Emerging Trends, Challenges and Opportunities

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Emerging Trends, Challenges and Opportunities for the Indian Seed Industry under New Policy RegimeR. K. Sinha, IAS (Rtd) Executive Director National Seed Association of India

National Seed Association of India Seed industry has been represented in the past by a number of associations, and hence lacked strength and cohesion 4 apex seed associations, namely INSIA, SAI, ASI and AICBA, have decided to merge and form a new entity, NSAI, to garner strength and clarity of vision and direction Other state level seed associations would be roped in as members It shall be the endeavour of NSAI to bring in its fold almost ALL the seed companies that fulfill the membership criteria

National Seed Association of India Amongst the public sector seed corporations/companies: National Seed Corp is already a member Other State Seed Corporations/companies would also be made members NSAI will then be truly representative of the entire seed industry In order to respond effectively to local conditions, NSAI will have branch offices in all the major seed producing states NSAI will present one unified voice for the entire seed industry in India before the policy makers and other stakeholders

VisionA dynamic, innovative, 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

Mission 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 Actively contribute to the industry policy development, with the GoI, to ensure that policies and regulations create an enabling environment including public acceptance so that the industry is globally competitive

Mission (contd.) Actively assist member companies in their efforts to develop efficient seed production and distribution systems to ensure high quality and reliable seed supply create an enabling environment for partnering with the public sector where both parties can bring complementary and synergistic competencies for a competitive value proposition strengthen information delivery systems to farmers to adopt new technology: increase seed replacement rates and implementation of best practices

Indian agriculture-concerns Comparative advantage due varied agro climatic conditions 170 mill ha of arable land, likely to reduce to 100 mill by 2020 (afforestation and environment concerns) Rising population, estimated 1.4 bn by 2025 Per capita availability of arable land declining Number of farmers would reduce Inputs, particularly water, may either be in short supply or expensive Low productivity Yield levels plateauing Heavy biotic (pests, pathogens, weeds) and abiotic (drought and salinity) losses (30-40% ) Heavy post harvest losses (10-30%) Nutritional deficiencies: Avg intake of vitamins, proteins and other micro nutrients grossly inadequate

Indian Agriculture-concerns Challenge for ag scientists and technologists: increase productivity and at least double food production with declining land and water availability and limited farmers Newer production techniques and technologies suited to Indian agriculture Technologies in the areas of seed development that would ensure good yield even under constraints of water and land Matching of seed with fertiliser, water management and evolving pre-harvesting techniques under different soil conditions For food and nutritional security: newer ag technologies including biotechnology required

Enhanced productivity in drought prone / saline areas. Biotic stress tolerance Reduced storage/transportation losses. Healthier and nutritionally enhanced foods. Optimise use of chemical pesticides: Integrated Pest Management. Hence GOIs Doubling of food production program lays emphasis on transgenics in agriculture (Prof Gandhis report)

Indian agriculture, therefore, needs

Evolution of the Indian seed industryCurrent status Though nascent, yet private sector accounts for 70% turnover in seed domestically and is internationally recognised Due to varied agroclimatic conditions and natural resources, R&D hubs are being created. Almost 1/3 companies have a global technology/ financial partner Private seed companies are spending 10-12% of their turnover in R&D R&D budget of medium sized companies is growing @ 20% p.a.

mid 1980s - 1990s Seed industry boomed as a result of several Govt. initiatives Foreign direct investment allowed and encouraged Imports of improved varieties and breeding lines liberalized

1960s mid 1980s Minimal private sector participation R&D in public domain Restrictions on germplasm exchange, foreign ownership, etc.

