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Summary of the Action Platform Seed Initiative reflecting discussions during

Summary of the Action Platform Seed Initiative reflecting discussions during July 19 Action Group Meeting on Helping Farmers Move from Subsistence to Commercial Agriculture August 1, 2013.

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Summary of the Action Platform Seed Initiative reflecting discussions during

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  1. Summary of the Action Platform Seed Initiative reflecting discussions during July 19 Action Group Meeting on Helping Farmers Move from Subsistence to Commercial Agriculture August 1, 2013

  2. Objectives of the Action Platform Initiative to Build Value Chains in Seeds Production with Small Farmers The Action Platform Initiative to Build Value Chains in Seeds Production with Small Farmers could engage all or some of the seven major seed companies active on the Action Platform in helping 50,000 to 100,000 marginal farmers become commercial producers of hybrid or improved seed in the 2014 to 2020 period: Doubling the net earnings of participating seed growers, with each averaging between about one acre and one hectare devoted to hybrid seed production. Contributing to productivity enhancement measures of over a million small farmers. Contributing to India’s agricultural growth and food security objectives. Organizations engaged Focus Syngenta UPL Advanta Nirmal Seeds NSL Bayer Monsanto NathSeeds • Focus on marginal and small farmers with 1 to 2 acres • In states with major concentrations of seed producers e.g. Karnataka, Maharashtra and Gujarat. • Other states in which seed companies have a presence: MP, the Punjab, Haryana, UP, Andhra Pradesh, Tamil Nadu, Rajasthan, West Bengal. • Focus crops: vegetable seeds e.g. tomato, okra, peppers, cabbage, Bt cotton, maize, rice, other grains, oilseeds, moong Seed Compa-nies NGOs/ support BAIF Digital Green Pradan IFC Financing of seed farmers once doing commercial sales 2 HDFC Bank and other banks

  3. Key elements of the Action Platform Initiative to Build Value Chains in Seeds Production with Small Farmers Each participating company could select its major commodities and geographies for focus, within the agreed commodity groups and concentration states. 1 Each company would be asked to focus on developing 5,000 to 15,000 marginal and small farmers as hybrid or improved seed operations over the five year period, procuring seeds from those farmers which meet company standards. 2 3 • Companies would be given the option of developing these farmers in the following three ways, or combining different approaches in different areas: • Using their own staff and contract field agents • Using SFI system to provide the inputs to farmers and/or • Working with strong NGOs focused on agriculture, with the company providing a strong technical person to work full time with NGO to train farmers. Expectations from participating companies • Companies would provide or organize the advice for each participating farmer • Company would provide its people to test and certify seed for commercial purchase by company. • Company would work with financial institution to organize bank financing for working capital and fixed investment requirements e.g. shade nets, MIS of participating farmers and help channel any external support.

  4. Financing of the Seed Initiative The Action Platform may seek external financing to complement resources from banks and participating companies for borrowing and technical service requirements. Given interest by banks in seed value chains, and commitment of several companies to provide developmental costs, participants in the July 19 Action Group judged that external financing may be small. Potential funding arrangements • HDFC Bank, which is active in financing seed farmers, has indicated that it is willing to finance early stage seed farmers, once they are making commercial sales to the promoting company based on: • Commodity specific seed income and expenditure models • Arrangements specified on cash flow –company, farmer, commission agent • Commercial and technical service relationship company-farmer • Land titles and risk sharing if possible. • Farmer bank account to enable payments and repayments. In some cases, seed farmers may be able to meet commercial standards in first year. For most hybrid seeds, the development period will probably be two years for the first commercial sales. In August and September, we will work with participating companies on seed financing needs by commodity and area, to build financing projections by company cluster with likely company, bank and external financing.

  5. Next steps and timeline of the initiative to build value chains in seeds production with small farmers Next steps • Determine the desired focus by crop and geography of participating companies—and targeted numbers of farmers to be engaged. • With participating companies build farm and support business models and projections for development time and costs, working capital and fixed investment requirements for small farmer seed production in different commodity groups • Determine piloting and rollout strategies for individual companies and overall, including partnering, management and monitoring arrangements • Build out full project document , with costing, and mobilize any needed external support.

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