Counterview: Fact-checking Vandana Shiva's latest criticism of Monsanto and Bt cotton

In a country where activists regularly occupy the space meant for academics, it is not uncommon for reason to submit to flourishing and at times incendiary rhetoric.

While rhetoric is a powerful tool of advocacy and acceptable – even desirable – to a certain degree, it should not slip into the dark zone of misrepresentation.

Vandana Shiva, who describes herself as an eco-feminist and has been at the forefront of the anti-genetically-modified-organisms movement, often straddles the grey area between rhetoric and misrepresentation. Her recent piece published on Scroll.in, backing the government’s Licensing and Formats for GM Technology Agreements Guidelines, 2016, is replete with claims and misrepresentations that simply do not stand up to a cursory fact-check.

The building analogy

Shiva’s piece begins with an analogy – she likens the absurdity of a person claiming ownership over a building on grounds that they moved furniture into it to companies like Monsanto claiming intellectual property rights over genetically modified seeds on the basis of the modified genes they insert into the seed.

This does not really make sense because a modified gene is not comparable to furniture in a building. Genes are the building blocks of any living organism – a better analogy would have been special patented bricks that were used to construct a building.

Misplaced comparisons aside, the more problematic aspect is Shiva’s reluctance to get into detail, because facts often become a troublesome impediment to the grand narrative.

To understand the problem with Shiva’s narrative, it is necessary to first understand how intellectual property law works in the context of the seed industry.

Intellectual property laws

A seed can be covered by two distinct and different forms of intellectual property law in India – The Patents Act, 1970, and The Protection of Plant Varieties and Farmers Rights Act, 2001.

Monsanto owns a patent over a synthesised genetic sequence of select genes of Bacillus thuringiensis (a naturally occurring bacteria from which the acronym “Bt” comes) that are inserted into the cotton genome. These Bt genes generate a toxin that repels the Bollworm that feeds on cotton and hence drastically cuts down the need for pesticide.

As another piece on Scroll.in explains, Bt technology is one of the reasons – and certainly not the only reason – for the phenomenal increase in India’s cotton yields.

Apart from patents, the second form of intellectual property rights under the Protection of Plant Varieties and Farmers Rights Act covers new varieties of seeds developed by breeders through cross-breeding or other techniques. Each variety may have different properties – some may boost yield, others may increase resistance and some may change flavour for food crops. Each new variety is given monopoly protection under the 2001 Act, provided the breeder applies for such protection.

The logic of such monopoly protection for a fixed term is to incentivise innovation. Innovation in agriculture can change countries – and has been around since before Silicon Valley made innovation cool – Norman Borlaug’s high-yielding variety of wheat crop perhaps saved India from famines and reduced dependence on PL-480 food imports.

Bt cotton in India

Monsanto licences its patent for Bt technology to 48 Indian seed companies. These companies hand over the seeds they develop to Monsanto, which then injects them with Bt technology. These seeds are returned to the company, which then breeds more seeds that are sold to the farmer.

The biggest of these Indian seed companies is Nuziveedu in Hyderabad – a domestic company with investors such as Blackstone, which gave them a $50-million funding in 2008. These licencing deals earn Monsanto big bucks – in 2013, as per its filings with the Patent Office, Monsanto made a cool Rs 685 crores by licencing this patent to Indian seed companies.

The final seed that sells in the market is thus covered by two sets of intellectual property – one belonging to Monsanto and the other to the seed company – although some may sell older varieties not necessarily protected under the Protection of Plant Varieties and Farmers Rights Act.

Unlike the furniture and building analogy, the issue of intellectual property protection for new seeds and genetically modified technology is centred on innovation, which is protected only for a fixed period and not in perpetuity as Shiva suggests in her piece when she says “such corporations claimed they had invented and created the seed, the plant, and all future seeds which have now become their property.”

Price controls

In her piece, Shiva links farmer suicides to Monsanto’s alleged “extraction of illegal royalties” and explains that the “crime” can be stopped by showing support for the Seed Price Control Order, 2015, issued in December 2015 and the Licensing and Formats for GM Technology Agreements Guidelines, 2016.

