Case # 36 - Controversial sales

Submitted by-

Zorawar Bhattal

501504011

Q1 Analyse the situation.

Ans 1- In this case study, the Indian company Navbharat Seeds Ltd had sold the genetically modified
Navbharat 151 variety of BT cotton to the farmers illegally without the knowledge of Indian govt
Authorities by not seeking relevant permissions. MAHYCO was a Mumbai based company who held
the patent for this variety of BT Cotton and was already in the process of Testing this variety of
seeds. Since the revelation by MAHYCO came in a bit late, already about 10,000 hectares of land
area had already been put under cultivation and some part of it was already harvested by the
farmers. It was already a known fact that it was illegal to cultivate a genetically modified variety of
cotton without its testing and taking relevant approvals and that all the parties involved in the sale
of its seeds should be heavily penalized as per the law. At this point if the govt did step in a decide to
destroy the entire crop, they would have to compensate the farmers which would run into several
crores of rupees (150 Crores) , something that was not possible since the accused company would
never be able to pay the amount so a part would have to be borne by the govt . Also farmers had
already cultivated and reaped the harvest and most of them made good profits over the regular
variety in terms of better yield and less expenditure on fertilizers as this variety was resistant to
certain pests as opposed to the domestic variety of seeds available.

The seeds association was of the view that the company was not to be blamed since the seeds were
sold in good faith with an assurance that the farmers would definitely get more yield per hectare
over the conventional seeds. The same view was echoed by various scientists of repute who had
witnessed the benefits of the same variety of the crop abroad.

Moreover the govt of India would have to invest approx 100 million in establishing the 6 testing
laboratories for the genetically modified crops which was a huge expenditure to make in a short
period.

Q2- Is this the issue of Environment or of competition among private players?

Ans 2- the case study discusses both the environment aspect as well as the competition issue among
pvt players. Since the cultivation of genetically modified seeds is not allowed in India because there
are no clinical trials or labs available to test the GM crop for any damages to the environment, the
other aspect about monopoly being established by Navbharat for the particular crop also stands to
protect the interest of other local producers of the seeds as no farmer would purchase the local
variety due to the imported variety being more superior and beneficial in the long run. Moreover
MAHYCO owned the patent for this variety of cotton and Navbharat could not sell this variety
without its express permission.
Q3- Should action be taken against farmers and Navbharat seeds P ltd ?

Ans 3- Navbharat should definitely be penalised since they had committed an illegal act by importing
and selling a GM BT crop. Even though it was established by various scientists from the Biotech dept
that the Seeds had no negative impact and that the farmers would stand to benefit only, But a
precedence should be set so that no other organisation commits a similar act in the future without
taking all requisite permissions. As far as the farmers are concerned, their crops should not be
destroyed but all unsold stock of the seeds should be recovered from the market and the govt
should put up a surveillance and monitor the harvested crop.

Q4- What should Navbharat do now?

Ans 4- Navbharat seeds should abide by all laws and withdraw all unsold stock from the market to
prevent misuse and take all relevant permissions from MAHYCO and Indian govt before selling GM
seeds in future. Navbharat should also be penalized by the govt so that a right precedence is set in
future for other dealers.

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