Rice seed policy in Thailand- Nipon Poapongsakorn

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  • การพัฒนาพันธุ์เริ่มต้นจากรัฐบาลการตั้งศูนย์วิจัยข้าวโพดฯ เป็นฐานในการพัฒนาพันธุ์ พัฒนานักปรับปรุงพันธุ์ สอดรับกับการขยายตัวของปศุสัตว์
  • การพัฒนาพันธุ์เริ่มต้นจากรัฐบาลการตั้งศูนย์วิจัยข้าวโพดฯ เป็นฐานในการพัฒนาพันธุ์ พัฒนานักปรับปรุงพันธุ์ สอดรับกับการขยายตัวของปศุสัตว์

Transcript

  • 1. Seed Provision Policy in Thailand Nipon Poapongsakorn Kamphol Pantakua TDRI ReSAKSS-International Conference on Agricultural Tranformation in Asia: Policy options for Food and Nutrition security. Organized by IFPRI, Siem Reap, 25-27 September 2013
  • 2. 1. Objectives  This paper will answer 3 questions: • What are the salient characteristics of the seed market? …..not discussed today • What were the major changes in the public policies of seed provision in the last two decades? And how did the policies affect the private seed market? • What are the key take –home messages?
  • 3. Main findings  Though the rice seed provision is still dominated by the public sector, the private seed market has thrived recently, thanks to (1) the strong government support, (2) long-term investment in research and training of plant breeders, (3) limited public resources and the Seed Division policy not to compete with the private sector in seed trading business.  The government has also proactively support the role of private sector in hybrid seeds for the same reasons.
  • 4. Outline  A brief overview of the markets for rice and maize seeds….not discussed today • Rice seed is inbred varieties, maize is hybrid  A brief development of agricultural research and seed policy in Thailand  Law, regulations and policy in the seed markets  Some challenges in the future
  • 5. 2. The seed markets in Thailand 2.1 Rice seed market: rising demand, smaller govt share Demand for rice seed is estimated at 1.14 million tons/year (2012) • KDML 105 (26%) and RD.6 (22%) is the most popular varieties (Figure 3.1(b)) • Chainart1,2 (8%) and Supanburi60,90 (2%) are the most popular non- photosensitive varieties. Millions Demand for seed 1976 - 2012 Non- Photos ensitiv e KDML RD.6 glutino us 22% Photos ensitiv e Other Landra ce Seed used 2012 (1.1 M.ton) Source: Office of Agricultural Economics.
  • 6. 2.2 Maize seed market: dominated by a large-scale Thai firm and a few MNCs • Demand for maize seed is 23,500 tons/year, most of which are field maize (Table 2 and Figure 5) • 96% of farmers used hybrid seed Type of maize Planted area (Ha) Seed use per area (kg/Ha) Seed demand (ton) Field maize 22,100.99 Sweet corn 341.17 Baby corn 1,033.73 Source: Napasintuwong, O. 2013. Thousandston MillionsHa Figure 5 Planted area and demand for maize seeds in 1981-2011 Planted area (Ha) Maize seed demand (ton) Hybrid seed (ton) Table 2: Planted area and seed requirement for corn Source: Suwantaradon et al., 2011
  • 7. 3. The development of rice research and seed policy in Thailand 3.1 Brief history of genetic improvement  Between 1960 and 2010, the Department of Rice successfully developed 100 of varieties - - - - - - NumberofGenetic Improvement Number of Registered Varieties Modern Plant breeding Source: Rice Department Figure 7-a: Number of Registered Rice Varieties,1956-2012
  • 8.  Thailand have 2 major problems in agricultural research. • Declining of agricultural and rice research intensity  Rice research budget received by DOR is 200 mil bath, comparing to the output of 350 billion baht • Shortage of researchers, especially plant breeders Figure 8: Declining agricultural and rice research intensity Rice Agriculture Source: Waleerat 2009, NRC and NESDB
  • 9.  The Thai governments have always put emphasis on the production and export of “quality rice”. In the first agricultural trade exhibition in 1910, King Rama V stated that “ the Oriental Nation,…, felt the need again of opening the country to commerce as it was necessary for the prosperity add strength of the nation. Such a nation can now be seen, which by fostering agriculture and commerce, and by changing its methods, has, in a short space of time, brought itself to the foremost rank, in power and prosperity…….Many of the samples of rice (at the First Annual exhibition of Agriculture & Commerce in 1910) were of high class…. And they (rice millers) told us that it was very seldom that they get such fine samples of rice as shown at this Exhibition; and that if they could get such good rice to send to Europe, they would be able to get prices equal to Patna rice…” (J. C. Barnett, 2004). 3.3 Brief history of rice seed production and provision
  • 10. 3.3 Brief history of rice seed production and provision The main policy objective has always been “quality rice”.  The production of “registered seed” began even before the Green Revolution.  A law in 1942 stipulates that the rice seed varieties must be measured at least 7.00 mm long, 2.00 mm wide and a thickness not less than 1.60 mm.  The 1975 Plants Act regulates the quality of seed production and seed trade (see Figure 9).  The government began to establish 23 seed centers between 1976 and 1985 (DOAE 1995).  In 1982, the government began to encourage the farmers to exchange their seeds with the improved varieties.
