Let markets determine cotton seed prices, says Eco Survey

With the government deciding to fix cotton seed prices, including royalty fee, the Economic Survey today said market forces should determine the seed prices and favoured higher competition among companies to check price cartelisation.
In December last year, the Agriculture Ministry issued the Cotton Seeds Price (Control) Order to fix the maximum sale price of the seeds, including that of genetically modified (GM) varieties.
As per the order, the government "would also determine the royalty fees or trait value for the technology provider".
"... It is desirable to let markets determine the price of seeds... Enhancing competition through more players can help check/reduce cases of price rigging and cartel formation," the Survey said, citing previous experience and limitations in administratively fixing prices in India.

It elaborated that there are asymmetries or assumptions in the cost and price data and other related information.
Meanwhile, the industry body National Seed Association of India (NSAI) has supported the government's decision to control seed prices.
The Mahyco-Monsanto Biotech Ltd (MMBL) on December 19 had filed a writ petition in the Delhi High Court challenging certain provisions of the order that seeks to regulate licensing of the cotton seed technology.
Bt cotton is the only GM crop allowed for commercial cultivation in the country. Over the last decade, Bt cotton technology has been adopted over 95 per cent of the cotton growing area, making India its second-largest producer.