Monsanto, allies desert National Seeds Association over pricing, royalty issues

Battle lines are drawn within the Indian seed industry with aggrieved multinationals led by biotech major Monsanto breaking off the industry alliance National Seeds Association of India (NSAI) over government restrictions on profiteering and royalty hikes, which the association also supports.

The split came into the open on Friday, during the 10th annual general meeting of the association held at the National Academy of Agricultural Sciences, Pusa, New Delhi when MNC seed companies complained that their voices were not being heard and announced the formation of a rival grouping.

The split has been in the making for the last 10 years, with the MNCs looking to expand the country's Rs15,000-crore seed industry further and gaining a larger share of the market in the process.

The National Seeds Association of India has over 300 small and big companies across the country.

Things came to head after the NSAI backed the May 2016 Gazette notification that reasserted the government's right to fix seed prices, infuriating some of its members. These members had written to the government distancing themselves from the association's stand.

The representatives of FSII, which is yet to be registered, did not spell out their plan of action. They said they would work towards more transparent and inclusive decision-making, respecting intellectual property. The founding members of the Association also include Metahelix, Mahyco, Shriram Bioseeds and Namdhari.

''Our new association is driven by the fundamental value of respecting research and intellectual property of others,'' said M Ramasami, chairman and managing director, Rasi Seeds, while announcing the formation of the FSII in New Delhi on Friday.

The NSAI, which has about 300 seed firms and state-wide associations as members, remained unfazed over the split. ''It doesn't affect us. A majority of the members are with us and we will continue to fight against the monopolies of big companies,'' BusinessLine quoted NSAI president M Prabhakara Rao as saying.

He alleged that the move was aimed at putting pressure on the government to go slow on the cottonseed price regulation issue.

Though the two sides have been engaged in a fight over cottonseed pricing and royalty fee for years, the differences intensified early this year after the centre came out with an order capping seed prices and reducing royalties.

The reduction of the royalty component will have an adverse impact on Monsanto's revenues, as 95 per cent of all cottonseed in the country uses the American multinational's Bollgard II technology.

The All-India Kisan Sabha has termed the regrouping of MNCs as a reassertion of seed monopolies. ''We have been demanding for seed price control. Their regrouping could seriously harm the interests of the farmers,'' said Vijoo Krishnan, national joint secretary of AIKS.

While India as member country of World Trade Organisation (WTO), it is under an obligation to provide optimum IP protection and the TRIPs agreement provides patent protection, NSAI wants members to exclude from patentability inventions the commercial exploitation of which is necessary to protect public order or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.

Members may also exclude from patentability diagnostic, therapeutic and surgical methods for the treatment of humans or animals; plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes.

However, members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.

Seeds and plant varieties are excluded from the Indian Patent Act. Mere discovery of a scientific principle or the formulation of an abstract theory or discovery of any living thing or non-living substance occurring in nature, a method of agriculture or horticulture and plants and animals in whole or any part thereof other than microorganisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals, are not patentable under the Act.

While the biotechnologies required for developing GM traits are patentable under Indian Patent Act, after the GM traits become part of a plant, such transgenic plants are not patentable.

It is pertinent to note that the GM trait is imported by Monsanto into India only in the form of seeds of a transgenic variety to its licensee in India so that they or their assignees can transfer the Bt cotton GM trait into the proprietary lines. The transgenic varieties get intellectual property protection only under the Plant Varieties and Farmers' Rights (PPVFR) Act.

While section 92 of the PPVFR Act gives it primacy over Patent Act, section 30 of the Act provides for researcher's rights under which a protected variety can be used for developing new varieties.
A new variety developed by a researcher (which may include a farmer, public sector research system like state agriculture university, ICAR Institute or a domestic seed company) is registerable under section 15 of the Act for enjoying IPR and shall have exclusive rights under sections 24 and 28 of the Act for commercial exploitation.