Child Labour in Cottonseed Production by Ashok Khandelwal

“ Mr Reddy also complained of the high price of Bt cotton seeds paid by farmers on account of
high trait value charged by the global seed multinational Monsanto. It is for this reason that the
state government has sued the seed multinational before the Monopolies & Restrictive Trade
Practices Commission (MRTPC), he said. The minister said where the actual cost of the seeds is
Rs 450 per 450-gm pack, the trait value charged by Monsanto amounts to Rs 1,250. Thus, the
farmers paid Rs 1,700 per 450-gm pack in kharif 2004. This year the farmers paid Rs 1,850 per 450gm
pack. Mr Reddy also was not happy with the low prices paid to the farmer-seed growers by
the seed Companies. He said the farmers were paid a paltry Rs 250” (Financial Express, 2006).
In our considered opinion low rate of seed procurement by the
companies from the farmers is definitely one crucial determining
reason for widespread child labour use. During personal
discussions, the farmers have related the issue of low wages to the
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prices of seeds . The companies however are extremely touchy
about the price issue and do not want any discussion on it. D
Venkateswarulu (2004a) in his study observes,
“However, in all the initiatives undertaken by ASI, one crucial aspect missing, which the seed
companies alone can address, is procurement price policy. ASI holds the view that the
employment of child labour in cottonseed production is in no way linked to procurement price
policy adopted by the companies. It argues that cottonseed farmers have relatively better profit
margins compared to other farmers and the procurement rates offered invariably exceed the cost
of production considering the wages paid to adult labourers, and provide enough margin. But the
findings of the present study and also earlier study by the author reveal a clear linkage between
procurement pricing and employment of child labour in cottonseed production. In the ICN report
published in 2003, the author analyzed data on cost of cultivation, procurement prices and wages
structure in cottonseed production and argued that low procurement prices paid by the
companies is one of the contributing factors for the extensive use of child labour in cottonseed
production. Even though companies obtain a huge profit margin, they do not seem to be making
any rational calculation about the cost of cultivation while fixing the procurement price to be
paid to their seed farmers. With the current procurement prices of companies, seed farmers
cannot afford to pay better wages to the labourers and still make reasonable profits. Unless better
wages are paid, farmers would not be in a position to attract adult labourers to work in their fields
in sufficient numbers”. (Page 17) (Emphasis Added).
(d) Company, Agent and Farmer
As we noted above, each farmer knows the parent company for
which he is growing cottonseed. However, no seed company
operates directly with farmers. They appoint organisers who in
turn appoint agents. The job of an 'agent' is to liaison between
farmers and seed organiser. He is the main link who also performs
task of labour recruitment many a times. Many advance money to
farmers and even sell pesticides.
Organisers usually own dedicated ginning factories for CSP. For
28 :: Child Labour in Cottonseed Production
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The importance of MNC
price is not diluted even if we
assume that there production
base is insignificant compared
to other Indian companies as
they are responsible in setting
the upper limit.