Who’s afraid of GM cotton?

The cotton revolution in India, through the use of genetically modified (GM) BT cotton, has been well researched and documented. Even then, a repeat of its success story is in order. Ever since the introduction of Bollgard 1 in 2002 and Bollgard II in 2006, the area under cotton cultivation with GM strains nearly peaked to 11.6 million hectares or 95% of total cotton acreage by 2014. Peak yields, prior to the introduction of BT cotton, touched 265 kg per hectare in 1996-97, gradually saw a slow decline, before scraping the bottom at 186 kg/ ha in 2001-02. The tide turned with the introduction of Bollgard 1, and hit a new peak of of 552 kg/ha in 2013-14, ringing in happy times for seven million cotton farmers in Maharashtra, Andhra Pradesh, Gujarat, Punjab, Haryana and even Karnataka, etc and more than 40 million workers engaged in cotton ginning and processing.

Higher productivity was not the only plus factor in the return to good times, but it also coincided with the lower use of fertilisers, weedicides and pesticides in the last one to two decades. In fact, studies by various experts committees, including Niti Aayog’s report of December 2015, “Raising Agricultural Productivity and Making Farming Remunerative for Farmers”, show that farmers are saving nearly Rs 2,250 per hectare because of reduced use of pesticides. According to a press note by the Ministry of Agriculture of 2011, between 2001 and 2010, BT cotton helped reduce the use of insecticides by more than 50%. All that has meant that cotton farmers in India are earning nearly Rs 8,000 per hectare.

Yet, that success story may be short-lived because of two policy measures initiated by the recent government. These include the Cotton Seed Price (Control) Order of December 2015 and the Licensing and Agreements for GM Technology Assessment Guidelines of May 2016, which will not only regulate the price of cotton seeds—maximum selling price or MSP—and related technologies across India, but also put a cap on input costs like seed value and trait value –the license fee charged by the providers of technology companies like Mayhco Monsanto Biotech a joint venture between Maharashtra Hybrid Seed Company and Monsanto Technology, to seed companies like Nuziveedu Seeds.

The rationale for the draft notification was simple enough: to ensure that all seed companies have access to GM traits without any problems, while at the same time ensuring that biotech trait development companies are adequately rewarded under the fair, reasonable and non-discriminative (FRAND) mechanism.

But the implementation of such a notification can adversely impact the future of GM cotton seeds in India, because in one stroke it invalidates all bilateral agreements worked out between technology providers and seed companies, and limits the amount that the intellectual property holder could get from the deal. It put a ceiling of Rs 25 lakh on the upfront amount that the seed company has to pay and also fixed the license fee or GM Trait at 10% of the MSP.

Again, once a new genetically modified seed is cleared by the government-owned Genetic Engineering Appraisal Committee (GEAC), it has to be made available within 30 days to any seed company that asks for such seeds. Those denied can appeal to a controller, appointed by the Central government.

Moreover, since the government believes that the efficacy of traits will diminish over the years, the trait value will start to diminish from the fifth year of its commercialisation—a 10% reduction in the trait value every year after that, which implies that after a few years the seed companies will be able to get these GM seeds—developed over the years and spending millions of dollars on them—free of cost.

Salil Singhal, chairman and managing director of PI Industries, points out in a letter to the Ministry of Agriculture and Farmers Welfare that the notification seeks to create a government-determined license structure and price for the use of technology in agriculture in current and future technologies. In other words, create a system of compulsory licensing of technology.” He goes on to add that arbitrary and subjective determinants of the value of technology will discourage innovators from investing in R&D and also discredit the technology by vested interests who don’t want to pay for it.’’

The reference to FRAND guidelines, according to Singhal, has no relevance in this case because the development and usage of the technology is not restrictive and any seed company can obtain GM technology by working out a fair, reasonable and non-discriminative arrangement with the technology provider. “In fact, almost all the companies, which are into breeding seeds have access to BT technology and have been using it for the past 12 years without any complaint of fairness or lack of reasonability.”

As the Indian agricultural sector lurches from one crisis to another, the government's focus should not just be on continuing with those well-established technologies that help boost productivity but also look at newer ones like BT brinjal—a vegetable whose safety and efficacy has already been proved elsewhere—which requires the application of pesticides every third or fourth year. But the recent order and the draft guidelines together not only has the potential to scare away big biotechnology firms, but also goes against the government’s declared policy of “Minimum Government, Maximum Governance” or even its long-term plan of making India an innovation hub for the world.

Views expressed are personal.