The Indian subcontinent is diverse and has varied agro-climatic zones. The country boasts great potential for the seed market. Unlocking the potential of the seed market promises an exciting array of opportunities in the Indian agricultural sector.
Indian Seed Market:
The seed market in India accounts for approximately 4% of the global seed market, while the country covers 11% of the global arable land. However, trends in the American and Chinese seed markets suggest that these countries are set to dominate the global seed market share although with relatively lower share of arable land. This expected domination can be attributed to the widespread technological advancements and the flexible regulatory environment in these countries.
The disparity between the demand & supply of cotton has been a persistent trend in the Indian context. The market for seeds is traditionally hybrid, except for the penetration of Bt cotton, which has the lion’s share of the market (over 90%). Consequently, India is the largest cotton cultivator in the world, and the second largest cotton exporter after the United States. The penetration of Bt cotton is an Indian success story. Traditional cotton production, which was buckling under industry pressure, witnessed more than double production rate in six years after the commercialization of the biotech trait.
The Indian seed market is expected to be driven mainly by increasing penetration of corn, paddy and vegetable seeds. The promise of sustainability can be revitalized with increased intervention of technology in the market. The threat of regulatory bias looms large over the advances in technology, especially in India.
Indian Pulses Market:
The weakening scenario of pulses in India is a tale commonly associated with the unfavorable weather conditions, which lead to an annual shortage of pulses.
The advancement of molecular biotechnology and selective marker assisted techniques has opened the door for genetic engineering, which promises growth in the yield of 14 different varieties of pulses grown throughout the country. In this regard, India has enormous potential in cutting-edge research.
Despite poor growth of the pulses market, governmental support for maximum retail prices has negatively influenced the market; farmers are left behind with small rain-fed land holdings, already depleted soils and ineffective chemical supplements to grow crops. The National Food Security Mission, an ambitious project launched under the 11th Plan to promote pulses production, could barely create a mark, even with a whopping INR 2,148 crore investment in targeted technology demonstrations, distribution of seed kits and irrigation equipment.
What the Industry Needs?
The need of the hour is a change in policy and a revamp in ideology – negating the prospects of transgenic seed penetration. In case of pulses, transgenic supplementation can beef up the leakages and unaccounted losses due to environmental factors.
Current regulatory policies in India have witnessed major changes in terms of the government coming down heavily on the growers of the BG–ӀӀ variety of cotton. This has cheered up many seed firms across the country.
MMB (Mahyco Monsanto Biotech Limited), a joint venture between Mahyco and Monsanto Holdings Pvt. Ltd., had sub-licensed the Bollgard II and Bollgard Ӏ technologies to 28 Indian seed companies. Each one of these companies have introduced the Bollgard technology into its germplasm, and is reevaluating its strategy for operations in India.
The Indian government, in an attempt to regulate the cotton seed market further, has capped royalties for the new GM seed varieties, questioning the likes of Monsanto’s increased dominance in the Indian seed market.
The Indian government has barred Monsanto Co. and other providers of genetically modified (GM) seed technology from denying a license to any local company. The decision prohibits the technology provider from charging a royalty that exceeds 10% of the maximum sale price of the seeds, which is controlled by the government every year. The Indian government has also attempted to regulate an otherwise private contract between parties with new IPR policies promising to promote innovation and strictly enforce intellectual property rights of private companies. The new guidelines, officially called ‘Licensing and Formats for GM Technology Agreement Guidelines, 2016’ focus more on enforcing IPR and regulations in the market.
The move is a welcome trend for the domestic seed companies, as it will help the market for indigenously developed seeds. It also relieves the farmers from the tyranny of paying higher royalties to companies.