MANTHAN

REPORT 2020

SEED SECTOR

National Institute of Agricultural Extension Management (MANAGE)

Rajendranagar, Hyderabad, 500030
 INDEX

S.No Topics Pg.No

1 Introduction 1

2 Overview Global Seed Industry 1

3 Overview Indian Seed Industry 2

4 Government bodies in seed business 4

5 Seed legislations and Policies 5

6 Classes of seeds 8

7 Mergers & Acquisition 8

8 Bt. Crops 11

9 Global Scenario in GM crops 12

10 Indian scenario in GM crops 13

11 Regulatory mechanisms in India 13

12 Impact of COVID 19 in seed sector 14

Introduction

Seed is the basic and most critical input for successful and sustainable agriculture,
which holds the key to farm productivity and profitability. the advent of modern
plant breeding and technology advances in the seed industry has played a
significant role in evolution of high yielding varieties and hybrids. it is estimated
that good quality seeds of improved varieties can contribute about 20-25% increase
in production depending of the crops

Overview Of Global Seed Industry

● The seeds market is projected to register a cagr of 7.9% of value usd
90.37billon during the forecast period 2020-2025

● The shift in farming practices and farmers needs high yield, improved
nutritional quality, reduced crop damage, disease resistance, etc. motivated
farmers in investing in commercial seeds

● The massive increase in the demand for biofuel had a major impact on the
evolution of world food demand for cereals and vegetable oils and thus is an
important factor behind expansion of global seed market

● Acceptance of area under genetically modified crops, increasing demand for

animal feed, rapid adoption of biotech crops and decreasing per capita
farmland are contributing to the growth of seed market

● In 2019, North america was the largest geographical segment of the market
studied and accounts for a share of around 35% of the market.
Overview of Indian Seed Industry

● Indian seed occupying the 5thposition globally with a market value of 30,600
crore turnover. The Indian seed industry has been growing at a Cagr 6.8%
for the forecasted period of 2020-25. (source: Mordor intelligence )

● In India, hybrid seed penetration is high in cotton (90%), corn (60%). low
penetration in major cereals, such as paddy and wheat (5%). cotton
hybridization is almost reaching saturation, as Bt cotton is sown over 90% of
the cotton-producing area in the country

● Comparing the global seed production India's share is very less. India is way
behind countries like the USA and China in terms of total seed market size.
India accounts for only 4% of total seed business whereas us accounts for
35% of total seed business globally

● The indian seed market is majorly dominated by non-vegetable seeds such as

corn, cotton, paddy, wheat, sorghum, sunflower and millets.
 INDIAN SEED MARKET
2018 287
2017 234
2016 166
2015 141
2014 122
2013 103
2012 86
Value(Billion Rs)
2011 59
2010 46
0 50 100 150 200 250 300 350

Source:I CFA

● Patenting process in India is not very vigorous, enabling other companies to

replicate better performing seeds in the marketplace

● The competitive landscape of the market is highly fragmented with the

presence of a large number of unorganized players

● In geographical front, Uttar Pradesh represents largest seed market

accounts for 12% of total market followed by mp, up, Andhra Pradesh,
Karnataka

Evolution of Seed Industry

1960-mid 1980
Start of green revolution

Minimal private sector participation and emergence of private firm due to

benefit from NSC'S assistance

Restrictions on germplasm exchange, foreign ownership etc..,

 Mid 1980- 1990
Seed industry boomed as result of several governments initiatives like seed bill,
seed act etc..,

Foreign direct investment allowed and encouraged

Imports of improved varieties and breeding lines liberalized

Trade regulations liberalized

Many joint ventures are made between Indian and Foreign firms

Current status
High private sector participation(~70%) in commercial seed production

R&D hubs are created due to varied climatic conditions.

