Monsanto vs Indian Farmers

Posted on Monday, March 28th, 2016

By Dr Vandana Shiva, 27 March 2016

TheEcologistVol28SepOct1998page-000009
Source: http://vandanashiva.com/?p=402

If we believe in democracy, it is imperative that we have the right to choose which technologies are best for our communities, rather than having unaccountable institutions like Monsanto decide for us. Rather than technologies designed for the continued enrichment of a few, we can ground our technology in a hope of a greater harmony between our human communities and the natural world. Our health, our food and the future of life on Earth truly lie in the balance.
Monsanto: A Checkered History by Brian Tokar,
The Ecologist, Vol. 28, No. 5, September/October 1998

Seed is the basis of agriculture; the means of production and the basis of farmers’ livelihoods. In less than two decades, cotton seed has been snatched from the hands of Indian farmers by Monsanto, displacing local varieties, introducing GMO Bt cotton seeds and coercing extravagant royalties from farmers. Since Monsanto’s entry into India in 1998, the price of cotton seeds has increased by almost 80,000% (from ₹5 – ₹9/KG to ₹ 1600 for 450 gms). 300,000 Indian farmers have committed suicide, trapped in vicious cycles of debt and crop failures, 84% of these suicides are attributed directly to Monsanto’s Bt cotton.

For 8 million cotton farmers awaiting the Kharif 2016 sowing season, access and availability to fairly priced seeds is a matter of survival. Any situation that threatens the livelihoods of 8 million Indians is a national emergency. The issue of Seed Price impinges directly on farmers rights. And since the high prices with the high royalty component has driven farmers to suicide, State Governments and the Central Government have acted to bring down the seed prices.

There are 3 issues related to the state of seed and the current conflicts related to Monsanto, Indian farmers and the Govt of India. First is the farmers rights to reliable and affordable seed and with it the duty of the government to protect farmers right to livelihood and right to life . It is the government’s duty under Art 21 of the constitution to protect the life of all its citizens. The Cotton Seed Price Control Order issued by the Government of India needs to be seen in the context of farmers rights.

Second is the issue of IPRs, patents, royalty ,technology fees in the context of false claims and a failing technology, and the duty of Government to act to revoke a patent according to Article 64 and Article 66 of the Indian Patent Act. There is a show cause notice served to Monsanto by the Central Government regarding the patent.

The third is the issue of monopoly on seed. The Government has a duty to prevent monopolies being established . This is why we had the MRTP commission earlier, and now the competition commission .

The issue of monopoly is before the Competition Commission of India which has stated that Monsanto has violated Competition laws and there is Prima Facie evidence of monopoly.

Just as Monsanto is forum shopping by going to different courts at the same time, it is also issue-shopping. First it is trying to reduce the contest over seed price as only between Monsanto and Indian companies which are its licensees, thus attempting to totally erase farmers and the fundamental rights of farmers from the case. Second, Monsanto is hiding the two other Government actions against it on the issue of Bt Cotton, the show cause notice on revocation of the Bt cotton patent, and the Competition Commission of India case.

All aspects impact farmers rights and farmers livelihoods.

Farmers Rights to Seed = Right to Life

In the case of farmers, the right to seed is the basis of the right to life. Farmers are being trapped in debt and being driven to suicide because seed is too costly and the seed available is also unreliable. Since at the end of the day, royalty is paid by farmers, Monsanto’s royalties are violating the affordability criteria and are responsible for farmers debt, distress and suicides. First Bt I and now Bt II are failing to control pests and the pink bollworm has become resistant, Bt is failing the test of reliability.

Monsanto has collected royalty for its Bt I cotton since 2002 without having a patent for it. Instead it created a new category called “Technology Trait” for which it charged a “Trait Fee”. But it was royalty under a new name.

Monsanto could not sign individual contracts with farmers, as it does in the US, in India because a) there would be far too many contracts, and b) Monsanto did not have a patent for the intellectual property the contract would cover, i.e. the Bt gene (MON 531 event of Cry1Ac). So Monsanto locked in 28 Indian seed companies through one-sided license agreements to collect royalties on its behalf – very much like the British arbitrarily appointed zamindars to collect taxes and revenues from peasants in colonial times, ruining a rich and prosperous land and leaving us in poverty. The hefty royalty is collected from small farmers, even if it is routed through an Indian licensee, just as the peasant paid the lagaan to the British, even though it went through collectors and zamindars. Indian seed companies are feeling the squeeze, finding themselves between the price control measures exercised in the interest of the farmers and Monsanto demanding nine times more in illegal royalty and unilaterally terminating some of the license agreements.

