Date:12/05/2006 URL: http://www.thehindu.com/2006/05/12/stories/2006051208010400.htm

Andhra Pradesh - Hyderabad

Monsanto directed to reduce Bt cotton price

K. Venkateshwarlu

MRTPC upholds State's appeal, grants injunction against the firm

Monsanto action termed `restrictive trade' practice
A great victory for farmers in the State, says YSR
Order comes as relief: Agriculture Commissioner

Will have adverse effect on investments: company

HYDERABAD: In a significant development, the Monopolies and Restrictive Trade Practices Commission (MRTPC) has upheld the Andhra Pradesh Government's appeal and granted injunction against the multinational seed major Monsanto charging Rs. 900 per 450 gram packet of Bt cottonseed as trait value.

Commissioner of Agriculture Poonam Malkondaiah told The Hindu that the commission upheld the State Government's argument that the Mahyco Monsanto Biotech (India) Limited (MMBL)'s action was indeed a "restrictive trade practice" and directed it bring down the trait value (royalty) to a reasonable level on a par with the value it charged in China (Rs. 45 for a packet of 450 gm) and the US (Rs. 108).

Hailing the verdict as "a great victory for farmers not only in the State but in the country", Chief Minister Y.S. Rajasekhara Reddy said for the first time in India, the State Government filed a public interest litigation on behalf of farmers and saw to it that the MNC was indicted for violation of anti-trust laws.

Raghuveera elated

Elated, Agriculture Minister N. Raghuveera Reddy, who is in Israel, told The Hindu that only the State Government took the lead on the issue. He said the company had originally demanded a royalty of Rs. 1250 per packet of 450 gm but when the Government warned, the rate was reduced by Rs. 350. But the Government went ahead, challenged the "overpricing" and was successful.

Ms. Malkondaiah said the order had come as a relief for the small and marginal farmers. More farmers could access the technology. It would also put an end to the illegal trade in Bt Cotton seed. P. Siva Rao, advocate, who argued the State's case before the commission, said the injunction had come into effect on Thursday. It was also decided to file a caveat before the Supreme Court.

Current trait value

On the other hand, the MMBL said the "interim order scheduled to be implemented some time in the future will force it to review the current trait value, collected as a fee for its beneficial Bollgard insect protected cotton technology."

Making it clear that it would appeal against the order, the company said the interim ruling was beyond the commission's jurisdiction and inconsistent to the laws of India and the MRTP Act. "MMB believes this ruling could have adverse effect on the flow of many investments to in India," it added.