Hit by a sharp cut in the royalty fees, US-based Monsanto's India joint venture Mahyco Monsanto Biotech Ltd (MMBL) today said the government has only fixed the maximum sale price of Bt cotton seeds.
Earlier this week, the Centre issued a notification fixing a uniform price of BT cotton seeds at Rs 800 per packet (of 450gm) including Rs 49 as royalty fees. Royalty fee has been reduced by about 70 per cent.
"Based on our preliminary review, the Notification appears to have fixed only the Maximum Sale Price (MSP) of cotton seeds, while only considering the components that constitute this MSP," MMBL said in a statement.
The company said it continues to evaluate the notification issued under the Cotton Seeds Price Control Order, 2015 (CSPCO) by the Ministry of Agriculture.
"MMBL's writ petition challenging certain clauses of the CSPCO that attempt to fix trait fees and licensing terms is pending before the High Court of Delhi," it added.
The Agriculture Ministry in December last issued an order to control cotton seed prices including trait or royalty value and a committee was set up to recommend the seed price.
According to the notification, the maximum sale price of Bt cotton seed packets has been fixed at Rs 800 per packet for bollgard (BG)-II version of Bt cotton hybrid, including Rs 49 for the trait value.
The trait value for BG-II has been drastically cut to Rs 49/packet from the current Rs 183/packet, including tax.
For the BG-I version of Bt cotton hybrid, the maximum sale price has been fixed at Rs 635 per packet with no trait value, the notification added.
US biotechnology major Monsanto had last week warned of re-evaluating its presence in India and holding back new technology if the government cuts trait fee of Bt cotton seeds drastically.
MMBL, which has sub-licensed Bt cotton seed technology to 50 domestic seed companies, said that "such regulation is contrary to the government's own policies for promotion of innovation and ease of doing business in India, fundamental to which is providing for sanctity of private bilateral contracts and recognising Intellectual Property Rights".
It also argued that the trait fees for Bollgard II cotton technology in India are just 1-2 per cent of the farmers cost of cultivation and are the lowest in the world.
The cotton price control order was issued in the backdrop of a bilateral dispute where few licensees refused to honour their commitments to pay MMBL over Rs 450 crore after having collected these amounts from cotton farmers in Kharif 2015, the company said.
