India has cut the royalties that local seed companies pay to German drugmaker Bayer AG’s Monsanto unit for the third time in four years.
The decision could prompt Monsanto and other foreign seed companies to further scale back investment in the sector, said Ram Kaundinya, director general of the Federation of Seed Industry of India.
Prime Minister Narendra Modi’s government has decided to reduce royalties paid by Indian seed companies to Monsanto for its genetically modified (GM) cotton by 49 percent to 20 rupees for a packet of 450 grams, according to a farm ministry order. Before it was 39 rupees. The decision comes at a time when India’s cotton output is falling and needs a breakthrough to help maintain its leading position in the global cotton market.
“The order is most disappointing,” said Shivendra Bajaj, executive director of the alliance for Agri Innovation, an advocacy group. Other than cutting Monsanto’s royalties, the government raised the prices of GM cotton seeds by 1.43 percent to 710 rupees ($10.16) a packet.