The Hindu Business Line : Giving farmers a technology choice

WHILE NEW technologies, such as Bt cotton, that have benefits in terms of augmenting the farm incomes, are available, the quantum jump in their cost can slow technology adoption. — Shaju John

The recent ruling of the Monopolies and Restrictive Trade Practices Commission restraining Mahyco-Monsanto Biotech India Ltd (MMB), a 50:50 joint venture between the multinational Monsanto and the Maharastra-based seed company Mahyco from charging Rs 900 for a packet of 450 gm of Bt (Bacillus thurengiensis) cotton as trait fee, has evoked different responses from various quarters.

The Andhra Pradesh Government, which had petitioned the Commission, has reasons to feel vindicated and millions of small cotton farmers all over the country, who have so far been affected the most by the cotton pest scourge, have reasons to be hopeful that they will now be able to afford a potent technological solution. The company, understandably, stands to lose much if this decision is implemented, and has gone on appeal in the Supreme Court, contending that this ruling is beyond the jurisdiction of the MRTPC.

High trait fee

It appears that the MRTPC came to this decision because the Rs 900 trait fee charged by Monsanto from its sub-licensees for a 450 gm packet of Bt cotton seed is much higher than it is in the US and China. Monsanto apparently charges the equivalent of around Rs108 and Rs 45 in the US and China respectively. However, it is not clear if this trait fee is being charged on per-acre basis or for 450 gm of seeds. The seed rate in the US or China is much higher than what is used here.

The total area under cotton in India is well over 20 million acres, and less than half this area is covered by hybrids. All commercial deployment of Bt cotton has been only in cotton hybrids and in 2005, Bt cotton was planted on about three million acres, a growth of over 160 per cent compared to the area in 2004.

This figure does not include the area under the unapproved version of Bt cotton, which has become a major business of several seed traders and small companies, particularly, in Gujarat and Andhra Pradesh. The trade in the unapproved version of Bt cotton is rampant and can easily match the volumes of the approved version. Indeed, the train running between Ahmedabad and Bhatinda is apparently so frequently used by the seed merchants for trafficking that farmers and dealers commonly referred to it as the "Bt-Express"!

The phenomenal growth of Bt cotton acreage in this country despite the high cost of seeds being is a clear proof of the tangible benefits of this technology. Were the alarmist propaganda against agricultural biotechnology, in general, and the shrill campaign against Bt cotton, in particular, then justified? It is estimated that the Bt cotton technology leads to a saving of 5-10 insecticide sprays, and this in monetary terms could mean savings of about Rs3,000 per acre. Therefore, even with a seed cost of around Rs 1,250-1,400, which includes the trait fee, the farmer's share of the technology benefit is more than half.

Tech help for better yield

Further, there is avoidance of insect damage and the consequent boll drop leading to a saving of up to 30 per cent of the yield that would have been otherwise lost; and this is clearly a bonus to the farmer.

Though this logic may make good economic sense and must have actually worked, it can cause justified resentment among the farmers, which in turn will influence the sentiments in the seed trade.

For one, agriculturein this country is still largely subjected to the vagaries of weather as well as pests and diseases not addressed by the Bt technology.

The benefits of the Bt technology can be realised only if the crop is successfully raised, overcoming all those risks, which are loaded solely against the farmer. To sustain Indian economic growth, it is imperative to address the malady of low productivity, poor quality and falling farm incomes, affecting Indian agriculture. It appears that another dose of technology infusion is a potent option. And yet again, while new technologies, such as Bt cotton, that have proven benefits in terms of augmenting the farm incomes, are available already, the quantum jump in the cost of seeds can considerably slow technology adoption. There is, therefore, an urgent need to improve agricultural technology access by making it more affordable. Promoting agricultural biotechnology innovation in the country is a sustainable option to reach this goal. The availability of scientific talent combined with the low cost of innovation can significantly reduce the cost of product development.

We have many public institutions that have had the people and the facilities to develop genetically altered crop varieties.

However, their output in terms of useful products developed over the years has been dismal. These institutions need to be strengthened with more funds for research infrastructure and projects.

In the last five years, significant investments have been made in agricultural biotechnology research by the Indian private sector as well. These investments are on the threshold of bearing fruits, and several products, which can give a good competition to the existing technology, have just been approved or are in the final stages of the regulatory approval process.

This competition needs to be promoted so that there will be more technology choices for farmers, and the market forces will ensure a better value to the customer and force a fall in prices, as has been amply demonstrated for many technology products, say, the mobile phone, after the economy was opened up.

As regards legal protection, the Plant Variety Protection and the Farmer's Rights Act of 2002, is yet to be enforced. There is also no clarity on whether genes and such transgenic technologies can be protected under the new patenting regime. Developments such as the recent ruling by the Supreme Court, taking away the authority of the Review Committee on Genetic Manipulation (RCGM), a body under the Department of Biotechnology that grants permission for regulatory field trials, only add to the confusion and cause delays.

The formation of the proposed National Biotechnology Regulatory Authority (NBRA) and the implementation of certain policy changes in the regulatory process such as gene/event based approval instead of the present variety/hybrid based approval and avoidance of sequential testing for agronomic performance by different agencies, will go a long way in hastening the approval process.

This will be crucial in reducing the cost of product commercialisation and this saving can then be passed on, making the much needed technologies more affordable to large sections of small farmers.

(The author is Managing Director of Metahelix Life Sciences, an agricultural biotechnology company, and President of the Association of Biotech-Led Enterprises)

More Stories on : Bio-tech & Genetics | Insight

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Half-measures still

The helmsman takes a buffeting

Mr Blair's slip is showing

Democratic deficit

Are we moving in the right direction?

Giving farmers a technology choice

Seven reasons for the Sensex rampage

Fuel price hike