Seed Co Tanzania

Abundance from African soil

At the age of 75 Seed Co is an established player on the global agribusiness scene though it does not spend as much time in the headlines as some of its rivals. Nevertheless on the continent of Africa it is the biggest seed company, outstripping the large multinationals also interested in the African market in both volumes and value. Seed Co develops and markets certified crop seeds, including hybrid maize seed, cotton, wheat, soya bean, barley, sorghum and ground nut. Its core function is genetics research and subsequently the production, testing, marketing, sales and distribution. This is a fully integrated business, controlling the supply chain from end to end. Very little is outsourced: the company is unique in developing in-house genetics for over 95 percent of what it sells. And it is also unique in that the vast majority of its sales – again about 95 percent – is sold to small scale farmers.

The company's origins go back to a 1940 seed co-operative in Zimbabwe called the Seed Maize Association. Amalgamation, organic growth and acquisition brought it to the point in 1996 when it floated on the Zimbabwe Stock Exchange, raising capital that enabled it not only to upgrade its facilities in that country but to embark on a process of regional expansion into neighbouring Zambia, Malawi and Mozambique. At that period it also formed a research joint venture, Syngenta Seed Co in South Africa. However its most significant international collaboration was inaugurated earlier this year when international agricultural co-operative group Limagrain bought a significant share of Seed Co. Limagrain is the fourth largest seed company in the world with annual sales of more than €1.9 billion – the alliance gives Seed Co access to a large product range, yet one that does not compete with it in Africa. Just as importantly it too has a co-operative background so shares Seed Co's values and ethos.

Today the company supplies farmers from South Africa right up to Ethiopia. In 2010 Seed Co established a business at Arusha in northern Tanzania under the leadership of an experienced agriculturist and entrepreneur, Managing Director Dave Clements. Tanzania is prime territory for Seed Co, he explains: “Out of the 40 odd million people who live here 80 percent are employed in agriculture, the vast majority on small scale farms.”

As yet the company has no research station based in Tanzania itself – however it has seven across Africa, covering all the different types of climate and soils. One at Kitali in Kenya, for example specialises in highland conditions, another in Zambia looks at tropical forest ecologies, one in Zimbabwe itself does the Savanna and one is located in South Africa where the climate is more temperate. In any case, he points out, plant breeding rights are not yet well developed in Tanzania and IP protection is better controlled elsewhere.

 

Nevertheless Tanzania is taking strides towards getting a modern regulatory framework in place as well as becoming internationally accredited in the seed industry. “Under Nyerere's African socialism (Ujamaa) the government controlled these matters and the material was all in the public domain,” explains Clements, “but as the private sector has expanded these regulations have had to be put in place.” Until the country becomes accredited and the private sector can set up its own labs Seed Co will rely more on its own research network, he says.

He is excited by commercial opportunities presented by the East African region, especially Tanzania. “We are doing a significant amount of local production. About 70 percent of our seed sold is produced locally and we have been topping that up from Zambia. However in the next three years we intend to become completely self sufficient in Tanzania.”

The seed conditioning plant that has been built at Arusha is one of the most modern in the world, and here the company employs around 100 people. A further 500 work in the field through outgrowers. The cycle starts with the farmers' demand for high quality seed. A big majority of small farmers in Tanzania still grow their crops from seed retained from the year before. It's a time-honoured way to farm but it is not good for productivity, as the stock degenerates and crops need greater quantities of fertiliser and become less resistant to pests. “We aim to get at least 80 percent of Tanzanian farmers to use certified seed,” says Clements.

The need for the farmers to access seed that suits their land is met by the research station, which supply genetic solutions for the company to test in the different climatic and ecological zones of the country. “When we find a product that is appropriate, we do the multiplication of that product here in Tanzania. The multiplication is done through establishing out-growers and training them on the skills of hybrid production. They then deliver that product to us where we do the processing and conditioning and clean, grade, treat and pack the seed.” Another arm of the company does the marketing and explains to farmers the attributes of the seed and when and why they ought to use it.

The out-growers and distributors are clearly as important as the researchers in this cycle. Out-growers are selected on the basis of having sufficient acreage, with sufficiently good isolation to avoid contamination from other crops in the area, he explains. “We have a team of agronomists that we send for training to become accredited inspectors, and these visit the farms on a weekly basis to ensure that the quality standards are met right though the production cycle. A qualified agronomist is attached to each of the distribution depots to train the farmers.

As much training as possible is done at the farm level, and involves the workers as much as the management. “On the retail side, we bring in the distributors twice a year and train them on the product and the information they need to give the farmers, how to handle complaints and the like. We do around 300 visual demonstration round the country a year where farmers are brought in to learn not just about the seed, but weed control, fertiliser use and general best practice.”

Seed Co supplies the seed from its store locations across the country to local wholesalers, who then supply small dealers trading sometimes from a single godown. Seed Co is a founder of the Last Mile Alliance, an innovative model that brings together commercial partners (providers of high-quality farm inputs, financial services and insurance), existing agro-dealers, foundations and donors to create a cost-effective rural distribution network to reach smallholder farmers in Tanzania, delivering both commercial success and development impact at scale. “Its objective is to get product within 25 kilometres of every farmer in Tanzania because that is the distance a farmer can travel on a bike in a day and get home again. Eventually we would like to get that down to 12 kilometres!” Dave Clements enthuses.

Right across Africa, he concludes, the average farmer is still only realising about 25-30 percent of the genetic potential of the varieties available. “These guys are at the core of our business so it is not just about creating a better product for the farmer, as our competitors do, but trying to create a better farmer for our product!”

www.seedco.co

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