EA_Seed_Assessment_Report_26_October_2018.pdf

ASSESSMENT TO SUPPORT THE PROMOTION OF REGIONAL SEED TRADE IN EAST AFRICA | iii

FEED THE FUTURE: BUILDING CAPACITY FOR AFRICAN

AGRICULTURAL TRANSFORMATION (AFRICA LEAD II)

Assessment to Support the Promotion of Regional Seed Trade in East Africa

This publication was prepared by DAI in conjunction with Agri Experience Limited and funded by the

U.S. Agency for International Development under Cooperative Agreement No. AID-OAA-A13-

00085.

Note: This report is for internal use by Africa Lead and USAID only

Program Title:

Feed the Future: Building Capacity for African Agricultural

Transformation (Africa Lead II)

Sponsoring USAID Office: USAID Bureau of Food Security

Award Number: AID-OAA-A13-00085

Awardee: DAI

Date of Publication: October 2018

Author: Africa Lead

The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International

Development or the United States Government.

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TABLE OF CONTENTS

I. EXECUTIVE SUMMARY ................................................................................................................................ IX

RECOMMENDATIONS ................................................................................................................................... XII

SHORT-TERM RECOMMENDATIONS ........................................................................................................................... XII LONG-TERM RECOMMENDATIONS ............................................................................................................................ XIII

II. INTRODUCTION

IV. BACKGROUND INFORMATION

Regulatory and Institutional Framework Regional Seed Harmonization and its Potential Impact Country Status

V. KEY FINDINGS

1.0 REGIONAL SEED TRADE AND TRADE BARRIERS

Regional Seed Trade Seed Company Perspectivees on Regional Seed Trade Demand Regional Seed Trade barriers Slow Progress towards Implementation of the Regional Seed Harmonization Regulations Mistrust Around the Certification Process and Quality Assurance Capacity of Trading Partners Lack of Clarity and Effectiveness of Trade and Certification Procedures Efficiency of Border Operations Capacity for Seed Testing for Importation Private Sector Perceptions of Risk Availability, Quality, and Use of Seed Trade Data for Effective Decision Making Political Economy as a Barrier to Seed Trade Seed Subsidies

2.0 Effectiveness of Existing Seed Programs Supported by Development Partners to Reduce Trade Barriers and Increase Regional TradE

3.0 Organizational Capacity of Institutions Facilitating Regional Seed Trade and Policy

VI. RECOMMENDATIONS

Short-Term Recommendations Long-Term Recommendations

VII. REFERENCES

VIII. ANNEXES

Annex 1: Country Profiles

Kenya Country Profile Rwanda Country Profile Tanzania Country Profile Uganda Country Profile Zambia Country Profile

Annex 3. Import and Export Data

Annex 4: Regional Demand and Supply Comparisons

Annex 5. Seed Trade-Related Programs in East Africa

Annex 8: Regional Seed Policy Harmonization Efforts

Annex 9: Seed Class Terminology

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TABLES, GRAPHS, AND FIGURES

TABLES

Table 1: Border Posts Visited Table 2: Selected TASAI Indicator Scores Relevant to Regional Seed Trade Table 3: Categories of Seed Traded by the Private Sector Table 4: Import and Export Volumes of Focus Crops in Focus Countries Table 5: Kenya's Formal Market Share for Maize Seed Table 6: Status of COMESA Member States Alignment with Harmonized Seed Regulations

GRAPHS

Graph 1: Yearly Imports and Exports for Maize and All Other Seeds Traded Graph 2: Kenya's Maize Seed Yearly Imports and Exports Graph 3: Rwanda Maize Production and Yields Graph 4: Rwanda's Maize Seed Yearly Imports and Exports Graph 5: Tanzania's Maize Seed Yearly Imports and Exports Graph 6: Zambia's Maize Seed Yearly Imports and Exports Graph 7: Kenya vs Tanzania – Hybrid Maize Seed Demand and Supply Graph 8: Rwanda vs Zambia – Bush Beans Seed Demand and Supply

FIGURES

Figure 1: Map of Countries and Border Points of Focus

Figure 2: Number of Key Informant Interviews Conducted by Country

Figure 3: Status of Focus Countries Relative to International Seed Treaties and Conventions

Figure 4. Total Imports and Exports of Maize, Sorghum, Soybean, and Groundnuts

Figure 5: Comparison of COMESA and SADC Regional Variety Catalogues

Figure 6: Poster at the Busia Border Poster

Figure 7: Summary of Rwanda’s Seed Sector Characterization

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ACRONYMS

AATF African Agricultural Technology Foundation

ACTESA Alliance for Commodity Trade in East and Southern Africa

AGRA Alliance for a Green Revolution for Africa

ASARECA Association for Strengthening Agricultural Research in Eastern and Central Africa

ASTI Access to Seeds Index

ASYCUDA Automated System for Customs Data

BMGF Bill and Melinda Gates Foundation

CAADP Comprehensive Africa Agriculture Development Program

CBD Convention on Biological Diversity

CIAT International Center for Tropical Agriculture

CIMMYT International Maize and Wheat Improvement Center

CIP International Potato Center

COMESA Common Market for Eastern and Southern Africa

COMSHIP COMESA Seed Harmonization Implementation Plan

COMSIS COMESA Seed Information System

DFID Department for International Development (United Kingdom)

