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The Centre’s reassertion of its right to control seed prices sends out a clear message to seed firms that it will not yield to industry pressure.
Union Agriculture Minister Radha Mohan Singh sent out an unambiguous message, just as farmers are gearing up for the kharif season, that the government would not allow multinationals like Monsanto “to exploit farmers”.
This sets the stage a uniform price for cottonseed across the States.
Curbing monopoly Some leading agrarian States too have stepped up pressure and have written to the Commerce Ministry demanding that it restrain Monsanto from resorting to “monopolistic practices”.
Recently, the governments in Andhra Pradesh and Telangana wrote to the Ministry, seeking its intervention.
Last year, the government had issued a Price Control Order and set up a committee to recommend a price after consulting stakeholders.
The seed sector is deeply divided on the issue, with a few companies backing Monsanto, while the majority of the seed-producing firms welcoming the government move.
Uniform pricing The issue, however, has not been resolved yet, although the marketing season for cottonseed for the kharif has begun.
Armed with the Central Order, seed-producing firms have reportedly begun to print the MSP (Maximum Sale Price) of ₹800 as prescribed in the order.
“The season has begun and we are going ahead with the uniform pricing mandated by the government. The seed is an essential commodity and you can’t violate the government order,” a top seed firm executive said.
The Centre’s assertion of its authority comes at a time when the seed industry is engaged in legal battles with Monsanto, Mahyco Monsanto and the Association of Biotech Led Enterprises (ABLE-AG) in various courts.
The industry is, therefore, flaunting the order to prove its point. Monsanto is understandably upset; the government’s move could hit its revenues very hard as the royalty component has been cut to just ₹49 per packet of 450 gm as against over ₹180.
Bilateral pacts The St Louis-based firm and others in the ABLE-AG have decided to fight it out.
Monsanto argues that the firms are bound by the bilateral agreements that they signed when they secured a sub-licence from Mahyco Monsanto Biotech Limited. It asserts that the firms are required to pay the royalty component as agreed upon.
The Centre’s decision to step in to resolve the issue will help to clear the air. A uniform price, if gets the go-ahead from the courts, will solve the problems of the farmers and of the seed-producing firms too.
Farmers can then get the seed at a lower price. The absence of a uniform price in the different cotton-growing States often incentivises smuggling. This is also leading to marketing of spurious seeds.
For the seed firms, it will solve two major problems: it will help do away with what it calls “stifling trade pacts”, and it will solve the issue of producing seed packs with different prices for different States.
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