Source: The Hindu Businessline

The court allows the seed companies to collect Rs 60-100 additionally to make up for the difference between the trait value fixed by the State and Mahyco-Monsanto.

K. V. Kurmanath Hyderabad, June 10

The Andhra Pradesh High Court has asked seed companies and the State Government to create an escrow account to temporarily put an end to the row over the cottonseed technology trait fee.

In an interim order on Friday, the court has allowed the seed companies to collect Rs 60-100 additionally to make up for the difference between the trait value fixed by the State and Mahyco-Monsanto Biotech Limited. The court found contradictions in the Government arguments and observed that trait value is a small component in the overall seed price.

The contentious trait value is the fee collected by Mahyco-Monsanto, the joint venture between Indian seed major Mahyco and multinational agri-biotech company Monsanto, in lieu of providing the technology that gives cotton hybrids internal strength to kill bollworms. Bollworm is the single largest reason for yield losses in cotton.

The company enters into agreements with cottonseed companies every year for transfer technology on payment of Rs 110 (for BG-I or Bollgard-I) and Rs 163 for Bollgard-II on each packet of 450 grams. But the State Government, while fixing the maximum retail price of the seed, had capped the trait fee at Rs 50, triggering the row.

Caught between “the devil and the deep sea”, Seedsmen Association of Andhra Pradesh, Ganga Kaveri Seeds, Kaveri Seeds and Prabhat Agri Biotech moved the court, challenging the State Government’s order capping the fee. They also made the technology provider as a respondent along with the Commissioner of Agriculture (AP).

Escrow account

The differential amount would be deposited in the escrow account. The court directed the Seedsmen Association to join hands with the respondents in working out the modalities of the escrow account within a week. The petitioner will get the deposited amount if it wins the case. If it fails, the amount would go to the State Government.

“There is no explanation as to how the magic figure of Rs 50 was put in the Government Order, fixing the trait value. The petitioners have not made any grievance with respect to the production cost and cost of overheads. The dispute only relates to the royalty. The value of trait fee alone is not the determinative factor in the seed price fixed by the State where the total cost of production for an acre is put at Rs 20,000,” the court observed in the order.

(Source: The Hindu Businessline)