Agricultural Sector Reform

With the current narrative in the national consciousness dominated by issues such as the citizenship amendment Bill, the National Register of Citizens and the amendment to the SPG Act, an important initiative to reform the agricultural sector has missed the headlines. The Union government has proposed a new Seeds Bill, 2019, that seeks to expand upon the availability of quality seeds to farmers. The proposed legislation hopes to replace the The Seeds Act of 1966 and bring in measures that will empower the farmers in accessing high-value seeds for their crops.

The existing law takes into account ‘notified kinds of varieties of seeds’. In other words, only seeds that fall in this category are regulated for quality standards. Most of these varieties are created by various public sector institutions such as the Indian council of Agricultural Research (ICAR) and state agricultural institutions. These seeds are officially released for cultivation after they undergo a host of tests in multiple locations over a period of two to three years — at times even more. They are tested for performance and resistance to pests and diseases.

However, the market has a host of seeds that fall outside the notified category, such as the hybrid varieties. The proposed legislation makes its mandatory for all of the seeds — “any kind or variety” —to be registered with the authorities before they are sold to the farmers for sowing or other purposes. They would undergo the usual tests, including for physical and generic purity. Breeders of such seeds would be required to furnish details of the expected performance of their products under certain “given conditions”. If the seed, after being registered and allowed to enter the market, is found to be an under-performer (that is, below the expected performance), the farmer would have right to claim compensation from the producer, dealer, distributor or vendor of such seeds, under the relevant provisions of the Consumer Protection Act, 1986.

One of the reasons for the new seeds legislation is the changed environment in the farming industry. The 1966 law had come at a time when the seeds business was dominated, indeed monopolised, by the public sector. Few private firms existed that bred quality seeds. The Green Revolution, spread from the late 1950s to the 1960s, had served to increase agricultural production, turning India from a food-deficient nation to food self-sufficient. Focus was on the development of rust-resistant varieties of wheat, high crop-yielding seeds and the generous use of fertilisers and pest-resistant chemicals to enhance production. Given that the entire campaign was government-driven, the role of the public sector was of utmost importance. Today, while the government agencies still have a prominent role to play, there has been a proliferation of private firms that develop and breed seeds, both mono and hybrid types. Over the last twenty five years especially, private companies as well as multinationals have shown increased interest in the seeds business, because they have grasped the potential that exists in this under-utilised sector.

According to some estimates, the private hybrid seeds industry in the country is today worth well over Rs 14,000 crore, with cotton hybrids alone accounting for close to 30 per cent of that figure. Hybrids seeds have also made an entry into the vegetable and food grain areas, although in less formidable ways when compared to the cotton industry. The advantages that have been touted are many, including high produce and high resistant to disease and pests. The 1966 Act had not foreseen these developments, which is why it was felt necessary to amend the law.

This does not mean that, without the new legislation, the hybrid varieties or the seeds bred by private industries today don’t find their way to the market. They do, but because they are not covered under the old law, the firms breeding the new seeds can get away by claiming — to the best of their knowledge — various advantages such as generic purity and high yield. There is little that can be done to punish those who make false claims. The new Bill tackles this lacuna by doing away with the notified category, and makes it mandatory for all seeds to be registered with the authorities. It is true that even under the 1966 law, seed breeders had to, as per the Seeds (Control) Amendment Order of 2006, ensure quality control, but in the absence of an Act which made the seed companies accountable, this order had remained toothless.

While most seed companies have welcomed the government’s intent to bring in a new legislation to regulate the seeds market — both public and private — they have forwarded a few suggestions as well. The National Seed Association of India (NSAI) has, for example, sought clarity on the definition of transgenic variety. The NSAI, which represents prominent seed companies, has written to the ICAR, saying that a clear scientific definition, which is not available as of now, should be made in the Bill. The other important suggestion the seed association has made relates to R&D. Pointing out that with the boom in seed industry, research and development activities too are poised to take off in a big way. The government should make provisions to ensure that registrations are fast-tracked; in fact, certain firms can be accredited to conduct the registration after the seed company meets the requirements. The NSAI said that this system existed and has worked well in countries such as China. The private seed industry has underlined the setbacks that could happen in case the registration process was not made time-bound.

The private sector’s other major concern is on the sale price regulations that would kick in when there is an ‘emergency’ situation — floods, drought, sharp rice in prices, etc — leading to a serious scarcity of seeds. Private seed companies are wary of the powers that the government would have in determining seed prices in such situations. They point out that the cost of seed is only a fraction of the total cost of crop cultivation, and there is thus no need for the government to target seed firms by having a right to set the prices even in emergency situations.

The livelihood of over 60 per cent of Indians depends on the use of quality seeds. The proposed Seeds Bill, must, therefore, keep the interests of farmers uppermost, rather than end up largely benefiting private industries, including the multinationals. Therefore, redressal mechanisms for the farmers, who are the end users, should remain simple and workable. While farmers would be free to approach the consumer courts in case they feel cheated, one cannot expect farmers to individually fight their cases. The government machinery ought to intervene in such cases and offer the necessary assistance.

The government has time, if it desires, to tweak the proposed legislation with a view to addressing outstanding concerns. It has to walk the tightrope of farmers’ interests and the seeds industry’s demands. If the two are seen as complementary and not confrontational, the solutions which emerge will not only be acceptable but also beneficial to all.

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