Report No. 6575 Impact Evaluation Report India Tarai Seeds Project (Loan 614-IN) and indonesia Seeds I Project (Credit 246-IND) December 31, 1986 Operations Evaluation Department FOROFFICIAL USE ONLY P -2~~~~~~~~~~~~~~~~~~~~~~~~~~ I.4 ..... 44-'*" .' , . ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ,1 Docmen ofte1*WU This documnt has a estricteddistributin and nmybe usM byrecipient onl4'i the prformnce-ofth.-rofficil dutis. It come-i maynot oterwis bedslsdwihu.i Ba. k auh. .. tin Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
SSC State Seed CorporationTI)C TI'arai Development CorporationP [Jttar Pradesh
VJPAU Ut tar Pradesh Agri cultural lUniversityUSA P U,nited States Agency for nter atfonal Develonment
FPOR OFFICL4L USE ONLYTHE WORLD SANK
Washington, D C 204 3 3U.S.A.
Olice n Dv*ctnh.CneOps&at{mv &akiatoon
December 31, 1986
MEMORANDUM TO THl, EXECUTIVE DIRECTORS AND TtE PRESIDFNT
SUBJECT: Impact Evaluation Report: India - Tarai Seeds Project(Loan 614-IN) and Indonesia - Seeds I Project (Credit 246-IND)
Attached, for information, is a copy of a report entitled"Impact Evaluation Report: India - Tarai Seeds Project (Loan 614-IN) andIndonesia - Seeds I Project (Credit 246-IND)" prepared by the Operat.onsEvaluation Department.
Attachment
This document has a restricted distribution and may be used by recipienLs only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization
FOR OMCIAL USK ONLY
IMPACT EVALUATION REPORT
INDIA TARAI SEEDS PROJECT (LOAN 614-IN)AND
INDONESIA SEEDS I PROJECT (CREDIT 246-IND)
TABLE OF CONTENTS
Page No.
Preface . iSummary and Conclusions ............................. ii
IMPACT EVALUATION REPORT
I. BACKGROUND ......... 1.... so
A. The Seeds Sector ...... 1B. Bank Involvement ... .................................. 2
II. PROJECT DESIGN, IMPLEMENTATION AND PRELIMINARY RESULTS ... 3
A. The India Tarai Prolect .........6...6.6 ............... 31. Existing Seeds System in India .........see... ....... 32. Objectives and Project Design .................... 43. Implementation and Findings of the PPAR .......... 5
8, Indonesia Seeds I .......... o.o .........- .s.. 61. Objectives and Project Design ........ ....... ..... 62. Implementation and Findings of the PPAR .......... 8
III. rRODUCTION IMPACT .,,, .............. ...... 8
A. Seed Production - India ......... 8B. Grain Production -India ............................ 10C. Seed Production - Indonesia ........... ......... * #....a 11D. Grain Production -Indonesia ..... .................... 11E. Cropping Intensity - Indonesia ....................... 12F. Estim,ation of Economic Impact ........................ 15
IV. INSTITUTIONAL IMPACT ..................... sees .......... 17
A. Impact on Traditional Seed Systems ........ 17
B. Institutlonal Effectiveness ...................... ..... 171. Seed Certification and Quality Control ....... .... 192. Public Sector Seed Firms ....6.6 ....... ....... off 19
This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
TABLE OF CONTENTS (Cont'd)
Page No.
C. Limitations to Institutional Effectiveness ........... 201. Seed Certification and Quality Control ........... 202. Limitation of Public and Private Seed Firms ...... 213. Public Seed Farms versus Contracted Production ... 214. Aspects of Processing Plant Design ............... 22
V. IMPACT ON PRIVATE SEED INDUSTRY .........................., 23
A. Release of New Varieties .......................-..... 23B. Range of Crops being Handled by the Private Sector ... 24C. Effects of Government Subsidies ...................... 24D. Financing ...... ...................... *** 24
VI. ENVIRONMENTAL IMPACT ... .................................. 25
A. Wheat Rust in India ............oo ... *5**** .** **** * *5B. Brown Plant Hopper (BPH) in Indonesia ................ 26
VII. PROJECT SUSTAINABILITY AND REPLICABILITY .................. 27
A. Sustainability ...... o .......... ,, , ..,,,,............. t oo 281. Sustainahility of Seed Certification ..0 ........... 282. Sustainability of Public Sector Production
and Marketing ........ .... 283. Sustainability of Private Sector Seed
1. Comments from the Ir'Aan Department of Economic Affairs ....... 352. Comments from the Indonesian Directorate General of Food
Crops Agriculture e .... .. s .... ... ... ............. , 37
Maps:
IBRD - 20357 (India)IBRD - 3284R1 (Indonesia)
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IMPACT EVALUATION REPORT
INDIA TARAI SEEDS PROJECT (LOAN 614-IN)AND
INDONESIA SEEDS I PROJECT (CREDIT 246-IND)
PREFACE
Almost two decades ago the Bank became involved in the seedindustries of India and Indonesia. Since then substantial change hasoccurred in the varieties of basic grainq planted by farmers in bothcountries. India Tarai Seeds and Indonesia Seeds I were approved at a timewhen the imports of foodgrains were causing serious drains on foreignexchange. Both projects had the general objective of increasing foodgrainproduction by improving seed availability of new high yielding varieties. Atthe time of project approval, the major potential of the new high yieldingseml -dwarf varieties of rice and wheat hadl already been proven by growingimported seed. Attention had begun to focus on ways to improve local seedmultiplication, seed processing facilities and quality control.
The Indian seed effort has heen supported by the 1969 Bank Loan ofUS$13.0 million for Taral Seeds (of which USSll.5 million was disbursed), a1976 Bank Loan of 'TS$25.0 million for National Seeds I and a 1.978 IDA Creditof US$16.0 million for National Seeds TI. Tn Tndonesia, Seeds T was approvedfor an IDA Credit of USS7.5 million in '.971 anid was followed in 1981 by aUS$15.0 million Banl. Toan for Seeds 11.
This impact evaluation report covers the India Tarai. Seeds andIndonesia Seeds I, initiated in 1969 and i971, respectively. Both projectswere completed in 197F and audited by (K) in 1979. These projects were thefirst Bank-supported seed projecvs and are the first to he the subject of animpact evaluation. Because of the 16 vears of experience involved, theseprojects are particularly sulted to an Impact evaluation. During this entireperiod, the seed systems of both countries have confronted exceptionalopportunities and a number of perplexing problems through whlch they havecontinued to evolve and search for solutions hest fitted to national needs.
This report is hased on a review of the Proiect Performance AuditReports (No. 2551 dated June 18, 1979 and No. 2800 dated Dec-mber 28, 1979),the two appraisal reports (TO-689a datedi MaV 23, 1969 d PA-85a datedApril 26, 1971) and other Bank documents. A mission to huth countries wasundertaken in lanuarv-Fehriiarv 1986 by the Operations Fvaluation Department.Mission members discuissed the impact of the projects with the respectiveauthorities in India and Tndonesia and h^ld numerous interviews with field
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staff and seed pr,oducers as well as with Bank staff that had been associatedwith these projects.
The valuable assistance provided to the mission in preparation ofthis report by the Government of India and the Government of Indonesia andall contacted staff and seed producers is gratefully acknowledged.
The draft version of this impact evaluation report was sent toIndian and Indonesian officials for their comments. Comments received havebeen actached to the report.
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IMPACT EVALUAT1ON REPORT
INDIA TARAI SEEDS PROJECT (LOAN 6i4-IN)AND
INDONESIA SEEDS I PROJECT (CREDIT 246-IND)
SUMMARY AND CONCLUSIONS
India Tarai Seeds and Indonesia Seeds I, Initiated in 1969 and1971, respectively, were the first Bank-supported seed projects and are thefirst to he the subject of an impact evaluation. Both projects werecompleted in 1978 and audited by OED in 1979. Following the 1969 Bank Loanof US$13.0 million for Tarai Seeds, the Indian seed effort has been supportedhy a 1976 Bank Loan of US$25.0 million for National Seeds I and a 1978 IDACredit of US$16.0 million for National Seeds II. In Indonesia, the 1971 IDACredit of US$7.5 million for Seens I, was followed in 1981 by a US$15.0million Bank Loan for Seeds II.
India Tarai Seeds and Indonesia Seeds I were approved at a timewhen two important conditions converged. On the one hand, the imports offoodgrains had become a serious drain on foreign exchange in both countries.On the other hand, two international research centers--CIMMYT working onwheat and maize ln Mexico and IRRI on rice in the Philippines--had beensuccessful in developing new semi-dwarf, fertilizer-responsive, high yieldingvarieties of wheat and rice, respectively.
Hence the main objective in both ptojects was Lo stimulatefoodgrain production by improving seed availability of the new high yieldingvarietieo. At the time of project approval, the major potential of the newhigh yielding semi-dwarf varieties had already been proven in both countriesby growing imported seed. Consequently both projects focused on multipli-cation of germ plasm that had already been tested locally, on improvement ofseed processing facilities, and on quality control.
Although different In various aspects, the design of IndonesiaSeeds I drew on the positive experience of the India Tarai Seeds Projectwhich had been approved about two years earlier. The incorporation of"lessons" from the Tarai experience was 'acilitated by participation of theChairman of the Tarai Development Corporation (TDC) as a consultant on theBank appraisal team for Indonesia Seeds I. Common concepts in the two proj-ects, though applied somewhat differently, were: (a) inclusion of a plantbreeding and variety testing component; (b) proximity of plant breedingresearch seed production and seed processing; and (c) R compact area for seedproduction.
Institutionally the two projecti were operated differently. In theTarai, the Vice Chancellor of the Uttar Pradesh Agricultural University(UPAU) served concurrently as Chairman of TDC. The TDC was in turn operated
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essentially as a private undertaking with a capital structure of: farmers,30%; UPAU, 30%; UP Agro-Industries Corporation, 20% and NSC, 20%. While thefoundation seed was produced on UPAU land, nmost of the certified seed wasproduced by the farmer "shareholders". In contrast, Indonesia Seeds Iinvolved three implementing entities: the National Seeds Corporation (NSC),the Central. Research Institute for Agriculture (CRIA) end the Seed Controland Certification Service (SCCS). Overall direction was to have been theresponsibility of a National Seeds Board, hut it did not play a key roleduring implementation.
The main findings of the Tarai PPAR were that the project had been
generally successfuL and the recomputed economic rate of return (ERR) at thetime of completion was 18% compared to 17% estimated at appraisal. At thattime seed production had increased from 420 tons of processed seed in 1966 toan average of over 28,000 tons per annum from 1973 onward. As a result ofthe project, it was estimated that incomes of 1,150 participating seeogrowers hal increased, as weLl as those of 2,500 seed dealers of the TaraiDevelopment Corporation and the estimated 400,000 smallholders using seed ofimproved varieties. The main finding of the PPAR for Indonesia Seeds I wasthat it fell short of its pro.iuction goals, particularly during its earlyyears. The principal project site at Sukamandi in West .Java, thougn suitablefor rice seed cultivation an.i research, In the earlv years lacked adequlatehousing, secoridarv schools or a hospital., so therr was difficulty inobtaining resident staff. Land devel.opment was delayed hecatuse of delays inprocurement of machinery And equipmenIt. Mpchanized rice production had notbeen well tested in Indonesia, ar.d the climatp and soils at Sukamandi weresuch that mechanized dotible cropping proved difficult because of the shortdry season. On the positive side, the PPAR has pointed out the effectiveSeed (.Control and Certification Service established throtugh the project aswell, as the contrihition of project-funded research in helping to preventserious production losses iTl rice from Brown Plant Hopper (BPH) infesta-tions. The PPAR, w-.-itten In 1979, considered Indonesia Seeds I onlv margin-ally successful. The recompuitecl ERR at completion was I]T versus the 58%estimated at appraisal.
Tiring the seveni years since prolect completion, the seed systemshave continued to evolve il hoth countries, assisted in part by two follow-onprojects in India and one in Indonesia. In India the two follow-on projectshave modified the Taral approach, and extended the area by supporting aNational Seed Program (NSP) to develop a decentralized network of seed pro-duction, processing, storage and marketing agencies. The Tarai project assuch has heen incorporated into the Uttar Pradesh State Seed Corporation(SSC) and has received further support, including finances for constructionof two additional seed processing plants under the National Seeds II proj-ect. However, the Uttar Pradesh SSC, along with other SSCs that constructedadditional processing facilities under NSP I and NSP II, now has capacitybeyond cturrent demands. In Indonesia, Seeds r focused primarily on rice andon the island of Java, the main rice-producing area. Seeds II has expandedthe focus to operate nationwide and to inc lude fouir main ariditional. crop.--maize, soyheans, wriundniits nrid mIInTleaol
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During this period, farmer participation in the seed industry inboth countries has been prima-ily in the form of contract production. Thedominant firms in processing and marketing of certified seed have been con-trolled by the provincial and federal governments. The involvement of morethan one publically controlled firm in each country has provided an elementof competitior. However, because of various inteiventions with resoect topricing atid subsidies, the devel pment of private seed firms has been con-strained.
