This is excerpt of an interview with one of the leading professional dealing with agri-biotechnology.The interview is provided as is without any editorial oversight by us.
In March, K.K. Narayanan— one of the Founder-Directors of Metahelix Life Sciences— exited the company after 15 years. In 2010, he sold the agri-biotechnology company to the Tatas but remained Managing Director as part of the deal. Narayanan continues to be an advisor to the Tata group.
The focus crops for Metahelix are cotton, rice, maize, millets (bajra) and a few vegetables. Here, K.K. Narayanan discusses with the writer the arduous but persistent growth journey of genetically-modified crops in India, and his views on the government strategy to double farmers’ incomes.
No new genetically-modified (GM) crop has been approved in India after Bt cotton in 2002. At Metahelix, was there any hesitancy about persisting with agri-biotechnology?
This is a question that often comes up, particularly from investors and the parent company. But they realise you need to have a foot in the door. One day, when the door opens, you should be there. Having invested so much money, time and the intellect of so many people, it would be foolish to step back. We have revenue streams coming from hybrids; part of it you set aside. It does have a hit on the bottom line but that is a conscious decision. It is a long-term investment.
Do you have difficulty attracting talent?
Those who are choosing this field of science are confused and some are not very confident. But the opportunities are huge for a largely agrarian country like India. To fulfil their promises of equitable development, our political bosses will have to leverage the technology.
Bt cotton is under price control. The Agriculture Minister believes it is expensive. Is that what farmers tell you?
Farmers are wise. They take commercial decisions. I don’t think the government should intervene in prices. When we talk of “free market play”, you need a free market. On the one side, you are choking the pipeline of alternate or competitive technologies. So there are a few people who have a head start. (Monsanto’s Bt cottonseed technology has more than 90 percent share of the market-ed). Now the hurdle has been raised to such a high level that nobody else is able to cross it. And then you cry “monopoly, monopoly.” This is an artificially created monopoly. If the regulatory system can be scientific and rational, these problems can be eased. Indian companies, both in the public and private sectors, can develop competitive technologies. Farmers need to have a choice.
Does the present regulatory system help incumbents?
It is inadvertently creating a monopoly. They (incumbents) are also having trouble because they cannot bring newer versions. Today, the entry barrier is regulation— it is not the capability to develop technologies.
Our political leaders associate agri-biotechnology with American companies.
If you look from the stratosphere, you will see that one company is giving the technology to everybody. You are not realising why the other companies are not coming up to that level. It is because of regulatory hurdles. We have developed Bt cotton with stacked genes for bollworm resistance. It is different from that of Monsanto, the leading provider today. We have Bt rice and herbicide-tolerant maize. These are not imported technologies. We have developed them here.
How long have you been waiting?
We have been waiting since 2007. We were one of the few companies to get approval for our own Bt cotton. But it was a single-gene product that protected against the leaf-eating caterpillar. We could not go to the market because it has moved to double genes. So we developed (Bt cotton with) other genes which give protection against bollworms. But we have had no success (with field trials) since 2007-08.
What about Bt rice?
We did a field trial in 2009. After that, we have not had permission. In 2010-11 we got GEAC (Genetic Engineering Appraisal Committee, the apex regulatory body) permission for large-scale field trials in Andhra Pradesh. But A.P. was not giving us the NOC (no objection certificate) which became mandatory after February 2010. The permission lapsed because it was for one season. We went back to GEAC for open-ended permission. By the time they gave it, A.P. was no longer A.P.
So we had to apply to Telangana for NOC and that is still pending. It is 2016 and you can imagine how much time is being wasted.
And herbicide- tolerant maize?
We have just selected the (DNA recombination) event and have applied for trials. It is still at an early stage. But if commercialisation was within sight, we could have easily fast-tracked it. When the present government came, we were quite hopeful. But suddenly you find other arms like the Swadeshi Jagran Manch or the Bharatiya Kisan Union pulling in the other direction. The Maharashtra government gave permission for field trials and, before it happened, it pulled back.
Genetically-modified mustard, DMH-11, developed by Deepak Pental of Delhi University is awaiting approval for commercial cultivation. Metahelix has the rights to DMH 4 which is a non-GM mustard hybrid. How as it been received?
Oh, it is certainly better in terms of yield and productivity than open pollinating varieties. That is a given because of hybrid vigour. What is important is not whether it is absolutely better but whether it can compensate for the negatives with increased yields or revenues. Like any product, it comes with some challenges. It takes five days more to mature. Farmers feel this will affect planting of the next crop. The plant habit may be important. If it grows too tall, it is difficult to harvest. Labour is no longer cheap and availability is an issue. The seed size is small. Famers prefer bolder seeds. Actually, what is important is the oil content.
The Central Institute of Cotton Research believes that India does not need Bt technology. With high-density planting of short duration cotton, it says, the crop can be harvested before bollworms arrive.