DRC Democratic Republic of Congo

DUS Distinctiveness, uniformity, and stability

EAC East African Community

EATIH East Africa Trade and Investment Hub

ECOWAS Economic Community of West Africa States

EGS Early Generation Seed

FANRPAN Food, Agriculture and Natural Resources Policy Analysis Network

FAO Food and Agriculture Organization of the United Nations

FISP Farm Input Subsidy Program

GDP Gross domestic product

HaSSP Harmonized Seed Security Project

IARC International agricultural research center

ICRISAT International Crops Research Institute for Semi-Arid Tropics

INGO International non-governmental organization

IPPC International Plant Protection Convention

IPR Intellectual property rights

ISSD Integrated Seed Sector Development

ISTA International Seed Testing Association

ITPGRFA International Treaty on Plant Genetic Resources for Food and Agriculture

KCEP Kenya Cereal Enhancement Program

KEPHIS Kenya Plant Health Inspectorate Service

MAAIF Ministry of Agriculture, Animal Industries and Fisheries, Uganda

M&E Monitoring and Evaluation

MoU Memorandum of Understanding

MLN Maize Lethal Necrosis

MNCs Multinational companies

MT Metric tons

NAADS National Agricultural Advisory Services

NAIVS National Agricultural Input Voucher Scheme

NARS National Agricultural Research System

NSCS National Seed Certification Service (Uganda)

NSTA National seed trade association

OECD Organization for Economic Cooperation and Development

OPV Open Pollinated Variety

OSBP One Stop Border Post

PASS Program for Africa’s Seed Systems

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PIP Plant Import Permit

QDS Quality declared seed

RAB Rwanda Agriculture Board

REC Regional economic community

ReSAKSS Regional Strategic Analysis and Knowledge Support System

RICA Rwanda Competition and Regulatory Authority

RSA Republic of South Africa

SADC Southern African Development Community

SANSOR South African National Seed Organization

SCCI Seed Certification and Control Institute (Zambia)

SDC Swiss Agency for Development and Cooperation

SFSA Syngenta Foundation for Sustainable Agriculture

SPS Sanitary and Phytosanitary

SSA Sub-Saharan Africa

SSSN Seed Security Network Project

STA Seed trade association

STAK Seed Trade Association of Kenya

TASAI The African Seed Access Index

TMEA TradeMark East Africa

TOSCI Tanzania Official Seed Certification Institute

UPOV International Union for the Protection of New Varieties of Plants

USAID United States Agency for International Development

USTA Uganda Seed Trade Association

VCU Value for cultivation and use

ZARI Zambia Agricultural Research Institute

ZASTA Zambia Seed Trade Association

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5,000

10,000

15,000

20,000

25,000

30,000

35,000

2015 2016 2017

M e tr ic T o n n e s

Maize Seed Imports

Maize Seed Exports

Other Seed Imports

Other Seed Exports

I. EXECUTIVE SUMMARY

This assessment investigated the regional trade in certified seed of major staple food crops in Kenya, Uganda, Rwanda, Tanzania, and Zambia to determine whether trade barriers limiting growth in the exchange of new crop varieties needed to boost crop productivity to support food security. The impetus for this assessment was the general perception that seed trade was no growing steadily despite substantial regional, national, and development partner investments to reduce barriers throughout East Africa. These parties have made investments for more than a decade to harmonize the regulations governing seed trade among member states of the Common Market for Eastern and

Southern Africa (COMESA), the East African Community (EAC), and the Southern Africa

Development Community (SADC), the dominant Regional Economic Communities (RECs) in the region.

The study seeks to: confirm or refute the perception that seed trade was growing slower than supply and demand trends should support; identify the trade barriers slow seed trade; and, identify stakeholder-supported recommendations for actions to rapidly improve regional trade in seed.

The five focus countries of this study: (1) encompass a significant volume of the current seed trade flow in eastern and southern Africa; (2) represent a trade corridor with great opportunity for growth; and, (3) share border points. Maize, sorghum, groundnut, Irish potato and soybean were selected as focus crops for the assessment based on their (1) high potential for trade; and (2) varietal release listing in regional catalogues that make them eligible for commercial trade in all COMESA and SADC member states.

Alongside a literature review, key informant interviews (KII) were deemed the most appropriate data collection approach due to the specialized nature of seed production, certification, and trade.

Between March 2nd and April 26th, 2018, the team interviewed 105 key informants across the five countries and ten border points. The interviews covered regional and national public regulators, development partners, and private sector stakeholders. Representatives of twenty-eight seed companies were interviewed. Seed trade data covering 2015-2017 was requested from all countries;

however, Uganda provided no data and Tanzania provided no export data. Significantly, 2016 was a deep drought year that depressed seed production and trade. Issues with Irish potato seed trade data led to its exclusion from trade volume analysis.

KEY FINDINGS:

In general terms, regional maize seed exports increased from 2015 to 2017 with a dip during the 2016 drought year, while maize seed imports declined over the same period.

