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Seeds -- a US$ 30 billion global industry

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

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Seeds -- a US$ 30 billion global industry

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  1. 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

  2. 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.

  3. 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.

  4. 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

  5. Key Indian Seed Players

  6. Market Share of Key Indian Players

  7. 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.

  8. 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

  9. 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

  10. 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

  11. 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

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