A Report on

Seed Industry

Institute of Agri Business Management Rajasthan Agricultural University Bikaner, Rajasthan

Submitted to Dr.(Mrs.) Madhu Sharma
Associate Professor

Submitted ByHarshit Chittora
MBA (AB) 1st year

Contents –
1. Introduction 2. Historical perspective 3. Structure of Seed Industry I. Major global players (2004-05) II. World's Top 10 Seed Companies – 2006 III. Key Indian Seed players IV. Major Player in Vegetable Seed 4. Seed Industry in India: Poised for a leap 5. Seed supply chain I. Demand & Supply of Seed in India II. Employment generation III. Seed Replacement Rate 6. Seed Policies and Regulation 7. Context for Research 8. Seed Pricing 9. Seed Industry and GATT/WTO/TRIPS 10. Market Structure and Regulation 11. Relevance and need for biotechnology 12. Need for transgenics 13. Conclusion

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3 . Several companies have Government of = India (DSIR) recognized research and development departments and have produced and released a large number of varieties and hybrids in several crops. A study made over nine private seed companies indicates that the amount spent on R&D ranged from 0. There are about 150 organized seed companies in India today. The organized seed industry of the country is just forty years old. some suggestions are also provided for improvement and modification in the regulatory procedures.Introduction SEED is the most important input component for productive agriculture. India is one of the few countries where the seed sector is already reasonably advanced. The Indian seed industry is currently valued around Rs 2500 crores ($ 500 million) and is proposed2 to be around 3750 crores ($ 750 million) by 2002. the role of the seed sector has been substantial. This article provides a historical perspective to the development of seed industry in India. Subsidiaries and joint ventures with multinational companies account for 30% of all private seed industry research3.62 crores) (Companies Annual Reports 1998–99). Given the fact that sustained growth to cope with increasing demand would depend more and more on the pace of development and adoption of innovative technologies. In March 2002 the first transgenic hybrid cotton seed was allowed for commercial cultivation in the farmer’s field. The contribution of private research in terms of value is steadily increasing.49 crores) to 15. It has as well acquired technological strength to cater to the varietal needs of tomorrow. maize. Some of the companies initiated the work on development of transgenic crops. its growth has been phenomenal. particularly in case of transgenic crops. The private seed industry is no more confined to just production and marketing of seed. sorghum-sudan grass. The expansion of seed industry has occurred in parallel with growth in agricultural productivity. sorghum and cotton was about 70% in 1997–98 compared to 46% in 1990–91. The share of research hybrids in total turnover of crops like pearl millet. Private R&D’s real investment in research has quadrupled between 1986 and 1998. Yet.78% (0. Besides. sunflower.08% (22. its current statusand future. the seed would continue to be a vital component for decades to come. In the significant advances that India made in agriculture in the last four decades.

particularly wheat and rice but also for many other positive developments related to seed such as. It would replace the existing Seeds Act of 1966 and Seed (Control) Order of 1983. This was the period. viz. 4 . Further. The proposed legislation features establishment of National Seeds Board (NSB) and compulsory registration of any seed with the board before sowing or planting could be done for commercial purposes. the Act provided a system for seed quality control through independent State Seed Certification Agencies which were placed under the control of state departments of agriculture. A draft Seeds Act 2001 is being finalized on the basis of the recommendations of Seed Policy Review Group. not only because of introduction of high-yielding cereals. The Seeds Act stipulated that seeds should conform to a minimum stipulated level of physical and genetic purity and assured percentage germination either by compulsory labelling or voluntary certification. The eighties witnessed two more important policy developments for the seed industry. The investments are expected to increase with increasing volumes of seeds of proprietary hybrids and preparedness of farmers to pay higher price for quality seed. granting of permission to MRTP/FERA companies for investment in the seed sector in 1987 and the introduction of ‘New Policy’ on seed development in 1988 (ref. The 1991 Industrial Policy made a radical departure from the earlier policy on foreign investment. More than 24 companies initiated research and development activities and have made substantial commitments for investment on research and development in response to this policy initiative. The sixties were the most eventful times for Indian agriculture. 1966 and formation of National Commission on Agriculture. Under this policy seed production was identified as a ‘high priority industry’. constitution of Seed Review Team. 5). The New Policy on Seed Development greatly liberalized import of vegetable and flower seeds in general and seeds of other commodities in a restricted manner and also encouraged multinational seed companies to enter the seed business. enactment of Seeds Act. during which the private sector significantly stepped into the seed business.Historical perspective The National Seed Corporation was established in 1963. The Government of India enacted the Seeds Act in 1966 to regulate the growing seed industry4.

