Global agri biotech major, Monsanto has threatened to pull out of India if the government goes ahead with a recommendation to impose a massive cut in royalties that local firms pay for its genetically modified cotton seeds.
Monsanto’s threat came after a committee appointed by the agriculture ministry last December, reportedly recommended a 70 per cent cut in Bt cotton trait value as part of the move to bring cotton seeds under price control.
The agriculture ministry appointed the price control panel came after complaints of local seeds companies that the company was charging high fees. The ministry is yet to take a decision on the committee’s recommendation.
Mahyco Monsanto Biotech (India) Pvt Ltd, (MMBL), a joint venture with India’s Mahyco, licenses a gene that produces its own pesticide to a number of local seed companies in lieu of royalties and an upfront payment. MMBL also markets the seeds directly, though the local licensees together command 90 per cent of the market.
MBBL currently charges trait fees of Rs 122.96 and Rs 183.46 per packet of Bt Bollgard I and Bt Bollgard II seeds, respectively.
“If the committee recommends imposing a sharp, mandatory cut in the trait fees paid on Bt-cotton seeds, MMBL 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.