India has capped the royalty fee for all new genetically modified (GM) seeds at 10 percent of the maximum sale price, a move that seed technology providers said was a huge blow to the innovators in agri-biotech sector.
The government said in a notification that the fee will be capped for the first five years from the time the technology is commercialised in India and then will be lowered by 10 percent every year.
The notification also prescribed a new format for sub-licensing agreements that all seed technology providers would have sign with the seed companies. If such an agreement is not signed within next 30 days, all old agreements would be considered invalid, the notification said.
India already regulates the retail sale price of BT cotton seeds. Cotton is the only crop in which GM technology is allowed for commercial use in India, and the government regulates the retail price of BT cotton seeds,
Companies such as Monsanto had earlier threatened to quit the country of the royalty fee was capped.
Monsanto’s Indian unit, Mahyco Monsanto Biotech Ltd (MMBL), has sub-licenced GM cotton seed technology since 2002 to about 50 domestic seed companies. The seeds produced through this technology are used in over 95 per cent of the Indian cotton market.
For the 2016-17 cotton season, maximum retail sale price for a 450-gm GM cotton seed packet has been fixed at Rs 800, lower than the prevailing price range of Rs 830-1,030, the Business Standard newspaper reported.
This effectively means that seed licence providers won’t be able to charge any trait value, irrespective of the cost at which the seed has been produced for a new technology, which they want to introduce in the market, it said..
The Association of Biotechnology-Led Enterprises – Agriculture Focus Group said the government’s notification was a huge blow to the innovators in agri-biotech sector.
It clearly indicates the intention of the government to disregard research and innovation and thereby not protecting IPR (intellectual property rights) in the sector. This order creates an environment of policy unpredictability and arbitrariness of decision making, which is contrary to the recently-launched IPR policy,” Executive Director Shivendra Bajaj said.
Such a decision will further create an environment of uncertainty and disincentive to technology developers for bringing new technologies into India, which will ultimately harm the farmers as new technologies come slow to them, he said in a statement.