An assessment of the production and marketing/distribution systems for improved seeds in the Philippines

Professorial Chair Lecture

Metro Manila Commission Professorial Chair Lecture

Place

Department of Agricultural Economics, CEM, UPLB, College, Laguna

Date

6-24-2004

Abstract

The paper identified the key players and institutions involved in the country's improved seed industry. The improved rice see industry has been developed with the combined participation of the government and private sector. Both the government seed farms and experiment stations and the private seed companies experiment stations and farms of their contract growers, and the farmer member of seed growers association all throughout the country participate in the production of improved seeds.

In all the three producers of the improved seed there is always the trend of higher level of production, higher level of costs, and thus higher net returns per hectare. Total returns per hectare were higher for farmers who plated hybrid seeds as compared to certified seeds user, amounting to P46,440 per hectare and P58,750 per hectare, respectively.

Cost of production of hybrid rice seed vs. inbred rice and commercial cultivation was P77.2/kilogram as compared to P9.8 per kilogram, respectively. For commercial cultivation the cost of production per kilogram amounted to P4.53 and P5.36 for hybrid (F1) users and inbred (certified seeds) users.

Higher cost of hybrid seeds were addressed by the DA by offering to our farmers a 50% subsidy of the cost of hybrid rice seeds.

Seed certification is entrusted to the Seed Quality Control Services (SQCS) of the BPI, which is the sole certifying agency in the country.

The main causes of rejection for certification are mixture of other varieties (5.9%), low germination (4.5%) and higher moisture content (1.9%).

Improved seeds produced in the Philippines are sold mainly to the government (DA, NFA), directly to other farmers in the nearby areas, and lastly to seed dealers either as wholesalers or retailers, and/or input suppliers.

Pricing of improved seeds are done or set by the government through the BPI. There is a price difference between improved seeds and rice food grains by as much as 67%, P650/bag of 40 kgms. for inbred rice seed and P2,400/bag of 20 kgms. for hybrid seeds as compared to P475/cavan of 50 kgms. of commercial grains.

Other support service to encourage seed growers to go into commercial cultivation is by offering a 50% subsidy on the cost of hybrid seeds. For those who would fo into production of F1 (hybrid) the government give the following incentives: free seeds of parental lines, free GA3 loan at cost for sprayer, cash incentives of P5,000 per hectare, pumps for marginally irrigated rice farms, farm machinery support for harvesting and threshing, and lastly, temporary storage of seeds in government cold storage facilities.

Physical functions such as advertising their seeds were done by private farmers seed growers thru word of mouth and mass media, extension technician workers and field experiment/demo by private seed companies.

Facilitating functions, specifically seed control and certification, are provided by the BPI but the owner of the seed pay for the labor, transport and fuel used for processing their seeds.

A marketing model was suggested by the DA-GMA Rice Program for a more effective marketing and distribution system for palay and improved seed. In the model, in addition to NFA, private millers and traders are being organized as rice movers/consolidators to act as seed distributors together with the other production inputs. The private traders/millers will buy the palay after harvest and sell the rice to institutional buyers and major establishments (hotels, food chains, and supermarkets). Farmers will then buy seeds from the seed growers because he is assured that his seeds are bought by the consolidators. This will ensure an increase in income to the farmers and reduce price of rice to consumers.

Common problems in producing and marketing certified seeds were as follows: 1.) risk due to rejected variety; 2.) lack of improved seed sources; 3.) lack of technical and managerial skills especially in producing and in the BPI testing centers; 4.) large capital requirement involved; and 5.) greater need for private sector participation.

Hence, there is a need to integrate the informal and formal subsectors of the country's seed industry to promote complementation of activities for the production of good quality seeds.

Private seed companies and farmer seed growers should be supported indirectly by the government in terms of general infrastructure and services in order to enhance the provision of extension and technical assistance to small farmers through their field technicians in the form of techno-demo farms, field days, harvest festivals, farmers meeting, hands-on and on-site training and formal training courses.

Seed cooperative and seed growers associations should be encouraged and strengthened to facilitate the extension services and technical assistance of the government thus promoting more adoption of new technology. This will also enhance the performance of other related components of the seed industry development, such as research and development and efficient marketing and distribution component.

Location

UPLB Main Library Special Collections Section (USCS)

College

College of Economics and Management (CEM)

Language

English

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