Seed magazine 2018 - Seed Sectors Around the Globe (Jan to April 2018) by NATIONAL SEED ASSOCIATION OF INDIA

Volume 11 No. 1, January - April 2018

Seed Times January - April 2018

Seed Sectors Around the Globe

Seed Sectors Around- India the Globe Vegetable Seed Industry & World

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ABOUT NSAI

National Seed Association of India (NSAI) is the apex organization representing the Indian seed industry. The vision of NSAI is to create a dynamic, innovative and internationally competitive, research based industry producing high performance, high quality seeds and planting materials which benefit farmers and significantly contribute to the sustainable growth of Indian Agriculture. The mission of NSAI is to encourage investment in state of the art R&D to bring to the Indian farmer superior genetics and technologies, which are high performing and adapted to

a wide range of agro-climatic zones. It actively contributes to the seed industry policy development, with the concerned governments, to ensure that policies and regulations create an enabling environment, including public acceptance, so that the industry is globally competitive. NSAI promotes harmonization and adoption of best commercial practices in production, processing, quality control and distribution of seeds.

NSAI Governing Council Members

NSAI Office Bearers President: M. Prabhakar Rao (Nuziveedu Seeds Ltd.)

G.V. Bhaskar Rao Kaveri Seed Co. Ltd.

Ashwin Garg Super Seeds Pvt. Ltd.

Vice President: Sameer Mulay Ajeet Seeds Ltd.

N.P. Patel Western Agri Seeds Ltd

Kamal O. Zunzunwala Safal Seeds & Biotech Ltd.

Janak Peshrana Seeds India

K.S. Narayanaswamy Karnataka Maize Development Association

General Secretary: Pranjivan Zaveri Farm Tech Biogene Pvt. Ltd. Treasurer: Pawan Kumar Kansal Kohinoor Seed Fields India Pvt. Ltd.

K. Niranjan Kumar GARC Seeds Pvt. Ltd. Arun Kumar Agarwalla West Bengal Hybrid Seeds & Biotech Pvt. Ltd.

Manish Patel Integrated Coating and Seed Technology

NSAI SECRETARIAT Kalyan B. Goswami Executive Director

Nilendri Biswal Deputy Director - PR & Social Intervenion

Manisha Negi Asst Director - Scientific Affairs

Yash Pal Saini Sr. Manager - Admin & Accounts

Priyank Samuel G Asst. Manager - Brand Alliance & Communication

Sher Singh Office Assistant

Compiled & edited by: Nilendri Biswal & Manisha Negi Designed Coordinated by: Priyank Samuel G | Advertisements Coordinated by: Yashpal Saini The views and opinions expressed by the authors are their own and NSAI by publishing them here, does not endorse them. The editorial correspondence should be sent to, National Seed Association of India, 909, Surya Kiran Building, 19, Kasturba Gandhi Marg, New Delhi-110001 (INDIA); Ph.: 011-4353 3241-43 Fax : 011-43533248; E-mail : info@nsai.co.in Designed and Printed at: YUKTI Seed Times January - AprilPRINTS, 2018 338 First Floor, Old Four Story Building, Tagore Guarden Extn., New Delhi - 27 | E-mail: yuktiprints@gmail.com

Seed Sectors Around the Globe

TABLE OF CONTENTS

Message from Desk of President

Message from Director General

SAARC Region Potential for Trade in Seeds between India and Other SAARC Countries Nitesh Kumar Singh

CHINA

1. 2016 Chinese Seed Market Watch - Li Tongchao

2. Summary: 10 keywords of Chinese seed industry 2017- Dingfu Liu & Moran Lin

THE NETHERLANDS Interview with Mr. Wouter Verhey, Agriculture Counsellor-The Netherlands “Who Grows what?”

4. GERMANY

1. Overview of seed sector in Germany Sowmini Sunkara, Dieter Ruecker, Ekkehard Schroeder

2. Indo-German Cooperation on Seed Sector Development Sowmini Sunkara & Ekkehard Schroeder

5. AFRICA

1. Zambia Brief 2017 – The African Seed Access Index

2. Zimbabwe Brief 2017 – The African Seed Access Index

3. Kenya Brief 2016 – The African Seed Access Index

4. South Africa Brief 2017 – The African Seed Access Index

100

6. ITALY The role of the seed sector in Italy for a modern and competitive agriculture Marco Nardi

110

7. VIETNAM The Seed Industry in Vietnam N.M. Dung

121

128

ASIA Towards better metrics and policymaking for seed system development: Insights from Asia’s seed industry David J. Spielman, Adam Kennedy

Seed Sectors Around the Globe

Seed Times January - April 2018

CHARTS & TABLES

154

Figure 1 - South Asia remains the fastest-growing region in the world.

154

Figure 2 - The eastern part of the region is leading, Nepal and Maldives are bouncing back.

155

Figure 3 - Industrial production has accelerated in Bangladesh and Pakistan.

155

Figure 4 - Exports have stopped their decline.

156

Figure 5 - Inflation slowed down across most countries in South Asia.

156

Figure 6 - FDI inflows are stable but not stellar

157

Figure 7 - Afghanistan- Contributions to real GDP

157

Table 1 - Afghanistan macro outlook indicators (annual percent change unless indicated otherwise)

158

Figure 8 - Bangladesh, Contribution to real GDP

158

Table 2 - Bangladesh macro outlook indicators (annual percent change unless indicated otherwise)

159

Figure 9 - Bhutan, Contributions to real GDP growth

159

Table 3 - Bhutan macro outlook indicators (annual percent change unless indicated otherwise)

150

Figure 10 - India, Contributions to real GDP growth

160

Table 4 - India macro outlook indicators (annual percent change unless indicated otherwise)

161

Figure 11 - Maldives, Contributions to real GDP growth

161

Table 5 - Maldives macro outlook indicators (annual percent change unless indicated otherwise)

162

Figure 12 - Nepal, Contributions to real GDP growth

162

Table 6 - Nepal macro outlook indicators (annual percent change unless indicated otherwise)

163

Figure 13 - Pakistan, Contributions to real GDP growth

163

Table 7 - Pakistan macro outlook indicators (annual percent change unless indicated otherwise)

164

Figure 14 - Sri Lanka, Contributions to real GDP growth

164

Table 8 - Sri Lanka macro outlook indicators (annual percent change unless indicated otherwise)

165

Seed Times January - April 2018

Seed Sectors Around the Globe

Seed Times January - April 2018

Message from Desk of

President Seed is the source of life and vitality. The current edition of Seed Times deals with the topic Seed Sectors Across World. The topic elucidates interest because each country has distinct identity and its own strength and weakness. Like the Indian Seed sector each of the seed sectors across world seek to serve needs and demands of their end users i.e. farmers. India constitutes the fifth largest seed market measured in value terms in the world. The share of Indian seed industry in the global seed production is 4.7 percent preceded by the US (28.1 percent), China (21.2 percent), France (8.4 percent), and Brazil (6.2 percent). In terms of overall demand-supply scenario, the Indian seed industry appears to be self-sufficient in a number of seeds categories such as flower, fruits, vegetables and field crop. The future scenario also seems well. Among the others regions having robust Seed markets, the SAARC region is one of the region which has advantage of comparative low transaction cost of carrying out business, similar agro-climatic conditions, food habits and common languages. With a high economic growth and varied agro-climatic and biodiversity the region has significant potential to develop a vibrant seed sector. It also presents an opportunity for complementing each other’s strengths to develop intra and inter-regional trade. Overall, India’s seed trade with other SAARC constitutes less than 1.5 percent of its total trade in 2007 and it is 1.41 per cent in 2016. Similarly, intraSAARC trade with India is also observed to be quite low accounting for less than 1.65 percent in 2007 while it is 3.77 per cent in 2016, a clear indication of low level of cooperation in seed. Still a lot of scope remains for expanding the market and reaching out to farming communities across the region with quality inputs. There is significant potential for developing robust production systems in SAARC and African countries i.e. to produce in one country with suitable agro climatic conditions and supply in another. This edition of Seed Times with the theme “Seed Sectors Across the World” is exciting and provides lot of useful information for further laying a foundation for developing a vibrant seed sector in the region. The analysis and insights provide an opportunity for us to rethink our strategies for creating a quality and standards based seed industry built on strong foundations of innovation to make agriculture a profitable enterprise and to develop global export capabilities. M Prabhakar Rao

Seed Times January - April 2018

Seed Sectors Around the Globe

Seed Times January - April 2018

Message from Desk of

Director General Agriculture is an integral part of the economy. Agriculture not only provides source of income to rural households but also ensures food security for millions. With rapid growth in science and technology great results in the field of agricultural advancement is expected out of both Public and Private Bodies. The Indian Seed Industry has a significant role to play in ensuring that the farmers in our country have the best input material. The global commercial market for planting seed is estimated at $ 45 billion. Our neighbouring SAARC countries and countries of far east offer a very good potential market for planting seed and Indian Seed Producers have great business opportunity in these regions. Same is the case in African continent. This recent issue of â&#x20AC;&#x153;Seed Timesâ&#x20AC;? gives a rare and useful insight into the opportunities available to Indian Seed Producers and Exporters. It will provide an excellent opportunity to the readers to broaden their knowledge on seed sectors of various countries. Constant innovation in the seed sector has led to greater yield and better price of crops for the farmers. In coming times, it is imperative that trade in agriculture sector with focus on seed should be of prime importance in the region. Greater cooperation between countries would ensure good quality seeds which are, on an average, significantly low in South Asia as compared to other countries of Asia. Under South Asian Free Trade Area (SAFTA) agreement it has been agreed to reduce customs duties of all traded goods to zero by the year 2016. However, trade is yet to realize its complete potential. In this edition we have covered the Seed Sectors of SAARC region (Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka), China, Italy, The Netherlands, Russia, Germany, Zambia, Zimbabwe, Kenya, South Africa and Vietnam. In the upcoming issues of Seed Times we would cover more countries for ensuring robust knowledge dissemination among our members. Kalyan B Goswami

Seed Times January - April 2018

Seed Sectors Around the Globe

Seed Times January - April 2018

SAARC Region

Potential for Trade in Seeds between India and Other SAARC Countries Nitesh Kumar Singh Assistant Policy Analyst CUTS International

Executive Summary India and other South Asian Association for Regional Cooperation (SAARC) countries offer natural markets for each other’s export products. The South Asia region enjoys mutual advantages of trade carried out within the group due to low transaction cost, scope for quicker delivery, similar agro-climatic conditions and food habits and common languages. These similarities are worthwhile to explore opportunities for increasing formal trade to meet demand, especially in food items. This paper explores potential for trade in seeds. It identifies ninteen important seeds that are directly or indirectly related to food security and livelihood in the region. These include Seed potatoes, Wheat seed, Barley seed, Maize seed, Rice seed, Grain sorghum, Millet seed, Soya bean seed, Groundnut seed, Sugar beet seed, Alfalfa seed, Clover “Trifolium spp” seed, Seeds of forage, Seeds of herbaceous, Vegetable seeds and fruits and spores. The paper shows that though total trade (in ninteen identified seeds) between India and the other SAARC countries reveals an increasing trend during the period 2007-16, the region holds much bigger potential and opportunity of seed trade. Among the South Asian countries, India holds a place of prominence in seed trade, particularly export. The paper reveals that India is a dominant player in the SAARC seed market, whose status can be understood by the fact that India’s share of ninteen seeds in SAARC seed export to the world in 2016 is over 91 percent.

Seed Times January - April 2018

Seed Sectors Around the Globe

Overall, India’s export of seeds to other SAARC countries constituted 38.12 percent of its total seed export to the world valued at US$ 59 mn in 2007. A significant variations, however, is observed over the next 10-year period and it ranges from 16 to 45 per cent. The share marginally increased with a value of 39.47 per cent in 2016. It is also revealed that total seed export from India to other SAARC countries increased at almost similar (CAGR 10.91 percent) compared to that of its seed exports to the world (CAGR 10.53 percent). In contrast, India’s seed import from other SAARC countries which constituted almost neglibile percent of the total import of US$ 45 mn in 2007 while same trend has been observed in latter years also till 2016. To analyse the existing opportunity of seed trade from India to other SAARC countries, Bilateral Trade Intensity Index and Revealed Comparative Advantage (RCA) Index has been computed. The Bilateral Trade Intensity Index of seed trade shows that SAARC countries particularly Nepal, Bangladesh and Pakistan have emerged as good markets for India in last one-decade period. The paper also computed comparative advantage and disadvantage in seed trade with Revealed Comparative method between India and other SAARC countries. India has comparative advantage in export of ten seeds out of fourteen seeds analysed for RCA i.e., Barley seed, Maize seed, Rice seed, Grain sorghum, Millet seed, Soya bean seed, Groundnut seed, Sugar beet seed, Seeds of forage, Vegetable seeds and fruits and spores to other SAARC countries while it has disadvantage in exporting of Wheat seed, Alfalfa seed, Clover “Trifolium spp” seed and Seeds of herbaceous to other SAARC countries.

Introduction SAARC member-countries are predominantly agriculture-based economies. All its member countries derive their sustainability in economic growth and development from agriculture to a large extent. SAARC, as per its mandate, seeks to facilitate cooperation and collaboration between its member-countries in 11 areas. These include agriculture, education, culture and sports; health, population and child welfare; the environment and meteorology; rural development; tourism; transport; science and technology; and communications. Any decline or stagnancy in agriculture growth not only impacts growth in Gross Domestic Product (GDP), but also reduces per capita income and thus increases poverty and food insecurity. Though it is observed that the contribution of the agriculture sector in GDP for all SAARC countries in the last decade has declined except for Nepal and the contribution of service and manufacturing sector has increased, this in no way negates importance of agriculture for these countries. This is because agriculture is not only a contributor to GDP but it also provides employment and livelihood to millions of people in the region. Another feature of the SAARC countries is that agriculture yield and production is found to be low as compared to the other developing and developed countries. At present, this region faces huge challenges on account of climate change, global warming and higher prices of food grains. All these challenges coupled with lack of adequate irrigation facilities and declining agricultural productivity lead to the reduction in agriculture production which implies low level of food availability. It also results in increased volatility in the food market. Besides, the region is popularly known for its low income and middle low-income status in the world. It is accepted that India and other SAARC countries potentially offer natural markets for each other’s export products. Close proximity could result in low transaction costs. Other factors that create advantageous position include scope for quicker delivery, similar agro-climatic conditions and food habits and common languages. In reality, however, the situation is not very conducive. It is observed that the region suffers from high trade cost because of various factors. These primarily include infrastructure bottlenecks and also non-trade-related issues.

Seed Sectors Around the Globe

Seed Times January - April 2018

To address the issue of lack of cooperation, continuous efforts from the government of South Asian countries culminated in establishment of the South Asian Free Trade Area (SAFTA) agreement in January 2004 (at the 12th SAARC summit in Pakistan). The agreement virtually created a free trade area of 1.8 billion people. Under the agreement, it was agreed to reduce Customs Duties of all traded goods to zero by the year 2016. The SAFTA agreement came into force on 1th January 2006 and is operational following the ratification of the agreement by the member-countries. As far as real development and cooperation between the SAARC member-countries is concerned, not much has changed despite establishment of SAARC and SAFTA. The region continues to remain one of the least integrated regions globally in terms of trade among the member-countries occurring within the group. This is obviously not because of lack of complementarity or lack of potential.Agriculture, including agricultural inputs, suffers from the same fate, despite looming threats to food security and climate change in the region. Many Indian states share a border with some of the countries of the SAARC countries like Bihar with Nepal, West Bengal with Bangladesh, and Jammu and Kashmir and Rajasthan with Pakistan, indicating potential to significantly enhance the level of people-to-people contact within the region. Needless to say, seed is the basic input in the enhancement of agricultural production and productivity of different crops. The green revolution in India and other South Asian countries during the 1960s and 1970s is clear evidence of this. Particularly in food grain production, India and other South Asian countries got a tremendous boost. The major achievement in wheat and also rice production was due to adoption of High Yielding Varieties (HYV) of seeds by the farmers. In India, a similar development occurred during 2000s, when Bt cotton and hybrid Maize seed showed spectacular results in the production of both the crops. The paper seeks to explore and understand the scope and potential for trade in agricultural seeds within the region with a focus on India. The selection of seeds as the focus for the paper stems from the fact that seed is one of the most important determinants of crop yields and thus food security in the region. The paper identifies ninteen important agricultural products (seeds) that are directly or indirectly related to food security and livelihood in the region. This paper consists of five sections. Section two deals India’s trade in seed and seed scenarios in India. Section three deals with India’s trade in seed in SAARC countries. Section four presents the results and findings.Section five provides the conclusion.

2. India’s Production and Trade in Seeds Seed-related Initiatives India constitutes the fifth largest seed market measured in value terms in the world.3 The share of Indian seed industry in the global seed production is 4.7 percent preceded by the US (28.1 percent), China (21.2 percent), France (8.4 percent), and Brazil (6.2 percent). In terms of overall demand-supply scenario, the Indian seed industry appears to be selfsufficient in a number of seeds categories such as flower, fruits, vegetables and field crop. The future scenario also portends well. According to an estimate done by the National Seed Associations of India (NSAI), the seed industry will grow at an average of about 11 percent till 2016. The growth would be primarily because of increase in demand and the need for increasing supplies of grain in the world. It is expected that grain productivity would gradually decline in many regions owing to low seed replacement rates and other factors. Such a scenario would call for initiatives to improve the seed replacement rate.

Seed Times January - April 2018

Seed Sectors Around the Globe

In addition, Indian seed policies and regulations are seemingly in favour of seed producer and exporter, and that might help the sector to grow in coming years. The industry is exempted from GST rate on seeds used for sowing purpose only. Besides, considering the importance of the sector, the government of India has allowed 100 percent Foreign Direct Investment (FDI) in the development and production of seeds and planting materials. Institutional Set-up and Trend in Seed Acreage In India, it is noted that the supply of breeder seed by Indian Council of Agricultural Research (ICAR) and State Agricultural Universities (SAUs) are available in sufficient quantity to meet the domestic demand of all breeder seed. There are, however, some issues with regard to multiplication of breeder seed to foundation and certified seed. It is often argued that the full potential is not realised. This might be due to inadequate follow- up of recommended policy on seed multiplication, leading to low seed replacement rate in the country. The SAARC report on seed (2009) shows that only 25 percent certified seed are distributed by the organised sector and rest of the remaining seed comes from the farmer- saved seed/unorganised sector. Despite some issues encountered, the seed sector in India has shown impressive progress over the last few decades. The area under certified seeds for all crops has increased from less than 500 hectares in 1962-63 to over 5 lakh hectares in 1999-2000. Even in the later years, impressive developments have occurred with regard to requirement5 and availability of quality seeds. The requirement and availability of certified/quality seed which was 330.41 and 353.62 lakh quintals in 2011-12 increased to 337.09 and 343.52 lakh quintals in 2015-16. In the four-year period, the increase in requirement was by a whopping 1.02 times while availability of seed marginally decreased in spite of that India is a seed surplus state in 2015-16. Structure of Seed Industry The Indian seed system is run by the Central and State Governments, ICAR, SAUs, the public sector, co-operative sector and private sector institutions. The seed sector in India consists of two national-level corporations, i.e. National Seeds Corporation (NSC) and State Farm Corporation of India (SFCI), 13 State Seed Corporations (SSCs) and about 100 major private sector seed companies (Figure 1). For quality control and certification, there are 20 State Seed Certification Agencies (SSCAs) and 100 State Seed Testing Laboratories (SSTLs). It is observed that over the last few years since the introduction of the New Seed Policy of 1988, the private sector has started to play a significant role in the production and distribution of seeds, particularly for food crops and cereals, a function earlier dominated by the public sector. Trend in Seed Production Table 1 shows that overall production of breeder and foundation seed and distribution of all inclusive certified seed in India from 2007-08 and 2016-17. The production of breeder and foundation seed during this period has increased 1.2 and 2.6 times.

Seed Sectors Around the Globe

Seed Times January - April 2018

Figure 1: Mapping of Indian Seed Industry (Seed Supply Chain in India)

Source: S55g://seedwe5.gou.iw/Wa5erial/GSawwels_of_keed_kmggly.S5m

Table 1: Production of Breeder, Foundation and Certified Seed in India, (1991-1992 to 2016-2017) Years

Production Breeder Seed (In ' 000 Qtls.)

Production of Foundation Seed (In Lakh Qtls.)

Distribution of Certified/ Quality Seed (In Lakh Qtls.)

2007-2008

9196

85254

1943100

2008-2009

9441

96274

2503500

2009-2010

10683

114638

2797200

2010-2011

11921

180640

3213592

2011-2012

12338

222681

3536200

2012-2013

11020

161700

3285800

2013-2014

8229

174307

3473130*

2014-2015

8621

157616

3517664

2015-2016

8621.32

149542

3435248

2016-2017

11221.8 (Target)

220907

3802904

Source: Indiastat.com,2017, * Andhra Pradesh, Meghalaya, Manipur, Mizoram, Puducherry, Sikkim,Tripura

Seed Times January - April 2018

Seed Sectors Around the Globe

Data also show that per hectare availability of quality/certified seeds is the highest in Andhra Pradesh, whereas it is the lowest in the state of Kerla. This might be indicative of higher varying seeds replacement rates across different states in India. It is well understood that Andhra Pradesh has the highest seed replacement rate amongst all Indian states. At the aggregate level, it is observed that Andhra Pradesh has the largest area under crops and has also the largest supply of quality/certified seeds in fact, its total seed requirement is more than the total requirements of 15 states combined together. Table 2: State-wise Total Demand and Supply of Quality/Certified Seeds in India (Quantity, in lakh quintals) States/UTs

2013-2014

2012-2013 Demand

Andhra Pradesh

Private (Supply)

Total (Supply)

Demand

Private (Supply)

Total (Supply)

Total Cropped Area in Lakh Hectare, 2014-15

Supply of quality/ certified seeds per hectare (quintal)

43.57

21.81

49.95

47.38

26.72

56.23

76.9

0.73

Assam

8.15

5.79

8.15

6.79

4.66

6.79

40.83

0.17

Bihar

13.66

6.58

16.63

15.14

8.37

17.02

76.73

0.22

Chhattisgarh

7.87

0.76

7.73

8.42

2.37

11.36

57.28

0.20

Goa

0.07

0.06

0.01

0.06

1.58

0.04

9.8

6.95

10.15

12.32

9.06

12.63

127.73

0.10

14.13

9.46

15.58

14.68

11.42

16.25

65.36

0.25

Himachal Pradesh

1.29

1.06

1.42

0.14

1.42

9.18

0.15

Jharkhand

4.92

2.61

3.19

3.43

11.78

0.29

Jammu and Kashmir

1.26

0.18

1.22

1.53

0.19

1.53

15.54

0.10

Karnataka

13.46

5.73

14.72

15.53

8.47

15.63

122.47

0.13

1.2

26.25

0.04

Madhya Pradesh

30.96

16.52

35.52

34.28

16.78

33.99

238.1

0.14

Maharashtra

27.79

28.88

28.08

14.86

28.34

234.74

0.12

Nagaland

0.49

0.64

0.34

0.64

0.13

Odisha

8.17

7.09

9.15

8.78

51.73

0.17

Punjab

12.93

13.08

14.66

13.72

13.28

15.77

78.57

0.20

Rajasthan

20.15

9.36

20.85

20.77

7.87

22.84

242.35

0.09

Tamil Nadu

5.54

5.99

8.8

9.49

6.21

10.48

59.95

0.17

Uttarakhand

1.13

1.31

0.93

1.24

10.97

0.11

Uttar Pradesh

53.65

29.79

51.07

53.88

26.76

46.08

261.47

0.18

West Bengal

34.07

19.41

29.92

35.81

21.95

34.76

96.9

0.36

Others

0.94

0.01

0.93

1.04

0.09

1.04

15.41

0.07

India

315.2

167.42

328.6

335.26

179.55

347.31

1983.6

0.18

Gujarat Haryana

Kerala

10 Lakh = 1 million Source: Indiastat.com, 2017, Note : * : Indent., # : Metric Tonne.

Seed Sectors Around the Globe

Seed Times January - April 2018

Requirements & Availability of Seeds Figure 2 shows the trend in requirement and availability of seeds in India. Data shows that the requirement and availability of seeds in India is increasing every year and availability is much higher than the requirement for each of the years. The figure also demonstrates that India has maintained seed surplus in all years.

3. India’s Seed Trade with Other SAARC Countries Low level of economic integration has its impact on low level of trade and cooperation. This is true for all the tradable products, but particularly for agricultural trade, including seeds. Seed trade in SAARC countries is very low compared to its potential and also when compared to trade with other countries outside the region. India’s total export of selected ninteen seeds to the world and also the other SAARC countries may be grouped into three categories: food grains including maize, wheat, rice, barely; vegetables and fruits and fibre. A detailed analysis is presented in this section. Overall, India’s seed trade with other SAARC constitutes less than 1.5 percent of its total trade in 2007 and it is 1.41 per cent in 2016. Similarly, intra-SAARC trade with India is also observed to be quite low accounting for less than 1.65 percent in 2007 while it is 3.77 per cent in 2016, a clear indication of low level of cooperation in seed. While the intra-regional cooperation is quite low, India has a dominant share when it comes to SAARC.s overall trade in seeds. India, at present, accounts for almost 91 per cent in total seed export from the SAARC region. In comparison, its share in total import is less than 14 percent (Table 3). This export domination of India, however, shows a not much significant increase in India’s seed trade with the SAARC countries during 2007 to 2016. Its share in seed export from the SAARC region in 2007 was as high as 88.48 percent in 2016. In comparison to export, its share in total import has reduced from 26 per cent to 13 per cent during the same periods. This establishes the fact that while India’s seed industry has fared relatively better compared to other SAARC countries; it has not been able to penetrate markets of other South Asian countries optimally.

Seed Times January - April 2018

Seed Sectors Around the Globe

Table 3: Trend in India’s Seed Trade within and outside SAARC Region, Unit: USD “000” Year

Export of seeds from India to SAARC

Exports of seeds from India to ROW (excluding SAARC)

Exports of seed by SAARC countries to India

Exports of seed by SAARC countries to ROW (excluding India)

India's seed trade as a % of total trade with SAARC countries

Intra-SAARC seed trade (as a % of world trade)

2007

22462

36457

7670

1.13%

1.65%

2008

18412

95638

13130

1.44%

1.61%

2009

18271

57746

19717

1.55%

1.66%

2010

18271

53088

7583

0.87%

1.46%

2011

38807

55504

198

9349

1.10%

1.59%

2012

72467

95370

101

27274

1.95%

2.34%

2013

78123

147018

29222

1.97%

2.54%

2014

95458

115380

15326

1.62%

2.27%

2015

80878

104371

7203

1.58%

4.10%

2016

63265

97014

15757

1.41%

3.77%

Source: ITC Trade Map, 2017

Data shows that India’s export of seeds to the other SAARC countries constituted 38 percent of total seeds export from India in 2007. Data relating to ninteen select seeds shows that South Asia accounted for 38 percent of total export of seeds from India valued at US$ 20 mn in 2007. The share, however, marginally increased to over at around 39 percent in 2016 out of total export from India (US$160mn), reflecting an increasing trend and deeper integration over the decade. It is also observed that while India’s seed export to the world during 2007-16 increased by over two times, export to the South Asian countries increased by a similar rate of 2.8 times, realising a CAGR of 12 percent compared to a CAGR of 17.3 percent in case of seed export to the world. Data on import of ninteen seeds by India from the world and other South Asian countries show a different pattern. The share of South Asia in India’s import of ninteen seeds works out to be negligible out of total imports valued at US$45mn in 2007. Notably, this low share of South Asia further continued and it was also neglibile in 2016 out of total imports of these ninteen seeds valued at US$101mn in 2016. This implies that while India’s import of the selected ninteen seeds from the world has increased more than two times while it has decreased from the SAARC countries. In other words, one can argue that while India was dependent on the world market for 99 percent of its imported seeds in 2007, in the later years this dependency has been stagnant. Table 4 shows the net export and import of India’s seed trade with the world. Data reveal that while India is a net exporter of Seed potatoes, Wheat seed, Barley seed, Maize seed, Rice seed, Grain sorghum, Millet seed, Soya bean seed, Groundnut seed, and Alfalfa seed, Seeds of forage, and fruits and spores. it is a net importer of Sugar beet seed, Clover “Trifolium spp” seed, Seeds of herbaceous, Vegetable seeds in 2016. It is also reflected with the net position of India that some of seed’s export in recent years has significantly increased. Table 4 also reflects that the net export of vegetable seed from India has declined over the period 2007-2016. The gap between export and import of vegetable seed has widened by about 1.8 times. On the other hand, net export from India in case of Rice, Forgae and herbaceous have increased seven, four and five times. In other cases also, net export situation has significantly improved. 18

Seed Sectors Around the Globe

Seed Times January - April 2018

Table 4: India’s Status as Net Exporter of Seed* from the World Types of seed Seed potatoes

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Indias net position as seed exporcer (US$ Thousand) 668

3341

954

1701

1694

608

767

763

671

1043

Wheat Seed

7584

14531

Barley seed

197

7971

9927

-25

Maize seed

15896

75187

28172

19865

16924

15207

29028

31878

20468

26408

Rice Seed

6275

7380

17460

13202

23799

85607

82815

62176

72982

47045

Grain sorghum,

13120

9557

5307

4031

Millet seed

10040

9570

8670

7569

Soya bean seed,

7581

4176

949

1226

Groundnut seed,

1082

2079

3087

776

Sugar seed,

833

-46

-175

-22

-227

-591

-853

-1408

-1774

-1320

Alfalfa seed

1595

1329

1313

624

1667

3408

8858

3555

1075

396

Fescue seed

-9242

-10595

-8708

-8406

-14782

-20624

-5356

-18176

-12564

-12382

252

1017

525

867

863

1589

2584

413

1328

1122

Seeds of herbaceous

-1759

-1660

-2127

-3553

-3391

-7717

-3976

-4819

-6039

-8900

Vegetable seeds,

-8743

-20391

-29498

-26290 -18158

-15953

-16908

-22955

-32504

-16409

Seeds, fruits and spores,

7771

6197

6371

10555

14628

18561

13864

11751

5946

6243

13546

61759

14287

8543

23017

80095

150427

111062

79549

58873

Seeds of forage

Total

Source: ITC Trade Map, 2017

Integrating India’s net export position with the SAARC countries. (including India) import position reveals an interesting scenario. Table 5 shows the SAARC seed import from the world for the last decade, 2007-16. During this period, overall seed import in SAARC countries shows a fluctuating trend. However, when one compares seed import for 2007 to the 2017 period, it is observed that import of all ninteen seeds except few has increased. Total seed import of ninteen seeds in SAARC countries increased by over 4.5 times. At individual level, increase in import of sugar seeds was the highest (14 times) followed by Seeds of forage 5 times and Seeds of herbaceous 4 times. This implies that while India’s net export position has improved with South Asian countries. Import has also increased, creating a complementarity between export from India and import by SAARC countries. Table 5: SAARC Seed Import from the World Types of seed Seed potatoes

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

SAARC countries position as seed importer, (US$ Thousand) 9935

7242

14777

9855

10517

Wheat seed

10998

6537

18146

10768

11344

42663

152693

33939

110208

Barley seed

170

Maize seed

28104

33611

36336

30241

49967

60293

79691

73102

85671

67063

Rice seed

12062

13304

14742

25563

52041

99838

76981

92612

88861

59290

Seed Times January - April 2018

Seed Sectors Around the Globe

Types of seed

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

1267

1833

Grain sorghum,

SAARC countries position as seed importer, (US$ Thousand) 238 37

Millet seed

604

1549

843

1989

1998

Soya bean seed,

31767

4071

10825

259200

384940

Groundnut seed,

197

483

106

Sugar beet seed,

143

657

560

886

1497

1445

1392

2854

2312

2053

2892

4035

1552

1631

2842

3861

2953

2158

7200

3523

39176

22299

23728

19996

28026

38193

16512

36717

36307

33419

Seeds of forage

3411

4028

5800

8166

9119

9352

9964

14474

16389

19264

Seeds of herbaceous

2378

3472

2630

3999

4647

9337

5847

6136

7502

10229

Vegetable seeds,

56383

59043

72243

86406

91303

99809

95211

105728

132134

127699

Seeds, fruits and spores,

14102

13064

13306

14649

18193

14261

20473

19015

32094

38437

169649

160050

189043 202305

268979

421380

474986

413415

791519

760558

Alfalfa seed Clover "Trifolium spp" seed,

Total

Source: ITC Trade Map, 2017

India’s growing importance as supplier of seeds is, however, not reflected by the penetration of Indian seeds in the other South Asian market (Table 6). The table presents India’s share in SAARC total seed import (ninteen seeds) from world for the last 10 years. Interestingly, data reveal that there is no import of HYV food grain seed from India to other SAARC countries. These include wheat, rice, maize, grain sorghum and barley. A clear revelation from the data is that while India is in a better position to serve import requirements of seeds of other South Asian countries, in practice there is not much development. This is reflected in negligible/declining share of India in South Asian countrie in total import of seeds by other south Asian Countries. Table 6: India’s share in SAARC Seeds import Product label

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Seed potatoes

Wheat seed

Barley seed

35%

Maize seed

Rice seed

Grain sorghum, Millet seed

Soya bean seed,

Groundnut seed,

Sugar beet seed, Alfalfa seed

52%

45%

39%

16%

41%

64%

50%

77%

64%

Seed Sectors Around the Globe

Seed Times January - April 2018

Product label

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

24%

48%

37%

43%

56%

37%

50%

35%

44%

7.27%

2.36%

5.48%

0.00%

3.40%

2.40%

3.01%

8.83%

1.07%

0.33%

Seeds of herbaceous

98.19%

65.67%

98.90% 99.15% 94.00%

99.11%

98.07%

98.27% 99.01%

97.39%

Vegetable seeds,

56.48%

62.89%

66.60% 55.93%

51.87%

52.55%

58.86%

63.93% 55.84%

50.56%

Seeds, fruits and spores,

10.49%

14.49%

12.73% 13.06%

18.41%

27.18%

26.68%

25.39% 30.23%

27.47%

Total

26.75%

32.67%

32.65% 31.05%

26.51%

20.82%

15.73%

24.13% 13.35%

13.33%

Clover "Trifolium spp" seed, Seeds of forage plants

Source: ITC Trade Map, 2017

India’s importance as a growing seed market is fully demonstrated by the share of India in SAARC total export (Table 7). India’s percentage share in SAARC seed export to the world is over 90 percent. Table: 7 India’s share in SAARC seed export (%) Product label

2007

2008

Seed potatoes

48.37%

76.65%

2009

2010

2011

2012

2013

75.12% 53.29% 80.55%

64.61% 0.00%

Wheat Seed Barley seed Maize seed

98.16%

97.05%

64.54% 92.38%

Rice seed

73.75%

66.18%

98.41%

2014

2015

2016

42.05%

97.82% 72.30%

83.91%

18.26%

99.99%

100%

85.65%

98.86%

99.61%

72.92%

78.50%

45.70%

89.95%

96.14%

97.90%

96.35%

97.50% 99.46%

98.71%

96.61%

99.12%

99.15%

98.24%

99.96%

100%

Grain sorghum, Millet seed

0.00%

99.41%

99.67% 99.52%

99.76%

Soya bean seed,

0.00%

99.87%

91.36% 98.00%

98.74%

Groundnut seed,

0.00%

86.70%

99.86%

87.20%

92.71%

100%

0.00%

69.04% 33.06%

3.36%

Sugar beet seed,

100%

36.78%

24.36%

Clover "Trifolium spp" seed,

0.00%

Seeds of forage plants

66.84%

80.29%

53.12% 56.93%

Seeds of herbaceous

63.86%

56.57%

Vegetable seeds,

96.46%

Seeds, fruits and spores, Total

Alfalfa seed

83%

82%

100%

54.98% 32.57%

50.76%

79.40%

87.18%

0.00% 23.85% 88.00%

564.35%

100%

83.01%

83.24%

97.01%

83.01% 96.78%

97.45%

84.95% 64.98%

45.61%

70.44%

79.51%

58.53%

61.32%

47.71%

99.02%

98.23%

97.05%

97.66%

98.85%

99.24%

99.49% 98.95%

98.94%

99.64%

97.42%

88.94% 94.59%

98.18%

97.66%

95.18%

90.66% 86.71%

92.22%

88.48%

89.68%

79.40% 90.39% 90.98%

86.02%

88.51%

93.22% 96.26%

91.05%

65.94% 13.04% 122.66%

Source: ITC Trade Map, 2017

Seed Times January - April 2018

Seed Sectors Around the Globe

An Overview Analysis of data for the 10-year period demonstrates that the overall export of seeds from India to other SAARC countries (Bangladesh and Nepal) has increased by a whopping over 5 times and 4 times. (Table 8). The increase in export of seed from India to Bangladesh is seemingly because of a combination of factors such as continuous initiatives by the both Government for formalization of trade and similarities in agro-climatic condition. Another important factor could be a good political relationship between the two countries. Table 8: Trend in Export of Seeds from India to Other SAARC Countries and World, 2007

Region

2008

2009

2010

2011

2012

2013

2014

2015

2016

Export of seeds from India to other SAARC countries (US$ Thousand)

World

58919

114050

76017

71359

94311

167837

225141

210838

185249

160279

SAARC

22462

18412

18271

38807

72467

78123

95458

80878

63265

118

Afganistan Bangladesh

5017

4870

4806

9971

9478

16353

24152

24649

23442

29503

Bhutan

262

354

143

241

Maldives

110

5689

2068

2073

4202

10252

36907

35723

45755

46852

25321

Pakistan

10236

8614

10354

15039

16401

17586

17129

23620

8987

6169

Sri Lanka

1518

2750

1028

1825

2304

1448

1080

1378

1238

2259

Nepal

Source: ITC Trade Map, 2017

A similar pattern is revealed in case of export of seeds from other SAARC countries to India in 2007-17). As indicated above, data reflect that the import of seeds by India from other South Asian countries is significantly low compared to import from the world (Table 9). During the 10-year period, it is also observed that while seed import from the world increased by over two times, increase in import from the SAARC countries was insignificant which was much lower compared to import from the world. It is also found that the share of Indiaâ&#x20AC;&#x2122;s import of seed from other SAARC countries has fluctuated over the years and imported few of the products out of 19 seeds. Table 9: Trend in Import of Seeds from India to Other SAARC Countries 2007

Region

2008

2009

2010

2011

2012

2013

2014

2015

2016

Import of seeds by India from other SAARC countries (US$ Thousand)

World

45373

52291

61730

62816

71294

87742

74714

99776

105700

101406

SAARC Afganistan

198

101

Bangladesh

175

Bhutan

Maldives

Nepal

Pakistan

Sri Lanka

Source: ITC Trade Map, 2017

Seed Sectors Around the Globe

Seed Times January - April 2018

Not much variation with respect to other SAARC countries. The share of India’s total export and import are observed when the analysis is extended crop-wise. There is no consistency in trade for different seeds. However, SAARC countries share in India’s overall export is found to be much higher than their share in India’s overall import of seeds (Table 10). Table 10: Share of Other SAARC Countries in India’s Import and Export of Seeds 2007

Types of Seed Seed potatoes Wheat seed Barley seed Maize seed Rice seed Grain sorghum Millet seed Soya bean seed, Groundnut seed, Sugar beet seed Alfalfa seed Clover "Trifolium spp" seed, Seeds of forage Seeds of herbaceous Vegetable seeds, Seeds, fruits and spores,

2008

2009

2010

2011

2012

2013

2014

2015

2016

Yearly trend in share (in percent) Export

62.57%

69.35%

90.97%

91.28%

19.95%

3.41%

1.75%

3.16%

Import

43.50% 76.54% -

0.00%

Export

10.14%

0.64%

60.00%

0.00%

Import

0.00%

Export

0.00%

2.62%

0.86%

0.00%

Import

0.00%

Export

25.32%

7.67%

20.72% 48.07%

46.73%

78.50%

67.21%

66.52%

65.58%

59.85%

Import

0.00%

Export

76.18%

12.93%

5.61%

19.14%

36.10%

43.03%

41.22%

72.84%

66.14%

53.55%

Import

100.00%

0.00%

100.00%

Export

8.51%

63.80%

31.92%

29.65%

Import

Export

16.64%

31.46%

27.88%

34.06%

Import

Export

0.87%

0.00%

Import

0.00%

Export

14.14%

11.01%

1.46%

0.28%

0.00%

7.09%

15.34% -

Import

Export

3.19%

32.66%

45.45%

0.00%

85.71%

87.88%

0.00%

Import

0.00%

91.24% 88.62% 100.00%

88.50%

16.17%

22.89%

24.74%

14.65%

Export

100.00% 100.00%

Import

Export

0.00%

Import

0.00%

Export

13.80%

47.48%

35.82% 45.21%

12.36%

36.96%

48.06%

40.27%

5.59%

3.37%

Import

0.00%

10.27%

9.00%

0.78%

0.00%

Export

0.52%

3.23%

0.63%

3.88%

6.86%

1.04%

0.00%

0.91%

0.07%

3.20%

Import

0.00%

Export

41.17%

32.12%

35.93%

64.15%

50.04%

40.41%

32.70%

29.75%

26.21%

24.11%

Import

0.00%

0.09%

0.02%

0.00%

0.12%

0.00%

0.05%

0.01%

0.00%

Export

21.56%

25.24%

34.85% 22.83%

23.78%

20.63%

24.88%

26.66%

22.73%

39.21%

Import

0.00%

0.95%

4.24%

0.34%

0.35%

0.08%

0.00%

0.06%

0.00%

Source: ITC Trade Map, 2017

Seed Times January - April 2018

Seed Sectors Around the Globe

Seed-related Sensitive List under SAFTA and Applied MFN Tariff It is here important to note that intra-regional seed trade in SAARC is influenced by a number of factors. Seemingly, the most important of these are sensitive product lists of member-countries under SAFTA and also applied MFN tariffs. Under the revised sensitive list, even though members have significantly reduced their list of products, the number still is quite high as demonstrated by Table 11. Table 11: Negative List of SAARC Member Countries Number of Products in the earlier Sensitive Lists

Number of Products in the Revised Sensitive Lists (Phase-II) (effective from 01 January 2012)

Afghanistan

1,072

858

Bangladesh

1,233 (LDCs), 1,241 (NLDCs)

987 (LDCs), 993 (NLDCs)

150

156

480 (LDCs), 868 (NLDCs)

25 (LDCs), 614 (NLDCs)

Member State

Bhutan India

681 154

Maldives 1,257 (LDCs), 1295 (NLDCs)

998 (LDCs), 1,036 (NLDCs)

Pakistan

1,169

936

Sri Lanka

1,042

[845 (LDCs)], 906 (NLDCs)

Nepal

Source: South Asian Association for Regional Cooperation http://saarc-sec.org/areaofcooperation/detail.php?activity_id=35

Moreover, in most of the member-countries, a large number of seeds continue to be in the sensitive list. For example, while India has 19 different types of seeds in the sensitive list, Afghanistan has 15. A detailed list of seeds maintained by member countries in sensitive list is enumerated in Annexure 1. Besides, most of the member-countries apply MFN tariffs on import of certain seed products. This could be for the obvious reason of protecting one.s domestic seed industry from external competition. A detailed list of MFN tariffs applied by member countries in SAARC is presented as Annexure 2.

