Farmers Seed RightsLegislative measures

RamanjaneyuluCentre for Sustainable Agriculture

Rights are the ones which is not given, but ones which cannot be taken away by law

CS

A

Why emphasis on farmers seed rights?

• Increasing monopolies• Erosion of diversity• Undermining farmers knowledge and skills• Privitizing resources and knowledge• Seed technologies and link to food safety• Quality, affordability and accountability

regimes• Seed sovereignty

FRs in a global treatyInternational Treaty on Plant Genetic Resources

…agree that the responsibility for realising Farmers’ Rights, as they relate to plant genetic resources for food and agriculture, rests with national governments. In accordance with their needs and priorities, each Contracting Party, should, as appropriate, and subject to its national legislation, take measures to protect and promote Farmers’ Rights…

Any legislation should ensure• farmers’ rights of breeding, saving, using, exchanging, distributing and

selling seeds should be upheld as inalienable rights and not be given as residual rights – in other words, control in the hands of farmers over their seed resources

• should help increase biodiversity• should help in farmer-level self sufficiency in the form of community

seed banks and seed networks• farmers should also be given rights of affordable access to good

quality, desired seeds primarily from the public sector, followed by the private sector if need be;

• farmers should be given protection rights in case of violation of trust in terms of quality, quantity and price of seeds accountability and liability clauses should be fixed both in terms of civil and criminal damages

Exercising control on technology and market

Technological controlHybridsTransgenicsGURTechnologies

Legislative control

Plant Breeders RightsUPOVPatents

Market controlMergersAcquisitions

Background1930: Plant Patent Act (PPA)

17 yr monopoly for asexually reproduced plants (fruits, nuts, flowers and other ornamentals)Food crops like potatoes and Jerusalem artichokes excludedFocus on high value flowers and fruit trees342 sps to 2361 breeders and 781 assignees (1995)Costs about $490+preparation expenses and attorney fee

1970: Plant Variety Protection Act (PVPA)Patent like protection for sexually propagated plant varieties which are new, distinct, uniform, and stable for 25-30 yrsFarmers, breeders allowed to sell, exchange, and breed new varieties from protected material1994 amendment, the exemptions removed

1985: Utility (Industrial) Plant PatentsIndustrial patents to plants meeting patent criteria of novelty, utility, and non-obviousnessCosts about$250,000 to get and maintain over life time

Union Pour la protection des Obtentions Vegetales (UPOV)International Protection of new Varieties of Plants 1978

• The identity of the plant material must be established beyond doubt for which the principle of Distinctness, Uniformity and Stability is applied

• Breeder is given exclusive rights to produce reproductive or vegetable

propagating material of his variety for the purpose of commercial marketing and sale.

• Farmer can reuse the seed

• Article 5(3): provides for utilisation of protected variety for the purpose of creating new one without authorisation of the breeder except in case of an inbred line in commercial production of hybrid seed

• Article 8: Period of protection is not less than 8 yr

Union Pour la protection des Obtentions Vegetales (UPOV)International Protection of new Varieties of Plants) 1991

Major modifications

• removal of ban on double protection so that the new member states have the option to either maintain the ban, or allow simultaneous protection of varieties under utility patents and Plant Variety Protection (PVP) certificates

• Member states are required to grant PVP to all botanical species without further restrictions on cultivar or use

• Provisional protection during the processing of PVP application is mandatory

• widening of PBRs to include an extension of the list of infringing acts, extension of PBRs to new materials and addition of rights beyond the protected cultivar to other cultivars such as essentially derived varieties

IPRs relevant to Agriculture

PatentsNovel: which is not known in the prior artNon obviousness: which involves an inventive stepUsefulness: which is industrially applicable

Plant Breeders RightsSui generis, UPOV etc.Prevents third parties from commercially exploiting the protected materialDistinctness: distinguishable from earlier known varietiesUniformity: display of the same essential characteristics in every plantStability: retention of the essential characteristics on reproduction

Geographical Indicationsproducts originating from a country, region or locality where the quality, reputation or other characteristics of the product are essentially attributable to its geographical originPresently restricted only to wines and spirits

IPRs are legal rights established over creative or inventive ideas

Trademarks

Seeds, chemicals, services etc.

