Is The Modi Government’s Policy On Bt Cotton Hurting The Textile Industry?

Growing cotton has never been less than a roller coaster ride for farmers. It had its ups and downs, twists and turns. The only difference being roller coaster rides in fun parks are meant for fun and rarely kill people. But cotton farming has witnessed awfully large share of farmer's suicides. And that is really unfortunate. More unfortunate is apathy of the government towards cotton farmers, in particular, and farmers, in general, till Narendra Modi came to power in 2014. The solace provided by reformed Beema Yojana, fast tracked irrigation projects and other measures was very short lived. Farmers were hit, hit very hard, by Pink Bollworm Attack.

There are various accounts provided by different agencies of the damage caused by pink bollworm in 2017-2018.

Kishor Tiwari, president of Vasantrao Naik Shetakari Swawalamban Mission, has said that 50 per cent of the crop has been damaged. Government agencies claim that the crop damage has been limited. Some industry veterans, who swear by their experience, say that cotton yield varies in the band of +/- 15 per cent year-on-year basis, not less and not more. And there are some bullish speculators who try to paint a grim picture of huge crop loss and push prices up. Unfortunately, we do not have a reliable, efficient and scientific system to predict production, yield and damage to the crop. The real loss/gain of cotton crop will only be known at the end of the season when we get numbers for cotton bales produced.

It is true that this loss was unprecedented. It is also true that it was avoidable. Unlike hurricane or unseasonal rains, this loss was not sudden and was certainly not beyond human limitations. The seeds of the loss were sown long ago. Way back in December 2015, director of Central Institute for Cotton Research (CICR), Dr K R Kranti, had warned the government on the resistance developed by pink bollworms to two CRY toxins in Bollgard II. But there is huge inertia in government and it moves very slowly. Dr Kranti's warnings were ignored.

If we discuss the history of genetically modified Bt ( Bacillus thuringiensis) cotton in India, briefly, it will help us understand the issue better. Way back in 2000-2001, the yield of cotton per hectare was less than 300 kilogram. Initially in the 2001-2002 season, farmers sowed Bt cotton seeds on a large-scale without waiting for government approving the genetically-modified variety. The Atal Behari Vajpayee government was quick to understand that adoption of Bt cannot be stopped and hence it gave approval to genetically-modified cotton with CRY 1AC gene. The results were telling. The cotton yield per hectare exceeded 300-kg mark and steadily went up. The arta under Bt cotton increased as more farmers preferred the genetically-modified version. By 2016-2017 season, over 95 per cent of cotton sown was the Bt variety, with US seed major Monsanto enjoying the patent for the CRY 1AC gene. This helped the yield per hectare to increase over 550 kg. From 278 kg to 568 kg a hectare was a great leap forward - more than double. In the same period, use of pesticides was reduced significantly. And farmers benefited hugely.

The journey was never smooth, though. There were many opponents to Bt technology, mostly non-governmental organisations (NGOs). Unsubstantiated rumours were that the opposition to Bt was funded by the pesticide lobby, which suffered a loss of business. Here again, we do not have concrete data to prove this point. But speak to farmers and they will corroborate the story.

In the meanwhile, bollworms developed resistance to Bt I. Mahyco, Monsanto’s partner in producing Bt cotton in India with CRY 1AC gene, was quick to introduce the Bt-II variety. Soon by 2012-2013 Bt-II began losing its potency in resisting bollworm. Mahyco Monsanto submitted an application for field trials of the Bt-III variety, that was supposed to be effective against bollworm and herbicide-tolerant. This variety would have helped farmers reduce de-weeding costs. Instead of employing labour to remove weeds, herbicide sprays could be used. Cost of spraying was much lower than cost of manual de-weeding. But again, agriculture in India is not a smooth business. It has its ups and downs. An unknown danger was lurking around the corner and it took everyone by surprise.

In June 2015, Nuziveedu seeds owed a little over Rs 120 crore in royalties to Monsanto. Instead of paying the dues, as per the agreement, Nuziveedu sent one of its representative to negotiate. It sought a concession in the amount due but Monsanto refused. The story, however, does not end there. Nuziveedu representative left the meeting threatening that Monsanto will face the ‘consequences’, if we believe the report that appeared in Reuters (Monsanto meets its match as Hindu nationalists assert power in Modi’s India By Mayank Bhardwaj, Rupam Jain and Tom Lasseter).