  • 11. MillionsHa Planted area of dry-season rice Community Seed centers Figure 4.8: Chronology of rice seed policy: quality of rice has been the main objective Seed replacement II Co-op seed centers A private seed company entered the market Source: OAE and DOR. Rice seed wholesaler association Registered Seed Centers Seed replacement Plant quarantine Act 1964, 1999, 2008 Plants Act 1975, 1992, 2007 Plant varieties protection Act 1999
  • 12. Millionston Millionston Production Export chicken Promotion of maize cultivation : land distribution and price support 1950s Maize breeding investment by RF and establishment of NCSRC 1966 Release of first OPV maize, Su wan1 1975 Seed Developme nt Loan & by USAID 1975 Investment promotion of maize seed 1970s and commercializa tion of suwan1 seed by a private company, BSI- 1979 National program of hybrid maize development 1979 Supporting private production of hybrid seeds 1990s and hybrid seed subsidize for farmers 1994 CP released the single cross hybrid, CP.DK 888 1991 Source : O.Ekasingh,2013 and FAO. Figure Chronology of maize seed policy & production of maize 3.4 Brief history of maize seed production and provision: promoting the private sector
  • 13. 4. Law, regulations and policy in the seed markets  Question: why the private seed markets – both the rice inbred varieties and the maize hybrid varieties – thrive?
  • 14. 4.1 Overview of laws and regulations Breeders Registered certification New varieties, Landrace, Endemic varieties. Varieties with unique characteristics. Controlled seed No. renewal fees every 5 year but send sample of every production lot to test Collector register Wholesale register renewal fees every year renewal fees every year Wholesalers resellers register renewal fees every yearRetailers Import seed For restricted or forbidden seed need permission from the director of Department of agriculture and phytosanitary certificate. Import seed For restricted or forbidden seed need permission from the director of Department of agriculture and phyto-sanitary certificate. Plant quarantine act Plant varieties protection act Plants act Import policy Figure 4.1: Laws governing the seed market Trade policy Seed standard
  • 15. -Seed suppliers & collectors must have collection permits & seed certificates. -All seed traders must apply for the sale permits • Seed centers • Community seed centers • Wholesalers (Collectors) Who are seed collectors • Seed centers • Community seed centers • Wholesalers (Collectors) • retailers Who are seed sellers 1. Collections permit 2. Sales permit 3. Seeds certificate Department of Agriculture Ministry's Announcement Plants Act (1) Apply Seed standard (see figure 3) 1.Pure Seed 2.Other Crop Seed and Other Varieties 3.Weedy seed 4.Germination 5.Moisture (3) Apply (2) Apply Note: 3 procedures.
