The Case for Deregulating Pakistan's Seed Industry

Only 37% of seeds in Pakistan are certified—one of many numbers that have bothered me since I started writing about agriculture.

This industry is in a dysfunctional state and constantly looking for the government to either do something or just get out of the game completely.

But why is that important that I decided to put my insomnia into it, and why now?

Recently came across this interesting piece by the Pakistan Institute of Development Economics (PIDE). They called for the deregulation of this whole industry, arguing that excessive government footprint over the years has pushed away any investment in R&D.

Moreover, the institutes developing their varieties are also involved in regulating private companies, which is a direct conflict of interest. It also provides a brief framework for liberalizing this sector.

PIDE rightfully proposed abolishing the certification system

I have been a pro-regulation person, but after a year and a half of screaming in the abyss, I have started to rethink this entirely at least for the seed sector (no love for big fert). I mean why would an international company hand over its germplasm to an institute that itself is in the same practice? But first, let’s see what we are talking about here.

According to Government data, Pakistan’s total seed requirement is about 1.7 million tons for a sowing area of 19 million hectares.

Apart from Rice, seeds for all other crops face a shortfall of more than 40% on average and as high as 73% and 84% when it comes to pulses and vegetables Now, just to be clear, lack of certification doesn’t necessarily mean they are bad seeds. They might perform better, but I fear that’s not the point.

The lack of certified seeds does translate to giving us the lowest agricultural productivity in the region but more than that, the high barrier to entry set for new varieties shuts down any investment and, in conjunction, any hope of excelling in producing better crops through research.

Lastly, the fact that the share of certified seeds has failed to grow in the market at pace over the years tells us that the system is not promoting growth, on the other hand, it's holding it back.

There are two problems with our regulations and both are not in the essence of content. First, there are too many of them with no implementation. Doesn't matter how good of a legislation we put on the paper, government organizations simply lack the capacity to enforce them.

I mean we all remember how Govt messed up BT cotton where instead of bringing it through proper channels and developing it for the local climate, it found its way into our fields without any deal with Monsanto and the rest is history. Even now, growers struggle for quality seeds in this day and age.?

Moreover, all Govt programmes focus on the supply side. From Olives to Oilseeds, the focus is often on supplying the seeds and then praying for the demand to grow on its own. Supply-side regulations cause market distortion, increase inefficiency, curb innovation and impost burdensome compliance on SMEs.

So in addition to what PIDE has recommended, Govt also need to educate both farmers and consumers. Both sides of supply chains have to be digitized with market information systems to empower them to express their choices freely in the market. Secondly, there should be laws against misinformation or rather lack of it on product labels and all resources should be dedicated towards these two goals only.

Liberalizing an industry will only make sense when there is some form of transparency in the market and both consumers and farmers are aware enough to make their choices rightfully.?