On Bt Cotton, FRAND Licensing and Recent Governmental Initiatives: Putting Things in Context – II


In Part I of this guest post, Dr. Mrinalini Kochupillai recommended against immediate incorporation of Bt technology into all cotton seeds (typical or hybrid) in India. In Part II of the post below, she discusses the reasons for this recommendation.



On Bt Cotton, FRAND Licensing and Recent Governmental Initiatives: Putting Things in Context – II

Dr. Mrinalini Kochupillai

Promoting Indigenous Private Sector R&D

It may well be pure conjecture that the government’s efforts to reduce the price of Bt technology under its recently withdrawn guidelines is (also) aimed at promoting private sector R&D in plant varieties. However, it is a stated fact that one of the key aims in promulgating the PVP Act, is to stimulate private sector R&D for the development of new plant varieties. As was discussed earlier and elsewhere, the Indian private sector seed companies in India were already engaged in R&D for the creation of hybrids before the PVP Act came into being. In fact, almost their entire business model was based on development and sales of hybrids under a ‘true label.’ Following the introduction of the PVP Act, private sector seed corporations seem to have intensified their R&D efforts – but they still focus on the same set of crops as before and their primary focus continues to be on the creation of hybrids (and after the Bt technology came into India, also transgenic hybrids).

In fact, in the first seven years following the start of the registration process under the PVP Act, the private sector had filed applications for more than 800 new and extant hybrid varieties of tetraploid cotton. In fact, cotton (particularly hybrid tetraploid cotton) is the single most highly researched crop in the Indian private sector’s R&D portfolio. For comparison, take a look at Maize, which occupies a distant second place: during the same 7 year period, the private sector applied for less than 250 new and extant varieties of maize – but again, almost all for hybrids and parental lines.

In this scenario, is there really a need to further promote R&D into cotton? Would it not be better for the government to promote R&D or at least production and sales of high quality seeds of other crops?

Bt/GM Technology: Should it be THE Standard of the Present/Future?

The Economic Times recently requested in a rather provocative article that it be ‘Poked’ (back), “intelligently”, on the points made therein. The article, written by a US professor, questions the wisdom of governmental efforts to curb prices of Bt technology, suggests that Bt technology is the savior of cotton farmers the world over, price control will work as a disincentive for R&D in Bt/GM technology, and makes a sweeping claim that “arguments against GM crops are not based on science but on emotions.” Others closer to home have argued that the ‘cotton revolution is in danger of being reversed by government control over GM seed prices.’

Although I am a great supporter of scientific work and innovations, including in the field of biotechnology, I disagree with both propositions: First, it is highly unlikely that the biotech industry the world over will suddenly halt all its R&D efforts just because of a governmental regulation in India based on unsteady legal grounds. As was pointed out by others in the forum, the sheer market size of a country like India will ensure that seed companies from far and wide will use all available technological ammunition (e.g. creation of F1 hybrids, use of modified Genetic Use Restriction Technology, etc.) to profitably remain in the Indian market.

Secondly, and perhaps more importantly, there is enough scientific evidence and associated scientific and political controversy out there to make any prudent policy maker cautious while recommending large scale roll out of GM/Bt technology (including transgenic seeds) – on environmental and ecological grounds (including threats to genetic diversity and unwanted introgressions leading to stronger weeds and pests), as well as health grounds. This does not mean the GM/BT technology is all bad, but it means that regulators as well as scientists testing the impact and effectiveness of new technologies must do their job well and better than ever before to win public confidence. By making sweeping statements pushing all public and scientific concerns to the realm of ‘emotion’ or ‘junk science’, not much will be accomplished.

In fact, there is growing interest, including at MPI, in investigating means of promoting not just innovations per se, but responsible and ethical innovations. In the context of cotton, for example, policy makers may do well in asking themselves if further incentivizing R&D into a technology that is inefficiently being pushed into hybrids primarily for profit motives, is a wise or far sighted policy. In this regard, it is also worth highlighting that licensors of Bt technology will likely refuse to license it to companies that want to incorporate it into non-hybrids. The article by Mr. Kranthi discussed above, already indicates this.

Furthermore, one cannot overlook the fact that the bollworm does not affect cotton crops in all regions of India, and Bt-II technology has brought back the pink bollworm, which was unheard of for decades.  This calls for sincere debates and discussion on means of identifying and promoting R&D into robust indigenous cotton varieties and also indigenous technology for local pest control and yield increase, rather than on means of promoting greater adoption of foreign technology (such as Bt cotton) that also makes India increasingly dependent on fertilizers and pesticides. FYI – In addition to being disastrous for the environment, chemical fertilizers are not produced in India in the quantities being currently demanded due to rising field area under hybrid/HYV seeds. This means that India needs to import these at heavy costs every year (see here and here). In the light of these facts, would it be prudent to pursue any effort that might result in making Bt technology THE standard for cotton cultivation in India?

This is not to say that Bt cotton seeds should be banned in India. The point being made is a simple one – when private sector efforts are already heavily focused on Bt hybrids (as evidenced also by the statistics above), and the area under Bt cotton cultivation has been expanding (notwithstanding the ‘high’ price of cotton seeds), is it necessary to spend governmental and public resources on further promoting affordability or roll out of Bt cotton? In fact, this initiative contradicts recent and more far sighted initiatives of the Indian government and government funded institutions seeking to promote the use of indigenous cotton seeds.

History has evidenced the need for variety and diversity, especially in the field of agriculture. The great Irish potato famine was a result of monocultures of one variety of potato. In the light of these facts, any move of the government that can have the effect of making Bt technology more ‘affordable’ is a scary one. We don’t need more farmers or more private sector seed companies to run towards the same technology. What we need is clear governmental initiatives and efforts to increase cotton seed diversity and diversify cotton R&D – including R&D by farmers using traditional varieties that are naturally immune to local pests.

