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LATEST NEWS UPDATES | Seed companies reap rich harvest on Bt cotton wave by Sanjeeb Mukherjee </title>
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Bt cotton has doubled the seed industry and boosted the fortunes of seed firms. But yields still need to improve
In the last 10 years, Bacillus thuringiensis (Bt) cotton and its impact on farmers has perhaps been the most talked about..."/>
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Bt cotton has doubled the seed industry and boosted the fortunes of seed firms. But yields still need to improve
In the last 10 years, Bacillus thuringiensis (Bt) cotton and its impact on farmers has perhaps been the most talked about..." />
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<h1 class="cat-box-title">Seed companies reap rich harvest on Bt cotton wave by Sanjeeb Mukherjee</h1>
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Published on</span><span class="text-date"> Feb 24, 2012</span>
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<div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Bt cotton has doubled the seed industry and boosted the fortunes of seed firms. But yields still need to improve</em></div><div style="text-align: justify"><img src="https://im4change.in/siteadmin/tinymce/uploaded/Bt1.jpg" alt="bt1" width="600" height="240" /></div><div style="text-align: justify">In the last 10 years, Bacillus thuringiensis (Bt) cotton and its impact on farmers has perhaps been the most talked about topic in Indian agriculture since the ‘Green Revolution’ of the 1960s and 1970s. Not only has farmers’ income from growing Bt cotton risen by almost 67 per cent in the last one decade—the crop was first introduced in 2002—but Bt has made India a front-ranking, cotton-growing country of the world. Almost 95 per cent of India’s total cotton production of over 32 million bales today comes from Bt cotton (1 bale=170 kilograms). From being a lowly fifth-largest cotton producer largely known for its low-quality fibre, India is now the world’s second-largest grower of cotton, only behind China, clocking an average annual output of around 30 million bales.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The surge in Bt Cotton has ushered another equally important development—the coming of age of Indian seed companies whose fortunes have flourished alongside the boom in Bt Cotton. Be it Ankur Seeds of Nagpur, Ajeet Seeds of Aurangabad, Rasi Seeds in Tamil Nadu or Kaveri Seeds of Hyderabad—all of these companies have grown their businesses manifold ever since Bt technology was introduced in India. Some others like Advanta Seeds of Hyderabad and Delhi-based Kohinoor Seeds Field India have even expanded their operations into Europe, Africa and Asia.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">At Rs 9,000 to Rs 10,000 crore, India’s seed market is today one of the biggest in the world, and double the size of what it was before Bt muscled its way into the Indian agricultural terrain. Of the Rs 10,000 crore market, almost 40 per cent is dominated by Bt cotton. In other words, the entire rise in size of Indian seed market has been because of Bt cotton. “Before 2002, cotton seeds comprised just around 10 to 15 per cent of the Indian seed market, which now stands at almost 40 per cent,” Dr Ramasami, chairman-cum-managing director of Tamil Nadu-based Rasi Seeds Ltd told Business Standard. What was once considered a small and inconsequential seed business is now counted amongst the fastest-growing industries in the country.</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Booming business</em></div><div style="text-align: justify"> </div><div style="text-align: justify">However, even though Monsanto has given licence to around 44 seed companies in India, almost 70 to 80 per cent of entire Bt cotton seed market is dominated by just 7 to 10 big companies. What has enabled some of them to succeed while others languish? “Just having Bt licence will not benefit a seed company as the technology is same for all. What makes the difference is how companies have used the technology to manufacture their own proprietary products that suit the needs of Indian farmers,” said Dr Sateesh Kumar, director of Prabhat Agri-Biotech Ltd, which is part of the Rs 3,500 crore Nuziveedu Group. Evidence shows that only those companies which had a sound research and development base and invested in their proprietary products managed to make the best use of Bt licence from Monsanto.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Prabhat’s turnover has risen from around Rs 30 to Rs 35 crore annually to almost Rs 100 to Rs 105 crore in the last 10 years even though it has been in the seed business since 1992. Kumar said top line of seed companies have also grown because Bt cotton is priced more than traditional hybrid cotton seed. “But, much of this price of cotton seed goes towards paying royalty to Monsanto,” he said.