Breeding for Market Development

OutlineOutline

• How it all began

• Company developmentCompany development

• Quality Seed Multiplier

• Conclusions

1981

SE Asia study tourSE Asia study tour• Simon GrootGerard Gr bben• Gerard Grubben

• Glenn Goldsmith

SE Asia During the early eighties the 

local seed industry could best be Dependence onlocal seed industry could best be characterized as a seed trading 

system

Dependence on imported varieties

Exchange of locally produced farmer‐saved seeds

Mainly open‐pollinated varieties

High post‐harvest losses

Poor yields and qualityq y

Imported varieties generally did not do well

d l l ditiunder local conditions,particularly during theparticularly during the 

rainy season

Challenges & Constraintsg

ClimateClimate

Knowledge and Technology gapsKnowledge and Technology gaps

Financing gapsFinancing gaps

I f t tInfrastructure

fDiverse growing conditions and farming systems

Diverse market and consumer preferences

Climate

Diffi lt t• High Temp

• High humidity

Difficult to grow crops off‐season

• Heavy rains

• TyphoonsHigh pest and di• Typhoons disease pressure

Knowledge & Technology gapsg gy g pFarmers‐ Predominantly small scale‐ Primitive crop production technology

Knowledge & Technology gapsg gy g pSeed business

Educational gaps:Educational gaps: Plant breedingLocal expertiseLocal expertise

1st breeding team Philippines R&D and Seed Production staffg pp R&D and Seed Production staffThailand, early nineties

Financing gapsg g pFarmers

P d ti t f t bl ll h hi hP d ti t f t bl ll h hi h• Production costs for vegetables are generally much higher than for field crops such as rice or corn

• Farmers are often resource poor and need access to credit

• Production costs for vegetables are generally much higher than for field crops such as rice or corn

• Farmers are often resource poor and need access to creditFarmers are often resource poor and need access to credit and financing

• Financing of small farmers not attractive to banks

Farmers are often resource poor and need access to credit and financing

• Financing of small farmers not attractive to banks

Seed BusinessSeed Business

• EW targeted Break‐Even 5 years• Took 10 years• EW targeted Break‐Even 5 years• Took 10 years• Took 10 years• Took 10 years

Infrastructure

Poor farm to market 

High transport 

roads cost

Lack of good i h lgood 

postharvest facilities

High losses

Infrastructure

EW breeders had to deal with the same problemsp

Lipa City to Hortanova Farm = 8 kilometers 

Before

45 minutes

Now

15 minutes45  minutes 15 minutes

Diverse growing conditions and farming systems

• High G x E interaction

• Complex pest and disease problems, specific to locations

Diverse market and consumer preferences

• Requires good market knowledge – farmers, traders and consumers

• Availability of a broad germplasm base a ‘must’ for breedingmust  for breeding

Higher yields

Disease tolerance/resistance

Improved shelf‐life and keeping quality

Extended growing season

Better taste and quality

But the business development challenges were daunting …….

“Oh, East is East, West is West, and never the twain shall meet… But there

is neither East nor West, border, nor breed, nor birth, when two strong men

stand face to face, tho’ they come from the ends of the earth!”

Rudyard Kipling

The twain did meet …….The twain did meet …….

1982 – East-West Seed established in the Philippinespp

Simon Groot in partnership with Benito Domingo saw an enormous potential to improve tropical vegetable varieties for local farmers

Combining local market and production expertise from the E t ith d b i ti f th W tEast with seed business expertise from the West

2003

200020002006

1984 1995 1982

1990

From Pioneer to Market Leader

fBefore 1980

• Trading of

1980‐1990

• EW

1990‐2000

• Established

2000‐present

• ExpansionTrading of local OP selections 

d

EW pioneered local, market i t d

Established market leadership in SE A i

Expansion into other markets: I di /S A iand 

imported seeds

oriented breeding for local 

SE Asia India/S Asia; China

• Low quality markets in SE Asia

• Others (e g• Others (e.g. Mahyco) did the same in dIndia

New operationsTanzania• EW Seed Production

Guatemala• As base for developments of markets in   C l d S h A i• Afrisem, with Rijk Zwaan Central and South America 

John Wester & companyAfricaMiddl E tMiddle East

Organizational HeterosisOrganizational Heterosis

H t i

Germplasm Market Info

Heterosis

p Market Info

Plant Breeder Marketeer

Quality Seed Multiplier

• Measures the additional farmers income for

y p

Measures the additional farmers income for every dollar spent on quality seeds

Gross Rev. of New Var. – Gross Rev. of Old Var.

