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MANAGING

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                                                1

                     BASIC ELEMENTS OF SEED MARKETING




SEED MARKETING--RISKY BUT ESSENTIAL

Seed marketing is the final step in a seed program--it takes the seed to farmers, and gets
them to buy it and plant it. All seed program operations exist only to provide high-quality
seed for marketing.

Seed marketing is critically time-sensitive, and sensitive to factors affecting rural
marketing. Seed must reach the farmer at the right time, at the right place, at the right
price, in the right amount, and of the highest economic quality. Because seed marketing is
sensitive to so many factors, it has been considered as a high-risk business.

An additional problem is that during production, conditioning and handling, highly
technical tasks must be performed properly on the seed crop and seed, done in the proper
sequence, and in specific critical time periods. There is further an inflexible time lag of 2-4
years from initiating stock seed production to production of the seed. Initial decisions are
critical; little can be done--without significant financial loss--to change or reduce
production after the seed multiplication program has started. Too often, good seed is
produced and then stays in the storage.

Despite all these obvious drawbacks, a dependable supply of high-yielding seed is
essential to improved income of individual farm families, and to adequate food production
for the nation. With good management and careful planning, seed production can be
successful and profitable--if it is carefully marketed. To ensure cost effective seed
production and supply, marketing must be carefully planned, analyzed and conducted.

REPEAT SALES AND STEADY CUSTOMERS--THE GOAL

Repeat sales--the same farmers coming back every year to buy seed--are the key to a
profitable seed business. This does not require a high profit margin on every bag of seed;
since farmers will or can pay only a certain amount for seed, the dealer's profit is in selling
a large volume at a low profit margin. A seed company can be successful only if its farmer
customers are satisfied with the seed they buy and their relations with the retail dealer and
sales staff. This requires that the dealer and all staff with whom farmers come in contact
be honest, service-oriented, and are focused on helping the farmer--in a way which the
farmer sees and appreciates. They can never use the "hard sell, make a profit today"
approach; they must use the "soft sell, educate and help the customer" approach. This,
combined with dependably high-quality seed and complete service and information to the
farmer, will make farmers happy with their seed and their dealer's service, so they keep
coming back every year to buy seed.


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Managing Seed Marketing. Gregg & van Gastel. 1997          WASDU Publication No. 1, 1997
                                               2


KEY FACTORS IN SUCCESSFUL SEED MARKETING

Seed marketing can be successful and profitable--if every person involved constantly
keeps in mind that the seed company and his job exist only to provide a service for
farmers. And--if each person does his individual job to the best of his ability, always
aimed at providing a good service to farmers at a reasonable cost.

Marketing is the end result of seed business and production operations, the contact
between the seed company and the farmer, the means of getting the farmer to spend money
for the seed.


                      Create and stimulate among farm families:
                       --Desire to produce more, so they can purchase a better standard of
                         living,
                       --Sense of security in buying a better standard of living.

                                                         V
                      Demonstrate, educate, and promote the value of improved seed as an
                      efficient, sure and ultimately economical way to produce more.

                                                         V
                      Produce adequate quantities of TRULY improved seed of high
                      genetic yield potential, viability and purity.

                                                         V
                Do not wait for farmers to come to you to buy seed; use every possible means
                of distributing and carrying seed to farmers, wherever they are. Improved seed
                must be as easily obtainable as alternative kinds of seed.

                                                         V
                             Make the improved seed easily identifiable.

                                                         V
                  The improved seed must be dependable and reliable. Farmer faith in the seed
                  must be maintained at all times, at all costs. Even if it means loss at the
                  moment, never permit sale of below-standard seed.

                                                         V
                  Orient seed operations to farmers' needs. Maintain information feedback not
                  only to produce and supply farmers' real seed needs, but to keep farmers
                  aware that the seed program is serving them.

                      V
                  RESULTS--

                    --Higher farmer yields
                    --Higher total national seed production
                    --More seed sold, with farmers coming back every year to buy seed

Figure 1. The keys to successful seed marketing.

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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
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Providing a good service to farmers at reasonable cost requires careful application of seed
technology, good business management, and good public relations. Above all else, all
operations must be honest, quality-oriented, and completely dependable year after year.

The following are basic elements of Successful Seed Marketing.

1. All seed production, harvest, conditioning, handling and storage operations must be
   conducted properly and carefully, to ensure that the highest possible seed quality is
   produced at the lowest possible cost.

2. Quality control monitoring, and the work of each person, must be constantly aimed at
   quality. Conditions which reduce seed quality must be avoided and prevented. At any
   time when seed quality declines, or there is even any doubt about the seed's quality, it
   must be discarded. NEVER sell low-quality seed to farmers; once a farmer has been
   deceived in the quality of the seed, he will never again trust that seed supplier.

3. Be sure the seed is properly treated so that the seed quality is protected in the field and
   in delivery storage. High-quality seed can completely fail in the field if it is not treated
   for protection against soil pathogens and insects, short periods of unfavorable weather,
   and other menaces.

4. Package high-quality seed in bags or packages of the size which is most convenient to
   farmers. The package should suit the farmer, not the packaging equipment in the
   conditioning plant or the seed company's convenience.

5. Have technically proper storages which provide the proper safe storage conditions for
   seed for the required storage period. This is usually short-to-intermediate storage until
   the next planting season for most seed, with carryover storage for a certain amount.
   The most technologically advanced facilities of a seed company should be its storages-
   -storages and their management determine if seed quality is maintained until the seed
   reaches farmers who plant the seed.

6. Have a transport and delivery system which carefully protects seed during transit, and
   gets seed to the proper places at the proper time.

7. Have a system of market analysis and planning, so a realistic marketing plan can be
   prepared. Use the marketing plan to guide production and distribution.

8. Have retail outlets which are close to the target farmers. Be sure that farmers have
   complete trust in the retail dealers, that the dealers never sell low-quality seed, and that
   the dealers can give farmers complete information on their seed and all aspects relating
   to their crops.

9. Maintain a constant educational promotion program which lets people at the mass
   media level, know about the seed and where it is. At the individual level, the program
   must demonstrate the benefits of the seed, and convince individual farmers that the
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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
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   seed is beneficial to them.

10. Where necessary, help farmers obtain credit to purchase seed. However, do not get the
    retail outlets involved in supplying credit on their own account.

11. Be sure that the retail outlets are kept well-supplied with the seed they need so they
    can sell it when farmers come in. However, avoid overstocking any retail dealer.

12. Be sure that seed salesmen are honest, capable of establishing good relations and trust
    with farmers, and are able to advise farmers correctly and honestly on seed and crops.

13. Keep good records which provide useful operating and management information, not
    just a historical record.

14. After the seed sales season is over and crops are growing, contact all farmers who
    purchased the seed and discuss with them how the seed performed, if they liked it,
    what they want to see in their seed, and what seed they plan to purchase next planting
    season.

15. Use the experience and knowledge gained to fine-tune production and marketing plans
    for the next year, so that it continues to meet farmer needs at the best possible price.

16. Work closely with Government agencies, to ensure that Government credit, crop
   promotion and extension programs mesh with company efforts, and are aimed at
   developing farmer understanding and use of improved seed.

BASIS FOR SUCCESSFUL SEED MARKETING

Seed marketing can be successful only if the seed is of high quality, and the program is
efficient. Seed marketing is the final step in an overall quality program which includes:

1. Varieties which are well-suited to local production conditions and farmer needs.

2. Basic seedstocks which are varietally pure.

3. An efficient, quality-oriented production system.

4. Properly organized and equipped harvest systems which get seed from the field to the
   plant in good condition.

5. Complete drying, conditioning, treating and bagging systems which ensure high seed
   quality with minimum loss and operating cost and time.

6. Safe storage and transport which can keep seed in good condition.

7. Adequate distribution system and retail dealers to get seed to farmers.

8. And most important, highly trained employees who are highly motivated to turn out
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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
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   high seed quality and provide a good service to farmers.

MEASURING SUCCESS

It is easy to measure the success of seed marketing: Is the seed company profitable, or does
it barely make enough money to stay alive? Does it stay in business, or does it go
bankrupt? Do farmers keep coming back year for seed, or do they buy seed once and then
don't come back?




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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
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                                                2

                                WHO IS THE MARKET?




"SEED PLANTED" OR "SEED MARKET"?

Persons lacking detailed knowledge of farmer conditions and operations tend to think of
"total seed planted by farmers" as "the market for seed". For example, if 1,000,000 ha of a
crop are planted, and planting rate is 50 kg/ha, they consider the "seed market" to be 50 x
1,000,000 or 50,000,000 kg (50,000 mt) of seed.

However, this is the "total seed planted by farmers", not "the market for seed". In the
above situation, there may actually be a cash "market" for only 5,000 mt of seed. A
Government or private-sector seed program which determines its seed production on "total
seed planted by farmers" is doomed to failure--and its poor managers deserve full credit
for the failure!

"The market for seed" includes only that amount of seed which farmers are willing to
purchase, either for cash, through various credit schemes, or by bartering farm produce for
the seed. This is almost always considerably less than "the total seed planted by farmers",
and is less to the extent determined by (1) farmer economic/financial ability to purchase
seed; (2) farmer willingness to accept and buy the seed, as determined by the marketing
and extension educational promotion conducted; (3) how easy it is for the farmer to save
seed/grain and replant his own seed (i.e., hybrid variety, self-pollinated or cross-pollinated
crop, etc.); (4) how much truly better is the quality and genetic purity of the seed, and the
performance (yield) of the crop grown from the seed; and (5) how easily available the seed
is, and if the farmer considers its price reasonable in terms of its benefit to him.

The "seed market" thus varies widely, as an amount of "total seed planted", from place to
place, and among crops at any one place. For example, in some areas where small, low-
income farmers predominate, "the market" for rice seed may be only 5-10% of the "total
rice seed planted by farmers". In the US and Europe, as another example, almost 100% of
maize seed is of hybrid varieties, and so "the seed market" is almost 100% of "total maize
seed planted". At the same time, even in the US, many farmers may plant back their own
wheat (a self-pollinated grain crop) seed, so "the wheat seed market" may be as low as
30% of "total wheat seed planted", in some areas.

If your seed program handles only certain kinds of seed, or if you can adequately serve
only a specific area, your "market" is further limited to a specific "target market"--the
farmers who will buy the kinds of seed you offer, and who live in the area you serve.

The "seed market" is truly only those farmers who can/will buy your seed, ultimately
spending part of their resources (cash money) for the seed. To have a successful seed
operation, you must identify these farmers and produce seed to supply their needs. You
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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
                                          7


can operate, and seed are useful, only if the seed are sold to farmers and they plant the
seed; seed which are not sold, and stay in the storage until they lose germination, are a
waste of your money and the nation's resources. Regardless of how much good seed will
benefit other farmers, if they cannot or will not buy the seed, you cannot produce seed in
the amounts they should plant.

CLASSES OF FARMERS

While all farmers plant "seed" to start their crops, not all will buy seed. As noted above,
this depends on the farmers' financial ability and education, as well as on how intensively
seed is marketed and promoted to the farmers.

Thus, different farmers respond to the supply of good seed--which must be purchased for
cash--in many different ways. To determine which farmers will purchase seed (or other
commodity), there are endless ways of classifying farmers, but each classification aims at
one thing: to determine what percentage of, and how many, farmers will purchase the seed,
and how much they will purchase at what price.

One common classification of farmers to determine if they are "in" or "out" of the "seed
market" (i.e., will purchase improved seed at a price higher than grain price) places
farmers in the following categories:

1. Farmers who will buy improved seed without the necessity of promotional marketing.
   These farmers--a small percentage of the total number of farmers, in most cases--are
   usually financially well-to-do, well-educated, have large farms, and have adequate cash
   to purchase the best inputs. These farmers are often ahead of Government personnel in
   knowing about and adopting improved technologies.

2. Farmers who will buy improved seed if they receive a moderate amount of educational
   promotion or marketing effort. These are also a small percentage of the total farmers,
   and have good education, large operations, and financial strength. However, they are
   not as advanced as category 1 above.

3. Going further down the economic/educational scale, there are farmers who will buy
   improved seed if they receive intensive educational promotion, seed are readily
   available and easy to get, and adequate credit is available. In more developed
   agricultural economies, this is often the largest percentage of farmers.

4. Even further down the scale are the farmers who will not purchase improved seed
   themselves, but will try to obtain grain-seed produced by farmers who did plant
   improved seed.

5. At the bottom are the farmers who will not or cannot purchase improved seed, and
   seem to have no interest in or ability to try to use higher-yielding inputs. These are
   usually small subsistence farmers with few resources and little education. In under-
   developed economies, this is often a high percentage of the total number of farmers.

Within and among these rough groupings are many sub-groups. There are also many other
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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
                                            8


classifications of farmers as to their willingness and ability to purchase seed and other
improved inputs.

DETERMINING WHAT "THE MARKET" IS

There is no way to guess what the real "seed market" for your particular kinds of seed is.
The only way to get an accurate determination/estimate of the real seed market is to get out
and survey farmers, get all possible information, and learn all you can, as described later in
developing a Marketing Plan. And, an accurate estimation of how much seed you can
really sell is the only way a program can continue to produce and supply seed. There is
only a choice between success and failure! A private-sector seed program which fails to
develop an accurate estimate of the market goes bankrupt; a Government seed program
can continue to produce seed, but the seed stays in the storage!

INCREASING "MARKET" PERCENTAGE

The number or percentage of farmers who will actually purchase and use improved seed
can be increased. Means of getting more farmers to enter "the seed market" include:

1. Always ensure that the seed is truly of higher quality, and is well-identified. Never
   sell low-quality seed.

2. Conduct intensive extension-type educational promotion, to demonstrate to farmers
   how the improved seed can benefit them personally, and how it will perform under
   their own conditions.

