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The seed sector in Nepal- Ram Sah

Ram P. Sah analyzed constraints to Nepal's seed system. The national seed system includes public institutions, international collaborators, private sector, and farmer communities. Cereal production has grown but seed replacement rates remain low (<10%). Major constraints include inadequate variety choice, ineffective seed planning and supply, low seed quality assessment capacity, and limited private sector participation. Policy interventions are needed to promote a demand-driven, efficient seed industry through quality control, proactive policies and regulations, infrastructure updates, and public-private partnerships.

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1 Ram P. Sah, Nepal Agriculture Research Council (NARC) Singh Durbar Plaza, Kathmandu CONSTRAINTS TO SEED ADOPTION, MARKET AND TRADE IN NEPAL
Nepal: National Seed System National Seed System Public Institutions •MOAD, NARC, NSB, DOA, DADO, SQCC, UAF, Gene banks, Biotech International Collaborators • CGIAR, Donors, INGOs, Bilat eral /Multilateral Projects, Multinationals, Farmers Communities FGs, HHs, CBSP, Social Activists Private Sector SEAN, FNCCI/AEC, Seed Co, Agrovets, Seed importers
0 500 1000 1500 2000 2500 3000 3500 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 1991/92 1995/96 2000/01 2005/06 2010/11 2011/12 Area('000Ha),Production('000Mt)&Yield(Kg/Ha) Year Cereal Area, Production and Yield Trends (MOAD 2012) Area Production Yield Growth: Area 0.8%, Production 3.6%, Yield 2.5% Contributes: GDP 16.5% , AGDP 49.4%, FS 95%
Seed Replacement Rates 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% SRR % Informal %
-1 0 1 2 3 4 5 6 7 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 %Growth Poor and Fluctuating GDP and AGDP Growths GDP AGDP
Major Constraints to Effective Seed System • Inadequate location specific varietal choice • Ineffective seed planning: demands and supply mechanism/networks - access to source and high quality seeds, • Low capacity for seed processing and storage, proactive marketing • Low rate of seed replacement (<10% in cereals), • Inadequate seed quality assessment and certification capacity, • No priority for hybrid breeding in rice and maize, and vegetables due to weak national capacity and investment, • Limited options for increased private sector and multinationals participation in seed industry, • Unregulated cross-border flow of seeds (hybrids /OPVs): rice, maize and vegetables, • Conservative regulatory process and seed policies: Commitment, coordination, resources and effective implementation (Ag R&D funding intensity 0.26%).
Breeder Seed Production and Demands Mt (SQCC 2011) Rice Wheat Maize Lentil Millet 2010/11 15.5 27.0 4.0 1.1 0.2 2011/12 27.8 45.3 8.1 0.4 0.2 Demand* 7.4 22.6 7.4 0.2 0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 BS(Mt)
Rice Wheat Maize Lentil Millet 2010/11 341.3 171.6 120.8 8.8 2.2 2011/12 520.2 276.7 194.6 13.9 3.9 Demand* 231 296 38 8.5 0.4 0 100 200 300 400 500 600 FS(Mt) Foundation Seed Production and Demands Mt (SQCC 2011)
Cereal Seed Production Agencies (%) (CDD 2011) 40% 4% 1%1% 26% 4% 23% 1% DISPRO CBSP CSB Gvt Farms NSC STC Pvt Co NGOs Rice: 6649 Mt, Maize: 1827 Mt, Wheat: 8773 Mt, Lentil: 203 Mt
Analysis of Varietal Release, Registration and Adoption (MOAD, 2012) Crop Var released (year)/OPVs Var registered/Hybrids Total Var in seed production (OPVs)2 Rice 67 (1967-2011) 18 (2010-11) 85 BS(24), FS (45) Popular (10) Maize 22 (1965-2010)1 15 (2010-11) 37 BS (10), FS (13), Popular (5) Wheat 32 (1960-2011) 0 32 BS (13), FS (18), Popular (5) Popular Varieties3 Rice Khumal 4(1987), Khumal 10 (2010), Khumal 13 (2010), Sabitri (1979), Radha 4 (1995), Radha 12 (1995), Sukha 3 (2011), Samba Masuli sub 1 (2011), Swarna Sub 1(2011), Hardinath 1 (2004) Maize Rampur Comp (1975), Arun 2 (1981), Man 3(2002), Deuti (2006), Poshilo Maize 1(2008) Wheat Vijay (2011), NL 297 (1985), Gautam (2004), Bhrikuti (1994), WK 1204 (2007) Notes: 1 Gaurav hybrid in Maize released by NARC in 2003 2 Value in parenthesis indicate number of varieties 3 Number in parenthesis indicate the year of release/registration Focus: Demand Driven Varieties Breeding and Scaling up Strategy
Cost of Production and Returns (ABMDD 2013) 0 10000 20000 30000 40000 50000 60000 70000 80000 Rice-IG/T Rice-IG/MH Rice-UIG/T Rice-UIG/MH Wheat-UIG/T Wheat–IG/T Maize-UIG/MH Maize-IG/T/IT Net profit (Rs/ha) Gross income (Rs/ha) Total cost (Rs/ha) Incentives are poor in cereal seeds < Rs 10K/ha
Cost and Returns of BS and FS Production NARC 2012 0 20000 40000 60000 80000 100000 120000 140000 160000 180000 200000 BS FS BS FS Bs FS Rice Wheat Maize Gross income Rs/ha) Total cost (Rs/ha) Net income (Rs/ha) Net returns are higher in rice than wheat and maize
