Sekhar Natarajan: "Our job as a company or an industry is to give the farmer choice." Photo: Monsanto India

Sanjiv Rana talks to Sekhar Natarajan, Monsanto Lead – India Region.

There is a similarity between Sekhar Natarajan’s career profile in Monsanto and the company’s own operations in India - both started off doing something quite different from what they currently do, and both underwent transformations that led them to their present roles.

Monsanto India (MI) began its operations in 1949 as a trader of industrial chemicals.  It evolved into an agrochemical company in 1975 with the launch of the herbicide, Machete (butachlor).  The evolution from a herbicide company into an entity that initiated a genetically modified crop revolution in the country took over two decades.  It seems to have come full circle with the sale of Machete to Chinese company Sinochem earlier this year.

Mr Natarajan’s career path in MI too has taken different tracks along the years.  Starting out in finance, he spent a decade in credit control before making a cross-functional move in the early 1990s to sales and marketing, then on to development, and finally taking over as the head of Monsanto's Indian business in 2007.

The Monsanto lead stresses that MI has always been unique in its positioning in the Indian marketplace.  Contrary to the general norm, it started off as a herbicide company rather than an agrochemical one.  The gradual evolution into seeds and biotechnology has now ensured that “we are not a pure-play agrochemical or technology or seed company - we are a combination of all three,” he points out.

The definition may create an impression of a diffused focus, but Mr Natarajan tends to disagree.  “Focus has been our strength and we have always been able to funnel investments into a smaller area without spreading them too thin.”  In a bid to achieve tighter focus, the company has divested its pearl millet and sunflower seeds businesses, and the herbicides, sulfosulfuron, butachlor and alachlor, over the last two years.  “We are a seed biotech company and are in a process of continual transition.”

Is the focus on seeds a way to bypass the generics morass?  “Seeds as an industry does not fall into the definition of a generics market, as unlike a chemical molecule, one cannot copy a seed in a mechanical process.”  Monsanto India Limited (MIL), MI’s listed entity in India, has recorded a decrease in revenue contribution of herbicides from 100% in 1995-96 to 79% in 2000-01, and to 41% in the year ended March 31st 2007.  There has been a corresponding increase in the contribution of seeds.

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So is there an ideal mix that the company is moving towards?  Not really, according to Mr Natarajan, who augurs an upturn for herbicides in India.  In contrast to the western world, the pesticide market in India is skewed towards insecticides, with herbicides accounting for only 10-12% of the market.  Mr Natarajan finds this perplexing since many documented government studies have shown that the biggest yield losses in India happen due to weeds rather than pests.

He feels that the problem lies in the mindset of farmers who consider pests a problem but do not necessarily view weeds in a similar fashion.  Labour has traditionally been cheap in India and weeds have largely been controlled by manual labour.  “But the current reality of migration from villages to cities and the younger generation displaying an aversion to agriculture is creating a situation wherein labour is not all that readily available to farmers in a timely fashion”, explains Mr Natarajan.

He believes that even though glyphosate was introduced in India in the 1990s, there will yet be a lot of growth for the active ingredient as labour becomes expensive and herbicides gain more usage.  Nevertheless, the seed business will remain a larger component of Monsanto's overall operation.

Another factor for the buoyant expectations is the rapid adoption of GM insect-resistant cotton, which also portends an optimistic future for herbicide-tolerant crops.  “If you draw an adoption curve for Bt cotton over six years and its penetration in the US and match it with ours, my guess is we would be a little bit more aggressive than the US curve,” avers Mr Natarajan.  This comes out as a surprising point, especially because the less educated smallholder in India has generally been considered averse to sudden change.  Mr Natarajan feels that a factor in the rapid adoption has been that, unlike other technologies, GMO technology acts as a leveller.  “Different technologies of farm automation have traditionally favoured big farmers but GMO technology is price and scale neutral,” he declares.  This, combined with the fact that, unlike chemical pesticides, GMO technology provides season-long protection to crops, spurred widespread adoption among farmers.

if I were the agriculture minister

Mr Natarajan wants the Indian government to continuously endeavour to provide a free market mechanism that ensures private companies the freedom to make a decent return on the investments they make in innovation, research and development.  “This is the only way to fuel further research and bring in better products and technology into the market,” he believes.  A free market also presupposes free pricing.  The second suggestion that he makes is a firm commitment towards ensuring a free regulatory mechanism that is transparent and science based _ “a mechanism that is not swayed by political or NGO pressures”.  A third expectation is that of strong mechanisms of intellectual property protection because “for every Monsanto product that you see in the market, there are a thousand products that never see the light of the day _ this is money down the drain.”

greed vs philanthropy

How does one protect the farmer from corporate greed in a free pricing mechanism?  It’s a no-brainer, according to Mr Natarajan.  Competition is what drives the pricing to be realistic in the market.  No one wants to set a wrong price in the marketplace, as the farmer always has a free choice to buy any other product.  “Our job as a company or an industry is to give the farmer choice,” he says.  He resents the accusation that corporations are greedy by nature and will always try to constrain farmers to buy their products.  “This is an extremely wrong statement _ there is a law in this country that says that a farmer can save his seed for his own sowing purposes.  There is no way that we can force the farmer.”

Trying to make a case for an altruistic streak in Monsanto’s basic philosophy, he says: “We, as a company, are not averse to donating our technology in social interest to certain institutions”.  He cites examples like the donation of the beta-carotene mustard technology to the Tata Energy Research Institute, which would use it to tackle vitamin A deficiency that is prevalent in India.  “Our belief is that if we have a technology and are not working on it, we are open to lend it to institutions working for the greater benefit.”  The idea is to provide a spur to the public sector to learn new technologies and apply them to other crops that may not be of commercial interest to the private sector but may be crucial for the public good.

future orientation

The Monsanto research centre established in Bangalore in the late 1990s is the only R&D centre established outside the US.  Mr Natarajan is positive that this would make India a hub of research and development in the coming years.  The company seems to have acknowledged the fact by declaring India an independent region in 2007.

Through divestments and sharper focus, the company hopes to increase efficiency.  MIL’s results for the quarter ended December 31st 2007 displayed a 5.4% drop in sales but a 26% increase in profitability.  As Mr Natarajan puts it: “We are in the business of providing good yields to farmers in a sustainable way.”  The logic seems to be working for his organisation as well.

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