3. Make the improved seed readily available at locations close to the farmers. The
   farmers must trust the supplier, be able to reach him easily, and he must have the seed
   when the farmers need it.

4. Seed suppliers must not wait for farmers to come to them, but must actively contact
   farmers and convince them to buy seed.

5. Seed prices must be at levels the farmers consider reasonable, in terms of its value to
   them.

6. Credit must be available to farmers, in a manner which is reasonably priced and is
   easy to get, but at the same time ensures that farmers repay the credit they receive.

This requires an intensive and well-coordinated program implemented by a combination of
several Government and private-sector agencies. The end result, however, is truly worth
the effort: more farmers use improved seed to produce more and earn more, thus enabling
them to improve their standard of living. Nationally, more food is available for domestic
use and perhaps even for export. Not only the individual farm families benefit; the entire
local and national economy benefit.




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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
                                           9



                                               3

              ORGANIZING FOR SUCCESSFUL SEED MARKETING




SUPPLYING SEED

If seed can be put at the place the farmer needs it, when he needs it, in the amounts he
needs, at the price he is willing to pay, then seed marketing can function effectively. The
seed company must be able to supply enough seed, of assured high quality. It must be able
to:

1. Produce seed of high genetic and physical purity and high germination and vigor.

2. Harvest and dry the seed properly, at the proper time for highest yield and quality.

3. Condition the seed to a high quality standard, with minimum loss. The seed must then
   be properly treated and packaged in bags of the size most useful to farmers.

4. Transport seed safely and rapidly to the points where farmers can take delivery.

5. Make the seed readily available to farmers when they need seed for planting.

6. Operate cost-effectively, with minimum loss. Competent, careful staff are essential in
   all positions from laborer to manager, and an effective internal quality control system
   is critical.

GETTING SEED READY FOR MARKETING

Seed must be ready when they are needed for distribution, sales and planting. The
conditioning season and operations, especially as it relates to specific varieties, must be
planned well in advance, and conducted to supply conditioned seed according to the
Marketing Plan.

If the climate permits two cropping seasons each year, getting seed ready for marketing
can become quite complicated. Sometimes, seed are produced for planting in the next
season, so that seed harvest and planting time almost occur at the same time. In such cases,
seed harvest and delivery to conditioning must be expedited, and conditioning must be
ready to begin work immediately.

Sometimes, it has been most suited to orderly marketing to produce seed, condition it,
move it directly into carryover storage, and sell it in the following year. Carryover seed
from last year (or from the earlier cropping season) is used to supply farmer demands in
this year. While this increases storage costs and handling operations, it has been the only
means of getting quality seed to farmers on time, when the two cropping seasons overlap.

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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
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THE MARKETING CONCEPT

Many seed companies work hard and produce good seed--but then they go bankrupt.
Analysis after the fact indicates that they focused on technology and production, rather
than on marketing the seed they produced.

Many times, they could have been successful if they had operated on the Marketing
Concept. This is an approach to doing business which says that:

           Satisfying the needs of farmers is the justification for the existence of a
           seed company.


PRODUCTION

              V
           PROCUREMENT & ASSEMBLY

                                     V
                  CONDITIONING, TREATING, PACKAGING

                                                            V
                                               TESTING AND LABELING

                                                                 V
                                                 TRANSPORT & DISTRIBUTION

                                                                           V
                                                              SALES/MARKETING

                                                                              V
                                                                           FARMERS

Figure 2. Physical operations of seed handling in a seed program.


Following the Marketing Concept, all activities of the seed company--breeding, variety
development, research, production, quality control, conditioning, storage, distribution,
promotion, marketing--are aimed at two points:

1. Determining what are the realistic wants and needs of farmers.

2. Satisfying these farmer needs while still making a reasonable profit.

To achieve these, the Marketing Concept is based on two principles:
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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
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1. Planning, policies, production and operations are aimed at the real needs of farmers.
    These must be identified, supplied, serviced and satisfied.

2. Producing and conditioning efficiently, supplying high-quality seed, promoting
    effectively, and selling at prices acceptable to farmers, at a volume large enough to
    generate the required return for the company.

In a developing agriculture, operating your seed company by the Marketing Concept is
extremely important, because:

1. Farmers are not educated and motivated. You must motivate farmers to buy and use
   improved seed. They will not actively seek improved seed even after they have once
   used it, and they do not understand improved seed or the technologies of producing it.

2. Marketing channels and support services are not well-developed, so the seed company
   must handle many aspects by itself; it cannot rely on others. It must handle much of its
   own marketing, train and support its dealers, and carefully produce according to what
   can be sold.

Failure to follow the Marketing Concept is indicated in developing seed industries when
the seed company has unsold seed, while many farmers still use low-yielding seed. To
successfully sell its seed, the seed company must be totally oriented toward (1) identifying,
creating and increasing farmer demand for improved seed; and then (2) supplying that
demand.

TOTAL FOCUS ON MARKETING

The company/program organization must focus on marketing, and this focus must extend
through all planning, management and operations. Everyone is involved and must aim
his/her activities at marketing:

1. Breeders must ensure better performance of new varieties under farmer conditions, and
   they must provide data which is useful in selling seed.

2. Agronomists and crop specialists must provide crop data and advice which help sell
   seed--if the seed and variety are good; if not, they must provide data which helps
   prevent the low-quality seed and varieties from being sold by the company.

3. Agronomists, internal quality control, seed growers and seed conditioners must
   consistently and dependably supply only seed of consistently high quality which
   maintains farmer trust.

Every operation and staff member of the seed program/company must be market-oriented.
They provide the seed which the Marketing Unit sells, and the information they use to sell
the seed. The Marketing Unit only presents their results to farmers in a way which
stimulates farmer desire to buy and use the improved seed.
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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
                                           12



ORGANIZING FOR PROFITABLE MARKETING

Only with an efficient, market-oriented organization can the seed program/company
achieve this. The organizational structure is the means by which relationships and attitudes
are formalized. In a market-oriented seed company organizational structure:

1. All responsibilities in a particular activity area are focused under one manager, so they
   can be coordinated and directed. Marketing then provides goals for all sections.

2. All operations of servicing farmers (the "market") are under one manager, so they can
   be coordinated and integrated to meet farmer demand efficiently. This includes:

   -   Forecasting farmer demand, by crop, variety, location, and class of farmers.
   -   Planning production to satisfy these farmer demands.
   -   Planning dates and locations where seed stocks must be available; i.e., controlling
       inventory to supply farmer demand.
   -   ales promotion and advertising.
   -   arket and sales expansion.
   -   ealer development and servicing.
   -   ll other farmer servicing functions.

3. Marketing can then advise production and conditioning:

   -   Give them realistic targets of kinds, amounts, dates, quality, locations, etc.
   -   Help them to be able to concentrate on their technical operations.
   -   Provide better coordination at the operational management level.

4. Production and conditioning can then work toward supplying the definite and realistic
    market needs identified by the Marketing Unit.

5. Management efforts can focus on:

   -   Determining realistic long-term objectives, with specific short-term goals to meet
       current farmer demand.
   -   Planning long-term and short-range operating strategy required to meet the goals.
   -   Organizing and coordinating all activities, facilities, personnel and responsibilities
       so as to achieve maximum production and cost-efficiency.
   -   Maintaining close communication to integrate and coordinate all activities.
   -   Identify and maintain the staff, facilities and funds required to meet the goals.
   -   Supervise and manage so that all operations are goal-oriented, efficient, timely,
       correct and complete.
   -   At regular intervals, analyze and evaluate all activities and improve them as
       possible, so as to improve the company's market position.

Figure 3 shows a simplified form of seed company/program organization which
concentrates management of activity areas and permits the company to focus on
marketing.
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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
                                           13




                              PRESIDENT/GENERAL MANAGER

                                                         QUALITY CONTROL
                                                         MANAGER

     ________________________________________________________________

_____________      _______________        ____________       ___________        ____________
PRODUCTION          CONDITIONING           MARKETING          FINANCIAL          PERSONNEL
 MANAGER             MANAGER               MANAGER            MANAGER            MANAGER
______________ ______________            ____________        ___________        ____________

            _____________________________________________
__________________________________               __________________
 MARKET RESEARCH & PLANNING                       GENERAL SALES
 MANAGER                                          MANAGER
__________________________________               __________________

     (These 2 sections must work closely together and coordinate closely, under close
       coordination through the Marketing Manager)

   ____________________________                                  _______________________
     Market Analysis                                               Market Study/Reporting
     Market Planning                                               Field Sales Organization
     Advertising & Promotion                                       Sales Offices Control
     Sales Analysis                                                Customer Service
     Forecasting                                                   (Forecasting)
     Production/Inventory Control                                  Product Service
     Production Scheduling                                       _______________________
     Distribution Quotas
     Sales Territory Establishment
   ____________________________

Figure 3. Organizing the seed program/company so that all activities are focused on
          marketing, and all marketing activities are together so that the entire
          program/company is aimed at identifying, developing and satisfying farmer
          demand for improved seed (after Law et al.).



MARKETING CONTROL

All marketing activities, from market planning to delivery of seed to retail dealers, must be
concentrated under one marketing manager so that all activities can be fully coordinated to
deliver the right seed to the right place at the right time.

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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
                                             14


All Sections--Production, Conditioning, Finance, Quality Control, etc.--are involved in
marketing by ensuring that the right seed is produced, is of high quality, and at the most
economical cost. They are also involved by always identifying their seed with high quality
and service to farmers. However, the final sale and delivery of the seed to marketing
channels and farmer customers must be closely coordinated by the Marketing Section.

As a further efficiency measure, the cleaned seed storages at the conditioning plant should
be under the control of the Marketing Section.

USING MARKETING TO GUIDE PRODUCTION

Marketing seeks to determine how much of what kind of seed can be sold, and where and
when it can be sold. Production should always be focused on producing the seed that
Marketing says it can sell. Thus, the information developed by Marketing, in the
Marketing Plan, incorporating the data of the Finance Section on profitability of
production, should be the sole factor guiding how much of what kind of seed is produced
by the Production Section.

MARKETING POLICY

The seed company or program must have a formal marketing policy which defines:

1. Company/program emphasis on producing only what can be sold.

2. Objectives of marketing, and of production as it relates to producing seed which the
   marketing unit needs to fill farmer needs.

3. Actions to take when specific circumstances are encountered.

The marketing policy should be adequate to guide staff whenever a need arises, but it
should not be in such detail as to be inflexible in special cases. Any change in policy, such
as price increases, should be made in off-seasons, when a change will not create confusion
or antagonize dealers or farmers during a planting season.

The marketing policy should include the program/company policy to follow in:

1.   Sales methods.
2.   Dealer contracts.
3.   Seed pricing and discounting.
4.   Sharing promotion costs with dealers.
5.   Payment methods.
6.   Transport and delivery responsibilities, costs, etc.




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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
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                                             4

                    PROMOTION AND ADVERTISING OF SEED




STIMULATING FARMERS

To satisfy urban needs, get best possible use of available fertile crop lands, and often to
provide for exports, the country must produce as much as possible on each hectare of land.
Also, this is the only way that farm families can earn more.

The problem is that farmers are often not interested in producing as much as possible.
Often, they are not market-oriented, and only concerned with producing the needs of their
own families. Often, a farmer says "I don't need anymore. If I spend more to produce more,
the merchant who buys it only lowers his purchase price, so I don't make any more."

This is a major social problem confronting Government efforts to increase production of
food: Farmers are not motivated, nor educated, to produce more and market the extra
production to feed urban populations. To stimulate farmers to try to produce more--and
thus purchase and use more costly but higher-yielding seed, they must be motivated to
receive income above their basic minimal needs. This requires stimulating farm family
desire for more and better goods, services, homes, health care, education for their children,
clothing, tools, etc. This, in turn, requires social and economic development to create
farmer awareness of a better way of life, and to stimulate their desire to increase their
production so they can earn more and improve their life.

Some--usually the more well-to-do large farmers--already have this personal motivation.
Obviously, the smallest, poorest subsistence farmers will seldom if ever be motivated
adequately. However, the vast majority of farmers are in between these two groups, and
they have the ability to use better inputs and increase their production, if they can be
properly motivated. They can be stimulated through a combination of government action,
social development, education and training, secure law and order, mass communication,
and marketing.

Seed marketing is only a small component of this socio-economic structure, but it is the
part that most urgently concerns seed companies. Good seed marketing can convince these
farmers to spend more for seed so that it ultimately reduces their per-kg production costs
and increases their income. This is also the first step toward motivating and enabling them
to produce more to earn more to improve their standard of living.

SEED MARKETING CHARACTERISTICS

Seed marketing faces the same problems as any other business which must market to
farmers in villages and rural areas:


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1. How to reach many farmers in many villages and rural areas, often remote with poor
   roads and communication.

2. How to sell to many farmers who purchase only small amounts, and often don't have
   ready case.

3. How to make them want to by and use the product.

In addition, seed marketing has its own set of often difficult operating conditions:

1. A large volume of seed must be transported and sold, but only a small amount is sold
   to each small farmer.

2. Seed are living, and will die if they become too hot or humid. And, safe storage
   conditions seldom if ever exist in isolated rural villages.

3. Seed are not bought and used year-round; they are needed only in particular seasons. If
   they are delivered too early, farmers do not need them; if delivered too late, farmers
   will not buy them.