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Before the introduction of Bt, Rasi Seeds Ltd was an Rs 100-120 crore seed company primarily dealing in hybrid cotton seeds. Today, its annual turnover has grown to almost Rs 450 crore, of which 70 to 75 per cent comprises of Bt cotton seeds. It has branched off into producing hybrid corn, rice, bajra, has built value-added infrastructures like three research stations in Bangalore, Gurgaon and Kullu (Himachal Pradesh) , a seed-processing plant spread over 35 acres of land and forayed into molecular breeding and transgenic apart from adding a new division for vegetable seeds. “Yes, we have been immensely benefited from Bt,” accepts Ramasami of Rasi seeds.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Cotton has also been the main growth driver of Ajeet Seeds Ltd of Aurangabad. The company initially clocked an annual turnover of Rs 70 to Rs 80 crore and had a share of around 3 to 4 per cent of the cotton seed market. In the last 10 years, not only has the company’s turnover risen to around Rs 250 crore, but it now holds almost 10 per cent share of the entire cotton seed market in the country. “Only those who had sound research base like Ajeet can manage to survive and grow in this competitive market,” Sameer Mulay, MD Ajeet Seeds said. He said from 40,000 square feet of seed-processing his company now boasts of having almost 200,000 square feet of seed-processing area.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">It’s easy to see why Bt cotton has become a farmer’s favourite. Gyanendra Shukla, director of Mahyco Monsanto Biotech, says that research and experience have shown that the fibre from cotton bolls grown from Bt seeds is of superior quality than traditional cotton. Almost 80 per cent of Bt cotton is medium to long staple which has good international demand, while earlier, this was around 50 to 60 per cent. In the normal cotton varietals, the bolls (the pod which hosts the cotton fibre) do not open properly and are very fragile leading to low-quality cotton. The Bt cotton plant, on the other hand, is resistant to bollworm, one of the main scourges of cotton plants in India. Today, a farmer does not need to spray any insecticide to control bollworm during the entire life span of the Bt crop, while earlier he would have to spray it at least 10-20 times.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Yet, despite its phenomenal success, civil society activists have blamed Bt cotton cultivation for the hundreds of farmer suicides in Andhra Pradesh and Maharashtra in the last few years. The seed is expensive—around Rs 950 per packet in some parts of the country (1 packet is 450 grams), while the same quantity of hybrid non-Bt cotton seeds cost around Rs 350 to Rs 500. The fact that Bt seeds do not give the same result and uniformity when replanted exposes farmers to price hikes. Companies contend that Bt seed prices are higher than normal seeds as much of the cost goes towards paying licence fee to Monsanto, while the fact remains that any hybrid seed when replanted cannot retain the same vigour.</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>What next for seed firms?</em></div><div style="text-align: justify"> </div><div style="text-align: justify">Indian seed companies will not be able to rest on their laurels for too long. Fact is, yields from Bt cotton have been stagnating around 500 to 550 kilograms per hectare from the 2002-03 levels of around 250 to 300 per hectare. To jump to the next level of yields ie 750 to 1,000 kgs per hectare, seed companies need to devise technological solutions to new problems like sucking pests. Also needed are seed varietals which are resistant to drought as it is being increasingly felt that cotton cultivation is suffering because of falling ground water levels particularly in Maharashtra and Andhra Pradesh.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">There is also the urgent need to help seed companies develop their own research and development facilities considering only 7 to 10 companies dominate the field. Plus, Bt technology needs to spread to other crops as well, since cotton occupies just 8 per cent of total cultivable land in India.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Another big challenge that the seed industry faces today is the need for a proper scientific regulatory mechanism which leads to proliferation of fake and uncertified seeds. According to a rough estimate, around 5-7 per cent Bt seeds sold by small regional players in northern India and in Gujarat are fakes. Experts say that Intellectual Property Right mechanism also needs to be strengthened to enable seed companies get global recognition for the seeds that they develop. Alongside, price control regimes a progressive seed policy which boosts investment in research needs to put in place—a must for this fairy tale story to continue.</div><div style="text-align: justify"><br /></div>
