The company was responding to the Centre’s order to control cotton seed prices

US biotechnology major Monsanto today warned of re-evaluating its presence in India and holding back new technology if the government cuts trait fee of Bt cotton seeds drastically through “arbitrary and potentially destructive” interventions.

The Centre had last December issued an order to control cotton seed prices including trait or royalty value effective from 2016-17 crop year. A committee under the Agriculture Ministry has been set up to recommend the seed price along with royalty fee soon.

Mayhco Monsanto Biotech Ltd (MMBL), a joint venture firm of Monsanto, has challenged the order in Delhi High Court.

MMBL has sub-licensed Bt cotton seed technology since 2002 to various domestic seed companies.

“If the committee recommends imposing a sharp, mandatory cut in the trait fees paid on Bt-cotton seeds, MMBL will have no choice but to re-evaluate every aspect of our position in India,” Monsanto India Region CEO Shilpa Divekar told PTI.

MMBL currently charges trait fees of Rs. 122.96 and Rs. 183.46 per packet of Bt Bollgard I and Bt Bollgard II seeds, respectively.

Ms. Divekar threatened it would be difficult to introduce new technologies in India at a time when there is no sanctity of contracts between the two private parties and no guarantee of recovering investments made in research activities.

“It will be difficult for MMBL to justify bringing new technologies into India in an environment where such arbitrary and potentially destructive government interventions make it impossible to recoup research and development investments focused on delivering extensive farmer benefits and where sanctity of contracts is absent,” she said.

Noting that certain reports in the public domain are false, Ms. Divekar said, “We sincerely hope that the government will be fair in its approach.”

Over the past 19 years, MMBL’s single-minded focus has been to serve over seven million cotton farmers in India. This has been reflected in benefits delivered by the technology, trait value prevalent in India, broad licensing of technology and extensive ongoing investments in stewardship for sustenance of technology, she added.

According to sources, the government committee has already held one round of discussions on this issue. It is likely to submit its recommendation to the ministry soon.

The government’s cotton seed order comes against the backdrop of a bilateral dispute where few licensees refused to honour their commitments to pay MMBL, over Rs. 450 crores after collecting these amounts from the cotton farmers in Kharif 2015.

Meanwhile, competition watchdog Competition Commission of India has ordered a detailed probe against MMBL for alleged abuse of dominance by the Indian arm of the US-based genetically modified seed giant Monsanto.