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Market Potential Index and Supply Analysis of Improved Maize Seeds
in MexicoLaura Donnet, Ciro Dominguez, Dámaris Lopez y Jon Hellin
Advanced Wheat Improvement Course 2012September 27, 2012
CIMMYT, Texcoco
Objectives for today
Discuss about work of SEPDiscuss about MasAgroNote: this is work in progress
IMIC, objectivesFocus is on rainfed production
areas in Mexico1. Raise average maize yield from 2.2 to
3.7 t/ha2. Increase maize production from 13 to
20 million tones3. Increase adoption of improved
materials in 1.5 to 3 million additional hectares
4. Production and distribution of additional 70,000 t of high quality seed
5. Increase the competitiveness of national companies that target small producers
Maize yield in Mexico
2004 2005 2006 2007 2008 2009 20100123456789
10
Maíz amarillo riego Maíz amarillo temporalMaíz blanco riego Maíz blanco temporal
Mai
ze y
ield
(t/
ha)
4
IMIC, approachFocus is on seed deliveryo The diversity of maize production
conditions determines specific demands for improved seeds that can be served by the IMIC consortium / network / supply chain
o Success depends on involving seed companies in the delivery and distribution of seed innovations
o The interaction is in the field of public-private partnerships through agreements between CIMMYT and seed companies
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IMIC, conceptualIMIC is a supply chain moving both germplasm and information about performance and remuneration
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Public R&D(Cimmyt, Inifap, ColPos)
Inbread lines and basic seed
Germplasm performance in trials
R&D remmuneration
Seed firms(El Trébol, Bidasem, El Caudillo)
Maize producers
Commercial seeds
Germplasm performance on producer’s fields
Firms’ remmuneration
IMIC, market studies
Initial assessment of the market demand for improved seeds
Initial assessment of the market supply
Identification of quick impact areas
A market potential index for improved seeds A representation of the market size
and market profiles of improved maize seedso Preliminary assessment of the market demand
for improved seedso Identification of quick impact areas
Based on five key dimensions of the market demand for improved seeds.
A marketing management tool for MasAgro stakeholders
8
Research questions
1. What is the market potential for improved seeds in Mexico in the different production areas?
2. How much improved seed needs to be produced?
3. What are the different market profiles in Mexico?
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Framework Market potential
Market potential indexes:o Systematic approach to quantifying and ranking market
potentialo Used by managers to determining which markets to enter
and which marketing strategies to useo Examples:
• Market Potential Index (MPI) of emergent countries: Cavusgil, 1997; Business Center of Michigan State University, 2011
• Market Potential Value (MPV) of a town: RK Swamy BBDO Guide to Marketing Planning, 2008; Bijapukar, 2004
o Limitations: initial assessment, variables selection, data, algorithm
Market demand
Marketing effortObserved marketing effort
Market po-tential
Market forecast
Market minimum
Framework, con’t
Source: Based on Kotler and Keller (2011); GlobalEdge (2011) and RK Swamy BBDO Guide to Marketing Planning (2008)
Major concept in demand measurement
Market potential dimension Market potential indicator Description
Market maximum Size (Log of) maize area
Maximum number of bags of improved seeds that can be sold
Product penetration percentage Penetration Percentage use of improved seed
Number of consumers who are not yet part of the market
Market environment
Capacity
Combined of farm size, farm productivity and socioeconomic level
Accessibility, acceptability and affordability resistance and improved seed
Intensity Percentage area with high production potential
Feature of the market situation or increasing-intensity-demand
Receptivity Differential profitability with improved seed
Responding to change and willingness to adopt improved seed
Market potential for improved seeds: Upper limit as marketing expenditures in a given marketing environment cannot further increase demand
Methods
Where xij is the value of the indicator i for the unit of analysis j
And x1, x2 , x3, x4 and x5 are the five indicators of the index, as follows:
Indicator 1: Maize area Indicator 2: Percentage use of improved seed Indicator 3: Producer capacity is a combined of farm
size, farm productivity and socioeconomic level Indicator 4: Production potential Indicator 5: Change in profitability with improved seed
𝑀𝑃𝐼 ሺ𝑥1,𝑥2,𝑥3,𝑥4,𝑥5ሻ= 15 𝑥𝑖5
𝑖=1
Methods, con’t
Methods, con’tMarket potential dimension
Market potential indicator
Data Source
Market size (Log of) maize area Area planted to maize (ha)
