1. Monsanto warns it will bail out of India

Monsanto warns it will bail out of India

Move after reports suggest 70% cut in royalty

By: | New Delhi/pune | Updated: March 5, 2016 8:06 AM

 

MMBL has sub-licensed Bt cotton seed technology since 2002 to various domestic seed companies. (Reuters) MMBL has sub-licensed Bt cotton seed technology since 2002 to various domestic seed companies. (Reuters)

While a government committee has reportedly recommended a 70% cut in Bt cotton trait value as part of the move to clamp price controls on the seeds, US biotechnology major Monsanto on Friday threatened to re-evaluate its presence in India and hold back new technology if the plan is not rolled back.

“If the committee (set up by the agriculture ministry) recommends imposing a sharp, mandatory cut in the trait fees paid on Bt-cotton seeds, MMBL will have no choice but to re-evaluate every aspect of our position in India,” Monsanto India region CEO Shilpa Divekar said.

Mahyco Monsanto Biotech (MMBL), a joint venture between Monsanto and Maharashtra-based Mahyco, currently charges trait fees of R122.96 and R183.46 per packet of Bt Bollgard I and Bt Bollgard II seeds, respectively.

Divekar said it would be difficult to introduce new technologies in India if there is no sanctity of contracts between the two private parties and no guarantee of recovering investments made in research activities. The stance of the global biotech major comes at a time when the government is taking steps to correct India’s poor ranking in enforcement of contracts and thereby improve the ease of doing business here.

The Centre had last December issued an order to control cotton seed prices including trait or royalty value effective from the 2016-17 crop year.

While the Delhi High Court is hearing a petition against the price control move by MMBL — the mater will be next heard on Wednesday — the agriculture ministry is expected to soon notify the “maximum price inclusive of seed value, licence fee, trade margin and local taxes or duties, at which the cotton seeds or transgenic varieties of cotton seeds can be sold to the farmers”. The nine-member committee is learnt to have recommended a pan-India maximum sale price of Rs 800 for a 450 gm packet of Bollgard II Bt cotton seeds. The packets are currently sold for Rs 830 per packet in Maharashtra, Rs 930 in Telangana and Andhra Pradesh and Rs 1,100 in northern states such as Punjab and Haryana.

MMBL has sub-licensed Bt cotton seed technology since 2002 to various domestic seed companies. It is alleged that some of these companies have to pay MMBL some Rs 450 crore after collecting the amount as trait value from the cotton farmers in kharif 2015.

About 90% of the country’s cotton area of 11.8 million hectares (in the 2015-16 season) is under Bt cover. The country’s cotton production has risen manifold since the introduction of Bt seeds — from 13.6 million bales in 2002-03 to a projected 36.5 million bales in 2015-16.

“It will be difficult for MMBL to justify bringing new technologies into India in an environment where such arbitrary and potentially destructive government interventions make it impossible to recoup research and development investments focused on delivering extensive farmer benefits and where sanctity of contracts is absent,” Divekar said. Noting that certain reports in the public domain are false, she said, “We sincerely hope that the government will be fair in its approach.”

On February, 6, the Delhi High Court refused to stay the government’s notification to set up a committee to regulate Bt cotton seed prices in the country. The agriculture ministry, in accordance with the Cotton Seeds Price Control Order, 2015, had on January 27 set up a nine-member committee under a joint secretary to execute the order issued on December 7, 2015. under the Essential Commodities Act.

According to the December notification, the decision to put Bt cotton seeds under price control 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. MMBL had stated in its petition that the price control order is “illegal and unconstitutional”.

As many as 49 seed companies in the country use MMBL’s Bollgard-II double-gene technology, which provides in-built protection for cotton against the destructive American bollworm. The Centre’s move to regulate control prices of Bt cotton seeds and regulate the licensing of the technology followed steps taken by states like Maharashtra and Andhra Pradesh on similar lines.

Meanwhile, competition watchdog CCI has ordered a detailed probe against MMBL for alleged abuse of dominance by the Indian arm of the US-based genetically modified seed giant Monsanto.

Shares of Monsanto India dropped as much as 7% to a near two-year low on Friday before ending down 2.4%.

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  1. Nepid
    Mar 6, 2016 at 4:59 am
    This blackmailing is on par with the pharmaceutical companies. These guys have already looted farmers of the developed nations. Unfortunately in India farmers are already committing suicides, forget about losing more money to this evil company.
    Reply
    1. A
      aditi
      Mar 5, 2016 at 5:05 am
      Go go go... The door is there
      Reply
      1. F
        finvision
        Mar 5, 2016 at 11:40 am
        Monsanto has been banned in America ,Europe long ago its high time we bid them good bye
        Reply
        1. F
          finvision
          Mar 5, 2016 at 11:44 am
          Our Agri-Scientists should concentrate on Wild species which has more natural resistance This will pave way for organic farming
          Reply
          1. N
            nand
            Mar 5, 2016 at 4:44 am
            Please get out. Its a blessings.
            Reply
            1. V
              Vandana
              Mar 6, 2016 at 4:48 am
              This evil MNC needs to leave Mother Earth alone.
              Reply
              1. Krishna Karmakar
                Mar 5, 2016 at 5:04 pm
                This is a setback for science and technology in India as some professional agitators are out to stop progress and are keen on stopping all scientific development. These nut-cases should avoid all cereals as these have been developed by farmers over thousands of years from wild grains by careful grain selection and matching of traits and today's rice, wheat, maize, potatoes etc. all have been engineered crops. If Monsanto can operate all over the world why stop it in India? Why prevent Indian farmers from accessing genetically modified seeds? As it is our productivity is abysmal; why come in the way of progress? Too many Luddites and environmentalists in the guise of scientist-avtivists are operating with impunity.
                Reply
                1. K
                  Kasa Oole
                  Mar 6, 2016 at 5:39 am
                  Monsanto quit India now. You have destro the native cotton species. You've destro farmers' lives. No body wants you in India.
                  Reply
                  1. D
                    dipak rai
                    Mar 5, 2016 at 8:36 pm
                    Good decision. Do it before the Govt arrests all you crooks....
                    Reply
                    1. Y
                      yechuri
                      Mar 5, 2016 at 4:12 am
                      get out, now!
                      Reply
                      1. S
                        Satish
                        Mar 5, 2016 at 12:06 pm
                        Fantastic, good move Monsanto, what we want, you want to do. Great.
                        Reply
                        1. P
                          pradeep
                          Mar 5, 2016 at 4:42 pm
                          Monsanto and their comical moves; All they are doing, is that they are trying to intimidate the govt of India. Dear Monsanto You are a immoral business eny, due to whom millions of farmers have committed suicide, your move to leave India will only make us Indians Happy; in-fact we will joyously celebrate the day you leave as "-Monsanto Day". And India is a country of 1.3 billion people (customers) and currently the fastest growing economy in the world; if i was a share holder of any business that decides to back out of India while its consumer base is growing and economy is booming, Id'd cut my losses as a share holder and back out of that company too. In conclusion, Monsanto you are involved in the immoral business of killing farmers, you trying to intimidate a country whose backbone is its farmers is not only not going to fly, but rather comical, ridiculous and absurd.
                          Reply
                          1. S
                            SK Rao
                            Mar 5, 2016 at 4:42 pm
                            Great! Finally, this rogue company will exit! Celebrations due. Bloody Congress was licking it's feet and now BJP finally shows it the door!
                            Reply
                            1. V
                              Vinay
                              Mar 6, 2016 at 5:36 am
                              Good riddiance of most evil company, please speed up its exit.
                              Reply
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