Current Status on Business Performance and Development Opportunities

Home , Myinmu, Myinmu Township, Patheingyi Township, Sagaing Region

SEED PRODUCERS IN THE DRY ZONE OF MYANMAR Current status on business performance and development opportunities

Abishkar Subedi, Thuzar Khin and Win Soe

Integrated Seed Sector Development Programme, Myanmar – 35 35+

METHODOLOGY

FIGURE 1 About ISSD Myanmar Programme Assessment framework Key performance areas used to analyse seed producer business performance in the dry zone of Myanmar The Integrated Seed Sector Development (ISSD) programme Four strategic aspects of seed business constitute the poor satisfactory envisions a vibrant and pluralistic seed sector that caters framework of this study. We looked at the extent to good for the quality seed needs of smallholder farmers in which seed producers were technically well-equipped, 1/ TECHNICALLY 3/good MARKET ORIENTED Myanmar’s dry zone. Started in 2017, ISSD is a four years professionally well organized, market oriented and WELL- EQUIPPED programme with a budget of Euro 1.5 million. It is imple- strategically linked. These are the four key performance mented by the Ministry of Agriculture, Livestock and Irriga- areas (KPAs) that we adapted in the context of Myanmar The scheme of evaluation of tion (MOALI) of Myanmar and Welthungerhilfe (WHH), (Figure 1). Each KPA was further analyzed, based on one overall seed business with technical support from the Wageningen Centre for or more Critical Success Factors (CSF) and scored with a performance Development Innovation (WCDI), Wageningen University four-points scale; one (lowest) indicating poor performance, 76–100% and Research, and Resilience BV. The programme is funded and four (highest) indicating excellent performance. excellent by the Directorate-General for International Coopera- 0–25% poor tion, Ministry of Foreign Affairs of the Kingdom of the The Critical Success Factors for each key performance 51–75% Netherlands. areas were as follows: good

26–50% The ISSD Myanmar programme operates in four regions Technically well-equipped – a crop and varieties portfolio satisfactory in the dry zone of Myanmar: Sagaing, Mandalay, Nay Pyi that fulfils local demand; easy access to the required

Taw and East Bago regions. Rice, green gram, black gram, volume of Early Generation Seed (EGS); a substantial 1: 26% 2/ PROFESSIONALLY 2: 25% 4/ STRATEGICALLY LINKED pigeon peas, chick peas, sesame, groundnuts and sun- volume of quality seed production; pre-harvest and 3: 65% WELL-ORGANIZED 4: 82% flowers are the eight targeted crops of the ISSD Myanmar post-harvest seed production skills; the ability to pro- programme. duce quality seed guided by the seed quality assurance system. Interventions focus on: 1) improving seed sector coordination, 2) increasing the business performance of early Professionally well-organised – easy access to seed produc- FIGURE 2 Map showing study sites generation seed producing seed farms, and 3) increasing tion land; easy access to supplementary irrigation and the local availability of quality seed at an affordable price physical assets; an effective seed business plan, along for smallholder farmers. The program is targeted to with proper finance and human resources management. reach 75,500 smallholder farmers with locally available quality seed of well adapted varieties of rice, food legume Market orientated – good market segmentation; effective and oilseed crops. product promotion; successful handling of customer Kachin feedback.