Seeds of varieties can be reproduced for many generations with little deterioration in quality. These growers are supplied with the foundation seed that is used 5 . these functions are integrated in the private firms. sunflower). The product segments correspond to all the major field crops and vegetables. the seed industry consists of a large public sector and a growing private sector. private firms are closely held and not listed in the stock exchanges although some of the large firms have sold equity to foreign seed companies.6 On the other hand.e. if it can be called that. Plant breeding research is found in the larger firms. Estimates vary from 200 to 500.. It is therefore unimportant in the product segments of wheat and rice except as a seller of public varieties and hybrids. Unlike the public sector. As a result. the private sector is a major player in the hybrid seed markets of vegetables. cotton and pearl millet. The public sector consists of the National Seed Corporation. where research is separate from seed production and marketing. In terms of ownership. In terms of organization. of the seed industry is its heterogeneity in many dimensions. i. technical alliances or through wholly owned subsidiaries. The private sector focuses largely on hybrid seed. maize. the State Farm Corporation of India and 13 State Seed Corporations. pearl millet and maize. The major cereals of rice and wheat are principally open-pollinated varieties. whether in the private or public sector. The other striking difference is in product types. This is not a viable strategy with hybrids because they suffer noticeable declines in yields in subsequent generations.. sorghum. hybrid seed tend to be repeatedly purchased. research capacity and product segments.5 Hybrids dominate in coarse cereals consisting of sorghum. With respect to product type. Hybrids are also important in cotton and oilseeds. Foreign firms maintain a presence through equity stakes in Indian firms. There are no firm estimates of the number of private seed firms. the research institutes financed by the Indian Council for Agricultural Research (ICAR) and the State Agricultural Universities. beyond the initial purchase. Seed firms. a major distinction is between hybrids and open-pollinated varieties.Structure of Seed Industry The most important characteristic.g. Private seed firms are heterogeneous with respect to size. oilseeds (e. These corporations multiply and market varieties bred by the public sector institutions. As a result. farmers can multiply their own seed. outsource the production of seeds to contract growers.

The seed industry is one of the earliest examples of contract farming in India. 1998).com/invitation. The value of the seed market is estimated to be close to $ 1 billion (www. the proportions of seed supplied by the commercial seed industry ranges between 25% and 43% (see the estimates of Chopra and Thimmaiah quoted in Shiva and Crompton.7 In some cases. maize and sunflower.to produce commercial seed. Because the private sector sells high value hybrids. 1998). In the case of sorghum. Seed saved from the preceding crop supplies nearly 90% of requirements in these crops. their share in value is greater than their share in volumes. Major global players (2004-05) 6 .htm). the principal source of seeds is not the seed industry whether private or public but the farmers themselves. The seed industry was probably half this size in the early part of the 1990s (Shiva and Crompton. For the cereal crops of rice and wheat. It has therefore grown rapidly in the last decade.worldseed2003. Estimates of the share of the private sector range from 60% to 70% (Shiva and Crompton. 1998). a large farmer or groups of farmers specialize in growing seeds and supply to neighbouring areas.

Groupe Limagrain (France) $1. Monsanto (US) $4. Land O' Lakes (US) $756 6. the top 10 seed corporations account for 55% of the commercial seed market worldwide.035 5.The World's Top 10 Seed Companies .028 2. KWS AG (Germany) $615 7. Sakata (Japan) $401 10. DLF-Trifolium (Denmark) $352 Company Source: ETC Group Based on 2006 revenues. Dupont (US) $2. Delta & Pine Land (US) (acquisition by Monsanto pending) $418 9. Syngenta (Switzerland) $1. Bayer Crop Science (Germany) $430 8.2006 Based on 2006 Seed Revenues 2006 seed sales US $ millions 1.743 4. Key Indian Seed players 7 .781 3.

the top 10 seed companies accounted for 37% of the worldwide market .600 million in 2006. • 8 .or 64% of the total proprietary seed market.accounts for more than onefifth of the global proprietary seed market. just two years ago. Monsanto .one decade ago . ETC Group reported that the top 10 accounted for 49% of the worldwide market. The market share of the top 10 seed companies is even greater when looking at the proprietary (patented?) seed market. • In 2006. the top 10 companies account for $12.559 million .1 By contrast. the value of the overall commercial seed market was $22. Context Network. the global proprietary seed market was worth $19.the world's largest seed company . According to Context Network.Major Player in Vegetable Seed Percentage Indo American 16% 36% 11% Mahyco Namdhari Novartis Century 7% 4% 5% 7% 7% 7% Pahuja Sungrow Nath Others Concentration Trend Continues: According to estimates provided by industry analysts. In 1996 .900 million in 2006 (includes seeds purchased from public breeding programs).and Monsanto did not even appear on the list.