4. Time is critical to seed marketing not only for reaching the farmer when he needs it,
   but also because seed are living and will die. They cannot be purchased far in advance
   and kept.

5. And, the primary problem with marketing high-quality seed is that this quality cannot
   be seen by looking at the seed. Poor-quality seed or even dead seed often look much
   the same as high-quality seed. Even when there are subtle differences, farmers seldom
   know what to look for. Since the appearance of seed does not indicate its quality, the
   farmer has no way of knowing if the seed really is better. He must buy seed based on
   his faith in the seed supplier; by the time the farmer knows whether or not the seed is
   good, it is usually too late to replant. Thus, when he buys seed, the farmer usually buys
   on the basis of his trust in the dealer.

6. Seed marketing must be oriented to the farmer's specific, personally-perceived needs.
   The farmer wants to know: "What is its benefit to me and my family? Why should I
   spend money on this?" And too often, the farmer does not perceive his personal need
   to produce more.

PROMOTION MUST BE EDUCATIONAL

Small farmers often have low education, and little knowledge of improved seed and crop
production. So, seed promotion must be intensive and continuous, and follow the
educational extension promotion concept of educating, demonstrating and convincing
farmers. All promotion efforts must be well-coordinated, honest, and designed to:

1. Make farmers AWARE of the existence of improved seed.

2. Arouse farmer INTEREST in what improved seed are and why farmers should plant
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   them.

3. DEMONSTRATE to farmers what improved seed can do under farming conditions
   like theirs, to which they can relate.

4. MOTIVATE farmers to use improved seed for their own crops.

5. EDUCATE farmers on how to get improved seed and the credit to purchase it; how to
   handle it, plant it, and improve their care of the crop it produces.

AWARE
 INTEREST
  DEMONSTRATE
   MOTIVATE
    EDUCATE

Called the AID ME principle, this approach must guide all educational promotion to
farmers, from the "innovator" farmers who are quick to adopt demonstrably improved
ideas, to the lower-income farmers who are the last to adopt improvements. The majority
of farmers can be convinced to accept and use improved seed if they:

1. Consistently and effectively learn of its usefulness from sources they trust.

2. See that it can improve income under their own conditions.

3. Are helped to obtain it.

4. Are constantly kept aware of its value to them.

EFFECTIVE PROMOTION

To be effective, promotion must be:

1. Comprehensive enough to reach all farmers in the target area.

2. Intensive enough to have a positive impact on their choice of seed.

3. Constant and consistent enough to keep them motivated to use improved seed every
   planting season every year.

Promotion must be educational in nature, to train farmers to understand, accept and use
improved seed. Seed promotion should not be a "hard sell".

Promotion must be honest, reliable and hold the farmer's trust in the information it gives
him, the improved seed promoted, the seed suppliers, and the seed's value to him
personally in his own cropping situation. If he ever has reason to distrust it, or does not
receive the promised quality and benefits, he will no longer accept the seed.
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Promotion must be complete, giving the farmer reliable advice not only on the use of
improved seed, but concurrently on crops, varieties, pesticides, irrigation, crop
management, harvest, marketing and other crop production concerns. This improves both
his crop yields and income, and develops his trust in the seed and its supplier, and this
develops his willingness to accept the guidance offered by the seed company.

Promotion must be intensive, and reach the farmer through every possible source, from
mass communication media to personal contacts, every time he has reason to think of his
crops. Repetition is as essential for educational marketing to farmers as it is for any
learning process.
_______________________________________

  AGENCIES WHICH PROMOTE FARMER
  UNDERSTANDING AND USE OF
  IMPROVED SEED:

  - Agricultural Extension Agencies
  - Crop Promotion Projects
  - Agricultural Research Departments, Stations
  - Farmer Cooperatives & Associations
  - Government & Other Rural Development
     Agencies & Programs
  - Government Production, Promoting &
     Targeting Agencies
  - Educational Institutes & Universities
  - Schools (Elementary, Secondary)
  - Dealers, Users, Buyers, Exporters, &
     Importers of Farm Produce
  - Farm Input & Equipment Suppliers/Dealers
  - Seed Companies
  - Seed Growers & Contract Growers
  - Seed Dealers & Merchants

  - Seed Certification Agencies
  - Seed Law Regulatory Agencies
  - Seed Testing Laboratories
_______________________________________

Figure 4. Who should be involved in promoting farmer understanding and use of improved
          seed.



WHO DOES EDUCATIONAL PROMOTION

Both government agencies and private sector seed companies must work together in
carefully planned, coordinated and implemented educational promotion. Any promotion
by any agency or company should complement that of all other agencies and companies. It

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should never conflict or compete with other reliable seed suppliers; in a developing
agriculture, the true competition is low-quality seed rather than other brands of improved
seed.

MASS MEDIA PROMOTION

Mass media promotion is aimed at the population in general, and must be designed to
make farmers aware of the existence of improved seed, what it is, how it can increase their
yields, and where they can get improved seed.

Mass media promotional tools include:

- Newspapers
- Magazines
- Radio
- TV
- Newsletters
- Billboards
- Posters
and other means aimed at large groups of people.

EDUCATIONAL ASPECTS OF PROMOTION

Educational promotion builds farmer confidence in improved seed, shows what it can do
under their own crop conditions, and creates farmer desire to use improved seed. It also
directly convinces many farmers to buy and use improved seed. Educational promotion
methods include:

- Demonstration plots and farms
- Variety and crop trials
- Tours and visits to seed operations
- Field days
- Training programs
- Farmer meetings
- 4-H club and school projects and contests
- Youth meetings, farm wives meetings, etc.

AREA COVERED

Mass media and educational promotion seek to expand the number of farmers who use
improved seed. This requires intensive "market penetration" or contact with large numbers
of farmers in the target areas. It is also the means of expanding "geographic coverage" to
spread the use of improved seed into larger areas and to more farmers.

The intensive promotional program can at first be targeted on a relatively small area, to
reach all of its farmers. After farmer acceptance of improved seed is established in this
area, their use of the seed can be maintained with a lower promotional effort. The
intensive promotion effort can then be shifted to another area.
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_______________________________________________________

  TOOLS & METHODS FOR PROMOTING FARMER
  UNDERSTANDING AND USE OF
  IMPROVED SEED:

  - Demonstration Farms
  - Demonstration Plots in Farmer Fields

  - Field Days at Demonstration Plots/Farms
  - Field Days at Seed Companies/Programs

  - Variety Trials
  - Crop Production Packages of Practices
  - Training Courses/Classes/Programs for Farmers

  - Individual Contacts With Farmers
  - Newsletters

  - Variety Descriptions
  - Bulletins, Pamphlets, Publications

  - Newspapers, Magazines
  - Radio
  - Television

  - Visits & Tours to Seed Production Fields, Seed Dealers,
     Conditioning Plants, Storages, etc.

  - Mail Announcements, Letters, Pamphlets

  - Pre-Conditions for Getting Crop Credit

  - Posters, Signs, Billboards

  - Seed Grower and Farmer Yield Contests

  - Programs, Contests, etc., in Schools

  - Crop Quality Contests at Local Fairs

   - Seed Sales, Demonstrations, Posters, etc., in Local Farmer
       and Produce Markets
_________________________________________________________

Figure 5. Tools and methods for promoting farmer understanding and use of improved
          seed.

INDIVIDUAL CONTACTS

Contacts with individual farmers are aimed at convincing them as individuals to buy
improved seed. This "point of sale" contact is usually between the farmer and the seed
salesman, and is the final and most important individual motivating contact. If the farmer
trusts the seed salesman, he will buy the seed.
REQUIREMENTS FOR A SUCCESSFUL PROMOTION PROGRAM
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A successful promotion program must:

1. Have well-trained personnel, with adequate budgets and facilities.
2. Use all suitable promotional, educational and individual contact sales methods to
   publicize the value of improved seed.
3. Create farmer desire to use improved seed, and be coordinated with sales so that it
   follows through to finalize sales to individual farmers.
4. Be acceptable to the traditions, customs and social mores of the target farmers, and fit
   into their economic conditions while helping them to improve.
5. Be well-planned and coordinated with all possible participants.

CONDUCTING DEMONSTRATION PLOTS

Demonstration plots are ideal ways to demonstrate the value of improved seed and
varieties. The objective in conducting demonstration plots is to compare the performance
of different seed and varieties, hopefully showing that yours perform better under farmer
conditions. Tips on having successful demonstration plots include:

1. Always have the plots on farmer land. Avoid research stations. It is often advisable to
   pay the farmer for the use of his land and his taking care of the plots. Also, provide the
   seed, fertilizer and pesticides, and apply them yourself at the proper times.

2. The plot should be located near a road, where access is easy and will not interfere with
   the farmer's crops, or get them trampled during visits.

3. Involve local extension and research specialists in planning and conducting the field
   plot demonstrations. Their cooperation and support is essential.

4. Include the varieties and seed you want to sell, and others which are not as good as
   your seed. In general, it is not wise to include really good varieties from other seed
   companies, as you will be giving them free advertising!

5. Plant a row or rows of each seed and variety which are adequate to show their
   performance. Usually, 3 rows will be planted, with rows 3-5 meters long. Be sure the
   soil is uniform throughout the plot area; don't let one variety look better because of
   better soil. Usually, one plot of each seed and variety is adequate; however, if you plan
   to harvest the plots and prepare statistical performance data from them, have at least 3
   plots of each seed and variety, in a randomized block design.

6. In planting, plant all seed and varieties at the same rate; this is essential to show
   differences in their performance. Do not, for example, plant poor seed at a higher rate
   because you know its germination is low.

7. Cultivate, fertilize, etc., all plots exactly the same. Be sure the farmer who owns the
   field accompanies you each time, so that he sees what you do and learns proper
   methods. Also, this ensures that he cannot say "you gave that one more fertilizer, etc.!"

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8. Have a small sign at each plot indicating what it is. For the entire demonstration, have
   a large sign identifying it and welcoming visitors.

9. At the best time to show differences in performance of different seed and varieties,
   hold demonstrations or short field days at the plots. Give all farmers an adequate
   chance to see the various plots for themselves. Always have breeders, agronomists and
   other specialists present so they can answer farmer questions. A good procedure is to
   have a discussion session at which the specialists give talks and answer questions after
   the demonstration, while the visitors are having drinks and snacks.

10. Before the field day, advertise it thoroughly so that as many farmers as possible come.
    Invite local officials, merchants, school groups, etc. In fact, special demonstration/field
    days for them are ideal. Inform in advance and invite local newspaper, radio and TV
    staff. Serve at least drinks and snacks after the demonstration. If possible, give each
    farmer and visitor a souvenir such as pens, note pads, calendars, crop record books,
    etc.

11. Encourage the farmer who owns the field to take his friends to the demonstration
    whenever he wants to, just being careful they do not damage the plots or pull plants or
    heads.

12. At harvest time, harvest the plots in the presence of the farmer who owns the field, and
    any other farmers who want to attend. Weigh the yields at that time, and answer any
    questions from farmers.

CONDUCTING FIELD DAYS AND OPEN-HOUSE VISITS

Field days and open-house visits are excellent ways to let farmers know who you are,
where you are, what you do, how you do it, and how your seed and varieties can benefit
the farmers. They are also excellent ways to establish friendly relations with farmers, and
impress them that you are service-oriented. Field days and open-houses can be used for a
seed conditioning plant, a seed testing laboratory, a seed storage, a retail seed dealer's
facility, on the opening of a new plant or new equipment, company anniversary, and many
other occasions.

Some tips for successful field days and open-houses are.

1. Thoroughly advertise the event in advance, so everyone can make arrangements to
   attend. Send special mail invitations to farmer seed customers, farmer association
   officials, local officials, and other important persons. Be sure to invite all news media-
   -newspapers, radio, TV, etc.

2. Involve local extension and research specialists in planning and conducting the field
   day or open-house. Their cooperation and support is essential.

3. Make sure the entire facilities are thoroughly cleaned, repaired, painted, etc., and are in
   good conditions. Outside areas should be clean and well mowed; buildings in good
   condition; machines in good condition.
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4. Have a sign on everything, telling what it is or how it is used.

5. Put up signs on the street or road, indicating "this is the place" and the date and time of
   the field day or open-house.

6. When farmers and other guests arrive, have them sign the guest register, giving their
   name and address. If possible, give each guest a name tag, and give them pencil/pen
   and pad to take notes.

7. Have organized tours, led by employees who can get along well with groups, speak
   well, and know the operations well enough to answer questions. If there are many
   guests, organize several tours at the same time for a specific time period; after one tour
   ends, the guests can go to the next tour, until they have seen the entire operations.

8. After the tours, hold a large group meeting at which specialists can speak--briefly!--
   and questions can be answered. At this time you can also distribute sheets describing
   the seed available, where to get it, and order forms for advance seed purchase.
   Advance seed purchase should include a price discount for immediate payment, even
   though the seed will be delivered to the purchasing farmers only at planting time.

9. Have a display near the entrance, with an adequate supply of all possible pamphlets
   from the seed company, research stations, extension service, etc. Tell the guests where
   this is, and invite them to take what they want for themselves and their friends.

10. After all activities are finished, invite the guests to a special meal. This should be the
    last activity, as many guests will then leave.

PREPARING MASS MEDIA ADVERTISING

Mass media advertising is aimed at large populations, and is intended to catch people's
attention and arouse their interest in the seed or other product. Whether newspaper,
magazine, radio or TV, the advertising should follow these rules:

1.   Be short.
2.   Be easily understood and informative.
3.   Aim at the personal needs of the target people.
4.   When possible, include pictures. TV is ideal to include field shots.
5.   Layout should include:

     A. First, what are its advantages (or main advantage) directly to customers.
     B. Second, what is the product (seed) being advertised.
     C. Third, where the seed can be obtained.
     D. Fourth, re-state the advantages, and urge the customers to come see for themselves.

