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In a relief to Mahyco Monsanto Biotech Ltd (MMBL), the Karnataka High Court in an interim order said the Centre cannot regulate the 'trait value' (licence fee) for seed technology as it is based on mutual agreement entered between two parties. However, the court did not interfere with that part of the central government's cotton price control order, which fixed a uniform maximum retail price for all genetically modified (Bt) cotton seeds.
"…though detailed consideration on that aspect of the matter would be required, prima facie it is seen that the trait value is not one of the components to be included for fixing the price," the court said in its order.
At the same time, this court will also have to ensure that the object with which the maximum sale price is fixed under the March 8 notification would have to be maintained as the same is for the benefit of the farmers.
The petition was filed by the Association of Biotechnology Led Enterprises- Agriculture Focus Group (ABLE-AG), a lobby group of biotech industries and Namdhari Seeds Ltd.
The court price control order, issued by the Centre earlier this month, lowered the 'trait value' or licence fee that MMBL could charge from seed companies by over 70 per cent, while at the same it also reduced the maximum retail price which the seed companies can sell their seeds by over 25 per cent.
MMBL is a joint venture between Maharashtra Hybrid Seeds Co. Ltd (Mahyco) and Monsanto Holdings Pvt Ltd. It licences seed technologies to companies, which in turn market their hybrid seeds.
The Centre had, last December, issued an order to control cotton seed prices, including trait or royalty value, effective from the 2016-17 crop year.
Accordingly a committee under the agriculture ministry was set up to recommend the seed price and royalty fee.
The committee suggested a price of Rs 800 per 450 grams of a Bt cotton packet which includes Rs 49 as trait fee or licence fee. The trait fees are 70 per cent less than the current rate.
MMBL currently charges trait fees of Rs 122.96 and Rs 183.46 per packet of Bt Bollgard I and Bt Bollgard II seeds, respectively.
A formal notification on the order was issued on March 08, 2016, through a gazette notification.
At present a 450 gram packet of Bt cotton is sold at around Rs 830 in Maharashtra, while in Karnataka, Andhra Pradesh, Telangana, Gujarat and Tamil Nadu it is sold at Rs 930. In the northern Indian states of Punjab, Haryana, Rajasthan etc it is priced at Rs 1,000.
The uniform retail sale price fixed by the Centre is almost 25 per cent less than highest prevailing price of Bt cotton in northern states, while it is around 14 per cent less than the price which prevails in areas where the sales are maximum of Bt cotton.
Peeved over the order, Monsanto threatened to 're-evaluate' it's all businesses in the country.
MMBL had challenged the order in Delhi High Court. MMBL has sub-licenced Bt cotton seed technology since 2002 to various domestic seed companies.
The government's cotton seed order came against the backdrop of a bilateral dispute where few licensees refused to honour their commitments to pay MMBL, over Rs 450 crore after collecting these amounts from the cotton farmers in kharif 2015.
Meanwhile, competition watchdog Competition Commission of India has also ordered a detailed probe against MMBL for alleged abuse of dominance by the Indian arm of the US-based genetically modified seed giant Monsanto.
Reacting to the interim order of the Karnataka High Court, Shivendra Bajaj, executive director, ABLE-AG said, "The association has challenged the legality and validity of cotton seeds price control order and subsequent notifications issued under it before the Karnataka High Court. The court, while maintaining the MSP has directed that trait value charged by its members cannot be regulated under the notification dated March 8 till final consideration given to the validity of CSPCO and subsequent notifications under it by the court."
Meanwhile, MMBL in a statement said that in Wednesday's hearing, MMBL brought to the notice of the Delhi High Court that the Karnataka High Court had passed some interim orders on a petition filed by the industry body ABLE and Namdhari Seeds on which the Delhi court indicated that this matter will be heard further on April 7, 2016.
"We remain confident in the merits of our legal claims and are optimistic that the government will take into account arguments that will result in an outcome that will continue to encourage innovation in Indian agriculture," MMBL said.
COTTONING ON
2015
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Nov 15: Union agriculture ministry urges the Competition Commission of India to look into allegations of monopoly practice against MMBL
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Dec 7: Centre issues notification bringing Bt cotton seeds under price control order
- Dec 27: Centre also sets up a nine-member committee headed by joint secretary, seeds, to decide on MSP of GM cotton seeds
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Jan 26: A group within the National Seed Association of India, apex body of seed manufacturers opposes price control order
