In a farmer-centric move, the central government, after a gap of two years, lowered the retail price of BT cotton seeds by Rs 60 to Rs 740 for a 450-gramme packet. This also includes the ‘trait value’ (licence fee) of genetically modified (BT) cotton seeds for the 2018-19 crop season that has been cut by Rs 10.
A formal notification regarding the same was issued late Monday.
The current price of Bt cotton is Rs 800 for a 450-gram packet, of which Rs 49 is the ‘trait fee’, including taxes. The trait fee is what seed companies have to pay to the licence holder. In this case, it is global giant Monsanto’s joint venture partner in this country — Mahyco Monsanto Biotech (MMBL).
The order comes hours after thousands of farmers in Maharashtra laid seize in Mumbai demanding loan waivers and compensation for crop damage.
Cotton is majorly grown in Maharashtra and witnessed low productivity this year due to pest attack.
A drop in the retail price of Bt cotton seed prices might impact the profitability of seed companies that had written to the Centre to raise prices or else they would find it difficult to supply cotton seed to farmers in 2018-19.
Bt cotton seed prices were first lowered in 2016 by a panel constituted by the Centre under the Cotton Seeds Price Control Order of December 2015. Brought down from Rs 830-1,030 earlier; trait value was lowered about 70 per cent, from Rs 163 a packet.
The move was followed by a guideline issued in May 2016 that capped the trait value at 10 per cent of the seed sale price, thereafter, lowered it periodically.
This was much criticised by multinational seed companies. Monsanto said it would “re-evaluate” all its business in the country as it took the biggest hit. It had also petitioned against the order at the high court in Delhi.
MMBL has sublicensed Bt cotton seed technology since 2002 to 50-odd domestic companies.
First sublicensing was BG-1 technology, which went off-patent in 2006. It now sublicenses BG-2 technology. Seeds produced using this technology occupy 95 per cent of the Indian cotton market.
A third technology —BG-3 is in the pipeline but commercial use has not yet been approved.
Domestic seed companies alleged MMBL collected Rs 5.3 billion annually as trait value and since 2002 had taken Rs 70 billion as licence fee.
The Indian Bt seed market is worth at least Rs 35 billion a year.
The issue divided National Seed Association of India, with multinational companies and some like-minded Indians, thus, forming the Federation of Seed Industry Association