To distinguish the goods and services of one enterprise from another

Prevents the wrongful use of commercial marks

Not limited in time, registration may have to be renewed from time to time

Trade secrets

Can be protected against third party misappropriation through law as relating to unfair competition or to restrictive trade practices or to contract law

Unlike patents no obligation to disclose the inventive or creative ideas to society

Test data protection

Protection of test data submitted for obtaining marketing approval of agricultural products for a limited period of time usually 5-10 yrs

TRIPS Article 27 Patentable subject matter

1. Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application […]

2. Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or in order to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.

3. Parties may also exclude from patentabilitya. Diagnostic, therapeutic and surgical methods for the treatment of humans or

animalsb. Plants and animals other than microorganisms, and essentially biological

processes fro the production of plants or animals other than non-biological and microbiological processes. However members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.

In general, developing countries can make a choice amongst the following policy options:

• To make provisions for the patent protection of plant varieties

• To join the International Union for the Protection of new Varieties of Plants (UPOV) in either of both variants (UPOV 78 or 91)

• To provide for comparable Plant Variety Protection (PVP) without formally joining the UPOV Convention

• To devise a sui generis system which is better designed to suit national interests and to take into account the protection demands of informal and local communities.

The US additionally sought broad patent protection for all patentable subject matter, including plants and living organisms. US biotech industry sought two additional concessions during negotiations.

• a minimum term of patent protection of 20 yrs from the date of filing, and

• an expansion on definition of what constitute patentable subject

matter. Developing countries sought however to shorten the term of patent protection, and to narrow the definition of patentable subject matter by excluding plants and living organisms from the definition of patentable subject matter.

IPRs and biotechnology

• Patents are even granted to plant and bacterial gene sequences, animal inventions and human genome sequences.

• Extreme cases of granting broad species patents in cotton and soybean.

• Often justified showing the high costs of research, development and commercialization associated with biotech inventions

• Billions of dollars are invested in developing new technologies, and yet it is estimated that only one in few thousand compounds/products ever reaches commercial markets

• Costs of bringing a biotech product to market are compounded by the problems and complex rules imposed by regulatory agencies before a new product is approved for sale

• Biological inventions are particularly susceptible to piracy because, while they typically require substantial expenditures to develop, they are often simple to replicate.

Proprietary technologies and materials

• Selectable markers• Promoters• Transformation systems• Gene constructs• Genetic markers• Diagnostic probes• Plant varieties

Ex: Bt/herbicide resistant plants at least 8 patentsGolden rice 72 patents IAAA

Implications to agriculture

Percy Schmeiser, Bruno, Saskatchewan, facing legal bills of about 600,000 Canadian dollars

ISAAA (International Service for the Acquisition of Agribiotech Applications) identified 70 patents and 16 tangible property constraints (Material Transfer Agreements- MTAs, licenses, agreements etc.) that could have implications for commercialization of Golden Rice. The potential legal complexities of negotiating these patent licenses led the inventors Potrykus and Beyer to strike a deal with Greenovation (A University spin-off biotech company based in Freiburg, Germany) and Astra Zeneca (A Multinational Life sciences company)

In 1994 CICR announced success in developing Bt cotton variety, not commercialised due to IPRs not being in place

In 2012 CICR was forced to withdraw the Bt Bikeneri narma from market

All Bollgard 10 more Cotton hybrids with Bt developed by various companies are pending with GEAC, all are under license from Monsanto paying royalty

AP government moved to MRTP to get the seed price reduced

Broad patents

Though patents are granted only for specific innovations, instances of broad patents are surfacing

• Cohen/Boyer patent covers all DNA transfer

• US patent no. 5,004, 863 for Agrobacterium mediated gene transfer

• US patent no. 5,120, 657 for Accell=FE Gene gun

• US patent no. 5,159,135 covers all genetically engineered cotton plants

• EU patent no, 0,301,749,B1 covers all genetically engineered soybeans

• Similar broad cotton patent has been granted India and applications are pending in Brazil and China

Biopiracy

• FAO-CGIAR Trusteeship Agreement established in 1994 to bring the CGIAR’s germplasm collections under inter governmental authority.

