Many seed companies in Nigeria cannot compete in the local market, leading to a fall in the current number of players from 314 to 40, signifying an 87 percent drop.
Also, most of the seed companies ventured into the industry during the Growth Enhancement Scheme (GES) of the ex-President Goodluck Jonathan administration when key inputs such as seeds and fertilisers were distributed to farmers.
Under the scheme, contracts were awarded to lots of seed companies to provide farmers with input. But the scheme was suspended by the current administration as states could no longer afford to pay their counterpart fund for the scheme.
The companies that closed shop struggled to offer competitive prices to buyers in the face of stiff competition with local and international players, experts say.
Industry players argue that some of the firms lacked the capacity to understand the chemistry of the industry, but jumped into it basically to make money. They were, however, gobsmacked by the reality on ground.
Michael Oyegbaja, director of marketing, Premier Seeds, in a telephone response to BusinessDay questions attributed the tremendous decrease in the number of seed companies that are functional to quick-money syndrome in the country and the lack of technical capacity to operate in the industry.
“A lot of companies registered as seed companies because they thought they could make quick money due to the huge potential. Also, the industry requires lots of technical capacity to operate which majority of them lack,” he said.
Nigeria has a total of 314 registered seed companies, according to data from the National Seed Council, but BusinessDay investigation found that only 40 of the registered companies are in operation.
BusinessDay visited the premises of some seed companies located across five different states and found out that many of the firms registered by the National Agricultural Seed Council (NASC) were not functional.
The situation has slowed the growth of Nigeria’s seed industry which has a potential put at N777.38 billion in 2015, thus leaving farmers with low quality and adulterated seeds and seedlings that portend danger to crop production and food-sufficiency target.
Experts suggest that currently the value of the industry may have risen by five to 15 percent since 2015.
“Lots of businesses ran into the seed industry because of the enormous potential without undergoing due diligence of the industry. They lack the capacity needed to successfully operate in the industry and the infrastructure to grow the industry is also lacking,” AfricanFarmer Mogaji, chief operating officer, X-Ray Farms Consulting Limited, said.
“Also, many of them went into it with the intention of importing seeds into the country and not to produce,” Mogaji added.
He advised NASC to carry out de-registration exercises after two to three years if the companies are unable to carry out any activity.
Since 2012, the number of registered private seed companies grew from 11 to 315.
Some of the seed companies that are functional, according to BusinessDay’s investigation, are Premier Seeds Nigeria Limited, Maslaha Seeds Nigeria Limited, West African Cotton Company Limited (WACOT), Notore Seeds Limited, Candel Seeds Limited, Alheri Seeds Nigeria Limited, Value Seed Limited, Techni Seed Limited, among others.
Nigeria’s total national seed requirements for major crops, including maize and rice, stood at 413,417.64 metric tonnes (MT) in 2017, while the quantity available was 93,306 MT, leaving a yawning gap of 320,111 MT, data from NASC show.
To help reduce cost of production for operators willing to invest in the industry, some experts suggest the issue of inadequate funding can be addressed if seed companies enter into contractual agreement with breeders in research institutes to fund their breeding activities.
“The cost of breeding can be enormous and since Nigeria cannot adequately fund agric research institutes to produce enough breeder seeds, seed companies should enter into contractual agreement to fund breeders,” Sam Ajala, breeder, International Institute of Tropical Agriculture (IITA), said in a response to questions.
“With adequate planning and funding of the breeders by seed companies, research institutes will be able to produce the volume that they require,” Ajala said.
In June, Nigeria signed the seed bill into law to provide legal backing to NASC to deal with issues of seed adulteration in the country but the Plant Variety Protection Bill – which provides legal intellectual property rights to plant breeders who develop new and improved seeds for increased crop production – is still waiting for assent.
JOSEPHINE OKOJIE