Private seed companies are spending 10-20% of turnover in R&D

Reduction in entry barriers for entry of foreign firms

Government Bodies in Seed Business
Seed Marketing

Public Sectors: NSC, SSC, NGO’s, Co-operatives

Private Sectors
Private Companies, C/F Agents, Dealers and Distributors
% Of seed sales by various players

13%
30% Public sector
17% Large private players
Medium private players
Unorganised sector

40%

Seed Legislations and Policies

● 1955- Essential Commodities Act
● 1966- Amendments (Seed Act And Seed Rules On Need Basis)
● 1975-85- National Seed Programme
● 1983- Seed Control Order
● 1986- Technology Mission On Oilseeds And Pulses
● 1988- New Policy On Seed Development (NPSD)
● 2001- PVP And Farmer’s Rights Act
● 2002- National Seed Policy
● 2004- Seed Bill
● 2007- National Biotechnology Development Strategy
● 2009- National Biotechnology Regulatory Authority Of India Bill
Seed Act, 1966

● Statutory bodies and agencies are established like CSC, CSCB, state and
central testing labs and certification agencies
● Regulation of sale of notified variety by compulsory truthfully labeled seeds
● Penalty of rs.500 for first offence and 6 months prison/ rs1000/- and seeds
may be forfeited to government National Seed Corporation

Seeds Bill, 2004

● Registration of kinds and varieties of seeds etc.(compensation to framers)

● Registration of seed producers and processing units (seed dealers to be
registered)
● Regulation of sale of seed and seed certification, seed analysis and seed
testing
● Export and import of seeds and planting material.

Functions of National Seed Board

● Undertake registration of kinds/varieties of seeds on the basis of
identified parameters.
● Maintain the national seed register and meet quality assurance requirements
for export of seeds.
● It will promote efficient and timely distribution and marketing of seeds
throughout the country

National Seed Corporation

NSC was established in 1963 to undertake production of foundation and certified

seeds. at present, it is undertaking production of certified seeds of nearly 600
varieties of 60 crops through its registered seed growers

Functions

● Implementation of various schemes of the govt. of India like integrated

scheme ISOPOM, NFSM, NHM
● Technical support and training to seed producing agencies
 ● Implementation of the central sector scheme to create infrastructure facilities
like processing and storage (Godowns)
● Exports of seeds across the world especially in SAARC and African
countries.

State Seed Corporation

● Regulate production and supply of certified seed, and within the state
marketing of certified seed.
Functions

● To install, manage and operate processing plants and seed storage facilities
● To organize supply of foundation seeds to contract growers out of its own
production
● To undertake distribution of seeds to farmers at reasonable price and in
sufficient quantities

Seed testing laboratory

● Essential organization in seed certification and quality control
● To serve producer, consumer and seed industry by providing information on
seed quality
● to maintain seed quality, seed laboratory will do tests like purity testing,
moisture testing, viability testing, germination and vigour testing
 Policy Initiatives in Seed Sector

Seed policy Function

The Seed (Control) Order, 1983 Was  Ensure the production, marketing
Promulgated Under Essential and distribution of the seeds
Commodities Act, 1955 through licensing
 Includes seeds as consumer
produce.

Protection Of Plant Variety & Farmers  Provide for a system of plant

Right Act, 2001) variety protection through patents and
registration
❖ Novelty , distinctness,
❖ uniformity, stability

New Seed Policy (1988)  Promote the import of high quality

of seeds with exceptions

National Seed Policy 2002  Encouraging the private seed

industry and safeguarding the
interests of Indian farmers
 Also deals on transgenic seeds
(biotechnology)

New Seed Bill 2004  Strengthening of breeder,

foundation and certified seed
production by NSC, SSC, state
farm corporations and private
agencies.
 NSB will be established in place
of existing CSC and CSCB
Strengthening the infrastructure
facilities for seed testing, seed
certification and research
 Classes of Seed

AGENCY CLASSES OF SEED QUALITY

CONTROL
Breeder himself
Concerned breeder or NUCLEUS SEED
(No Specified tag) maintenance breeding
sponsoring Institute

Breeder seed monitoring

BREEDER SEED team
Concerned breeder or
(Golden Yellow) Field inspection to check
sponsoring Institute genetic purity
Grow out test

Department of FOUNDATION
Department of seed
Agriculture, NSC, SSC, SEED
Mergers And Acquisition (White) certification
Co-operative agencies
and private sector
Field inspection and seed
CERTIFIED testing
SEED Genetic purity
(Blue tag) Physical purity
Germination
Moisture

FARMER
S

Due to global competency in the market, slow organic growth, sustained downturn
in the world cereal market has made the seed and agro-chemical companies
difficult to maintain consistent progression. So the multinationals around the world
to look at opportunities for collaboration to expand their business in-organically
and this result in major merger and acquisitions of companies namely, Dow agro
sciences and Dupont, Monsanto and Bayer etc.., at the base the intention behind
this is global dominance and control over global agricultural sector

How Mergers Will Help for Firms?

