Agriculture ministry's bravado in bringing seeds under compulsory licensing was short-lived
For more than a decade now various state governments have tried several ways to control the pricing policy of agri-biotech giant Monsanto on its genetically modified (GM) Bt cotton seeds. Essentially, they have tried to get the US multinational to bring down the high royalty fees it charges for its technology, a battle that started shortly after Bt cotton entered India in 2002.
Monsanto’s Indian licencees—domestic seed companies that insert Monsanto’s GM technology in their own hybrid seeds—have been claiming that the royalty or trait fee charged by Monsanto on its Bt cotton is extortionate. Over the years, several states have backed the domestic seed industry by issuing executive orders fixing Bt cotton prices, orders that were challenged by Monsanto. The confrontation came to an unexpected flashpoint on May 18 when the Ministry of Agriculture and Farmers Welfare notified the Licensing and Formats for GM Technology Agreements Guidelines, 2016. These guidelines were clearly targeted at Monsanto and were rather sweeping in their ambit. The notification said the “licensor shall not refuse grant of a licence” to any eligible seed company and that the licence should be given within 30 days to companies wanting to incorporate the GM trait into their own hybrids.
The ministry cited FRAND (fair, reasonable and non-discriminative) licensing terms for its order and also capped the royalty at 10 per cent of the sale price. The order, of course, created a sensation since the Narendra Modi government has been stepping on eggs where intellectual property rights (IPR) are involved. It has gone out of its way to assuage the US which has been complaining about India’s IPR laws which, although compliant with the World Trade Organization rules, are deemed below Washington’s expectations.
Expectedly, the ministry’s notification evoked outrage from the biotech giants. Its lobby, the Association of Biotechnology Led Enterprises-Agriculture (ABLE-Ag) said it was indicative of the government’s intention “to disregard research and innovation and thereby not protect intellectual property in the sector”. The licensing rules, the industry felt, were tantamount to unrestricted compulsory licensing since innovator companies had been left with no choice whatsoever.
ABLE-Ag is composed primarily of multinational seed firms and its clout cannot be gainsaid. Within five days, the order was practically withdrawn with an official press release saying the notification will be put in the public domain for 90 days for comments from all stakeholders. Agriculture Minister Radha Mohan Singh was clearly on the back foot when he insisted in a newspaper interview that it was not a rollback but was intended to get “wider suggestions”.
While the confrontation over the past decade has primarily been between states and Monsanto, the Modi regime has been taking on the MNC frontally. The May notification comes on the back of a series of measures to curb the huge trait fees charged by Monsanto’s Bt Bollgard I and II varieties. So far there has been an inquiry by the Competition Commission of India into Monsanto’s licensing practices and more significantly a Cotton Price Seed Control Order issued in December 2015 which slashed the royalty payable to the biotech giant by 74 per cent. What has prompted these measures is the whopping profits that Monsanto earns on its Bt cotton patent. In 2013 alone it earned Rs 685 crore in fees.
Some BJP ministers have taken the nationalist or swadeshi line advocated by some outfits belonging to the party’s ideological mentor, the Rashtriya Swayamsevak Sangh (RSS). The agriculture minister appears to have been persuaded by leading domestic company Nuziveedu Seeds which has been vigorously pushing FRAND terms. Nuziveedu is one of the top franchisees of Monsanto. At the end of 90 days we will know which of these lobbies is more powerful.
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