The document examines the challenges of measuring innovation, competition, and productivity growth in Asia’s maize seed sector, focusing on the need for better data to inform policies. It highlights the current state of the maize seed industry, the market concentration among major firms, and the relationship between innovation and competition. Additionally, it identifies key metrics necessary for comprehensive analysis and discusses Nepal's emerging seed industry within the broader Asian context.

1. Innovation, competition, and
productivity growth:
Evidence on the impact of growth in Asia’s maize seed sector
David J. Spielman and Adam Kennedy
International Food Policy Research Institute

2. Motivation: A serious measurement problem
• Policies designed to promote seed industry growth require data and information
• Innovation policies require data on firm-level R&D spending, product pipelines
• Competition policies require data on market structure and firm behavior
• But the requisite data and information are difficult to obtain
• Firms do not share proprietary data on revenues, R&D spending, product pipelines
• Governments may not monitor firm-level activity in a regular manner
• Even with data, the link btwn innovation and competition isn’t easily measured
• How does competition encourage/discourage innovation? (Schumpeter 1934)
• How are the gains from innovation distributed in society?
• How do private firms behave in complex markets?

3. Aims and objectives
• Define a minimal set of measurements required to gauge industry
growth, innovation, and competition
• Apply these measurements to available data from the maize seed
industries in Nepal and selected Asian countries

4. Asia’s maize seed industry: Stylized facts and figures
• 2006 estimates of the global maize market(Fuglie et al. 2011)
• Maize seeds and traits = ~$5 billion
• Private R&D spending on maize seeds and traits = ~$0.5 – $1 billion
• Among the “big 6” firms, only two do not invest in maize R&D
√ Monsanto, DuPont/Pioneer, Syngenta, Dow,
X Bayer, BASF
• Prior studies have documented maize innovation and product markets
• Evidence of increasing market concentration around seeds & traits markets
• No clear relationship between increasing concentration and R&D activity
• No clear evidence of non-competitive behavior in product markets

5. How useful are aggregate demand & supply figures?
6 7 4
90
93 964
10
90
0
10
20
30
40
50
60
70
80
90
100
Bangladesh Pakistan Thailand Vietnam
Percent
Estimated seed demand and supply of maize seed,
by source
Public Private Informal Combined (public + private)

6. How useful are seed replacement rate figures?
0
10
20
30
40
50
60
70
80
90
100
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Percent
Seed replacement rates, India, 2001-2011
Bihar OPV Andhra Pradesh Hybrid Punjab OPV Uttar Pradesh OPV

7. A minimum dataset required for useful analysis
• Industry performance
• Industry structure
• Innovation
• Regulation
• Consumer protection
• Intellectual property rights
• Biosafety regulations
• Imports

8. Rate of innovation ≈ varietal release rate
19
8
82
16
98
0 0 2
118
0
20
40
60
80
100
120
140
Bangladesh, Maize
(all), 1994-2011
Indonesia, Maize
(composite), 2006-
2012
Indonesia, Maize
(hybrid), 2006-
2012
Pakistan, Maize
(all), 1990-2013
Vietnam, Maize
(all), 1977-2012
No.ofreleases
Country, maize type, years
Maize releases for
selected crops, years and countries
Public Private Combined (public + private)
Sources: Authors, based on data from Bangladesh by
Naher and Spielman (2014); Indonesia: Jamal (2014);
Pakistan: Rana (2014); Vietnam: Mau Dung (2014).

9. Rate of innovation ≈ varietal aging
21 20 20
19
0
5
10
15
20
Marginal Small Medium Large
Years
Landholding size
Average age of top 5 rice varieties under cultivation, by
farmers’ landholding size, Bangladesh
Source: Naher and Spielman (2014) based on data from Ahmed (2013)
The top 5 varieties in
Bangladesh account
for 53% of area under
rice cultivation

10. 1,294
2,185
2,070
0
500
1000
1500
2000
2500
HH
Indexvalue
Paddy Wheat Maize
Competition ≈ seed market concentration
Authors, based on data for Nepal from Sah (2014).
Concentration in Nepal’s seed market, by crop, 2012
1,294
2,185
2,070
0
500
1000
1500
2000
2500
HH
Indexvalue
HH index values (0-10,000)
64
87
82
9391
99
0
10
20
30
40
50
60
70
80
90
100
CR4 CR8Percent
CR4 & CR8 (%)

11. Competition ≈ innovation market concentration
0
2000
4000
6000
8000
10000
12000
0
20
40
60
80
100
120
2006 2007 2008 2009 2010
HHI
CR4(%)
Concentration in India’s innovation market viz.
transgenic R&D, based on field trial data, 1997–2008
Four-firm concentration ratio HHI

12. Innovation incentives ≈ IP protections
114 117
242
59
107 123
10
934
252 260
180
85
18 43
0
100
200
300
400
500
600
700
800
900
1000
Cotton Maize Rice Pearl millet Sorghum Wheat Other
No.ofapplications
Applications for plant varietal protection, India, 2007-2014
Public Private

13. Innovation incentives ≈ IP regime strength
Source: Author, based on data from Ginarte and Park 1997; Park and Wagh 2002; Park 2008
China India
Brazil South Africa
Bangladesh Colombia
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Enforcement of IPRs
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Coverage of IPRs

14. Data and analysis priorities
• Crop and variety-specific data on releases
• No. of firms participating in the innovation and product markets
• Estimates of firm-level R&D spending
• Estimates of firm-level R&D shares allocated by crop, trait, management
• Material transfer agreements by source, destination
• PVP applications, certifications
• Patent applications, issuances
• GM trials, approvals by crop, trait, event

15. A few thoughts on Nepal’s emerging seed industry
• Nepal has several underutilized comparative advantages
• Altitude and ecology appropriate to quality seed production
• Proximity to a large seed market in India
• R&D spill-ins from India, Bangladesh, Pakistan
• Nepal has several conflicting priorities
• Strong regulatory protections for farmers vs. pro-business regulations
• Foreign direct investment vs. imports vs. import substitution
• Crowding out: State-owned enterprises vs. farmer enterprises vs. domestic co’s vs. foreign co’s
• Which way to go? A serious debate

16. Thank you