The government further strengthened its grip on BT cotton seeds by capping the royalty paid to the genetically modified seed developer. Though the order has not mentioned US based cotton seed developer Monsanto anywhere but the move is mainly aimed at Monsanto. Monsanto’s joint venture in India Mahyco Monsanto Biotech, which controls majority of the BT cotton seed market will be directly affected.
The major highlights of the notification are:
Read our earlier post titled “Royalty Mess at Kaveri Seeds Revisited”
Post December 2015 the BG-I and BG-II version of BT cotton hybrid seeds (developed by Monsanto) are capped for maximum sale price (MSP) of Rs 635 and Rs 800 respectively for 450 Gms of seeds. The BG-I version (which is outdated) doesn’t earn any royalty whereas BG-II earns a royalty of Rs 45 (5.6%). The MSP’s was fixed after some state governments and farmers complained about the soaring prices of BT cotton seeds. Earlier the BG-II variety earned a royalty to the tune of 17-18% (Rs 163) with a MSP of Rs 930.
Monsanto’s subsidiary, Mahyco Monsanto Biotech has sub licensed BT cotton seed technology to around 50 domestic seed companies since 2002.
Monsanto has a monopoly over the Indian BT cotton seed segment. This notification will make a dent on their new products. The order will definitely make way for cheaper BT cotton seeds, but on the contrary will scare away investor for putting their capital in R&D sector.
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