About the study Strategically linked – good record of acquiring services; effective use of new technologies, information and capaci- INTRODUCTION The purpose of the study is twofold. It serves as a base- ties; membership of seed growers’ associations. Sagaing line study assessing the current status of seed producers Monywa Madaya in the dry zone of Myanmar in terms of their technical Myinmu Pathengyi Kyaukse The use of quality seed is a key driver for increasing skills, internal capacities, business models, operational Study sites Chaung-U the agricultural productivity of Myanmar’s farmers. The styles, partnerships and sustainability. It also serves as Shan inherent characteristics of varieties and the quality of the a key entry point to identify their challenges and support The study was organised in three townships from Sagaing Chin seed determine to a large extent the yield potential and needs. Based on the information and analysis provided region (Chaung U, Monywa and Myinmu) and three the capacity of the crop to adapt to a changing climate. by the study, the ISSD programme selects seed producers townships from Mandalay region (Kyaoukse, Madaya Mandalay In recent years, improved varieties of a large number of for further support, designing specific interventions and Pathengyi) (Figure 2). Rakhaing crops have been developed or tested and released in to develop scalable and sustainable local seed business Magwe Myanmar; however, not all of them have reached farmers. models in the dry zone of Myanmar. Kayah Access to good quality seed at an affordable price remains Sampling Bago a major issue for smallholder farmers in Myanmar. Seed producers in this study include existing ‘contact farmers’ or ‘individual farmers’ in the dry zone who are A cluster sampling method was used to select seed Improved access to good quality seed of a wide portfolio involved in quality seed production of improved or officially producers. Data were collected from 18 clusters, nine in Kayin of varieties contributes to food and nutrition security, released varieties. They are often linked with the Depart- the Sagaing region and nine in the Mandalay region. The Ayeyarwady Yangon income generation, and climate resilience for men and ment of Agriculture (MOALI), and produce quality seed survey consisted of a total of 130 seed producers, chosen women farmers in Myanmar. In addition, seed sector for local market. We have excluded domestic private from producers from six townships that were growing development is a business opportunity that in itself seed companies in this report; these have been studied the eight crops targeted by the programme. Mon creates economic growth, jobs and exports. separately. Survey design

A semi-structured questionnaire was used to interview the seed producers. Data collection took place from Tanintharyi November 2017 to December 2017. The data collection software KoBoToolbox was used to administer the survey. Developed in English, the questionnaire was pre-tested and finally administered in the Myanmar language. 0 500 km

2 3 RESULTS: BUSINESS PERFORMANCE ASSESSMENT OF SEED PRODUCERS

CRITICAL SUCCESS FACTORS: 1. Variety portfolio and early generation seed CRITICAL SUCCESS FACTORS: 1. Market segmentation 2. Quantity of seed produced 2. Product promotion 1/ TECHNICALLY WELL-EQUIPPED 3. Seed production Skills 3. Customer feedback 3/ MARKET ORIENTED 4. Seed quality management Kyaukse Madaya Patheingyi The study suggests that the overall market orientation 83% of seed producers show a satisfactory perfor- Kyaukse Madaya Patheingyi 1: 66% 1: 58% 1: 65% mance in being technically well equipped, while no 2: 34% 2: 35% 2: 35% of seed producers is satisfactory in 78% of cases, while 1: 42% 1: 26% 1: 31% 3: 35% 3: 45% 3: 34% 2: 24% 2: 25% 2: 25% 23% of respondents show a good performance. producers were found to be poor (scoring below 25%) 3: 53% 3: 65% 3: 49% or excellent (scoring above 75%). 4: 46% 4: 37% 4: 44%

Mandalay Region With regard to specific CSFs, seed producers show a satisfac- With regards with critical success factors, the study shows that Mandalay Region tory performance both in product promotion and in customer seed producers both in Mandalay and Sagaing region score Chaung U Monywa Myinmu feedback management. However, it is in the way seed lowest in quantity of seed produced, having a poor perfor- Chaung U Monywa Myinmu 1: 59% 1: 62% 1: 59% producers diversify their customer portfolio (market segmen- 2: 35% 2: 36% 2: 33% tation) that the performance score is the highest, reaching mance (score below 25%). This is the area of performance 1: 34% 1: 38% 1: 43% 3: 38% 3: 35% 3: 37% 2: 25% 2: 25% 2: 25% the level of good. Moreover, the data indicates that Nat Sein where most support is needed. On the other hand, the area 3: 64% 3: 55% 3: 52% of performance in which seed producers are best technically 4: 59% 4: 42% 4: 37% village, in Mandalay Region, performs best (score: excellent)

