Caught between Monsanto and States, cottonseed industry seeks Centre’s help

With no end in sight to the pricing tussle with Mahyco-Monsanto – the Bt cotton technology provider – the seed industry has approached the Centre to intervene and resolve the knotty issue. Invoking the Patent Act, Competition Act or the Environment Protection Act, the industry asked the government to help fix the price of cottonseed, including the royalty fee (or trait value).

High royalties

The industry feels that only the Centre could bail them out from the ordeal. The State governments of Maharashtra, Andhra Pradesh and Telangana have been issuing orders at the beginning of the kharif season, fixing the seed price, including the trait value component. This, however, has consistently been opposed by Mahyco-Monsanto which argued that governments could not fix it.

“Due to high royalties fixed by MMBL on its Bt cotton technology, the States intervened by referring the issue to Monopolies and Restrictive Trade practices and invoked the provisions in the Seed (Control) order of 1983 to regulate the cottonseed prices. They promulgated legislations to regulate the Bt cotton seed prices, specifically to bring down high royalty,” Kalyan B Goswami of National Seed Association of India (NSAI), said.

Issues faced

In an appeal to the Union Minister for Agriculture Radha Mohan Singh, the NSAI executive pointed out the issues that dogged the industry. Armed with legislations, the State governments have not raised the MRP of cottonseed despite sharp increase in production costs. “The MRP remained stagnant between 2006 and 2010 and again between 2011 and 2015. In a span of 10 years, the price went up only once,” he said.

The second issue the industry raised was the contracts between the seed firms and MMBL for accessing Bt technology. “The States have never shown interest in recognising the contracts and licences. They haven’t considered the trait values mentioned in the contracts. We have no other go but to obey their orders as they are backed by legislations. The MMBL, however, insist that we obey the contractual obligations,” the industry said.

The association pointed out at a host of petitions in various States by seed firms and MMBL with State governments as an important respondent. These cases were in different stages of hearing. This, the association argues, is impacting the business, leaving it in constant state of uncertainty.

“We have asked MMBL to have a relook at the accounts from 2010 keeping in view the States’ directive on reducing the trait value. It moved the court, asking us to pay the full payment in contravention to the state legislations,” it said.

“This has put us in a fix. On one hand, we are burdened with increased cost of productions, on the other we are faced with uncertainty. The Central government must intervene to resolve the issue,” a seed industry representative said.