After almost two years, the Centre has slashed the retail price of Bollgard II (Bt cotton) seeds by Rs 60, giving the much-needed relief to eight million cotton growing farmers in the country.
Besides, the Agriculture Ministry has reduced the trait or royalty fees, which domestic companies are required to pay to technology developer Monsanto Mahyco Biotech (India) Ltd.
For a 450-gram packet of Bt cotton seeds, the existing maximum sale price is Rs 800 with royalty charges of Rs 49. The formal notification, issued late on Monday, will bring down prices of the seeds to Rs 740 and royalty charges will be revised to Rs 39.
"In exercise of the powers conferred by sub-clause (1) of clause 5 of the Cotton Seed Price (Control) Order,2015, the central government, after consultation with the committee referred to in sub-clause (2) of the said clause to recommend the maximum sale price of cotton seed, hereby declares the maximum sale price of Bt Cotton seed packets for the financial year 2018-19 for the whole of India," said a note issued by the Ministry of Agriculture.
Though the government's move will benefit the farmers, the domestic seed industry is expected to face losses following the rate cut and it may also hit supplies. The seed companies and associations have been asking the government to increase the prices. In one crop season, 50 million cotton seed packets are usually sold.
Earlier, one packet of seeds was priced at Rs 1,030, while the trait was at Rs 163 per packet. The prices were cut to Rs 830 and the royalty was lowered by about 70 per cent in 2016, following a guideline issued by a central panel under the Cotton Seeds Price Control Order of December 2015, fixing the trait value at 10 per cent of the seed sale price.
The 2016 move was criticised by multinational seed company, including Monsanto, which had moved Delhi High Court challenging the order. Last year, prices were kept unchanged.
"The price change will impact next year's seed production. Some members have decided not to take up seed production this year and a few are thinking to move court against the illogical price fixation," National Seed Association of India director general Kalyan Goswami told The Economic Times.
He added that the seed industry's input costs have gone up, following an increase in the costs of labour, supply chain, electricity and fuel.
The Bt cotton technology was introduced in India in 2002 for commercial cultivation. At present, 90 per cent of India's cotton production is genetically modified. Industry analysts had predicted a record high production with a rise of 9.3 per cent in production in 2017/18. But large amount of crop was damaged following the bollworm attack in Punjab in 2015 and in Maharashtra last year.