Just as Shiva claims that the petition to support the guidelines has received 30,000 signatures, there is another petition seeking a rollback of the guidelines, which has reportedly received 3.24 lakh signatures.

In order to understand whether farmers are really going to be saved by the Order and the Guidelines, it is first necessary to explain the background of both.

Ever since Bt cotton was introduced in India, Monsanto has been accused of over-charging for its technology – a difficult allegation to prove given that there is nothing else that the technology’s price can be pegged against.

In 2005-’06 the governments of Andhra Pradesh and Gujarat dragged Monsanto to the Monopolies and Restrictive Trade Practices Commission. Thereafter, these states, along with Maharashtra, started enacting their own price-control legislation to control the price of cotton seeds. This ran into constitutional issues because High Courts differed on whether states had the power to control seed prices.

The price control orders of these various states regulate the price at which seeds are sold by the company to the farmer. Such price control affects seed companies more than Monsanto, because they regulate the price at which the seed is sold to farmers and not the royalty payable to Monsanto. The latter is fixed by the licencing agreements between Monsanto and the company.

Therefore, every time a state government lowers rates using price-control legislation, the profit margins of Indian seed companies like Nuziveedu get squeezed – Monsanto is still relatively immune at this point.

Battle lines

Last year, the pressure boiled over and the Indian seed companies refused to honour their contracts and eight of the largest seed companies withheld Rs 400 crores in royalties to Monsanto, thereby setting the stage for one of the biggest intellectual property battles this country has witnessed.

Monsanto sued the companies, initiated arbitration proceedings and terminated contracts. Monsanto also initiated a patent and trademark infringement lawsuit before the Delhi High Court against Nuziveedu.

The Ministry of Agriculture then stepped into the fray by notifying the Cotton Price Seed Control Order, 2015, using its powers under the Essential Commodities Act, 1955 – unlike other price-control orders that fix only retail prices, the Cotton Price Seed Control Order gave the government the power to fix even the technology-licencing fee between Monsanto and the Indian seed companies.

Then, in March, the ministry used its powers under the Order to reduce the price of cotton seeds as well as the technology licencing fee between Monsanto and Indian seed companies.

Price control legislation has usually affected retail prices – rarely have they interfered with private contract. Under this order, the government fixed the retail price of the Bt cotton seeds at Rs 800 for 450 gm. For some states, the reduction was quite marginal, since the seeds were being sold at Rs 830 prior to the order, while in others, where seeds were being sold at Rs 1,000 the order was significant.

The real surprise with this notification was that the government slashed royalties payable to Monsanto by Indian seed companies by 74%, from Rs 163 to Rs 43 per packet of cotton seeds. The biggest beneficiaries of the price cut were not farmers, but Indian seed companies, who will now make a windfall in profits.

The Licensing and Formats for GM Technology Agreements Guidelines, 2016 which were notified (without public consultation) just short of Prime Minister Narendra Modi’s visit to the US in June went a step further. The made it mandatory for owners of GM patents to licence their technology to any seed company that demanded it at a rate fixed by the government – the guidelines were then de-notified because of outrage across the industry.

There was also the fear that Modi would be embarrassed in the US, since intellectual property is a sensitive policy issue between both countries. The agriculture ministry is currently holding consultations on the guidelines and is likely to take a final call soon.

The legality of these measures are still under litigation and the Karnataka High Court case filed by Monsanto against the Cotton Seeds Price Control Order that Shiva refers to has not yet achieved finality.

Questions of legality aside, it is quite obvious that this battle is not of Monsanto vs farmers but one between Monsanto and Indian seed companies. It is therefore breath-taking that nowhere in her piece does Shiva even refer to Indian seed companies like Nuziveedu, preferring instead to pitch this as an issue concerning farmers when the benefit for them from the government order is quite marginal when compared to the bonanza handed over to Indian seed companies.