According to a recent news item, the Punjab government has refused to agree to US agrichemical giant Monsanto’s demands for intellectual property rights protection for its BT cotton seeds and has accused the company of a “monopolistic” plan to take over agriculture in Punjab. Monsanto has maintained that it is not against the use of other seeds, just against the illegal transfers of its own seeds.
Monsanto’s position is challenged not only by the provincial government but also by farmers’ lobbies. Ibrahim Mughal, the chairman of Agriforum Pakistan has said that “Monsanto would destroy Pakistan. If we want a free economy in Pakistan, then Monsanto must not be allowed to market its seeds in Pakistan.”
Call for a free economy and opposition to the entry of a firm in a single breath is not only paradoxical but also ironic. Free market economy is featured with easy entry and exit and strong checks on anti-competitive practices such as monopolistic tendencies and cartelization.
Monsanto is not the sole provider of BT cotton seeds in the world and thus there is no threat of a monopolistic conduct from this giant rendering fears of Punjab government and farmers baseless. Seed Association of Pakistan has earlier pointed out several alternative suppliers. Pakistan’s own research institutes such as Punjab University’s Center of Excellence for Molecular Biology has developed BT cotton varieties successfully and waiting for government’s approval to commercially market their seeds.
The best way out of this quagmire is that government should stay out of actual business decisions. Certainly enforcement of intellectual property, standardizations and maintaining fair competition are the most important obligations of government. Government risks loss of credibility by taking steps beyond this boundary. Let our farmers, or buyers, and local and international seed manufacturers, or suppliers make free choices and assume risks of failure themselves.