equipped is production skills, with four out of six townships Sagaing Region in market segmentation, as their seed producers manage to scoring good. Sagaing Region comply with 78% of requirements. Analyzing the data at village level, the study shows that two Seed producers in Inn Tine village and Kyawt Min village, both villages score particularly high on the CSF of seed quality in Sagaing Region, require the greatest attention by the pro- management. Kyar Kar, in Mandalay Region, and Thaunt Pan gramme as their score is just on the threshold between poor Hla, in Sagaing Region, respectively meet 88% and 80% of the OVERALL and satisfactory in the CFS of customer feedback management. requirements for this CSF, indicating that their performance is excellent. On the other hand, two villages in Kyaukse township Overall seed business performance for all KPAs We assessed the (% of producers per performance category) require the closest attention by the programme, being the overall performance of seed producers, villages with the lowest level of seed quality management 130 seed producers 5.56% poor 84.72% satisfactory taking into account (25% score). interviewed 9.72% good all KPAs: data shows over half are located in Sagain Region 11% 32% 0% excellent that on average seed rest are located in Mandalay 25% producers have a poor –35 poor performance, as their 87.5% male 12.5% female years old score meet 25% of the 35–45 all together requirements for a years old successful seed business performance. Proportion of producers scoring per KPA (poor, satisfactory, good, excellent) 2/ PROFESSIONALLY WELL-ORGANIZED 0% 25% 50% 75% 100% From the graph on 4/ STRATEGICALLY LINKED HIGHER LEVEL Technically the left, we observe All seed producers scored as satisfactory in being profes- EDUCATION well equipped that seed producers The study indicates that 78% of seed producers show 53% HIGHER LEVEL are particularly weak sionally well-organized in both Sagaing and Mandalay Professionally satisfactory performance. At the same time, 22% of of seed producers EDUCATION with regard to the regions. well organized respondents are classified aspoorly linked, indicating PRIMARY strategically linked EDUCATION Market KPA. that most of the support provided by the programme oriented should be in this CFS of seed business. It is worth noting that Ahlar Kapa village in Sagaing region is Strategically where seed producers perform best. Further analysis could linked reveal what makes these producers perform particularly well, As this KPA is composed by only one CSF, the data at township and the way the producers are organized could be taken as and village level reflect results at the general level. Seed pro- an example to scale up in other villages and regions. ducers show satisfactory performance, with only a few cases of CRITICAL SUCCESS FACTORS: 1. Access to land, water CRITICAL SUCCESS FACTOR: Strategic linkages in township/village level 2. Seed business plan poor performance (Tha Pyay Whun and Ye Baw Gyi in Kyaukse 3. Financial management township, Magyi Pin in Patheingyi township and Kyawt Min in Kyaukse Madaya Patheingyi Myinmu township). Kyaukse Madaya Patheingyi Kyar Kar: 44% Kan Lae Khone: 30% Magyi Pin: 25% 1: 44% 1: 43% 1: 43% Tha Pyay Whun: 25% Tha Min Twin: 27% Nandar North: 28% 2: 40% 2: 42% 2: 41% Ye Baw Gyi: 25% Nat Sein: 33% 3: 29% 3: 31% 3: 32% Pehlaw Hpo: 29% Mandalay Region Mandalay Region

Chaung U Monywa Myinmu Chaung U Monywa Myinmu 1: 44% 1: 37% 1: 49% Inn Ma: 32% Inn Tine: 29% Ahlar Kapa: 27% 2: 38% 2: 39% 2: 39% Shwe Hlae: 34% Kan Pyar: 29% Kyawt Min: 25% 3: 29% 3: 29% 3: 33% Thaunt Pan Hla: 38% Lae Zin: 41% Wun Pyae: 30% Sagaing Region Sagaing Region

4 5 RESULT: CURRENT STATUS OF SEED PRODUCERS IN SEED BUSINESS MANAGEMENT

1/ TECHNICALLY WELL-EQUIPPED 3/ MARKET ORIENTED

Crop and variety portfolio Seed production skills Market segmentation Product promotion • Seed producers produce a maximum of three crops and • 85% of seed producers have skills in pre-harvest production, • 88% of seed producers have only one buyer (farmers within • 51% seed producers use word of mouth to promote their three varieties, of which at least one is a new improved such as site selection, land preparation, and fertilizer appli- the same township) but 12% have three types of buyers product. They occasionally organize promotional activities variety. cation. However, they need labour to perform weed control, (farmers within the same township, farmers outside the such as giving out seed samples and organizing demonstra- • Only one seed producer produces hybrid seed (sunflower); sowing, rouging and agro-chemical applications. township, and the township office). tions. the rest produce OPV. • 58% of seed producers have some post-harvest skills. For • 87% of seed producers do not set their own seed price. • 98% of seed producers have no seed packaging materials, • 45% of seed producers get information on new varieties instance, they can do packaging and storage on their own. The price is determined by the market price demanded own bags, or brand name. from brokers, 31% from DOA extensions, 14% from DAR The hiring of skilled labour is needed for threshing, drying, by brokers and/or DOA extension staffs. However, seed and 1% from NGOs. cleaning, and seed treatment. producers sometimes set their own price when supply is low and demand is high. Customer feedback

