India is the first country to introduce hybrid cottonseeds for commercial cultivation. The public sector in India has played a crucial in developing and propagating the use of hybrids seeds. The world first cotton hybrid H4 was introduced in 1970 by the government Cotton Research Station situated at Surat in the state of Gujarat. This hybrid cotton by virtue of its high yield potential and adaptability became popular among the farmers initially in Gujarat and later on in states of Andhra Pradesh, Maharashtra, Karnataka and Tamilnadu. Since 1970, a number of new hybrids have come up and the use hybrids has been rapidly increasing.
Cotton is a major commercial crop in India, occupying about 9 million hectares, with about 40% of this land is currently covered by hybrid seeds. India accounts for 21 percent of world's total cotton area (largest in the world) and 12 percent of global cotton production. Among the cotton growing states Maharashtra takes the lead with about 35% of total cropped area followed by Gujarat and Andhra Pradesh. Andhra Pradesh account for nearly 900,000 hectares of land - with about 65.0% of this land currently covered by hybrids.
Andhra Pradesh - seed capital of India
Though hybrid seeds are used all over the country hybrid seed production is concentrated in Andhra Pradesh. During the year 1999-2000, nearly 90% of the hybrid seeds of Maize and Jowar, 70 %of hybrid Bajra and 65% of hybrid cottonseeds marketed in the in country were produced in Andhra Pradesh. (see table 1)
Table 1: Quantity of Hybrid Seed Produced in Andhra Pradesh during 1999-2000|
Total quantity of seed|
produced in AP (in quintals)
|% share of AP to total|
seed marketed in India
Source: Yogeswara Rao, Y. (2001) 'An estimate of the production of hybrid seeds of different crops (public and private companies) in Andhra Pradesh', Seedsmen Association, Andhra Pradesh Souvenir.|
In AP hybrid cottonseed production is highly concentrated in three districts Mahaboobnagar, Kurnool and Ranga Reddy which alone account for nearly 95% of the total production in the state. The primary reason for concentration is availability of cheap labour and also suitability of agro climatic conditions. About 60 % of the seed produced in AP is exported to other states and countries7.
Public and private hybrids
The production and marketing of hybrid seeds is carried out by both public and private seed agencies. The public sector includes State Seed Corporations of the cotton growing states and State Farms Corporation of India (SFCI). Hybrids are of two types - public and private. Public hybrids like H4, JKH1, Savitha, NHH 44 are released by state agencies (i.e., Agricultural Universities, research centers). Private hybrids (also called research or proprietary hybrids) like Paras Brahma (released by Hindustan Lever Limited), Mech 12 BT, Mech 162 BT, Mech 162 (BT cotton hybrids released by Mahyco-Monsanto) Sandocot (Syngenta) banny (Nuzeveedu seeds) RCH2 (Raasi seeds) are developed by private seed companies through their own research.
State Seed Corporations produce and market only public hybrids. The hybrids developed by public sector agencies are registered and notified to enable certification by State Seed Certification Agencies. Private seed companies produce and market both public bred hybrids as well as hybrids developed by them. The foundation seeds of public hybrids are made available by the government for any one (both public and private seed companies) who wants to multiply them and market to the farmers. In contrast, the proprietary or research hybrids are developed by private companies themselves and they alone will have patent rights over production and marketing of that seed.
Currently private seed companies contribute about 80% hybrid cottonseed produced and marketed in the country. Though public sector Seed Corporations in other states are playing an important role, in production and marketing of hybrid cottonseed, yet in AP their role is negligible. In AP the share of State Seed Development Corporation is about only one percent8.
The growth of hybrid cottonseed production in AP state is not only linked to increasing demand for hybrid seeds within the state but also growing demand for these seeds in national and international markets. As the demand for hybrid cottonseeds is growing within and outside the state the area under seed production also has increased significantly in recent years.
