Monsanto seed royalty cut, again

NEW DELHI: India has cut royalties that local seed companies pay to Monsanto Co for the second time in two years, potentially fuelling another row with the United States company that threatened to leave the South Asian country in 2016.

India’s farm ministry had decided to reduce royalties paid by Indian seed companies to Monsanto for its genetically modified (GM) cotton by 20.4 per cent, said a government order released yesterday.

In 2016. the farm ministry cut Monsanto’s royalties by more than 70 per cent, triggering a long-running feud that drew in the Indian and US governments.

“It is unfortunate that today’s order further erodes trait fees (royalties), which are now less than 0.5 per cent of the cost of cultivation, while the technology continues to provide value to farmers across India,” said a spokesman for Monsanto’s India joint venture, Mahyco Monsanto Biotech (India) (MMB).

Cotton had been a success story for Indian agriculture with a sharp jump in both output and exports, said the spokesman, but noted that the sector needed a predictable business environment to attract investment.

As well as cutting Monsanto’s royalties, the government also lowered the prices of GM cotton seeds by 7.5 per cent to 740 rupees (RM44.50) for a packet of 450g to help farmers who are struggling with pest infestations.

Farmers buy GM cotton seeds from Indian seedmakers who pay to use Monsanto’s proprietary technology to produce them.

Producers body, the National Seed Association of India, last week threatened to halt supplies to eight million cotton farmers to protest the planned move to reduce seed prices.