Yearly Imports and Exports (Kenya, Rwanda, Tanzania, Zambia) for Maize compared with the combined total for Sorghum, Soybean, and Groundnuts (Other Seed below)

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Current trade volumes in the focus crops and countries are shaped primarily by the extent to which local seed demand is satisfied, as well as national policies that target increasing maize productivity through the substitution of maize hybrids for open-pollinated maize varieties (OPVs). In addition, the durability, strength, and quality of the seed industry, whether dominated by public (Kenya) or private (Zambia) ownership, greatly affects demand responsiveness. The other three crops studied have issues that currently limit volumes traded, specifically, low transportability over long distances under general cargo conditions of fragile groundnut seed, short-viability soybean seed, and perishable seed potatoes. Kenya alone maintains a small but steady export trade in sorghum seed.

Rwanda’s policy decision to move to hybrid maize intensification, coupled with its low capacity to produce hybrid seed has created an import demand that will be sustained for as long as Rwanda can support the expense. Tanzania’s similar policy has created the single largest import demand pole for certified maize seed in the region (see the graph below). Its shift towards hybrids has greatly outstripped its seed industry’s ability to supply the seed, in large measure because of the poor business environment, including a de facto ban on the export of seed.

Importantly, Tanzania belongs to SADC and EAC but not COMESA, creating a discontinuity in seed trade harmonization efforts in EAC and COMESA that are otherwise converging.

Tanzania's Maize Seed Yearly Imports and Exports

Of the two net maize seed exporting countries, Kenya and Zambia, the former, a hub for African maize public crop breeding, is by far the smaller exporter and has more of a westward focus on

Uganda and Rwanda than a southern orientation towards the large market in Tanzania. Zambia, the largest exporter of maize seed to the rest of Africa (see graph below), and the largest commercial maize breeding hub outside South Africa on the continent, has a strong seed export industry cluster.

Zambia’s system of decentralized third-party buyers and sellers and self-certification, enables its seed industry to grow a quality-controlled seed industry faster and more easily than Kenya’s heavily centralized, state-based seed certification and testing system. Zambia’s reduction in maize seed imports may reflect a maturation of its national maize seed production capacity.

Zambia's Maize Seed Yearly Imports and Exports

5,000

10,000

15,000

20,000

2015 2016 2017

M e tr ic T o n n e s

Imports

Exports

5,000

10,000

15,000

20,000

25,000

2015 2016 2017

M e tr ic T o n n e s

Imports

Exports

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Supply and demand trends, individual country crop policies, national budgetary allocations to subsidy programs that emphasize hybrid maize varieties with fertilizer supply, and accelerating food demand in rapidly urbanizing countries have been relatively more important than harmonization of regional seed trade policies and regulations to the growth of the maize seed trade in ESA. This is partly confirmed by approximately two-thirds of the 28 private seed companies interviewed who felt that, in the long term, producing seed outside the country of sale or in countries that have good production potential would be a viable model and could assist in countering climate-related shocks. Respondents suggested that an import model is likely for East African countries that require seeds and do not have local production, including Burundi, the Democratic Republic of Congo (DRC), and South

Sudan. A majority of seed companies report an 80 percent likelihood of starting seed export or increasing their existing seed exports. Several national companies are looking to capture niche markets, such as drought tolerant varieties and legumes. A number of these companies are already reaching out to local companies in neighboring countries with similar interests, with the goal of sharing germplasm and working on joint variety releases. The demand-driven and competitive technology positioning plans of seed companies will move forward. However, seed companies will move forward faster if their risks and costs of market entry and trade are reduced through regional harmonization.

Regional trade harmonization efforts that have focused on establishing and improving the operations of One-Stop Border Posts (OSBPs) and improving general trade regulations have reduced trading risks and transport delays at the border with positive effects on the seed trade. It is harder to draw the conclusion that investments in building seed-specific regulatory capacity has been the driving factor in reducing the seed import and seed export times that are vital to seed companies, their distributors, and farmers. While The African Seed

Access Index (TASAI) surveys show a trend towards reductions in seed import times and export times, import times are generally still higher than export times, likely reflecting a mix of protectionism and technical quality control issues. Kenya, with a dominant public seed enterprise, has stringent import controls that require on average 38 days to fulfill. In the same period of time, a company could enter seed into Tanzania (12 days), Uganda (six days), and Zambia (12 days), and still have time to get the same lot into Uganda again. Uganda, which has cut its days to import (48 to six) and export (18 to nine) the most of any focus country since

2013, also is seen by many informants to have low capacity to enforce quality control and phytosanitary standards.

There is a level of mistrust among seed agencies and phytosanitary authorities on the quality and reliability of their trading partners’ seed certification, seed testing, and phytosanitary surveillance, detection, and quarantine capacities that slow implementation of harmonized rules, and that calls into question the ability of trading partners to enforce harmonized seed trade rules. This mistrust is mainly based on different country gaps in supplying the facilities, equipment, personnel, and operating budgets needed to meet the international accreditation standards to which regional harmonization regulations are aligned.

