Economy

India again cuts Monsanto's GM cotton seed royalty, this time by 20%

India again cuts Monsanto's GM cotton seed royalty, this time by 20%”

A drop in the retail price of Bt cotton seed prices might impact the profitability of seed companies like Monsanto India and Kaveri Seed, who criticized the government's move.

The 2016 move was criticised by multinational seed company, including Monsanto, which had moved Delhi High Court challenging the order.

"It is unfortunate that today's order further erodes trait fees (royalties), which are now less than 0.5 per cent of the cost of cultivation, while the technology continues to provide value to farmers across India", said a spokesman for Monsanto's India joint venture, Mahyco Monsanto Biotech (India)(MMB).

India's farm ministry says it will reduce royalties paid by Indian seed companies to Monday for its genetically modified cotton by 20.4%, following its 70% cut in 2016.

In March 2016, the agriculture ministry, on the recommendation of a nine-member panel, slashed prices to Rs800 per packet, compared with Rs830-1,000 charged earlier-and cut royalty fees sharply by over 70%.

Last week, the National Seed Association of India (NSAI) threatened to halt supplies to eight million cotton farmers to protest the planned move to reduce seed prices.

According to an agriculture ministry notification, the maximum sale price of a Bt cotton seeds packet has been fixed at Rs 740 for bollgard (BG)-II version, including Rs 39 for the trait value. However, in recent years, Bt cotton fields have seen repeated pest attacks and crop losses-in Punjab in 2015 and in Maharashtra last year. "NSAI may even file a writ petition against the government decision", Kalyan Goswami, director general of NSAI, told Reuters.

He added that the seed industry's input costs have gone up, following an increase in the costs of labour, supply chain, electricity and fuel. A packet of Bt cotton seeds is of 450 gram. "But the idea was ignored", he said. Over the last decade, Bt cotton technology has been adopted on over 95 per cent of the country's cotton growing area, making India the second largest producer and exporter of the cash crop.

Previous year the government kept both the royalties and the retail prices of GM cotton seeds unchanged. Industry analysts had predicted a record high production with a rise of 9.3 per cent in production in 2017/18.



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