ISSD Briefing Note April 2013 Mozambique Seed Entrepreneurship Assessment

Transcription

1 ISSD Briefing Note April 2013 Mozambique Seed Entrepreneurship Assessment How does ISSD approach seed entrepreneurship? In September of 2012, the Integrated Seed Sector Development (ISSD) programme in Africa published briefing notes assessing the seed sectors in eight countries 1, aimed at informing policy-makers and practitioners on the realities of farmers, with the intention of influencing seed policies and programmes in becoming more coherent with the practices of farmers, and thereby more effective in addressing the diverse range of demands among seed consumers. ISSD recognizes the relevance of informal seed systems. It aims to better link informal and formal seed systems, and balance public and private sector involvement. ISSD endorses and supports a pluralistic approach to seed sector development, by identifying and characterizing a range of seed systems and work within these systems according to the structure of the seed value chain. The aim is to promote market orientation and entrepreneurship, and foster an enabling environment for the emergence of a diversity of international, national, and local seed businesses to contribute their strengths and operate in their specific niches. The driving forces are food security, biodiversity management, economic development, and the promotion of agricultural entrepreneurship. Entrepreneurship is a strong incentive for investment and development in the seed sector, and can be a catalyst to improve the functioning and performance of seed value chains. Strengthening entrepreneurship in the seed sector requires an enabling environment for different types of seed systems, differing in operators and service providers. In order to support the design of seed programmes and policies that promote and/or strengthen entrepreneurship in a range of seed systems, decision-makers need to be able to recognize entrepreneurship in all its existing and potential forms. Assessing seed entrepreneurship in Africa Guided by the assessments of national seed sectors, experts from across all ISSD Africa countries were involved in the design of an approach to assess seed entrepreneurship in different clusters of seed systems, namely: the informal, intermediary and formal systems. In Mozambique, the informal cluster involves the farmer-saved seed system and the community-based seed system. The intermediary cluster consists of the emergency seed system and the NGO seed system. The formal cluster involves public, large- and small-scale private, and value chain systems. See the previous Mozambique seed sector assessment briefing note for more details. In each cluster, two indicator crops were selected for identifying value chains through which opportunities for entrepreneurship emerge. An assessment of the strengths, weaknesses, opportunities and threats relevant to the different forms of entrepreneurship is then carried out; and finally, projects and programmes aimed at promoting and/or strengthening seed entrepreneurship are evaluated according to the specific requirements of those entrepreneurs identified. 2 Accordingly this note presents the seed entrepreneurship assessment in Mozambique. The National Agricultural Development Strategic plan (PEDSA) foresees the focusing on agricultural growth corridors. Based on the ISSD assessment in Mozambique three of these corridors were selected for the seed entrepreneurship assessment. These are: The Nacala Corridor (Northern Region), the Zambezi valley and the Beira Corridor (Central Region). The clusters of seed systems and the corresponding main seed value chains, the reference crops for each of the three clusters and the priority corridors have been indicated in bold (see Table 1). 1 Briefing notes on Burundi, Ethiopia, Ghana, Malawi, Mali, Mozambique, Uganda and Zambia are available at: 2 For further details on the assessment and the methodologies applied, reports are available upon request. See also, ISSD Africa Newsletter 3, December 2012, available at: Briefing Note: page 1

2 Table 1: Selection of main target corridors and indicator crops for the Seed Entrepreneurship assessment Main Agricultural Growth Corridors Informal systems (Farmersaved; Community-based) Intermediary systems (Emergency; NGO) Formal systems (Public; private large scale and private small-scale South (Limpopo Corridor) Cowpeas Cassava, rice, groundnuts Hybrid and OPV maize Centre (Beira and Zambezi Sorghum and cowpeas Rice (Zambezi valley) Hybrid and OPV Maize Valley) Cassava (Dondo) North (Nacala Corridor) Sorghum and cowpeas Groundnuts and cassava Rice Hybrid and OPV Maize Soya beans Programme associated to cluster PRODEZA IKURU and OLIPA Technoserve, Nzara Yapera, (INOVAGRO) A total of five Focus Group Discussions (FGD) were organized in the locations of Chimoio (formal cluster, Central Region); Quelimane (intermediary cluster, Central Region), and Nampula (all three clusters, Northern Region). In relation to the original proposal, some changes were made by the ISSD Task Force (mainly caused by the differences in corridors): (i) The rice seed value chain in the centre and north is part of the intermediary cluster of systems (was formal); (ii) Maize OPV is largely part of the formal cluster of systems (was intermediary); (iii) Groundnut was added to the intermediary cluster of systems, as it its becoming a commercial crop in the North; and traditional legumes are many in Mozambique, hence the focus on cowpeas which is firmly in the informal system. In correspondence with the five FGDs five interviews were held