Driving Demand?

(Note: I've omitted some figures and explanations from this post for confidentiality reasons)


Based on my analysis of the Formal Seed Production costs and value chain for Seeds of Life, I recently presented my findings to the Ministry of Agriculture District and National Directors. The main aim of my presentation was the government’s current seed purchasing practices, which revolve around imported seed. Timor-Leste imports tons and tons of maize seed annually, with this seed costing A LOT for purchase and transport to the districts. Meanwhile, seed produced in-country is not currently purchased, which is a problem for the development of seed businesses and local entrepreneurs. 

While local contract producers are making a profit selling their raw seed to Seeds of Life, they could potentially make a much-larger profit by cleaning and storing the seed themselves and then selling the finished seed to the government. An alternative would be for contract growers to pay for the Seeds of Life cleaning and storage, yet retain the seed as their own for final sale to the government. Such an arrangement would have several benefits: the seed would already be locally-available in one of the regional warehouses, saving on transport and reducing the likelihood of late-arriving seed delaying planting; the seed would be cheaper than the imported seed, around half the price; the farmers’ profits would increase, encouraging their further investment in quality seed production; “informal” seed production groups could market their non-certified (yet high-quality) “truthfully-labeled” seed at a lower price to government purchasers, creating a locally-produced hierarchy of seed prices and qualities; other entrepreneurs would see the demand for quality, locally-produced seed and invest in the sector; and the Timorese could begin to wean themselves from foreign agricultural imports and take pride in their own products.

I think the Directors understood these points, and were interested in the presentation. But any purchasing of local seed would depend on proper planning, coordination, and resources. Budgetary planning is a major agenda-point for the ministry, and something that they are working on improving (along with overall strategy preparation). Another issue involves procurement policies, which (as I understand it) currently favors imports because the government requires multiple tenders and large quantities (both of which cannot currently be met locally (*)). Such policies will need to be addressed in the country’s new Seed Policy, which is being drafted now. Finally, the seed sector (and agriculture in general) is a long way from being truly demand-driven in Timor-Leste; after all, however the government acquires seed it always distributes it to farmers free-of-charge. The result is that no farmer will purchase seed, unless the variety is new or there is low supply at planting season. But that issue will take more time to resolve (if it should be resolved at all… see, a bit of my pinko-socialist leanings remain!)


(*) Just to reiterate my point: the only way these requirements can be met in the future is to encourage supply increases through a demonstrated demand now!