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NSAI for Full Regulation of Cotton Seed Price; to Move Court

Submitted by Food Democracy Now on January 5, 2016 - 11:37am

NEW DELHI: Seeking full regulation of cotton seed price, the seed industry body NSAI plans to move the Delhi High Court to oppose a Mahyco-Monsanto Biotech Ltd plea that the government should not regulate trait fee or royalty charged by technology providers.

Mahyco-Monsanto Biotech (India) Pvt Ltd (MMBL) is a joint venture company of US biotech major Monsanto.

The Agriculture Ministry had on December 7 issued a Cotton Seeds Price (Control) Order to fix a uniform maximum retail price (MRP) from March on all cotton seeds including the genetically modified versions.

It also decided to fix and regulate the seed value and licensee fee including royalty or trait value.

MMBL had on December 19 filed a writ petition in the Delhi High Court challenging the order's certain provisions that seek to regulate the licensing of cotton seed technology.

Now, the National Seed Association of India (NSAI) wants to join as 'Party' in this case as it favours full regulation of cotton seed price, including the trait fees and royalty.

"We will soon file a petition in the Delhi High Court to oppose the MMBL's contention that trait fees/royalty should not be regulated," NSAI President M Prabhakar Rao told PTI.

"We feel that if government regulates the BT cotton seed price, then it will have to regulate the trait fees as well. Partial regulation can harm the domestic seed industry badly," Rao said.

Terming the government's order as "balanced", he said the government should determine prices in such as way that all the stakeholders be satisfied. The price should be based on the cost component of the seed producing companies as well as the technology provider, he added.

The ministry had said that the price control order has been issued for "uniform regulation" of sale price of cotton seeds with existing and future genetically modified technologies.

The aim is to ensure cotton seeds are available to farmers at "fair, reasonable and affordable prices" and there are uniform rates for cotton seeds across the country, it said.

The decision followed several representation by farmers and the NSAI for regulating sale price of Bt cotton and other varieties in the country.

According to the notification, MRP of the cotton seed will be notified in the Official Gazette on or before March 31 of every year applicable for the next financial year.

Currently, Bt cotton seed is sold at different rates across the country. In Punjab and Haryana, it is priced at Rs 1,000 for a 450g packet, Rs 830 in Maharashtra and Rs 930 in six states including Andhra Pradesh.

Separately, the ministry has asked fair trade regulator CCI to investigate the alleged monopolistic practices of MMBL.

"Farmers organisations and NSAI had requested the Department (of Agriculture) to intervene to regulate royalty charges for Bt Cotton technology being charged by MMBL.

"The matter has also been referred to CCI to investigate the allegations of monopolistic practices of MMBL," Minister of State for Agriculture Mohanbhai Kundaria had said in a written reply to the Rajya Sabha.

Bt cotton is the only GM crop allowed for commercial cultivation in the country. Over the last decade, Bt cotton technology has been adopted on over 95 per cent of the cotton growing area, making India the second largest producer.

The Centre's order comes at a time when there is a tussle between the MMBL and seed companies over payment of royalty for using Bollgard technology in hybrid cotton seeds.

MMBL has dragged eight seed firms for non-payment of about Rs 400 crore royalty for using its technology in cotton hybrids and for breach of the contract.

On the other hand, NSAI has sought refund of over Rs 1,600 crore paid as royalty to MMBL for using latter's technology in last five years arguing that the seed firms paid this amount over and above the state government stipulated trait value.

Originally Published: The Economic Times

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