with entrepreneurship enhancement programmes (see Table 1). An additional interview with INOVAGRO, a Swiss Development Cooperation supported project, was held for testing the questionnaire. Defining seed entrepreneurship The informal seed system cluster defines entrepreneurship as a combination of mindset, skills and access to resources, but dominated by being able to build community trust, a market and demand orientation and good use of opportunities, as well as access to knowledge and financial resources. The intermediary systems representatives identified again mindset and attitude (perseverance, innovativeness) as key, as well as strategic use of resources (land, capital and knowledge) to address emerging market opportunities and contexts. Central here are market intelligence, the capacity to compete and innovative resource use. The formal seed system cluster emphasized mindset, skills and access to resources as main elements defining entrepreneurship and in particular, management capacity, skills and creative talents, as well as market intelligence, and profit and employment generation. The emerging definition was that entrepreneurship is the capacity to create a sustainable business with profit orientation and based on local opportunities, which generates employment and contributes to the community at large (Formal, Nampula). For all three clusters of seed systems, entrepreneurship was defined in terms of a particular mind-set (business orientation; innovativeness; perseverance) and a set of skills (trust building; communication, business management, market and demand analysis) and in relation to seed specific knowledge (seed processing, technology). These in combination with identified opportunities (demands, markets, partners, and context) and resources (capital, quality seed, inputs) can lead to seed businesses. The main differences between the seed system clusters were the importance of trust (informal), communication (formal), risk-taking (formal) and access to resources (formal and intermediary), as well as relations with research and access to germplasm (formal and intermediary). Seed entrepreneurship programmes defined entrepreneurship more as farmer integration in seed value chains (informal), innovativeness and resultsorientation (intermediary), market and business planning, and chain development. The resulting approaches by the different programmes focused on: the facilitation of seed value chain development, cooperative development with market and financial services links. There was an overall emphasis on capacity development from training (technical and business planning) to organizational development (cooperatives, associations) and institutional development (agribusiness forum, market information system and communication, trust-building and contract arrangements with seed sources and markets, i.e. seed value chain development). Different programmes have in common that association and cooperative development are seen as important building blocks for production, marketing and actual use of seed. Key words are multi-stakeholder interaction and innovation. Seed value chains in the different clusters The informal seed value chains involve only local households with male and female roles, and the corresponding communities. Some communities can start interacting with others based on trust and a reputation for having quality seed. Some new varieties of the indicator crops for this cluster (sorghum and cowpeas) are being introduced and adopted by these communities for specific reasons (e.g. for sorghum brewing and early-maturing cowpeas), but most varieties are local for these two endemic African crops. Briefing Note: page 2

3 The main difference with the intermediary system is the interaction with other actors in the seed value chain, notably the public sector and NGOs for seed multiplication and distribution. Also, more new varieties of cassava, rice and groundnuts are introduced into a system still dominated by local varieties. In the formal system, the emphasis is strongly placed on introduced varieties of soybeans and maize. The formal seed value chain involves formal basic seed production and marketing of certified seed, it includes roles held by the public sector (variety source, basic seed production and marketing by institutional buyers) as well as by the private sector (for the actual seed production and marketing). The enabling environment for informal systems is less relevant, except for the possible threats of reduction of farmers rights and the free distribution (relief and other programmes) of alien varieties. In the intermediary seed value chains, the implementation and recognition of the guaranteed seed quality (i.e. Quality Declared Seed) arrangement in the legislation is a constraint. For all systems, the enforcement and operationalization of the seed legislation is a general constraint. Options for involvement of the private sector in breeding, basic seed production and seed certification are not being adequately used. On the other hand, the private sector development is stifled by the subsidized seed distribution, as well as by the lack of variety protection. Similarly, there is limited involvement of service providers in the informal systems (mainly only some extension). Developing quality control services is important in the intermediary systems (technical support by NGOs and extension, quality control through these NGOs). The formal system involves formal breeding (mostly public, but also some private, registration), basic seed inspection and different kinds of services for seed production and marketing (financial, input supply and certification, extension services). The formal system has an increasing number of examples of public-private partnerships in service provision (breeding, basic seed production, and certification), apart from the seed distribution. Seed entrepreneurship across the three clusters is strongly influenced by value chain development. This is in particular visible in the intermediary systems in which new opportunities for cassava (beer brewing and biofuel), groundnuts (export) and rice (developing local quality rice processing, despite the problems with imported cheap rice) lead to demand for quality seed and hence many local initiatives. In the formal seed systems of maize and soya bean, the number of established private actors is rapidly increasing, including a rising number of international seed companies. Table 2: The value chain of the informal cluster Seed value chain Variety source (Basic) seed source Seed production and multiplication Operators Services Enabling environment Mostly local selection by women in farmers own fields, and locally exchanged and obtained from local markets Varieties maintained by the community Some limited cowpea introductions (IT 18) Strategies for the maintenance of local varieties Indicator crops: Sorghum and cowpeas Type of seed quality: farmer-saved and trusted seed No basic seed use apart from local selections Some few collections by research institutes (IIAM, IITA), also for comparison No Some specialized producers (individuals and groups), as well as associations producing for the community Communities recognize importance of local varieties Some limited support by extension New varieties are actively being introduced in the local systems Seed dissemination and marketing Exchange in kind or through local markets, some introduction of new varieties through seed fairs and relief operations Some promotion support through local seed fairs by NGO and public extension Seed exchange is freely permitted Briefing Note: page 3

4 Table 3: The value chain of the intermediary cluster Seed value chain Variety source (Basic) seed source Seed production and multiplication Seed dissemination and marketing Operators Services Enabling environment Local varieties (mainly in the North), as well as public research institutes (groundnuts, cassava, rice) Local rice variety collection not handled properly by Semoc and Seedco Rice research in the North not given due priority Community seed selected and locally distributed Basic seed also from research institutes Some quality assessment by local laboratories (e.g. Nampula and groundnuts) Some rapid multiplication of cassava cuttings Limited involvement of research due to priorities and costs Some groups/ associations/ individuals contracted by local seed companies and NGOs NGOs and local seed companies provide support to seed producers Limited support by public extension Public sector distribution (rice), as well as NGOs (cassava) and local (seed) companies (groundnuts) Value chain companies involved in seed distribution (groundnut exporters, cassava beer brewers, and rice millers) Rice seed distribution affected by cheap rice imports for food Indicator crops: groundnuts, rice and cassava Type of seed quality: guaranteed (groundnuts and cassava) and quality seed (groundnuts), as well as certified (rice) Table 4: The value chain of the formal cluster Seed value chain Variety source (Basic) seed source Seed production and multiplication Operators Services Local OPV varieties from IIAM and CIMMYT Maize hybrids from IIAM, Mozseeds, PANNAR and Seed Co Soya varieties from IITA and ICRISAT IIAM breeding, CGIAR and private seed programmes (only maize, soya bean and rice) Basic seed from USEBA (public sector) and PANNAR (RSA import) Breeder seed and inbred lines from IIAM Pre-basic seed registration Inspection and certification as basic seed (Seed department) Specialized producers (groups and individuals) contracted for maize and soya production Exclusive deals for hybrids (IIAM- Mozseeds, Lozane Farms, with support from AGRA) Accreditation of seed companies Field inspection Pre and post-harvest inspection not done (all SD) Input supply services (private) Seed dissemination and marketing Individual agro-dealers Public sector distribution system (PAPA, PEDSA) Seed companies with their outlets Control and registering of agro-dealers (Trade Ministry) Seed extension (public and NGOs) promoting certified seed (demos) Some demonstration by companies Financial services limited Enabling environment National seed variety list Import regulations not fully applied Seed permits private basic seed production, but not applied Poor control on imported varieties Legislation on seed company accreditation and seed quality inspection not fully implemented Licences for seed sales not controlled Seed distribution policy by MINAG outdated Indicator crops: maize and soya bean Type of seed quality: certified Briefing Note: page 4

