1. Indian Seed IndustryState of Indian Agriculture:Indian agriculture has come a long way since the Green Revolution of the late1960s. India presents an interesting scenario: both GDP and food grain productionin the country have risen faster than the growth in population over the last 50years. But now the situation is becoming alarming as the agricultural growth hasbeen static in recent years. The enormity of the problem is indicated by the factthat the during the 10 year period 1997-98 to 2006-07, our food grain productionhas grown at an average annual rate of only 1%. Interestingly, while the nationrejoices at the recovery in food grain production at 241.6 million tons in 2010-11with 6.6% growth, the fact remains that it is only marginal increase over theproduction of 233.88 million tons in 2008-09. The total demand estimate for foodgrains will touch 280 million tons by 2020. To achieve the forgoing amount ofproduction a growth rate of 4% in agricultural sector has to be maintained overnext 15 years. It is very important that the economic growth fosters social equity.For this the agricultural growth should be in the forefront of our national GDPgrowth.Therefore the focus of the Second Green Revolution or the so called EvergreenRevolution is on ensuring food and nutritional security to the Indian populaceespecially below poverty line population which constitutes around 28% of theIndian population. With practically no more land to farm and some depletion of theagricultural land, this miracle is not easy to achieve. Science and technology haveto play a big role. High productive seeds, private sector involvement andexpenditure on long stalled irrigation schemes are the keys to achieving higherproduction. Hence a Second Green Revolution that maximizes productivity andgenerates income and employment opportunities for the rural population is need ofhour. As the most critical of all farm inputs in agricultural production, SEED holdsthe key for increased productivity. Coupled with biotechnology and other cropimprovement technologies, seeds offer tremendous opportunity for improving theproductivity of Indian Agriculture.Indian Seed Industry Current Status and Future Growth:Indian seed Industry is one of the most mature and vibrant one in the worldcurrently occupying the 6th position with nearly 9000 Crore turnover. During thepast 5 years the Indian Seed Industry has been growing at a CAGR of 12%compared to global growth of 6-7%. In value terms the major growth has comefrom the increased adoption of Bt cotton hybrids, single cross corn hybrids and

2. hybrid vegetables. The volume growth has mainly come through increased SeedReplacement Rate in crops like Paddy and Wheat. Indian seed industry isundergoing wide ranging transformation including increased role of private seedcompanies, entry of MNCs, joint ventures of Indian companies with multinationalseed companies and consolidations.Indian Seed Industry is poised to grow at a CAGR of 17% for next 4 years. By2014, India will rank at No 3 or 4 in the Global Seed Business.Fig-1The optimism is based on the following facts:Though there may not be significant increase in the market size of HybridCotton, the value additions like Herbicide tolerance will significantly improvethe market value.Adoption of high value single cross maize hybrid seed is growing fast.With the IPR in place through PPV&FR Act more private bred open pollinatedvarieties in rice, wheat and soybean will be available to the farmers.The Seed Replacement Rates will improve with the raising farming income andprofitability.New Biotech traits will further boost the Seed Market Value.This growth is expected as a result of many drivers, some of which have beenaddressed below. All the drivers should work in tandem to achieve the goal. Theyare interlinked and not exclusive. For example, the improvement in SRR will 3. happen through technology up gradation and extension work and the governmentpolicies will be crucial in achieving this growth.The Growth Divers:-1.Inherent strength of India-India is blessed with 2nd largest arable land, 15 major agro-climatic zones in theworld and 46 soil types out of total 60 types of soil in the world. This diversitygives us opportunity to conduct breeding and evaluation research for most parts ofthe world. More importantly, the Indian farmer is innovative and quick adopter ofnew technologies. The example of adoption of Bt cotton is quoted worldwide. Theinherent strength of the country is a combination of values, culture and traditionsapart from physical properties. This has been demonstrated to the whole world byattaining self sufficiency in food grain production through the Green Revolution.2. Improvement in Seed Replacement Rates (SRR)-While the seed replacement among hybrids in crops like Cotton, Sunflower, Bajra,and Jowar is 100%, the SRR in OPVs is suboptimal in Indian Agriculture. Thegrowth in SRR for some crops is shown below (fig-2). To achieve the futuregrowth, the industry along with public extension system needs to improve the SRRfrom current status by 2 to 17% depending on the crop.Fig-2 4. The situation is more complicated if we see the variation between the States.