While controversy has dogged it, the transnational agritech group has been beavering away with some success to grow here
The Monsanto story in India, much like elsewhere in the world, has been one of success coexisting with controversies. Be it the question on seed quality or general opposition to biotechnology, seldom has Monsanto been out of the news anywhere across the globe. India has been no exception.
Having started operations way back in 1949 by selling herbicides, Monsanto in India has now grown into an organisation employing a little over 800 people. From a Rs 250-crore company a decade earlier, it has grown into a Rs 1,000-crore one.
It operates through three divisions, or verticals. One is exclusively for selling hybrid corn (maize) seeds and a variety of herbicides, called Monsanto India Ltd. The second one sells biotech (Bt or genetically modified) cotton seeds and vegetable seeds, called Monsanto Holdings Pvt Ltd. The third is a joint venture with Maharashtra Hybrid Seeds Corp (Mahyco), called Mahyco Monsanto Biotech (MMB), which has exclusive rights to license the Bt technology to cotton seed companies.
Alongside its growth story, which has boomed in the decade since Monsanto started licensing Bt cotton seeds, have been the numerous controversies the company has got associated with. The most recent being the Gujarat government’s decision to stop purchase of double-crossed, hi-breed corn seeds produced by Monsanto for its ‘Sunshine Programme’ meant for tribals. Its alleged role in accessing Indian varieties of brinjal for commercial purposes without relevant permission from the National Biodiversity Authority has also come in for criticism.
Globally, there have been questions over Monsanto’s role in the Agriculture Appropriations Bill in the US and how some proposed amendments in the Bill were allegedly explicitly meant to hasten clearances of GM varieties. In Mexico, activists have been protesting for months over the possible clearance of GM crops, allegedly under pressure from Monsanto.
“Over the years, Monsanto has managed to push through government policies for its own good. They also illegitimately charge huge royalty from Indian seed companies which keeps seeds prices high in the country. In some cases, the royalty is around 200 per cent of the seed cost, while worldover it is just five-eight per cent,” said G V Ramanjaneyulu, executive director of the Centre for Sustainable Agriculture, Hyderabad. He said Monsanto as a company has repeatedly violated India’s bio-safety and bio-diversity laws over the years.
But, in between all this, Monsanto has gone ahead here and is now among the top vegetable and corn seed producers in India.
Partnering for growth
So, what makes India so important for Monsanto’s global plan of action? The game changer has been its philosophy of partnering Indian seed companies in its growth plans. “Adaptation, partnership and dialogue, be it with authorities or agriculture universities or farmers or even our adversaries, have been our mantra in India,” Amitabh Jaipuria, managing director of Monsanto India, told Business Standard.
Monsanto’s annual global turnover is around $11 billion and India is the eighth largest market for it. Yet, beyond the financials, India has always been a sort of laboratory for Monsanto’s wider global vision of outreach to end-consumers.
India was also the first country where Monsanto got listed outside the US. Shares of Monsanto India rose from Rs 438 a piece in August 1, 2002 to a peak of Rs 2,307.25 on January 9, 2008. Since then, it has dropped to Rs 606.25 on August 8, 2012.
“India is extremely important to Monsanto from two largely non-financial perspectives. First, to implement the global vision of producing more from less resources and lifting farmers out of poverty and,second, India as an important talent pool for Monsanto,” said Jaipuria.
The partnership Monsanto forged with local seed companies in transferring the Bt technology through licences has been a unique experiment Monsanto carried out outside the US markets. This not only widened the reach of Bt seeds, but also enabled the Indian seed industry to flourish and be counted among the top markets in the world today. In 2002, when Monsanto first ventured into Bt seeds in India, it granted a licence to Indian seed companies to share the technology with those who had the required research infrastructure to nurture the technology.
The result was that Bt cotton seeds made for Indian conditions were available almost everywhere. “Our philosophy was, we had the technology but we knew that for technology to grow, it needs seed suited to farmers’ needs. Hence, we partnered around 45 Indian seed companies, which really has been our story,” said Gyanendra Shukla, director, MMB.
The partnership, despite all criticisms, bore fruit. In the past 10 years, average cotton productivity in India has gone up from 300 kg per hectare to 500 kg, making it the world’s second largest producer. The crop is now planted on 10-11 million hectares; a decade earlier, it was 6.5-7 m ha. Monsanto transformed itself on the back of this. “From 80 per cent of business in herbicides, the company now gets just 20 per cent business from herbicides and the rest is from its seeds business,” said Shukla.
Then, there is corn. Monsanto has invested heavily in the business in India, also globally its biggest earner. It has launched a modern information sharing platform called Dr Dekalb Farm Care (DDFC), taking its name from the hybrid corn seed Monsanto sells. DDFC, also the first such innovation for Monsanto across the globe, marries India’s mobile telephony penetration with the company’s knowledge of corn and its seeds. The company has created a huge back-office network through which it supplies corn-specific information on a regular basis, along with generalised information on fertiliser and weather to member-farmers. In three years, 800,000-1 million farmers have been registered in DDFC. .
“If we are able to sustain this (DDFC), it will create an entire infrastructure backbone for us to sustain business in India and will also be a big differentiating factor. The DDFC initiative is now being evaluated to be reapplied by our colleagues in other countries as well, which have similar agro-climatic conditions like India,” said Jaipuria.