4. Potential of Seed Trade and Revealed Comparative Advantage To assess the potentiality of seed trade between the SAARC member countries, and the positioning of different member countries, techniques of RCA and bilateral trade intensity index have been applied. RCA for India and other SAARC countries has been computed. A revealed comparative advantage is calculated to understand the relative advantage or disadvantage of a certain country in a certain class of goods or services as evidenced by trade flows. Computation of revealed comparative advantage relies on bilateral trade intensity index, that has been computed for India on the one hand and other SAARC countries on the other. It might be noted that bilateral trade intensity index is used to explain the flow of trade between two regions. In the present case, it is India and other SAARC countries. The process is reversed to understand flow of seed from other SAARC countries to India.

Seed Sectors Around the Globe

Seed Times January - April 2018

Table 12 summarises the results obtained from the RCA analysis. The table establishes the fact that India has revealed comparative advantage in eight out of ninteen seed categories traded between India and other SAARC countries for the entire period 2007-17. The table reflects that there is big scope and opportunity for both India and other SAARC countries in seed. Both India and other SAARC countries stand to potentially gain from trade in these ninteen seeds. Table 12: Trade Potentials between India and Other SAARC Countries by RCA India

Other SAARC countries

Seed potatoes

Potential Exporter

Potential Importer

Wheat seed

Potential Exporter

Potential Importer

Barley seed

Potential Exporter

Potential Importer

Maize seed

Potential Exporter

Potential Importer

Rice Seed

Potential Exporter

Potential Importer

Grain sorghum,

Potential Exporter

Potential Importer

Millet seed

Potential Exporter

Potential Importer

Soya bean seed,

Potential Importer

Potential Exporter

Groundnut seed,

Potential Exporter

Potential Importer

Sugar beet seed,

Potential Exporter

Potential Importer

Alfalfa seed

Potential Exporter

Potential Importer

Fescue seed

Potential Importer

Potential Exporter

Seeds of forage

Potential Exporter

Potential Importer

Seeds of herbaceous

Potential Exporter

Potential Importer

Vegetable seeds,

Potential Exporter

Potential Importer

Seeds, fruits and spores,

Potential Exporter

Potential Importer

However, it is important to emphasise that there exists potential for bilateral and intra-regional trade between India and other SAARC countries. This is because while India has comparative advantage in some, other SAARC countries have advantages in others. This is, however, a dynamic situation and can change over time.

5. Conclusion and Policy Recommendations From the analysis and results obtained above, one can conclude that India has fair potential to meet the import needs of the SAARC region. The scope of benefiting from the bilateral trade with SAARC region looks quite good. Greater opening of seed trade might help other membercountries in SAARC to have better access to quality/certified seeds. These countries might also benefit from the efficiency which trade will bring in to their respective domestic markets. Considering the mutual benefits which could be ushered in as a result of seed trade, countries in South Asia need to join hands to avail existing potential and opportunities within the region and further to address challenges to food security and poverty reduction. The tasks at hand are challenging, considering the present low level of cooperation reinforced by trust deficit. To have a real breakthrough, some focused and time bound initiatives are required. Some of these include the following:

Seed Times January - April 2018

Seed Sectors Around the Globe

Presently a clear understanding of seed market in the South Asian countries is missing. It is difficult of the countries in the region to design solutions, unless there is a proper assessment of what is available and what needs to be done. There is urgent need for understanding of market dynamics, demand-supply and gap; capacity of each county to meet seed requirement of domestic and regional market. These should also include proper assessment of challenges faced at the country level keeping regional perspective in view. Considering that seeds are living basic inputs for a sustainable agricultural growth, South Asian countries should come forward with initiatives such as identifying major varieties that could be adapted to other countries in the region. Research institutions in one or more countries in the region should design a plan of action for engagements with similar institutions in other countries. Such engagements could be premised on what is required to not only ensure adequate seed production for the local market, but also to meet regional demand. The focus, obviously, should be on development and use of seeds. The SAARC Seed Bank is a noble initiative. Its objective could be embedded with focused and time bound activities and initiative to effectively address seed-related challenges faced by the region.

References: Bangladesh Seed Grower, Dealer and Merchants Association (2007), .Bangladesh Seed Industry at a Glance., accessed on March 4, 2013, URL: www.apsaseed.org/docs/bc3147ea/Bangladesh_Seed_Industry_at_a_Glance.pdf. Cho, Renee (2013), .Improving Seeds to Meet Future Challenges.,available edu/2013/02/08/improving-seeds-tomeet-future-challenges/

at http://blogs.ei.columbia.

Cromwell, Elizabeth, Esbern Friis-hansen and Michael Turner (1992),.The Seed Sector in Developing Countries: A Framework for Performance Analysis., ODI Working paper No. 65. Murugkar, Milind, Bharat Ramaswami, Mahesh Shelar (2007),.Competition and Monopoly in the Indian Cotton Seed Market.,Economic and Political Weekly, Vol - XLII No. 37, September 15,2007 Pray, Carl E. and Bharat Ramaswami (1991), .A Framework for Seed Policy Analysis in Developing Countries.. IFPRI: Washington, D.C. SAARC Agriculture Centre (2009), .Quality Seed in SAARC Countries (2009), Production, Processing, Legal and Quality Control and Marketing. Ravi, S. Bala, (December 2009), .The Conflict between Seed Bill and PPVFR Act of India.. Sikdar, Chandrima (2012), .Prospects of Bilateral Trade between India and Bangladesh. Spielman, David J., Deepthi Kolady, Anthony Cavalieri, N. Chandrasekhara Rao, (IFPRI Discussion Paper 01103, July 2011), .The Seed and Agricultural Biotechnology Industries in India: An Analysis of Industry Structure, Competition, and Policy Options. Tripp, Robert, Ruifa Hu and Suresh Pal (2010), .Rice Seed Provision and Evolution of Seed Markets, in Sushil Pandey, Derek Byerlee, David Dawe, Achim Dobermann, Samarendu Mohanty, Scott Rozelle, and Bill Hardy, Rice in the Global Economy: Strategic Research and Policy Issues for Food Security, IRRI: Manila.

Seed Sectors Around the Globe

Seed Times January - April 2018

1. SAARC, established in 1985, consists of eight countries in South Asia namely Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Afghanistan is a relatively new entrant, having joined the group in April 2007 2.

Afghanistan from over 45 percent in 2002 to less than 30 percent in 2010; Bangladesh from 24 percent in 2001 to a little over 18 percent in 2011; Bhutan from about 28 percent in 2001 to about 19 percent in 2009; India from 23 percent in 2001 to less than 18 percent in 2011; Maldives from about 10 percent in 2001 to about 3 percent in 2010; Pakistan from over 24 percent in 2001 to less than 22 percent in 2011; and Sri Lanka from 20 percent in 2001 to about 13 percent in 2011

IFPRI (2011), .The Seed and Agricultural Biotechnology Industries in India:An Analysis of Industry Structure, Competition, and Policy Options., IFPRI Discussion Paper 01103, July 2011, available at: www.ifpri.org/sites/ default/files/publications/ifpridp01103.pdf

It might be noted that Breeder seed is used for the production of foundation seed and certified seeds

The estimate of total seed requirement in India is based on state-level estimate of seed requirements presented at the Bi-annual (Kharif and Rabi) national-level conferences. Each of the states are invited and present their seed requirement for Kharif and Rabi cropping seasons

For details, see CUTS (2013), Dynamics of Rice Seeds Trade: Need for Cooperation between India and Bangladesh, available at: www.cuts-citee.org/RISTE/pdf/Dynamics_of_Rice_Seeds_Trade-Need_for_Cooperation_between_ India_and_Bangladesh.pdf

Consumers and Economic Cooperation: Cost of Economic Non-cooperationto Consumers in South Asia, CUTS International, 2012, available at: www.cuts-citee.org/pdf/Consumers_and_Economic_Cooperation-Cost_ of_Economic_Non-cooperation_to_Consumers_in_South_Asia.pdf

Vegetable seed includes cabbage, cauliflower, onion, pea, radish, tomato,among others

Oil seed includes palm nuts and kernel, cotton, mustard, coaster, sesamum, safflower, melon, poppy, sea nuts

Abbreviations Bilateral Trade Intensity

RCA

CAGR :

Compound Annual Growth Rate

SAARC :

FDI

Foreign Direct Investment

South Asian Assoiation for Regional Cooperation

GDP

Gross Domestic Poduct

SAFTA :

South Asian Free Trade Area

HYV

High Yielding Varities

SAUs :

State Agricultural Universities

ICAR

Indian Council of Agricultural Research

SFCI

State Farm Corporation of India

MPN

Most Favoured Nation

SSCs

State Seed Corporations

NSAI

National Seed Associations of India

SSTLs :

State Seed Testing Laboratories

NSC

National Seeds Corporation

VAT

Value Added Tax

BTI

Seed Times January - April 2018

Revealed Comparative Advantage

Seed Sectors Around the Globe

Annexure 1: Country-wise Revised Sensitive fist Relating to Seeds under SAFTA Afghanistan’s Revised Sensitive List in Seeds under SAFTA 9092000

Seeds of coriander

9093000

Seeds of cumin

9094000

Seeds of caraway

9095000

Seeds of fennel; juniper berries

12051000

Low erucic acid rape or colza seeds

12060000

Sunflower seeds, whether or not broken

12072000

Cotton seeds

12074000

Sesamum seeds

12075000

Mustard seedsa

12091000

Sugar beet seed

12092100

Lucerne (alfalfa) seed

12092200

Clover (Trifolium spp. ) seed

12092300

Fescue seed

12093000

Seeds of herbaceous plants cultivated principa lly for their flowers

12099100

Vegetable seeds

Bangladesh’s Revised Sensitive List in Seeds under SAFTA 90920

Seeds of coriander

90930

Seeds of cumin

Sensitive List* in Seeds under SAFTA 70110

Potatoes seeds

71339

Guar seeds

90920

Seeds of coriander

90940

Seeds of Carrway

100510

Maize seeds

120100

Soya Beans of seed

120210

Groundnut seeds

120400

Linseed

120510

Rape Seeds

120600

Sunflower seeds

120710

Palm nuts of seed

120720

Cotton seeds

Seed Sectors Around the Globe

Seed Times January - April 2018

120730

Castor Oil Seeds

120740

Seasum Seeds

120750

Mustard Seeds

120760

Safflower Seeds

120791

Poppy Seeds

120799

Other Oil Seeds

120810

Soyabeans

*Relates to LDCs.

Pakistan’s Revised Sensitive List in Seeds under SAFTA Durum wheat

100110

Sri Lanka’s Revised Sensitive List in Seeds under SAFTA 9011110/ 9011210

Coffee Seeds

90910

Seeds of anise or badian

90940

Seeds of caraway

120740

Sesamum seeds

120750

Mustard seeds

12079910

Tea seeds

Annexure 2: Applied MFN Rate by SAARC Countries on Import of Seeds HS Code

Bangladesh

70110

Seed potatoes

100111

Durum wheat seed for sowing

2.5

100191

Seed of wheat and meslin, for sowing (excluding durum)

2.5

100310

Barley seed for sowing

100510

Maize seed for sowing

100610

Rice in the husk, "paddy" or rough

100710

Grain sorghum, for sowing

100821

Millet seed for sowing (excluding grain sorghum)

120110

Soya bean seed, for sowing

120230

Groundnut seed, for sowing

120910

Sugar beet seed, for sowing

120911

Sugar beet seed, for sowing

120919

Beet seed for sowing (excluding sugar beet)

Seed Times January - April 2018

MFN 0

Seed Sectors Around the Globe

HS Code

Bangladesh

120921

Alfalfa seed for sowing

120922

Clover "Trifolium spp" seed, for sowing

120929

Seeds of forage plants for sowing (excluding of cereals and of sugar beet, alfalfa, clover ...

120930

Seeds of herbaceous plants cultivated mainly for flowers, for sowing

120991

Vegetable seeds, for sowing

120999

Seeds, fruits and spores, for sowing (excluding leguminous vegetables and sweetcorn, coffee, ...

HS Code

India

70110

Seed potatoes

100111

Durum wheat seed for sowing

100191

Seed of wheat and meslin, for sowing (excluding durum)

100310

Barley seed for sowing

100510

Maize seed for sowing

100610

Rice in the husk, "paddy" or rough

100710

Grain sorghum, for sowing

100821

Millet seed for sowing (excluding grain sorghum)

120110

Soya bean seed, for sowing

120230

Groundnut seed, for sowing

120910

Sugar beet seed, for sowing

120911

Sugar beet seed, for sowing

120919

Beet seed for sowing (excluding sugar beet)

120921

Alfalfa seed for sowing

120922

Clover "Trifolium spp" seed, for sowing

120929

Seeds of forage plants for sowing (excluding of cereals and of sugar beet, alfalfa, clover ...

120930

Seeds of herbaceous plants cultivated mainly for flowers, for sowing

120991

Vegetable seeds, for sowing

120999

Seeds, fruits and spores, for sowing (excluding leguminous vegetables and sweetcorn, coffee, ...

HS Code

Pakistan

70110

Seed potatoes

100111

Durum wheat seed for sowing

100191

Seed of wheat and meslin, for sowing (excluding durum)

100310

Barley seed for sowing

100510

Maize seed for sowing

Seed Sectors Around the Globe

MFN

MFN 0

MFN 3

Seed Times January - April 2018

100610

Rice in the husk, "paddy" or rough

100710

Grain sorghum, for sowing

100821

Millet seed for sowing (excluding grain sorghum)

120110

Soya bean seed, for sowing

120230

Groundnut seed, for sowing

120910

Sugar beet seed, for sowing

120911

Sugar beet seed, for sowing

120919

Beet seed for sowing (excluding sugar beet)

120921

Alfalfa seed for sowing

120922

Clover "Trifolium spp" seed, for sowing

120929

Seeds of forage plants for sowing (excluding of cereals and of sugar beet, alfalfa, clover ...

120930

Seeds of herbaceous plants cultivated mainly for flowers, for sowing

120991

Vegetable seeds, for sowing

120999

Seeds, fruits and spores, for sowing (excluding leguminous vegetables and sweetcorn, coffee, ...

HS Code

Nepal

70110

Seed potatoes

100111

Durum wheat seed for sowing

100191

Seed of wheat and meslin, for sowing (excluding durum)

100310

Barley seed for sowing

100510

Maize seed for sowing

100610

Rice in the husk, "paddy" or rough

100710

Grain sorghum, for sowing

100821

Millet seed for sowing (excluding grain sorghum)

120110

Soya bean seed, for sowing

120230

Groundnut seed, for sowing

120910

Sugar beet seed, for sowing

120911

Sugar beet seed, for sowing

120919

Beet seed for sowing (excluding sugar beet)

120921

Alfalfa seed for sowing

120922

Clover "Trifolium spp" seed, for sowing

120929

Seeds of forage plants for sowing (excluding of cereals and of sugar beet, alfalfa, clover ...

120930

Seeds of herbaceous plants cultivated mainly for flowers, for sowing

120991

Vegetable seeds, for sowing

120999

Seeds, fruits and spores, for sowing (excluding leguminous vegetables and sweetcorn, coffee, ...

Seed Times January - April 2018

MFN

Seed Sectors Around the Globe

HS Code

Sri Lanka

MFN

70110

Seed potatoes

100111

Durum wheat seed for sowing

100191

Seed of wheat and meslin, for sowing (excluding durum)

100310

Barley seed for sowing

100510

Maize seed for sowing

100610

Rice in the husk, "paddy" or rough

100710

Grain sorghum, for sowing

100821

Millet seed for sowing (excluding grain sorghum)

120110

Soya bean seed, for sowing

120230

Groundnut seed, for sowing

120910

Sugar beet seed, for sowing

120911

Sugar beet seed, for sowing

120919

Beet seed for sowing (excluding sugar beet)

120921

Alfalfa seed for sowing

120922

Clover "Trifolium spp" seed, for sowing

120929

Seeds of forage plants for sowing (excluding of cereals and of sugar beet, alfalfa, clover ...

120930

Seeds of herbaceous plants cultivated mainly for flowers, for sowing

120991

Vegetable seeds, for sowing

120999

Seeds, fruits and spores, for sowing (excluding leguminous vegetables and sweetcorn, coffee, ...

Annexure 3: Seed Trade Intensity of India and Other SAARC Countries The analysis below provides the trade intensity index of seed trade between India and SAARC, Bangladesh, Pakistan and Nepal. The trade intensity index provides the flow of trade between India and SAARC countries. This index has been used since 1960 to analyse the direction and magnitude of international trade. The intensity index allows the country to trade with each other more or less depending on its value. The importance of this index is that it can capture the small changes in trade between two countries. It can also highlight the small change in trading countries even if their earlier pattern of trade happens to be small. Bilateral trade intensity index measures are an exporter.s penetration of an importer.s market within the context of overall world trade. A formula of this index is as follows: ITij = (Xij/ Xiw) / (Mjw/ Mww).............. (i) Share of I.s export going to j Share of world import going to j

Seed Sectors Around the Globe

Seed Times January - April 2018

Alternatively, if one abstracts from transportation margin, then this index can also be reshaped to focus on exporting country and its competing suppliers in market j. In that case, the IT index becomes supply, a ratio of destination shares (ds) as is stated below: ITij= dsij/dswj = (Xij/ Xiw) / (Xwj/ Xww)..........(ii) Share of I.s export going to j Share of world export going to j Where Xij is export from country I to country j; Xiw is total exports to the world by country I; Xwj is total export to country j; Xww is total world export; Mji is import of country j from country I; Mjw is total imports from the world by country j; Mww is total world imports; ds is destination share. A unit values of ITij shows that country I has no gain in supplying of country j or supplying the same in foreign markets. Following the results of second equation, if ITij> 1 implies that nation .j. is an important market for exporter I, than for any other country of the world. Likewise,, if 0<ITij<1, then country j would be a less important market for I than any other country exporting to j. The bilateral trade intensity index has been computed by using the second equation for the ninteen seeds as mentioned above. It has been computed for the period 2007-17. The changes in the results of this index will show the experience of trade of increasing or decreasing over the time. Bilateral Trade Intensity Statistics Table A.1: Bilateral Trade Intensity Index of India and other SAARC Region Types of Seed Seed potatoes

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Bilateral Trade Intensity Index 3.59

31.13

1.59

8.26

8.14

3.54

1.18

0.10

0.08

0.19

Wheat seed

0.00

0.57

239.92

0.00

Barley seed

0.00

0.00 12400.99

112.23

0.00

Maize seed

13.72

15.06

11.25

21.59

9.49

12.61

9.73

14.41

Rice

13.80

17.22

37.42

6.30

4.63

6.76

9.90

23.38

24.84

29.11

33.71

25.99

Grain sorghum, for sowing

262.61

9777.43

82.97

39.85

Millet seed

0.00

60.41

211.93

75.41

78.87

Soya bean seed,

0.00

0.91

0.00

Groundnut seed,

0.00

95.21

68.97

28.14

68.62

Sugar beet seed,

40.27

19.60

4.09

0.00

0.45

3.21

0.00

Alfalfa seed

52.08

28.93

53.79

23.18

35.16

49.49

27.16

22.39

2.29

1.01

Clover "Trifolium spp" seed,

0.00

Seeds of forage

2.06

11.79

3.84

3.28

0.99

4.65

8.03

3.06

0.32

0.13

Seeds of herbaceous

6.59

1.47

7.21

32.17

14.40

12.21

0.00

6.16

0.84

7.78

Vegetable seeds,

36.60

21.55

19.31

25.37

19.94

19.73

18.30

20.66

11.51

11.24

Seeds, fruits and spores,

14.92

16.05

16.87

15.28

17.26

28.24

17.94

18.49

9.86

14.44

Seed Times January - April 2018

Seed Sectors Around the Globe

Table A.2: Bilateral Trade Intensity Index of other SAARC Region and India, Types of Seed

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Bilateral Trade Intensity Index

Seed potatoes

Durum wheat seed

Barley seed

Maize seed

Rice

Grain sorghum,

Millet seed

Soya bean seed,

Groundnut seed,

Sugar beet seed, Alfalfa seed

Clover "Trifolium spp" seed,

Seeds of forage plants

Seeds of herbaceous plants

Vegetable seeds,

Seeds, fruits and spores,

0.75

1.45

0.83

6.17

1.73

0.31

4.91

5.09

0.00

3.82

0.00

0.12

0.00

0.59

0.04

0.08

0.02

0.01

Pattern of Revealed Comparative Advantage The bilateral trade intensity index shown above explains the importance of a particular country as an export destination for the products of other countries. The results above shown can be compared with the revealed comparative index (RCA). This estimate will help to distinguish between exportable showing improved comparative advantages from those that show declining tendencies or none at all. Comparative advantage is generally used to understand the pattern of trade. The concept of comparative advantages contains the features of theoretical as well as policy discussions. RCA of a country in a particular good is the ratio of net export to its total trade in that good. A formula can be written as follows:

RCA = (Xij/Xit)/(Xnj/Xnt)--------------------------( iii)

Where X reprents exports, I is a country and j is a commodity, t is a set of commodity and n is a set of countries. The RCA value of a country evaluates the trade performance of the country and simultaneously and also shows the exporting and importing of a particular commodity. The RCA value ranges from -1 to +1; where -1 indicates that there are no export from country (Xih = 0) which reveals comparative disadvantage and +1 indicates that there are no imports (Mih =0) which reveals that comparative advantage. RCA can be computed at the various level but the results would be finer if it is disaggregated. Larger the level of disaggregation, it will identify the product in which export potential exit.

Seed Sectors Around the Globe

Seed Times January - April 2018

Table A.6 show revealed comparative advantage of India in different seeds from 2007 to 2016. India has maintained comparative advantage in most of the seeds except few in which India has comparative disadvantage. RCA between India and other SAARC countries Types of Seed Types of Seed

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

0.1

0.4

0.8

0.1

0.4

0.3

0.1

3.3

0.1

0.5

wheat seed

0.0

0.1

0.0

Barley seed

0.8

6.3

9.9

0.3

Maize seed

7.0

3.8

0.5

1.3

0.4

0.1

1.2

1.8

2.6

Rice Seed

0.4

0.2

16.1

4.2

18.3

12.5

3.7

8.2

4.5

5.5

Millet seed

0.0

21.7

8.0

41.3

Soya bean seed,

0.0

98.5

0.8

1.9

7.7

Groundnut seed,

0.0

0.8

50.4

0.3

1.3

Alfalfa seed

0.1

0.0

0.3

0.1

0.6

0.9

0.2

0.0

Clover "Trifolium spp" seed,

0.0

0.7

-0.2

0.1

0.0

-0.5

Seeds of forage plants

0.3

0.5

0.3

0.1

0.5

0.8

4.2

0.4

1.2

3.8

Seeds of herbaceous plants

0.2

0.1

1.5

0.2

0.1

0.4

0.5

0.1

Vegetable seeds,

3.5

11.6

14.4

3.5

4.1

14.0

16.9

14.1

3.7

9.2

Seeds, fruits and spores,

36.5

4.4

2.1

1.9

5.4

6.8

2.6

0.7

0.3

1.2

Seed potatoes

Total

Source: ITC Trade Map 2017 Note: (-), indicate that country has not traded the seeds during the periods

The article has been published with permission of authors

Seed Times January - April 2018

Seed Sectors Around the Globe

CHINA

1. 2016 Chinese Seed Market Watch Li Tongchao Strategic Planning Dept., China National Seed Group 2016 was the first year when the new seed law came into effect. During that year, an increase in the corn seed production area, cancelation of temporary purchasing and storage of corn and the reduction of corn planting area altogether has resulted in a continued downturn in the seed industry. However, several policies and regulations issued in support of the seed industry, a broadened market access and the governmentâ&#x20AC;&#x2122;s interpretation of GMO development are seen as positive for the seed industry. Let us look back and recap the year 2016, which had both opportunities and challenges.

New seed law comes into effect On January 1, 2016, the amended Seed Law of the Peopleâ&#x20AC;&#x2122;s Republic of China came into effect, followed by three additional administrative measures implemented at a later date. The Administrative Measures for Major Crops Variety Registration included a green channel examination and approval approach, where the scope of examination and approval for major crops was reduced and the system of forced withdrawal of varieties was formulated; the Administrative Measures for Crop Seed Production and Operation Licensing, under which two licenses were consolidated as one, specified the responsibility of the business main body; the Administrative Measures for Seed Labeling and Use Instructions made clear the scope and content of labeling and use instructions. The amendments also reflected the intentions of the seed law to encouraged innovation, simplifying administrative measures and effected strict controls while allowing for a certain degree of flexibility.

Seed Sectors Around the Globe

Seed Times January - April 2018

In the meantime, the Chinese Minister of Agriculture, together with the local administration in charge, took measures to crack down illegal acts in major locations and among major vendors, such as unauthorized business operations, release of product without prior approval, infringement by using fake product, and producing and selling counterfeit or inferior product. The series of policies and actions against counterfeits made clear the responsibility of the business main body, strengthened law enforcement measures, regulated production and promotion means and enhanced the intensity of punishment for illegal acts. These policies enabled the establishment of an open and fair business environment.

Crop production structural adjustment In 2016, the phrase “agricultural supply-side structural reform” was brought into the No.1 Document of the Central Government for the first time. On the agricultural supply side of structural reform, structural adjustment is a key element and a difficult issue. In April, the Chinese Ministry of Agriculture issued the National Structure Adjustment Plan for Crop Farming (20162020), which specified that this round of structural adjustments would focus on the establishment of the “grain, cash crop, forage crop” ternary structure. This ternary structure not only serves to ensure the production of grain, cereal, cotton, oil, sugar and vegetable, but has added for the first time the forage into the crop production structure for consideration as a whole. The objective is to speed up the establishment of a modern agricultural structure, based upon the coordination of grain, crop and forage, combination of farming and animal husbandry, integration of planting, breeding and processing, incorporation of the first, second and third industries. In the Liandaowan region (China’s corn planting areas mostly in North China), the corn planting area is being reduced, while planting of soybean, which is in short supply, will be increased. In this regard, subsidy is being provided to support the planting-breeding combination oriented “grain switching to forage “initiative and the crop rotation/fallowing oriented “grain switching to soybean” initiative. To this end, a rare development opportunity has been provided for those seed enterprises focusing on silage corn and soybean, despite the downturn occurring in some of the corn seed companies. This round of planting structural adjustment is not only a structural adjustment for the better, but requires more effort being put into the improvement of quality and efficiency. With Chinese agriculture being transformed and upgraded at present, demand for renovated, featured and simplified varieties is growing day by day. In government papers, such as the China Agricultural Modernization Plan (2016-2020), the concept of a “new round of variety upgrading” has been mentioned repeatedly. The differentiated development of seed enterprises and the ecological development of the seed industry have become more and more important with each passing day.

Broadened market access channel With the implementation of the Notification on Further Modification of Variety Trial Examination and Approval as issued by Chinese Ministry of Agriculture, a large number of major crop variety trial-targeted consortium emerged; also the variety green channel examination and approval system and the reporting system for variety introduced into a similar ecological region were put in place. These measures enabled crop varieties a broadened market access channel. A major crop variety trial-targeted consortium was established between seed enterprises and research institutions to conduct a variety trial in accordance with the examination and approval procedure. This is a positive approach to the variety trial utilizing social resources to broaden trial channels, which also helps to make up for the insufficiency

Seed Times January - April 2018

Seed Sectors Around the Globe

of national examination and approval capacity. The approach in this way is of benefit to the seed breeding innovation of seed enterprises and of research institutions, enabling them to launch more superior varieties, which are of high yield, good quality, wide-range adaptability and easy plantation. Since the green channel system was implemented substantially, the first batch of rice and corn varieties was approved via the system in 2016. More varieties are expected to be released to the market via the system at a later time. Seed breeding, production and marketing integrated enterprises will be able to make full use of the green channel system to enhance their innovation capacity and competitive edge. It should be noted that a blowout of varieties will be testing the market operation capability of seed enterprises, and will in return force varieties to be upgraded. The differentiated development of seed enterprises has gradually appeared.

GMO roadmap interpreted for the first time Further to the 2016, the No.1 Document of the Central Government, emphasized the prudent promotion of GMO on the basis of safety assurance, while GMO development and oversight of GMO development needed to be strengthened. In the National Scientific and Technological Innovation Program under the 13th Five-Year Plan issued in August, the subject of “GMO variety breeding” was listed as a key state science and technology project, with request that “China’s GMO research level in general needs to leap to the forefront of the world, so as to provide variety and technical reserves for the assurance of the national food security.” The GMO roadmap was elaborated for the first time at a press conference in April held by Chinese Ministry of Agriculture. The responsible person at the Ministry expressed that: firstly the promotion of industrialization of GM crop production should be based on safety assessment and management, which are conducted in strict compliance with the law and regulations to obtain production application oriented safety certificates; secondly the road map for non-edible crops, indirectly edible crops and edible crop needs should be followed, which means GMO development shall follow this sequence: non-food crop, forage crop, crop for processing, ordinary food crop and major food; thirdly demand from industry needs to be considered and stress should be laid on solving the bottleneck problems, which are restraining China’s agricultural development, such as the issues of disease resistance, insect resistance, water saving and drought resistance, high yield and high quality. While the GMO roadmap is being determined, the Chinese Ministry of Agriculture has strengthened GMO safety supervision. On the one hand, the examination of law enforcement was conducted to investigate and punish illegal planting of GM crops. On the other hand, a number of GMO national standards for safety management were formulated. The Administrative Measures for Safety Assessment of Agricultural Genetically Modified Organisms were amended, and the process of designation for the first batch of GMO experimental bases was initiated.

Capital market embraced by seed industry 2016 saw accelerated cooperation between the seed industry and the capital market. At the macro level, the government positively promoted integration between the seed industry and the capital market. In May, the Chinese Ministry of Agriculture held the Capital Driven Seed Industry Upgrade Workshop, aiming to introduce financial, industrial and capital funds into the seed industry in a smooth and efficient way, so as to speed up the transformation and upgrading of the seed industry. Soon afterwards, six Chinese ministerial authorities, including the People’s Bank of China and the Ministry of Agriculture issued the Modern Seed Industry-Oriented Financial Service Guidelines, which encouraged angel investment and risk investment into the seed industry, as well as provided supportive measures for eligible seed enterprises to seek financing in the stock market.

Seed Sectors Around the Globe

Seed Times January - April 2018

From an industry perspective, the outcome of the support from the capital market to the seed industry has become evident. Up until end 2016, public-listed Chinese domestic enterprises increased up to 52, including 10 seed enterprises in stock market and 42 in NEEQ. In 2016, 19 seed enterprises went listed on NEEQ. With the help of the capital market, mergers and acquisitions between seed enterprises have obviously speeded up. In the Chinese market, Yuan Long Ping High-Tech Agriculture Ltd. acquired a 51 percent stakes in Guangxi Heng Mao Agricultural Technology Ltd., and established a joint venture with Heilongjiang Guang Yuan Seed Group Ltd., being regarded as further regional business deployment. In the international market, COFCO completed the acquisition of Nidera, which is a precedent for Chinese enterprises to acquire international prime seed companies. Chem Chinaâ&#x20AC;&#x2122;s bid of $43 billion for acquisition of Syngenta hit a record high in the history of overseas acquisition by Chinese enterprises, which may change the business distribution pattern of the world seed industry.

The article has been published with permission of authors

Seed Times January - April 2018

Seed Sectors Around the Globe

2. Summary: 10 keywords of Chinese seed industry 2017 Dingfu Liu Moran Lin, NOVOSEED Editor/Translator: AgroPages China’s seed industry of 2017 has been labeled with keywords such as Variety Burst, Revision of Standard, Merger and Acquisition, Global Top 10, Adjustment of Planting Structure, and Capital Shrinking, among others. These labels can be summarized thus: “Everything will be redefined.” The changing tone of our times constitutes a great challenge to the seed industry practitioners.

Keyword No. 1: Variety Burst In the background of multiple increases in seed varieties covered by the national variety regional test, the growing number of cultivation, propagation and promotion-integrated seed enterprises, and more varieties being covered by the green channel test and introduced to all regions of China, a variety spring tide has begun. Variety testing has accelerated, more regions have joined variety testing, the first round of joint testing has come to an end, and provinces have established mutual recognition mechanisms.

Keyword No. 2: Revision of Standards The Rules of Registration for Main Crop Variety, as issued by the Chinese National Crop Variety Approval Committee in September 2014, have been revised after being put into effect only two years ago. The new revision is seed naturecentric and market-oriented, which changes the past yield-driven evaluation criteria. Seed variety is divided into three types – high yield stability, green quality and special purpose, which indicate the direction of development of variety registration towards classification and diversification.

Seed Sectors Around the Globe

Seed Times January - April 2018

Keywords No. 3: Modification of Laws and Regulations This year, China has revised a series of agricultural laws, including the Regulations on Administration of Agricultural GMOs Safety, Measures on Administration of Agricultural GMO Safety Evaluation, Measures on Administration of Agricultural GMO Import Safety, Measures on Administration of Agricultural GMO Labelling, Measures on Administration of Crop Seed Business Licensing, and Measures on Administration of Crop Seed Quality Inspection Body. In the meantime, following seed-related regulations have been abolished: Permission of Employment Access to Two Occupations in Agricultural Crop Seed Propagation Industry, Procedure of Renewal of Agricultural GMOs Safety Certificate, Evaluation Report on the Safety of Southern Propagation of Agricultural GMOs, Reply to Questions on the Territory of Seed Sales, Reply to Questions on Numbering of Main Crop Variety Registration, and Reply to Tobacco Variety Registration.

Keyword No. 4: Merger and Acquisition On June 8, 2017, ChemChina announced the closing of the acquisition of Syngenta, the world’s largest pesticide company and the third largest seed company. On November 30, Longping High-Tech, together with CITIC Agri Fund, announced the completion of the acquisition of Dow AgroSciences Sementes & Biotecnologia Brasil. Longping HighTech acquired majority stakes in Hunan Golden Rice, Hubei Huimin Agricultural Technology, Sanrui Agricultural Technology and Hebei Universe Agricultural. COFCO International sold its Nidera seed business to Syngenta.

Credit: Keith Gillard, Pangaea Ventures Ltd.

Keyword No. 5: Global Top 10 From the 1990s to the early 21st century, there were three merger waves — the first one from 1997–2000, which lasted for three years; the second one from 2004–2008, and the third one from 2016–2017. Monsanto cast the first stone in the series of mergers. The merger waves in global agrochemical industry witnessed the birth of global seed giants such as Monsanto, Syngenta and DuPont Pioneer, as well as the rise of the Chinese seed industry. The third merger wave was precipitated by the two Chinese companies, ChemChina and Longping High-Tech (under CITIC Agri Fund). This round of mergers resulted in great changes to the industrial structure of the global seed industry. Seed Times January - April 2018

Seed Sectors Around the Globe

Credit: Vilmorin Cie

Keyword No. 6: Lowered Price of Rice While for two years there has been no escalation in the minimum purchase price of mid-late indica and japonica, China’s National Development and Reform Commission lowered the price of rice for the first time this year, and also disclosed that the price would be further lowered in 2018, and it might even cancel the mandated minimum purchase price of the early-season rice. The prices of early Indica rice, mid-late Indica and Japonica have been lowered respectively by Yuan0.03, Yuan0.02 and Yuan0.05 per 1/2 kg this year. The prices were lowered to convey the message that the supply of rice is now exceeding demand. The reform in pricing mechanism, and the purchasing and storage of key farming products such as grain will follow the idea of“variety-differentiated planning and gradual progression,” where basic policy framework stays unchanged while the flexibility of policies is increased, which means that pricing needs to reflect the market demand accurately. If pricing is distorted, then what happened to corn will happen to rice also (reduction of planting area).

Keyword No. 7: Adjustment of Planting Structure To meet the requirement of stability in grain crop, quality of economic crop, and expansion of feed crop, efforts are being made to speed up the formation of “grain-crop, economic-crop and feed-crop ternary planting structure.” For grain crop planting, stress is laid on stability and security with special focus on quality rice and high (low)gluten wheat. The decrease in non-advantageous grain corn shall continue. Planting of quality food soybean, potato and various beans shall continue. For economic crop planting, quality of varieties and regional distribution for plantation will be optimized. Cotton, oil plants and sugar production shall continue; effect and value of horticultural plants shall increase. For feed crop planting, planting area will be expanded so as to grow silo corn and high quality forage such as alfalfa, and a modern feed industry system will be established. The restructuring of agriculture and pasturage-interlaced zone of northern China shall be accelerated to shape a plantation structure, which is breeding-oriented, rather than plantation only, as well as livestock-agroforestry and grass-fruit-vegetable integrated. The grain-change-to-feed and grain-change-to-soybean subsidy pilot program shall continue.

Seed Sectors Around the Globe

Seed Times January - April 2018

In November, the State Grain Administration and Ministry of Finance initiated a Quality Grain Program which would drive grain production to move from “focusing on output of grain” towards “focusing on quality of grain.” The initiative is expected to enable increased supply of green, high-quality grain and oil products, as well as to facilitate the grain industry to achieve high quality.

Keyword No. 8: High Temperature and Rains There has been a nation-wide high temperature summer in China this year. In May the first round of high temperature hit Northeast China, North China and the Huang-Huai Region. This summer high temperatures impacted the crops, where seed-set ratio of corn and rice dropped in large areas, resulting in reduced output. The autumn rain of West China came early this year and lasted long with heavy rains and high precipitation. The accumulated rainfall was 70% higher than normal, a maximum since 1984. Paddy rice was beaten down in large areas affecting 480,000 hectares of planting area and causing economic loss of Yuan12.1 billion.

Keyword No. 9: Business Shrinking Corn planting area of 2017 decreased by 50 million mu, whereas seed consumption decreased by 100 million kg, and market value decreased by Yuan2.5 billion, resulting in a threat to the survival of corn seed enterprises. The National Agro-Tech Extension and Service Center (NATESC) analyzed the business performance of 90 representational corn seed enterprises, revealing a corn sales profit of Yuan841 million for 2016, which was Yuan1.571 billion in 2015, 46.5 percent down year on year. The first half of 2017 saw more difficulties with 21 listed seed enterprises having 66% decreased sales while profit of 30 representational corn seed enterprises decreased 65%.

2016, 2017 financial year net income data Credit: NOVOSEED

Seed Times January - April 2018

Seed Sectors Around the Globe

Keyword 10: Technical Breakthrough The National Key Technical Promotion, which is the Corn-Soybean Strip Mixed Cropping System and its mechanization process, has been demonstrated successfully in Zhangye of Gansu Province. The intercropped corn in the pilot zone in Ganzhou District and Gaotai County, shows an average yield of 919kg and 878kg per mu, whereas the yield of sole-cropping corn has decreased about 4%, and the intercropped soybean shows an average yield of 101kg per mu, resulting in a unit yield increment of Yuan355 per mu. Corn and soybean are both mechanically planted and cropped. In light of the difficulty in weed control during direct sowing in paddy fields, a Chinese scientific research team, via a chemical mutation screening process, has developed non-GMO herbicide resistance materials for application to paddy rice, wheat, corn and rapeseed. The team has also worked out a special â&#x20AC;&#x153;clean cultivationâ&#x20AC;? mode which applies well to the higher multiple crop index of the cultivated land of China. This approach can avoid damage to paddy rice caused by weed. This is a big technical breakthrough into the technological monopoly of multinationals.

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Seed Sectors Around the Globe

Seed Times January - April 2018

THE NETHERLANDS Who Grows what? Wouter Verhey Agriculture Counsellor Embassy of the Kingdom of the Netherlands Profile of Country:

• Climatic Zone present: (Please √ in the box) Polar Temperate

√

Tropical

Arid

Mediterranean

Mountains (Tundra)

• Population estimate

: 70 Million

• Agricultural output

: 8.2 million metric tons of the crop (approx.)

Q 1. Name the top 5 crops grown in your country: Potatoes

Cucumber

Sugar Beets

Tulip Bulbs

Seed Potatoes

Barley

Seed Times January - April 2018

Seed Sectors Around the Globe

Q 2. Name the top 5 crops Exported from your country:

Potatoes

Mustard Oil

Sugar Beets

Tulip Bulbs

Tomatoes

Bell Pepper

Q 3. Name few crops you think, that India can export to your country?

a. Rice

e. Brinjal

b. Spices

f. Coconut

c. Tea

g. Unmanufactured Tobacco

Q 4. Name the major Agricultural stakeholders in your country?

a. LTO Netherlands

b. Netherlands Food and Consumer Product Safety Authority

c. NEPLUVI d. Naktuinbouw

e. Netherlands Zuivel Organisatie

f. Leeuwarden Q 5. What are the Major Trade Issues/ barriers between your country and India according to you?

• India is not a signatory of UPOV

• High Import Duty charged in India

Q 6. What is the scope of seed export with your country?

• Most of Major Seed Players are having research facilities in most of India, like Bejo Sheetal, Nunhems, Rijk Zwaan, East West Seeds India Pvt ltd. etc.

