India has one of the world’s fastest growing seed markets. Presently estimated at US$1.1 billion, India’s seed market is the sixth largest in the world. The world seed market is growing at the rate of 5% whereas the Indian seed market is growing at the staggering rate of 12% despite prevailing economic slowdown.
To govern and regulate such a growing market is a priority of every country and India is no exception. With India being largely an agricultural-based country, the need to have an efficient legal system for the regulation of the seed industry is a priority.
India has a specific law on seeds, namely the Seeds Act, 1966, but it being outdated paved the way for Seeds Bill, 2004, which aims to regulate the quality of seeds sold and would replace the Seeds Act, 1966.
The proposed enactment is progressive in nature. It addresses the contemporary issues faced by the country and reflects a genuine attempt by the legislators to resolve these issues.
Key features of the bill (including amendments) are as follows:
(1) All varieties of seeds for sale have to be registered and the seeds are required to meet certain prescribed minimum standards. Further, transgenic varieties of seeds can be registered only after the applicant has obtained clearance under the Environment (Protection) Act, 1986.
(2) The bill categorically exempts farmers from the requirement of compulsory registration. Further, the farmers are allowed to sow, exchange or sell their farm seeds and planting material without having to conform to the prescribed minimum standards for germination, physical purity and genetic purity (as required by registered seeds).
(3) If a registered variety of seed fails to perform to expected standards, a farmer can claim compensation from the producer or dealer. The bill provides for setting up a compensation committee to hear and decide such cases. The bill also provides for an appellate mechanism to be set up on notification.
(4) The penalty for contravening any provision of the act or selling misbranded or substandard seeds is a fine ranging between ₹25,000 (US$400) and ₹100,000, while the offence of giving false information may incur a prison term for up to a year and/or a fine of up to ₹500,000.
The bill was introduced in December 2004 and has passed through stringent tests of the standing committee’s recommendations and amendments (including the latest amendment in 2011) but still awaits the final nod from the parliament to become law. The bill has been delayed due to concerns raised on price control, registration, acceptance of foreign seeds registration without prior testing of such seeds on Indian soils, and quantum of penalties, which are relatively low.
Despite having received criticisms from various groups including farmers, there exists a general consensus that the bill is a welcome change which provides the required backdrop for both Indian and foreign entities to develop, expand and realize the potential of the Indian seed market.
Under the consolidated foreign direct investment (FDI) policy issued by the Department of Industrial Policy and Promotion, 100% FDI is permitted under automatic route for development and production of seeds, subject to certain terms and conditions for transgenic seeds such as compliance under the Environment (Protection) Act, 1986, the Foreign Trade (Development and Regulation) Act, 1992, the National Seeds Policy and other regulations governing genetically modified materials and obtaining approval from the Genetic Engineering Approval Committee and the Review Committee on Genetic Manipulation.
Contemporary issues such as differential pricing of seeds are a concern for the central and state governments and also impact economic factors such as the income of the farmers, price of crops and ultimately inflation, which is a key to various economic policies and reforms of the country. This differential pricing of the seeds (especially vegetable seeds) cannot be controlled overnight, but strong enactments (extensively covering the various granted rights and their exploitation) and their judicious implementation at various levels can have the desired impact.
Further, it is equally desirable that the central and state governments should work in tandem and provide necessary infrastructure for the growth of the seed industry in the country.
At this stage, the bill is yet to be passed by the parliament and once it takes the form of the enactment it should address all the concerns and provide the necessary boost to the Indian seed industry in the true sense.
Sidhartha Srivastava and Gurmeet Kainth are partners at DH Law Associates.