India: Effects of Tariffs and Nontariff Measures on U.S. ... - USITC

ottom” for the pricing <strong>of</strong> Bt cottonseeds. 43 Today, Bt cottonseed price are limited to Rs.
650–750 ($13–$15) per package for Bollgard I, <strong>and</strong> Rs. 750–925 ($15–$19) for Bollgard
II. 44 These restrictions on customer prices necessarily limit the amount that MMB can
charge its licensees for the technology. Various legal challenges mounted by MMB to the
state government price restrictions have been unsuccessful.
BOX 9.2 Bt Cotton in <strong>India</strong>
Bt cotton is an insect-resistant transgenic crop that contains genetics from the bacterium Bacillus thuringiensis
(Bt). These genetics confer resistance to certain pests, particularly the bollworm.
In 1996, Monsanto, the original developer <strong>of</strong> the Bt cotton technology, obtained approval in the United States
for the commercial release <strong>of</strong> its product, marketed under the br<strong>and</strong> name Bollgard. At about this same time,
the <strong>India</strong>n firm Mahyco obtained permission to import Monsanto Bt cotton genetics under a license agreement.
Mahyco began to backcross its hybrid cotton lines with the Monsanto genetics. In 1998, Monsanto acquired a
26 percent share in Mahyco <strong>and</strong> created MMB to develop <strong>and</strong> commercialize biotech products in <strong>India</strong>. Field
tests <strong>of</strong> three Mahyco backcrossed lines began in 1998. In 2002, <strong>India</strong>’s Genetic Engineering Approval
Committee (GEAC) approved the three hybrids for cultivation in central <strong>and</strong> southern <strong>India</strong>.
Patent protection was not available for biotech products in <strong>India</strong> at the time <strong>of</strong> Bollgard’s initial release, so the
technology underlying the first generation product, Bollgard I, is not patented in <strong>India</strong>. In 2009, however,
Monsanto was granted a patent for the technology underlying its second-generation product, Bollgard II.
Since the initial approval in 2002, the Monsanto genetics have been broadly licensed to other private- <strong>and</strong>
public-sector firms <strong>and</strong> incorporated into their cotton hybrids. As <strong>of</strong> 2008, 274 cotton hybrids had been
approved for marketing by 30 different seed companies. These hybrids incorporate genetics developed by
Monsanto (Bollgard I <strong>and</strong> II); the <strong>India</strong>n firm JK seeds, in collaboration with the <strong>India</strong>n Institute <strong>of</strong> Technology;
<strong>and</strong> genetics developed by the Chinese Academy <strong>of</strong> Agricultural Science <strong>and</strong> licensed to the <strong>India</strong>n firm Nath
Seeds. In May 2008, the GEAC approved the release <strong>of</strong> genetics developed by an <strong>India</strong>n public-sector institute
<strong>and</strong> incorporated in an OPV such that farmers will be able to effectively save <strong>and</strong> reuse the biotech seed.
In 2008, approximately 5 million (82 percent) <strong>of</strong> <strong>India</strong>’s small farmers were reported to be planting Bt cotton.
The adoption <strong>of</strong> Bt cotton has been credited with substantial yield increases, decreases in pesticide use, <strong>and</strong>
increases in farmers’ pr<strong>of</strong>itability per hectare. Farmers have been willing to purchase Bt cottonseeds despite
higher prices than conventional cottonseeds (before price restrictions were implemented) because <strong>of</strong> these
substantial benefits.
.
Sources: Scoones, Regulatory Manoeuvres, August 2003, 6–7; James, Global Status, 2008, 57; industry
representatives, telephone interviews by Commission staff, January 21 <strong>and</strong> June 10, 2009; <strong>and</strong> industry
representatives, interview by Commission staff, Mumbai, May 11, 2009.
43 Singh, <strong>India</strong>: Agricultural Biotechnology, August 25, 2008, 8; industry representative, telephone
interview by Commission staff, January 21, 2009.
44 Industry <strong>of</strong>ficial, interview by Commission staff, Mumbai, <strong>India</strong>, May 11, 2009; industry <strong>of</strong>ficial, e-
mail message to Commission staff, August 25, 2009.
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