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[Genet-news] BUSINESS & AGRICULTURE: India: Why Monsanto's Biotech-Food Business Isn't Growing in India

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SOURCE:  Wall Street Journal

AUTHOR:  Jacob Bunge, Biman Mukherji


DATE:    14.03.2016

SUMMARY: "In a research laboratory surrounded by acres of arid land in western India, Bharat Char showed off tiny sprouts of rice, wheat and okra in glass bottles."

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In a research laboratory surrounded by acres of arid land in western India, Bharat Char showed off tiny sprouts of rice, wheat and okra in glass bottles.

These plants could solve a lot of Indiaâ??s food problems, he said. Because they are genetically modified to resist bugs and weed-killing sprays, said the scientist for Mahyco, an Indian firm that joined Monsanto Co. to develop biotech crops, the plants could boost impoverished Indian farmersâ?? profits and reduce food imports.

There is precedent: Genetically modified organisms, or GMOs, grow in an estimated 97% of Indiaâ??s cotton fields and have helped India by some measures become the fiberâ??s top global producer.

But after a decade of Monsantoâ??s efforts with Mahyco to win Indian-government approval for biotech food crops, seeds for plants like Mr. Charâ??s remain in limbo, stymied by environmentalist opposition, farmer skepticism and bureaucratic inertia. Despite dozens of biotech-food-crop trials in India, the country has approved none for commercial cultivation.

â??What greater case study in terms of food security than a country that will soon have more people than any other country in the world?â?? said Robert Fraley, Monsantoâ??s chief technology officer. â??To see a country that has the potential and intellectual ability to be a leader in these biotech advances, to be stymied politically, I think itâ??s a tragedy.â??

Meanwhile, Monsantoâ??s established cotton business in India faces new threats, including new government price controls around seed genetics and an antitrust probe into pricing practices, prompting Monsanto on March 4 to warn that it could withdraw its biotech crop genes from the country.

Monsantoâ??s experience is part of a broader backlash against genetically engineered crops from a mix of environmentalists, consumer groups and nationalism thwarting the technologyâ??s expansion after years of growth. Biotech-crop opponents say they can damage the environment, burden poor farmers with high-price seeds and potentially harm health.

GMO proponents reject such assertions, and the U.S. Food and Drug Administration, World Health Organization and European Commission have concluded GMOs are safe to eat.

Yet pushback has swept the world. More than half of European Union countries have moved to bar GMO cultivation. Russia hasnâ??t approved any biotech crops. China, which allows cultivation of some, isnâ??t expected to approve new ones soon. In the U.S., where GMO crops are widespread, some food brands are stripping GMOs from their products.

The backlash has slowed global-sales growth of genetically modified seeds. Sales grew 4.7% to $21 billion in 2014, compared with 8.7% growth in 2013 and average annual growth of 21% from 2007 through 2012, according to research firm PhillipsMcDougall Ltd.

Monsanto, a top global seller of biotech seeds, in 2015 made an unsuccessful $46 billion bid for Syngenta AG , a top pesticide seller, partly for access to more countriesâ?? fields than biotech seeds give it. Syngenta last month agreed to a $43 billion takeover by China National Chemical Corp.

Biotech seeds have nearly saturated major markets where approved, said Mike Mack, who retired in October as chief executive of Syngenta, also a GMO-seed seller. â??Show me the new markets or the new crops that are going to bring the sort of wave that we saw in the last decade,â?? he said in September. â??I donâ??t see how itâ??s going to pick up in a material way anytime soon.â??

India cultivated the worldâ??s largest cotton-growing area, yet produced among the fewest bales per acre. Four million Indian cotton farmers battled many of the same pests that U.S. farmers didâ??pests resisted by a gene Monsanto created with a bacterium called Bacillus thuringiensis, or Bt, that lets plants secrete a bug-killing protein. Monsanto in 1997 formed a joint venture with Maharashtra Hybrid Seeds Co., or Mahyco, to pair its biotechnology with Mahyco seeds suited to Indiaâ??s soil.

When Mahyco won permission to sell Indiaâ??s first biotech cottonseed in 2002, scientists and staff threw a party at its research center in Dawalwadi, said Mr. Char, who joined Mahyco in 1999.

â??It was like India winning the cricket world cup,â?? said Monsanto Treasurer D. Narain, its India unitâ??s chief financial officer in the late 1990s.