In this context, it is also noteworthy that farmer innovations are higher in crops where the private sector has not made great leaps (noteworthy: hybrids cannot be successfully created for all crops and are more easy to create for certain cross pollinating crops than for self-pollinating ones). While some of the reasons for this are discussed in my recently published research, it is worth pondering more deeply into why this might be the case.

When the potatoes are in plenty, the price goes down!

I don’t know the origin of this quote, but it follows a simple economic logic. Substituting ‘potatoes’ with ‘cotton’ yields the same result. Although based entirely on common sense, this point needs to be more carefully considered while introducing any policy relating to agricultural pricing and farmer welfare in India: Imagine a farmer, one who has a small or medium sized land holding. He, along with several others in his village, jumps to Bt cotton because of the promised high yield it comes with. Let’s keep aside the controversy associated with the effectiveness of the Bt seed vis-à-vis crop yield in India and more intense controversies associated with their overall environmental impact for a while and presume that all the farmers do indeed get the bumper crop they  are promised. One might think that the farmers will then all be rich. But this is not the case. Given the over flooding of the market with cotton, if the farmer tries to sell his produce in the open/competitive market, he will not get much of a price at all – because, when the potatoes are in plenty… the price will go down! The government’s solution to this problem is rather interesting – the introduction of a minimum support price (MSP) for cotton. However, in most instances, the MSP is also hardly (if at all) able to cover the costs incurred by the farmer in purchasing the necessary fertilizers and organizing the water supply necessary for the successful cultivation of Bt cotton. If anyone has done the math to calculate price of fertilizer needed per quintal of cotton yield + price of Bt cotton seed needed per quintal of cotton yield and compared it with the per quintal MSP rate, please do let me know what you found. In the meantime, this report by CNN may be of interest. Farmers also report delays in government purchase of farmer crop yields as there is often a lack of adequate funds at the rural level to pay all the farmers immediately for their crop.

Now imagine that the government is successful in further reducing the price of Bt cotton seeds through regulation of trait value and licensing guidelines. Zealous Regional Agricultural Extension Officers (RAEOs) will now encourage (more) farmers to migrate to cotton cultivation to become ‘rich’ and given the new lowered prices of cotton seeds, even more farmers will likely jump on the Bt cotton cultivation band wagon, further creating a glut in the national and international cotton market, leading to a revision of MSP (Note: MSPs can and are revised based on ‘overall demand-supply, domestic and international prices’ etc.) and further impoverishment of Indian farmers. Here’s some more food for thought: where I live (in Germany), the prices of cotton T shirts is dropping year by year. This year, I bought a cotton T shirt for just five euros from a branded store! How much of it is going to the cotton cultivating farmer you think?

Dealing with allegations of ‘India disrespecting IPRs’

It is not uncommon to hear allegations of ‘India disrespecting IPRs’. What the allegers (as well as policy makers within India) seem to not notice, however, is that price control can and does increase sales. In relation to seeds, interviews with regional agricultural extension officers even suggest that low seed prices, when coupled with promised high yield will in fact also increase total land area over which the seed is planted (not only within, but also across diverse agro-climatic regions). In relation to cotton, given the global cotton glut and urgent need to increase crop diversity, there is neither a need nor any real financial benefit (for farmers) in reducing cotton seed prices. Neither is there a need to increase land area under cotton cultivation. Poor farmers would do much better (for themselves and for the larger national interest) in cultivating low volume, high value crops such as pulses that win them a higher MSP as well as much higher value in the open market.

In the light of the above, prudence invites us to not give too much governmental and regulatory attention to the cost of foreign technologies protected by IPRs, especially when they are controversial technologies, that do not consistently yield benefits to small and marginal farmers (that constitute 80% of India’s farming population). Unlike in the pharmaceutical sector where the price of a high priced branded drug will lead to the death of a poor patient, in the field of seeds, non-affordability of high end, cost and chemical input technologies can be blessings in disguise for poor farmers as well as the environment and ecology of India. By focusing instead on developing and disseminating robust, cost effective and environment friendly indigenous seed varieties (and associated technologies), Indian policy makers would also successfully keep at bay, those who love screaming ‘foul’ vis-à-vis Indian IPR policy.

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1 thought on “On Bt Cotton, FRAND Licensing and Recent Governmental Initiatives: Putting Things in Context – II”

  1. Happy to see you taking a plunge on a latest hot topic in the Indian crop-seed sector. I can imagine another excellent PhD thesis (your) work from Max Planck after the thesis of Sabine Demangue (in 2005). I always remember one sentence from Sabine’s great work. About India’s PPVFR law, somewhere in the concluding pages, she said, “For today, however, the cautious approach of the Indian legislature should not be too hastily criticized.” I think you will agree that unlike UPOV, the PPVFR law also acknowledges crop variety rights as a development right – and encompasses a range of concerns, including food security, livelihood rights, social justice, and access to resources. I can imagine for sure that your thesis will also have great food for thought. At the same time, I would also like to imagine that Max Planck has already thought of more focus and priority (in terms of more no. of PhD theses) to crop-seed sector in the developing world. As I see, taking advantage of the provision for developing a sui generis system, India has made PPVFR Act, both a marketing and conservation tool. Students like you should have attended the seminars on this latest topic with active participation of seed industry and agriculture scientists. Seed-rights dichotomy in the developing and least developed countries obviously raises very difficult questions. Thanks for remembering me in the Acknowledgements. Best wishes.

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