Proceedings of the Fifth Asian Regional Maize Workshop - Search ...

The relationships depicted in Figure 8 are consistent with historical experience. As
discussed earlier, widespread adoption of hybrid maize by small-scale farmers has occurred
most frequently when seed-to-grain price ratios have been around 5:1; as farmers' yield
levels rise, smaller yield gains are needed to induce adoption of hybrids. These breakeven
yield gain curves illustrate why farmers producing maize under better growing
conditions and with good management are likely to adopt hybrids more readily than those
producing maize under marginal growing conditions and with poor management.
200
160
20:1
~ Seed-lo-Brain price ralio
120
Yield
.dvanfale
ol.h.
hybrid
(%) 80
40
0.5 1.0 1.5 2.0 2.5 3.0 3.5
Yield orrarmer', currenI vulety (fiba)
Fig. 8. Yield advantage over farmer's current variety required to compensate additional
cost of hybrid seed and generate 100% marginal return to investment.
4. Policy and institutional issues in hybrid seed pranot'jon
With certain notable exceptions, public and parastatal seed Companies in developing
countries have not been particularly proficient at developing, producing, and distributing
adequate quantities of high quality maize seed. Therefore, if future efforts to increase
maize production in Asia are to involve greater use of hybrid technologies, the private
sector probably will have to assume a more active role in the seed industry. Private
sector involvement can potentially involve one or more types of activities. At a mlnlmum,
all private seed companies produce and market seed~ In addition, many larger companies
also support their own in-house R&D programs in order to carry out the applied research
needed to develop new hybrids. Some of the largest companies (often multinational corporations)
even undertake basic research, such as biotechnology research.
Figure 9 summarizes potential links between public and private participants in the
hybrid maize seed market. Experience from many countries suggests that private companies
have a comparative advantage in producing and marketing seed, which means that they tend
to be most active in the activities which appear in the right-hand side of the figure.
Since private companies by definition are in business to generate profits, they will
become active in the seed industry only if it is economically attractive to do so. Several
key factors that can influence the profitability of the seed industry are discussed in
this section. Because profit opportunities change depending on the maturity of the seed
market, it is useful to organize the discussion around two types of seed markets representing
different stages of development: (1) emerging markets, in which farmers are
adopting hybrid seed for the first time, and (2) mature markets, in which most farmers
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