• Mahindra & Mahindra – HZPC (Agri Division) cultivates Seed potatoes.

• There is scope and existing cooperation b/w Indian and foreign, also scope of promoting Greenhouse environments.

• Also, we are undertaking Seed Valley Project in the state of Gujrat.

Q 7. Can you name few seeds which are in demand but they are scarce in your country? ……Nil……………………………

…………………………………….

Seed Sectors Around the Globe

Seed Times January - April 2018

Q 8. Who are major Seed producers in your country?

• Rijk Zwaan

• Bejo

• Enza Zaden

• Nunhems

• Mahindra & Mahindra – HZPC (Agri Division)

Q 9. Speak about the policy environment in your country?

• Ministry of Economic Affairs (EA) of Netherlands takes care of enabling envision. Agriculture is a part of EA, which is a single organisation which takes care of Phytosanitary, Food Safety Authorities etc.

• Various Research Stations are based in our country.

• Universities and Private Sectors – Diamond Approach (Brain Storming) is followed.

• Researches are doing what society needs, It’s a close relationship between researcher and Private Sector.

Q 10. Share with us the various opportunities in Agricultural/Seed sector in your country?

• Research on what Retailers need – ‘Chain Approach’

• Chain is Interchained as the Market is Linked.

• More focus is on Taste this time, earlier it was focused on Production.

• We are partnering Central Govt. and State Govt. in ‘Centres of Excellence’ in India. The aim is to train individuals in skill for capacity building.

Q 11. What are the major challenges in Agricultural/Seed Sector in your country?

• Energy Cost for construction and Operation of Green Houses, the operational cost is high.

Q 12. Mention Key regulatory issues which you think should be addressed?

• In India, there is registration and development by same agency.

• There might be conflict of interest.

Seed Times January - April 2018

Seed Sectors Around the Globe

Centers of Excellence Joint Action India & The Netherlands In 2012 the Indian Government and the Netherlands signed the Joint Action plan in order for the Indian government to make use of Dutch technology and skills in the agricultural sector. This Joint Action plan covers a broad spectrum of areas; from horticulture (fruit, vegetables, flowers) to animal husbandry, dairy and food processing. For the implementation of the various areas of cooperation, the concept of “Centers of Excellence” (CoE) has been designed. These Centers of Excellence can be seen as a demonstration center and education platform of the Dutch technical practices, adapted to the Indian context. The intention of the centers of excellence is to improve the quality and productivity of agricultural sector in India with modern technology and adequate training given by Dutch companies. It is all about sharing knowledge, technological know-how and developing skills through the training of instructors and farmers in the region. By demonstrating the Indian instructors Dutch production methods and techniques, these instructors are again able to educate thousands of farmers and experts with as goal to increase the food production in India. The focus is on every aspect of the production chain, from the development phase to post harvest phase; a total integrated chain approach. In the Netherlands, farmers and growers are full partners in the agricultural production chain, something from which India can learn. For example the Center of Excellence in apples will inform the fruit growers about highquality plants, micro-irrigation, high-tech greenhouse technology, tissue culture and weather forecasting. For Dutch companies, the CoE’s are a very interesting opportunity to build a strong position in India. The CoE’s namely enable Dutch companies involved to demonstrate local farmers Dutch production methods and techniques and teach them how to use their equipment. As a result, local farmers can become acquainted with the Dutch expertise and get a feeling with Dutch technologies from the beginning onwards. Hence, the CoE are the perfect mode to enter the Indian market and can be seen as a very interesting platform for business development; it connects Dutch companies with local partners which can result in a long lasting business relationship. These relationships with local partners are the key ingredient in order to be successful in the Indian market. Therefore, the CoEs in India are a great opportunity to help Dutch companies building a strong position in one of the most promising markets in the world. Centre of Excellence for Vegetable Production in the state of Maharashtra has been commissioned as part of the National Action Plan of Indo-Dutch Cooperation Project. The project has been undertaken jointly by the Government of India, through MIDH (former National Horticulture Mission) and, the Government of the Netherlands. The State Horticulture Mission, Maharashtra is doing efforts to bring up more area under protected cultivation for minimizing the gap between supply and demand of vegetables. The main objectives of this CoE are to demonstrate the latest Agricultural Technologies to the farmers as well as the extension workers of the state Department of agriculture with a view to reduce the time lag between the technologies generation and it’s adoption and to test and verify the technologies in the socio economic condition of the farmers and to identify the production constraints.

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Seed Sectors Around the Globe

Seed Times January - April 2018

GERMANY 1. Overview of the Seed Sector in Germany Sowmini Sunkara (Ph.D)a, Dieter Rueckerb, Ekkehard Schroederc National Project Coordinator, Indo- German Seed Sector Development Consortium SFG /ADT /BDP ADT Projekt GmbH, Bonn a

Director International Relations German Plant Breeders’ Association – BDP General Director Sortenfoerderungsgesellschaft – SFGmbH b

Project Team leader Indo-German Seed Sector Development Consortium SFG /ADT /BDP ADT Projekt GmbH, Bonn c

Brief Profile of Agriculture in Germany German agriculture has achieved a massive increase in productivity in the past decades. With around 17 and 11 million hectares respectively, agriculture and forestry take up more than half of the area of Germany. Arable land represents almost 12 million hectares.

Seed Times January - April 2018

Seed Sectors Around the Globe

With more than 55 percent of the total crop growing area, cereal and fodder crop cultivation takes up most of the arable land, which makes it the most important crop. Currently Germany devoted about 6.4 million hectares of land to cereals production and yielded over 52 million metric tons per year. The agricultural growing season in Germany is typically from March to October, which means that most of the crops grown in the fields are harvested until end of October before the cold winter period is coming.

The tremendous improvements in the performance of German agriculture and horticulture would not have been possible without successes in plant breeding. Efficient plant varieties belong to the most important means of production in agriculture and horticulture. The effects of these successes can be seen in the increase of hectare yields of many crop plants, in progress in their value for cultivation, in enhanced quality and in higher levels of pest and disease resistance as well as in the increase in the total number of ornamental species and varieties.

Seed Sectors Around the Globe

Seed Times January - April 2018

Plant Breeding in Germany German Plant Breeding is a vibrant and a powerful industry where plant breeding is very research-intensive constituting 15.1% R&D to turnover ratio. The German Plant Breeders’ Association (BDP) has among its members ~130 plant breeding and wholesale seed trading companies of which 58 companies have active own plant breeding programmes. The plant breeding companies have about 25 biotechnological laboratories, 150,000 m² greenhouse area and 3,700 ha trial plots. They work with around 12,000 employees (breeding and seed production). Plant breeding in Germany is organised almost exclusively by private companies. German seed industries have a turnover of approximately EUR 900 million of which 70% come from export markets. The German plant breeding network consists of 5,773 staff in total who are engaged in breeding programmes (excluding seed production) of which 2,364 are mainly engaged in research & development (R&D). Till date more than 3,200 varieties have been registered at the German Federal Plant Variety Office (Bundessortenamt – BSA).

•

green dots = seed merchants

•

blue dots = breeding companies

Distribution of plant breeding companies in Germany Source: BDP, 2014, R&D-survey

Seed Times January - April 2018

Seed Sectors Around the Globe

Various stakeholders are involved at different stages of seed value chains which aid in functioning of seed sector of the country. Plant breeding in Germany is not confined to national borders. Various global players with international operations are often involved in product development in multiple countries, seed production in various climate zones, central seed processing, treatment, enhancement and distribution and in global seed marketing. Seed of different crop species are moving frequently across international borders in the form of germplasm exchange for R&D purpose; few experimental lines and hybrids for screening; basic seed for multiplication; also, few commercial varieties move out of Germany for marketing. The following figure illustrates the company breeding programmes per crop. Several breeding companies are active in multiple crops. Breeding programmes in Germany (Per company per crop)

(Source: BDP, Quintannual survey 2014)

The German Plant Breedersâ&#x20AC;&#x2122; Association (BDP) represents the professional interests of plant breeders and seed traders in Germany. BDP is a registered non-governmental association. Membership is not compulsory. Currently, BDP has approximately 130 members which comprise nearly 100 % of German plant breeders and it represents the interests of its members in the following areas which include promotion of new breeding technologies, research organisation, intellectual property issues, seed marketing rules & regulations, international networking, political lobbying and public relations. BDP has created a strong network to national and international organisations covering all issues relevant to the seed sector. Plant Variety Protection (PVP) often helps in boosting innovation in German plant breeding. European Union level and national plant variety protection is majorly involved in protecting intellectual property, promoting investment in research & development into new plant varieties, ensuring access to breeding material, and generating breeding progress of approx. 1-2 percent annually.

The Long Road to a New Variety The following figure illustrates main steps from research to variety development, testing and listening of new plant varieties for seed production. It is usually an enormous investment of the breeding companies to develop a successful new variety.

Seed Sectors Around the Globe

Seed Times January - April 2018

Granting Plant Breedersâ&#x20AC;&#x2DC; Rights and Variety Registration The German Federal Plant Variety Office (BSA) with its headquarters in Hanover is an independent federal authority under the supervision of the German Federal Ministry of Food and Agriculture (BMEL). The BSA is responsible for official testing of new varieties and granting of variety registration and/or Plant Breedersâ&#x20AC;&#x2DC; Rights.

Till date, over 3,200 agricultural and horticultural varieties have been registered (admission to the national list) at the BSA, see table below:

Seed Times January - April 2018

Seed Sectors Around the Globe

Variety registration ensures that the final user of seeds (farmers) have suitable high-quality plant varieties available for the respective climatic conditions and uses. The legislation on Plant Variety Protection (PVP) provides basis for private investment in plant breeding and variety development, DUS testing results in unique variety description, implementation of PVP by royalty systems and also helps in international harmonisation via UPOV Convention.

Marketing of Seed and Planting Material in Germany General rule: Only seeds and planting material of officially registered varieties can be certified and marketed in Germany. Certification is mandatory for most agricultural, horticultural and fruit species. Such material has to fulfil a number of requirements which are verified during field inspection and seed examination (e. g. varietal identity and purity, germination, freedom of diseases etc.). Admission to the National List is a prerequisite for marketing of seed and plant material of agricultural plant species, vegetable species and vines. The National List ensures that only the highest quality of seed and plant material is available for agriculture, horticulture and vineyards. Not only varieties listed in Germany, but also those listed in other EU countries (EU Common Catalogues) can be marketed in Germany. A consumer law (SaatG â&#x20AC;&#x201D; Seed Act) regulates national listing. The prerequisites for admission to the National List are distinctness, uniformity, stability as well as issuance of a variety denomination. Trials for the National List are the same as those for Plant Breedersâ&#x20AC;&#x2122; Rights. Agricultural plant varieties must also show proof of their value for cultivation and use (VCU).

Seed Sectors Around the Globe

Seed Times January - April 2018

Procedures for National Listing and Plant Breeders’ Rights

(Source: Brochure of German Federal Plant Variety Office, 2017)

Important elements of seed legislation are compulsory official variety registration and official seed certification (or under official supervision). The basic principle for marketing is that only certified seed may be marketed and only seed of registered varieties can be certified in Germany. In some cases marketing of seed can be subject to derogations, e.g.: plant genetic resources, breeding or scientific purposes or for tests and trials (pre-marketing authorisations). Seed Certification in Germany In the Federal Republic of Germany, the responsibility of seed certification is given to the single Federal States according to the German legislation including Seed Act. Each of the 16 Federal States has its own Seed Certification Agency. Some work together so only 12 are active. These 12 Federal State certification agencies are responsible for seed certification which are variably structured and they either belong to Chambers of Agriculture or agriculture authorities or other state institutions. All certification agencies follow German Seed Act which is based on EU-Directives (e.g. 66/402/EWG – cereals, 2002/56/ EG – seed potatoes, 2002/57EG – oil and fibre plants, 2008/90/EG – fruit species) which consist of detailed procedures regulated in Seed Ordinance or Seed potatoe Ordinance resp. and also on international context: OECD Seed Schemes.

Seed Times January - April 2018

Seed Sectors Around the Globe

Variety and Seed Scheme, Germany

Source: Dr. Hermann Freudenstein, BSA

Market Control In order to ensure that both the requirements as to the quality of the seed and the provisions for ensuring its identity are complied with during marketing, the EU Member States must make provision for appropriate control arrangements. In Germany, control authorities of the single Federal States are also responsible for market controls which include

• samples drawn from lots during marketing (identity, purity, germination, labelling);

• samples drawn from imported seeds;

• samples provided by farmers (discontent with quality of seed or questioning identity of variety);

• book-keeping of seed companies.

Key Challenges and Opportunities in German Seed Sector The demand for high quality seeds of superior performing varieties is expected to rise in the future. The challenge for the plant breeding companies is to finance their substantial investments in plant breeding and variety development. A strong variety protection is the precondition for a sufficient return on investments. License fees are collected for certified as well as for farm saved seeds (in case the variety is granted PVP). The costs for breeding work need to be carried by all farmers who benefit from the new genetics.

Seed Sectors Around the Globe

Seed Times January - April 2018

Genetically modified varieties cannot be marketed in Germany. Consumers are suspicious about GMO technology. The suspicion is fuelled by NGOs more for ideological than scientific reasons. Innovative methods in plant breeding will play a crucial role in the future (e. g. gene editing). The German plant breeding companies need freedom to operate and a clear legal framework for their activities. The export markets are of high importance for German seed industries. The international variety and seed systems provide a â&#x20AC;&#x153;level playing fieldâ&#x20AC;? for all players involved. Those systems need to be further developed and more countries need to be integrated. It is the farming community that benefits from sufficient supply and competition on the seed markets.

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Seed Times January - April 2018

Seed Sectors Around the Globe

2. Indo-German Cooperation on Seed Sector Development Sowmini Sunkaraa, Sowmini Sunkarab a

Ph.D, National Project Coordinator, Indo-German Seed Sector Development, Consortium SFG /ADT /BDP, ADT Projekt GmbH, Bonn b

Project Team leader Indo-German Seed Sector Development, Consortium SFG /ADT /BDP, ADT Projekt GmbH, Bonn

Introduction Seed is one of the most critical agricultural input and determines the performance and efficiency of other inputs for enhancing productivity and production and thereby income of the farmers. It is therefore essential that high quality seeds with good genetic potential appropriate to the agro-climatic conditions are produced in sufficient quantities at affordable price and made available to the farmers on time. The availability of new plant varieties with characteristics such as increased yields, pest and disease resistance as well as adaptability to changing climatic conditions are key elements for a sustainable enhancement of agricultural productivity. In order to achieve the food production target of the future in India, a major effort will be required to enhance the seed replacement rate of various crops along with major increase in the production of high quality seeds. Production of high quality seed and its marketing are not a one-time affair but a continuous process which requires lots of planning to ensure timely availability of suitable crop varieties to cater the needs of the farmers. To increase the availability of high quality seeds a long term seed production plan is required by involving various Agricultural Research Institutions, Government Department/ Agencies and Private Seed Producing Companies. Seed production value chain is being strengthened by producing various classes of seed i.e. Breeder seed, Foundation seed and certified seed by different Government and Private institutions. Currently the Government sector in India is mainly concentrating on production of high volume and low value crop seeds of notified varieties such as Paddy, Jowar, Red gram, Green gram, Black gram, Bengal gram, Groundnut, Castor and Sesamum whereas the private companies are more focused in the production of low volume and high value Hybrid crops seeds such as Cotton, Maize, Sunflower, Jowar, Bajra and also Paddy.

The bilateral cooperation project The overall objective of the Indo-German Cooperation Project on Seed Sector Development is to support the Indian seed industry in providing Indian farmers with high-quality seeds, strengthening its competitive position and improving conditions for international cooperation. Key areas of the bilateral project are to identify and describe the potential for improving the politico-legal framework and for augmenting production, processing and marketing of high quality seeds in India. The current two-year intensification phase (01/2017-12/2018) of the project builds on the expert dialogue that has been conducted at the national level since July 2013. Selected pilot measures will be implemented in the southern Indian state of Telangana. Telangana is a major seed producing State of India which is endowed with excellent climatic conditions suitable for seed production of paddy varieties, pulses, oil seeds and hybrids of cotton, sorghum, maize, bajra, sunflower, fodder sorghum (SSG) and vegetable crops. Best quality seed is produced due to congenial climate prevailing for seed production and many farmers have become experts in seed production of different crops over a period of four decades.

Seed Sectors Around the Globe

Seed Times January - April 2018

improving conditions for international cooperation. Key areas of the bilateral project are to identify and describe the potential for improving the politico-legal framework and for augmenting production, processing and marketing of high quality seeds in India. The current two-year intensification phase (01/2017-12/2018) of the project builds on the expert dialogue that has been conducted at the national level since July 2013. Selected pilot measures will be implemented in the southern Indian state of Telangana. Telangana is a major seed producing State of India which is endowed with excellent climatic conditions suitable for seed production of paddy varieties, pulses, oil seeds and hybrids of cotton, sorghum, maize, bajra, sunflower, fodder sorghum (SSG) and vegetable crops. Best quality seed is produced due to congenial climate prevailing for seed production and many farmers have become experts in seed production of different crops over a period of four decades.

In particular, the project will support dialogue of seed sector experts and training measures on plant variety protection, seed marketing including certification of seeds as well as technical processes and methods for the registration and identification of new seed varieties. At the same time, the project will take the needs of the informal seed sector into consideration and promote the preservation and use of plant genetic resources. Project activities include:

• Consultation and technical training by German/International experts in India;

• Exchange of information and lessons learned through seminars, workshops and studies;

• Training and study tours of Indian experts to Germany.

Project Partners and Cooperation Political partners of the project are the GermanSeed Federal Ministry Food and Agriculture (BMEL), the Seed Ministry ofGlobe Times September - Decemberof 2017 Sectors Around Agriculture and Farmers Welfare/Department of Agriculture, Co-operation and Farmers Welfare (MoAFW/DAC&FW) in New Delhi and the Government of Telangana/Department of Agriculture and Co-operation (GoT/DAC) in Hyderabad. The German consortium charged with conducting this project consists of the Sortenfoerderungsgesellschaft mbH (SFG), the ADT Projekt GmbH (ADT) and the German Plant Breeders’ Association (BDP). Technical partners in India at national level are:

• Protection of Plant Varieties and Farmers’ Rights Authority (PPV&FRA);

• National Bureau of Plant Genetic Resources (NBPGR);

• National Seed Association of India (NSAI).

Technical partners in the southern Indian state of Telangana are:

• Telangana State Seed & Organic Certification Authority (TSSOCA);

• Telangana State Seeds Development Corporation Ltd. (TSSDC);

• Prof. Jayashankar Telangana State Agricultural University (PJTSAU);

• Seedsmen Association Hyderabad.

Other technical project partners in Germany include the German Federal Plant Variety Office (BSA), the Leibniz Institute of Plant Genetics and Crop Plant Research (IPK), the German Plant Breeders’ Association (BDP) and the Julius Kuehn Institute (JKI).

Seed Times January - April 2018

Seed Sectors Around the Globe

Identified technical areas of cooperation with project partners at national level

Identified technical areas of cooperation with project partners in Telangana

Seed Sectors Around the Globe

Seed Times January - April 2018

Key activities taken up in the year 2017 Mutual study visit of experts coming from both countries have been realized during 2017 where specialists could exchange experiences on policies and legislation regarding plant variety protection, the International Convention for the Protection of New Varieties of Plants (UPOV), implementation of DUS testing according to UPOV guidelines, OECD seed certification schemes, seed marketing and on techniques/methodologies for plant breeding, varietal testing, seed production and conservation as well as the promotion of cooperation between German and Indian seed companies. A comprehensive baseline study on the regulatory and political framework of the seed sector in India has been elaborated by a team of German and Indian experts as well as a SWOT Analysis in the State of Telangana in order to identify priority measures for improvements in the seed chain. The bilateral project supported in 2017 also several national and technical workshops for example on “Organic Certification and Farming”, “Practical DUS testing on apple and rose”, “Plant Variety Protection” and “OECD Seed Certification”.

1. National workshop on Organic certification & Farming & Organic Mela with TSSOCA, Hyderabad on April 6-7, 2017

Seed Times January - April 2018

Seed Sectors Around the Globe

Organic Mela

2. SWOT Analysis

Seed Sectors Around the Globe

Seed Times January - April 2018

3. Practical DUS Testing WS on Apple from 6.-7- June 2017 in Mashobra, Shimla

4. Technical workshop on Seed sector in Telangana with Govt. of Telangana

Seed Times January - April 2018

Seed Sectors Around the Globe

5. Project steering Review meeting July 20, 2017 at Secretariat, Govt. of Telangana

6. Joint Workshop: Indo-German Bilateral Co-operation in Seed Sector with PPV & FRA on November 21 & 22, 2017

Seed Sectors Around the Globe

Seed Times January - April 2018

7. Technical Workshop on Modern Plant Breeding and Seed Processing Technologies with PJTSAU, Hyderabad on November 23, 2017

8. International (OECD) Seed Certification with TSSOCA, Hyderabad on November 24-29, 2017

Seed Times January - April 2018

Seed Sectors Around the Globe

Other Field visits by German team

Seed Sectors Around the Globe

Seed Times January - April 2018

Articles in National & local Newspapers

Seed Times January - April 2018

Seed Sectors Around the Globe

Seed Times January - April 2018

Seed Sectors Around the Globe

The African Seed Access Index (TASAI) Timely availability of improved seeds at affordable prices is critical to increased productivity by smallholder farmers in Africa. Improved seeds can deliver state of the art technology to farmers including higher yields, disease and pest resistance, climate change adaptation, and improved nutrition. Over the last two decades, formal seed systems in Africa have been gradually liberalized resulting in increased participation of private seed enterprises (multinationals, regional and domestic companies). The African Seed Access Index (TASAI) is a tool that appraises the structure and economic performance of formal seed sectors. For the top four grain and legume crops in each country, TASAI tracks 20 indicators in five categories: Research and Development, Industry Competitiveness, Seed Policy and Regulations, Institutional Support, and Service to Smallholder Farmers. In 2016 and 2017, TASAI research was conducted in 13 countries - Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Madagascar, Malawi, Mozambique, Senegal, South Africa, Tanzania, Uganda, Zambia, and Zimbabwe. Policy briefs summarizing each country research study can be accessed from the TASAI website (http://tasai.org/reports/). In addition, the TASAI Data Appendix present data on all the 20 indicators across the 13 countries. TASAI is a collaborative initiative of the Emerging Markets Program at Cornell University and Market Matters Incorporated. For more information on TASAI, please contact Dr. Ed Mabaya (em37@cornell.edu) or Mainza Mugoya (mmugoya@marketmattersinc.org). www.tasai.org

Seed Sectors Around the Globe

Seed Times January - April 2018

AFRICA 1. Zambia Brief 2017 Edward Mabaya, Francisco Miti, Watson Mwale, Mainza Mugoya INTRODUCTION A competitive seed sector is key to ensuring timely availability of high quality seeds of improved, appropriate varieties at affordable prices to smallholder farmers in Zambia. This country brief summarizes the key findings of The African Seed Access Index (TASAI) study conducted in 2016/17 to appraise the structure and economic performance of Zambia’s seed sector. With a focus on four grain and legume crops important to food security in Zambia — maize, rice, groundnut, and beans — the study evaluates the enabling environment for a vibrant formal seed sector. These four crops account for about 41% of arable land in Zambia (FAOSTAT, 2017). The study covers 20 indicators divided into the following categories: Research and Development, Industry Competitiveness, Seed Policy and Regulations, Institutional Support, and Service to Smallholder Farmers. Appendix 1 summarizes all 20 indicators and compares Zambia to 12 other countries where similar studies were conducted. TASAI seeks to encourage public policymakers and development agencies to create and maintain enabling environments that will accelerate the development of competitive formal seed systems serving smallholder farmers.

Seed Times January - April 2018

Seed Sectors Around the Globe

Overview Like most other African countries, the seed industry in Zambia consists of two systems: the informal sector and the formal sector. This country brief focuses almost exclusively on the formal seed sector. The informal sector broadly refers to the system where farmers produce, obtain, maintain, and distribute seed resources from one growing season to the next (FAO, 1998). Standards in the informal seed sector are not monitored or controlled by government policies and regulations; rather, they are guided by indigenous knowledge and standards, and by social structures. The colloquial nature of transactions means that there is scant performance data on the informal sector. The formal sector focuses on breeding and evaluating improved varieties, and producing and selling seed of these varieties that are certified by the Seed Control and Certification Institute (SCCI), the government department under the Ministry of Agriculture responsible for regulating seed in Zambia. Zambia’s seed sector is mature, with a robust private sector. Adoption rates for improved maize seed are above 70% (Langyintuo, A.S., W. Mwangi, A.O. Diallo, J. MacRobert, J. Dixon, 2008), and the country is a net exporter of maize seed. As shown in Table 1, Zambia’s formal seed sector comprises numerous institutions, including government (e.g. Zambia Agriculture Research Institute, ZARI; SCCI, extension service), private sector (mostly local and multinational seed companies and agro-dealers), and development agencies. Founded in 1999, the Zambia Seed Trade Association (ZASTA) is an established institution that represents the interests of seed companies. Table 1: Role of key players in Zambia’s formal seed sector ROLE

KEY PLAYERS

Research and breeding

ZARI, seed companies, CGIAR (CIMMYT, CIAT, ICRISAT)

Variety release and regulation

SCCI

Seed production and processing

Local seed companies, multinational corporations

Education, training, extension

Seed companies, ZASTA, agro-dealers

Distribution and sales

Seed companies, agro-dealers

RESEARCH AND DEVELOPMENT Number of active breeders For the four priority crops in Zambia – maize, rice, groundnut, and bean – there are 26 active breeders. Of these, 15 breeders are from the private sector, and 11 are from the Zambia Agriculture Research Institute (ZARI). Most of the breeders (17 of 26) focus on maize, while five breeders focus on rice, three on groundnut, and one on beans. On average, seed companies’ rate their satisfaction with the number of active breeders as good (66%). The highest level is satisfaction is for rice (80%). Seed companies’ satisfaction with the number of breeders for the other three crops is fair – 64% for maize, 55% for groundnut, and 60% for bean.1 Varieties released in the last three years Between 2014 and 2016, a total of 44 varieties were released for the four crops combined; of these, 37 were maize, 3 were rice, 2 were groundnut, and 2 were bean. Not surprisingly, the number of varieties released strongly correlates Key acronyms: CIAT - International Centre for Tropical Agriculture; CIMMYT – International Maize and Wheat Improvement Centre; COMESA – Common Market for Eastern and Southern Africa; DTMA – Drought Tolerant Maize for Africa; FISP ¬– Farm Input Support Programme; HHI – Herfindal-Hershman Index; ISTA – International Seed Testing Association; SADC – Southern Africa Development Community; SCCI - Seed Control and Certification Institute; ZARI – Zambia Agriculture Research Institute; ZASTA – Zambia Seed Trade Association

Seed Sectors Around the Globe

Seed Times January - April 2018

Average age Varieties released in the last three years

The average lows: 10 yea Between 2014 and 2016, a total of 44 varieties were regroundnut, a leased for the four crops combined; of these, 37 were for all four cr maize, 3 were rice, 2 were groundnut, and 2 were bean. version from Not surprisingly, the number of varieties released oldest varieti strongly correlates with the number of active breeders. years for gro Figure 1 shows the trend for variety releases (using threewith the number of active breeders. Figure 1 shows the trend for variety releases (using threeyear moving averages) sale of old var year moving averages) for the four crops. Variety releases for the four crops. Variety releases for maize outnumber the combined variety releases for rice, groundnut, and varieties by maize outnumber the combined variety releases for beans. There werefor no releases for rice between 2000 and 2008, and no releases for groundnut between 2009 and maize; some rice, groundnut, and beans. There were no releases for 2013. decades old, rice between 2000 and 2008, and no releases for groundFigure 1: Number of varieties released in Zambia (three-year moving average) between 200 nut between 2009 and 2013. ent, as fewer 20 riety sold in 2 15 ties were rele 10

Varieties wit

To be classif meet at least tolerance to e -5 flooding, or Maize Rice Groundnut Bean leased betwe Figure 1: Number of varieties released in Zambia (three-year movdrought toler Availability of foundation ing average)seed maize variet Availability foundation und Many companies produce their ownof foundation seed. Ofseed the companies that produce maize, 78% produce CIMMYT their own foundation seed, while 50% of rice-producing companies and 33% of bean companies also produce their (DTMA) proj Many companies produce their own foundation seed. Of own foundation seed. remaining companies source maize, rice, 78% and bean foundation seed from ZARI,leased the under the The companies that produce maize, produce their

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

International Maize and Wheat Improvement Center (CIMMYT), and the International Center for Tropical Agriculture (CIAT). Groundnut-producing companies source their foundation seed primarily from ZARI. On average, seed companies are more satisfied with the availability of foundation seed for maize (76%) and rice (68%), and less satisfied with the availability of bean (57%) and groundnut (40%) foundation seed. This may be because most of 1 scores reported in this brief are based on industry self-reporting of satthe maize and half ofAllthe bean-producing seed companies use their own foundation seed. isfaction ranging from 0% (completely dissatisfied) to 100% (completely sat-

Average age of isfied). varieties sold

The average age of Copyright the varietiesÂŠsold 2016 was as follows: years for maize, 4 years for rice, 29 years for TheinAfrican Seed Access 10 Index groundnut, and 12 years for bean. The youngest varieties for all four crops are one-year old, implying a rapid conversion from variety release to commercialization. The oldest varieties are 24 years for maize, 7 years for rice, 62 years for groundnut, and 18 years for bean. The ongoing sale of old varieties suggests a reluctance to switch to new varieties by some farmers. This is especially true for maize; some of the oldest varieties are more than two decades old, yet there were 192 new varieties released between 2000 and 2016. The case for groundnut is different, as fewer varieties have been released. The oldest variety sold in 2016 was 62 years old, but only seven varieties were released by SCCI between 2000 and 2016.

Varieties with climate-smart features To be classified as climate-smart, a crop variety must meet at least one of two criteria: early maturity, and/or tolerance to extreme weather conditions such as drought, flooding, or frost. For maize, 19 out of 37 varieties released between 2014 and 2016 were climate-smart, with drought tolerance being the dominant trait. Four of the maize varieties were developed in collaboration with CIMMYT under the Drought Tolerant Maize for Africa (DTMA) project. A total of 22 maize varieties were released under DTMA between 2007 and 2014 (CIMMYT, 2015). Given the increasing incidence of drought in southern Africa (both past and projected), the high percentage of climatesmart maize varieties reflects responsive breeding. Very few climate-smart varieties for the other three crops were released over this period: one rice variety (of three), one groundnut variety (of two), and one bean variety (of two).

Seed Times January - April 2018

Seed Sectors Around the Globe

INDUSTRY COMPETITIVENESS Number of active seed companies In 2016, there were 50 registered seed enterprises in Zambia. Of these, 17 produced and marketed at least one of the four crops. Of the 17, only 10 were engaged in the production of certified seed. The remaining seven produced QDS seed and the rest were seed merchants, i.e., engaged in seed trade but not seed production. Of the 10 companies that produced certified seed for the four focus crops, all produce maize seed, four produce rice seed, four produce groundnut seed, and four produce bean seed. These ten companies form the core of the formal seed sector in Zambia, and all but one were interviewed for this study. Total seed sales for the local market in 2015 were 33,018 tons (maize), 295 tons (rice), 621 tons (groundnut), and 719 tons (bean). Seed production in Zambia is overwhelmingly dominated by maize, with very little focus on the other three crops. Market share of top seed companies Market concentration is calculated in two ways. First, by calculating the sales of the top four companies as a percentage of total industry output for each commodity. Using this method, the overall volume weighted market share for the top four companies (for all four crops) was 82%. Using data for the top four companies, the market share by crop was 81% for maize and 100% for the other three crops. The latter is due to the fact that only four companies produce bean and groundnut seed, and only four of the five companies producing rice reported sales data for 2016. Figure 2 illustrates the market shares. Figure 2: Total market share (%) of top four companies

e of drought in south, the high percentage reflects responsive arieties for the other period: one rice varity (of two), and one

100% 80% 60% 40% 20% 0%

Maize

Rice

Top 4 Market share

Groundnuts

Beans

Market share of others

Figure 2: Total market share (%) of top four companies

seed enterprises in Market concentration was also analyzed using the Herfindal-Hershman Index (HHI). The HHI measures market Market concentration was also analyzed using the Hermarketed atconcentration least one by squaring the market share of each firm competing in a market and then summing the resulting findal-Hershman The HHI measures marketHHI was calculated for numbers. HHI can range from close to zeroIndex (perfect(HHI). competition) to 10,000 (monopoly). were engaged in the byissquaring the market share each(3,530), firm and extremely poor each of prothe four crops.concentration The HHI for maize good (1,952), but it is poor forofbeans emaining seven for rice (4,898) and groundnut (4,765). marketand shares of the top fourthe companies and the HHI results both competing in a The market then summing resulting seed merchants, i.e., indicate that the seed numbers. market for three cropsrange – rice,from beans,close and groundnut – is dominated HHI can to zero (perfect com- by a few players, with production. Of the 10 poor levels of competition. More competition for these crops could improve choice, affordability, and seed quality petition) to 10,000 (monopoly). HHI was calculated for eed for thefor four focus farmers in Zambia. smallholder each of the four crops. The HHI for maize is good (1,952), r produce rice seed, but it is poor for beans (3,530), and extremely poor for Market share of government parastatal d four produce bean rice (4,898) and groundnut (4,765). The market shares of he core of the formal In Zambia, the government is notfour involved in the production marketing of certified the top companies and theand/or HHI results both indicateseed for any of the four ne were interviewed focus crops. From 1981 through the mid-1990s, Zambia Seed Company Ltd (Zamseed) was a government parastatal that the seed market for three crops – rice, beans, and responsible for the production and marketing of all types of seed, except for cotton and tobacco. In the mid- 1990s, groundnut is dominated by a fewhas players, withitspoor lev-name. Zamseed was fully privatized, though–the new private company maintained original els of competition. More competition for these crops in 2015 were 33,018 could improve choice, affordability, and seed quality for ons (groundnut), and smallholder farmers in Zambia. in Zambia is overth very little focus on Market share of government parastatal

ies

Seed Sectors Around the Globe

Seed Times January - April 2018

In Zambia, the government is not involved in the production and/or marketing of certified seed for any of the four

Length of import/export process for seed Seven of the nine seed companies interviewed engage in both export and import of seed. One company is only involved in seed import with no exports. Zambia’s main seed testing laboratory is accredited by the International Seed Testing Association (ISTA) and issues International Seed Analysis Certificates. In 2015, about 20,000 tons of seed was exported using ISTA certificates, while more was exported using national seed certificates. Maize is the most common seed export. The main export destinations are Botswana, the Democratic Republic of Congo, Kenya, Malawi, Mozambique, Rwanda, South Africa, Swaziland, Tanzania, and Zimbabwe. In 2015, seed companies imported less than 5,000 tons of seed (mainly vegetable, sweet potatoes and parental lines of maize. Much of the seed imports are mainly from South Africa, Netherlands, Sweden, Zimbabwe, Malawi and Australia. The length of the import process is measured as the number of days from the time an import permit is applied for to the time the seed is cleared at the border. Seed companies reported that the import process ranges from 2-21 days, with an average of 11 days. The situation is similar with the export process, which ranges 2-25 days, with an average of 12 days. Relative to other countries surveyed by TASAI, these numbers are impressive and seem to indicate an efficient seed trading process. Seed companies rated their satisfaction with the import process as fair (55%) and with the export process as good (60%). Companies highlighted the following areas for improvement: increased clarity on the import/export certification process; extending the validity period of the phytosanitary certificate; and clear distinctions between maize grain and maize seed during times of export bans in neighbouring countries.

SEED POLICY AND REGULATIONS Length of variety release process The length of the variety release process is the duration of time from when the application for a variety release is submitted to when the variety is released by the relevant authority. The National Variety Release Committee has the sole mandate for crop variety release in Zambia. Prior to the release of a crop variety, the variety is evaluated for distinctness, uniformity, and stability (DUS) and value for cultivation and use (VCU) over two cropping cycles. Seven companies released a variety in 2015. All but one companies reported an average duration of 24 months for the variety release process. (The one exception was a company that had experienced a 36-month-long wait for the release of a new maize variety.) This uniformity in responses shows a standardized and predictable process for variety release that is typical of a mature seed sector. Overall, seed companies are very satisfied with the process of variety release, rating it as excellent (84%). By crop, companies’ satisfaction is excellent for rice (85%), groundnut (90%), and bean (88%). Companies rated their satisfaction with the variety release process for maize as good (79%).

Status of seed policy framework Zambia’s national seed policy was passed in 1999. Before then the seed industry was guided by various laws and regulations established after Zambia’s independence in 1964. The current seed law is the Plant Variety and Seeds Act (CAP 236), which came into effect in 1995. The formal seed sector was liberalized in the mid-1990s as part of the structural adjustment program ending the monopoly of government parastatals in the production and marketing of seed. Zambia is a member of both the Southern Africa Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA). Zambia’s seed regulations have been amended to conform to the COMESA harmonized seed regulations, the goal of which is to facilitate the movement of certified seed within the region.

Seed Times January - April 2018

Seed Sectors Around the Globe

Draft regulations were submitted to the Ministry of Justice for approval in 2016, which is expected to approve the regulations in 2017. In anticipation of the approval, several private seed companies have already listed varieties in the SADC and COMESA seed catalogue. In 2016, Zambia applied for membership to the Organisation for Economic Cooperation and Development (OECD) Seed Schemes for maize and sorghum.

Quality of seed regulations and enforcement Seed companies have a favourable opinion of the quality of the seed law and regulations in Zambia, rating it as good (77%). Companies are less satisfied with their enforcement, though this is still rated as good (68%). According to the seed companies interviewed, enforcement agencies are not well-equipped (in terms of manpower and equipment) to effectively enforce the current seed law and regulations.

Adequacy of seed inspectors Zambia has 118 licensed seed inspectors. Of these, 83 are private and 35 are under SCCI, which has been licensing private seed inspectors since 1995. Unlike in other African countries where seed inspectors are all government employees, in Zambia seed personnel from the private and public sectors can be licensed to perform seed quality control services, such as seed inspection, sampling, and analysis. At the minimum, licensed seed inspectors must have a diploma in agriculture and must pass the Seed Inspectors Training Course provided by SCCI. Seed companies rate the adequacy of inspectors as good (67%), indicating that they are generally available and sufficiently skilled to carry out seed inspections.

Efforts to stamp out fake seed Seed companies indicated that they had received a total of 22 reported cases of fake seed sales in the 2015/2016 season. This figure is likely to be an underestimate as not all cases of fake seed are reported officially. Seed companies rated the governmentâ&#x20AC;&#x2122;s effort to stamp out fake seeds as fair (57%), indicating that more could be done by government to address this problem. Companies identified the main sources of fake seed as agro-dealers, marketing agents, and informal cross-border imports. SCCI has been working with private companies and other actors to implement various approaches to stamp out fake seed. These include regular seed market inspections, awareness-raising via community radio, publications, and farmersâ&#x20AC;&#x2122; workshops, and introducing unique security features on seed packages. However, according to SCCI, these efforts have had limited success due to a lack of resources.

Use of smart subsidies Since 2002, the Zambian government has been implementing the agricultural input subsidy program called Farmer Input Support Programme (FISP), which aims to increase farmersâ&#x20AC;&#x2122; crop production. At its inception, the government procured agricultural inputs (seed and fertilizer) and distributed them to farmers across the country. During the 2015/16 season, part of the subsidy program was implemented electronically using e-vouchers, with the intention of improving its efficiency. Inputs are distributed to farmers through agro-dealers. At the point of purchase, a farmer pays about 20% of the cost of the inputs, and the government covers the rest. In 2016, the government spent US$ 23 million on the subsidy program for seed and fertilizer. The target was for 30% of the total certified seed to be sold as subsidy. Seed companies reported that on average 38% of their maize sales, 80% of bean sales, and 50% of groundnut sales were through the subsidy program. For seed companies, the main challenge is that payments from government are often delayed. In 2016, the program adopted an evoucher system (called FISP e-voucher); however, seed companies still faced challenges when trying to redeem the voucher cards.

Seed Sectors Around the Globe

Seed Times January - April 2018

that more could be done by roblem. Companies identiseed as agro-dealers, maross-border imports.

the system is hampered by inadequate financial and human resources. Seed companies rate their satisfaction with extension services as fair (55%). Zambia has about 1.47 million farming households, thus the ratio of government extension worker-to-farm household is about 1:560.

rivate companies and other approaches to stamp out INSTITUTIONAL Quality of national seed trade association ar seed market inspections, SUPPORT nity radio, publications, Availabilityand of extension services ZASTA is a national seed association that represents the ducing unique security feaof its 19 members. roleare in liZambia has approximatelyinterests 2,633 agricultural extension ZASTA officers,plays 65% aofkey whom male and 35% are female. wever, according to SCCI, employ 127 aising between private seed companies the governSeed companies of these extension officers. Government and extension services are provided through a system fromment the Camp, Districts, Provincial success duewellstructured to a lack of rein theBlocks, implementation of FISP. to National levels. However, the effectiveness of the system is hampered by inadequate financial and human resources. Seed companies rate their satisfaction with extension services as fair (55%). has about million farming thus the ratio of government Figure Zambia 3 illustrates seed1.47 companies’ level households, of satisfaction extension worker-to-farm household is about 1:560.

with ZASTA’s performance in six service areas. The comQuality national seed trade panies rateassociation their satisfaction with the overall quality of vernment has been of impleZASTA as good ZASTA’s highest rating is in democ-ZASTA plays a key role in ut subsidy program ZASTA is acalled national seed association that (69%). represents the interests of its 19 members. racycompanies and governance (85%), while the implementation lowest rating isofinFISP. and the government in the mme (FISP),liaising which between aims toprivate seed its ability to mobilize resources (58%). In all other areas – ction. At itsFigure inception, the 3 illustrates seed companies’ level of satisfaction with ZASTA’s performance in six service areas. The effectiveness in advocacy, activity on important seed seccompanies rate their satisfaction with the overall quality of ZASTA as good (69%). ZASTA’s highest rating is in ural inputs (seed and fertidemocracy and governancetor (85%), while the lowest rating its ability to mobilize (58%). In all other issues, managerial ability,is in and providing value resources to farmers across the country. areas – effectiveness in advocacy, activity on important seed sector issues, managerial ability, and providing value members - ZASTA’s members rate the association as art of the subsidy program to members - ZASTA’s members rate the association as good, with responses ranging from 64% and 69%. good, with responses ranging from 64% and 69%. ally using e-vouchers, with

s efficiency. Inputs are disgro-dealers. At the point of t 20% of the cost of the iners the rest.