Lack of International Seed Testing Association (ISTA)-accredited labs in Uganda is an example of this challenge. The costs of levelling-up investments are substantial and progress is slow. National recurrent budget allocations to maintain personnel, facilities, and equipment are insufficient as evidenced by visits at border posts and seed company interviews

The lack of high-quality seed trade data and seed lot traceability (seed certificates, seed test results, and phytosanitary certificates) makes it difficult to demonstrate good systemic quality control, impedes the suppression of counterfeit seed, and makes public and private seed trade decision-making riskier and more difficult. Among the focus countries, only Zambia has started an automated, internet-based, seed-plot-to-seed-lot-to-sales disposition information system. This system links to phytosanitary certification. Its integration with export licensing and fee payment is lauded by seed companies. No country has anonymized

ASSESSMENT TO SUPPORT THE PROMOTION OF REGIONAL SEED TRADE IN EAST AFRICA | xii information on seed exports and seed imports by seed class that is readily accessible and up-to-date.

Regional seed trade data in some trade databases appears to be off by as much as an order of magnitude because of commodity miscoding that tags grain or potatoes as seed for planting.

Private seed companies, including those who have registered crop varieties on the

COMESA and SADC catalogues, some as early as 2014, give high marks to regional authorities for their legislative achievements and gazettement of domesticated and regionally-aligned seed laws, but give a score of zero to COMESA and SADC on implementation. These companies have paid registration fees and are paying annual varietal maintenance fees, but have received little value from their investment. When queried what private seed companies want as value, they offered that they want to see seed lots of varieties that are authorized for regional release trading to REC member states without national authorities requiring additional field tests. They want to be able to market and start selling those varieties now. While trade tests of small lots of seed with COMESA and SADC seed tags are planned for 2018, the wait has been long and communications on progress by the RECs to the industry partial and slow. Seed companies and development partners may have had unrealistic expectations about the timing of commercial trade results because the COMESA/COMSHIP effort started in

2014 projected a 7- to 14-year period before full member state implementation.

Funding of seed harmonization efforts has been done primarily by development partners, including funding of REC seed staff and their operating budgets. The private sector sees this creating an unsustainable system that is biased toward development partners’, rather than national regulatory and seed company priorities. Also, the work required to operate the REC-harmonized seed regulatory apparatus takes more than the one technical staff and an assistant that are currently funded under harmonization projects. The private sector and the public sector recognize that the lack of regular funding of RECs by member states leads to a state of

“projectization of the harmonization effort” (i.e. harmonization led by development projects).

Tighter linkage of REC seed center operations to their crop and market priorities is essential.

RECOMMENDATIONS

This section outlines the most important recommendations to promote expanded regional seed trade. Recommendations include long-term (five year) activities, as well as interventions that can be undertaken in the short-term (less than one year).

SHORT-TERM RECOMMENDATIONS

• Reorient COMSHIP from the current perceived focus on harmonizing legislation and regulations to include a stronger focus on supporting and measuring the impact of implementation

• Establish a regional platform for regulatory dialogue(s), with strong private sector participation to ensure collaboration and progress in implementing seed policy harmonization

• Increase qualified staff at the seed technical office within RECs

• Embed the position of Seed Coordinator within REC formal structures so that it is a permanent position and not project-linked

• Explore opportunities to enhance the efficiency of information and communication technology (ICT) systems used for clearance of shipments at borders and reduce delays

• Initiate urgent dialogue with the private sector to review their approach to regional variety catalogues, including fees, provision of information, and numbering conventions

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LONG-TERM RECOMMENDATIONS

• Establish a platform for development partner dialogue to strengthen seed trade

• Support exploration and development of tripartite agreements between COMESA, EAC, and

SADC to harmonize and implement REC seed protocols, with strong private sector input and emphasis on an enabling environment

• Support the development of a digital information portal in each country for access to information on seed trade volumes, import and export requirements for seed, information on regionally-released varieties, downloadable forms, and more

• Build the capacity of “mission critical” public officials in national regulatory agencies and at border posts

• Support seed trade associations (STAs) to play key advocacy roles in seed trade, including the implementation of harmonized seed laws in their individual countries

• Actively seek to minimize the negative effects of political economy behaviors by: 1) increasing efforts to enlighten heads of state of focus countries on the critical need for seed trade and the benefits to their countries; and 2) increasing efforts to ensure countries abide by signed agreements.

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II. INTRODUCTION

High quality seed of improved varieties is widely recognized as one of the most important determinants of a nation’s agricultural productivity. Across sub-Saharan Africa (SSA), crop yields lag far behind other regions of the world. There are many contributing factors to this issue, including agronomic management practices and fertilizer availability and usage. However, one of the key reasons is low availability and lack of farmer access to high quality seed of improved varieties that are well adapted to farmers’ agroecologies. Estimates of the percentage of arable crop land in SSA that is planted with quality seed of improved varieties ranges from a low of 10 percent to a high of approximately 20 percent.

Cross-border seed trade in Africa offers largely untapped potential to: 1) increase quality seed availability for Africa’s farmers; 2) reduce production risks for seed companies by permitting seed production in areas with stable rainfall; and 3) disseminate new and improved crop varieties. Varieties with climate-resilience traits, e.g. drought tolerance, make them candidates for growth through trade.

