Foreign seed firms rally behind Monsanto in Indian alliance

August 26, 2016 6:19 AM EDT

Monsanto logo is displayed on a screen where the stock is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. on May 9, 2016. REUTERS/Brendan McDermid/File Photo


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By Krishna N. Das and Mayank Bhardwaj

NEW DELHI (Reuters) - Major international seed companies in India formed an alliance on Friday, seeking the support of their peers after a flurry of regulatory steps in recent months by Prime Minister Narendra Modi's government.

Executives from companies including the local businesses of Monsanto, Bayer, Dow, Dupont Pioneer and Syngenta announced the alliance in a crowded Press Club of India conference room.

The newly-formed Federation of Seed Industry of India (FSII) says its goal is to address difficulties in the industry.

Reuters reported earlier this week that Monsanto had withdrawn an application to sell its next-generation genetically modified (GM) cotton seeds in India on concerns over the security of its intellectual property.

India is Monsanto's biggest market outside the Americas. Monsanto objected to a government proposal that would force it to share its technology with local seed companies. It has also taken the government to court over a cut in the royalty it gets from seed companies for licensing use of its patented technology.

The New Delhi press conference was a show of solidarity with Monsanto, which has operated in India for decades but is now being investigated by the anti-trust regulator on whether it misused its near-monopoly on GM cotton seeds to jack up prices.

"Our new association is driven by the fundamental value of respecting research and intellectual properties of each other," M. Ramasami, a founding FSII member, read out from a statement.

"The association believes that no single company has all the solutions and hence collaborations, joint ventures, licensing arrangements and similar approaches are necessary among the members of the industry."

Monsanto, a takeover target of Germany's Bayer, has said it contemplated quitting India because of heightened regulation.

But on Friday its India head, Shilpa Divekar Nirula, said there was a need to align Modi's goal of doubling farmers' income by 2022 with what firms like Monsanto can offer.

She declined to comment specifically about her company and left with her media managers immediately after the conference.

"I would always want a very transparent system around licensing," said Sharad Khurana, country manager for DuPont Pioneer. "Forceful licensing stifles innovation. Nobody would want to invest."

LOCAL MUSTARD

Nirula told Reuters in February last year that Monsanto was close to submitting final trial results for its GM corn to the government, but a top government official said it had yet to do so.

A Monsanto India spokesman declined to comment on corn, but the official said the government was moving swiftly on another application for what could be the country's first GM food crop: mustard.

India does not yet allow GM food crops, whose introduction could help reduce heavy import bills for items such as edible oils that it needs to feed its growing population, already over a billion.

But political and public opposition to lab-altered food remains strong due to fears that GM crops could compromise food safety and biodiversity.

The source said the government would soon make public a summary report on the indigenously developed mustard, inviting comments on it within 30 days before making further decisions.

A panel of experts gave technical clearance for the mustard on Aug. 11 after multiple reviews of crop trial data generated over almost a decade, Reuters reported on Thursday.

(Editing by Ruth Pitchford)



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