Number one global seed supplier Monsanto Co has threatened to leave India if the government imposes a 70% cut in royalties that local firms pay for its GM cotton seeds, Reuters reported on 4 March.
A farm ministry committee has recommended the cut in royalty fees paid to Mahyco Monsanto Biotech (MMB), Monsanto’s joint venture with India's Mahyco.
MMB licensed a gene that produced its own pesticide to several local seed companies in lieu of royalties and an upfront payment, commanding about 90% of the market, Reuters said.
The committee was set up last year to investigate complaints that MMB fees were too high, but the farm ministry had yet to make a decision on its recommendation, the report said.
"If the committee recommends imposing a sharp, mandatory cut in the trait fees paid on Bt-cotton seeds, MMB will have no choice but to re-evaluate every aspect of our position in India," Shilpa Divekar Nirula, Monsanto's chief executive for the India region, said in a statement.
"It is difficult for MMB to justify bringing new technologies into India in an environment where such arbitrary and innovation stifling government interventions make it impossible to recoup research and development investments," she said.
In addition, MMB has filed a case in a Delhi court, challenging the committee’s authority to set the trade fee between MMB and local seed companies.The committee has also recommended cutting Bt cottonseed prices to about 800 rupees (US$12) for a 400g packet from the current price of 830-1,100 rupees (US$12.50-$16.50) in different parts of the country, Reuters said.
MMB launched a GM cotton variety in India in 2002 and Monsanto said the use of Bollgard technology had increased cotton yields to 552kg/ha in 2013/14 from 302kg/ha in 2002-03, transforming India from a cotton importer to the world’s top producer.
Reuters reported that in February, the Competition Commission of India – the antitrust regulator – had said there were indications that MMB had abused its dominant position in the country and asked its director general to complete an investigation within two months.