India agriculture is at cross roads of transformation. There is an urgent need for more investment in research and to develop high quality seed varieties. We have to catch up with the global best yields in different crops and this will depend on the research investments in breeding and biotechnology, modernization of agronomic practices, mechanization and improving profitability of farmers. Climate change and depletion of natural resources are the greatest challenges which will make this task of transformation more difficult. At the core of the solution is seed and planting materials.
Background
If we have to modernize Indian agriculture we have to first modernize Indian Seed Systems.
Seed is the genetic powerhouse that imbibes potential to yield and abiotic and biotic stress tolerance in crops. New varieties of seed are developed by Indian Council of Agricultural Research (ICAR), State Agricultural Universities (SAU) and private industry.
Private seed industry has played a pivotal role in last 60 years through investments in crop improvement and new variety development, introduction of new technologies, bringing elite germplasm from outside wherever necessary, farmer level extension and promotion of new agronomic practices, development of seed production systems and building manpower strength in the country. In fact the seed industry is a perfect example of ‘Make in India’ since more than 95% of seed sown in India is locally produced.
The Indian seed industry is the fifth largest in the world and is poised for remarkable growth in the coming decades. Indian seed market size is estimated at $3.61 billion in 2024, and is expected to reach $5.01 billion by 2030, growing at a CAGR of 5.58% during the forecast period (2024-2030). The major crop markets in descending order of size are Vegetables, Cotton, Rice, Maize, Soybean, Mustard, etc. While in some geographies the markets are more sophisticated there are vast tracts of under developed areas, especially in Eastern and North Eastern parts of India. Hybrid penetration is very high in crops like Cotton, Maize, Sunflower, Millets, etc while it is picking up rapidly in Mustard, Vegetables, Rice and it is practically absent in Wheat, Pulses, Soybean, Ground Nut, etc.
India has the potential to become seed export hub and its current share of global seed exports is just around 2% of global seed trade of US$ 14B. But with the right policy environment, India can achieve 10% share by 2030.
The industry has more than 400 seed companies. However there are only a few dozens who invest in research. Research investments are low at 3% of revenue against a global benchmark of 10-12%. Research investments can go up with appropriate policy support from the government. As agriculture is a state subject there is a need for both the Central and State Governments to have a common vision and strategy to achieve this.
Industry consists of large Indian and Multinational companies and MSMEs . However it is a fragmented market with no single company having even 10% market share. The largest players have 6 to 8% market share.
Among many MSME companies some have all the three functions of research, production and marketing while many of them do either one or two of these three functions. They focus on regional markets and develop/source/ produce/market products for those markets. In that sense they discharge an important function of providing seed access to some of the remote markets.
Some of the companies supply low quality seeds or pirated seeds (infringing upon the Intellectual Property of others) while some fly by night operators add to the complexity of the market structure. Frequent news reports of farmers suffering from low quality seeds comes from this group. All of us are aware of the huge quantity of unapproved GM cotton that is occupying almost 18% of the cotton acreage now. Such rampant pirating and violation of law has to be controlled through the legal framework and its enforcement,
India has recognized the farmers right to sow, resow, save, share and sell seed grown in his field – whether it is his own variety or a purchased variety or a protected variety under the seed IP law. For centuries farmers have been saving grain from the previous crop and using it as seed in the next season of the same crop. However this is possible only with OPV seed varieties and not with hybrids. Scientific evidence shows that saving of seed has a limitation beyond one or two generations. Hence the government and industry have been encouraging farmers to buy fresh seed more often to increase yields. This is measured through Seed Replacement Rate (SRR) which is creeping up steadily in many crops like rice, wheat, pulses, soybean, mustard, vegetables, etc indicating the readiness of the farmer to buy seed more often to enhance results from his crop. It is estimated that farmers seed occupies almost 35 to 40% of the acreage in many crops.
Apart from physical quality of seed agroclimatic conditions determine the actual performance of seed in the field. Since it is a biological system sometimes we face uncertainty with the performance of the seed in the field. This can lead to losses for the farmer for no fault on his part or on the part of seed.
Currently one variety/hybrid is sold in multiple brands for different reasons. The most common one is piracy. Parent material is stolen from production fields and the copying companies sell such a variety in multiple names under Truthful Label. This has had the biggest impact on research investments and new variety development programs of companies who want to invest. In some cases companies with long pipeline of products do license out their products officially because of which one variety could be sold in different brand names. ICAR and SAUs license same product to multiple companies who sell it in different brand names. While this has led to proliferation of brands in the market it has left the market very indisciplined.