Figure 3: Members’ satisfaction with ZASTA Overall level of satisfaction

Ability to mobilize resources Democarcy in elections and decision making Providing value to members

t US$ 23 million on the subManagerial ability rtilizer. The target was for Effectiveness in advocacy to be sold as subsidy. Seed Activity on important seed sector issues average 38% of their maize d 50% of groundnut sales 0% 20% 40% 60% 80% gram. For seed companies, SERVICE TO SMALLHOLDER FARMERS Figure 3: Members' satisfaction with ZASTA ayments from government he programConcentration adopted an e- of rural agro-dealer network e-voucher); According however, to seed the Agribusiness and Marketing Department of the Ministry of Agriculture, there are 450 agro-

ess Index

dealers in Zambia. This translates to an agro-dealer-to-farm household ratio of 1:3,276, which is worse than other countries surveyed by TASAI, e.g., Kenya, Malawi, or Zimbabwe. This implies that smallholder farmers in Zambia have to travel longer distances to access agricultural inputs from agro-dealers. Further, since the e-voucher system Page 5seed access by smallholder is implemented through agro-dealers, the agrodealer network is vital to improved farmers. Seed companies rate their satisfaction with the agro-dealer network as fair (57%), signaling that it meets their basic requirements but there is room of improvement.

Availability of seed in small packages Much of the seed in Zambia is sold in 5 or 10 kg packages. In the 2015/16 season, 19% of seed was sold in small packages (2 kg or less). Breaking the numbers down by crop, we find that 19% of maize seed and 4% of bean seed

Seed Times January - April 2018

Seed Sectors Around the Globe

are particularly beneficial for Z packages (2 kg or less). Breaking the numbers down by most are already active in the crop, we find that 19% of maize seed and 4% of bean seed the FISP e-voucher program were sold in small packages. In contrast, 100% of rice efficiency and transparency o seed and 62% of maize seed were sold in larger package the area of breeding and var sizes between 2 and 10 kg. Further, for maize, 19% of seed room for developing more ne was sold in packages larger than 10 kg. On average, seed varieties in the market today companies rate their satisfaction with the volumes of varieties on the market, s were sold in small packages. In sold contrast, 100% of rice seed and (72%). 62% of By maize seed in larger package seed in small packages as good crop, thewere soldnew more in most cases, bet sizes between 2 and 10 kg.companies’ Further, forsatisfaction maize, 19% of of package seed was sizes sold in kg. –Onand average, is packages excellent larger for than 10 seed companies rate their bean satisfaction with the volumes of seed sold in small packages as good (72%). By crop, (80%) and good for maize (74%), rice (65%), and Despite the achievements to thecompanies’ satisfaction of package sizes is excellent for bean (80%) and good for maize (74%), rice (65%), and groundnut (65%). Figure 4 shows a breakdown of the pergroundnut (65%). Figure 4 shows a breakdown of the percentage of seed sold in the different package sizes each formal se remain in for Zambia’s centage of seed sold in the different package sizes for crop. top four crops (rice, groundnu each crop. Figure 4. Percentage of seed sold in different package sizes seven varieties were released while there was a heavy focus 100% of research and development 80% versify breeding efforts, esp 60% recognition that sufficient calo sarily equate to sufficient nutr 40% 20%

Seed companies also report clarity in the seed export proc Maize Rice Groundnut Bean tries treat seed as grain, which trade in times of grain expor 2 kg or less > 2 kg - 10 kg > 10 kg - 25 Kg > 25 kg checked, the threat of fake s Figure 4. Percentage of seed sold in different package sizes Seed-to-grain price ratio affect an otherwise vibrant see ter the now, while the Assuming stable prices at planting time, seed-to-grain price ratios can reflect the attractiveness of athreat varietyis or affordability of improved seed relative to farmer-recycled grain. The seed-to-grain price ratio for the four crops shows significant variation. At the time of planning, the seed-to-grain ratio is highest for hybrid maize (13.4:1) and OPV maize (10.0:1). In contrast, for rice, groundnut, and bean, the seed-to-grain price ratio is much lower at 1.4:1, 1.3:1, 2.2:1, and 2.3:1, respectively. The high ratios for maize seed are due to the high cost of production. From a seed company’s perspective,Copyright the low © seed-to-grain price ratios for rice, groundnut, and bean reflect competition The African Seed Access Index from farmer-recycled seed. 0%

OPPORTUNITIES AND CHALLENGES Zambia’s seed industry has several opportunities for further growth. As a net exporter of seed, there is potential to access new regional markets, especially under the COMESA and SADC trade agreements. These agreements are particularly beneficial for Zambian seed companies as most are already active in the region. The introduction of the FISP e-voucher program is expected to improve the efficiency and transparency of the subsidy program. In the area of breeding and variety development, there is room for developing more new varieties, as most of the varieties in the market today are quite old. With more new varieties on the market, seed companies can provide more – and in most cases, better – options for farmers. Despite the achievements to date, significant challenges remain in Zambia’s formal seed sector. For three of the top four crops (rice, groundnut, and bean), a total of only seven varieties were released between 2014 and 2016, while there was a heavy focus on maize for all indicators of research and development. There is thus a need to diversify breeding efforts, especially with the increasing recognition that sufficient calorific intake does not necessarily equate to sufficient nutrients. Seed companies also report concern about the lack of clarity in the seed export process: some importing countries treat seed as grain, which negatively affects the seed trade in times of grain export bans. Further, if left unchecked, the threat of fake seed could cause negatively affect an otherwise vibrant seed sector. The time to counter the threat is now, while the problem is relatively small.

Seed Sectors Around the Globe

Seed Times January - April 2018

Seed companies also highlight the need to improve efficiency in the handling of the FISP program, especially regarding the speed of payments from government. Lastly, since Zambia is a net exporter of maize seed, the government should prioritize the domestication of the harmonized SADC and COMESA seed regulations. CONCLUSION Zambiaâ&#x20AC;&#x2122;s seed sector is relatively advanced. Most of the active seed companies in the country export seed across the SADC and COMESA regions. The policy environment promotes private sector growth through private inspection services and efficient variety releases. In addition, the national breeding programs work closely with local private seed companies to ensure the timely availability of foundation seed. To promote nutritional security, there is a need for increased investment in breeding varieties for rice, groundnut, and beans. TASAI research has shown that the seed companies are satisfied with most of the public services. Nevertheless, to sustain the impressive performance of the sector, there is a need to address several policy-related gaps. These include instituting innovative ways to address fake seed; fast-tracking the nationwide implementation of FISP e-voucher; ensuring that export regulations are consistent and predictable; and fast-tracking the passing of the revised seed regulations. With an active seed association, seed companies have the appropriate platform to respond to these challenges.

REFERENCES FAO (1998) Developing Seed Security Strategies and Programmes for Food Security in Developing Countries. FAOSTAT (2017) FAOSTAT. Available at: http://www.fao.org/faostat/en/#home (Accessed: 1 July 2017). Langyintuo, A.S., W. Mwangi, A.O. Diallo, J. MacRobert, J. Dixon, and M. B. (2008) An Analysis of The Bottlenecks Affecting The Production And Deployment of Maize Seed In Eastern and Southern Africa. Harare. Available at: http:// repository.cimmyt.org/xmlui/bitstream/handle/1088 3/1081/92341.pdf?sequence=1&isAllowed=y (Accessed: 14 August 2017).

APPENDIX 1. For a comparison of TASAI Indicators across 13 countries, please visit: http://tasai.org/wp-content/uploads/ TASAI-Appendix-CURRENT.pdf

The article has been published with permission of authors

Seed Times January - April 2018

Seed Sectors Around the Globe

2. Zimbabwe Brief 2017 Edward Mabaya, Claid Mujaju, Patience Nyakanda, Mainza Mugoya INTRODUCTION A competitive seed sector is key to ensuring timely availability of high quality seeds of improved, appropriate varieties at affordable prices to smallholder farmers in Zimbabwe. This country brief summarizes the key findings of The African Seed Access Index (TASAI) study conducted in 2016 to appraise the structure and economic performance of Zimbabwe’s seed sector. With a focus on four grain and legume crops important to food security – maize, beans, soybeans, and sorghum – this study evaluates the enabling environment for a vibrant formal seed sector. The cultivation of these four crops covers about 75% of the Zimbabwe’s arable land (FAOSTAT, 2017). The study covers 20 indicators divided under the following categories: Research and Development, Industry Competitiveness, Seed Policy and Regulations, Institutional Support, and Service to Smallholder Farmers. Appendix 1 summarizes all 20 indicators and compares Zimbabwe to 12 other countries where similar studies were conducted. Further, a TASAI study was conducted in Zimbabwe in 2013, allowing us to study the performance of Zimbabwe’s seed industry over time. It is important to note that cotton, one of the four focus crops in 2013, was replaced with beans in 2016, to limit the research to food crops.

Overview Unlike most African countries, Zimbabwe’s has a well-established formal seed sector with a long history. As early as the 1960s, the government of Zimbabwe (then Rhodesia) recognised the urgent need to enhance the provision of quality seeds to farmers. Presently, the country has high adoption rates of certified seeds – approximately 80% for hybrid seeds (Chikobvu, Kassie and Lunduka, 2014). However, the country’s economic woes that started in the mid-2000s have significantly diminished the country’s seed security. The informal sector broadly refers to the system where farmers produce, obtain, maintain, and distribute seed resources from one growing season to the next (FAO, 1998). Standards in the informal seed sector are not monitored or controlled by government policies and regulations; rather, they are guided by indigenous knowledge and standards, and by social structures. The colloquial nature of transactions means that there is scant performance data on the informal sector. Due to the recent economic problems, a growing number of smallholders have returned to the informal sector. The formal sector focuses on breeding, evaluating, and releasing improved varieties, and producing and selling certified seed. The formal seed sector is regulated by Seed Services, an institute in the Department of Research and Specialist Services (DR&SS) under the Ministry of Agriculture, Mechanization, and Irrigation Development. Seed Services implements the seed laws and regulations in Zimbabwe. The national association of seed companies known as the Zimbabwe Seed Trade Association (ZSTA), coordinates seed companies’ activities and interface with government. Through Seed Services and ZSTA, the Zimbabwe seed industry participates in various regional and international associations and technical bodies such as ISTA, AFSTA, UPOV and OECD. Other key institutions in Zimbabwe’s formal seed sector are listed in Table 1.

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Seed Times January - April 2018

Table 1: Role of key players in Zimbawe’s formal seed sector ROLE

KEY PLAYERS

Research and breeding

DR&SS; CBI; CBI; ZTS-SIRDC; MNCs; SME seed companies; universities (University of Zimbabwe, Midlands State University, Chinhoyi University of Technology, Africa University)

Variety release and regulation

Seed services (National Certifying Authority)

Breeders and foundation seed production

CBI; ZTS-SIRDC; MNCs; seed companies

Seed production and processing

Seed companies; MNCs; contract farming companies

Education, training, and extension

Seed companies; government extension agents; NGOs

Distribution and sales

ZSTA; Private sector seed merchants; rural agro-dealers; NGOs; Government

Key acronyms: AFSTA – African Seed Trade Association; CBI – Crop Breeding Institute; CIAT - International Center for Tropical Agriculture; CIMMYT – International Maize and Wheat Improvement Center; COMESA - Common Market for Eastern and Southern Africa; ICRISAT International Center for Research in the Semi-Arid Tropics; ISTA - International Seed Testing Association; MNC – Multinational Corporation; SME – Small and Medium Enterprise; UPOV - International Union for the Protection of New Plant Varieties; ZSTA – Zimbabwe Seed Trade Association; ZTS-SIRDC – Zimbabwe Technological Services - Scientific Industrial Research and Development Center

RESEARCH AND DEVELOPMENT Number of active breeders In 2016, Zimbabwe had 32 active breeders across the four focus crops (maize, beans, soya beans and sorghum), serving 560,000 farming households. Of these, 17 specialize in maize, 5 in beans, 6 in soya bean, and 4 in sorghum. Most (25) of the breeders work for six private seed companies. The other seven breeders work in the public sector. The Crop Breeding Institute (CBI) has a public mandate to develop improved varieties of all field crops grown in Zimbabwe. CGIAR centers including the International Maize and Wheat Improvement Center (CIMMYT), the International Center for Tropical Agriculture (CIAT), and the International Center for Research in the Semi-Arid Tropics (ICRISAT) support the maize, bean, and sorghum breeding programs in the country through the provision of germplasm, capacity building of breeders, and training of scientists. However, at the moment, only CIMMYT has an active breeding program in the country. In addition, several local universities including the University of Zimbabwe, Midlands State University, Chinhoyi University of Technology, and Africa University conduct training and research to support breeding programs. However, the primary role of these institutions in teaching, and as such they are not involved in variety development. Notably, the number of breeders has reduced from 40 in 2013. By crop, the main reductions have been for maize (from 21 to 17) and for sorghum (from 7 to 4). This reduction in number of breeders is a manifestation of the overall brain drain as skilled labour continues to migrate to other countries in search of better opportunities. Despite this reduction, on average, seed companies rate the adequacy of breeders as excellent (86%).1

Varieties released in the last three years In the last three years on record (2014-2016), 44 new varieties were released of the four focus crops. This compares well to 35 varieties released in the last reporting period of 2011-2013. The drive behind this increase was a demand for varieties with special traits such as droughttolerance and improved nutritional content. Of the 44 new varieties, 37 were maize, one sorghum, three soya beans, and three beans. Figure 1 illustrates the predominance of maize in All scores reported in this brief are based on industry self-reporting of satisfaction ranging from 0% (completely dissatisfied) to 100% (completely satisfied).

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beans, and three beans. Figure 1 illustrates the predominance of maize in breeding programs. Over the years, rs maize breeding has been given more attention than other crops. For example, since 2000, 125 new varieties of active breeders across the four breeding programs. Over the years,have maize breeding hascompared been giventomore than other crops. For example, maize been released only attention eight for sors, soya beans and sorghum), since 2000, 125 new varieties of maize have been released compared to only eight for sorghum, 15 for soybean, and ghum, 15 for soybean, and 14 for beans. This is in part useholds. Of14 these, 17 specialfor beans. This is in part because maize is the most widely cultivated crop in the country, given its importance because maize is the most widely cultivated crop in the n soya bean, for andfood 4 in security. sorghum. country, given its importance for food security. work for six private seed comFigure 1: Number of varieties released in Zimbabwe (three-year moving average) eeders work in the public sec14.0 titute (CBI) has a public man12.0 arieties of all field crops grown 10.0 8.0 ers including the International 6.0 ment Center (CIMMYT), the In4.0 ical Agriculture (CIAT), and the 2.0 search in the Semi-Arid Tropics 0.0 e, bean, and sorghum breeding -2.0 y through the provision of Maize Sorghum Soybean Beans ng of breeders, and training of moment, only CIMMYT has an Figure of 1: Number varieties released in Zimbabwe Seed companies sold 95 varieties the fourofcrops in 2016. Of these, most (three-year were maize varieties (59 of 95), while 14 n the country.were In addition, sevmoving average) bean varieties, 12 were sorghum varieties and 10 were soya bean varieties. ding the University of ZimbaSeed companies sold 95 varieties of the four crops in Availability seed ersity, Chinhoyi Universityofoffoundation 2016. Of these, most were maize varieties (59 of 95), niversity conduct and countries, Unliketraining most African seed varieties, production12inwere Zimbabwe is mostly the responsibility of the seed whilefoundation 14 were bean sorghum varieties companies. On average, seed companies scored their satisfaction with the availability of foundation seed as good ng programs. However, the priand 10 were soya bean varieties. (79%).and Seed and parastatals that have their own breeding programs rate their satisfaction at 84% and ions in teaching, as companies such 85%, respectively. Emerging seed companies that rely on CBI are less satisfied (63%). Nevertheless, by crop, seed Availability of foundation seed riety development. companies rate the availability of foundation seed as excellent for maize (84%) and soya bean (80%), and good for beans (76%) and sorghum (77%). Unlike most African countries, foundation seed produceeders has reduced from 40 in tion in Zimbabwe is mostly the responsibility of the seed ductions have formain maizeconstraints limiting foundation seed production at CBI is the shortage of technical resources Onebeen of the companies. On average, seed companies scored their satmachinery ghum (from 7(such to 4).asThis reduc- and irrigation equipment) and financial resources. This shortage has reduced CBIâ&#x20AC;&#x2122;s capacity to isfaction with the availability of foundation seed as good adequately is a manifestation of thesupply over-foundation seed to emerging companies. Emerging seed companies, given their limited capacity, are not willing to invest in (79%). foundation production it does nothave yield their short-term financial returns. In Seedseed companies andbecause parastatals that bour continues to migrate to addition, these emerging seed companies are unable to project their requirements own breeding programs rate their satisfaction at 84% for andfoundation seed in advance, better opportunities. Despite which further complicates planning for CBI. 85%, respectively. Emerging seed companies that rely on seed companies rate the adeAverage age of varieties CBIsold are less satisfied (63%). Nevertheless, by crop, seed ent (86%). 1 companies rate the availability of foundation seed as exThe average age of the varieties currently on the market is 8.4 years. Broken down by crop, this is 8.5 years for maize, cellent for bean, maizeand (84%) soya (80%), good for age for sorghum is due to ast three years 5.6 years for beans, 8.2 years for soya 12 and years for bean sorghum. Theand high average beans (76%) and sorghum (77%). the low44 commercial ecord (2014-2016), new va- interest in the crop, and the resultant minimal investment in breeding and subsequent variety release. The relatively high average age of maize and soya bean varieties, both of which are grown commercially, e four focus suggests crops. This One ofsome the main constraints limiting foundation seed pro-for each crop on the market thatcomfarmers still prefer old and trusted varieties. The oldest varieties leased in theinlast reporting pe2016 are as follows: 28 years for maize, 29 years for sorghum, 17 years for soybean duction at CBI is the shortage of technical resources (suchand 10 years for beans. The youngest varieties a year old for and all focus crops equipment) other than sorghum whererethe youngest variety is three ve behind this increase was a are onlyas machinery irrigation and financial years old. Compared to most other African countries, these varieties are very young, and the high variety turnover special traits such as droughtsources. This shortage has reduced CBIâ&#x20AC;&#x2122;s capacity to adein Zimbabwe reflects a responsive industry. utritional content. Of the 44 quately supply foundation seed to emerging companies. aize, one sorghum, three soya Emerging seed companies, given their limited capacity,

Seed Sectors Around the Globe

based on industry self-reporting of sately dissatisfied) to 100% (completely sat-

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

MENT

Seed Times January - April 2018

dation seed in advance, ng for CBI.

In 2016, Zimbabwe had 16 registered seed companies producing and/or marketing at least one of the four crops. Of these companies, 13 produce maize, 8 produce beans, 6 produce soya bean, and 7 produce sorghum. currently on the market Further, two are government parastatals and the rest are op, this is 8.5 years for private companies. The overall number is a reduction ears for soya bean, and from the 20 seed companies reported in 2013. The reason Varieties with climate-smart featuresis the competitive business environverage age for sorghum for the reduction rest in the crop, the as climate-smart, ment across the country, in further To be and classified a crop variety must which meet athas leastresulted one of two criteria – early maturity and/or n breeding tolerance and subseconsolidation of the industry. There were two mergers to extreme weather conditions such as drought, flooding, frost, moisture orinheat stress. Many maize varieties (21ofof 34) and the all three varieties between 2013together and 2015 two are climate-smart. However, vely high average age last sorghum two years. Onereleased merger brought only three of the seven bean varieties are climate-smart, and none of the soya bean varieties oth of which are grown companies, and a second merger brought together three have any climatesmart characteristics. investment inInthe maizeofvarieties is attributed to CIMMYT’s Southern Africa ers still prefer some old The highcompanies. a climatesmart third case, one the companies went Drought and Low Soil Fertility (SADLF) project. Sorghum is naturally well adapted to low rainfall regimes, and thus varieties for each crop into a technical equity partnership with a non-seed organall recently released varieties are considered drought-tolerant (with two of them also early-maturing). For beans, ows: 28 years for maize, ization. breeders have emphasized early maturity; 71% of the recent releases are early maturing. or soybean and 10 years COMPETITIVENESS The estimated aggregate sales of the four crops in 2015 s are only aINDUSTRY year old for were 49,278 tons. Maize seed accounted for about 90% um where the youngest Number of active seed companies (44,150 tons) of sales of the four crops. This is slightly ared to most other AfriIn 2016, Zimbabwe had 16 registered seed2013 companies and/or marketing least one of the four crops. lower than the maizeproducing seed sales of 39,889 tons.atThe very young, and the high Of these companies, 13 aggregate produce maize, 8 produce beans, 6 produce soya bean, and 7 produce sorghum. Further, seed sales of the other three crops are as folects a responsive two areindusgovernment parastatals and the rest are private companies. The overall number is a reduction from the 20 lows: 1,078 tons (beans), 1,300 tons (sorghum), and 2,750 seed companies reported in 2013. The reason for the reduction is the competitive business environment across the tonsin(soya bean). country, which has resulted further consolidation of the industry. There were two mergers in the last two years. atures One merger brought together two companies, and a second merger brought together three companies. In a third Market share of top equity seed partnership companieswith a non-seed organization. case, one of the companies went into a technical rt, a crop variety must is crops calculated – early maturity and/or aggregateMarket The estimated sales ofshare the four in 2015using were seed 49,278sales tons.reported Maize seedby accounted for about 90% companies. illustrated Figure 2, the market tons) of sales ofseed the four crops. ThisAs is slightly lower in than the 2013 maize seed sales of 39,889 tons. The ditions such(44,150 as drought, shares thecrops top four bytons crop(beans), are as follows: seed sales of the otherfor three are ascompanies follows: 1,078 1,300 tons (sorghum), and 2,750 stress. Manyaggregate maize varitons (soya bean). Market93% share of top seed sharebean), is calculated using seed sales reported by seed (maize), 85%companies (beans), Market 95% (soya and 91% (sorghum varieties released companies. As illustrated in Figure 2, the market shares for the top four companies by crop are as follows: 93% ghum) (fig. 2). imate-smart. However, (maize), 85% (beans), 95% (soya bean), and 91% (sorghum) (fig. 2). eties are climate-smart, The market shares reveal a dominance of a few players, The market shares reveal a dominance of a few players, particularly in the maize seed market, which has many active eties have any climateparticularly in the maize seed market, which has many acseed companies. vestment in the climatetiveFigure seed companies. 2: Total market share (%) of top four companies d to CIMMYT’s Southern 100% ity (SADLF) project. Sor5% 7% 9% 95% to low rainfall regimes, 15% arieties are considered 90% em also early-maturing). 85% 95% 93% 91% hasized early maturity; 85% 80% rly maturing.

Index

75%

Maize

Sorghum

Top four companies

Soya bean

Beans

Other companies

Figure Total market (%) of top four companies Market concentration was also2:analyzed usingshare the HerfindalHershman Index (HHI). The HHI measures market concentration by squaring the market share of each firm competing in a market and then summing the resulting numbers. The index ranges from near zero (perfect competition) to 10,000 (pure monopoly). HHI was calculated for all the seed companies, for each crop. The market concentration is fair for beans (2,370), poor for maize (3,380) and sorghum (3,565), and extremely poor for soya bean (8,297). The market shares of the top four companies and Page 3

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Seed Sectors Around the Globe

the HHI results both indicate that the seed industry is dominated by a few players, with poor or extremely poor levels of competition. The decrease in competitiveness since the last reporting period reflects the four industry mergers and acquisitions that occurred over the past few years.

Market share of government parastatal Seed production and distribution in Zimbabwe is mostly privatized. However, there are two government parastatals that are currently active in the Zimbabwe’s seed sector. ARDA Seeds, registered in 1988 is active in all four of the focus crops. Zimbabwe Technological Solutions (ZTS), recently registered in 2014, only produces maize seed. The two parastatals both have a mandate to meet the needs of smallholder farmers in areas of the market where private seed companies have limited involvement. Because of this market segmentation, the competition between parastatals and private companies is little-tonone, and the seed industry is mostly privatized. Their combined volume weighted market share is for all four crops is 3%. This is a slight reduction from the government market share of 4% in 2013. By crop, the government market share is about 3% for maize, 3% for beans, 4% for soya beans, and 6% for sorghum.

Length of import/export process for seed The time it takes to import seed is calculated as the number of days from the time an import permit is requested to the time the seed is cleared at the border. In 2016, seed companies report that it took an average of 30 days to import seed into Zimbabwe. This is a significant increase from the 12 days reported in 2013. This increase is reflected in the “fair” rating reported in 2016 (44%) compared to a “good” score (68%) in 2013. The main sources of seed imports are Malawi, South Africa, and Zambia. The same trend between 2013 and 2016 is observed in seed exports. The average length of time for seed exports in 2016 was 35 days. The companies’ satisfaction over this period has dropped significantly from good (69%) in 2013, to poor (27%) in 2016. The main export destinations are Angola, Botswana, Kenya, Madagascar, Mozambique, South Africa, Uganda, and Zambia. Companies’ dissatisfaction is due to the long and bureaucratic process to obtain import and export documentation. Since 2013, the processes for both imports and exports have been expanded to include more government institutions (Seed Services, Department of Economics and Markets, Reserve Bank, Agricultural Marketing Authority, National Biotechnology Authority) that are physically scattered. Consequently, the import/export process has become more expensive and time-consuming, requiring more paperwork and visits to various offices than before. A one-stopshop for seed import and export would alleviate the companies’ frustrations.

SEED POLICY AND REGULATIONS Length of variety release process The length of the variety release process is the duration of time from when the application for a variety release is submitted to when the variety is released by the Variety Release Committee. On average, the length of the variety release process in Zimbabwe is 18 months, ranging from 12 months (for soya bean) to 20 months (for beans). This is a slight improvement from an average of 22 months in 2013. On average, seed companies rate the variety release process as excellent (83%). By crop, the level of satisfaction is excellent (85%) for maize and soya bean, and good (78%) for beans and sorghum. These findings show that Zimbabwe has a relatively straight-forward and well-coordinated variety release system, which is appreciated by seed companies. That said, several breeders recommended that the variety release panel needs to keep abreast of recent data analysis techniques as well as new approaches to variety evaluation.

Status of seed policy framework Zimbabwe does not have a seed policy, though a task force has been established to formulate a draft policy. The Zimbabwe Seed Act was last amended in 1971, with Seed Regulations passed the same year. The Plant Breeders’ Rights Act was last amended in 2001. However, the various seed regulations and subsidiary legislation are more 84

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Seed Times January - April 2018

recent. These were amended and published in 2016 to conform with the Common Market for Eastern and Southern Africa (COMESA) seed harmonization regulations, to which Zimbabwe is a signatory. The recent amendments include the Seed Certification Regulations and the Plant Pests and Diseases Regulations. These, among others, were passed in November 2016 and address issues such as seed certification, inspection, variety release, and seed movement in the region.

Quality of seed regulations and enforcement The Seeds Act Chapter 19:13 of 1971 accompanied by the regulations and the Seed Certification Scheme of 2000 serve as Zimbabweâ&#x20AC;&#x2122;s seed laws. The responsible regulatory authority is Seed Services. Seed companies rate their satisfaction with the quality of seed regulations and the quality of enforcement as excellent (86%) and good (77%), respectively. This is comparable to the corresponding ratings of 88% and 83% in 2013. Seed companies are all aware of the main elements of the seed law and regulations, and are satisfied with their enforcement. However, emerging seed companies feel that the seed regulations should be revised to better meet their needs. In addition, some respondents noted that, given the high staff turnover at Seed Services, some of the new government inspectors lack the confidence to enforce the laws, especially when faced with more experienced company seed inspectors.

Adequacy of seed inspectors The Seed Services Institute in Zimbabwe is guided by the Organization for Economic Cooperation and Development (OECD) seed inspection schemes. Under this scheme, government field inspectors should inspect at least 10% of registered seed crops and all crops meant for export. The remainder is inspected by private field seed inspectors employed by their respective companies but reporting to Seed Services Institute. There are 61 seed inspectors in Zimbabwe, a 36% increase from the last reporting period. Of these, 14 are public inspectors, while 47 are from the private sector. This is an increase from a total of 45 inspectors in 2013. Seed companies rate the adequacy of seed inspectors as excellent (84%), which is similar to the 2013 score of 83%. A notable improvement since the 2013 report is the decentralization of Seed Services, which started in 2015. As a result of the process, in addition to the original central office in Harare, three new sub-stations have opened in Masvingo, Bulawayo and Nyanga. Efforts to stamp out fake seed Incidents of fake seeds are reported to the national seed authority, which investigates all reported cases. There are provisions in the Seeds Act chapter 19:13 section 24 to prosecute offenders. In 2016, the Seed Services Institute dealt with 10 cases of fake maize seed, mostly from unscrupulous dealers. In addition, seed companies encountered 42 cases of fake seed. The total of 52 cases is a notable increase from 41 cases reported in 2013. Seed companies are less satisfied with efforts to stamp out fake seed in 2016 (56%) than in 2013 (67%). According to the seed companies, the main source of fake seed is at the retail level, where agents have been caught manipulating seed packages. Unfortunately, in most cases, the seed is destroyedbut the culprit is not punished. A majority of TASAI survey respondents felt that the incidence of fake seed was on the rise and there was a need for harsher penalties to stem the problem.

Use of smart subsidies Since 2010, the government of Zimbabwe has implemented various agricultural input support programs. In 2016, the government subsidy program targeted 300,000 poor farmers and cost US$ 28 million. Participating farmers received 10 kg of either maize or sorghum seed plus 50kg Compound D basal fertilizer and 50kg Ammonium Nitrate top-dressing fertilizer. Seed was sourced competitively from seed companies, using an open tender. Six companies participated in the government tender for maize seed, while two participated in the sorghum seed tender. In total, 3,000 tons of maize seed (7% of total sales) and 300 tons of sorghum seed (23% of total sales) were distributed through the program. Collectively, this accounted for 7.3% of the total maize and sorghum seed market, which is low

Seed Times January - April 2018

Seed Sectors Around the Globe

enough not to disrupt market dynamics. Seed was distributed through existing government depots owned by the Grain Marketing Board. A less disruptive way to distribute seed would be through a voucher or e-wallet system that would allow farmers to choose the type of seed they want to receive. Such voucher systems have been successfully implemented (and documented in TASAI reports) in Malawi, Zambia, and Kenya. INSTITUTIONAL SUPPORT

INSTITUTIONAL SUPPORT Availability of extension services There are approximately 4,408 agricultural extension workers in Zimbabwe, of which 206 (5%) are from private seed companies. The gender disaggregation of extension workers is almost equal, as an impressive 44% of extension workers are female. By these two measures, Zimbabwe’s extension system out-performs all other countries covered by TASAI to date. However, the current extension officers are under-resourced and often lack mobility, which is critical for increased impact. The current government target is to have three extension workers per ward2. This would translate to about one extension worker for every 400 farming households. The 2013 TASAI findings recorded a ratio of one extension officer for every 300 farming households, which signifies that the target has been met. Not surprisingly, seed companies are fairly satisfied with the extension services. The companies rate their satisfaction with the extension service, the Agricultural Technical and Extension Department (AGRITEX), as good (72%). This is slightly higher than the satisfaction rating of good (64%) in 2013. AGRITEX covers all farmers across the country. Farmers receive additional services from farmers’ associations, agro-input suppliers, non-governmental organisations, and developmental agencies. A new development is the increasing use of technology in delivering extension services. ECONET, the largest mobile operator in Zimbabwe, has been developing farming tips for a range of crops, including the four focus crops. The Zimbabwe Farmers’ Union has also developed messaging service with farming tips using the WhatsApp platform.

Quality of national seed trade association The Zimbabwe Seed Trade Association (ZSTA) currently has 23 registered members, although only 13 are currently active in the affairs of the association. Fifteen seed companies responded to this survey, of which three are not registered members of the association. The reasons cited for nonmembership include the high costs of subscription, especially for emerging seed companies; lack of awareness of the existence of the association; and lack of compelling reasons to be a member. ZSTA sees its two main roles in the national seed systems as the coordinator of the sector and supplier of relevant information to members. Figure 3 illustrates seed companies’ satisfaction with ZSTA’s performance in eight service areas. Seed companies rate their satisfaction with the overall quality of ZSTA as fair (50%). This is a decline from their rating of good (64%) in 2013. Seed companies gave particularly low ratings in the following areas: facilitating networking opportunities (35%), skills development for members (33%), democracy in elections (49%), ability to mobilize resources (51%), and providing value for members (50%). Members scored ZSTA higher in the areas of managerial ability (63%) and effectiveness in advocacy (64%). The low satisfaction ratings and low membership suggest the need for improvements at the ZSTA. See companies propose that ZSTA represents all members’ interest irrespective of company size. It should also transparently share information on industry opportunities especially with regard to seed supply tenders.

Each ward has 1,200 farming households

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Seed Times January - April 2018

y, which is critical for in-

s to have three extension translate to about one exming households. The 2013 f one extension officer for which signifies that the tar, seed companies are fairly vices. The companies rate on service, the Agricultural ment (AGRITEX), as good n the satisfaction rating of vers all farmers across the nal services from farmers’ non-governmental organcies.

advocacy (64%). The low satisfaction ratings and low membership suggest the need for improvements at the ZSTA. See companies propose that ZSTA represents all members’ interest irrespective of company size. It should also transparently share information on industry opportunities especially with regard to seed supply tenders. Figure 3: Members’ satisfaction with STAM Overall level of satifaction

50%

Ability to mobilize resources

51% 49%

Democracy in elections and…

50%

Providing value to new members Managerial ability

63%

Effectiveness in advocacy

64% 71%

Activity on important seed sector…

SERVICE TO SMALLHOLDER FARMERS

20%

40%

60%

80%

Figure 3: Members' satisfaction with STAM asing use ofConcentration technology in of rural agro-dealer network CONET, the largest mobile the value chain, in of seed in smallFARMERS In 2016, the numberAvailability of licensed seed selling agro-dealers inpackages Zimbabwe was 1,278. This was more than a three-fold SERVICE TO SMALLHOLDER developing farming tips for increase from the 354 agro-dealers in 2013. The new number translates to a ratio of one agro-dealer for every 438 as breedin as well Across thetofour focus of alltoseed is with soldSeed in Services and ur focus crops. The Zimbaagricultural households. In order sell agricultural seed, tradersnetwork have register renew Concentration of ruralcrops,126% agro-dealer the companies co package sizes ofrated 2 kgtheir or less. For maize, 12% of seed network is sold as good (75%). their license each year. Seed companies satisfaction with the agro-dealer The veloped messaging service In 2016, the number of licensed seed selling agro-dealers in plement majority of TASAI survey respondents indicated that the agro-dealer distribution network is very good in terms of the gove in packages of 2 kg or less, while the corresponding numApp platform. numbers. However, in most areas it has observed thatmore the seed stocks were too inlow to sustain demand. wasbeen 1,278. This a three-fold ment Inpolicy fram ber Zimbabwe for soya bean is 18%, forwas beans is than 7%, and for sorghum addition, at the village level, most agro-dealers stock maize seed but not the other three focus crops. from the 354 agro-dealers 2013.for Themaize new number fined and effectiv association 6%.crease The most popular package in sizes are 10kg to aand ratio5kg of one agro-dealer forfor every 438bean agriculsupport key indu Availability of seed intranslates small packages (59% of sales) (23% of sales), soya seed iation (ZSTA) currently has ment and release tural households. In order to sell agricultural seed, traders kg (34%). companies rate their with 12% of seed the four crops,126% of allSeed seed is sold in package sizes of 2 satisfaction kg or less. For maize, is sold h only 13 areAcross currently ac-focus10 mance of the go to register with Seed Services and renew their license in packages of 2 kg orthe less,have while the corresponding number for soya bean is 18%, for beans is 7%, and for sorghum package sizes as excellent for maize (83%) and sorn. Fifteen seed companies 6%. The most popular package sizes for maize are 10kg (59% of sales) and 5kg (23% of sales), for soya bean seed 10 acknowledged by each year. Seed companies rated satisfaction withcompathe ghum (82%), and good (76%) for their beans. However, h three are kg not(34%). registered Seed companiesagro-dealer rate their satisfaction with the package sizes as excellent for maize (83%) and sorghum network as (75%). Thebean majority of TASAI nies’ with thegood sizesatisfaction of soya seed (82%),for andnongood (76%) forsatisfaction beans. However, companies’ with the sizepackages of soya bean seed packages is these pos he reasons cited Despite survey respondents indicated that theon agro-dealer distribufair (47%). This is because soya bean is a commercial crop grown large pieces of land. The farmers prefer large is fair (47%). This is because soya bean is a commercial osts of subscription, espeto face certain cha network very good in terms of numbers. However,prefer in package sizes. croption grown onislarge pieces of land. The farmers es; lack of awareness of the tence of fake see most areas itsizes. has been observed that the seed stocks were large package Figure 4. Percentage of seed sold in different package sizes lack of compelling reasons satisfied with gov too low to sustain demand. In addition, at the village level, o main roles in the national The second challe most agro-dealers stock maize seed but not the other three 100% 7% of the sector and supplier 13% 14% and exports. focus crops. 80% ers. 23% In spite of these 75% 60% 81% ties, which if explo 81% 40% 57% growth. The on-g s 8% 20% tions in the COM 18% 12% 7% 6% 0% wider market for s Index Page 6 Maize Soya bean Beans Sorghum ularly important f of which already 2kg or less >2-10kg >10-25kg >25kg given the domina Figure 4. Percentage of seed sold in different package sizes sales for the four Seed-to-grain price ratio into other crops. in vari Assuming stable prices at planting time, seed-to-grain Seed Times January - April 2018 87 Seed Sectors Around the Globe vestments ploring their nati price ratios can reflect the attractiveness of a variety or should increase it affordability of improved seed relative to farmer recycled

Seed-to-grain price ratio Assuming stable prices at planting time, seed-to-grain price ratios can reflect the attractiveness of a variety or affordability of improved seed relative to farmer recycled grain. The seed-to-grain price ratio for the four crops in Zimbabwe is as follows: 9.3:1 for hybrid maize, 3.6:1 for OPV maize, 2:1 for beans, 2.6:1 for soya bean, 8.0:1 for hybrid sorghum and 6.9:1 for OPV sorghum. The ratios for maize hybrid and sorghum (both hybrid and OPV) are high, mainly due to the long-standing high adoption rates for certified seed of in Zimbabwe. These high adoption rates indicate that seed prices do not appear to be a major constraint to the adoption of certified seed in the country.

CONCLUSION The seed industry in Zimbabwe is mature, with adoption rates of about 80% for maize hybrid seeds. Two key aspects of Zimbabweâ&#x20AC;&#x2122;s seed sector provide evidence of maturity and strength. First is the presence of a vibrant private sector, where most companies are active at different levels of the value chain, including seed production and marketing, as well as breeding and variety development. In addition, the companies conduct seed inspections services, to complement the government efforts. Second, is the government policy framework. The government has a well-defined and effective system, including extension services, to support key industry functions such as variety development and release. More importantly, the good performance of the government in these different services is acknowledged by the seed companies. Despite these positive aspects, the seed industry continues to face certain challenges. Chief among these is the persistence of fake seed in the market. Seed companies are not satisfied with government efforts to address this problem. The second challenge is the long duration for seed imports and exports. In spite of these challenges, there are several opportunities, which if exploited, would provide avenues for industry growth. The on-going efforts to harmonize seed regulations in the COMESA and SADC regions would provide a wider market for seed companies to exploit. This is particularly important for seed companies in Zimbabwe, several of which already have a regional presence. In addition, given the dominance of maize (accounting for 90% of seed sales for the four crops), seed companies should diversify into other crops. This can be done by increasing their investments in variety development for these crops and exploring their national and regional potential. Lastly, ZSTA should increase its activity to become a stronger voice for the industry and to provide a platform for the companies to work with government and other seed industry players.

REFERENCES Chikobvu, S., Kassie, G. T. and Lunduka, R. W. (2014) Country Report â&#x20AC;&#x201C; DT Maize Adoption Monitoring Survey Zimbabwe. doi: 10.13140/RG.2.2.35722.47042. FAOSTAT (2017) FAOSTAT. Available at: http://www.fao.org/faostat/en/#home (Accessed: 1 July 2017).

APPENDIX 1. For a comparison of TASAI Indicators across 13 countries, please visit: http://tasai.org/wp-content/uploads/ TASAI-Appendix-CURRENT.pdf

The article has been published with permission of authors

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Seed Times January - April 2018

3. Kenya Brief 2016 Edward Mabaya, John Mburu INTRODUCTION A competitive seed sector is key to ensuring timely availability of high quality seeds of improved, appropriate varieties at affordable prices to smallholder farmers in Kenya. This country brief summarizes the key findings of The African Seed Access Index (TASAI) study conducted in 2016 to appraise the structure and economic performance of Kenya’s seed sector. With a focus on four grain crops that are important to food security— maize, sorghum, beans and cowpea—the study evaluates the enabling environment for a vibrant formal seed sector. It covers 19 indicators that are divided into the following categories: Research and Development, Industry Competitiveness, Seed Policy and Regulations, Institutional Support, and Service to Smallholder Farmers. To give perspective, this brief assesses the performance of Kenya’s seed industry over time, as a similar study was conducted in 2013. It also offers a comparison to Uganda’s s e e d industry, where similar studies were conducted in 2013 and 2016. Appendix 1 summarizes all 19 indicators across the two countries. TASAI seeks to encourage public policy makers and development agencies to create and maintain enabling environments that will accelerate the development of competitive formal seed systems serving smallholder farmers.