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<br><a href="http://www.business-standard.com/taketwo/news/seed-companies-reap-rich-harvestbt-cotton-wave/465532/" class="re" target="_blank">The Business Standard, 23 February, 2012, http://www.business-standard.com/taketwo/news/seed-companies-reap-rich-harvestbt-cotton-wave/465532/</a><div class="clear"></div>
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LATEST NEWS UPDATES | Seed companies reap rich harvest on Bt cotton wave by Sanjeeb Mukherjee </title>
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Bt cotton has doubled the seed industry and boosted the fortunes of seed firms. But yields still need to improve
In the last 10 years, Bacillus thuringiensis (Bt) cotton and its impact on farmers has perhaps been the most talked about..."/>
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Bt cotton has doubled the seed industry and boosted the fortunes of seed firms. But yields still need to improve
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<h1 class="cat-box-title">Seed companies reap rich harvest on Bt cotton wave by Sanjeeb Mukherjee</h1>
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Published on</span><span class="text-date"> Feb 24, 2012</span>
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<div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Bt cotton has doubled the seed industry and boosted the fortunes of seed firms. But yields still need to improve</em></div><div style="text-align: justify"><img src="https://im4change.in/siteadmin/tinymce/uploaded/Bt1.jpg" alt="bt1" width="600" height="240" /></div><div style="text-align: justify">In the last 10 years, Bacillus thuringiensis (Bt) cotton and its impact on farmers has perhaps been the most talked about topic in Indian agriculture since the ‘Green Revolution’ of the 1960s and 1970s. Not only has farmers’ income from growing Bt cotton risen by almost 67 per cent in the last one decade—the crop was first introduced in 2002—but Bt has made India a front-ranking, cotton-growing country of the world. Almost 95 per cent of India’s total cotton production of over 32 million bales today comes from Bt cotton (1 bale=170 kilograms). From being a lowly fifth-largest cotton producer largely known for its low-quality fibre, India is now the world’s second-largest grower of cotton, only behind China, clocking an average annual output of around 30 million bales.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The surge in Bt Cotton has ushered another equally important development—the coming of age of Indian seed companies whose fortunes have flourished alongside the boom in Bt Cotton. Be it Ankur Seeds of Nagpur, Ajeet Seeds of Aurangabad, Rasi Seeds in Tamil Nadu or Kaveri Seeds of Hyderabad—all of these companies have grown their businesses manifold ever since Bt technology was introduced in India. Some others like Advanta Seeds of Hyderabad and Delhi-based Kohinoor Seeds Field India have even expanded their operations into Europe, Africa and Asia.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">At Rs 9,000 to Rs 10,000 crore, India’s seed market is today one of the biggest in the world, and double the size of what it was before Bt muscled its way into the Indian agricultural terrain. Of the Rs 10,000 crore market, almost 40 per cent is dominated by Bt cotton. In other words, the entire rise in size of Indian seed market has been because of Bt cotton. “Before 2002, cotton seeds comprised just around 10 to 15 per cent of the Indian seed market, which now stands at almost 40 per cent,” Dr Ramasami, chairman-cum-managing director of Tamil Nadu-based Rasi Seeds Ltd told Business Standard. What was once considered a small and inconsequential seed business is now counted amongst the fastest-growing industries in the country.</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Booming business</em></div><div style="text-align: justify"> </div><div style="text-align: justify">However, even though Monsanto has given licence to around 44 seed companies in India, almost 70 to 80 per cent of entire Bt cotton seed market is dominated by just 7 to 10 big companies. What has enabled some of them to succeed while others languish? “Just having Bt licence will not benefit a seed company as the technology is same for all. What makes the difference is how companies have used the technology to manufacture their own proprietary products that suit the needs of Indian farmers,” said Dr Sateesh Kumar, director of Prabhat Agri-Biotech Ltd, which is part of the Rs 3,500 crore Nuziveedu Group. Evidence shows that only those companies which had a sound research and development base and invested in their proprietary products managed to make the best use of Bt licence from Monsanto.