EXTRACT: The largest Indian GMO seed company, Mahyco-Monsanto Biotech (MMB), a joint venture between the Indian arm of Monsanto and privately held Mahyco, reported a revenue decline of 62 percent to 1.5 billion rupees in 2006/07.
Monsanto India , which sells Bt technology to seed companies, has seen revenues erode since 2004/05.
GMO crops launch delay hurts seed industry
The Economic Times (India), August 6 2007 http://economictimes.indiatimes.com/News/Economy/GMO_crops_launch_delay_hurts_seed_industry/articleshow/2258972.cms
MUMBAI: India's hesitation to allow sale of genetically modified food and cash crops other than cotton is cramping growth of the biotech-based seed industry, players said.
After Bt Cotton received the nod in 2002, the federal government has withheld approval for the commercialisation of any other genetically modified (GMO) crop.
Civil protests led to the Indian Supreme Court staying multilocation trials of GMO food crops. India's stringent bio-safety norms have also been partly blamed for the delay.
In the past, several state governments, including Andhra Pradesh, Tamil Nadu, Gujarat, Maharashtra and Karnataka have tried to control Bt cotton seed prices as cotton seed was an essential commodity.
However, the central government's decision to remove cotton seed from the list in February prompted the Andhra Pradesh government to introduce an ordinance to regulate prices in the state last week.
The ordinance aims to cut prices of the new Bt cotton seed variety, Bollgard-II, by 21 percent to 750 rupees per 450-gram packet. Other states may follow suit, say industry watchers.
"No clear policy directive, and state intervention into seed marketing, has affected the revenue of seed companies drastically," said S. Raghuraman, head of research with agri-sector research firm, Agriwatch.
The largest Indian GMO seed company, Mahyco-Monsanto Biotech (MMB), a joint venture between the Indian arm of Monsanto and privately held Mahyco, reported a revenue decline of 62 percent to 1.5 billion rupees in 2006/07.
Monsanto India , which sells Bt technology to seed companies, has seen revenues erode since 2004/05. Last year its revenue fell 7 percent to 3.09 billion rupees.
Bt cotton has found favour with a section of the farmers due to higher yields and reduced pesticide costs. However, there is opposition to GMO crops on several counts, including higher cultivation costs. Trade sources said more than half of the cotton area is expected to be under GMO cotton in 2007 crop season, but a high adoption rate will not be enough for growth.
State intervention in fixing Bt cotton seed prices is to blame, said M.K. Sharma, managing director of MMB.
"Although adoption has been higher, earnings will be comparatively lower, thereby impacting new investments."
Following Bt Cotton commercialisation, several seed companies have been heavily investing, some as much as 15 percent of revenue, to develop new GMO crops, R.K. Sinha, executive director of industry body All India Crop Biotechnology Association, said.
However, R&D spend will be hit if the government drags its feet on commercialisation of new GMO crops, say players.
"We spend a vast amount of capital on R&D prior to having a crop approved for commercialisation," Sekhar Natarajan, Monsanto's India regional lead said. "If the approval is delayed, then our return on investment is also delayed".
"It would be difficult for any company in any industry to consider bringing new technologies to India in a market where prices are set by the state governments," Sharma said.
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