Seed companies have threatened to halt supplies to cotton farmers in India in protest against a plan to cut prices. Seed companies would also stop producing for the next season beginning June 2019. Farmers start planting the crop in June and July. Lower supplies of seeds could delay plantings and hit output. India is the world’s top cotton producer and the second-biggest exporter of the fiber.
India is mulling lowering the price of genetically modified cotton seeds by 7.5 per cent to help farmers whose fields have been ravaged by pests. Cotton seed prices have dropped drastically in the past few years, but fuel, labor, chemical and supply chain costs have risen sharply, squeezing margins of most seed makers. Other than cutting the prices of GM cotton seeds, India is likely to impose another cut to Monsanto’s royalties paid by domestic companies for its GM cotton seeds.
The latest reduction risks another row with the US company, the world’s biggest seed maker, which threatened to leave India in 2016 when its royalties were cut by more than 70 per cent. India approved the first GM cotton seed trait in 2003 and an upgraded variety in 2006, helping to transform the country into the world’s top producer of the fiber.