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Press
Notes
Protecting
the cotton farmers of Andhra Pradesh
LOK SATTA
petitions High Court against
Monsanto's Bt Cotton seeds' pricing
The
Background:
Cotton
farming forms an important part of the agricultural scenario in
India: our country has the world's largest cropped area under cotton
(20-25%) and is the third largest producer (12%). Cotton forms the
backbone (at 70%) of our textile industry and textiles are the largest
exported commodity from India (worth Rs. 42,000 crores annually).
Nearly half of the cotton cultivated in our country is composed
of hybrid varieties and increasingly, these hybrids are of the Genetically
Engineered (GE) varieties. This has resulted in the increased dependency
of the farmers on the seed producing/selling companies.
In
total, 60 million people across India are dependent on the production
and processing of cotton. There are over 4 million cotton growers
in our country of whom 70% are small and marginal farmers. A large
number of ryots who have committed suicides in the past years, especially
in Andhra Pradesh, are from this community of small and marginal
cotton farmers.
Given the above scenario:
Monsanto,
a company incorporated in USA has developed the genetically modified
'Bt Cotton' hybrid variety (in 1996) which reportedly has the trait
of being inherently resistant to the bollworm insect. Monsanto incorporated
Mahyco Monsanto Bio-Tech (India) Ltd. (MMBL) and has transferred
the 'Bt' technology to it. However, it is contended that neither
MMBL nor its parent company Monsanto, hold patent(s) in India over
the 'Bt' Cotton technology or the seeds, as per the Indian Patents
Act (Sections 2 and 3; prior to the 2003 amendment). In spite of
this, MMBL has ensured that domestic seed companies were directed
by the Union Government's Genetic Engineering Advisory/Approval
Committee (GEAC) to obtain 'no-objection' certificates from them
and subsequently become 'sublicencee' companies.
MMBL
is now charging Rs. 1250 as 'trait value' (can be understood as
'royalty fees') per 450 gm package (termed one 'unit') of Bt hybrid
cotton seed, in addition to the domestic seed companies' earlier
price of less than Rs. 450 - 500 per unit of bare seed. As a
result, the selling price of Bt hybrid cotton seeds, even from the
domestic seed companies, has steeply jumped to Rs. 1700 to Rs. 1800
per unit.
The
same parent company Monsanto is charging a royalty/trait value of
a mere Rs. 40 - 45 per unit in China and Rs. 108 - 120 per unit
in the USA. While this royalty fees/trait value is almost three
times the market price of the bare seed in India, it is one-third
the unit seed price in the USA. There is no convincing explanation
behind why the seeds are exorbitantly expensive in India and relatively
very cheap in China or the USA.
Further,
the agreements between the domestic seed companies and MMBL have
several clauses which give MMBL the sole right to fix/revise these
trait values/royalty fees, at their choice, each year. All the while,
the Union and State Governments, which have adequate powers to prevent
such price fixing (under the Monopolies and Restrictive Trade Practices
(MRTP) Act / Patents Act), have remained effectively mute spectators.
It
is contended that Monsanto Mahyco Bio-Tech Ltd. (MMBL) has taken
undue advantage of its monopoly over the genetically modified 'Bt'
hybrid cotton seed technology and has resorted to several illegal
acts of monopolistic and restrictive trade practices resulting in
the blatant manipulation and fixing of prices to the severe detriment
of our farmers. These business and trade practices adopted by MMBL
and the named domestic seed companies (their 'sublicencees') are
in violation of the Contract Act, Monopolies and Restrictive Trade
Practices (MRTP) Act and the Consumer Protection Act.
If
left unaddressed, these developments could, very likely, severely
impact the livelihoods of lakhs of small cotton farmers in this
State. It is high time for our authorities to establish a rational
seed pricing regulatory mechanism that offers win-win solutions
to all stakeholders.
Therefore,
LOK SATTA has filed a Public Interest Litigation (PIL) Writ Petition
on behalf of the cotton farmers of Andhra Pradesh, before the AP
High Court, naming the MMBL, involved domestic seed companies and
the Union and State Governments as respondents.
The
Honourable AP High Court, having received the writ petition, directed
the Central and State Governments, apart from Monsanto/MMBL and
other domestic seed companies named in the petition, to file counters
and posted the case to the 27th of April (2006) for hearing. A.
Prabhakar Rao (Advocate) and D. Prakash Reddy (Advocate) filed the
said writ petition on behalf of LOK SATTA.
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