India is Monsanto’s largest market, outside the Americas, and losing the world’s biggest cotton producer and second largest exporter of cotton will be a huge financial blow to the company.
Monsanto is objecting to a proposal by India’s government that it share its technology with local seed companies. The company’s response to the request was a letter, dated July 5, sent by Maharashtra Hybrid Seeds Co Ltd, (MAHYCO) Monsanto’s technical partner in India, to New Delhi, singling out the request for proprietary technology.
After protests from Monsanto and other global seed companies, the government temporarily withdrew its request and decided to seek feedback from farmers and local seed companies. The government is now evaluating the feedback. In MAHYCO’s letter, which was seen by Reuters, they said the proposal, “alarmed us and raised serious concerns about the protection of intellectual property rights.”
Monsanto’s Bollgard cotton
India first approved Monsanto’s Bollgard I cotton in 2002, and Bollgard II in 2006, with this seed propelling India into becoming the world’s top producer of the fiber, with output increasing fourfold. But while Monsanto’s GM cotton seed is still the dominant seller on the market, many Indian farmers are going back to the “desi”, an indigenous variety of cotton that is half the price of the GM cotton seeds.
While the Bollgard seeds increase productivity, the plants are losing their effectiveness against the cotton bollworm, and even more of a concern is the GM cotton plants are not resistant to the whitefly, an insect especially common during the dry seasons in India.
The new seed, Bollgard II Roundup Ready Flex was supposed to be a technological breakthrough for Monsanto, pushing the yield to even greater heights, while addressing the complaints about the bollworm.
But as an excuse, experts are now saying that as with any technology, it loses its effectiveness over time because of its limited shelf life. But even so, 41 million packets of seeds were sold in India last year, earning Monsanto 6.5 billion Indian rupees ($97 million) in royalties.
It will be interesting to watch the cotton market in India over the next couple of years for a number of reasons. First, Prime Minister Narendra Modi has been increasing his efforts to make India appealing to investors, and any pressure on the government at this time is not a good thing.
Perhaps even more important is the loss of agricultural lands to desertification. On August 21, Digital Journal ran a story on the over-exploitation of India’s agricultural lands and the loss of nearly one-third of its productivity. It is possible that with Modi encouraging farmers to go back to using “indigenous” crop seeds, the country might very well lose its ranking in cotton production.