6. If on radio or TV, it should be shown at times when the most people and farmers will
   see it. This is during noontime or early evening programs, especially news programs.

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7. The message should be repeated frequently, as repetition is the best form of learning or
   promoting.

SOUVENIRS AND HAND-OUTS

Most companies prepare and distribute souvenirs, hand-outs and similar small items as
advertising materials. These include ball-point pens small notebooks, memo pads,
calendars, caps, crop record forms, almanacs, small household or farm utensils, and many
other items. All are well-labeled with the company name and information on its seed.

These are ideal forms of advertising, as they bring the seed company to mind every time
the farmer uses them. They are also especially helpful to farmers when they are useful
either in day-to-day activities or with his crops.

The seed company's advertising budget should include such items. It is best to purchase
only reasonable amounts of an advertising item until experience indicates which is most-
liked by farmers. Then, larger amounts can be purchased to get item-cost savings. From
time-to-time, it is also helpful to change to a different item. When such advertising items
are distributed, make certain that all dealers get them, and that the dealer gives them to
purchasing customers or persons who will help develop and maintain the local esteem of
the company and its seed.

SCHOOL PROJECTS AND PROGRAMS

School children have an impact on their parents' decisions to buy seed and other inputs.
Also, the school children will be the next generation of farmers! It is always money wisely
spent to provide seed and cash support for school projects, prizes for students who achieve
special work such as crop yields in their projects or performance in school programs, and
to conduct tours and field days for entire school classes.

AWARDS FOR FARMERS, SEED GROWERS AND SEED DEALERS

Prizes and awards for farmers who produce the highest yields using your company's seed
and varieties, for seed dealers who sell the most seed or give outstanding performance in
community or farmer service, and for contract seed growers who have outstanding yields
and seed quality, make ideal means of news and advertising.

Prizes should be awarded at special dinners and ceremonies to which news media, local
officials, Agricultural Extension and other officials, and as many farmers and seed dealers
as possible are invited. The purpose of such recognition is three-fold: (1) to make the
person who receives the prize feel that he is an important part of the seed company and to
recognize his outstanding performance; (2) encourage others to perform better; and (3) to
gain publicity for the seed company and its seed.




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                                             5

                 INDIVIDUAL CONTACTS--MAKING SEED SALES


PERSON-TO-PERSON: THE MOST IMPORTANT CONTACT

Individual contacts with farmers are the "point of sale" final contacts to convince the
farmer to spend money and buy the seed. They are the most important individual
motivating contacts. After the farmer has heard and seen the mass-media promotions, is
aware of improved seed, and has become interested, the individual contact convinces him
that the improved seed will do what it is supposed to under his individual conditions. He is
now convinced, willing to spend money, and is ready to buy the seed. The seed must be
ready to deliver to him at this time.

WHO MAKES INDIVIDUAL CONTACTS

The important "point-of-sale" individual contact is usually made by salesmen of the retail
dealer, at the time of the sale. However, individual contacts before the actual sale are
important in convincing the farmer to buy improved seed. Contacts on an individual basis
can be made by:

1.   Extension specialists and agents.
2.   Government specialists from other concerned programs.
3.   Agricultural and crop researchers.
4.   Seed dealers and their salesmen and representatives.
5.   Other merchants.
6.   Crop and commodity dealers and buyers, etc.

CONTACT METHODS

The most important individual contact is a one-on-one meeting between the farmer and the
seed salesman or person promoting use of good seed. However, many educational
promotion methods can give individual farmers an understanding of improved seed, and
bring the farmers into a situation where an individual contact is possible. These include:

1.   Demonstration farms and plots.
2.   Field days.
3.   Variety and crop trial plots.
4.   Training programs for farmers.
5.   Farmer meetings.
6.   4-H club and school projects and contests which educate the farmer's children.
7.   Youth meetings and farm wife meetings, which educate farm youth and wives.

The key point in effective contact methods is that they are made directly to the farmer and
his family, and emphasize what the benefits of improved seed are to the farmer under his
own conditions.
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MAKING SUCCESSFUL CONTACTS

To be successful, the individual contact must be made by someone who has the farmer's
unqualified trust. This requires the contacter to be completely honest with the farmer, even
if it means telling him not to buy a certain seed. He also must always be reliable, and the
seed he promotes must also always be of high quality and perform well for the farmer.

MAKING THE SALE

Making the sale requires that the contacting salesman have the seed on hand and ready to
deliver at the moment he has educated the farmer and the farmer understands the seed and
is willing to buy it. The sale may be lost if the seed is not immediately available, and the
salesman must tell him "wait".

The farmer must have been convinced that the seed is beneficial to him, and worth the
price. This means that he must have been advised earlier of the price, how to plant the
seed, and why it is worth the cost to the individual farmer.

The seed should be packaged in attractive, educational packages which carry additional
information for the farmer. The package should be of the size he needs; a bag should never
be opened and a lesser amount of seed sold out of the bag. Also, the farmer should never
be required to buy much more seed than he needs, unless two neighboring farmers buy
seed together.

At the time of the sale, the salesman (if he does not already have it) should get the farmer's
address, and promise to visit him during the crop growing season. And, he should follow
through on this promise, to continue to hold the farmer's trust.

FARMER TRUST IN THE SALESMAN OR CONTACT

The most critical factor is that the farmer must trust the salesman or person making the
contact with him. The farmer must believe the contact person, believe that what he says
will benefit the farmer, and trust him enough to spend money to follow his advice on seed.

To maintain this trust, the seed salesman or contact person must always be honest, sincere,
and have the farmer's best interests in mind. The salesman cannot be interested in just
making a quick sale. He must be able to give the farmer complete information on the seed
and the crop it will produce, and give honest information. There are times when the
salesman must tell the farmer that he should not buy this seed, but should buy another kind
of seed. Do not hesitate to advise the farmer to do so, when it is in the farmer's best
interests. HOWEVER--never send the farmer somewhere else to buy the different kind of
seed; go get the seed for him, and deliver it to him in your own store. Never send the
farmer to a different seed store; he may stay and buy all his seed there, and you have lost a
customer. Always provide full service to your farmer customers, even if there is no profit,
or even a small loss, in doing so.



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                                            27


VARIETY DESCRIPTIONS

Always have on hand full information on what you are selling, and be able to show it to
the farmer, and give him copies if he wants them.

Detailed descriptions of your varieties and competing varieties are essential. You can point
out differences in the varieties, and advantages to the farmer. Details are very useful,
because farmers often have personal likes and dislikes which emphasize factors other than
yield in official trials.

VARIETY PERFORMANCE TRIALS

Have up-to-date information on how different varieties performed in variety performance
trials, especially in nearby trials under farmer conditions. These are good comparisons
which help sell farmers.

DEMONSTRATION PLOTS

Having a demonstration plot where the farmer can see the varieties during the growing
season is a major sales promotion and individual contact to help establish sales in the next
planting season. Try to have plots grown in villages by leading well-respected farmers, and
take farmers to see them not only during field days and tours of the demonstration plots,
but also when you make follow-up or sales visits to farmers.

CALCULATE REAL SEED COST AND VALUE

Be able to calculate, with the farmer, the real cost, the real value, and the planting rate for
the kinds of seed he could use, to show the advantages of using improved seed. A good
idea is to get samples of local farmer-grown seed before the seed selling season starts, and
have it tested to learn what its quality really is.

POSTERS OF RECOMMENDED VARIETIES

A good method of getting farmers thinking in the right direction is to have posters on the
walls around the entrance, or where they wait. Posters should describe varieties, and one
poster should be a summary of recommended varieties, with complete information on the
varieties.

                          RECOMMENDED VARIETIES
___________________________________________________________________________
 Crop          Variety       Growing         Average    Planting      Planting      Remarks
                             Conditions       Yield       Date          Rate
___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________|
(extend lines as needed)
Figure 6. Example of information on varieties on a poster for farmer information.
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Be sure the information on the posters is reliable; if possible, use research and Extension
trial data from that area.

If the retail dealer outlet has a place where farmers can gather, with a tea pot or coffee pot
where they can always get a cup, this is an ideal place to put posters, pamphlets and other
information as well as to meet with farmers individually or as a group.

VISITING FARMERS

During the off-seasons when seed are not selling--especially the time before planting
seasons--all seed salesmen should make a special effort to visit farmers in their area. This
visit is not to put pressure on farmers to buy, but is intended primarily to establish and/or
strengthen personal relations with the farmer, strengthen his confidence in you and your
seed, let him know you are thinking about him and value his patronage, and get him to
think seriously about visiting you when he buys seed. Visit him, talk with him about his
plans and needs, give him advice in anything you can--and let him know what seed you
will have for sale, and why it is better than other seed. Try to avoid getting caught in the
discussion of "which is cheapest". If the farmer--as all farmers do--move the discussion
into which seed is cheapest, your best response is "You always get what you pay for; cheap
price, cheap value in your seed; it costs more money to put the technology and quality in
seed, and that's what we are interested in--good quality which gives you better yields."

FARMERS WHO DON'T BUY FROM YOU

The alert retail dealer not only tries to hold the farmer customers he has, but also tries to
get new customers. New customers are essential for two reasons: (1) no matter how hard
you try, you will always lose some customers, so new customers are essential to maintain
your business; and (2) new customers are the only way you can increase your business.

Try to contact and visit all the farmers in your area, even those who do not buy seed from
you. In your visits, you are trying--as with all farmer customers--to make them aware that
you sell seed, what seed you have for sale, why your seed are better, create a feeling of
personal relationship with you, and establish confidence in you and your seed.

It may take several years, but if you continually visit the farmers who get their seed
somewhere else, you will ultimately establish their trust and they will become your
customers. Remember that seed quality cannot be seen by looking at the seed, so most
farmers buy seed on the basis of personal confidence in the seed dealer and salesman. It
has been said that "you must make a special point of visiting and holding the confidence of
your farmer customers, and you must make a special point of visiting and gaining the
confidence of farmers who are not your customers."




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                                              6

           SEED QUALITY--ITS REAL VALUE AND SELLING POINT


In mass media advertising, demonstrations and individual contacts, the way to sell
improved seed is to emphasize its quality, what seed quality is, what each aspect of seed
quality means to the seed's field performance, and how this benefits the farmer. The seed
salesman must thoroughly understand seed quality, what it is, and why it benefits the
farmer. Then, he must be able to explain it to the farmer in a way which convinces him to
buy improved seed. And most importantly--the seed he sells must always, with exception,
be of high quality and perform as promised!

WHY USE GOOD SEED?

The seed you plant carries tiny embryos, which are actually the plants which grow in your
field. When you plant seed, you are putting plants into your field; they do not change; they
only grow, become bigger, and become mature.

The plants carried in your seed may be alive or dead. If they are alive, they may be strong
and able to grow vigorously, or they may be weak and unable to survive in the field. Like
all living things, seed vary in all degrees from very strong and vigorous, to weak and
unable to survive, or already dead. Thus, your seed determine the stand of plants you get in
the field, and how well the plants grow. If you do not get a stand when you plant, you will
either have a poor stand which will yield poorly, or you must replant. If you replant, you
must spend extra money for more seed, and the crop will be later. If the plants are weak
and slow-growing, their yield will be poor and they cannot compete well against the grass
and weeds which come up in the field.

The plants carried in your seed will not change after they are planted in your field. Every
seed, and every living thing, is controlled by genetics. When you plant seed, your crop's
maximum yield potential is already determined; so is your crop's susceptibility or
resistance to diseases and insects. What the plants grown from the seed will be, is
determined when the seed are pollinated on the mother plant. Nothing you do in the field
can change what the plants will be, or how vigorous they will be. All your cultivation,
fertilization, insect control and other field operations are aimed at creating a favorable
field environment for the plants to grow in, and achieve as much as possible of their yield
potential. Their yield potential is determined by the genetics carried in the seed before they
are planted. It is often said that when you plant seed, your selection of the seed puts a cap
on how much the crop can yield.

WHY GOOD SEED COST MORE

Some farmers always look for the "cheapest" in everything; most farmers look for the
lowest-cost seed, and other crop production inputs. There is always the question "Why
should I pay more for seed?"

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As a salesman who deals in good seed, you must answer this question in enough detail to
explain why, and in terms the farmer can understand. In brief, the reasons why good seed
cost more are:

1. Good seed cost more because they are genetically pure, and it takes a lot of expensive
   technology, work and quality control to get that. This cost is for the benefit of the
   farmer who uses the seed, and it must be paid for.

2. Good seed have been conditioned to remove undesirable materials. Conditioning
   machines and plants cost more to establish and to operate, so this cost must be covered
   in the cost of the seed.

3. Good seed have been treated to protect the seed, seedlings and plants from diseases
   and pests. This also is for the benefit of the farmer, and it costs money which must be
   paid for.

There is an old adage which says "You get what you pay for; pay cheap, you get cheap;
pay expensive, you get an expensive quality product". This is also true for seed, but there
is an added advantage: when you buy good seed at a higher price per kg, you are really
saving money. How is this possible?

1. With good seed, you can plant lower rates (fewer kg of seed per ha), so you save
   money here.

2. With good seed, you can plant to a stand, so there is less labor for thinning in the field.

3. With good seed, there is less replanting because the seed have higher germination and
   vigor, and are treated, so they can withstand cooler or unfavorable field conditions
   better. The result is less replanting.

