The African seed market has grown appreciably since our last Crop Science report (published in 2014), reaching close to US$1.9 billion in 2019. African food imports are seen rising from $35 billion in 2020 to an estimated $100 billion by 2030. This figure amply demonstrates the necessity for increased domestic crop productivity.

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Although great strides have been made modernizing the relevant regulations and policies in the African seed environment, there are many issues that remain. The promotion of an enabling regulatory environment for the release and adoption of improved varieties will further stimulate private sector interest and investment.

The African commercial seed market was dominated by maize (42%), vegetables (20%) and cereals (14%) which combine for a three-quarter share of the continental market.

Smallholder, subsistence farmers constitute over 70% of the population and account for over 75% of agricultural output in Sub-Saharan Africa (SSA) adoption of improved crop varieties is amongst the lowest in the world (estimated to be 20% by the civil society organisation AGRA), yet the formal seed sector has grown significantly following deregulation of the seed industry regionally in the early 1990s and the emerging private seed sector provides a unique and timely opportunity to promote the development and dissemination of improved, crop varieties through certified, scalable seed systems that can potentially impact millions of livelihoods throughout Africa and beyond.

This report has attempted to highlight some of the serious concerns over the suitability of the seed varieties presently available in the formal seed sector, the quantity and quality of seed delivered, seed production costs and prices and the timeliness of supply. More importantly, rigid government policies and regulations, poor organizational linkages and inadequate infrastructure appear to contribute to the problems of the formal system throughout the African continent. Also, despite the growth of the seed industry in SSA since the 1990s, rates of variety turnover remain slow, and investment into agricultural research and development extremely low.

In order to encourage the private sector to invest in crop improvement, to reduce product life cycles, and to ensure certified seed reach smallholder farmers, these issues need to be addressed and resolved. In general, Africa presents an attractive seed market with many countries sharing common agro-ecologies, a factor which eases regional grading of competitive varieties. The reality, however, is that multiple individual nation states with distinct laws, regulations and trade agreements, render the continent a fractured and challenging seed market.

Our forecast is the commercial seed market in Africa is expected to resume its robust growth following a down year in 2020, reaching $2.95 billion in 2025.

Overview

In the past two decades there has been dramatic transformation in different countries and various localities. There is a noticeable upward shift in expenditure on agriculture by national governments in African countries.

These governments have reaffirmed their commitment to prioritizing agriculture in their development agendas and are investing an increased proportion of their budgets in the sector from a growing national revenue base. There is evidence of faster growth in agricultural productivity, improved nutrition, and greater job expansion even in the non-farm segments of their economies.

Sub-Saharan Africa has the fastest growing population in the world and the most rapid rate of urbanization. Each year these demographic facts complicate Africa's ability to achieve food self-sufficiency, not to mention a food export capacity. Most African countries have serious land tenure issues that have stymied the development of agricultural projects. Many African countries must improve their agricultural policies, eliminate trade barriers among African countries, reduce corruption, and/or end conflict before they can reasonably expect to increase food production. Due to the absence of adequate water sources, irrigation is not an option in many areas; it is also expensive and comes with environmental downsides.

Agriculture is the largest generator of jobs and guarantor of food security on the African sub-continent. The sector is currently at a crossroads: persistent food shortages are compounded by threats from climate variability. Sub-Saharan Africa is dominated by rain-fed agriculture, while 75% of its surface area is dry land or desert. This makes the region highly vulnerable to droughts and floods, threatening its agricultural sector and food security. Many African countries experience severe water scarcity, which is likely to increase in the coming years.

Boosting the agriculture sector's productivity, profitability and sustainability is essential for fighting hunger and poverty, tackling malnutrition, and ensuring food security. It is well known that seeds are the most important input in crop production; they are the basic unit of plant propagation, and as such, are a crucial component of agriculture. Quality seeds are a prerequisite to successful agriculture and constitute a major pathway for the success of regional food security goals, with the potential to increase overall productivity by nearly 40%. Seed companies are well positioned to develop and provide access to quality seeds in Africa.

