 "Centre freezes GM seed notification")
The notification, dated May 18, had also called for regulating all bilateral agreements between licence providers and licensees. It has not been formally withdrawn. It will be put in the public domain for three months, after which a decision will be taken.
A clause requiring all existing bilateral agreements between seed licence providers and licensees to adhere to the new pattern within the next 30 days or be considered void was one of the main contentious points. By the new provision, licence providers wouldn't have any discretion on choosing whom to give a licence; anyone fulfilling the criteria would be eligible.
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The notification capped the ‘trait value’ (equivalent of licence or royalty fee) for all new GM seed technologies at 10 per cent of the maximum sale price. The fee was to be capped for the first five years from the time the technology was commercialised in India and then be lowered by 10 per cent each year.
This was in addition to the retail sale price of GM cotton seed, already regulated by the government. Cotton is the only crop in which GM technology is allowed for commercial use in India.
Mahyco Monsanto Biotech (MMBL), a subsidiary of seed giant Monsanto, was seen to have been the most highly impacted by the notification, as it is the biggest licence provider of GM seeds in India. Monsanto's Indian subsidiary, Mahyco Monsanto Biotech (MMBL), has sub-licensed GM cotton seed technology since 2002, to 50-odd domestic companies. First it sub-licensed BG-1 technology, which went off-patent in 2006. Thereafter, it sub-licenses BG-2. GM seeds produced using this technology has about 95 per cent of the Indian cotton market. A third new technology, BG-3, is in the pipeline but its commercial use has not yet been approved.
MMBL, seed companies allege, collects Rs 530 crore annually as ‘trait value’ or licence fee for its technologies and since 2002 has collected at least Rs 7,000 crore. The Indian GM seed market is worth around Rs 3,500 crore.
The maximum selling price of BG-2 technology seeds has already been regulated by the government through the Cotton Seeds Price Control Order of 2015. For the 2016-17 season, the maximum retail sale price for a 450g GM cotton seed packet has been fixed at Rs 800, down from the current Rs 830-1,030.
The notification effectively meant that seed licence providers won’t be able to charge any ‘trait value’ or ‘royalty fee’, irrespective of the cost at which the seed has been produced for a new technology which they want to introduce in the market.
The agriculture ministry had also capped the upfront fee for the new GM trait at Rs 25 lakh, to be paid in two equal annual instalments.
In the new licensing norms in line with the notification, technology providers had to give a licence to all companies seeking GM technology if they met the minimum requirement. Seed companies can also develop their own seeds through research and development without taking a no-objection certificate from the licence providers.
Shivendra Bajaj, executive director at the Association of Biotechnology-Led Enterprises -Agriculture Focus Group had said the May 18 notification was a huge blow to innovators in the agri-biotech sector. “It clearly indicates the intention of the government to disregard research and innovation and thereby not protecting IPR (intellectual property rights) in the sector. This order creates an environment of policy unpredictability and arbitrariness of decision making, which is contrary to the recently launched IPR policy. Such a decision is a discouragement of research and is contrary to our Prime Minister’s vision of bringing research into the hands of farmers,” Bajaj had then said.
And, Kalyan Goswami, executive director of National Seed Association of India, had said the notification sought to address the issue of failure of non-performance of technology, to bar one-sided licensing terms.