Monsanto

Monsanto India, subsidiary of USA based Monsanto Company, posted bountiful numbers for Q1FY15, showing a 26% jump in net profit at Rs.71 crore on a 16% rise in net sales at Rs.259 crore. In Q4FY14, the company had posted a net loss of Rs.6 crore, thus sequentially it is a very healthy turnaround. Seasonally, Q4 as such is always weak and this time around Q2 is also expected to be good given the late arrival of monsoon, as sowing got delayed into Q2. Q3 as such, is the company’s peak season due to rabi sowing. This is a typical MNC, debt free and parent company’s stake is at 72.14% and reserves stands at Rs.390 crore.

Controversy surrounds this seed company, which literally monopolises India’s cotton seeds. It is blamed for making super profits, by selling seeds at high costs and earning a bounty through royalties as farmers get caught in the debt trap. The highest number of farmer suicides is in the same belt where Monsanto enjoys a monopoly and thus indirectly, it is being blamed for the plight of the farmers. The company is blamed for genetic engineering to control seed and the food system through patents and intellectual property rights. The farmers in Brazil have also levied the same charges on Monsanto and farmers in Brazil have sued Monsanto for $2.2 billion for unfair collection of royalty.

Recently, the Govt put on hold a field trial of 13 genetically modified (GM) crops, a departure from previous UPA Govt where Govt allows only commercial use of Bt Cotton, grown across 10 million hectares in India. This uncertainty over BJP’s stand on GM crops is a negative for the company.