Agriculture ministry seeks legal advice on Monsanto’s royalties

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September 10, 2015 HYDERABAD: The Union agriculture ministry will seek comprehensive legal advice on regulating the contentious royalty payments levied by global hybrid seed makers like Mahyco Monsanto
Biotech to protect the interests of farmers and other stakeholders, a senior official has said.

The domestic hybrid seed producers under the banner of National Seed Association of India (NSAI) recently met Agriculture Minister Radha Mohan Singh and urged him to invoke provisions of the Indian Patents Act and other laws to rein in Monsanto.
"The NSAI representatives have urged us to regulate the hybrid seed industry with regards to fixing trait values (royalty) and selling prices of hybrid seeds and licensing conditions," the official told ET on condition of anonymity. "The hybrid seed industry lobby body wanted the ministry to look into the provisions of the Seed Control Order, Indian Patents Act, Competition Act or the Environment Protect Act on the genetically modified crops to regulate the royalty and seed selling prices."The official said the agriculture ministry will seek the views of the ministries of law & justice and commerce. "We have also asked NSAI to submit a detailed report on the legal advices they obtained on the matter from various legal experts," he said.

NSAI sought the agriculture ministry's intervention weeks after some state governments began fixing caps on the royalty the seed makers pay to obtain technologies as well as on the price of hybrid cotton seeds sold to farmers.
Maharashtra, Telangana and Andhra Pradesh are among the key cotton growing states that intervened to protect the interests of farmers and fixed royalty charges besides slashing selling price of hybrid cotton seeds.

Claiming that the sales revenue and profitability were crippled due to the price fixations, the seed industry lobby urged Monsanto to downwardly revise the royalty payments and refund excessive amount collected since 2010Estimated at over $2 billion (Rs 13,200 crore), India's hybrid (.seed industry is growing at 1015 per cent a year.

NSAI claims to have paid over Rs 5,000 crore to Monsanto towards royalty charges over the last decade with BT cotton accounting for nearly 45 per cent of the country's hybrid seed industry."We first appealed to Monsanto to consider our plea on slashing royalty payments positively, so that there is no pressure on profitability of hybrid seed makers. However, Monsanto was very rigid on the issue and cited the licensing contracts we entered into with it on royalty payments," NSAI executive director Kalyan Goswami had told ET earlier.

Detailing the contents of the appeal they submitted to the ministry, Goswami had said they urged the government to invoke sections 83 and 84 of the Indian Patents Act to enable the Controller General of Patents to decide on reasonable royalties to Monsanto.

Goswami said absence of a regulatory mechanism on seed technology licensing arrangements between technology providers like Monsanto and hybrid seed makers had led to a chaotic situation after many state governments began fixing selling prices of hybrid seeds.
"Absence of a competent authority to regulate technology licensing will only help few reap undue gains at the cost of others. We want the Union government to consult the state governments and create a competent authority to look into monopolistic dominance of technology providers and fix reasonable royalties by taking into account the interests of hybrid seed makers and farmers," Goswami had said.In response to an email query, a Mahyco Monsanto Biotech spokesperson said some of the 45 cotton seed companies to whom it provided technology access recently chose not to pay "trait fee due under these agreements by licensees even on completion of seed sales to farmers for the current sowing season. It also appears that these companies are using an industry platform inappropriately to address bilateral matters of partnership".

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