Seed Cost of New Var. – Seed Cost of Old Var.Seed Cost of New Var. Seed Cost of Old Var.

Bittergourdg

Important Cucurbit with high market valuep g

First successful hybrid introductions for EW in bittergourd: h h l h l d d din the Philippines, Thailand, Vietnam and India

EW hybrid introductions transformed the crop from a semi‐commercial, small‐scale crop into a commercial crop

EW h d i t iti i SE d S A i k tEW has a dominant position in SE and S Asian markets

b dStrong resistance breeding program

One of the biggest EW crops: 60 T hybrid seed 

BittergourdBittergourdQuality Seed MultiplierQuality Seed Multiplier

Hybrids 241/242 in Vietnam vs. local OPV

Variable Before Intro

After Intro

Seed Cost (VND/ha) 1,000,000 4,480,000Marketable Yield (kg/ha) 18,000 40,000F t i (VND/k ) 1 200 1 500Farm gate price (VND/kg) 1,200 1,500Total Gross Revenue 21,600,000 60,000,000 Exchange Rate: 20,000 VND = 1 USDg ,Quality Seed Multiplier (QSM) = 11

For every additional VND spent on hybrid bittergourd seeds, y p y g ,the farmer earns an additional 11 VND revenue compared to the old variety!

Hybrid MilestonesHybrid Milestones

• Pumpkin– Suprema in Vietnam: QSM = 37 p Q

• CucumberMi C i Th il d QSM 20– Micro‐C in Thailand: QSM = 20

• Tomato– D‐Max in the Philippines: QSM = 65

• Eggplant• Eggplant– Casino in the Philippines:  QSM = 63

Milestones Improved OPVpKangkong

Common , cheap, fast‐growing vegetable that nobody took seriously

Improvements for germination,  standability, uniformity 

In combination with improved physical seed quality and packaging

Introduced in 1988 at more than double the seed price of regular seed

2010: > 800 T

Ref:Kang kong, an important leaf vegetable in Asia : report of a fact finding mission to Singapore, Malaysia and Thailand, with a review of the available literature on Ipomoea aquatica forsk.Authors Jan Cornelis; Jan Arie Nugteren, 1982. Wageningen Agricultural University

Milestones improved OPVp

Long Beang

EW has a good position in the two main long bean markets in SE Asia: Indonesia and Thailand

Improved yield and pod quality

First multi‐virus resistant varieties in the market in 2014in the market in 2014

Our Markets

Region/Co ntr pop lation egetable prod ctionVeg 

Region/Country  population  vegetable production g

consumption per capita (kg)million  % ha   %

SE Asia 590 8 7% 3 216 187 6 1% 52SE Asia  590 8.7% 3,216,187 6.1% 52

India  1,166 17.2% 5,904,800 11.2% 65

China 1,338 19.7% 23,717,182 45.0% 280China  1,338 19.7% 23,717,182 45.0% 280

Europe  830 12.2% 4,499,713 8.5% 117

N America  307 4.5% 1,331,192 2.5% 127

Japan  127 1.9% 438,850 0.8% 106

World  6,790 100.0% 52,705,297 100.0%CIA The World Fact Book  FAO Stat 2007  FAO Stat 2007

East West SeedEast‐West Seed

Created dramatic plant breeding breakthroughs for vegetable farmers in tropical Asia through a combination of excellent seedmanship extensive knowledge of local markets and localseedmanship, extensive knowledge of local markets and local plant breeding 

Played a key role in the development of the region’s vegetable industry by local plant breeding high qualityvegetable industry by local plant breeding, high quality standards and introduction of better production technology

Today, we are the world’s leading breeder and distributor of tropical vegetable seedstropical vegetable seeds

Summary and Conclusionsy

Th l ti f th f t i i l d k t i The evolution of the fast growing commercial seed market is largely due to farmers’ recognition of the economic benefits of high quality seedsg q y

Value‐adding by private sector plant breeders will further g y p pexpand the commercial seed market in SE and S Asia

The knowledge and expertise developed to overcome the constraints in SE Asian vegetable industry can be harnessed to support development of the vegetable seed markets and vegetable production systems in other tropical countries

Happy Farmersppy

3,500 MT seed = 300 billion seeds = >303,500 MT seed   300 billion seeds  >30 million Happy Farmers