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 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.