4. With good seed, the crop grows off faster, so it smothers weeds better, and there is less
   cost for weeding.

5. With good seed, the crop yields more, so the farmer can either earn more, or use less
   field area to produce the same amount.

6. If the good seed is treated with systemic insecticides, there is no need to spray
   insecticides on the field for the first 4-6 weeks after the crop comes up. This saves a
   lot.

7. If some good crop seed are treated, there is less damage from plant diseases, such as
   smut in wheat.

HOW TO IDENTIFY SEED QUALITY

Seed quality cannot be determined by looking at the seed; often, poor quality seed looks
much the same as high-quality seed, especially to a farmer not trained in seed technology.

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To identify the quality of seed, look for the following:

1. Seed analysis tag: Every bag of seed should carry a tag which describes the seed
   quality factors required by law to be on the seed label.

2. Certification tag: Variety is the genetic ability to be certain things and do certain
   things, such as be of a specific variety and yield more. Seed certification is a special
   technical process which ensures genetic purity.

3. Freedom from adulteration: Each seed bag should be unopened, and sealed as proof
   that it has not been opened and mixed. Examine the bags, and look for the seals and
   indications that the bag has not been tampered with.

4. Proper treatment: The seed must be treated with proper dosages of the proper seed
   protectant chemicals. Each seed must be thoroughly covered with the protectant
   treatment, which can usually be easily seen because the treatment includes a dye which
   colors the seed.

5. The seed supplier: Not all seed sellers are reliable. Some sell low quality seed; others
   will mix seed, or even re-use seed bags filled with low-quality seed instead of the
   original high-quality seed. To be sure to get good seed, always buy from a reliable
   dealer. If someone offers low-price seed, it probably is not even worth that low price!

COMPONENTS OF SEED QUALITY

Seed are living beings. They are made up of a living embryo and a small supply of food to
help the embryo get started when it is planted. The entire purpose of seed is to grow in the
field, and produce a new plant which has certain characteristics such as high yield.

Any population of living things varies; seed also vary, from high quality to low quality.
Many different things must be considered in determining what the quality of a living being
is, because many different factors affect the quality of its life. Seed quality has been
broadly classified into three groups:

1. Genetic quality: Seed genetic quality is the genetic make-up of the seed, carried by the
   genes in its chromosomes. These determine--when the seed is formed on its parent
   plant, long before it is planted--what kind of plant the seed will produce, and what the
   plant can do and will look like. Genetic quality is the variety of the crop seed, and how
   pure it is of the variety. A lot of seed may be mixed of different varieties of seed, so
   that the lot is not varietally pure. An individual seed may have been pollinated with
   offtype pollen when it was formed, so that seed will not produce a varietally-pure
   plant, even though the seed looks like the right kind.

2. Physiological quality: Physiology refers to the growth and growing ability of plants. In
   seed, this is determined by growing a sample of seed up to the embryo stage, and
   determining the percentage of the seed which have enough life force to form an
   embryo which could produce a normal plant in the field. Some seed are alive and
   strong; some are dead; others are weak, diseased or damaged, so they may begin to
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   grow but cannot go all the way to produce a normal mature plant. In the last 20 or so
   years, the vigor of seed has been recognized as important. Some seed grow weakly;
   others grow vigorously and rapidly. Storability of seed, or its ability to stay alive and
   vigorous while it is in storage awaiting planting, has also become an important aspect
   of seed physiological quality.

3. Physical quality: Physical purity means how much of the seed in a bag is the desired
   crop seed, and what part of the mass in the seed bag is other seed or even trash.

4. Seed health quality: Seed, Like all living beings, seed vary in their health quality.
   Some seed may already be insect-infested or diseased, such as smut in wheat. And,
   every seed carries genetically-controlled resistance or susceptibility to certain diseases
   and insects. The recent publicity about genetic engineering and putting the Bt gene in
   crops is only one aspect of seed health. The Bt gene gives the plants genetic resistance
   to a worm which attacks bolls in cotton, ears in corn, etc. Seed health quality is also
   affected significantly by the chemical protective treatment on the seed.

HOW SEED QUALITY IS DETERMINED

Seed quality cannot be determined by looking at seed, even by experts. Many scientists
have worked for years to determine what are the characteristics of seed quality, and how to
test them so good seed can be identified.

Today, several tests are used to identify different aspects of seed quality. The normally-
conducted tests to determine seed quality include:

1. Moisture test: determines what percentage of the seed's weight is made up of water, or
   moisture in the seed. To be safe seed must be dry; if their moisture content is high,
   they will die. To make this test, the analyst puts a sample of the seed into a special
   moisture testing machine, adjusts it properly, and measures the moisture content.

2. Purity test: determines what percentage, by weight, of the seed material is actually crop
   seed, and how much is other material. The kinds of other material present are
   identified. To make this test, a trained analyst takes a seed sample and examines each
   seed or particle, identifies it, and puts it into a category according to what it is.

3. Germination test: determines what percentage of a seed lot is alive and capable of
   producing normal crop plants in the field. To test germination, the analyst takes a small
   sample of the pure crop seed and places it in a special laboratory chamber which
   maintains the conditions under which the seed would grow in the field. After a certain
   number of days in the growing chamber, the seed sample is taken out and the analyst
   counts the number of seed which have grown into healthy seedlings. Dead seed which
   did not grow, and weak, incomplete or damaged seedlings are not counted.

These tests are normally made to determine seed quality. However, other tests must be
conducted to determine other important aspects of seed quality. These include:

1. Varietal purity: Varietal purity of seed cannot be determined by laboratory tests. This
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     must be determined by either (1) planting pure seed stocks in isolated fields, roguing
     and growing the seed crop under special conditions to maintain purity, as is done under
     certification; and/or (2) field grow-out tests of the seed after it is produced. Field grow-
     out tests have the disadvantage of requiring considerable time after the seed are
     harvested and conditioned.

2. Seed health: A wide array of seed health tests have been developed to identify various
   insect or disease organisms carried by seed.

3. Seedling vigor: Seedling vigor is the relative ability of the seedlings to grow in the
   field. For example, low-vigor seedlings grow slowly and weakly, and can achieve only
   less growth and lower yield. High-vigor seedlings grow rapidly, smother out weeds,
   and yield more. Seed whose seedlings carry high vigor can germinate and survive
   better under unfavorable field conditions; for example, cotton seed require warm soil
   and warm weather to germinate; when the common cool weather occurs after planting,
   only the high-vigor seedlings can survive under the cooler soil conditions. Several tests
   have been developed to measure seedling vigor in different crops, and by different
   methods.

4. Seed storability: After harvest, seed is almost always stored for some period before it is
   planted. Sometimes storage is for only a few weeks, but usually is for a few months
   until the next year's planting season. Often, seed are "carried over" to the following
   year's planting season. Sometimes, seed such as Breeder or Foundation stocks are
   stored for several years. During this storage period, seed continue to live and carry on
   life processes, even though they take place at reduced rates under safe storage
   conditions. The ability of seed to live and maintain their vigor during storage is
   critical, and seed differ in their storability. Several tests, notably the Accelerated Aging
   test, have been developed to measure the storability of seed.

THE LABEL (TAG) ON SEED BAGS

Today, certain important seed quality characteristics are identified by special standardized
tests made by experts. The Seed Law requires these tests to be made, and test results to be
shown on a tag or label carried on each bag of seed. To determine these quality factors, a
sample of the seed must be taken in a special manner, and the seed must then be tested
under standardized conditions with special equipment, and evaluated by experienced
specialists. This information is then shown on a label or tag on each seed bag. By usual
national Law, the tag must show:

1.   Crop name
2.   Variety name
3.   Pure crop seed %
4.   Other crop seed %
5.   Weed seed %
6.   Inert material %
7.   Germination %
8.   Hard seed % (and Total germination %, when hard seed are present)
9.   Sometimes, moisture % of the seed
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10. Lot number
11. Who produced the seed, and where
12. Year the seed was grown

This is the basic information needed to determine the kind and quality of seed in the bag.
Some other quality information is very useful and is determined by special testing, but is
not required by law to be on the seed tag. However, many better farmers often demand that
these special tests be conducted on their seed, so they can select the best seed lots.

VARIETY

A crop variety is a group of plants which have certain characteristics or appearances. The
variety is the genetic make-up of your seed and the crop it produces; the chromosomes and
genes carried in your seed determine its genetic make-up. Variety determines how well
your crop is adapted to your soil and climate, what the plants look like (tall, short, upright,
vines, etc.), how long it takes them to mature, whether they are low-yielding or high-
yielding, if the crop they produce is of good quality or poor quality, if they are susceptible
or resistant to insect pests and diseases, and all other characteristics of the crop.
Unfortunately, the variety often cannot be distinguished by looking at the seed, so when
the seed is tested in the laboratory, the analyst often must accept the statement of the
supplier on what the variety is. However, if the seed is certified, it has gone through a
rigorous production system which ensures that its variety is pure. Also, even outside of
certification, some high-standard seed companies go to great effort to ensure that seed
which carries their brand name is varietally pure.

PURE CROP SEED

Pure crop seed is the percentage by weight of the seed which is really seed of the desired
crop. No seed lot is 100% pure crop seed; other materials occur mixed with the seed, such
as inert (trash), other crop seed, and weed seed. For example, if your seed is 95% pure
crop seed, out of every 100 kg you buy, only 95 kg is really seed. Some unlabeled seed
actually planted by farmers has been tested and found to be only 40% pure crop seed. Of
every 100 kg these farmers bought or traded for and planted, 60 kg was trash or worse!

Only with seed which has a high percentage of pure crop seed can you get what you are
paying for, and be able to control your planting rate and stand emergence in the field. Pure
crop seed of most field crops should be at least 98%.

GERMINATION

Germination is the percentage of the pure crop seed which are actually alive, with
sufficient growing power to emerge under field conditions and--barring unforeseen
damage--grow into mature normal plants. If germination is high, more seed can grow in
the field, and you need less seed to plant your field to the desired stand. The trend in
developed countries is to require seed to have high germination, and then "plant to a stand"
in the field; i.e., seed are planted only at the spacing required of the plants in the field, and
only one or two seed are planted at each place.

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Germination of seed is greatly influenced by how well it is handled and protected during
crop maturity in the field, harvest, drying, conditioning, storage and handling before the
seed reaches the farmer's field at planting time. Germination of seed of different crops also
varies naturally. For example, seed of cereal crops is hardier and maintains germination
better (assuming good storage, low moisture content and protection from the ever-present
insect pests and fungi). On the other hand, seed of oil-crops (soybeans, cotton, etc.), some
vegetables onion, etc.) and other crops, tend to deteriorate rapidly after harvest, and do not
maintain their germination for very long unless they are kept in special storage conditions.

WEED SEED

Weeds always occur naturally in almost all fields. Certain weed species mature and
produce seed at about the same time as the crop seed; when the crop seed is harvested,
weed seed are also harvested and occur mixed in the crop seed lot. Proper conditioning can
remove many of the weed seed, but some cannot be removed. The kind and amount of
weed seed present is limited in high-quality seed, such as certified seed.

If the farmer plants seed which contain weed seed, he is actually paying money for weed
seed, and then planting and fertilizing weeds in his fields! Weeds compete with the crop
plants for space, water, fertilizer, and sunlight. Heave weed growth when the crop is in the
seedling stage can seriously smother and suppress the crop seedlings. Research in many
countries has shown that weeds in the field significantly reduce crop yields, in different
amounts according to the amount of weeds present. Also, many weeds will harbor insects
or diseases which move onto and attack the crop plants.

OTHER CROP SEED

Other crop seed also occur mixed in seed lots. For example, barley or rye is often found
mixed in wheat seed. These compete with the pure crop plants in the field, and reduce
their yield and quality. Other crop seed can come from plants which grew in the seed field,
or from mixtures which occurred during handling, conditioning, or bagging. Only careful
production and handling practices can eliminate other crop seed. Certified seed, and seed
produced by certain high-quality seed companies, prevents contamination by weed and
other crop seed by growing seed in clean fields, then cleaning up and inspecting all
handling and conditioning equipment, using clean new bags, etc.

INERT MATERIAL

Inert material is trash, plant parts, seed pods, stems, etc., remaining in the seed lot. While
this is less harmful than seed of weeds or other crops, it is expensive compost for the field.
When the percentage by weight of inert material is high, the farmer must pay for this
compost, then go to the expense to plant it in his field, and buy and plant more seed in
order to get the desired stand. Some kinds of inert material also can plug up mechanical
planters or drills and cause serious problems in planting. Inert material for most field crop
seed should not exceed 2%. However, some crop seed such as chaffy grasses are difficult
to clean, so its percentage of inert material is high.

SEED HEALTH AND TREATMENT
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Seed health is a measure of the presence of harmful insects and diseases in the seed lot,
and the susceptibility of the seed and the crop to harmful diseases and insects. Seed often
will have disease organisms or insect structures in with the seed at the time they are
planted. This brings the pests into the field so they can attack the crop seedlings or mature
plants. Many varieties are either susceptible or resistant to specific diseases or insects;
when the farmer selects his seed and varieties, he determines his risk of damage to his
crop.

Seed treatment has developed to the point where it is a major aspect of seed health quality.
Proper treatment with the right amounts of the proper treatment chemical can eliminate
disease organisms and insects carried on the seed, and can protect the seed and young
seedlings in the field. Seed of all crops should be treated for protection from diseases and
insects. For some crops, treatment is essential; for example, if acid-delinted cottonseed is
not treated, most of the seed will die due to attack by soil fungi.

