An in-depth overview on the global seed industry. From significant investment in plant breeding and infrastructure in Russia to China’s outlook on the pepper seed market.
Russia’s seed industry is currently going through hard times and the state is taking serious steps to try to bring it out of crisis. According to the Russian Ministry of Agriculture, the main problems within the industry are the deterioration of the material and technological base of the seed selection process, declining seed production and the lack of adequate infrastructure required to supply agricultural organizations with high-quality seed material.
As a result, today almost 30 percent of Russia’s sowing seeds for major culture crops are now considered to be sub-standard. According to Russia’s Ministry of Agriculture, the productivity of plant breeding in the country currently stands at only 30 percent of the total number of seeds produced by domestic seed companies. Therefore, the volume of quality domestic seed of numerous key crops is falling short of the required quantities for agricultural producers.
According to data from the nation’s Federal Static Service, the share of sowing seeds of Russian origin is high only for cereals and legumes, where Russian-produced seed makes up about 96 percent of the total market. For vegetables, imported seed accounts for a 65 percent market share, and for sugar beets, it is estimated to be 65 percent, for potatoes 53 percent, for maize 34 percent, and for sunflower 28 percent.
To combat this problem, the government has adopted measures aimed at supporting the seed industry and improving the efficiency of plant breeding. In particular, the state is currently subsidizing the purchase of elite seeds. Every year, 1.5 billion rubles ($50 million) is allocated for this purpose. At the same time regional authorities are instructed to subsidize interest rates on investment loans for the construction of plants and other seed production facilities.
The government is also currently working toward improving legal frameworks in this area. In particular, it has developed a federal law entitled On Plant Genetic Resources as well as a long-term federal program for seed industry development. According to the Strategy of Selection and Seed Industry Development through 2020, the coming seven years will see significant upgrades of main production assets take place within Russia’s seed industry, to the point where there should be enough high-quality domestic seed to meet at least 75 percent of Russian farmers’ needs.
— Vladislav Vorotnikov
Over the past few years, the activities of the European Seed Association and Breeders Trust N.V. have revealed several cases of fraud and illegal marketing of grass seed in the European Union. The ESA, Breeders Trust and individual seed companies are determined to continue their monitoring activities and to step up the fight against illegal seed marketing.
Violation of plant breeders’ rights not only creates an unfair playing field, it is also a threat to the entire production chain. In the grass seed sector, the focus tends to be more on preventing illegal activities, such as the sale of unregistered seed varieties, mixing cheap, uncertified seed into certified seed lots and mixtures, and the misuse of trade names or the use of falsified certificates. Furthermore, there is a challenge to stop the illegal importation of grass seed lots and grass seed mixtures into the EU. In this respect, there are major smuggling leaks, in particular in southern European countries, which “strongly disrupt the market, and which need to be stopped,” says Breeders Trust project manager Corné van Beers, who specializes in tracking down illegal grass seeds.
Breeders Trust is presently active in the grass seed sector in Portugal, Hungary, Poland, Italy, among other countries, and has successfully stopped an illegal Internet trading scheme in the Netherlands—recently a Dutch company was offering small packages of uncertified grass seed mixtures to customers via the Internet. Moreover, Breeders Trust also focuses on the major European ports to identify lots of uncertified grass seeds arriving from overseas, which are subsequently transported to various European member states where they are then illegally given new identities.
Breeders Trust takes strong action against these unlawful activities and the violation of plant breeders’ rights. The ESA and Breeders Trust continue to carefully monitor the global flows of grass seed in order to remain on top of these issues.
— European Seed Association
At present, China’s pepper seed market is mired in a slump, mainly due to increasing players, depressed prices and soaring production costs. However, the value of the pepper seed market is growing gradually with the promotion of hybrid seeds in linear pepper and pod pepper planting.
More and more companies have become engaged in the pepper seed business, leading to intense price competition. This has resulted in low market prices, currently the same level as they were 10 years ago. During this same period, pepper seed production costs have soared—in some instances by as much as two or three times the cost of production 10 years ago.
Among the large number of pepper seed companies, only a few have undertaken professional market research to properly gauge market demand. In addition, there are few companies with pepper seed as their core business. Jiangxi Zhengbang, Hunan Xiangyan Seed Industry Co. Ltd. and Beijing Zhongshu Horticultural Crop Seed R&D Center are the leading domestic pepper seed enterprises, with sales accounting for more than 80 percent of their respective annual revenues.
Multinationals, like Syngenta and Seminis, also report good sales but pepper seed only accounts for a small portion of their revenues. Multinational companies dominate the sweet pepper and pod pepper seed markets, while domestic firms are the main suppliers of horn-like and linear pepper seeds.
The total value of China’s pepper seed market is believed to be more than one billion yuan (US$15.8 million), with annual sales of hybrid pepper seeds totaling around 80,000 kilograms. In recent years, there haven’t been any large fluctuations in the domestic pepper seed market, only some small fluctuations caused by price changes.
In the future, China’s pepper seed market is predicted to take a turn for the better. Apart from industrial policies and breeding technology, there are two major factors that would help boost the market. First, disadvantaged players should be eliminated if the soaring costs of pepper seed production and marketing go beyond the market price. Second, the large-scale planting of peppers would link operations closer with superior companies, which in turn would impact seed companies.