Monsanto threatens to exit India over royalty dispute

|About: Monsanto Company (MON)|By:, SA News Editor

Monsanto (NYSE:MON) threatens to pull out of India if the government imposes a 70% cut in royalties that local companies pay for its genetically modified cotton seeds, Reuters reports.

MON's joint venture with India's Mahyco licenses a gene that produces its own pesticide to a number of local seed companies in lieu of royalties and an upfront payment; amid complaints of local seeds companies that MMB was charging high fees, a farm ministry committee reportedly is recommending a ~70% cut in the royalty, or trait fee, that the seed companies pay to MMB.

"If the committee recommends imposing a sharp, mandatory cut in the trait fees paid on Bt-cotton seeds, MMB will have no choice but to re-evaluate every aspect of our position in India," MON's top exec for the India region says.

MON -1.1% premarket.

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