The seed trade in the Asia-Pacific region has been strongly affected by COVID-19 related lockdown measures. A survey in early April among seed enterprise members of the Asia and Pacific Seed Association (APSA), reported here, showed reduced demand for sowing seed of all crops, problems in seed production, and challenges to the international shipment of seed. The survey was repeated in late May to detect any changes to the situation. While seed companies continue to report the same difficulties, there are clear improvements in nearly all aspects.
By Pepijn Schreinemachers (World Vegetable Center) and Kanokwan (May) Chodchoey, Steven Layne and Weeranuch Mhadlhoo (APSA)
Man browsing vegetable seed packets in Nakhon Pathom, Thailand (May 2020). Demand for vegetable seed packets has increased as more people try growing vegetables at home. Photo: Sorawit Limsiriwat/WorldVeg
Quality seed is a fundamental input for farmers to achieve a good and reliable crop harvest. Disruptions to seed supplies may trigger changes in food production and adversely affect global food and nutrition security. It is thus very important to monitor how restrictions on the movements of people and goods, introduced to contain the spread of COVID-19, have disrupted the demand for, production of, and trade in sowing seed.
APSA’s Special Interest Group for Vegetables and Ornamentals and the World Vegetable Center (WorldVeg) probed seed company managers via an online survey among APSA members. The initial survey was conducted 8-14 April 2020 and garnered a total of 68 responses from more than a dozen countries in the Asia-Pacific region. The follow-up survey was done 19-29 May 2020 and collected data from 59 companies in the Asia-Pacific region and 15 companies outside the region. The comparison between April and May uses the sample of companies in the Asia-Pacific region; we also compared the responses inside and outside the region. See the end notes below for sample details and a link to download the data.
Demand for sowing seed is regaining strength.
Most companies in the Asia-Pacific region continue to report a negative effect on the demand and sale of sowing seed for all crops (Figure 1). However, the intensity of the effects has become less severe. For field crops, for instance, 61% of the respondents reported a strong-to-moderate negative effect on seed sales in April, but in May this was only 38%. Most notable is the change for vegetable seed as the share of respondents reporting a negative effect on seed sales dropped from 94% in April to 65% in May, with 7 respondents (13%) even reporting a positive effect. This is likely the result of an uptake in demand for small seed packs for home gardens. This was also confirmed by several presenters during a webinar on the “ Impact of COVID-19 on Seed Trade” organized by APSA and the China National Seed Trade Association (CNSTA) on 26-27 May 2020.
Figure 1. Effect of COVID-19 lockdown measures on the demand/sales of sowing seed for major crop categories during April and May 2020 as reported by APSA members in the Asia-Pacific region
Seed production and seed shipments are slowly recovering
Most respondents continued to report a negative effect of COVID-19-related lockdowns on various aspects of their business. This includes difficulties in obtaining inputs and labor for their seed farms and factories, and difficulties in moving seed within and across national borders. For instance, many companies reduced the number of staff at their factories to comply with social distancing guidelines and have had to introduce staggered work shifts. Sometimes, farm input shops were closed or roadblocks were erected by villagers trying to protect their communities. Some of these limitations have meanwhile been eased and this may explain that fewer respondents reported strong-to-moderate negative effects (Figure 2). For instance, negative effects on domestic seed movements were reported by 85% of respondents in April, but by 65% in May. Furthermore, negative effects on access to labor were reported by 58% of respondents in April, but by 41% in May.
A new question on the effects on research and development (R&D) was added. Nearly 80% reported a negative effect on R&D. During the webinar, several presenters described reduced staffing in R&D facilities, difficulties reaching field trials or even finding hotel accommodation near their field trials. This has slowed down innovation and is likely to delay the introduction of new varieties to the market in the near future.
Figure 2. Effect of COVID-19 lockdown measures on seed company business during April and May 2020 as reported by APSA members in the Asia-Pacific region.
Bottlenecks remain in the international seed trade
In April, 42% of the respondents reported a negative effect on new export orders. This had reduced to 28% in May, which confirms the above observations (Figure 3). However, there remain bottlenecks in the international seed trade. Chief among them is the difficulty finding air, sea or land freight: 54% of respondents reported this to be a problem in April and 44% in May. During the COVID-19 webinar it was mentioned that seed of flowers/ornamentals and vegetables is often shipped by air using spare capacity of passenger planes. Indeed, rising costs and unreliability of freight was cited as a common challenge in most countries.
Other key constraints include getting customs clearance, export permits, import permits, and phytosanitary certificates. This is often because of reduced staffing of government offices, which causes delays. In many countries, national seed associations have worked closely with government agencies to resolve these problems and this may have helped to relax these bottlenecks to some extent. For instance, some have reported that government agencies accept electronic copies of documents instead of originals. Still, about a quarter of all respondents indicated that paperwork around permits and certificates has become a problem.
