September 2, 2015
Author: Calestous Juma, Professor of the Practice of International Development; Director, Science, Technology, and Globalization Project; Principal Investigator, Agricultural Innovation in Africa
The seed industry in sub-Saharan Africa is informal in nature, with approximately 80% of farmers saving and replanting seeds from year to year. This gives them security of access. But improved varieties — including high-yielding and hybrid crops — will increase productivity and income.
To get these seeds into the hands of farmers, a better marketing and distribution system is needed. Local small and medium-sized seed enterprises have a comparative advantage in reaching this underserved market due to their size and market reach.
There has been considerable concern over the potential control of Africa’s seed sector by large corporations. While such firms continue to operate in most countries, it notable that Africa’s seed sector is currently dominated by local start-ups.
The firms are well positioned to promote food security and improve livelihoods among marginalised rural communities. They could help grow the fledgling seed industry, but need better access to credit, research facilities and human resources to achieve their full potential.
What’s holding back the sector in Africa
The seed industry in sub-Saharan Africa suffers from five levels of bottle necks.
The first are political and technical policies. Import procedures in Tanzania, for instance, are cumbersome enough to dissuade seed imports. In Zimbabwe, during the economic crisis, the government banned seed exports.
Secondly, establishing a seed company has a high initial cost, requiring access to credit. The company also needs reliable research facilities and qualified human resources.
Thirdly, the production of seed suffers from a lack of adequate and adapted input, from expensive production costs and lack of production credit, and from poor weather and unfavourable land policies.
Fourthly, poor infrastructure in the value chain, such as poor retail networks or sales points, jeopardise marketing and access to the farmers.
And finally, farmers tend to have low demand for seeds.
Over the past five decades India has transformed the industry with targeted interventions, showing that major changes are possible with the right approach.
What India did
Millions of small-scale farmers in India live in harsh environments where rainfall is limited and irrigation and fertiliser are unavailable. In these areas many farmers have long grown sorghum and pearl millet.
Production from these crops was low, however, and so were returns to farmers. This changed when improved, higher-producing varieties were developed and distributed starting in the 1970s.
Since then, a succession of more productive and disease-resistant varieties has raised farmers’ yields and improved the livelihoods of about 6 million millet-growing households and 3 million sorghum-growing households. Although public funding was the key to developing this improved genetic material, private seed companies have helped ensure that these gains were spread to the maximum number of Indian farmers.
Three key interventions increased investments in crop improvements during the 1970s. These were the development of efficient seed systems, a gradual inclusion of the private sector in the 1980, and the liberalisation of the Indian seed industry in the late 1990s.
At the beginning of the Green Revolution, India decided to create state seed corporations. Gradually, they replaced state departments of seed production and formed the nascent foundations of a formal seed industry. But the industry was heavily regulated, with limited entry and formation of large private domestic or foreign firms.
In 1971, India began deregulating the seed sector, relaxing restrictions on seed imports. It also allowed the entry of private firms. This, combined with a new seed policy in 1988, spurred enormous growth in private sector seed supplies.
Sorghum and pearl millet breeding by private companies began around 1970, when four companies had their own sorghum and pearl millet breeding programs. By 1985 this number had grown to 10.
One major reason for this exponential growth was the strong public sector research on sorghum and millet. International agricultural research centres exchanged breeding material with public and private research institutions. National agricultural research centres and universities also provided breeder seed to private seed companies.
Currently, the Indian market for agricultural seed is one of the biggest in the world. More than 60 private seed companies supply improved pearl millet to small-scale farmers and account for 82% of the total seed supply, while more than 40 companies supply improved sorghum, accounting for 75% of supply.
Many of these companies benefit from the availability of public research on improved pearl millet and sorghum and from innovative partnerships that disseminate new materials to the private sector.
The ultimate beneficiaries of this public-private system are the millions of small-scale farmers who grow sorghum and millet. Public research agencies contribute genetic materials and scientific expertise to improve crop varieties when the incentives for private-sector involvement are limited.
Private companies then take on the final development of new varieties and seed distribution. In this way, the benefits of crop improvements are delivered directly to farmers, who find them worthwhile enough to support financially.
All three elements of the Indian intervention to improve sorghum and pearl millet hybrids were important. The investments in public-sector plant-breeding and crop-management research were made by the national government, state governments and international agricultural research centres.
The Indian government, with the help of donors, made major investments in government corporations that multiplied the seeds of not only wheat, rice, and maize, but also pearl millet and sorghum. New laws allowed small companies to enter the industry.
India liberalised the seed sector starting in the mid-1980s. It opened the doors to investment by large Indian firms and allowed foreign direct investment in the sector.
This change, coupled with continuing investments in public plant breeding and public-private partnerships, has continued to provide private firms with a steady stream of genetic materials for developing proprietary hybrids. The result is a vibrant and sustainable supply of seed of new cultivars that are drought tolerant and resistant to many pests and diseases.
What Africa has done so far
Since 2003, the Seeds of Development Programme in eastern and southern Africa has aimed to improve access to affordable, quality seed varieties for smallholder farmers. One major focus has been on management training for more than 30 small and medium-sized local seed companies.
The programme runs a fellowships for management training. In addition it has a research arm that conducts market research on the seed industry throughout the region.
Companies chosen to participate sell seeds that are on average 20% cheaper than larger seed companies and reaching the intended client base. More than 80% of the sales go to smallholder farmers.
Seed is to agriculture what microprocessors are to computing. Building the capacity to develop and market quality seed adapted to Africa’s diverse environments will shape the continent’s agricultural outlook.
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