● The mergers are basically the integration of the expertise in the seed and
agrochemical segments, all the above major companies started with
agrochemicals and later moved into the seed sector. This consolidation gives
them control over the value chain and gives them global market access.

● The firms needed greater scale to invest in and support research, and that the
mergers by creating more balanced portfolios of seed and chemical
businesses would spur greater combined seed/chemical innovations

● Six large firms dominated the sale of seeds and agricultural companies in
2015 around the world are BASF, Bayer, Dow chemical, Monsanto and
Syngenta known as “big six”. These firms are involved in production of
pesticides, seed treatments, and crop seed and also in development of seed
traits like herbicide tolerant, insect resistance. in 2015&2016 itself three
mergers are announced by five of out of big six firms

Dow Chemical and Dupont

● In December 2015, dow chemical and Dupont proposed to merge, and then
to split the merged entity into three firms

Seed and agri-chemical business

Material science
Specialty chemical products

● Each firm had a distinctive profile, with a strong tilt toward either seeds and
traits or chemicals. for example, Dupont derived nearly 70 percent of its
agricultural product sales from seeds and traits, while Dow derived nearly 80
percent of its agricultural sales from chemicals
 ● In 2019, Dow-Dupont announced the name of new company “Corteva
Agriscience”

Chemchina And Syngenta Ag

● Syngenta, the largest producer of agricultural chemicals among the big six
and was the third-largest seed business. Two months later, in February 2016
Chemchina offered $43 billion to purchase Syngenta.

● Among the big six, Chemchina did not invest heavily in research and
development for new products and did not participate in the seed business.

Bayer and Monsanto

● In September 2016, Bayer proposed to acquire Monsanto for $66 billion

and deal was completed in 2018
● Bayer's chemical sales placed it second among the big six, and accounted
for over 80 percent of the firm’s agricultural sales.
● In contrast, Monsanto derived nearly 70 percent of its agricultural sales
from seeds and traits, but its chemical sales placed it fifth among the big six.
so, the merging of two firms has made their portfolio strong
BASF and Bayer
● BASF was not initially involved in the mergers, although it came to play a
role later. The firm had the third-largest agricultural chemical business
among the big six but did not have a significant seed business. in 2018,
BASF completes its merging

● The transaction is a strategic complement to BASF’s crop protection,

biotech and digital farming and marks its entry into seeds and nematicide
seed treatments. in seeds they acquired the Bayer’s global vegetable seed
business, operating under the brand name of “Nunhems”

Bt Cotton

● Bt cotton was first used in India in 2002. The only genetically modified crop that is under
cultivation in India is bt cotton which is grown over 11.7 million hectares. in 2018-19
Kharif season 88.27% of 122.38 lakh ha cultivation in Bt and productivity of cotton
increased from 8.62 million bales in 2002-03 to 34.89 million bales in 2017-18
(Source: India Today)

14
11.79 Area under
12 10.46 10.78 10.33 BT-Cotton IN
10 8.44 India over
8 years (in
million ha)
6
4
1.73 1.32 1.48
2 0.96 0.79
BT cotton )
0 Non- BT cotton
2015 2016 2017 2018 2019
Source: Business Stand
Bt Brinjal

● The GEAC in 2007 recommended the commercial release of Bt Brinjal,

which was developed by MAHYCO in collaboration with TNAU and UAS,
Dharwad, but the initiative was blocked in 2010

Failure Of Bt-brinjal In Bangladesh

● In 2006, Bangladesh government approved Bt-brinjal and seeds are imported

from mahyco. In order to promote crop farmers are given free seeds and
financial assistance. in spite of this gm brinjal failed in Bangladesh due to
various reasons,
1) Their raining pattern does not match with crop cycle, results in plant
wilting
2) Incur high cost results in less profit to farmers.

Gm-mustard

● Dhara mustard hybrid-11 is a genetically modified variety of mustard

developed by the Delhi using “Barnase / Barstar” Technology.

