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Industry slams draft notification on GM technology guidelines

The industry has come out against the draft licensing guidelines for Genetically Modified (GM) technology, issued by the agriculture ministry a few months ago, by stating that besides being retrograde, such provisions would discourage innovation and investment in research and development (R&D) in agriculture and are contrary to the government’s policy of ‘ease of doing business’.

The industry has come out against the draft licensing guidelines for Genetically Modified (GM) technology, issued by the agriculture ministry a few months ago, by stating that besides being retrograde, such provisions would discourage innovation and investment in research and development (R&D) in agriculture and are contrary to the government’s policy of ‘ease of doing business’.

Industry associations such as Confederation of India Industry (CII), PHD chambers and Assocham, in their response to the draft licensing guidelines for GM technology, have especially criticised the provision on the fixing trait value for new GM trait at 10% of the maximum sale price of Bt cotton seeds for the first five years and lowering the same by 10% annually.

“Regulation of trait fee which is based on the bilateral contract will create significant unpredictability with respect to existing and future technologies. It is important to recognise that it takes around minimum eight years and more and a lot of investment to develop superior quality seed,” the CII stated in its communication in draft guidelines to the agriculture ministry.

It further said such a provision would totally disincentivise potential new innovators and start-ups, thus clearly being antithetical to the spirit of ‘Start-up India’ and encouraging entrepreneurship.

Assocham, in its petition to the agriculture ministry, has stated that the draft guidelines overlook the scientific capability of potential licensees and could send discouraging signals to R&D intensive enterprises.

“Provisions like limiting loyalties are unprecedented and completely negate the scope for any technology provider to negotiate prices, terms and contracts for patented technologies, thus completely repress their freedom to engage in commerce,” it noted.

PHD chamber in submission has noted that draft guidelines on GM technology would create negative environment for R&D investments in agriculture in India.

In May this year, faced with sharp criticism from major biotech companies like Monsanto, the agriculture ministry has decided to withdraw the notification which capped the trait value charged by them on new GM traits, besides declaring null and void all existing licence agreements between the trait providers and seed producers. The ministry had put the notification in the public domain for 90 days.

The ‘Licensing and Formats for GM Technology Agreement Guidelines, 2016’ was notified by agriculture ministry two months after the Centre had fixed the Minimum Support Price (MSP) of Bt cotton seed packets at R800 per packet for bollgard (BG)-II version of Bt cotton hybrid, including R49 for the trait value.

The seed price was fixed as per the Cotton Seeds Price Control Order issued in December 2015.

The notification prescribed a new format for bilateral agreements and said the existing signed pacts between licensors (technology providers) and licensees (seed firms) would become invalid and they should execute the agreement in new format in next 30 days.

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