The Impact Study finds that, on balance, both prolects have beenFuccessful in achieving their broad oblectives, although adequate data arenot availahle to confirm or reject the rate of return estimates of theappraisals and Lhe PCRs. The Study recommends that ir fututre seed projects,specific field trials should be carried out to verify the benefits attributedto the use of certified seed.
A number of important lessons have been learned or confirmedthrough the prolects that should be kept in mind by Bank staff in consideringfuture seed projects in these and other countries.
Of particular relevance with respect to market demand:
(a) Initial demand for certified seed depends primarily on a source ofnew already-proven hiTh yielding germ plasm. In these projects,the plant breeding research of CIMMYT on wheat and IRRI on rice,and their continued cooperation with national institutions, was akey element Ln justifying the expansion of processing capacity forthe seed industry. However, the lack of outstanding new HYV inrecent years has constrained the deman.l for certified seed.
(b) Maintenance of demand for certified seed in the case of self-pollinated crops such as wheat and rice, depends primarily on thefarmers' perceptions of the economic advantages of buying newcertified seed each year versus keeping their own seed. When thereare new varieties that have proven yield advantages, farmers tendto buy new certified seed. In the meantime, they save their ownseed each year until there is -'ear evidence of decreasing yields.Consequently, appraisal projections of seed demand are easilyoverestimated as has been found in India under National SeedsProjects I and II. Responding to this, proposals for a thirdnational seeds project in India include provisions for strength-ening plant breeding research and for extension services to in.provefarmer seed plot techniques in producing their own seed of estab-lished varieties.
(c) Surges in seed demand may occur from time to time as the result ofa build-up of damaging insects or disease organisms such asoccurred in Indonesia with BPH and the virus diseases for which it
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is the vector. Over time, a series of varieties with improvedgenetic resistance have been bred and released to seed producers,and these have provided a series of demand surges for processedseed.
(d) For seeds such as hybrid maize, which loses hybrii vigor in subse-quent generations, or soybeans, which require special handling tomaintain seed viability, many farmers will purchase certified seedeach year.
(e) Another ma'or factor that influences demand is consistency ofsupply over time in terms of: genetic and physical seed quality,timely availability of seed at local outlets, and consistent pric-ing at reasonable levels. However, in some instances, to encourageuse of certified seeds, governments have subsidized seed distrihu-tion to the extent that farmers have simply found it cheaper topurchase certified seed each year than to save their own. Asgovernment policy, this type of subsidization should be discouragedbecause of the market distorsions which are introduced.
With respect to national s2ed policy:
(f) The optimum roles of the private and public sectors may vary fromcountry to country depending in part on the stage of development ofthe seed Industry. Usually most funding for crop breeding researchwill be from the public sector because the costs of such long-terminvestments are difficult to recover by any single firm. Qualitycontrol and seed certification is also a key public role which mustbe independent from other seed activities in order to providefarmers with assurance of genetically pure seed of the varietyidentified on the label.
(g) The private sector is frequently more adept than government in seedmultiplication, marketing and distri,ution, and should be encour-aged.
(h) Government must, however, provide the basic legal and policy frame-work to encourage progressive farmers, cooperatives and privateseed firms to make long-term investments in the seed industry.Pricing policies must allow an adequate margin to the seed growers;subsidlzation of the public sector is a potential threat to thegrowth and usefulness of the private sector.
With respect to processing plants:
(i) Design and sizing of future plants should take into account keyaspects of a country's overall seed system including best sites forproduction of various seeds, best natural sites for seed storage,
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convenience to seed producing and distribution areas, transportfacilities, etc. When the first seed projects were initiated,there was a lack of experience wit', marketing and demand analysis,and with respect to appropriate size, location and design of pro-cessing plants for conditions of developing countries in thetropics. Plants were frequentl) over-designed and too sophisti-cated. Lessons cat be learned from this experience and from somesmall but very efficient private plants and should be taken intoaccount in future designs. Particular attention should be given tothis aspect in selection of the consulting engineer.
With respect to Bank Involvement:
(t) Bank involvement in the seed sector generally occurs because of anidentified urgent need for better availability of improved seeds.However, at the time the need is identified there is usually littleinstitutional capability in place. Rate of return estimates mayindicate a high potential return, but if a realistic assessment ofrisk were made taking into account the lack of institutional capac-ity, the results might be quite modest. For example, in Indonesiathe objectives of the first seed project included establishment ofa National Seeds Corporation, creation of a Research Branch toensure an adequate flow of high yielding plant variet' s, enactmentof seed legislation and establishment of a governm t regulatoryorganization to administer the law. Indonesia now has a muchimproved institutional capacity hut this is still not the case inmany countries that need improved seed systems. For technicalback-up the Bank does not have a full-time seed expert nor a sourceof regular consulting facilities with the full development exper-tise needed. This merits priority attention.
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IMPACT EVALUATION REPORT
INDIA TARAI SEEDS PROJECT (LOAN 614-IN)AND
INDONESIA SEEDS I PROJECT (CREDIT 246-IND)
I. BACKGROUND
1.01 This study is an effort to assess concurrently the imnact of thefirst two seeds projects supported by Bank funding. The impressive sutccessboth of India and Indonesia in reducing foodgrairi deficits in recent years,through substRntial Increases in prodtuction per unit area, make!; thlese twoseed projects of specia'l interest for an impact evaluation.
A. The Seeds Sector
1.02 Genetic DesiLg. New improved varieties are the foundation of agood seed program whether the varieties are the result of testing a largenumber of varieties brought in from abroad or are the result of a good localbreeding program. In either case, the plant breeder sets priorities for thecharacteristics tco be improved and then isolates gene pools (seeds) whichhave the capability of transmitting to sabsequent generations such charac-teristics as Ihigh yield, resistance to specific diseases and insects, betterprotein or higher oil content, drought or flood tolerance, etc. Ns soon as avariety is developed that is superior to those current.ly i u use, it isreleased and research c-ontinues in or(der to further improve it, Perhapsadding resistance Lo a new hiotype of an insect or race of rust. Thus, thedevelopment of varieties is a continuotus and ongoing process to meet thechallenges of nature or special market demands. When the plant breeders havesuccessfully creaced a new variety of a given crop, there is then lustifica-tion for a seed enterprise to maintal.n and multiply it for as long as itmight be used and in such quantities as the market would demand- Both Indiaand Indonesia now have breeding programs at various stages of development andthey collaborate with the international agricultuLral research centers.l!
1.03 Seed Multiplication. The standard procedure followed internation-ally is to have four generations of seed: breeder, foundation, registeredand certified. Breeder seed genetically represernts the end product or genepool which the plant breeder has evaluated extensively and found to besuperior in one or more characteristics. It is multiplied In small quanti-ties under the supervision of the plant breeder. Breeder seed is cthe firstmajor seed increase of the variety and is again subject to very careftl
1/ See for example, Indonesi a and t.he CGrAR C(ertE rs: A Stuty of theirCollaborationt in Agricultural Research' hy Barrv Neste]. CMTAR StudyPaper No. 10, IBRD, Washington, D.., .
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supervision. If the production meets all minimum standards it will becertified and sealed as foundation seed. Its progeny can either beregistered or certified seed. If it is registered seed, then its progeny canonly be certified seed. Certified seed cannot be re-certified. Thecertified generation is the one used for commercial production. To start thecycle again the seed grower must either purchase foundation or registeredseed. Thus, the agency maintaining and multiplying foundation seed must havegood marketing intelligence data at hand to make wise decisions relative toanticipated quantities of foundation seed which must be maintained andmultiplied to meet fluctuating market demands. For hybrids there will bel0OZ replacement each planting season. For self-pollinated varieties thereis often high demand when first released and then a substantial drop indemand in later years if the farmers only replace their seed every three orfour years. In other cases, where farmers plant back-to-back with differentvarieties, they may buy all of their seed needs each season.
1.04 Foundation seed maintenance and multiplication of publicly releasedvarieties is a public responsibility. In Ind-.a, it was the responsibility ofits NSC, the State Seed Corporations and private seed companies which haveequal access to public sector-produced breeder seed. In Indonesia, both itsNSC and the provincial seed farms assumed this role.
1.05 International Transfer of Technology. During the early 1960s, twoInternational Research Centers were established: one in Mexlco for wheat andmaize (CIMMYT) and one in the Philippines for rice (IRRI), The success ofthese first centers led to the creation of others for a total of 13 which arethe members of the Consultative Group for International Agricultural Research(CGIAR).
11.06 Both CIMMYT and IRRI gave top priority to plant breeding focused onhigher sustainable yields. Within a few years, their scientists were suc-cessful in developing semi-dwarf varieties that were resistant to lodging,responsive to high rates of fertilizers and photosynthetically efficient,enabling the plant to produce more food in less time. These varietiesgenerally had a type of foliage that took better advantage of the sunlightthan the traditional tall types. They also required a shorter growingperiod. For example, traditional rice varieties took anywhere from 150 to260 days to mature, whereas HYVs would mature in 110 to 125 days with betteryields.
1.07 In-country Modification of the Technology. Scientists in bothIndia and Indonesia have benefited from collaborative work with IRRI andCIMMYT. Both of these international centers sent germ plasm of their newmaterial for evaluation under a wide range of conditions. When a certainline performed well, the collaborating country could: (a) release the linedirectly, avoiding thereby many years of breeding work to develop a newvariety in-country, or (b) use this material for further selection to developvarieties more suitable for specific environments.
B. Bank Involvement
1.(8 A key component of the agricultural. strategy of most countries is arapid increase in the yield and production of basic gralns and other crops.
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To support these efforts, over the past two decades the Bank has attempted invarious ways to assure availability of good quality seed of improvedvarieties. The efforts for improving genetic quality have included supportfor plant breeding at several of the international centers associated withthe CGIAR as well as funding for several national research projects. Tobolster the availability of quality seed at the farm level, over the past 16years Bank lending has also been expanded to i;.clude projects specificallyfocused on seed multiplication, quality control, processing and distribution,and strengthening the institutions involved. During this period the Bank hasfinanced 13 seed projects in 9 countries and, in addition, has financed seedcomponents, typically with total costs less than one million dollars, in alarge number of other agricultural projects. While there is generalagreement that the potential returns to these projects are very high, manyproblems have heen encountered in implementation, so it is of particularinterest to examine whether some more generally applicable lessons can beextracted from this experience.
II. PROJECT DESIGN, IMPLEMENTATION AND PRELIMINARY RESULTS
2.01 Governmental support for these projects stemmed in both cases fromtwo main facts: (i) a substantial balance of payments drain to pay forfoodgrain imports, and (1.) a new awareness of the potential of a strategyfor increasing agricultural production based largely on new high-yieldinggerm plasm of wheat emanating from CIMMYT and rice from IRRI. Further, ithad been noted that progressive farmers were taking up the new technologyeagerly but that a significant lag existed between the high yields alreadyachieved by a few farmers and the lower yields of others.
A. The India Tarai Project
1. Existing Seeds System in India
2.02 At the time of appraisal the Indian seed industry was little deve-loped. The private sector produced small quantities of high-value flower andvegetable seed. The public sector attempted to disseminate improved seedfrom small, government-run farms located in each Community Development Block,with little success. The difficulties of managing so diffuse a schemeresulted in poor quality seed an,' an imbalance in supply and demand.
2.03 The release of India's first maize hybrids in 1961 had been fol-lowed by hybrids of sorghum and pearl millet, then by high-yielding semi-dwarf rice varieties and finally by the high-yielding semi-dwarf wheats. Allwere highly responsive to higher input use, gave greater profits, and createda stro g demAnd for quality seed.
2.04 In response there was a rapid growth of private sector seed compa-nies. In the public sector, the Government of India decided to create a cen-tral seed organization and to prcmote legislation to establish quality
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contr^l. In 1963 NSC was established and in 1966 a Seeds Act was passed.NSC was charged to promote seed industry development, from production throughprocessing, storage and marketing, and to establish a system of qualitycontrol.
2.05 Through the mid-sixties seed output expanded rapidly--the certifiedseed production area grew from 360 ha to 35,000 ha between 1963/64 and1968/69, mainly in the private sector. During this period NSC was concernedmainly with foundation seed production and, after the passing of the SeedsAct in 1966, with seed certification.
2. Objec:tives and Project Design
2.06 By initiation of the Tarai Seeds Project in 1969, NSC occupied astrong position in Tnoiia's growing seed industry. Hlowever, improvementsbrought about bv NSC did not vet asstire seed production of highest quality.Typically, seed production and distrihution were undertaken by scatteredinefficient farms which were rarely equipped with proper processing orstorage facilities. Arrangements for breeder stock and foundation seed stockwere also weak. The Taral. Seeds EProlect was conceived to address theseweaknesses through the com'ined efforts of NSC, t.he IJttar PradeshAgricultural University (fiPA;) at Pantnagar and neighboring progressivefarme rs.
2.07 As appraised, the project entailed the develoipment over five yearsof qeed farms on ahout 18,600 ha 2 ' of land in the Taral region of UttarPradesh ( UP) in northern In(Ia. At fuill development, certified seedprodtiction was proj.ected tf reach 46,0()O t:ons per annum--sufficient to sowover 001,000 ha each of rice and wheat, and over 11.2 mi1llion ha of otherfc o?1grains. Pro ject co.-ponernts irc luded
-.) in-farm (level!tpment (I.e., land leveling, irrigation and tuhewellelectrificatior-n) on some 400 farms;
(b) provision (if farm machilnerv, ferti lizer and fouindiat ion seed topro,.ect farms;
(c) execution of soil and topowgrapvl- surveys of seed firms
i f provis inr of oeed pro,-esI -P g facI iIrs an d
(?J) credit and technical assistance for the lh)nve puirposes.
