The marketing and manufacturing of hybrid maize seed is a complex process involving several steps: product development, testing, seed multiplication and marketing. Seed companies control the development and marketing of this high-value commodity, but the actual multiplication of maize seeds takes place in farmers’ fields. This study highlights that seed multiplication is a product of both biological and social processes involving the interaction of several actors. Misfits among actors may frustrate efficient solutions for risks intrinsic to seed multiplication.

Much literature on the hybrid maize seed industry focuses solely on research and varietal development. Less attention is paid to the seed multiplication. Since the beginning of the hybrid maize seed industry in the USA, a major concern for the industry has been how to achieve high seed yields to make it a profitable investment. Seed production is a significant factor since the actual manufacturing of hybrid seeds comprises 30 per cent of the seed’s market price. To produce hybrid seeds economically, much depends on the interaction between the production qualities of selected parent lines, the environmental conditions in the production area, and the crop management in the seed farms. To understand the management of seed multiplication, I investigated the contractual production of hybrid maize seed in the Southern island of Mindanao, the Philippines, in 1996 and 1997. The contracting agency, Pioneer Hi-Bred, is one of the world’s largest maize seed companies with its headquarters in the USA. The company offered production contracts to a varied group of some 150 farmers owning land in an irrigation scheme comprising about 300 hectares.

Hybrid maize in the Philippines

Contract growing in the seed industry

Companies take this strategy to externalize the production risk intrinsic to seed multiplication. In the Philippines as well as in other Southeast Asian countries, companies have difficulties in controlling the quantity and quality of commercial seed. The process requires constant supervision and careful crop management because reproduction in maize is very sensitive to environmental influences. This can only be controlled effectively through intensive, hands-on management. Natural conditions such as high temperatures, uncertain rainfall and high disease pressure have strong impact on yields. Seed yields are commonly lower than grain yields because of weak inbred parents, reduction of harvestable land due to the need to plant unproductive male parents, and higher quality standards that lead to high levels of rejected seeds.

Aside from risk management, it is vital for companies to have a stable supply of genetically uniform seeds and to have sustained access to suitable seed fields. In Mindanao, the majority of maize farmers have been facing spiralling costs of agricultural inputs, rising interest rates, declining or unstable prices, and traders monopolizing the grain markets. To these farmers, Pioneer Hi-Bred made an offer difficult to refuse. The company would advance all inputs including free provision of parent seeds plus other incentives, provide technical assistance, guarantee access to the market and offer fixed purchase prices. The price of the product is agreed a priori, and is, in most cases, slightly higher than the price offered by traders. The price difference is, according to farmers, a major reason to sign the contract. More decisive, however, is the provision of a budget for agricultural production because normally these farmers find it difficult to raise capital.

Farmers’ perspectives on risk

Despite the often stable and higher prices for the product and the favourable credit arrangements in contract growing, seed farmers are reluctant to enter into a long-standing growing arrangement due to the probability of failure. Since the genotype of parent seed is non-negotiable, financially independent farmers consider non-renewal of their contracts, especially when alternative crops such as okra and silage become available elsewhere. Other growers, however, are not able to do without the financial assistance provided by the company, and hence these farmers have to live with the likely possibility of low yields in seed multiplication.

Although the company shifts risks to growers, its operations equally rely on a sustainable access to irrigated land of farmers. To convince farmers to stay in the seed production scheme, companies must guarantee that the system is going to yield for contract growers. According to production managers of different seed companies, sustaining farmers’ interest depends on the performance of the company’s technology and on the extent to which farmers’ risks are compensated. Managing production problems in seed multiplication involve the participation of different parties and this reveals the problematic nature of division of labour in contract growing.

Technological and organizational complexity

In responding to these factors, farmers have to ensure proper pollination by synchronizing pollen shed from the male plants with silk emergence which enables pollen reception in the female plants. During the flowering stage, both male and female parents are particularly susceptible to abiotic stress, in particular to drought stress. High temperatures and low soil moisture content have an adverse effect; silking is delayed, causing poor seed setting and reduced yields. Furthermore, stressful conditions can lead to abortion of fertilized spikelets one or two days after fertilization because the plants lack energy during and after flowering. Particularly, inbred lines are often characterized by additional undesirable traits, such as low yields and greater susceptibility to adverse environmental conditions. Hence, proper management of abiotic conditions is crucial during flowering periods.