Nuziveedu roped in Rashtriya Swayamsevak Sangh (RSS) and its affiliate Bharatiya Kisan Sangh (BKS) to help them fight Monsanto. Prabhakar Kelkar, vice-president of BKS, said that farmers, seed companies and BKS must come together to wage a war against Monsanto. Why farmers need to fight Monsanto? For 'swadeshi' lobbyists, the answer is simple. They believe that a royalty payment of Rs 163 per packet of cotton seed sold at Rs 830-Rs 1,100 was too high. It was a 'loot'. But these people forget the very fact that seed cost is but a minuscule part of total cost of cotton cultivation. Labour cost is the highest followed by pesticides cost. More money is spent on fertilisers than on seeds. Also, those who advocate swadeshi tend to forget that the Bt seeds patented by Monsanto were responsible for doubling the yield of cotton per hectare. They also tend to forget the fact that none of the Indian research institutes or desi universities could come up with a gene like CRY 1AC that could help tackle pests like Monsanto Bollgard. Then why bat for ‘swadesi’? The answer to this question is best known to them. It will be prudent to note that Monsanto received about Rs 4,500 crore in royalties in some 10 years. In the same period, our farmers received more than Rs 20,000 crore by way of improved yields!

Unfortunately, as cotton yields increased, so did the reliance of farmers on this crop. But government did not have a stable import-export policy. Hence, cotton prices fluctuated up and down, forcing farmers to bear losses. And when losses became unbearable, many committed suicide. Unfortunately, Bt cotton seeds were blamed for the suicides and many believed the theory. The Government, under the influence of ‘swadeshi' lobbies and likes of Bharatiya Kisan Manch, was too eager to oblige.

In a surprise order, Union Agriculture Minister Radha Mohan Singh slashed the price of 450 gm packet of Bt seeds from Rs 830-Rs 1,100 to Rs 800. The royalty was cut from Rs 163 to Rs 49. The reduction was unilateral. Monsanto was not consulted in the process. When the retail price is uneconomic, seed companies lose interest in the business. Ideally, demand and supply dynamics must decide the price of commodities. Government’s intervention does not help the cause of free markets. But in the garb of helping farmers, government exercised its control over huge seed market.

Annoyed by this unilateral cut in royalties, Monsanto moved the High Court but failed to get a relief. It then decided to quit cotton seed business in India. It withdrew its application submitted to the Genetic Engineering Approval Committee for the latest Bt-III round-up ready seeds. Had the seed been commercially launched, it would have reduced the cost of de-weeding substantially.

Indian seed companies are now selling the same old Bt seeds that have not been effective against bollworms. This resulted in damage to Bt cotton crops, especially in Maharashtra and Telangana. Farmers in Gujarat, however, with the help of the State government and Monsanto controlled the damage to a great extent by adopting modern pest control techniques. The pink bollworm damage is a failure of farmers and state governments in Maharashtra and Telangana. There is another reason why farmers must take some blame for failure of Bt-II. Right from the beginning, farmers were advised to sown non-Bt or traditional cotton variety around their Bt cotton crop. (The traditional seed varieties are usually supplied along with the Bt variety since it is mandatory for seed companies to do so.) These traditional varieties must surround the Bt variety in two rows, called the refuge area. Building such a refuge area helps in the pests not developing immunity to the Bt gene eliminates them. The refuge would have at least delayed pests building immunity to the Bt cotton gene. But farmers did not plant refugee rows are paying a heavy price for ignoring the advice.

In the current season, some companies sold Bt-III or Bt Round-Up ready seeds, though unapproved, to farmers for a premium. It is estimated that about 3.5 million unapproved seed packets were sold. These packets were sold for Rs 1,300-1,500. It is a premium of about Rs 500 per packet. About Rs 175 crore were thus pocketed by these seed companies. And for this loss incurred by farmers, the union government is solely responsible. Unfortunately, Bharatiya Kisan Union is silent on this loot.

Now join the dots to get a full picture. With Bt cotton farmers benefiting, pesticide manufacturers are annoyed over the loss in sales. Besides, local seed companies are not happy to shell out royalty payment for Bt technology. These groups take the help of 'swadeshi' lobbyists and environmentalists to oppose genetically-modified crops. Bollworms develop resistance to the Bt gene. Opponents of Bt are happy to find a Government supporting their cause. The government obliges by reducing royalty and not allowing field trials of the latest Bt seeds. Monsanto abandons its cotton business in India. Seed companies in India make huge money, selling unapproved Bt seeds. No taxes or royalties are paid on this!

Forcing Monsanto to close its cotton business has serious consequences. We have sent a wrong signal to the international business community. We have put the fate of cotton farming and thereby the cotton value chain in jeopardy. For the 2018-19 season, cotton farmers in India will not get Bt seeds that will tackle bollworms. They will be forced to use old Bt seeds or unapproved, unauthorised seeds sold at a premium.

Cotton farming is very important for our country as its value chain, namely textiles, provides employment to the highest number of people in the country. Secondly, textile exports are about $40 billion, whereas China's textile exports are about $300 billion. China imports cotton from the US and exports finished products to it. The $80 billion IT industry has transformed our economy. Imagine if we double our textile exports, what great impact it will have on our economy as money earned from cotton export is spread all across to a large section of the population. The cotton value chain has a huge potential to provide jobs to a large number of people. Therefore, the central government must let cotton farmers have access to the latest technologies. Government should also make policy changes to make our textile products competitive in global markets. Asking Monsanto to come back and approving its latest seed technology would be the first step in right direction.