2C P0' . Oflitfl''' ,;V IJ nQdSO't l irj the fro lf(:S do-uments] #'1 V r he * fst
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The Bank Loan (614-IN) of US$13.0 million was for 30 years, including 10years' grace, at an interest rate of 6.5x.
3. Implementation and Findings of the PPAR
2.08 The Loan Agreement was signed on June 18, 1969, with projectcompletion expected by December 31, 1974. Subsequently, the project ClosingDate was extended twice, for two years (to December 1976) and then for oneyear (to December 1977). Total withdrawals were US$11.5 million, leaving anundisbursed loan balance of approximately US$1.5 million which was cancelled.
2.09 The project was considered generally succe-sful in achieving itsobjectives. At project completion, annual certified seed production wasaveraging 28,000 cons. To produce this quantity of seed, 6,883 ha of landwere leveled by the end of 1977 (versus 14,575 ha prolected at appraisal),tubewells were constructed to serve 10,526 ha (as envis6ged at appraisal),but the underground water distribution systems were not installed (a commandarea of 16,600 ha was assumed at appraisal). In additiu.i, 196 km of powertransmission lines were built (in line with appraisal estimates). The farmmechanization program as implemented was successful (though different fromappraisal projections) and fertilizer was provided only at much higherprices. Processing capacity was provided for 53,000 tons of seed byexpanding three existing plants at lower cost instead of constructing two newplants with a total capacity of 45,000 tons (as envisaged at appraisal). Thenumber of Tarai Development Corporation (TDC) distributors and dealers forseed marketing exceeded 2,500 In 1977 (no specific target was given duringappraisal).
2.10 Several major problems and changes of original plans occurredincluding:
(a) the idea of constructing new seed processing plants was graduallyabandoned in favor of expanding capacities of existing seedprocessing plants;
(b) the absence of suitable contractors for land leveling forced theproject to arrange for alternatives (UPAU and State Agro-IndustriesCorporation) to carry out the work;
(c) legislation introducing ceilings on farm sizes contributed to lowerthan projected investments in land leveling and no investment atall in underground irrigation water distrinution systems;
(d) crop areas deviated from plans as follows: (i) for maize, theBhabar area, where maize was to be grown, was much less developedthan anticipated due to the decision to drill fewer deep wellsthere, while in the main project area maize suffered from disease,(ii) for soybeans, due to a change in seed demand, and (ili) forwheat and rice, areas were much larger than projected;
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(e) actual mecharization differed from appraisal assumptions partly dueto a larger number of smaller farming units participating andpartiy due to other cheaper funds available for financing farmmachinery;
(f) high standards ot TDC management declined temporarily during thesecond half of the project period;
(g) toward the end of the project, farmers shifted from seed productionto other crops (including sugar cane) due to a weakening of seedprices making them less competitive with alternative crops; and
(h) considering the very slow prce of disbursements under TDC, theGovernment of India suggested that the Tarai loan halance (US$1.5million) be cancelled and that future requirements be addressed inthe context of the follow-on project.
2.11 Despite the above-mentioned problems and changes from the appraisalconcept, the project's recomputed ERR was 18%, compared to 17% estimated atappraisal. Incomes of the 1,150 participating seed growers had increased asa result of the project, as well as those of the 2,500 TDC dealers and theestimated 400,000 smallholders using the improved seed. The project alsoserved, in part, as a model for two follow-on prolects covering most ofIndia.
2.12 Several factors contributed to the project's success. First, thetiming of the project was appropriate as there was initially great farmerdemand for seed of the newly released HYV, and at that time TDC faced no realcompetition in producing and marketing this seed. Second, the Tarai area hasa suitable climate and good soils conducive to producing quality seed.Third, the project had highly motivated and well qualified management and agood organizational structure. Fourth, seed production was already inprogress in the Tarai area prior to the project, pro"tding UPAU's SeedProduction Division, Progressive farmers and UP State marketing agencies withsome experience. Fifth, the project received support from virtually everygroup or agency affected by it.
B. Indonesia Seeds I
1. Objectives and Project Design
2.13 The project was to he the initial development phase of a modernseed industry in Indonesia. It would locus primarily on rice but smallquantities of maize and soybean seed would also be produced. The followingwere the broad ohjactives:
- establishment of a National Seeds Coi'poration (NSC) as an autonomousbody responsible to Government through the Minister of Agriculturefor seed production, processing, packaging and marketing ofcommercial seed, assisted by managing agents and including:
(a) development of 2,450 ha of Sukamandi Estate as a mechanizedand irrigated seed production farm to be operated by NSC; and
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(b) establishment of NSC facilities in threc seed districts inEast and Central Java for collecting and processing seedproduced by farmers in selected villages under contract toNSC, and the provision of credit facilities to such farmers;
- creation of a 250 ha semi-autonomous Research Branch of the CentralResearch Institute for Agriculture (CRIA) at Sukamandi to ensure aflow of high-yielding plant varieties to support the seed productionprogram and initially to provide a seed certification service--tocarry out these functions, qualified and experienced staff would beemploved;
- enactment of appropriate seed legislation, and establishment of asmall government regulatory organization to administer the law and toprovide a permanent seed certification service; and
- development of facilities at Sukamandi by NSC and the CRIA SukamandiBranch for training their staff, government extension staff andfarme-s.
The Minister of Agriculture, advised by the National Seeds Board (NSB), wasto have overall responsibility for the project, and agencies of the Ministrywould be responsible for its implementation.
2.14 The project was designed to rehabilitate a large estate previouslyunder private operation into a tract of some 2,450 ha for seed production and250 ha for a research station. The seed to be processed and marketed fromthe Sukamandi site (province of West Java) would be produced primarily onland under the control of the Sukamandi branch of NSC. There would be threeother districts (Klaten, Batang and Kepanlen) which would serve as satellitecenters in the provinces of Central and Last Java where seed would beproduced under ccntracts with farmers. A Seeds Act would he promulgatedwhich would embrace a Seed Certification Institution, Seed Policy (includingformal variety release) and Truth of Labelling.
2.15 A system of marketing and distribution of seed would he set up andoperated by NSC. The provincial seed farms would be phased out. Appropriateconsultants would be used both for the development of the seed productionprogram including processing plants, etc., and the scientific dimension ofthe Sukamandi research center of CRIA.
2.16 Since the Sukamandi area is located within the Jatiluhur irrigationdistrict, which was being rehaoilitated under Credit 195-IND, it was plannedto use the district facilities and expertise to expedite land preparation forirrigation of both the seed farm and the research station. In this way bothinstitutions could become effective at an early date. There would be aresettlement of the 860 families who were ex-employees of the originalprivate estate in August/September 1971 and May/June 1972. There would beseven scientific expatriate consultants located at the research center andmanagement consultants with NSC. A marketing consultant was to assist in
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setting up a Marketing and Distribution Program. There would be a NationalSeeds Board which would be concerned with planning, formulating policies fordevelopment and operation of a national seeds industry. It was anticipatedthat a Seeds Law would be enacted at an early date. The total project wasestimated to cost US$12.0 million equivalent. The Bank would finance USS7.5million or 62.5% of the total cost.
2. Implementation and Findings of the PPAR
2.17 At project completion, Indonesia Seeds I was considered onlymoderately successful. The ERR was reestimated at 11% compared with 58% atappraisal3/ and this high only because it was favorably influenced by thesharp rise in the relative world price of rice in the 1972-75 period. ThePPAR concluded that the project fell short of its production goals primarilybecause of poor preparation, design and management. It indicates thatinappropriate production technology was specified for the seed farm atSukamandi and that staffing of the project with expatriate and Indonesianscientists was slow because of the remote location of thie main project site.On the positive side, the PPAR acknowledges that an effective Seed Concroland Certification Service was established through the project and contlnuesto be one of the most successful components. It also points out that throughthe research and seed multiplication complex at Sukamandi it was possible toprevent serious rice production losses that would have occurred as a resultof BPH infestations. Finally, it was concluded that NSC management should beconsiderably strengthened.
III. PRODUCTION IMPACT
A. Seed Production - India
3.01 In India, the Tarai Seeds Project in the State of Uttar Prade&'(UP) had a substantial impact on seed production which increased from 42utons of processed seed in 1966 to an average of over 28,000 tons per annum atfull development since 1973. During this period the Indian seed industry wasstudied in depth by a Government of India (GOI)-commissioned Seed Review Teamin 1969 and reviewed further by the National Commission on Agriculture in1971. Based on their findings, and the encouraging results of the Taraiproject, the GOI decided to reorganize and expand the seed industry. A work-ing group was established in 1975 to prepare proposals for a National Seed
3/ The 58% estimate at appraisal was based on the normal assumption that
each year's net benefits would be reinvested for the remainder ofproject life at the internal rate of return. The overall return -wasalso calculated on the assumption that annual net benefits would bereinvested, not at 58% but at 20% and, alternatively, 15%. Thisassumption reduced the estimated return to 41% and 37%, respectively.
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Program (NSP). The group proposed that the states accept greater respon-sibility. Hence, under India National Seed Projects I and II, State SeedCorporations (SSCs) were to be established in nine States using the basicparameters which had been successful in the Tarai project. In order toretain the Tarai project and build a more ccmprehensive seed program for theState of Uttar Pradesh, TDC was restructured to become a component of theState Seed Corporation of Uttar Pradesh. The name of this Corporation becamethe U.P. Seeds and Tarai Development Corporation, Ltd.
3.02 Table 3.1 shows the performance of the new SSC during the firstfour years of the current decade.
Table 3.1: Certified Seed Produced bythe U.P. Seeds and Tarai Development
3.03 This longer term impact of the sequence of projects on productionof certified and quality seed throughout India is indicated in Table 3.2 withdata from the 1984-85 Annual Report of the Indian Ministry of Agriculture andRural Development.
Table 3.2: Distribution of Certified/Quality Seed in all India1979/80 to 1983/84(metric tons)
3.04 The SSCs developed under NSP I and NSP II have provided a substan-tial increase in seed processing capacity, to the extenc that for the momentat least most of the SSCs are suffering from slow expansion of demand,under-utilization of plant capacity and low profit margins, The MaharashtraState Seeds CorporatLon (MSSC), established under NSP I in April 1976, is anexample of one of the wore successful SSCs. MSSC has 16 well equipped pro-cessing plants. Its gross income increased from USS3.5 million in 1979 toUS$22.5 million in 1985. It handles a wide range of crops which includehybrids and varieties of sorghum, millet and cotton, varieties of wheat, andmany oil seed crops. MSSC is also a major producer of jute seed for theStates of Bihar and West Bengal which are major jute production states buthave climates not suitable for seed production. The corporation is currentlyinstalling facilities to de-lint its cotton seed and thus reduce seed-carrieddiseases and increase germination percentage.
B. Grain Production - India
3.05 India's advance from large-scale importation of foodgrains toself-sufficiency has been the result of many factors in &ddition to the useof improved seed. These include the major initiatives taken by the Govern-ment of India in the fields of irrigation, fertilizers, farm credit, agricul-tural research and development and the like. There is no good measure of thecontribution of each; however, the existing evidence would suggest that theavailability of new high-yielding varieties and the broad distribution ofquality seeds made possible by the Tarai project and its successors, havebeen key elements in India's success. The extent of success is shown inTable 3.3. In 1985, India had an inventory of some 30 million tons of food-grains in excess of its anticipated consumption. Per hectare yields of riceincreased 44% from 1960-61 to 1983-84 and yields of wheat increased 117% inthe same period.
Table 3.3: Foodgrain Production in all India,1960/61 to 1983/84
3.06 In Indonesia, over the ten years 1975-84, the total tonnage of riceseed produced (Certified and Labelled) increased from 2,898 to 43,937 (Table3.4). It is estimated that the annual total seed requirements during thisdecade were approximately 168,336 tons. Approximately one-third of thisamount, or 56,112 tons, was purchased by farmers and. the balance was fromtheir own production. Within this frame of reference the total supply of43,937 tons in 1984 was beginning to ap roach the anticipated marketrequirements. However, NSC advised that it was having difficulties inproviding sufficient seed of the variety Cisadane, whose popularity with thefarmers had increased more rapidly than anticipated in some cases. Bettermarketing surveillance is clearly needed in order to be more responsive tomarket demand.
Table 3.4: Production of Certified and LabelledHYV Rice Seed in Indonesia, 1975-84
3.07 Table 3.5 reflects tha start which NSC has made on other crops,;qhich is modest but growing. The Government's current strategy is toincrease produtction of these crcops, particularly maize and soybeans.
