HYDERABAD: The National Seed Association of India (NSAI) has decided to challenge the Andhra Pradesh Government’s ordinance issued recently to control supply, distribution and price of cotton seed in the High Court.

It felt that the ordinance was contrary to the Centre’s stated intentions when it took cotton seed out of the purview of the Essential Commodities Act. As the ordinance was enacted without any consultation with the seed industry, “we have no option left but to challenge it in court.”

Cotton production in the country in the last six years has nearly doubled from 170 lakh bales/year to an estimated 300 lakh bales in 2007, it said. This has been possible through the rapid introduction of Bt cotton technology in the best hybrids by seed companies and technology providers.

Almost 85% to 90% of the total hybrid cotton market is now being supplied by over 100 seed companies who have made huge investments (Rs 200-300 cr) for R&D that provide the best hybrids and technology to cotton growers.

The NSAI said farmers recognised the value of seed and technology and would not compromise on quality. An example was the rapid adoption of Bt cotton by farmers. The area under Bt cotton had grown to 14 million acres in a mere six years since its introduction in 2002. All this was due to the R&D efforts of seed companies in introducing newer hybrids and technologies.

In a free market, it is important that prices are determined by market forces of demand and supply and also on the basis of the quality and yield potential of different hybrids of cotton. Unintended price controls could have several negative impacts, the NSAI said.

With over 100 cotton seed companies competing, market forces will ensure that farmers get the seed at reasonable prices. Government mandated pricing, the industry argued, was a wrong practice.