5 Seed entrepreneurship incentives A variety of incentives for seed entrepreneurship was identified but the main ones all relate to the market, directly or indirectly, for certified seed, quality declared seed, and trusted seed, as well as service provision, all depending on the type of seed system. The government is a large institutional buyer of seed (maize, rice and soya beans mainly), which is subsequently distributed at attractive prices and favourable credit conditions. Large companies such as SEMOC and PANNAR, often in association with others, tender for annual supply contracts. Their business model is largely based on this and not the real seed market. Smaller seed companies are hardly involved, and want this system to be removed. The proposed change is gradual in order for the sector not to collapse e.g. government has now withdrawn from cash crop (e.g. soya bean) seed distribution, but not from major urban staples (maize, rice, potatoes). Smaller seed companies are in spite of the subsidies finding opportunities to start or increase their seed business, as the seed market notably in the North and Centre is improving, due to value chain development. The national market demand for commodities such as maize, rice, cassava, potatoes, and beans is increasing, as well as an additional export demand for soya beans, groundnuts, pigeon peas, sesame and others, all leading to demand for quality seed. Basic seed production and seed certification services are in practice monopolized by the public sector, although the seed legislation provides options for private sector involvement. The Seed Department is a regular MINAG department and cannot use fees for its services to improve their provision; the previous National Seed Services had more financial autonomy, also to involve private sector services. As indicated, a number of new market crops and corresponding value chains are emerging, often of a local nature (e.g. green grams, cassava, onions, and vegetables). NGOs in general have reacted to this by supporting farmer organizations interested in getting involved in such chains, due to their flexibility and local presence. This has led to various initiatives to produce quality seed for such emerging value chains. The government and national seed company strategies for providing varieties which are stable over many environments is challenged by small companies, farmer organizations and NGOs, which see opportunities for locally adapted varieties. These varieties are increasingly demanded by farmers, leading to local seed businesses, gradually these are also using newly introduced varieties. At community level, the seed system is dominated by relationships of trust. Farmers will acquire seed from certain communities or associations (through barter, mostly e.g. 2 kg grain for 1 kg seed) based on trusted relationships developed over many years. Seed extension in the seed multiplication programmes could make better use of such traditional systems. Improving seed production through entrepreneurship Lobbying by seed companies, programmes and projects (e.g. Technoserve, INOVAGRO) on seed sector development has resulted in an opening by the Ministry of Agriculture to reduce its seed subsidy programme, which will therefore stop interfering with the soya bean seed market. As a result of this, there is wide interest from small seed companies and contracted seed producers in soya bean seed production. Market development, rather than development of institutional buying contracts requires different seed business models which interact strongly with the markets. Interventions by market studies and market linkages (Agribusiness Forum, facilitated by PRODEZA in Zambezia), are largely in the formal and some intermediary seed value chains. Local seed companies and businesses, as well as agrodealers in the intermediary systems are eager to develop markets through variety demonstrations. This requires attractive labelling of the seed and guaranteed seed sales (e.g. supported by Ikuru). Agro-dealers are going into seed production (contract growers mainly), and are demanding better quality inspection services and access to foundation seed and new locally adapted varieties (some are available but not yet released). The emerging value chains have led to a demand for quality seed in the informal and intermediary value chains. This has led to the recognition of the need for local seed production. Different NGOs (Miruku) concentrate on capacity development of farmer groups for seed production, as well as linking them with markets and district and provincial authorities. In the informal and intermediary systems, farmer organizations and networks are a driving force in quality seed production for emerging value chains. Some farmer organizations are also contracted by seed companies for formal seed production; the latter is also supported by larger projects such as INOVAGRO and Technoserve on maize and soya bean production (also PROSAVANA, AGRA) (see Case study 1). Briefing Note: page 5

6 Case study 1: Farmer organization networks developing into cooperatives 3 Through involvement of NGOs such as Oxfam, Olipa- Odes and PRODEZA, different farmer association networks have been developed in the intermediary systems, resulting in strong Farmer Unions and Fora, as well as cooperative enterprises in rice and groundnut production, processing and marketing. These networks have also been instrumental in organizing quality seed production. Examples in Nampula are the Forum de Nametil and Muatoa and the Muecate Farmer Union (supported by Olipa-Odes/PPLS, local seed production programme) and Ikuru Cooperative Society (with part of the shares owned by 28 Farmer Fora with 254 associations, and other shares by NGOs). PRODEZA in Zambezia is another example of a project that supports the development of 11 Farmer Unions of ten associations each with 25 members. A challenge is to organize these networks for other commodities which provide market opportunities, such as cassava; this has been initiated with support from IFDC. Other examples exist notably in the merging value chains, such as groundnuts, soya beans for smallholders, sesame and rice. The farmer networks, facilitated by NGOs, are also becoming increasingly articulate in demanding good quality