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Prabhat’s turnover has risen from around Rs 30 to Rs 35 crore annually to almost Rs 100 to Rs 105 crore in the last 10 years even though it has been in the seed business since 1992. Kumar said top line of seed companies have also grown because Bt cotton is priced more than traditional hybrid cotton seed. “But, much of this price of cotton seed goes towards paying royalty to Monsanto,” he said.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Before the introduction of Bt, Rasi Seeds Ltd was an Rs 100-120 crore seed company primarily dealing in hybrid cotton seeds. Today, its annual turnover has grown to almost Rs 450 crore, of which 70 to 75 per cent comprises of Bt cotton seeds. It has branched off into producing hybrid corn, rice, bajra, has built value-added infrastructures like three research stations in Bangalore, Gurgaon and Kullu (Himachal Pradesh) , a seed-processing plant spread over 35 acres of land and forayed into molecular breeding and transgenic apart from adding a new division for vegetable seeds. “Yes, we have been immensely benefited from Bt,” accepts Ramasami of Rasi seeds.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Cotton has also been the main growth driver of Ajeet Seeds Ltd of Aurangabad. The company initially clocked an annual turnover of Rs 70 to Rs 80 crore and had a share of around 3 to 4 per cent of the cotton seed market. In the last 10 years, not only has the company’s turnover risen to around Rs 250 crore, but it now holds almost 10 per cent share of the entire cotton seed market in the country. “Only those who had sound research base like Ajeet can manage to survive and grow in this competitive market,” Sameer Mulay, MD Ajeet Seeds said. He said from 40,000 square feet of seed-processing his company now boasts of having almost 200,000 square feet of seed-processing area.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">It’s easy to see why Bt cotton has become a farmer’s favourite. Gyanendra Shukla, director of Mahyco Monsanto Biotech, says that research and experience have shown that the fibre from cotton bolls grown from Bt seeds is of superior quality than traditional cotton. Almost 80 per cent of Bt cotton is medium to long staple which has good international demand, while earlier, this was around 50 to 60 per cent. In the normal cotton varietals, the bolls (the pod which hosts the cotton fibre) do not open properly and are very fragile leading to low-quality cotton. The Bt cotton plant, on the other hand, is resistant to bollworm, one of the main scourges of cotton plants in India. Today, a farmer does not need to spray any insecticide to control bollworm during the entire life span of the Bt crop, while earlier he would have to spray it at least 10-20 times.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Yet, despite its phenomenal success, civil society activists have blamed Bt cotton cultivation for the hundreds of farmer suicides in Andhra Pradesh and Maharashtra in the last few years. The seed is expensive—around Rs 950 per packet in some parts of the country (1 packet is 450 grams), while the same quantity of hybrid non-Bt cotton seeds cost around Rs 350 to Rs 500. The fact that Bt seeds do not give the same result and uniformity when replanted exposes farmers to price hikes. Companies contend that Bt seed prices are higher than normal seeds as much of the cost goes towards paying licence fee to Monsanto, while the fact remains that any hybrid seed when replanted cannot retain the same vigour.</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>What next for seed firms?</em></div><div style="text-align: justify"> </div><div style="text-align: justify">Indian seed companies will not be able to rest on their laurels for too long. Fact is, yields from Bt cotton have been stagnating around 500 to 550 kilograms per hectare from the 2002-03 levels of around 250 to 300 per hectare. To jump to the next level of yields ie 750 to 1,000 kgs per hectare, seed companies need to devise technological solutions to new problems like sucking pests. Also needed are seed varietals which are resistant to drought as it is being increasingly felt that cotton cultivation is suffering because of falling ground water levels particularly in Maharashtra and Andhra Pradesh.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">There is also the urgent need to help seed companies develop their own research and development facilities considering only 7 to 10 companies dominate the field. Plus, Bt technology needs to spread to other crops as well, since cotton occupies just 8 per cent of total cultivable land in India.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Another big challenge that the seed industry faces today is the need for a proper scientific regulatory mechanism which leads to proliferation of fake and uncertified seeds. According to a rough estimate, around 5-7 per cent Bt seeds sold by small regional players in northern India and in Gujarat are fakes. Experts say that Intellectual Property Right mechanism also needs to be strengthened to enable seed companies get global recognition for the seeds that they develop. Alongside, price control regimes a progressive seed policy which boosts investment in research needs to put in place—a must for this fairy tale story to continue.</div><div style="text-align: justify"><br /></div>
