Agri Business

Indian seed industry in talks with multinational firms for new technologies

Subramani Ra Mancombu Chennai | Updated on August 03, 2021

Negotiations over royalty fee on as seed tech firms mull filing applications

With two warring Indian seed associations burying their 16-year-old hatchet, multinational seed technology companies have been persuaded by them to resubmit their applications for new technologies that are tolerant to troublesome pests and insects in crops, particularly cotton.

“Bayer has, in principle, accepted our request. The issue is being discussed at its headquarters. We plan to meet government authorities to ensure a smooth process. This is just the beginning,” said M Ramasami, Chairman-cum-Managing Director, Rasi Seeds (P) Ltd.

Ramasami also heads the Federation of Seed Industry of India (FSII), which decided to join hands with the National Seeds Association of India (NSAI) to end disputes over trait value of seeds and licensing of seed technology last month, which had been raging since 2005.

The FSII comprises 45 companies and NSAI has about 400 members — all indigenous firms.

Trait fee percentage

“We are looking at fixing a particular percentage as the trait value for the seeds to the technology providers. The percentage will depend on the strength of the technology and benefits to farmers,” said Ramasami.

Initially, seed companies paid a high royalty that resulted in Bt seeds for cotton ruling higher. In 2016, the royalty was cut by over 70 per cent by the Centre, from ₹163 per 450 gm to ₹43.

This resulted in seed technology providers, led by Bayer that took over another seed giant Monsanto two years ago, withdrawing their applications for approval of technologies such as Bollgard Roundup Ready Flex cotton seed three years ago. The move was also in protest against the Centre’s stipulation that they give licence compulsorily to all applicants for technology.

In India, genetically modified seeds have been approved for commercial sale only in cotton. All the disputes and controversies have been over the Bt (Bacillus thuringiensis) cotton technology.

The last technology approved by the Genetic Engineering and Appraisal Committee (GEAC) — the authority to approve genetically modified organisms technology — was in 2006 when Bollgard II cotton was cleared. Since then, no other crop has been approved.

20% royalty

Bt brinjal was at the stage of approval when a 10-year moratorium by the Supreme Court set back the clock. Though the moratorium ended in 2019, the Centre’s policy of leaving it to the States to approve field trials of GM crops has resulted in no progress being made on the seed technology front.

Industry sources said that the ₹20,000-crore Indian seed industry was offering a maximum royalty of 20 per cent with riders such as the seeds’ acceptance and sales.

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A senior executive of a multinational seed technology firm told BusinessLine on the condition of anonymity that they were looking to file applications for new technology seeds but would want to know what the Indian seed industry vision is.

“We are looking at their ideas as a framework. We see the coming together of the associations as a positive development. We are looking at ways to reintroduce technology but we need to see how things develop, how the (Indian) government looks at the development,” the senior executive said.

The multinational firm official said that the technology firms would have a better picture by looking at how the seed firms proceeded positively with their vision and “put together their ideas”.

‘Idea in framework’

Asked if any discussion on trait fees or royalty had been worked out, especially since they withdrew their applications in protest against low royalty, the senior executive said that they have an “idea in framework” and would see how things can work.

Surge in illegal HTBt cotton acreage worries seed industry

To another question on whether the technology firms would be willing to work with some of NSAI members who had been charged with proliferation of herbicide tolerant Bt cotton (HTBt) and possessing spurious seeds, the multinational firm official said that relations with the national association were good and there was a lot of common ground with those firms.

Rasi’s Ramasami said the Centre should consider allowing newer technologies and motivate the regulatory team. “A country like the Philippines is cultivating Bt maize and golden rice. Even Bangladesh is growing Bt cotton,” he said.

Indian seed companies were developing new technologies but were unsure of the future in view of no new seed technology being approved commercially since 2006.

Though HTBt cotton has not been approved for commercial use, farmers in Maharashtra, Andhra Pradesh, Telangana, Gujarat and Maharashtra are cultivating it illegally. They have even defied authorities, who are unable to act against the growers planting an unauthorised crop.

“It takes 10 years to develop technology. Indian companies are also strong in technology. If the multinational technology firms file applications for the new technologies, it will encourage Indian firms to invest more in research and development,” Ramasami said.

‘Doomed marriage’

Meanwhile, seed industry sources are pessimistic over the move of FSII and NSAI to come together, saying “it is a marriage that is doomed to fail”.

This is in view of a few NSAI members having openly questioned if the Bt technology could be patented a few years ago. The FSSI supports patents and thus, there could be some friction over this between the two factions, they said.

One of the leading NSAI members has been engaged in a few cases in the court against Monsanto (now taken over by Bayer) which resulted in orders by the Agriculture Ministry against the latter and antitrust investigations.

Seed industry seeks action against illegal GM seed business, promoters

Monsanto suffered losses to the tune of millions of dollars after the NSAI member stopped paying royalties in 2015 on the grounds that the US seed tech firm had not got patent protection.

The legal dispute ended with an “out-of-the-court settlement” earlier this year.

While the senior executive of the multinational firm sees this as a positive development, industry sources are, however, sceptical given the long-drawn out legal battle that lasted for five years.

Published on August 03, 2021

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