India: The Competition Commission of India (CCI) has found Mahyco Monsanto Biotech (MMBL) abusing its dominant position in the country by overcharging license fee from farmers.
CCI has asked MMBL to respond before making a final ruling on the matter.
MMBL has also been alleged for overcharging trait fee in states such as Maharashtra and Andhra Pradesh where the government had fixed trait fees “on the pretext of pendency of litigation.” Investigation also found that the company does not conduct any research and development activity which could result in hiking its cost.
It has also been found multiple instances where MMBL was accused of abusing its dominant position in the market by overcharging trait fees from seed producers in those states like Haryana, Punjab and Rajasthan where price regulation does not exist.
“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 CCI report seen by Economic Times.
Bt cotton is a genetically modified organism (GMO) or genetically modified pest-resistant plant cotton variety, which produces an insecticide to bollworm.
According to Indian newspaper, MMBL also inked pricing agreements with farmers to sell Bt cotton technology seeds aimed at overcharging farmers.
It has been further reported that an equal joint venture of Maharashtra-based Seed Company Mahyco and Monsanto, MMBL has been involved in a business of selling genetically modified seeds to many Indian companies by charges a licensing fee called ‘trait’, or technology fee.
US agrochemical giant Monsanto, currently owned by Bayer, has been involved in business of selling genetically modified cotton seed since 1998 in India. It has been reported to create its monopoly over Bt cotton production in the country. As many as 90 percent of India’s cotton produced is Bt crop on area of 11.8 million hectares of cotton fields. However, the Indian authorities have been making efforts to push Monsanto out of the market to provide more favorable economic conditions for domestic farmers.
In 2015, India’s agriculture ministry and Nuziveedu group had lodged a complaint against Monsanto Group levelling allegations of abusing its dominant position in the Bt cotton technology market. Following this, the investigation was initiated. However, Mosanto had challenged the role of CCI in the Delhi High Court.NT