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<br><a href="http://www.business-standard.com/taketwo/news/seed-companies-reap-rich-harvestbt-cotton-wave/465532/" class="re" target="_blank">The Business Standard, 23 February, 2012, http://www.business-standard.com/taketwo/news/seed-companies-reap-rich-harvestbt-cotton-wave/465532/</a><div class="clear"></div>
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LATEST NEWS UPDATES | Seed companies reap rich harvest on Bt cotton wave by Sanjeeb Mukherjee </title>
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Bt cotton has doubled the seed industry and boosted the fortunes of seed firms. But yields still need to improve
In the last 10 years, Bacillus thuringiensis (Bt) cotton and its impact on farmers has perhaps been the most talked about..."/>
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Bt cotton has doubled the seed industry and boosted the fortunes of seed firms. But yields still need to improve
In the last 10 years, Bacillus thuringiensis (Bt) cotton and its impact on farmers has perhaps been the most talked about..." />
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<h1 class="cat-box-title">Seed companies reap rich harvest on Bt cotton wave by Sanjeeb Mukherjee</h1>
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Published on</span><span class="text-date"> Feb 24, 2012</span>
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<div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Bt cotton has doubled the seed industry and boosted the fortunes of seed firms. But yields still need to improve</em></div><div style="text-align: justify"><img src="https://im4change.in/siteadmin/tinymce/uploaded/Bt1.jpg" alt="bt1" width="600" height="240" /></div><div style="text-align: justify">In the last 10 years, Bacillus thuringiensis (Bt) cotton and its impact on farmers has perhaps been the most talked about topic in Indian agriculture since the ‘Green Revolution’ of the 1960s and 1970s. Not only has farmers’ income from growing Bt cotton risen by almost 67 per cent in the last one decade—the crop was first introduced in 2002—but Bt has made India a front-ranking, cotton-growing country of the world. Almost 95 per cent of India’s total cotton production of over 32 million bales today comes from Bt cotton (1 bale=170 kilograms). From being a lowly fifth-largest cotton producer largely known for its low-quality fibre, India is now the world’s second-largest grower of cotton, only behind China, clocking an average annual output of around 30 million bales.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The surge in Bt Cotton has ushered another equally important development—the coming of age of Indian seed companies whose fortunes have flourished alongside the boom in Bt Cotton. Be it Ankur Seeds of Nagpur, Ajeet Seeds of Aurangabad, Rasi Seeds in Tamil Nadu or Kaveri Seeds of Hyderabad—all of these companies have grown their businesses manifold ever since Bt technology was introduced in India. Some others like Advanta Seeds of Hyderabad and Delhi-based Kohinoor Seeds Field India have even expanded their operations into Europe, Africa and Asia.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">At Rs 9,000 to Rs 10,000 crore, India’s seed market is today one of the biggest in the world, and double the size of what it was before Bt muscled its way into the Indian agricultural terrain. Of the Rs 10,000 crore market, almost 40 per cent is dominated by Bt cotton. In other words, the entire rise in size of Indian seed market has been because of Bt cotton. “Before 2002, cotton seeds comprised just around 10 to 15 per cent of the Indian seed market, which now stands at almost 40 per cent,” Dr Ramasami, chairman-cum-managing director of Tamil Nadu-based Rasi Seeds Ltd told Business Standard. What was once considered a small and inconsequential seed business is now counted amongst the fastest-growing industries in the country.</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>Booming business</em></div><div style="text-align: justify"> </div><div style="text-align: justify">However, even though Monsanto has given licence to around 44 seed companies in India, almost 70 to 80 per cent of entire Bt cotton seed market is dominated by just 7 to 10 big companies. What has enabled some of them to succeed while others languish? “Just having Bt licence will not benefit a seed company as the technology is same for all. What makes the difference is how companies have used the technology to manufacture their own proprietary products that suit the needs of Indian farmers,” said Dr Sateesh Kumar, director of Prabhat Agri-Biotech Ltd, which is part of the Rs 3,500 crore Nuziveedu Group. Evidence shows that only those companies which had a sound research and development base and invested in their proprietary products managed to make the best use of Bt licence from Monsanto.