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Entering India later in 2002, the multinational seed giant – Mahyco-Monsanto Biotech Ltd (MMBL) – walks away with a profit of Rs 1400-crore in just four years of commercialisation of the first genetically modified crop. And it isn’t giving up. After all, in a liberalised economy, profit is no longer a dirty word.

 In 2005, Mahyco-Monsanto and its sub-licensees earned a profit of Rs 1000-crore from selling genetically modified seeds of Bt cotton. Profit does become a dirty word when one realises that at a time when the countryside is reeling under a terrible agrarian crisis, the Rs 1000-crore that the seed companies have siphoned-off from the ravaged farms could have been the life saving thread for millions of farmers struggling between life and death. 

Ironically, while the Ministry of Agriculture remains a mute spectator to the greed of the seed companies, Prime Minister Manmohan Singh provided a Rs 1000-crore aid package to the visiting Nepalese Prime Minister G.P.Koirala to rebuild the shattered economy of the Himalayan Kingdom. If Rs 1000-crore aid lifeline can help rebuild the Nepalese economy, there is no reason why the same amount cannot infuse hope in the dying fields of India.

But for the seed companies, there is no reason to feel apologetic. Ever since Bt cotton was approved for commercial planting in 2002, Mahyco-Monsanto and its allies have been charging a hefty price of Rs 1600 –1700 for a packet of 450 grams, which includes a royalty (they call it ‘technology fee’) of Rs 1200. But what makes the high ‘royalty’ appear disgraceful is the diverse technology standard the company applies in different countries. In neighbouring China, the corresponding royalty or ‘technology fee’ that the parent company charges is Rs 38, and in the United States it is pegged at Rs 108.

True, both China and the US know how to regulate the seed industry. In India, the seed industry is holding farmers to ransom. 

Taking the bull by the horn, Andhra Pradesh took the initiative to bring the Bt seed under a price control. Faced with a recurring failure of the Bt cotton crop, AP had publicly accepted that the technology had failed. Hundreds of Bt cotton farmers had committed suicide in Andhra and in the Vidharba region of Maharashtra. AP therefore had even demanded a compensation of a little over Rs 3-crore for the loss its cotton farmers suffered. But the company was unrelenting. It refused to compensate the farmers, thereby even defying the obligations of the MoU it had signed earlier with the state government.

Andhra Pradesh took the case further. It appealed before the Monopolies Restrictive Trade Practices Commission (MRTPC) asking for parity in prices (essentially the ‘technology fee’) with other countries. The commission accepted, and directed the company to reduce its trait value (royalty) from Rs 900 per 450 gm pack to a reasonable level as charged by its parent company Monsanto in China. One of the respondents, Nuziveedu Seeds, had earlier submitted that MMBL was forcing it to sell genetically modified seeds to poor cotton growers at exorbitant prices under the guise of 'trait value.'

For some strange reasons, the AP government lost the vigour and appeared not so willing to ‘annoy’ the multinational giant. It therefore passed an order directing the seed companies not to charge more than Rs 750 for a packet of 450 grams (enough for one acre) against the MRTP directive of Rs 38 per packet. The AP government (followed by Karnataka and Maharashtra) however needs to be questioned as to how did they arrive at the magical figure of Rs 750 per acre. After all, at Rs 750 per packet the state government’s are allowing the seed companies a royalty margin of Rs 300. This is approximately three times what the highly subsidies cotton farmers in America are paying, and ten times what the Chinese farmer pay. Why should the same seed be sold at a higher price in India?

The seed multinational refused to take it lying down. It moved the Supreme Court seeking a stay on the AP government order. The apex court turned down the plea but qualified that it will either be the MRTP Commission or the court that will decide as to who should pay the additional amount. In other words, the Supreme Court hints at the need for a government subsidy for the seed companies. Meanwhile, adopting a unanimous resolution, agriculture ministers of eight cotton producing states have joined hands to fight the exploitative pricing of Bt cotton seed by the MMBL and its sub-licensees.

What does it mean for the farmers? Well, even at Rs 750 per acre, the AP agriculture minister N Raghuveera Reddy says: “Cotton farmers in the state could save up to Rs 1200-crore on input cost in 2006.” Considering that each penny saved is a penny earned, the price order means a huge saving for the farmers.

The entire sequence of events that led to the unsavoury row is the outcome of a national seed policy that remains silent on seed price control. Even the Seed Bill 2004 that has been introduced in parliament does not make a mention of the need to regulate seed prices. Otherwise there is no reason why a seed company that was desperate to sell the improved seed technology to the ICAR for a paltry Rs 9-crore in 1990-91 should be allowed to romp home with a profit margin that actually pauperises the farmers. 

Devinder Sharma ~ STWR member

[1] One crore= 10 million

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