(Table-1) 1. Showing SRR in different Crops and StatesCropNationalHighest SRRLowest SRRAverage SRR%State % StatePaddy 3382AP9 UttarakhandWheat 25 42 Maharashtra 11 J&KMaize 50 100Karnataka 5OrissaJowar 26 65 AP11 TamilnaduBajra 63 100Gujarat 29 KarnatakaSunflower 43 100AP8MPThe immediate need is to improve SRR in food crops like Paddy, Wheat andPulses. The private Industry has entered into this area with significant R&Dinvestments after PPV & FR Act enactment, and we can see the growing marketfor proprietary varieties in these crops. Maize is another crop where the SRR isvery low in certain agro-climatic zones like Rajastan the state with largest maizearea. Suitable hybrids for this region shall see steep growth in SRR. 2. New Technologies :Seed is the basic carrier of technologies to improve productivity. The wholeworld was amazed to see at the rate of adoption of Bt cotton. Here the newtechnology means any innovation in seed which the farmer finds good valuefor money. It can be a biotech trait and/or new hybrid/ variety and/or valueaddition to seed. Apart from Public investments in R&D, there has beenspurt of major investments by private sector in Biotech/Breeding Research.The private industry is also sponsoring research in the National andInternational research institutions either individually or through consortiumplatform. We can expect hybrids in rice with wider adaptability with finegrain quality. This will push the growth of seed industry in a very significant 5. way. Biotech traits on several important crops are ready for launch at variousstages of regulatory process. Some of them are listed belowList of GM Crops under development in India Crop GM Trait (s)Cabbage Insect Resistance Castor Insect ResistanceCauliflower Insect ResistanceInsect Resistance CornHerbicide ToleranceInsect Resistance CottonHerbicide Tolerance Next GM after Bt EggplantInsect ResistanceGroundnutDisease ResistanceMustard Male sterility Okra Insect Resistance PotatoDisease ResistanceRiceInsect ResistanceTomato Disease Resistance 3. Extension ServicesTaking the new agronomic practices to the farmers is a challenge. One cannotexpect every useful information to have Bt cotton effect. Therefore it is essential toreach the farmers and train them to practice the cultivation in more effective andprofitable way. The existing extension network of the public system ishandicapped with lack of knowledge upgradation. Perhaps the best way forward isto have a PPP extension model with private sector participation either individuallyor thru the input associations like NSAI, FAI etc. Some companies have alreadysigned agreements with the state governments to partner in their extension work.This needs to be expanded across the country. 6. 4. Increase in vegetable seed market size- With the increase in the Income there is change in the lifestyle and habits of Indian population to consume more fruits and vegetables. Area and production is increasing due to demand generated by higher incomes. This would create more demand for hybrid vegetable seed. GM traits will add further value e.g. Bt Brinjal. The current vegetable seed market size of about ` 900 Crores is likely to double in next 3-4 years5. Effect of PPV&FR Act With the protection given under PPV & FR Act, the private sectors participation has increased in R & D of OP varieties particularly in Rice and wheat. It has also facilitated larger participation of production and supply of improved seed by the private sector. New varieties combined with proper extension shall have significant effect on the growth of Seed Industry due to increased SRR.6. Geographical expansion Companies are exploring opportunities in the export markets in Asian countries such as Bangladesh, Pakistan, Srilanka, Myanmar, Indonesia, and Malaysia and African countries like Tanzania, Ghana, Ethiopia, Nigeria, Sudan and Kenya. The limited availability of hybrid seeds in these countries and the potential adaptability of Indian crop germplasm offer a huge opportunity to the Indian seed players. With minimum incremental R&D cost, business expansion can be done in these countries. More than 80 Indian companies have invested Rs. 11300 Crores in East Africa for food grain production & plantation crops. These companies are looking for better seed from India. But before going to foreign lands, we should take the seed to the regions within the country where the Seed Industry is almost non-existent like North Eastern States.7. Policy support from Government Green Revolution in late 60s became possible because of unflinching public and political support and policy backing for new technology. The country 7. again needs similar support from all quarters, particularly in policy backingin the following areasEnabling environment to encourage R&D, Seed production and