The Centre has marginally lowered the maximum sale price of Bt cotton seeds (BG-II) for a 450-gram packet to Rs 730 for the 2019-20 season. The licence, or trait fee, charged by companies has also been slashed by almost 49 per cent to Rs 20.
The new price of a Bt cotton seed packet weighing 450 grams and 120 grams refugia for the 2019-20 season — October to September — will be Rs 730, including a trait fee of Rs 20. The maximum sale price of Bt cotton seeds in 2018-19 was Rs 740, including trait value of Rs 39.
According to a gazette notification issued last week, for the second consecutive year after the central government started fixing its prices, following recommendations of a committee, the sale price of Bt cotton seeds, along with the trait fee, has been lowered.
The licence fee is inclusive of all taxes. The planting of cotton crop starts in June.
For the 2019-20 cotton season, the retail price of BG-I genetically modified cotton seed varieties was not touched, while the licence fee was maintained at zero, as was the case in the previous season. However, it is of little consequence as BG-I cotton is already off-patent.
Lowering the retail price and the licence fee for Bt cotton seed packets (BG-II varieties) for the second year might impact the margins of seed companies, especially original licence holders, as it occupies almost 95 per cent of the country’s cotton market.
Bt cotton seed prices were first lowered in 2016-17 by a panel constituted by the Centre under the Cotton Seeds Price Control Order in December 2015.
The panel brought down the price to Rs 800 a packet from the previous Rs 830-1,030, while trait value was lowered by about 70 per cent, from Rs 163 a packet to Rs 49.
The move was followed by a draft guideline issued in May 2016, which capped the trait value at 10 per cent of the seed sale price and thereafter lowered it periodically.
The move received a lot of criticism from multinational seed companies.
Monsanto, which had a joint venture in this regard with Mahyco (Mahyco Monsanto Biotech or MMB), said it would “re-evaluate” all its businesses in the country; it took the biggest hit.
It had also petitioned against the order at the Delhi High Court.
In the 2017-18 season, the sale price of cotton seed packets was maintained at Rs 800 per packet, including a trait value of Rs 49.
MMB has sub-licensed Bt cotton seed technology since 2002 to about 50 domestic companies. It first sub-licensed BG-I technology, which went off-patent in 2006.
It now sub-licenses BG-II. Seeds produced using this technology occupy 95 per cent of the Indian cotton market. A third technology, BG-III, is in the pipeline, but its commercial use is yet to be approved.
Domestic seed companies alleged that MMBL has collected over Rs 7,000 crore as licence fee since 2002.
The Indian BT seed market is worth over Rs 3,500 crore a year.
The issue divided the National Seed Association of India (NSAI), with multinational companies and some like-mined Indian ones forming the Federation of Seed Industry Association.