Economic Survey bats against cotton seed price control order

In a significant development, the Economic Survey 2015-16 tabled in Parliament today has batted against the recent central government decision to control sale price of cotton seeds, including BT, saying that markets should be allowed to determine price. 

The survey said that given the past experiences and limitations in administratively fixing prices in India, it is desirable to let markets determine the price of seeds. Enhancing competition through more players can help to check and reduce cases of price rigging and cartel formation, it added.

The central government, through a circular issued on December 2015, had decided to fix a uniform retail price for cotton seeds in the country in the interest of farmers.  

According to the order, the government may, after taking into consideration the seed Value, licence fee which includes one time and recurring Royalty (trait Value), trade margins and other taxes, whenever necessary, as it may deem fit, from time to time, notify in the Official gazette, the maximum sale price of cotton seeds on or before 31 March of every year, applicable for the next financial year.

The order was issued in accordance with the provisions of the Seeds Act 1966 and the Seeds (Control) Order 1983.  

A committee under the chairmanship of the joint secretary (seed) and controller, Department of Agriculture, Cooperation and Farmers Welfare, will be constituted to recommend the maximum sale price of cotton seed.  

The committee will have to take inputs from such persons or associations or authority, as may be necessary for working out the maximum sale price of cotton seed.  It held its first meeting last week.

The order also states that any person, who contravenes any of the provisions of this order or fails to carry out any direction or requisition made there under, shall be punishable under section 7 of the Act.