The Indian seed industry can become a globally competitive, export-oriented and self-reliant industry, especially for several Asian, African, East European and South American countries, which share similar agro-climatic conditions like India. India can offer seeds for export to many countries with suitable sub-tropical and tropical agro-climatic regions in Asia, Africa, Eastern Europe and so on at affordable prices. With strong research and development capabilities, a commitment to innovation, and government support through various initiatives, the Indian seed industry is well-prepared to meet 21st-century challenges being faced by the Indian farmers.
Seed Regulations
Seed business is regulated by the Seed Act 1966 which is administered by States. The Seed Control Order 1983 is another important regulatory tool. The Intellectual Property protection for seed varieties is provided by Protection of Plant Varieties & Farmers Rights Act 2001 (PPV&FR). GM technology usage in seeds is controlled by Environment Protection Act, 1986 (EPA). The Biodiversity Act, 2002 (BDA) exercises control on the management, access and benefit sharing when seed industry uses biological resources in the country to generate new plant varieties. Plant Quarantine Order 2003 plays a role in the movement of seed and germplasm across borders for import and export purposes. International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA), an international treaty notified in 2014 establishes certain obligations on member countries like India in terms of access to germplasm for breeding.
All the above acts keep interacting with each other. However the Seed Act 1966 and the SCO 1983 have played crucial roles in regulating the seed industry. But these acts have actually influenced the way the structure of the seed industry has developed over the last four decades. Most of the good and bad features of the seed industry structure are results of the policy environment and the implementation of the same during the past many decades.
New Seed Bill
Against this background of the way the seed industry has evolved over last 60 years, the Government has now published draft of a New Seed Bill for public comments. The objective of new bill is to ensure supply of good quality seed to the farmers. Two earlier attempts were made by the Government to introduce new seed bill in Parliament (2004 and 2019) did not succeed for various reasons.
Let us look at certain aspects of the proposed draft.
The Preamble of the bill is not inspiring enough with a simple sentence “ to provide for regulating the quality of seeds for sale and import, to facilitate production and supply of quality seeds and for matters connected therewith or incidental thereto.” This needs to be strengthened considerably to give it an elevated pitch – benefit to farmer and Indian agriculture. A suggested version is here:
“An Act to provide for development of an effective seed system in both public and private sectors that delivers high quality of seeds for the benefit of Indian farmer and Indian agriculture.
And Whereas for accelerated and sustainable agricultural development in India, it is necessary to establish modern and progressive regulations for development, production, import and sale of high quality seeds and planting material, to enhance the quality of seeds and planting material to high standards and to provide regulatory framework to ensure this.
And Whereas to promote investments in and facilitate development of a world class yet competitive seed market that will serve the interests of Indian farmers through supply of high quality seed and planting material at affordable prices to the farmers”
- Definitions: Under Definitions there is a need to define a Seed Grower. Seeds are produced in the fields of seed growers through a contract system by the public and private organizations. The Seed Grower is different from the Farmer who is defined in the Act. It is essential to define Seed Grower as a separate entity since the seed originates from his field.
- Committees.
A Central Seed Committee will be constituted as the top body to implement this Act (Chapter II, Section 3 (1)). This committee will appoint a Registration Sub Committee (Section 9) with powers to recommend registration of a variety. Each State will have a State Seed Committee (Section10). Each State may register a variety for the state (called State Varieties) while the Central Committee will register a variety for cultivation in many states (National Varieties). No variety except a farmers variety can be sold without registration (Section 13(1)).
Nothing contained in this Act shall restrict the right of the farmer to grow, so, resow, save, use, exchange, share or sell his farm seeds of kind or variety registered under this Act except when he sells such seed or planting material under a brand name (Section 1(2)). The Protection of Plant Varieties & Farmers Rights Act 2001 (PPV&FR) also gives the same rights to farmers even for a protected variety under section 38 (i) (iv).
- Registration of every variety is mandatory (Section 11)
A national register of seed varieties will be prepared with additions being made from time to time (Section 11.1)
Section 13.1 prescribes “no seed of any kind or variety except farmers’ variety and kind or variety produced exclusively for export purpose shall, for the purpose of sowing or planting by any person, be sold unless such kind or variety is registered in the manner referred to under sub-section (2) of section 14”
This compulsory registration requirement will bring control and accountability to the number and types of varieties in market. This is a very good step.
However there is need for clarity on the following:
If ICAR or a Pvt company developed a new variety that variety will be registered and will get a Registration number. However, as it happens today, if some other company ‘copies’ or ‘steals’ or ‘licenses’ that variety and wants to introduce do they have to apply for a new registration? Will such registrations be granted? If there is no need for new registration for them, anyone can sell the same variety using the same Regn number. If new Regn is required by others, how will Govt provide testing capacities for so many varieties? If the registered variety has obtained protection under PPV&FR how will it be treated differently compared to a variety which is not protected.
