The row over Bt Brinjal, a genetically modified version of the plant, provoked the government into imposing a moratorium on the commercial cultivation of the plant in India.  The debate has revolved around issues of economic efficacy, human health, consumer choice and farmers’ rights. Jairam Ramesh, the Minister of State for Environment and Forests, made public his views on the subject, a gist of which is given below:

  • The Genetic Engineering Approvals Committee (GEAC) report recommended commercial cultivation of Bt Brinjal but qualified it by stating that since the issue has important policy implications at the national level, the government should take a final view on the matter.
  • Most of the state governments have expressed concern and have sought to ban the use of Bt Brinjal, or all GM crops.
  • Pesticides have harmful effect on human health and Bt technology is one way of reducing pesticide use.  However, other routes such as non-pesticide pest management can be explored.  For example, about 6 lakh farmers in Andhra Pradesh practice non-pesticide pest management over an area of about 20 lakh acres.
  • Safety is a concern since the kind of tests that have been done is not specific or stringent enough to detect toxins.  Also, tests have only been carried out by the developers of the product, Maharashtra Hybrid Seeds Company Ltd. (Mahyco).  (The results of the biosafety tests are available on the GEAC website).
  • There is no large-scale public funded biotechnology effort toward agriculture, which could compete with Mahyco.  Monsanto is the main producer of Bt Brinjal, and Mahyco is owned to the extent of 26% by Monsanto.
  • While two government owned agricultural universities -- University of Agricultural Sciences, Dharwad and Tamil Nadu Agricultural University (TNAU), Coimbatore – have produced Bt Brinjal along with Mahyco, doubts have been raised about how Bt related research in these universities have been funded.
  • There are apprehensions that there will be diversity loss in the variety of Brinjal if Bt Brinjal is introduced, and this fear cannot be glossed over.
  • While Bt Cotton and Bt Brinjal are not comparable, the introduction of Bt Cotton in India has made India the second largest grower of cotton in the world.  Over 90% of cotton farmers in India cultivate Bt Cotton.  Many farmers support Bt Cotton on economic grounds but some did express doubts.
  • The Central Institute of Cotton Research, Nagpur has developed a Bt cotton variety (Bikaneri Nerma) whose seeds can be kept by farmers for planting during the next season.  The Director of the Institute while expressing support for Bt Brinjal has mentioned that resistance development is a serious issue.  Therefore, more tests that are well-designed, widely-accepted and independently conducted are necessary.
  • The GEAC process has been questioned by  Dr P.M. Bhargava, the Supreme Court nominee on GEAC.  He opposed the recommendation on the ground that all necessary tests had not been carried out before coming to a decision.  The 2006 committee of the GEAC had asked for several tests to be conducted which were not taken into account by the second expert committee.  All GEAC reports (including additional tests) of tests conducted with regard to Bt Brinjal are in the public domain.
  • There is some evidence that the GEAC not followed global regulatory norms of which India is a party.  For example, the Cartagena Protocol on Biosafety, Rio Declaration on Environment and Development etc.
  • Some international scientists have raised doubts about Bt Brinjal and the way the tests were conducted.
  • Many Indian scientists have supported commercialization of Bt Brinjal such as Dr G. Padmanabhan of the Indian Institute of Science; Dr Deepak Pental, Vice Chancellor of Delhi University; and Dr Raj Bhatnagar of the International Centre for Genetic Engineering and Biotechnology, New Delhi.  However, even they have mentioned the need for a statutory body with regulatory powers and R&D capabilities to govern all aspects of GM crops.
  • The Indian Council of Agricultural research and a number of farmer’s groups have come out in support of the move to introduce Bt Brinjal.

In order to understand the process followed by GEAC before giving the green signal to Bt Brinjal, we have made a timeline in which the plant was approved and the bodies involved in the process.

2000-2005 Scientific tests carried out by Mahyco on Bt Brinjal
2006 Mahyco submits bio-safety data to GEAC (regulatory body under the Ministry of Environment and Forests). Seeks permission for large scale trials.
  Supreme Court stops ongoing field trials of GM crops due to a PIL filed by civil society representatives.
2007 The expert committee 1 set up by GEAC, submits its report.  Recommends seven more studies on bio-safety be repeated for reconfirmation of data generated during confined multi-location trials but approves large scale trials.
  Supreme Court lifts ban on GM crop field trials subject to conditions such as isolation distance etc.
  As per GEAC direction, Indian Institute of Vegetable Research (IIVR) takes up the responsibility of large scale trails of Mahyco's Bt Brinjal trials at 10 research institutions across the country in 2007 and 11 in 2008.
2009 Jan: IIVR submits the results of the large scale trails. Due to concerns raised by several stakeholders, GEAC constitutes another expert committee to look into adequacy of biosafety data generated as well as the concerns raised by all stakeholders.
  Oct 8: Expert-committee 2 submits its report. States benefits of Bt Brinjal far outweigh the perceived and projected risks.
  Oct 14: GEAC approves the environmental release of Bt Brinjal containing the event EE1 (with one dissent note from P.M. Bhargava).
  Oct 15: Jairam Ramesh announces a nationwide consultation in January and February of 2010 pending a final decision on this issue.
2010 Jan 13 to Feb 6: Public meetings were organized on the Bt Brinjal issue. The summary of the consultations is available on the Ministry’s website.
  Many states announce ban on commercial cultivation of Bt Brinjal including Uttarakhand, Himachal Pradesh and Karnataka.
  Feb 9: Jairam Ramesh decides to halt the commercialization of Bt Brinjal.

