Is cotton seed shortage for real?

This year there is news of shortage of Bt cotton seeds everywhere. How far this is true? If one examines the sequence of events, and the facts related to private seed production, the truth appears to be otherwise.

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 series of meetings, claiming it is only to discuss fixing of seed prices. Ofcourse, it is another matter, there was no discussion on any other seed, but Bt seed. By-elections in Kadapa also seemed to have some influence. While these efforts have been going on private seed industry has been releasing information to the media claiming that there 3.4 crore Bt seed packets (each packet of 450 gms), and they expect the demand to be more than this. Their expectation was that the shortage, or additional demand, would be 40 lakh packets.

To be precise, per acre, 650 gms of Bt cotton seed is required. However, since the package is of 450 gms, necessarily, farmers buy two packet per acre. By this standard, 3.4 crore packets would be sufficient for 170 lakh acres of cotton fields. Last year, as per government estimates, cotton was sown in 110 lakh acres, in India. Even if the demand has rise to 170 lakh acres, the growth would be 54 percent. However, authentic trends show that the growth rate cannot be more than 10 percent. At the maximum, it can be 20 percent.

That is, if the growth in acreage under cotton, even assuming it to be hundred percent Bt cotton, there is sufficient seed available for this season, for any growth from 0 to 54 percent. However, all acreage under cotton is not Bt cotton. There are different varieties, due to different factors. Last year stocks also need to be considered. Thus, the availability of 3.4 crore packets should be sufficient for this season of cotton sowing, in addition to the last year stocks and availability of non-Bt cotton seeds.

In AP, as per official information, in 2010-11, the area under cotton crop was 18 lakh acre and about 80 lakh packets (of 450 gm) were used by farmers. The expected area under cotton crop this year (2011-12) is about 20 lakh acre and the requirement of cotton seed this year would be around 90 lakh packets of 450 gm. Even if one takes, 4 packets per acre, there should be surplus of 10 lakh packets in AP state alone. There should be sufficient packets, as per their own estimates, given before the announcement of increase in seed packet market prices.

Also, in the meetings organized by the State government, it was mentioned that 1 crore packets would be made available to Andhra Pradesh. In fact, association of seed companies have also threatened the government about diversion of Bt cotton seed packets, if the State government does not agree to increase the price per packet. Government has also prepared a supply plan, with 32 companies, of about 84 lakh packets. Of this, more than 50 percent is to be supplied by three top brands – as the choices of the farmers.

Meanwhile, AP government has also agreed to increase the price of Bt seed per packet to Rs.930. It was reportedly assured by the association of seed companies to supply the necessary requirement, as promised. It has to be remembered that Andhra Pradesh is the major State cotton seeds are produced. Most of the 3.4 crore packets are produced in this State. There have been allegations of low price being paid to seed farmers. Such a situation has been blamed for usage of child labour. Some companies have claimed to have reduced this by paying more to the seed farmers, as an incentive. There is no independent verification of the same.

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, media 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. Thus, we cannot be sure that this increase would benefit the seed farmers. Past performance and seed industry practices do not give any such assurance.

Also, governments have increased prices of Bt seed packets for this year, in March-June period. But by this time, seed has passed long back from the seed farmers to the seed companies, processed and packed for sale. It would be illogical for seed companies to pay the seed farmers, for a transaction that has been completed. In summary, the increase in the cost of Bt seed packets would directly benefit the companies. In these days, one cannot be sure if these decisions have been taken by the particular persons in the decision-making structure, without any ‘payback’ to themselves. On a rough, back of the hand calculation, this should be anywhere between Rs.500 to Rs.1000 crore stakes. There have been reports in the media of corruption involving some higher political and administrative functionaries. Whatever might be the truth, this is a fit case for anti-corruption enquiry and proceedings, not in only in Andhra Pradesh, but across India.

Given these dynamics, past pronouncements, and present situation, shortage of seed seems to be artificially created. Farmers are being fleeced, by a consortium of government and seed companies, in the name of shortage. They are now paying anywhere between Rs.1200 to Rs.1800 per packet. Even last week, top officials have been claiming there is no shortage, while admitting that the seed packets supplied are way below the supply plan, initiated by the government. What went wrong? We need to seek answers for the following:

1. What is the actual production of cotton seeds?

2. Is there a independent government estimate of seed production?

3. Why the companies have supplied short, even while claiming they had sufficient stocks?

4. Who is responsible for this fiasco? Companies? Or government?

In conclusion, there seems to be 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. Alas, there is no independent agency, which can fix responsibilities, punish the guilty and correct this faulty system. No political leader, worth his salt, has cared to bring succor to the farmers. No ‘conscientious’ official has stood up to the machinations of the seed companies. Hard, toiling farmers are increasingly becoming victims of a powerful combine of politicians, traders and companies. From February to May, it was the case with grain traders and millers; in June, it is by seed companies and in July, we would probably see the manipulations of fertilizer companies and traders. Appointed and elected officials seem to be concerned with their bank balances and growing assets.