Trade regulations liberalized

Seed market composition Farm saved seeds: 75% Commercial seeds: 25% Of the commercial sector: private 76% and public 24% ( by volume) Of the private sector: organised is 57 % (with research capabilities) and the small sector/largely unorganised is 43% ( no research)Source: Rabobank report 2006

Contribution of Seed Industry to Indian AgriculturePublic bred hybrids 9%

Private bred hybrids 30%

Vegetable 11%

Open pollinated 50%Market Segmentation

Seed industry Total seed market: about Rs 5000 crores Public sector: NSC, 13 State seed Corp, State Farm Corp of India High volume and low value seeds of improved varieties of cereals, pulses and oilseeds

Private sector: highly fragmented Size: 300 companies Top ten 25% of total volume 250 trading companies with turnover of Rs 5 crores Low volume high value hybrids of cotton, corn, sunflower, millets and vegetables Foodgrains such as rice and wheat Coarse cereals such as sorghum, pearl millet, ragi and maize Pulses Oilseeds Cotton Sugar cane Fruits and vegetablesSource: Rabo 2006

Key crops:

Research priorities Heavy dependence on rains: only 40% of the gross cropped area under irrigation, seed companies thus focus on drought resistant varieties To produce more from less, need for appropriate technologies which can increase productivity and reduce the losses, apart from saving from the vagaries of nature About 70 mill ha of uncultivable land: seed development for dry land and saline land cultivation technologies Agricultural biotechnology and plant genomics for: High yield and disease and insect resistant crops Abiotic stresses: Drought and salt tolerance Longer shelf life technologies to assist post harvest measures Nutrient enrichment technologies No till farming to conserve the environment and prevent top soil loss: HT crops technologies Global warming concerns: technologies and crops which would absorb the extra CO from the atmosphere and also reduce carbon emissions2

The private seed industry has come of age Strong scientific capabilities and breeding programs Comprehensive multi location testing including onfarm testing of pre-commercial hybrids as per national and international testing protocols Research trial data supplemented by on-farm test data and farmer feedback on performance and preference to facilitate decisions on commercialization of new hybrids

High adoption of private bred hybrids by the farmers all across the country is a testimony to the robustness and successes of the development and testing protocol followed by the private industry

Contribution of Indian Seed Industry Achieved self sufficiency in foodgrains Over 1 million acres of contract seed production Direct employment for about 50 lakh persons in rural areas Rural income generation: about Rs 2000 cr Hybrid and improved seeds produced on 10 lakh acres are sown on 10 cr acres resulting in incremental yield of about Rs 15000 cr per annum to the farmers India has the potential for growth of R&D and seed production global hubs like the IT sector

Industrys potential to contribute to economic growth High productivity agriculture requires optimum level of inputs Seed is the most important input as it determines maximum potential yield Improved high yielding genetics and high quality seed will increase productivity GM traits will reduce biotic (pest & disease attacks) and abiotic (DST) losses, and increase profitability Production of commercial seed generates considerable employment in rural areas

Private enterprise qualities Quality germplasm collection and maintenance Technological superiority: reduced product life cycles has lead to the need for a product pipeline to suit disease profiles, climate pattern, and farmer choices stability of parental lines for consistent performance Trait fixation and advanced breeding techniques

Private enterprise qualities Established production systems built on loyalty and trust Distribution network to supply seeds within the short span of 25 days during the season Large inventory of 6-10 months: working capital management issues Advanced booking system Product mixSource: Rabobank 2006

Regulatory regime Strict regulatory regime Seed Act, 1966 Seed Rules, 1968 Seed Control Order, 1983

New Policy on Seed Development, 1988: first wave of liberal outlook- increased collaboration between domestic and foreign players Seed Policy, 2002: direction for reforms- it recognises the importance of technology as well as tries to protect the farmers Seed Bill, 2004, modelled on these lines Compulsory registration on the basis of VCU Farmers rights Compensation for non performance as per CPA Transgenic seeds

Stdg Committee of Parliament has examined and given its report

Issues & Concerns Regulated industry, with variable implementation Restricted movement of germplasm Ineffective Intellectual Property Rights protection Lack of rural infrastructure including irrigation, electricity, roads and post harvest infrastructure High risk, unpredictable business with no margins in some sectors Policies being followed in some State Governments rather irksome for the industry

