09 / 1997
From a predominently public sector producing varieties suited for Green Revolution agriculture in the 1960’s, the Indian seed industry has evolved into a multi-faceted industry with a large involvment of private firms and increasing emphasis on research and development.
In its initial stage, the Indian seed industry consisted primarily of two national organizations. The National Seeds Corporation was established in 1963, and for about 13 years, it was the main organization in charge of the production and marketing of commercial seeds (1). NSC was assisted by the Rockefeller Foundation and USAID in its mission of quality control and training in seed production. A second national agency, the States Farms Corporation of India Limited (SFCL), was formed in 1969 with the mandate of producing breeder, foundation, and certified seeds of high yielding varieties. With its 12 large mechanized farms located in 8 different states, the SFCL continues to be the largest seed-producing agency in the country.
In the 1970’s and 1980’s, 13 State Seeds Corporations were formed on the model of the Terai Seed Development Corporation as a joint effort of the G. B. Pant Agricultural University in Uttar Pradesh and the World Bank, which financed two successive National Seed Projects in 1977 and 1978 (2). The SSC largely took over the role of the NSC in individual states. As Bharat Dogra points it out, the Indian seed sector has been and continues to be dependent on foreign funds and inputs for its development. For instance, Jonhson E. Douglas – a former seed specialist with the Rockefeller Foundation – played a major role in orienting India’s seed programme in the 1960’s (3). And recently, in 1990-91, National Seed Project III was launched thanks to a third World Bank loan. Its thrust was to upgrade the efficiency and infrastucture of the public seed sector (the NSC, SFCL, SSC, as well as the Seed Certification Agency, and the Central and State Seed Testing Laboratories). World Bank loans are not ’neutral’, and the restructuration of the seed sector is highly imbued with concepts of cost efficiency and rational investment.
The main task of the public sector today lies in meeting the national seed requirement for high volume, low value crops like self-pollinated crops such as rice or wheat. These seeds are supplied at fixed rates (determined by the government), and the NSC and SSC have incurred major deficits, because fixed prices do not always reflect the actual costs of production, processing, and distribution.
Private seed firms slowly emerged throughout the 60’s and the 70’s, with a number of them benefitting from NSC’s technical assistance. Many of these firms have developed their own breeding programmes, and released inbred improved cultivars. Firms set their own prices for their own hybrid varieties of crops such as pearl millet, sunflower, cotton, sorghum, and maize. These private hybrids represent an important share of the market for these crops. For public-bred varieties, private companies have to respect fixed government prices.
The production of hybrid seeds is to a large extent the prerogative of the private sector. Of all improved cutivars bred and marketed by private companies until 1993, nearly 70% were hybrids. Since hybrid seeds can not be multiplied in farmers’ fields, they must be bought from the company every time they are raised. This high seed replacement rate ensures firms good sales. That is not the case with high yielding varieties of crops like wheat or rice, for which the replacement rate fluctuates between 9 and 14%.
Apart from hybrids, the private sector is also largely involved in the commercialization of low volume, high value crops such as vegetable seeds.
With some 500 companies of various sizes, 24 of which with links to multinationals, the private sector contributes a little less than 50% of the commercial seed requirement for the country today.
In the recent years, partly as a consequence of the reduction of barriers on the entry of foreign firms and large Indian conglomerates into the seed industry (dating from1986), many joint ventures between foreign and Indian firms have entered the seed market. Private sector research is also fast expanding, with investments in research tripling between 1986 and 1995.