PURE LIVE SEED--THE ACTUAL SEED IN THE BAG

An important measure of seed quality called Pure Live Seed was developed to answer the
farmer's question of "How much of the seed I buy will really produce a stand of crop
plants in my field?"

Of his seed, the only part that will benefit the farmer is the pure crop seed which are alive
and can grow in the field. To measure this requires the germination percentage from a
Germination Test and the pure crop seed percentage from a Purity Analysis. Pure Live
Seed (PLS) is then calculated as follows:

Pure Live Seed (PLS) % = Germination % x Pure Crop Seed % /100

For example:
 Lot A has 98% pure crop seed and 95% germination. PLS % = 98 x 95 / 100 = 93.1%
   PLS
 Lot B has 80% pure crop seed and 70% germination. PLS % = 80 x 70 / 100 = 56%
   PLS

When the farmer buys seed, he pays for the entire weight he receives, but only the Pure
Live Seed will grow in the field. Thus, PLS has a significant influence on the real cost of
seed. For example, using the two lots above:

   If Lot A (93.1% PLS) costs $100 for 100 kg, the real cost per kg of actual seed is
    $1.07.
   If Lot B (56% PLS) costs $70 for 100 kg, the real cost per kg of actual seed is $1.25.

These simple calculations can show that although "seed price" per kg may be much lower,
if the PLS is lower, the actual cost for seed is much higher.

GOOD SEED REDUCE PLANTING RATE AND SEED COSTS

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An added advantage of good seed is that when the seed have a high PLS %, less seed can
be planted per hectare to get the required stand. This saves money which would otherwise
be spent for seed.

For example, if the two example lots above were cottonseed (prices, stands used are not
realistic in all cases, and are only for examples of how the calculations are made) a stand
of 75,000 plants per hectare was desired, and 8,000 weighed made one kg, the actually
required planting rate can be calculated. In calculating:

75,000 / 8,000 = 9.38 kg of pure live seed needed per ha to produce the required stand.

Allowing 25% extra seed for "field emergence problems" 9.38 x 120% = 11.73 kg seed
required to get the desired stand.

Lot A of 93.1% PLS would require 11.73 / 93.1 x 100 = 12.6 kg of the seed lot to get the
required number of live seed and--under ideal field conditions--the required stand in the
field. At $1.00 per kg, the seed required for a good stand on one hectare would cost
$12.60.

Lot B of 56% PLS would require 11.3 / 56 x 100 = 20.95 kg of the seed lot to get the
required number of live seed and--under ideal field conditions--the required stand in the
field. At 0.70 per kg, the seed required for a good stand on one hectare would cost $14.66.

As a further complication, Lot B with a lower PLS and germination would probably have
lower seedling vigor, so its growth in the field would be weaker and its yield would be
lower.

If field conditions such as rain and cool temperatures occur after planting, the lower
quality, seed of the lower vigor lot would be much more likely to die and thus require
replanting. High-quality seed, with high PLS, germination and vigor--combined with
proper seed treatment and good crop management--are much less likely to require
replanting. This not only saves the cost of additional seed and field work of replanting, but
also gets the crop started sooner, so it stands a better chance of growing well and
producing a high yield.

PLANTING TO A STAND

Planting to a stand means simply to plant only one (or at most two) seed for each plant you
need in the field. The seed are planted at the spacing required for the crop plants to grow
and yield best. This can be done by hand or mechanical planting.

In developed agricultures, especially for high-value crops, farmers demand high-quality
seed and plant to get the desired stand in the field. This can also be done in developing
agricultures, by planting only high-quality seed.

This not only reduces the cost of seed purchase, but also eliminates much of the labor
costs of thinning in the field. An extra advantage is that, in several countries, research has
shown that when seedlings are thinned in the field, the roots of the remaining seedlings are
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disturbed. This "shocks" the seedlings, so their growth is set back. Field trials have shown
that crop growth and yields are better if the crop can be planted to a stand, without having
to thin the stand.

SEEDLING VIGOR

Where possible, always ask for the results of seedling vigor tests, and buy seed of lots
which have the higher vigor rating. High-vigor seed give better stands in the field, grow
faster, and have been shown to produce higher yields in most crops.

SEED STORABILITY

Seed storability tests are important for the seed company and the seed dealer. When seed
storability is tested as soon as seed lots are conditioned, and lots with best storability can
be immediately put into safe carryover storage, this seed can safely be held until the next
crop year if necessary. All seed lots with acceptable germination but lower storability are
sold first, to get them planted in this crop season, as soon as possible. If the seed in
carryover storage is needed for planting this year, it can be taken out of carryover storage
and sold. This prevents loss of seed which is not sold, and provides a safety margin in case
seed sales do not require all the seed which was produced.

Where seed storability can be tested and carryover seed can be sold at high quality, this is
often a plus for the farmer, and can be stressed by the seed salesman. For example, in
some countries some of the better farmers prefer one-year old cottonseed, because they
have found that it produces better crops and yields--if it can be stored safely to maintain its
germination and vigor.

CERTIFICATION AND RELIABLE BRANDS

The only way to be sure of getting high-quality seed is to buy seed which is known to be of
consistently high quality. This means that the seed is produced from high-quality stock
seed, grown under strict quality control conditions, and is then harvested, conditioned and
handled to maintain its high quality. The only way to be sure that this was done is to buy
certified seed and seed of known reliable brands from seed companies which strive to
maintain a reputation for high quality.

And, always look for the seed quality information on the tags, and be sure the seed is in a
labeled bag, with a seal to prevent adulteration, and looks to be untampered and handled
well!

ALWAYS BUY FROM A RELIABLE DEALER!

Never buy seed from an unknown or untried source, or from a "special low cost deal" from
someone who has no record for high quality. To get good seed which will perform best in
your fields, locate a nearby reliable seed dealer who has a reputation for high-quality seed
and good service. Always buy all your seed needs from him! Establish your reputation as a
quality-conscious and regular customer, and expect the dealer to establish his reputation
for dependable service and high-quality seed.
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ASK FOR CERTIFIED SEED!

As an added guarantee of the high quality of your seed, always ask your reliable seed
dealer for certified seed. The certification process is available from the Certification
Agency for all reliable seed producers, and is an extra, outside "dis-interested third party"
quality control system which helps ensure both varietal purity and seed quality.

IF YOU DOUBT THE QUALITY OF YOUR SEED

If you have doubts about the quality of your seed, take a sample and send it to the
Government seed testing laboratory. The Seed Law of most countries allows each person
or farmer to send a small number of samples for testing each year, at no cost.

A certain amount of seed is required to make a test. The amount required depends on seed
size: more for larger seed, less for smaller seed. Ask your reliable seed dealer or
Agricultural Extension agent how much seed is required, how to sample the seed, how to
package the sample, and how to send it to the testing laboratory.

To be sure the sample represents all your seed, take a small amount from each bag or each
part of your seed. Mix these together, and then take from this the amount needed for the
test.

Put the sample into a bag or other container which will protect the sample and keep it from
spilling. Be sure to include your name and address, the crop and variety of the seed, and
why you want it tested. Send or take the sample to the testing laboratory.

From one to three weeks are required to make a test. After the test is completed, the
laboratory will send you the results of the test. If you have difficulty understanding the
technical terms and presentations of the test results, ask your Agricultural Extension Agent
or the seed dealer you trust about the test results.

BETTER TO BE SAFE THAN SORRY!

The planting time which gives the best crop performance and yields is usually a short time
period at the beginning of each crop season. If you plant cheap but unknown or low quality
seed, you run the risk of having to replant the entire crop, or to replant "skips" in the rows.
Replanting almost always results in lower yields, in addition to the extra cost for seed and
replanting.

Lower quality or "unknown" seed almost always yield lower. Also, the seedlings produced
by such seed grow with less vigor, so they cannot shade out grass and weeds in the field.
The result is that grass and weeds grow more strongly in the field, requiring more
cultivation and hand hoeing, and the crop produces less because of the weed competition.

Can you afford to take a risk on your seed? Is the small saving on cheaper seed worth the
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risk of producing less? Have you calculated the real cost of using cheap seed?




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                                             7

                      SEED DISTRIBUTION AND TRANSPORT


Seed is usually produced in concentrated areas, or farms or fields, which offer efficiency
and economy in production, as well as quality. The seed is then marketed to farmers
throughout a larger area. To get farmers in the market areas to use the seed, it must be
taken to the target farmers who need it, when they need it, and in the amounts they need.

A few of the larger commercial farmers will seek out the seed and inputs they want.
However, the greater part of the seed market, including most farmers, is made up of
relatively small farmers. These farmers will not go to much trouble or travel any distance
to get improved seed. They tend to buy whatever is easiest to get and is cheapest. The
distance farmers will ordinarily travel to buy inputs and goods, or to market their produce,
is called the farmers' "Zone of Mobility". Within this area, they tend to purchase whatever
seed and other inputs they use.

To get them to use improved seed, the seed must be taken to easily accessible, trusted
outlets close to the farmers, or at least within their Zone of Mobility. The improved seed
must be almost as available to farmers as are the alternative kinds of seed they could use.

To get seed within farmers' Zone of Mobility and make it readily available to them,
requires a rather sophisticated distribution system. The seed must be transported from the
conditioning plant storages to the many small dealer outlets near the farmers, must be
available to farmers when they need it, and must be kept in good quality condition. The
distribution system requires:

1. Safe storage at the conditioning plant, designed so seed can be quickly loaded onto
   trucks for distribution.

2. Adequate transport to move the required seed to the required distribution points, in
   time for farmers to plant properly.

3. Storages which can maintain seed quality, at every point where seed will be kept, even
   for short periods.

4. Retail outlets which make seed easily available to all target farmers.

5. Stocking points (larger wholesale or distribution storages) at strategic locations so they
   can supply and replenish retail dealer outlets quickly and economically.

MARKETING CHANNELS

In the classic seed marketing channels, larger quantities of seed move first from
conditioning center storages to distribution storages operated by the seed company, or by
seed brokers or wholesalers. Each distribution storage serves a specified area. From the
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distribution storages, smaller amounts of seed then move to retail dealer outlets scattered
over the target market area so they are close to farmers. From the retail outlets, farmers
purchase seed and take it to their farms for planting; sometimes, the retail outlet may
deliver seed to some farms.

The pattern of marketing channels varies with different crop seed, because different
agencies are involved with farmers who produce different crops. Since seed marketing
aims to get seed to farmers efficiently, any agency which deals with the target farmers can
be used to move seed to farmers. Realistically, when any different agency is an effective
means of contacting farmers, it should be used as a marketing channel point.


SEED COMPANY/PROGRAM CONDITIONING PLANT STORAGES




                                            V
                                   CENTRAL OR REGIONAL DISTRIBUTION POINTS
                                   (Seed Company/Program, Wholesale Dealers, Brokers)




                 V             V
           RETAIL DEALERS
              includes
           Farmer Cooperatives &
           Associations
           Crop Production/Promotion
           Programs




   V                  V                                       V
                             FARMERS

Figure 7. General marketing channels for getting seed from the conditioning plant to the
           farmers who plant it.



TRANSPORT

The right seed must be transported to a point where the farmer can easily get it, at the time
he needs it. Any suitable means of transport may be used; however, the transport used
must:

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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
                                          43


     DOAE SEED CENTERS
     (contract production, drying, conditioning, treating, bagging)
     (located throughout the country, so they serve as regional centers)
                         V
              RETAIL SALES DEALERS/AGENCIES:
              Marketing Organization for Farmers (MOF, government enterprise)
               DOAE Crop Promotion Division
                Local DOAE Extension Offices
                 Farmer Cooperatives
                  Royal Forestry Department
                    Royal Irrigation Department
                      Public Welfare Department
        V                    V
       FARMERS WHO PLANT THE SEED

Figure 8. Seed marketing channels used by the Seed Division, Department of Agricultural
           Extension (a Government seed program) to distribute improved seed of field
           crops to small farmers in Thailand.




     COMPANY-OWNED CONDITIONING & STORAGE CENTERS
           ___________________________________________
            Company-owned Retail Seed and Farm
      _____ Supply Stores                              ______
           ___________________________________________
           ___________________________________________
            Company-owned Traveling Sales Trucks
      _____ and Teams                                  ______
           ___________________________________________
           ___________________________________________
            Merchants--Authorized Dealers Who Sell
      _____ on Commission                              ______
           ___________________________________________
           ___________________________________________
            Village Sales Representatives (Farmers,
      _____ etc.) Who Sell on Commission               ______
           ___________________________________________
           ___________________________________________
            Farm Supply Cooperatives and Dealers
      _____ Who Sell on Commission                     ______
           ___________________________________________
                                                             V
                                           FARMERS WHO PLANT THE SEED

Figure 9. Distribution channels used by one seed company in a developing agriculture.
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                                           44


     GOVERNMENT OR COMPANY-OWNED CONDITIONING &
     STORAGE CENTERS

             ___________________________________________
       _____ Government Land Reform Programs                   ______
            ___________________________________________
             ___________________________________________
       _____ Farmer Cooperatives                               ______
            ___________________________________________
             ___________________________________________
       _____ Extension Offices & Crop Programs                 ______
            ___________________________________________
             ___________________________________________
       _____ Distributors-Wholesalers
            ___________________________________________
                    ____________________________________
       ____________ Retail Seed Merchants                      ______
                     ____________________________________
                    ____________________________________
       ____________ Booths in Produce Markets                  ______
                     ____________________________________
                    ____________________________________
       ____________ Village Stores                             ______
                     ____________________________________
                    ____________________________________
       ____________ Fertilizer/Pesticide/Equipment/etc. Stores ______
                     ____________________________________
                    ____________________________________
       ____________ Food Stores                                ______
                     ____________________________________


                                                                            V V
                                            FARMERS WHO PLANT THE SEED

Figure 10. Potential seed distribution channels in Egypt (for both private sector seed
            companies and the Government seed program).