Bt Cotton Seed cost

The price, including the technology fee, was reduced in 2006 because of case brought before the MRTPC by the Government of AP, in which the Research Foundation intervened. The AP government also negotiated with the seed companies to set the prices of hybrid Bt cotton seed at $18/packet (of 450 grams) inclusive of technology fee which is much lower than the $29/packet that MMB had been selling it at. Soon other state governments adopted the same pricing policy.

At present a 450g packet of Bt cotton is sold at around Rs.830 in Maharashtra, while in Karnataka, Andhra Pradesh, Telangana, Gujarat and Tamil Nadu it is sold at Rs.930. In the northern states of Punjab, Haryana, Rajasthan etc. It is priced at Rs.1,000. MMB currently charges trait fees of Rs.122.96 and Rs.183.46 per packet of Bt Bollgard-I and Bt Bollgard II seeds, respectively.

On March 8th, the Central Government issue a seed price control order slashing Monsanto’s royalty on Bt cotton seeds by 74% since the technology has lost its efficacy in resisting certain pest attacks and royalty fees on failed technology has to be reduced.

Price Control

Governments regulating seed prices thus has a precedence, and Monsanto challenging the Centre’s Price control order is a desperate act.

Monsanto approached the High Court of Delhi to challenge the order . The Delhi High Court refused to put a stay on the Central Government order for regulating seed prices and the royalty component. Monsanto also approached the High Court of Karnataka through its lobby group ABLE.

According to the interim order, the Karnataka High Court says the Centre cannot fix royalties because they are based on agreements between companies. It allowed the government to fix the Maximum Sale Price (MSP) of Bt cotton seeds for the benefit of farmers.

Bt is a gene, not a technology :The Bt gene is part of the Bt cotton seed, the “trait value” of the Bt gene is part of the Seed Price

Unlike other technologies, where the technology of production and the product are separable, in the case of genetically modified seed (GMO) like Bt cotton, the Bt gene, once introduced into the seed becomes part of the seed. The Bt gene, which Monsanto misleadingly calls “technology” and the “technology trait “ becomes part of the Bt cotton seed. It is not separable from it. On the same scientific basis, the “technology fees” charged for the “technology trait” of Bt is intrinsic to the price of seed that the farmer pays. The technology fees and seed price that includes that fees are not separable.

The mischievous use of “technology” for a gene introduced into the plant hides two important facts. First, that Monsanto is not licensing to Indian seed companies the use of tools of genetic engineering (used for introducing non related genes into a plant). These tools are only two: A gene gun, or an agrobacterium. What Monsanto is transferring to Indian companies is not the technology for creating transgenic plants, but the Bt cotton seed, which includes the genes within the seed, to multiply, hybridise, sell under their monopoly. So the mystification through the use of the term “technology trait” and “technology fees “ is hiding the fact that the case is about Seed, and the price of Seed. And the price of seed has become a life and death issue for Indian farmers.

Secondly, Monsanto changes its Technology trait value every season, showing again that the issue is seed price.

As the CCI records:

As per the information and documents contained in Reference, many Indian seed companies including the Informants entered into sub-license agreement with MMBL for procuring its Bt cotton technology in consideration of an upfront one time non–refundable fee of Rs. 50 lakhs and recurring fee called as, i.e. ‘Trait Value’. The ‘Trait Value’ is the estimated value for the trait of insect resistance conferred by the Bt gene technology. It forms a significant portion of the Bt cotton seed prices. It is stated that the trait value is determined by MMBL on the basis of Maximum Retail Price (MRP) of 450 gm seed packet (hereinafter ‘per packet’), in advance for each crop season. It is also stated that out of this trait value, some amount is disbursed as royalty to MIU and the royalty paid to Monsanto US by MMBL is a small portion (between 15-20%) of the Trait Value it collects.

Once an upfront fees has been paid for seeds with a Bt toxin trait, the “technology fees “ is an unfair, greedy means of increasing seed prices to increase profits in a monopoly market. The MRTPC had also made this observation forcing Monsanto to concoct “Trait Fees”.

In the meanwhile, MRTPC vide its interim order dated 11th May, 2006, observed that “There is a basic difference between royalty and trait value …and are not synonymous… In any case the lumpsum payment of Rs.50 lakhs may be considered as royalty for the same, but the future payments on sale cannot be termed as royalty” and held that “… by temporary injunction the MMBL is directed during the pendency of this case not to charge trait value of Rs.900/- for a packet of 450 gm of Bt cotton seeds and to fix a reasonable trait value that is being charged by the parent company in the neighboring countries like China”.

