Tuesday, June 21, 2011

The growing


Seed shortages during the sowing season have become regular phenomena across the country. The reasons vary from public agencies’ incompetence to seed companies’ hidden motives, adding to it the middlemen, agents and distributers further play spoilsport in the vicious cycle with the rising cases of black-marketing and spurious seeds, particularly in Bt cotton.

Cotton sowing is in brisk pace in major growing areas, thanks to more than normal monsoon rain across the cotton growing belts. The well timed arrival of southwest monsoon and higher prices has encouraged farmers to go for early sowing of cotton, but the reported cases of shortages of Bt cotton seed and rampant incidences of black-marketing is waning the good show.

The seed shortage is anticipated to be over 10% for the 2011 kharif season, which may result in the area under cotton declining by one million hectare from the present 11 million hectare. Cotton production, too, may come down by three million bales from the 33-million bale production estimate for the current season.

This demand-supply gap led to the black-marketing of Bt cotton seeds across the cotton growing states. The cotton seeds were even distributed under police protection during the last few years in many parts of Maharashtra and Andhra Pradesh, as there were riots for seeds.

In 2010, Bt cotton was grown on 9.4 million hectares in the country or 85.5 per cent of the total estimated 11 million hectares under cotton in India. Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Gujarat are major Bt cotton growing states in the country. Bt cotton has surpassed 90 per cent of cotton acreage this kharif season with farmers continuing to gain from the high-yielding seed since its commercialisation in 2002. There are 80 companies marketing 300 hybrids of Bt cotton seeds in India.

Demand & Supply situation for the Kharif season, 2011;


Demand (lakh packets)

Supply (lakh Packets)

Gap (lakh Packets)




~ 50

Reasons for the shortage

Quality seed is said to be the basis for successful agriculture production; but imagine the situation where only half of the seed demand is met with and only handfuls of farmers prove to be lucky enough.

The unseasonal rainfall in November and December damaged the field activities regarding seed production, which may have resulted in a shortage situation, as per the industry source. But as per the distributers and agents, shortage of cotton seeds is also attributed to the farmers' preference for particular varieties. Otherwise, a lot of seeds are available in the markets from other seed companies and of many brands.

It is alleged that a few seed brands popular with farmers had created an artificial shortage. Thus, knowingly going with lesser quantity seed production, which seems to compensate its profits and make the business lucrative enough.

The premium price

In all cotton growing states, the prices of Bt cotton seeds for BG 1 and BG 2 cotton seed has been revised at Rs 830 and Rs 930 per 450 gram packet, respectively, for 2011-12. But seed companies had sought an increase in the MSP to Rs 850 and Rs 1,050, respectively.

From March 2011 onwards, private seed industry has been lobbying with the State governments to increase Bt cotton seed. They were instrumental in bringing together various Agricultural Ministers in Ahmedabad to discuss this. Subsequently, Gujarat increased the seed prices, followed by Karnataka and other States.

There was intense pressure in Andhra Pradesh to increase the seed prices. Government also organized a series of meetings, claiming it is only to discuss fixing of seed prices. Of course, it is another matter that there was no discussion on any other seed, but Bt seed.

While these efforts have been going on, private seed industry has been releasing information to the media claiming that there are 3.4 crore Bt seed packets, and they expect the demand to be more than this. Their expectation was that the shortage or additional demand would be 40 lakh packets.

Farmers prefer cotton seeds of particular companies, which were not able to meet the demand. This is leading to sale of these particular brands in black market at higher prices. Dealers say that apart from Mahyco (MECH 7351) there is a shortage of some varieties made by companies like Ajeet Seeds and Nuziveedu Seeds too.

Major Private players:

  • Rasi Seeds
  • Nuziveedu Seeds
  • Mahyco-Monsanto
  • Vibha Seeds
  • Shriram Bioseed
  • Ganga-Kaveri Seeds
  • JK Agrigenetics Ltd.
  • Ajeet Seeds
  • Others

Black-marketing on a high

Black marketing of Bt cotton seeds has become a routine issue during the sowing season in the past few years. At many of the places farmers have to pay as much as Rs 2000- 3000 for a 450 g Bt cotton seed packet with a printed price of Rs 700- 900.