Q.C. • 85% of seed growers sold between 50% and 70% of the • 20% of seed producers have specific mechanisms to get Seed quality management Access to EGS seed that they produce. customer feedback (farmers to farmers in person, contact • 30% of seed producers by phone or field visits). • Seed producers are able to get only 50% of the volume of • 75% of seed producers grow do not have knowledge of the required registered seed of the majority of the crops one improved variety that • 80% of seed producers have no specific mechanisms to rouging and have not done studied. have been released within get customer feedback. it before. THE TOP FIVE CHALLENGES TOP FIVE CHALLENGES • 38% of seed producers do not use fresh registered seed, the last 10 years. but use certified seed as EGS to produce quality seed • 73% of the seed producers IN SEED PRODUCTION IN SEED MARKETING (i.e. they produce C2 seed). have not submitted seed samples to the labora- ❶ increase of drought ❶ insufficient number • 45% seed producers source their registered seed through tory over at least the two middlemen. Only 15–31% of seed producers access regis- (78%) of seed marketing last production seasons, outlets (76%) tered seed directly from the DOA or DAR farms. because they do not know where or how to send ❷ shortage of labour samples. (53%) ❷ low seed market Scale of seed production • Only 5% of seed producer prices (54%) • 46% seed producers have 1–5 acres, 39% have 6–20 acres, receive support from DOA ❸ increase of pests and and only 5% seed producers have over 30 acres of land extension staff for sending diseases (42%) volatility of the grain given over to seed production. ❸ seed samples to the lab. market (32%) • 43% seed producers produce 1–20 baskets of seed, 20% seed producers produce 21–50 baskets, 16% produce 51–100 ❹ insufficiency of capital and only 5% produce over 500 baskets of seed. (35%) ❹ limitations of marketing skills (25%) ❺ insufficiency of EGS (28%) ❺ lack of any platform 2/ PROFESSIONALLY WELL-ORGANIZED for seed producers, seed traders and 4/ STRATEGICALLY LINKED seed users to meet Seed business plan • 51% of seed producers together (21%) reinvest between 30% and • 82% of seed producers have no long-term vision or plan- 50% of their revenues in ning. They manage their business on an ad hoc basis. the seed business. • 45% of seed producers do not keep records. • • Seed producers have functional collaboration with • Seed producers have made some estimates for resource Access to land, irrigation, seed equipment and planning but have no clear schedule for production activities. farmers and DOA extension staff for seed production infrastructures and marketing. They do not have strong relationships • Last season 46% of seed producers had 2–5 acres, and or interactions enabling them to acquire services, technologies, information and capacities mutually. Financial management 27% had 5–10 acres of land dedicated to seed production. • 95% of seed producers are not officially registered. • 53% of seed producers have no financial bookkeeping • 78% of the seed producers have supplementary irrigation This means that they can only operate as informal system and do not audit. 46% of seed producers have a facilities available all year round. This scheme covers water seed producers. poor bookkeeping system. requirements for 50% of their land. • Only 35% of seed producers are a member of a seed • None of the seed producers have a bank account dedicated • Only 10% of seed producers have two types of machinery grower association participating in at least one to seed business. for pre-harvest management, 2% of seed producers have any machinery for post-harvest management (rice threshers). meeting per year. • 65% of seed producers do not have access to credit and 35% of seed producers have credit from the agricultural • 80% of seed producers have warehouses that can store • bank. On average, the available credit only covers 50% of up to 1000 baskets. 20% have warehouses that can store the required investment. 1000–10 000 baskets.