For a country as large and diverse as India, you need a multi-pronged approach. I say this even in the context of Vitamin-A rice or Golden Rice. Some people say, give carrot or green leaves and solve the problem. If you are giving Golden Rice, is somebody preventing you from giving a carrot? No. (Bt) hybrids and high-density planting are not mutually exclusive. Ultimately, you have to test it out, validate it. Our farmers are wise enough. They will pick only the good ones. The others they will throw into the Bay of Bengal.
In May, the government tried to give a compulsory license on patented Bt cotton using the Essential Commodities Act.
Compulsory licensing is bad. If you stifle the system, you are going to impact innovation. Compulsory licensing is warranted where there is an emergency, a famine or a war-like situation. Bringing cotton seed into the Essential Commodities Act was an arbitrary decision.
Do you think the government has a strategy to double farmers’ income by 2022?
There are a few things which should be considered: increase productivity and reduce the cost. This can be achieved by leveraging technology. It is not up there. It is not blue sky. It has been proven and there is enough evidence. Take the example of Bt cotton itself. Studies have shown how incomes have gone up and that is the reason why 95 percent of farmers are cultivating it.
The other aspect, do not stop with production. There is a huge scope in this country for value addition. For example, there is an estimate which says that the farmer who produces the bean gets 1/20,000th the price we pay for the coffee we drink here (at Café Coffee Day in Bengaluru).Why not make it 1/200? And, here again, there is huge scope for technological intervention.
Is there a GM solution to alleviate the shortage of pulses?
Some of the major pests which infect cotton also affect pulses. So if you have a Bt solution you are actually saving on pesticides and improving productivity. What these technologies do is actually stabilise production. The uncertainty with regard to production is, to a large extent, eliminated or mitigated.
Bt cotton is an example. The technology only mitigates the impact of bollworms on yield. So the farmer puts more inputs and produces more. It is a kind of insurance. If you give that for pulses, farmers will give more inputs to increase productivity. Today, our productivity in pulses is abysmal.
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Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.
Globally, around 80% of wastewater flows back into the ecosystem without being treated or reused, according to the United Nations.
This can pose a significant environmental and health threat.
In the absence of cost-effective, sustainable, disruptive water management solutions, about 70% of sewage is discharged untreated into India’s water bodies.
A staggering 21% of diseases are caused by contaminated water in India, according to the World Bank, and one in five children die before their fifth birthday because of poor sanitation and hygiene conditions, according to Startup India.
As we confront these public health challenges emerging out of environmental concerns, expanding the scope of public health/environmental engineering science becomes pivotal.
For India to achieve its sustainable development goals of clean water and sanitation and to address the growing demands for water consumption and preservation of both surface water bodies and groundwater resources, it is essential to find and implement innovative ways of treating wastewater.
It is in this context why the specialised cadre of public health engineers, also known as sanitation engineers or environmental engineers, is best suited to provide the growing urban and rural water supply and to manage solid waste and wastewater.
Traditionally, engineering and public health have been understood as different fields.
Currently in India, civil engineering incorporates a course or two on environmental engineering for students to learn about wastewater management as a part of their pre-service and in-service training.
Most often, civil engineers do not have adequate skills to address public health problems. And public health professionals do not have adequate engineering skills.
India aims to supply 55 litres of water per person per day by 2024 under its Jal Jeevan Mission to install functional household tap connections.
The goal of reaching every rural household with functional tap water can be achieved in a sustainable and resilient manner only if the cadre of public health engineers is expanded and strengthened.
In India, public health engineering is executed by the Public Works Department or by health officials.
This differs from international trends. To manage a wastewater treatment plant in Europe, for example, a candidate must specialise in wastewater engineering.
Furthermore, public health engineering should be developed as an interdisciplinary field. Engineers can significantly contribute to public health in defining what is possible, identifying limitations, and shaping workable solutions with a problem-solving approach.
Similarly, public health professionals can contribute to engineering through well-researched understanding of health issues, measured risks and how course correction can be initiated.
Once both meet, a public health engineer can identify a health risk, work on developing concrete solutions such as new health and safety practices or specialised equipment, in order to correct the safety concern..
There is no doubt that the majority of diseases are water-related, transmitted through consumption of contaminated water, vectors breeding in stagnated water, or lack of adequate quantity of good quality water for proper personal hygiene.
Diseases cannot be contained unless we provide good quality and adequate quantity of water. Most of the world’s diseases can be prevented by considering this.
Training our young minds towards creating sustainable water management systems would be the first step.
Currently, institutions like the Indian Institute of Technology, Madras (IIT-M) are considering initiating public health engineering as a separate discipline.
To leverage this opportunity even further, India needs to scale up in the same direction.
Consider this hypothetical situation: Rajalakshmi, from a remote Karnataka village spots a business opportunity.
She knows that flowers, discarded in the thousands by temples can be handcrafted into incense sticks.
She wants to find a market for the product and hopefully, employ some people to help her. Soon enough though, she discovers that starting a business is a herculean task for a person like her.
There is a laborious process of rules and regulations to go through, bribes to pay on the way and no actual means to transport her product to its market.
