India tightens rules over sale of Monsanto's GM cotton seeds

India has tightened rules for the sale of genetically-modified cotton seeds, a government order said, in a move that will cap royalties for any new variety that the market's sole supplier - U.S.-based Monsanto Co - decides to develop and sell.

Reuters May 23, 2016 12:36:25 IST
India tightens rules over sale of Monsanto's GM cotton seeds

India has tightened rules for the sale of genetically-modified cotton seeds, a government order said, in a move that will cap royalties for any new variety that the market's sole supplier - U.S.-based Monsanto Co - decides to develop and sell.

The farm ministry in March cut royalties that local seed firms pay to Mahyco Monsanto Biotech (India) (MMB), a Monsanto joint venture with India's Mahyco, following complaints from domestic firms that the venture was overcharging for a gene that produces its own pesticide.

As well as cutting the royalties, the government capped genetically modified (GM) cotton seed prices at 800 rupees for a packet of 450 grams after appeals by some state governments and farmers to lower the price of the Bt variety that commands 90 percent of the market in India.

India tightens rules over sale of Monsantos GM cotton seeds

Representational image. Reuters

Now, if Monsanto decides to introduce any new, advanced variety of its GM cotton, the world's biggest seed company cannot charge royalties more that 10 percent of the price of seeds, fixed at 800 rupees, for five years from the date of commercialisation, according to Thursday's ruling.

From the sixth year, the royalties, or trait value, will taper down by 10 percent every year, said the order, which laid down these guidelines without naming Monsanto.

Also, as GM traits are expected to have a limited period of efficacy, any variety which loses its effectiveness will not be eligible for royalties, the order said.

The new order is tougher than the royalty arrangements announced in March.

"We are evaluating the order," said a Monsanto spokesman in India.

The order also specified that any local seed company seeking licences for selling any new Bt cotton variety shall get the licence within 30 days of requesting the licensor.

Terming the latest order as a "huge blow" to innovation in agricultural biotechnology, the Association of Biotechnology Led Enterprises-Agriculture Focus Group, a pro-GM advocacy group, said the decision would discourage companies from investing in research.

Updated Date:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply

also read

Russia detects first cases of H5N8 bird flu in humans in poultry farm, says it has alerted WHO
World

Russia detects first cases of H5N8 bird flu in humans in poultry farm, says it has alerted WHO

Russia's health watchdog said that its scientists have isolated the strain's genetic material from seven workers at a poultry farm in southern Russia, where an outbreak was recorded among the birds in December

Prince Harry, Meghan Markle open up on 'unbelievably tough’ split from royal life, on Oprah Winfrey special
World

Prince Harry, Meghan Markle open up on 'unbelievably tough’ split from royal life, on Oprah Winfrey special

In an excerpt from an upcoming TV special with Oprah Winfrey, Prince Harry also discussed his mother's departure from the Royal Family three decades ago.