The role of the seed sector is not only to ensure adequacy in seed quality but also to ensure varietal diversity. • Seed Industry in India: Poised for a leap Seeds form the fundamental and crucial input for sustained growth in farm production. the Indian seed programme boasts one of the biggest seed markets in the world. Of this. Public Sector: Like many agriculturally developed Asian nations.552 million . Its role extended to several developmental programmes including training. domestic off take accounts for US $900 million and sales in the global market account for the remaining US $20 million. the State Farms Corporation of India (SFCI) and the thirteen State Seed Corporations (SSCs). machinery and yield-enhancing agro-inputs. This was followed by the setting up of the SSCs under two consecutive plan periods.or 44% of the total proprietary seed market. established in 1963. often stimulating the use of new methods.• The top 3 companies . 9 . The top 4 companies account for $9. and these largely adopted the role of the NSC in the Indian States.Monsanto. These corporations engage principally in production and marketing of seeds of high yielding and hybrid varieties developed by the public sector. Giant public sector players include the National Seeds Corporation (NSC). NSC was the first public sector organization. and remained virtually the only agency for seed production for around 13 years. Currently there are over 200 private seed companies. with annual sales at around US $920 million. accelerated growth of the private sector began only after the introduction of the new seed policy in 1988 which ushered in a liberal business climate. Today. The New Policy on Seed Development (NPSD). India has sizeable public and private sector seed businesses. India has the potential to become the foremost player in the seed export business in the developing world with prospective markets in Asia. Given the growth of the seed sector in recent years. supported by the World Bank. Dupont and Syngenta . stimulated major growth in the industry as it attracted a lot of investment in seed business from major domestic seed companies.account for $8.587 million . Private Sector: Although private seed companies such as Poacha and Sutton have been established since the pre-independence era. established in 1988 with the objective of augmenting productivity and output quality.or almost half (49%) . Africa and South America. quality control and extension activities in seeds.of the total proprietary seed market.

Global Initiatives: India today has a critical mass and level of growth that it could use not only to cater to the growing domestic requirement but also to make a concerted effort for global trade under provisions of GATT and WTO. and the largest area of irrigated land. maize. India is endowed with second largest area of farmland. Public v/s Private ownership 13% 13% 41% public sector large medium small medium unorganized 33% 10 .together with a few multinational companies. cotton and vegetable crops. its seed industry is well placed to serve both domestic and international markets. in the world and. The private sector accounts for 70% of the market in terms of market turnover whereas the public sector has the greater share in terms of volume sales. and these tend to focus on low volume. with its huge germplasm diversity. Furthermore. high value crops with the principal effort being placed on creating hybrids for oilseeds.

it was 9.  Large area is sown with the farmers' save seed.298 LT in 1981-82 and in 2002-03. sorghum (17. pearlmillet (26.  Certified production was 0. sunflower (8.g.45%). etc Pro d Bre uction ede r Se of ed Govt. of India In Bre dent o ede f r se ed Allocation for Production Production of Breeder Seed ICAR Allo Bre tment ede o r se f ed seed Certified n Distributio Distributor SSC.90%). SAU. 11 . d see tion n nda o Fou roducti P Certified seed Production Agencies Foundation seed to Certified seed Agencies Demand & Supply of Seed in India  Meet only 12% of the total seed used for sowing each year.81%).79%). SFCI SAI.Seed supply chain Lifting Allo t Pro ment duc for tion ICAR Inst. etc.  India is Ist in the world to develop hybrids in many crops but area coverage under hybrids is low due to seed supply deficit e.54%). maize (7. cotton (3.  SRR (Seed Replacement Rate) is very low. NSC.3 lakh quintal  There is almost a plateau in seed production and distribution in India and they grew with insignificant growth rate of less than 1% per annum during nineties.

16% : 24. Employment generation CROP (hybrid) (Tons) Cotton Maize Millet Sunflower Sorghum Paddy 6000 65000 18000 6000 18000 4000 20000 36000 35000 13933 20.48% : 19.6%). sorghum (77.72 2.75 2.5% Rapeseed and mustard: 66.02% : 7.95 4.6%).60% : 5.6%) and sunflower (29.96% 12 . maize (59.09% : 20. pearlmillet (60.20 Seed Replacement Rate Crops Wheat Paddy Maize Jowar Bajra Gram Urd Moong Arhar Groundnut Seed Replacement Rate : 13% : 19. Share of hybrids in total seed produced in the country is not encouraging e.6%).g.56 4.41% : 26. cotton (23%).000 8000 1200 40 40 60 40 80 200 110 110 110 110 135 Hybrid seed production Area (Acres) Man days (days/acre) Crop Duration % (Days) Contribution 82.82 2. castor (75%).48% : 13.71% : 51.