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Prabhat’s turnover has risen from around Rs 30 to Rs 35 crore annually to almost Rs 100 to Rs 105 crore in the last 10 years even though it has been in the seed business since 1992. Kumar said top line of seed companies have also grown because Bt cotton is priced more than traditional hybrid cotton seed. “But, much of this price of cotton seed goes towards paying royalty to Monsanto,” he said.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Before the introduction of Bt, Rasi Seeds Ltd was an Rs 100-120 crore seed company primarily dealing in hybrid cotton seeds. Today, its annual turnover has grown to almost Rs 450 crore, of which 70 to 75 per cent comprises of Bt cotton seeds. It has branched off into producing hybrid corn, rice, bajra, has built value-added infrastructures like three research stations in Bangalore, Gurgaon and Kullu (Himachal Pradesh) , a seed-processing plant spread over 35 acres of land and forayed into molecular breeding and transgenic apart from adding a new division for vegetable seeds. “Yes, we have been immensely benefited from Bt,” accepts Ramasami of Rasi seeds.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Cotton has also been the main growth driver of Ajeet Seeds Ltd of Aurangabad. The company initially clocked an annual turnover of Rs 70 to Rs 80 crore and had a share of around 3 to 4 per cent of the cotton seed market. In the last 10 years, not only has the company’s turnover risen to around Rs 250 crore, but it now holds almost 10 per cent share of the entire cotton seed market in the country. “Only those who had sound research base like Ajeet can manage to survive and grow in this competitive market,” Sameer Mulay, MD Ajeet Seeds said. He said from 40,000 square feet of seed-processing his company now boasts of having almost 200,000 square feet of seed-processing area.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">It’s easy to see why Bt cotton has become a farmer’s favourite. Gyanendra Shukla, director of Mahyco Monsanto Biotech, says that research and experience have shown that the fibre from cotton bolls grown from Bt seeds is of superior quality than traditional cotton. Almost 80 per cent of Bt cotton is medium to long staple which has good international demand, while earlier, this was around 50 to 60 per cent. In the normal cotton varietals, the bolls (the pod which hosts the cotton fibre) do not open properly and are very fragile leading to low-quality cotton. The Bt cotton plant, on the other hand, is resistant to bollworm, one of the main scourges of cotton plants in India. Today, a farmer does not need to spray any insecticide to control bollworm during the entire life span of the Bt crop, while earlier he would have to spray it at least 10-20 times.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Yet, despite its phenomenal success, civil society activists have blamed Bt cotton cultivation for the hundreds of farmer suicides in Andhra Pradesh and Maharashtra in the last few years. The seed is expensive—around Rs 950 per packet in some parts of the country (1 packet is 450 grams), while the same quantity of hybrid non-Bt cotton seeds cost around Rs 350 to Rs 500. The fact that Bt seeds do not give the same result and uniformity when replanted exposes farmers to price hikes. Companies contend that Bt seed prices are higher than normal seeds as much of the cost goes towards paying licence fee to Monsanto, while the fact remains that any hybrid seed when replanted cannot retain the same vigour.</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>What next for seed firms?</em></div><div style="text-align: justify"> </div><div style="text-align: justify">Indian seed companies will not be able to rest on their laurels for too long. Fact is, yields from Bt cotton have been stagnating around 500 to 550 kilograms per hectare from the 2002-03 levels of around 250 to 300 per hectare. To jump to the next level of yields ie 750 to 1,000 kgs per hectare, seed companies need to devise technological solutions to new problems like sucking pests. Also needed are seed varietals which are resistant to drought as it is being increasingly felt that cotton cultivation is suffering because of falling ground water levels particularly in Maharashtra and Andhra Pradesh.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">There is also the urgent need to help seed companies develop their own research and development facilities considering only 7 to 10 companies dominate the field. Plus, Bt technology needs to spread to other crops as well, since cotton occupies just 8 per cent of total cultivable land in India.