Table 2: Growth in area and quantity of hybrid cottonseed produced in Andhra Pradesh|
during 1990-1991 and 2000-2001
|Area||Quantity of seed|
|Area||Quantity of seed|
Source: The data on public hybrids is taken from annual reports (1990-1991 and 2000-2001) of Andhra Pradesh State Seed Certification Agency. The data on private hybrids is collected from the interviews with representatives of Seedsmen Association of Andhra Pradesh. |
Table 3: Extent of area and quantity of hybrid cottonseeds (public varieties)|
certified by the AP State Seed Certification Agency
Area certified||Quantity certified|
Source: compiled from annual reports of AP State Seed Certification Agency.|
Shift from public to private hybrids
Though the area under both public and private hybrids have registered significant increase during 1990-1991 and 2000-2001, there is clear shift from public to private hybrids. The area under private hybrids has increased about 18 times during 1990-1991 and 2000-2001 (from 1000 acres in 1990-1991 to 18000 acres in 2000-2001). The area under public hybrids also registered significant increase about three and half times during 1990-1991 and 1999-2000 (from 5160 to 17502 acres) but shown sudden decline in 2000-2001. The reasons for shift from public to private hybrids are many fold. Private companies in recent years have started showing greater interest in developing their own hybrids than relaying on public hybrids because the profit margins are very high in private hybrids. Companies are at liberty to fix the prices for their own hybrids. The entry of multinational seed companies who have well equipped research facilities and able to invest large sums of money on developing new hybrids is another factor which has contributed for shift from public to private hybrids.
Trends in employment of child labour in cottonseed production
As already explained in section one the production of cottonseed is highly labour intensive and children are employed in most of its operations. The number of child labour in cottonseed production is linked to the extent of area under cottonseed production. As the demand for hybrid cottonseeds has been growing the area under seed production and the number of child labour employed have also been increasing. The estimates of total number of children working in cottonseed farms presented below are drawn on the basis of per acre requirement of number of labourers to do different activities in cottonseed cultivation and children's ratio to the total labour force. Various field studies conducted by the author in different parts of Andhra Pradesh have indicated that on average ten children are employed for cultivation of an acre of cottonseed. It is estimated that for acre about 10 persons are required every day for doing cross pollination activity, which last about four months, in cottonseed fields. Except in few areas, cross pollination activity is exclusively done by children. Children are also employed in other operations like sowing, intercultivation and harvesting. Assuming that an average ten children are employed for doing one acre of cottonseed cultivation, the total number of children employed in cottonseed fields in Andhra Pradesh is estimated for different years. The trend indicates that there has been a significant rise in the total number of child labour employed in cottonseed production during 1990s. The number of child labour increased from 61600 in 1990-1991 to 300000 in 1999-2000. Compared to 1999-2000 year, the total number of number of child labour employed in cottonseed production declined due to fall in the extent of area under production in 2000-2001 year.
Table 4: Approximate area and number of children employed in hybrid cottonseed farms|
in Andhra Pradesh
Total area under production (acres)||Total number of children employed|
Role of Multinational Seed Companies
The increase in the demand for hybrid seeds in recent years has resulted in the proliferation of private seed companies, which produce and sell hybrid seeds. Developing, producing and marketing seeds, such as hybrid cottonseeds, is a major business for several companies in India including multinational corporations like Hindustan Lever Limited, Monsanto, Syngenta, Advanta and Proagro. Currently there are about 100 seed companies including the multinational companies mentioned above are involved in cottonseed production and marketing in Andhra Pradesh.
Various trade liberalisation policies introduced by the government of India since 1991 have encouraged the large-scale multinational seed companies to enter into Indian seed market in a big way. The role of multinational seed companies in production and marketing of hybrid cottonseeds is rapidly increasing. It is estimated that in the year 2000-2001, five multinational seed companies i.e. Syngenta, Hindustan Lever, Advanta, Proagro and Mahyco-Monsanto accounted for nearly 21.6% (5350 acres out of 24783) of the total area under hybrid cottonseed production in Andhra Pradesh. The number of children employed in farms producing and supplying seed for these MNCs is estimated to be around 53500. Out of 53500 children, HLL accounted for 25,500, Syngenta 6,500, Mahyco-Monsanto 17,000, Advanta 3,000 and Proagro 2,000 (see table 5).
