India's maize seed industry in transition: changing roles for the public and private sectors

Abstract

Recent policy reforms have brought major changes to India's maize seed industry. Since seed laws were liberalized in the late 1980s, private investment in maize research has risen sharply, and seed companies have captured a significant share of the market. Although the emergence of a flourishing private seed industry has benefited many producers and consumers, calls for complete privatization of the industry are misguided. Profit-oriented firms are unlikely to assume functions that cannot easily be exploited for commercial gain, so government agencies will continue to play an important role in supporting basic research, conducting applied research targeted at marginal environments, collecting and disseminating market information, and establishing and enforcing industry standards. Public-sector involvement in commercial seed production seems destined to decrease, however, as the private seed industry gains in strength.

Introduction

Since India's seed laws were liberalized in the late 1980s, private companies have captured a significant share of the national market for maize seed.¹ The rapid growth of the private maize seed industry has profound implications for the government agencies charged with developing improved production technologies for India's millions of maize farmers. Long accustomed to a virtual absence of competition, these agencies have seen their territory invaded by profit-driven seed companies whose superior products, aggressive marketing techniques, and deep pockets make them formidable competitors.

The rise of the private seed industry has brought substantial benefits to many producers and consumers of maize. Private seed companies do not necessarily represent an unmitigated blessing, however. Concern has been expressed in some circles that in their quest for profits, seed companies are bound to neglect farmers in marginal production zones who do not represent an attractive market for hybrid seed.² Furthermore, warn some analysts, even conceding that seed companies are doing a good job in many respects, there is a need to ensure that their activities complement, rather than compete with, efforts already being carried out by government agencies.

This article examines the organization and performance of India's maize seed industry and addresses the question of where the ongoing liberalization process is likely to lead. The discussion proceeds in three stages. First, recent changes in seed industry policy are briefly reviewed. Second, data are presented to highlight the relative strengths and weaknesses of the public and private sectors in carrying out research and development, seed production and conditioning, and seed distribution activities. Third, policy issues are described that will have to be resolved if India's maize seed industry is to remain dynamic, efficient, and responsive to the needs of producers and consumers.