1. Commercial disputes: How India’s bid to make farmers self-sufficient is being harmed by policy aberrations

Commercial disputes: How India’s bid to make farmers self-sufficient is being harmed by policy aberrations

Without any doubt India needs to apply modern science and technology in agriculture if it has to move farmers from a position of distress to a point of prosperity and become self-sufficient in the times to come, and in fighting climate change.

New Delhi | Published: February 9, 2017 4:49 AM
Although India is a fast-developing economy and is placed well as the hub of technically-qualified manpower, it has not been a research-friendly country. Although India is a fast-developing economy and is placed well as the hub of technically-qualified manpower, it has not been a research-friendly country.

Without any doubt India needs to apply modern science and technology in agriculture if it has to move farmers from a position of distress to a point of prosperity and become self-sufficient in the times to come, and in fighting climate change. But certain policy aberrations are causing enormous damage to this effort.

Although India is a fast-developing economy and is placed well as the hub of technically-qualified manpower, it has not been a research-friendly country. Research investments in both public and private sectors in general, and agriculture in particular, have been low. Lack of sufficient protection of intellectual property is one of the reasons for the low research investment. And, India seems to be driving the nail deeper into the coffin with recent illogical policy decisions.

There seems to be a dichotomy in the policies of the government. While our prime minister is announcing his support to the use of latest scientific and technological innovations in agriculture and is asking for foreign investment in this field, some section of the government is bringing out statements and policies which stifle research investment, innovation, intellectual property protection and foreign investment. The industry and the farmers are confused with these mixed signals.

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Innovations and modernisation in agriculture require sufficient encouragement in the form of IP rights protection, predictable policy structure and enabling environment. The recent happenings in the field of agri-biotech demonstrate examples of uncertain policies and unfavourable conditions, which would discourage infusion of cutting-edge technologies in Indian agriculture by the industry.

The impact of such discouraging policy and regulatory environment will have direct ramifications for farmers, who will not be able to access modern technologies, and continue to be under disadvantageous situation with little hope of breakthrough improvements in crop productivity.

To explain this in detail, it is well-accepted in other parts of the world and also in the legal framework of India that bio-tech traits are provided IP protection through the Indian Patent Act, while the varieties of seeds are provided protection under the Protection of plant varieties and farmers’ rights (PPVFR) Act. The technology developer licenses his traits to seed companies, since seed is the only carrier of technology to the farmer. The licensing works on the basis of the payment of trait fee (royalty) payable by the seed company on the sale of their seed which is carrying the trait licensed by the technology provider.

This is a simple contract between the technology provider and the seed company, a model of technology sharing which works all over the world and has worked in India since 2002 when bio-tech was introduced.

The Cotton Seeds Price Control order in December 2015, by the ministry of agriculture, was the first instance of an unreasonable uncertainty brought in to fix the prices of cotton seed carrying Bt technology, thereby reducing incentives for the investors who develop and deploy such cutting-edge techniques. This was followed by draft licensing guidelines in May 2016, which virtually proposed compulsory licensing of such technologies and fixed the amount of trait fee that can be charged by the technology provider. Based on unfavourable feedback on such a move, these guidelines seem to be on hold temporarily but this shows the intent of the government.

While the draft licensing guidelines seem to be on hold, there have been efforts by few interested elements to push for the same agenda and are proposing to nullify the crop bio-tech traits under PPVFR Act. The key argument forwarded for such a proposal is that PPVFR overrides the protection of crop bio-tech traits under the patent act. A handful of cotton seed companies controlling an industry body have been carrying out policy advocacy work in favour of the above proposal. It is interesting to note that this advocacy is against the backdrop of a legal dispute between a few licensees and the technology provider about payment of the contractual trait fee on Bt Cotton. These companies have already collected the trait fee from farmers, but have not paid it to the technology provider. They are making an effort to influence the government policy under the garb of benefit to Indian farmers, but actually to settle their commercial dispute with the technology provider. Unfortunately, the government does not seem to understand such manipulations. This could prove to be very expensive for Indian agriculture.

The PPVFR Act, 2001 is designed to protect the plant varieties developed by the breeders through regular plant breeding methods. This Act was not intended to over ride the Patent Act which provides protection to crop bio-tech traits, which are novel methods of synthesising a gene construct in the lab and using it to incorporate a specific trait in the plant. If these new guidelines are implemented it would make patent protection irrelevant and would provide free access of trait to anyone who would want access to technology. This would practically amount to no intellectual property protection to crop biotech trait, and therefore, would discourage anyone particularly from the private sector to invest in research and introduce novel and breakthrough crop biotech traits and go through the onerous regulatory process for approvals.

It is also not inspiring confidence in the minds of well-meaning stakeholders of Indian agriculture, that the agricultural ministry has recently included those advocating above line of approach on the reconstituted PPVFR body. One hopes that this is not an indication of leaning towards the above argument which could inflict huge damage to the interests of Indian farmers.

Modernising Indian agriculture and improving its global competitiveness requires infusion of latest crop technologies as available elsewhere in the world. Development and introduction of such technologies will depend on the policy environment including protection of IP rights and pricing freedom to recover the investments. Obfuscation of the policy environment in this respect would only stifle the flow of technologies to Indian agriculture. The biggest loser in such an environment is Indian agriculture, with millions of our farmers being denied access to modern tools of crop productivity improvements.

Our prime minster has articulated the ambitious vision of doubling the farmers’ income by 2022. This would be possible only with modernising our agriculture with all available tools of productivity improvements. One fervently hopes that the progressive government under him would not allow a few to jeopardise his agenda for agriculture, which would negatively impact the long term future of the maximum number of people our country.

The author, Ram Kaundiya, is an independent agriculture expert

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