The seed sector in sub-Saharan Africa is dominated by informal and formal supply systems. The informal refers to systems where farmers obtain, develop, produce, maintain and distribute seeds from one growing season to the next, whether retained from previous harvests or acquired from farmers' social networks (farmer-to-farmer gifts, exchanges and trade). Most smallholder farmers heavily rely on this system of seed supply.

The informal seed system provides a rich diversity of seed, including varieties that are relevant to farmers and adapted to local weather conditions. It offers dynamic channels of seed distribution that can reach the most remote farming communities, and accounts for approximately 80-90% of seeds planted in Western and Central Africa. Quality standards in this system are not controlled by national or regional policies and regulations but are guided by the local knowledge and experience of farming communities.

The formal sector is regulated by national seed committees and quality standards controlled by national seed certification agencies. In the region, the formal seed sector comprises many institutions including government, civil society organizations, research agencies, the private sector as well as development partners (NGOs and CBOs). Institutions involved in seed breeding, production, supply and marketing are registered and regulated by national/regional policies and acts.

Executive Summary and Methodology

As a result of the increasing global interest in agriculture, in a context of rising food prices and concerns about food security and climate change adaptation, seed sector development in Africa has regained the attention of governments, donor communities, civil society, and other stakeholders. At the local level, farmers and entrepreneurs seek opportunities in the seed market. This report describes and quantify the commercial seed market in Africa.

This report looks at the policy backdrop of a market that is transforming from public sector hegemony to one in which the private sector is becoming more involved. National seed systems across Africa are at different stages of development and seed sectors are still emerging, characterized by under-funded government seed agencies, poorly implemented seed regulations, and a relatively weak private sector. Currently, in African countries, with the exception of Zambia, the combined market share of African-owned companies exceeds that of Multi-National Companies (MNCs).

Despite some challenges, in the last decade many African countries have made significant progress towards establishing a strong and vibrant private seed sector serving smallholder and commercial farmers. However, the story of formal seed sector development in Africa is nuanced, with significant variation by country, crop, and year.

Aside from looking at enabling environments in twenty-two key African countries, the report seeks to quantify the commercial seed market in monetary terms. The criterion used to determine whether in-depth review was warranted was a commercial seed market greater than $10 million.

Coverage of these 22 African countries was determined by the size of their commercial seed markets highlighting those with sales in excess of $10 million. Likewise, the selection of individual or crop composites (pulse, forage, other cereals, for example, targeted those with turnovers in excess of $10 million). Focus was placed on the crop markets in the 22 countries investigated, although there were some rare exceptions taken and duly noted.

This report will inform and update all those interested in the technologies and players involved in providing digital and precision products and services to farmers, including robotics. The focus is on crop protection. Precision agriculture tackles the variability inherent in farming systems to improve productivity and profitability, and to reduce risks and environmental impact. Digital farming extends into platforms for farm and agri-food chain management. The report describes technologies and markets; profiles, innovations, developments and other company news; all with a specific focus on the control of crop weeds, pests and diseases.

Included in the report are descriptions of the established and latest precision technologies used in the collection of data, its use in diagnostics and decision support systems and its application to operations, including the fast-developing areas of drone spraying and ground robots. Those more generally applicable and those specific to disease, insect and weed control sectors are covered. The activities of the major crop protection companies are reported; and profiles of leading specialist precision agriculture companies and other organisations are provided.

Chapters cover: essential background and enabling technologies; digital farming activities of the crop protection majors and specialist companies in farm machinery, satellite data and imagery, data and artificial intelligence; drones including spraying by drone and company profiles; ground robots, including company profiles; weed control research and innovation; disease control research and innovation; insect control research and innovation; and a glossary of terms.

About the author

Jake Cooley is a consultant and author on crop protection markets and soft commodities. He has vast industry experience and has authored several specialist reports for IHS Markit, particularly on Africa and Latin America.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.