6 7 the Myanmar national gene bank and assessment of local THE WAY FORWARD: varieties maintained by farmers are very important as they Priority strategies hold thousands of germplasms. Crowd sourcing, using a citizen science approach and a fast-tracking variety delivery of climate resilient varieties, should be the key strategy. The study provides detailed insight on the current status of seed producers’ business performances and the key Producing own Early Generation Seed challenges that they face. The quality and quantity of EGS production and supply specific to pulses and oil seed crops in the dry zone is A number of intervention strategies would help to develop not sufficient. Only 50% of registered seed demand is viable, scalable and sustainable local seed businesses in fulfilled. This has resulted in the recycling of certified the dry zone of Myanmar. These are detailed below. seed over several seasons. Efficiency would be gained if some of the steps of the seed value chain were to be Development of an organisation model that shapes taken up by seed producers themselves. In this regard, the local seed business producing own-registered seed would have the biggest Currently seed business operations are done on an impact, as it would solve the RS seed demand and further individual basis. Business sizes are very small (about assure seed quality. half metric ton of seed per season, per seed producer). Seed producers are not officially registered yet. In regula- Strengthening the internal and external seed quality tory terms, they are informal seed producers. In addition assurance system to this, mobilising public seed service provision is Only 5 % of seed producers of the dry zone send seed challenging; for instance, providing a seed quality assur- samples to the seed testing laboratory. This means that ance service capable of satisfying the need of hundreds of most of the seed sold to farmers in the study sites is small-scale seed producers, often at the same time. The uncertified, and that its quality is unknown. Over 70% of public seed quality assurance service is already resource seed producers do not know that they need to send their constrained in fulfilling their obligation. Getting access seed samples to the seed quality testing laboratory. Two to credit from financial institutions is difficult because issues thus need urgent attention. First, seed certification current seed businesses are so informal and small. Access should be a compulsory requirement for those who in- to credit would solve many issues such as purchasing seed tend to sell seed to the farmers. This should go together equipment and developing infrastructures that could with a training and awareness programme. Second, the lower labour shortage issues. In this context, moving capacity of seed producers should be developed so that from small-scale individual seed production to a more they can carry out their own internal quality controls. collective business model would be the most effective The key areas of focus should be sourcing good quality pathway for development. EGS, using fresh registered seed every season to produce certified/commercial seed, developing capacity in rouging In many emerging economies, seed producers have and testing seed germination, and improving seed storage. gained economy of scale through establishing their own cooperatives or seed producers’ associations. It is legally Seed business planning possible to establish seed producer cooperatives in Long-term visions and business plans are completely Myanmar. We suggest organising current individual seed lacking among with seed producers in the dry zone. production into seed producer cooperatives (SPC) at the Proper financial record keeping is also largely lacking. cluster village or township level. In this regard, partner- Intervention should focus on developing tailor-made ship with the Department of Cooperatives of MOALI training for seed producers to develop their capacity in should be emphasized to develop specific guidelines for seed business planning and record keeping. SPCs. These SPCs would need to develop functional linkages, on the one hand, with the output market such as Seed marketing and creating more demand traders and millers for demand information, on the other Currently seed sales are about 50–70% of total production hand with public seed farms for EGS and other seed ser- per season. Seed producers do not yet deploy specific vice providers. This would allow them to bulk their seed seed marketing strategies or get customer feedback. business efforts and resources, and eventually allow Organising quality seed demonstrations, new variety them to grow as viable seed businesses. trails, and township level seed fairs, all of which could be done by the producers themselves, could boost quality Promoting climate resilience varieties seed uptake, develop mechanisms for customer feed- Most seed producers in the dry zone have experienced back and create more demand. These activities would increased spells of drought, disease and pest pressure. help to develop seed marketing platforms at the local level. Framers and seed producers both need climate resilient Effective linkage with grain traders and millers should varieties more urgently than ever before. Currently DAR be highly emphasised to broaden the seed market and is the main public body for new variety development or improve demand estimation. Most seed producers sell for testing of CGIAR’s best bets. Effective coordination is their seed directly to the farmers, but as yet there are no needed with ICRISAT, the World Vegetable Centre, IRRI linkages with agro-dealer shops; these linkages should and the international private seed sector to source best be established. In addition to this, 98% of seed producers bet products, to conduct variety adaptability trials, and to do not have packaging materials or brand names; this is make available resilient crops and varieties. The role of another area that needs support.

CITATION OF THIS BRIEF: Subedi, A, Khin, T, and Soe, W. 2018. Seed producers in the dry zone of Myanmar: current status on business performance and development opportunities. Integrated Seed Sector Development Myanmar Programme, Research Brief 1-2018.