Table ..5: Production of Certified and Labelled Seed inIndonesia, 1982-84
Year Maize Soybean Peanut(tons) (tons) (tons)
1982 68 21 151983 406 505 541984 2,798 464 329
D. Grain Production - Indonesia
3.08 During the 1975-84 decade, annual rice production rose from 16 to25 million tons of milled rice. BY L984/85 Indonesia had reached self-sufficiency in rice production. Tabre 3,6 ineicates that the total area in
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rice grew only slightly during this period, while the area planted to HYVs inthe main rice-producing areas grew from 51X of the total in 1975 to 82% in1983. During this period, NSC multiplied and maintained 39 different ricevarieties.
Table 3.6: Total Area in Lowland and Rainfed Bunded Rice;Percentage of Area in all IHYVs, and in PB36 and Cisadane.
3.09 Currently the most popular varieties are PB36 and Cisadane. Thepercentage of total hectarage planted to these two varieties is shown inTable 3.6. Cisadane is a longer maturing variety than PB36. When PB36 firstbecame popular for its BPH resistance alid high yield, it presented a problemin that it would ripen in January dur;'r.g heavy rains. Th' rainy seasonusually extends until late April or early May, but frequently there is abreak in February. Thus, using the two varieties--planting Cisadane first soit would ripen in February and then immediately planting PB36--had a majoradvantage in harvesting. However, genetically pure seed was necessary tomeet this demanding timetable.
E. Cropping Intensity - Indonesia
3.10 In Indonesia, two crops of rice during the rainy season became astandard pattern during the decade of the 1970s with the introduction andwide usage of the short season HYV. Frequently, this was followed in therotation by another crop such as maize, soybeans or mung beans, on residualmoisture. Where irrigation was available, a third crop of rice could begrown in some cases. Hence the cropping intensity cuuld be dramaticallyincreased
3.11 The total area in rice grew only slightly, fluctuating between 8and 9 million hectares per year, while total production increased from about12 million tons (milled rice) in 1967 to 24 million tons in 1984 and over 25million in 1985. The average yield expressed in milled rice increased fromapproximataly 1.7 tons to over 2.6 tons per hectare. This trend is shown inFigu-re 3.1.
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3.12 During the period of 1979-84 the annual production growth for ricewas about 6X. The rapid increase in production has been attrihited tosubstantia] yield increases mainly in Java and Bali. In 1981 some 17 millionfarmers participated in various intensification programs using HYVs and hadan average yield of 3.8 tons/ha per crop. These changes in degree ofintensification were primarily in lowland areas.
3.13 New approaches were also possible in the 'ipland rainfed areas. Theshort season varieties of rice permitted flexibility in cropping patterns.Table 3.7 shows how new cropping patterns produced douhle and more proteinper hectare than traditional cropping patterns. These were rice-based andgot their impetus from the short season PB36 which is adapted to upland aswell as lowland condidions. Once improved and adapted varieties of the othercrops are developed, a much higher total production per hectare per year canbe expected.
Figure 3.1
Million Hectaires ons!. rrecrtre M ,
44
A1 f 0. t i t 4C-s a ;_ . N _ 1_
60o 7 8C 0 'G du rear year
Increases in area y!ea o no productior, of 'ce ir C rcaonesia :Q60-3 ieoira io -'' 1ener s ,r.' .e' ,re enerai for,Fooc CroPs ard Central Bureau of Stotistics
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Table 3.7: Yield of Crops, Calories, and Protein from AlternativeCropping Patterns in Year-round Cropping Systems
Source: Science and Rice in Indonesia, 1PSAlD, 1985, p. 78.
3.14 Figure 3.2 shows how cropping patterns can be engineered tinder up-land conditions to take advantage of aval.able moisture in keeping with themoisture requirerients of a crop. En lowland areas, where irrigation wasavailable for nire months per year, two successive rice crops of a varietylike PB36 could he harvested within 26/ dIays, producing average yields of 6.8tons per hectare in the first crop and 5.7 tons per hectare in the second.There was normaLly sufficient time nnd water left to grow a soybean crop.Previously only one long season ri.:e croi) was grown in the same time frame.Another system, where only five months of irrigation was available, used adirect-seeded short season rice varlety lust before the rainy seas)n start-ed. It was followed by a short season transplanted variety. These two cropswere followed by a short season drouight-resistant legume like cowpeas. Thisintensification was expedited by availability of seed of appropriate varie-ties.
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F. Estimation of Economic impact
3.15 As arpraised, the prolected rates of retuirn for the two projectswere quite diff2rent: 17T for the Tarai project and 5P7 for Inlonesia SeedsI. At completion, the Taral estimate was revised slightly unward to 1IA4 an.dIndonesia Seeds I revise,r shArply downward to 1l0. The differences reflect:(i) different hases for the tnitial estimates, as well as (ii) some indica-tion of relative suiccess during the disbursement period. It is acknowledgedthat these estimates are very imprecise. However, if one accepts the assurmp-tions of the PCR, Then the e;timated net henefits generated since completionare hroadly consistent with earlier projections and the ERRs reestimatecl ataurdit can he retainerd as current best estimates. However, it shoiild he keptin mind that the ERlR estimates are' verv sensitive to changes iln unierlivgassumpttons. Fu..r example, the P'PAR for Indonesia Seeds I indicates that ifestimated henefitq drue to avoided crop) losses were inc-lulded, this wouvld haveproducedl an ERR of 28Y. This type of estimate Is hy nattire suhject to alarge margin of error because of the leverage of slight errors in vield esti-mates applied to the large nutmber of hectareq involved. Improved est'mategwotildl require careful farm level research focused specifically ol1 meas-uringthe Incremrental vieldt of certifiedt seed over farmers seed.
Figure 3.2
2'-
ct Nov Dec ,eb Mar Apr may A,g e
.- rrD>*7 / ~~~;; r,a 'ice /t ,eon2. Ct'ne 7
. Irh c rqa g corrCu 7 C -rr
s ,^ rwir7Cz7 PI~ ~ ~ ~~ce // ~ <
F77.7
- c . ; r ; -. er-
., ' o -er- .. r. i'' .r. :'ea. -: . I .,t ,Ei rc rj r?e-
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3.l1 In the case of Tarai, benefits were estimated using a typical seedfarm as a model and taking into account only those benefits perceived asarising directly from the investments, nqmely:
(a) increased value of seed over commercial grain production;
(b) increased seed production due to on-farm investments in landleveling and irrigation; and
(c) reduced seed farm operating costs due to mechanization.
3.17 This procedure reflected the focus of the Tarai project ondeveloping on-farm seed production and seed processing in a specificgeographic area--the Tarai area of Uttar Pradesh.
3.18 In contrast, Indonesia Seeds I was defined in broader terms as theinitial development phase of a modern seed industry for the country. Itincluded the establishment of a National Seed Corporation, creation of aresearch branch of CRIA, and enactment of appropriate seed legislation aswe'l as the major project investment in development of the seed productionfarm and seed processing facilities at Sukamandi. Thus, it was consideredthat the main project benefits would be increased national rice productionand related foreign exchange savings brought about by higher paddy yields andbetter milling outturn through the use of project-produced rice seed. It wasestimated that when the new seed stream reached full production (1977/78),the incremental benefits would he some 320,000 tons of rice resulting inforeign exchange savings of US$28 million per year; yield improvements wouldbe 10% in the first season of seeding, falling to 7-1/2% during the secondand 5% in the third.4 / Valuing the additional rice output at the US$87/tonworld price forecast by the Bank for the late 1970s, the project's economicreturn would be 58%.
3.19 The reestimation of ERR at project completion for Indonesia Seeds Ifollowed essentially the same methodology used at appraisal. The mainfactors accounting for the sharp reduction were: (i) a 90% overrun in
4/ Other benefits not taken into account in calculating the ERR were: seedof better quality and purity that should ensure a more homogeneous grainwhich could lead to an increase in milling yields estimated to be ashigh as 4%; disease and insect resistance leading to healthier crops;and better utilization of farm inputs. The appraisal estimate, whileincluding downstream benefits, was limited to the production benefitsdirectly attributable to increased yields from the new seed stream.
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project costs, due primarily to price inflation; and (ii) the slowdevelopment of NSC seed production and processing which had reached only 20Xof the appraisal estimatE by 1978.
3.20 During the following years, the NSC continued to increase its riceseed production, but its share of the national total decreased (Tahle 3.8).
Table 3.8: Total Rice Seed Production in Indonesia1981/82 - 1984/85
3.21 During this period, the Indonesian Government encouraged the expan-sion of seed production on provincial seed farms and among private seedgrowers and cooperatives In order to speed up the multiplicatlon of BPH-resistant varieties. This was facilitared by investments in research andseed certification that were part of the project accoujnting for 1.8% and2.1% of total project costs, respectively. Research staff played a "key"role in selecting and field testing HYV varietles for resistance to attack byBPH (see also Chapter VT). The seed certification service, through its fieldinspection, lahoratory testing and seed labeling, estahlished qualit7 controlthat made it possible for the seed industry to expand capacity heyond thelimitations of the NSC olants so that today 65%/ of tne rice seed 1i producedby private seed growers, cooperatives and provincial seed farms (Table 3.8).
TV. INSTITUTIONAL IMFACT
A. Impact on Traditional Seed Svstems
4.01. Neither India nor Indonesia had a significant seed industrv priorto the 1960s. With the advent of plant breeding research and the resuitingHYVs there was a surga of interest in producing and merchandising seed.
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4.02 In India, the seed industry developed rapidly in the 1960s andfarmers actively exchanged seed of new self-pollinated crop varieties.However, within a few years, many varieties became badly contaminated throughadmixtures and lost their genetic integrity as varieties. In the face ofdecreasing demand for this seed of variable quality, production exceededdemand and many seed firms went bankrupt in the late sixties at the time theTarai project was being conceived.
4.03 There was a revival of interest in the Indian seed industry in theearly seventies as the Tarai project got underway. During the interim, aseed law had been enacted and a seed certification program had begun toprovide assurance and documentation of varietal, purity.
4.04 In Indonesia, several varieties of rice had been developed hy theMinistry of Agriculture in the 1950s. In order to mtultiply and distributeseed of these new varieties, Provincial agricultural officials used landbelonging to the Agricultural Schools whilh subsequently became known asProvincial seed farms. As demand increased beyond their capabilities theywould contract with individual growers. Transportation infrastructure waspoor. The seed farms made money when a new variety was released, hut hadgreat diffictulties in the interim. Quality varied from one region toanother, usually correlated with adequacv of the provincial budget and thetrairtng level of personnel.
4.05 When Indonesia Seeds I was conceived and implemented, theprovincial seed farms were to be phased out in favor of NSC. However, whenthe BPH epidemic threatened, NSC was not ahle to multiply and distribuite alarge enough volume of new BPH-resistant varieties to counteract thethreat. Consequently, the Government used alL of the seed multiplicationresources at its command, which included 350 provincial seed farms. As aresult, in 1977/78 sufficient seed of PB 36 was increased to plantapproximately 900,000 hectares in 1978/79. This led to the containment ofBPH to endemic proportions and was the beginning of Indonesia's move to self-sufficiency in rice. As a result of the successful participation of theprovincial seed farms, the Seeds II project has now provided some assistanceto upgrade these seed farms.
4.06 Subsequently two other semi-government corporations have been givenseed increase and distribution responsibilities. P.T. Pertani, an agricul-tural supply corporation (ma4nly fertilizer), has established seed processingcenters in provinces where NSC is not based as yet. Patra Tani, a sistercompany of the State Oil Corporation (Pertamina), concentrates on seed pro-duction of soybeans and coconut. It does some contracting with farmers inaddition to growing seed on property which it has in the province of SouthSumatra. In this evolution, the competition is such that the individual seedgrower generally has to contract with a firm or cooperative to facilitateselling his seed. Nevertheless, the present system more adequarelv meets theseed requirements of the cotuntrv than was prevIously the case.
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B. Institutional Effectiveness
1. Seed Certification and_ Quality Concrol
4.07 In India, the in-depth study an.i discussion of a Seed Act before itwas finally enacted in 1966, was a major contributing factor to the success-ful establishment of an effective seed certification institution. Duringthis period one of the best qualified international seed technologists workedas a consultant with Indian officials. This, plus the training programswhich he conducted on seed technology, set the stage for an effective seedcertification institution. Funding from Seeds I (India) facilitated settingup seeri laboratories which are essential to seed quality control. In themid-seventies, seed certification became a State Government function.
4.08 in Indonesia, seed certification and quality control was formalizedby ministerial decree in 1971, as a National Government function. Certifica-tion of maize was begun in 1982; soybeans, peanuts and mungbeans followed in1984. However, the number of crops Is small in comparison to the Indian pro-grams. Lack of trained personnel and facilities curtailed faster growth.Funding from Indonesia Seeds II helped to establish Seed Certification cen-ters, including seed labs, at 13 key locations around the country and provid-ed a new seed technology training facility at Bogor tlniversity, to strengthenon-the-job training and rneet academic training needs.
4.09 In both India and Indonesia there has been a steady growth i.n thevolume of certified seed and In the number of crops included. The Blue Labelused internationally to designate certified seed is recognized by farmers inhoth countries as the hallmark cf quaLitv seed. Both countries regularlyschedule in-service training of seed certification officers (inspectors) andseed lahoratory technicians. However, this is recent and there were very fewtrained seed technologists. Thus, as seed certification grew rapidly it wasnecessary to select personnel who had some training in related areas such ascrop production, agronomy and botany, and hlave them lea;n ab apprentices. Bycontrast, in India some training sessions had been conducted earlier andthere was a cadre of trainecd seed technologists available when the Taraiproject was Implemented. Marathwada Agricultural University in Parbhani,Maharashtra State has a modest but very practical program in seed technologyresearch and teaching, whichi includes aspects of seed certification.
