Aug. 9: The Maharashtra government has cancelled the licence of Mahyco, one of the largest crop biotechnology companies in the country, to sell Bt cotton seeds in the state in a decision that reflects the pulls and pressures of farm politics in western India.
The ban has been attributed to alleged market malpractices by the company, not the concept of genetically modified crops, which in itself is a controversial topic. (Bt stands for Bacillus thuringiensis, the bacterium whose gene is inserted into cotton to genetically modify it.)
Mahyco or Maharashtra Hybrid Seeds Company has been accused by cotton farmers and dealers of creating an artificial shortage of seeds and then selling them at exorbitant prices in the black market.
Mahyco, headquartered in Maharashtra, has a 50-50 joint venture with US multinational Monsanto and is considered a pioneer in its field in the country.
At first glance, the crackdown in response to appeals from farmer lobbies looks like decisive action to control prices at the very root but appearances can be deceptive.
The ban on the sale of seeds has been clamped after sowing was over, although complaints were being made over the past two months. The timing of the action means that the company gets nearly a year till the next sowing season in June 2013 to sort out the issue.
The delayed action ensures that the crop in the state will not be affected. Maharashtra accounts for a third of the country’s total cotton acreage of 120 lakh hectares.
Many are viewing the licence ban as a shot across the bows of the powerful agriculture establishment, which is torn between two power centres.
The administrative powers lie with the Congress, which holds the agriculture portfolio. But the agricultural system — both farming companies and farmers — is largely allied with coalition partner NCP because of Sharad Pawar’s long stint in the state.
It is an open secret that the Maharashtra Congress does not want to lose any chance to explore the possibility of breaking into Pawar’s sources of support. Against such a backdrop, the complaints by farmer bodies, which are known to be opposed to a section of the seed companies, have come in handy for the Congress, sources said.
The licence cancellation was initiated on Wednesday evening by the agriculture controller and director in Pune. The state government has filed a caveat before Bombay High Court that in case the company moves an appeal, the court must first hear the government before issuing any interim order.
“As of now, we haven’t received any official communication from the state government regarding the withdrawal of our licence,” A.R. Subbarao, a senior company official at Mahyco’s corporate headquarters in Mumbai, told The Telegraph this evening. “But if what we are hearing from the media is true, it’s unfortunate.”
The Congress-NCP government in Maharashtra was aware of the allegations since mid-June. Police had then caned farmers in Beed, a town in central Maharashtra, to break up a violent protest. The farmers had launched the protest after dealers told them that a popular seed variety of Mahyco was in short supply.
Maharashtra agriculture minister Radhakrishna Vikhe-Patil had accused Mahyco of misleading the government but the company had denied the charges.
The government then listed data that discounted the possibility of a shortage. Around 30 companies sold more than 1.7 crore 450-gram cotton seed packets last season for a crop spread over 41 lakh hectares across the state. This year, the acreage has shrunk to 40 lakh hectares but the seed supply was put at over 2 crore packets.
“This is not the first year when the company has been warned; there have been problems with Mahyco for two to three years now,” agriculture commissioner Umakant Dangat said.
Dangat said the agriculture department had this year banned advance booking of cotton seeds — a practice that led to black-marketing of seeds. Instead, the department asked the seed companies to submit their production and distribution plans for each district. “All the seed companies complied with it, except Mahyco,” Dangat said.
In a statement emailed to The Telegraph, Mahyco said it had “complied with all the guidelines set by the state agriculture department; we will address the concerns raised by the authority once we have received the official communication from the department”.