58% : 19.61% : 37.49% 13 .25% : 68.Soybean Sunflower Cotton Jute : 5.

There have been two recent developments.Seed Act 1966 .Essential Commodities Act 1955 . seed certification and seed testing.State Acts of land acquisition/land use . 14 . it is not mandatory for private varieties. The Seed Act of 1966.Plants.State Acts for the control/movement of crops and seeds Seed Policies and Regulation The government regulates the seed industry and the seed trade in various respects.Urban Land Ceiling Act 1976 . and the Seeds Policy of 1988 are the major components of policy specific to the industry. The seed industry has also been subject to policies relating to industrial licensing and direct foreign investment that are applicable to all industry.Standrads of Weights and Measures Act 1976 . the Plant Variety Protection and Farmer’s Rights Act came into being. the Seeds Control Order of 1983.Package Commodities order 1975 . In June 2002.Seed Control Order 1983 .Consumer Protection Act 1986 .Presently Indian seed industry is governed by the following Acts: . Varieties approved are “notified” which is a prerequisite for certification. While all public sector varieties go through this process. In September 2001.Seed Rules 1968 . the government announced a new seeds policy that significantly alters the framework of regulation.Export Regulations and Quarantine . The Seed Act of 1966 and the Seeds Control Order of 1983 provide statutory backing to the system of variety release. Fruits and Seeds (Regulation of import into India) Order 1989 . Varieties are released after evaluation at multi-location trials for a minimum of three years.

the seed industry was also subject to the policies on industrial licensing and foreign direct investment that applied generally. new and extant. The Seed Policy of 1988 allowed limited imports of commercial seed. flowers and ornamental plants. However. The evaluation will be done over three seasons of field trials. Prior to 1991. This Act provides for plant breeder’s rights. 15 . Certification requires that that the certifying agency has access to the parent lines of the variety. The new policy of 2002 allows imports and exports of seeds of all crops. However. All seed sales outlets have to be licensed and must observe certain marketing practices such as public display of stocks and prices. the government has also controlled imports and exports of seed. certification will continue to be voluntary.Certification is a process that certifies that seed is of a specified variety and is of acceptable genetic purity. which requires extant and new plant varieties to be registered on the basis of characteristics relating to novelty. analytical purity and pathogen levels. Curbs were removed from imports of seeds of vegetables. Variety registration (i. uncertified seeds are required to be truthfully labeled listing quality attributes on the label.. the process is voluntary for private varieties. notification) will now be mandatory for all varieties. However. Usually. Major changes in this system of regulation are proposed in the National Seeds Policy of 2002. distinctiveness. uniformity and stability. seeds are also tested for physical characteristics such as germination capacity.e. while all public sector varieties are certified. These controls have fallen by the wayside as a consequence of the economy wide reforms of 1991. Besides regulating quality. pulses and oilseeds could be imported for upto two years provided this finally led to technology transfer in the form of parental lines/breeder seed. The emphasis on registration in the new seeds policy ties in with the demands of the Plant Variety Protection and Farmer’s Rights Act passed in 2001. all imported seed is also required to go through the process of registration. In India. The seed sector was reserved for the small-scale sector and the entry of foreign firms was tightly regulated. Often private seed firms do not submit their varieties for certification either because they do not wish to go through the time consuming process of notification or because they have their own quality control processes. Seeds of coarse cereals. The seed control order brings seeds within the scope of the Essential Commodities Act that regulates the marketing of essential items.

Setting up conditioned as well as proper storing facilities to ensure proper storing of raw & processed seeds as well as reserve stock. corporation transporting and selling of agricultural seeds. To enter into agreement with individuals. To store and stock pile reserve supply of any seed needed for improvement of agriculture in India. 6. To undertake by inspection and any other means. Monitoring availability of breeder. The goal seems to be to facilitate private enterprise rather than to control it. periodical quality control checks as well as continuous testing of seeds to ensure quality of seeds. Making available seeds to deficit states in time and in sufficient quantities. Corporate Profile and Objectives NSC was established to organise the development of a sound seed industry in India and a first step towards that direction. were : To carry on in India the production. distribution and transportation of agricultural seeds. distribution. stocking and supply organisation. 2. inter alia. drying. (iv) Objectives of National Seeds Corporation 1. co-operative socieities. 16 . the overall emphasis of the new seed policy seems more favourable to the private sector than in the past. Undertaking field inspections.While the system of mandatory registration will irk private seed firms because of its time consuming process as well as the requirement to trust the registry with their proprietary breeding material. to function as a foundation seed production. seed quality control (iii) measures in all facets of seed business carried on behalf of or in co-operation with the Corporation. 5. Developing seed dealers network with emphasis on co-operatives as far as possible to distribute seeds through out the country. storing. The main objectives set before it. foundation & certified seeds of all Indian varieties and ensuring timely availability there of. 4. (i) (ii) and government agencies in the growing processing. processing. 3. storing. Setting up adequate processing facility to ensure timely processing of seeds.

