Indian government cuts Bt cotton seed price by Rs 10 to Rs 730 per packet; royalty to Monsanto cut by half

The Centre has marginally lowered the maximum sale price of Bt cotton seeds (BG-II) by reducing the royalty fee payable by domestic seed firms to developers of this genetically modified variety.

Under the new price, notified by the agriculture ministry , the farmers will have to pay maximum Rs 730 per packet of 450 gm (including Rs 20 for royalty) for Bt cotton seed of Bollgard (BG)-II version this year as against Rs 740 (including Rs 39 for royalty) last year.

This is the third year in a row when the Union agriculture ministry has reduced the maximum sale price of cotton seeds and royalty.

The new maximum sale price (MSP) include Rs 20 per packet as trait fees (royalty) this year as against Rs 39 per packet last year. It means while the farmers will have to pay Rs 10 less per packet this year as compared to 2018 season, the domestic seed firms will be the bigger beneficiaries as they will have to pay Rs 19 less per packet as trait fees to the developer (innovator of transgenic variety of cotton).

The move will benefit eight million cotton growers and also increase the margin of domestic seed companies as royalty fee to Mahyco Monsanto Biotech Ltd (MMBL), a Monsanto group firm, has been reduced sharply. MMBL has sub-licensed Bt technology to various seed companies in India.

German pharma and agrochemical major Bayer, which has now acquired Monsanto globally, expressed disappointment on reduction in royalty value. “We are extremely disappointed with today’s order that further cuts trait fees for cotton seeds across India. Trait fees were less than 0.5 per cent of the farmers’ cost of cultivation and today’s decision reduces them further,” Bayer spokesperson said in a statement.

For the BG-I version, the maximum sale price has been kept unchanged at Rs 635 per packet with no trait value, the notification added.

Bt cotton is the only GM crop allowed for commercial cultivation in the country. Over the last decade, Bt cotton technology has been adopted on over 95 per cent of the country’s cotton-growing area, making India the second-largest producer and exporter of the cash crop.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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