Farmer's Weekly (South Africa)

Industry responds to seed access claims

Months after the release of the Competitio­n Commission’s Fresh Produce Market Inquiry (FPMI) report, the seed industry is still battling the accusation that there is an active strategy to limit access to high-quality seeds to new farmers.

The FPMI report, released in June, contained allegation­s that various stakeholde­rs in the fresh produce industry, from seed suppliers to market agents, were acting uncompetit­ively. The report was, however, littered with inaccuraci­es, casting doubt over its validity and ability to provide a constructi­ve way forward.

Inaccuraci­es included referring to market share of companies that no longer exist, confusing company sales with commercial sales, and discussing the role of geneticall­y modified (GM) seed when no GM fresh produce varieties exist in South Africa.

In analysing the prices of seedlings, the report compared the prices of Swiss chard, commonly known as spinach, with those of baby spinach, which differ drasticall­y.

The report stated that mark-ups for seeds supplied by Starke Ayres, notably cabbage, tomatoes and spinach, were high. The FPMI recommende­d: “Starke Ayres should reduce the markups of cabbage, spinach and tomato seeds to the average of the markups of its entire seeds category.”

In response, Frikkie Bam, managing director of national operations at Starke Ayres, said the seed industry was highly competitiv­e and that farmers quickly switched varieties if the seeds did not perform. “Loyalty is not guaranteed, and seed companies must provide the best seed possible for farmers to continue purchasing them. We believe our seeds are priced fairly in accordance with the value they give to the farmer, while balancing the enormous reinvestme­nt required by the seed company.”

He added that the recommenda­tion to reduce mark-ups to an average across all categories “made no sense”. “Each crop has its own cost structure, but so too does each variety within a crop, based on research and developmen­t, input and testing costs, and currency fluctuatio­ns. Exclusive varieties and proprietar­y crops have different values, and then there is a supply and demand element that must be factored in. This is a difficult recommenda­tion to understand given the free market system.”

Simba, owned by PepsiCo, came under firing in the report and was accused of preventing third parties from gaining access to its FL2006 potato seed varietal, shortly before the expiration of the protective period.

Debbie Sharwood, communicat­ions lead for PepsiCo in South Africa, said the company had explained its operating model yet they maintained their preliminar­y findings regarding Simba, despite the lack of any data to support it.

“Simba withdrew this varietal almost five years prior to the expiry of plant breeder’s rights to replace it with a stronger varietal. This subpar varietal was proven to be inferior to many other varietals, including other potato growers and our competitor­s. These facts were shared extensivel­y during Simba’s engagement in the FPMI.” –