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

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Despite these constraints, there are opportunities for growth in the seed industry in
developing countries. Growth could be optimized if unduly restrictive constraints are removed or
modified. A few lessons can be gleaned from the history of the global seed industry over the
past 25 years.
- Flexible dynamic management is critical to success;
- Success is more likely when building onto an existing successful program;
- Private sector commitment is directly related to a product's gross margin; the higher
the margin, the greater the commitment;
- seed growers are more involved and effective when their share in the profit is assured;
- Repeat business is possible only if the farmer's return on investment is high ($3-$5
for each $1 spent);
- Strict quality assurance is indispensable for success;
- capital intensive projects are often neither necessary nor appropriate (sc-called
"white elephants") in the developing world;
- seed production must be linked to seed demand in order to manage inventories properly;
- A long term perspective is essential for success;
- Timely availability of seed in areas of use in critical.
Creating success
While seed is a small part of total farming costs, it has greater influence on productivity
than any other input. Most good farmers understand the value of high quality seed. They are
willing to travel considerable distances, and are willing to buy in advance, to ensure they get
quality seed.
Since most farmers in developing countries operate at a subsistence level, it has been
said that they lack the resources to utilize hybrid seed. There is indeed reluctance on the part
of the farmer to pay high prices for hybrid seed. Traditionally, farmers have used open-pollinated
varieties, not hybrids. The former are, of course, a much cheaper input.
However, the experience of one of the leading seed companies in India (Proagro Seed
Company ltd.), suggests that there is reason to doublt this accepted wisdom about farmers in
developing world. Except for 1993, Proagro's biggest constraint in the past five years has been
to get enough hybrid seed produced to meet demand. Proagro's biggest constraint in the past five
years has been to get enough hybrid seed produced to meet demand. Proagro's bottleneck has not
been in creating demand, but rather in ensuring enough supply to meet demand for hybrid millet,
sunflower, corn and sorghum seed. Approximately 1/3rd to 1/4th of the company's sales are made
prior to even undertaking production. From the seed company's point of view, the importance of
advance bookings is that they provide cash to make seed grower payments without getting highly
indebted to banks.
If a seed company is to become successful, farmers must share in the value added (farmer's
benefit). The seed grower must benefit by earning more than what he would from a commercial
crop. And, the seed comp~y must benefit by earning an acceptable return on investment. Farmers
will pay for hybrid seed if it benefits them regardless of its price premium. Farmers in the
developing world have centuries of crop growing experience, even if they may lack the formal
education of their colleagues in the developed world. Higher input levels are no disincentive to
use of hybrids.
Experience has shown industry is capable of providing quality seed to farmers as they need
it. Given the prominence of agriculture in the,developing world, hybrids could have the same
catalytic effect on its seed industry in North America, Europe, and Japan.
As Dr. sehgal could not attend the Workshop copies of the paper were distributed to all
the participants well in advance. Dr. Hallauer coordinated the deliberations on this paper. He
informed the group about the IPR laws as present in the U.S.A. Dr. Hess informed the group about
the CGIAR's stand on the IPR. Dr. Hess also informed that CIMMYT would opt for patenting its
material to prevent others from patenting it.
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