Indian seed firms eye share of Pakistan’s Bt cotton market

India and Pakistan may be at loggerheads over most issues, but trading in genetically modified cotton could be an exception.

Top seed companies in India, such as Monsanto Holdings Pvt. Ltd and Rasi Seeds Pvt. Ltd, have petitioned India’s apex biotech regulator to allow export of Bt cotton seeds to Pakistan. Pakistan’s agriculture institutions are conducting preliminary trials to test the efficacy of these seeds in that country.

The moves could open up a potential $1 billion (Rs.4,510 crore) market in Bt cotton, analysts say.

Cotton is an important cash crop in Pakistan and accounts for 8.2% of the value added in agriculture and around 3.2% to gross domestic product; around two-thirds of the country’s export earnings are from cotton products, which adds $2.5 billion to the national economy.

"Climate conditions are similar in both countries, so several varieties of cotton that can be cultivated in India can be grown in Pakistan, too,” said Jagresh Rana, director, Mahyco Monsanto Biotech (India) Ltd, in which Monsanto Holdings has a little over 12% stake. “It’s a very good market to compete in.”

Another official in a leading Indian cotton seeds firm said though the Pakistan government doesn’t yet allow Bt cotton for commercial cultivation, its approval was “imminent” as several varieties were already available in Pakistan’s fields and there were talks between agriculture ministries of China and Pakistan to develop Bt cotton varieties for Pakistan.

"There’s already competition for (a) prospective Bt cotton market share in Pakistan. India and China are both eyeing it,” he said, requesting that neither he nor his company be named.

Later this week, the Genetic Engineering Appraisal Committee, India’s biotech regulator, is likely to decide on allowing export—for trial purposes—of more than 20 varieties of Bt cotton seeds to Pakistan, according to a statement on its website.

It is estimated that globally pests cause agricultural losses worth $120 billion (Rs.5.4 trillion), Rs.60,000 crore of which takes place in India. Pesticides worth $8 billion are used every year in India, with cotton accounting for nearly $3.8 billion of this. Pakistan’s cotton acreage, which is about half of India, faces as much proportional damage from cotton pests as India.

"Key cotton pests are common across both countries,” said M. Vinay Kumar, a cotton researcher with the Indian Agricultural Research Institute. “So the damage per acre is pretty much the same across both countries.”

For the past several years, Pakistan has been a net importer of cotton in excess of 300 million kg due to an acute shortage in production.

According to a report by that country’s agriculture department, the government forecasts various options, including transgenic crops, to reach "production levels of 20.7 million bales by 2015”, by adding 25,000 acres of cotton areas annually, along with 5% growth in per hectare yield.

Bt cotton is now grown over 90% of India’s cotton acreage, and has been credited with tripling yields and making the country a net exporter of the commodity since 2006. It’s largely due to the success of Bt cotton and its acceptance among farmers that several companies and agricultural research institutes have been trying to integrate the Bt gene into food crops in India.

Genetically modified cotton today uses one or more genes from a soil bacterium called Bacillus thuringiensis that triggers an insecticidal protein. These toxins are usually fatal only to a bug called the American bollworm, considered the chief cotton pest and, as a result, the target of most insect sprays.

Though Bt cotton seeds are costlier than their non-Bt counterparts, its proponents claim that seeds engineered in this way dramatically reduce the sprays—and hence costs—in protecting cotton crops.