foundation seed of locally adapted varieties and access to seed quality control services. Improving service provision to seed value chains through entrepreneurship Many programmes provide special financial services for seed value chains, notably in the formal systems. Some analysis of the various mechanisms, such as matching funds (AGRA), soft loans (INOVAGRO), vouchers (FAO), and financial arrangements for agro-dealers, is needed. A major dilemma is to design financial services which do not unfairly compete with the local financial service organizations, including banks. NGOs support farmer savings and credit organizations as well as farmer organizations to become shareholders in cooperatives (Olipa-Odes, PRODEZA, etc.). Seed value chain development requires more than some seed extension. Some programmes are trying to develop seed business services such as the agribusiness centre in Mocuba, Zambezia, by PRODEZA. In other cases, the private sector, notably the agro-dealers themselves go into service delivery (see Case study 2) or the seed companies such as Nzara Yapera, supporting their outgrowers and providing seed market information (AMISA in Manica). Ikuru, as a cooperative enterprise, 3 Source: This study and Kaarhus R. and Woodhouse P Development of National Producer Organizations and Specialized Business Units in Mozambique. Noragric Report No. 63 January Department of International Environment and Development Studies (Noragric), Norwegian University of Life Sciences, UMB. gricrep63.pdf provides specific courses on price negotiation for farmer associations. Local seed companies and agro-dealers are increasingly organizing and paying for on-farm demonstrations of varieties, though coordination with public extension could be improved. Communities and associations involved in the informal seed system can be assisted with seed extension on production (seed production handbook), but in particular for seed storage and conservation of local varieties (cowpeas, sorghum, etc.). Examples can be found with many NGOs, but also the public extension has local seed multiplication programmes. Some few examples exist of public-private partnerships in seed certification (seed department contracts) and foundation seed production (IIAM subcontracts). The current seed certification services and seed quality testing services (provincial) are largely inadequate. Use should be made of opportunities such as private laboratories (Unilurio Laboratory in Nampula) and private inspection services. This can be stimulated by granting the National Seed Department some financial autonomy. Case study 2: Private seed business services by agro-dealer Insumos Agrícolas e Veterinários in Manica 4 Insumos Agrícolas e Veterinários (IAV) is a partner in CIMMYT s Simlesa (Sustainable intensification of maizelegume cropping systems for food security in eastern and southern Africa ) programme. IAV supplies seed, fertilizers, pesticides and equipment (ploughing, spraying, etc.). The company has noticed that the effective demand for inputs, seed, fertilizers, but also herbicides has gone up. More people come to the shop to buy these inputs. They have basically sold out of Matuba (maize OPV), partly because the government is not providing cheap seed this year (no vouchers and no voucher schemes and subsidy programmes (PAPA), which is good for their business. So far they are not involved in buying, but they have been looking, through the associations for sesame and pearl millet seed. Most of the associations informed them that they are still multiplying seed and not yet ready for sale. The challenge for IAV is to go to the communities without facilitation. They have only recently acquired some expertise in this, but they still need to build up a relationship of trust with most associations, which is a challenge. Some associations are however already considered trustworthy and can get inputs from IAV on short-term credit. The company has some good experience with the previous input voucher scheme in Bárue and Gondola Districts and 2010/2011 in District. 4 Source: Source: Interview November 2012 by Willem Heemskerk with Sara Penicela, (co-)owner of IAV. Briefing Note: page 6

7 IAV considers the voucher scheme a good programme, as it benefits the smallholders, and some of the beneficiaries have found a way to its shop. Currently, the Banco de Oportunidade has a support programme in place, that guarantees the payment by associations for seed they buy. In the future, IAV would like to expand the number of selling points, as it sees the demand for inputs increasing. The company is even convinced about the importance of the maize and herbicide trials, three of which it will finance this year (Sussundenga, Gorongosa and Gondola). IAV staff has sufficient technical capacity and they also accompany their input provision to farmers with an explanation or advice about which variety or pesticide they would need for their situation; they are therefore also acting as extensionist agents. The public extensionists do not come to the IAV s shop as they think they know it all. The IAV staff have started to like being in the field with farmers and will continue doing this. Some sort of distribution has taken place between agro-dealers for different districts. They see that the programme will be successful now that the subsidies are being removed; the subsidy programmes were bad for business, partly because there was previously no coordination between Simlesa and PAPA. Impact of the enabling environment on seed entrepreneurship Some few examples exist of public-private partnerships in seed certification (seed department contracts) and foundation seed production (IIAM subcontracts). The current seed certification services and seed quality testing services (provincial) are largely inadequate. Use should be made of opportunities such as private laboratories (Unilurio Laboratory in Nampula) and private inspection services. This can be stimulated by granting the National Seed Department some financial autonomy, as was the case in the past. Seed companies, in particular the ones not benefiting from the subsidies, complain about unfair competition from organizations and projects that import seed and distribute it at reduced rates (e.g. rice in Zambézia, soya beans in Nampula). The larger problem is the import of cheap, import tariff-free seed, making locally produced rice uncompetitive and leading to reduced seed demand. Recently, even Monsanto and Cargill provided large (maize hybrids) seed donations for relief programmes in the north of the country. In contrast, local seed companies have to pay tax. Better enforcement of the import regulations (rice seed is not even allowed to be imported at all), could greatly benefit local seed companies. The national farmer organization, UNAC, is active in promoting the rights of farmers to keep their own seed. In Zambézia province, farmers grow many local aromatic rice varieties, which are preferred by local consumers. Farmer organizations could be better supported in legislation and by services to resist introduced varieties and maintain the local quality varieties. The main enabling factor for seed entrepreneurship in almost all systems is the market and notably the developing value chains. Important in this is the coordination between entrepreneurs (companies, traders, and including farmers), research and the government, most notably at the local level (district, province) (see Case study 3) Case study 3: The Multi-stakeholder Oilseed Innovation Platform in Nampula 5 The vegetable oilseed sector has developed a multistakeholder oilseed platform, which is facilitated by SNV (a Dutch NGO). Its main objective is to discuss opportunities and constraints in the oilseed sector. The platform aims at enhancing innovation in the oilseed subsector. The platform involves producers, processors, researchers, financial services, provincial departments of agriculture, NGOs, and other main actors and support services for the groundnut, soya bean and sesame oilseed value chains. The platform focuses in particular on the quality of the products in the chain, which includes the use of quality seed and technical service provision. The platform is part of the Agri-ProFocus Network in Mozambique. This platform is an important governance mechanism in the subsector. The number of interventions in all three of the vegetable oil commodities value chains is large, especially since all three have become export crops. The three commodities have a booming demand for quality seed. In the August 2012 platform meeting, an analysis of the seed systems for the three chains led to the development of an action plan (seed road map), agreed upon between the main actors of the seed value chain: the Zonal Research Centre in Nampula, seed producers, the Provincial Seed Services, and the private sector. The plan is supported by a number of NGOs and by the industry, notably Olam, Coredor Agro, and Ikuru. The platform is a coordination mechanism with SNV and AgriHub as the secretariat. Facilitation of the interaction of stakeholders in the platform is continuing through SNV and AgriHub Mozambique, while individual actors continue implementing the agreed actions. 5 Source: Briefing Note: page 7

8 Recommendations for making policies, programmes and practices more effective in promoting and strengthening entrepreneurship Promoting successful initiatives and incentive mechanisms in the practices of seed entrepreneurship With support from UNAC, the small farmers organization, the use and protection of local (aromatic) rice varieties is being promoted. Value chain development can be a threat for these varieties, but also an opportunity if the urban population recognizes the consumer value of these varieties. To support commercialisation of local rice varieties, the government should reduce imports of not only rice as such (both high quality basmati rice and bulk low quality tax-free rice), but should also enforce the 1992 import regulation which prohibits the import of rice seed. Also, efforts should be made to produce Quality Declared Seed (guaranteed seed; QDS) for all local varieties (so not only rice), and to use it (e.g. in the seed fairs). Communities obtain seed on the basis of trust, which was built over years, resulting in villages and individuals being known locally for their quality seed. Seed marketing should make use of these traditional seed distribution systems and link them to local agro-dealers and formal community seed outlet development strategies. The private sector (local seed companies and agrodealers) should continue to get more involved in general seed advisory services, such as advice during seed sales, variety on-farm demonstrations, and working with community seed outlets for seed demand identification. The seed business requires investment and timely pay for seed production. To stimulate seed entrepreneurship and further up- and outscaling of seed development programmes, continue to build an inventory and analysis of different financial service systems and payment guarantee systems (e.g. by Olipa, Ikuru and Banco de Oportunidade). Seed businesses face large risks in their seed production even before facing the marketing