Agri Business

Cottonseed price issue continues to haunt AP, Telangana

KV Kurmanath Hyderabad | Updated on January 23, 2018 Published on May 18, 2015

Cotton seed

Farmers want price reduction while companies seek a hike

As farmers get ready for the kharif season, the issue of cottonseed pricing has resurfaced. While farmers are asking for a reduction in price, seed producing farmers are demanding a hike in their remuneration.

The seed firms argue that they can’t increase the procurement charges unless the government increases the seed price.

The price announced by the two States, the two important seed hubs in the country, act as a benchmark for the rest of the cotton growing States.

The seed industry has been demanding a hike in the price, citing sharp increase in the cost of production.

GO & Pricing

The governments of Telangana and Andhra Pradesh have issued orders in a span of three weeks, fixing the price of a 450-gm seed packet at ₹930 for BGII (Bollgard-II), retaining the previous year’s figure.

The price is fixed at ₹930 on a packet that goes with non-Bt cottonseed as refugia and ₹862 on a packet that comes with redgram as refugia seed. (Refugia seed is something that is sown around the Bt cotton crop to prevent proliferation of pesticide-resistant insects.)

Farmers’ leaders have been asking for a cut in the price. They argue that the seed companies have reduced wages to the seed growing farmers. “They have reduced the compensation to seed growing farmers by ₹40-50. How can they ask for more,” AP Rythu Sangham (affiliated to CPM) Bharat told BusinessLine. Both the governments held the customary meeting with the representatives of stakeholders before they fixed the price.

Royalty cut in Telangana

Though the two GOs fixed the price at ₹930 for BG-II, the Telangana government tweaked the break-up by reducing royalty (paid by the seed firms to Mahyco-Monsanto for getting the biotechnology solution) to ₹50 from ₹90 and enhanced the procurement cost to ₹330.

The Andhra Pradesh, however, retained the royalty fee at ₹90, while keeping the procurement component at ₹290.

The royalty fee has become a contentious issue between the government and Mahyco-Monsanto. The latter contends that the government has no power to determine the royalty that is specified in the license agreement.

A delegation of seed-growing farmers from Kurnool met Andhra Pradesh Agriculture Minister P Pulla Rao on Monday and appealed to him revise the GO, taking a cue from the Telangana order.

“Cost of production has gone up significantly in the last five years but the government has not increased the MRP. The companies are arguing that they can’t increase the price unless the MRP is revised upwards. Lack of remunerative prices is forcing the seed growers to look at other alternatives. This would have an impact on the seed production,” Devakanthapu Reddy, leader of the delegation, said.

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Published on May 18, 2015
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