Farmer seed enterprise revisited: Local seed business models in Ethiopia, Uganda, and Myanmar

Globally, seed business is dominated by vegetables, in sub-Saharan Africa by maize hybrids, and in South and Southeast Asia by rice and wheat. Save for informal seed systems, smallholders have few sources to turn to for quality seed of local staples, like sorghum, beans, and sweet potato. This is despite large public investments in developing improved varieties of such crops. We revisit the debate on whether farmer seed enterprise is a viable missing middle between formal and informal seed systems and assess the business case of the model known as local seed business (LSB). To this end, we ask the questions: 1. What is the LSB niche; 2. What is the business model; 3. Is it viable, if so; 4. Under what conditions, and; 5. What is its contribution to seed availability and the agricultural economy? We evaluate the business case for LSB through the systems perspectives of integrated seed sector development and market archetypes. Further to making inductions about the niche and business model using these concepts, we document the institutions conducive to LSBs' viability and measure LSBs' contribution in economic terms. Data were collected from case studies of the programs of Integrated Seed Sector Development (ISSD) in Ethiopia, Uganda, and Myanmar using internal documents and opinions elicited during experts' consultation. The LSB ‘niche’ is the gap left between commercial entities and the development community intervening to improve certain households' welfare outcomes. Whilst LSBs capture small premiums compared to companies, margins are modestly positive. The presence of support – like which ISSD provided – is prerequisite for startup. The model's viability depends upon continued support in accessing affordable early generation seed and seed quality assurance services. We conclude that LSB complements rather than competes with other forms of seed entrepreneurship by broadening the products on offer, deploying new and improved varieties of crops considered commercially less interesting, and accessing harder-to-reach markets. The systems perspective applied in our article refutes the notion that one size fits all and departs from the dichotomy that seed systems are either formal or informal. It is also an interesting case of niche innovation and strategic niche management in seed systems change. Supporting LSB is a worthwhile policy option to catalyze public investments in variety development and contribute to SDG 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture. • Farmer seed enterprise is long debated as a viable solution to limited supply of quality seed of local staples. • We assess the business case of the model known as local seed business (LSB). • The LSB niche is replacing seed saved and sold locally of unknown quality with quality seed of known provenance. • We conclude that LSB complements rather than competes with seed companies by broadening the portfolio of products on offer. • The systems perspective applied here departs from the dichotomy that seed is either formal or informal.