August 25, 2016

A long-standing dispute between the Indian government and Monsanto has escalated this week as Monsanto has withdrawn its application requesting approval for its newest generation of genetically modified cotton seed, in India – the company’s biggest market outside of the Americas.

Maharashtra Hybrid Seeds Co. Ltd. (Mahyco) – Monsanto’s local partner in India announced via letter that the decision to pull its Bollgard II Roundup Ready Flex technology was made in protest to the Indian government’s proposal that would require Monsanto to share its technology with local seed companies, and its ongoing dispute with the government over allowable prices for its GM cotton technology. In its letter, Mahyco responded that the Indian government’s proposed requirements “alarmed us and raised serious concerns about the protection of intellectual property rights,” reports Reuters.

“Our decision to suspend this introduction in India is an outcome of the uncertainty in the business and regulatory environment, which includes the regulation of trait fees and introduction of the draft compulsory licensing guidelines,” said Monsanto according to Business Today.

In May of this year Monsanto announced it was re-evaluating its situation in India and was considering pulling its technology from the market.

At the time, Shivendra Bajaj, executive director of the Association of Biotechnology Led Enterprises Agriculture Group said, “By slashing trait fees the government has clearly shown that it is going for short-term populist measures rather than supporting innovation in the long term. Such a decision is a discouragement of research and is contrary to the respect for IPR in Agriculture and ‘Make in India’ initiative encouraged by our Honorable Prime Minister.”

GM cotton has been cultivated in India since 2002 with the introduction of Monsanto’s single gene Bollgard I technology. The double gene Bollgard II was then approved in 2006 resulting in a quadrupling of cotton output for the country. The introduction of Bollgard II Roundup Ready Flex would have been the first cotton seed advancement in the country in 10 years.

Reuters reports that the decision to withdraw its GM cotton from India will have a negative impact not only on Monsanto’s bottom line through the loss of millions of dollars in annual revenue, but will bar India’s farmers from much needed technology that could lift softening yields, while also deterring investors from committing capital in a country where the business atmosphere appears to be difficult and the government appears to be averse to agricultural technological development.

India however is not an isolated case for Monsanto, which has seen business become increasingly difficult on multiple fronts.

As scientific advancements fuel the acceleration of the commercialization of new biotech traits, and globalization includes more and more countries onto the global market, the clash of differing governmental regulations, approval timelines and systems is causing increasing tension between industry and regulators.

On June 24 Monsanto and Argentina came to an agreement regarding the collection of royalties and patenting difficulties following years of conflict and negotiations, while Burkina Faso, Africa’s top cotton producing country announced in April of this year that it would not continue to cultivate Monsanto’s cotton due to a noticeable drop in fiber quality.