Aditya Vaibhav | The TrickyScribe: In a fresh move that targets to reap benefits to as many as 8 million cotton farmers across the country, the BJP-led Centre slashed down the BT cotton seed price on road to LS Polls-2019 by tapering down the royalty fee payable to developers of this genetically modified variety by Indian seed firms.
With the latest price revision of the most popular variety of genetically-modified (GM), insect-resistant cottonseed, the Centre has tried to appease Indian cotton farmers but to their own peril. The move is said to have diluted their long-term interests. Reduction in profits incurred due to R&D on part of government will dampen the pace of technical upgradation across sectors.
Disincentivization of Research
Agriculture minister might have tried to appeased cotton farmers with a Rs 10 cut but the magnitude is too small to sway cotton farmers into voting for the ruling party. It, however, will give its candidates an issue to brag about while electioneering for the upcoming Lok Sabha polls. Still, if research is disincentivised, it is Indian agriculture that will lose in the end.
The aborted attempt of union agriculture ministry to subvert agricultural patent rights back in May 2016, environment ministry’s denial of permission for commercial cultivation of GM mustard, as developed by a team of researchers from Delhi University, despite the apex regulator’s recommendation, and the rulings of various Delhi High Court benches on the pricing and patentability of GM traits is said to have “killed” the agribiotechnology industry. Latest revision in trait fees is described by experts as “icing on the cake” as it will ensure that the industry firmly remains six feet below the surface of ground.
Although there are other proprietary Bt cotton seed trait owners in India, they are bit players. MMB has a monopoly on the business. Though MMB the one that has borne the brunt of the government’s arbitrary action, the entire agribiotech industry arena has felt the chill. Mahyco withdrew its application for approval of commercial cultivation of herbicide-tolerant (HT), insect-resistant cotton called RRF BG-II citing lack of respect for patent rights.
What is Bt cotton?
Bt cotton is an insect-resistant transgenic crop designed to combat the bollworm. About ten years ago, Monsanto scientists inserted a toxin gene from the bacterium called Bt (which is the nickname for Bacillus thuringiensis) into cotton plants to create a caterpillar-resistant variety. The gene is DNA that carries the instructions for producing a toxic protein.
The Mathematics Involved
About four crore packets of BG-II cottonseed of 450 gram each are sold annually. The reduction of Rs 10 in maximum selling price to Rs 730 per pack will benefit cotton farmers by about Rs 40 crore. Altogether 45 franchises of American joint-venture Mahco-Monsanto Biotech (MMB) – that owns patent of the insect-resistant traits – will also get close to Rs 36 crore from union ministry of agriculture vide reduction of trait fees payable to MMB by Rs 19.
Observers wonder why the Rs 19-reduction in trait value resulted in a mere Rs 10 reduction in selling price? Are they right in smelling something fishy? Only a detailed examination of the episode will be able to shed some light on it.
Mere Rs 36 Crore Will Not Suffice
Hefty Rs 36 crore windfall notwithstanding, seed companies are disenchanted. Producing hybrid cottonseed is a labour-intensive task. It calls for skilled hands to pollinate cotton flowers. Close monitoring is required so as to restrict contamination and ensure genetic purity. The seeds are produced by smallholder farmers on contract mainly in Gujarat.
Jalna (in Maharashtra)-based pioneer of the organised seed industry in India, Mahyco, has close to 20,000 of them. Costs of labour, fertiliser and pesticides are skyrocketing, but ever since it brought Bt cottonseed under price control nationally in December 2015, union agriculture ministry has been trimming down the selling price. Selling price was fixed at Rs 800 a pack in May 2016. It was further reduced to Rs 740 in 2017; this year it has been brought down to Rs 730.