it grew in incremental steps focusing first on vegetables and later moving on to sorghum and pearl millet. non-viable seeds and inert matter. Produced under suitable agro-climatic conditions in selected seed production areas. The NSC provided foundation seed. training and technical assistance to state governments and private companies. 4. the public sector was the principal vehicle for the development and diffusion of new seeds. NSC seeds for Farmers Prosperity 1. Healthy & vigorous seeds for high germination and field standards. 17 . Indeed. 3. Consequently. 1995). the seed industry in India had its beginnings in the early 1960s with the establishment of the public sector National Seeds Corporation. 6. certify and distribute high quality seeds that were the product of public research. NSC seeds are available from thousands of retail outlets at short bullock cart distance. The primary purpose of these and related public sector organizations (such as the state seed certification agencies) were to produce. Treatment with appropriate chemicals assuring protection in storage and during emergency in the field. This was followed in 1969 by the Terai Seed Development Corporation that became the model for state seed corporations established in the 1970s and 1980s. Context for Research In the past. 8.7. NSC seeds are suitable for sowing under varying climatic conditions. private sector activity depended on home grown firms. other crop seeds under sized. 5. 7. Scientific processing ensures removal of weed seeds. Quality control at all stages of production under the care of experts. Sold in handy sealed packets or bags with tags containing all relevant information. As the import of commercial seeds was prohibited and since foreign direct investment was not permitted. processing and distribution) (Candler. 2. But they also stimulated private sector activity in direct (through distribution of foundation seed) and indirect ways (through the creation of expertise in seed technology. Imparting training to personnel engaged in various activities of seed industry.

government policy focused principally on public sector seed provision and neglected private industry. the most important of all is the fact that with certain kinds of varietal development.The obstacles to private industry were not just their lack of capabilities whether in research or access to capital and technology. Probably. about leaving these activities to the forces of market. regulatory reforms have eased the restrictions on the entry of large and foreign owned private firms into this industry. private research has expanded its range of activities. was for farm machinery. R&D effort (measured by rupee investments. private sector spending on seed R&D is rapidly growing. As a result. the private sector invests considerably more in food and agricultural R&D than the government. wherever technologically feasible. the innovator cannot appropriate a significant enough share of the gains leaving little incentives for private effort. public sector research emphasized variety development rather than hybrids. this scenario is ideal for public intervention.S. In India too. size of experiment stations) in the private sector tripled within a short span of about 8 18 . While earlier most private research in the U. As a result. Furthermore. In the last decade. they were not always regarded with much promise in the initial years. Although hybrids. Not only does public plant breeding fill this gap. 1996). These developments have affected the structure of the seed industry worldwide.al. In recent years. however. offer a route for private sector development. It is also expected that the strengthening of intellectual property rights and the new technologies of genetic selection offered by biotechnology would make this sector even more attractive for private investment. even in cross-pollinated crops. on the part of the government. There was also lack of confidence. It was thought that the technology does not offer much to small farmers as hybrid seed would be high priced and would have to be repeatedly purchased. This is certainly true for seeds of openpollinated varieties (which includes rice and wheat) that can be reproduced by farmers for their own use or sale to other farmers. new food products and processing methods. the ease of reproduction aids rapid diffusion and adoption. private spending for food and agricultural research tripled in real terms between 1960 and 1982. On the other hand. technical personnel. In the United States. the private seed industry has grown to be a sizeable presence in many crops. As a result. the private sector has since developed research capabilities in plant breeding that was once a traditional area of public sector research (Fuglie et. According to one estimate.