Challenges before the seed industry To provide quality seeds, either by itself or through an effective public private partnership, to farmers so that they can improve their quality of life, To discharge effectively the role of a reliable partner for sustainable growth in Indian agriculture To intensify R&D for future generation seeds To strive to continuously enhance farmer education to enable them to take informed decisions To substantially increase the seed replacement rate in the overall interests of farmers To create a diverse, competitive, responsive and a mature seed market for the benefit of farmers

To meet the challenges, the industry seeks GOI Vision for seed industry and consistency in application of same Freedom to operate in an enabling environment Responsibility and self regulation by industry Profitability (reasonable return on investment) Sustainability

The seed industry seeks An enabling legislative and policy environment A regulatory framework that is flexible, responsive, transparent and predictable Unshackling of bureaucratic controls, in particular, search seizure actions by Seed Inspectors under the Seed Control Order Greater reliance on self regulation Greater role in the decision making process on the basis of mutual trust, openness and dialogue

The seed industry seeks contd An effective public-private partnership Free flow of germplasm between public and private sector, specially from the public sector Smoother import of germplasm and planting materials for R&D and contract multiplication Greater consumer education, consumer protection, and free flow of science based information to farmers A level playing field

To sum up The seed industry has come together to form the National Seed Association of India It will power the growth of sustainable agriculture It is in the process of ushering in the Second Green (Gene) Revolution through technological innovations The seed industry is poised to be the hub of seed production for the developing countries- production for export It seeks policy support and an enabling environmentFTO Emphasis on HYV and hybrids with an increased Seed Replacement rate

To sum up It seeks the states support for the establishment of seed valleys in different parts of the countrysomething in the nature of an SEZ Contract farming and the retail boom: changing the ways of farming Huge opportunities emerging Pepsico: pioneered contract farming for tomatoes in Punjab Reliance Retail ITC- e-chaupal Subhiksha Aditya Birla Group Bharti with Wal Mart Biyani Goup

Borlaug speak Dr Norman Borlaug, 93, World Food Prize Founder and 1970 Nobel Peace Laureate was awarded the Congressional Gold Medal, highest US civilian honour, on July 17,07 His article on Global biotechnology: a tool for agricultural sustainability and survival appeared on July 18 in the WSJ He says: Persistent poverty, environmental degradation, changing global climatic patterns, use of crops to produce biofuels, all pose new challenges and opportunities Ag science including biotechnology critical to meeting the demand for food, feed and fibre Plant breeders would be challenged to produce seeds that are equipped to better handle salinity, drought, diseases and insects and increase the yield Tools of biotechnology such as molecular and marker assisted selections, enable scientists to achieve the goals in an organised and accelerated manner Advent of Gene revolution

53rd NDC Prime Minister laid emphasis on reversing the prolonged slow down for inclusive growth raising the quality of inputs such as seeds, fertilizers and pesticides and also improving the access to credit technology fatigue substantial yield gaps and the urgent need to focus on such gap reduction Amongst other policy interventions, he laid emphasis on improving quality seed supply.

53rd NDC Agriculture Minister said urgent need for effective development and transfer of technology covering all aspects such as seeds, nutrients, mechanization and water resource management, besides strengthening institutional support for credit, extension, marketing and value addition private-public sector partnership model must be explored on a wider range.

Finance Minister urged NDC to consider issues relating to both production and productivity, continuous cultivation of same genetic material responsible for deceleration in production and productivity growth lack of technology breakthrough in the development of agro-climate specific seeds, particularly for rainfed areas appealed for focus on seeds, amongst other areas.

53rd NDC Chief Minister, Andhra Pradesh said that investments have to be made by Government in R&D for technological and for better seeds development in crucial areas. He goes on to say that States have to invest extensively in the development of appropriate technology and quality seeds essentially suitable for dry land agriculture...

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