Is it time for a new seed paradigm for scaling seeds in Africa?

A presentation given at the Regional Dialogue on Strengthening African Seed Systems:

Technical, Economic and Policy Challenges July 15, 2014

Seed in the context of Global Food Security

• Seed is placed highest in order of importance among agricultural inputs– Quality seed gives the single highest return on investment of

crop inputs that any farmer may purchase– Acceptance of new seed technologies is dependent on reliable

supply

• No other input can give such a return on investment or on long term food security– Providing farmers the best choice of seed for their particular

environment and needs is paramount – Bad seed cannot be ‘made better’ by adding other inputs – Purchasing power and cash-flow challenges of farmers should

be solved in other ways (i.e. not by giving sub-standard seed)

Seed gives the highest ‘bang for the buck’ of any agricultural investment

Foundations

Consultants Academics

FAO National Programs

Donors

Previous Seed “Projects” in Africa

Seed Industry

Seed Companies

CGIARSeed

Initiative

Inputs Initiative

NARS

NGO’s

Contractors

CBO

Commodity Initiatives

RegulatoryInitiatives Farmers

Seed Industry and Farmers were ‘awkward guests’ in the Development Agenda

Private Sector

Understanding seed demand

• Acute seed insecurity– Civil and/or natural

disasters

• Chronic seed insecurity– Usually as a result of

poverty

• Demand for quality seed– Hybrids

• Demand for new varieties

Existing seed systems

• Informal (farmer) seed system– Seed production integral to

crop production– Farmer seed selection– Regulation through “good

neighborliness”– Range of seed acquisition

methods– New varieties through social

networks, local selection, and formal seed system

– Very resilient

• Formal (commercial) seed system– Seed multiplication

separate from crop production

– Quality control regulated externally (seed legislation)

– Seed acquired for cash– New varieties through

research and development– Dependent on a regular

demand

Who are the seed customers?• Deficit producers

– Risk averse– Few fungible assets

• Vulnerable to disasters

– Food and nutritionally insecure– Depend on grain markets

• To meet production shortfalls• For seed

• Commercially oriented farmers– Risk takers– Greater level of assets

• Less vulnerable to disasters

– Market surplus production– More likely to purchase seed

Organizational arrangements

• Formal (commercial) seed system– Vertically integrated

• Large multinationals• Private capital

– Vertically coordinated• Smaller seed companies• Mix of investment sometimes including public

Vertically integrated versus vertically coordinated

• Vertically integrated– Strategic research

• Public and private sector investment

– Applied research• Mainly private sector

investment

– Market research• Private sector

– Marketing• Private sector

• Vertically coordinated– Strategic research

• Mainly public sector investment

– Applied research• Mainly public sector

investment

– Market research• Public and private sectors

Formal seed systems

• Successful systems are commercially viable• Public investments in crop improvement need to be accessible

– Stimulate seed entrepreneurship– Reduce the cost of seed

• Supportive regulatory framework– Stimulate seed trade

• Effective regulation required– Quality control etc– Plant variety protection

• Development should support and not replace private initiative

Constraints to seed sector development

• Technological• Institutional• Policy• Output markets• Relief seed

Technological constraints

• Availability of improved germplasm– Open-pollinated varieties– Hybrids

• Biological protection of Intellectual Property (IP)• Provides incentives for commercial investment

– Research– Seed production and marketing

– Transgenics

Institutional constraints

• Lack of technical capacity– Seed production, processing and marketing

• Poorly developed regulatory systems– Seed quality control– Seed testing services

• Over regulation increasing transactions costs

Policy constraints

• Small national seed markets• Different agro-ecologies within countries• Similar agro-ecologies between countries• Different regulations between countries

– Variety release– Phytosanitary standards– Very limited Plant Variety Protection laws

• Results in limited seed trade

Output market constraints

• Limited development of output markets• High price volatility• Disincentive to farmer investment• Farmer organizations provide one option