Overview Like most other African countries, the seed industry in Kenya consists of two systems: the informal sector and the formal sector. This policy brief focuses almost exclusively on the formal seed sector. The informal sector broadly refers to the system where farmers produce, obtain, maintain, develop, and distribute seed resources, from one growing season to the next (FAO, 1998). Because of limited exposure, low availability of most varieties, inability to purchase seeds, limited access to agrodealers, or other reasons, most smallholder farmers in Kenya still rely at least in part on informal seed systems. In cases where the farmer is unable to retain part of the harvest, or where a farmer decides to plant a different variety, seed is generally acquired from the local community, including markets as well as farmers’ social networks. This is true particularly for crops other than maize. Standards in the informal seed systems are not monitored or controlled by government policies and regulations; rather, they are guided by indigenous knowledge and standards, and by social structures. The formal sector focuses on breeding and evaluating improved varieties, and producing and selling seed of these varieties that is certified by the Kenya Plant Health Inspectorate Service (KEPHIS), the government entity responsible for regulating seed in Kenya. As shown in Table 1, Kenya’s formal seed sector comprises numerous institutions, including government (e.g., KALRO, KEPHIS, public universities, and county extension agents), parastatals (e.g., Kenya Seed Company, Simlaw, KALRO Seed Unit), private sector (MNCs and local seed companies), and development agents (NGOs and CBOs). Associations such as the Plant Breeders Association of Kenya and the Seed Trade Association of Kenya (STAK) also play an important role in information sharing and advancement of members’ interests.

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Table 1: Role of key players in Kenya’s formal seed sector ROLE

KEY PLAYERS

Research and breeding

KALRO; CGIARs, universities; MNCs; local seed companies

Variety release & regulation

KEPHIS

Breeder and foundation seed production

KALRO; Universities; CGIARS; MNCs; local seed companies

Seed production

KALRO, local seed companies, MNCs, community organizations

Processing and packaging

KALRO Seed Unit, local seed companies; MNCs

Education, training, extension

Universities, Seed companies, extension agents, NGOs, rural agro-dealers

Distribution and sales

Private sector seed merchants; Kenya Seed Company, KALRO Seed Unit and other parastatals, rural agro-dealers; NGOs

RESEARCH AND DEVELOPMENT Number of active breeders For the four focus crops (maize, sorghum, beans, and cow peas), in 2015 Kenya had 37 public and 26 private breeders serving over 6 million farming households. Of these 63 breeders, 34 specialize in maize, 17 in beans, 7 in sorghum, and 5 in cowpeas. The number of breeders has decreased by 5 since 2013, as four of the breeders moved to other jobs and one of them has passed away. The reduction in the number of breeders exacerbates an already existing shortage of breeding expertise in Kenya. Discussions with seed sector stakeholders further highlighted a scarcity of breeders outside of the four focus crops, and revealed that, as a result, a number of scientists are engaged in the breeding of more than one crop, often in areas outside their core specialization. The limited breeding capacity in turn reduces the number of crop varieties available, thus limiting choice in the seed market. Kenya’s wider agro-ecological diversity also translates to more work for breeders. On average, seed companies rate the adequacy of breeders at 59% (fair).

Varieties released in the last 3 years In the three years between 2013 and 2015, KEPHIS released 35 maize varieties, 15 sorghum varieties, 10 bean varieties, but no cowpea varieties. The three-year moving average for maize and beans increased in 2015, while that of cowpeas remained the same. Sorghum on the other hand registered a decline in the moving average for the same period (Figure 1). It is particularly important to note that 2015 was a good year for beans, with 6 new varieties released. This is mainly due to implementation of breeding agreements or partnerships between the public and private companies. Figure 1 shows that the latest threeyear average for maize is 20 varieties, which is also significantly higher than the other three crops. Most of the new maize variety releases in the past three years were done by parastatals and local private companies in partnerships with international research organizations operating in the country.

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Seed Times January - April 2018

private companies. Figure 1 shows that the latest three‐ year average for maize is 20 varieties, which is also signif‐ icantly higher than the other three crops. Most of the new maize variety releases in the past three years were done by parastatals and local private companies in partnerships with international research organizations operating in the Figure 1: Number of varieties released in Kenya (three year moving average) country. Maize

Sorghum

Beans

Cowpeas

30 20

that is not weighted b age of varieties is rel that maize, beans, and that have been on the Sorghum is the except ety is ten years old. Th each crop are as follow years, beans – 34 ye worth considering if t measures to retire ol cause of continuous d

Percentage of varieti

10 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

To be classified as cl meet at least one of tw erance to extreme we flooding, or frost. Mo

Figure 1: Number of varieties released in Kenya (three year moving Over the years, maize breeding has been given more attention than other crops. For example, there were no releases average) of cowpea varieties between 2001 and 2013, compared to more than 200 maize variety releases over the same period. This is in part because maize is the most widely cultivated crop in the country, given its importance for Copyright © The African Seed Access Index food security. Also, the productivity of hybrid maize declines significantly whenever seed is recycled, unlike beans and cowpeas that are openly pollinated. This “ability to recycle” lowers demand for bean and cowpea seed, thereby discouraging investment in pulses.

Availability of foundation seed On average, seed companies scored their satisfaction with the availability of foundation seed as 60%. (All scores reported in this brief are based on industry self-reporting of satisfaction). While this is rated as “good,” it is important to take a closer look at the numbers, which reveal that private seed companies are less satisfied (42%) than the parastatals (72%). This is because parastatals have their own breeders and produce their own foundation seed. By contrast, most of the private seed companies source foundation seed for beans and cowpeas from KALRO. The ratings for the parastatals have not improved since the 2013 study. Average age of varieties sold Some of the varieties on the Kenyan market are old and may not meet the challenges facing farmers today. The average age of varieties on the market in 2015 was as follows: maize – 9.4 years, sorghum – 24.1 years, beans – 14.7 years, and cowpeas – 16.9 years. Note that since data on seed sales by variety is considered strategic by seed companies, the reported mean is a simple average that is not weighted by sales volume. While the average age of varieties is relatively old, it is important to note that maize, beans, and cowpeas all have several varieties that have been on the market for less than three years. Sorghum is the exception, where even the youngest variety is ten years old. The oldest varieties on the market for each crop are as follows: maize – 49 years, sorghum – 46 years, beans – 34 years, and cowpeas – 29 years. It is worth considering if the government should put in place measures to retire old varieties. Old varieties exist because of continuous demand from farmers.

Percentage of varieties with climate-smart features To be classified as climate-smart, a crop variety must meet at least one of two criteria – early maturity and tolerance to extreme weather conditions such as drought, flooding, or frost. Most of the varieties – half of all the maize varieties, and all of the sorghum and cowpea varieties – released between 2013 and 2015 are characterized as either early-maturing or drought-tolerant. In contrast, only 5 out of 14 bean varieties are considered climatesmart. Early maturity is the most common climatesmart feature in maize and bean varieties, while sorghum and cowpea varieties were bred for drought-tolerance. This is due to the agro-ecological areas where these crops are grown.

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INDUSTRY COMPETITIVENESS Number of active seed companies The number of registered seed companies in Kenya has grown from less than 10 at the turn of the millennium to 112 in 2016. These companies can be categorized as parastatals, local private companies, African multinationals, and non-African multinationals. However, most registered seed companies are in fact seed merchants that are not involved in seed production or any breeding activities. They import seed, often for their own commercial agricultural activities, and only distribute seed within their own commercial production enterprises. Out of the 112 seed companies, only 22 are active in their own seed production and/or marketing of at least one of the four study crops. Maize seed is currently produced by 19 companies, sorghum by nine companies, beans by 12 companies, and cowpea by nine companies. The total number of companies dealing with any of the four crops has increased slightly from 21 in 2013 to 22 in 2015, due to recent recognition of Maseno University as an active seed producer. Out of the 22 active seed companies, 15 are privatelyowned, four are public entities, and three are universities. All seed companies surveyed felt that there was still room on the market for more seed companies. Time it takes to import/export seed The time it takes to import seed is rated by seed companies as fair at 50%. On average in 2015, it took 38 days to import seeds (down from 43 days in 2013) and 14 days to export seeds. The difference in length of time for import versus export of seed reflects the more stringent import requirements in place in Kenya compared to its trading partners, including Uganda and Tanzania. Seed companies in Uganda report taking only 6 days on average to import and 9 days to export seeds in 2015. The short import/ export process is attributed to significant improvements in customs procedures implemented by the Uganda Revenue Authority. In 2015, seed imports into Kenya were mostly from Zambia and South Africa, while exports went to other East African countries such as Burundi, Rwanda, Somalia, South Sudan, Tanzania, and Uganda. Two seed companies rely almost entirely on imports of their seed stocks from parent companies.

Market share of top seed companies The combined market shares for the top four companies producing maize, sorghum, beans and cowpeas are represented in Figure 2. For maize, beans and cowpeas, the combined market share of the top four companies, while still high, was slightly lower in 2015 than in 2013. The most notable decrease (from 95% in 2013 to 82% in 2015) in market concentration was observed in the bean seed market. This decrease is attributed to the increase in the number of seed companies in the market, which went up from 8 to 12 between 2013 and 2015. The Herfindahl-Hirschman Index (a way to quantify industry competitiveness) is also given in Appendix 1. (The index ranges from near zero for perfect competition to 10,000 for pure monopoly). Both measurements show an industry that is dominated by a few large players. Market concentration increased significantly for the sorghum seed market between 2013 and 2015. The main reason for this increase is that one company doubled its production, and consequently its market share, over the past two years. Reflecting these developments, the HHI for sorghum also rose from 1,974 in 2013 to 4,576 in 2015.

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Seed Times January - April 2018

breeding activities. ommercial agricul‐ d within their own ut of the 112 seed own seed produc‐ of the four study d by 19 companies, 12 companies, and number of compa‐ ops has increased ue to recent recog‐ ive seed producer. , 15 are privately‐ ee are universities. here was still room es.

industry that is dominated by a few large players. Market concentration increased significantly for the sorghum seed market between 2013 and 2015. The main reason for this increase is that one company doubled its produc‐ tion, and consequently its market share, over the past two years. Reflecting these developments, the HHI for sorghum also rose from 1,974 in 2013 to 4,576 in 2015. Figure 2: Market share (%) of top four companies

ed by seed compa‐ The HHI index shows Figure 2: Market share (%) of top four companies that there is fair competition in only the bean seed market. The competition in the other , it took 38 days to three crops is categorized as poor or extremely poor. In 2015, maize contributed 93% of the seed market size, out 013) and 14 days to of the total of the fourThe HHI index shows that there is fair competition in only crops. This is a slight decrease from 97% in 2013. Market share of government parastatals of time for import In Kenya a large share of the seed market is still controlled by the government parastatals, which dominate the the bean seed market. The competition in the other three e stringent import market in maize (68% market share), beans (64% market share), and cowpeas (86% market share). While there are notrading regulatory barrierscrops is categorized as poor or extremely poor. In 2015, to entry into the Kenyan seed sector, private-sector participants have expressed that the ared to its maize contributed 93% of the seed market size, out of the ania. Seed dominance compa‐ of state-supported players is discouraging to potential investors. With the exception of cowpeas, the combined market share of public companies fell slightly from 2013 to 2015. total of the four crops. This is a slight decrease from 97% ays on average to SEED POLICY AND in 2013. REGULATIONS 015. The short im‐ gnificant improve‐ Length of variety Market share of government parastatals release process lemented by the It takes an average ofIn Kenya a large share of the seed market is still controlled 33 months for a variety to go through the release process with slight variation by crop as seed imports into follows: 32 months for maize, 36 months for sorghum and cowpeas, and 30 months for beans. This is a slight by the government parastatals, which dominate the mar‐ South Africa, while improvement from theket average time of 36 months reported in 2013.beans Seed companies rated their satisfaction with in maize (68% market share), (64% market untries such as Bu‐ this duration as “poor,” with an average satisfaction rating of 47%. The companies noted that KEPHIS continues to share), and cowpeas (86% market share). While there are an, Tanzania, rely onand rain-fed trials and suggested that it should switch to irrigated trials. Also, the commercial interest of the applicant, or speed with which the applicant is able to provide the required information and fees, may affect the Page 3 duration of the variety release process. Notably, the length of the process is significantly longer than in Uganda, where on average it takes only 19 ½ months to release a new variety.

Quality of seed policy Kenya’s Seed Policy was last updated in 2010. The quality of the seed policy framework is measured as an opinion rating by seed companies. This rating remained almost unchanged from 65% in 2013 to 62% in 2015. According to several seed companies, there have been a number of positive movements including reforms at KEPHIS that have made the organization more efficient. While seed producers in Kenya had varying opinions on seed policy, the majority were of the view that seed trade is overregulated and costly to seed companies.

Quality of seed regulation and enforcement Satisfaction with the quality of seed laws and regulations remained relatively unchanged from 61% in 2013 to 63% in 2015. However, satisfaction with the quality of the enforcement system went up slightly from 53% to 61%. Most of the companies were hopeful that the regulatory environment would improve since the main regulator (KEPHIS)

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Seed Sectors Around the Globe

has started accommodating their views. However, the actual impact of this positive gesture by KEPHIS was not captured in the 2015 data collected since it had just been initiated (in December 2015). That said, the industry highlighted certain areas where more attention is needed, namely:

• improving the inspection/certification process by reducing the number of authorization steps;

• lowering charges for seed trials and packaging labels, mark of quality, and licensing fees;

• supporting seed dissemination to smallholder farmers;

• increasing KEPHIS’ capacity to handle many concurrent seed trials to reduce the length of the variety release process, or alternatively accrediting additional private certification bodies;

• fast-tracking the process of acquiring an import permit;

• institutionalizing the self-regulation of seed certification.

By November 2016, the Seeds and Plant Varieties (Plant Breeders Rights) Regulations (2016) and the Seeds and Plant Varieties (Seeds) regulations (2016) had been submitted to the Government printers for publication. In addition, Kenya is also in the process of harmonizing the seed regulations to conform to the COMESA Seed Trade Regulations. This will have an impact on KEPHIS guidelines for seed certification and the Seed and Plant Varieties Act (CAP 326), among other policy instruments.

Adequacy of seed inspectors Seed companies’ satisfaction with the availability of inspection services is rated as “good” at an average of 62%. This is similar to the rating in 2013 (64%). KEPHIS employs hundreds of staff, of whom 64 are involved in seed inspections. This is a slight increase from 60 inspectors in 2013. To ensure effectiveness and efficiency in service delivery, KEPHIS has distributed inspectors to key sites, including all formal border points and international airports. Also, KEPHIS may, in consultation with the most active seed companies, set up a desk/office within their premises. Seed companies expressed concern about the limited inspection at retail level may result in stocking expired seed, fake seeds, or illegal repackaging.

Efforts to stamp out fake seed Government efforts to stamp out fake seed are rated by the industry as “fair” with a score of 50%. This is an improvement from the rating of 39% in 2013. KEPHIS indicated receiving an average of 6 reports of fake seed per year, which is a reduction from 36 cases in 2013. However, this may be partly due to under-reporting. Seed companies noted that there have been some efforts to stamp out fake seeds as KEPHIS has tightened enforcement systems at the agro-dealer level. However, the greatest hindrance is still the lenience of law enforcers (police and courts). It is important to note that in 2015, KEPHIS in collaboration with the Seed Trade Association of Kenya (STAK) introduced several security measures on seed packets to address the challenge of fake seed, including an embossed KEPHIS logo on gold foil and lot numbers. What remains now is raising awareness of these features among farmers.

INSTITUTIONAL SUPPORT Availability of extension services According to the Centre for Agriculture and Biosciences International (CABI), the ratio of public sector extension workers to farmers in Kenya is about 1:910. This is a slight improvement from the 2013 ratio of 1:1000, but it is still lower than the desired level of 1:400. However, this number is likely to change as extension service provision

Seed Sectors Around the Globe

Seed Times January - April 2018

inputs. While the number the counties will manage the extension systems at their quate, seed companies’ lev level). In addition, seed companies employ their own ex‐ ers varied. In general, lar tension agents who double as salespersons. The total higher than smaller compa number of extension staff from these companies dropped to prefer dealing with bigge from 197 in 2013 to 135 in 2015. However, this excludes whose products are more p over 500 extension officers employed by the government parastatal, ADC. Seed companies rated their satisfaction will soon be fully devolved to the county level (meaning that the counties will manage the extension systems at Availability of seed in sm their level). In addition, seed employ their own extension agents who double The total with companies availability of extension services at an average of as salespersons. number of extension staff from these companies dropped from 197 in 2013 to 135 in 2015. However, this excludes Kenyan seed companies p 51%. Most seed companies believe that lack of farmer over 500 extension officers employed by the government parastatal, ADC. Seed companies rated their satisfaction awareness is a Most major impediment with availability of extension servicesof atimproved an averageseed of 51%. seed companies to believe thatmaking seeds available in lack of farmer awareness of improved seed is a major impediment to wide-scale adoption in Kenya needs of smallholder farm wide‐scale adoption in Kenya sold by the seed companie Quality of national seed trade association Quality of national seed trade association ing 2 kg or less. While this Figure 3: Members’ satisfaction with STAK 2013, it still represents an Overall score individual crops are as fo Resource mobilization sorghum, 93% for beans packages are an important Democracy zation of certified seed Providing value to members Kenya’s smallholder farme Managerial Ability total agricultural output an Effectiveness of advocacy cultural produce. They wo Activity on important seed sector issues hectares. Given the seed 0% 20% 40% 60% 80% smallholder farmers often 2013 2015 der to minimize surpluses packages The Seed Trade Association of Kenya (STAK) is the recognized national voice for the seed industry. The also STAK allow small Figure 3: Members' satisfaction with STAK membership in 2016 was 32. Figure 3 breaks down the level of members’ satisfaction of STAK, inwith different varieties of seven different The Seed Trade Association of Kenya (STAK) is the recog‐ attributes. The services offered by STAK are, on average, rated as “good” by its members with a score of 62%. This is of small packages notwith similar to seed companies’ overall rating of 65% in 2013. In both years, STAK is rated well in aspects of democracy nized national voice for the seed industry. The STAK mem‐ pressed concern about the and fairness in elections,bership in 2016 was 32. Figure 3 breaks down the level of management capacity and activity level on important seed sector issues. However, seed companies note that STAK could improve in areas of advocacy towards government and in resource mobilization. On bels, which render small p members’ of Traders’ STAK, Association in seven different attrib‐scored 51%. average, STAK is rated higher than thesatisfaction Uganda Seed (USTA), which ble. This fact has contribut utes. The services offered by STAK are, on average, rated availability of seed in smal SERVICE TO SMALLHOLDER FARMERS Copyright © The African Seed Access Index Concentration of rural agro-dealer network

The recently launched Seed Sector Platform KENYA (www.seedsectorplatformkenya.com) lists over 5,240 agrodealers in Kenya. This is 15% higher than the number in KEPHIS records. The number is significantly higher than in Uganda, which has about 1,167 agro-dealers. It is common in Kenya to find small towns and markets with more than one agro-dealer, commonly referred to as agro-vet, given their involvement in both agricultural and veterinary inputs. While the number of agro-dealers may be adequate, seed companies’ level of satisfaction with agro-dealers varied. In general, larger companies rated agro-vets higher than smaller companies, because agro-dealers tend to prefer dealing with bigger and better-known companies whose products are more popular among farmers.

Availability of seed in small packages Kenyan seed companies perform well when it comes to making seeds available in small packages that meet the needs of smallholder farmers. In 2015, 79% of the seed sold by the seed companies was packaged in bags weighing 2 kg or less. While this number is down from 89% in 2013, it still represents an excellent rating. The figures for individual crops are as follows: 73% for maize, 96% for sorghum, 93% for beans and 100% for cowpeas. Small packages are an important incentive to promote the utilization of certified seed among smallholder farmers. Kenya’s smallholder

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Seed Sectors Around the Globe

farmers account for over 75% of the total agricultural output and about 70% of marketed agricultural produce. They work land sizes of about 0.2 to 3 hectares. Given the seed rate for different crops, such smallholder farmers often demand small packages in order to minimize surpluses that may go to waste. Small packages also allow smallholder farmers to experiment with different varieties of the same crop. The advantages of small packages notwithstanding, seed companies expressed concern about the high cost of packaging and labels, which render small packages less economically viable. This fact has contributed to the slight reduction in the availability of seed in small packages.

Seed-to-grain price ratio Assuming stable grain prices at planting time, seed-tograin price ratios capture two aspects of seed systems. First is the extent to which a crop variety is improved, as reflected in the costs of seed production; second is the cost of transacting in the seed market (Nagarajan & Smale, 2005). In other words, a high ratio (implying a high seed price) either denotes a high-yielding seed or high transaction costs. The findings reveal that the high-yielding maize hybrid seeds have the highest ratios (4 for hybrids from public companies and 5 for hybrids from multinational companies). The ratios for lower-yielding crops such as cowpeas and beans are less than 2. Given these ratios, the price of seed in Kenya does not appear to be a major constraint to adoption of certified seed.

OPPORTUNITIES AND CHALLENGES The private sector is responding to the increasing demand for certified seeds in Kenya. This is evidenced by an increase in the number of seed companies, higher market share of private seed companies in some of the key crops, and more varieties being released between 2013 and 2015. In addition, seed policy harmonization efforts within the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA) present the industry with wider market opportunities. Further, there are significant developments at KEPHIS to address regulatory challenges and encourage uptake of certified seeds by farmers. These include the use of various information technology tools such as sms messaging and various online services aimed at disseminating key information to end users. However, challenges persist in Kenya’s formal seed sector. Since maize lethal necrosis (MLN) has become a major threat to maize production in Kenya, seed companies have had to test their seeds for the disease. This has resulted in additional costs. Reliance on rain-fed production of both seed and grain leaves the country susceptible to drought. Fake or counterfeit seed continues to be a major threat to seed companies. This problem is exacerbated by farmers’ lack of knowledge to differentiate fake from genuine seeds. Corruption and rent-seeking behavior have adversely affected some local companies. Several county governments are charging extra taxes and promoting seed merchants that are based in their administrative areas to the detriment of national ones. It has been nearly two decades since Kenya’s seed sector has been liberalized. For a country with an excellent private sector reputation in many sectors (air travel, tourism, information and communication technologies, banking, flower production, horticulture for export, retailing, etc.), privatization of the crop seed sector seems to be lagging behind. The seed sector in Kenya has registered some improvements between 2013 and 2016 in the number of and satisfaction with variety releases, a slight reduction in the market share of the government parastatal, and a reduction in the number of cases of fake seed. Several indicators have not registered any significant progress over the past three years. Performance has declined on several key indicators. For example, it takes more time to import and export seed than before and there are fewer active breeders working on the four key crops. Given Kenya’s strong performance in other private sector-led industries, there is room for optimism in the Kenyan seed sector. A level playing field, smart and efficient regulations, greater enforcement against fake seed can improve the enabling environment for the seed industry and can ensure timely availability of high quality seeds of improved, appropriate varieties at affordable prices to smallholder farmers in Kenya.

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REFERENCES Alliance for a Green Revolution in Africa (AGRA), (2010). Kenya Mid-Term Review of the Program for Africaâ&#x20AC;&#x2122;s Seed Systems. AGRA-PASS MTR. Food and Agriculture Organization of the United Nations (FAO) (1998). Seed and Plant Genetic Resource Services: Developing Seed Security Strategies and Programmes for Food Security in Developing Countries. Resource Management and Policy Analysis Institute (REMPAI) (2014). Market Inquiry/Benchmarking of the Seed Industry in Kenya. Republic of Kenya (2016). Economic Survey, 2016. Kenya National Bureau of Statistics. Seed Sector Platform Kenya (2016) (http://www.seedsectorplatformkenya. com/) Olwande John and Smale Melinda (2012). Is Older Better? Maize Hybrid Change on Household Farms in Kenya. Paper presented at the International Association of Agricultural Economists (IAAE) Triennial Conference, Foz do IguaĂ§u, Brazil.

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APPENDIX 1. KENYA’S FORMAL SEED SECTOR, COMPARED TO UGANDA COUNTRY PROFILE

KENYA

Focus crop 1 Focus crop 2 Focus crop 3 Focus crop 4 Number of farmers (millions) Population (Million) Size (KM2) Arable land (Million Ha) (% of size) Ease of Doing Business rank (Rank out of 189) Stage of seed sector development A. RESEARCH AND DEVELOPMENT

Number of active breeders

Varieties released in last 3 years

Availability of foundation seed

Average age of varieties sold (years)

Percent of varieties sold with climate– smart features (%)

B. INDUSTRY COMPETITIVENESS

Number of active crop seed companies for focus crop only

Time it takes to import/export seed from neighboring countries (days)

Market share concentration Herfindahl‐Hirschman Index

Market share of government parastatal

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2015 Maize Sorghum Beans Cowpeas 6.4 44

2013 Maize Sorghum Beans Millet 8.8 34.6

2015 Maize Sorghum Beans Millet 9.1 35.6

569,250

197,100

4.89 136 Growth

4.89 108 Growth

5.3 150 Growth

5.3 122 Growth

25 10 22 11 ‐ 68 ‐‐ 47 5 10 0 ‐ 61 68 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Maize Sorghum Beans Cowpeas Millet Total Import seed Import score (out of 100) Export seed Export score (out of 100) Maize Sorghum Beans Cowpeas Millet % mkt share

34 7 17 5 ‐ 63 54 61 3 14 2 ‐ 80 60 9.4 24.1 14.7 16.9 ‐ 51 100 36 100 ‐

16 8 8 6 ‐ 21 43 ‐ ‐ ‐ 6,450 1,989 3,223 3,240 ‐ 73

2013 Maize Sorghum Beans Cowpeas 6.3 43

Maize Sorghum Beans Cowpeas Millet Total Satisfaction Score (out of 100) Maize Sorghum Beans Cowpeas Millet Total Score Maize Sorghum Beans Cowpeas Millet Maize Sorghum Beans Cowpeas Millet

UGANDA

19 9 12 9 ‐ 22 38 50 14 69 5,438 4,576 2,472 3,505 ‐ 66

6 5 2 3 2 3 ‐ ‐ 1 1 11 12 36 28 18 19 5 0 11 3 ‐ ‐ 0 0 19 22 43 52 ‐ 6.4 ‐ 14.5 ‐ 9.9 ‐ ‐ ‐ 22.7 ‐ 55 ‐ 0 ‐ 56 ‐ ‐ ‐ 0 13 12 8 8 11 13 ‐ ‐ 5 2 14 13 48 6 55 71 18 9 55 65 1,509 1,317 1,050 2,483 1,125 1,269 ‐ ‐ 1,350 6,401 0 0

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C. SEED POLICY AND REGULATIONS 10

KENYA

Length of variety release process

11 Quality of seed policy framework Quality of seed law / regulations 12 Quality of enforcement systems 13 Adequacy of seed inspectors 14 Efforts to stamp out fake seed D. INSTITUTIONAL SUPPORT Availability of extension services for 15 smallholder farmers 16 Quality of national seed trade association E. SERVICE TO SMALLHOLDER FARMERS 17 Concentration of rural agro‐dealers

Availability of seed in small packages (% of seed sold in packages of 2kg or less)

65 61 53 60 64 36 37

33 47 62 63 61 64 62 6 50

33 56 47 44 41 5 44 ‐ 41

UGANDA 2015 19.5 60 52 55 42 6 40 ‐ 37

1:1000

1:910

1:3140

1:4,019

62 5,240 79 73 96 93 100 ‐ 3.7 4.5 3 1.8 1.5 ‐

61 2,064 29.1 24 4 27 ‐ 55 ‐ ‐ ‐ ‐ ‐ ‐

51 1,167 27 32 20 3 ‐ 75 3 6 2.3 1.6 ‐ 1.7

2013

Seed‐to‐grain price ratio at planting time

Time (months) Score (out of 100) Score (out of 100) Score (out of 100) Score (out of 100) Total inspectors Score (out of 100) Reported cases in 1 year Score (out of 100)

2015 36

Ratio to farmers Score (out of 100) Number of agro‐dealers % volume sold Maize Sorghum Beans Cowpeas Millet Maize (OPV) Maize (Hybrid) Sorghum Beans Cowpeas Millet

‐ 89 89 89 100 100 ‐ ‐ ‐ ‐ ‐ ‐ ‐

2013

Key

Score (out of 100)

Color Code

Interpretation

H‐4 Index

80 to 100

60 to 79.99

40 to 59.99

20 to 39.99

Excellent

Good

Fair

Poor

Extremely poor

<1000

1000‐1999

2000‐2999

3000 ‐ 3999

>4000

0 to 19.99

The article has been published with permission of authors

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4. South Africa Brief 2017 Edward Mabaya, Marnus Gouse, Mainza Mugoya, Emma Quilligan, Wynand van der Walt INTRODUCTION A competitive seed sector is key to ensuring timely availability of high quality seeds of improved, appropriate varieties at affordable prices for farmers in South Africa. This country brief summarizes the key findings of The African Seed Access Index (TASAI) study conducted in 2016/17 to appraise the structure and economic performance of South Africa’s seed sector. With a focus on four grain crops important to food security — maize, soya bean, sunflower, and wheat — the study evaluates the enabling environment for a vibrant formal seed sector. These four crops constitute the main food and feed commodities in South Africa. Maize and wheat are the two most important grain crops, while soya bean meal is the preferred source of protein for animal feed. Sunflower is increasing in popularity, partly due to its good performance under dry conditions (Department of Agriculture, Forestry and Fisheries, 2016). Together, these four crops cover about 34% of South Africa’s arable land, and constitute 53% of daily calorie consumption (FAOSTAT, 2017). In addition, these four crops accounted for 98% of the market share of agronomic seeds in South Africa in 2014/15 (Department of Agriculture, Forestry, and Fisheries, 2015). TASAI seeks to encourage public policymakers and development agencies to create and maintain enabling environments that will accelerate the development of competitive formal seed systems serving smallholder farmers. The TASAI study covers 20 indicators divided into the following categories: Research and Development, Industry Competitiveness, Seed Policy and Regulations, Institutional Support, and Service to Smallholder Farmers. Appendix 1 summarizes all 20 indicators and compares South Africa to 12 other countries in which similar studies were conducted.

Overview The seed sector in South Africa is more developed than in other African countries. Whereas most other countries on the continent are characterized by low adoption rates of improved seed varieties and heavy reliance on the informal seed sector, the system in South Africa is highly formalized, mature, and fully privatized. Maize seed testing laboratories had been established by the 1940s, and the first hybrid seed programme was launched in 1959. By 1980, almost all of South Africa’s commercial maize area was planted to hybrids (Byerlee and Eicher, 1997). However, it is important to note that, unlike other African countries, the system is designed to serve mostly largescale commercial farmers, who produce most of South Africa’s agricultural output. South Africa’s formal seed sector comprises numerous institutions, including government (e.g. DAFF, ARC), private sector, and universities (Table 1). The formal sector focuses on breeding and evaluating improved varieties, and producing and selling seed varieties certified by the South African National Seed Organization (SANSOR), a nonprofit organization accredited by the government as the seed certification authority. Established in 1989, SANSOR brings together seed companies and other key players in the industry. Table 1: Role of key players in South Africa’s formal seed sector ROLE

KEY PLAYERS

Research and breeding

Seed companies, multinational corporations ARC, universities

Variety release and regulation

DAFF, SANSOR

Seed production and processing

Seed companies, multinational corporations ARC, SANSOR

Education, training, and extension

Seed companies, DAFF, ARC, SANSOR, NGOs

Distribution and sales

Seed companies, agro-dealers, private merchants, cooperatives

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Key acronyms: ARC – Agricultural Research Council; DAFF - Department of Agriculture, Forestry & Fisheries; CIMMYT – International Maize and Wheat Improvement Center; GM – Genetically modified; HHI – Herfindahl - Hirschman Index; ICARDA – International Centre for Agricultural Research in the Dry Areas; IITA – International Institute of Tropical Agriculture; OPV – Open Pollinated Variety; SANSOR - South African National Seed Organization; WEMA – Water Efficient Maize for Africa

RESEARCH AND DEVELOPMENT Number of active breeders In 2015, South Africa had 44 active breeders working on the four priority crops of maize, soya bean, sunflower, and wheat (Department of Agriculture, Forestry, and Fisheries, 2015). The breakdown by crop is as follows: 27 for maize, 7 for soya bean, 10 for sunflower, and 9 for wheat1. Of the 44 breeders, six (two for maize, one for soya bean, and three for wheat) work in the public sector at South Africa’s two Agricultural Research Council (ARC) institutions. Most private sector breeders are employed by the top three multinational corporations present in the country (Monsanto, Pannar, and Pioneer). It is important to note that these figures do not include breeders at public universities; all public universities with a faculty of agriculture employ at least one plant breeder; some, such as the University of the Free State, employ up to eight. On average, seed companies’ satisfaction with the number of active breeders is excellent (88%).2 The highest level of satisfaction is for sunflower (96%), though excellent ratings were also given to maize (84%), soya bean (88%), and wheat (85%). However, satisfaction ratings for the number of active breeders in public research institutions were much lower - fair at 50%. Partly due to restructuring and revised financing models, the level of government support given to public institutions as well as the number of breeders at those institutions have declined in recent years.

Varieties released in the last three years Between 2014 and 2016, 362 varieties were released for the four crops: 236 were maize, 71 were soya bean, 38 were sunflower, and 17 were wheat varieties. Figure 1 shows the three-year moving average of variety releases since 2002. Maize varieties include yellow and white open pollinated varieties (OPVs), hybrids, genetically modified (GM) hybrids, and high-quality protein hybrids. The dominance of maize varietal releases is illustrated in Figure 1, though the number of soya bean releases is steadily increasing. The high number of variety releases is indicative of active breeding programs, a competitive market, and the increasing availability of new technologies. The rapid uptake of genetically modified (GM) crops has spurred demand for new varieties in South Africa. The area planted to GM maize has increased from 3000 ha in 2000 to 2.38 million ha in 2015, and the number of GM maize varieties being released has increased accordingly. Approximately 90% of South Africa’s total maize area is currently planted to GM varieties. Seed companies tend to release a new maize variety first as a conventional variety, and then again after one year as a GM variety with GM traits added. It is not unusual that one new conventional maize variety would have up to three GM varieties, one with insect resistance (Bt), one with herbicide tolerance (HT) and one variety that is stacked (Bt+HT), all with the same base germplasm. For soya bean, most GM (herbicide tolerant) varieties are imported from South America.

Some breeders work on more than one crop.

All scores reported in this brief are based on industry self-reporting of satisfaction ranging from 0% (completely dissatisfied) to 100% (completely satisfied).

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101

to release a new maize variety first as a conventional va‐ oya bean, 10 for sunflower, and 9 for riety, and then again after one year as a GM variety with breeders, six (two for maize, one for GM traits added. It is not unusual that one new conven‐ ee for wheat) work in the public sector tional maize variety would have up to three GM varieties, wo Agricultural Research Council (ARC) one with insect resistance (Bt), one with herbicide toler‐ private sector breeders are employed ance (HT) and one variety that is stacked (Bt+HT), all with ultinational corporations present in the the same base germplasm. For soya bean, most GM o, Pannar, and Pioneer). It is important (herbicide tolerant) varieties are imported from South figures do not include breeders at pub‐ Figure 1: Number of varieties released in South Africa (three-year moving average) America. public universities with a faculty of ag‐ t least one plant breeder; some, such 100 f the Free State, employ up to eight. 90 80 70 60 50 40 30 20 10

Maize

d in the last three years

Availability of

Soya bean

Sunflower

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

0 2002

companies’ satisfaction with the num‐ ders is excellent (88%). 2 The highest n is for sunflower (96%), though excel‐ also given to maize (84%), soya bean 85%). However, satisfaction ratings for ve breeders in public research institu‐ wer ‐ fair at 50%. Partly due to restruc‐ financing models, the level of govern‐ n to public institutions as well as the s at those institutions have declined in

Wheat

Figure 1: Number of varieties released in South Africa (three‐year foundationmoving average) seed

2016, 362 varieties were released for Availability of foundation seed 6 were maize, 71 were soya bean, 38 On average, seed companies rate their satisfaction with the availability of foundation seed as good (67%). The highest satisfaction maize, which is rated excellent (80%), while sunflower and wheat both received a nd 17 were wheat varieties. Figure rate 1 is forOn average, seed companies rate their satisfaction with “good” rating at 66% and 73%,the respectively. bean wasseed ratedas “fair” though there was a large disparity ear moving average of variety releases availability Soya of foundation good (49%), (67%). The between the ratings of multinational (80%) and local (20%) companies. varieties include yellow and white open highest satisfaction rate is for maize, which is rated excel‐ s (OPVs), hybrids, genetically modified lent (80%), while and wheat received of a local seed companies. These Multinationals enter the South African seed sunflower market through the both acquisition high‐quality protein hybrids. The dom‐ “good” rating at 66% and 73%, respectively. Soya bean companies produce their own foundation seed and report having access to a wide range of breeding materials from rietal releases is illustrated in Figure 1, parent companies. In contrast,was rated “fair” (49%), though there was a large disparity most parastatals and small local companies source their early- generation seed er of soya bean releases is steadily in‐ between multinational research (80%) and local through collaborative agreements withthe theratings ARC orof international institutions such as the International number of variety releases is indicative Maize and Wheat Improvement(20%) companies. Center (CIMMYT) and the International Center for Agricultural Research in the Dry programs, a competitive market, and Areas (ICARDA). Multinationals enter the South African seed market lability of new technologies. Overall, much of the maize andthrough wheat foundation seedof islocal sourced parent These companies and research institutions the acquisition seed from companies. in the US and Europe; soya bean foundation seed is largely sourced from South America (particularly Argentina, companies produce their own foundation seed and report

Brazil, and Uruguay), while sunflower seed comes from Australia.

2 All scores reported in this brief are based on industry self‐reporting of sat‐ Average age of varieties sold

n more than one crop.

isfaction ranging from 0% (completely dissatisfied) to 100% (completely sat‐

Information on the ages of varieties isfied). being sold on the South African market is not readily available. However, by combining the 2016 variety list with the Plant Breeders’ Rights database, it is possible to calculate ages for 49% of maize varieties, 69% of soya bean varieties, 16% of sunflower varieties, and 64% of wheat varieties. Within this can Seed Access Index Page 2 sub-section, the average ages of the varieties currently on the market are as follows: four years (maize), four years (soya bean), five years (sunflower), and seven years (wheat). There was little difference in minimum and maximum ages between crops: All crops had varieties less than one-year old on the market, and the oldest varieties for each crop ranged from 16 years old (maize) to 18 (sunflower) and 19 years old (soya bean and wheat). Few varieties are older than nine years old, and soya bean has seen a marked increase in the number of varieties on the market during the last four years. Varieties with climate-smart features To be classified as climate-smart, a crop variety must meet at least one of two criteria – early maturity and/or tolerance to extreme weather conditions such as drought, flooding, or frost. Breeding drought-tolerant maize has long been a priority in South Africa, and almost all hybrid maize varieties in the country confer some resistance to drought. In recent years there has been increased focus on

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early-maturing and ultra-early maturing maize varieties. In the past decade, several public and private initiatives have focused on breeding drought-tolerant varieties. The Drought Tolerant Maize for Africa project, established by CIMMYT and the International Institute of Tropical Agriculture (IITA) in 2006, aimed to distribute 60,000 MT of improved maize seed to farmers across Sub-Saharan Africa in 2016. Meanwhile Monsanto has been field-testing GM drought tolerant maize in South Africa since 2008, with samples of conventional drought tolerant maize released to South African smallholder farmers in 2015. Furthermore, South African maize breeding companies that participated in the public-private partnership Water Efficient Maize for Africa (WEMA), gained access to some of the released hybrids and GM technology. From 2014 to 2016, 362 maize varieties were added to the national variety list, of which all (100%) were climatesmart with drought tolerance characteristics and / or early maturing characteristics. Some of the maize, soya bean, and wheat varieties also had early/late maturing characteristics.

INDUSTRY COMPETITIVENESS Number of active seed companies In 2016, 46 seed companies in South Africa produced or marketed of at least one of the four focus crops. Of these, 18 were involved in breeding, seed multiplication and/or selling of their own varieties: 16 produced maize, 12 produced soya bean, 9 produced sunflower, and 4 produced wheat. A further 27 companies licensed their seed to other companies, and at least seven companies were affiliates of one another. Based on information from SANSOR and the South African Grain Information Service, the estimated aggregate sales of the four crops in 2016 was 57,841 metric tons. The 2015/16 crop season occurred during a drought period, which heavily impacted seed sales. In several production areas, maize and soya bean seed was sold but was not planted. Of the estimated sales for 2016, maize seed accounted for about 57% (33,223 tons) and wheat seed 25% (14,515 tons). It is important to note that the severe drought resulted in some carry-over seed in the market, and some companies were unable to share seed sales figures. Market share of top seed companies

Market share is calculated using seed sales reported by seed companies. By crop, the market shares for the top four companies are: 94%(sunflower), and 99% (wheat). However, about 65‐70% of (maize), 60% (soya bean), 90% (sunflower), and 99% (wheat). However, about 65-70%South of the Korea, a soya bean area and 50-60% of the wheat area in South Africa are planted to farmer-saved seed.

the soya bean area and 50‐60% of the wheat area in South Africa are planted to farmer‐saved seed. Figure 2: Total market share (%) of top four companies 100%

80% 60% 40%

10% 40%

94%

90%

99%

60%

20% 0%

Maize

Soya bean Sunflower

Top 4 companies

Wheat

Other companies

Figure 2: Total market share (%) of top four companies

The Herfindahl‐Hirschman Index was also used to quan‐ Around tify industry competitiveness. The index, Seed a Sectors sum of the Globe squared market shares, ranges from near zero for perfect

Seed Times January - April 2018

port from othe Zimbabwe, and tina, Mexico, It

The National that the seed im but there are o of entry/exit. S time to import southern Africa tively. However tions outside A rate their satis process as goo tively. 103

SEED POLICY A

The Herfindahl-Hirschman Index was also used to quantify industry competitiveness. The index, a sum of squared market shares, ranges from near zero for perfect competition, to 10,000 for a pure monopoly. HHI was calculated for all the seed companies, for each crop. The market concentration is good for soya bean (1,226) and poor for maize (3,079), and sunflower (3,159). The HHI for wheat is extremely poor (7,168) due to the dominance of one company. In addition, the main wheat seed producers are farmers. These figures indicate that the South African seed sector is generally concentrated and specialized. However, since the top companies are global giants, intense competition among them results in a strong push for investment and delivery of high quality products at competitive prices.