  • 16. • Seed standards  Apply only for controlled seed  Rice: highly regulated but new standard are lower (Table 4.1) Rice seed standard Thai 2006 Thai 2009 USA 2012 1. % of Pure Seed - Pure Seed (Minimum) - Inert Matter (Maximum) 2. Other Crop Seed and Other Varieties - Foundation None (Maximum) - Registered (Maximum) - Commercial (Maximum) 3. Weedy/Red Rice - Foundation None None None (Maximum) - Registered None None (Maximum) - Commercial None (Maximum) 4. Germination (Minimum) 5. Moisture N.A. (Maximum) Source: DOR and The California Crop Improvement Association
  • 17.  Table 4.2: Maize seed standards, Thailand and USA Maize seed standard Thai 1993 USA 2011 1. % of Pure Seed - Pure Seed (Minimum) - Inert Matter (Maximum) 2. Other Crop Seed and Other Varieties None (Maximum) 3. Weed seed None None (Maximum) 4. Germination (Minimum) 5. Moisture (Maximum) Source: DOR and The California Crop Improvement Association
  • 18. Enforcement of seed certification  Thailand has the reasonably efficient enforcement mechanism to detect lower-standard seed, deteriorated seed, contaminated seed.  Yet there are two weakness • The sampling method is loose • Though the enforcement is quite active, the penalty is quite light.  Note that a few leading “rice” seed wholesalers (collectors) put in place a rigorous process of seed farm inspection
  • 19. 4.2 Seed provision system • Rice  The seed provision system had been dominated by the public sector (Figure 4.2). But recently the private sector has played increasing role in supplying the seeds used by farmers.  The National Research Center is responsible for the genetic improvement and production of foundation seed, while the main unit that produces the extension seeds is the public seed centers , who contract the farmers to grow the extension seed and registered seed (Figure 4.2).  The DOR helps the farmers to set up the “community seed centers) to produce commercial seeds
  • 20. 27 Research centers Breeder seed Foundation seed Genetic improvement 23 Seed centers Extension seed Commercial seed Contract farmers 2,199 Community Seed center Commercial seed Contract farmers Collected* Collected* 97 Wholesalers (Collectors) Contract farmers Collected* Retailers Cooperation Registered Retailers Farmers Farmers in near by villages Farmers with good crop Collected* Sale Supply Sale Note: *Collection regulation is explained in figure 2 Sale Sale Sale Rice seed provision system is still dominated by the public sector Figure 4.2: Rice seed system
  • 21. 4.3 Role of private rice seed suppliers • The private seed suppliers have just entered the market since 1998 but their market share has increased sharply (to 35%) because of 4 reasons  cultivated area of dry season rice surged after 1998  limited capacity of the government’s seed centers, i.e., budget & small staff • the Seed Division has a clear policy to encourage the private sector • Enabling factor: seed certification and sale permit regulation  The private seed suppliers focus on the non- photosensitive seeds which are demanded by the commercial farmers who grow 4-6 crops in two years in the irrigated areas of Central Plains and Lower Northern provinces.
  • 22. … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … MillionsHa Planted area of dry-season rice Community Seed centers The first major private seed suppliers entered the market in 1998 Co-op seed centers A private seed company entered the market Source: OAE and DOR. Rice seed wholesaler associatio n Seed Centers Plants Act 1975, 1992, 2007
  • 23. Limitation of the public seed production capacity leaves room for the private sector Figure 4.4: Seed used and capacity of government rice seed production Thousandston/year Capasity Seed used
  • 24. The private seed suppliers focus on the non-photosensitive seeds for farmers growing 4-6 cycles in 2 years Non- Photosen sitive KDMLRD.6 glutinous 22% Photosen sitive Other Landrace Seed used 2012 (1.1 M.ton) Private Seed centers Other Seed used 2012 (0.5 M.ton) Non-Photosensitive Source: Estimate form OAE 2008 and interview private seed producer. (of which 11% from SCs) (0.4 M.tons)* Figure 4.6: Market shares of photo-non-sensitive variety seed market
  • 25. Market share of private rice seed suppliers is much larger than that of the public sector Rice department Agricultural co- operation Community rice centers Private sectorSelf seed and gray market Seed production capacity in 2012 (1.13 M.tons) Rice department Agricultural co-operation 0%** Community rice centers 1%** Private sector 35% Self seed and gray market “Most likely” actual market share in 2012 (1.13 M.tons) Note: *and interview private seed producer. ** Chaowagul 2013 argues that only 10% of cooperative and CRCs are active in seed production. Source: Rice Department . (0.4 M.tons)* Figure 4.5: Capacity and market shares of rice seed