• International Treaty on Plant Genetic Resources for Food and Agriculture (2001) aims to facilitate access to genetic resources and benefit sharing in 35 crops and 29 forages

• Article 12.3 (d) of the treaty states “ recipients shall not claim any intellectual property or other rights… in the form received from the multilateral system

• Patents cover Neem, Basmati, Aloe Vera, Indian Olibanum Tree, Amaltas, Cummin seeds, Dudhi, Garden Balsam, Amla, Pomegranate, Black Pepper, Rangoon Creeper, Castorseed, Black Nightshade, Arjun, Harad, Tinospora, Aswagandha, Cotton, Potato, Tomato and many more…

• There are over 217 patents on usage of neem and neem based products

• The US TNC, W.R. Grace has patents for neem-based biopesticides, including Neemix for use on food crops. Neemix suppresses insect feeding behaviour and growth in more than 200 species of insects.

"A method for controlling fungi on plants comprising contacting the fungi with a neem oil formulation containing 0.1 to 10% of a hydrophoobic extracted neem oil which is substantially free of azadirachtin, 0.005 to 5.0% of emulsifying surfactant, and 0 to 99% water.“

• An US Company, AgriDyne has received two US patents for bioprocessing of neem for bioinsecticidal products. The first patent is for a refining process that removes fungal contaminants found in extracts from the neem seed, and is used in the manufacture of technical-grade azadirachtin, and in the production of AgriDyne's neem-based bioinsecticides. The second patent is for a method of producing stable insecticide formulations containing high concentrations of azadirachtin.

Neem

• Ricetec, a Texas based company had claimed a patent (5663484) for inventing novel Basmati lines and grains

• Twenty claims were made including • novel rice lines and to plants and grains of these lines• method for breeding these lines• novel means for determining the cooking and starch properties of rice

grains and its use in identifying desirable rice lines• novel rice lines whose plants are semi-dwarf in stature, substantially

photoperiod insensitive and high yielding, and produce rice grains having characteristics similar or superior to those of good quality Basmati rice

• In response to the Supreme Court direction in the Basmati case, the Government of India filed petition in the USPTO for re-examination of the grant of patent to RiceTec in respect of the its "claims from 15 to 17" which were related to grain

• RFSTE and other NGOs made a letter campaign to USPTO

• All claims except 5 claims were withdrawn

Basmati

• Dr. Hari Har Cohly, Dr. Suman Das et.al from University of Mississippi (US) obtained patent on turmeric (Curcuma longa) for monopoly control in the US over the use of turmeric (also called haldi), an ingredient in Ayurvedic medicine since antiquity, to promote wound healing

• In proceedings at the US Patent and Trademark Office (USPTO), the Indian Government argued the obvious to the "experts" in the US government: Indians had been using turmeric for the same uses claimed in the "new" "invention" for thousands of years. The USPTO admitted that India was correct and rejected Mississippi's claims

• A narrower version of their turmeric claim has been submitted in an attempt to hold on to at least part of the patent. The USPTO has yet to rule on this reworked version.28

Turmeric US Patents 5401504, 5135796, 5047100

Wheat• Monsanto obtained patent EP 445929 from European Patent Office, Munich (Two US

patents 5763741 and 5859315 were obtained in 1998-99)

• Galahad 7 by crossing traditional Indian variety NAP Hal with other plant Galhad

Novelty: meeting certain traits like special combination of visco-elasticity and elasticity not satisfied by any other known variety of wheatNon-obviousness: evolving a method for preparing such a variety not known ealrierUsefulness: soft milling type doesn’t absorb much water suitable for biscuit making

• Apart from plant patent covers biscuits, flour and dough produced from wheat (total 22 claims)

• Monsanto can take legal action not only against farmers and scientists trying to breed/grow varieties with similar genetic traits but also bakeries, confectionaries and supermarkets if they produce or market products from the patented wheat

• Nap Hal is freely available in public germplasm collections • Accession no. 1362, AFRC Institute of Plant Science Research, Norwich, UK

Dr. R. H. Richaria’s Rice collection, IGKVV, Raipur

• Since 1971 after leaving CRRI, Dr. Richaria initiated adaptive rice research to evaluate and document all local rice varieties

• Aim: decentralised adaptive rice research for conservation and development of rice varieties, which would act both as a repository of public knowledge and help enhance local farming

• 22,792 local varieties were collected• Syngenta entered into an agreement to take custody of the collection• After farmers’ agitation company has withdrawn