Market share of government parastatal The first South African private seed company (Sensako) was established in 1959. Since then, the government’srole in seed breeding and marketing has decreased significantly. Its role, for the four focus crops, is now limited to the two ARC institutes – the Grain Crops Institute (maize, soya bean, and sunflower) and the Small Grains Institute (wheat). ARC produced 11 tons of maize seed in 2016, which was sold to a government farmer support program. ARC still has a reasonable amount of wheat seed in the market, but their varieties are licensed to a number of private seed companies and ARC is not involved in sales.

Length of import/export process for seed South Africa is a net exporter of seed, primarily to othe African countries such as Zambia, Mozambique, and Uganda, but also as far as Argentina, Italy, India, Uruguay, South Korea, and Pakistan. Several seed companies import from other African countries, especially Zambia and Zimbabwe, and countries outside Africa including Argentina, Mexico, Italy, Germany, and the USA. The National Plant Protection Organisation mandates that the seed imports/ export process not exceed 30 days, but there are often delays due to bureaucracy at the point of entry/exit. Seed companies reported that the average time to import and export seed within the eastern and southern Africa region is 18 days and 12 days, respectively. However, importing from and exporting to destinations outside Africa may take up to 90 days. Companies rate their satisfaction with both the import and export process as good, with scores of 66% and 61%, respectively.

SEED POLICY AND REGULATIONS Length of variety release process The time it takes to release a variety refers to the time from application for release of a variety to the time the variety is released by the relevant authority. In South Africa seed companies rate their satisfaction with length of the variety registration and release process as excellent for maize (86%), soya bean (85%), and sunflower (80%), and good for wheat (70%). Wheat scored slightly lower due to one company’s concerns about the management of the Plant Breeders’ Rights and field trial requirements (the fulfilment of distinctiveness, uniformity, and stability). The average length of the release process for the four crops combined was 15 months. Though most companies (8 of 14) reported a duration of 12 months, several companies reported 24 and 36 months, and one company even reported 60 months. By crop, the average length of the release time varied from a minimum of 17 months for soya bean to 28 months for wheat. Wheat generally takes longer to be released because varieties must conform to miller and baker requirements. The wheat industry argues that this focus on wheat grain qualities, which has more to do with food processing requirements, is negatively impacting breeding for increased yields. Average release times for maize and sunflower varieties were 19 and 22 months, respectively.

Status of seed policy framework The draft National Policy on Plant Improvement (2012) is the overall policy guiding the seed industry in South Africa. Though still in draft form, the policy is intended to inform all legislation related to the propagation of material, including genetically superior propagating material, the use of improved varieties, the promotion of

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breeding, fair trade, and increased participation by a range of stakeholders. The Plant Improvement Draft Bill (8B, 2015) is intended to update the prevailing law, the Plant Improvement Act (1997), which the industry considers to be outdated. The Bill includes several improvements. Notable among them is that the bill authorizes other organizations to implement national certification schemes, currently the preserve of SANSOR. The bill further recommends increased enforcement and penalties for non-compliance to industry regulations, harmonization with international industry standards, and the insertion of mandatory value for cultivation and use (VCU) tests as part of the variety testing and release process. At the moment, these tests are voluntary. In South Africa, plant breeders’ rights are guided by the Plant Breeders’ Rights Policy of 2015, which has been updated from the 2011 policy document. The policy informs on-going amendments to the Plant Breeders’ Rights Bill (B11B) of 2016. The Bill provides a step-by-step application procedure, designates a registrar for varietal protection, and outlines the extent of this protection. When enacted, the Bill will replace the Plant Breeders’ Rights Act 15 of 1976, which was amended as Act 15 of 1996. Overall, seed companies are satisfied with the quality and regulations of the seed policy, rating it “good” (79%).

Quality of seed regulations and enforcement Seed companies similarly rate their satisfaction with the enforcement of seed laws and regulations “good” (69%). One larger seed company commented that enforcement of regulations is not very strict and enables easy market entry by new companies, which may not benefit the industry in the long-term.

Adequacy of seed inspectors South Africa’s national seed testing laboratory was established in the 1940s, with seed companies and cooperatives establishing further facilities since the 1980s. SANSOR was accredited by the government as a seed certification authority and has appointed an in-house seed testing committee to meet the requirements of the International Seed Testing Association. In South Africa, seed inspection functions through SANSOR, which trains staff from the private sector to become qualified inspectors and monitors their performance. There are an estimated 180 inspectors (field inspectors and seed samplers) within the SANSOR system. In addition, the government employs a further 400 inspectors who cover the entire agricultural sector. In contrast with other African countries surveyed by TASAI, there is little interaction between seed companies and government inspectors in South Africa. Because of the high level of self-imposed standards in the private sectors, government inspectors would rather spend their time on other, more pressing, problems in the rest of the agricultural sector. Seed companies rate their satisfaction with the adequacy of seed inspectors as good (79%).

Efforts to stamp out fake seed DAFF has the authority and duty to enforce compliance with plant and seed control legislation. SANSOR inspectors are also authorised to investigate transgressions of the plant improvement act and the plant breeders’ rights act, though it has delegated its responsibilities – including investigating contraventions of seed ownership and fake seed issues – to Agri-Inspect, a private policing company. More recently, an Anti-Infringement Bureau has been appointed as a watchdog to ensure protection of intellectual property rights on plant varieties, which is an important issue in South Africa’s highly competitive private seed sector. Fake seed is generally not a major problem in South Africa due to the short supply chain between seed producers and commercial farmers. Seed companies indicated that a total of six cases involving the sale of fake seed were reported to them in 2016, though this may be an underestimate. On average, seed companies rate their satisfaction with the government’s efforts to stamp out fake seed as fair (50%), as currently there are no procedures in place by government to mitigate against this problem. According to the seed companies, the main sources of fake seed are

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105

unscrupulous traders and merchants. Furthermore, seed companies expressed their frustration with farmers who replant farm-saved seed; they feel that this “privilege” is misused and could lead to trading of fake seed, limiting the investment in research and development for OPVs.

Use of smart subsidies The South African government supports emerging farmers (mostly historically disadvantaged black farmers getting into commercial farming) through three programs: the Comprehensive Agricultural Support Programme, Ilima/ Letsema, and LandCare. In recent years, the government has spent close to 2 billion rands (about US$ 167 million) on these programmes, which aim to ensure the sustainability and commercial viability of emerging farmers and beneficiaries of agrarian reform, support sustainable agriculture, promote rural development, address land degradation, and encourage the sustainable use of natural resources. These programmes do not specifically focus on seed or seed subsidies, thus figures are not available on a disaggregated level.

INSTITUTIONAL SUPPORT Availability of extension services Approximately 2,210 agricultural extension workers are employed by DAFF (Koch and Terblanche 2013). These extension officers largely serve subsistence, smallholder, and emerging farmers, at a ratio of approximately one extension worker to every 1,059 farming households. This ratio is higher than other African countries such as Ethiopia (1:592) or Kenya (1:910), and provincial extension officers have limited resources to support farmers. Largerscale commercial farmers are largely served by private company agronomists. Few seed companies employ extension officers, and the ones that do concentrate on organizing farmer days rather than providing on-farm support. Seed companies reported their satisfaction with extension services as fair (46%). This is an increase on the 35% satisfaction reported in the TASAI 2015 study, though there is wide variability in the responses by company.

Quality of national seed trade association SANSOR was established in 1989 and is registered as a non-profit company according to the Companies Act (71, 2008). SANSOR represents the seed industry both locally and internationally and aims to protect and further the interests of the seed trade to the benefits of its members (SANSOR, 2017). Its membership comprises 71 full members, 2 third-party distributors, 23 associate members, 6 international members, 7 affiliated members, and 8 honorary members. Seed companies rated the overall quality of SANSOR as excellent (81%). Figure 3 illustrates the seed companies’ level of satisfaction with SANSOR’s performance in six service areas. SANSOR was rated as excellent in all service areas, with its highest rating for democracy in elections and decision making (87%) and its lowest rating in activity on important seed sector issues (81%). The other four areas (effectiveness of advocacy, managerial ability, providing value to members, and ability to mobilize resources) all scored between 82% and 86%. SANSOR represents the South African seed sector at many international fora, including the African Seed Trade Association, the International Seed Federation, the Organisation for Economic Cooperation and Development, the Association of Official Seed Certifying Agencies, and the International Seed Testing Association. Through its website, SANSOR provides important, current information on South Africa’s formal seed sector, as well as news and events that may be relevant to its members.

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bility of emerging farm‐ eform, support sustain‐ development, address the sustainable use of mmes do not specifically hus figures are not avail‐

SANSOR represents the South African seed sector at many international fora, including the African Seed Trade Asso‐ ciation, the International Seed Federation, the Organisa‐ tion for Economic Cooperation and Development, the As‐ sociation of Official Seed Certifying Agencies, and the In‐ ternational Seed Testing Association. Through its website, SANSOR provides important, current information on South Africa’s formal seed sector, as well as news and events that may be relevant to its members. Figure 3: Members’ satisfaction with SANSOR

81% extension workers are Aability to mobilise resources 82% lanche 2013). These ex‐ Democracy in elections and… 87% bsistence, smallholder, Value to members 84% f approximately one ex‐ Managerial ability 86% rming households. This Effectiveness in advocacy countries such as Ethio‐ 82% provincial extension of‐ Activity on important seed sector… 81% upport farmers. Larger‐ 0% 20% 40% 60% 80% 100% rgely served by private Figure 3: Members' satisfaction with SANSOR companies employ ex‐ SERVICE TO SMALLHOLDER FARMERS t do concentrate on or‐ SERVICE TO SMALLHOLDER FARMERS providing on‐farm sup‐ Concentration of rural agro-dealer network eir satisfaction with ex‐ Concentration of rural agro‐dealer network is is an increase on the According to the seed companies surveyed, the concentration of agro-dealers in South Africa is not a substantial According to the seed companies surveyed, the concen‐ he TASAI 2015 study, limiting factor to seed access. Due to the input distribution network developed by the commercial farming sector, tration of agro‐dealers in South Africa is not a substantial the responses by com‐ seed and complimentarylimiting factor to seed access. Due to the input distribu‐ inputs are generally available in key farming regions. Commercial farmers often order large quantities of specific seed varieties with specific treatments, either directly from the seed company or through tion network developed by the commercial farming sec‐ their local agency. tor, seed and complimentary inputs are generally availa‐ ssociation ble in key farming regions. Commercial farmers often or‐ and is registered as a By contrast, smallholder farmers in former homeland areas tend to be under-serviced, though there has been der large quantities of specific seed varieties with specific the Companies Act (71, progress in infrastructure and financialeither servicesdirectly in these regions overseed the past 20 years.or Smallholder farmers often treatments, from the company ed industry both locally buy their seed from local cooperatives, spaza shops (small general dealers), or hardware stores in nearby towns. through their local agency. protect and Transport further costs the and middle men often increase the cost of inputs for smallholder farmers and the choice of seed benefits of its members By contrast, smallholder farmers in former homeland ar‐ varieties is usually limited. While many seed companies interviewed by TASAI recognize the challenges of seed comprises 71 full mem‐ eas tend though there has been access by smallholder farmers, mostto dobe notunder‐serviced, see this market segment as profitable. 3 associate members, 6 progress in infrastructure and financial services in these

ndex

Overall level of satisfaction

Availability of seed in small packages

Maize is the staple food for South Africa grown by both commercial and smallholder farmers. Of the four focus crops, Page 6 maize is the only one that the seed industry tries to supply in small packaging. Most of the seed (90%) sold by the large seed companies is sold in packages of at least 20 kg. The few seed companies that sell seed in small packages of 2kg, 5kg, or 10kg sell almost exclusively open-pollinated varieties and a few non-GM hybrids. From key informant estimates, only 3% of maize seed is sold in packages of 2 kg or less. Soya bean, sunflower, and wheat are not typically produced by smallholder farmers in South Africa, thus seed companies have no incentives to supply these seeds in small packages. All soya bean and wheat seed was reportedly sold in bags of 25 kg or more. For sunflower, only 1% of seed sold by one of the companies was in packages weighing less than 2 kg; the rest is in bags of 150 thousand or 180 thousand kernels. Seed companies rate their overall satisfaction with the availability of seed in small packages as fair (50%). However, the low availability of small packages of soya bean, sunflower, and wheat meant that very few companies reported satisfaction scores for this indicator. For maize, companies rated their satisfaction with the availability of seed in small packages as good (60%), though multinational companies rated their satisfaction much higher (90%) than local private companies (50%).

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Figure 4. Percentage of seed sold in different package sizes

er farmers often paza shops (small n nearby towns. ncrease the cost e choice of seed seed companies enges of seed ac‐ t see this market

100% 80% 60% 40%

97%

100%

99%

100%

3% maize

soya bean

1% sunflower

wheat

20% 0%

2kg or less

> 2kg

Figure 4. Percentage of seed sold in different package sizes Seed-to-grain price ratio

a grown by both Seed‐to‐grain price ratio Assuming stable prices at planting time, seed-to-grain price ratios can reflect the attractiveness of a variety or f the four focus Assuming stable prices at planting time, affordability of improved seed relative to farmer recycled grain. Seed prices seed‐to‐grain for white maize vary significantly by industry tries to type, from OPV at about 14.00 ZAR/kg, conventional hybrids at 95.54 ZAR/kg, and GM stacked (Bt+HT) at 138.32 price ratios can reflect the attractiveness of a variety or ed (90%) sold by ZAR/kg. Seed-to-grain price ratios were very high for maize GM stacked and maize hybrid, at 52.2:1 and 34.4:1, affordability of improved seed relative to farmer recycled ges of at least 20 respectively. The seed-to-grain price ratio for sunflower was also high at 22.9:1. Ratios for maize grain. Seed prices for white maize vary significantly by OPV, soya bean, and ed in small pack‐ wheat were much lower at 5.0:1, 4.9:1, and 3.0:1, respectively. In comparison, seed-to-grain price ratios for maize type, from OPV at about 14.00 ZAR/kg, conventional hy‐ hybrids in other African countries are significantly lower – Ethiopia and Zimbabwe are 7.1:1 and 9.3:1, respectively, usively open‐pol‐ brids at 95.54 ZAR/kg, and GM stacked (Bt+HT) at 138.32 for hybrid maize. While the high seed to grain price ratios imply reduced affordability by smallholder farmers, they ids. From key in‐ Seed‐to‐grain price ratios very high for also reflect the levelZAR/kg. of seed quality, productivity, and overall higher were valued addition through seed treatments. d is sold in pack‐ maize GM stacked and maize hybrid, at 52.2:1 and 34.4:1, CONCLUSION respectively. The seed‐to‐grain price ratio for sunflower was also high at 22.9:1. Ratios for maize OPV, soya bean, ot typically Thepro‐ South African seed industry has had a long and successful evolution from its embryonic inception in the and wheat were much lower at 5.0:1, 4.9:1, and 3.0:1, re‐ 1890s to a strong and well-established private sector-led industry. Part of the key to its success has been the Africa, thus seed spectively. In comparison, price ratios for close interaction between private sector managers and seed‐to‐grain government representatives. Its competitive environment y these seeds in maize hybrids in other African countries are significantly ensures maintenance of seed quality, private seed testing laboratories expertise, and efficient management of seed was report‐ seed certification schemes. The national seed traders’ association (SANSOR) is highly effective in representing the lower – Ethiopia and Zimbabwe are 7.1:1 and 9.3:1, re‐ nflower, only 1% interests of its members. spectively, for hybrid maize. While the high seed to grain was in packages price commercialized ratios imply reduced affordability by has smallholder of 150 thousand However, due to a highly agricultural sector, the seed sector evolved to primarily serve the farmers, they also reflect the level of seed quality, needs of large-scale commercial farmers. The industry performs poorly on measures that are specific to seed access s rate their over‐ productivity, and overall higher valued addition through for smallholder farmers such as availability of seed in small packages, the presence of a cost effective rural-agroed in small pack‐ dealer network, andseed treatments. the availability of extension services. Thus, there is still great scope for improving access to ailability of small

seed for smallholder farmers in rural areas. heat meant that CONCLUSION n scores for this REFERENCES heir satisfaction The South African seed industry has had a long and suc‐ Byerlee, C. K. (1997) ‘Africa’s emerging maize revolution’. Edited by C. K. eds. Byerlee, D. and Eicher. ackages as good D. and Eicher, cessful evolution from its embryonic inception in the 1890s Lynne Rienner Publishers, p. 301. Department of Agriculture, Forestry, and Fisheries, R. of S. A. (2015) GRAIN rated their satis‐ to a strong and well‐established private sector‐led indus‐ SEEDS MARKET ANALYSIS REPORT 2015. ivate companies try. Part of the key to its success has been the close inter‐ Available at:

action between private sector managers and government representatives. Its competitive environment ensures http://nda.agric.za/doaDev/sideMenu/Marketing/Annual Publications/Commodity Profiles/field crops/South African Grain Seeds maintenance of seed quality, private seed testing laborato‐ Market Analysis Report 2015.pdf (Accessed: 13 November 2017). ries expertise, and efficient management of seed certifica‐ tion schemes. The national seed traders’ association (SANSOR) is highly effective in representing the interests of its members. 108

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However, due to a highly commercialized agricultural sec‐ tor, the seed sector has evolved to primarily serve the

Department of Agriculture, Forestry and Fisheries, R. of S. A. (2016) Trends in the Agricultural Sector. Pretoria. Available at: http://www.daff.gov.za/Daffweb3/Portals/0/Statistics and Economic Analysis/Statistical Information/.Trends in the Agricultural Sector 2016.pdf (Accessed: 13 November2017). FAOSTAT (2017) FAOSTAT. Available at: http://www.fao.org/faostat/en/#home (Accessed: 1 July 2017).

APPENDIX 1. For a comparison of TASAI Indicators across 13 countries, please visit: http://tasai.org/wp-content/uploads/ TASAI-Appendix-CURRENT.pdf

The article has been published with permission of authors

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ITALY The role of the seed sector in Italy for a modern and competitive agriculture Marco Nardi Assosementi (Italian Seed Association), Bologna, Italy

Abstract The high number of seed companies that are active on the Italian market provides our agriculture with the most appropriate varieties. Italy is particularly suited for growing seed crops: thanks to its favourable environmental conditions and also to the high level of professional skills of companies and farmers, Italy plays a leading role in the multiplication and export of vegetables, rice and sugarbeet seeds. In many cases, seeds grown in Italy are exported for conditioning and then re-imported for distribution to the end users. In 2014 the annual turnover for seed sales in Italy was approximately EUR 680-700 million, at wholesale level and excluding the incidence of chemical seed treatment. The difference between the value of seed imports and exports has been negative in the last few years of an average amount of approximately EUR 100 million. At the moment there are about 300 seed companies trading on the Italian market (220 for agricultural plant species and 80 for vegetable species). Seed multiplication is also a great income opportunity for farmers: every year approximately 15,000 Italian farmers devote around 220,000 ha to grow seed crops. The use of high quality seed today represents not only a simple means to start a new cultivation, with a healthy, well identified and traced product, but an efficient way to transfer plant breeding results to farmers, in order to cope with the need of innovation and sustainability. Through the purchase and planting of certified seeds farmers support and strengthen variety research and innovation.

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Correspondence: Marco Nardi (former General Secretary), ASSOSEMENTI, via dellâ&#x20AC;&#x2122;Industria 33, 40138 Bologna, Italy. E-mail: nestplace35@gmail.com Key words: Seeds; seed industry; innovation; plant breeding; economic resources. Acknowledgements: the author would like to thank Enrico Noli of the Seed Research and Testing Laboratory (LaRAS) of the University of Bologna for his suggestions and for revising the text. Conference presentation: SIA XLIV Congress, Bologna, 2015. Received for publication: 2 February 2016. Revision received: 24 March 2016. Accepted for publication: 1 April 2016. ÂŠCopyright M. Nardi, 2016 Licensee PAGEPress, Italy Italian Journal of Agronomy 2016; 11:761 doi:10.4081/ija.2016.761 This article is distributed under the terms of the Creative Commons Attribution Noncommercial License (bync 4.0) which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.

Introduction Seeds, as well as any other asexual reproduction material, are the first critical link in the agri-food production chain and represent the starting point for growing crops intended to produce food, feed and other bio-based products and energy. The properties of seeds are essential to obtain a high yield and quality. The evolution of both the private and public seed sectors, alongside with the progress of genetic research and the technological advancement in seed production and processing, greatly contributed to the development of farming and to the value of the agri-food production chain. The seed sector includes plant breeding, seed growing, seed conditioning and seed marketing and distribution, which are rarely carried out by a single firm (the so called integrated company). Seed companies in Italy are mainly engaged in seed growing, conditioning and marketing wilst only a few private firms carry out some traditional plant breeding, in any case, economic resources available for this activity are limited. Private/public partnership in variety research has been important in the past and should have a crucial role in the future. The aim of this work is to describe the main traits of the Italian seed sector and the issues to be faced maintaining this role, for the wealth of the whole Italian agri-food production.

Results and discussion The Italian seed industry As far as seed activity is concerned, today Italy can be pictured as follows: a land where it is possible to multiply high quality seeds of many plant species, thanks to the favourable climatic conditions and the skills of all those involved in the production chain; a country where seed research and plant breeding are limited, both at private and public levels, apart from some restricted sectors; a market where all the worldâ&#x20AC;&#x2122;s leading seed companies are present to promote and sell their new varieties to feed a very intensive and innovation oriented farming.

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IJA-2016_2.qxp_Hrev_master 22/06/16 08:14 Pagina 138

Some data toShort set theCommunication framework

In Italy there are about 300 active seed companies (which are regularly authorized by the local Regional Phytosanitary Service according to the fundamental seed law n. 1196/71, to process and condition seeds; Italian Regulation, 1971); of them, about 220 deal with seeds of agricultural plant species (cereals, herbages, sugarbeet and oilseeds), 700 tomillion, at wholesale level excluding the incidence of seed 80 deal Table which are subjected official certification before beingand placed on the market, whereas the remaining with 1. Seed gr vegetables seeds, that are subjected to official post2014 controlestimation). and for which preliminary treatments (ASSOSEMENTI Seeds of certification vegetables,is optional and Species very rare. cereals and maize represent the most important sectors (Figure 3)

2015). The number of (ASSOSEMENTI, companies dealing with seeds of agricultural plant species is decreasing, being around Seeds 360 inof agricultu subjected 1998/1999. FiguresConcerning 1 and show the regional distribution and the licenses for seeds thecompany seed trade with other countries, the balance issubjected con- to official to offici - Durum wheat certifications, respectively. Cereal (wheat, barley, rice, maize) is the sector mainly represented.

stantly negative in terms of value: over EUR 100 millions in 2014, - Common wheat The value of the resulting Italian seedfrom marketan canimport be set atofaround 680-360 700 million, wholesale level and the aboutEUR EUR millionatand an export of excluding - Barley incidence of seed treatments 2014 estimation). Seeds of vegetables, cereals ISTAT and maize represent - Rice about EUR (ASSOSEMENTI 255 million (ASSOSEMENTI elaboration of official the most important sectors (Figure 3) (ASSOSEMENTI, 2015). - Maize data). Figures 4 and 5 represent the main sectors and the value of the - Sunflower Concerning the seed seed trade other countries, the balance is constantly negative in terms of value: over EUR tradewith with other countries. For vegetable seeds, imports greatly - Sugarbeet 100 millions in 2014, resulting from an import of about EUR 360 million and an export of about EUR 255 million exceeds exports, and this also stands for maize, legumes and potato- Lucerne (ASSOSEMENTI elaboration of official ISTAT data). Figures 4 and 5 represent the main sectors and the value of the - Clovers Forage seed importsseeds, are about same as exports. andalso stands seed trade withseeds. other countries. For vegetable importsthe greatly exceeds exports, Rice and this for - Ryegrasses seeds are seed the imports only two value ofand exports maize, legumes sugarbeet and potatoseeds. Forage aresectors about thewhere same asthe exports. Rice sugarbeet seeds are - Legumes the only two sectors whereimports the value(ASSOSEMENTI, of exports exceeds imports exceeds 2015).(ASSOSEMENTI, 2015). Vegetable seeds* Seed growing (multiplication) in Italyand concerns many Seed growing (multiplication) in Italy concerns many companies a wide land area.companies Table 1 outlines the main Herb seeds* data. In 2014, seed was carried on aroundthe 190,000 for agricultural plantmulspecies, subjected andmultiplication a wide land area. Tableout 1 outlines mainhadata. In 2014, seed to official certification, and on 26,000 ha for vegetables and 190,000 herbs, forha both market and exports (mainly Seeds of agricultural pla tiplication was carried out on around forinternal agricultural plant on the Puglia (12%), Sicilia (10% species, subjected to official certification, and on 26,000 ha for vegetaEmilia-Romagna (40%), Figure Seed companies in Italy: regionalmarket distribution companies that officially bles 1.and herbs, for both internal and of exports (mainly on the *ASSOSEMENTI survey.

112

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certify seeds of agricultural plant species (source: CRA-SCS data).

Figure 2. Main Figure 1. Seed companies in Italy: regional distribution of comcially certify see panies that officially certify seeds of agricultural plant species data). (source: data). Seed Times January - April 2018 Seed Sectors Around CRA-SCS the Globe

a 138

Table 1. Seed growing surfaces in Italy in 2014. Hectares

Species

Seeds of agricultural plant species subjected to official certification, of which:

In total 189,000

ng the incidence of seed Table 1. Seed growing surfaces 71,000in Italy in 2014. - Durum wheat n). Seeds of vegetables, Hectares 24,500 - Common wheat Species ortant sectors (Figure 3) 8000 - Barley Seeds of agricultural plant species 10,500 subjected to official certification, of which: In total 189,000 - Rice is conntries, the balance Durum wheat 71,000 7500 - Maize UR 100 millions in 2014, - Common wheat 24,500 1700 Sunflower million and -an export of - Barley 8000 - Rice 10,500 3500 boration of official ISTAT - Sugarbeet Maize 7500 ectors and the- value of the 20,000 Lucerne - Sunflower 1700 ble seeds, imports greatly 15,000 - Clovers - Sugarbeet 3500 aize, legumes- Ryegrasses and potato- Lucerne 20,000 4000 - Clovers 15,000 ame as exports. Rice and 5000 - Legumes Ryegrasses 4000 here the value of exports In total 14,000 5000 Vegetable seeds* - Legumes In total 12,500 In total 14,000 seeds* Vegetable seeds* oncerns manyHerb companies Herb seeds* In total 12,500 in data. In 2014, mulSeedsseed of agricultural plant species in 2014 were grown mainly in the regions of Emilia-Romagna (22%), Puglia (12%), Sicilia Seeds of agricultural species in 2014 werespecies grown mainly in the regionsof of Emilia-Romagna Emilia-Romagna (22%), 0 ha for agricultural plant(9%) and (10%), Marche Veneto (8%). plant Seeds of vegetable in the regions (40%), Marche (27%), Puglia (12%), Sicilia (10%), Marche (9%) and Veneto (8%). Seeds of vegetable species in the regions of and Molise (5%). Source: CRA-SCS data and *ASSOSEMENTI survey. d on 26,000 Puglia ha for(14%) vegetaEmilia-Romagna (40%), Marche (27%), Puglia (14%) and Molise (5%). Source: CRA-SCS data and d exports (mainly on the *ASSOSEMENTI survey.

al u

Figure 2. Main sectors of activity in Italy of companies that officially certify seeds of agricultural plant species (source: CRA-SCS data).

nal distribution of comgricultural plant species

Figure 2. Main sectors of activity in Italy of companies that officially certify seeds of agricultural plant species (source: CRA-SCS data).

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5000 In total 14,000 In total 12,500

er ci al

- Legumes Vegetable seeds* Herb seeds*

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Seeds of agricultural plant species in 2014 were grown mainly in the regions of Emilia-Romagna (22%), Puglia (12%), Sicilia (10%), Marche (9%) and Veneto (8%). Seeds of vegetable species in the regions of Emilia-Romagna (40%), Marche (27%), Puglia (14%) and Molise (5%). Source: CRA-SCS data and *ASSOSEMENTI survey.

EMENTI, 2015). lication) in Italy concerns many companies le 1 outlines the main data. In 2014, seed mulut on around 190,000 ha for agricultural plant cial certification, and on 26,000 ha for vegetainternal market and exports (mainly on the

Figure 1. Seed companies in Italy: regional distribution of companies that officially certify seeds of agricultural plant species (source: CRA-SCS data).

Figure 2. Main sectors of activity in Italy of companies that of cially certify seeds of agricultural plant species (source: CRA-SC data).

N on

Figure 3. The seed market in Italy in 2014, values in EUR million at wholesale level and excluding chemical seed treatments (source: ASSOSEMENTI estimation).

Figure 2. Main sectors of activity in Italy of companies that officially certify seeds of agricultural plant species (source: CRA-SCS data). Figure 3. The seed market in Italy in 2014, values in EUR million at wholesale level and excluding chemical seed treatments (source: ASSOSEMENTI estimation).

Figure 4. Imports of seeds by Italy in 2014. Values in EUR m lion (source: ASSOSEMENTI analysis of ISTAT data).

Figure 4. Imports of seeds by Italy in 2014. Values in EUR million (source: [page 138] [Italian Journal of Agronomy 2016; 11:761] ASSOSEMENTI analysis of ISTAT data).

nies in Italy: regional distribution of comcertify seeds of agricultural plant species a).

ket in Italy in 2014, values in EUR million Figure contract 4. Importsorofinseeds Italy inof2014. Valueswith in EUR mil- companies). In addition to d excluding basis chemical seed party treatments of third multiplication the by context relations mother lionin(source: ASSOSEMENTI analysis of ISTAT data). TI estimation).seed companies, seed growing 2014 involved about 14,500 farmers for agricultural plant species and at least

another 2500 farmers for vegetable seeds. [Italian Journal of Agronomy 2016; 11:761] In regards to the regional distribution of seed crops, overall, seed growing of agricultural species is carried out more or less in all areas of the country, whereas that of vegetable species is particularly concentrated in the EmiliaRomagna and Marche regions, which are located in the northern and middle area along the Adriatic coast.

The growing of seed crops is a very specialized and profitable activity, capable to integrate the farmersâ&#x20AC;&#x2122; income. However, it has to be carried out under a cultivation contract, in close cooperation with the seed company owner of the variety or with the provider of pedigree seed. Production of seeds depends also on agricultural policies and on the grants of direct or indirect subsidies. Figure 6 shows the collapse of production of official certified seeds of durum wheat as a result of the decoupling of common agricultural policy direct payments and the consequent abolition of the compulsory use of certified seeds by farmers to get subsidies.

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company owner of the variety or with the provider of pedigree seed. Production of seeds depends also on agricultural policies and on the grants of direct or indirect subsidies. Figure 6 shows the collapse of production of official certified seeds of durum wheat as a result of the decoupling of common agricultural policy direct payments and the consequent abolition of the compulsory use of certified seeds by farmers to get subsidies.

have entered the seed business, important resources have ed to sustain new breeding programs and regulatory ste companies were created through mergers and acquisition The evolution of the seed sector has to be examined als tion with the existence and evolution of seed policies, a well as international levels [see the European Seed Associ https://www.euroseeds.eu/vision-document; the Interna Federation (ISF): https://www.youtube.com/watch?v=o The evolution of seed activity (2009); the HFFA Research GmbH (2016): http://w org/images/stories/stories/documents_pdf/HFFA_Research The seed industry has experienced extensive structural changes and 16_final_protected.pdf]. transitions. The first companies in Europe date back to 1750-1800s and It is worth to recall the implementation of the Europea were specialized in the selection of horticultural crops. However, for lation started in 1966 and based on two fundamental pilla decades seed production was hardly developed as a commercial activity: of new commercial varieties, after trials to dependedstructural essentially on seeds saved from previous crops Thepulsory The seed industry has experiencedfarmers extensive changes andtheir transitions. first listing companies in Europe distinctness, uniformity and stability and value for cultiva and only rarely or in case of need they purchased seed from commercial date back to 1750-1800s and weresources. specialized in the selection of horticultural crops. only However, for decades seed for agricultural plant species, and the official certifica At the beginning of the 1900s, with the implementation of production was hardly developed asmodern a commercial farmers on seeds saved fromAstheir before placing on the market. regards to the intellec plant breeding,activity: seed activity marked adepended first importantessentially transirights on plants, in 1961 the International Convent with the trade of seedsseed of varieties in previous crops and only rarely or intioncase of multiplication need theyand purchased fromdeveloped commercial sources. At the beginning Protection of New Varieties of Plants (UPOV Convention) the public domain, such as Universities or other Research Institutions. of the 1900s, with the implementation of modern plantwere breeding, activity first important transition Itaestablished an intellectual property protection system, In Italy, a good example figures likeseed Francesco Todaromarked and with the multiplication and trade ofNazareno seeds Strampelli of varieties developed incereals’ the public such or UPOV otherConvention admits ferent as fromUniversities patents. In fact, the with their work in the sector, domain, that has been atexample the basis of were the creation respectively of the company Società and exemption (access to previously with protected varieties for b Research Institutions. In Italy, a good figures like Francesco Todaro Nazareno Strampelli

er ci a

The evolution of seed activity

co m

their work in the cereals’ sector, that has been at the basis of the creation respectively of the company Società Produttori Sementi (1911) and of the Istituto Nazionale di Genetica per la Cerealicoltura (1919).

Figure 5. Exports of seeds by Italy in 2014. Values in EUR million (source: ASSOSEMENTI analysis of ISTAT data).

Figure 6. Winter cereal surfaces officially approved seed multiplication in the period 2003-2015. The de direct payments for grain production under the comm tural policy, introduced with the Fishler reform, EC No. 1782/2003 (European Commission, 2003), and quent abolition of the compulsory use of certified direct payments, has caused a severe drop in the seed in particular for durum wheat.

Gradually, private seed companies integrated and developed their own plant breeding capabilities. A formidable transition took place around the 1950s with the development and spread of hybrid varieties, starting with maize, [Italian Journal of Agronomy 2016; 11:761] for their inherent capacity to protect themselves against non-authorized multiplication and to assure returns to private investments. The last and still ongoing transition is related to the implementation of modern biotechnologies in plant breeding, since the 1980s with the first genetically modified varieties up to present with the so called new breeding techniques. In this phase, chemical, oil and food industries have entered the seed business, important resources have been allocated to sustain new breeding programs and regulatory steps, and new companies were created through mergers and acquisitions. The evolution of the seed sector has to be examined also in connection with the existence and evolution of seed policies, at national as well as international levels [see the European Seed Association (ESA): https://www.euroseeds. eu/vision-document; the International Seed Federation (ISF): https://www.youtube.com/watch?v=oy2XQloPbps (2009); the HFFA Research GmbH (2016): http://www.plantetp. org/images/stories/stories/documents_pdf/ HFFA_Research_Paper_03_ 16_final_protected.pdf]. It is worth to recall the implementation of the European seed legislation started in 1966 and based on two fundamental pillars: the compulsory listing of new commercial varieties, after trials to verify their distinctness, uniformity and stability and value for cultivation and use, only for agricultural plant species, and the official

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he variety or with the provider of pedigree seed. ds depends also on agricultural policies and on the ndirect subsidies. Figure 6 shows the collapse of l certified seeds of durum wheat as a result of the on agricultural policy direct payments and the conthe compulsory use of certified seeds by farmers to

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al us e

on ly

have entered the seed business, important resources have been allocated to sustain new breeding programs and regulatory steps, and new companies were created through mergers and acquisitions. The evolution of the seed sector has to be examined also in connection with the existence and evolution of seed policies, at national as well as international levels [see the European Seed Association (ESA): https://www.euroseeds.eu/vision-document; the International Seed Federation (ISF): https://www.youtube.com/watch?v=oy2XQloPbps f seed activity (2009); the HFFA Research GmbH (2016): http://www.plantetp. org/images/stories/stories/documents_pdf/HFFA_Research_Paper_03_ has experienced extensive structural changes and certification seeds before on the market. As regards to the intellectual property rights on plants, in 16_final_protected.pdf]. t companies in Europe date backof to 1750-1800s and placing It for is worth to recall the implementation of theofEuropean seed legisthe International Convention the Protection of New Varieties Plants (UPOV Convention) was signed. It the selection of1961 horticultural crops. However, for lation started in 1966 and based onistwo fundamental the comtion was hardly established developed as a an commercial activity: intellectual property protection system, which different frompillars: patents. In fact, the UPOV Convention pulsory listing of new commercial varieties, after trials verify their ssentially on seeds saved the frombreeder’s their previous crops admits exemption (access to previously protected varieties for tobreeding pur-poses), as well as the distinctness, uniformity and stability and value for cultivation and use, case of need they purchased seed from commercial farmer’s exemption (right of the farmer to save for propagating purposes, on his/her own holding, the product of only for agricultural plant species, and the official certification of seeds inning of the 1900s, with the implementation of the harvest of important a protected variety). before placing on the market. As regards to the intellectual property ing, seed activity marked a first transirights on plants, in 1961 the International Convention for the ication and trade of seeds of varieties developed in Figure 6. Research Winter Institutions. cereal surfaces officially approved seed multiplication in the period 2003-2015. Protection of New Varietiesin of Italy Plants for (UPOV Convention) was signed. uch as Universities or other The decoupling of direct payments for grain production under the common agricultural policy, introduced It established an intellectual property protection system, which is difexample were figures like Francesco Todaro and ferent from patents. In fact, the UPOV Convention admits the breeder’s i with their work with in thethe cereals’ sector, that has Fishler reform, EC Regulation No. 1782/2003 (European Commission, 2003), and the consequent f the creation respectively thethe company Società use exemption (access to previously protected varieties for breeding purabolitionofof compulsory of certified seed to get direct payments, has caused a severe drop in the seed

co m

production, in particular for durum wheat.

Figure 6. Winter cereal surfaces officially approved in Italy for

Plant breeding and seed industry contributions to 2003-2015. agriculture seed multiplication in the period The decoupling of direct payments for grain production under the common agricul-

tural policy, introduced withwork the Fishler reform,and EC seed Regulation There are plenty of studies and analyses showing how the of breeders companies contribute to agriNo. 1782/2003 (European Commission, 2003), and the consefood productions, through new quent varieties with higher yields, better quality, improved useefficiency of resources abolition of the compulsory use of certified seed to get of seeds by Italyand in 2014. Values in EUR million directSome payments, has caused are a severe in the seedi)production, reduced environmental impact. achievements citeddrop hereunder: higher crop yields: a review of the MENTI analysis of ISTAT data). in particular for programs durum wheat. results obtained through the Italian breeding over the last century showed for durum wheat an annual genetic gain in terms of yield ranging from 17 to 24.6 kg per ha per year (De Vita et al., 2007). In the UK, a similar analysis of historical data from National List trials indicated that, since 1982, for cereal and oil seed rape at least 88% of yield increase is attributable to2016; genetic improvement (DTZ, 2010; Mackay et al., 2010; ADAS UK Ltd., 2015) [Italian Journal of Agronomy 11:761] [page 139] [for further reading see also the British Society of Plant Breeders (BSPB): http://www.plantbreedingmatters. com/ sg_userfiles/Sustainability.pdf]. At a global level, between 1985-2005 an increase of 28% in agricultural production has been observed. The expansion of new cultivated land areas has contributed marginally (less than 3%), while more intense use of land (7%) and yield increase (over 18%) have given the most important contribution, thus confirming the major role played by genetic improvements of major crops (Foley et al., 2011; Ceriotti et al., 2015); ii) stronger resistance to diseases and pest attack, as well as to abiotic stress, to prevent harvest loss; iii) quality of production more suited to market needs; iv) more efficient use of resources, mainly water and nutrients. It should be noted that the use of higher yielding varieties increases land carrying capacity, which contributes to maintaining uncultivated land thus benefitting biodiversity.

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Good and certified seeds also bring to farmers the progress of conditioning technologies used by seed companies, like applications of fungicides and insecticides and treatments to facilitate germination in field. Elements of evaluation Itlay: • Wheat cropped surfces, about 2,100 ha; • Royalties calculated on certified seeds, approximately EUR 7.5 million/year; • No system in place to collect royalties on farm saved seeds. France: • Wheat cropped surfaces, about 7,800,000 ha; • Royalties calculated on certified seeds, approximately EUR 50 million/year; • Royalties collected on farm saved seeds, some additionally EUR 10 million/year.

The case of wheat in Italy Each crop has specificities that involve seeds too and should be analysed properly. For example, the wheat sector, one of the most important in Italy, following the main point of this presentation: variety development and seed activities are functional to innovation and sustainability in agriculture, therefore they require full support and fundings. Concerning the collection and availability of fundings for seed variety development, a comparison between Italy and France’s situation is reported in Figure 7, where the Italian gap is apparent, due to a lower area for wheat crops, but also to the lower efficiency of the royalty collection system (Curtis and Nilsson, 2012). Moreover, it is not certain that all royalties collected remain in Italy, normally they are gained by original breeders! In addition, in Italy royalties are collected only through the sale of certified seeds. Table 2 reports for the main crops the rate of use of non-certified seeds, including real farm saved seed, as well as seeds illegally reproduced and marketed. The most evident impact is represented by the increase in the national Italian market of varieties obtained through foreign research programs. Figure 8 shows simply, but clearly, how the presence of varieties not bred in Italy has been gradually increasing over time. For common wheat, this presence increases from 3% in the 1969-1980 period vs 57% in the 2000-2010 period, whereas for durum wheat it increases from 24% in the 1969-1980 period vs 44% in the 2000-2010 period. Farmers and the agri-food industry may not suffer by this situation since other varieties and foreign seed companies are ready to meet market demand. However we should be concerned by the inevitable negative side effects on Italybased private and public breeding, as well as on the viability of the whole seed sector, including the activity of seed production.