Table 5: Approximate area and number of children employed in hybrid cottonseed farms producing seed for Multinational seed companies in AP, 2000-2001|
|Name of seed company||
Extent of area under|
hybrid cottonseed farms (acres)
|Number of children employed|
in seed production
|Hindustan Lever Ltd.|
The control of MNCs over Indian seed business is expected to grow further in coming years because of the recent decision taken by the government for allowing companies to market genetically modified hybrid cottonseeds. Mahyco-Monsanto Biotech, a 50: 50 joint venture company formed by Monsanto and Mahyco, has received permission to sell BT cotton hybrids in April 2002 and it has already sold all the seed available with that company (about 100,000 packets) during this year. Keeping the good response from farmers this year it has made arrangements for selling about 700,000 packets of BT cottonseed in the coming season. Monsanto which has patent rights over BT gene has also sub-licensed the Bollgard gene to five other leading seed companies - Rasi, Ajeet, Krishi Dhan, Ankur and Emergent Genetics. Just like Mahyco, all these companies would be back-crossing Monsanto's Bollgard varieties with their own hybrids.
Brief profile of MNCs involved in cottonseed production in AP
Syngenta India, an Indian subsidiary of Switzerland based Syngenta AG, is one of the leading seed company in India. Syngenta AG, which was formed in 1999 through the merger of agro-chemical and seed divisions of two leading companies Novartis AG and Astra Zeneca, is the third largest seed company in the world. Syngenta India has a turnover of Rs 4,280 millions. Novartis India whose agro-chemical and seed business was merged with Syngenta India was itself an outfit of a merger took place between two Switzerland based companies i.e Sandoz and Hindustan Ciba in 1996.
Syngenta India is involved in developing, producing and marketing of variety of hybrid seeds of cotton, maize, jowar, vegetables, etc. In hybrid cottonseed business Syngenta accounts for about 5% of market share in India. It produces about 3,000 quintals of cottonseed annually and production centers are located in Andhra Pradesh, Maharashtra, Gujarat and Karnataka states. 600 quintals or 20% of the company's production is located in Andhra Pradesh. Syngenta is involved in production and marketing of both public and private research hybrids. Syngenta's own cotton hybrid 'Sandocot 35' is one among the popular private hybrid cottonseeds in the country.
Hindustan Lever Limited
Hindustan Lever Limited (HLL), an Indian subsidiary of Anglo-Dutch multinational company, Unilever Plc, was formed in 1956 by a merger of three Unilever subsidiary companies in India. Since then the company has consolidated its position in the Indian market significantly and today it has the distinction of being India's largest FMCG company with an annual turnover of Rs 114,000 millions. The parental company Unilever holds 51.6% stakes in HLL. HLL's business sprawls from personal and household care products to foods, beverages, specialty chemicals, animal feeds and hybrid seeds.
Joint venture with Emergent Genetics
Seed business is not a core activity of HLL. As part of its long-term business strategy, HLL has recently (March 2002) transferred its seed business to its subsidiary 'Paras Extra Growth Seed Ltd'9 and formed a joint venture partnership with Emergent Genetics10, a US-based biotechnology company for the seeds business. HLL now holds 26% share in Paras Extra Growth Seeds and remaining 74% share is sold to Emergent Genetics.
HLL seed business- Hybrid cotton
HLL's seeds business, which has an annual turnover of around Rs 950 millions, is engaged in the production, marketing and distribution of a variety of hybrid seeds of cotton, maize, jowar, vegetables, etc11. Though HLL has been involved in hybrid seed business since 1980s, it made substantial improvement in volumes, turnover and profits in the late 1990s after it expanded its cottonseed business by introducing a new cotton hybrid in the market by name 'Brahma' in 199712. The HLL cottonseed, 'Brahma', met with remarkable success and became quite popular among the farming community, particularly in the southern states of India.
The success of 'Brahma' cottonseed placed the HLL as one among the top five private seed companies in India and also the second largest company in production and marketing of hybrid cottonseed in Andhra Pradesh. Currently hybrid cottonseed alone accounts for about 25% of its total seed business. Since 1997 the demand for 'Brahma' cottonseed has been growing steadily and to meet the market demand HLL has been expanding its area under cottonseed production. The area under 'Brahma' cottonseed has increased fourfold during 1996-1997 and 2001-200213. The demand for 'Brahma' cottonseed in Andhra Pradesh market is such that the company was at times unable to meet the requirements of farmers and AP Government had to involve its Agricultural department machinery to oversee the proper distribution of this seed to the farmers14.
