Agri Business

‘R&D is the way forward for a robust agriculture sector’

Ram Kaundinya July 10 | Updated on July 10, 2020 Published on July 10, 2020

Indian seed companies need financial support to compete in global markets, policy support to protect IP, and incentives for research investments

Stagnant yields, malnutrition, abiotic and biotic stresses and climate change will be the greatest hurdles for us in the next 10-20 years which cannot be surmounted without stepping up our research efforts.

Research in seeds is a process that requires long gestation investment and commitment to develop new products suiting the market. Deregulation cost for biotech traits and their stewardship costs are significantly high. Income Tax benefit for 200 per cent of research investments is to be restored for the seed industry.

The seed industry should therefore be encouraged to increase research investment to 10 per cent of revenue from the current 3 per cent. Accreditation of national-level seed research companies with integrated facilities for product testing, trial data analytics and seed quality control are to be established through a National Register. Our IP regime needs strengthening to encourage research investments and to prevent proprietary parent seed from being stolen from seed production fields for producing copy products, fake products and for breeding purposes.

Encouragement for Indian Companies

A robust policy framework is needed to encourage research investments by Indian seed companies enabling them to compete effectively with international companies. They need financial incentives to compete in global markets, policy support to protect Intellectual Property, incentives for research investments and recognition for their research efforts.

Most Indian companies operate at regional levels with crops which are important for the local population. Many local crops, including some orphan crops, are covered by them ensuring a wider coverage for crop improvement with regional impact. Research alliances with global corporations can bring modern technology to India-centric crops. Special incentives are also needed for Indian and foreign companies who collaborate and bring new technologies to India.

World class research projects between ICAR and Indian seed companies need to be established, especially to improve OP crops which need private investments. Assurance of a reasonable returns on their investments for Indian companies is the key.

Encouragement for International companies

The FDI inflows in seeds and plantation sector have gone up from $17.46 million in 2014-15 to $40.55 million in 2018-19 with a cumulative investment of $191.64 million. To continue this trend, it would be critical to continue with our current policy of attracting FDI investments into seed sector. Since 2006, when 100 per cent FDI was approved in India, many foreign companies have set up 100 per cent subsidiaries in India or have acquired Indian seed companies. They have brought new technologies and elite breeding lines into the country, thus improving the quality of seed varieties in India and enhancing yields. A prime example is maize.

Indian companies benefitted in terms of technology collaborations, access to modern systems and processes, valuation in M&A deals and on the stock markets. Many progressive nations allow majority foreign shareholding in seeds.

Access to Indian germplasm for a foreign company needs approval of the National Biodiversity Authority (NBA) and governed under BDA Act of 2002. Any company with even one foreigner as its director or shareholder is treated as foreign company. Whether a foreign company has 1 per cent or 100 per cent share in a seed company here, they will not be able to access or transfer Indian germplasm without NBA’s approval.

Need for global collaboration

Global collaboration provides access to unique and new germplasm that allows breeders to deliver better products to farmers. We can’t find all traits within our own germplasm collections. For example, the Norin dwarf gene from Japanese germplasm is used in modern dwarf wheat and the Dee gee woo gen triple dwarf gene from Chinese germplasm is used in cultivated rice in India which changed rice to a dwarf, lodging resistant plant. This led to the Green Revolution.

Ever since the government issued OGL in 1989 foreign companies imported of elite global germplasm and new traits got introduced in vegetables. Full FDI rules in India encouraged MNCs to invest in research in different crops — vegetables, corn, rice, mustard, millets and sweet corn — which benefitted the farmers immensely. Biotechnology is another area where foreign collaborations benefitted Indian farmers.

Foreign companies, encouraged by our FDI rules, have invested in developing research facilities of global standards in cities such as Hyderabad, Bangalore, and Delhi, as well as high-class production and processing facilities. They invested for training in research, production, product development, marketing, sales which contributed immensely in developing our seed sector. Many from Indian industry travelled to other countries, visited nurseries, witnessed high quality breeding programmes, biotech programmes and enriched their knowledge.

Foreign companies sell seeds produced in India and they employ large number of Indians in running these companies. They built good export business from here. Corporates make strategic commitments to a country based on the predictable policy environment.

India has the technical manpower, agro-ecological zones, research institutions and other strengths which we must leverage in our collaborations with foreign companies and access the benefits of the best of global innovation. We should invest in infrastructure and utilise our technical competency to establish ourselves as a winter nursery and field evaluation hub for the world. Seed research is key to the future security of our agriculture and our farmers. The government should encourage research investments by both Indian and foreign companies to develop climate resilient crop varieties through a ‘Research in India’ programme.

Our campaign for self-reliance should be based on our strengths and it should not lead to more protectionism. We have to move forward.

(The author is Director General, Federation of Seed Industry of India. Views are personal)

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Published on July 10, 2020
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