Strengthening seed systems to meet the challenges of food security

M. Larinde, P. Le Coënt, R.G. Guei & T. Osborn

Austria Room, 9 July 2009

Presentation outline

World Food security and hunger

Overview of global seed industry issues

FAO’ s Contribution to strengthening seed systems in developing countries:

Seed policy, strategy and programmes formulation or review

Strengthening local seed production and supply systems

Food security challenges

Nine billion people to feed in 2050 in the face of limited resources and climate change.

FAO’s food price index in March 2009 was still 23 % higher than 2005

There is a need to improve agricultural productivity and food security in poor rural communities.

Functional and efficient seed delivery systems is critical to sustainable production intensification and productivity increase

Food security challenges

Overview of global seed industry issues

Estimated size of global seed markets

Billion US$Billion US$

ASIAASIA 1010

NAFTANAFTA 9,59,5

EU -27EU -27 99

CENTRAL & SOUTH AMERICACENTRAL & SOUTH AMERICA 3,53,5

AFRICAAFRICA 1,11,1

REST OF THE WORLDREST OF THE WORLD 3,43,4

TOTALTOTAL 36,536,5

DISTRIBUTION OF SEED MARKET IN AFRICAMarket share in Million US$ (source ISF)

Policy and legislation ( norms, taxes, subsidy, laws, IPR, international and regional cooperation)

Science (genetics, technology, physiology,

entomology, pathology, agronomy, biodiversity....)

Economy (management, marketing, investment, finance, credit)

Culture and social (livelihoods, traditions, indigenous knowledge)

Seed systems development: Key issues

Formal Versus Informal sectors

Business competitiveness and return to investment

Higher value crops with higher profit margin (hybrid maize, hybrid millet and sorghum, vegetables) Vs lower value crops - Self pollinated (rice, millet, sorghum, cowpeas), open pollinated and vegetative propagated crops (cassava, Plantain, yam ..)

Most companies deal with hybrid Maize

0 2 4 6 8 10 12 14 16

Lesotho

Botswana

Ethiopia

Angola

Mozambique

Malawi

Swaziland

Kenya

Zambia

Uganda

Tanzania

Zimbabwe

South Africa

Number of Maize Seed Companies

About 47 Distinct Seed Companies.

70% have maize seed.

15 large seed companies in ESA, most of which are in Southern Africa.

Cimmyt, 2006

Cost of seed production and distribution and the need for heavy investment in:PeopleLandEquipmentInfrastructure (drying, storage, treatment, bags)TransportServices (registration, certification, IPR)

FAO’ s contribution to strengthening seed systems in developing countries

Assist countries and regions on request to formulate conducive, flexible, coherent,

comprehensive, and integrated seed sector development policies, strategies and programmes in line with the IT and

the GPA;

Trends in countries requests

There is an increasing request for seed policy and legislation reform by countries and regions

From 2005-2009, 62 % of AGP projects including emergencies have seed components or seed officers as LTO

ISFP projects with strong seed components (AGPS-LTU)

79 TCPs ( $29,998,000) 23 OSRO/GCP/UTP ( $52,359,414)

Afghanistan, Burkina Faso,CAR, DRC, Guinea Bissau, Liberia, Mozambique, Nepal, Pakistan, Zimbabwe

TOTAL : about $130,000,000

+ about 10 projects in finalization

EC food Facility:

Countries want to improve the use of quality seed and improved varieties

Productivity increase Mitigate negative impact of the food crisis Climate change adaptation.

Need to invest in local seed production

Local varieties more adapted and strategically important for the national food security.

Trends in countries requests

FAO’s work: Seed policy and legislation reform

Non conducive Government policies and regulatory frameworks

Import-export controls, tax, financial services

National segmentation National segmentation

IPR (PVP)

Overregulation in some countries not adapted to farming structure

Low level of agricultural development (rainfed agric)

Limited or no access to market

Main Constraints

Poor infrastructure

Cost of transport, utilities

Small Market Size

Low effective demand

Small, dispersed clients

Main Constraints

Inefficient diffusion of technical knowledge to end users

Statistics on farming profiles and seed markets not reliable

Market disturbance due to seed donations

Seed Policy Development Process

Identification of national priorities and problems through, assessment, stakeholders consultation/ field visits

