Bt cotton seed price unchanged for 2017-18

The 'trait value' has also been retained at Rs 49, which includes all taxes

The Centre has kept the prices of genetically modified (Bt) cotton seeds for 2017-18 unchanged at Rs 800 per 450g packet. The ‘trait value’ (fee charged by seed research companies from license holders) has also been retained at Rs 49, which includes all taxes.

The Centre sets both rates. Bt cotton seed prices were first lowered last year by a panel constituted by the Centre under the Cotton Seeds Price Control Order in December 2015. The panel had brought down the price to Rs 800 a packet from Rs 830-1,030 earlier; trait value was lowered about 70 per cent, from Rs 163 a packet.

The move was followed by a draft guideline issued in May 2016 which capped the trait value at 10 per cent of the seed sale price and thereafter lowered it periodically.

The move created much criticism from multinational seed companies. Monsanto, which had a joint venture in this regard with Mahyco (Mahyco Monsanto Biotech or MMB), said it would “re-evaluate” all its businesses in the country; it took the biggest hit. It had also petitioned against the order at the high court in New Delhi.

Competition Commission of India (CCI) had ordered a probe against MMB for alleged abuse of dominance by the Indian arm of Monsanto. MMB has sub-licensed Bt cotton seed technology since 2002 to 50-odd domestic companies. It first sub-licensed BG-1 technology, which went off-patent in 2006. It now sub-licenses BG-2. Seeds produced using this technology occupy 95 per cent of the Indian cotton market. A third technology, BG-3, is in the pipeline but its commercial use has not yet been approved.

MMB, domestic seed companies allege, collected around Rs 530 crore annually as trait value and since 2002 had taken over Rs 7,000 crore as licence fee. The Indian Bt seed market is worth around Rs 3,500 crore a year.

The issue divided the National Seed Association of India (NSAI), with multinational companies and some like-mined Indian ones forming the Federation of Seed Industry Association (FSII).

“NSAI had requested the ministry of agriculture to reduce the trait fees on Bt cotton, as the technology has become obsolete and it has completely failed to stop pink bollworm. The department’s guidelines commit to reduce trait fees by 10 per cent every year, which has not been reflected in the 2017 pricing,” said NSAI executive director Kalyan Goswami of the latest order.

He said by not raising the selling price of Bt cotton seeds, the seed industry would have to work on less margin.

Status quo

* The government has kept the prices of Bt cotton seeds unchanged at Rs 800 per 450g packet for 2017-18

* It has also retained the fee charged by seed research companies from license holders at Rs 49, which includes all taxes