Indian farmers attack seed shops over low yield Bt cotton (5/7/2005)

The cotton growing season is hardly underway and already the reports of serious problems with Bt cotton cultivation have been coming in from various parts of India, not least the Punjab, a key agricultural state.

Below Kavitha Kuruganti of the Centre for Sustainable Agriculture in Andhra Pradesh introduces several press reports on the problems being experienced there.

One particularly interesting point that Kavitha notes is how the Bt cotton variety that is at the centre of one of the controversies because of its poor performance was previously hyped as not being prone to all the problems found with Monsanto's Bt cotton. This was used to suggest that the problems were not coming from GM seeds (or Bt seeds) per se but just came from the varieties Monsanto had developed.

The latest Bt cotton disaster would seem to give the lie to that claim. The problems seem endemic yet the continuing wave of Monsanto-inspired hype means farmers are still being fleeced over Bt seeds and few, other than the state government in Andhra Pradesh, seem to be trying to do anything about it.

from kavitha kuruganti:

In AP, the problems for Bt Cotton growers have begun. And we are not talking about just the illegal Bt Cotton seed trade that has been expanding unchecked and unregulated. A few arrests here and there and a few seizures have been reported but the illegal Bt Cotton seed trade is reportedly increasing despite this.

Incidentally, the company involved in the latest news story has been appreciated for "its service to the farmers" some time back by the Chief Minister as he released the company's Bt Cotton seeds to farmers by his own hands in a much-publicised meeting. This is also a Bt Cotton variety where the Bollgard gene was inserted into a well-performing locally popular cotton hybrid, even as the reasoning for the failure of the earlier Mahyco varieties was attributed to poor germplasm and not a failure of the technology.

kavitha kuruganti

The following is a story that appeared in Andhra Pradesh page of The Hindu, July 5 2005:

"Cotton Ryots Go On Rampage in Khammam
Attack seed shops; seek compensation for low yield of Bt Cotton (Staff Reporter)

Khammam: Five seed shops came under the attack of cotton farmers who went on a rampage in the town on Monday, demanding compensation for their loss owing to the low germination of Bt Cotton seed - Bunny - supplied by the Nuziveedu Seeds Limited.

Hundreds of them gathered near the shops along with the receipts in proof of the purchases they made, to stake claim for compensation. As neither the shopkeepers nor the company representatives turned up, they broke open the locks and attempted to storm in.

The protestors were quelled by the police, who resorted to a mild lathicharge as the situation appeared to be going out of control.

The protestors complained that the seed they procured at a high price was of little use as the germination was hardly 20 percent. The company officials, they said, had agreed to pay compensation. But they had backed out on their assurance at the last minute after finding too big a crowd in front of the seed shops.

They made a representation to the District Collector, Mr Rajendra Narendra Nimje, who in turn apprised the matter to the Agriculture Minister and also spoke to the Managing Director of the seed company.

He said the company agreed to abide by the compensation clause in the Memorandum of Understanding.

As per the version in Page 2 of a leading telugu daily newspaper called "Vaartha":

"Farmers of Khammam Urban, Yenkuru, Chintakaani, Tirumalapalem, Konijerla, Koosumanchi, Kamepalli and Singareni blocks demanded the seed dealers who sold them Nuziveedu Seeds' Bunny Bt that they should be paid compensation for failure of germination and losses of thousands of rupees. When they received no assurance from the dealers, they went and protested outside the office of the Joint Director of Agriculture of Khammam district. When the discussions with the Regional Manager of the seed company and the government officials failed, the farmers attacked the Regional Manager".

As per another telugu newspaper Eenaadu, the estimated loss to farmers due to the failure of germination of the Bunny Bt Cotton seeds is around 30 million rupees. In the police caning, at least ten farmers were injured, as per this paper. This paper commented that the government is in a real quandary given that it is unable to check the sale of unapproved seeds and given that now, even approved varieties are not performing on the ground! When the Mahyco varieties failed last year, the official explanation was that the hybrid/germplasm was not suitable to the local growing conditions and that it was not the fault of the technology. Now, the Monsanto Bt gene has been inserted in a highly popular local hybrid called Bunny. However, even as the season had just begun, Bunny Bt has also failed. The newspaper goes on to question whether the seeds being supplied by the company are genuine at all.

While the government is assuring that it will get the company to compensate the farmers based on the MoU it has with farmers, there are unanswered questions about who will pay for the expenses incurred so far as well as the fact that sowing time is nearly over. The farmers in effect lose a whole crop season.

