People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 40

October 04, 2009

Predatory Agri-Businesses Threaten Indian Agriculture


THROUGH a statement issued from New Delhi on September 25 by its president S Ramachandran Pillai and general secretary K Varadha Rajan, the All India Kisan Sabha (AIKS) has strongly protested against the growing hold of agri-businesses in the country.     

The statement pointed out that even as the Indian government is making a shrill campaign about a �Second Green Revolution,� it is becoming increasingly clear that, under the garb of the Indo-US Knowledge Initiative on Agriculture (KIA), the real intention is to usher in an unbridled monopoly for the predatory agri-businesses like Monsanto which also is on the KIA Board. The statement noted that ever since the �new� seeds policy announced in 1988, multinational corporations (MNCs) entered the Indian seeds market in a big way and have, by a policy of mergers and acquisitions, taken over a bulk of the Indian private seeds companies. The giant corporations have gradually established control over the local seeds companies through buyouts, joint ventures and licensing arrangements, and established complete monopoly over the huge seeds market. The present policy allows 100 per cent FDI in the seeds industry and the institutionalisation of the MNCs� monopoly over the seeds sector as well as the agro-chemical sector, thereby placing the Indian farmers directly at their mercy.

The AIKS statement further said the supply of seeds, which was being taken care of earlier by the ingenuity of the Indian farmers as well as the public sector seeds corporations and indigenous companies, has now slipped into the control of global players like Monsanto. The enormous payments as royalty has ensured that a continuous flow of profits accrue to these MNCs. Seeds are no longer in the public domain as they are now the �intellectual property� of these MNCs. The withdrawal of state regulation has aided the creation of seed monopolies and the governmental policies are abetting the gradual annihilation of the public sector seeds corporations. The Kisan Sabha noted that only six companies --- Monsanto, Du Pont, Mitsui, Syngenta, Aventis and Dow --- now control 98 per cent of the world seeds market; in India too the MNCs directly or indirectly control a major share of the seeds market.

Though the debate on the question of genetically modified (GM) crops has not yet been clinched, recently the European Union cracked down stringently and sent back the GM crops coming from the USA. However, Indian farmers are still growing Bt Cotton and MNCs have clandestinely been carrying out open field trials in contravention of the law of the land. Through its subsidiary, Monsanto has been charging very high royalties on its patented technology in collusion with its sub-licensees. After the Genetic Engineering Approval Committee (GEAC) gave Monsanto approval to launch its Bt Cotton technology between 2002 and 2005, Monsanto charged an exorbitant trait value (royalty) of Rs 1200 per packet of 450g. Bt Cotton seeds are being now sold at an exorbitant price of Rs 1800 to Rs 2000 per packet. Based on the complaints of the Andhra Pradesh Ryotu Sangham, the government of Andhra Pradesh referred the matter to the Monopolies and Restrictive Trade Practices Commission (MRTPC). The latter indicted Monsanto and passed an interim order stating that Monsanto is indeed following restrictive trade practices. This brought some relief for the farmers. Despite this, Bt Cotton seeds are still priced at Rs 750 per packet of 450g which includes 120g Bt Refugia (seeds that are not Bt transformed or treated with Bt, planted to generate resistance to pests) which is useless to the farmer. Even now the royalty is high --- Rs 175 per packet.

The AIKS statement noted that the department of industrial policy and promotion (DIPP) under the ministry of commerce has prepared a draft note, stating that all the foreign direct investments would be approved through automatic route without any restrictions as royalty payments and subject only to the Foreign Exchange Management Act (Current Account Transactions) Rules of 2000. The present stipulation is that there has to be compulsory approval if the technology transfer exceeds two million US dollars and the royalty payable exceeds five per cent on the domestic sales or eight per cent of the export sales, both pertaining to value addition. These caps were fixed so that Indian farmers were not burdened by high seed costs. But at a time when the powers of the MRTPC have been diluted, it is all the more essential to retain the existing safeguards.

The AIKS has demanded that the government of India and the Controller General of Patents, Designs and Trade Marks take immediate steps to rein in the MNCs that are following restrictive trade practices and infringing upon the MRTP provisions. There must be a cap on the rate of royalty payment, to ensure that seeds are available at affordable prices. An Agri-Biotech Regulatory Authority must be set up to ensure that farmers are protected. In addition to these measures, the ministry of agriculture must take adequate measures to promote participatory plant breeding through an interface between the farming and the scientific community with attractive incentives, provide remunerative prices for the seeds developed through this mechanism, and also ensure certification to counter the seed monopolies and ensure self-sufficiency.