It may be necessary to look at the registration system in pesticides under the Insecticides Act. Under this Act the original pesticide (either a new active ingredient or a new formulation) gets the original registration under section 9(3). If another company wants to register the same chemical or formulation they get a ‘Me too’ registration under section 9(4), subject to some data requirements.
Perhaps a similar model may be looked at for seeds where the first registrant gets the original registration. The subsequent applicants get a ‘Me Too’ registration subject to providing some data.
In case a variety is protected under PPV&FR the original registrant has to give a license or NOC for a Me Too registration to be given during the period of protection.
The Act may define a mechanism by which other companies access registered varieties officially through follow on registrations. Without such a mechanism licensing of varieties by private industry, ICAR and other research institutions will be stopped and the availability of seed in the market will be severely restricted. If this type of detailed arrangement is not made it will lead to lack of enough varieties in the market and lack of differentiation between the registration under PPV&FR and registration under the Seed Act.
- Registration of all value chain players
Sections 17, 18 and 19: From seed producers, processors, distributors to retailers have to get registered which helps in establishing responsibility and traceability of the system. Nurseries selling seedlings of Vegetables, rice, etc have to now register themselves. A welcome move.
Seed growers are not recognized in the Act and hence not included in mandatory registration. Seed traceability starts with seed growers and hence registration of seed growers will be important. Since they produce seed under contract with companies and it is proprietary material of the companies, Sections 1(2) and 13(1) should not apply to seed growers – these sections give farmers the freedom to sow, share and sell the seed they produce in their fields.
- Merit based Accreditation of companies
Section 17 (8) (a): A salient feature is the provision for a merit based accreditation of companies, who have the technical wherewithal and operate in multiple states. This accreditation system should be very strictly used to grant accreditation and should not get diluted under pressure. This system recognizes companies with deep investments in research, product testing and trial data management systems. This recognition enables the accredited companies to generate data for registration of varieties and to get state wise licenses more easily. Currently seed companies have to get licenses from each state and for companies that operate in multiple states this leads to a lot of wastage of precious time, effort and money. A centralized licensing system under ‘One Nation, One License’ for companies who are accredited and operate in multiple states will improve ease of doing business enormously.
- Seed Certification .
For seed certification similar accreditation provision is provided in Section 24. This accreditation is given to either Govt agencies or other agencies who have the necessary infrastructure and competence. However this is subject to inspections and renewals and it is not a permanent accreditation. Accreditation helps in increasing capacity and quality of variety registration, quality control and seed certification. A progressive step.
A QR code is prescribed on every pack to establish traceability and to help in quality management (Section 21 (1) (d)).
- Price Control
Section 22 says that the Central govt may regulate sale price of seeds of any kind or variety in the emergent situation in such manner as may be prescribed.
The section gives an explanation for the term emergent situation. It means scarcity of seeds, abnormal rise in prices, monopolistic pricing or profiteering in respect of a particular kind or variety.
While this section looks very innocent on the face of it, this section can be easily misused. Pricing should be left to the market competition. The role of the government is to ensure that sufficient competition is present in the market which will automatically keep prices affordable for the farmer. No company can price its product beyond the value it delivers to the farmer. Price control is easy to introduce but very difficult to remove later. Price controls stifle innovation, reduce research investments and adversely affect the flow of new varieties into the market. We have seen this happen with Bt Cotton. Ultimately it is the farmer who suffers from lack of new products and technologies that can address his problems.
- Appellate authority
Section 28 says that the Central Seed Committee will be the Appellate authority for the decisions taken by the State Seed Committee and the Registration Committee. But it does not specify the Appellate Authority for the decisions taken by the Central Seed Committee.
- Seed Quality Testing Laboratories
Section 29 gives the Central Seed Committee and the State Seed Committee to nominate Central and State Seed Quality Testing Laboratories from Govt or Non government organizations as official Seed Testing Laboratories subject to some criteria. Seed quality testing has been left to the government laboratories so far. The quality of the laboratories, the methods of testing, the training of the laboratory personnel, etc has not been very modern. A few Govt labs have got ISTA accreditation. Similarly some of the private industry labs have got ISTA accreditation. This is a positive step towards improving seed quality testing and management in the country. This will help greatly in providing better quality seeds to farmers and also will help the government in keeping track of the quality of seeds being supplied by different companies in the market.
