Seed makers have raised the issue of non-viability of cottonseeds in the midst of shrinking prices.

Following the government’s latest announcement to cut down cottonseed prices, seed players are contemplating alternative crops instead.

Seed makers claim that the reduction in prices will impact their margins and force them to move away from cottonseed production.

Costs

According to seed producers, the cost of production involves farmer’s share, labour and research costs, besides logistics and distribution channel expenses.

Ahmedabad-based Navbharat Seeds Pvt Ltd – a cottonseed maker – believes that the reduced margins will prompt them to shift focus from cottonseed production to other crops such as castor and vegetables. “The overheads and costs for seed production have been going up for past 4-5 years. And this is the second time the government has cut down the prices, which has further reduced the margins. This is demotivating for seed companies, and many will consider pruning down the production of cotton seeds and focus on other crops,” said Vinay Dhanavat, from Navbharat Seeds.

Also, the seed companies have raised questions on the over dependence of foreign technology for Bt seeds.

N P Patel, the promoter of Gujarat-based Western Agri Seeds, expressed concerns over excessive dependence on foreign technology for domestic seed production.

“The government needs to encourage research for new gene technology. The current Bollgard-2 has failed as we have seen pink bollworm attack in multiple states. If the government wants to control the price at both ends of the cotton value chain, then it must be done by direct transfer of subsidy to the farmers. The companies can’t survive on thin margins,” said Patel, adding that companies facing losses in cottonseeds will not produce seeds in the next season.

As per an estimate, overall cottonseed consumption stands at about 45-50 millon pouches, of which, Gujarat alone consumes about 10-11 million pouches.

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