Almost every year there are some localised shortages of Boro and at times wheat seeds. This year the seed crisis seems to have grown out of proportions. The entire blame for the crisis has been sought to be placed on Bangladesh Agriculture Development Corporation (BADC) and also the private sector dealers. These dealers, it is alleged, have taken full advantage of the shortage in supply and priced the seeds at a level beyond the capability of the farmers to buy. The news item referred to has estimated that because of this speculative behaviour of the private sector dealers, the farmers would have to spend an additional amount of Tk. 500 million. How this estimate was arrived at was not, however, spelt out in the news item. At a time of seed crisis there is a tendency to merge and then confuse BADC's role in seed production, supply and sale. BADC neither is nor can be capable of meeting the total seed requirement of the country.

Seed market in Bangladesh, as is common for other developing countries, is heavily dominated by the informal sector. It is necessary, therefore, to place things in correct perspective and suspend our judgment for the moment on this vital issue. The seeds referred to in the news item are analysed in terms of total seed requirement and BADC's capability to supply the same. The figures used relate to 2002-2003 and the situation has not changed much and may in fact have deteriorated given the total lack of attention to strengthen public sector seed supply. The total quantity required and the quantity supplied are shown in the table.

BADC's capability since the eighties has been seriously eroded because of the shifting policies and strategies pursued by the donors. First came the idea of commercialising seed production through the establishment of a separate Seed Corporation. The World Bank in 1981 under the promise of funding Cereal Seed Project Phase II (CSP II) proposed this. The government of the day was not fully averse to the concept. However, the final negotiations held in Washington in 1981 led to a break down mainly because of the stiff conditionalities on commercial pricing of seed.

Then came German Agency for Development (GTZ) assistance, which continued till late eighties. Other major donors such as Asian Development Bank (ADB), United States Agency for International Development (USAID) and the World Bank (WB) called for total privatisation and gradual withdrawals from seed marketing by the public sector.

With a kind of hindsight, it is possible to recall that way back in 1988-89, the World Bank mounted a technical assistance project (TA) to determine the future role of BADC in the changed context of privatisation of agricultural input trade. The University of Illinois was contracted to complete the study and the local associate was Rahman, Rahman and Huq, a Chartered Accountant firm. Report was submitted. Both the World Bank and the government as it then was, remained silent.

During 1996-2001 period, a committee was constituted with a Secretary as Chairman to submit a report on restructuring of BADC. The report was submitted in late 2000. No action as yet is visible.

As part of the conditionalities of different aided projects, the closure of BADC's Thana Sales Centres (TSCs), more or less on the same lines as USAID had done in case of fertilizers, was effected. BADC had to close about 400 TSCs. At present, there are only 78 such centres. BADC's wholesale outlets are 22 from which 1,800 registered seed dealers lift seeds and supply to farmers. However, not all 1,800 dealers are active. Depending on the number of active dealers, shortages occur at places. In line with the free market policy, the dealers can set any price for onward sale to farmers. A Seed Policy was framed in 1992, which stressed on the need for private sector development in the sector more or less on the same lines as the donors wanted.

GTZ in the late nineties came up with the idea of private sector seed companies. Under this initiative, as many as 23 private seed companies on a small scale have been set up. Non-government Organisations (NGOs) also started to be in seed business. Seed Industries Promotion Unit (SIPU) has been set up in one of the projects under the Ministry of Agriculture (MOA).

During 1996-2001 period, MOA realised the need for strengthening public sector seed production and supply. The rationale was on replacement of seeds, which have lost their genetic quality. As many as 10 new Seed Processing Centres were set up by BADC to ensure steady and stable supply situation keeping in mind the need to achieve self-sufficiency in food.

In addition, MOA also took the initiative of strengthening the informal seed market which operates on farm level seed production. The project then initiated has led to encouraging results and contributed to stabilising supply for cereal seeds only. Seeds of other crops are not covered by the project. The statistical data for production of farm level seed maintained by the Project Director's office indicate that production of seeds is fairly stable and has increased manifold from 7,159 tons in 2000-2001 to 19,960 tons in 2002-2003 for Boro. Information gathered from the Project Director's office indicate that last year also there were local shortages, but the situation could be overcome from farm level seed production. He seems hopeful that the situation can be tackled this year also.

An important development relating to the future of the project is that the project is under transfer to the revenue budget following a recent decision by Executive Committee on National Economic Council (ECNEC). This is a step in the right direction as seed production at farm level is a recurring activity and the support provided by the government conduces to additional income generation for the farmers. However, unless transfer of the project and its timely funding under revenue budget is made, a crisis situation of real nature will have to be faced next year during Boro season. This is an aspect, which needs immediate attention of the government. Additional issues relating to fund management will also need to be addressed because fund management under revenue budget is much less flexible than under development budget.

Reverting back to the news relating to the crisis and BADC, it should be distinctly understood that along with the so-called crisis the substantive issue relates to quality of Boro seeds supplied by BADC in Khulna and Barisal. This needs impartial investigation by the MOA based on which corrective actions need to be taken. Inquiries with the Ministry and BADC indicate that some senior officials from BADC are already in the field apparently to look at the allegations. In this context, it needs to be mentioned that in the past also there were some isolated complaints on this issue. Inquiries then conducted proved that many dealers filled up BADC's seed bags with non-seed grains and sold the same to the farmers. Privatisation of seed marketing, therefore, calls for intense monitoring relating to quality and supply. This raises the issue of, apart from speculative behaviour of private sector dealers, their ethical standards. How this issue will be addressed remains an open question.

At the same time, there is need to identify factors that impede BADC's seed operation in a user-friendly way. Available information indicate that funding of seed operations of BADC is a major problem. BADC, for seed production, operates through what is known as the contract growers system. This essentially involves contracting arrangements with seed producing farmers well in advance of the crop season. Prices are to be negotiated, while the standards of quality are already set by the National Seed Board (NSB). It is said that fund management to run the contract growing operations are in a state of disarray. Much of the funds received are diverted to pay for other operations. This aspect needs close scrutiny. Available information also indicate that payment to the contract growers are in arrears. If this is the case, there is likely to be a breakdown of the contract growing system creating problems for BADC to whatever little seed they need to supply. BADC's failure to maintain supply will further encourage speculative behaviour of the market.

At the end of it all, the issue of close monitoring of demand and supply situation assumes paramount importance. As things stand now, there is a committee located in MOA. Its membership includes officials from Department of Agricultural Extension (DAE), research institutes and BADC. There is need to adopt a more professional approach in location-specific demand forecast and appropriate steps to meet the demand. In addition, location-specific varieties based on farmers' choices need to guide the seed production process. BADC also needs to adopt an equally professional approach in marketing seed in which they appear to be deficient at the moment.

The lesson that emerges from past and current experiences is very simple. We should get away from the disabling notion that the public sector can do nothing right and that the private sector can do nothing wrong.

AMM Shawkat Ali is a former secretary, Ministry of Agriculture.