While agri-biotech execs feel price-control will be reinstated, others believe it is unlikely given the US govt’s pushback
JS Chauhan, assistant director-general (seeds) at the Indian Council of Agricultural Research (ICAR) was unusually forthright for a government official at an event on IPR in genetically-modified (GM) seeds, organised by the National Seed Association of India (NSAI) in Delhi. “Did the circular come into force on the request of farmers?” he asked, referring to the December order of the Union agriculture ministry bringing Bt cottonseed under price-control nationally. “Perhaps not,” he said, answering his own question.
Other officials at the event sang the tune of the organisers who had strongly pleaded for price-control. Tajamul Haq, former chairman of CACP, the body that fixes minimum support prices for crops, and, at present, head of NITI Aayog’s special cell on land policy, said India had always frowned on monopolies and referred to the infamous Monopolies and Restrictive Trade Practices (MRTP) Act. That law carried socialist paranoia at corporate expansion to such a ridiculous extreme that it put a company with assets of over R100 crore (in 1985) at a regulatory disadvantage. It fettered India’s economic growth. The cap was removed in 1991. Haq said, “Market, in the true sense, does not exist.” As an economist he should know, he asserted. “So, there is a role for the government. There must be price-control,” to balance the interests of producers and consumers (or farmers).
Is there evidence of balance in the March order of the ministry, fixing the MRP of Bt cottonseed? (These seeds have genes from a soil bacterium which help the plants produce their own insecticide). For Bt cottonseed with one insecticidal gene, the order says only the seed value, which includes cost of production, overheads and profits—R635 per pack of 450 grams—is payable as the GM trait has gone off-patent. For the patented two-gene version, the trait value has been fixed at R49 and the MRP at R800. The South Asia Biotechnology Centre, an advocacy group, says farmers should have paid no more than R684, which is the seed value (R635) and technology fee (R49). A scientist heading the agri-biotech department of a prominent seed company said that there would be a marginal increase in breeding and testing costs when two genes are inserted. CD Mayee, who was director of the Central Institute of Cotton Research in 2002, when Bt cotton was introduced, says the additional cost would at most be R10 a pack. So, the price-control order transfers an extra R106 a pack from farmers to seed companies or R435 crore on 41 million packets estimated to have been sold this planting season.
But NSAI was not satisfied. A few days after the order, it wrote to the ministry that it was ‘disappointed’. The price of Bt cottonseed with a single insecticidal gene should have been R800 and the version with two genes R875, it said, to allow ‘sufficient profit margins to invest in R&D.’ It also wanted a premium of R100 on Bt cottonseed hybrids introduced over the past three years. This while pressing for a trait fee cut from around R180 to R49 for the sake of farmers.
Finding that NSAI was not representing their interests, ten of its members who are engaged in agri-biotech research announced the formation of another lobby group, even before its incorporation, on August 26. Kalyan Goswami, NSAI’s executive director, called them ‘Monsanto’s loyalists.’ Three of them—Mahyco, Monsanto and Rasi Seeds—have quit the organisation. Prabhakar Rao, who is chairman of NSAI and CMD of Nuziveedu Seeds Group, has a score to settle with Monsanto which cancelled its franchise over non-payment of trait fees for the past few years. It is the single-largest seller of Bt cottonseed.
Speakers at the launch conference wanted ‘more transparency’ in policy making. Reporters sought to know whether it implied the ministry was less than transparent. They will find a reply in Mahyco’s withdrawal of its application seeking regulatory approval for Bt cottonseed with herbicide tolerance and a spodoptera-killing gene (in addition to being toxic to bollworms). Though seen as a protest against a notification on patents, it is an exercise in caution.
In the May notification, the ministry waived Bt cottonseed patents, invoking the Essential Commodities Act. Monsanto was the most aggrieved as its two-gene insecticidal trait has 99% share of the market, though such traits are offered by three other companies as well. It is obvious that farmers do not find the latter very effective. Faced with abacklash, the ministry converted the notification into a draft for consultation over 90 days. That period is over. Executives of agri-biotech companies perceive that notification will be substantially reinstated. Others say this is unlikely, given strong pushback from the US government.
But Mahyco, in which Monsanto has a 26% stake, is not taking any chances. NSAI’s Rao says the Indian Patent Act (IPA) doesn’t apply to GM traits, as ‘seeds and plant varieties are not inventions.’ They should be patented under what is called the PPVFR Act. This act is actually meant to protect the rights of traditional communities to seeds they have conserved over time from commercial usurpers. Rao believes it should cover transgenics as well. Once that happens breeders like him can use a trait, without permission from the developer, after regulatory approval. Breeders will pay the trait fee, according to a procedure to be prescribed by the agriculture ministry, to a National Gene Fund on which the developer can make a claim.
To forestall this and the possibility of the trait being snatched for free, Mahyco withdrew its application. Such is Rao’s perceived influence on the ministry and his reputation for getting things done!
Paresh Verma, research director of Shriram Bioseed, and head of ABLE-AG, the association of agri-biotech companies, doesn’t accept Rao’s interpretation. He says GM traits, being nucleic acid sequences engineered artificially, are inventions and therefore patentable under the IPA. He agrees that seeds cannot be patented, but ‘the rights of the trait developer don’t get exhausted when (GM) traits are introgressed into a hybrid or variety.’ In his view, both the IPA and the PPVFR Act can co-exist.
ICAR’s Chauhan also disagreed with Rao. “There should be no compulsory licensing. PPVFR Act doesn’t allow free use of a proprietary trait for commercial purposes,” he said. But RR Hanchinal, chairman of the PPVFR Authority, did not express an opinion. Instead he intoned platitudes about ‘farmers contributing much to conserving biodiversity’. Asked why he skirted the issue of patentability, Hanchinal told this author, ‘If I make a statement I will have to implement it!’
The author is editor of www.smartindianagriculture.in