Need for dialogue between Monsanto & govt:Ex-VP, Nuziveedu Seeds

Monsanto Co, the world's biggest seed company, threatened to pull out of India on Friday if the government imposed a big cut in royalties that local firms pay for its genetically modified cotton seeds.

Mahyco Monsanto Biotech (India)(MMB), a joint venture with India's Mahyco, licenses a gene that produces its own pesticide to a number of local seed companies in lieu of royalties and an upfront payment. MMB also markets the seeds directly, though the local licensees together command 90 percent of the market.

According to FE report, the price control committee has recommended cut in royalty fees for GM cotton seeds. It has recommended reducing royalty fees to Rs 49 per packet from Rs 163 per packet.

Speaking on the above issue SVR Rao, Former Senior VP, Nuziveedu Seeds says there is  a need for a dialogue between Monsanto and government and according to him these are just suggestions and the government will take a decision on it.

According to him, it is unlikely that the Monsanto will walkout.Below is the transcript of SVR Rao’s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18. Latha: Monsanto is threatening that it will walk out of the country. How do you think this problem is going to pan out? A: Actually, it is slightly complicated in the sense that there are three parties: Monsanto, seed industry and the farmers and all of them have views which are very right. Monsanto says they are giving a lot of benefit to the farmer, that is why they want a portion of that by royalty. Seed industry is having problem of very stiff competition and government control on the prices, it is not there for merely 10-12 years. And, the costs are rising, so they are not able to meet both ends. And finally, farmer, what happened recently particularly last year, the technology is not protecting against another pest called pink bollworm. Monsanto, they never guaranteed against that, but farmer’s point of view is, if I have to spray for pink bollworm, the same thing can be, other pests also can be controlled, so, I am not getting any benefit. Earlier, very good benefits, Monsanto, seed industry and then win-win situation. Now, things have changed. Sonia: So, for the seed industry, particularly, for companies like yours and Kaveri Seeds, what could the impact be? A: If the government controls the price, and reduces the royalty on this particular technology, that is welcome by the industry because seed control price is already there for cotton for quite a while, we have gotten used to it. But the royalty is the biggest issue which get resolved by reducing the royalty. Latha: But if Monsanto indeed walks out, you expect that to happen? Is that a solution? A: It is not a solution even for Monsanto in my personal opinion. Latha: You do not think they will walk out? A: I do not think they will walk out because there are other technologies which are coming. This technology is more than 12 years old. So, why pay high royalty when it is not working for the farmer? Sonia: But the question is it could raise concerns about how India views its intellectual property rights as a regime. So, it could be a big blow to a lot of the technology providers. A: No, this problem of pink bollworm pests, the farmer is not getting any benefit. Latha: What is your sense then? Who blinks first? Monsanto will blink you think? A: I feel there should be a dialogue between Monsanto and the government. If government takes the right steps to introduce other technologies faster and Monsanto will benefit with new technologies, we can again charge good royalty on very useful technologies to the farmer. And if they have a dialogue, they can follow. Latha: But you think that this cut of the royalty fees to Rs 49 stays, the government is unlikely to change its mind on that and do you think the government is justified. A: No, in my knowledge, the government is just a view, they all may not announce anything. They formed a committee and the committee has recommended Rs 49. So, government has to take a view and declare whether it is right or wrong. That is my understanding.