PRODUCT LIABILITY IN SEEDS MARKET: ECONOMIC ANALYSIS OF SEED LAWS AND REGULATION IN INDIA

R V Ramana Murthy

The IUP Journal of Agricultural Economics, 2007, vol. IV, issue 1, 7-23

Abstract: The quality failures in seeds, in several instances, add to the looming crisis in agriculture, particularly in Andhra Pradesh, which only precipitates the condition further. This precipitated situation has led to the enforcement of a regulatory regime to deal with the problem to punish the erring and fraudulent seed companies and impart compensatory justice to the victims. Private participation in seed companies is generally described as a remedy to the ‘governmental failure’ in the public sector production in terms of inability to supply seeds both, in volume as well as quality, for the crops in demand. The seed market can suffer from the ‘lemons problem’ that cannot be solved through market-based instruments alone, such as labeling, advertisement and warranties, but should have a vigilant regulation system with penalties, punishments and compensations. The Indian Seed Law, since a long time, has been oriented more towards regulation, rather than compensating the farmer. To suit the changing scenario, the Act, while protecting the breeder intellectual property rights, also offers protective measures to safeguard the farmers. This study suggests that the compensation clause, alone, is the most important provision that addresses the punishment to the injurer as well as justice to the victim.

Date: 2007
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