Direct Seed Marketing in Ethiopia
By: Swati Malhotra, IFPRI
Crop production is an important subsector of Ethiopian agriculture, accounting for 69 percent of the country’s agricultural production and contributing more than 30 percent of the national gross domestic product . Due to low adaption of improved crop technologies, however, the subsector continues to experience low productivity . One of the main constraints of Ethiopia’s crop production is low use of improved seed varieties. Many farmers use grains saved from the previous year’s harvest or grains purchased from other farmers or traders; these seeds tend to have lower yield potential and other desirable attributes, such as heat and pest resistance.
To combat this problem, Ethiopia’s Direct Seed Marketing (DSM) system was introduced in 2010 as a pilot program to supply quality seeds to farmers on a timely basis and at competitive prices. The system provides a set of organizations, rules, and relationships in the national seed supply chain in order to improve farmer demand for seed in terms of volume, type, and timing. A recent IFPRI working paper examines the DSM to evaluate the performance of the pilot program and the potential for scale-up within Ethiopia and neighboring countries.
Under DSM, Ethiopia’s seed producers can sell directly to farmers through their own marketing channels, therefore expanding regional seed systems. This contrasts with the conventional seed marketing (CMS) system in which seeds pass from seed producers to regional Bureaus of Agriculture to woreda (district) agricultural offices to development agents, cooperative unions, and primary cooperatives, and then finally to farmers.
DSM aims to provide a solution to systemic issues within Ethiopia’s seed sector. These issues include various supply constraints, such as non-availability or late supply of higher quality seeds, poor weather conditions, pricing problems, and limited public and private investment in improved seed research and development. Similarly, some demand constraints include limited farmer awareness of the characteristics of improved varieties, low income, poor access to agricultural input credit, and shifts in the preferred characteristics of improved seed demanded by farmers due to changes in weather conditions. These constraints exist due to Ethiopia’s heavy reliance on public investments for improved seed development, multiplication, distribution, promotion, and marketing.
The two overall objectives of the DSM study were to evaluate the performance of the pilot program interventions as of 2015 and to examine the experiences of other countries in promoting the growth and development of their seed sectors.
Between 2010 and 2015, one-fifth of smallholder farmers used improved seeds for cereal crops. According to the 2012 farm survey carried out by IFPRI for the Ethiopian Agricultural Transformation Agency (ATA), ordinary (unimproved) seeds tended to be purchased from other farmers and traders instead of from a cooperative or Bureau of Agriculture (BOA). The authors’ calculations indicated that share of farmers in this survey who used certified (improved) seed was 8 percent for white teff, 11 percent for wheat, 24 percent for maize, and 6 percent for beans. The study also found that the proportion of cultivated area planted to improved seed remained low between 2010 and 2015; wheat and maize experienced slight improvements in improved seed use, but changes in use for teff and barley were insignificant.
Although there were heterogenous effects across different regions, the overall DSM program performed as well as CSM on the eight criteria examined by the study: seed availability, sufficiency of supply, timeliness of delivery, seed pricing, quality, accountability for low-quality seed, ease of purchase, and use of public resources. However, DSM outperformed CMS in terms of time efficiency, requiring 39% less time involvement of Development Agents. In addition, the system received better farmer reviews than CSM. In terms of seed producers, DSM performed better than conventional system in ensuring the accountability of stakeholders; in other words, if farmers had complaints about the seed they bought, the DSM system was more successful at holding seed producers accountable.
The study also identified one of the major challenges in Ethiopia’s seed system: how to increase the rate of development of new varieties of important crops. While between 1999 and 2009 Kenya released 17.7 new cereal crops per annum and South Africa released 60 new cereal crops per year, Ethiopia on an average released only 10.4 new cereal varieties per year.
DSM has only been tested in several regions of Ethiopia since 2010, and it has yet to reach its true potential. To invigorate the wide dissemination of DSM, the paper’s authors recommend that the Ethiopian government should increase public investment in agricultural research and development, recognize and utilize private sector capacity, open up seed retailing to private vendors to stimulate farmer demand, and revise seed law policies to appropriately acknowledge and work with the informal seed sector.