High Market Margins of CS (NSC) 0 20 40 60 80 100 120 Rice Wheat Maize Farmer cost Food price Producer incentice NSC margin Dealer margin Retailer margin Price Rs/Kg: Rice (35), Wheat (35) Maize 50/30)
Major Cost Centers of BS and FS (%) NARC 2012-13 0.0 20.0 40.0 60.0 80.0 100.0 Bs FS BS FS BS FS RiceWheatMaize Labor Fertilizers Others Price Rs/kg (BS/FS/CS ): Rice(70/40/35), Wheat ( 70/55/35), Maize (90/65/50)
Seed System: Varietal Development and Maintenance Structure • Updated national research institutions: organized breeding on cereals-NARC (70%) • Effective collaborations with CGIARs • Increased GON supports for RWM R&D • Limited capacity and teams for Hybrid breeding • Lack effective PPP in varietal development Conduct • Weak R&D capacity • <11% FTE crop staff on breeding variety , Critical Teams? • < 20% crop research budget for variety and source seed prod. • Weak labs and logistics: modern biotech capacity? • 50% positions vacant: incentives? • Limited visionary, competent and committed project leaders. Performance • Inadequate demand driven varieties: slow release and adoption • Insufficient source seed stock of new varieties: Increased seed imports and exploitation (OPVs/hybrids) • IPR/FR motivation? • Inadequate capacity for hybrid variety • Lack effective policy to integrate PPP and multinationals-Hybrids
Seed System: Seed Multiplication Structure •Modest R&D network for seeds: PPP •Weak integration between varietal development and seed multiplication chains • Huge labor cost followed by fertilizers and tillage, and the net returns are low (<Rs 10K/ha) •Weak infrastructure, and markets: both public and private sectors •Lack updated technical staff and capacity: small size of industry Conduct • Mismatch of BS-FS- CS/IS to address the farmers’ demands • New varieties from cross border is coming on big way that distort internal seed demands and supply • Non compliance of contract agreements: Policy implementation • Limited investment in seed multiplication, cereal seed production less attractive: • No policy and program for Buffer stock management Performance • Foundation seeds are being used as CS/IS seed • The cost of production is high (labor 60%, fertilizers 30%) and returns are low. • Weak Business and marketing intelligence, • Monitoring :24% seeds are poor quality • Insurance and compensation : quick and timely policy? • Alignment on seed subsidy and supports in : NSC and private sectors
Seed System: Seed Marketing and Trade Structure • Inadequate seed marketing studies, intelligenc e • Poor Business enterprise: capacity and investment in marketing research • Infrastructure and labs • Weak structure and initiatives for scaling-up superior varieties, registere d hybrids Conduct • Updated seed Acts, Regulations and Guidelines : Seed Vision 2025 • Varietal Registration, Contract Farming, Compensatio n, IPR and FR Bill, promote PPP ?? • Lack commitment • High tariffs and bureaucratic delays in export markets • Cross border trade of seeds: formal/informal Performance • Uncontrolled flow of exotic seeds • Quality seeds and varieties • Low returns and B/C ratio-less incentives • Unregistered varieties of OPVs and hybrids • Inadequate performance monitoring and initiatives to promote superior varieties
Policy Interventions and Guidelines •Regional release, friendly release/registration, decentralized release and certification, VARRS? Varietal release and registration • Incentives, mechanism, guidelines, WTO/TRIPS bindings, commitments FR , IPR, WTO, TRIPS • Compensation, quality, biosafety, insurance, subsidy, Hybrid variety Consumer protection and competition • Quality, competitive, biosafety, Hybrid var, buffer-stock, Harmonization, Plant quarantine capacity, WTO/TRIPS, IPR Import and export • Incentive, support price, implementation, Benefit/Cost analysis, market intelligence, subsidy aligned Pricing and incentives • GMO policy and guidelines, Harmonization, Capacity building(labs, staff, resources ) Biosafety regulations and implementation
FINAL WAY-OUTS Seed industry slowly growing: components of the seed chain- integrated, demand driven, and efficient Work as business enterprise- with focused plans priorities, strategies, market analysis, and implementation strategy: costs and incentives Quality control is vital- a robust mechanism is important at various levels of production, processing, certification, storage and use Existing seed policies and regulations must be proactive to promote integrated initiatives and effective implementation Updated infrastructure and plant quarantine, international seed obligations, biosafety regulations to promote seed trade: Harmonization, GMO, Promote effective, efficient and sustainable PPP: Policy, mechanism, incentives & commitments
The seed sector in Nepal- Ram Sah