In a move that could hit cotton productivity, which has jumped over the last decade, the Centre has brought genetically modified (Bt) cotton seeds under price controls, reports Sandip Das in New Delhi.
According to a notification issued by the agriculture ministry earlier this week, the decision was taken in view of farmers finding the seeds “to be highly priced” and the need to bring “uniformity” in their prices across the country.
Bt cotton was first introduced in the country in 2003 and in a couple of years it expanded to most parts of the country. About 90% of the country’s cotton area of roughly 11.8 million hectares in 2015-16 is under the Bt coverage, according to an industry estimate.
The ministry invoked the Seed (Controls) Order, 1983, issued under the Essential Commodities Act, to impose price controls on Bt cotton seeds, but hasn’t fixed a pan-India maximum selling price (MSP) for now. Taking a cue from states like Maharashtra and Andhra Pradesh, it, however, stated that the MSP would mean the “maximum price inclusive of Seed Value, License Fee, Trade margin and local taxes or duties, at which the Cotton Seeds or transgenic varieties of Cotton Seeds are sold to the farmers”.
Maharashtra and Andhra Pradesh had earlier imposed price controls on Bt cotton seeds including the “trait fee” charged by the US-based multinational Monsanto which has proprietary rights over the gene (Bacillus thuringiensis) that accords the Bt cotton its pest-resistant property. The move could hit Monsanto hard. The agri-biotech major, along with Maharashtra-based Mahyco, is currently fighting “non-payment of around Rs 450 crore” in royalty fees (trait value) by nine Bt cotton seed manufacturers.
The current price of Bt cotton seeds to farmers, as fixed by the Maharashtra government, is around Rs 900 per packet.
“For the purpose of fixing Maximum Sale Price, the Government may constitute a Committee under the Chairmanship of Joint Secretary (Seed) and Controller, Department of Agriculture, Cooperation and Farmers Welfare to recommend Maximum Sale Price of Cotton Seed after taking into consideration the components of Seed Value, License Fee which includes one time and recurring Royalty (Trait Value), trade margins and other taxes. The Committee may take inputs from such persons or associations or authority, as may be necessary for working out the Maximum Sale Price of the Cotton Seed,” according to the notification.
The country’s cotton production has risen manifold since the introduction of the Bt seeds — from 13.6 million bales in 2002-03 to a projected 36.5 million bales in 2015-16. Even yield has improved from 302 kg per hectare in 2002-03 to a projected 484 kg per hectare in 2015-16 despite a deficient monsoon this year. The Cotton Advisory Board has projected production of cotton to touch 36.5 million bales in the current season, down from 38 million bales a year earlier, due to an expected drop in area under the crop.
According to MMB, the JV between Monsanto and Mahyco, “Over the last decade, Bt technologies have helped increase cotton yields by over 1.8 times from 302 kg per hectare in 2002-2003 to 552 kg per hectare in 2013-2014. This has led to significant increase in farmer incomes from higher yields and reduced usage of insecticides thereby helping generate an additional farm income of over Rs 42,300 crore.”