Shift from public to private research hybrids
HLL is involved in production and marketing of both public and proprietary (research hybrids) hybrid seeds. Brahma cottonseed is a private research hybrid. This seed was actually developed by a Andhra Pradesh based private seed company called 'Bharati seeds' and HLL tied up with this company for production and marketing of this seed. In addition to private research hybrids like Brahma, Krishna, HLL is also involved in production and marketing of public hybrids like NHH 44, Savitha, PKYV. Prior to 1997, HLL was more involved in production and marketing of public cotton hybrids. Since 1997 it has shifted its business focus from public to private hybrids. At present the public cotton hybrids account for only a small component of about 10% of its total cottonseed business.
HLL's cottonseed production activity is concentrated in Andhra Pradesh particularly in Kurnool and Mahaboobnagar districts. About 70% of the cottonseed produced by HLL in India comes from Kurnool and Mahaboobnagar districts of AP. The remaining production is done in Gujarat and Karnataka states. The seeds produced in Andhra Pradesh are not only marketed in that state but also exported to other states in India.
Monsanto and Mahyco
Monsanto, a US based Multinational company, is the second largest seed company in the world which has patent rights over BT (Bacillus Thuringiensis) and terminator gene technology. It has recently merged with Pharmacia Corporation, a leading global pharmaceutical company. Though Monsanto has 50 years of presence in India till recently its activities were mainly confined to pesticide business.
1n 1997 Monsanto has entered into collaboration with Mahyco to introduce BT cotton in India. It has purchased 26% of share in Mahyco and also established a separate 50:50 joint venture company with Mahyco called Mahyco-Monsanto Biotech Limited (MMB). Mahyco is one of the oldest and also largest seed company in India which has country-wide production and marketing network. It has been involved in production and marketing of both public and private hybrids since early 1970s.
Mahyco-Monsanto Biotech Limited is the first company to receive permission from government of India to sell Genetically Modified (GM) cottonseeds. This company is involved in conducting of BT cotton trails in India since 1997. It has developed three BT hybrid cottons i.e Mech 12 BT, Mech 162 BT and Mech 184 BT (introducing Monsanto Bt gene into Mahyco's own hybrid cottonseeds). After several years of trails Indian government has given permission to this company in April 2002 to sell BT hybrid cottons.
The control of Monsanto in cottonseed business in India is expected to grow further in coming years. The Bollgard gene has not only been incorporated in Mahyco's cotton hybrid seeds - Mech-12, Mech-162 and Mech-184, which were cleared for commercial cultivation in 2002 - but is also set to be back-crossed with hybrids evolved by other companies.
MMB has so far sub-licensed the Bollgard gene to five other leading seed companies - Rasi, Ajeet, Krishi Dhan, Ankur and Emergent Genetics. MMB is presently 'in talks' with Proagro Seeds as well for collaboration in BT cotton technology.
According to Dr M.K. Sharma, Managing Director of MMB, "we would like a 30-40 per cent share in the hybrid cottonseeds market, i.e. 3-4 million packets". And this would be achieved not just through Mahyco's BT cotton, but also by incorporating the Bollgard gene into the hybrids of Ankur, Rasi, Ajeet, Krishi Dhan, HLL, etc. Just like Mahyco, all these companies would be back-crossing Monsanto's Bollgard varieties with their own hybrids.
In 2002 kharif season, MMB has sold 1.05 lakh packets of BT cottonseeds. Given that each packet of 450 grams costs Rs 1,600 (farmer's price), it means that the BT cotton has generated business worth nearly Rs 170 million in its very first year of commercial planting. For kharif 2003, MMB expects sales to touch 6-7 lakh packets and in coming five years about 3-4 million packets.
The Proagro Group of companies comprises Proagro Seed Company Ltd., Proagro-PGS India Ltd., Hybrid Rice International (HRI), and MISR Hytech. With the exception of the Egypt-based MISR Hytech, the Proagro group companies are headquartered in New Delhi, India. Proagro group is one among the top five leading private seed companies in India.
Proago Seeds Company ranked first in the production of coarse seeds like corn, millet and forage sorghum, and second in the production of sunflower and grain sorghum. It is also involved in production and marketing of hybrid cottonseeds. Proagro-PGS which is a joint venture founded in 1993 between Proagro Seed Company Ltd. and Plant Genetic Systems (PGS), a subsidiary of AgrEvo specializes in vegetable seeds. Hybrid Rice International (HRI) is the market leader in India in hybrid rice and is active in other important South East Asian markets. MISR Hytech is active in both hybrid vegetables and field crops for the Egyptian, Middle Eastern and North African markets.