The same study concludes that about 50% of the observed increase in R&D was attributable to the liberalization in government policies that allowed entry into the seed industry by large domestic firms as well as foreign firms (Pray. Ramaswami and Kelley. The last decade has seen the entry of major international seed firms into the Indian market. The growing importance of the private seed industry has prompted new policy concerns. it is still the major supplier of seeds of open-pollinated varieties. was explicitly motivated by the objective of facilitating rapid technology transfer from the private sector (and in particular. Since the entry of private players is possibly only because of greater appropriability (of the gains from higher productivity). the multinational seed firms) to farmers. 19 . However. 2001). the benefits to farmers and consumers? The earlier literature that estimated the gains to agricultural research typically assumed competitive markets and therefore does not address the new situation. Third. it has also been accompanied by consolidation of the industry through mergers and acquisitions. Furthermore. Broadly speaking. First. is the issue of efficiency. like the New Seed Policy of 1988. Second is the issue of equity. seed certification and testing. seed production. certification and environment regulation? On the one hand. This period was associated with changes in government policy towards the seed industry as well as the industry wide economic reforms. does the exercise of resulting monopoly power reduce social gains and in particular. they were debated vigorously in the context of the Green Revolution technologies as well although the concerns there were not with the price of seed but with the cost of complementary inputs. The Seed Policy of 2002 is even more direct in its goal of fostering the growth of a private seed industry. do these developments call for a redefinition of the priorities of the public sector whether in terms of research. has also raised fears about the viability of smaller seed firms. This question is important because some of the regulatory reform. The entry of large firms. seed production. On the other hand. Would the products of private technology suppliers be so high priced that small farmers would not be able to afford it? Note that such issues are not exclusive to private research. there is now considerable expertise outside the public sector that is capable of applied plant breeding. there are three inter-related issues.years from 1988 to 1996. backed presumably by formidable marketing and technological prowess. the public sector constitutes a countervailing power in the marketplace.

advertising and promotion. 3. setting the right price is an important tactical decision and is a key factor influencing revenue and profit. processing and storage. Seed marketing. which the farmer can save. These costs will include the cost of the processed and packaged seed and the marketing costs associated with selling and distribution. To a government price may mean popularity and votes and is therefore a sensitive political issue. Administration and finance. THE COST OF SEED Cost is a major factor in any discussion about price. where spending power is low. governments may therefore seek to influence and control seed pricing. B. rather than price that dominate the farmer's decision to purchase. C. will be more price sensitive than hybrid seed. Price will be a more critical factor in marginal farming areas. To the seller price is revenue and therefore a key element in the marketing mix. The importance of price varies from one market to another and between different segments in the same market. quality control and certification. Thus the costs involved in putting a bag of seed on the farm must be recorded. Seed production. sales and distribution. Providing the benefits of the seed are understood. but less important where high yields can be obtained and farm produce can be sold profitably. involving procurement.Seed pricing The importance of price Price has different meanings for different groups of people: A. such as the availability of fertilizer and confidence in the produce market. it is other factors. non hybrid seed. 2. For example. analyzed and known to management. the buyer valuates one variety or source of seed against the alternatives. market research. To the buyer price is a cost which is used as a measure of value. Costs may be grouped according to the activities involved notably: 1. taking into account marketing. 20 .

the proposed legislation also seek to safeguarded farmers and researcher’s rights.  For satisfying the TRIPs GOI. Seed held in stock at the various stages of processing also has to be financed. Seed Industry and GATT/WTO/TRIPS  GATT has a number of implications for the seed trade in Asia Pacific region including India. medicines. If it is not to be financed out of existing resources then short-term loans are required to ensure that there is sufficient working capital. it is protected by the Plant Variety Protection and Farmer’s Rights Act. In this act.3 b of the TRIPs states that “ Parties shall provide for the protection of plant variation either by patents or by on effective Sui generic systems or by combination thereof.  Four major forms of intellectual property rights can be applied to agricultural plants • • • • Patents Plant Breeders’ Rights Trade Secrets Trade Markets  Article 27. 21 .  In USA. This is a significant cost item and there may be serious financial consequences for a business that has high stock levels.”  India is balance to meet this requirement through a Sui generic systems for the protection of plant breeders’ rights. Framers’ right to use farm saved seed are projected. biotechnology aspects have been included.  The Uruguay round of GATT sought to expand the scope of the organization by including service investment and Intellectual Property Agreement provided for setting up WTO. plant varieties are protected either by plant or Plant Breeder Rights  In India.For a company planning a seed production programme the working capital needed to procure and process seed has to be assured. 2001. amendments were made in the Indian Patent Act (1970) for the third time on 26th December 2004. foods.

drugs Compulsory licensing and license of Limited compulsory licensing. 5-7 in chemicals. debate regarding some orbiotechnology treatment render treatment of animals and plants toareas in agriculture and them disease increase economic value of products) Government allowed to use patented Very limited scope for governments to invention to prevent scarcity use patented inventions The Protection of Plant Varieties and Farmers’ Rights Act  Rights Act was passed by the Indian Government in 2001. and taking care of the concerns for equitable sharing of benefits. medicines.  The Sui generis system for protection of plant varieties was developed integrating the rights of breeders. any processpatentable. chemicals Term of patents 14 years. free of or or otherexcluded from patentability is plant similarvarieties. Only area conclusively for medicinal of surgical humans. no all fields of technology Term of patents 20 years right license of right Several areas excluded from patentsAlmost all fields of technology (method of agriculture. farmers and village communities. 22 .Indian Patent Act of 1970/TRIPS Only process not product patents inProcess and product patents in almost food.

