Seed Marketing

Seed Marketing

Seed marketing is one of the most vital components of seed technology. On it depends the size and scope of the seed industry. Broadly, it includes such activities as production, processing, storage, quality control and marketing of seeds. In the narrow sense, however, seed marketing refers to the actual actual acquisition and selling of packed seeds, intermediate storage, delivery and sales promotional activities. In the present context, our discussion is limited to seed marketing in the narrow sense.

Seed Marketing Comprises the Following:

1. Demand forecasts (assessment of effective demand),
2. Marketing structure,
3. Arrangements for storage of seeds,
4. Sales promotional activities.
5. Post- sales service; and
6. Economics of seed production and seed pricing.

Demand Forecasts:

The assessment of effective seed requirement is critical to any planned seed programme. The underlying principle in marketing demand forecasts should be that the seed supply keeps pace with seed demand (both present and future) in terms of quantity, quality , price, place, and time. The outcome of such an approach would be planned seed production and marketing. It would also avoid shortage and gluts and as well ensure stable prices and profits.

In making demand forecasts, the following must be considered carefully:

a) Total cultivated acreage, seed rate, quality replacement period and assessment of total potential seed requirement of each of the important crops.
b) Impact of extension efforts on the introduction of improved production techniques, and future plans for promotion.
c) Current acreage under high yielding varieties and amount of seed sold in the last year.
d) Cultivator preferences for varieties, package size, kind of packing, quality and price.
e) Number and size of competitors.
f) Kinds of publicity and sales promotion those are most effective.
g) Climate of the area where seed is being marketed.

Assessment of potential effective seed demand of the market, based on total seed requirements is of very little values, since the demand for high quality seed normally exists for the crop area which is under good fertility and irrigated conditions. The requirements for the remaining crop area are covered by uncontrolled production material obtained from the preveious crop production. Furthermore, experience shows that the varietal purity and the yield potential of high quality seed of the self pollinating varieties can be maintained by farmers during the reproduction process, without significant deterioration for three to four generations. Therefore, individual farmers only need to replace seed of self –pollinating varieties every third or fourth year. Thus, the demand for high quality seed of self –pollinated crops is normally not higher than 25 to 30 percent of the total requirement for areas under irrigated and high fertility conditions. However, there could be some exceptions, E. g , if the climate of the region is not suitable for retaining viability of seed from the preveious crop production. The farmers of such areas, if properly trained, can buy high quality seed each year, even of self-pollinated crops.

A rather different approach must be taken in the marketing of hybrid seeds, in which case new seed is needed by the farmer each season. Although, the critical period may be rather difficult, the subsequent planning is easier, particularly after sale statistics are seen to point in a certain direction.

The dealers need to make periodic surveys of the market areas, to determine market potential  at least one season in advance. Dealer advance orders should be treated as informational material to aid the production section in organising an effective production programme. The dealer should, however , hot to be held to the exact amounts of such advanced orders.

The uses of demand forecasts are many and varied. A reliable forecast is the sheet anchor of all planning in business. Long term demand indications, in terms of quality, prices and locations, help to make an investment decision, that is how much to invest , where to locate the production facility, and how to organise marketing. Intermediate-range demand forecast help to make decisions on action necessary to optimise profits by balancing production and sales. Uses of short-term demand forecast include production planning and scheduling, distribution planning and scheduling , determination of targets and quotas for dealers and salesmen, planned buying of inputs, preparation of cash flow budgets, preparation of overall budgets and profits and loss statements , modifications of prices, policies, etc.

Marketing Structure: (Establishment of Effective Channel for Seed Distribution) :

The key to success in seed marketing is the establishment of effective channel of distribution. The various channels through which seed can be marketed vary greatly according to the needs of the seed company.

Present Status of Seed Distribution:

The types of seed distribution systems in India are:

a) Farmer to farmer distribution. This is the traditional method, whereby farmers obtain their requirements from neighbours either on cash payment or on exchange basis. No formal marketing organisation is required for this type of distribution.

b) Distribution by co-operatives. This involves procurement of seeds by cooperatives and its subsequent distribution. The distribution of seeds through cooperatives has often been encouraged by the government through subsidies and guarantees.

c) Distribution by departments of Agriculture. Seeds are purchased by the governments, out of the government funds, and are distributed district Agricultural Officers and Block Development officers.

d) Distribution of seeds by non-government or quasi-government agencies. In this system, the seeds are distributed through a network of seed distributors and seed dealers.

Both the seed Review Team ( 1968) and the National Commission on Agriculture ( 1976) have recommended that the State government should withdraw from the seed procurement and distribution fields in a phased manner, so as to be able to concentrate on their principal function of providing extension education in the use of high quality seeds for improving productivity. Thus, emphasis is on the establishment of a seed marketing network to replace the role of state government, and to establish a system that will be adequate for the anticipated increase in seed demand. In this connection, it is considered necessary that a network of seed dealers should be established.

Marketing Organisation:

There are a number of possible ways a marketing network could be organised.

The simple and most efficient systems are to establish a central marketing cell and regional offices in end-use areas. The retail sale could be organised either by appointing distributors/ dealers such as private dealers, cooperatives, agro-sales service centres, etc, or by opening seed company/ corporation –owned sales points, or both as illustrated in above:

Central Marketing Cell:

1) Regional Offices
a) Sole distributors
b) Dealers (Private)
c) Dealers (Coops)
d) Dealers (Agro-Sales Services)
e) Company sale depots

a) Sole Distributors:

i) Dealers (Private)
ii) Dealers (Coops)
iii) Dealers (Agro-Sales Service)

Under such a scheme, the central marketing cell is responsible for planning, appointment of dealers/ distributors, seed movement, marketing intelligence research , pricing , promotional activities, financing and record keeping.

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