Plant Variety Protection Act 8 yrs for Trees and vines and 5 yrs for plant varieties

Farmers rights Chapter IV. 401. Who has developed a new variety shall be entitled for registration in

like manner as a breeder

2. Who is engaged in the conservation of genetic resources of land races and wild relatives of economic plants and their improvement through selection and preservation shall be entitled in the prescribed manner a reward under National Gene Fund

3. Shall be declared to be entitled to save, use, sow, exchange, share or sell his farm produce including seed of the varieties protected under this act in the same manner as he was entitled before the coming into force of this act, provided that the farmer shall not be entitled to sell branded seed of a variety protected under this act

Plant Variety Protection Act

Community rights Chapter IV

42 (1): any person, group of persons (whether actively engaged in farming or not) or any govt. or non. Govt organization may on behalf of any village or local community in India can file for the protection of the variety

Protection of innocent infringement

43 (i): a right established under this act shall not be damned to be infringed by a farmer who at the time of such infringement was not aware of the existence of such right

(ii): a relief which a court may grant in any suit for infringement refered to in this section

• To prevent the rampant biopiracy of our plants and knowledge we need a genuine `sui generis' system, which protects the collective, cumulative innovations, embodied in traditional knowledge as a societal common property

• Trademark challenge using GIs still needs to be made in the USPTO, using the victory in the Patent Case on RiceTec selling Texmati & Kasmati as Basmati

• GIs address only exports, of a small number of commodities, not the rights of our farmers to use, save, exchange, and improve their seeds for domestic production or protection of our indigenous knowledge

• Domestic laws on GIs are toothless without appropriate Amendments in TRIPs

• GIs could work for protecting a few export commodities like, Alphonso mangoes, Darjeeling Tea and Basmati Rice. They have no relevance in the deeper conflicts and contests relating to patenting of life forms and piracy of our traditional knowledge in agriculture and medicine.

Geographical Indicators law

TRIPS Plus• EU has forced TRIPS-plus commitments regarding intellectual property on life

forms in almost 90 deve loping countries, including the ACP pack

• Under some of the agreements, the parties recognise the need to provide adequate and effective protection of intellectual property rights, sometimes to the level of “the highest international standards”, specifically include: patent protection of plant varieties and of biotechnological inventions

• TRIPS has no provision about implementing or joining either UPOV or Budapest treaty

• It does not require patent protection of plant varieties. And it doesn’t even mention “biotechnological inventions”

Substantive Patent Law Treaty• Aims at hormonizing IPR laws of member countries

• Proposes to curtail governments’ power to obstruct IPR in public interest

• Though no legal obligation but would be a norm

In terms of… Companies and developed countries

Developing countries Actually needed

Plant varieties Plant Breeders Rights and patents

Willing to provide plant breeders’ rights, with some provision for a farmers’ “privilege”

Farmers’ rights and community rights

Sui Generis UPOV standards Not clear what they want, but most go for UPOV

Real alternatives to IPRs

Patents No exclusions for any subject matter

Certain exclusions No patents on life

Ownership Market control State sovereignty Community sovereignty and collective control

TRIPs review No amendments that lower standards of IPR protection

Amendments to confirm with CBD, but not challenging patents on life or TK

Exclude biodiversity and do not introduce traditional knowledge, or introduce protection for traditional knowledge

Access Free and unregulated State control Community control

Benefit sharing Through IPR Through IPR Through community intellectual property regimes or comprehensive resource rights

Paradigm shift….

U and I would not have been there if Adam and Eve had patents over propagation

Seed regulation should

• Regulate misbranding including false claims through advertising and propaganda

• Regulate prices and royalties• GM contamination issue• Regulate quality with• Fine and compensation proportionate to the

loss/damage caused

Some important legislations/policies• Seeds Act 1966 & amendments (1972)• Seeds Control Order 1983 under Essential Commodities Act,

1955• National Agriculture Policy, 2000• Plant Varieties Protection and Farmers’ Rights Act, 2001 • Biological Diversity Act, 2002• National Seeds Policy, 2002• Patents Amendment Act, 2005• Environment Protection Act, 1986• Consumer Protection Act, 1986• Geographical Indication of Goods Act, 1999• Plants, Fruits and Seeds (Regulation of Import into India)

Order, 1989

WRITTEN LAWS…

...are like spider's webs; they will catch, it is true, the weak and the poor, but would be torn in pieces by the rich and powerful.

