1 South Asian Conference on Trade and Development entitled “Harnessing Gains from Trade: Domestic Challenges and Beyond ” December 20, 2007 The Claridges Hotel, New Delhi Changing Structure of Indian Seed Industry: Policy Prospects and Emerging Lessons Sachin C hat ur vedi
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• It seemed quality seeds supply stabilised however in latesixties and early seventies policy went through variousphases and restricted growth of seed market especially ofquality seeds in different crops particularly vegetables, etc.
• As part of this several institutional efforts like NSC, State
Farms Corporation of India (SFCI) and several State SeedCorporations (SSCs) came up.
• However, the low seed replacement rate in most crops andthe narrow focus of the public sector led to the launching ofthe New Policy on Seed Development (NPSD) in 1988.
• Gradually the situation started changing with the use ofhybrid seeds in cotton, and to some extent in corn, millet,rice, sunflower, and vegetables, which have expanded in amajor way.
• Majority foreign equity holding upto 51 percent equity allowed for trading companiesprimarily engaged in export activities.
• Automatic permission was proposed forforeign technology agreements in highpriority industries.
• The 1991 Industrial Policy also proposed toamend the MRTP Act to remove thethreshold limits of assets in respect of MRTPcompanies and dominant undertakings .
• Growing concentration should be addressed through various
policy mixes.• In the seed sector it is found that the idea of cluster
formation is too narrowly focused in its geographical coverage.
• Unlike in the industrial sector, in agriculture one should have a
different approach for clusters. Though generally the clusterscome up with a highly localised concentration of specialisedskills and knowledge but over concentration of seed productionwould have high costs in terms of environment and the supplysystem. It is all the more desirable, given the huge size of
India and its emerging seed requirement.• As of now 90 per cent of vegetable seed comes from
Rannabennur in Karnataka; 80 per cent of cotton comes fromNadiad in Andhra Pradesh. Similarly, 90 per cent of pearlmillet comes from Andhra Pradesh again. This is not a very
Harmonising Policies across States• As agriculture is a state subject sometimes seed companies face
completely different policy regime sin different states.
• The variations range from packaging guidelines to the insistence forsigning MoUs for seed replacement in case of dispute with
consumers. In some cases the policy changes are so rapid that thefirm finds it difficult to cope up.
• There is an urgent need to make provisions for adequate protectionof intellectual property so that demands like samples of parentalseeds and hybrids for DNA fingerprinting are not resisted by the
industry as has happened in state of Andhra Pradesh.• In states like Madhya Pradesh an undertaking is taken for
compensation against under performance of seeds. This practice hasbeen done away in states like Andhra Pradesh.
Raising Entry- Exit Barriers: Industry for Self Regulation
• There are almost no barriers for entry and exit in the seed industry. Thefly-by-night operators exploit farmers and create confusion in the industryand among the regulatory authorities.
• With the advent of biotechnology, the seed industry is likely to get polarisedon lines of high technology and low technology products.
• Rapidly evolving and costly agricultural biotechnology innovations and stillexpensive regulatory regime may pose entry barriers especially for smallerfirms.
• The material transfer agreements and intellectual property rights may alsoplay respective roles in limiting entry into the agricultural biotechnologysector. However, these would become effective once the enforcement
related institutional setting up takes a shape.• In India, the setting up of PVFRA is a rather recent phenomenon. Its counter
part at the state level has yet to come up. Till then IPR violations leading tothe production of spurious seeds may well be imagined. Unlike the pesticideor fertiliser markets there are no barriers in the seed sector. Though theSeed policy 2002 proposes to implement some measures but one needs to
• There is a need to rechannel the subsidy or assistance being given tostate governments on various counts.
• The support in 1999-2000 was Rs. 1.9 billion. Out of this the keyrecipient states were Andhra Pradesh (11 per cent), Gujarat (7 percent), Madhya Pradesh (9 per cent), Maharashtra (8 per cent), andRajasthan (9 per cent). The others all were below 5 per cent.
• In 2000-01, this amount remained almost same at Rs. 4.3 billion.
• Apart from this assistance, the state governments make availabletheir own resources as well to support the seed sector.
• The support should be more effective in the sense that producer and
farmers may have a wider choice. This would also help in ensuringaccess to high technology products even by farmers who otherwisefind it a constraint.
• Karnataka, has increased the seed subsidy but the farmers mayselect the seed company of their choice.
Enhancing Role of Private Sector in Extension• Information on seeds is disseminated to farmers by
agricultural extension personnel, State AgriculturalUniversities, Krishi Vigyan Kendras, etc. through leaflets,pamphlets, radio and television programmes, articles innewspapers and periodicals, distribution of seed minikits,field demonstrations, awareness campaigns, KrishakGoshthis, Rythu Bazars, Kisan Melas and AgricultureExhibitions, etc.
• The post Green Revolution R&D system in the agriculture sector ispassing through a phase in which the private sector is delivering manymore products than their counterpart in the public system.
• A viable and strong public private partnership with well-defined publicpolicy objectives may well help in advancing the technology frontier
but may also facilitate access to technology products by the farmersof all categories.
• It is important to place inputs such as seeds in the larger context ofthe agriculture innovation system in which rising input costs, whichhave emerged as a major challenge for the adoption of newtechnologies.
• The recent controversy on Bt cotton seeds, in India, is a case in point.Since greater R&D resources are required for high technologyproducts coupled with a strong IPR regime, it is not difficult toimagine the entry of higher priced products in market.