Bayer is battling seed companies and farmers in several countries over royalty on Monsanto's GM seeds
Monsanto has always been a litigious company and even though the US multinational has been bought by German giant Bayer, it has left behind a legacy of lawsuits related to patents and royalty fees on its genetically modified (GM) seeds across the world, from Latin America to Asia. In India, the Monsanto brand has seldom been out of the headlines in the past few years as it fought seed companies over the trait fees or royalty payable for its GM Bt cotton. The big difference is that unlike in Latin America where, too, the US firm has been tangled in court cases over trait fees, in India governments have acted decisively to keep trait fees within reason.
Bt cotton is the only GM seed that has been allowed for commercial release in the country but it has been a vexatious issue from the start. Introduced surreptitiously to farmers in 2002, Monsanto and its Indian subsidiary very quickly ran into problems over the high prices for its transgenic Bt cotton. The prices were unaffordable for India’s poor farmers and state governments were drawn into the fight against a multinational determined to extract a heavy price for its technology which has since been acknowledged a failure.
The crux of the problem was the value that Monsanto set on its Bt technology. In 2006 it was selling its cotton at Rs 1,800 for a packet of 425 gm (plus 125 gm of refugia seeds), with a whopping two-thirds of the cost being charged as trait fee. Andhra Pradesh set the trend in slashing the price of the Bt cotton seed to Rs 750 per packet with trait fee fixed at Rs 150. Although seed prices have risen over the years, the trait fee has been in continuous decline. In 2016, cotton seed was brought under price control nationally by the BJP government, thanks to pressure from fraternal organisations of the party which are opposed to multinationals in the seed sector. The trait fee was thereafter cut to Rs 49 even as Monsanto instituted a lawsuit against local seed firms that refused to pay royalty, claiming that the US company did not own a patent in India.
When Bayer finally won the case in February, it was a pyrrhic victory since the government wasted no time in slashing prices further. In March, trait fees were cut to Rs 39 sending seed companies licensed by the erstwhile US giant into a tailspin. The question that arises is to what extent innovator companies can continue to charge for an old technology.
In Latin America, its biggest market, Monsanto has been challenged on the patents and royalties for its GM soy seeds not by licencees or the government but by farmers. Brazilian growers are fighting a lawsuit to revoke the patent granted to Monsanto for its Intacta RR2 Pro soy.
They allege irregularities in the grant of patent for a technology which is far from innovative. They appear to be winning. Last year, a court ordered Bayer to deposit the royalties collected by Monsanto on this seed in an escrow account. This is a case that India should be keeping a close eye on, specially its farmers.
(This article was first published in Down To Earth's print edition dated April 1-15, 2019)
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