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Monopolies and Restrictive Trade Practices Commission of India finds US Corporation Monsanto manipulating prices
US biotech giant Monsanto has been told to cut the cost of its genetically-modified seeds to Indian farmers after monopoly investigators ruled it was manipulating prices, according to a report Friday.
The Monopolies and Restrictive Trade Practices Commission said the US-Indian joint venture, Mahyco Monsanto, imposed "unjustified" costs on farmers and demanded that prices be reduced in a month, the Press Trust of India said.
"We find that prima facie it has been established that the respondent is indulged in trade practices, which... have the effect of preventing, distorting and restricting competition," said Justice B K Rathi of the commission in the ruling yesterday.
Mahyco Monsanto immediately announced it will appeal against the decision in the Supreme Court, the country's highest court, saying the ruling is "beyond the commission's jurisdiction and inconsistent with the laws of India."
The company cut its royalty fee by 30 pct to 900 rupees per 450-gramme bag of GM cotton seeds in March amid growing controversy over its tight grip on the Indian cotton GM seed market.
It said the cut was in order "to best meet current market conditions."
The commission rejected the company's claims it was not involved in fixing prices and backed a report by investigators in March that it was charging "exorbitant" prices, the media reported.
Farmers in Maharashtra were quoted by Agence France-Presse last month that they used to pay 450 rupees for a bag of traditional seed, but about 1,600 for GM seed.
Mahyco Monsanto's cotton was launched in 2002 in India and planted by more than a million farmers in 2005, the company said.
It said a survey showed that yields from their seed were 64 pct higher compared with conventional cotton and farmers used less pesticide.
MK Sharma, managing director of Mahyco Monsanto, said the ruling "could have an adverse effect on the flow of many investments in India if companies are afraid that the government may come in and set prices for them."
BIZ/FINANCE ARTICLES
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