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NEW DELHI: The investigation arm of the competition watchdog has found Mahyco Monsanto Biotech Ltd (MMBL) has abused its dominant position in the market for Bt Cotton technology by charging unfair licence fee and entering into pricing agreements directly aimed at overcharging farmers who use Bt Cotton seeds.MMBL is an equal joint venture of Maharashtra-based seed company Mahyco and Monsanto Holding Pvt Ltd which has been acquired by German drugmaker Bayer. It sells genetically modified seeds to many Indian companies and charges a licensing fee called ‘trait fee’, or technology fee.The Competition Commission of India ( CCI ) has asked the company and the complainants, including government of India, Telangana government, All India Kisan Sabha and Nuziveedu, to file their replies. The commission will consider the report of the investigation arm as well as the response of various parties before taking a view on the matter.In 2015, the agriculture ministry and Nuziveedu group filed a complaint with the CCI against Monsanto Group alleging abuse of its dominant position in the Bt Cotton technology market, after which the investigation was started. Challenging the role of CCI, Monsanto had filed cases in the Delhi High Court.“It has been shown that trait fee was linked with the maximum retail price of seed packets by MMBL just to extract surplus as much as possible from the end consumer of Bt Cotton seeds i.e. farmers,” said the report by the director general (DG) of CCI, which has been reviewed by ET.CCI and Monsanto India did not respond to emailed queries at the time of going to press.The report also says there are multiple instances where MMBL abused its dominant position in this market, most notably by charging higher trait fees from seed producers in Haryana, Punjab and Rajasthan compared with others as there was no price regulation in these states.“Charging different prices in different geographic locations in the light of local conditions especially when such variation is not related to costs can distort competition and is in the nature of third degree price discrimination exercised by a monopolist. There is no evidence of welfare enhancement of consumers on account of the price discrimination,” it said. Further, MMBL also charged a higher trait fee in states such as Maharashtra and Andhra Pradesh where the government had fixed trait fees “on the pretext of pendency of litigation”.The investigation also found that the trait fees charged by MMBL were not based on high costs incurred by MMBL as it is “merely a licensing entity with very limited fixed costs”. It noted that MMBL also does not undertake any research and development activity which could push up its costs.MMBL abused its dominant position to prevent the entry of competition by mandating that producers using its technology and provide notice to MMBL before entering into agreements with any provider of competing technologies, according to the report.Further, the report notes that Monsanto sought to deliberately exclude certain seed companies which fulfilled all requirements prescribed by Monsanto from time to time and expressed willingness to meet further requirements.DG CCI also found that MMBL’s requirement that sub licensees dispose of all inventory within two years of the termination of their licensing agreement was in contravention to the Competition Act. Further, the report states that this clause was not applied uniformly which “put many seed companies in a disadvantageous situation as compared to the competitors”.The reports also said restriction imposed by MMBL that seed companies only use proprietary germplasm for production has affected the development of innovation and increased cost of seeds for farmers.“MMBL, which holds patents for Bt Cotton, insisted that partner organisations use proprietary hybrids and not public (government) released varieties. By doing so, the company tried to hold control not only on their technology but also the plants so that farmers cannot reuse them. This made farmers and the local companies perpetually dependent on them,” said GV Ramanjaneyulu, executive director, Centre for Sustainable Agriculture.