1. Mahyco Monsanto cancels Bt cotton licence over royalty payment

Mahyco Monsanto cancels Bt cotton licence over royalty payment

Mahyco Monsanto Biotech (MMB), the joint venture between US-based Monsanto and Mahyco, has cancelled the licence of Bt cotton...

By: | New Delhi | Published: December 23, 2015 12:28 AM

Mahyco Monsanto Biotech (MMB), the joint venture between US-based Monsanto and Mahyco, has cancelled the licence of Bt cotton seed manufacturer Nuziveedu Seeds and its two subsidiaries, Prabhat Seeds and Prabhat Agri Bio-tech, for “non-payment of royalty fees” (trait value) of Rs 160 crore for using its Bollgard-II technology.

MMB had earlier approached the Bombay High Court over non-payment of around Rs 450 crore of royalty fees by nine Bt cotton seed manufactures, including Nuziveedu, Rasi, Kaveri and Ajeet. These companies, which had in-licensed the technology from MMB, have not paid the trait value to MMB for the seeds these firms sold to farmers in the current and last year’s kharif seasons.

“A few seed companies continue to withhold large sums of technology fees payable to MMB despite having collected the full price of seeds from farmers. We are continuously evaluating all remedies available to us under law, but we don’t comment on specific actions that we may be considering,” a spokesperson from MMB told FE.

This is despite the fact that these firms have sold the Bt seeds to farmers at prices inclusive of the cost of the trait value. The MMB charges a trait fee of Rs 183 per each 450-gram packet of the Bollgard-reinforced Bt cotton seeds. Including the trait fee, the seeds would cost Rs 930.

MMB’s decision to cancel the licence of Nuziveedu and its arms comes close on heels of the Centre’s recent move to bring Bt cotton seeds under price controls. According to  the the agriculture ministry, the decision was taken in view of farmers finding the seeds “to be highly priced” and the need to bring “uniformity” in their prices across the country. The ministry has recently asked the Competition Commission of India to investigate the alleged monopolistic practices by MMB.

A total of 49 seed companies, including these nine, use MMB’s Bollgard-II double-gene technology, which provides in-built protection for cotton against the destructive American bollworm. The Bollard-II double-gene technology was approved by the Genetic Engineering Approval Committee in 2006. The first generation Bollard-I was approved in 2002.

Bt cotton was introduced in the country in 2003 and in a couple of years it expanded to most parts of the country. About 90% of the country’s cotton area of roughly 11.8 million hectares in 2015-16 is under the Bt coverage, according to an industry estimate.

Pending dues
* Mahyco Monsanto Biotech (MMB), the joint venture between US-based Monsanto and Mahyco, has cancelled the license of Bt cotton seed manufacturer Nuziveedu Seeds and its two subsidiaries for ‘non-payment of royalty fees’ of Rs 160 crore for using its Bollgard-II technology
* MMB had earlier approached the Bombay HC over non-payment of Rs 450 crore of royalty fees by nine Bt cotton seed manufactures  including Nuziveedu, Rasi, Kaveri and Ajeet

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