HC to hear Monsanto plea against seed price cap today

By: |
New Delhi | Published: March 23, 2016 12:09:31 AM

Recently, Monsanto had threatened to re-evaluate its presence in India and hold back new technology if the plan to reduce the trait value was not rolled back

The Delhi High Court is set to hear a plea by Mahyco Monsanto Biotech (MMB), a joint venture between Monsanto and Maharashtra-based Mahyco, against the agriculture ministry’s recent notification to cap Bt cotton seed prices, on March 23 and 28.

MMB had moved the Delhi High Court against the ministry’s notification of December last year capping Bt cotton seed prices, arguing that the price control order is “illegal and unconstitutional”. In a communication to the agriculture ministry, MMB had stated that the government or committee “does not have the authority to determine licensing terms or promulgate mandatory licensing guidelines”.

Recently, the agriculture ministry, following the recommendation of an expert committee, had announced a steep cut on the trait value on Bt cotton seeds prices by 70% to R49 per packet. Under the agriculture ministry notification, a pan-India ceiling price of Bt cotton seeds has been fixed at R800 per packet, down from R830-1,100 per packet. Earlier, a committee set up by the ministry had recommended the above rates.

According to the notification issued in December last year by the agriculture ministry, 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.

Last year, MMB had cancelled the licence of three seed companies Nuziveedu Seeds Ltd (NSL) and its two subsidiaries, Prabhat Seeds and Pravardhan Agri Bio-tech, for “non-payment of royalty fees” (trait value) of more than R163 crore for using its Bollgard-II technology.

Meanwhile, FE is in possession of a communication by MMB to agriculture ministry, which states “in June, 2015 when MMB refused Nuziveedu group’s request for certain preferential licensing terms, NSL warned MMB that there will be consequence of our refusal”. Subsequently, about eight companies refused to pay MMBL over R450 crores despite having collected these amounts as trait value from the cotton farmers in kharif 2015. An NSL official declined to comment on the issue.

Recently, Monsanto had threatened to re-evaluate its presence in India and hold back new technology if the plan to reduce the trait value is not rolled back.

About 90% of the country’s cotton area of 11.8 million hectare (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.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1Tea output declines to 1,127.7 million kg in Apr-Jan
2Gold price steadies, but may resume fall as rate hike worries resurface
3Oil prices rise as commodity rally holds