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Bt cotton price cut seen as big positive for drought-hit Maharashtra -Abhiram Ghadyalpatil
-Livemint.com

The Union government has cut the prices of genetically-modified cotton seeds and slashed royalty fees by 74%

The Union government’s decision to cut the prices of genetically-modified (GM) cotton seeds, popularly known as Bt cotton, and slash royalty fees, will have a positive impact on cotton farming in Maharashtra, India’s top state in terms of area under cotton cultivation.

The Maharashtra government’s agriculture officials, cotton growers and officials at the Nagpur-based Central Institute for Cotton Research say the reduction in price and royalty will significantly reduce the cost of production for cotton growers.

“In absolute terms, this will translate into a saving of around Rs.225-250 crore for Maharashtra’s 40 lakh cotton growers. It may not look like a big amount but it is actually substantial money for individual cotton growers who are caught in the throes of crop failure, drought and indebtedness,” said a senior agriculture department official who requested anonymity.

Maharashtra cultivates cotton on nearly 3.9 million hectares, compared with the all-India acreage under cotton cultivation which is at 12.5 million hectares. It is the top state in terms of acreage under cotton, followed by Gujarat which cultivates cotton over 3 million hectares.

But Maharashtra has among the lowest cotton productivity—345 kg per hectare as against 700 kg in Gujarat.

Genetically modified cotton is grown on 96% of the total area under cotton cultivation in Maharashtra and the three cotton-growing regions—Vidarbha, Marathwada and Khandesh—see a sale of nearly 10.5 million packets of GM cotton seeds every cotton harvest, according to data available with the agriculture department.

The Union government on 9 March cut prices of GM cotton seeds and slashed royalty fees by 74%. These price interventions have brought the maximum sale price of genetically modified Bollgard II cotton seeds to Rs.800 (per 450 gram packet) from Rs.830-1,000 earlier.

The government also slashed by 74% the royalty Monsanto Mahyco Biotech (India) Ltd (MMBL), a joint venture of Mahyco Seeds Ltd and Monsanto, charges from seed firms in exchange for its patented cotton seed technology. The royalty has been cut from Rs.163 per packet to Rs.43, excluding taxes.

For Maharashtra, the latest price and royalty reduction come after it had in June 2015 reduced the price of Bt cotton seeds by Rs.100 per packet following complaints by farmers and political parties over the “expensive” nature of this seed. The state reduced the price of Bollgard-I variety from Rs.830 per packet to Rs.730 and Bollgard-II from Rs.930 to Rs.830. “Nearly 95% of the GM seeds bought in Maharashtra are Bollgard-II and the price reduction made a big impact. Farmers saved about Rs.150 crore last harvest,” said the agriculture department official quoted above.

Keshav Kranthi, director of the Nagpur-based Central Institute for Cotton Research, a central government undertaking, welcomed the reduction in price and royalty. “Though Maharashtra reduced the price last year, common pricing across the country made sense because farmers from Andhra Pradesh bought hybrids in Maharashtra due to the lower price last year. But those hybrids were meant for Maharashtra’s climatic conditions and soil and not suitable for Andhra Pradesh. So the uniformity in price is welcome,” Kranthi said.

He also pointed out that the drastic reduction in royalty would benefit the Indian seed companies licensed by MMBL. “The price and royalty were really expensive and I would want them to come down further. Because 96% of the entire cotton growing area in India is under hybrids now and it is important to reduce the farmer’s cost of production if the benefits of research are meant for him,” Kranthi said.

Welcoming the government intervention in what he called a “long overdue price correction”, Vidarbha-based cotton grower and farm activist Vijay Jawandhiya said the government should also drive top-quality research in government-funded agriculture universities and institutes to develop region-specific varieties of cotton seeds.

“Such price corrections are useful for temporary gains but the long-term benefit for the cotton growers would come only when the government gets its universities and institutes to invest in research to develop straight-line cotton seeds which are re-usable for five harvests and which will reduce farmers’ dependence on the Indian seed companies also,” Jawandhiya said.