- Offences
Chapter IX prescribes the criteria for dividing offences into three categories and different levels of punishments. Earlier all offences were bunched together with very low punishments. Now the proposal differentiates between Trivial offences, Minor Offences and Major Offences with appropriate punishments ranging from Rs. 50,000 for trivial offences, Rs. 1 lakh for minor offences (Rs 2 lakhs for repetition of minor offences and Rs. 10 lakhs for Major offences (Rs. 20 lakhs for repeating a major offence within 5 years and Rs. 30 lakhs penalty for repeating the major offence a second time within 5 years along with imprisonment). This is a sound approach which gives sufficient disincentive to companies from committing such offences.
While some improvements can be made in classification of different offences, this is a good step. For example failure to fix a label on the packet or failing to fix QR code on packet can not be a trivial offences.
- Compensation to farmers in case of non performance of seed
One of the shortfalls in the proposed Act is regarding Compensation for farmers, in case of non-performance of seed. It is left to Consumer Act as it was earlier.
It is not easy to assess the connection between environmental factors and seed failure in the field. It is a very technical matter. It would be good if a process is defined in the Act to determine different types of non-performance of seed (germination failure, genetic purity failure or failure of flowering/fruiting, etc) it would be appropriate, as it is done in the case of offences. A competent and transparent technical committee may be formed in each state by the State Seed Committee which will visit serious non-performance complaint fields (genetic purity failure or failure of flower/fruiting), conduct assessment and establish if any fault with seed or seasonal conditions or physiological problems of the crop, etc and give a report. This report may be used by Consumer Courts as an input in taking right and quick decisions. When seed fails, for whatever reasons, the farmer suffers. Hence it is necessary to create a robust system by which the farmer gets to cover his losses in such situations.
- MSME Seed Companies
Seed industry consists of many MSME companies who might not have the financial wherewithal to incur high costs. There is a need to make the cost of compliance reasonable for MSME sector. However it has to be ensured that they do register their firms and their varieties as required by the law. In the long term interests of improving the structure of the seed industry some special programs may be put in place for MSME sector to improve their operations, build their capacity and make it a robust sector within the seed industry.
- Quality of farmers seed
While farmers freedom to share or sell unbranded seed is supported by all including the seed industry, how do we ensure quality of the seed being sold? About 35% of the acreage in the country is sown with farmers seed. A simple germination test may be conducted independently at local level before such seed is sold in order to protect the interests of lakhs of farmers who buy such seed. There is a need to create a List of such farmers’ varieties being sold. Local Agriculture dept may maintain a list of such varieties on a digital platform. It will help with maintaining an account of seed varieties being used in the country.
- Alignment with other laws
There is a need for alignment of the new bill with other Acts like PPV&FR, Biodiversity Act, Environment Protection Act and others. Common definitions of critical terms are important. It is important that the Seed Act being the primary law that controls the seed markets it has to ensure that compliances with all the other laws impacting the seed markets are properly facilitated in the Seed Act.
- Implementation and Enforcement.
A law is only as effective as its implementation. It is easy to create laws but if they can not be implemented or enforced they will be ineffective. The draft proposes appointment of Seed inspectors which is a good step. But it will need more than that to implement the law. The proposed law will bring about very fundamental changes in the way the seed industry has been operating. That is a positive change and is beneficial for the farmer.
The transition from the existing system to the new structure will take time. There may be resistance in some quarters since seed is a politically sensitive subject. It is better to make it a gradual process, well accepted by all the stakeholders, capacity is built among important stakeholders to function within the rules of this Act and all the enablers are put in place. Political support is very important. The Central Seed Committee and various State Seed Committees have their task cut out.
- Future Readiness.
The seed technology will undergo a huge change by 2047 in the face of climate change, natural resource depletion, new agronomic practices, developments in biotechnology, large scale mechanization, digital technology development, Artificial Intelligence and similar new developments which will transform Indian agriculture. The new Seed Bill must provide flexibility to facilitate changes in the working of seed industry which will have to cope with these changes. Modernization of seed industry is essential to make the Indian farmer competitive in the International markets. The New Seed Act should help shape the seed industry structure to transform into a more progressive, technology driven and meeting global quality standards.
The questions we all have to answer :
Will the proposed Act help the transformation of Indian seed sector? Will it usher in the golden period of the Indian seed sector? Will this help the Indian farmer access the best quality seeds, the latest technologies and the best extension education so that he can be profitable, financially robust and globally competitive? Will it stop illegal sale of unapproved GM seeds? Will it eliminate the substandard seed sales? Will it transform Indian agriculture?
Undoubtedly, this draft Bill is a step in the right direction. With a little more effort it can become a better draft and a model law. Let us hope the final version will be a more robust one.
Unlike previous occasions let us hope the bill gets the approval of Parliament.
Source : linkedin
