Opinion

India must reform its seed sector before RCEP takes effect

Indra Shekhar Singh/ Prabhakar Rao | Updated on October 23, 2019 Published on October 23, 2019

India is the only country which grants rights to farmers to reuse and even sell seeds produced in their farms

The RCEP agreement, if implemented, will allow other countries to dump excess seeds in the Indian market. The current 100% FDI policy also threatens seed sovereignty

With a confirmed Brexit, the days of liberal globalisation are numbered. Open borders, FTAs and multilateral agreements find no takers in the White House either. Leaders Boris Johnson and Donald Trump have heralded a clear and blunt message of tariffs, conservative economics and national interest. It appears the time of Adam Smith has ended, as the financial powers of the world are looking towards protectionism and focussing inwards to repair their economies. Amidst such developments are the ongoing RCEP negotiations for what will potentially be the world’s biggest free trade agreement. We are opening the doors that guard our farmers’ agricultural produce against exploitation. A bit counterintuitive?

Today, India boasts of a vibrant seed sector which involves both public institutions and a variety of private companies. The seed sector is the backbone of agriculture in many countries, but the situation in India can’t be compared with that of Australia, Japan, China or other members of the RCEP grouping. Seeds are vital to our national security, and any wrong policy decision could sound the death knell many dependent on the seed economy. We have a large population involved with the seed sector for food and livelihood. Our plant genetic resources (PGR) and seeds will play a critical role in ensuring food security for the future generations.

Foreign presence

The RCEP agreement, if implemented, will bypass the WTO and offload all the excess agricultural produce from China — like grains, seeds and milk — into the Indian markets freely. Shifting our balance of payment and food sovereignty into the hands of China will be detrimental to the Indian seed sector.

It is imperative to note here that India signed the Trade Related Aspects of Intellectual Property (TRIPS) and fulfilled all obligations, including the changing of its Intellectual Property Rights (IPR) laws to be TRIPS-compliant by 2005. Out of respect for the traditional regard given to plants and animals, India excluded them from patentability. To claim IPR for plants — including transgenic ones — India developed a sui generis system and enacted the Protection of Plant Varieties and Farmers Rights (PPVFR) Act.

At the same time, we were harmonising our biodiversity laws with the world. India became the signatory of the Convention on Biodiversity Diversity (CBD) and enacted the Biological Diversity Act (BDA) to conserve and allow for sustainable use of biodiversity. These two treaties have helped India stop bio-piracy and develop unique and progressive legislations for farmers’ and breeders’ rights.

Going one step further in good faith, India allowed for 100 per cent foreign company subsidiary operations in the seed sector, giving such entities full rights for seed production and distribution at par with the domestic companies to ensure more benefits for farmers, with the hope that other countries like China would reciprocate. But that did not happen.

Though India allowed 100 per cent FDI to foreign entities in the seed sector, Indian companies are not allowed to operate in major RCEP member countries like China and Indonesia. They allow only research and development activities. Seed production and distribution are allowed only by companies with 49 per cent or lower foreign ownership. This is done keeping national food security in mind.

China allows operations of companies with foreign shareholding in limited geographic areas, comprising certain provinces/states. For each region, the foreign company needs to find local/regional partners for operations. This keeps a tight check on foreign companies working in China. The Indian policy, on the other hand, is more open, as it allows Chinese-owned companies full rights to operate in the country without any local partner or shareholder.

If the RCEP goes through, Chinese companies which have already set up a strong base in India will start to dump all their excess seeds into the Indian markets. This may flood the markets, which will result in small and medium Indian seed companies taking a major hit.

PGR ownership

Also, China and a few other countries don’t allow export of parent lines or the germplasm by any seed companies. So no foreign company can take Chinese PGR outside the country. There is no such prohibition in India, nor is this aspect monitored.

In wake of the RCEP, India needs to modify FDI policy in seeds to protect our national interest. Indonesia also modified its FDI policy a few years ago, allowing FDI to be below 49 per cent in field crops and below 35 per cent in vegetable seed companies. We could follow a similar policy, allowing a three-year period for companies which are fully foreign-owned to comply, as a bid to prevent dumping of seeds and indirectly take control of precious PGR and parent lines.

Sustainable use of PGR is key to tackling challenges such as climate change. With a view to encourage use of biological resources by Indian seed companies, the BDA provides for use of bio-resources without prior approval only for companies without any foreign shareholding. However, to encourage development of new plant varieties, exemption is provided for varieties registered under the PPVFRA. The FDI policy, therefore, is leading to an anomaly wherein the prohibition for use of biological resources by a foreign-owned entity is automatically removed for a seed company with foreign ownership. This anomaly should be fixed by a clarification to the provisions of the BDA. Once the RCEP is implemented, this may again hamper the growth of the Indian seed industry, especially small and medium companies.

Farmers’ rights

Another issue with the implementation of the RCEP is that it creates conflicts for the PPVFRA, farmers’ rights and the UPOV system. India already fulfilled its commitment under TRIPS but stood firm on exempting lifeforms from patents. We are, in fact, the only country in the world which grants rights to farmers to reuse and even sell seeds produced in their farms. To that effect, we chose not to join the UPOV, which restricts farmers’ rights. Many of the RCEP members, however, are signatory of UPOV. Once this treaty comes into play, India could be compelled to make special provisions for UPOV member-states. This will result in the dilution of Indian legislation and farmers’ rights will take a back seat.

Lastly, we know that farmers and the seed sector, especially, will suffer at the hands of the RCEP. The Indian seed sector currently generates millions of jobs, especially in rural areas. With a robust education system, there may be thousands of able graduates that are seeking work in the agriculture and seed sector. Where will all these people go? What will happen to seed sector jobs in India?

We advocate that India join the RCEP with the position that the agricultural sector — including diary, fishing and the seed sector — will not be covered under it, as it is of strategic importance to food security as well as farming. The same position may well be taken by China and Japan. After all, despite being a part of the WTO, these countries have clear-cut exemptions for agriculture. India should make a strong case for adopting such exemptions.

India must act in its national interest. Food, seeds and farmers’ rights are of vital importance to our sovereignty, and we shouldn’t compromise on them. The government should follow the Chinese or Indonesian example and roll back 100 per cent FDI in seeds. We need to think of India first, and the RCEP later.

Singh is the Program Director for Policy and Outreach Rao is the President of the National Seed Association of India

Published on October 23, 2019
This article is closed for comments.
Please Email the Editor