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Another big challenge that the seed industry faces today is the need for a proper scientific regulatory mechanism which leads to proliferation of fake and uncertified seeds. According to a rough estimate, around 5-7 per cent Bt seeds sold by small regional players in northern India and in Gujarat are fakes. Experts say that Intellectual Property Right mechanism also needs to be strengthened to enable seed companies get global recognition for the seeds that they develop. Alongside, price control regimes a progressive seed policy which boosts investment in research needs to put in place—a must for this fairy tale story to continue.</div><div style="text-align: justify"><br /></div>
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<br><a href="http://www.business-standard.com/taketwo/news/seed-companies-reap-rich-harvestbt-cotton-wave/465532/" class="re" target="_blank">The Business Standard, 23 February, 2012, http://www.business-standard.com/taketwo/news/seed-companies-reap-rich-harvestbt-cotton-wave/465532/</a><div class="clear"></div>
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LATEST NEWS UPDATES | Seed companies reap rich harvest on Bt cotton wave by Sanjeeb Mukherjee
Seed companies reap rich harvest on Bt cotton wave by Sanjeeb Mukherjee
Published on Feb 24, 2012
Modified on Feb 24, 2012
Bt cotton has doubled the seed industry and boosted the fortunes of seed firms. But yields still need to improve
In the last 10 years, Bacillus thuringiensis (Bt) cotton and its impact on farmers has perhaps been the most talked about topic in Indian agriculture since the ‘Green Revolution’ of the 1960s and 1970s. Not only has farmers’ income from growing Bt cotton risen by almost 67 per cent in the last one decade—the crop was first introduced in 2002—but Bt has made India a front-ranking, cotton-growing country of the world. Almost 95 per cent of India’s total cotton production of over 32 million bales today comes from Bt cotton (1 bale=170 kilograms). From being a lowly fifth-largest cotton producer largely known for its low-quality fibre, India is now the world’s second-largest grower of cotton, only behind China, clocking an average annual output of around 30 million bales.
The surge in Bt Cotton has ushered another equally important development—the coming of age of Indian seed companies whose fortunes have flourished alongside the boom in Bt Cotton. Be it Ankur Seeds of Nagpur, Ajeet Seeds of Aurangabad, Rasi Seeds in Tamil Nadu or Kaveri Seeds of Hyderabad—all of these companies have grown their businesses manifold ever since Bt technology was introduced in India. Some others like Advanta Seeds of Hyderabad and Delhi-based Kohinoor Seeds Field India have even expanded their operations into Europe, Africa and Asia.
At Rs 9,000 to Rs 10,000 crore, India’s seed market is today one of the biggest in the world, and double the size of what it was before Bt muscled its way into the Indian agricultural terrain. Of the Rs 10,000 crore market, almost 40 per cent is dominated by Bt cotton. In other words, the entire rise in size of Indian seed market has been because of Bt cotton. “Before 2002, cotton seeds comprised just around 10 to 15 per cent of the Indian seed market, which now stands at almost 40 per cent,” Dr Ramasami, chairman-cum-managing director of Tamil Nadu-based Rasi Seeds Ltd told Business Standard. What was once considered a small and inconsequential seed business is now counted amongst the fastest-growing industries in the country.
Booming business
However, even though Monsanto has given licence to around 44 seed companies in India, almost 70 to 80 per cent of entire Bt cotton seed market is dominated by just 7 to 10 big companies. What has enabled some of them to succeed while others languish? “Just having Bt licence will not benefit a seed company as the technology is same for all. What makes the difference is how companies have used the technology to manufacture their own proprietary products that suit the needs of Indian farmers,” said Dr Sateesh Kumar, director of Prabhat Agri-Biotech Ltd, which is part of the Rs 3,500 crore Nuziveedu Group. Evidence shows that only those companies which had a sound research and development base and invested in their proprietary products managed to make the best use of Bt licence from Monsanto.
Prabhat’s turnover has risen from around Rs 30 to Rs 35 crore annually to almost Rs 100 to Rs 105 crore in the last 10 years even though it has been in the seed business since 1992. Kumar said top line of seed companies have also grown because Bt cotton is priced more than traditional hybrid cotton seed. “But, much of this price of cotton seed goes towards paying royalty to Monsanto,” he said.
