The right of Maharastra to regulate GM seed prices, and to order compensation to farmers when the seeds fail, has been upheld.
Bombay HC upholds Maharashtra Seed Act, delivers blow to industry
Jayashree Bhosale, ET Bureau
The Economic Times, 1 October 2013
PUNE: Giving a major blow to the Bt cotton seed industry, the Bombay High Court has upheld the validity of the Maharashtra Cotton Seed Act, 2009 that regulates the prices of Bt cotton seeds in the state, the second largest producer of cotton in India.
The seed industry had challenged the state acts of Maharashtra, Gujarat, and Andhra Pradesh, seeking to regulate prices of Bt cotton seeds, in their respective High Courts. "The decision will be of great help to the farmers," said state agriculture commissioner Umakant Dangat.
Under the Maharashtra Cotton Seed Act, the seed companies also have to pay compensation to the farmers in case the seeds fail to deliver as its labels claim.
The authority has been given to the licensing authority of the state government. For seeds other than that of Bt cotton crop, the farmers have to seek redressal from the consumer courts. BayerBSE -0.14 % BioScience, the Indian arm of Bayer CropScience, world's largest agrochemicals company, had to pay compensation to farmers in Maharashtra under this act for poor Bt yields.
The state government had also suspended the license of Mahyco, joint venture partner of Mahyco-Monsanto Biotech, in 2012 under the Maharashtra Cotton Seed Act for various charges related to the sale of Bt cotton seeds.
However, the National Seed Association of India (NSAI), the national body of the seed industry, has decided to challenge the decision of the Bombay High Court in the Supreme Court. Bt cotton gives the highest revenue to the seed industry, which is estimated to be of Rs 7,000 crore size. "We will go to the Supreme Court against this decision of the Bombay High Court.
"The seed industry has been suffering as costs of seed production have gone up but the seed prices have remained stagnant," said M Prabhakar Rao, president, NSAI and chairman and managing director of Hyderabad-based Nuziveedu Seeds.
An official of the state agriculture department, on condition of anonymity said, "We presented before the court that the seed companies must have made profits as they were able to sell at lesser price for many years now. The reduction in price in Maharashtra has mostly helped the farmers from the suicide prone belt of Vidarbha."
Earlier, the verdict of the High Court of Gujarat was in favour of the seed industry as it held the Gujarat Cotton Act invalid on the grounds that it contradicted the central act of Essential Commodities. The Gujarat government has challenged this decision in the Supreme Court and the case is still pending there. The seed industry has also challenged the act passed by the Andhra Pradesh government, which regulates Bt seed prices, and the case is pending in the state high court. Before the price regulations by state governments, the official price of Bt cotton seed in India was Rs 1,600/packet of 450 grams, which was reduced to Rs 750/packet by the Andhra Pradesh government.
Currently, the price of Bt cotton seeds is Rs 830/packet for BG I and Rs 930/packet for BG II in the central and southern states. Bt cotton, which was introduced in India in 2002, now covers almost all the entire area under cotton cultivation in the country.