The Karnataka High Court arguing that the matter of seed royalty being “between (companies)… based on agreements entered into amongst themselves” and is beyond the jurisdiction of the Government of India suggests that any inhuman, unjust commercial activity can be allowed if corporations sign agreement with other businesses. And it ignores the governments duty to protect its citizens under the constitution.

Indian farmers are paying for Monsanto’s superprofits with their very lives. The State must intervene to regulate seed prices to end the emergency of farmers suicides.

Bt cotton is a failed technology and Monsanto’s patent should be revoked

The Karnataka High Court interim Stay Order ignores two facts Firstly because of the failure of Bt II to control the pink bollworm, the government has sent a notice to Monsanto asking why its patent should not be revoked. The Government can revoke patents under section 64 and section 66 of the Patent Act.

Second, Monsanto through its patents which are based on false claims, is creating monopolies, raising seed prices and destroying more affordable and reliable alternatives for farmers. This is at the root of the crisis of farmers suicides in cotton areas.

The Government has a duty to not grant patents, or revoke patents if they violate the public interest or their claims are false.

Make believe “innovation”

Excluded from patentability

Monsanto has two patents on Bt II: IN 214436 (Methods for transforming plants to express Bacillus thuringiensis delta endotoxins) and Patent No. 232681 which provides IPR protection to Bollgard-II technology.

The granted patent is in violation of the Indian patent act, 1970, specifically to the section 3(J) relating to non-patentability of plants, seeds and essential biological processes and 3(h) relating to non-patentability of methods of horticulture and agriculture.

Art 3 (j ) was used by the Indian Patent office to reject Monsanto’s patent on climate resilience.

The patent which covers all crop plants does not consider “position” effects of the gene integration, pleiotropy or epigenetic interactions and grants perpetual rights for all descendant plants.

Articles 64 and Art 66 of the patent Act allow for the revocation of patents. The Bt cotton patent should be revoked under the following clauses of Art 64:

64. Revocation of patents.

(1) Subject to the provisions contained in this Act, a patent, whether granted before or after the commencement of this Act, may, be revoked on a petition of any person interested or of the Central Government by the Appellate Board or on a counter-claim in a suit for infringement of the patent by the High Court on any of the following grounds that is to say –

(d) that the subject of any claim of the complete specification is not an invention within the meaning of this Act;

Art 3(j) and 3(h) (above) disallow the patent

(f) that the invention so far as claimed in any claim of the complete specification is obvious or does not involve any inventive step, having regard to what was publicly known or publicly used in India or what was published in India or elsewhere before the priority data of the claim; (g) that the invention, so far as claimed in any claim of the complete specification, is not useful;

The introduction of Bt genes through genetic engineering was known in India both in the Cotton Research Institute of India and in Dharwad Agriculture University. Adding two Bt genes is obvious to anyone skilled in the art of genetic engineering.The so called invention of introducing Bt genes in cotton has proved to be not useful in controlling pests.

(j) that the patent was obtained on a false suggestion or representation;

The patent was obtained under the false suggestion that Bt cotton will control pests, specially the bollworm.
Article 66 allows Revocation of patent in public interest.

Where the Central Government is of opinion that a patent or the mode in which it is exercised is mischievous to the State or generally prejudicial to the public, it may, after giving the patentee an opportunity to be heard, make a declaration to that effect in the Official Gazette and thereupon the patent shall be deemed to be revoked.

Hundreds of thousands of Indian farmers being driven to suicide because of high costs of seed, and false promises is enough ground for the government to revoke Monsanto’s Bt cotton. Why are farmers being made to pay such a high price for a failed technology ? And why are lobby groups defining Monsanto imposing a failed technology as “innovation”?

In an article titled Heading Backwards in the Indian Express of March 14th 2016, Ashok Gulati wrote: “If Monsanto decides to quit India, Bollgard III may not come, and Bollgard II will wear off its potency in the next 3 to 5 years”.

Bollgard I failed, Bollgard II is failing, and we are supposed to give up our rights and sovereignty so that Monsanto can bring Bollgard III, which will fail in a few years? Each time it stacks more toxic genes, it raises its royalty. Einstein had said , “A clear sign of insanity is doing the same thing over and over again, expecting a different outcome”. Are we now calling insanity “Innovation”?

Insanity

It is built into the technology of Bt cotton that the plant will become vulnerable to non target insects, and bollworm- the target pest – will evolve resistance. Greater evolutionary pressure via more toxic genes results in faster emergence of resistance. Those who constantly refer to “science” to illegally impose GMOs ignore the basic science of evolution which is determining the non-ffectiveness and non-sustainability of GMO technology, whether it be the creation of superpests with resistance to Bt cotton in India, or superweeds with resistance to Roundup in the US.

