Monsanto India Ltd., a subsidiary of the U.S. multinational, has been barred from selling seeds in Bihar for allegedly marketing substandard products.
The action came after farmers complained that Monsanto's Cargill hybrid 900M maize seeds were substandard or contaminated as they failed to germinate and much of the winter crop failed, Agriculture Minister Shivshankar Yadav said.
Monsanto is believed to have sold 700 tonnes of seeds for the winter crop, promising farmers yields of 80 to 85 quintals per acre. The actual yield was not even 10 percent of this, according to figures available with the government.
Bihar has 180,000 acres under maize. Monsanto seeds were planted over 140,000 hectares.
The company has been asked to explain its conduct. Experts from the Rajendra Agriculture University (RAU) would study its reply before the Government decides on canceling the company's license to operate in the state, Yadav added.
Monsanto officials contend the poor yields were due to the unexpected cold weather earlier this year that had affected all hybrids across much of Bihar as well as nearby regions.
They pointed out that seed trial during the summer crop of 1996, 1997 and 1998 had produced adequate yields, after which they had been recommended to the central seed committee for notification in 1999.
Sources in the Bihar government said it was under tremendous pressure to cancel Monsanto's license because thousands of farmers were demanding compensation after being reduced to penury following the failure of the winter crop.
While the loss has not been quantified, B.N. Jha, a specialist with the Agriculture Technology Management Agency, said it would run into millions of rupees.
"Farmers sowed Cargill seeds over hundreds of acres in Muzaffarpur district but the low output has devastated us. We had not faced such a problem earlier," said an upset Aawadesh Singh, a farmer of Meenapur village in the district.
His tale is similar to that of hundreds of farmers in over a dozen districts of north Bihar including Samastipur, Darbhanga, Madhubani and West and East Champaran.
Monsanto has said it would send its teams to the affected districts to study the situation on the ground.