Problems in China's corn seed industry

Statistics from the Ministry of Agriculture show that China has more than 8,700 seed companies. Only about 200 have registered capital of more than 30 million yuan, and just 100 have the capability to undertake research.

Elsewhere, the situation is different. Although there are only around 100 seed companies in the US, their combined profit accounts for more than half of the industry's global total. A report released by the Chinese Academy of Science and Technology for Development shows that the top 10 domestic seed companies hold a combined global market share of just 0.8 percent. In 2010, the annual sales revenue of Monsanto, the multinational agricultural biotechnology company, exceeded that of China's total seed industry.

"Before, all the farmers bought their seeds from one Stated-owned company. However, after the seed law came into effect in December 2000, China's market was opened to the outside world, and many foreign varieties flooded in, gradually exerting a stranglehold on the market," said Zhang Xue, director of the Yushu Agriculture Bureau.

"In 2005, Pioneer 335 was the first foreign variety to enter China. It had obvious advantages in terms of its quick ripening time, the fact that it can be planted closer than other varieties, and provides higher yields than domestic seeds," he said.

The area of Jilin sown with Pioneer 335 was about 140,000 hectares in 2008. By 2010, that figure had soared to 1.4 million hectares, accounting for more than 40 percent of the province's total corn fields.

Meanwhile, 2011 saw a sharp decline in the market share for domestic seeds. Zhengdan 958, a well-known local brand that accounted for 50 percent of the Jilin market, saw its share shrink to 10 percent.

"In terms of marketing, foreign companies don't enjoy more advantages than us, but technologically, they are far ahead of us. Generally, foreign seed companies reinvest 10 percent of their annual sales income in research, but the proportion in domestic companies is only 1 percent, or lower," said Luo Zhenfeng, deputy director the Jilin Academy of Agricultural Sciences.

"To solve the problem, we need to introduce brand-monopolization management to reduce the incidence of inferior seeds being sold as high-end products. But in the long term, the central government must give more support to, and accelerate the progress of, agricultural science and technology, to cultivate more talent," said Zhang Xue.

"Jilin province plans to establish several seed cultivation bases in the coming years. We hope to expand the market share of provincial self-cultivated corn seeds to 50 percent during the next five to 10 years," Ren Kejun, director of the Jilin Provincial Agricultural Association, said at a news conference on March 2.

However, experts warn that it will be difficult to solve the problem starting from a purely provincial level and have urged the central government to draw up policies designed to slow the pace of foreign seed companies entering China.

"Seed companies should establish close contact with institutes of scientific research, but in the long run, we must establish enterprises that will dominate in the field of scientific research," added Ding.