Monsanto threatens to shut down Indian operations

The rift between Monsanto and the Indian Government deepens as the seed titan threatens to leave market

Cotton plants ready for harvest. Seed giant Monsanto supplies genetically modified Bt cotton seeds to India, but is threatening to withdraw from the market 

Monsanto, the world’s biggest seed producer, has threatened to exit the Indian market after six decades of business. Following a mounting dispute with regulators, the Missouri-based agri-business giant has slammed the Indian Government for its recent decision to regulate the price of Bt cotton seeds.

Under the government’s new rule, Bt cotton seeds – the only genetically modified seeds commercially available in India – will have a fixed price for the first time since they were introduced to the country in 2002. Starting in April 2017, the maximum selling price will be $11.90 (INR 800) for 450 grams – a far cry from previous prices, which ranged from $12.30 (INR 830) to $14.80 (INR 1,000).

Bt cotton has been widely popular and quickly adopted in India: it has been modified to produce a toxin that can kills certain insects, including the moth larvae that consume cotton bolls and can therefore destroy entire crops. In fact, India is now the world’s largest producer and exporter of cotton fibre.

Along with implementing a maximum price, the Modi regime has also ruled that the whopping 74 percent royalty fee that Monsanto charges to local producers will be drastically reduced to INR 49 per 450 grams. Monsanto, along with its local partner Mahycom, currently licence the crop gene to 40 seed producers, thereby making royalty fees a large portion of its business in India.

According to a statement given by Shilpa Divekar Nirula, Chief Executive of the company’s Indian division, these new conditions will make it difficult to continue introducing new technologies to India, given “such arbitrary and innovation-stifling government interventions”.

Monsanto is currently under investigation by the Competition Commission of India, which launched a probe into antitrust pricing practices of the company in February.