The Centre will set up a statutory committee to study and recommend a price for cottonseeds in the country, ending over a 10-year row over the issue.
The committee would hold discussions with all the stakeholders periodically to ascertain the cost of production, margins of producers, dealers and firms, before arriving at a Maximum Sale Price (MSP).
Invoking the Seed (Control) Order, 1983, the Centre said the (seed) Controller has the power to regulate the sale price of cotton seed and prescribing licensing guidelines and format for all the genetically modified technology licensing agreement.
The Centre has decided to intervene to solve the endless rows on the issue between the State governments, seed firms and Mahyco-Monsanto, which provides genetic technology to seed firms under exclusive licence agreements. The government has said no one would be allowed to sell the seeds above the MSP. The price would be notified before March 31 every year, well ahead of the kharif season, letting the seed companies plan for the kharif season.
“This (move) should solve the problem once for all. We have been wasting a lot of time and energies, running pillar to the post in order to seek a uniform price across the country. It is desirable,” a seed industry representative told BusinessLine.
The government has indicated that the committee would be headed by the Joint Secretary (Seed) and Controller, Department of Agriculture, Cooperation and Farmers’ Welfare. The panel would consider important components such as seed value, licence fee (including trait value or royalty fee), trade margins and applicable taxes.
After considering representations from farmers’ associations and the seed industry, the government has come out with an order, with a strong intent to put an end to the row. The associations argued that the issue of seed price had become a big menace with different State governments announcing different prices.
These price orders often end up in courts with the technology provider Mahyco-Monsanto challenging the rights of States to fix royalty prices and defending the licence agreements it sign with seed firms.
The industry too made a representation to the Centre to intervene to settle the issue of royalty permanently by taking up the responsibility to ensure uniform pricing across the country.
The proposed committee would have two representatives (Agriculture Production Commissioner or Secretary, Agriculture) from two major cotton growing States. It would also have representatives from Indian Council of Agricultural Research (ICAR), Commission for Agricultural Costs and Prices (CACP), seed industry and a farmer.