U.S. seed giant Monsanto has threatened to pull its genetically modified crop technology from India if the government goes ahead with its plan to cut the company's royalty fees.
Monsanto's joint venture firm in India said that it would be difficult to bring new technologies to India because it was becoming difficult for the company to recoup its investments in research and development of genetically modified seeds.
Shilpa Divekar Nirula, chief of Monsanto's India unit, said in a statement seen late Saturday that if the committee recommends imposing a cut in the fees that local seed companies pay to use Monsanto's crop genes then the company would have to reevaluate its position in India.
Nirula said it was difficult for Mahyco Monsanto Biotech (India) Limited, the company's joint venture, "to justify bringing new technologies into India in an environment where such arbitrary and innovation-stifling government interventions make it impossible to recoup research and development investments."
In December, India's government ordered that cotton seed prices, including royalties on seeds, be controlled from the 2016-17 crop year. India's agriculture ministry has set up a committee to determine the price of cotton seeds, including fees the company charges for licensing crop genes.
"If the committee recommends imposing a sharp, mandatory cut in the trait fees paid on Bt-cotton seeds, MMBL will have no choice but to reevaluate every aspect of our position in India," Nirula said.
The company said it was "shocked and disappointed" at the news that the government plans to reduce the "trait fees," or the fees that seed companies pay Mahyco Monsanto to use its crop genes, by around 70 percent.
Monsanto said about 7 million cotton farmers in India use its seeds. Over the last two decades, millions of small farmers have adopted genetically modified cotton seeds, making India one of the world's biggest producers of cotton and a major exporter of raw cotton.
However, farm activists say that the pest-resistance of the seeds has gone down and that farmers have to use more insecticide on their cotton crops.
Genetically modified plants are grown from seeds that are engineered to resist insects and herbicides, add nutritional benefits or otherwise improve crop yields and increase the global food supply. Advocates say these new strains will boost yields and stabilize supply by also improving drought resistance.
India has allowed the use of genetically modified seeds only to grow cotton. It says further study needs to be done to guarantee consumer safety before genetically modified food crops can be cultivated in the country.