The Proagro group of companies are currently owned by Bayer which is one of the world leading agro chemical company based in German. Till 1999, Biogenetic Technologies, a Dutch holding company owned majority stake in the Proagro group companies. In February 1999, Hoechst Schering AgrEvo a German based MNC acquired 100% stake in Biogenetic Technologies a parental company of Proagro group of companies in India. Since then the AgrEvo acquired control over Proagro group. In 1999 December AgroEvo AG merged with Rhone Poulanc AG and formed a new entity called Aventis Crop Science. Bayer purchased the Aventis Crop Science in 2001 for EUR 7.25 billion.
Like other MNCs Proagro is also involved in production and marketing of both public and private hybrids. Its cottonseed production activity is largely concentrated in Andhra Pradesh.
Advanta India Limited
Advanta India Ltd. (formerly ITC Zeneca Ltd.) is the Indian joint venture company of Advanta B.V., which is among top ten seed companies of the world. Advanta B.V. was formed in 1998 by the merger of Astra Zenaca Seeds, U.K. and Vanderhave Seeds of Netherlands. ITC Zeneca was formed in 1994 through a joint venture between ITC, an agribusiness affiliated to British- American Tobacco, and Zeneca (formerly part of British's ICI). Due to restructuring of promoters/shareholders business ITC Zeneca India has changed its name to Advanta India. Advanta India produces and markets a variety of hybrid seeds. It is the marker leader in Sunflower seed business. It is involved in production and marketing of both public and private cotton hybrids. Advanta's cottonseed production activity is concentrated in Kurnool and Mahaboobnagar districts of Andhra Pradesh.
Table 6: Top 10 Seed Companies in the World (Ranked by sales in 2000)|
Company name||Country||Sales in 2000 (US $, millions)|
Grupo Pulsar (Seminis)
Dow (+Cargill North America)
Delta & Pine Land
Source: ETC Group (Action Group on Erosion, Technology and Concentration), "Globalization Inc. -- Concentration in Corporate Power: The Unmentioned Agenda", July/August, 2001, available at http://www.rafi.org. |
Companies claims about social responsibility
All the MNCs mentioned above claim that that they are committed to highest standards of socially responsible corporate behaviour. For instance Unilever, parental company of HLL claims that it is committed to highest standards of corporate social responsibility. Part of Unilever's corporate purpose states that states that "We believe that to succeed requires the highest standards of corporate behavior towards our employees, consumers and the societies and world in which we live.... This is our road to sustainable, profitable growth for our business and long-term value creation for our shareholders and employees." (Extract from Unilever's Corporate Purpose15)
Regarding the minimum age for employment and child labour, Unilever in its report 'Social Review - Unilever's approach to corporate social responsibility' states that "Unilever's policy fully supports the International Labour Organisation Convention on Minimum age and its new Convention 182 banning the worst forms of child labour. Unilever Business Groups around the world regularly assess their operations against this policy and have confirmed compliance. In India for example, we operate a minimum working age policy of 18 years, and contractors and licensed manufacturers are also required to comply with this standard"16.
Regarding corporate social responsibility of its company, Syngenta states that "As an industry leader, Syngenta takes its ethical, social, scientific and environmental responsibilities seriously. The trust and confidence of Syngenta's shareholders, employees and trading partners, as well as of government and regulatory authorities and the communities in which Syngenta operates, will only be earned and sustained if the company acts, and is seen to act, in accordance with the highest standards of fairness, honesty and integrity."
In a similar way other MNCs i.e Monsanto, Advanta and Bayer also claim that they are committed to socially responsible business practices. Unilever, Syngenta and Bayer are member companies of the global compact, a joint initiative of the United Nations and private business companies started in 2000, aimed at improving the human rights, social standards and environmental protection.
The activities of these MNCs in the area of cottonseed business in India are certainly not in tune with what they claim about their commitment to socially responsible corporate behaviour. Though they are not directly involved in employing children they have substantial control over entire production process and seed farmers who actually employ children for producing seed for these companies. A large number of children, mainly girls in the age of 6-14 years, are working on the farms, which are producing and supplying hybrid cottonseed for these companies.