The absence of a strong framework can hold up productivity improvements. But GEAC is better than having no regulator at all
The
clamour for the state to regulate (as against the powers of the legally
mandated regulatory agency), field trials of bio-technology seeds for
cotton and then mustard, is truly extraordinary. It has serious
long-term consequences for the economy.
The challenges to the
Genetic Engineering Advisory Council’s powers to regulate the sanction
of field trials, go back to the Bt brinjal seed episode when Jairam
Ramesh was environment minister. He took the plea that he was going to
set up a new regulatory mechanism. Therefore, under the extant
legislation, he relied on exceptional powers, which all laws carry as a
matter of abundant caution, to interfere in the trials approved by the
Council.
In the controversy that followed he also took the plea
that brinjal was not an important crop. The minister was ill-advised,
since brinjal is around 10 per cent of the production of vegetables.
Fruit and vegetables, in addition to animal husbandry products, are
major contributors to food inflation.
Productivity challenges
The
earlier hybrids (Shankar variety) and then the Bt seeds played the
major role in India’s cotton supply for the textile sector. Even in the
nineties, India was dependent on expensive imports for long staple
cotton, thereby jeopardising its competitive advantage in cotton
textiles and mixed fabric textiles and their use in made-ups.
Cotton
requires good soil and regulated water, and in both the country faces
resource constraints. This makes India vulnerable to competition from
the better placed US, Europe and some Asian countries.
The
present research effort under the direction of the Indian Council of
Agricultural Research (ICAR) is concentrating on dry land cotton and the
attempt is to build a seed base that can take on rainfall failure or
delay. This is a tall order and will need advanced technological
research. The Department of Biotechnology and ICAR have the competence
to lead such research but the resources required for it would need
public private partnerships, and the BT companies have to be a part of
this process.
Pricing issues
There is going to be
the important question of pricing. Many States have issued price control
orders under the draconian Essential Commodities Act which the NDA
constituents had said would be abolished. The seeds price control order
issued at the end of the last year by the ministry of agriculture was
under this Act.
Since royalty and trait value will also have to
be regulated under the new dispensation, bio-technology companies will
obviously want freedom in pricing seeds. From the angle of economic
policy, this argument will not hold since, given the innovative nature
of the product, companies will hold monopoly power on pricing. Earlier,
in such cases, well informed government regulatory bodies developed what
the Bureau of Industrial Costs and Pricing in the 1980s called Long
Range Marginal Cost Pricing. This kind of pricing recognises that the
free market does not exist in innovative commoditieswhere large funds
are needed to develop new products and hence entry is selective.
The
answer then was for the regulator to take into account the costs,
including for R&D, of developing such products and including them in
the price formulation process. This has obviously not been done in the
present policy order.
The present regulatory system of
bio-technology was developed in the mid-nineties by a committee chaired
by MS Swaminathan; I had the privilege as minister for science and
technology , to implement it. Ramesh was in the right direction in
pursuing the setting up of a new regulatory authority. Until that
happens it is important that we work within the framework of the Genetic
Engineering Advisory Council and not take ad hoc decisions.
The writer is the chancellor of Central University of Gujarat, and a former Union minister