The Union government has cut the price of cottonseed in the country to ₹800 for a packet (of 450 grams) of Bollgard-II against ₹830-1,000 in various parts of the country.
The price will be uniform across the country unlike in the past where different States announced different price tags for the transgenic seed.
The Association of Biotechnology Led Enterprises Agriculture Group (ABLE-AG) has strongly opposed the move, saying it violates the principles of free market economics.
Equipped itself with a newly-issued Cottonseed Price Control Order, the government has steeply reduced the royalty component to ₹49 from ₹184 that Monsanto and Mahyco Monsanto Biotech (MMBL) charge the farmers through seed companies.
The Centre’s notification put the seed value of BGII at ₹751 and the trait (or royalty with taxes) at ₹49, making it ₹800 for a 450-gm packet plus 120 grams of refugia (Refugia seed is planted around the main crop to reduce the risk of the worm developing resistance to the technology). For BGI, the seed value is put at ₹635 with no trait value to be charged.
Revenues take a beatingThe government said the panel would announce the prices before March 31 every year so that the farmers and seed firms can plan well for the kharif season.
The move would have serious ramifications on the revenues of Monsanto, which owns the transgenic technology, and MMBL that sub-licenses the technology to seed companies in the country.
“We are in the process of examining the notification in detail and will be able to comment only after we study the document in its entirety,” an MMBL spokesperson has said.
The government has notified the pricing in the Gazette making it mandatory for seed firms to follow the order. It, however, is subject to the final decision of Delhi High Court that is hearing a plea from MMBL, which challenged the validity of Price Control Order.
The Union government has come out with the order recently to put an end to litigations around the cottonseed pricing by different governments and MMBL and Monsanto challenging their right to fix the royalty component.
The component ranges from ₹20 (Maharashtra), ₹50 each in Telangana and Andhra Pradesh as the seed price varied from ₹830 and ₹930 respectively.
“By slashing trait fees the government has clearly shown that it is going for short term populist measures rather than supporting innovation in the long term,” Shivendra Bajaj, Executive Director of ABLE-AG, said.
‘Populist measure’“Such a decision is a discouragement of research and is contrary to the respect for intellectual property rights in agriculture and ‘Make in India’ initiative,” he said.
The association, which comprises 11 firms including Monsanto, MMBL, Syngenta and others, said the decision would be detrimental in the long run as companies might have to reconsider their investments in research and development in the seed sector.
Meanwhile, the National Seed Association of India (NSAI) has welcomed the Centre’s notification. It, however, felt that the ‘seed value’ component would have been at least ₹100 more.