Monsanto has threatened and the Indian government is calling its bluff. After the Union government proposed a cut in royalties paid on Bt cotton seeds, which are seeds genetically modified to bestow pest-resistance on a cotton crop and most of which are sold by the joint venture Mahyco Monsanto Biotech Limited, the parent firm declared on March 4 that it will have to reevaluate its India business.

Despite Monsanto's warning the government cut royalty by more than 70% on March 9 and followed that up by capping the price of seeds at Rs 800. They were earlier sold at between Rs 830 and Rs 1,000. In its statement about the company's future in India, Monsanto cited “arbitrary and innovation-stifling government regulations”. The row escalated as minister of state for agriculture Sanjeev Kumar Balyan shot back in an interview to Reuters on March 16 saying that Monsanto was free to leave if it could not accept the seed price determined by the government.

Farmers associations are cheering the move saying it will bring relief to cotton farmers. Many farmers in Punjab and Haryana lost their crops to whitefly infestations last year. This year cotton farmers in Maharashtra are facing what could be the worst drought yet in recent years.

At present, 96% of India cotton cultivation area is under Bt cotton crops but it wasn’t always so. Bt cotton was the first genetically modified crop to be approved for cultivation in India in 2002, with the introduction of Monsanto’s GM cotton seeds. Bt stands for Bacillus thuringiensis, a bacterium that produces toxins harmful to a variety of insects, including bollworms that attack cotton. Bt cotton was created by introducing genes from the bacterium into the cotton seed, creating a crop resistant to this pest.

The introduction of Bt cotton led to a dramatic increase in production across the cotton producing states and soon Bt cotton took over most of the acreage under cotton cultivation. Cotton production rose from 14 million bales in the pre-Bt year of 2001-'02 to 39 million bales in 2014-'15, a rise of almost 180%. India’s cotton imports fell, exports grew and as of 2015-16 India is expected to have overtaken China as the biggest cotton producer it the world.

The side effects

But with the adoption of Bt cotton came side effects, which farmers and food activists have been protesting for the past decade. The first qualifier in the adoption of Bt cotton is that the seeds are more expensive than local, non-genetically modified varieties. The second is that the seeds cannot be reused and farmers need to buy new stock for every growing season. This, along with licencing agreements with local seed companies, has given Monsanto a near monopoly on cotton seeds in India that has been the biggest worry for activists. The third worry was the diffusion of illegal Bt hybrids that hadn't been cleared for biosafety standards, leading to fears of environmental toxicity.

Researchers from the Central Institute of Cotton Research said that the spread of more than 1,000 varieties of cotton hybrids had led to cotton yield stagnating after the initial burst of production in the first five years, a lot of it because Bt hybrids were unsuitable for rain-fed cotton lands. In a 2012 interview, the institute’s director general KR Kranti also pointed out how farmers found it hard to make an informed decision about which of the thousand Bt hybrid varieties suited their farms, conditions in Maharashtra differing from those in Andhra and Gujarat.

A study published in Environmental Sciences Europe suggested a link between Bt cotton and farmers suicides. The study showed how Bt cotton cultivation was uneconomical in rain-fed areas because the crops were prone to bollworm infestations and so there wasn't much increase in cotton yield from local or non-Bt varieties. But the greater investment on Bt seeds was leaving farmers on financially shaky ground. Other analyses shows that the suicide rates among farmers are not different from the rate in the general population. There also hasn't been much of a change in farmer suicide rates before and after 2002 when Bt cotton was adopted in India.

Activists have also raised the issue of the actual efficacy of the Bollgard seeds with reports of bollworm infestations even in Bt cotton crops. After admitting that the bollworm has developed resistance to Bollgard, Monsanto developed Bollgard II, which is the most widely-used hybrid in India now.

In reality, Bt provides protection only against one type of cotton pest but leaves the plant open to attack from others like aphids, which might be another reason that cotton yields have stagnated in recent years. The use of insecticides on cotton farms has risen again close to the levels of the pre-Bt years.

Trends in insecticide use in cotton farms.
Trends in insecticide use in cotton farms.

Monsanto faces a big challenge from the Central Institute of Cotton Research, which has introduced Bt genes into 21 cotton seed varieties and is offering to provide these seeds to farmers at 10% the cost of Monsanto’s products. The new seeds developed by the institute are currently being tested.

Meanwhile, agricultural economist Ashok Gulati has said the government’s interference in cotton prices will cost the sector. Gulati contends that the move will hit India’s credibility on the issue of protecting intellectual property rights at a time when Prime Minister Narendra Modi has been calling for global companies to “make in India” and invest in India. If Monsanto leaves then India will lose access to the new iterations of its Bollgard seed that farmers might need in the next three to five years.