Bt-mustard In India

● If Bt-mustard is accepted in India it will reduce the trade deficit and save
foreign currency reserves, because India spends roughly around $12 billion
annually on vegetable oil imports. gm mustard has been considered by agri-
experts as a solution for the country’s edible oil deficit because it has yields
up to 30% higher than the normal varieties

Global Scenario in Gm Crops

● Commercialization of GM crops started in 1996. from the initial planting of
1.7 million ha, it got increased to 191.7 million ha which is 113 fold
increase
 ● Developing countries are planting more gm crops than industrious countries
which may due to adoption and commercialization of gm crops like bt-rice
in developing countries

● USA (75 million ha) topped among the countries with more area under gm
crops followed by Brazil(51.3 million ha)

● The most planted GM crops in 2018 were soybean (78% of total area),
cotton, canola, maize(31% of total area)

● Other than this field crops, food crops like papaya, eggplant, potato, apple,
pineapple and sugarcane also planted under gm crops

Hectares (in million hectares)

500
400
300
200
100
0
2005
1997
1998

2001

2011

2015
2000

2006

2008
2009
2004

2010

2016
2014
2002

2012
1996

1999

2003

2007

2013

2017
2018

Hectares

250

200
59.16
150
AREA

100 GM crops(million ha)

96.33 138.04 conventional(million ha)
50
25 10
27.17 7.9 24.7
0
Soyabean Cotton Maize Canola
CROPS

Source : Isaaa
Gm Crops-Indian Scenario:
● Genetically Modified Crops are plants in which DNA of which has been
modified using genetic engineering techniques

● The aim is to introduce a new trait to the plant which does not occur
naturally like resistance to certain pests, diseases, environmental conditions,
herbicides, to increase nutritional value, bioremediation

● Major companies interested in genetically modified crops in India

include Monsanto India, Mahyco And BASF
Regulatory Mechanisms in India

● The top biotech regulator in India is genetic engineering appraisal

committee was established in 1989

● Approval of activities involving large scale use of hazardous

microorganisms and recombinants in research and industrial
production from the environmental angle

● The GEAC is also responsible for approval of proposals relating to

release of genetically engineered organisms and products into the
environment including experimental field trial

Future Prospects in Seed Sector

Indian seed industry is undergoing wide ranging transformation including
increased role of private seed companies, entry of multinational companies, joint
ventures of Indian companies with multinational seed companies and
consolidations

● The future seed market of the country is expected to witness more adoption
of hybrid seeds
● One of the most important developments in the future will be the increased
demand for quality vegetable and fruit products with increased nutritional
values because of the increased consumer awareness and increase in
disposable income of the population.
 ● India and fruits, driven by the growth and development of the food
processing sector. the export sector is also set to witness growth
Impacts of COVID 19 in seed sector
● Agriculture was not included as an essential activity and FSII proactively
took up the matter with the Central and State governments before the
lockdown were initiated. The importance of harvesting the crops standing in
the fields as well as monsoon sowing was put forward

● The government in turn included Agricultural related activities in the

Essential services that were allowed during the lockdown with appropriate
safety measures

● Seed companies operating plants have taken necessary precautions like-

Operation with 30% staff, frequent site sanitization, social distancing and
regular health monitoring of the staff. There is no overlap between shifts and
the site is sanitized between shifts

● Such measures have decreased the productivity of the plants by 50%, even
though plants are operating in multiple work shifts

● Availability and cost of transport due to the reduced number of commercial

flights, fewer personnel available for production, transportation and
documentation processes, and a contraction in the market for plants and
seeds, particularly ornamentals, due to the closure of garden centers and
florists and the loss of contracts with key retailers is creating specific
problems for the seed sector.

● Companies have closed all major operations, and might be doing so till
further clearance from the Government. The main sowing season is in June,
so April and May are very critical months for packing, testing and timely
dispatches to the markets. Companies can’t ship seeds to India until April
14th since international flights are not allowed to land. Currently the labor,
Logistics, harvesting machinery and the plants are not operating at optimum
 levels. Lot of the migrant workers are headed back home thereby creating
problems for farms, R&D farms, seeds production areas, seed packing and
the winter crop harvesting. This is the concern for all companies, and
stakeholders across India.

 The increased cost of transport, due to the reduced availability of flights, as

well as delays at borders due to stricter safety measures and fewer personnel,
may hamper seed supply chains and on-time delivery of seed. Depending on
how long the pandemic and associated confinement measures continue, the
seed sector and its associated supply chains could feel the impact of
COVID-19 long in to the future
 Academic Committee
2019-2021
National Institute of Agricultural Extension Management

(MANAGE)

Rajendranagar, Hyderabad: 500030