  • 26.  The private rice seed market has not only expanded, but become competitive because • The products are almost homogeneous • There are large number of small sellers and farmers can save their own seeds • No entry barriers  Performance : the profit margin is only 1,000 baht per ton or less than 6% of the pledging price. • Many wholesalers are now entering the market to provide the services of planting rice using the machine
  • 27. 4.4 Factors explaining the development of the maize hybrid seed market  The emergence of the private maize hybrid seed market was in response to the increase in the export of chicken in the early 1990s (see Figure 4.7) which followed the introduction of the modern poultry industry  Unlike the private rice seed market dominated by the public provision, the private maize seed market has been • (1) proactively developed by the closed cooperation of the government and the private companies • (2) the introduction of hybrid seeds by private firms  MNCs use Thailand as seed production base, thanks to availability of plant breeders & skilled maize farmers
  • 28. Export of frozen chicken surged - Thailand export of poultry, froze and precooked (tons) Cut and frozen Precooked and semi-cooked Total Source: Ministry on Commerce - tons Poultry Meat Pig meat Milk Production of poultry meat 1961 – 2010
  • 29. 4.4 Factors explaining the development… (cont.)  Two groups of policies and factors that helped support the development of the private maize seed (see Ekasingh 2013) : • Direct policies • Enabling factors  The direct polices (see Figure 4.10) • Maize breeding investment and the establishment of the maize research center in 1966 • Seed development loan by USAID in 1975 • Investment promotion of maize seed production in the 1970s • Commercialization of Suwan1 variety (OPV) by Bangkok Seed Industry Co. in 1979 • National program of hybrid maize development in 1979 • Supporting the private production of hybrid seed in 1990s, e.g., the research of Thai firms depend on germplasm and free ride on research from NCSRC and CIMMYT (O. Ekasingh, 2013). • Legislation of the plant protection law in 1999 and the use of trade secret clauses
  • 30. Millionston Millionston Production Export chicken Promotion of maize cultivation : land distribution and price support 1950s Maize breeding investment by RF and establishment of NCSRC 1966 Release of first OPV maize, Su wan1 1975 Seed Developme nt Loan & by USAID 1975 Investment promotion of maize seed 1970s and commercializa tion of suwan1 seed by a private company, BSI- 1979 National program of hybrid maize development 1979 Supporting private production of hybrid seeds 1990s and hybrid seed subsidize for farmers 1994 CP released the single cross hybrid, CP.DK 888 1991 Source : O.Ekasingh,2013 and FAO. Fig 4.10: Chronology of major maize policies
  • 31. 4.4 Factors explaining the development… (cont.)  The enabling factors • Land distribution to veterans and poor farmers to produce maize in 1950s • Turning blind eyes to the illegal expansion of maize production in the national forests since the 1970s • Scholarship and training of plant breeders in 1960s and 1970s generated skills and knowledge of breeders both in the public and private sectors • Plants Act in 1999 • Promotion of contract farming for the production of broiler (by Thai companies) and maize seeds (by MNCs) • Investment privilege for the establishment of chicken slaughtering house in the late 1970s
  • 32. Structure and competition in the hybrid maize seed market Structure: oligopoly but competitive • More than a dozen companies – both MNCs and Thai  Dominated by one largest Thai agri-firm (CP) and a few MNCs (Syngenta, Monsanto, Pacific, Pioneer) • 7 companies have the export shares of 73.8%  3are Thai companies belonging to the CP group with combined market share of 21.85%  Competition • MNCs have huge competitive edge, i.e., using their own germplasm from their parent companies and share research and seed production among regional branches • Thai firms can make use of research and germplsm materials from the public research system and CIMMYT. A few Thai firms are also seed exporters. • Thus there are competition both among big and small firms and between Thai firms and MNCs  As a result, farmers have alternatives in buying quality seeds.
  • 33. 5. Conclusion: take-home messages  Seed provision policy: the government can create the “competitive” markets for seed: smart regulation, facilitating factors, enabling environment, and reduce entry barriers  Fertilizer policy: neutral trade policy (i.e., duty-free) on fertilizer and minimal intervention will allow farmers to make rationale and efficient use of fertilizer  Public sector does not have to compete with private sector because of no serious market failure  Government still needs to provide information for farmers to make informed choices, e.g., regulating advertising, monitoring & enforcement of the “quality” and “standards” of commercial seed and fertilizer
  • 34. Thank you