Monsanto comes under CCI probe

18 Feb '16

4 min read

The Competition Commission of India (CCI) has ordered a probe against American multinational agrochemical and agricultural biotechnology company Monsanto for violating competition law in the market of Bt cotton technology in India.

The fair trade regulator's order comes in the wake of a complaint filed by the agriculture ministry and three Indian seed companies - Nuziveedu Seeds, Prabhat Agri Biotech and Pravardhan Seeds, according to media reports.

The CCI ruling recommends investigation against Monsanto, Monsanto Holdings Private Limited (MHPL), Maharashtra Hybrid Seeds Company (Mahyco) and Mahyco Monsanto Biotech India (MMBL) for forcing anti-competitive agreements and abusing their dominant position in the country's Bt cotton seeds market.

“The termination conditions of the sub-licence agreement entered in between MMBL and the informants are found to be excessively harsh and do not appear to be reasonable as may be necessary for protecting any of the intellectual property rights… Such agreements discourage and serve as a major deterrent for the sub-licencee from exploring dealing with competitors,” CCI said.

In its response, MMBL said the CCI's order was only a prima-facie opinion recommending an investigation and not a reflection of any final conclusions.

MMBL said it was evaluating the order and its options. It said the company conducts its business in an honest, transparent and respectful manner, and it remains confident this will be evident after all relevant information has been considered by the CCI.

The company said that the Bollgard II technology provides tremendous benefits to Indian farmers and the licensing system fully complies with the relevant laws in India.

According to the CCI, the Bt cotton technology sub-licensed by MMBL is used in 99 per cent of the area under Bt cotton cultivation in India.

“The competitors of MMBL do not seem to pose effective competitive constraints on MMBL and there is huge consumer dependence.”

MMBL is a 50:50 joint venture formed between MHPL and Mahyco and is engaged in sub-licensing of Bt cotton technology of Monsanto in India. MHPL is a 100 per cent subsidiary of Monsanto in India and it is engaged in marketing of Bt cotton hybrid seeds and other field crop seeds.

“Charging of trait value payable on the basis of MRP of the seed packet apparently has no economic justification in light of the fact that performance of the Bt cotton crop depends not only on the Bt cotton technology, but also on other factors like genetic composition, climatic conditions etc and appears to be unfair,” the CCI said. The 'trait value' is the estimated value for the trait of insect resistance conferred by the Bt gene technology.

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