The seed companies have also taken advance booking amounts from the dealers and, in turn, dealers also get bookings from farmers as early as January for ensuring the required seed quantity.

Inter-state black marketing is in operation across the border districts of Andhra, Maharashtra and Karnataka at very large scale. The blackmarketeers earn booty within a few days, almost equalling to their year round income.

Vigilance and Quality Control department has to be created and made more pro-active on field level rather than its engagement in only issuing certificates and licences.

Possible implications

As some farmers grudgingly buy, others are left with no choice but to go for some other alternative crop this season due to the prohibitively high rates demanded by touts. The next choice is maize, which fetches less than half the price a quintal of cotton does. Thus, area under cotton and, ultimately, the production will be affected by such diversion of cotton area with other alternate crops sown in case of seed shortage. It would prove a bigger jolt for the whole Indian agriculture situation, as cotton is the crop that has climbed the ladder of success globally at utmost speed and within a minimum time.

The cotton seed business has transformed into a purely cash business and even advances were given by the farmers in parts of Maharashtra and Andhra Pradesh for booking the required quantity of seed packet 6 months before the supply. The trend has made farmers more vulnerable to the defaults by dealers and other middlemen by the assurance of supplying certain quantities of seeds well on time.

Who is responsible for this fiasco - Companies or Government?

Seed prices were increased by the governments, with no independent verification of the information proffered by the seed companies about rising seed production costs. However, their own information shows that seed farmers, who invest their capital in seed production and sell them to the companies, get only 20-30 percent of the market price of the seed cost. When the seed prices were increased by Gujarat, it was reported that Rs.500 of the increase would go to seed farmers. Government in AP did not even declare how much of the rise of Rs.180 would be shared with the seed farmers. In either case, none of the governments have taken any legal guarantees from the seed companies about sharing this price increase with the seed farmers.

Government looks helpless in tackling the menaces of demand-supply imbalance, black-marketing and spurious seeds and, thus, ensure supply of the preferred brand seeds in large quantities.

Today, our greatest agony is that the government establishments like NSC, SFCI, State Agriculture Departments, etc. have proved to be completely incompetent in seed production activities even after owning vast tracts of cultivable areas and employing a large chunk of human resource.

There seems to be a lot of distortion, fudging and deliberate misinformation being spread by the seed companies, primarily to increase the anxiety among farmers and mint profits out of such anxiety. Unfortunately, government seems to be a ‘knowingly’ silent spectator, if not a partner-in-arms.

So, to ensure the required quantity of quality seed well on time to the farmers, government has to either maintain a fair stock of seeds for the upcoming season, or strengthen the infrastructure at their very own establishments and set up an authority to check the repetition of such untoward situation time and again.


Dr. Gurdial Singh, Jt. Director-Agriculture, Punjab

“Due to good returns from cotton during last year, currently, we are witnessing a 15-20% rise in the area covered under cotton. This season farmers have got 25 lakh packets of Bt cotton seeds and there is no such problem of cotton seed shortage reported from anywhere in Punjab. About 20 companies are marketing the Bt cotton in the state and cotton sowing is in its full swing as we received few pre-monsoon rains since last one month”.

Mahesh Galtani, Owner- Ajanta Seeds, Mehekar, Buldhana Distt, MS

This season we have sold about 20,000 packets of Bt cotton seeds @ Rs 930/- per packet of 450 g as per its MRP and also fixed by the state government. Our agency deals with the seeds of Mahyco-Monsanto, Ajeet Seeds and Krishidhan Seeds. As the seed produced is less this year due to unseasonal rains in many parts of peninsular India, the supply side was constrained booking was more. We already supplied the quantities booked with us.

N. S. Reddy, Farmer, Warangal, Andhra Pradesh

I have bought 5 packets of Bt cotton seeds for my land at very exorbitant price of Rs 1500 per packet. As it was available in the open market so I have purchased the same with a local tout. It seems everyone, including government, companies and department is all hands in glove to exploit the poor and destitute farmers.

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