- Anacharsis, 600 BC, Scythian Philosopher

The Proposed Seeds BillSeeks to replace the Seeds Act of 1966 and seeks to regulate the quality of seeds for sale, import and export. Referred to the Parliamentary Standing Committee on Agriculture in December 2004 and report submitted in 2006 and is pending

• Seeks to “put a check on the sale of spurious and poor quality seeds and to provide compensation to affected farmers”

• It “intends to increase private participation in seed production, distribution, certification, seed testing, besides making provision for stringent penalty for non-compliance of the rules and regulations”

• The proposed legislation “aims to liberalise import of seeds and planting materials compatible with the World Trade Organisation (WTO) commitments”

• The revision of existing Seeds Act is proposed “to overcome its present deficiencies”

• To create facilitative climate for growth of seed industry• To enhance seed replacement rates for various crops • To boost the export of seeds and encourage import of useful germplasm and• To create conducive atmosphere for application of frontier sciences in varietal

development and for enhanced investment in research and development.

What about Seeds Act 1966?• For regulating the quality of “certain seed” for sale • Regulation mainly through notification of kinds and varieties and checks • Central Seed Committee and Central Seed Certification Board set up along

with Seed Testing Laboratories, Certification Agencies, Seed Inspectors and Seed Analysts (to be appointed by state governments)

• Central Government, if it is necessary or expedient to regulate the quality of seed of any kind or variety, by notification in the Official Gazette, will declare such kind or variety to be a notified kind or variety. Then, the Committee lays down minimum standards of germination, purity etc.

• No person shall sell, keep for sale, offer to sell, barter or otherwise supply any seed of any notified kind or variety unless – such seed is identifiable as to its kind or variety; conforms to the PRESCRIBED STANDARDS; container bears the mark or label containing correct particulars, in the prescribed manner

• Certification is voluntary• Penalty is Rs. 500/- for first offence & 6 months prison and/or Rs. 1000/- and

seed may be forfeited to the government• Exemption: “Nothing in this Act shall apply to any seed of any notified kind or

variety grown by a person and sold or delivered by him on his own premises direct to another person for being used by that person for the purpose of sowing or planting”

The Seeds Control Order, 1983• Dealer in Seed to be licensed for 3 years at a time - No person

shall carry on the business of selling, exporting or importing seeds at any place except under and in accordance with the terms and conditions of license granted to him under this order. This is applicable to ANY SEED and not just NOTIFIED KINDS OR VARIETIES

• Dealers to display stock and price list• Dealer to give cash or credit memorandum to purchaser• Power to distribute seeds with Seeds Controller, when

considered to be in public interest• Licensing Authority to be set up by State Government• State Governments to appoint Inspectors to inspect and draw

samples of any seed

Proposed Seeds Bill 2004• To cover non-notified varieties also• To make registration of seed varieties compulsory• To cover commercial crops and plantation crops under the

purview of the legislation• To expand the scope of certification beyond the State Seed

Certification Agencies• To provide for regulation of transgenic material• To overcome the mild penalties that exist for infringement

right now• For instance, Seed Inspectors under the 1966 Act can inspect

places of growing, storage and sale of only notified seeds while Seeds Control Order allows Inspectors to inspect and draw samples of any seed – the Bill now proposes to give such powers

What does the Bill propose to do?A Bill to provide for regulating the quality of seeds for sale,

import and export and to facilitate production and supply of seeds of quality

• Compulsory registration of varieties based on agronomic performance

• Private accredited Certification Agencies• Accreditation of agencies to conduct agronomic trials

(universities, ICAR bodies, private agencies etc.)• Maintenance of National Register of Varieties• Private accredited seed testing laboratories• Enhancement of penalty for Major & Minor Infringements• Provisions to regulate GM crops• Regulation of import and export of seeds

How?• Every Dealer and every Producer brought into the ambit• Agriculture here includes horticulture, forestry, cultivation of plantation,

medicinal and aromatic plants• “producer” means a person, group of persons, firm or organisation who

grows or organizes the production of seeds and “farmer” means any person who cultivates crops either by cultivating the land himself or through any other person but does not include any individual, company, trader or dealer who engages in the procurement and sale of seeds on a commercial basis

