Western and Central African seed market- A lucrative business opportunity
Africa is a homeland to 1.3 billion people and UNICEF2019 report shows that from 2000 to 2018 the number of children under five with stunting increased by 1.4 million in Eastern and Southern Africa and by 6.5 million in Western and Central Africa (referred to as “neglected region” which includes countries like Togo, Benin, Niger, Cote d’Ivoire, Democratic Republic of Congo, Chad, Madagascar etc.).Approximately 27.4% of the population in Africa was classified as severely food insecure in 2016, which is almost four times as high as any other continents. The primary reason behind this is insufficient diet and lack of dietary diversity which is mainly because of subsistence agriculture leading to insufficient food in the country that forces huge imports. Eighty percentof dietary energy in Africa comes from cereals, roots and tubers which clearly indicates the lack of nutritious food. On an average, crop yields are one-third of average yields in developing countries and this is due to negligible use of hybrids, predominant cultivation of age old varieties and lack of crop diversity with reliance on limited number of crops.
Over 90% of farmers in Western and Central Africa do not have access to quality planting material and very few farmers have access to basic inputs like fertilizers, agro-chemicals, mechanized farming and irrigation. Challenge of quality planting material is due to lack of breeding capacity among National Agricultural Research System and presence of negligible seed companies coupled with limited multiplication and distribution channels. Eastern and Southern Africa is much advanced as compared to Western and Central Africa with access to improved and climate-resilient varieties and other basic inputs. The technologies from this region which is already proven effective can be implemented in the neglected region. These technologies include cultivation of improved varieties, use of other basic inputs like fertilizers and agro-chemicals, mechanized cultivation of crops with good irrigation practices
The past decade has observed an emergence of interest by Multi-national seed companies for seed business in African continent. They have effectively set their footprints in Eastern and Southern African regions and increased their presence in Western and Central African regions where they perceive good potential for seeds. There is also a huge presence of French seed companies in seed market which export nearly US $1.8 billion worth of seeds annually to African continent and also some have presence through investments like Limagrain(Leading French seed company) investment in SeedCo (African seed company). The Indian seed players have also shown their presence in Eastern and Southern regions through collaboration and acquisitions route. For example,Mahyco has acquired Zimbabwe-based Africa’s largest listed seed maker Quton Seed Company while many other major Indian players are testing and marketing their hybrids.
Since, currently the gap between quality seed supply and demand is almost 90-95%, there is a huge opportunity for Indian seed companies to bridge the gap in these countries. This can be achieved through partnering with local seed players or acquisition of local players for easy market entry. The collaboration with local seed players will help in seed distribution initially and with the growth in volumes it can also help in seed multiplication. The major advantage for Indian seed companies is the similarity in agro-ecological conditions which enjoys a great potential for Indian varieties and/or hybrids in this region. There is a great scope for hybrid rice, hybrid maize, millets and vegetables in this region. The seed system in Africa is governed by harmonized seed sector policies and regulatory frameworks on regional levels which ease the process of variety registration and thus reduce the time for seed companies to establish market. This model has been proven in Eastern and Southern region and has benefited the farmers to achieve higher yields with quality food production with widened crop diversity thus leading to nutritional security. Western and Central African seed market is a lucrative business that is waiting to be explored.