Financial Daily from THE HINDU group of publications
Friday, Apr 19, 2002
Agri-Biz & Commodities - Cotton
Farmers ready, but where are Bt cotton seeds?
NEW DELHI, April 18
IT is not only the farmers in the northern region who will be denied the opportunity to plant Maharashtra Hybrid Seeds Company Ltd's (Mahyco) Bt cotton this year. The bulk of cotton growers in the rest of the country, too, are unlikely to obtain adequate supply of the hybrid seeds, genetically modified to confer `in-built' resistance to the dreaded American bollworm.
According to Mr Raj Ketkar, Deputy Managing Director of Mahyco Monsanto Biotech India Pvt Ltd (MMB) - the 50:50 joint venture formed in 1998 between Mahyco and the US life sciences major, Monsanto, for marketing the Bt hybrids - the projected seed supply in the current kharif season would be just enough to cover around 1.5 lakh acres.
"The certified seeds to be sold to farmers this year have been produced from the foundation material that we supplied last year to our contract seed growers for further multiplication. Although we had sought planting of the foundation seeds on 2,000 acres, we were given permission then for only 700 acres. Considering that one acre of foundation material can produce certified seeds to cover 200-250 acres (depending upon yields), we can meet the farmers' requirement for about 1.5 lakh acres this year," Mr Ketkar told Business Line.
Even for the next 2003 kharif season, Mr Ketkar said that the projected supply of certified seeds (based on the quantity of foundation material available for multiplication this year) would be sufficient for only 5-6 lakh acres. Compare this to the country's total cotton area of roughly 215 lakh acres, of which nearly half is planted under hybrids!
So will all this translate into spiralling seed prices? "Not really. The open field evaluation trials carried out by the Indian Council of Agricultural Research (ICAR) indicate that our Bt hybrids will give farmers an additional Rs 4,000 per acre through reduction in pesticide sprays and overall higher yields. Our assessment is that if a particular input enables a farmer to realise an extra Rs 100 on his output, he would be willing to pay an additional Rs 25 for the same input. We cannot expect him to pay beyond this level," Mr Ketkar noted.
What will be the price at which the Bt hybrids will then be sold? The maximum retail price of Mahyco's existing non-Bt hybrids (including Mech-12, Mech-162 and Mech-184) is now Rs 350-450 per packet, each containing 450 grams of seed that can cover up to one acre.
If the Bt versions of these hybrids are claimed to give an extra economic advantage of Rs 4,000 per acre, they will accordingly be priced in the Rs 1,350-1,400 per packet range, Mr Ketkar said, while adding that "we are still studying the market." Assuming sales of 1.5 lakh packets at these rates, MMB would end up grossing about Rs 20 crore from marketing the Bt cotton hybrids in the current season alone.
For augmenting supplies, which, Mr Ketkar admitted, could not be met by Mahyco alone, MMB has tied up with three other seed companies - Rasi Seeds (Salem), Ankur Seeds (Nagpur) and Krishi Dhan (Jalna). The joint venture (which is the Indian licensee for Monsanto's patented Bt gene construct) has sub-licensed the Bt gene to these companies, which will incorporate the same in their own cotton hybrids.
"Once these back-crossed hybrids are evaluated by ICAR, we can expect more suppliers of Bt cotton based on Monsanto's technology," Mr Ketkar said, even as he conceded that this process would take at least a couple of years. So till then, the farmer has no alternative but to wait.
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