The seed sector in Thailand- Makasiri Chaowagul and Orachos Napasintuwong


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The seed sector in Thailand- Makasiri Chaowagul and Orachos Napasintuwong

  1. 1. Seed Industry in Thailand: Constraints to adoption, trade and market development Associate Professor Makasiri Chaowagul, Ph.D Naresuan University Orachos Napasintuwong Artachinda , Ph.D Kasetsart University Agricultural Transformation in Asia : Policy Option for Food and Nutrition Security Conference September 25–27, 2013 | Siem Reap Angkor, Kingdom of Cambodia
  2. 2. Content of Presentation • Seed industry of Thailand would focus on rice and maize seed industries • Paper tried to answer the main question of how efficient the market was under the existing market structure • Concept of Market Structure , Conduct and Performance was the analytical tool adopted
  3. 3. Overview of Thailand’s Seed Industry • 24th largest seed exporter • 3rd largest seed exporter in Asia following Japan and China • SE Asia is the largest export market, 70% of total seed exports (12,937 tons in 2012) • Seed of maize has the largest trade values
  4. 4. History of Maize Seed Industry in Thailand Year Major Event Mid1950s Promoted maize as alternative for rice (for export) Subsidized opening of new land for maize cultivation Distributed improved seed and other inputs & agreed to buy grain at predetermined price 1960 Beginning of R&D breeding system/Collecting germplasm from abroad 1966 Established Corn and Sorghum Research Center on Kasetsart Univ Campus by Rockefeller Foundation 1974 Suwan-1 OPV was successfully developed, resistant to downy mildew 1975 Public sector production of downy mildew resistant maize seed 1977 Development of hybrids by public and private sector More investment from foreign companies and international organizations i.e. USAID, Rockefeller, World Bank. 1978 Private companies started selling hybrid seeds Low adoption due to high price and not significant yield different from OPV Late1970s Promote baby corn as value-added product for export Late 1980s Private co. developed hybrids specifically for local conditions 1990 Private companies bred new hybrid seeds giving more than 50% higher yield than OPV, High adoption
  5. 5. Public Private Partnership in Maize Seed Industry(cont) • 1970s: Maize seed production & distribution established in framework of Coordinated National Corn and Sorghum Program • Private investment through Board of Investment incentives i.e. tax holidays & reduction • Suwan-1 was used to many hybrids development • 6 inbredlines from Suwan-1 (S) C-4 have been used in public and private breeding programs • Many private companies in Asia have been using Suwan-1 to develop hybrids i.e. Pioneer, CP, etc. • Bank of Ag Credit and Cooperatives (BACC) provide credits through inputs (including seeds) at subsidized price • Under seed cluster: PPP in maize field trials (public universities & Dept of Ag), germplasm collection and evaluation • SME (Sweet Seeds, Co.) for germplasm development Source: Sriwatanapongse, 1993; Morris, 1998; NSTDA, 2012
  6. 6. Current Situation: Import/Export Value of Maize Seeds Source: Generated from Thai Seed Trade
  7. 7. Share of Maize Seeds Export Destinations, by Quantity, 2012 Source: Generated from Thai Seed Trade Association, 2013 Shares of Maize Seeds Import Origins, by Quantity, 2012
  8. 8. Maize seed industry summary • Successful public-private partnership & rapid private industry development • Four types of private companies: ▫ Developers: R&D, sell license ▫ Developers & producers: R&D, own brand , only 5 larges co., 4/5 are multinational co. ▫ SME: no R&D, buy or free inbred from other co. ▫ Traders: buy and sell • Role of public sector: ▫ Department of Ag: R&D, breeder seeds, foundation seeds production, support famer own hybrid seed production ▫ Public universities: research, sell license • Future development of maize seed industry depends on regulations i.e. GMO, Plant Quarantine Act B.E. 2507 (1964) Amended by Plant Quarantine Act B.E. 2542 (1999)
  9. 9. Rice Seed Industry : Production Organization Estimated Quantity produced (ton) Production Channel Type of rice seeds produced Seed certification DOR 95,000 23 rice seed centers Certified seeds Certification Agricultural Cooperatives 30,000 members Certified seeds Certification ? Community rice centers 120,000 members Certified seeds Certification ? Private sector 200,000 Small local enterprises Certified and Noncertified seeds Certification ? 100,000 Large enterprises Certified seeds Self certification Sub Total 545,000 Farmers 455,000 Farmers kept paddy for seeds Noncertified seeds No certification Total 1,000,000 19.5% was certified seeds , 35.0% was (informal) certified seeds , 45.5% was non certified seeds
  10. 10. Organization Production plans of rice seeds (metric ton) 2012 2013 2014 2015 2016 Department of Rice 95,000* 80,000 75,000 70,000 60,000** Community Rice Center 120,000 150,000 160,000 173,000 200,000 * Extension and certified seeds ; ** only extension seed • To increase the good quality of rice seeds for the purposes of community self reliance on seed and community enterprises , DOR would set up 4,000 Community Rice Centers (CRC) in almost all provinces in 2016. ( 2016 CRCs in year 2012) • However , only 10% are effective CRC in term of community enterprises. Rice Seed: Production Policies
  11. 11. Market Structure and Conduct of Rice seed • Consider in terms of ▫ number of producers , varieties of rice seed produced (many alternatives for farmers) ▫ market entry (low degree of barrier to entry) ▫ Production policy of DOR • It could be concluded that market structure of rice seed is competitive market • Prices are derived from current prices of paddy ▫ Farmer prices received for seed produced are 500 – 1,000 baht per ton higher than the paddy price at harvesting % of moisture (usually 20-22%) ▫ Selling prices would be determined by quality of seed , degree of competition and prices of DOR seeds (reference prices)
  12. 12. Market Performance of Rice Seed Industry Quality not quantity of rice seed produced is still question. Factors explain are  potential of production  inefficiency of certification system  current system is ‘product certification’  Inspection is done by DOR personal by randomly inspecting once in a while  lacking of potential field inspectors If there is enough potential field inspectors , certification system could be modified into ‘Process Certification’ ‘Process Certification’ and ‘professional field inspectors’ should be a challenge missions for rice seed certification system of Thailand