4.10 A large measure of the success of the Tarai project is attributedto the enthusiastic and knowledgeable leadership provided by the then ViceChancellor of Pantnagar liniversity. The implementing agency in Indonesia,NSC, was not successful initialiv due .largely to inexperienced management andinadequate nreliminarv planning.
2. Public Sector Seed Firms
4.11 Both ountrles had a National Seed Corporation i-nvolved in process-ing and Trarketi.ng. In Indonesia, the NSC was also the prolect implementingagency. In India, the NSC waq on thae -dvisorv committee and held 20% of theequitv share, inl the Taral T';Pveiopmtpent: (.r)rpooratIon (TT(). hu t implementation
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was carried out bv the TDC. Later this corporation served in part as a modelfor the SSCs established under Seeds I and II. Today the NSC has someresponsibilities for production and distribution on an interstate basis andit serves as a national coordinating body. In Indonesia the NSC does nothave provincial counterparts as such.
C. Limitations to Institutional Effectiveness
1. Seed Certification and Quality Control
4.12 Seed Certification can only maintain its integrity if it is staffedwith well trained personnel and is able to work within an independentenvironment. In India it was able to operate within these parametersinitially, but in some States it now appears that it is being absorbed intothe State's political bureaucracy. This reflects a potential weakness.Preferably it should underwrite its costs of operation by assessing adequate
fees for services rendered. There is now in India a Central Seed Certifica-tion Board which provides coordination with the responsible State certifica-tion agencies throughout the country and will serve as clearlng house formatters of mutuial interest. National workshops on seed certification arebeing held. These steps will help to prevent deterioration of its effective-ness as an Institution.
4.13 In Indonesia, throughout Seeds I there was a lack of communicationamong the institutions involved in plant research, seed multiplication andseed certification. These Institutions need to know what one another isdoing. This can he accomplished through seminars, conferences, field tripsand personal interaction. Gradually this weakness is heing corrected throughparticipation in the monthly Genetic Evaluation and Utilization (GEU) meet-ings held by the Central Research Institute for Food Crops (CRIFC).
4.14 Lack of transport for the field officers has heen a major weaknessin Indonesia. Bank and seed certification officials recognize this problemand have stressed that it must be corrected. However, for budget reasonsGovernment has been reluctant to permit purchase of the vehicles.
4.15 The certification tag signifies that the seed in the bag meets all
minimum standards. If it is mutilated or lost the seed loses Its identity.In this aspect the Indonesian label is of good durahle quality while thequality of cardboard of the Indian tag is not of best quality.
4.16 In certification agencies in both india and Indonesia there is atendency for field inspectors to rely too much on urniformity of height as acr,iteria of purity, particularly in cereals such as rice and wheat. Theprime purpose of seed certification is to documrnt that proper seed i- usedof the variety being multiplied, that the potential for contamination in thefield is minimal (through field his ary), and that harvesting, threshing andprocessing has heen carefully monitored. Genetic purity is an absoluterequirement. Sometimes when seed stupplies are short, seed having a germina-tionI helow the mirimum can be tised providing appropriate adlustment is madeIn plant!:ng rates. A variety having important genetic characteristics can
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thus be retained and increased. Some seed labs frequently place an inor-dinate emphasis on the minimum germination percentage requirement forcertification. It is a decision which should be made jointly by the plantbreeder and the head seed certification official.
4.17 There is an urgent need to expand and intensify seed technology
training to provide staff for the future. The seed industry is developingrapidly in both countries, and many of the early seed certification staffwill retire soon.
2. Limitations of Public and Private Seed Firms
4.18 Governments of both countries have stated their interest in en-couraging the private sector. Table 3.8 shows that in Indonesia the privatesector is now producing as much seed as the NSC. However, at times NSCs andSSCs can be unfairly competitive If they are subsidized1 by Government andproduce Large quantities of c'ertified seed. As the ,1rivate seed sectordevelops and shows a capabilitv of meeting the needs of ,he farmers throutghefficient seed processing and distribution, the role of the public sector inthe seed system should gradually be reduced. The public sector institutionswill need to continue to handle maintenance of 'stock seed and themiiltiplication of foundation and certified seed of those crops not beinghandled by the private sector. In India, the private sector is stillproducing, for the most part, Fl hybrids and low-volume high-value crops sluchas vegetables while the State seed corporations and NSC produce most of theseed of wheat, rice and other cropq wherte PI hybrids are not, involved.
4.19 In Indonesia, the private sector is effectivelv involved Inhandling the high-voluime low-value rice crop. Frequent evaluatiorn and a goodmarketing surveiLlance system by competent seed marketing specialists isneeded to gauge these potential changes of responsibility so that the farmerwil] alwavs have the right varietv, at the right time and at the right place,an1 to encourage the development of the private sector.
3. Public Seed Farms versuls Contracted Production
4_20 The desigrn of Seeds I (Indonesia) provided for a large centralizedseed farm of several thousand hectares at Sukamandi. Two major factors hadto be taken into account in its development and operitirn. First, the landneeded development for irrigation and drainage. To handle this large area asa unit, a mechanized farming approach was planned. However, contractors withexpertise on levelIng and drainage could not he fottnd. It was difficult andslow to obtain government authorization to import the large farm equipment.Lacking experience and training, equipment operators were generallv poor andmaintenance costs were high. As a result of these factors plus inexperiencedmanagement, the cost of nroduction was high and volume of production waslow. In addition, the Government required that thle NSC employ severalhundred employees f the previ Ous onerator of thiq estate who wore not neces-
sarilv qualifled empnlovees for a seed operat!-nT q) tlhe ether hand, theKlaten T pVT n ,p 1s' huflt under See,<s T , mCccl: ted (,(ntract ,rowing
t thr far'rers. the u k;,M8an1(di Se e r' t eIp r l *! hai q8 hon e dve iopEls is
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now used primarily for increasing foundation seed and producing initialincreases of new promising experimental lines not yet released, whileprcluction of certified seed is now done primarily under contract. This haspermitted increasing the volume of seed produced and has substantiallyreduced production costs.
4. Aspects of Processing Plant Design
4.21 Processing plants are one of the most expensive capital investmentsof a seed enterprise. There are three main features: processing (removal ofoff types, foreign material and sizing of the seed), drying to below 11%moisture, and storage. Wheat Is ustually quite low in moisture content whenharvested under normal. conditions. Hence the needed drying is minimal.
4.22 Prior to these two projects, very little experience had beenaccumulated on designing seed processing plants in the tropics. As a result,much had to be learned relative to appropriate size and design. Hence theplants were probably no more than 40% effective.
4.23 The renovated plant used by the Tarai prolect had capacity tohandle up to 10,000 tons per year. The Bank was flexible in permitting therenovation of an old plant rather than constructing a new one as originallyscheduled. Thus, the effectiveness of this design was reasonably goodalthough there were some shortctomings which will, he disetssed later.
4.24 The Sukamandi plant, on the other hand, was over-huilt and1 ,noresophisticated than necessarv. Klaten I, also built on Seeds I funds, was animprovement in that it was less complex than SuWamandi. Klaten II benefitedfrom the experiences gained with Sukamandi and Klaten I. It has a dustcollector which the earlier plants did not have. Thus, work areas are easyto maintain. The qualitv of the concrete appears to be good. These featturesare essential for minimizing contamination due to spillage anrd for ease ofcleanup between lots. The artificial drving facility, however, isInefficient. Thus, the overall effectlveness of the Indonesian processingplants was low, in spite of the better recent construction.
4.25 The bulk storage at the Tarai and Sukamandi was not efficient forhandling varying nuantities of manv varieties. As farmers deliver the rawproduct (seed) to the processing plant in sacks where it is processed andthien bagged again, storage warehouses such as those built for Klaten ITproved more functional.
4.26 Checking the moisture content of the seed is an important qualitycilteria. Too frequiently moisture meters were located in a dark environmentwhere it is d1ifficult to make accurate and quick readings. A relativelylarge digital readout instrument is needed. Also, not enough thought wasgiven to conditions for efficient cleaning of equipment and work areasbetween lots to prevent or at least minimize contamination of one lot withseeds from another.
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4.27 The configuration for installation of equipment in the provincialseed farm facilities in Indonesia was poor. It created an environment forinefficient use of manpower and potential contamination. Too often, in theinterest of saving funds, there was a tendency to buy locally made equip-ment. For processing seed only the best equipment is the best investment.The turnkey contract approach continues to be the best until more experienceis gained and expertise is readily available. High quality concrete isessential. Cracks and crumbling directly contrihute to unsatisfactory workareas and a major contamination factor. In contrast, a private firm inJalna, Maharashtra State in India had excellent concrete work.
4.28 Artificial drying is a key facility in the tropics. At some sitessunshine is adequate, but most will require better drying provisions for therainy seasons. At Klaten I and II in Central Java, Indonesia, an otherwisegood facility hnad a sack drier which was inefficient because of the resist-ance due to the sack. Holes were poked in the sack to reduce this resist-ance. This automatically contributed to contamination. Some type of bulkbatch drier would be much more satisfactory. This feature definitely limitedthe effectiveness of this plant.
4.29 There is a tendency to design the seed processing plants tooldrge. It would be better to keep them to about a 5,(OO-ton capacity peryear for cerea]s such as wheat and rice. Plans should also have taken intoaccount the potential need to process seeds of other crops in the futuire. Aprivate orocessor near Solo in Central Java, Indonesia was cdoing an excellentlob with a plant having about a 3,000-ton capacitv per year and a relativelysmall warehouse. He moved his seed quickly, thus avoiding a large inventoryan(d the need for a large storage warehouse.
V. IMPACT ON PRTVATF SFFD INDUSTRY
A. Release of New Varieties
5.0: In most developing countries ,here are three potential sources forrnew varieties: national research agencies, universities and internationalagricultural research centers. One of the features of hoth the Tarai (India)and Seeds I (Indonesia) prolects was a National. Seed Board (NSB) which wotuldhave among its responsibilities the release of new varieties and Fl hybridsdeveloped hy public institutions.
5.e2 IRRI and CIMMYI have international networks for evaluating germplasm throughotut the world. Any country can participate. If a lineperforms well in a certain country, that country can either release it as avariety or use it as parental material for further plant breeding research.
5.03 FjIndation seed of ptublicly developed varieties is uciallly alsoa'ailahle to the private seed firms for their increase anId marketing.
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B. Range of Crops being Handled bv the Private Sector
5.04 The majority of the private seed firms in these two countrles arequite modest. They include growers who produce, process and market their ownproduction; associations of sead growers, village cooperatives -ho frequentlyproduce seeds primarily for their own members; processors who contract forproduction and then market it; and seed dealers who buy and sell.
5.05 In some states of India there are also progressive seed firms whichhave their own plant breeding programs bult contract with neighboring farmersfor the production of their Fl hyhrids or varieties. They then do theirmarketing throtigh a network. of sales locations. There are also a few inter-national plant breeding firms with limited operations in Intdia. These firmstypically develop their own germ plasm of one or many crops, evaluate Itinternati.onally and market it in many countries unider franchise arrangementswith local dealers, providing government permits can he obtained. Thesefirms deal almost exclusivelv withi Fl hybrids and vegetables (low volume,high value).
5.06 The private sector is producing about half the seed distribhuted inIndonesia (Table 3.,), but none of these firms have their owni breeding pro-grams. There are three private international firms, one hased In Thailandand two in the Phi ppines. whi ch have franchises for the product ion ofhybrid maitze in TnIdonesia and are prodticing thetr first crops in 1986.
C. Effe-ts of Government Subsidies
5.0O7 Thle private sector Tmrust make a o.rrotit eiLvier foir the individualowning the firm or its shareholders. If possl Pe., theset fir,,s prefer tomarket an item (variety or hybrid) w-4e:h thelr competition does nwO h,ive.
Hence if there Is the potentia. and thev have the workiniz capital to retainan appropriqte ;ci entif1c staff they w1.l1 concentraite on Ft hvbri1ds. t t.herwise, If they are merchandising publiclv developed varieties, they must havea good marketing program nd(1 handle large vollimes at a sma I1 mark-up in orderto compete profitabLy. They are freiuertly ntut in a difficult position1 i,-thev have to compete with national or stite s:eed( corporations, which areusuallv given a vovernment qsu"sidy that enabiles then to undersel l the privatesector.
5.(8 One example of private firms placed at a disadvantage was in WestJava (Indonesia) where some Individual seed growers, who had a modest incomefrom a seed enterprise previously, are now having difficul[ty in mnarketingtheir production at a profitable level becatise of the low pricces at which theNSC sells the same variety.