• Definitions of Misbranded and Spurious Seeds given• Central Seeds Committee, Registration Sub-Committee, Seed Inspectors,

Seed Analysts, Seed Certification Agencies, Seed Testing Laboratories etc., are the mechanisms

• Minimum limits of germination, genetic & physical purity, seed health etc., prescribed by the Central Seeds Committee

• Registration Committee to register seed varieties after scrutinising claims made in the applications and maintain a National Register of Seeds

• NO SEED CAN BE SOLD UNLESS REGISTERED (for 15 years for most seeds and 18 years for long duration perennial crops)

• However, Self Certification & Voluntary Certification continued

How else?• State Seed Committee to advise the State Government on registration of

seed producing units, seed processing units, seed dealers and horticulture nurseries etc.

• No producer shall produce seed or organise production of seed unless registered…

• Special Provision for Registration of Transgenic Varieties• Compensation to Farmers: Where the seed of any registered kind or

variety is sold to a farmer, the producer, distributor or vendor, as the case may be, shall disclose the expected performance of such kind or variety to the farmer under given conditions, and if, such registered seed fails to provide the expected performance under such given conditions, the farmer may claim compensation from the producer, distributor or vendor under the Consumer Protection Act, 1986

• Seed Dealers: Every person who desires to carry on the business of selling, keeping for sale, offering to sell, bartering, import or export or otherwise supply any seed by himself, or by any other person on his behalf shall obtain a registration certificate as a dealer in seeds from the State Government

Offences & Punishments proposed• Misbranded seed or without registration certificate or violation

of minimum standards: fine of 5000/- to 25000/- rupees• Spurious seed or spurious transgenic seed or any non-registered

seed: imprisonment upto 6 months and/or fine upto Rs50,000/-• This is applicable to any person who imports, sells, stocks or

exhibits for sale or bartersExemption from Registration:• Nothing in this Act shall restrict the right of the farmer to save,

use, exchange, share or sell his farm seeds and planting material, except that he shall not sell such seed or planting material under a brand name or which does not conform to the minimum limit of germination, physical purity, genetic purity prescribed

What are the concerns, then?• Regulation of Industry Vs Regulation of Farmers: It brings all farmers who are seed

producers under its ambit – they would now be subjected to unneeded harassment – regulation from post-production should be enough; It also covers farmers’ traditional systems of seed exchange and wants to prescribe minimum standards for seed exchanged thus

• Facilitation of the entry and freer operation of many private entities, with several “conflict of interest” elements thrown in – public sector to be strengthened

• Registration of Seeds overlaps with the domain of ownership/parentage of seeds and can take away farmers’ rights as breeders – especially given that the PPVFR is not yet operational. No obligation to disclose origin or get prior informed consent

• Compensation clauses not satisfactory-should have farmer-friendly mechanisms• Inadequate mechanisms to ensure seed pricing and seed supply• Unclear clause on Provisional Registration for Transgenic Seeds• No vision for decentralised regulation – for instance, Panchayats can monitor

performance and certify failure• No mechanisms that can take care of better seed planning and production • Penalties should be based on the extent of losses – real and potential• Impracticability of National Register of Seeds • Do we need so many private players?

What are we suggesting?• Regulation to include seed pricing, seed supply, seed

planning in addition to seed quality• No registration – only licensing of seed producers

and dealers, post-production• Licensing for 3-5 years only – compulsory reviews• Strong punitive clauses, better compensation

mechanisms• Decentralised mechanisms for regulation• All traditional practices of farmers saving, selling,

exchanging/bartering seed to be excluded • Should create a situation which should increase

farmer self-reliance and agro-diversity, not the other way around

LIABILITY MECHANISMS IN THE PROPOSED LEGISLATION – PENALTY & COMPENSATION:

• The proposed “Offences & Penalties” sections fall woefully short of the kind of proposals needed to make penalties into effective deterrents, and to pay compensation to farmers against the claims made. Here, it is important to have penalty clauses which are in proportion to damage caused and the seed stocks produced or stored by the offender and which act as real deterrents.