After making her first batch of agarbathis and taking it to Bengaluru by bus, she decides the venture is not easy and gives up.
On the flipside of this is a young entrepreneur in Bengaluru. Let’s call him Deepak. He wants to start an internet-based business selling sustainably made agarbathis.
He has no trouble getting investors and to mobilise supply chains. His paperwork is over in a matter of days and his business is set up quickly and ready to grow.
Never mind that the business is built on aggregation of small sellers who will not see half the profit .
Is this scenario really all that hypothetical or emblematic of how we think about entrepreneurship in India?
Between our national obsession with unicorns on one side and glorifying the person running a pakora stall for survival as an example of viable entrepreneurship on the other, is the middle ground in entrepreneurship—a space that should have seen millions of thriving small and medium businesses, but remains so sparsely occupied that you could almost miss it.
If we are to achieve meaningful economic growth in our country, we need to incorporate, in our national conversation on entrepreneurship, ways of addressing the missing middle.
Spread out across India’s small towns and cities, this is a class of entrepreneurs that have been hit by a triple wave over the last five years, buffeted first by the inadvertent fallout of demonetization, being unprepared for GST, and then by the endless pain of the covid-19 pandemic.
As we finally appear to be reaching some level of normality, now is the opportune time to identify the kind of industries that make up this layer, the opportunities they should be afforded, and the best ways to scale up their functioning in the shortest time frame.
But, why pay so much attention to these industries when we should be celebrating, as we do, our booming startup space?
It is indeed true that India has the third largest number of unicorns in the world now, adding 42 in 2021 alone. Braving all the disruptions of the pandemic, it was a year in which Indian startups raised $24.1 billion in equity investments, according to a NASSCOM-Zinnov report last year.
However, this is a story of lopsided growth.
The cities of Bengaluru, Delhi/NCR, and Mumbai together claim three-fourths of these startup deals while emerging hubs like Ahmedabad, Coimbatore, and Jaipur account for the rest.
This leap in the startup space has created 6.6 lakh direct jobs and a few million indirect jobs. Is that good enough for a country that sends 12 million fresh graduates to its workforce every year?
It doesn’t even make a dent on arguably our biggest unemployment in recent history—in April 2020 when the country shutdown to battle covid-19.
Technology-intensive start-ups are constrained in their ability to create jobs—and hybrid work models and artificial intelligence (AI) have further accelerated unemployment.
What we need to focus on, therefore, is the labour-intensive micro, small and medium enterprise (MSME). Here, we begin to get to a definitional notion of what we called the mundane middle and the problems it currently faces.
India has an estimated 63 million enterprises. But, out of 100 companies, 95 are micro enterprises—employing less than five people, four are small to medium and barely one is large.
The questions to ask are: why are Indian MSMEs failing to grow from micro to small and medium and then be spurred on to make the leap into large companies?
At the Global Alliance for Mass Entrepreneurship (GAME), we have advocated for a National Mission for Mass Entrepreneurship, the need for which is more pronounced now than ever before.
Whenever India has worked to achieve a significant economic milestone in a limited span of time, it has worked best in mission mode. Think of the Green Revolution or Operation Flood.
From across various states, there are enough examples of approaches that work to catalyse mass entrepreneurship.
The introduction of entrepreneurship mindset curriculum (EMC) in schools through alliance mode of working by a number of agencies has shown significant improvement in academic and life outcomes.
Through creative teaching methods, students are encouraged to inculcate 21st century skills like creativity, problem solving, critical thinking and leadership which are not only foundational for entrepreneurship but essential to thrive in our complex world.
Udhyam Learning Foundation has been involved with the Government of Delhi since 2018 to help young people across over 1,000 schools to develop an entrepreneurial mindset.
One pilot programme introduced the concept of ‘seed money’ and saw 41 students turn their ideas into profit-making ventures. Other programmes teach qualities like grit and resourcefulness.
If you think these are isolated examples, consider some larger data trends.
The Observer Research Foundation and The World Economic Forum released the Young India and Work: A Survey of Youth Aspirations in 2018.
When asked which type of work arrangement they prefer, 49% of the youth surveyed said they prefer a job in the public sector.
However, 38% selected self-employment as an entrepreneur as their ideal type of job. The spirit of entrepreneurship is latent and waiting to be unleashed.
The same can be said for building networks of successful women entrepreneurs—so crucial when the participation of women in the Indian economy has declined to an abysmal 20%.
The majority of India’s 63 million firms are informal —fewer than 20% are registered for GST.
Research shows that companies that start out as formal enterprises become two-three times more productive than a similar informal business.
So why do firms prefer to be informal? In most cases, it’s because of the sheer cost and difficulty of complying with the different regulations.
We have academia and non-profits working as ecosystem enablers providing insights and evidence-based models for growth. We have large private corporations and philanthropic and funding agencies ready to invest.
It should be in the scope of a National Mass Entrepreneurship Mission to bring all of them together to work in mission mode so that the gap between thought leadership and action can finally be bridged.