1. Move the required amount of seed quickly and safely, so that it is available to farmers
   where and when they need it.

2. Protect seed quality, never exposing seed to rain, moisture, pests, damaging chemicals,
   or direct sunlight. The critical factor is to remember that during transport, the seed is
   really still in storage. The transport must provide safe storage conditions for the seed--
   keep it dry, cool, and protected from damage.


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Rail transport can be used to move large amounts of seed for longer distances, to
wholesale distribution points. However, problems with rail transport are that delivery is
often delayed, seed may be damaged by rain in transit, and loading/unloading is sometimes
a problem.

Trucks can supply almost any amount of seed to any location. Larger trucks are commonly
used to transport seed from the conditioning plant to distribution centers, and then to retail
dealers.

During the busy seed sale season, some distribution centers regularly run trucks on specific
routes once or twice a week, to replenish the seed stocks needed by retail dealers. Before
the truck goes, the distribution center telephones each retail dealer and asks what seed he
needs. After all dealers' requirements are known, the seed is loaded onto the truck so that
seed go into the truck in reverse order in which they will be deliver; i.e., seed for the last
dealer go into the truck first, and so on until the seed for the first dealer is the last loaded.
When the truck arrives at the first dealer, his seed are at the back of the truck, easily
unloaded. As seed is unloaded, the amount for each dealer is thus easily accessible in the
truck.

Sometimes small dealers located in more remote villages sell only small amounts of seed.
Seed may be transported to them by pickup truck, bullock cart, car, or any available
transport, sometimes even by boat.

Seed is usually transported from the retail dealer to the farmer by the farmer himself,
although sometimes the dealer may transport the seed, or even a third agency may
transport it. Any suitable means may be used; for example, in Thailand and Indonesia,
seed may be transported by boat or bicycle; in Nepal, bearers may carry seed bags on their
backs for several days to farmers in remote areas.


                          STORAGES AT CONDITIONING PLANTS
                                           V
                        CENTRAL OR REGIONAL DISTRIBUTION POINTS
                        (Seed Company/Program, Wholesale Dealers, Brokers)
                                           V
                                   RETAIL DEALERS
                                           V
                                    TO FARMERS

Figure 11. Transport required between agencies to move seed from the conditioning plant
            to farmers.



THE IDEAL TRANSPORT

In many tropical countries, and in most developing countries, seed are transported in

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watertight, thermally-insulated vans or trucks. These protect the seed from outside
moisture, and keep the seed cool. These seed storage vans may be mounted on trucks, or
pulled as semi-trailers. They are constructed of metal, and sealed watertight. Inside, they
have the equivalent of about 3 inches of glass wool insulation, and another inside metal
finish surface to protect the insulation from damage during seed loading. The inside
surface is smooth and can be easily cleaned to avoid accidental contamination of seed or
harboring insect pests. The doors are only at the back end, and have rubber seals to keep
out moisture. They are painted a light reflective color, such as with aluminum paint, to
reflect as much as possible of the sun's heat. The truck's exhaust pipe extends upward to a
height and in a location where heat and fumes from the exhaust do not affect the van.
Chemicals, fertilizers, salt, etc., are never transported in the seed vans.

These protective van trucks can move rapidly over the roads and deliver seed quickly so
that the seed spend a minimum of time outside the properly-constructed seed storages in
the distribution system.

SEED COMPANY DISTRIBUTION RECORDS

The seed company must keep accurate, up-to-date records on what seed is sent to each
dealer and sales area, and how much seed is actually sold. This data is extremely
important in making next year's Marketing Plan, and in managing and servicing seed
marketing.

Examples of simplified record forms used by seed companies are shown in Figures 12 and
13.

IF DEMAND SUDDENLY DROPS

If the Marketing Department has made accurate forecasts, seed usually moves smoothly.
However, cropping conditions not infrequently occur which change farmer demand for
seed of a particular variety. For example, a sudden outbreak of a disease which affects
only a few susceptible varieties may wipe out farmer demand for seed of those varieties.

If demand for some varieties drops unexpectedly, the seed company must be ready to take
several actions to overcome the situation. These include:

1. Try to make available seed of replacement varieties. Simultaneously, conduct an
   intensive promotion campaign to let farmers know about the replacement varieties, and
   that seed of the replacement varieties is available.

2. If raw seed of the low-demand varieties has not yet been conditioned, do not condition
   it. This not only eliminates conditioning costs, but also permits selling the seed for
   grain to avoid a total loss, and makes conditioning available for other varieties. If
   information early in the conditioning season indicates the seed may not sell, condition
   reasonable amounts, but do not treat more seed than the absolute minimum required.

3. If there is a possibility that the seed not sold this year can be sold next year,
   immediately move it into safe carryover storage.
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                                          47




              SUMMARY OF SEED SOLD BY DEALER OR OUTLET
Year ________ Dealer or Outlet ___________________________________________
___________________________________________________________________________
Crop       Variety       Lot Number     Amount Sold in Week of:         Total    Comments
                                                                        Sold
___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________
(lines continued down entire page)
___________________________________________________________________________


Figure 12. Example of a seed company summary record of seed sold by a dealer.




                             SEED SALES SUMMARY
Year ________ Crop ________________ Variety ___________________________
___________________________________________________________________________
District   Village/Area Dealer or       Amount Sold in Week of:         Total    Comments
                        Sales Outlet                                    Sold
___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________
(lines continued down entire page)

Figure 13. Example of a seed company summary record of all sales of seed of a variety.



PRODUCTION SHORTFALLS

If the production section has followed the Marketing Plan and planned well, there should
seldom be shortages of seed. Careful planning to spread production over a wide area helps
eliminate major losses due to local stormy weather. And, anticipating market demand at
harvest and setting seed prices paid to contract growers at good levels helps ensure
delivery of all the seed crop. However, production problems sometimes occur which result
in lower-than-expected seed yields.

When a shortfall in seed supply does occur, the seed company should:

1. Ensure full delivery to advance sales and orders.
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2. Have seed of substitute varieties which can be delivered, and advertise its availability.

3. Work with retail dealers to try to deliver less seed of the scarce varieties, and more
   seed of substitute varieties. Help dealers with advertising and promotion of the
   substitute varieties.

4. If reserve stocks or stocks in carryover storage are available, remove them and use
   them to fill orders.

5. Make special efforts to reward retail dealers for being cooperative. For example, give
   them additional discounts on seed of substitute varieties, hold appreciation
   dinners/trips/etc. after the seed sale season ends, include dealers in news articles and
   promotion, etc.

6. If possible, purchase seed from other companies to meet your delivery needs. This is
   best done by purchasing from other companies who are outside your sales area, and
   having the purchased seed put in bags carrying your brand name. Of course, do not
   purchase other seed unless you are certain that it meets the required quality standards.

At all costs, try to ensure that each retail dealer has adequate stocks to meet the needs of
his farmer customers.

TRUCK BREAKDOWNS

The seed company must own, lease or hire enough trucks to ensure timely delivery of all
seed. Before the seed marketing season begins, all trucks should have a complete
maintenance service, with everything that seems even questionable repaired or replaced.
Even the truck van bodies should be inspected and brought into top condition. With pre-
season complete maintenance, trucks should be ready to provide good service during the
busy seed delivery period.

However, breakdowns and problems do occur. The seed company should have reserve
trucks which can be sent when a truck breaks down.

To minimize problems if a breakdown occurs on the road, an assistant driver should
accompany the driver. One can stay with the load of seed to guard it while the other goes
for assistance. Drivers should also be instructed to telephone the seed company
immediately and advise them of the problem. The receiving retail dealers should then be
notified of a short delay in delivery, and another truck--with a labor crew--dispatched
immediately to transfer seed from the disabled truck to the new truck, so delivery can be
made immediately.

If a breakdown occurs in another city, a suitable truck may be leased or rented there to
complete the deliveries. If the breakdown is near a retail seed dealer, advise him and he
may go to the truck to pick up the seed.



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                                              8

                               RETAIL SEED DEALERS


Retail outlets or dealers sell seed directly to the farmers who plant it. Successful seed
marketing requires enough trustworthy, reliable dealers to make improved seed readily
available to each one of the target farmers.

RETAIL PROMOTION

The "point-of-sale" educational sales promotion by the dealer is the final convincing effort
to get farmers to use improved seed. Retail dealers are the key to seed marketing; they are
where farmers get seed; they make the actual sales contact and delivery.

Retail dealers must not only sell seed, but must also be able to tell farmers why improved
seed is better, why the recommended variety is better, how and when to plant it, how to
handle and harvest better yields, and other information.

FARMER CONFIDENCE

The retail dealer must hold the farmers' trust. All seed dealers, regardless of their other
operations, must follow practices which ensure long-term trust and good relations with
farmer-customers. Both the seed program and national crop production suffer if the seed
dealer cannot get "repeat sales"--farmers buying and using improved seed every season,
year after year. A seed dealer cannot be a "fly-by-night" high-pressure operator who sells
farmers seed one time and then they never come back to him. He must be honest and
trusted by the farmers, so they come back to him every time they need seed. Having farmer
confidence means they come back to the dealer time after time, which ensures customers
and a market for the seed, and greatly reduces the cost of promotion. This is the objective
of all seed marketing promotion--to get farmers to come to the seed dealer, to trust him,
and to buy seed from him.

WHO CAN BE A RETAIL DEALER

A major part of seed promotion is to establish contact with farmers so they can be
"sold" improved seed. Thus, the best seed dealers are existing merchants, shops,
buyers, cooperatives, offices, etc., which already have established contacts with
farmers. Using them as seed dealers not only uses existing farmer contacts and helps
distribute seed widely, but also gains the existing merchant's support for the use of
improved seed.

LOCATION

Retail seed dealers should be located so that improved seed is available within farmers'
normal "Zone of Mobility", or the distance they normally travel to buy other supplies,
sell their produce, etc. If farmers must travel further to get seed, the number of farmers
who buy the seed decreases as the distance increases.
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                                           50


CENTRAL, REGIONAL OR WHOLESALE SEED STORAGE/DISTRIBUTION CENTERS
       _____________________________________________________
 -----> Suppliers of Credit to Farmers                            ________________
       _____________________________________________________
       _____________________________________________________
 -----> Retail Seed Stores and Shops                              ________________
       _____________________________________________________
       _____________________________________________________
 -----> Farm Supply Stores & Shops                                ________________
       _____________________________________________________
       _____________________________________________________
 -----> Village Commission Sales Representatives                  ________________
       _____________________________________________________
       _____________________________________________________
 -----> Traveling Sales Teams & Delivery Trucks                   ________________
       _____________________________________________________
       _____________________________________________________
 -----> Sales Booths in Village/etc. Markets                      ________________
       _____________________________________________________
       _____________________________________________________
 -----> Farmer Supply & Marketing Cooperatives                    ________________
       _____________________________________________________
       _____________________________________________________
 -----> General Stores & Shops                                    ________________
       _____________________________________________________
       _____________________________________________________
 -----> Extension Offices & Agents, Government Offices, Programs,
        Stations, Crop Production Promotion Package Programs      ________________
       _____________________________________________________
       _____________________________________________________
 -----> Mail Orders From Mailed Catalogs & Lists                  ________________
       _____________________________________________________
       _____________________________________________________
 -----> Agricultural Chemical Dealers & Shops                     ________________
       _____________________________________________________
       _____________________________________________________
 -----> Farmer & Village Leader Distributors                      ________________
       _____________________________________________________
       _____________________________________________________
 -----> Gasoline & Fuel Dealers & Stations                        ________________
       _____________________________________________________
       _____________________________________________________
 -----> Hardware, Tool & Implement Dealers & Shops                ________________
       _____________________________________________________
       _____________________________________________________
 -----> Buyers of Farm Produce                                    ________________
       _____________________________________________________
       _____________________________________________________
 -----> Feed Dealers & Shops                                      ________________
       _____________________________________________________
                                                                                  V
                                                      FARMERS WHO PLANT THE SEED

Figure 14. Retail outlets or dealers which have been used successfully to market seed to
            farmers in developing agricultures and seed industries.


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Retail seed dealers may sell only seed or may also sell any other goods and services
which farmers buy. Seed dealers may even be the merchants who buy farmers'
produce.

Retail seed dealers should be conveniently located in every city, village and market which
deals with the target farmers. Maximum use of improved seed is achieved when it is
available in every village from local seed dealers, sales booths at markets, commission-
sales seed representatives, farmer or village leader seed distributors, traveling sales-
delivery trucks, local supply shops, and other respected outlets.

RETAIL DEALER BUSINESS PRACTICES

Effective business operating practices for retail seed dealers must include the following.

1. Be ethical, honest and fair. Farmers must trust the seed dealer, and be convinced that
   he is honest, charging them a reasonable price, telling them the truth, and giving them
   fair measure for their money. This is the most important requirement to ensure "repeat
   sales".

2. Sell only high-quality seed. Farmers must have confidence in the quality of the seed.
   Test all seed, no matter how small or large the amount. Discard low-quality lots and
   bags; a small loss today is better than losing the entire business next year.

3. Know the seed and the variety. Know and advise farmers honestly on what improved
   seed and recommended varieties can do under local farmer conditions.

4. Know appropriate farming practices and requirements. Advise farmers not only on
   improved seed and recommended varieties, but also on better cultural practices, what
   crops to grow, marketing and other helpful information.

