Market News

Report warns of State seed firms dominance risk

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Farmers buy seeds from a Kenya Seed Company outlet in Eldoret. FILE PHOTO | NMG

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Summary

  • State-owned firms control over 50 per cent of total seed sales in Kenya despite private players having more factories , raising the risk of stifling competition, a study said.
  • A 2020 report on Kenya’s seed sector released Thursday by The African Seed Access Index (TASAI), says even though the government has seven companies that produce planting materials out of a total of 22 in the country, the State has greater control.

State-owned firms control over 50 per cent of total seed sales in Kenya despite private players having more factories , raising the risk of stifling competition, a study said.

A 2020 report on Kenya’s seed sector released Thursday by The African Seed Access Index (TASAI), says even though the government has seven companies that produce planting materials out of a total of 22 in the country, the State has greater control of the market based on sales.

The study says a good seed industry depends on a robust private sector in, which seed producers invest in developing, producing, processing, and marketing improved varieties to farmers.

“In 2019, the government contributed at least 50 percent of the market share in three of the four crops – maize, cowpea, and beans,” says the report.

“The presence of more active seed companies increase competition and creates incentives for companies to innovate and improve service delivery,” it added.

The report says that at least a total of 22 seed companies produced and or sold seed for the four focus crops in the review period. Seed companies surveyed, 15 sold maize seed, 10 bean seed, eight traded in sorghum seed while four sold cowpea seed.

The seven state-owned seed entities include one agricultural research institute, four public universities, and two government corporations.

The primary role of the research institute and the universities is to produce basic seed and to process certified seed, while the state-owned corporations mainly focus on the multiplication and sale of certified seed.

TASAI says unlike in other countries in Africa where these companies have been fully privatised, government participation in the Kenyan seed market remains significant, raising the risk of unfair competition.