To Aid Farmers, India Restricts Royalty And Cancels All Licence Agreements
Cotton is the only GM crop grown in India. Biotech firms are crying foul over a recent government order.
The agricultural ministry of India has temporarily withdrawn an order capping royalties on any new variety of genetically modified cotton seeds; bringing relief to the U.S. based Monsato Co, the market’s sole supplier.
“We are temporarily withdrawing the order,” said the source, who is involved in the decision-making process but didn’t wish to be named. Aimed to help farmers, the order will increase competition by forcing companies like Monsato to grant licences to all eligible seed makers who seek the technology.
The agriculture ministry said any company providing any new, advanced variety of GM cotton would not be allowed to charge royalties of more than 10 per cent of the price of seeds, currently fixed at 800 rupees, for five years from the date of marketing. From the sixth year, the royalties, or trait value, will taper down by 10 percent every year. Along with putting a lid on royalties, New Delhi also tightened rules that regulate the sale of GM cotton seeds
The notification, meant to help farmers distressed by two
droughts, also empowers an official body to decide if a particular technology is no longer effective enough to deserve any royalty at all, dealing a severe blow to international firms which dominate the market . Cotton seeds account for about 40% of India’s Rs 10,000 crore seeds market.Syngenta International’s Chief Operating Officer Davor Pisk said such a rule would force his company to review its priorities for developing GM products in India , although he remains bullish about other products. He also said compulsory licensing had an ethical argument only for live-saving drugs that were unaffordable. “If we start to extend that into other industries then I think there’s a risk to undermine the whole basis of the intellectual property law, which in the long run would undermine the incentives for innovation and science-based research,” he said.
The notification escalates the raging dispute between the Centre and biotechnology companies including Monsanto over price controls recently imposed on cotton seeds. Officials say controls on prices were imposed after farmers and seed manufacturers complained that they were being exploited by alleged monopolistic and exploitative practices by Monsanto. The US firm strongly denies this.
Global companies accuse the government of creating an uncertain business climate with arbitrary anti-innovation steps, two weeks before Prime Minister Narendra Modi’s visit to the US, where he is due to address a joint session of the US Congress. Market leader Monsanto and the industry executives said the notification would crush innovation and eventually hurt farmers.
“We strongly oppose the recent gazette notification … as it a huge blow to the innovators in agri-biotech industry. It clearly indicates the intention of the government to disregard research & innovation and thereby not protecting IP in the sector,” said Shivendra Bajaj, executive director, Association of Biotechnology Led Enterprises-Agriculture Focus Group (ABLEAG), whose members include Syngeneta, Monsanto, Dow Agri-Sciences and Bayer BioScience.
“This order creates an environment of policy unpredictability and arbitrariness of decision making, which is contrary to the recently launched IPR policy. Such a decision will further create an environment of uncertainty and disincentive
to technology developers for bringing new technologies into India, which will ultimately harm the farmers as new technologies come slow to them,” he said.
Separately, India’s antitrust regulator has ordered an investigation into Mahyco Monsanto Biotech (India) (MMB), a joint venture with India’s Mahyco, to probe whether the company had abused its dominant position as a supplier of GM cotton seeds.
Monsanto, the target of a $62 billion offer from Germany’s Bayer, introduced a GM cotton variety in India in 2002 despite stiff opposition from critics who questioned its safety. GM cotton seeds catapulted the country to being the world’s top producer and the second-largest exporter of the fibre.