risks. Risks are associated with climatic change and increasing dry spells and floods, leading to the need for irrigation, drainage and flood protection strategies. Another major risk is quality (long-term) storage of seed. Seed advisory service programmes must be enhanced, to help seed businesses to confront all of these risks. Scaling-out and up of successful initiatives and interventions of seed-related programmes NGOs and other projects focus on seed business development services to improve seed value chains, by increasing an effective demand for quality seed. Examples include seed market information systems, and the development of websites that inform about seed prices in all stages of the value chain as well as for different qualities and commodities. Other services are specific training programmes on seed business management, including seed production (planning, contract farming, risk management), processing (seed chain quality control), as well as financial services (pluralist models, guarantees, bankable plans, seasonal credit, record keeping, storage management) and marketing management (packaging, posters, bulletins, fairs, demos). These initiatives should be coordinated with the public agricultural advisory services and public seed extension. Seed companies in the formal seed systems have long been developing their businesses based on a model which foresees selling to institutional buyers such as the Ministry of Agriculture, donor projects and relief organizations. This model is gradually changing from a development orientation to a seed needs-and-demand orientation, which will require different business models. Build on programmes (such as INOVAGRO), to support this business model reorientation process. A number of NGO programmes (Olipa-Odes, SNV) are supporting local seed business development as a component of farmer association networks which concentrate on certain subsectors (e.g. groundnuts, sesame, rice and possibly cassava). These networks are developing into cooperative enterprises (e.g. Alimi, Ikuru and Apac) in which associations are shareholders. Continue to build on strengthening of these networks, emphasising innovation (e.g. by using annual SWOT analysis of the networks seed business). The local character of the association networks also leads to a demand for locally adapted varieties, demanded by the emerging market, challenging the one-variety-fits-all principle. Carry out a specific analysis of the Ikuru and Alimi (and others) association shareholding model (for groundnuts, sesame and soya beans) which is supported by NGOs (Oxfam and others), to gather learnings on good seed business development as well as options for outscaling in other commodities. Addressing gaps in policies and the enabling environment To strengthen the development of the seed sector, the government needs to work on a new seed strategy (outsourcing basic seed and inspection); establish formal regulations and legislation operations in support of its development; enforce rights and regulations (breeders and farmers rights; import regulations; seed sector governance; basic seed production; variety release and seed inspection); and improve its seed sector mechanisms (seed department). The lack of the above is partly due to the governance constraints of the sector. Recent workshops and Briefing Note: page 8

9 meetings across the sector (ISSD, MINAG, FAO, INOVAGRO, etc.) have illustrated the demand for sector governance strategies and mechanisms. The national seed committee, foreseen in the seed law, has not met for ten years (with the exception of the variety release subcommittee), which has also resulted in the expiration of the national seed development strategy in A strategy which addresses all issues mentioned is urgently needed, notably to address sector governance (roles of the public and private sectors, importance of informal seed systems and farmers rights, etc.) as well as the mentioned enforcement of the seed legislation. Pay specific attention to the role of the public sector in seed development, such as the gradual removal of subsidies (only for relief programmes, and seed demand development), the release of market-based and local seed systems demanded varieties, seed quality certification (outsourcing services, quality declared seed inspection, seed inspection autonomy). Clarify the role of local governments in promoting local seed business (seed extension and removal of obstacles, as well as involvement of communities). Within the overall relations between public and private sector, give a stronger role to the private sector in variety release (demand orientation, variety release communication, and involvement in breeding), as well as in foundation seed production, and seed certification (outsourcing) to enhance the entrepreneurial dynamics in the system. Authors: Inacio Pereira (Mozseeds) and Willem Heemskerk (KIT) Picture credit: Peter Casier (CGIAR) ISSD Africa II Mozambique task force and team: Elsa Timana, National Seed Department, representing the public sector Maria Estrela Alberto, Mozseeds, representing the private sector Armando Amâncio, Mozambican Association for the Promotion of Modern Cooperatives, representing NGOs Rogerio Chiulele, Eduardo Mondlane University, representing knowledge institutions Inacio Pereira, ISSD consultant Willem Heemskerk, Karèn Verhoosel (process advisors) ISSD Africa editorial team: Gareth Borman, Marja Thijssen, Elizabeth O Keeffe and Mundie Salm Centre for Development Innovation of Wageningen University and Research centre, the Netherlands ISSD Africa II is supported by: Briefing Note: page 9