Agrifood and Fishery Information Service (SIAP)
Market penetration
Percentage use of improved seed
Sales of improved seed (bags)
Seed firms
Market capacity Combined of farm size, farm productivity and socioeconomic level
Index of social backwardness
National Council for Evaluation of Social Development Policy (CONEVAL)
Farm size supported by government program Procampo (ha)
Support and Services for Agricultural Marketing (ASERCA)
Maize yield (t/ha) SIAP Market intensity Percentage area with
high maize production potential
Maize production potential (ha)
National Institute for Forestry, Agriculture and Livestock (INIFAP)
Market receptivity
Change in profitability with improved seed
Revenue and costs of production with improved seeds and with criollos
Strategic Support Program for Producers in the Maize and Bean Chains (PROMAF)
ResultsMPI for improved seeds and ranking of
maize production regions in Mexico
Regions / Dimension Size Penetration Capacity Intensity Receptivity MPI Ranking
High Valleys 4.3 4.7 2.0 1.2 4.0 3.2 3
Bajio 3.2 1.7 3.8 3.9 3.4 3.2 4
Central Valleys 2.5 5.0 1.4 2.3 1.0 2.4 10
Pacific Lowland Tropics 4.6 3.3 2.3 3.4 4.2 3.6 1
Atlantic Lowland Tropics 3.7 5.0 1.6 3.8 1.0 3.0 6
Humid Tropics 3.7 4.6 1.5 2.1 3.5 3.1 5
Middle Input 3.6 5.0 2.9 1.6 3.4 3.3 2
Northern Pacific 3.1 0.0 4.6 1.1 4.5 2.7 8
Chihuahua 2.5 1.5 3.8 1.1 4.0 2.6 9
North Central 2.0 2.7 2.6 1.1 1.0 1.9 11
Northern Gulf 1.8 1.5 2.7 4.3 4.5 3.0 7
Results, con’tPotential and current market size of
maize production regions in Mexico (bags) Regions / Bags Potential Current
High Valleys 954,197 120,000
Bajio* 337,233 400,000
Central Valleys 122,712 0 Pacific Lowland Tropics 1,485,272 750,000
Atlantic Lowland Tropics 518,473 0
Humid Tropics 534,279 80,000
Middle Input 513,886 0 Northern Pacific* 260,101 900,000 Chihuahua* 127,772 210,000
North Central* 58,039 80,000
Northern Gulf* 76,072 120,000
Total 4,988,034 2,660,000
Results, con’tMarket profiles of maize production
regions in Mexico
Size
Penetration
Consumption capacityIntensity
Receptivity
0
2
4
High ValleysSize
Penetration
Consumption capacityIntensity
Receptivity
0
2
4
BajioSize
Penetration
Consumption capacityIntensity
Receptivity
0
2
4
Central Valleys
Size
Penetration
Consumption capacityIntensity
Receptivity
0
2
4
Pacific Lowland Tropics
Size
Penetration
Consumption capacityIntensity
Receptivity
0
2
4
Atlantic Lowland Tropics
Size
Penetration
Consumption capacityIntensity
Receptivity
0
2
4
Humid Tropics
Results, con’tAreas of greatest immediate potential
Region Municipality Size Penetra
tion Capacit
y Intensit
y Recepti
vity MPI
Ranking
High Valleys Yecapixtla 3.1 4.7 2.3 5.0 4.0 3.8 17
High Valleys Atlatlahucan 2.6 4.7 2.5 5.0 4.0 3.8 33
Bajio Arandas 3.6 1.7 3.8 5.0 3.4 3.5 148
Bajio Jesús María 3.8 1.7 3.4 5.0 3.4 3.5 166
Central Valleys Miahuatlán de Porfirio Díaz
3.5 5.0 2.1 5.0 1.0 3.3 244
Central Valleys Ejutla de Crespo
3.3 5.0 2.1 5.0 1.0 3.3 274
Pacific Lowland Tropics
Atotonilco el Alto
3.9 3.3 4.0 5.0 4.2 4.1 1
Pacific Lowland Tropics
Tepatitlán de Morelos
3.9 3.3 3.9 5.0 4.2 4.1 2
Atlantic Lowland Tropics
Papantla 4.1 5.0 2.1 5.0 1.0 3.4 181
Atlantic Lowland Tropics
Acayucan 3.6 5.0 2.4 5.0 1.0 3.4 203
Humid Tropics Hueyapan de Ocampo
3.9 4.6 2.2 5.0 3.5 3.8 14
Humid Tropics Santiago Tuxtla
3.6 4.6 2.3 5.0 3.5 3.8 21
Middle Input Mocorito 4.0 5.0 3.8 3.2 3.4 3.9 9
Middle Input Ciudad del Maíz
3.6 5.0 2.2 5.0 3.4 3.8 16
MPI Features and Managerial Implications
Allows comparative evaluation of potential markets:o Reduce complexityo Understand trade-offs involvedo Help choice: self-select into serving specific
markets To develop over time:
o As market information platform: share data, analyzing scenarios, assessing collective performance
o As a marketing management toolo For policy analysis: public-private joint analysis:
testing opinions and hypothesis, exploring alternative viewpoints
Maize seed market in México
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Source: Interviews with seed firms
Maize seed market in México, cont’d
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Multinational companies: 2.2 million bags
Source: Interviews with seed firms; SNICS 2010
National companies:0.7 million bags
Total seed market: 2.9 million bags
24%
Concluding remarks
Our supply and demand studies need to become more specific in order to deliver useful information for:o Identifying niches and help develop
business plans to target themo Helping the promotion of improved seeds
based on information on performance and impact on profitability
o Helping coordinate consistent supply of basic seed and parental inbred lines
o Developing new tools and relations for germoplasm development and access
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Thank you for your attention
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