Joint work with national counterparts for elaboration of policy or legal texts

Endorsement of policy or legal text by national policy makers

Elements of a Seed Policy

Establishment of institutional arrangements (NSC, Seed Fund, Seed observatory)

Definition of roles of the various actors to avoid unfair competition and maximize efficiency

Definition of measures, rules and regulations for tax incentives, seed IPR, other measures to improve seed trade

Setting of national interests

Compulsory certification vs. true-to-label approach

Acceptance of landraces in national lists of varieties

Elements of a Seed Policy

Definition of measures or standards

Production-conditioning-storage-distribution-marketing

Import and Export,

Standards for certification

Requirements for variety release

Support to credit

Elements of a Seed Policy

National level:

Seed policy reform in: Afghanistan, Iran, Sierra Leone, The Gambia, Congo DRC, Cote D’ Ivoire, Burkina, Cameroon..

Lead to seed industry development in Afghanistan and Iran

improvement in seed quality control in Burkina and Cameroon

national seed association and stronger seed institutions in Cote D’ Ivoire

Achievements

Regional level

Seed policy and programmes:

West and central Africa (1998);

Near East & North Africa (1999);

Asia and the pacific (1999);

Latin America and the Caribbean (2000);

Central and Eastern Europe (2001)

Achievements

Regional seed programme for Central Africa (CEMAC) – adopted in 2009

Africa wide: African seed and biotechnology programme (ASBP) for the African Union- adopted in 2007

Achievements

Achievements

Harmonizing seed rules and regulationsHarmonization of seed rules and regulations in

Africa West Africa (ECOWAS/UEMOA/CILSS)

(Adopted in 2008); Southern Africa (SADC); Eastern Africa (ASARECA/EAC) Central Africa (CEMAC) COMESA ( being initiated)

Harmonization in Central Asia ( Economic Community Organization (ECO)

Variety release regulation

Plant breeder’s rights

Quarantine pest lists- an phytosanitary measures

Seed trade regulations

Seed certification and standards

Key areas of harmonization

30

SADC (14)

ECOWAS -15 countries

EAC/ASARECA (6 )

Harmonizing in Africa

CEMAC (6)

COMESA (19)

Strengthening local seed production and supply systems

Presentation overview

– Current state of seed systems

– FAO strategy to strengthen local seed production and supply systems.

– Examples of FAO projects to support local seed production and supply

State of seed systems

In countries with market oriented agriculture

• Seed sector is dominated by the formal seed system.

• Huge development of the private seed sector since 1950 (variety development, seed production and distribution)

• Consequence: farmers are using high quality seed of improved varieties and agricultural productivity is high.

In countries dominated by subsistence agriculture

• Farmers’ seed systems largely dominate.

• Predominance of landraces and old varieties (in Africa less than 20% of the land is planted with improved varieties) and a variable seed quality.

• In these countries, formal seed systems are weak :• Limited private sector involvement• Public sector involved in early generation seed multiplication,

sometimes certified seed multiplication with poor results• Inefficient seed quality control systems and extension services.

State of seed systems

In countries dominated by subsistence agriculture

This situation is mainly due to:• Limited investments in seed sector development• Limited market for seed because :

• Most staple crops are self pollinated, vegetatively propagated or dominated by open pollinated varieties

• Weak connection of farmers with output markets which limits their revenues and capacity to invest in inputs

• Lack of access to credit• Limited access to information

• Limited farmers’ use of improved varieties and low agricultural productivity.

State of seed systems

Shifting paradigm of seed sector development

Constant objective: improve farmers’ access to quality seed of adapted varieties.

• FAO Seed Industry Development Programme umbrella: strong investment in public sector seed production.

• System failed because too costly. Transfer to the private sector, but in many countries the private sector never developed.

• Current strategy is to facilitate the development of local private sector seed enterprises

Elements to be considered to develop a national seed production and supply system

Variety development and variety release

Seed multiplication

Seed processing and transportation

Seed distribution

Seed policy and

regulation

Formal seed system

Farmers’ seed system

Seed Market

Output market

• Strategy must be adapted to the type of crop and to the agricultural system in place.

• Low volume – high value crops (Hybrid Maize, vegetables...). High profitability of seed activities

Seed production for this type of crop can be easily managed by the private sector

• High volume - low value crops (wheat, rice, groundnut, cassava...). Low profitability of those activities.– Importance of public sector involvement in plant breeding, early

generation seed multiplication and quality control– Limit overhead costs and develop community based seed entities.– Improve connections between seed producers, farmers and the food

industry to increase investment capacity of farmers.