Seed and seed trade are complex topics. Countries have their own laws, regulations, institutions, sovereign visions of self-sufficiency, and scales and maturity levels of private sector seed companies. In addition, SSA countries are dealing with novel seed borne diseases (Maize Lethal Necrosis Disease) and new quarantine pests (Fall Army Worm) that oblige new phytosanitary procedures for trade.

Seed trade should be showing signs of growth as certified seed demand exceeds national supply in key

Eastern and Southern African states. However, seed trade volumes and the diversity of crop seed traded appear to be growing slowly, despite efforts by development partners and regional bodies to harmonize seed trade in ESA through the COMESA Seed Harmonization Implementation Project

(COMSHIP) and parallel efforts in SADC.

STUDY OBJECTIVES

This assessment seeks to understand why seed has not been moving between surplus and deficit countries at steadily growing levels and to make practical and implementable recommendations to catalyze an increase in regional seed trade.

Specific Objectives:

The specific objectives of the assessment are to:

1. Assess regional seed trade barriers, focusing on both public and private sector experiences and perceptions.

2. Assess the effectiveness of existing programs supported by development partners to reduce seed trade barriers and increase regional seed trade.

3. Assess current organizational capacity, and particularly the seed-related capacity of entities working to facilitate regional seed trade and policy.

4. Highlight potential partners and possible partnerships for promoting regional seed trade that needs to be developed and/or strengthened.

5. Develop realistic and stakeholder-supported recommendations to rapidly improve regional seed trade.

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III. STUDY METHODOLOGY

The study was done in three phases: 1) preparation and a literature review; 2) field work and the development of a draft assessment; and 3) peer review, stakeholder validation, and production of the final assessment.

PREPARATION AND LITERATURE REVIEW

Five countries were chosen as the focus for this assessment: Kenya, Rwanda, Tanzania, Uganda and

Zambia. These countries were selected because they: 1) represent a significant volume of the current seed trade flow in eastern and southern Africa; 2) constitute a trade corridor with great opportunity for increased trade flow, including to neighboring, non-focus countries such as the DR Congo; and 3) share common border points, which facilitated interviews with customs and other border officials on both sides of the borders. Figure 1 shows the countries and border points of focus. Annex 7 provides individual country profiles, seed demand and seed trade analysis.

Figure 1: Map of Countries and Border Points of Focus

The focus crops selected for the assessment were maize, sorghum, groundnut, Irish potato, and soybean. These crops were selected because of their importance as staple food crops, their high potential for seed trade, and their listing in regional COMESA and SADC variety catalogues to speed their commercial release for distribution and sale in all member states.

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The study team reviewed a selection of available grey literature and peer-reviewed articles on regional seed trade in eastern and southern Africa. A full list of all documents reviewed with short content summaries is provided in Annex 1.

FIELD WORK AND DEVELOPMENT OF ASSESSMENT REPORT

KIIs were deemed the most appropriate data collection technique due to the specialized nature of seed production, certification, and trade. The team interviewed 105 key informants across the five countries between March 2nd and April 26th, 2018, as summarized by country in Figure 2. The interviews were done with 31 public sector policy makers, 33 private sector representatives, seven

Regional Economic Communities (RECs) officials, five development partner officials, seven regulatory body officials, 18 border post officials, and four subject matter experts. The full list of key informants is included in Annex 2.

Figure 2: Number of Key Informant Interviews Conducted by Country

The team conducted 18 interviews at the ten border posts, as shown in Figure 1 with the status of development as One-Stop Border Posts (OSBPs) given in Annex x. The OSBP between Zambia and

Zimbabwe at Chirundu was included to assess the import/export issues encountered from the

Zimbabwean, regionally important as the first SSA country other than South Africa to permit third-party and self-certification with public seed authority audit and as the headquarters of the Seed Co.

Group, which operates with subsidiary companies in staple food crop seed throughout ESA.

The main study limitations were lack of access to official seed trade data in some countries, and a period of field data collection which coincided with the planting season when many stakeholders were doing intensive field work.

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PEER REVIEW AND STUDY VALIDATION

The stakeholder validation meeting for the study was held on May 30th, 2018 in Nairobi. Participants included representatives of the EAC and COMESA, national regulatory authorities, the African Seed

Trade Association (AFSTA) and national seed trade authorities, seed companies, and development partners. A full list of participants is provided in Annex 2. In addition, the study findings and recommendations were also presented to participants in the Seed Assure meeting organized by

AGRA and CIMMYT who provided addition feedback on the study.

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IV. BACKGROUND INFORMATION

This sections provide background on the seed regulatory and institutional frameworks, regional seed trade harmonization, and country seed system status to identify factors that help or hinder trade.

REGULATORY AND INSTITUTIONAL FRAMEWORK

The countries studied are all members of the World Trade Organization (WTO) and bound to notify the WTO of tariff schedules and mandatory technical regulations imposed on imported products.