Monsantoâ??s success seemed to augur well for GMOs in India, which boasts the most arable land of any country and is projected to surpass China as the worldâ??s-most-populous by 2023.

India had a history of pioneering agricultural methods. The so-called Green Revolution in the 1960s and 1970s revamped Indian farms with high-yielding wheat and rice supported with fertilizers, pesticides and irrigation. Government officials credited it with saving millions from starvation.

By late 2006, Monsantoâ??s Bt genes blanketed about 40% of Indiaâ??s cotton fields, according to the International Service for the Acquisition of Agri-Biotech Applications, or Isaaa, a nonprofit funded by governments and companies that tracks and promotes agricultural biotechnology.

â??I had gravitated to Bt cotton because my yields used to be poor,â?? said Dheeraj Chhaganbhai Wadodariya, a farmer in Indiaâ??s Gujarat state. Genetically modified seeds increased his earnings so much, he said, he can now buy cattle, do up his home and occasionally travel.

But clouds were gathering over the field. Fears that Indiaâ??s government relied too heavily on biotech companies to research safety and that GMO plants would mix with wild versions prompted nutritionist Aruna Rodrigues to seek out independent scientists and compile data to challenge the government over its handling of biotech crops.

In 2005, she filed a petition with Indiaâ??s Supreme Court seeking a moratorium on GMO field trials, arguing that such crops would damage the nutritional qualities of the food. The court accepted her petition, which is still winding its way through Indiaâ??s notoriously slow judicial system.

As public pushback increased, India in 2010 placed a surprise moratorium on an insect-resistant brinjal, or eggplant, which had been set for approval.

Indiaâ??s potential nevertheless persuaded Monsanto to continue research here and it continued to get approvals for trials, including biotech corn. Other companies pursued rice, mustard, peanuts, potatoes and sorghum.

â??We never lost hope that things were moving,â?? said Mr. Narain, who led its India business from 2010 to 2013.

Globally, pushback was spreading. In America, where the Agriculture Department says GMOs represent more than 90% of corn, soybeans and cotton acres, opponents launched state-by-state efforts to require GMO-food labeling. Following the USDAâ??s 2015 approval of genetically modified apples and potatoes, companies including McDonaldâ??s Corp. and Wendyâ??s Co. said they didnâ??t plan to use them, saying they were happy with non-GMO suppliers.

The EU unveiled a new opt-out program in 2015. Ukraine and Russia have also ruled out using GMO seeds. China, which permits some biotech cotton, papaya, sweet peppers and tomatoes, isnâ??t expected to approve new GMO crops until the domestic seed industry shows it can compete against Western rivals, the USDA and seed-industry officials said. Chinese government officials didnâ??t respond to inquiries.

Indiaâ??s food-security concerns may lead it to soften its stance, seed industry officials say. The country is a big importer of edible oil and lentilsâ??protein sources for many mired in povertyâ??and has high child-malnutrition rates. GMO proponents say biotech seeds would increase production of protein-rich crops on Indiaâ??s mostly small farms, which the United Nations numbers at 138 million.

The 2014 election of Prime Minister Narendra Modi, who supported GMO crops as chief minister of Gujarat state, encouraged biotech-seed makers. India has since approved field tests for biotech crops, although state governments can block trials.

Indiaâ??s Supreme Court is expected to rule soon on the petition to bar GMO-crop cultivation. But Monsanto faces more immediate challenges in cotton, after Indiaâ??s agriculture ministry this month imposed a 70% cut in the royalty fees that Monsanto and Mahyco had charged for their crop genes. The companies also face an inquiry from Indiaâ??s antitrust enforcer over pricing of their pest-resistant cotton genes, and some Indian seed companies have withheld tens of millions of dollars in royalty payments, according to Monsanto.

The price controls on crop biotechnology -- which Monsanto and Mahyco license to about 50 Indian seed companies -- may force the companies to reassess all aspects of their joint venture in India, they say. Officials for Indiaâ??s Ministry of Agriculture said in a court document that Monsanto and Mahycoâ??s dominance in supplying biotech cotton genes requires curbs on royalties, which ministry officials called â??exorbitantly high.â??

â??We need innovation in agriculture in the country,â?? said Shilpa Divekar Nirula, chief executive of Monsantoâ??s India unit. â??The government seems intent on promoting innovationâ?¦but something like this is at cross-purposes with what the government is seeking to do.â?? 

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