distributionThe following recommendations of the stakeholders interface on GM foodcrops held in New Delhi in May 2011 should be positively consideredBRAI Biotechnology Regulatory Authority of India (BRAI) should be madeoperational soon.Regulatory system needs to be efficient and fool proof without slowing down therelease processTransparent procedures for testing, clearance and monitoring GM Crops Fiscal Incentives like Tax exemptions, Credit on soft terms, Duty free importof equipment for R&D and processing Infrastructure building in PPP through nationwide mission mode approachlike TUFS 8. Attractive for InvestmentRecently Seed Industry has become very attractive for the investors. Indianinvestors are eagerly looking for many IPOs from Seed Industry. As the Govt.allows FDI in selected agri- sectors including seed production, private equity Firmssuch as Blackstone and Summit partners have taken stakes in Nuziveedu andKrishidhan Seeds respectively. The capital infusion will facilitate infrastructuredevelopment that is required for faster growth of Indian Seed Industry.These above drivers will have to be simultaneously activated to achieve the setgoal. The prospects of growth are in the safe hands of young entrepreneurs /professional who are now managing the Indian Seed Industry. Their enthusiasm isevident by the numbers of their active participation in the National andInternational events like APSA Congress, ISF, and ISC etc.Seed Corporation In IndiaIndian seed programme includes the participation of Central and Stategovernments, Indian Council of Agricultural (ICAR), State AgriculturalUniversities (SAU) system, Public sector, cooperative sector and private sectorinstitutions. Seed sector in India consists of two national level corporations i.e. 8. National Seeds Corporation (NSC) and State Farms Corporation of India (SFCI),15 State Seed Corporations (SSCs) and about 100 major seed companies. Forquality control and certification, there are 22 State Seed Certification Agencies(SSCAs) and 104 state Seed Testing Laboratories (SSTLs). The private sector hasstarted to play a significant role in the production and distribution of seeds.However, the organized seed sector particularly for food crops cereals continues tobe dominated by the public sector.National Seeds CorporationNational Seeds Corporation (NSC) was established in 1963 under the CompaniesAct, 1956 with the objective of developing a sound seed industry in the countryand for production and distribution of high quality seed to the farmers. Itundertakes the production of breeder seeds in its own farms and also procuresbreeder seed from ICAR institutions/Agricultural Universities. Foundation,certified and labeled seeds are produced through contract growers, including StateAgricultural Universities, State Seeds Corporations and State Farms Corporation ofIndia. During the year ending 31st March, 1996, the Corporation has earned a netprofit of Rs. 96, 86 thousand as compared to a loss of Rs. 186, 54 thousand in1994-95. Major contributory factors for achieving profit are increase in turnoverand proportionate decrease in expenses. Production of Seeds by National SeedsCorporation Breeder SeedsThe total quantity of Breeder Seeds procured by NSC during the year 1995-96 wasto the extent of 2101 quintals (provisional) against 1937 quintals (actual) in1994-95.Foundation SeedsNational Seeds Corporation produced a quantity of 25127 quintals (provisional) offoundation seeds during the year 1995-96 as against 29557 quintals (actual) during1994-95. The reduction in foundation seed production was due to reduction in thecertified seed production of low value crops like wheat and paddy.Certified Seeds 9. National Seeds Corporation produced 2, 94,000 quintals (provisional) of CertifiedSeeds during the year 1995-96 against the production of 3,89,000 quintals during1994-95. The reduction of about one lakh quintals of certified seeds against theprevious year is mainly because of the production of low value crop i.e. wheatwhich was reduced from 2,30,000 quintals to 1,28,000 quintals. The lowproduction was mainly in crops like Maize, Oilseeds, Fodder, Vegetable andPotato. The severe drought in the State of Karnataka and early drought conditionsin Andhra Pradesh, Maharashtra and Gujarat affected production of Maize, Pulses,Soya bean and Maize Fodder. Further standing crops in Andhra Pradesh and UttarPradesh were damaged due to rains at harvesting stage.State Farms Corporation of IndiaAt present, there are twelve farms under the management of State FarmsCorporation of India in different parts of the country with an area of 36,141 ha.The principal programmes of the Corporation are:(a) Production of breeder and foundation seeds of cereals, pulses, oilseeds, fibreand vegetable crops.(b) Certified seed production for State Seeds Corporations and other agencies.(c) Production of Test Stock seed in respect of identified but pre-released varieties.(d) Commercial production of orchard and plantation crops.