D. Financing
5.09 Both wovernments (Tndonpsla ani Inria) have stated their fnrtnt toencourrage t he ; r'vate se t.or. However. to-ie small a:id med liur-sizzen urivatefirms nreeo a rellahire T,nd t i.nuirni *')mce of -redit. 1thetr nedqs Fall
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primarily into three forms: production credit, investment credit andoperating credit (for purchase and sale). Any seed activity involvingresearch or seed processing and storage will need some investment credit aswell as production credit. From the time a plant breeding program isinitiated until it may have a "payoff" will take from 10 to 15 years.Thereafter there should be something coming off the "heltline" every two orthree years. Hence assistance of long-term low-interest loans is neededduring this development period. Those firms which are processing andmarketing need operating credit to purchase from the seed growers upondelivery and meet expenses until they get paid for the certified seed theysell.
5.1( A case in point was a small, private, efficiently operated firm InCentral Java, In.donesia which usually received only half the valuie as a downpayment for seed sold until those who purchased it cotild pay in full afterabout a month's time. To ohtain operating credit from the local hartk, thisentrepreneur had to mortgage his home. The local hank woltld not consider hisinventory of seed or accounts receivable as collater,l.
5.11 DurIng the rainy season the rice farmers plant "hnack to back; thatis, they harvest a crop and immediately prepare the soil and plant a second1crop to take maximium advantage of the short maturing HYVs. T'o handle twocrops in orie rafny season the seed dealer must purchase, (claT and sell alargre quantlty of seed in a short period if he wishes to retaini his share olfthe market. Thas, operating credit is critical. Xome Drolnistng new ffrmo inTndia were also having difficulty in ohtainilgn reliahle credit to keep theirresea,rch ifotCz d (ritic'al 'qt,air;s
Vr. FNVIRONMENTAL IMPACT
* ;il 1he; <idellse comoact r`oil ae of t.he new high-yielIding varietles, whern.ellC irrigatedf an! hea,viiv tertflized, nroa'ides An ideal micro environment.fnr the growth of plant pests. Diseases and insects, which have previouslybeen endlemic, ran sidd.e-i lv become epide-i1 c. rhis occurred In hoth of thfprimary crrops involved ili these two proivcts: wheat. I.ni the India Tarai. andrice in Indonesia .
A. Wheat Rust in India
6.02 There are three major species of rust whtch attack whqat: blackstem rust, hrown leaf ruist an(d yellow stripe rust. To make the problem moreromplex (i) each snecies consi sts of several races. (i-) the diseaseOrganism has ari alternate host other than the wheat crop that it attacks, and(Ill) it Is eapahie of hybridizing on the alternate host and prOdulcing newraces in natLure.
r) 70 hnh; , .a Whei>.r variety resi-.tant to one race of rutl; or severalra;ces, can he n,oscertl. h 'e to other racos. 7 l d Trl,Ti,a mnre than 7'( plhvsllovlc;ra(esq of whoa- ruqsts have been identlIfted. ln Lhf Tar alI lrc 'ir)N, thbe F]ak- etrR asd hrowr Iari- s are tho mro!tt pre'.aelont,
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6.04 Although losses can be controlled in part through appropriatecultural practices and sanitation methods or with chemicals, the preferredapproach, used in India, is to find or develop varieties with resistance tothe prevalent races of rust. In India, new races evolve in the foothills ofthe Himalayas or in high elevations in the south. The spores are carriedover great distances (North and South) by wind currents. All new germ plasmdeveloped by wheat breeders is systematically screened by the plantpathologists at a rust research center at Simla in Himachel Pradesh State.To keep current on the disease situation, plant pathologists operate anAll-India Wheat Disease Surveillance Program.
6.05 When the original germ plasm was received from CIMMYT (mid-1960s),some of it was still segregating for characters such as rust resistance,maturity and grain type. Indian scientists selected strains more suitahle toIndian conditions from this segregating material. This research resulted inthe development of the varieties Sonalika and Kalyan Sona. They became verypopular with the farmers because of their high yields, rust resistance, amberor white grains (in contrast to the red grains of the original seed importedfrom Mexico) and adaptahility to a wide spectrum of soil and climat1cconditions throughotut the cotintry. The Tarai project plavfd a key role intheir initial, seed increase and continued maintenance. The variety Sonalikais still widely used. Even thotugh new races of rust have evolved, ft stillgives good performance since it Is very early matturing and It es(apes themost serious rust attacks. Thus, by use of resistant varieties aTnd goodcultural practices, wheat production has steadily Increased without the needfor heavy fungicide applications whlich could have deleterious effects on theenvironment.
B. Brown Plant Hopper (BPE1) in Indonesia
6.06 This insect had been noted miore than a century ago in Java. It wasendemic on rice until the earlv 1970s. With the advent of HYVs, it suddenlvbecame epidemic. It is a sucking insect whi(h can reduce the rice plant to awilted or hurned state wi hin a few hours whern present in large numbers. Itis also the vector or carrier of two serious virus diseases of r.ce--raggedsttunt and grassy stunt.
6.07 In the past, the only effective control for BPH had been use of antinsecticide. Furadan was the most effective. IRRI was successful inisolating genetic resistance. The first varietv carrying stuch resistance wasIR20 and it was followedi by IR26 which, after local testing, Indonesiareleased in 1975 (as PB26) in an endeavor to control the spread of BPH. 'V1977, the P826 resistance was hredkLng down. It was then realized that therewas another biotype of BPH. Throrugh the collaboration of TRRI'sTnternational Rice Testing lProgram with Indonesia's CRIFC, an experimentalline from IRRI, identified as 1R2071 ,5/ proved to he resistant to both
5/ The pedigree of IR.27 1 inclutded i"1 varietes tfrom h cotntri-s, including
the varietv Peta fron In1doTesiPi.
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hiotypes 1 and 2. The rapid increase of this seed as Indonesian variety PB36is descrihed in Chapter 4.
6.08 The Sukamandi eiitomology research (fu1nded by Seeds I) made asignificant contribution to understanding better the spread of BPH throughoutIndonesia. Research coordinated by CRIFC at Bogor dleveloped a method to mapemerging biotypes employing reports twice a year from 1,000 locationsthroughout the country. The identification Is based on a set of rice varietydifferentials which enables the scientists to determine the prevailingbiotypes. This "early warning" system, designed and calibrated by Indonesiarscientists, enabled NSC to organize its seed production program moreeffectively.
6.ns From 1978 to 1982, the gene fcr resistance to hiotype 2 kept thebrown plant hopper population under control, buit then there was evidence of apossihle new hiotype emerging in the province of North Sumatra. As aninterim emergency control measure, extensive spraying was done. In themeantime, oxperimental reqults indicated that the TRRI variety, 1R56, wasresistant to this apparenit new biotvpe. In qtuick response, 21 tons of seedwas airlifted from the Philippines by the Indonesian Air Force in February1983. Most of it was planted in North Sumatra in earlv March and theremainder in other provinces of Sumatra as well1 as on Java and Ball. As aresult, this hi otype dId not cauise serious damage to ncloneIi an riceprodtt ti on.
6.10 The North Sumatra emergencv is an example of the speed with which anew varietv cal bhe made avai lable to the tarmers whenl varieties or germ plasm
have been deve I opedi in anti ci pat ion of fusture cha 1 lenges .and when pi1ot seed'stocks' hlve he enr mri Itip lIed and mnaintained (in this case in thePhilippines ). The BPH problem i 1 I ustrates the need to integrate varieta Iresistance, hiologicaI and rIl turai eontrols, and when necessarv the use ofinseCt Icides in an economi cal v and ecoIoI ca1 Iv suItable means of control.The ava lahi 1.itv of genet ical Iv puire seed of resistant varieties is a keyas pePt.
ViT. PROJECT SUSTATNABILITY AND REPLICABIlTTY
7.01 India rarai Seeds and Indonesia Seeds I were both conceived to helpfarmers realize the notential high returns from adoption of new high-yieldingvarieties. The objective of hoth projects was to set tup mechanisms formultiplying and .istributing seeds of these HYVs in such a way that thegenetic characters for high yiel(d would he carrJed through to the ultimateusers by carefullv supervised production and distribution of the new varie-ties. At appraisal, there was good evidence of the need for suich improve-ments in the seeds system. The issuec that arise now do not dispute the neednor the positive impact of these projects. Rather, they relate to sustaina-hilitv and rerlicahilitv of the projects--to the effectiveness and efficiencyof the specific strategv emploved, to the tvpos of institultions created, andto aspects of project design and imPlementation.
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A. Sustainability
7.02 In spite of various impLementation problems confronted during thedisbursement period and in the peridc! since prolect completion, both of theseproject" appear to have good underly.ing bases for sustainaMlitv. Th_. impor-tance of a good national seeds sysat*ein is now generallv accepted in bothcountries and is seen not as a one-time change of varieties hut as a processthat mist continue. Within this context. the learning process is still con-tinuing and both countries are Fteekin£ the optimum mix of public andl privateinvolvement in the various coitponenti; oE the seeds system. Both countrieshave developed follow-on project:s that take into account lessons learned fromthese first projects.
7.03 Thus, the focus here is on ciPe sistainabiltity of the various com-ponents of the two national seeoc systems as noW constituted.
1. Sustainability of Seeci Ce;-rificatUon
7.04 Seed certification is the only system yet devised to docurnernt thegenetic purity of a variety. It Is not possible to distinunjlsh i one variDtyfrom all other varieties of that crop only on the basts of visual (haracter-istics of the see(i or plant. TlVa estahlishment of a speed certificati onInstitution was a key funCtioTn in the design of hoth of tlhoes.e proje(ts. InlTndia, Ctertifi(ation lad been set tip just orlor to the Initiation of theTaral project. In Indonorsia it was (le:reed for rice hy the Milnister of Agrl--ciiltiire in tinme (1971) fou imrpleI mentation of Seeds .. In Ind ta tt i s a ftinc-tion of statte Lovfrrnuemnts, wh1 'eI, I[ Andoesia it i s a nat,on1al. I veretfuncti.on.
7.1)5 In hnTh cases, seed certtfication has a fair die-ree of ao t.onomy aolis staffed wfth competent officers. However, 4.t is limttedo hv lack (if htidvelfonds and vehIcles. Fioeld officers should not be expected to diepeni on thevagaries of publlc transport. If :l.ev are not at the right spot at the rightt:irne, a seed crop may he lost. howev,a:, t vhe vl e of sepl c-ertIfIcation tinow broadlv recognized an(, well inst.itutionalized. ro permit greaterautonomv, it should he flianced t-o .he extent possihi-¢ by fees assessed forservices renrdered.
2. Sustainabil .tv of P"ublic Secl..r Productiorn and Marketing
7.06 The overall strategy employed in these two projects was to expandthe roLe of publi.c sector institutions in the seed industry to handle notonly plant breeding, product:'o½n of foundation seed and quality control, butalso large-scale production, processing, certification and distribution ofseeds. The importance to the nation of a good seed system seemed at the timeto justify major public in%ef-;tments in the seed industry.
7.07 This was the justification for the Tarai proiect, namely thAt: priorto the nro-ect, seed Droduction and d1strihution was undertaken by scatt:e(rei-nefficient farms whIch were rarely eaulrped with proper proceqs.rt,c or
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storage facilities. The project also sought to expand seed production on afairly conicentrated area of some 18,623 ha through land leveling, irrigatingand mechanizing seed farms and through processing and marketing of the seedproduced.
7.08 The Indonesian approach was similar in that the major investmentswere in pthysical. improvements for a seed farm and in establishment ofprocessing and marketing facilities. Only limited provision was made ineither project for private sector involvement in processing and marketing.The heavy reliance on public funding is now receiving more careful scrutinyfor several reasens, including: the growing budget subsidy required, thepolitical difficulties of raising seed prices to cover all costs, andquestions about the efficiency of puhlc enterprises for this kind ofendeavor. Costs are usually high and production is not as efficient as thatof a farmer whose profession it is to grow crops. If the farmer is allowedsufficient incentive for the extra work and care to produce good qualityseed, he will genierally do a berter job and get higher yields than agovernment-operated farm. However, if he has never heen a seel grower hewill need guidance and counsel.
7.09 If the private sector can take on more of the production,processing and distribution of certified Feed to farmers, the future role ofpublic sector corporations, such as NSC and SSC, Is expooted to focus fn
rapid production and dissemination of certified seed of newly releasedvarieties, thereafter maintaining and multipl]ing stock seed. (breeder andfoundation). As certified seed supplies become adequate, the national andstate seed corporations and provincial seed farms should phase out theircertified seed production. A well informed National Seed Board should bythis time have developed a policy which will providle for adequate cettifiedseed supplies through some or all sectors of the private industry. Tt wouldbe expected that under favorable conditions the szed industry might reach anEquilibrium -f approximately 75% private versu,s 25% public production anddistribution of seeds.
3. Sustainahilltv of Private Sector Seed Enterprises
7.10 The private sector includes three main categories of firms: (1)cooperatives; (ii) private processors; and (iii) firms with their ownresearch capacity. Cooperatives are primarily tnterested In, and legallyresponsible to, their members. In those cases where a coooerative has a seedenterprise it generally takes one of three forms: (i) contracting withgrower members to produce seed; (ii) purchase of seed for their members fromoutside sources; or (iii) a franchise with a domestic or international plantbreeding firm. Processors contract for production and market It through anetwork of seed dealers in a district or region. Firms having their own
research program endeavor to concentrate on Fl hybrids which give them anexc].usive product. UJsually they do not handle publicly released varietiessince their competition has access to the same varieties and the rnargin ofprofit is small. They have a good marketing system with their own salr-sforce and good advertising.
