It is ironical that despite prime minister, N Modi’s exhortation to stakeholders for embracing new technology in all spheres of economic activity for accelerating growth, at the ground level, the innovators face huge resistance from the very institutions which are expected to provide a supportive environment.
The introduction of genetically modified [GM] crops provides a classic example of how the administrative authorities, regulatory bodies and the institution of judiciary have orchestrated a game-plan to throttle attempts to bring in new technologies that hold huge potential for increasing agricultural productivity and farmers’ income.
Bt [Bacillus thuringiensis] cotton [the only GM crop so far allowed for cultivation by farmers in India] is genetically tweaked to kill bollworms that ravage cotton crops. It offers the possibility of substantially enhancing return by saving on pesticide use on one hand and increasing yield on the other. At the price paid for Bt cotton seed [including technology fee which is less than what the innovator viz. Monsanto charges even in China], farmers get handsome returns.
Since, introduction [2002] the use of Bt cotton in India has increased manifold with area under coverage leapfrogging from a mere 50,000 hectare then to around 12 million hectare covering major states such as Gujarat, Andhra Pradesh, Maharashtra etc. At present, 98 per cent of the area under cotton is covered by Bt technology. Millions of farmers have adopted Bt cotton on their own volition.
The manifold increase in cotton production at significantly lower cost [as expenses on use of pesticide declined] has led to surge in farmers income. The resultant increase in rural demand has given a boost to industries across a wide spectrum. Further, the fine fiber in Bt cotton has enabled substantial increase in apparel exports thereby contributing to improved current account. In short, the entire economy has gained immensely from this technological intervention.
Yet, the innovator [read: Monsanto] has faced a stifling environment caused by controls/restrictions on almost every aspect of its business operations.
In 2010, some states [e.g. Maharashtra] – citing overarching need to make seeds available to the farmers at reasonable prices – fixed the maximum retail prices [MRP] of cotton seeds, which included the trait values as a component. In June 2015, the Nagpur Bench of the Bombay High Court [BHC] upheld the decision of Maharashtra government. Other states too were controlling trait value.
Meanwhile, the union agriculture ministry issued in December 2015, a Cotton Seed Price Control Order [CSPCO] under which it fixed the price of cotton seed sales all over the country at a ‘uniform’ level and max trait fee [royalty] payable to Monsanto. On May 18, 2016, the ministry issued another order making it mandatory for Monsanto to license technology to any seed company that approaches it. It also capped royalty at 10% of MRP.
Following protest, though May, 2016 order was withdrawn, the December, 2015 order is intact. Under it, MRP of a packet of Bollgard II seed [450 grams] was cut from Rs 930/- [including Rs 163/- for trait fee] to Rs 800/- [Rs 42/- as trait fee]. Of Rs 130/- cut in price, Rs 121/- was in trait fee alone. In March, 2018, the price was further reduced to Rs 740/- which includes trait value of Rs 39/-.
The trait fee of Rs 39/- per packet is a mere 5% of the MRP of seed which incorporates Bollgard II. This is even lower than the 10% threshold that the ministry wanted to fix as per May, 2016 order which has since been withdrawn.
Meanwhile, Delhi High Court [DHC] vide an order on April 11, 2018, has invalidated a patent granted to Monsanto for its invention related to the gene sequence responsible for the Bt trait that eradicate pests afflicting cotton plants.
The Court has held the gene sequence to be a part of the seed, and hence un-patentable in terms of Section 3(j) of the Patents [Amendment] Act, 2005 that excludes higher life forms, like plants, animals, and their parts and essential biological processes from the realm of patentability. This is the proverbial ‘last nail in the coffin’ for Monsanto.
This has emboldened seed companies to ask the agriculture ministry to dispense with the trait fee [already a low 5% of MRP] altogether and the latter may yield.
In the follow through, the powers that be are also contemplating that ‘the company’s license was illegal since Indian law did not allow plants/genes to be patented’. Taking this to its logical outcome, the authorities could even consider cancellation of Monsanto license. This is absurd as permission to do business is not predicated on an entity holding a patent or otherwise.
The government seems to be pulling all stops to ensure that Monsanto exits India. This is not good omen for farmers who will not only be denied access to advanced versions of Bt cotton [to deal with emerging problems] but also, new technology solutions such as for saline soils, drought- and flood-resistant GM crops – badly needed to meet the challenges of fast changing climatic conditions.
A collateral damage will be by way of unapproved new seeds finding their way to the farmers. According to the Field Inspection and Scientific Evaluation Committee [FISEC], a body of experts—chaired by the co-chair of Genetic Engineering Approval Committee [GEAC] – set up for on-the-spot inspection of cotton fields, around 15% of the seeds being used in major cotton-growing states comprise of unapproved herbicide-tolerant (HT) seeds. These illegal seeds have increased the problem of resistant weeds and are responsible for the new threat posed to the cotton crop—that of pink bollworms.
Be it the government, regulators or the courts, the crux of the problem lies with their mindset. They believe that the innovator is out there to exploit his/her patent induced monopoly to fleece farmers. This in turn, leads them to disrespect intellectual property [IP] rights which are visible in all their actions. They should get rid of this mindset or else, Indian agriculture will be deprived of the new technologies and opportunity for farmers to increase their income.