– Forward contract– ‘Warrantage’ system to reduce volatility

• Introduction of grades and standards– Incentive to use improved seed

• More uniform and higher quality of produce

High market transaction costs

• Results in expensive seed in rural markets– Focus on few crops with

effective demand• High overheads of larger

seed companies– To maintain breeding

programs• Smaller overheads of

smaller companies– Depend on publicly

developed germplasm

Economies of scale in crop breeding

• Limited commercial investment in breeding• Public investments limited & inconsistent• CGIAR major source of germplasm • Increased adoption with seed investment

Existing approaches

• Supply driven– Free seed delivery

• “Seeds and Tools” programs• Starter packs/targeted inputs program

• Subsidized market-oriented approaches– Community seed banks– Seed for grain exchange

• Market-orientated approaches– Seed fairs– Small seed packs– Commercial seed sales

• Uncoordinated effort between stakeholders

The way forward

• Improve flow of information to seed stakeholders

• Improve access to public varieties• Support and strengthen development of private

sector capacity• Promote the development of regionalized seed

markets• Sustain investment in plant breeding• Support commercial investment

Improved flow of information to seed stakeholders

• Develop seed catalogs– Provide information on adaptation– Provide information on seed availability

• Publicly developed varieties• Commercial varieties

• Publicize new varieties– Community radio– Extension, NGOs, input suppliers, and farmers– On-farm demonstrations

Expanded on-farm demonstrations

• Exposes farmers to new varieties• Need to ensure that seed is available to

respond to created demand• Involve input dealers and entrepreneurs

Improving access to public varieties

• Establish foundation seed units• Sale of small packs• Capacity building in seed production

– Hybrids

Foundation seed availability

• Need for foundation seed of publicly developed varieties

• Effective seed storage to maintain seed stocks• Cost recovery through sales• Market foundation seed

– Organized groups of farmers– Seed entrepreneurs– Seed companies

• Provide training in seed production and marketing

Seed storage and processing

• High capital cost of equipment• Make effective use of underutilized public

facilities• Provide services on contract

– Seed entrepreneurs– Seed companies– Farmer associations

Promote the development of regionalized seed markets

• Harmonization of procedures– Variety release– Seed certification– Streamline quarantine pests and diseases– Establish plant variety protection laws– Implement an accreditation system– Streamline export/import regulations– Strengthen seed trade associations

Regional variety release (SADC)

Need for collaboration

• National governments• Regional economic

communities• Research institutions

– International– National

• Private sector– Seed companies– Farmer associations– Seed trade associations

Attract commercial investment

• Remove barriers to entry

• Let farmers decide– Retain DUS– Remove VCU

• Subjective assessment

• Allow and support introduction of hybrids

• Introduce Plant Variety Protection laws

Conclusions• Successful formal seed systems are the domain of

commercial companies not governments• Public investment needed in crop improvement• Balance between public and private investment

needs to be dynamic• Private investment needed in seed production and

marketing• Effective regulatory framework and support services

needed• Ensure relief interventions don’t undermine

development

Constraints

• Uncoordinated effort• Many released varieties never multiplied• High market transaction costs

– High overheads of larger seed companies• Markets distorted by relief seed• National seed markets too small• Private investments in breeding limited• Public investments inconsistent & inefficient• Limited output market development

Background• Improved varieties developed by researchers have not been accessible to

farmers due to lack of commercially viable or effective product deployment systems

• Lack of consistent quality and supply impedes uptake of new varieties.• Seed Industry best suited to ensure a long term supply of quality seed to

farmers• Slow in industry due to numerous challenges

– Non-competitive levels of credit access and funding for companies, poor seed systems infrastructure

– Regulatory capacity, environment, complexity or an inconsistent administration– Government and Donor ‘free seed programs’ or grain distribution– technical and economic constraints– Under developed business and technical skills– Germplasm and market access

Conclusions