Dow Agro 23 . Aventis Crop Science (now taken over by Bayer). 15 years Farmers' privilege in Min. and stocking of propagating material Extent of coverage Term of protection Exception to rights Compulsory licensing Min. Monsanto (which has acquired DeKalb Plant Genetics. Syngenta (the agriculture arm of the merger between Novartis and AstraZeneca). 24 species 15 species Min. this trend has weakened and even reversed as these “life sciences” firms have spun off their agricultural business primarily because investors perceived the earnings from agriculture to be more volatile on account of the controversies over GMO food. and supply of export markets practice conditions In case of public In case of public interest (not defined) interest(not defined) Market Structure and Regulation In the global seed industry. However. in recent years. defined as reasonable availability of seeds. marketing. the international seed business of Cargill and Plant Breeding International and many other smaller firms). exporting. exporting and importing of propagating of propagating material breeders' rights marketing of optional and under specifically recognized In case of public interest. marketing.Comparison of India's Plant Variety Act to the UPOV Acts of 1978 and 1991 UPOV 1978 Act UPOV 1991 Act Scope of Production and Production. there was a further wave of consolidation involving pharmaceutical and agricultural businesses. 20 years Farmers' privilege All species 15 years Farmers' rights propagating material India's Plant Variety Act Production. the seed business is usually a part of a larger agricultural business consisting most often of agro-chemicals. In the last decade or so.

the same study points out. Yet. using field assistants to visit farmers. At the same time. the patenting of life forms and the scramble to control access to elite germplasm. How do firms compete at the retail level? What choices do farmers exercise? According to Shiva and Crompton (1998). Some of these strategies are organization of field days and demonstration plots. The consolidation in the global seed industry is attributed to the rising cost of research. The impact of these changes in India has so far been limited to changes in ownership rather than a dramatic reduction in seed companies. As established seed companies have reputations to protect. As issues of market structure have traditionally been analyzed by looking at the market shares of the leading seed firms. corporate control is seen to be most prominent in the livestock sectors where producers are contractually tied to agri-businesses in the supply of inputs as well as in marketing. This suggests that seed firms in India have not yet built successful brands that could be leveraged into some degree of monopoly power. They found that even in areas where the use of private hybrids is extensive. Tripp and Pal (2000) studied the information flow between seed firms and farmers in the pearl millet market of eastern Rajasthan. farmer advocacy by the selection of model farmers. it has also been observed that public hybrids sold under private brand names are sometimes sold at premiums reflecting the farmers’ perceptions of quality. the hybrid seed market is fickle and farmers’ preferences for particular brands of seed change rapidly reflecting the specific marketing success of individual company. there has not been much research on the market structure at the micro level. the marketing strategies of seed firms aim at persuading farmers to switch to hybrids from open-pollinated varieties. 24 . while farmers can recall the brand or the company that produced their seed they cannot often distinguish between a company’s hybrids. customer contact programmes. free distribution of farmer’s handbook and free distribution of small packets of seeds. In the United States. branding is a convenient short-cut for communicating product quality. It is not clear whether smallholder agriculture offers greater or lesser opportunities for corporate control. But they have raised fears of corporate control of agriculture.Sciences (which acquired Cargill Hybrids) and DuPont (which acquired Pioneer HiBred) are some of major input supplying agricultural businesses today. This is possibly because companies invest resources in advertising company brands rather than in communicating information about the varieties.

Relevance and need for biotechnology At the current pace of growth. as is found and exploited in sorghum. The high input cultivation of rice and wheat has led to excessive water use and eroded soil quality. indiscriminate use of chemical pesticides has led to pesticide resistance making pest management increasingly difficult11. The high-yielding technology that heralded the Green Revolution has. Any scope for pest control through host plant resistance is becoming limited on account of shrinking sources of resistance. 25 . However. there are no means to manage the wide weed spectrum. Beyond herbicides. pearlmillet. Many of our staple food are characterized by deficiency of one or the other nutrients and excessive dependence on the same has led to nutrition deficiency related health disorders. Weed infestation causes heavy crop losses. In crops like wheat. The estimates of losses caused due to pests and weeds range between 10% and 40% but in some cases the losses could be much more12. quality regulation fails to protect farmers and neither does it reduce barriers to entry that are created by branding. Tripp and Pal find that such information is not used by farmers. seed certification should provide the route for small firms to convey signals about their product quality. which are weed specific. the scope for increasing yield has been limited. in the absence of farmer education. In crops like Indian mustard and in pulses likepigeonpea and safflower though exploitable hybrid vigour is quite sizeable. Thus. Limited variability for yield-related traits is slowing down the progress in yield enhancement. Ideally. heterosis is being commercially exploited in India from this year. for want of stable male sterility/ restorer systems and lack of economic hybrid seed production technology. Hybrid technology. though a potential technological option.Branding is also an entry barrier to small and new firms that cannot afford advertising or do not have past reputations to build on. if not controlled in time. meeting the future food grain demand would be an uphill task. The new technologies for increasing yield should also be sustainable in the long run. has not yet become a reality in several crop plants for want of stable cytoplasmic male sterility–fertility restoration system. no doubt. The farmers in the survey could not explain the difference between certified and truthfully labeled seed. sunflower and rice. rescued the country from chronic food deficiency and starvation but it has had its adverse effects too.

