Uniform TitleEconomic impact of price controls and regulations: case of GM cotton in India
NameRao, Smriti S. (author), Pray, Carl (chair), Bhuyan, Sanjib (internal member), Toole, Andrew (internal member), Rutgers University, Graduate School - New Brunswick,
SubjectFood and Business Economics,
Cotton--Law and legislation--India,
DescriptionBt cotton has been extremely popular with Indian farmers ever since unapproved varieties were introduced in Gujarat in 2001 by Navbharat Seed Company Ltd. Cotton hybrids with approved bt traits were released by Monsanto through the joint venture MMB (Mahyco Monsanto Biotech) in 2002. MMB had the first mover advantage because they had the only approved bt genes for commercialization in India thereby making considerable profits. This attracted a large number of firms to license the technology from MMB. However, in 2006 the government of Andhra Pradesh (AP) filed a petition with the Monopolies and Restrictive Trade Practices Commission (MRTPC) seeking to reduce prices. The Commission agreed but MMB appealed to the Supreme Court. Meanwhile, the AP government negotiated with the seed companies to set the prices of hybrid bt cotton seed at $18/packet (of 450 grams) inclusive of technology fee which is much lower than the $29/packet that MMB had been selling it at. Soon other state governments adopted the same pricing policy.
This paper primarily attempts to perform a cost-benefit analysis using the economic surplus model to address the immediate and longer term impact of price controls on farmers. A number of seed companies, especially the multinationals are concerned that this governmental intervention could inhibit innovation, which would mean that farmers would lose out on economic surplus in the future. We attempt to measure these losses. Our analysis finds that the current benefits to the farmers outweigh the losses of benefits due to non availability of some of the most easily measurable new technologies.
NoteIncludes bibliographical references (p. 43-45).
CollectionGraduate School - New Brunswick Electronic Theses and Dissertations
Organization NameRutgers, The State University of New Jersey
RightsThe author owns the copyright to this work.