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Seeds Of Distress: Story Of
Cotton Seed Growers In AP

By K.Jayaram

22 September, 2007

Distress in Cotton cultivation is extended its boundaries and reached to Cotton seed production. The area under Cotton seed production is on a shrinking trend. This can be attributed to the exploitive nature of companies. Farmer both as a consumer and producer of seed is exploited by the seed companies. Farmer as a consumer of seed has to pay more price and inturn he is getting less price for his seeds. To get maximum yields companies promoting input intensive methods in seed production. These methods increases cost of cultivation and made seed production labor intensive activity. After a tedious work cotton growers getting very little profits which lead the farmers into distress.

Hybrid cottonseed production is concentrated in Andhra Pradesh which alone account for 62% of the total seed production in India. Within AP, nearly 90% of seed production is concentrated in Mahaboobnagar and Kurnool districts. Area under cotton seed production in these two districts is around 14,000 acres. Though seed production is carried out in most of the mandals in these districts there is high concentration of seed production in Gadwal, Dharur, Maldakal, Gattu, Iza, Atmakur, Jadcharla in Mahaboobnagar and Allagadda, Nandhyala, Sanjamala, Koillkuntla, banaganapalli, Uyyalawada, Emmiganur, Mantralayam, Kodumur mandals in Kurnool districts.

The other districts where cottonseed production is carried out are Randareddy in Telangana and West Godavary, Krishna, and Vijayanagaram in Coastal Andhra region and Kadapa in Rayalaseema. The basic reason for concentration of seed production in this region is availability of cheap labour and also suitability of climatic conditions.

Monsanto, JK seeds, Rasi seeds, Krishidhan, Ankur, Nandi, Nuzuveedu seeds etc are the major players in Cotton seed production. According to one seed organiser (middleman between Seed Company and farmer) there are around 10 companies involved in Cotton seed production. Companies develop their seed programmes prior to the season based on their market analysis. These seed companies work with seed organizers for implementing their seed programme. There is no direct link between seed companies and farmers, but the companies will make an agreement with farmer for supply of the predetermined quantity of seed. This agreement is made between company, seed organiser and seed grower.

Seed production activities broadly can be divided into three stages. Farmer's responsibility is to submit the seeds which are passed all the GOT tests. The first stage includes production at farmer's field, second stage includes the processing at ginning mills and the third stage includes seed treatment with chemicals and packing. Farmer is involved up-to the second stage and third stage will be done by the companies themselves. All the costs involved up-to second stage will be bared by the farmers.

In many places seed production activities begin in the month of April and ends in December. These activities will be beginning with making a contract with the seed organizer for producing certain quantity of seed of a particular company. Farmers are generally not aware of the variety of seed which he is going to produce and even he is not aware whether it is a breeder seed or foundation seed or it is Bt or Non-Bt seed. This contact is made between the farmer, seed organizer and the company. Usually after signing the contract seed organizer will supply the money to the farmer as advance (credit @2% interest) for inputs. This advance will vary from Rs.20, 000/- to Rs.40, 000/- depend on the trust between farmer and seed organizer. There are no formal bond papers etc for this credit. This system is entirely depending on faith.

Seeds will be supplied by the seed organizer on cost basis to the farmer. Cost of a packet of foundation seed of 450grs packet is around Rs.2000/-. Seed rate is 900grs (two packets). Male lines and female lines were sown separately. In case of Bt certain companies are keeping male lines as Bt and female lines as Non-Bt and others are using vice versa.

In the entire seed production "seed organiser" plays a vital role. The basic qualification to become a seed organiser is to supply the required credit to the farmers. This amount ranges from Rs.20, 000/- to Rs 40, 000/- . Some times, small companies will supply the money to seed organizers. The interest rates are fixed and from the company to seed organiser and it is 1% and from seed organiser to seed grower it is 2%.

The entire credit system runs on the basis of trust. There are no bond papers between any one of them. The amount of credit is depends on the trust between the seed organiser and seed grower. Each seed grower has dealings with 4-5 companies. There are around 200-250 seed organizers in both these districts. Most of the time seed organisers are not disclosing any details of the seed to the growers.

In addition to the credit supply, seed organisers also give extension support to the growers. Under each organizer there are 3-4 people for monitoring the fields. Companies pay the organisers for monitoring; this payment varies from company to company and ranges from Rs.1/- to Rs. 5/- per packet of seed produced. This means on average he will get around Rs.400/- to Rs.2000/- per acre (by assuming average yield is 400packets/acre). In addition to the supervision costs he will also get Rs.20/packet as commission.

Extension support provided by the seed organizer is basically about spraying of pesticides and fertilizers. They always suggest farmer to use more and more fertilizers and pesticides. Interestingly most of the seed organizers also have fertilizer and pesticide shops. This extension support increases the cost of cultivation and ultimately pushes the farmer into distress.

