Seeds -- a US$ 30 billion global industry • India (US$ 1 billion) & China (US$ 2.5 bn.) are in the top 10 markets • India has over one sixth of the global population • high importance to food self-sufficiency • India needs to increase productivity significantly • 12% of global arable land • 4% share of global crops 12 top markets constitute 66% of theGlobal seed industry India US$ 1 bn market Figures in US$ mn
India seeds market • With a size of US$ 1 bn, India is the eighth largest commercial seed market in the world • Arable land is around 136 mn ha which is higher than China • High growth expected on the back of transition from traditional varieties to high value varieties and hybrids • Public sector – varietal crops like paddy, wheat, pulses – 80% of seed volume; 40% of total value • ~ 150 companies in Private sector – majority operates as traders Increase in India’s share in world crops can come from improved productivity as growers shift to hybrids.
Seed market structure Saved seeds account for nearly 85% of the market Private sector dominates with a 60% market share Commercial Seeds 15% Saved Seeds 85% Note: Research hybrids are 30% of commercial seed market by value • Rising food demand and limited agricultural land • Shift to commercial seeds which have better technology • Growth in fresh produce market and in processed food sector Driven by Domestic seeds market is expected to double over the next five years implying a CAGR of 13%. Hybrid seeds will grow much faster given expected conversions from traditional varieties.
Seed Industry Public Sector Private Sector MNC – 10 NSC IPS – 200 SSCs - 13 SFCI Industry Structure – The Situation Today • Public sector – in self-pollinated crops of which wheat & rice account for 60% • Private sector mainly in hybrids that are low in volume but high in return • Opportunity lies in converting users of farm-saved seeds and public hybrids • In terms of volume, paddy and wheat offer largest opportunity
Attractive research hybrid seed segments Marketshare by value of Key Hybrid Crops Cotton is the most important segment because of a high percentage of cultivated area under research hybrids.
Background – The Role of Regulation • Seed Act, 1966 – min. quality standards, certification & procedures for evaluating varieties • Public sector dominated the industry until 1971 • 1971 – National Commission on Agriculture recommended breaking of public sector stranglehold – Indian private sector enter the sector • 1988 – New Seed Policy – entry of MNCs; import of seeds and germplasm allowed for research • Seed Policy is still very restrictive and detrimental to farmers • 2002 – Comprehensive Seed Policy – to overhaul existing Seed Act – should usher new growth in the liberalised era
Public & Private Sector Activity • Public sector – in self-pollinated crops of which wheat & rice account for 60% • Private sector mainly in hybrids that are low in volume but high in return • Opportunity lies in converting users of farm-saved seeds and public hybrids • In terms of volume, paddy and wheat offer largest opportunity
Indian Agriculture – Challenges Ahead • Agriculture growth must keep pace with growing demand; food grain demand growing at 3.4-5.5%p.a. • Efficiency to improve in use or resources –decline in land & water resource base for average farm holding • Fertiliser must be used wisely and there should be adequate storage infrastructure • Agriculture tech management must become efficient to take advantage of expanding production & marketing opportunities • Tariff and non tariff barriers imposed by developed countries • Thrust to high yielding & efficient inputs like seeds
Types of Seed Produced in India • Cereals, Oilseeds, Cotton, Vegetable • Cereals dominate the seed market hybrids in Corn, Sorghum, Pearl millet, SSG • Major opportunities in Wheat and Rice • Sunflower dominate in oilseeds with opportunities in Brassica (‘00’ and transgenic) • 2:1 ratio of private to public hybrids in Cotton; • Tomato (28%), Cabbage(23%), Brinjal (14%) – major share of hybrids • 3.12 mn ha under vegetables; Current mkt. value for hybrids INR 200Cr, varietal INR 50Cr