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In addition, in Italy royalties are collected only through the sale of certified seeds. Table 2 reports for the main crops the rate of use of non-certified seeds, including real farm saved seed, as well as seeds illegally reproduced and marketed. The most evident impact is represented by the increase in the national Italian market of varieties obtained through foreign research programs. Figure 8 shows simply, but clearly, how the presence of varieties not bred in Italy has been gradually increasing over time. For common wheat, this presence increases from 3% in the 1969-1980 period vs 57% in the 2000-2010 period, whereas for durum wheat it increases from 24% in the 1969-1980 period vs 44% in the 2000-2010 period. Farmers and the agri-food industry may not suffer by this situation

ingmatters.com/sg_userfiles/Sustainability.pdf]. At a global level, between 1985-2005 an increase of 28% in agricultural production has been observed. The expansion of new cultivated land areas has contributed marginally (less than 3%), while more intense use of land (7%) and yield increase (over 18%) have given the most important contribution, thus confirming the major role played by genetic improvements of major crops (Foley et al., 2011; Ceriotti et al., 2015); ii) stronger resistance to diseases and pest attack, as well as to abiotic stress, to prevent harvest loss; iii) quality of production more suited to market needs; iv) more efficient use of resources, mainly water and nutrients. It should be noted that the use of higher yielding varieties increases land carrying capacity, which contributes to maintaining

Figure 7. Potential private resources for variety research: a comparison between Italy and France for wheats.

Conclusions To ensure that the seed industry can fully play its role as an agricultural innovation driver, some objectives have to be pursued and fulfilled: i) availability of important economic resources to promote and fund research programmes, at any level, private or public. At a time where the use of officially certified seeds is decreasing [Italian Journal of Agronomy 2016; 11:761] for those species where open pollinated varieties are mostly used, also because of the decoupling of European farm subsidies no longer linked to the compulsory use of certified seed, the implementation and full respect of plant variety rights (intellectual property) become vital to recover Research and Development (R&D) costs and foster new investments in variety breeding; ii) increased farmers’ awareness of the importance of seeds of good quality and its role for the traceability of productions and as a means of development. This requires the full involvement of farmers and their market organisations to support research and innovation. There are some examples already around us, the closest in France with the so called cotisation volontaire obligatoire on cereals, where, thanks to an agreement between breeders and farmers, a levy currently of 0.70 € per tonne is collected on grain crops [for further reading see also the Fonds de soutien à l’obtention végétale (FSOV): http://www.fsov. org/index.html; and the Union Française des Semenciers (UFS):http://www.ufs-semenciers.org/actualites/Documents/Reglementation% 20semences%20 pour%20diffuser%20la%20performance%20et%20la%2 0qualite.pdf]; iii) stronger private/public collaboration in R&D projects, targeted at practical objectives and with a precise division of tasks. With a European or global vision, cooperation must be extended at this level; iv) clear, fair and rational legislative framework, in combination with a major commitment to prevent and contrast (fight) frauds and illegalities that undermine both externally and internally the development of the whole seed industry.

Figure 7. Potential private resources for variety research: a comparison between Italy and France for wheats. [page 140]

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technology made available to farmers (Lorenzetti, 1986), delivered

Table 2. Use of non-certified seeds in Italy by farmers. Rate of NCS

on ly

Species Durum wheat Common wheat Rice Soybean Potatoes Lucerne Maize

ia lu se

filled: i) availability of important economic resources to promote and fund research programmes, at any level, private or public. At a time where the use of officially certified seeds is decreasing for those species where open pollinated varieties are mostly used, also because of the decoupling of European farm subsidies no longer linked to the compulsory use of certified seed, the implementation and full respect of plant variety rights (intellectual property) become vital to recover Research and Development (R&D) costs and foster new investments in variety breeding; ii) increased farmers’ awareness of the importance of seeds of good quality and its role for the traceability of productions and as a means of development. This requires the full involvement of farmers and their market organisations to support research and innovation. There are some examples already around us, the closest in France with the so called cotisation volontaire obligatoire on cereals, where, thanks to an agreement between breeders and farmers, a levy currently of 0.70 € per tonne is collected on grain crops [for further reading see also the Fonds de soutien à l’obtention végétale (FSOV): http://www.fsov.

40% 20% 20% 20% 20% 40% 0%

Figure 8. Evolution of wheat varieties on Italian market over last decades (source: ASSOSEMENTI analysis of the country of origin of the new varieties listed in the Italian official catalogue).

N on

co m

er c

NCS, non-certified seeds. Source: ASSOSEMENTI estimation, average for 2012 and 2013 crops.

Figure 8. Evolution of wheat varieties on Italian market over last decades (source: ASSOSEMENTI analysis of the country of origin of the new varieties listed in the Italian official catalogue).

The statement: The seed of genetically improved varieties already represents today, and even more tomorrow, the highest concentration of technology made available to offarmers (Lorenzetti, 1986), delivered when the omic era was [Italian Journal Agronomy 2016; 11:761] [page 141] just on the horizon, has been confirmed and will advance in future to meet the demands of a constantly increasing human population. Table 2. Use of non-certified seeds in Italy by farmers. Species

Rate of NCS

Durum wheat

40%

Common wheat

20%

Rice

20%

Soybean

20%

Potatoes

20%

Lucerne

40%

Maize

NCS, non-certified seeds. Source: ASSOSEMENTI estimation, average for 2012 and 2013 crops.

References ADAS UK Ltd., 2015. Review of the objectives of modern plant breeding and their relation to agricultural sustainability. Available from: http://www.bspb.co.uk/sg_userfiles/15-06-01_Review_of_objectives_ of_modern_ plant_breeding_and_relation_to_agricultural_s ustainability-_Report_Update.pdf ASSOSEMENTI (Italian Seed Association), 2015. Import export sementi in Italia, 2012-2014. Available from: http:// www.sementi.it/statistiche/ 396/import-export-sementi-italia-2012-2014 Ceriotti A, Tuberosa R, Cattivelli L, Lucas H, CNR for EXPO 2015. Wheat for the future - advancing wheat research for global food security. Available from: https://www.expo.cnr.it/en/node/69

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Curtis F, Nilsson M, 2012. Collection system for royalties in wheat: an international study. Bio-Sci. Law Rev. 6:215-38. De Vita P, Matteu L, Mastrangelo AM, Di Fonzo N, Cattivelli L, 2007. Effects of breeding activity on durum wheat traits breed in Italy during the XX century. Ital. J. Agron. 4:451-61. DTZ, 2010. Economic impact of plant breeding in the UK. Available from: http://plantbreedingmatters.com/sg_ userfiles/BSPB_Impact_ Final_Report.pdf European Commission, 2003. Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001. In: Official Journal, L 270, 21/10/2003, pp 1-69. Foley JA, Ramankutty N, Brauman KA, Cassidy ES, Gerber JS, Johnston M, Mueller ND, O’Connell C, Ray DK, West PC, Balzer C, Bennett EM, Carpenter SR, Hill J, Monfreda C, Polasky S, Rockström J, Sheehan J, Siebert S, Tilman D, Zaks DPM, 2011. Solutions for a cultivated planet. Nature 478:337-42. Italian Regulation, 1971. Legge 25 novembre 1971, n. 1096. Disciplina dell’attività sementiera. In: G. U. n. 322, 22/12/1971. Lorenzetti F, 1986. Seed as a factor in the progress of Mediterranean agriculture. pp 94-105 in Proc. ICARDA/EC Workshop, 16-18 December, Cairo, Egypt. Mackay I, Horwell A, Garner J, White J, McKee J, Philpott H, 2010. Reanalysis of the historical series of UK variety trials to quantify genetic gain and variety sensitivity. Theoret. Appl. Genet. 122:225-38.

The article has been published with permission of authors

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Vietnam The Seed Industry in Vietnam Nguyen Mau Dung Hanoi University of Agriculture, Vietnam INTRODUCTION For the last three decades, Vietnamâ&#x20AC;&#x2122;s agricultural sector has undergone continuous and impressive change. Having recently transi-tioned from a planned economy, the private seed industry has only recently begun to emerge and the legislation which governs it is new. Policy reform, which began in 1981, culminated in 1988 with the liberalization of input and output marketing. These changes en-gendered institutional transformation and resulted in significant development of the agricultural sector, especially rice production. Paddy output increased from 12 million tons in 1980 to 44 million tons in 2012. Since 1989, Vietnam has been a rice exporter and in 1997 the country became the second largest rice exporter in the world. Current exports average 6-7 million tons per year. In Vietnam, seed is important given that the country is an agriculture-based economy where more than 75 percent of the pop-ulation lives in rural areas and 60 percent of its labor force works in agricultural sector that encompasses close to 30 percent of the GDP. Rice area accounts for approximately 80 percent of total cropped area and is cultivated by 90 percent of farm households in Vi-etnam. Despite the importance of agriculture, the seed industry in Vietnam is underdeveloped and can only meet a small share of seed demand. In the cases of hybrid rice, maize, and vegetables, imported seed makes up 70-80 percent of the total. The added challenges of population growth and decreasing agricultural land availability due to industrial and urban expansion, makes it imperative that the seed sector develop and productivity continues to increase.

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Demand for rice consumption has been changing from low to high quality rice due to increasing incomes, both in Vietnam and in rice importing countries. The seed industry does not only face the pressure of creating high yielding rice varieties, but also high qual-ity rice to meet domestic and international demand. Improved seed varieties therefore have an important role for transforming agricul-ture in Vietnam in the future. The development of the Vietnamese seed industry can be divided into four separate periods. Table 1—The evolution of the seed industry in Vietnam 1960 – 1970

Seed related institutions are founded, consisting of one national seed company, research institutes, and an agricultural university that focuses primarily on rice.

1971 – 1985

The National Maize Research Institute and other specialized institutes are established. Maize and vegetables seeds are bred, tested, and produced.

1986 – 1995

Hybrid seeds including rice, maize, vegetables, and cotton seeds are introduced. Private sec-tor and foreign companies are allowed to participate in seed industry.

1996 – present

The seed industry has developed rapidly with multiple public and private participants. In this period, hybrid seed breeding has been a key feature.

Throughout the evolution of seed policy, Vietnam has had many successes including the development of a collection of short-duration crop seeds that are good quality, high yielding, adaptable, and have relatively good resistance to pests and diseases. In the northern regions the number of crops per year has increased from two crops (winterspring rice and autumn rice) to three crops (win-ter-spring rice, autumn rice, and winter crop) while in the south a single rice crop per year has been replaced by three rice crops per year, or two rice crops plus a winter crop. In both instances, increased cropping has rapidly expanded production. Additional advances in variety improvement have introduced high quality, fragrant rice breeds that are competitive with Thailand, sustaining the high-value export market. However, high quality certified seeds only account for approximately one quarter of all seeds used. While there have been many advances, the implications of poor adoption suggests that Vietnam still has not reached its seed production potential. Table 2—Seed demand and seed market volume in Vietnam Planted areas in 2007 (1000 ha)

Crop

Seed rate (kg/ha)

Seed demand (ton)

Seed market Volume (ton)

Value (1000$)

7210.0

120

865,200

216,300

131,180

- Hybrid

650.0

17,550

20,568

2. Maize

1067.9

21,358

19,200

38,400

3. Peanut

254.6

200

50,920

20,370

22,237

4. Soybean

190.1

100

19,010

11,470

13,912

20.5

164

160

1,164

644.0

432

267

70,000

1. Rice

5. Cotton 6. Vegetables Source: estimate by VSTA, 2008

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New seed varieties in Vietnam are a mixture of seeds created in the country and imported varieties. According to MARD (2007), between 1977 and 2005, there were 575 new crop varieties that were approved and recognized, including 177 rice varieties, 75 maize varieties, 15 potatoes varieties, and 7 cassava varieties. However, according to the National Center for Crop Test and Inspection (2005), there were in total 688 rice varieties including 159 local varieties and 529 improved varieties grown in the country, much more than the number of registered varieties (177). Table 3â&#x20AC;&#x201D;Number of new crop varieties by periods/ years New varieties

Number of new crop varieties approved 1977-2006

2007-2009

2010

2011

Areas under im-proved seed (%) 2012

177

2. Maize

3. Potatoes

4. Soybean

5. Peanut

6. Tomatoes

7. Coffee (new lines)

8. Sugarcane

9. Rubber

98.3

10. Tea

11. Cashew nut

28.6

12. Fruits

13. Other

139

Total

575

216

1. Rice

68 54.6

Source: National Center for Crop Test and Inspection, 2000; Vietnam Seed Trade Association, 2010; Crop Department - MARD, 2011, 2012, 2013

Imported seed constitutes a large part of the total seed sold and planted in Vietnam. According to recent statistics by the Vi-etnam Seed Trade Association, the annual import value of seed is about US$150 million. Annually, Vietnam imports nearly 15,000 tons of hybrid rice seed from China, accounting for 70-75 percent of rice seed demand, with a value of $21 million. Similarly, 10,000 tons of hybrid maize is imported mostly from Thailand and India annually comprising more than half of the total seed sold. Hybrid maize varie-ties account for 84.3 percent of total planted maize area with much of it (51.8 percent) coming from imported varieties. Vietnam has to import 80 percent of vegetable seed from Thailand, China, Japan, Korea and France with the import value estimated at $70 million.

POLICY LANDSCAPE The process of registering seed is quite lengthy and often takes 2.5-3 years. The system requires an organization or an individual to submit their variety to a facility for distinctness, uniformity and stability (DUS) testing and cultivation-value and use-value (VCU) testing to assess the productivity, quality, resistance against pests and unfavorable conditions, and capacity to produce seeds. The trials ensure that the variety outperforms comparison varieties in at least one of the criteria as follows:

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(a) Productivity is at least 10 percent higher;

(b) Quality is better in aspects of nutrition, appearance, export potential, or processing;

(d) Agronomic properties are better (duration, resistance to pests, or unfavorable conditions).

If the testing results meet the requirements, then the varieties are validated by the Grassroots Science Council and passed onto the Professional Science Council which will determine if the variety is suitable for trial production. The duration from trial produc-tion to formal recognition of new plant variety must be at least 2 crop seasons but not over 3 years for annual crops, and at least 2 years of harvest but not over 7 years for perennial crops. After trial production, a dossier of the technical process of cultivation, a report on DUS testing results for at least the first crop, the minutes of the Grassroots Science Councilâ&#x20AC;&#x2122;s meeting, and a written request for recognition of the new plant variety by the provin-cial Department of Agriculture and Rural Development where the trial is conducted will be submitted to the Crop Department of MARD. Based on the Professional Science Councilâ&#x20AC;&#x2122;s recommendation, the Crop Department proposes to the Minister of MARD to officially rec-ognize the new agricultural plant variety. Although the testing and recognition of new agricultural plant varieties has made sound achievements, seed registration in Vietnam still faces several challenges. First, the number of crop varieties that need to be tested for registration has increased signifi-cantly in recent years due to the liberalization of the sector, which has increased variety development and accelerated seed importa-tion, especially the latter. During the five year period from 2008 to 2012, a total of 1575 DUS tests and 4329 VCU tests were requested. Second, the duration for seed registration, usually 2.5-3 years, is lengthy and the staff for seed testing is limited in both number and qualification. Moreover, facilities for testing are not modern enough to handle the volume of tests and can be improved.

PERFORMANCE AND EFFECTIVENESS OF REGULATORY POLICIES Although the number of varieties requested for testing and registration are quite high, the number is still quite low compared to the total number of varieties traded in the market as discussed above. To ensure seed quality, MARD and provincial authorities organize seed inspections in the market. As reported by MARD in 2008, 41/64 (64 percent) of the provinces organized periodic inspections at an average of 1.25 visits/year although most visits were announced in advance. Because of limited staff, only a small share of the seed sales can be examined (for example only 8.7 percent in Lam Dong province) so in many cases inspectors focus on the primary crops for that agroecological zone. On average, there is only one seed inspector per province and only 70 staff in the whole country. Meanwhile the number of seed varieties in the market is large and often changes from one crop season to the next, especially vegetable seeds. The main contents of inspection include labeling requirements, quality, and compliance of trading requirements. Inspections have shown that the share of units that violated legal requirements were quite high (Table 4) and the units in violation of the law were quite diversified from big to small companies. Additionally, there are mechanisms for consumers to seek recourse for poor quality seed with successful cases brought against Syngeta (maize) and even local extension agents who provided poor watermelon seeds. Warn-ings, penalties, and public disclosures are main measures to deal with violating units.

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Table 4â&#x20AC;&#x201D;Seed test results by centers Northern Varieties

Middle and highland

No. of sam-ples

Percentage pass test (%)

1. Inbred rice

782

5.6

299

29.4

129

2. Hybrid rice

666

20.4

4.8

3. Inbred maize

4. Hybrid maize

186

46.2

11.1

338

84.6

5. Vegetable

128

6. Peanut

178

6.7

1852

14.7

353

26.1

595

55.0

7. Potatoes Total

No. of samples

Southern

Percentage pass test (%)

No. of sam- Percentage pass ples test (%)

Source: MARD 2008

KEY PLAYERS According to the Seed Ordinance, MARD is responsible for the implementation of state management for national agricultural and for-estry seed varieties. Under them the Crop Department a) Performs state management of seeds b) Formulates strategies, planning of crop development c) Organizes surveys, statistics on seeds utilization d) Develops procedures, specifications, and technology of agricul-tural seeds and plant varieties; d) Manages a database of plant varieties and tests the quality of new varieties e) Issues and withdraws licenses and certificates and f) Manages exports and imports of seeds and plant varieties. There also two units under the Crop Depart-ment that directly manage the seed sector, including the Plant Variety Protection Office (PVPO) and the National Center for Plant Vari-ety Test and Certification (NCPVTC). The NCPVTC has a main office in Hanoi, and 7 centers in the main geographical regions of the coun-try and cooperates with 54 inspection/certification stations. Management of seed at the provincial level belongs to the Provincial Peo-ple Committee (PPC) with the help of the Crop Department while at the district level the DARD or the General Economic Department together with the Extension Station and Protection Plant Station participate in seed sector management. Studies of MARD (2007) and VSTA (2007) highlighted that capacity at the provincial and district levels is weak and equipment for testing is inadequate. In addition, a lack of information systems and information sharing between state management agencies re-mains a problem hindering coordination and cooperation between agencies. According to the Vietnam Seed Trade Association, as of 2011, there were 415 businesses operating in the formal seed supply system, not including cooperatives and seed producing groups in rural areas. Of these, there are eight international/multinational com-panies that operate seed business, most of which concentrate on producing and trading of hybrid maize, vegetable, and rice seeds. There are two types of business models in Vietnam. Some are locally based and operate in many areas of seed production, trade, and retail. Others, such as Monsanto and Syngenta, operate a small representative office in order to submit varieties for DUS and VCU test-ing and registration. Once approved these companies partner with a Vietnamese counterpart that distributes their seeds. There are also two seed companies that prior to 2002 were state-owned enterprises. In 2002 these enterprises became joint-stock companies that operate for profit. Vinaseed or National Seed Company (NSC) is the leading firm in producing, importing, and dis-tributing rice seed while the Southern Seed Company is the leading firm in the maize seed market. The market share in rice seed and maize seed of NSC was 25 percent and 7 percent while these figures for SSC was 10 percent and 19 percent, respectively

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(Vinaseed, 2009). Likewise, at the provincial level there are currently 129 provincial seed centers operating that in the past were government agencies responsible for seed transfer to farmers but these centers have since transformed their operation model into a joint stock company. Lastly, there are five state-owned enterprises that belong to the national research institutes including: the Fruits and Vegeta-bles Research Institute, the National Maize Research Institute, the Southern Horticultural Research Institute, the Agricultural Genetics Institute, and the Food Crops Research Institute. These companies provide consultancy services and participate in seed research and development. Research activities for seed is mainly conducted by government agencies at the central level, sub-regional level, and universi-ties. There are 18 research institutions or centers and 6 universities that are involved in breeding and adapting improved seed in vari-ous regions of Vietnam. Fifteen of 18 research institutions belong to MARD (Ministry of Agriculture and Rural Development). Since 2005, all research institutions in Vietnam operate autonomously with regard to their research agenda, finances, and organizational structures. The purposes of the autonomy and self-management mechanism are to: 1) improve accountability for re-search results and to improve the dynamism and creativity of scientific organizations; 2) combine research and technological develop-ment with seed production and distribution to speed up the socialization of technological activities; 3) raise the operation efficiency of organizations. In recent years, several research institutions have established enterprises/companies to transfer their research outputs into production and markets. While it is hoped that these changes would improve the public seed system, there still remains several weaknesses in the sys-tem. First, while there have been some good advances in the country due to variety development, the research and development (R&D) system is largely dependent on the imported genetic material (VSTA, 2007). In addition, while there has been a policy change, the R&D priorities are still driven by MARD funding rather than autonomously determined by the institutions themselves, who have a better understanding of their clientsâ&#x20AC;&#x2122; needs. During the period from 2006 to 2010, MARD approved 19 seed projects with an invest-ment of VND 268 billion (US$ 12 million), but sales of seeds produced from these projects was only VND 16 billion (VietnamNews, 2013). Likewise, performance indicators do not monitor the usefulness and applicability of the research products.

POLICY RECOMMENDATIONS FOR SEED INDUSTRY The seed industry has significantly contributed to agricultural transformation in Vietnam in recent decades and must continue to do so in the near future in order to deal with the ongoing threats of population growth, climate change, and shifting demands for food. While the formal seed system in Vietnam has made many significant achievements in the last 50 years, it is still underdeveloped given the enduring contribution of the informal sector and the poor adoption rates of certified seeds. This analysis has revealed a number of the weaknesses in research, production, and distribution. As a consequence, the seed industry in Vietnam is highly dependent on imported seeds.

The study proposes the following policy recommendations to develop a viable the seed industry in Vietnam:

â&#x20AC;˘ Renovate the administrative system which determines priorities to improve the quality and applicability of research re-sults by: 1) involving stakeholders in seed research strategy development; 2) ensuring more even distribution of govern-ment research fund to all actors participating in seed research; 3) using third party quality assurance; and 4) prioritizing the commercialization of varieties.

â&#x20AC;˘ Facilitate greater private sector involvement in seed research and production by improving the registration and certifica-tion process. Support inter-country collaboration to harmonize and promote international standards.

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• Strengthen public institutions to control seed quality at the provincial and district levels by training technical staff in seed testing and providing appropriate equipment. Promote international cooperation in seed testing and certification.

• Build a seed testing and certification information system that fosters information sharing between state management agencies.

The above actions and policy changes open the door for greater private sector involvement in the seed sector while improving the efficiency of the public research and quality assurance systems. This will go a long way toward improving the quantity and quality of seed and will ultimately improve the productivity of Vietnam’s farmers.

About the Authors Nguyen Mau Dung, is a faculty member of Economics and Rural Development at Hanoi University of Agriculture, Vietnam

Acknowledgments This brief was edited by Adam Kennedy based on the original paper prepared by the author for the ReSAKSS-Asia conference entitled “Agricultural Transfor-mation in Asia: Policy Options for Food and Nutrition Security” which took place on September 25–27, 2013 in Siem Reap, Cambodia. The author benefited considerably from the valuable suggestions of David Spielman throughout the development of the paper and the comments received from the conference’s participants. Financial support for the conference and the preparations of the paper/brief is from the United States Agency for International Development (USAID).

The article has been published with permission of authors

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ASIA Towards better metrics and policymaking for seed system development: Insights from Asiaâ&#x20AC;&#x2122;s seed industry David J. Spielmana, Adam Kennedyb a

International Food Policy Research Institute, 2033 K St NW, Washington, DC 20006, USA

Abstract Since the 1980s, many developing countries have introduced policies to promote seed industry growth and improve the delivery of modern science to farmers, oftenwith a long-term goal of increasing agricultural productivity in smallholder farming systems. Public, private, and civil society actors involved in shaping policy designs have, in turn, developed competing narratives around how best to build an innovative and sustainable seed system, each with varying goals, values, and levels of influence. Efforts to strike a balance between these narratives have often played out in passionate discourses surrounding seed rules and regulations. As a result, however, policymakers in many countries have expressed impatience with the slow progress on enhancing the contribution of a modern seed industry to the overarching goal of increasing agricultural productivity growth. One reason for this slowprogress may be that policymakers are insufficiently cognizant of the trade-offs associatedwith rules and regulations required to effectively govern a modern seed industry. This suggests the need for new data and analysis to improve the understanding of howseed systems function. This paper explores these issues in the context of Asiaâ&#x20AC;&#x2122;s rapidly growing seed industry, with illustrations from seed markets for maize and several other crops, to highlight current

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gaps in the metrics used to analyze performance, competition, and innovation. The paper provides a finite set of indicators to inform policymaking on seed system design and monitoring, and explores how these indicators can be used to inform current policy debates in the region. © 2016 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http:// creativecommons.org/licenses/by/4.0/).

1. Introduction Policymakers often face difficult challenges in promoting seed industry growth in developing countrieswhere the intended beneficiaries are small-scale, resource-poor farmers operating in highly fragmented markets. Yet as a pathway to enhancing agricultural productivity and improving food security, there is strong historical evidence indicating that improved cultivars—and the seed systems required to deliver those cultivars to smallholders—are a highly effective means of doing so (Evenson and Gollin, 2003; Alston et al., 2000). Despite the introduction of seed policy reforms beginning in the late 1980s, many developing-country policymakers still express concern or impatience with the slow progress on enhancing the contribution of a modern seed industry to the overarching goal of increasing agricultural productivity growth. One factor that has contributed to this situation is the enormous complexity in designing and implementing policies, rules and regulations that are appropriate to a given country’s context, stage of development, needs, and priorities. Many of these early policy reforms during the 1980s tended to fall short because they equated market liberalization with seed system deregulation and privatization, leading to protracted struggles over the appropriate roles for the public and private sectors in cultivar improvement, and seed production and distribution to farmers (see, e.g., Tripp and Louwaars, 1997; Tripp, 1997; Byerlee and Echeverrıa, 2002). One explanation for the persistence of this struggle may be that policies have been formulated and executed with insufficient cognizance of the trade-offs associated with rules and regulations designed to govern a modern seed industry. Where the aim is to supply affordable quantities of high-quality seed of improved cultivars to populations and markets made up of heterogeneous farmers and farming systems, there is no single set of rules or regulations that leads directly to the development of a system that is both productive and innovative across breeding, seed production, regulation, distribution, and marketing. Rather, decisions on howto build that systemmust balance a complex set of societal and economic trade-offs. Static trade-offs exist, for example, in the distribution of the gains frominnovation among plant breeders, entrepreneurs, seed companies, public research organizations, and farmers themselves (Kloppenburg, 1988; Jaffee and Srivastava, 1994; Morris et al., 1998). Intertemporal trade-offs exist where present efforts to introduce yieldenhancing cultivars threaten the in situ conservation of genetic diversity required to support future investments in cultivar improvement (Smale, 2006). Actors involved in these decisions necessarily develop competing narratives around how best to build an innovative and sustainable seed system, each with varying goals, values, and levels of influence. As a country’s seed industry evolves and grows in size and value, balancing these narratives become increasingly difficult—but no less important (Tripp and Louwaars, 1997; Scoones and Thompson, 2011; Coomes et al., 2015). In many developing countries, efforts to strike a balance between these narratives often plays out in the policy discourse surrounding national seed policies, rules and regulations. Often, however, the public policy discourse tends to overlook changing realities in the region’s agricultural sector and seed systems. These changes include, inter alia, the rapid growth in private investment in cultivar improvement, biotechnology, and seed production and marketing (Pray and Fuglie, 2001; Langyintuo et al., 2010); stagnation in the capacity and contribution of public research to cultivar improvement (Beintema et al., 2012; Flaherty et al., 2013); and insufficient investment in the conservation of in situ and ex situ plant genetic resources (Koo et al., 2004; Smale, 2006). Instead, the policy discourse is oftenmired in legal and regulatory dimensions of seed systems management, with disproportional

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emphasis placed on the minutiae of rules, guidelines, procedures, protocols, and organizational mandates without commensurate analysis of their costs and benefits (see Tripp et al., 1997; Tripp and Louwaars, 1997). In some instances, the narrative revolves around the public regulator’s emphasis on protecting the farmer from unfair business practices by seed providers, possibly resulting in a constrictive regulatory system. In other instances, the narrative may hinge on the social planner’s desire for a more liberal economic system, which may come only with the withdrawal of regulations designed to protect farmers. In still others, the narrative may revolve around optimal ways of conserving scarce natural resources and biodiversity, resulting in an entirely different set of regulatory priorities and mechanisms. One way of shifting this discourse is to focus attention on the data and analysis that expand the understanding of how seed systems function. This paper explores these issues in the context of Asia’s rapidly growing seed sector. Specifically, the paper explores current gaps in the metrics used to analyze performance, competition, and innovation in the seed industry, with a specific emphasis on maize in selected Asian developing countries. It then describes and characterizes a finite set of indicators to informpolicymaking on seed systemdesign, and explores how these indicators can be used to inform current policy debates in the region. This paper proceeds as follows. Section 2 provides background on the performance and growth of the maize seed markets in selected Asian countries to illustrate the relationship between innovation and competition in developingcountry seed systems, with several caveats on the paper’s wider applicability. Section 3 critiques conventional indicators used tomeasure seed industry performance before proposing alternative indicators and examining the feasibility of collecting data on these indicators. Section 4 illustrates the utility of the proposed indicators for current policy debates surrounding Asia’s seed systems. Section 5 provides policy recommendations and concluding remarks.

2. Innovation, competition, and maize The present analysis relies partly on an industrial organization perspective on seed system development—a perspective that is slowly gaining currency in the study of agricultural development (Reardon and Timmer, 2012)— to illustrate the importance ofmeasuring relationships between performance, innovation, and competition. For several reasons, maize provides an opportunity to demonstrate the utility of this perspective and the applicability of indicators that measure and monitor seed system development. First, and unlike most other major field crops, maize has historically attracted significant levels of private investment in research, production, and marketing. Maize’s appeal stems primarily from the breeder’s ability to induce the expression of heterosis—an increase in yield or uniformity that results from genetic contributions derived from the crossing of distinct parental lines—in maize hybrids. This translates into economic value for breeders and seed companies because the yield gains conferred by heterosis decline dramatically after the first generation of hybrid seed (F1) is planted, thus compelling farmers to purchase new F1 seed each season to continually realize these gains. This is in contrast to the much lower economic value created by improving open-pollinated maize varieties (or by improving self-pollinated crops such as rice and wheat), from which harvested grain can be saved for use as seed in the subsequent season. In essence, the reproductive biology of hybrid maize confers a biological form of intellectual property rights protection to the breeder, creating an innovation incentive that has been central to fuelling a century of global knowledge accumulation in maize improvement in both industrialized and developing countries (Byerlee and Eicher, 1997; Morris, 1998; Fernandez-Cornejo, 2004). Estimates place the global market for

These figures are based on assumptions fromFuglie et al. (2011) thatmaize represents 25% of the globalmarket value for private sector seed combined with more recent figures on the value of the global seed market from Bonny (2014). These figures are greater than R&D spending on other commercial crops such as soybean, cotton, or wheat, and greater than public R&D spending on maize. Among the “big six” multinational cropscience companies (Monsanto, DuPont/Pioneer, Syngenta, Bayer, Dow, and BASF), only two do not invest in maize R&D.

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maize seeds and traits at approximately $5 billion in 2006 and $10–12 billion in 2012, with the associated spending on R&D ranging from $1 to $4 billion (Fuglie et al., 2011; Bonny, 2014).1 These figures are far greater than those for any other food staple crop. Second, maize is an appealing crop to focus on given the rapid growth in demand for its use as feed for the livestock and poultry industries that supply Asia’s rising population of consumers with incomes to spend on higher-value foods (Gulati and Dixon, 2008). The rapid growth in the derived demand formaize requireswell-functioningmarkets for both maize seed and grain, a robust innovation system around maize improvement, and an effective regulatory systemto sustain an innovative and competitivemarket. Yet inmany developing countries, not all of these elements are in place, particularly the enabling policy environment needed to promote sustainable intensification of maize production among smallholders in Asia (Gerpacio and Pingali, 2007). Third, earlier work on seed markets in Asia points to the maize seed industry’s rapid growth as a “success story”2 in which policy reforms introduced from the 1980s onwards succeeded in opening the market to private seed companies (Morris, 1998; Pray and Fuglie, 2001). Multinational seed companies with strong R&D programs and product lines played a central role in these markets, operating independently or in joint ventures with domestic seed companies in India (e.g., Joshi et al., 2005; Pray and Nagarajan, 2014), Pakistan (Rana, 2014), Thailand (Napasintuwong, 2014), and elsewhere. In India, for example, liberalization of seed market policy during the late 1980s encouraged the rapid growth of a private sector-led maize seed industry which, in turn, fuelled significant yield growth in maize (Morris et al., 1998; Pal et al., 1998; Pray et al., 2001; Ramaswami, 2002). The effects of this industry growth have been so substantial that the annual growth rates of yield, output, and area undermaize cultivation during the period 2004– 05 to 2013–14 were 2.9, 2.5, and 5.5%, respectively (KPMG/FICCI/ NCDEX, 2014). Thailand experienced a similar growth pattern in which the combination of policy reforms and a strong public-sector maize development program in the 1970s transitioned the country into a hub for private R&D investment (see Fuglie, 2001; Napasintuwong, 2014). Fourth, this rapid growth in industry size and innovation raises policy- relevant questions about market competition and concentration. Market concentration has been increasing in the global markets for seeds and traits (Fuglie et al., 2011), with some evidence of similar trends in countries such as India (Spielman et al., 2014). Yet there is little immediate evidence fromthese studies that concentration has led to significant changes in private R&D spending or R&D intensities which might, in turn, affect the rate of innovation inmaize improvement. Rather, these studies imply that there is still room for growth in both R&D spending and industry size, and that issues of monopolistic pricing, cartels, and other signs of a non-competitive market are second-order concerns at present. Still, these issues remain central to the policy discourse, implying that they are still an important area of analysis for the region. Finally, the rapid growth of private sector leadership in Asia’s maize seed market has not entirely replaced the need for public research. Through the 1990s, national maize breeding programs remained an active source of locally adapted materials, particularly improved openpollinated varieties (Gerpacio, 2003).3 And even today, many Asian countries retain maize breeding programs and maize seed production and distribution programs, oftenwith a mandate to supply underserved populations with open-pollinated varieties. However, given that public programs on maize R&D must compete for scarce funds with programs for other crops and other research priorities, and

For an analysis of how “success stories” come into being in the field of agricultural development, see Sumberg et al. (2012).

Gerpacio (2003) makes the important point that as of 1997/98, public investmentwasstill central to maize R&D inmany other Asian countries. Among organizations engaged in maize R&D surveyed in her study, 71% were public sector entities, the majority of which were accounted for by China and India. She further finds that the public and private sectors weremarketing an almost equal number ofmaize seed products during the late 1990s, albeit in different backgrounds (open-pollinated and hybrid, respectively).

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given that many public research systems are struggling with scientific capacity limitations, volatile funding trends, top-heavy organizational structures, and weak research incentives, questions remain about the proper role for the public sector in maize research.4 That said,maize is a means to an end in the present analysis—a vehicle to addresswider issues of seedmarket development in Asia. This implies that there are limits on the applicability of the discussion on indicators and metrics that follows. In particular, these indicators tend to be immediately relevant only to a commercial seed industry. This implies that the present analysis is primarily relevant to cropswhere innovators can appropriate the gains from innovation, whether through reproductive biology, intellectual property rights, or some combination of technological and institutional mechanisms. Such is typically not the case for wheat, rice, many grain legumes, and vegetatively propagated root and tuber crops. Seed markets for these crops rely significantly on largely state-led production and distribution systems or non-industrial systems in which farmers save, select, and exchange seeds among themselves (e.g., Lipper et al., 2010). Many of these crops are also cultivated within regions of genetic origin or diversity, highlighting the importance of informal seed systems as a means of both cultivar improvement and genetic conservation that are somewhat less applicable to maize, an exotic crop with limited genetic diversity in Asia (de Boef et al., 2010; Coomes et al., 2015).5 However, this analysis does not overlook the role of farmers—especially smallholder farmers—in a modern seed system. The overlap and integration between formal and informal seed markets in many developing countries means that farmers playmultiple roles in amodern seed system. They function as outgrowers for formal seed producers; conduits for new cultivar dissemination from the formal to informal system; innovators through traditional variety selection and seed saving and through more formalized participatory breeding, varietal selection, and action research programs; and as in situ conservators of genetic material for future breeding programs (Almekinders and Louwaars, 2002; Sperling and McGuire, 2010; Louwaars and de Boef, 2012; Coomes et al., 2015). This analysis is also relevant to a range of other crops for which hybrids have been successfully developed and commercialized, or for which investments in hybridization are ongoing. Well-documented examples from developing countries include sorghum, pearl millet, and cotton in India (Pray and Nagarajan, 2010; Gruère and Sun, 2012), rice in China (Li et al., 2010), hybrid rice in India and Bangladesh (Spielman et al., 2014), and a range of horticultural crops. For these reasons, the analysis occasionally ventures into the analysis of crops and technologies beyond maize hybrids. Finally, it is important to point out that while the analysis examines indicators that are potentially useful in evaluating seed industry development, it is not a naïve treatise on the primacy of evidence in shaping policy change processes. Necessarily, evidence is not the only means by which policies change: the relationships between evidence and policy outcomes often hinge on highly context-specific political economy factors that affect policymaking processes (Mayer et al., 2012; Carden, 2004; Court and Maxwell, 2005; Kristjanson et al., 2009). As such, the conceptual framework, indicators, and analysis presented here are meant to stimulate discussion around investment in and regulation of seed systems, rather than provide a definitive statement on measuring and governing seed industry development. Much of this discussion has been put forth by others, both in general terms (e.g., Tripp et al., 1997; Morris, 1998; Almekinders and Louwaars, 2002; Morris and Heisey, 2003), and with respect to maize in Asia (Gerpacio, 2003; Pray and Ramaswami, 2001; Gerpacio and Pingali, 2007). However the literature would still benefit from a more concise assessment of the indicators andmetrics that can informpolicy change. The analysis that follows attempts to address this need. While Flaherty et al. (2013) report that public agricultural R&D spending in the Asia- Pacific region increased by 50% from$8.2 billion in 1996 to $12.3 billion in 2008 primarily driven by the region’s low- andmiddle-income countries, Stad and Rahija (2012), among many others, point out that the region’s public research systems face significant challenges with respect to governance, management, and organization.

These caveats also apply to open-pollinated maize varieties, particularly those cultivated in Mexico, maize’s genetic center of origin and still a source of extensive genetic diversity. See Pixley and Banziger (2002) and Bellon et al. (2006), among others.

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3. Seed industry indicators and applications to selected Asian countries In this section,we examine current practice in assessing seed industry performance to highlight the shortcomings of key indicators for ongoing policy discourse around seed industry development. We then examine a set of alternative indicators to measure competition and innovation and address the feasibility of obtaining data for these indicators. 3.1. Current practice Conventional indicators used by policymakers to assess seed industry performance in many developing countries tend to be limited in terms of analytical value. Such indicators include quantity of seed produced, which is typically crop-specific data assembled from sector- or industry-level reports; estimates of the quantity of seed demanded, typically derived from crop-specific estimates of area under cultivation multiplied by recommended seeding rates; and shortfalls and surpluses between estimated supply and demand, calculated from a comparisons of these two indicators (Table 1). These highly aggregated indicators are rarely useful as they tend to be based on broad assumptions, empirical data that are not regularly updated, or some combination thereof. They lack insight into variety-level demand and supply quantities, as well as variation around mean quantities that may be induced by market and weather riskâ&#x20AC;&#x201D;all of which are critical to forecasting future supply and demand and planning research, production, andmarketing (see, e.g., Burer et al., 2008). Other conventional indicators are equally limited in analytical value. For example, seed replacement rates are commonly used to measure the proportion of seed that farmers purchase from the formal market rather than from their own saved or locally exchanged seed. They are typically based on aggregated national and sub-national data typically assembled fromsector- or industry-level reporting, and contain and implicit assumption that purchased (i.e., certified or truthfully labeled seed) is inherently superior to farmer saved seed because farmers are thought to rely on poor selection, storage and preservation practices that lead to lower purity and germination rates or losses in genetic integrity when the seeds are used in cultivation. Table 1: Estimated seed demand and supply from various sources for selected Asian countries, metric tons (mt). Crop Country (year)

Estimated total seed demand (mt)

Production (mt)

Public Maize

Thailand (2012) Vietnam (2012)

Informala

Public

Private

Informala

5000

288

4512

200

5.8

90.2

4.0

319,500

181,428

6392

131,680

56.8

2.0

41.2

Wheat

55,700

39,840

15,860

71.5

0.0

28.5

Maize

31,914

245

3460

28,209

0.8

10.8

88.4

Rice

42,480

5068

40,699

3610

11.9

95.8

8.5

Wheat

1,085,400

72,112

187,792

552,180

6.6

17.3

50.9

Maize

23,945

955

22,990

4.0

96.0

0.0

1,009,230

245,000

300,000

455,000

24.3

29.7

45.1

21,358

19,200

2158

10.1

882,750

233,850

648,900

75.0

Bangladesh (2012) Rice

Pakistan (2012)

Private

Production as a share of estimated total seed demand (%)

Rice Maize Rice

Sources: Bangladesh: Naher and Spielman (2014); Pakistan: Rana (2014); Thailand: Napasintuwong (2014); Vietnam: Nguyen Mau Dung (2014). Notes: a â&#x20AC;&#x153;Informalâ&#x20AC;? denotes farmer-saved seed and seed purchased through informal markets and farmer-tofarmer exchanges. b Includes both inbred and hybrid rice.

