1. Edit: Monsanto-Bt cotton episode shows zero application of mind

Edit: Monsanto-Bt cotton episode shows zero application of mind

Monsanto episode shows zero application of mind

By: | Updated: May 25, 2016 8:49 AM
What kind of a process declares all existing technology licenses between, in this case, a Monsanto and its seed-company licensees as null and void one fine day and then gives both sides 30 days to renegotiate the contract along the terms decided by the government?  (Source: IE)

What kind of a process declares all existing technology licenses between, in this case, a Monsanto and its seed-company licensees as null and void one fine day and then gives both sides 30 days to renegotiate the contract along the terms decided by the government? (Source: IE)

Given how ridiculous the original order to regulate the royalty on GM seeds was, the government has done well to decide to withdraw the order and open the issue up for discussion, after which a final view will be taken on the matter. It is, as yet, not clear if this is a genuine change of heart on the part of the agriculture ministry after the outcry its order caused or whether this is just a tactical retreat, to ensure that prime minister Narendra Modi does not have to face hostile questions on India’s IPR policy in the US next month. Should the question come up, the prime minister can, in all sincerity, say what is being talked of is merely a draft for discussion and that a final view will be taken only after considering the views put forward by all concerned.

Assuming for the moment that there has been a genuine change of heart, possibly prompted by an intervention from the prime minister’s office, it still calls into question the process that goes into decision-making in the government. What kind of a process declares all existing technology licenses between, in this case, a Monsanto and its seed-company licensees as null and void one fine day and then gives both sides 30 days to renegotiate the contract along the terms decided by the government? On what basis did the agriculture ministry decide that technology companies would be adequately compensated for their R&D efforts by limiting the royalty on seeds to 10% of the value of the seed—and this price, thanks to an earlier order, is to be set by the government, not the company!—for the first five years, after which it is to be cut by 10% in each subsequent year? Even if agriculture minister Radha Mohan Singh is able to duck the question at future press conferences/interactions, this is something the prime minister needs to ask him. It is easy to dismiss this as the action of an individual ministry, by now the norm should have been that any big decision will be taken only after extensive stakeholder discussions.

In this case, even if the government does decide not to issue an order limiting royalty payments to 10% of the value of the cotton seed, the government needs to withdraw the Cotton Seeds Price (Control) Order that was issued last year. Till the order was issued, prices of seeds were decided by the seed companies—probably in consultation with Monsanto—based on what the market could bear, exactly as it is done for millions of other products in India and in the rest of the world. Though there is no explicit connection between seed prices and the royalty Monsanto charges for its technology, a low seed price cannot really coexist with a high royalty. Under the seeds price order, however, the government decided to cut seed prices as well as the royalty—the bulk of the cut was made in technology royalties. Since the government has the power to fix royalty rates anyway, whether or not the licensing order is re-promulgated is quite irrelevant. This cotton seeds pricing order now needs to go. The larger question of whether the agriculture minister is in sync with the Modi cabinet’s development agenda or whether he is delivering on the RSS anti-GM agenda is something the prime minister needs to ponder over.

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    Anil Kumar
    May 26, 2016 at 4:57 pm
    First of all what is the valuation of R&D cost that needs to be compensated. Does Only Monsanto do R&D. What about seed companies who integrate Monsanto's gene. Should they recover their costs also. This R&D cost recovery and adequate compensation to Monsanto is a big sham. How much one needs to recover? What is the limit? How can one have Rs 1200 Royalty and Rs 500 seed price initially when technology was launched. India has stood strongly and had taken one good decision atlast. Kudos to Agri ministry and Radha Mohan Singh for taking tough decisions.
    Reply
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      Anil Kumar
      May 26, 2016 at 4:41 pm
      Is this an unbiased opinion based on objective analysis or just a routine propaa
      Reply
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        Anil Kumar
        May 26, 2016 at 5:14 pm
        On the contrary the article does what it says. Zero application.
        Reply
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          Anil Kumar
          May 26, 2016 at 4:45 pm
          The article is factually wrong and is spreading false information. " Till the order was issued prices were decided by seed companies" is totally a wrong information/fact. Cotton seed prices were controlled in India since 2006 under State seed acts. Central Government only harmonized different prices and trait values under State seed acts through CSPCO 2015.
          Reply
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            Bear n
            May 25, 2016 at 11:36 am
            Thanks for increasing Monsanto share price...
            Reply
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