Agri Business

In a first, Centre hikes Bt cottonseed prices

KV Kurmanath Hyderabad | Updated on April 01, 2021

Farmers oppose 5% increase, say it will spike input costs

The Union Government, for the first time since it issued the Cotton Seed Price (Control) Order in 2015, has increased the maximum sale price (MSP) of cottonseed by five per cent to ₹767 for a packet of 450 gm of Bollgard-II seed. The price of Bollgard-I is put at ₹635/packet.

The industry sells about 5-5.5 crore packets (of 450 gm each) of cottonseed every year. The price hike has evoked mixed response from the industry and farmers. While the seed industry has welcomed the move, farmers said it would further increase cost of production for them.

Rasi Seeds, Kaveri Seed and Nuziveedu Seeds, which have an aggregate share of 26 million packets , stand to gain from the price hike.

“The stakeholders such as seed producing farmers, seed companies and distributors will get part of what we get. We pass on the benefit to them,” a seed industry representative said.

For the farmer, it is not much of a burden. Even if he were to buy 10 packets (for five acres), the total additional cost would not be more than ₹200, he contended.

Vijoo Krishnan, Joint Secretary of the All-India Kisan Sabha, condemned the increase in the seed price. “At a time when the cost of production is increasing, the Government’s decision would result in additional burden on the farmers. We oppose the decision,” he said.

“The seed value component was reduced from ₹751 in 2016 to ₹730 in 2020. We asked for a correction of this and make it ₹810. But the Government increased it by only 5 per cent,” NSAI (National Seed Association of India) President M Prabhakara Rao told BusinessLine.

The association represents the seed companies that take the Bollgard-II technology from Monsanto, through its Indian joint venture Mahyco Monsanto, to equip their hybrids with ability to protect the plants from pink bollworm.

‘Remove price control’

“We are happy with the increase of five per cent in cottonseed price. This is less than the 10 per cent that we requested for, but we consider it as a good gesture by the Government,” Ram Kaundinya, Director General of Federation of Seed Industry of India (FSII) and Alliance for Agri Innovation, told BusinessLine.

The FSII represents agri biotechnology companies in the country.

“We represented to the Government that the cottonseed business was becoming unviable for the industry and research investments in developing new hybrids has dwindled significantly. If this is not corrected immediately it will adversely affect cotton yields and farmers profitability,” he said.

Cotton production in the country has to go to 57 million bales (of 170 kg) by 2027 from the current level of 37 million bales in order to support the aggressive plans by the textiles industry.

The industry argues that the cost of seed production is increasing tremendously. While the prices of other inputs such as fertilisers and pesticides have gone up significantly, the price of Bollgard-II has not kept pace with the cost increases.

“It has been reduced from ₹800 to ₹730 over the last five years, out of which the seed component (excluding the trait value) moved down from ₹751 per packet to ₹730,” he said.

The FSII wanted the Government to remove the price control completely. “This will encourage more investments to flow into introduction of modern technologies and seed varieties into the market, which is crucial for the health of Indian cotton industry and the Indian cotton farmer,” he said.

Published on March 31, 2021

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