Monday, August 1, 2011

China Should Strengthen Supervision Over Foreign Seed Companies

August 1, 2011, CCM – Recently, several China's government ministries including Ministry of Agriculture, Ministry of Commerce, etc. have jointly investigated the situation of foreign seed enterprises entering domestic market, and the influence foreign capital has brought to domestic seed industry according to CCM’s July issue of Seed China News.

The investigation found that, relying on the strong advantages in capital, R&D, core technology, brand, marketing and service, many foreign companies have actively entered domestic seed industry, through the ways of M&A, joint venture, etc.

A source close to the investigation team disclosed on 20 July that, the investigation report is still in drafting at present; most members participating in the investigation do not make suggestions to limit the development of foreign seed companies within China, but call for strengthening supervision over them, especially implementing appropriate measures, such as price ceiling, to those multinational companies with monopolistic behavior.

Although some insiders advocate restricting the expansion of foreign seed enterprises in China, most members participating in the investigation do not agree with it. "It is reasonable for foreign companies to provide farmers with competitive products and services, if domestic companies are unable to do it  temporarily", said a investigator. Actually, the "closed protection policy" for blindly rejecting foreign capital is nothing short of seeking no progress.

Content of Seed China News July 2011:
China should strengthen supervision over foreign seed companies
China: enhancing super rice promotion in 12th Five-Year
Changsha, future seed industry center of China
A vegetable seed company founded in Guangdong
Henan Qiule is climbing in seed industry
Winall Hi-tech to acquire Anhui Wannong
Guangxi Zhaohe acquires subsidiary of local corn institute

Editor’s Note:
The "Suggestions for Accelerating Development of Modern Crop Seed Industry" was released in April 2011, which leads to certain fluctuations in domestic seed industry. While the most glaring concern should be that seed companies are amplifying efforts to collaborate with research institutes, in order to improve their overall technology level in variety breeding.

Aiming to become main force for variety breeding, not a few companies have invested heavily to establish R&D centers, by introducing advanced equipment and facilities, and technical personnel. Due to lack of attention in R&D for a long time, most seed companies have seriously lagged behind in variety breeding. Therefore, research institutes who possess abundant breeding experience and senior research talents, are certainly considered as best partners for seed companies to improve variety breeding.

Apart from large-size enterprises such as CNSGC, Winall Hi-tech, etc., many fast-growing companies like Henan Qiule and Guangxi Zhaohe, also spare no effort to seek collaboration with local research institutes, in order to further enhance their regional advantages.

As for research institutes, they also actively get close to seed companies. For example, Hunan Academy of Agricultural Sciences releases that it shall phase out commercial breeding and turn to basic and public research in the future, to provide research services for seed companies.

Seed China News, a monthly publication issued by CCM International on 30th of every month, offers timely update and close follow-up of China’s seed industry dynamics, analyzes market data and finds out factors influencing market development

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