These regulations are generally developed in harmony with international recognized standards. The technical standards of importance to the seed industry are those that regulate phytosanitary inspection and certification (the International Plant Protection Convention - IPPC), biodiversity, biosafety, and some intellectual property rights and benefit sharing from intellectual property (the

Convention on Biological Diversity – CBD, and the International Treaty on Plant Genetic Resources for Food and Agriculture - ITPGRFA), and standards on plant breeder rights intended to incentiviize the development and commercialization of new crop varieties (the International Union for the

Protection of New Varieties of Plants - UPOV). In addition, international standards for seed testing

(ISTA) and traded seed quality (OECD seed systems) are recognized as reference standards for the regulation and audit of the quality of seed systems.

Annex 8 describes these conventions and the standard systems for the countries in this study. It is important to note that:

• Membership in treaties carries investment and operating costs borne by the governments, the private sector, and the public at large;

• Most member states align their technical regulations and standards enforcement procedures in ways that reflect national public and private interests;

• Membership in technical standards organizations requires that the public sector meet audit and performance standards for facilities, personnel, equipment, consumables, and reporting, in addition to annual fees. Private companies that opt in must also meet the standards. These costs are not small and require seed regulators and companies to make choices about which crops and which standards systems will be adopted and how to pay for their enforcement.

• These conventions and standards change as trade changes, and as new scientific and technical information evolves, often requiring re-investment and adjustment of official fees.

Different countries ratified treaties and became members of conventions and standards bodies at different times. They therefore have different capacities and experience in the application and enforcement of treaties and standards. Figure 3 below shows the current status of membership in international treaties and standards organizations important to the seed industry.

Today, none of the focus countries share the same set of global treaties in crop variety release regulation, plant variety protection, or application of international standards of seed testing. While all belong to the IPPC treaty, none of the focus countries recognize the equivalence of the other states’ plant quarantine and phytosanitary regulatory institutions and enforcement capacity. An illustrative example would be Kenya’s phytosanitary authority KEPHIS’s refusal to accept seed from countries declared free of Maize Lethal Necrosis (MLN) Disease without duplicate sampling and testing in

KEPHIS laboratories.

Figure 3: Status of Focus Countries Relative to International Seed Treaties and Conventions

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COUNTRY COMMENTS

KENYA UPOV membership since 1997 with updating to UPOV 1991 standards in 2016.

RWANDA National Plant Variety Protection (PVP) law in place aligned with UPOV.

TANZANIA Working towards ISTA accreditation. UPOV is very recent (2016) and OECD membership has recently been announced (2018).

UGANDA Initiated procedure for acceding to UPOV. National PVP law (2015).

ZAMBIA Working towards OECD membership, has initiated procedure for acceding to UPOV.

The differences among national laws, regulations, and enforcement capacity represent barriers to seed trade. One major constraint is the mosaic of different national requirements for the commercial release of new crop varieties, followed by varying seed certification and labeling requirements, layered with different national phytosanitary practices and competencies at national borders. Countries subscribe to the international principles, e.g. the Rwanda and the Uganda Plant Variety Protection

ASSESSMENT TO SUPPORT THE PROMOTION OF REGIONAL SEED TRADE IN EAST AFRICA | 12

laws that align to UPOV standards, but retain enough differences in their application to complicate and add time, cost, and risks for seed companies who want to trade seed and license crop varieties for commercial sale between those countries.

Public and privately-bred seed varieties that are commercially released in one country must undergo duplicative testing for two to three years before they can be approved for listing in the national varietal catalogue and varietal release in a neighboring state. To use an extreme example, a maize variety adapted to 10 COMESA member states could require 20 to 30 testing years (either simultaneous or consecutive)—along with the costs associated with each test—before it could become accessible to farmers in the 10 member states, either via national production of the seed variety in each state or production in one or more COMESA member states for export to the others. This has been the status quo for the seed trade for many decades, slowing the rate of crop variety development and release and narrowing the range of crop varieties released for trade in each country because of the time, direct costs and opportunity costs, and the market risk incurred.

Most international seed companies, even the largest ones, in practice tend to focus varietal registration on a few larger and more seed business-friendly markets, where they see good chances of sustainable and profitable scaling of seed sales. For example, the lifespan of a hybrid maize variety in a competitive market in SSA after commercial release is about seven-10 years, meaning that returns on investment must be generated over that time period. The CGIAR research centers (CIMMYT, ICRISAT, CIAT, IRRI, and others) have a mission to improve crop productivity to increase food security globally and apply a different logic, yet they too have to have varieties approved by national release committees in each country. Their effective reach and their program fund-use efficiency are reduced in the current process for varietal release. These issues provide the rationale for regional seed regulatory harmonization.

REGIONAL SEED HARMONIZATION AND ITS POTENTIAL IMPACT

RECs have worked for many years to harmonize varietal release and labeling, seed quality testing, and phytosanitary regulations and policies to facilitate and boost seed trade (see Annex 4). Harmonization efforts have the potential to cut variety testing time and costs to that required for official release in two countries. For example, 10 COMESA countries sharing at least one common agro-ecosystem would cut official testing-years and costs for commercial release from 20-30 to four-six years, resulting potentially in a five-fold increase in accessible markets, whether for private or publicly-owned varieties. If implemented, this degree of change would greatly improve the viability and returns from public and private investment in crop variety improvement by broadening the range of varieties that enter the formal seed trade and become available to the region’s farmers.