Figure 3. Effect of COVID-19 lockdown measures on the international seed trade during April and May 2020 as reported by APSA members in the Asia-Pacific region Effects on seed companies outside the Asia-Pacific region
Effects on seed companies outside the Asia-Pacific region
The data collected in May also included 15 respondents from seed companies that are APSA members, but based outside the Asia-Pacific region, including nine from Europe, three from Chile, and one each from Brazil, South Africa, and the United States. Fourteen of these companies were engaged in the vegetable seed trade, seven in the field crop seed trade, and six in seed of flowers/ornamentals. Of the sample of vegetable seed producers, 65% reported a negative effect on seed sales/demand (not shown), which is the same as for the Asia-Pacific region. However, for other types of sowing seed, respondents from outside the Asia-Pacific region reported smaller negative effects than for those from inside the region.
In terms of business continuity, 80% of the respondents outside the Asia-Pacific region reported a negative effect on international seed shipments, against 91% in the region (Figure 4). Slightly fewer respondents outside the region also reported negative effects on input supplies, labor, access to finance, and R&D. Furthermore, fewer respondents outside the Asia-Pacific region reported “strong negative effects”—with the exception of access to finance. For instance, whereas 80% of the respondents from the Asia-Pacific region reported a negative effect on R&D, this was only 54% for other regions and none reported a “strong negative effect”. Yet, overall, it appears that seed companies inside and outside the Asia-Pacific region are affected in similar ways.
Figure 4. Effect of COVID-19 lockdown measures on seed company business during May 2020 for APSA members in the Asia-Pacific Region (APR) and in other regions (“Other”)
Shoring up the seed supply chain
Seeds are an essential part of agricultural production and food supply chains. Restrictions on the movement of seed, bottlenecks in logistics, shortages in manpower, and/or delays in research and development can have knock-on effects and threaten food and nutrition security. It is crucial that farmers are assured access to quality seeds and other essential inputs well in advance of the next sowing season. Conventionally, vegetable seeds need to be in stock at least 30 to 45 days before sowing; however, as the survey and webinar indicate, producers, exporters and importers are struggling to supply seed in a timely manner and are incurring significantly higher costs.
Likewise, downstream trade in food commodities has also been affected. According to the Food and Agriculture Organization of the United Nations, logistics bottlenecks have reduced the market supply of high-value food commodities such as fruits and vegetables and prices of many food items have fallen during the pandemic. High input costs coupled with low or uncertain market prices are bad for smallholder farmers, many of whom have struggled to recover production costs, and may therefore reduce sowing in the coming season.
The seed industry needs to be flexible and responsive to the “new normal” of business in a post-Covid world. The pandemic has changed the way seed companies operate, as highlighted in the survey and webinar. Seed company managers offered various suggestions to adapt and cope, including:
Reviewing seed importation plans, including for parental lines, to ensure adequate supplies of seed and genetic resources for coming seasons.
Close monitoring of seed inventories of customers to ensure stocks are sufficient to cover the entire season.
Expanding the use of online communication platforms (B2C and B2B), social media and e-commerce in marketing and sales.
Using virtual or remote product demonstrations/exhibitions via live streaming tools, social media broadcasting platforms (e.g. WeChat, YouTube, Facebook, Zoom).
Working closely with national and regional seed associations as a bridge to government departments, regulators and facilitators, including for customs procedures, business updates, and investment opportunities.
Exchanging best practices and revising standard operating practices for work site rules and protocols (e.g. staffing and work shifts, balancing needs of production with health and safety rules and guidelines).
Looking ahead, although the negative effects of COVID-19 lockdown measures appear to be easing, strong collaboration between the public and private sectors will remain crucial in securing seed supplies to farmers and ensuring food and nutrition security. On the bright side, this crisis has presented a number of opportunities for seed companies to ‘shore up’ and strengthen their networks, consolidate resources and optimize operational efficiency. In addition, there is an opportunity to streamline official procedures related to phytosanitary clearance and plant variety registration by adopting digital tools. Examples include the ePhyto (electronic phytosanitary certificate) platform and online national and regional databases for checking import conditions and registering plant varieties. Digital platforms and electronic media will become more commonplace in the seed industry’s “new normal”, but one thing that won’t change is the value of people. Above all, the seed industry must continue to support its personnel, customers and farmers as end users.
The first round data are explained here. The second round was collected from 18-29 May 2020, with 74 respondents completing the survey: 59 came from countries/territories of the Asia-Pacific region with most coming from India (14 ), Japan (7) and mainland China (6) and others coming from Hong Kong SAR, Chinese Taipei (Taiwan), Thailand, Bangladesh, Pakistan, New Zealand, Indonesia, South Korea, Vietnam, Australia, Malaysia, the Philippines, Sri Lanka, Turkey, Singapore and Afghanistan.The 15 responses from countries outside of the region included Brazil, Chile, Denmark, France, Italy, South Africa, Spain, United Kingdom and the United States. The summary results can be downloaded here.