This year, the southwest monsoon arrived in India six days ahead of schedule, kindling the hopes of cotton farmers on early sowing. The year 2006 is also the year of the La Nina phenomenon, the favourable wet weather that developed in the Pacific around March. La Nina is good for India as there was no drought in the past La Nina years.



The Indian cotton farmers in each of the three cotton zones have now a very wide choice of Bt cotton varieties. This year, in addition to the earlier 20 Bt cotton hybrids, the GEAC has so far released over 45 Bt cotton hybrids containing the Cry 1 Ac gene for commercial cultivation and approved over 60 hybrids for large scale field trials in the North, Central and South zones. Most of these varieties are Mahyco Monsanto Biotech's (MMB) Bollgard I (Mon 531 event), many developed by MMB's sublicensees. The GEAC has also approved two cotton hybrids, one with the fused Bt genes Cry 1 Ab + Cry 1 Ac (GFM) developed by Nath Seeds, and the other with stacked Bt genes Cry1 Ac and Cry 2 Ab (Bollgard II, Mon 15985) developed by MMB, for commercial release in the Central Zone.

In the face of a price war, cotton farmers in India, more particularly in the State of Andhra Pradesh (AP), are denied the cheer of the early monsoon and wide choice of Bt cotton varieties, on account of the problems with pricing of Bt cottonseed.

The Monopolies and Restrictive Trade Practices Commission (MRTPC) directed MMB to peg the trait value around what is charged in the US (Rs. 108) and China (Rs. 34), and gave MMB time till June 10. Prior to this directive, MMB has fixed the trait fee at about Rs. 900, per packet to which the sublicensee's margin has to be added. Monsanto has moved the Supreme Court of India (Deccan Herald, May 17, 2005), seeking a stay on the implementation of MRTPC's order, which was not granted.

Subsequently, the Government of Andhra Pradesh (AP) ordered the seed companies in the State to sell Bt cottonseed at the maximum of Rs. 750 per packet. The AP Agriculture Minister had even hinted at invoking the Essential Services Maintenance Act (ESMA), which attracts criminal proceedings, if the seed business does not comply with the Government's decision.

Some Bt cottonseed companies agreed to the AP Government's order, but are in a fix as their licensor is not a party to this agreement and they cannot pay Rs. 900 to the licensor and selling at Rs. 750. The few Bt cottonseed companies who are not sublicensees of MMB may sell their seed lower than MMB's price, but their supplies are too small and the varieties are not suitable for cultivation in all regions of India.

The pricing has to be applied throughout the country, as there cannot more than one pricing structure. Except in the States of Maharashtra and Gujarat, there are no Government orders adopting the AP pricing model.

Considering the AP Government's order fixing Bt cottonseed price at Rs. 750 as arbitrary, illegal and in violation of the MRTPC order, MMB filed another petition in the Supreme Court seeking stay on AP Government's order. The Supreme Court did not grant a stay, but opined that when the issue is settled it will be decided who would bear the difference between trait value fixed by MMB and AP Government's fixation.

Complying with MRTPC's directive to fix the trait value around the price in China and US., but ignoring the AP Government's Order, the MMB has now fixed the price at Rs. 880. The claim of the NGOs that per packet cost of Bt cottonseed in China is Rs. 34 and Rs. 108 in US appears to be grossly incorrect as the conversions work out to be far in excess of Rs. 880. At Rs. 1670 in China and Rs. 2880 in the US, they compare favourably even with last year's MMB price. The quantity of cottonseed required per acre varies significantly depending upon if they were hybrids or varieties and on agronomic practices such as drill sowing and broadcasting, and so cannot be directly compared.

Last week, the Ministers of Agriculture of seven cotton growing States met under the aegis of the Government of AP and decided to co-operate with each other in fixing the costs of Bt cottonseed.

The whole seed industry is disturbed by the developments in AP, since similarly enthusiastic political adventurism by State Governments for seed of other crops will spell disaster to the whole industry. The seed industry has begun to question the very authority of the government to impose price restriction.

While the AP farmers are under pressure from the State Government and the NGOs not to pay more than Rs. 750 per packet of Bt cottonseed, the farmers in the other cotton growing regions of the country may not be enthusiastic to oblige. They are paying whatever they have to.

In this stalemate, the sale of illegal Bt is becoming rampant. To profit while the pricing controversy is alive, the costs of illegal Bt cottonseed are sliding further, increasing its presence.

If the controversy of Bt cottonseed costs were not expressly resolved, cotton farmers, particularly in AP would watch in vain the good monsoon pass by them.