Nath Seeds, the Aurangabad-based hybrid seeds manufacturer, has entered into a strategic alliance with Biocentury Transgene of China to bring into India transgenic technology for cotton.
Nath Seeds will have the license for the exclusive use of Chinese Bt+ genes in India. Biocentury has the patented technology for Bt and Bt+ genes developed by the Biotechnology Research Institute of the Chinese Academy of Agricultural Sciences.
Nath Seeds will incorporate the new Bt+ technology into parent lines of cotton hybrid seeds bred by Nath Seeds for the Indian market.
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The government of India is yet to clear the proposal of farmers being permitted to use Bt cotton or other genetically modified seeds. The company expects this product to be rolled out by 2004 by which time Nath Seeds expects the nod from the government.
Currently, in China, about 30 per cent of cotton grown is under genetically modified seeds and the economic benefit for the farmer has ranged between $150-200 per hectare.
India plants nearly 9 million hectares of land under cotton. The average yield of cotton lint is Rs 320 per kg while the average price in China is Rs 934 per kg. The increase in the cotton yield is expected to make available an additional 2.4 billion bales of cotton, valued at $ 5 billion or Rs 20,000 crore.
This method is also expected to curtail the use of pesticides and protect the environment and the crop from the deadly 'cotton boll worm'. Indian farmers use an estimated Rs 1,100 crore worth chemical pesticides, in spite of which the cotton boll worm remains a menace.
The company is working on pest resistant, drought resistant crops and nutrition enhancement as part of its long-term plan.
"The alliance with Biocentury to bring transgenic technology in cotton crop to India on exclusive basis is a first step in achieving the plan," Nath Seeds chairman Nandkishore Kagliwal said.
"The first genetically modified seed is expected to be cleared by the Union government in three months. Post approval, commercial sales are likely to take place in 2004 after conducting all the required trials," Kagliwal said.
The tie-up can boost the revenues and profits of Nath Seeds as it had exclusive rights to not only use the 'Bt+' gene but could also sub-license the same to other seed companies.
"In the first year of sale (2004), revenue and profit is expected to go up by Rs 35 crore (Rs 60 crore in third year) and Rs 25 crore (Rs 40 crore), respectively, considering we garner a 20 per cent market share," he said.
Nath Seeds would pay royalty to the Chinese company as part of the alliance. However, he refused to quantify the sum. On equity participation by Biocentury, Kagliwal said "Nath is open to the idea at a future date."