Meanwhile, the AP government is also making some moves to get legal intervention on Monsanto's high royalty charges on its Bollgard gene. As per the English daily The Hindu [July 5, 2005]:

"State Government Likely To Move Court on Bt Cotton Price

Private company allegedly charging whopping royalty by hiking MRP

Hyderabad: The government is likely to approach the courts to get a stay against the high "trait value" or royalty collected from farmers by Monsanto Mahyco Biotech Private Limited at Rs. 1250 on sales of Bt Cotton over and above the price of Rs. 350 to Rs. 450 per pack of 450 grams.

The government took a serious note of the whopping MRP of Rs. 1800 per 450-gram pack which the farmers are made to shell out.

The Commissioner for Agriculture, however, has been sounded to conduct negotiations with the Monsanto representatives first for removal of the "trait value" from the price tag before taking the drastic step of going to the court.

In the petition to be filed before the court, the State would seek a stay order so that the company would collect only the actual cost price from the farmers, keeping the MRP in abeyance till the case is disposed of.

Burden on Farmers: The feedback available with the Government is that the price of the pack at Rs. 350 to Rs. 450 itself is on the high side since 450 grams of seeds cost only Rs. 250 to Rs. 300 and the "trait value" is collected by Monsanto without adding any additional properties. The higher price on account of the royalty has burdened the farmers, given their present economic conditions.

Govt mulls MRTP clauses against Monsanto to curtail exorbitant Bt cotton seed prices
B Dasarath Reddy / Hyderabad July 05, 2005
Business Standard, July 5th 2005

The Andhra Pradesh government is seriously mulling options to curtail the exorbitant prices of Bt Cotton seeds, which have become a craze among cotton farmers in the state.

This includes using the provisions of Monopolies and Restrictive Trade Practices (MRTP) Act against Monsanto company.

The average price of Bt Cotton seed ranges between Rs 1,600 and Rs 1,700 per 450-gram packet in the local market as compared to Rs 350-Rs 450 of normal hybrid cotton seeds.

In the government's view, the steep prices of Bt Cotton seeds will blunt the cost competitiveness of local cotton in global markets.

The price of Bt Cotton seed includes the levy of Rs 1,250 as royalty on each packet by Monsanto, which owns the transgenic technology, towards the trait value.

The royalty is shared between the sub-licencees, which are the seed companies, and Mahyco Monsanto Biotech Private Limited (MMBPL), a joint venture company of Mahyco and Monsanto, USA, in a ratio of 30:70.

As per the clauses of the agreement, MMBPL reserves the right to fix the trait value every year and all companies are bound to charge the same trait value uniformly across the country.

The act of regulating the sale price to the consumer by fixing the royalty fee by Monsanto, therefore, is viewed as illegal as per the provisions of MRTP Act.

According to state officials, the government can intervene in this regard by using the provisions of MRTP Act and also of Competition Act of 2002 and can bring down the royalty component to anywhere between Rs 300 and Rs 400 per packet. This, in turn, will bring down the prices to around Rs 1,000 per packet.

Of the several measures the department of agriculture has chalked out for bringing down Bt Cotton prices, filing a PIL in the court against the royalty is also on the cards, official sources told Business Standard.

"If the courts intervene in the matter of royalty and ask the companies to stop collecting it even as an interim measure, it will bring relief to farmers," a government representative observed.

According to him, the government is expected to first call for a meeting with the seed companies on the possibility of reducing the prices before approaching the Centre on the whole issue.

According to a government note, the total royalty collected by MMBPL up to 2005, after Mahyco and Monsanto jointly got the technology approved by the Government of India in 2002, is a whopping Rs 625 crore.

According to an estimate, Monsanto sold 20 lakh packets in the year 2004 and is likely to sell 30 lakh packets this year.

The sales from 2006 onwards are expected to result in total trait value collections upwards of Rs 1,000 crore every year.

Officials feel that Rs 1,250 per bag royalty charged by Monsanto is totally irrational as it incurs no extra cost since all the works including seed production are done by the seed companies or sub-licencees.

Originally, Monsanto offered this technology to Indian Council for Agriculture Research (ICAR) at a one-time cost of Rs 18 crore ten years ago.

But the government did not accept the offer thinking that the cost was high and the same technology could be indigenously developed by spending less amount. But it proved otherwise. Despite the usefulness of Bt Technology, the cultivation cost has gone up.

On the other hand, it is estimated that the total cotton production in the country is expected to increase to more than 300 lakh bales a year from the existing 220 lakh bales in the next three-four years.

Cushioning cotton

Govt can intervene by using the provisions of MRTP Act and also of Competition Act, 2002, and can bring down the royalty component to anywhere between Rs 300 and Rs 400 per packet. This, in turn, will bring down the prices to around Rs 1,000 per packet. The department of agriculture plans to file a PIL in the court against the royalty

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