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Bt cotton seed firms tell states to end price control by B Krishna Mohan

Governments of cotton growing states have spiked proposals by companies to increase prices for genetically modified (Bt) cotton seeds.

Makers of Bt seed have asked for a rise in the price they could charge for a 40-seed packet of the BG1 variety to Rs 850 (from Rs 650 now) and for the BG2 variety to Rs 1,050 (up from Rs 750), as input and labour costs had gone up by 35 per cent. All the governments in question — Andhra, Maharashtra, Gujarat and Punjab — have declined to do.

They say an increase in seed costs would increase the input costs for farmers and this would trigger a rise in costs in the value chain. The seed market in India is estimated at Rs 6,500 crore. Cotton alone is about Rs 2,500 crore and about 80-90 per cent of that is the Bt variety.

A packet of the non-Bt seed is being sold for Rs 300, the same as last year.

Companies dislike controls on fixing the sale prices of Bt cotton seeds. “Bt cotton seed prices should be determined by market dynamics and state governments should not control them. This would foster competition and provide more choice for the seed buyers,” said K V Subba Rao, country manager of Pioneer Hi-bred International Seeds, a DuPont business.

The Association of Biotech Led Enterprises (Able) also said Bt cotton prices should be determined by market dynamics and state governments should not control these. There are about 60 companies producing Bt cotton seeds ,offering more than 300 products across six technologies. The prices of other seeds have increased by 50 to 100 per cent but not of Bt cotton, it said.

Organisations like Able have made many representations to the government asking for an increase in Bt cotton seed prices, citing inflation reasons.

Rakesh Chopra, executive director of Biostadt MHseeds, said the effort is still on to get state governments to agree for a hike. “The monsoons are on way. The governments should agree for a price rise,” he said adding that many cotton farmers might shift to paddy in Andhra Pradesh, pulses in Gujarat and paddy and maize in Karnataka if companies do not pay remunerative prices to them.

Companies buy Bt cotton seeds from farmers and want a price hike in the name of paying more money to seed-growing farmers. Recently, the Gujarat government had asked Bt cotton seed marketing companies to pay a higher price to farmers but while keeping seed prices at last year’s levels.

Typically, seed companies spend Rs 140 on distribution, Rs 243 on production, Rs 81 on research and Rs 96 as trait fee to the company which owns the rights to the technology of BG1 seeds. There is already a shortage of Bt cotton seeds in parts of northern India, according to the National Seeds Association of India.

At its recent meeting in Hyderabad, it said “cotton seed production has decreased to 30 million packets this year from the 45 million packets of two years ago. At this rate, there will be a shortfall of Bt cotton seeds next year. Bt cotton seeds were in surplus in the last two years. Because of the failure on the part of companies to pay remunerative prices, the seed growers are shifting to other crops, leading to a tight supply situation.”