In addition to the seed organisers extension support, some companies also organizing trainings for farmers to get maximum yields and in all these trainings they advocate dumping of fertilizers and pesticides. One example for this is Monsanto's -Target 400. Farmers who followed these practices and using more and more inputs to get higher yields, ends at higher cost of cultivation and distress among the seed growers.

The entire seed production activities are labor and input intensive. It needs around 620 labor days spread across 120 days of seed production. Out of this 620 labor days 300 are for crossing. Labor costs accounts for Rs.50, 000/- per acre. To achieve higher yields farmers usually apply more fertilizers than commercial Cotton cultivation. Around 15- 20 bags of fertilizers, which includes Urea, DAP, Potash and other fertilizers are also applied. Proportion of DAP and Potash is more when compared to Urea. These costs accounts for Rs.7, 000/- per acre. Farmers use more pesticides to avoid any damage to the bolls and seeds. They use all kinds of pesticides and all most all stages of crop growth. The cost of pesticides accounts for Rs.10, 000/-. The total cost of seed production varies between Rs.80, 000/- to Rs.85, 000/-.

Scarcity of labor, increased labor costs and child labor are the major concerns in cotton seed production. Migrations of labor to work at constructions of irrigation projects and to urban areas are the major factor for scarcity of labor. Due to NREGP and the intense agriculture activities, as a result of timely rains are responsible for increased labor costs. According to U.Venkatesh of Bingidoddi "farmers don't have any other option but to withdraw from seed production as the cost of seed production increased tremendously due to labor costs".

Engaging child labor is still continuing even though companies are giving incentives for the farmers who avoid child labor in their fields. Companies paying only Rs.15/- per packet in the name of incentive, which is insufficient to meet the additional costs bared by the farmer for hiring adult labor. This incentive accounts for Rs.6000/ - (if the farmer gets a yield of 400 packets) but the additional cost incurred by the farmer for hiring adult labor for crossing is around Rs.21, 000/-. According to U.Venkatesh of Bingidoddi "companies are forcing farmer to use adult labor by sending NGO people and police, but they are not paying the required amounts for hiring adult labor, this effort is pushing the farmers into more troubles rather than resolving the issue".

After harvesting, farmers dry the fiber for one week to ten days. Farmers are allotted specific dates by the organizer to take their produce to the ginning mills. Few companies have their own ginning mills but most of the companies depend on the private ginning mills. In ginning mills processing is done by ginning, delinting, cleaning, GOT and treatment. The entire cost incurred at this stage will bared by the farmer. Farmer presence is must for the entire process. Farmer has to pay Rs750/- per quintal as the service charge to ginning mill, Rs 400/- as wages. The total costs accounts for Rs. 1150/- per quintal. If farmer has a yield of 8quintols he has to pay Rs.9, 200/- .Companies will pay the amount to the farmer only after passing all the tests and it will take two to three months time. Up-to this time farmer has to pay the interest to the seed organizer. The interest amount may reach a minimum of Rs.4, 000/- per acre.

Farmers who are producing cotton seeds are spending around Rs. 85,000/- per acre and in turn they are getting Rs.96, 000/- (if they get 400 packets per acre) which mans a net income of Rs.11, 000/-. If we look at the total economics of seed production it is clearly visible that companies exploiting the farmer at all the stages. Companies supply the foundation seed not only at a higher rate but also at low quantity packets. Farmer has to supply 750gr packets at a cost of Rs.240/- but the companies will sold the seeds at Rs. 800/- per packet of 450grs. According to U.Venkatesh of Bingidoddi "there is not much change in the price paid by the companies to the farmers in last ten years, but the selling price of companies was hiked many times".

The economics of Bt Cotton seed production is also the same as Non Bt cotton seed production even though companies promoting Bt Cotton is more profitable. According to the seed growers even though Boll worm incidence was reduced, other minor pests particularly sucking pests incidence was increased and the costs was increased at the same proportion.

The more dangerous trend in Cotton seed production is the encroachment of Bt seed production, which leads to termination of the farmer's rights on seed. One can visualize easily that with in a very short span of time extinction of all other varieties and hybrids. In the entire Cotton seed production belt of Andhra Pradesh, not even a single acre is under hybrids or verities other than Bt Cotton. This has serious implications on erosion of varieties, farmer's knowledge on breeding methods and economics. Loss of rights on seed means loss of Rs.11, 00 crores (share of cotton seed industry in India).

In these two districts we met many farmers and all of them explained their problems in detail. All of them expressed their desire to withdraw from the seed production. Some farmers are not able to with draw from seed production due to their debt trap. It is very clear from the study that there is an urgent need for shift to farmer centric seed production from company centric seed production.

K.Jayaram, is an agriculture economist working with Centre for Sustainable Agriculture, Hyderabad based NGO, working for sustainable agriculture. The author can be contacted at [email protected]


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