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In fact, results from several studies call this assumption into question. Bishaw et al. (2012) found that the physical purity and germination rates of recycled wheat and barley seed in Ethiopia and Syria were not significantly different from that of certified seed. Similarly, Biemond et al. (2013) found that Nigerian farmers’ recycled seed was of poor quality but not more so than the seed being produced by public institutes such that neither passed the National Agriculture Seed Council’s standards for certified seed. Deu et al. (2014) have found that with proper training in seed production, farmers are generally able to maintain the phenotype of their varieties and minimize off type plants. At best, the seed replacement rate indicateswhether farmers are realizing the benefits conferred by F1 hybrids, suggesting that it does have some relevance when applied to crops that are not self-pollinating or vegetatively propagated. But a singular focus on this measure—as is common practice in many developing countries—tends to obscure the critical difference between seed replacement (improving the quality of inputs by purchasing fresh seed of either the same variety/hybrid or a new one) and varietal replacement (changing the genetic quality of an input by replacing seed of an older variety/hybrid with seed of a new one) (e.g., Brennan and Byerlee, 1991). The former provides a basic sense of industry sales volumes and market size, while latter provides a more meaningful measure of a seed industry’s performance in terms of supplying improved products to farmers. Yet evenwhen taken together, these conventional indicators are still of limited analytical value if the distributional consequences of technological change are of concern to policymakers. Aggregate replacement and turnover rates are incompletewithout additional data onwho actually purchases seed—what type of farmers in terms of land tenure, wealth, income, or geographic location—and how alternative uses of public resources might change those distributional outcomes in a welfare- improving manner. In short, policy and investment decisions taken tomaximize specific “rates”may be misinformed, potentially allocating scarce public resources to ambiguous ends. Instead of relying on conventional indicators with limited analytical value, we suggest a finite set of alternative indicators designed to help policymakers and other actors understand seed industry structure and performance and pursue policies and investments in support of industry growth. Our suggested indicators for seed industry performance aim to answer the question of whether the institutional architecture of a seed system is efficient, effective, and dynamic enough to deliver benefits to farmers. To answer this question, better information is needed on seed industry structure, innovation, regulation, and performance along the lines of indicators used to assess the state of agricultural input industries in industrialized countries (see, e.g., Fernandez-Cornejo (2004) on the United States’ seed industry), but adapted to fit the precise needs of countries with significantly different agricultural systems. These indicators are summarized in Table 2 and discussed in detail below. 3.2. Seed industry performance Ideally, a basic set of performance indicators should provide insight not only into quantity—the volumes and values of seed supplied and demanded—but also the accessibility and quality of the seed. These indicators might include variety- and source-specific quantities of seed sold, the prices at which seeds are sold, area planted to improved varieties and changes in area planted over time (Morris and Heisey, 2003). They might include detailed georeferencing to allowfor spatial analysis ofmarket coverage and participation. And they might include additional detail on farm size and social and economic characteristics of farmers who purchase the seed to better analyze market coverage, estimate of the benefits associated with adoption, and explore heterogeneity and distributional issues associated with adoption. Necessarily, discussion of these indicators needs to account for the feasibility of collecting the data required to generate these indicators. Consider several initiatives that aim to accomplish precisely this outcome which attempt to improve on or systematize the conventional but ad hoc use of data collection through household, market/ industry, or expert opinion surveys (Morris and Heisey, 2003). The firstmethodical attempt tomeasure seed system performance is highlighted by two projects led by the Consultative Group on International Agricultural Research

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(CGIAR) and its national research partners to assemble and analyze variety-specific cultivar diffusion data for 20 crops in more than 30 countries in Africa south of the Sahara and South Asia (see DIIVA, 2014; TRIVSA, 2015). These projects provide a novel collection of data on scientific strength in national breeding programs, varietal releases, and adoption (measured as estimates in the share of area under each variety). Data are garnered from a combination of expert interviews and survey data, and provide the first searchable online database containing variety-specific information over both space and time. Unfortunately, these projects focus—by design—on public research achievements and provide little descriptive insight into the contributions of private industry, or the pathways through which public R&D is handed off to private seed companies, farmers’ organizations, and other seed system actors. Another recent attempt that allows for measurement of seed system performance, albeit indirectly, is the Living Standards Measurement Study-Integrated Surveys on Agriculture (LSMS-ISA), a project of the World Bank and national statistical agencies in seven Sub-Saharan countries (World Bank, 2015). The project’s primary aim is to improve household and community data collection on agriculture, and the LSMS-ISA modules on seed use includes a range of questions that can potentially improve the resolution of data on what farmers sow, how much they use, what price they pay, and how they source their seed at the farm-, plot-, and variety-specific levels. LSMS-ISA data are georeferenced and designed to generate panel datasets, allowing for potentially useful analysis over both time and space. Table 2: Indicators of seed industry performance, innovation, structure and regulation. Indicator domain

Industry performance

Suggested indicator (unit)

Level of disaggregation

Seed sales (metric ton)

Geo-referenced at lowest level possible

Seed prices (local currency)

Geo-referenced at lowest level possible

Seed quality

Variety-specific samples of individual seed lots

-Germination, moisture, purity -Genetic and trait purity

Innovation

R&D spending

By sector (public/private)

Varietal releases

By producer/source

Age of varieties in production

By producer/source

Age of varieties under cultivation

Spatial, social, and economic disaggregation using household data

Seed sources

By crop

-Formal vs. informal markets -Public vs. private providers Innovation market concentration

By crop

-HHI, CR4, CR8 measures Structure

Product market concentration

By crop

-HHI, CR4, CR8 measures Distribution network structure

By crop

Market distortions

By crop

-Market share of SOEs -Producer, consumer subsidies -Tax credits, export subsidies, tariffs

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Indicator domain

Registration and quality control regulations

Intellectual property rights and biosafety regulations

Suggested indicator (unit)

Level of disaggregation

Variety release requirements

By crop

-Procedures, duration, exemptions Seed quality and certification -Procedures, duration, exemptions Seed inspection procedures

By producer, market or region

Plant variety protection applications

National

Patent applications

National

Compliance with TRIPS

National

Membership in UPOV

National

Existence of biosafety regulations

National

Implementation capacity/expertise

National

Source: Authors. Notes: HHI denotes Herfindahlâ&#x20AC;&#x201C;Hirschman Index; CR4/8 denotes four and eight-firm concentration ratio, respectively; SOEs denotes state-owned enterprises; TRIPS denotes the agreement on Trade-Related Aspects of Intellectual Property Rights; UPOV denotes the International Union for the Protection of New Varieties of Plants.

Efforts to gauge seed industry performancemight seek to collect and monitor several key indicators. First, they might focus on compiling and analyzing data along the lines of DIIVA, TRIVSA, and LSMS-ISA to characterize diffusion and adoption patterns and providing nuance to the generally non-descript, aggregate figures on demand, supply and replacement rates described earlier. Such data can also be used to identify spatial, temporal, and distributional dimensions of diffusion and adoption patterns at a resolution that is otherwise absent in government statistics aggregated by state/province or district levels. Efforts to gauge seed quality are slightly more challenging, but not prohibitively so. In fact, infrastructure exists in many developing countries to assess seed quality. Public research organizations and seed certification/ quality assurance agencies routinely collect data on purity, moisture, and germination of randomly selected seed lots are often routinely collected by. These same organizations and agencies often collect data on genetic purity and varietal integrity as well, although they likely tend to do so on a more ad hoc or occasional basis as part of maintenance breeding or related research activities. That said, efforts to collect data on the physical and genetic qualities of seed can be improved by slightly augmenting the routines of public research and regulatory agencies, investing in the provision of requisite personnel and equipment, and taking advantage of the declining costs of new diagnostic tools and technologies. With investment in high throughput systems and sample collection strategies, testing procedures could be scaled to levels that provide effective monitoring of seed quality at a national level (e.g., ASTA, 2011; ISU-STL, 2014). And as the costs of advanced diagnostics come down, investments in high throughput genetic fingerprinting systems become equally viable, as demonstrated byWestengen et al. (2014) for maize in Tanzania and Rabbi et al. (2015) for cassava in Ghana. Furthermore, by shifting from quality control systems that rely on monitoring at all key points of the seed production process to a more straightforward system of point-ofsale inspection system, there is scope for significant efficiency gains in quality assurance. These systems would also help address the non-trivial concern that farmers are unable to identify or misidentify the variety they are cultivating when responding to a household survey

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modeled along the lines of LSMS-ISA or similar surveys. Thus, efforts to compare and validate farmer-reported variety information with alternative diagnostics such as expert assessment or genetic fingerprinting can help determine the nature and direction of bias (see Rabbi et al., 2015). By combining variety-level data on marketing, adoption and seed quality with spatial and household data, there is considerable scope to improve the quality of evidence used in decision-making on research priorities, public input provision programs, incentive mechanisms, and market interventions. Indicators such as those described above can be useful in strengthening the evidence underlying narratives formed by various seed system actors. With additional data and analysis on innovation, industry structure, and regulation—topics that are explored in the next sections—seed systemactors can potentially informand inform policymaking more effectively. 3.3. Seed industry innovation In addition to quantity and quality data, precise data on cultivar improvement activities are critical to understanding the rate of innovation for a given crop which, in turn, allows analysts to gauge a seed system’s capacity to deliver modern science to farmers and enhance agricultural productivity. Many of the performance indicators mentioned earlier—area planted to improved varieties/hybrids, changes in area planted over time, and estimations of the benefits associated with adoption—are used on an occasional basis to gauge innovation, but face measurement and methodological challenges (Morris and Heisey, 2003; Alston et al., 2011). Other approaches rely less on single indicators and more on industry analysis, for example, in case studies of public and private innovation patterns and trends in Asia’s seed markets (e.g., Pray and Fuglie, 2001; Pray and Ramaswami, 2001; Pray and Nagarajan, 2012; Gisselquist et al., 2013; Singh and Pal, 2015). However, regular and systematic data collection efforts needed to augment these approaches remain rare. Public disclosures of key indicators such as the number of varieties/hybrids released, the year of release, and their production quantities (Table 3) are still difficult to access, although some government agencies are making these data available more accessible online. See, for example, the expansive datasets posted to the Seednet India Portal, an initiative designed and developed by the National InformaticsCentre (Seednet, 2015). Table 3 Varietal releases for selected crops, years and countries. No. of varieties released Country

Crop

Years

Public

Private

Average no. of releases per year Public

Bangladesh

Maize (all)

1994–2011

Indonesia

Maize (composite)

2006–2012

Maize (hybrid)

2006–2012

11.7

Pakistan

Maize (all)

1990–2013

Vietnama

Maize (all)

1977–2012

118

Private

1.0

5.2

1.1

0.7

0.1

3.3

Source: Bangladesh: Naher and Spielman (2014); Indonesia: Jamal (2014); Pakistan: Rana (2014); Vietnam: Mau Dung (2014). Notes: a Figures for Vietnam are only available as combined totals of all (public and private) releases.

Apart from SeedNet, TRIVSA (mentioned earlier), occasional publications fromCGIAR centers,6 and a fewsimilar initiatives, innovation indicators are difficult to come by. One notable exception is the Agricultural Science and Technology Indicators initiative (ASTI, 2014), which collects and analyzes data on public investment in agricultural For example, see the occasional publications on world maize facts and trends fromthe International Maize andWheat Improvement Center (CIMMYT).

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research using an approach consistentwith the Organisation for Economic Co-operation and Development’s Frascati Manual (OECD, 2002). However, ASTI coverage is limited to R&D inputs—financial and human resources—such that it does not capture innovation outputs such as new crop- and variety-specific products, processes, and services. Moreover, ASTI indicators concentrate primarily on public sector spending: while ASTI does contain data on private R&D investment for certain countries in certain years, the data are rarely at a level of disaggregation comparable to its data on the public sector. Other sources of private sector data and analysis do exist, for example,McDougal (2015) in the U.K. and Francis Kanoi (2015) in India. However, their proprietary information products are often too costly or otherwise inaccessible to public sector analysts, regulators, or policymakers. That said, there are readily available and low-costways of constructing indicators that provide a sense of seed system innovation. Themost common is an index of varietal age for a given crop, which is calculated as the average age of varieties in productionweighted by the quantity of production.7 A higher average age is associated with a low rate of varietal turnover and, implicitly, a slowrate of innovation in the seed industry (Smale et al., 2008; Brennan and Byerlee, 1991). Historically, these measures have been calculated forwheat and rice using variety-specific seed production data from state-owned seed companies (see, e.g., Lopez-Pereira and Morris, 1994). However,with additional variety-specific data on private sector production, amore complete indicator can be calculated for maize, as demonstrated in Table 3. Importantly, this measure can also be calculated for the average age of varieties under cultivation at the farm level by using crop/plot- and variety-specific data from representative household surveys. Ragasa et al. (2013) demonstrate this for maize in Ghana, as do Krishna et al. (2015) for wheat in Haryana, India. But there is potential for expanding this analysis further using LSMS-ISA and other agricultural household surveys containing varietyspecific questions mentioned earlier, but also other agricultural household surveys that contain variety-specific questions. Information on the average age of varieties under cultivation—especiallywhen provided in a spatially disaggregatedmanner and correlated with social and economic attributes of the household, farm, and market—can provide useful insight into the heterogeneity in innovation among populations targeted by the seed industry. That said, it is also difficult to obtain accurate variety-specific responses in such surveys because of poorly pre-coded lists of variety names in survey instruments, or poor recall by farmers. This highlights the need for better survey design incorporating local knowledge, and, as mentioned earlier, the potential use of low-cost genetic diagnostics as a validation tool. 3.4. Seed industry structure Indicators of seed industry structure are another potentially important means of understanding the relationship between competition and innovation which, in turn, can inform analyses of the seed system’s capacity to deliver modern science to farmers and enhance agricultural productivity. The conventional measure of market structure is often source of seed—estimated quantities and shares of seed that are purchased from formal versus informal sources (disaggregated by crop) and, within the formal sector, seed that are purchased from public sources versus private firms and community, farmer, or civil society organizations. This measure provides a simple indicator of the size of the formal, commercial seed industry and its growth potential.8 Of course, this assumes that commercial seed is a viable substitute for farmersaved seed which, as noted earlier, may not always be the case. The varietal age index from Brennan and Byerlee (1991) using a weighted average is: WAt ¼∑iPitRit where Pitis the proportion of the area sown to variety i in year t; and Ritis the number of years (at time t) since the release of variety i.

In some cases, a further level of disaggregation or analytical nuance is required, for instance, in the case of Pakistan where formal seed sources—registered seed companies—informally sell large quantities of unapproved geneticallymodified cotton varieties through their existingmarketing channels (Rana, 2014). This particular case clouds the line between formal and informal seed sources by highlighting a practice inwhich formal sources are responsible for supplying “informal” (i.e., unapproved transgenic) seed. While it is a rare practice, these issues are not uncommon in other countries where unapproved transgenic cultivars have enteredmarkets through retail operations of known seed companies.

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While these indicators are useful in helping us understand the source of seed, they are often too aggregated to provide real insight into market concentration. Instead, consider two common indicators used to measure market concentration: four- and eight-firm concentration ratios (CR4 and CR8) and the Herfindahl–Hirschman Index (HHI). The CR4 and CR8 ratios measure the total market share held by the four or eight largest firms in the industry, respectively. The HHImeasures the size of firms in relation to the industry and is calculated as the sumof the squared market share (in percentage terms) of each firmin the industry.9 TheHHI approaches zerowhen a market consists of a large number of firms of relatively equal size, and increases both as the number of firms in themarket decreases and as the disparity in size between those firms increases. Because the HHI takes into account the relative size and distribution of the firms in amarket, it is considered a more comprehensive indicator of concentration than the CR4 and CR8 ratios (Scherer and Ross, 1990; Rhoades, 1995). Table 4 Concentration in Nepal’s seed market, by crop, 2012. Indicator

Rice

Wheat

Maize

Herfindahl–Hirschman index (HHI)

1294

2185

2070

Four-firm concentration (CR4) ratio (%)

63.6

82.2

90.9

Eight-firm concentration (CR8) ratio (%)

86.9

93.0

99.2

Source: Authors, based on data for Nepal from Sah (2014).

These indicators may be used to measure concentration in downstream product markets using the value or volume of seed sales by firms in the seed industry (Fernandez-Cornejo, 2004), or in upstream innovation markets using the number of varieties under development or field trial applications approved (Brennan et al., 2005). While indicators from a single year can be useful to gauge concentration, trend data provide greater analytical insight (e.g., Fuglie et al., 2011; Fernandez-Cornejo, 2004). An illustration is given in Table 4 for Nepal, indicating moderate concentration in country’s maize market, particularly when compared to rice. A similar illustration for India’s innovation market where prospective technologies are developed for the seed market is provided by Spielman et al. (2014) using data from Randhawa and Chhabra (2009) on field trials and transgenicmaterial imports attributable to the private sector to calculate concentration ratios. Their figures suggest that market concentration in India’s agricultural biotechnology sector decreased between 2006 and 2010, a trend that is likely explained by the entry of new firms into the field of biotechnology research. More importantly, these calculations demonstrate the feasibility of measuring and characterizing concentration in both product and innovation markets. A related indicator is the extent towhich government participates in the seedmarket and howthe gains and losses associatedwith such participationare allocated between seed companies, farmers, and other seed system actors. Interventions include direct engagement in seed production and distribution through state-owned seed enterprises and extension services which, under certain circumstances, can impede private sector entry and participation in the seed market.More indirect interventions include the provision of specific advantages to state-owned enterprises or selected private firms, such as production subsidies, tax breaks, preferential access to improved germplasm from the public research system, well-endowed land for seed production, subsidized credit, credit guarantees, tariff exemptions on equipment imports, and other benefits that lower seed production and distribution costs. Other interventions may take the form of direct subsidy payment to farmers purchasing seed from state-owned enterprises or selected firms. 9 Formally, theHerfindahl–Hirschman Index is given asHHI ¼∑Ni S2i where Si denotes the market share of the ith firm of N firms operating in the market. Index values between 1500 and 2500 indicatemoderate concentration, and index values greater than 2500 indicate high concentration. The maximum index value is 10,000 and denotes one firm holding 100% of the market.

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Many developing countries in Asia have dismantled the large input subsidy regimes that underwrote rapid productivity growth in food staples during the 1960s and 1970s, although some subsidies persist e.g., water and electricity in India or fertilizer in Pakistan (Anderson, 2009; Anderson and Martin, 2009). Seed subsidies are also somewhat resilient to policy changes, possibly because they are a low-cost intervention relative to subsidies for bulky inputs such as fertilizer, or because they are conventionally viewed as a critical means of encouraging farmers to experiment with new varieties. However, there is a notable absence of data on seed subsidies and other interventions in seed systems that distortmarket signals. Without such data, it is difficult to calculate the price elasticity of demand for seed and answer common questions such as whether seed providers raise their prices in close proportion to the subsidy amount, or whether farmers have bargaining power in these markets. And without such answers, policymakers can rarely make evidence-based decisions on the optimal allocation of public resources for seed industry development. Yet in many cases, the data described above can be collected with a relative ease fromthe same sources discussed earlier: public documents on government investments and programs in agriculture, household and market/industry surveys, and expert opinion surveys. But in instances where detail and nuance matter, case-study approaches are likely to be more appropriate. Business school case studies, industry analyses, and other qualitative approaches can provide greater insight into howpublic and private organizations conduct R&D, howthey organize seed distribution and marketing, or how they navigate weather risk, market distortions, and regulatory systems. See, e.g., Rabobank (2006) on India’s seed industry. 3.5. Seed market regulation Indicators of the presence and effectiveness of seed industry regulations offer another potentially important means of understanding a seed system’s capacity to deliver modern science to farmers and enhance agricultural productivity. Unfortunately, regulations governing seed markets have not beenmethodically compiled formost developing countries. An early indication of the feasibility of collecting these indicators is demonstrated in a 10-country pilot study conducted by the World Bank Group (2014) that is loosely modeled on the “Ease of Doing Business” report series of the World Bank (2015),10 but focuses explicitly on identifying and monitoring indicators that capture data on 19 seed systems regulations and policies that are posited to enable the business of agriculture. Another indication of feasibility is found in GRAIN’s (2015) interactive atlas that highlights seed laws around the world, focusing specifically on the nature and extent of farmers’ rights in each country. We extend insights from these sources by describing below regulatory indicators covering varietal registration, seed certification, intellectual property rights protection, and biosafety regulation that may be useful in the analysis of developing country seed systems. 3.5.1. Varietal registration and seed certification Historically, when the majority of field crop varieties were developed by public research systems, regulations were codified in varietal registration procedures that were relatively standard processes for public breeders to navigate. As privately developed varieties—including privately developed maize hybrids—became increasingly available, countries have had to decide how to adjust variety release and registration requirements to accommodate this wider offering. Regulatory responses have ranged from a single testing and release system for all varieties to allowing private varieties to enter the seed market without any release requirements. To illustrate the importance of regulatory system analysis, consider the policies and procedures found in several of the Asian countries highlighted in this study. While these countries shared a common set of procedures that revolved around value in cultivation and use (VCU) testing and testing for distinctness and uniformity and stability (DUS), there is significant variation in where the procedures are applied and the timeinvolved. For example, For a critique of this report series, see the Independent Panel Reviewof the Doing Business Report (2013).

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whereas extensive VCU andDUS testing are required for all cultivars in most countries, Bangladesh does not require extensive testing formaize: testing is only required for rice,wheat potato, jute, and sugarcane,which represent the strategically important “notified” crops that are required to undergo close government scrutiny. And whereas Bangladesh and Vietnam have relatively short testing periods of just two to three years, countries such as Nepal can require a full five years of testing. Next, consider seed quality control regulations—an areawith similar levels of variation between countries. For example, notified crops in India, Bangladesh, and several other countries, must undergo certification processes that include examination of the documentary evidence regarding the source of the seed for the current seed crop, several inspections of the seed crop in the field, and sometimes grow-outs or laboratory analysis of harvested samples. Inmany of these same countries, non-notified crops can move to market as quality declared or truthfully labeled seed: regulatory regimes that shift the burden of quality control to the seed provider, whose business success may depend on building brand reputation and securing repeat clients; or the farmer, who can pursue legal recourse for seed that does not meet the advertised characteristics of physical or genetic purity. Certification—the higher quality control standard—is expressly designed to address the asymmetries of information between seed provider and farmer, i.e., the fact that it is often difficult for farmers to assess the identity or quality of seed upon visual inspection. But this does not necessarily guarantee that certification or similarly stringent regulations actually assure the supply of seed relative to other regulatory options. Companies may choose a higher standard of self-regulation to protect their brand, or the seed industry may self-regulate collectively to exclude companies they consider to be lower quality providers, competitors, or otherwise undesirable. It is also possible for public regulators and public quality control agencies to share duties, for example, by accrediting seed companies or third-party laboratories to carry out a majority of required inspections while allocating public agency with responsibility for reviewing company inspection data, conducting independent point-of-sale inspections, or holding an oversight role. Rana (2014) highlights these issues in Pakistan, where the absence of effective quality control in the cotton seed sector calls into question the very utility of the country’s seed certification system. This is in stark contrast to Pakistan’s experience with maize, where quality control seems to be driven by a single market leader—Pioneer, a leading multinational company—seeking to protect the reputation of its brand. Measurable indicators of a country’s regulatory environment need to both describe the registration and quality control process and assess its effectiveness. Indicators on registration procedures include answers to these questions: (a) which crops must be registered; (b) how many years of testing in how many locations are required before a variety can be released; (c) If private varieties must go through the same process, are they treated on an equal basis with public varieties; (d) are imported private varieties given equal footing to public or private varieties developed domestically; (e) are public varieties that have been released in other countries with similar ecologies offered a fast-track to release?11 Similarly, indicators on quality control procedures include answers to questions such as: (a) which crops fall under certification or truthful labeling regulations; (b) are inspections conducted by a public agency, by companies themselves, or by third parties; (c) are inspections conducted during the production process or at point-of-sale, at what frequency and geographic/market coverage, and with what size inspection force; (d) atwhat rate are seed lots rejected under these various inspection regimes, and how frequently are inspections; and (e) how many instances of legal recourse against seed providers have been pursued in the courts, how transparent are the procedures, and what levels of sanctions are imposed? Additional questions might focus on trade regulation issues, for example: (A) can breeders easily import genetic materials from foreign sources, and can they share domestic material with foreign breeders; (b) do plant sanitary and phytosanitary regulation and plant quarantine procedures exist, and are they effectively implemented; and (c) are there laws in place to prevent unsanctioned imports such as seed trade across porous borders? For example, Bangladesh, India and Nepal recently signed an agreement that harmonizes rice varietal registration procedures between the countries, paving theway for lower regulatory burdens and more rapid release of improved varieties developed in any of the three countries (IRRI, 2014).

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Answers to these questions—garnered from government documents, corporate disclosures, or expert interviews— can provide a set of individual indicators or the basis for calculating a composite index of regulatory coverage and effectiveness. On its own, such indicators or an index can provide a potentially useful means to explore associations between innovation, productivity, and regulation in developing country seed systems. The pilot study by the World Bank Group (2014) demonstrates the feasibility of gathering data for a subset of these indicators; however, the limited variation in their data suggest the need for greater detail. 3.5.2. Intellectual property rights and biosafety There is an extensive literature predicting that the entry and growth of private R&D investment in developingcountry agriculturewill hinge significantly on intellectual property rights, particularly in cases involving advanced biotechnology tools and products (Byerlee and Fischer, 2002; Pingali and Traxler, 2002). However, there are also predictions that IPRs, by providing private firms with temporary monopolies, may limit smallholder farmers’ access to new technologies in developing countries (Goeschl and Swanson, 2000; Srinivasan and Thirtle, 2000). Others suggest that IPRs are inconsequential to smallholders in developing countries because firms rarely seek IPRs in markets offering relatively limited value or where other means of IPR protection such as hybridization might exist (Binenbaum et al., 2003; Spielman and Ma, 2015). There is some evidence of the impact of IPR protection on innovation and productivity (Kanwar and Evenson, 2003; Kolady et al., 2012). However, others have found the evidence to be mixed at best (Naseem et al., 2010; Spielman and Ma, 2015). Yet despite the ambiguous nature of the evidence, IPRs still loom large in the policy discourse on developing country seed systems. Thus, there is utility in benchmarking the presence and effectiveness of their IPR regulations, even if as ameans of later exploring their contested effect on innovation, competition and productivity. A simple measure of IPR regime strength might be to determine whether a given country has enacted legislation that extends IPRs over plant varieties in a manner that is compliant with the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS); whether the country has joined he International Union for the Protection of New Varieties of Plants (UPOV); and whether the country opted for the UPOV 1991 or 1978 Act, where the latter contains language that expressly protects farmers’ privilege. Additional measures might reference the presence of patent laws and other IPR legislation designed to provide firms with the right to protect genes, gene sequences, tools and processes used in the development of transgenic crops. More complex measuresmight capture the extent towhich innovators have sought recourse for IPR infringements in the courts, or the extent towhich rules and regulations protect farmers’ rights to save, exchange, and sell seeds to other farmers, or seek IPR protection over extant varieties (e.g., GRAIN, 2015). Table 5 UPOV membership, selected countries, 2015. Countries that are members of UPOV (year of joining)

Countries that have initiated the procedure for acceding to the UPOV convention

Countries that have been in contact with UPOV for assistance in the development of laws

Kyrgyzstan (2000)

India

Cambodia

Vietnam (2006)

Tajikistan

Myanmar

Philippines

Pakistan Thailand

Source: UPOV (2015).

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The Ginarte-Park Index of IPR regime strength provides a useful model for what might be calculated with specific reference to developing- country seed systems and agriculture more generally (Ginarte and Park, 1997). The index assesses IPR regime strengthen on a scale of 0 (a weak regime) to 5 (a strong regime) based on indicators of IPR coverage, duration, enforcement, and limitations. In itsmost recent version, the index provides coverage of 121 countries between 1960 and 2005 in five-year increments (see Park and Wagh, 2002; Park, 2008). Other indices such as Rapp and Rozek (1990) are also viable models. Several Asian countries have also introduced legislation that protects plant breeders’ rights through PVP and/or sui generis (standalone) systems, are moving towards compliance with TRIPS, and have signed on to UPOV 1991 as part of their commitment to plant breeders’ rights (Table 5). But India’s experience may eventually emerge as the most useful case study of whether the measurement of IPR protection matters. The hallmark of India’s seed policy regime is the Plant Varieties and Farmers’ Rights (PPV&FR) Act of 2001, designed to incentivize private investment in plant breeding while simultaneously protecting farmers’ privilege. With the establishment of the PPV&FR Authority in 2005 and the commencement of varietal protection application processing in 2007, both the public and private sectors have submitted applications for protection of outputs from their breeding programs (Table 6). These data provide a clear indication of how innovators have responded as expected to the regulatory regime. Efforts to obtain additional data on whether India’s courts have adjudicated on infringement cases and, if so, whether the outcomes of their decisions have had an impact on the private R&D investment,would be a valuable addition. By tying these indicators together and analyzing them in the context of other indicators discussed in previous sections, it is possible to paint a more accurate picture of the influence of IPR regulation on innovation, competition and productivity. Next, we turn to biosafety regulation. The relevance of biosafety regulation to a given country’s seed systems is contingent on broad policy decisions made about whether to cultivate transgenic crops or not. In many countries, that decision is de jure, and influenced by the relative strength of competing—and highly contested—narratives around the introduction of genetically modified crops and other organisms. But in other countries, the decisionmay be influenced by the de facto presence of unapproved transgenics. Whether transgenic commercialization is de jure or de facto in a given country, seed industry development requires national capacity to provide an appropriate biosafety system to evaluate the consequences of transgenic crop releases to human and environmental health. Conversely, the absence of such systems can quickly undermine the prospects for transgenic crop improvement, especially when conflicting advocacy coalitions with distinct narratives collide over the design and implementation of biosafety regulations (Kingiri, 2011). Table 6 Applications for plant varietal protection, India, 2007–2014. Crop

Public

Private

Farmer

Maize

117

252

Cotton

114

934

Rice

242

260

3060

180

Sorghum

107

Wheat

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Pearl millet

Source: PPV&FR (2014).

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Table 7 Genetically modified crop events approved in Asia, 2013. Country

Maize

Other major crops

Bangladesh

Eggplant

India

Cotton, soybean

Iran

Rice

Myanmar

Cotton

Pakistan

Cotton

Australia

Yes

Alfalfa, canola, cotton, potato, rice, soybean, wheat

China

Yes

Canola, cotton, maize, rice, soybean

Indonesia

Yes

Soybean, sugarcane

Japan

Yes

Alfalfa, canola, cotton, potato, soybean

Malaysia

Yes

Soybean

New Zealand

Yes

Alfalfa, canola, cotton, potato, rice, soybean, wheat

Philippines

Yes

Alfalfa, canola, cotton, potato, rice, soybean

Singapore

Yes

Alfalfa, canola, cotton, maize, soybean

South Korea

Yes

Alfalfa, canola, cotton, potato, soybean

Thailand

Yes

Soybean

Turkey

Yes

Soybean

Vietnam

Yes

None

Source: ISAAA (2015).

Indicators on the status of biosafety legislation governing the commercialization and release of transgenic crops, as well as the financial and technical capacity to enforce such legislation, can provide useful insights into the enabling environment for innovation in a rapidly growing niche of Asiaâ&#x20AC;&#x2122;s seed market. As of 2015, 12 Asian countries had approved genetically modified events for maize (Table 7) (ISAAA, 2015). What is absent, however, is a set of indicators that capture the presence and effectiveness of this biosafety systemâ&#x20AC;&#x201D;indicators that capture uncertainties such as those in India, as well as progress toward the creation of an environment designed to ensure safe and effective use of biotechnology in agriculture. FAO, for example, maintains an inventory of national biotechnology strategies and policies (FAO, 2015). Such inventories could be one of several elements in a biosafety index similar to the Ginarte-Park Index mentioned earlier. Ideally, the index would integrate data on the existence, implementation, and efficacy of public policies and regulations on the safe use of biotechnology applications in agriculture, and would be a relatively low-cost investment in country- level collection of secondary data that is easily updated on a period basis.

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4. Discussion: where data and analysis might inform policy discourse The current indicators being used to measure performance, competition, and innovation in the maize seed sector fall short of measuring these critical industry characteristics on many counts. The indicators suggested above provide greater resolution at various levels—spatial, social, household, farm, plot and varietal—and represent a first step towards more methodical analysis of the opportunities and tradeoffs in seed system development. Such analysis can be used to shape national agricultural growth strategies, set public research priorities, design private innovation incentives, construct public input provision programs, and encourage maize seed industry development and productivity-enhancing technology adoption. In this section, we highlight several instances where current policy discourse on seed system development in Asia would benefit from such analysis. India provides a useful starting point given its considerable experience with input subsidy programs to accelerate technology adoption and productivity growth. Under the National Food Security Mission (GOI, 2007), India’s most recent agricultural sector support initiative, farmers purchasing seed for certain types of crops (e.g., hybrid rice) receive direct subsidies, reportedly up to 50% in somestates. Yet anecdotal accounts of seed sellers increasing their retail prices in response to the availability of these subsidies suggest that the scheme may be poorly designed and targeted. Estimates of price elasticities of demand and supply extracted from household and market surveys, combined with distributional analyses of adoption patterns extracted from household surveys, could be used to furnish evidence on the effectiveness of such schemes and their inherent tradeoffs.12 Such analysis could, in turn, influence the design of better targeting mechanisms and better uses of public funds. Policy discourse in Bangladesh offers a similar opportunity for greater use of evidence. At present, the state-owned Bangladesh Agricultural Development Corporation (BADC) plays a central role in the distribution and marketing of improved cultivars through an extensive production infrastructure and its large network of shops and authorized retailers (Ar-Rashid et al., 2012; Naher and Spielman, 2014). It also retains a significant portfolio in seed for several crops that might bemore appropriately handled by the private sector, including hybrid rice and maize. Given that BADC’s operational costs are partly underwritten by scarce public resources, a closer analysis of market concentration and industry structure using the indicators suggested above could help inform discussions about rationalizing BADC’s role and shift it into amore strategic position that supports the country’s growing private seed sector. This was the original but partly unrealized intent of the 1993 National Seed Policy, provisions of which called for the opening of equitable opportunities to the public and private sectors at all stages of the seed industry. Similar evidence on market concentration and industry structure could be used to informsome of Asia’s more contentious policy debates around the equitable distribution of gains from innovation between farmers and seed companies and the related issues of seed sovereignty, foreign direct investment, and multinational company participation in domestic seed markets. This debate has been central to public discourse around imports and promotion of hybrid maize in Nepal and the role of donor-funded projects involving multinational cropscience companies (see, e.g., Nepali Times, 2011; SciDev.net, 2011). Similar debates on distributional issues and the multinationals are ongoing in Pakistan (GRAIN et al., 2010) and the Philippines (Kuyek, 2000), among others (GRAIN, 2005), but are often absent of evidence. Measurements of industry concentration in innovation and product markets could help monitor changes in market concentration and detect anti-competitive practices. Evidence on regulatory system effectiveness and analyses of the costs and benefits of regulation could also play an important role in informing policy debates in Asia. In Pakistan, for instance, a policy debate is emerging around the 2015 Amendment to the Seed Act of 1976 and a proposed act on plant breeders’ rights. Both pieces of legislation seek to recognize and open the seed market for the private sector, but offer little in terms of regulatory reform. Rather, the amendment to the Seed Actwould extend the federal government’s regulatory authority and reach over 12 A study by Rickert-Gilbert et al. (2011) illustrates these trade-offswithMalawi’s largescale seed and fertilizer subsidy program, and is readily replicable in the Indian context.

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the private sector, without sufficient recognition of the associated costs (and benefits) of a stronger regulatory authority when compared to alternatives such as a truth-in-labeling regime (See Rana et al., forthcoming). A more evidence-based debate could reduce the dependence on conjecture and speculation these situations. Similarly, stakeholders in debates over genetically modified crops would benefit from a keener sense of precisely how comprehensive their country’s biosafety regulations are in addressing human and environmental health risk, andwhether the scientific, technical, and administrative capacity exists to implement these regulations. In Nepal, the policy debate on hybrid maize described above would have benefited from this type of information when several narratives emerged that incorrectly conflated demonstration trials of imported hybrid maize with the introduction of genetically modified crops, loss of national sovereignty to a multinational company, and abrogation of Nepal’s commitments to international treaties on plant genetic resource use and conservation (Nepali Times, 2011; SciDev. net, 2011). A similar use of evidence could have informed debates in countries that approved the cultivation of selected GM crops (Bt eggplant in Bangladesh; Bt maize in the Philippines and Vietnam), in countries that have pursued biosafety approvals for GM crops but stopped short of commercialization (Bt eggplant in India; Bt rice in China), and in countries that have not yet reached a decision beyond a single crop and a single class of technology (Bt cotton in India and Pakistan). In India, for example, the policy debatewould have benefited froma better and earlier sense of whether the country’s biosafety system had sufficient competency and capacity to fulfill its mandate. Answers to this question— whether in the form of qualitative or quantitative evidence—could have shaped narratives and informed decisionmaking in two instances. This could have occurred as early as 2001, when regulators had to decide howto handle the approval of Bt cotton after unapproved varieties were already detected in farmers’ fields; and later, in 2010, when the Minister of Environment issued a moratorium on the commercial release of Bt eggplant, despite the presence of a national biotechnology development strategy, approved biosafety reviewprocedures, accumulated experience with Bt cotton, and official approval for commercial cultivation by the appropriate regulatory committee (Herring, 2007; Kolady and Herring, 2014). A similar experience with Bt cotton in Pakistan in which the technology became available to farmers several years before the biosafety regulatory system issued its approval, similarly suggests that better data and analysis on regulatory efficacy could have been useful in shaping the continuing debates about subsequent Bt cotton approvals in Pakistan (Rana, 2014; Spielman et al., 2015). Necessarily, indicators and analysis do not alone effect policy change: the implementation of policy reforms and the conduct of regulation are determined by a complex landscape of political economy factors in a given country. As such, this discussion is only meant to demonstrate the potential role that evidence can play in promoting seed industry development and improving the delivery of modern science to farmers and enhancing agricultural productivity. It is meant to help guide decisions on investment and regulation, rather than provide definitive guidelines for measuring, regulating, and governing seed systems.

5. Conclusion This paper explores the measurement of performance, innovation, and competition in developing-country seed systems to better inform policymaking aimed at improving the delivery of productivity-enhancing modern science to farmers. Drawing on experiences from selected Asian countries, the paper demonstrates that while policy reforms introducedbeginning in the 1980s have led to seed industry growth in many countries, opportunities for subsequent policy changes is partly constrained by the absence of analyses utilizing indicators that adequately capture the trade-offs associated with policies meant to effectively govern a modern seed industry. With better measures of the seed industry health such as high-resolution data on productivity and distributional aspects of performance, analyses of innovation pipelines, products, and processes, and indicators on concentration and competition, policymakers can more accurately assess available policy options. Necessarily, policymaking does not occur in a vacuum, and policymakers must contend with competing narratives, each with distinct and varying goals, values, and levels of influence. Yet better data and analysis are also central to formulating and communicating these same narratives.

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Several recommendations do emerge from this discussion. First, there is clearly scope for expanding the systematic collection and analysis of data that are relevant to seed systems in developing countries. Initiatives such as DIIVA, TRIVSA, and LSMS-ISA, are all examples of data-intensive efforts that contribute along these lines and could be expanded. Second, there are opportunities to use new tools in genetic diagnostics to develop new quality indicators or validate existing indicators to improve seed system performance measurement. Third, there is scope to build regulatory indicators and indices covering individual components of a country’s seed regulatory system—for example, registration, quality control, IPRs, and biosafety—or the system as a whole. The Ginarte-Park Index offers a useful model, as does the pilot study by the World Bank Group (2015). Finally, there are opportunities to make these data available and accessible to researchers and decisionmakers in the public, private and civil society sectors to better inform policymaking.

Acknowledgments This paper was prepared with support from the Regional Strategic Analysis and Knowledge Support System in Asia (ReSAKSS-Asia) with funding from the United States Agency for International Development (USAID); the Cereal Systems Initiative for South Asia (CSISA), with funding from USAID and the Bill and Melinda Gates Foundation; and fromthe CGIAR Research Program on Policies, Institutions, and Markets (PIM). The authors thank Rob Tripp, Orachos Napasintuwong, Ahsan Rana, and Ram Sah for sharing their thoughts and insights; Simrin Makhija and Fatima Zaidi for their research assistance; and Lorena Danessi for her administrative support. Any and all errors are the sole responsibility of the authors.

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CHARTS & TABLES Figure 1- South Asia remains the fastest-growing region in the world.

Source- World Bank. 2017. “Globalization Backlash.” South Asia Economic Focus (April), Washington, DC: World Bank. Doi: 10.1596/978-1-4648-1095-4. License: Creative Commons Attribution CC BY 3.0 IGO

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Figure 2. The eastern part of the region is leading, Nepal and Maldives are bouncing back.

Figure 3- Industrial production has accelerated in Bangladesh and Pakistan.

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Figure 4- Exports have stopped their decline.

Figure 5. Inflation slowed down across most countries in South Asia.

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Figure 6- FDI inflows are stable but not stellar

Figure 7. Afghanistan- Contributions to real GDP

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Table 1. Afghanistan macro outlook indicators (annual percent change unless indicated otherwise)

Figure 8- Bangladesh, Contribution to real GDP

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Table 2- Bangladesh macro outlook indicators (annual percent change unless indicated otherwise)

Figure 9. Bhutan, Contributions to real GDP growth

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Table 3- Bhutan macro outlook indicators (annual percent change unless indicated otherwise)

Figure 10. India, Contributions to real GDP growth

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Table 4- India macro outlook indicators (annual percent change unless indicated otherwise)

Figure 11. Maldives, Contributions to real GDP growth

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Table 5- Maldives macro outlook indicators (annual percent change unless indicated otherwise)

Figure 12. Nepal, Contributions to real GDP growth

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Table 6- Nepal macro outlook indicators (annual percent change unless indicated otherwise)

Source- World Bank. 2017. â&#x20AC;&#x153;Globalization Backlash.â&#x20AC;? South Asia Economic Focus (April), Washington, DC: World Bank. Doi: 10.1596/978-1-4648-1095-4. License: Creative Commons Attribution CC BY 3.0 IGO

Figure 13- Pakistan, Contributions to real GDP growth

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Table 7- Pakistan macro outlook indicators (annual percent change unless indicated otherwise)

Figure 14- Sri Lanka, Contributions to real GDP growth

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Table 8- Sri Lanka macro outlook indicators (annual percent change unless indicated otherwise)

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NOTES

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