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Andhra files plaint against Monsanto

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Our Regional Bureau Hyderabad
The Andhra Pradesh government today filed a complaint before the Monopolies and Restrictive Trade Practices (MRTP) Commission in Delhi against Mahyco Monsanto Biotec (India) Limited (MMBIL), challenging the 'revenue model' adopted by the multinational for sourcing its transgenic Bollgard cotton seed technology to Indian companies.
 
Terming the company's decision to collect Rs 1,250 as royalty on each packet of cotton seeds sold in the state as a fit case to punish it under the MRTP Act, the state government argued that Andhra farmers were forced to cough up through their nose as there was no effective alternative to Bt cotton seeds.
 
Submitting the complaint before the commission, state agriculture minister N Raghuveera Reddy requested Justice Rathi, chairman of the MRTP Commission, to visit Andhra Pradesh to see the plight of the cotton farmers, weighed down by the exorbitant cost.
 
In its complaint, the state government argued that the royalty fixed by Monsanto was not proportionate to the actual cost incurred on the invention of the new technology.
 
Later speaking to the media in New Delhi, the minister said that Justice Rathi had responded positively to his request to visit the state.
 
In response to the complaint, the multinational seed company filed a caveat before the commission against any interference with regard to the pricing and sale of Bt cotton seeds in the country, officials said.
 
Over Rs 300-400 crore sales turnover of Bt cotton seeds is estimated to have been achieved in the past three years since the introduction of the technology in the country. Andhra Pradesh is among the cotton farming states where Bt cotton seeds, both authorised and unauthorised varieties, have gained enormous popularity among farmers.
 
Meanwhile MMBIL, which has given licence to 21 Indian companies to market Bt cotton seeds, has stated that the pricing philosophy in the agriculture industry is based on sharing the value that products and technology deliver to farmers.
 
In a communiqué to Business Standard on Monday, MMBIL corporate affairs director, Ranjana Smetacek, said that several factors like additional yield benefits, labour, equipment and fuel savings, time savings, efficiency and risk management would be used to determine the price of an agricultural input.
 
"Technology fees may be part of the price charged to farmers, and are used both to support current products in a market and to fund research that will deliver new products. These fees are shared with retail technology channel, seed partners and Monsanto shareholders and cover the costs of doing business," Smetacek said.
 
She said that an Indian Market Research Bureau (IMRB) survey released in April last year revealed that the net profit increase for Bt cotton farmers was Rs 5,950 per acre, a 60 per cent increase over conventional cotton seeds.
 
The survey also found that farmers stopped using 4 to 5 pesticides against bollworm resulting in a saving of Rs 1,137 per acre.

 
 

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First Published: Jan 03 2006 | 12:00 AM IST

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