After months of discussion,  the issue of FDI in retail is being deliberated in the Lok Sabha today.  In September 2012, the Cabinet had approved 51% of FDI in multi-brand retail (stores selling more than one brand).  Under these regulations, foreign retail giants like Walmart and Tesco can set up shop in India.  Discussions on permitting FDI in retail have focused on the effect of FDI on unorganised retailers, farmers and consumers. Earlier, the central government commissioned the Indian Council for Research on International Economic Relations (ICRIER) to examine the impact of organised retail on unorganised retail. The Standing Committee on Commerce also tabled a report on Foreign and Domestic Investment in the Retail Sector in May, 2009 while the Department of Industrial Policy and Promotion (DIPP) released a discussion paper examining FDI in multi-brand retail in July, 2010.  Other experts have also made arguments – both in support of, and in opposition to, the move to permit FDI in retail sales. The table below summarises some of these arguments from the perspective of various stakeholders as collated from the above reports examining the issue.

Stakeholder

Supporting arguments (source)

Opposing arguments (source)

Unorganised retail
  • No evidence of impact on job losses (ICRIER).
  • The rate of closure of unorganised retail shops (4.2%) is lower than international standards (ICRIER).
  • Evidence from Indonesia and China show that traditional and modern retail can coexist and grow  (Reardon and Gulati).
  • Majority of small retailers keen to remain in operation even after emergence of organised retail (ICRIER).
  •  Unorganised retailers in the vicinity of organised retailers saw their volume of business and profit decline but this effect weakens over time (ICRIER).
  • Other studies have estimated that traditional fruit and vegetable retailers experienced a 20-30% decline in incomes with the presence of supermarkets (Singh).
  • There is potential for employment loss in the value chain. A supermarket may create fewer jobs for the volume of produce handled (Singh).
  • Unemployment to increase as a result of retailers practicing product bundling (selling goods in combinations and bargains) and predatory pricing (Standing Committee).
Farmers
  • Significant positive impact on farmers as a result of direct sales to organised retailers.  For instance, cauliflower farmers receive a 25% higher price selling directly to organised retailers instead of government regulated markets (mandis).  Profits for farmers selling to organised retailers are about 60% higher than when selling to mandis (ICRIER).
  • Organised retail could remove supply chain inefficiencies through direct purchase from farmers and investment in better storage, distribution and transport systems.  FDI, in particular, could bring in new technology and ideas (DIPP).
  •  Current organised retail procures 60-70% from wholesale markets rather than farmers. There has been no significant impact on backend infrastructure investment (Singh).
  • There are other issues like irrigation, technology and credit in agriculture which FDI may not address (Singh).
  • Increased monopolistic strength could force farmers to sell at lower prices (Standing Committee).
Consumers
  • Organised retail lowers prices. Consumer spending increases with the entry of organised retail and lower income groups tend to save more (ICRIER).
  • It will lead to better quality and safety standards of products (DIPP).
  •  Evidence from some Latin American countries (Mexico, Nicaragua, Argentina), Africa (Kenya, Madagascar) and Asia (Thailand, Vietnam, India) reveal that supermarket prices for fruits and vegetables were higher than traditional retail prices (Singh).
  • Even with lower prices at supermarkets, low income households may prefer traditional retailers because they live far from supermarkets, they can bargain with traditional retailers and buy loose items (Singh).
  • Monopolistic power for retailers could result in high prices for consumers.

Source: ICRIER [1.  "Impact of Organized Retailing on the Unorganized Sector", ICRIER, September 2008]; Standing Committee [2.  "Foreign and domestic investment in retail sector", Standing Committee on Commerce, May 13, 2009]; Singh (2011) [3. "FDI in Retail: Misplaced Expectations and Half-truths",  Sukhpal Singh, Economic and Political Weekly, December 17, 2011];  Reardon and Gulati (2008)  [4. "Rise of supermarkets and their development implications," IFPRI Discussion Paper, Thomas Reardon and Ashok Gulati, February 2008.]; DIPP [5. "Discussion Paper on FDI in Multi-brand Retail Trading", Department of Industrial Policy and Promotion, July 6, 2010]