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Did Modi govt buckle under Monsanto pressure on Bt cotton?

Neeraj Thakur | Updated on: 10 February 2017, 1:49 IST

India's cotton farmers have been a distressed lot, and many blame the use of genetically modified (GM) seeds for a large part of the distress. GM seeds, in fact, have been controversial worldwide.

In March this year the Union government cut prices of GM cotton seeds and slashed royalty fees by 74%.

The maximum sales price of GM Bollgard II cotton seeds was reduced to Rs 800 (per 450gm packet) from Rs 830-1,000 earlier, despite threats from Monsanto Co to re-evaluate its India business. Monsanto is an American multinational giant dealing in agri-chemical and agri-biotech products.

Read- Victory for farmers: Why the govt was forced to backtrack on GM mustard

Narendra Modi's government received huge applause from activists for such bold decision that would increase the profitability of farmers.

However, in the last week of May, the government rolled back its decision, indicating it buckled under pressure from Monsanto.

Why the hue and cry over royalty?

Cotton farmers have been committing suicide alarmingly for more than a decade now due to depressed prices, failing crop and low rainfall. A large reason for their distress has also been identified as the cultivation of Bt cotton.

The high-cost Bt is now sowed in 90% of the country's cotton fields; naturally most farmers are dependent on Monsanto for cotton seeds.

Taking on Monsanto now might not be a good idea as current Bt cotton may run out of vitality soon

GM seeds were introduced in India in 2002, their selling point being pest-resistance. However, over years many farmers in Maharashtra and Karnataka have lost their crops due to attack from pests. This has lead to the demand of reduction in the cost of Bt cotton seed as they do not deliver 100% on the promise of reduced cost of farming due to less usage of pesticides.

Also read: #EconomicSurvey calls for changes in agriculture-sector, bats for GM crops

But can the government take on Monsanto and reduce the price of Bt cotton seeds?

According to some experts, taking on Monsanto at this point may not be the right thing simply because the current Bt cotton variety Bollgard II is expected to run out of vitality in a few years. GM seeds need continuous research to be improved as pests develop residence towards the DNA of the seeds and start attacking them. This means that if India needs to use GM seeds for cotton farming, it will have to rely on Bollgard III. And If Monsanto decides to not introduce the new seed in India, farmers may lose large acreage to pests by using older seeds.

Cycle of dependence

Using GM seeds is like getting into a cycle of dependence on one company's technology, which it would want to sell at a high price. The government and farmers do not know what would be the cost of the new Bt cotton seed that would be completely pest resistant. It is this cycle of dependence on GM seeds and Monsanto that the activists have been opposing all over the world. Moreover, some scientists have also claimed that in the long run the use of GM seeds destroys the quality of soil and production starts coming down.

Read more- Cotton farmer suicides: Punjab has been here before and not learnt

Therefore it is the government's responsibility to ensure that the interests of the farmers are not compromised under pressure from Monsanto.

Edited by Aditya Menon

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First published: 28 May 2016, 4:59 IST
Neeraj Thakur @neerajthakur2

As a financial journalist, his interface with the two dominant 'isms'- Marxism and Capitalism- has made him realise that an ideal economic order of the world would lie somewhere between the two.

Senior Assistant Editor at Catch, Neeraj writes on everything related to business and the economy.

He has been associated with Businessworld, DNA and Business Standard in the past.

When not thinking about stories, he is busy playing with his pet dog, watching old Hindi movies or searching through the Vividh Bharti station on his Philips radio transistor.