Licensing and Formats for GM Technology Agreement Guidelines, 2016
The Ministry issued — and retracted in less than a week — a new set of terms that would govern contracts between licensors and licensees of genetically modified cotton seeds.
The short-lived notification, called the Licensing and Formats for GM Technology Agreement Guidelines, 2016.
Details:
- Companies that licensed GM technology could charge seed companies royalty no more than 10% of the government-specified maximum sale price of a packet of cotton for 5 years.
- Moreover, they would have to reduce this value by 10% every year from the sixth year and were it proved that the potency of the technology was waning, the company could no longer claim this royalty.
- Finally, technology firms also could not refuse any eligible seed company wanting genes and any request not followed upon within 30 days would be deemed to have been granted.
- Genetically modified seeds are only permitted in cotton and the dominant player in the business of licensing seed technology is Monsanto Mahyco Biotech Ltd (MMBL), which licenses technology to several seed companies and underlies at least 95% of commercially grown cotton in the country.
- Earlier this year, the Central government capped the sale price of cotton seeds and the royalty that companies like MMBL could charge.
- The government caps have been challenged in the courts and separately MMBL is also fighting a legal battle to recover royalty payments from the Andhra Pradesh-based Nuziveedu Seeds, until last year.
- MMBL’s biggest licensee and the largest supplier of cotton hybrids in the country.