(e) Production and distribution of planting materials of outstanding horticulturaland plantation crops. Considering the ecological imperative and need for utilization of wasteland, thecultivation of fuel and fodder plants has been taken by the Corporation. Twelvelakh trees/plants have been planted under social forestry. The Corporation has alsoestablished Elite Progeny Orchard in ten of its units to meet the requirements of theseedlings of different types of fruit horticultural crops.To facilitate production of quality seeds, the Corporation has been investing infarm development and irrigation. 10. Specific Steps Initiated by the SFCI to Improve the Viability of theCorporation.The Corporation continues to make efforts for ensuring that irrigation at the farmswhich is a major constraint so far is put on a sound footing.(a) The irrigation system at Central State Farm, Suratgarh is at the completionstage which will provide irrigation for 3,500 ha. area for Suratgarh Farm. The firstphase has started providing irrigation.(b) At Central State Farm, Bahraich, 20 deep tubewells have been installed, and thework on 5 wells is in progress which will provide irrigation in an area of 750 ha.(c) There is a provision to cover 215 ha. by drip irrigation and 365 ha. by sprinklerirrigation system at different farms.(d) Apart from these, SFCI also plans to extendinstallation of deep tubewells,lining of channels, laying of under-ground pipes etc.under NSP III.(e) New tractors, processing plants and combine harvestors have been provided.(f) To increase seed production, the seed production through contract growers hasalso been started by SFCI. Activities taken up for diversification include propagation of more number of fruitsaplings, fish culture, duckery, piggery, sheep and goat rearing and mushroomcultivation. Cultivation of ayurvedic medicinal plants and spices has also beentaken up at Central State Farm, Aralam.Capital expenditure of the Corporation is linked with assistance for farmdevelopment by NABARD under NSP-III.The Corporation has invited applications for appointing distributors in differentStates in the private sector so that marketing channels may be strengthened.Distribution of seed will also be channelised through the private sector in additionto government/public sector institutions. 11. Sale of certified and foundation seed of different crops is estimated at 1,35,047quintal during 1995-96. Besides this, 15,053 quintals Wheat, Lahi, Lentil andRajmash seeds have been distributed under the minikit programme.Private IndustriesThere are no firm estimates of the number of private seed firms. Estimates varyfrom 200 to 500. Private seed firms are heterogeneous with respect to size,research capacity and product segments. Plant breeding research is found in thelarger firms.Unlike the public sector, where research is separate from seed production andmarketing, these functions are integrated in the private firms. The other strikingdifference is in product types. The private sector focuses largely on hybrid seed. Itis therefore unimportant in the product segments of wheat and rice except as aseller of public varieties and hybrids. On the other hand, the private sector is a major player in the hybrid seed marketsof vegetables, sorghum, oilseeds (e.g., sunflower), maize, cotton and pearl millet.In terms of ownership, private firms are closely held and not listed in the stockexchanges although some of the large firms have sold equity to foreign seedcompanies. Foreign firms maintain a presence through equity stakes in Indianfirms, technical alliances or through wholly owned subsidiaries.Seed firms,whether in the private or public sector, outsource the production of seeds tocontract growers. These growers are supplied with the foundation seed that isused to produce commercial seed. The seed industry is one of the earliestexamples of contract farming in India. For the cereal crops of rice and wheat, theprincipal source of seeds is not the seed industry whether private or public but thefarmers themselves. Seed saved from the However, especially for the large firms,the sale of public varieties and hybrids is not their mainline activity. precedingcrop supplies nearly 90% of requirements in these crops.In some cases, a large farmer or groups of farmers specialize in growing seeds andsupply to neighbouring areas. In the case of sorghum, maize and sunflower, theproportions of seed supplied by 12. the commercial seed industry ranges between 25% and 43% (see the estimates ofChopra and Thimmaiah quoted in Shiva and Crompton, 1998).The value of the seed market is estimated to be close to $ 1 billion The seedindustry was probably half this size in the early part of the 1990s (Shiva andCrompton, 1998). It has therefore grown rapidly in the last decade. Estimates ofthe share of the private sector range from 60% to 70% (Shiva and Crompton,1998). Because the private sector sells high value hybrids, their share in value isgreater than their share in volumes.