The earliest REC to begin this work was the Southern African Development Community (SADC), which started talks on regional seed harmonization in the mid-1980s (Kuhlmann, 2015). In 2006, these talks were built on by the Seed Security Network Project (SSSN 1). SADC approved a

Memorandum of Understanding (MoU) by member states followed by the adoption of a harmonized seed regulatory system in 2014 and the establishment of the SADC Seed Centre. In 2014 SADC facilitated the importation of MRI 514 seed consignment from Zambia to Swaziland to test the system and unearth bottlenecks to regional seed trade. Other RECs, including the East African Community

(EAC), the Economic Community of West Africa States (ECOWAS) and the Common Market for

Eastern and Southern Africa (COMESA), followed suit and are currently in the process of creating and adopting harmonized seed rules, all aligning with international standards but with important differences in how they handle regional catalogue development and crop variety release for commercialization.

For example, applications to COMESA for varietal release must be made through national seed authorities who supply applications and trail data using electronic dossiers. SADC applications must be made by the variety owner/maintainer using paper submissions to the SADC Seed Center. As the

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latest REC to begin this harmonization work, COMESA’s efforts have been guided by the experience of the other RECs (Keyser, 2013) and have moved relatively faster towards implementation under the

COMSHIP led by ACTESA. All regional seed trade harmonization efforts take time to implement because: national capacities differ; national political economies influence the pace of legal domestication and regulatory alignment; and, new seed regulatory implementation requires new information flow in administrative notices and in the day-to-day operations of export licensing, import licensing, tax and customs payment, and border police operations. COMSHIP was estimated to require seven to 14 years before full implementation would be possible across the majority of member states (Sikinyi, 2016).

However, two major points should be noted:

• Harmonized REC seed trade regulations lead to a REC-specific seed label that is a voluntary standard, not a mandatory label for all seed traded by member states. Member states operate and permit seed trade using existing national regulations and voluntary seed standards such as OECD seed systems. In the future, where a single state is a member of more than one REC, the seed trade will choose between two or three voluntary standards.

• Regional harmonization can also create new burdens for the seed trade between and with RECs.

Public seed authorities will maintain closely aligned, but separate systems using different seed certification procedures, package labels, and different audit requirements, and, potentially, different pest lists for phytosanitary certification. Seed companies in Zimbabwe and Zambia will have to decide whether they will register their varieties under COMESA, SADC, and/or the national catalogue, each with its own application fee and annual varietal maintenance fee. Then they have to decide each year under which standard their seed will be certified and exported, choices that will be driven by how much value they believe that these standards deliver (e.g. will they speed export and import or improve the total sales and/or marketing margins at equal or lower risk than their current method).

The complexity of these issues is similar to trade in other products that have REC-specific technical regulations and voluntary standards. Member states of EAC, COMESA, and SADC have agreed in principle to pursue a Tri-Lateral Free Trade Area that would unify regulations; however, this process is likely to take as long as or longer for countries to implement as current harmonization efforts.

In addition to the RECs framework, there exist a number of bilateral trade agreements that are used to facilitate seed trade between countries like the bilateral agreement between Tanzania and Rwanda, and Zambia and Angola. Some of this agreement face challenges from time to time but stakeholder holds consultations to address the issues arising.

COUNTRY STATUS

Seed systems in the focus countries are at various stages of development. They are strongly shaped by the respective national government’s view of how to develop its seed sector. The growth and sophistication of the seed sector in Zambia has been strongly influenced by its policy to support private sector investment in seed. Rwanda’s seed sector, on the other hand, is strongly influenced by centralized government planning and implementation. Kenya has a blended public and private sector seed system, but public seed companies still dominate seed market share. Tanzania and Uganda fall somewhere in between. A more detailed overview of the development status of the seed sectors in the countries of focus is included in Annex 5. The African Access to Seed Index (TASAI) provides indicators from pilot and annual surveys for the focus countries except for Rwanda. TASAI indicators relevant to regional trade are shown in Table 2.

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Table 2: Selected TASAI Indicator Scores Relevant to Regional Seed Trade (adapted from https://tasai.org/wp-content/uploads/TASAI-Appendix-CURRENT.pdf )

Country Kenya Tanzania Uganda Zambia Zimbabwe

Year 2015 2016 2015 2016 2016

Time taken to import/expor t seed from neighboring countries

(days)

Import seed (days) 38 12 6 11 30

Import score (out of 100)

50 63 71 55 44

Export seed (days) 14 - 9 12 35

Export score (out of 100)

69 - 65 60 27

Quality of seed law/regulatio n

Score (out of 100) 63 70 55 77 86

Quality of enforcement systems

Score (out of 100) 61 70 42 68 77

Market share of government parastatal(s)

