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The National Seed Association of India (NSAI) has expressed ‘deep concern’ over the meagre increase in the price of Bt cottonseeds for the upcoming kharif season. It felt that the decision could threaten the supply of quality seeds to the farmers in the future.
“The decision to increase the price by ₹11 a packet (of 450 gm each) to ₹864 falls substantially short of industry expectations. It poses significant challenges to the seed companies and threatens the supply of quality seeds to farmers in the future,” NSAI President M Prabhakara Rao has said. “We wanted a hike of at least ₹147 on a packet to save the cotton seed industry from the current crisis and to encourage the cotton seed industry to produce adequate seeds and invest in research and development,” he said.
He said even if the price was increased by ₹147 the total cost of seed would not be more than 4-4.50 per cent of the gross income per acre.
“The proposed correction of ₹147 will translate to 3.64 per cent Comound Annual Growth Rate on cottonseed prices since 2016, the year the government started regulating the seed prices. This is lower than the increase of seed prices of other crops like corn, rice, and mustard,” he argued.
Narrowing of profit
“This correction is expected to partly cover five to six per cent inflation costs year on year, which is a common phenomenon for all agri-input categories including other crop seeds,” he said.
He said that the stagnation in seed prices since 2016-17 has led to a narrowing of profit margins for seed companies, compelling many to reconsider their participation in the cottonseed business.
Despite the pivotal role of Bt cotton in India’s cotton yield and production over the past two decades, there is a decline in yields due to reduced investment in varietal development by seed companies.
He said there was an urgent need for a comprehensive review of cottonseed pricing to ensure the financial viability of seed companies and sustain the supply of quality seeds to the farmers.
The NSAI asked the Centre to hold discussions with the industry stakeholders and take corrective measures immediately to align the seed prices with the increasing cost of production.
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