate prices also divided the seed industry.
While the domestic seed industry body, National Seeds Association of India (NSAI), welcomed the decision, arguing that the technology is facing redundancy and developers like Monsanto cannot go on charging steep royalties, the other industry lobby of research and development (R&D) firms, Association of Biotechnology Led Enterprises Agriculture Group (ABLE-AG), called it a blow for R&D investments in new technology.
During the 2016 Kharif season, despite lower seed prices, farmers cut area under cotton crop to 10.3 million hectares compared to the normal five-year average area of 12 million hectares, following pest infestations and lower prices the year ago.
Further, farmers also shifted some area from GM cotton to non-GM native varieties hoping these will be resilient to white-fly pest infestations.