For Monsanto, introducing GMO Bt cotton, and tying up Indian companies in unfair one-way agreements is a means to establish a monopoly in the seed market, period.

In addition to issue of Bt cotton not working, and hence the grounds for revoking the patent, there is also the issue of monopoly related to patents. Monsanto knows that only through a patent can it collect huge royalties for unreliable technology from farmers. If Indian companies have the freedom to bring lower cost and more reliable seeds to the farmers, and Indian farmers have the freedom to produce their own organic seeds, no one will buy Monsanto’s Bt cotton. Therefore Monsanto uses the patent to both collect unreasonable royalties and lock Indian companies into licensing agreements to only sell Bt cotton seeds. This issue is before the Competition Commission of India.

Learn how Monsanto wrote and broke laws here

Additional Information:

Monsanto

Licensees

Monsanto has taken 9 Indian Seed companies to court for “non-payment of trait fee” Demanding ₹ 163.28 on every seed packet attracting a maximum retail price (MRP) up to ₹ 930. (Higher trait value if MRP is higher) 9 “defaulting companies” account for over 60 per cent of the estimated 5 crore seed packets sold in 2015-16Unable to pay the unreasonable royalty demanded by Monsanto
Cost incurred in seed production None BreedingSeed production DistributionMarketing and extensionSalaries and overheads
Indian Seed Companies file Counter Affidavit – Want Back Extra Royalty Paid to Monsanto/MMB Accused of taking advantage of it’s technology monopoly.₹ 5,000 crore collected from farmers via “Trait Fee”MMB has already received ₹ 1,300 crore since 2010 in accordance with state price control measures Overpaid Monsanto/MMB ₹ 1,300 crore since 2010, Demanding refund

Monsanto’s India Timeline

24th April 1998

Mahyco files to Department of Biotechnology for field trials

May 1998

Joint venture between Mahyco and Monsanto formed

13th July 1998

Letter of Intent issued by DBT without involving Gentic Engineering Approval Committee (GEAC).

15th July 1998

Mahyco agrees to conditions in letter of intent

27th July 1998

Impugned permission by DBT for trials at 25 locations granted.

5th August 1998

Permission for second set of trials at 15 locations granted.

6th January 1999

PIL filed by Research Foundation for Science Technology and Ecology in the Supreme Court of India

8th February 1999

RCGM expresses satisfaction over the trial results at 40 locations.

12th April 1999

RCGM directs Mahyco to submit application for trials at 10 locations before Monitoring and Evaluation Committee.

25th May 1999

Revised proposal to RCGM submitted by Mahyco.

June–Nov 1999

Permission granted for different trial fields

Oct–Nov 1999

Field visits

May 2000

Mahyco’s letter to GEAC seeking approval for “release for large scale commercial field trials and hybrid seed production of indigenously developed Bt cotton hybrids”

July 2000

GEAC clears for large scale field trials on 85 hectares and seed production on 150 hectares and notifies through press release.

October 2000

RFSTE filed an application for amendment in the petition challenging the fresh GEAC clearance.

18th October 2001

GEAC orders uprooting of “Navbharat-15”, which was found to contain transgenic Bt.

26th March 2002

32nd Meeting of the GEAC was held to examine the issue of commercial release of Bt Cotton. Members of GEAC from ICHR, Health Ministry, Commerce Ministry, CSIR, ICAR did not attend the meeting. Inspite of the absence of important members of the GEAC, approval was granted to three out of four of Monsanto – Mahyco’s transgenic hybrids.

5th April 2002

Formal approval granted to mach-12, Mach – 162 and Mach 184 by A.M. Gokhale, Chair of GEAC. Order of 05.04.2002 is a conditional clearance valid for three years. The stipulated conditions/restrictions are a clear implied admission on the part of the government that the tests are far from complete. In effect, the commercialisation was an experiment. Monsanto-Mahyco

http://www.livemint.com/Politics/LTlUVoQ79yFGh6XbG9nESI/Karnataka-HC-stays-centres-order-fixing-Bt-cotton-royalty.html

http://www.thehindubusinessline.com/economy/agri-business/why-should-we-not-revoke-bollgard-ii-patent-centre-asks-mahyco-monsanto/article8337510.ece

http://www.thehindubusinessline.com/economy/agri-business/why-should-we-not-revoke-bollgard-ii-patent-centre-asks-mahyco-monsanto/article8337510.ece

http://www.thehindubusinessline.com/economy/agri-business/wily-pink-bollworm-survives-monsantos-bollgardii/article7814810.ece

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