Dr. Suman Sahai

Gene Campaign
Phone:+91 11 29556248    Email: genecamp@vsnl.com
10 April 2006 

CIVIL SOCIETY DEMANDS ACTION AGAINST MAHYCO-MONSANTO AFTER ITS INDICTMENT FOR MONOPOLY PRACTICES

The Director General of Investigation and Registration (DGIR) has indicted Mahyco- Monsanto and found it guilty of illegal practices in the Bt cotton case filed against the company by the All India Kissan Sabha and Andhra Pradesh Ryotu Sangam before the MRTP ( Monopolies and Restrictive Trade Practices Commission ). The DGIR report states that Mahyco-Monsanto was charging an excessively high royalty fee for its Bt gene which made the seed exorbitant for farmers, leading to losses; that Mahyco-Monsanto has provided no rationale for the exorbitant license fees and that because there is no competition, Mahyco-Monsanto are in a position to charge for the technology arbitrarily and unreasonably, thus establishing a monopoly.

The DGIR report was welcomed by civil society groups that have been demanding action against Mahyco-Monsanto because its exorbitantly priced cotton was a failure, farmers had suffered heavy losses and already fragile farm economies were taking a beating.

Dr Suman Sahai of Gene Campaign, Dr Suneelam of Madhya Pradesh Kissan Sangharsh Samiti, Sri Yudhvir Singh of the Coordination Council of Farmers Movements , Sri Anil Chaudhary of Indian Social Action Forum (INSAF) and Sri Dhirendra Singh of Popular Education and Action Center(PEACE) said in a joint statement today that the indictment of Mahyco-Monsanto by the Director General of Investigation and Registration is an important and welcome step . The groups said this is a landmark judgment since it marks the first step that has ever been taken against the company whose poor quality Bt cotton has resulted in major losses for the farming community in almost all states where it was cultivated, chiefly Andhra Pradesh, Maharashtra, Madhya Pradesh, Gujarat, Tamil Nadu and Karnataka.

Despite the widespread failure of the Mahyco- Monsanto Bt cotton varieties reported by NGOs, State governments, media and other independent agencies, neither the Genetic Engineering Approval Committee (GEAC) nor the Ministry of Agriculture, have so far moved to take action against the offending company.

After the first harvest of 2003 when it was clear that the Mahyco- Monsanto cotton had failed, Gene Campaign had demanded from the Agriculture Minister that the company be made to pay compensation to those farmers who had suffered losses. Mahyco- Monsanto had flatly refused to pay any compensation; the government allowed it to have its way and the company was not made accountable for its actions. In 2004, a coalition of NGOs led by Gene Campaign requested an enquiry by the Central Vigilance Commission into the reasons why in the face of widespread failure of its Bt cotton, government officials refused to take any action against the company.

The organizations said that the DGIR report should be seized upon to start the process of redressing the losses suffered by farmers. The DGIR, which is a statutory body has established a clear case against Mahyco-Monsanto through due process of law so action must be taken swiftly. DGIR found that Bt cotton seeds are only being produced by sub-licensees of Mahyco- Monsanto which is, therefore, in a position to fix a higher royalty fee in the absence of any competition. It thus imposes unjustified costs and restrictions on the farmers.

Dr Suman Sahai, Dr Suneelam, Sri Yudhvir Singh , Sri Anil Chaudhary and Sri Dhirendra Singh said that it is clear that Mahyco-Monsanto is guilty of illegal action since the trade practice of charging exorbitant and unreasonable royalty fee amounts to monopolistic trade practice under Section 2(i) of the MRTP Act 1969 where ‘Monopolistic Trade Practice’ has been defined as a trade practice which has or is likely to have the effect of maintaining the prices of goods or charges for services at an unreasonable level by limiting, reducing or otherwise controlling the production, supply or distribution of goods. In the absence of any competition from other Bt cotton producers, Mahyco-Monsanto is in a position to maintain the price of Bt cotton seeds at an unreasonable level by fixing the license fee as it wishes, arbitrarily. The company is also in a position to control the production of Bt cotton seeds through its sub-licensees.

Gene Campaign ,Madhya Pradesh Kissan Sangharsh Samiti , Coordination Council of Farmers Movements, INSAF and PEACE said that Mahyco-Monsanto’s indictment by the DGIR should be followed immediately by action against the company. The organizations have demanded that:

• Mahyco- Monsanto be made to pay compensation immediately to farmers who have suffered losses due to crop failures from planting their MECH 12, MECH, 162 and MECH 184 Bt cotton.

• Mahyco- Monsanto be made to refund the excessive price it has charged farmers due to the exorbitant license fees of Rs 1250 per bag of seed, which has been found to be illegal and monopolistic by the DGIR.

• Mahyco- Monsanto be barred from setting the rate of royalty/ license fees on the Bt technology unilaterally and arbitraraily. The license fee should be set by a multi stakeholder body involving Mahyco-Monsanto, Indian seed companies, government officials and representatives of farmers and their organizations, inkeeping with the guidelines of the MRTP.

• In 1996, Monsanto developed insect resistant Bt cotton by introducing Cry1Ac gene from a soil borne bacteria Bacillus Thuringiensis (BT) and commercialized this trait in USA and subsequently in other countries.

   

  Monsanto came to India with the same gene and technology and got commercial approval in India in 2002 through its joint venture with Mahyco through the new company Mahyco-Monsanto Biotechnology Ltd (MMBL),

   

  Monsanto has successfully used the genetically modified crop release regulatory system to keep its monopoly intact preventing the entry of Indian seed companies or even other multinational companies.

   

  Even though the Indian law does not allow gene patents, specifically to prevent monopolies from being exercised on genes and plants, Mahyco-Monsanto has been able to exercise a de facto patent because of the monopoly position it has succeeded in establishing .