Before the introduction of Bt, Rasi Seeds Ltd was an Rs 100-120 crore seed company primarily dealing in hybrid cotton seeds. Today, its annual turnover has grown to almost Rs 450 crore, of which 70 to 75 per cent comprises of Bt cotton seeds. It has branched off into producing hybrid corn, rice, bajra, has built value-added infrastructures like three research stations in Bangalore, Gurgaon and Kullu (Himachal Pradesh) , a seed-processing plant spread over 35 acres of land and forayed into molecular breeding and transgenic apart from adding a new division for vegetable seeds. “Yes, we have been immensely benefited from Bt,” accepts Ramasami of Rasi seeds.
Cotton has also been the main growth driver of Ajeet Seeds Ltd of Aurangabad. The company initially clocked an annual turnover of Rs 70 to Rs 80 crore and had a share of around 3 to 4 per cent of the cotton seed market. In the last 10 years, not only has the company’s turnover risen to around Rs 250 crore, but it now holds almost 10 per cent share of the entire cotton seed market in the country. “Only those who had sound research base like Ajeet can manage to survive and grow in this competitive market,” Sameer Mulay, MD Ajeet Seeds said. He said from 40,000 square feet of seed-processing his company now boasts of having almost 200,000 square feet of seed-processing area.
It’s easy to see why Bt cotton has become a farmer’s favourite. Gyanendra Shukla, director of Mahyco Monsanto Biotech, says that research and experience have shown that the fibre from cotton bolls grown from Bt seeds is of superior quality than traditional cotton. Almost 80 per cent of Bt cotton is medium to long staple which has good international demand, while earlier, this was around 50 to 60 per cent. In the normal cotton varietals, the bolls (the pod which hosts the cotton fibre) do not open properly and are very fragile leading to low-quality cotton. The Bt cotton plant, on the other hand, is resistant to bollworm, one of the main scourges of cotton plants in India. Today, a farmer does not need to spray any insecticide to control bollworm during the entire life span of the Bt crop, while earlier he would have to spray it at least 10-20 times.
Yet, despite its phenomenal success, civil society activists have blamed Bt cotton cultivation for the hundreds of farmer suicides in Andhra Pradesh and Maharashtra in the last few years. The seed is expensive—around Rs 950 per packet in some parts of the country (1 packet is 450 grams), while the same quantity of hybrid non-Bt cotton seeds cost around Rs 350 to Rs 500. The fact that Bt seeds do not give the same result and uniformity when replanted exposes farmers to price hikes. Companies contend that Bt seed prices are higher than normal seeds as much of the cost goes towards paying licence fee to Monsanto, while the fact remains that any hybrid seed when replanted cannot retain the same vigour.
What next for seed firms?
Indian seed companies will not be able to rest on their laurels for too long. Fact is, yields from Bt cotton have been stagnating around 500 to 550 kilograms per hectare from the 2002-03 levels of around 250 to 300 per hectare. To jump to the next level of yields ie 750 to 1,000 kgs per hectare, seed companies need to devise technological solutions to new problems like sucking pests. Also needed are seed varietals which are resistant to drought as it is being increasingly felt that cotton cultivation is suffering because of falling ground water levels particularly in Maharashtra and Andhra Pradesh.
There is also the urgent need to help seed companies develop their own research and development facilities considering only 7 to 10 companies dominate the field. Plus, Bt technology needs to spread to other crops as well, since cotton occupies just 8 per cent of total cultivable land in India.
Another big challenge that the seed industry faces today is the need for a proper scientific regulatory mechanism which leads to proliferation of fake and uncertified seeds. According to a rough estimate, around 5-7 per cent Bt seeds sold by small regional players in northern India and in Gujarat are fakes. Experts say that Intellectual Property Right mechanism also needs to be strengthened to enable seed companies get global recognition for the seeds that they develop. Alongside, price control regimes a progressive seed policy which boosts investment in research needs to put in place—a must for this fairy tale story to continue.
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