Crop 1 Maize 68% Maize 1% Maize 0% Maize 0% Maize 3%

Crop 2 Sorghum 28% Beans 4% Sorghum 0% Rice 0% Beans 3%

Crop 3 Beans 64% Soybean 43

Beans 0% Groundnut 0% Soybean 4%

Crop 4 Cowpea 86% Pigeon pea

0% Millet 0% Beans 0% Sorghum 6%

Color Codes:

Extremely Poor

(0‐19.99)

Poor

(20‐39.99)

Fair

(40‐59.99)

Good

(60‐79.99)

Excellent

(80‐100)

These indicators show how important the history of the seed industry and national context is to the way that seed trade is regulated. Kenya’s domestic market is dominated in maize and beans by state seed companies and appears to protect that market through the complexity (time and cost) of seed import. Tanzania and Uganda are net seed importers with fast import times, but the Tanzanian government restricts seed produced domestically from export given its net seed deficit. It has a de facto seed export ban. Uganda has a private sector dominated seed market, but its lower quality of seed regulation and enforcement is a brake on exports of seed to neighbors with higher levels of seed quality assurance capacity and regulatory enforcement. Export sales to DRC, the Central African

Republic (CAR), and South Sudan are easier for Uganda to make than sales made elsewhere. Zambia clearly is a seed exporting nation, with balanced requirements for imports and exports. Zimbabwe also has balanced import and export requirements with strong seed regulations and good enforcement, but its seed export and import procedures take a lot of time, because the country’s economic problems increase the time needed for foreign currency transactions. Zimbabwe’s ability to hold private seed stocks in reserve for public need also slows exports. These differences among the focus countries slow implementation of the harmonized seed regulations and slow seed trade.

https://tasai.org/wp-content/uploads/TASAI-Appendix-CURRENT.pdf

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V. KEY FINDINGS

The key findings from the field work, literature review, and data analysis are presented in this section.

If literature reported a particular status that was then contradicted by findings on the ground, such as the timing of receipt of testing results, the KII is the version that has been presented. The findings are organized according to the study objectives.

1.0 REGIONAL SEED TRADE AND TRADE BARRIERS

REGIONAL SEED TRADE

Although seed trade plays a meaningful role in the five focus countries, the relative importance of imports versus exports varies. Three-year cumulative totals (2015 – 2017) for the grain and legume crops of focus illustrate higher rates of imports than exports across four of the five countries

(Zambia shows a higher export rate), suggesting that there is either unfilled seed demand. See Figure

4 below.

Figure 4. Source: KEPHIS, RAB, SCCI, TOSCI. (Uganda did not provide data). Note that Irish potato has been excluded from the totals above as the weight of Irish potato seed distorts the grain and legume totals.

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Looking at data for the last three years separately in Graph 1 below, there are three main points.

First, seed trade for the period of the study was at low levels for crops other than maize. Second, the lack of data from Uganda, a significant exporter of both certified and quality declared seed, makes generalizations about overall seed trade difficult. Seed trade data needs to be much more comprehensive and accurate to be interpretable. See Annex 3 for the full data table. The 2015-2017 period holds the very deep drought year of 2016 that depressed seed trade as countries and seed companies protected stocks as a conservative emergency response measure. The year 2017 started the recovery of informal and formal seed systems from that deep drought shock. Third, import and export data needs to extend over a longer period of time to trace the trade trends and relate them to the overall seed supply and demand in each country. Subsequent studies should use a period extending back to at least 2005, before the start of the global food and input price spikes that shifted continental, regional, and national agricultural policies and investment in the sector by national governments, companies, development partners, foundations, and non-governmental organizations.

Graph 1:

Yearly Imports and Exports (Kenya, Rwanda, Tanzania, Zambia) for Maize and Other

Seeds (sorghum, soybeans, groundnuts) Traded

There are multiple reasons for the dominance of maize seed in the seed trade. First, maize seed, especially hybrid maize seed, is more profitable to trade. Second, hybrid maize seed requires high levels of plant breeding and seed production skills to maintain quality. Countries with long traditions of hybrid maize breeding and seed production (Zambia and Kenya in this sample, but more broadly including Zimbabwe and South Africa) have better track records as maize seed suppliers.

The low level of trade in the other focus crop seeds is driven by financial, logistical, biological and phytosanitary constraints. Soybean, bean and groundnut seed have much lower profitability than maize seed. Groundnut seed is both fragile and bulky to transport. Soybean seed is very susceptible to transport damage and poor handling and in unrefrigerated storage starts losing germination levels and vigor after about six months. Seed potatoes are bulky and very expensive to transport, don’t stand up well in long-distance transport unless in refrigerated containers or ship holds, and are tightly controlled by phytosanitary authorities. For example, Kenya blocked imports of seed potatoes (other than in vitro plantlets) up to 2012 and has allowed seed potato imports under a tightly-controlled program since that time, initially as an emergency response to the collapse in domestic seed potato quality and then as a potato seed stock rebuilding effort after the appearance of the Potato Cyst

Nematode (PCN) quarantine pest at a time of rapid expansion of potato consumption in Kenya.

Seed trade volume in the region is the result of national certified seed supply falling short of domestic certified seed demand along with the factors discussed above. Demand estimation is complicated by

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