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7.11 The private firms have difficulty in getting prompt information onavailability of public seed releases. Their representation on the nationalseed board is only token. In both countries the private sector could play amore important role. However, it needs more encouragement by policies whichwould provide it more latitude and flexibility to operate. Competition is ahealthy feature and efforts should he made to reduce and remove the subsidiesto the seed ccrporations which permit them to consistently undersell theprivate sector. Farmers who are knowledgeable of the value of good seed arewilling to pay a reasonable price for this input. A comprehensive seedextension program is essential both for the seed industry as a whole and forthe farmer-user.
4. Sustainability through Farmer Participation
7.12 When allowed approoriate incentives, farmers are generally in-genious and efficient seed producers. With the development of a seedindustry there is an opportunity for a new source of income for the farmerand, in some cases, other members of his family. The evolving farmerparticipation as seed producers in both India and Indonesia is thus seen as amajor factor in long-term sustainability of these modern seed systems. Inthe Tarai, where the farms are relatively large, some of the wheat seed farmsare growing 60 ha for seed on an 80 ha farm and have done so for 20 years.In Maharashtra State, a typical seed producer had 20 ha and grew cotton,sorghum and pearl millet for seed. In this State, which excels in hybridcotton seed production, village youth are trained in how to hand-pollinate.This provides rural income not otherwise available. In Indonesia, wherefarms are very small (one hectare or smaller on the average), a group offarmers (150 ha in one block and 171 farmers) were growing excellent riceseed crops. They had one person in charge of irrigation, one for fertilizer,one for pesticides, one for harvesting, etc., and an overall chairman. TheNSC at Sukamandi has learned that it can cut costs and get more seed bycontracting with farmers than by using the large-scale mechanized estateapnroach.
5. Sustainability through Training
7.13 Where there were no previously trained seed technologistsavailable, as was the case in Indonesia, full-time consultants for start-upand in-service training helped to rapldly establish a basis forsustainability. By contrast, in India, where there had been considerabletraining in seed technology during the 1960s, the Tarai project could beimplemented with occasional consultant advice of a few months' duration.
7.14 Academic and non-academic training has provided further founda-tion. In Indonesia, a special seed technology training facility has beenestablished through Seeds II funding and is functioning effectively at theAgriculttural IUniversity at Bogor. The seed section of the production divi-sion of the Directorate General of Foo;1 Crops Agriculture (DGFCA) inIndonesia also holds regular In-house training on a non-academic basis.India is developing seed technology research and teaching programs in several
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of its agriculture universities. The Tarai project, in the interest ofeconomizing, cut out the budget item for training. However, trainingcomponents were included subsequently in National Seeds I and II.
B. Replicablility
7.15 In spitf of the piocaeering nature of these projects and the prob-lems encountered, on balance both projects are considered successful. Interms of lessons learned, this raises the question of what can be extractedfrom this project experience that could be applied to other projects nowunder consideration or in process. Which aspects depend on the particularecological or political and social conditions of these countries, and whichaspects may have broader application?
7.16 The first lesson that can be drawn is that the emergence of newhigh-yielding varieties of basic grains was a key factor in establishingdemand for a better seed industry. Neither farmers, seed growers nor thegovernment were ready to invest in seed production, processing and distribtu-tion until something occurred to Jar farmers away from the traditional varie-ties. In India, the first stimulus was some success with new corn hyhridswhich, being an open pollinated crop, required particular care in seed multi-plication. However, the main stimulus came from two self-pollinated crops:(a) when the new semi-dwarf fertilizer-responsive, rust-resistant varietiesof wheat from CIMMYT were shown to be well adapted in Northern India; and (h)when the discovery that the new semi-dwarf IRRI rice varieties would givehigh yields in Indonesia, setting off similar excitement among farmers inthat country.
7.17 The second lesson is that multiplication and distribution of a newvariety is not a single occurrence. It initiates a combination of changes infertilization, plant density and better moisture control that in addition tosubstantial yield increases, will likely create new problems as new varietiesand new production systems are extended over broad areas. This has occurredin both countries and has required subsequent changes In varieties inresponse to threatened epidemics of a particular insect or disedse. Specialefforts have been made to maintain genetic diversity by not allowing entireareas to be planted to a single most productive variety. Thus, a replicableseeds program needs to have available the kind of research hack-up fromnational scientists and international agricultural research centers as wasprovided to these projects.
7.18 The plant pathologists, entomologists, agronomists and plantbreeders as a team designed the new varieties. The pathologists and ento-mologists designed techniques to screen for resistance. The agronomistsdeveloped management practices to maximize yields. The plant breeder putthis matrix together based on his knowledge of genetics. The experience ofnational and international research institutions expedited the identificationof disease- and insect-resistant material suitahle for prevailing condi-tions. It also gave the national research Institution confidence and encou-ragement.
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7.19 A third lesson is the use of plant resistance, conveyed throughseeds to control pests while avoiding damage to the environment. A compre-hensive "wheat rust" research program is evolving in India which is providingwheat breeders with "tools" to scientifically search for resistant germ plasmto suppress and/or contain future races of rust which will occur in nature.The integrated pest management approach being used in Indonesia hy CentralResearch Institute for Food Crops (CRIFC) scientists in combatting BPH inrice through their Genetic Evaluation Unit (GEU) team effort and anappropriate halance of resistance varieties, pesticides (as a last resort andwhen necessary), biological control and a high level of sanitation in seedbed nurseries is helping to maintain a desirable environment for mankind.This technology has encouiraged, matntained and multiplied biologicalpredators and disease organismns (fungi) which are natural enemies of the BPH.
7.20 A fourth lesson from these projects refers to the need for a cleardefinition of tne roles of the public and private sectors in a national seedssystem. This Study holds that as a general prinLiple, the public sectorshould give primarv attention to developing appropriate policy which willencoutrage and expedite a sustainable modern seed industry involving bothpublic and private dimensions. The public should also keep primary responsi-bility for "stock seed (breeder andi foundatton) of publicly developed varie-ties and should help to provide reliable and current seed marketing intelli-gence and trainfng throtugh seed extension specialists. The public sectorshould gradually phase out of cercified seed prodtuction, marketing andl dis-trihution, and shoulP encourage the private sector to pick up these tasks.For self'-pollinated crops, seed multiplication by farmers for their ownfutuire plantings should he oncoiiraged Instead of pushling complete annualreplacementnt witl!h certifiedi seed. Tt permtt the development of a useful pri-vate seed -ector and thus improve the efficiency of the seed Industrv,cubsiditzation of public sector "irms needs to he curtailed. In this respect,It is noted tha', both of the countries subhect of this Stuidy have recognizedthe neel1 for an expanded private sector role in the seed industry.
7.21 A fifth lesson from these proiects is the need for a strongnati.onal seed hoard. Such an institoition was provided for in both projects,but it either did riot funclon or emerged very slowly. By virtue of itsfunction, an NSB should have top level policy-makers representing the mainpublic and privrate interests in the seed induistry. It also needs technicalexpertise and a good degree of continuity. Since high level government offi-cials are frequently rotated to other assignments, to provide continuity theExecutive Secretary of the board could be a professional seed technologistwho presumably, if well qualifted, would remain In this post for severalyears. The NSB woulH coordinate those aspects OL production, research andextension dealing with seed and the relation of the seed certification insti-tution to them.
7.22 The sixth lesson is the key role of the seed certification institu-tion. Tnhe farmer's (seed uisers) attitude was changed once he became con-vinced that the HYVs won'iid oiut-perform his tradittonal seed. The Blue Lahelhecnme s-;n<onvr wis th w li, tiV and h10i- nerformance. Aiqo, the packaging ofuertIf i f,1 ren;a reed eci , m a ki I.r,am na-ka2e'S wa-, an attractive
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incentive for small farmers as it was not necessary to subdivide certifiedbags at retail outlets. The lesson for replicability is that the act of cer-tifying or documenting each step in the production process is the only way ofassuring the farmer that it is genetically pure seed of the variety identi-fied on the label. Both countries (India and Indonesia) now have well estab-lished seed certification institutions.
7.23 The seventh lesson to be drawn from these projects is the need forbetter design of seed processing plants. There is a minimum of expertiseavailable on appropriate design for conditions of developing countries in thetropics. Consequently, there is a tendency to pattern installations afterthe large plants which are most efficient in the Western world and hence theyare over-built and too sophisticated. This was exemplified in Sukamandi.Also, in both India and Indonesia, locally made equipment was used exten-sively in order to save money or because of failure to get government importpermits. Its fabrication was frequently inferior. The equipment was diffi-cult to clean between seed lots leading to potential genetic contamination.The following conclusions are drawn with respect to design and equipping seedprocessing plants:
(1) the best equipment available is the soundest investment;
(ii) plant size should be .elatively small--perhaps 5,000 tons or less,and not more than 10,000 tons per year;
(iii) all work areas, receiving aprons and drying yards should be of highquality concrete to avoid crumbling, which automatically becomes asource of contamination;
(4V) when buildings are constructed with funds from one donor and equip-ment is provided by another donor, there should be carefully coor-dinated advance planning so that the most efficient configurationof equipment is used and the building is sized to convenientlyaccommodate It; and
(v) a well-qualified consulting engineer, knowledgeable in seed tech-nology, should remain on the assignment until the plants are fullyoperable and a well-trained national counterpart is ready andqualified to take over.
)~~~
I
- 35 - ANNEX 1
COMMENTS FROM THE INDIAN DEPARTMENT OF ECONOMIC AFFAIRS
316617/ lI:INE IN
31661.'. 1NE IN
FROM SHFI SUNEIARAM KRISHNA DY SECY ECOFAIFS NEW DELHI
TO SHRI CM VASUDEV ADVISER TO El, ( INriA)WO+ INTBAFRAEi WASHINGTON
P:LEASf FAS"; ON THE FO.L.LOWNG MESSAGE TO MR OTTO MAI'SS AUTING
DIlRECTOR OED (.) QUlOTE: REGARDING THE DRAFT IMPACT EVALUATION
REPORhT ON TARAI SEEDIS FPROJECI ( LN A4+ 614-iN)(.) WHILE wi.
6RE IN GENF'Rt,L AGREEMENT wITH THF CONTENS WE WOhuLD LIKE TO
POINT O!JT WITH REFERENCE TnO P*AA 3.05 P'fE' 16 THAT INrDIAS (See commentin para.
TRANSITION FROM A MAJOR IMPCTER OF FOOI.iGRAINS TO SP-F- 3.05]
SUFFICIENt ' HAS BEEN THE' R.ESU T OF MA VOR INTI'IATIVES TAKEN BY THE
GOVT OF INDIA IN THE FIELDS O)F IRRIGATIGN FERTILBIFilFS AGVRIC!LT[..ik
RESEARCH ANri DEVELOPFMENT MARKE'!ING SLUFFOR! AGRIT CIJL URAL CEDrIlI AN;
THE LIKE (. ) TO IMPUTE A MAJOR PART OF fHE CREDIT FOR THIS
TRANSITION TO BANK-ASSISTErD SE[D PROJEC(TS AS PARA 3.0 5 DOES IS NO
fi'ORRECT (. THF'IF CONTRIBUTION IS SIGNIFICANT RUf NOT ON THE
!LCALE IMF'LI EE (.) UNQUORE REGARDIS K)
MESSAGE NO 6826 D CATEDl 12/12/1986 KEWAL
I
I i\i
I lI
,Irs t
t. w
L-.l
_ 37 _ ANNEX 2
DEPARTEIMEN FIRTANIANDIREKTORAT JENDERAL PERTANIAN TANAMAN PANGAN
Jan AUP Pau MinuuKotak Pos 64/Pam. Jakarta Selbtan
Telepon: 782819
Noomor I.PD.200.926. Jakarta, Oictber 21 # 19b6Lampirn:
Diretor
Operation Evaluation Departennt
Thhe Wbrld Bank
Washington D.C. UE.
Dear Sir,
Please kirnly fimc the attached response wtit regard to vour uzactEvaluation Report - Inctia Tarai Seed Project (loan 614-IN) and Irn-nesia Seed I Project (Credit 246-Ir) August 8, 1986.
Please also note that the response considered to up date and add toour previous camTent which was suxiitted to you on vebver 10, 1979
No. I. C.8.79.1336.
The response does rtt necesarily disputed bufk rather crnplementing to
your report Dmpact Evaluation Report India Tarai Seed Project (Loan 614-
IN) and Indonesia Seed I Project (Crecit 246-IND) August 8, 1986.
I deeply appreciate for your cuiing cooperation.
*\ .zs4tSX l Wi raaarSja
'\ FK 9 rtr Generml
cc.
T'e World BankResident Staf in Incknesia
- 38 -
TIME SERIES ANALYSIS OF SEED I PROECTIN INDONESIA
- a response to the World Bank Impact EvaluationReport about India Tarai Seed Project (Loan-614-Ind)
and Indonesia Seed I Project (Credit-246-Ind)-
DIRECTORATE GEN ERL OF FOOD CROPS AGRICULTURE
1 9 8 6
- 39 -
INTRODUCTION
The World Bank Impact Evaluation Report about India Tarai SeedProject (loan 614-In) and Indonesia Seed I Project (Credit-246-Ind) concluded (among others) that the Tarai PPAR were that theproject had been generally successful and the computed ERR at thetime of project completion was 18% compared to 17% estimated atappraisal. The main finding of the PPAR for Indonesia Seed I wasthat it fell short of its production goals, particularly duringits early years. The PPAR written in 1979 considered IndonesiaSeed I only marginally successful and the recomputed ERR atcompletion was 11% versus 58% estimated at appraisal.