brinjal. chillies and bell pepper. Indian mustard. Considering that many problems still remain unsolved and that the currently available technologies are inadequate to solve them. Genetically engineered hybrids and hybrids with unique characteristics such as pest resistance are of special interest to the private sector institutions. which include both public research institutions and private research laboratories. The problems receiving priority attention include insect pest control. cotton. Recognizing the potential of genetic engineering and biotechnology and its relevance to India. Two transgenics now under field-testing. there is need for alternate technologies. Bt cotton hybrids against bollworm complex and Indian mustard (Brassica juncea) for exploitation of hybrid vigour are of this kind. corn. Transfer of useful traits from distantly related species which do not sexually cross with the crop plant is not possible through conventional recombination breeding procedures. more than double that in the Eighth Plan (Rs 427 crores)16. which is 26 . cabbage. cauliflower. Currently.Need for transgenics Plant breeders can rectify problems in a crop only when there is variability available for the desired character within the compatible species complex. exclusively to develop and apply biotechnological approaches in agriculture. Today 185 institutions. as they provide a degree of certainty. the Ministry of Science and Technology established the Department of Biotechnology (DBT) in 1986. animal science and human health15. potato. The fact that 23private sector institutions have today their own Institutional Biosafety Committee (IBSC). transgenic research is being done on several field crops. tobacco and rice and in vegetable crops namely tomato. The Ninth Plan outlay of DBT was around at Rs 1026 crores. are engaged in transgenic research. The first transgenic Bt cotton underwent field-testing in 1995. viz. hybridization systems and nutrition improvement11. Recombinant DNA technology that enables movement of genes of interest across sexual incompatibility barriers is one approach plant scientists are relying upon worldwide today to find genetic solutions to specific problems13. viz. Several large and medium-seed companies with turnovers ranging from Rs 35 crores to 100 crores are intensively pursuing full-fledged in-house agro-biotech research and development either on their own or through joint ventures with foreign companies. offsetting the risks to their investments in biotechnology1.14.

The need for creation of awareness among farmers and general public on the benefits and risks associated with transgenic crops is also very important. cotton hybrids with Bt gene. For instance. Transgenics will have a major impact on seed business. The first transgenic crop. Dramatic increase in the annual research expenditures of private companies engaged in biotechnology research is yet another indicator to the increasing involvement of private sector in biotechnology research.62 crores) of the total turnover of the companies is spent on R&D. It will replace the existing Seeds Act of 1966 and Seed (Control) Order of 1983. The speedy implementation of the Enactment of the Protection of Plant Varieties and Farmers’ Rights Act is urged. is indicative that private companies are as serious and interested as public institutions in pursuing transgenic research17. There is a need for promoting joint venture collaborations between industry and national and international institutions. Therefore recognized National Seeds Associations have an important role to play. as new varieties with improved performance enter the market. There is seed legislation in place and a Draft Seeds Act of 2001 is being finalized on the basis of the recommendations of Seed Policy Review Group.mandatory under the guidelines for institutes engaged in genetic engineering research. 27 . The seed industry has Government of India (DSIR) recognized research and development departments which have resulted in a large number of private research varieties and hybrids. The seed industry has grown steadily in the last four decades.78% (0. The current regulatory system requires coordination among 3 to 4 ministries. A singlewindow clearance is recommended for faster release of useful transgenic crops.49 crores) to 15. shares of individual varieties will shift quickly. Conclusions The Indian seed industry is currently valued at more than Rs 2500 crores with about 150 organized seed companies. A study based on the 1998–99 annual report of nine seed companies has indicated that 0.08% (22. have been cleared for commercial cultivation. The availability of data for analysis of the Indian private sector is problematic because it is often inaccessible and considered strictly confidential. The proposed legislation features establishment of National Seeds Board and compulsory registration with the Board of any seed for the purpose of sowing or planting.

seedassociationofindia.gov.indianagronet.in www.com www.seednet.agricoop.apsaseed.in www.in www.nic.indiabudget.manage.Reference • • • • • • • • www.org www.gov.indiaseed.com • Agriculture Today • Indian Food Industry 28 .com www.nic.in www.

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