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Cotton farmers and seed companies in Andhra Pradesh are at loggerheads again. All eyes are now on Andhra Pradesh to see what happens or will the State Government intervene again as it did in 2006.
The seed companies are demanding a Rs 200-a-packet increase on Bt 1 and Bt 2 seeds. The farmers' associations, on the other hand, have threatened to launch State-wide agitations if prices are hiked.
The issue has a bearing on the cotton farmers across the country as the State is the major player in seed production and the kharif season is set to begin. A decision either way could influence the pricing policies in other States.
The State Government is engaged in a series of discussions with farmers, seed companies and other stakeholders to arrive at a decision.
NSAI arguments
While farmers across the country earned Rs 25,000 crore, farmers in Andhra Pradesh realised Rs 4,000 crore after the introduction of Bt cotton. The farmers' income, which was at Rs 16,000 in 2006, has increased to Rs 36,000 in 2009.
The cost of seed production too has gone up significantly, with labour and input costs shooting up, the National Seed Association of India said. It pointed out that cost of spraying pesticides, fungicides and herbicides for seed-producing farmers has gone up.
Seed firms stand
The prices of Bt cotton seed were fixed at Rs 750 a packet (450 gm) and Rs 925 in 2006 for Bt 1 and Bt 2 respectively. This was further reduced to Rs 650 and Rs 750 respectively in 2008. As a result of the two-time decrease in the retail price, the association argued that the net margins of seed companies fell drastically.
As a result, the seed growing area has plummeted to 15,000 acres from 45,000 acres a few years ago, the association said.
Farmers' argument
On the other hand, the farmers argued that the NSAI figures of farmers' incomes are bloated. “They are saying that we are saving Rs 15,000 an acre. But the reality is different. Our costs too have gone up. Since we started using Bt 2 seeds, we are forced to use two packets of seed. Usage of pesticides too has gone up,” Mr Malla Reddy, Vice-President of All-India Kisan Sabha, a CPI (M) affiliate, and its Andhra Pradesh unit AP Ryhtu Sangham, said.
What seed growers' get
“On a packet of Rs 750, the seed grower is getting only Rs 250, up by Rs 20 recently after series of requests,” he pointed out.
While the associations alleged that Monsanto (NYSE:MON) is behind the clamour for increase in the seed price, the MNC that owns Bt technology argues that it does not have anything to do with the pricing of the seed. “We are just a technology provider,” Monsanto said in a statement.
Industry sources, however, said thatMonsanto would benefit from any increase in the seed price. “It will get at least 50 per cent of the hiked amount. They get a royalty of Rs 150 and Rs 225 on Bt 1 and Bt 2 respectively,” sources said.
They also pointed out that the company is charging different rates of royalty in different States. While it charges a high royalty in Punjab, Haryana and Rajasthan, where there is no price control by the State Governments, it is less in some States, including Andhra Pradesh.
04 March, 2010 by admin