Development program is a dynamic process where time horizonbecomes important to link the project operational stage or lifeand its continuing impacts in the post project period. Realisticestimation and assumption and time series analysiF can complementabove PPAR cross section analysis to measure and more clarify thecomplete dynamic impacts of the project.
The high estimated economic rate of return at 58% for Indonesia iSeeCredit 246 was considered unrealistic, therefore IBRD report commentnumber PA85A page 22, April 26, 1971 also suggested alternate ERR inat 20% and 15%. The lowest estimated ERR at 15% at appraisal para.should not dramatize the difference between the estimated ERR at 2.17]58% versus the achieved ERR at 11% at the project completion.
Segmented of time series analysis into four stages should befairly justified which are consisted of: (a) learning process1971-1978, (b) transition stage 1978-1981, (c)progressing/developing stage 1981-1990 and (d) established stageatter 1990.
This time series analysis does not necessarily disputes againstfinancial evaluation analysis in PPAR which is purposely excludedin this time series scope.
- 40 -
II. THE DEVELOPMENT PROCESS OF SEED PROJECT IN INDONESIA
(a). Learning process (1971-1978)
The learning process is characterized by: (a) low productivity(b) high investment (c) slow adoption of new technology beingintroduced (d) insufficient number qualified and skill humanresources.
Due to these identified characteristics, the project was assistedby team of consultant to supervise and directly managed theoperation of Seed Project, particularly in Sukamandi. In thislearning experience stage, project preparation and constructionwas implemented some what delay compared to the schedule plan. Itwas found al.-o the big scale mechanized technology being utilizedwith Western Oriented Model of Farm corporation was notappropriate.
Four components of Seed Development System (NSB, CRIA, SCCS, andSeed producer) in Indonesia were trying to synchronized each otherfunctionally to start establishing a network system in thisperiod.
(b). Transitional Stage (1978-1981)
Transitional stage is clharacterized by: (a) uncertainty and(b) unstable project performance. However, the progress ofproJect development allready indicated fairly increasing trend.
In this stage, full project and supervision were alreadyin the hand of Indonesian personels. The transitional period wasrelatively short and there were a lot of adjusment ana correctionwith regard to particularly the functioning of National SeedInstitutions in the Network. This stage was soon followed up bythe progressive/developing stage.
(c). Progressing/Developing Stage (1981-1990)
The period is characteristized by stable and sharp rising trendof (a) productivity and eficiency (b) volume of seed being sold(c) high response of farmer on certified seed (d) supportinginstitutuions and facilities being strengthened and (e) growth ofseed grower number was in optimum nature.
Complemented with other socio economic inovation at farm level,the National rice production steadily increase at high rate(6.58% /annually). This stage is estimated to be continued untill1990, whereby t.he targf-ted cerfified seed at 75,000 ton annuallywi 11 'be readJed3,
(d) Established Stage, after 1990.
Established stage is marked'by sustainabilty of the optimum
- 41 -
seed industry, efficiency, consolidation, flexibility and moredynamic performance to response to the quality and volume ofvariety of seed demanded by farmers.
All of the time series analysis are proven by the followingfigures and information.
IIIs istorical evedence and parameter
1. Yield and Production Cost
Level of yield and production cost are two parameters thatcan help to explain the degree of effectiveness of rice geedproduction financial and technical management. This two parameterbehaviours can be clearly observed in figure 1 and 2.
Yield level was recorded in Ton/ha. The average yield at theNational level was significantly changed from time to time. In thebeginning of the learning process (1971), the yield level was 1.01ton/ha and slightly increased at 1.02 ton/ha in 1972 after that itextremely decreased to 0.21 ton/ha in 1973. It was due to thedamage caused by Brown Plant Hopper. At the end of the learningprocess (1978), the yield was also decreased to 0.50 ton/ha only,due to suffered by Brown Plant Hopper. At the same time, the costof production increased at the peak level (Rp 43.67/kg),this wasattributed by the low level of yield.
In the transitional stage the average yield was almostincreasing steadily untill 1984. During that time the productioncost gradually decreased, however, it slightly increased againduring the progressing stage (1981-1990) and it reached at stablecondition in 1985 and 1986. During 1981 to 1984, the average yieldgradually increased from 1.64 ton/ha to 1.92 ton/ha.
Production cost was recorded in Rp/kg and since the currentrupiah value changed from time to time, it was necessary thisvalue to be depleted against price index of the other 8 foodcommodity values.
In the first stage (learning process) the depleted productioncost gradually increased fr-vn Rp 20.71/kg (1971) at seed growerlevel and reached Rp 43.67/kg in 1978.
Effective production management at private seed grower levelin the transition and development stages made it possibJe toreduce production cost and finally reached Rp 31.64/kg in 1984.
N National Seeds Corporation
In the learning and transition stage, the yield /unit of areaof NSC was similar compared to the seed grower. The performance ofNSC in the developing stage (1981-1984), indicated that the yieldof NSC increased sharply (figure 1). The highest certified yieldwas 2.92 ton/ha (in 1984).
Unfortunately this significant technical performance did notcause reduction of production cost', but in the other hand it'sproduction cost was remained steadily coincided with lowerselling price compared to private seed growers ( Figure 2 and 3).
The situation of NSC R/C ratio unfortunately was only 0.5,it met that NSC was continuing in lost. Mean while the privategrowers, although their technical performance was lower comparedto NSC, their financial business indicated their R/C was 1.7. Theunefficient financial management of the NSC was claimed due topolicy and pioneering oriented business, therefore this financialempirical evidence may direct future seed programme operation
All of certified seed produced is totally distributed and soldover. National Certified seed production level was below 1000 tonat the early period of the learning process and graduallyincreased to the peak level at 6,496 ton in 1976. This level ofproducti.on decreased again at 3,106 in 1978. Data in Table 1definitely shows the increased of certified seed production in thetransition period and then this level of product-ion jumped in thedeveloping stage at 94.35% growth annually.
This trend of production behaviour was similarly happened inNSC (sang ilyang SPri) within the respected stages of thedevelopment . This coeficient and information mark that in theprogressing/developing stage, trend of production is characterizedby higher efficiency (see figure 1 and 4).
The agregative National Sales Volume is presented on seedproduction curve in figure 4. The National seed corporation salesof certified seed volume was already included in this figure. Thetotal sales volume (certified and non certified seed) of NationalSeed Corporation is presented in Figure 5.
TOTAL SALES VOLUMECOF NA11Ot-L SIMD CORPORAA1DN (TCirJ
*67,,* ; 'L i.4 1 6 . t .7 2i6.6.597.; 5 c7. 5 . .. 9 1145.0 06i . 8.0
Figure 5.
- 47 -
Specific total sales volume of NSC during the learning period(1972 -1978) was 17,233 tons. The average growth per year was72.5% if 1972 sales was included, otherwise it would only 13% if1972 sales was excluded.
Problem encounter during this period are as follows:
(a). Risk of unsold seed was still high, because farmer'sperception on seed quality (certified seeds) was still low. Mostfarmer were still variety uriented.
(b). Risk of losses because of several and sudden change invarieties recommended by Government or demanded by farmer, due topest and deseases outbreak.
(c). The marketing pattern was not well established yet (themarketing system was still passive).
In the transitional stage, (1978-1981), NSC total salesvolume was 19,077.4 tons. The average growth per year was 26%. Andin the development or progressing stage, the accumulative totalvolume increased significantly at 51,546 tons. It was indicatedthat the supporting system for seed development in this stage wasbecame more stable and strongly established.The growth of NSCsales was 38% in this period.
Total National sales in the learning and transition periodhad similar trend compared to NSC sales. However in theprogressing/developing stage (1981-1985) the total National salesgrew much more vigorously compared to NSC sales. (Fig. 4 )
- 48 -
DEFLETED SEED PRVOI)DUCTION COS;lJr:) S.li: .V; lJf:fi I PFV' F r'i
The growing number of area being utilized for seed productionin the private sector reflects to the profitability of seedbusiness. Free and heavy competition naturally screen outuncapable seed growers, efficient seed grower on the other handremained stay in the seed business.
This healthy rice seed business generates tremendous incrementof certified seed production being sold in the progressing periodas indicated in Table 1.
Table : 1
Years Seed Certified Tota Cbst Produc- Seed ValueProducticn tidn Dflated Deflated(Ton) (x Rp 1,000) (x p, 1,000)
Number of seed grower almost did not change, where in the1978 (end of the learning process) they were 1249, in the end oftransition stage (1981) number of seed grower were 1078 and thisnumber was recorded as 1268 farms at the end of 1984.
Meanwhile the average area being planted by each seed growerwas increasing significantly from 3.62 ha in 1978 move to 6.54 hain 1981 and reached 8.82 ha in 1984. It is clear on Table 2 andFigure 2 that in 1984 there were 2370 famiiies (including 1102seed traders ) engaged in seed business network. This fact is oneof the measure of multiplying socio economic long term impact ofSeed I project.
- 50 -
Table : 2 Data knsers
Years Area NuTber of Seed Averag Area Nurber ofGroers Seed (rowers Mrchant
1975 2,159.41 1,062 2.03 71
1976 2,546.19 1,401 1.82 378
1977 3,322.88 1,219 2.73 478
1978 4,517.63 1,249 3.62 530
1979 4,062.52 1,174 3.46 546
1980 4,940.64 1,307 3.78 493
1981 7,05r.19 1,078 6.54 787
1982 8,049.89 1,019 7.90 1,166
1983 8,790.51 1,035 8.49 1,148
1984 11,178.29 1,268 8.82 1,102
5. Software infrastructure.
The historical evidence of the Institutional Building andquality of human resource development, had been dramaticallyimproved during the progressing stage (1981-1985). Particularlythe working mechanism among each components (National Seed Board,CRIA,SCCS and Seed Grower) in the seed development program wasstrengthened and well synchronized.
Number of qualified personels involved directly andindirectly in seed development program increased sharply in theprogressing stage. Number of University graduates were 6(including 3 person holding Phd degree) in 1978, compared to 29(including 6 persons holding PhD degree) in 1985.
All of those scientist and qualified technicians were in theGovernment Institution (CRIA, University, SCCS, Government SeedFarm). Qualified Technical personels in the NSC were 388 personsin 1978 and increased to 688 person in 1985. In the same periodpersons engaged in the private seed business was 3406 (1978), andin 1985 was recorded as 5254 persons.
The sharp increase of qualified person was resulted fromintensive training implemented internally and overseas graduatestudy program. Seed quality improvement training itself wasaccounted for about 50 to 60 each year from 1976 to 1985.
- 51 -
IV. Future outlook
It becomes clear from time series analysis that seed Iproject had no doubtly successful in the technical managementeither in the terms of yield per ha or total national certifiedseed being sold and planted by rice farmers. The other indicatorof success is healthy and profitable seed business at seed growerlevel particularly in the progressing stage. The crucial problemat NSC is that selling price of certified seed is much lowercompared to production cost.
Adjustment due to Integrated Plant Protection policy andpioneering oriented business are two main factors claimed as thecau3es of unprofitable high economic cost of NSC.
In this regard Government subsidy helps NSC stay in seedbusiness. Subsidy is always justified for early stage of strategicbusiness with future feasible in its ERR (for example seed Iproject). Therefore serious concideration should be taken for NSCbusiness expansion in the future, since this expansion will bringcontinous consequence of expanding government subsidy too.
The multiplying positive socio economic impact at rice farmlevel has not been assesed. Further research in this respect willclarify more about the multiplying socio economic impactcoefficient to the beneficiaries.
Jakarta, October 18, 1986
VU _\ - - 0N 80° 9ROe
E { ~~~~~~~~~~~~~~~~~~~~~~~Simia si I,) Chandigarh Simki C H I N A30
PAKISTAN
*NEW DELHI \s_ 7
( ~4 oHUTAN
Luckrnow . .... A...
SoF, rsc : R loqpr -\ _, ~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~Patr F. Pn.o.
'' , -t tBANGLADESH
¾Gandh;nagar JosSoreBhopoiAh,,edobtxo
,ct.elip.: Calcutta
Peryl A: ,,
BhLibaneshwar
Bombay
Hyderabad
INDIA
Bombay,
Hy sder ubad
INDIA
.ana~ 4 t1TARAI SEEDS PROJECT
MARKETING:
^ Main Project Center
6 Buffer Warehouse
Motor Morkets and Centers
Madras Dealers (number in area)
Distributors (number in orea)
Bongalore Regional Office
* State COpitat s
* Nationo. Capitol
Sloae Boundaries
Internatlional aoundaries
Due 'a sole consideratior sone areas could *ot be includedin the map in Assan, there owe 30 dealers. 1 dstributorarid a ma1o, ,iarket in Gouhoti. -n Meghalaya there isa