Elements to be considered to develop a national seed production and supply system

Examples of seed production and supply projects Ethiopia

• Objective : Strengthening the “Farmer Based Seed Production and Marketing Scheme” in the Oromiya region.

• Principle: formal public system is not able to meet seed demand. Improve farmer’s seed systems to ensure local seed production.

• Main crop : wheat

Principles:• Providing basic seed of improved varieties and inputs to farmers

groups on a credit basis• Seed production by farmers groups• Seed collected by cooperatives, processed and sold to farmers on

a credit basis.• Quality control and technical support from local extension service

Examples of seed production and supply projects : Ethiopia

Project activities:• Linkages with research and make variety demonstrations• Training of farmers on seed production technologies• Provide equipment to farmers’ cooperatives• Training and equipment to local extension services to improve

technical support to seed production activities and seed quality control

Strengths• Farmers involvement, knowledge and work in a high potential

region• Strong grain cooperatives need seed activities to improve overall

profitability• Active extension services at the community level• Demand for quality seed and improved varieties• Market for wheat.

Examples of seed production and supply projects : Ethiopia

Weaknesses• Limited quantities of basic seed available• Limited profits from seed production = limited interest of

cooperatives.• Weak seed quality assurance system• Weak seed policy

Since 2003, FAO seed programme focuses on the development of the national seed sector.

Activities :

• Seed policy and seed legislation• Variety testing and variety maintenance• Early generation seed multiplication• Quality assurance systems• Support to private seed enterprises

Examples of seed production and supply projects : Afghanistan

Examples of seed production and supply projects : Afghanistan

• Principle: Private entrepreneurs buy raw seed from contracting seed growers and then process and sell seed

• A critical problem for seed enterprises is the cash need to purchase seed from seed growers at harvest time

Growing season n Growing season n +1

Basic seed

Inputs Seed processing

Grain sales

Seed Sales

November June November June

Examples of seed production and supply projects : Afghanistan

To tackle this problem, an innovative approach is being undertaken in Afghanistan:

Principle:

• make loan funds available to eligible enterprises for buying raw seed from growers

• enterprises payback all loans received for procuring raw seed; and

• repaid loans deposited in a special fund of the Afghanistan National Seed Association (ANSA).

Examples of seed production and supply projects : Sierra Leone

Seed project in Sierra Leone: an input / output approach

• Weak seed demand is a major reason for the lack of sustainability of seed production projects.

• Farmers are able to buy seed if they can market their crops at a better price

• Principle: vertical integration of seed production activities and activities to improve value addition of crop outputs

• In the Sierra Leone project: create rice milling facilities in the seed enterprise.

What the examples illustrate?

• Ethiopia:

Strengthening farmer’s seed system can be an efficient way to establish a sustainable seed production system for self pollinated crops if appropriate support services are available.

• Afghanistan:

Access to credit is a critical issue for the development of seed enterprises.

• Sierra Leone:

Integrated input/ouput approach is a way to increase seed demand and strengthen seed production activities.

General conclusion

• Formulation and implementation of national and regional seed policies and regulations are key to the development of seed systems in developing countries

• Both the public and the private seed sectors need to be supported

• Investing in small scale seed enterprises, including farmer organizations with an input/ouput market approach

• Development strategies must be adapted to the type of crops, market opportunities, ie specific country conditions

• Importance of linking farmer’s seed systems with formal seed systems

• Strengthening seed systems is part of sustainable production intensification.

Improved food production

Better income

Investment capacity

Increased inputaccess and use (seed,

fertilizer,water)Better infrastructure

Vibrant input supply sector

Improved food

availabilityLower food

prices

More structured food marketing

sectorFARMERS

Upgraded farmer’s

technical knowledge

Support

to the seed

production sector

Improvecredit

access

Development of the input

supply sector

Technology transfer and good extension approaches

Improve processing capacity

Improve storage capacity

and access to markets

Develop irrigation facilities

Strengthening local seed production and seed supply

systems

Contract Grower

Cost Price ($168)

Contract Grower

Grain Market

Raw Seed Price ($271)

Seed Enterprise

Cost Price ($374)

Seed Buying Farmer

$103 (38%)

(Transport, processing, etc.)

$103 (61%)

($ 230)

31% 18% 13%

($420)