Mahyco Monsanto Biotech (MMB) has cancelled the licence of Bt cotton seed manufacturers for “non-payment of royalty fees” for using its Bollgard-II technology

Commenting on the first story below, GMWatchIndia (no relation to us!) tweeted: “What an irony. Bt cotton companies first fleece the farmers and now fight like vultures over dead bodies.”

1. Mahyco Monsanto cancels Bt cotton licence over royalty payment
2. Centre to control Bt cotton seed prices by fixing MRP

1. Mahyco Monsanto cancels Bt cotton licence over royalty payment

Financial Express (India), 23 Dec 2015

Mahyco Monsanto Biotech (MMB), the joint venture between US-based Monsanto and Mahyco, has cancelled the licence of Bt cotton seed manufacturer Nuziveedu Seeds and its two subsidiaries, Prabhat Seeds and Prabhat Agri Bio-tech, for “non-payment of royalty fees” (trait value) of Rs 160 crore for using its Bollgard-II technology.

MMB had earlier approached the Bombay High Court over non-payment of around Rs 450 crore of royalty fees by nine Bt cotton seed manufactures, including Nuziveedu, Rasi, Kaveri, and Ajeet. These companies, which had in-licensed the technology from MMB, have not paid the trait value to MMB for the seeds these firms sold to farmers in the current and last year’s kharif seasons.

“A few seed companies continue to withhold large sums of technology fees payable to MMB despite having collected the full price of seeds from farmers. We are continuously evaluating all remedies available to us under law, but we don’t comment on specific actions that we may be considering,” a spokesperson from MMB told FE.

This is despite the fact that these firms have sold the Bt seeds to farmers at prices inclusive of the cost of the trait value. The MMB charges a trait fee of Rs 183 per each 450-gram packet of the Bollgard-reinforced Bt cotton seeds. Including the trait fee, the seeds would cost Rs 930.

MMB’s decision to cancel the licence of Nuziveedu and its arms comes close on heels of the Centre’s recent move to bring Bt cotton seeds under price controls. According to the the agriculture ministry, the decision was taken in view of farmers finding the seeds “to be highly priced” and the need to bring “uniformity” in their prices across the country. The ministry has recently asked the Competition Commission of India to investigate the alleged monopolistic practices by MMB.

A total of 49 seed companies, including these nine, use MMB’s Bollgard-II double-gene technology, which provides in-built protection for cotton against the destructive American bollworm. The Bollard-II double-gene technology was approved by the Genetic Engineering Approval Committee in 2006. The first generation Bollard-I was approved in 2002.

Bt cotton was introduced in the country in 2003 and in a couple of years it expanded to most parts of the country. About 90% of the country’s cotton area of roughly 11.8 million hectares in 2015-16 is under the Bt coverage, according to an industry estimate.

Pending dues
* Mahyco Monsanto Biotech (MMB), the joint venture between US-based Monsanto and Mahyco, has cancelled the license of Bt cotton seed manufacturer Nuziveedu Seeds and its two subsidiaries for ‘non-payment of royalty fees’ of Rs 160 crore for using its Bollgard-II technology
* MMB had earlier approached the Bombay HC over non-payment of Rs 450 crore of royalty fees by nine Bt cotton seed manufactures including Nuziveedu, Rasi, Kaveri and Ajeet

2. Centre to control Bt cotton seed prices by fixing MRP [maximum retail price]

The Economic Times (India), 13 Dec 2015

The Centre has decided to control prices of cotton seeds including the genetically modified versions by fixing a uniform maximum sale price from March 2016, a move that would deal a major blow to global hybrid seed company Monsanto.

It has also decided to fix and regulate the seed value and licensee fee including royalty or trait value, according to a notification issued by the Agriculture Ministry.

Currently, Bt cotton seed is sold at different rates across the country. In Punjab and Haryana, it is priced at Rs 1,000 per packet of 450 grams, while it is Rs 830 in Maharasthra and Rs 930 in six states including Andhra Pradesh.

In the notification dated December 7, the Agriculture Ministry said the Cotton Seeds Price (Control) Order has been issued for "uniform regulation" of sale price of cotton seeds with existing and future genetically modified technologies.

The aim is to ensure cotton seeds are available to farmers at "fair, reasonable and affordable prices" and there is uniform rates for cotton seeds across the country, it said.

The decision follows several representation by farmers and the National Seed Association of India for regulating sale price of Bt cotton and other varieties in the country.

As per the notification, MRP of the cotton seed will be notified in the Official Gazette on or before March 31 of every year applicable for the next financial year.

A seven-member committee will recommend MRP of cotton seed after taking into account the seed value, license fee which includes one time and recurring royalty (trait value), trade margins and other taxes, it added.

While the National Seed Association of India hailed the development but Mahyco MonsantoBSE 0.05 % Biotech (India) Ltd (MMBL) a joint venture arm of Monsanto India, expressed disappointment.

"By further regulating price and license fees, the order will suppress innovation and deprive farmers of new technologies and a competitive market place for their inputs," a MMBL spokesperson told PTI.

"Contrary to the government's professed desire to enhance ease of doing business, the order also creates great unpredictability in the business environment by arbitrarily and unduly interfering with private contracts between technology providers and seed companies," he said.

MMBL remains confident that the government will take into account views of all stakeholders and will continue to encourage innovation in Indian agriculture, he added.

Indian farmers are seeking increasingly better technologies and other inputs that helps them grow their income and improve their livelihoods, not more regulation of prices, said MMBL, which has sub-licensed the Bt technology to 49 domestic seed firms.

Bt cotton is the only GM crop allowed for commercial cultivation in the country. Over the last decade, Bt cotton technology has been adopted on over 95 per cent of the country's cotton growing area, making India the second largest producer and exporter of cotton.

In the notification, the Agriculture Ministry said whatever the MRP, the seed value and licence fee fixed by the Centre will be binding on all stakeholders including the licensor and the licensee, notwithstanding anything contained in any contract or instrument to the contrary.

"No licensor, licensee or dealer shall cause distribution and sale of seeds above the MRP fixed by the government under this order," it said, adding that any person who contravenes any of the provisions of this Order or fails to carry out any direction will be punishable under the existing law.

Welcoming the development, National Seed Association of India (NSAI) President M Prabhakar Rao said, "This will benefit both farmers and seed industry. It is better if there is uniform rates across the country."

So far, state governments were regulating sale price of cotton seed and this was the first time the Centre has decided to fix the uniform MRP, he added.

The notification comes at a time when there is a tussle between the MMBL and seed companies over payment of royalty for using Bollgard technology in hybrid cotton seeds.

MMBL has dragged eight seed firms for non-payment of about Rs 400 crore royalty for using its technology in cotton hybrids and for breach of the contract.

On the other hand, NSAI has sought refund of over Rs 1,300 crore paid as royalty to MMBL for using latter's technology in last five years arguing that the seed firms paid this amount over and above the state government stipulated trait value.