Monsanto threatens to exit India over govt’s show cause notice

Over 90% of cotton grown in India is based on MMBL’s technology which is used by nearly 80 lakh cotton farmers.

Written by Amitav Ranjan | New Delhi | Published:March 5, 2016 2:21 am

The NDA government late Thursday issued show cause notice to Monsanto for revoking patent rights on one variant of genetically modified BT Cotton following representation by Bharatiya Janata Kisan Morcha that the crop had shown declining resistance against bollworm.

Sources said the Department of Industrial Policy & Promotion issued the show cause notice to Mahyco Monsanto Biotech (India) Ltd for Bollgard II variant for BT cotton as the efficacy against bollworm was coming down. “It was issued on the recommendation of the agriculture ministry,” said DIPP officials.

They said there was immense political pressure to issue the show cause notice even though the proper process should have been to ask the administrative agriculture ministry to assess if the falling resistance was due to inferior technology or a growing resistance in pests.

BJP-affiliate Bharatiya Janata Kisan Morcha had represented to agriculture ministry that patent right be revoked and price control be ushered as BT cotton had shown declining resistance in Gujarat, Maharashtra and Madhya Pradesh. All three states are ruled by Bharatiya Janata Party, the leader of the NDA coalition. MMBL spokesperson confirmed that the company had received the “query” from DIPP.

However, a day later, Monsanto India on Friday took a different track threatening to pull out of India and holding back new technology if the government cut trait fee of BT cotton seeds through “arbitrary and potentially destructive” interventions.

“It will be difficult for MMBL to justify bringing new technologies into India in an environment where such arbitrary and potentially destructive government interventions make it impossible to recoup research and development investments focused on delivering extensive farmer benefits and where sanctity of contracts is absent,” CEO Shilpa Devikar Nirula said on Friday.

“If the committee recommends imposing a sharp, mandatory cut in the trait fees paid on BT-cotton seeds, we will have no choice but to re-evaluate every aspect of our position in India,” the emailed statement said.

The committee has recommended a 70-per cent slash in royalty fee to Rs 49 from Rs 163 for a 450 gm packet of Bollgard II seeds that provides pest control allowing growers to reduce/eliminate insecticide spray for worms, especially bollworm. It also recommended an overall lowering of seed prices.

“Such a drastic intervention overrides existing private bilateral commercial contracts, and undermines the overall operating environment in India,” MMBL said, adding that it was hopeful of NDA upholding “fair business practices” and “predictability” due to “its intent to promote Make in India and improve ease of doing business”.

Over 90 per cent of cotton grown in India is based on MMBL’s technology which is used by nearly 80 lakh cotton farmers in India. It has changed the country from being a net importer to the world’s second largest grower. MMBL, a joint venture between Mahyco Seeds Ltd and Monsanto Co., licenses its patented Bollgard II Bt cotton seed technology to 49 seed companies in India in exchange for a royalty fee.

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