seed supply

Seed Systems Research Abstracts from the Biotechnology, Breeding and Seed Systems Conference

An investment fund for seed and related businesses in eastern and southern Africa

There are a number of factors in sub-Saharan Africa that justify the establishment of an investment fund to support the development and growth of the private seed sector. These factors include the economic advantages of seed of improved varieties, farmers' interest in acquiring new varieties, and the currently unacceptable status of commercial seed markets. In addition, opportunities for seed companies have improved with increased liberalization of agriculture and with advances in crop breeding. The countries of eastern and southern Africa are largely agrarian economies that depend on the production of basic staples. Maize is the most important grain in most countries of the region; it has replaced sorghum and millets in even some drier regions. For most of these crops, farmers have largely depended on local seed or planting material supply; households save their own seed, obtain it from neighbours, or buy grain suitable for planting in local markets. The major exception is maize, and many of the countries in the region have well-developed private or public maize seed enterprises. The basis of most of these enterprises is hybrid seed. Because of the deficiencies in formal seed systems, the introduction of new crop varieties has been difficult. The liberalization of the seed sector in the region opens up tremendous opportunities for private sector seed companies to provide the products and services which state controlled enterprises have so miserably failed to do. Financing for agriculture in the region has been poorly managed in the past and government interference in the sector has resulted in banks losing money. Equity financing will therefore be the prime source of capital for these emergent companies which will drive the growth of agriculture in the region. Apart from direct investments in seed companies, it is apparent that the delivery of good quality seed is dependent on investment in other related agricultural businesses. Relevant business sectors are: 1) plant breeding and seed production, e.g. companies involved in all aspects of plant breeding, seed production, seed marketing, and inputs marketing; 2) grain handling and marketing, e.g. facilities for cleaning, drying and storage of grain and related activities such as warehouse discounting systems and commodity exchanges if they can be developed within a reasonable time frame; 3) outgrower networks, e.g. companies that contract small farmers for grain or higher value crops which a larger company will process or package for local sale or export and 4) peripheral business opportunities, e.g. businesses which are further removed from direct farming activities, but could still impact on farmer incomes. Processing of grain and non-grain crops will come into this category, as will businesses which use communications technologies to improve farmer access to information on weather and market prices.