However, the organizational structure of seed multiplication separates the two basic elements of crop performance: genetic qualities and control over environmental stress (see box). The divisions of labour between companies and growers and forms of crop failure are influenced by three interrelated factors:

• genetic qualities of the parent seed provided by the company which determine yield potential and stress tolerance;
• crop management by individual farmers to influence yield potential and stress tolerance;
• efficiency of water distribution to the fields by the Irrigation Association.

In the contractual arrangement, various tasks in seed multiplication are assigned to different parties in the scheme. Seed multiplication entails the coordinated use of technological tools to regulate or transform natural processes, which strongly influence the level of risk in seed production. Apart from skilful crop management by seed growers, the mode of reproduction in maize itself requires close coordination with the agency responsible for water distribution.

Managing water

In the scheme, water was scarce, while maize plants required a substantial amount of water at particular growth stages. This necessitated careful water management by the irrigation association. Since the majority of farmers in the area were contracted to produce maize seeds, management of water allocation was closely coordinated with the planting and harvesting schedules of the company.

However, the irrigation association’s capability to control the system fluctuated. For efficient water management, the board of the irrigation association relied on the farmers’ willingness to continue growing seeds. However, after several occasions of crop failure, discontented but influential growers impaired the capability of the association’s board to manage irrigation in accordance with the needs of seed production. Growers planted alternative crops and demanded or simply took water for their farms. As a result, decision making about irrigation and about the presence of the seed company became politicized.

Consequently, finding solutions for specific production problems in seed multiplication turned into a social issue. The company technicians acted as ‘corporate diplomats’ in these matters. Despite their efforts, finding a collective solution to barrenness of the maize ear, the example central to this case study, almost became impossible. The organizational relations in contract growing hindered collective and coordinated solutions.

From this perspective, the agricultural practices in the production of hybrid maize seed can be understood as a composite technological system comprising an irrigation system, inbred lines and crosses, and individual farm management. All these mediate and regulate abiotic and biotic stresses from the natural environment. Although technically connected, different actors controlled different elements. My conclusion is that the particular social organization in contractual production of hybrid maize seeds constrained the endeavour of company managers and of growers to combine their efforts in ways that produce efficient results. Interests of growers and companies either converged or diverged, depending on the performance in seed production. The existent divisions of labour hamper feedback mechanisms because different types of expertise are located at different levels in the system.

Competition and new varieties

Seed companies in the Philippines originally produced three-way cross hybrids. However, from the perspective of a seed company, three-way crosses have two major disadvantages. Firstly, using a hybrid female requires the company to produce the hybrid parent. This means that additional land, time and money are devoted to the production of those parents. Hence, there is a delay of the introduction of new products on the market. Secondly, use of hybrid parents leads to an increased variability of the genotype (genetic constitution of an organism) and the phenotype (characteristics of an organism) within the commercial seed product. This implies a lower potential for vigour expression and consequently, a weaker market demand for three-way crosses. However for the growers, three-way cross hybrids seeds are easier to multiply because harvesting from a stronger single-cross parent promises a more stable and higher yield.

In the Philippines, and around the world, hybrid seed development is becoming increasingly directed towards single-cross hybrids. Single-cross hybrids have a better market demand due to their high potential for vigour expression. However, for growers, single-cross hybrids are more difficult to multiply since they are harvested from a weak inbred mother line, which means lower seed yield. Nevertheless, the commercial traits of hybrids are the first priority for seed companies, while the efficiency in seed multiplication is only secondary.

Consequences for seed growers

This case study showed that the company prescribed improved cultural practices and worked on better parental lines, but the control and regulation of environmental and biological stress, was beyond the direct influence of the company’s production management. For this, the company depended on the effort of individual growers and on the management capacity of the irrigation association.

Furthermore, solving particular production problems in seed multiplication received little attention from the experts in the hybrid maize industry. Problem-solving activities and use of various tools were habitually directed towards the commercial introduction of competitive hybrid varieties. This study, however, revealed that seed growers are crucial actors in the seed industry. Nevertheless, the commercial value of a new hybrid is of overriding importance in the hybrid seed industry.

This may offer an explanation for the consistent use of contract growing arrangements in seed multiplication. Production risks are shifted to growers, but if these risks are not balanced by higher prices, farmers may decide to leave the scheme and opt for alternative crops. Hence, contract growing increased the company’s level of uncertainty with regard to sustainable access to the production areas. Therefore, it becomes especially interesting to understand feedback mechanisms in the seed industry and to improve the ways in which companies and growers organize learning processes in seed production.
Sietze Vellema

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