• Further, the compensation awarded should have a formula to cover the costs incurred and should also be against the claims made for the performance of that variety at the time of registration. The compensation should be paid within three months of the award of the compensation so that the farmer’s next growing season is not affected and this should be incorporated into the legislation. Any farmer aggrieved by the decision of the Compensation Committee should be able to appeal to a prescribed authority which shall dispose off the appeal within a specified time and manner that is prescribed.

MRTP Case2006: AP government filed a case with MRTP Commission requesting that

Commission to declare the agreement between Indian seed companies and MMB as void as it is leading to monopoly and increase in seed prices– MMB maintained that it is not monopoly as other events (Nath seeds and JK agri

genetics) were approved. MRTP ruled that the royalty collected is higher the state government should take action to reduce it.

– As there was no law to regulate the seed prices, AP state government used its power under granting trade licenses under Seed Control Order based on Essential Commodities act, 1955

– The prices of Bt cotton seed were fixed at Rs 750 a packet (450 gm) and Rs 925 in 2006 for Bt 1 and Bt 2 respectively. This was further reduced to Rs 650 and Rs 750 respectively in 2008.

– As the Agreement between MMB and Indian Seed Companies continues to exists they still have to pay the royalty as demanded by the company.

Post MRTP case• The industry quickly changed the recommendation

from one packet (of 450 g to two packets of 450 g per acre) which quickly doubled their business.

• MMB was collecting royalty of Rs 150 and Rs 225 on Bollgard-I and Bollgard-II respectively.

• In 2006, after MRTP commission’s ruling to reduce the bt cotton seed price, AP government reduced the cotton seed prices to Rs. 650 and Rs. 750 for bollgard I and II. Challenging this, MMB moved to Delhi high court on this issue.

Meddling with Essential Commodities Act

• 2007: Central government has amended the Essential Commodities Act removing ‘Cotton seed’ from the list. This nullified the seed control order.

• When Agriculture officers in Warangal district found that Mahyco Bt hybrids are being sold in Warangal market, they raided and seized the shop. Mahyco challenged that cotton seed was removed from Essential Commodities Act, hence Seed control order which draws powers from EC Act does not apply to cotton.

• AP Government came up with a new act to regulate the Transgenic cotton seed which was more stringent..

• 2008: Cotton seed was brought back into Essential Commodities Act

Unregulated Royalties• 2010: Seed companies approached the

govts to increase the seed prices as they have to pay the royalties up to Rs. 156.00

• AP government didn’t agree to reduce seed price, but fixed prices as Rs. 650 BG-I, Rs. 750 for BG-II which effectively reduced the royalty to Rs. 50/- for Bollgard-I and Rs. 90/- for Bollgard-II

• In 2010, Monsanto filed case in AP High Court requesting to stop state govt from reducing the royalty arguing that it does not have any power to do so. The case is still pending in the court.

• 2011: Bt cotton seed for 2011-12 to Rs 830 for BG-I trait and Rs 930 for BG-II trait.

• 2012: Rs 850 for BG-I and Rs 1,050 for BG-II

Cost of a 450 g seed bagCompanies don’t want to cut royalty caseSeed procurement, processing, treatment and production

Rs. 288.00

Supervision, quality control, Packing etc (450 g)

Rs. 60.00

Refuge Rs. 20 (pigeonpea)/ Rs. 73.00

Distribution & after sales service , Market

Rs. 38.00

Financial and Admin costs Rs. 92.00

Research cost Rs. 95.00

Total cost per packet (450 g) Rs. 593.00

Trait free payable Rs. 165.00

Distribution retail costs (21.5%)

Rs. 198.09

Total Rs. 773.00

(National Seedmen Association of India)

SEED PRICE AND ROYALTY FIXING AUTHORITY WITH STATE GOVERNMENTS

• State governments have the authority through the Seeds Bill to fix the retail seed price and royalty charges applicable for any technology sub-licensing agreements.

• Further, given that the Seeds Control Order of 1983 will get nullified after the Seeds Bill is notified, it is important to incorporate all the powers that state governments have under the Order into the proposed Seeds Bill, including the ‘Power to Distribute Seed’.

• State governments should also be empowered to register seeds that are locally suitable and appropriate, in addition to the national registry. Authorisation of all seed production, processing, storage, distribution and sale should be with the state government through a compulsory licensing system.