5. Maintain good safe seed storage. Prevent loss of seed and seed quality, and use your
   good storage facility to help build a good reputation among farmers.

6. Keep the store attractive and clean. Attract and impress farmer customers with the
   dedication and competence of management and staff, and maintain good facilities in
   good condition.

7. Keep complete and up-to-date records. Good records are essential to help follow-up on
   farmer customers as a guide for future seed sales, and to comply with laws and seed
   program requirements. To help follow-up on sales, a good practice is to keep a special
   record of every farmer and what he buys. Some retail dealers keep a special loose-leaf
   notebook with a page for each farmer; others use the computer.

8. Follow-up on all sales. During the crop year every season, visit or check with farmer
   customers to see how the seed they bought performed, and what they will purchase the
   next season. A special record of each farmer's purchase helps the seed salesman from
   the seed dealer keep up with what each farmer buys and uses, and helps in follow-up
   contacts and creating seed sales the next year.
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9. Use promotion and publicity wisely. Stimulate farmer understanding of and demand
   for improved seed, and let farmers know where your shops are where they can get
   good seed.

10. Know the competition. Know what alternative sources of seed the farmer has, what
    their advantages and disadvantages are, and know how to sell improved seed against
    the competition. The competition is usually low-quality "farmer seed", not only other
    seed dealers and programs!

11. Always be able to supply what the farmer needs. If he asks for something you don't
    have and he really wants, tell him you will get it for him--then be sure you get it for
    him even if you have to pay more and sell it without a profit, in time to plant it
    properly! Never send a farmer to another place to get something; he may decide to buy
    everything there, and not come back to you!

SUPPLYING ALL THE FARMER'S SEED NEEDS

The retail dealer should make a special effort to stock, and be able to supply, all the seed
needed by its farmer customers. In doing this, however, the retail dealer needs to make a
careful Marketing Plan, to estimate carefully how much seed of each kind he can sell so
that he is not stuck with unsold seed.

Never tell a farmer that you don't have a certain kind of seed, but he can get it at another
place. If he goes to the other place to get one kind of seed, he may like what he sees and
get all his seed there, not coming back to you! If a farmer asks for a certain seed that you
do not have, tell him that you don't have it but that you will get it for him; come back in
the afternoon, and you will have it for him. Then, go to the other dealer and buy the seed
your farmer customer needs, and bring it back to your store to give to the farmer. Always
do this, even if you then sell the seed at cost or at a loss; your objective is to keep the
farmer as a regular customer. In fact, never sell the seed to the farmer at a price higher than
the other store charges; if you do, the farmer will learn about the difference in prices, and
may leave you to become a customer of the other store.

SUPPLYING OTHER NEEDS OF FARMERS

Selling seed is a seasonal business, with all sales activity concentrated in a short period
before each planting season. When the retail seed dealer also supplies other needs of
farmers--fertilizer, chemicals, pesticides, equipment, spare parts, fuel, feed, etc., even food
staples--these help spread the sales period over a longer time, and increases total income.
This greatly reduces overhead costs which must be charged to each bag or item sold. Also,
salesmen and other personnel can be kept busy during a longer period.

Supplying all the farmer's needs has been called the "One-Stop Shopping" concept. It
seeks to supply all the farmer's needs, so that he only has to go to one place to get
everything. The idea is to keep the farmer coming back to you for all his needs, so he
never has to go anywhere else. If you provide satisfactory service, this is supposed to help
keep the farmer as your steady customer. It not only increases your volume of business and
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income while lowering per-unit overhead costs, but also helps develop steady farmer
customers.

Selling additional commodities increases the knowledge that the dealer and his salesmen
must have, as they must be able to advise the farmer carefully and accurately on each
commodity.

Where it can be practiced, selling all the farmer's needs at one shop has proven to be a
good business practice.

THE RETAIL SEED STORE

A retail seed store or outlet must keep the seed in good storage conditions, promote and
advertise the seed, and make sales and deliveries to farmer customers. This requires some
minimum facilities, including:

1.   Safe seed storages, adequate for the amount of seed handled.
2.   Display and promotion area and facilities.
3.   Sales area.
4.   Facilities for receiving, handling and delivering seed which are easily reached.
5.   Facilities and a place to keep records.

While facilities for conducting these operations are essential, there is no set rule on what is
required. In fact, they range from modern store facilities with all the air-conditioned
conveniences and space, down to a small booth just large enough for one man and his seed
stocks. The important consideration is to know what must be done, and have space and
facilities adequate for the volume of sales operations required, and to be able to work and
deliver seed quickly and efficiently.

The retail store must be kept clean and neat, outside around the store and its entrance, and
inside in the sales area and in the seed storage area. Keep trash removed each day from the
outside and inside, not only to make the store look better-managed, but also to help control
birds and rats. The retail store must always give the appearance of good management,
good quality control, and attention to details.

Posters and signs on the walls must be in good condition, and give up-to-the-minute
information. The latest pamphlets and hand-out information sheets must be kept neatly in
a rack where they are easily reached by visiting farmers. Keep light bulbs replaced as they
burn out; do not allow lights to have burned-out bulbs which do not work, and look
sloppy. Keep dust, spider webs, etc., cleaned off of everything.

Keep seed stacks neat and orderly; do not allow bags to fall or be left out of order on the
stacks. Keep seed stacks neatly labeled so they are fully identified.

Outside the store, a large attractive sign should identify the store. The walk and drive or
road to the store should be kept in good condition. If there is space, plant flowers or plants
and have a small sign next to them indicating what seed was used to plant them.

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The sales counter or cash register area must be kept neat and orderly. If sales receipts, etc.,
are kept here until the end of the day, do not stack them on the counter; have a space
underneath the counter where they can be kept. If anything is kept on the sales counter, it
should be small "impulse buy" items which the farmer customers may decide to buy as
they are paying for their seed. Keep a notebook next to the cash register which shows all
seed in stock, its price, bag size, lot number, etc. As seed are sold, keep this notebook up-
to-date. This not only helps you keep up with what seed you still have, but is also good to
show to farmers what other kinds of seed you have in stock, and often leads to extra sales.

RETAIL OUTLET PERSONNEL

The most important personnel of a retail seed outlet are the salesmen who will deal with
farmers who purchase seed. In some small retail outlets, the only person is the salesman,
who also handles all other essential activities of managing, placing seed orders, handling
the money, and delivering seed. Larger retail stores may have the owner-manager,
salesmen, financial and record clerks, and warehousemen who handle seed receiving and
delivery.

RETAIL OUTLET RECORDS

Good and complete records are essential for a seed company and a retail seed dealer,
because:

1. Most Seed Laws require records that show seed deliveries, sales and quality.

2. Records are the basis for follow-ups with farmer customers, which are an essential part
   of ensuring repeat sales--which are the basis of a profitable seed business.

3. Records of seed sales in the previous seasons are the best means of analyzing sales and
   determining how much seed to purchase and order each year.

4. Records show how much was spent and how much was earned, which is essential to
   know if the business is profitable, what items made a profit and which cost money, and
   to keep up with required taxes.

Records should be complete, but require a minimum of time to keep up-to-date. A simple
sales record for small retail seed dealers consists of one page for each crop and variety of
seed handled. It includes basic information on seed sales, and includes at least the
information shown in Figure 15.

At the end of the planting and seed sales season, the retail dealer should compile his seed
sales, to provide a good estimate (Marketing Plan!) of what seed he will need, and when,
the next year. A good simple form for compiling sales is shown in Figure 16.

These records, and more sophisticated records according to the retail dealer's capabilities,
can be kept in various forms ranging from a single page for each crop variety kept in a
loose-leaf notebook, up to computer records which provide automatic summaries.

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Many small retail dealers keep their records "in their head". However, given the human
tendency to forget, this is not a good means of ensuring that the business makes the most
possible sales at the least possible cost.


                                        SEED SALES RECORD

Year ________ Crop _________________ Variety ___________________________
Source of Seed _______________________________________________________
___________________________________________________________________________
 Date          Farmer Purchaser              Lot. No.   Amount       Cost Price     Comments
___________________________________________________________________________

___________________________________________________________________________

(lines continued down entire page)

Figure 15. Example of a retail seed dealer's record of sales of seed of a variety.



                            SEED SALES SUMMARY
Year ________
___________________________________________________________________________
 Crop       Variety      Source/Brand     Amount Sold in Week of:           Total       Comments
                                                                            Sold
___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________
(lines continued down entire page)


Figure 16. Example of a retail dealer's summary record of seed sales.

FOLLOW-UP

The retail dealer's records of which farmers bought what kind of seed is his key to making
follow-up visits after planting season, while the crop is growing or after harvest time.
Although many retail dealers say "My business is too small to do something like that",
follow-up visits with farmer customers are essential to maintain business and grow in
volume. The retail dealer, or his salesmen if his business is larger, should always follow-
up the sale with a visit to the farmer on his farm, and ask how his crop produced, how the
seed performed, what he needs, and what/how much seed he plans to buy the next planting
season. If available, this is a good time to give the farmer small advertising souvenirs such
as pens, notebooks, caps, etc.

This follow-up visit is another form of individual contact, and is one of the best public
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relations means to create customer goodwill and repeat sales. It is also the key element in
the seed dealer's preparation of a Marketing Plan for the next year.

EXISTING MERCHANTS AND DEALERS

Seed sales to farmers depend heavily on individual contacts by, and associations with,
persons the farmers trust. It often takes a long time to develop farmer trust, and is based on
a record of honesty, good performance, good service and products, and good human
relations.

Existing merchants and dealers who have these attributes make ideal retail dealers,
because they already have established contacts with farmers. As much as possible, existing
merchants and dealers should be used as retail seed dealers. The seed company must train
the dealer's salesmen, provide advertising materials, conduct local area promotion, and
service the dealer, but using existing dealers is often not only most effective in selling but
is also most economical in operating costs.

There still exist some local merchants who literally have their farmer customers in
bondage; i.e., the farmer has been buying his needs on credit from the merchant, and in
turn sells his products to the merchant. Whether or not the merchant gives fair prices, the
farmer never gets out of debt to the merchant, and is literally the merchant's unpaid tenant
farmer. These merchants literally tell the farmer what he needs and then sell it to him.
While this is an unfortunate practice, the seed company should try to get these merchants
to become its seed dealers, as this is the only way to get the seed to these farmers, and the
seed often helps increase their production, which increases their income.

SHOULD DEALERS SELL ONE OR SEVERAL BRANDS OF SEED?

The question of whether an independent dealer should sell only one brand of seed, or can
sell several brands of seed, depends on the individual situation and has never been decided
one way or the other. In general terms, the seed company should consider these aspects:

1. The retail dealer should supply all the farmer's seed needs, from grain crops to
   vegetables. Often, one seed company does not provide all these seed, so the seed dealer
   must obtain seed from several seed companies. These kinds of seed are not competing,
   and one seed kind does not affect the sales of another kind.

2. If the retail dealer stocks two or more brands of the same kind of seed, the seed brands,
   and to some extent the varieties, compete with each other at the same dealer's store.
   Under equal circumstances, the retail dealer thus will not promote or emphasize one
   over the other. However, if one seed brand gives the retail dealer a higher dealer
   commission, he will actively promote that brand, to the disadvantage of the other
   brand. Getting into a bidding war over dealer discounts is not conducive to profitable
   seed company operations. However, it is often necessary to sell seed to dealers who
   stock several brands, in order to be sure those dealers' farmer customers see your seed
   and have a chance to buy it. Then, you must be sure to have a strong advertising and
   promotional program in that local area. Often, the seed company's own salesmen can
   conduct sales visits and follow-up visits in that area, and even use traveling sales
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   trucks to strengthen farmer confidence in the seed and ease of buying the seed.

3. If the retail dealer stocks only one brand of seed, he is in a position to tell farmers that
   "this is the best seed available, and I am only interested in providing you with the best
   possible". However, if he does not have certain varieties which are sold only under
   competing seed company brands, the retail dealer must convince farmer customers that
   the stocked seed variety/brand is best. If he cannot do this, to avoid losing the sale, the
   dealer should go to the supplier of the competing brand and get this seed for his
   customer. This is not stocking a competing brand, but is providing complete service to
   farmer customers at his store in order to hold their business.

4. If a dealer decides, or can be convinced, to sell only your company's seed (of the crop
   and variety kinds you provide), he should be given an additional discount rate of 1-2%
   or more as mutually agreed upon.

COMPANY-OWNED RETAIL OUTLETS

Company-owned retail seed shops or stores usually are staffed by employees who know
the company's seed well and can sell it effectively. These shops also focus on selling the
company's seed.

However, there are operating and cost problems which, unless properly managed, reduce
the profitability of owned seed retail outlets. Seed sales are seasonal, and business is
conducted only at planting times. Thus, the shop is either idle or must be closed during
off-seasons; either way, this does not build good customer relations with farmers, or
provide profitable operations for the seed company. Also, the owned retail outlet has a
serious sales and customer relationship handicap in that it provides only the seed supplied
by the company; it does not provide other noncompeting kinds of seed, fertilizers,
pesticides, equipment, etc. Farmer customers must go to other dealers to get these needs.
In general, farmers do not like to have to go to several places to get their needs; in fact,
this often complicates credit purchase arrangements.

If these problems can be overcome, company-owned retail outlets are an ideal approach to
retail seed sales to farmers. The retail shop lets the company keep the dealer discount, the
company's seed can be strongly promoted, and the company has in-depth firsthand
information on market potential in the local area.

To overcome the above retail sales problems, the company's local retail stores simply need
to stock a complete range of farmer needs, and stay open year round to become a trusted
part of the local community and hold farmer business. The store should stock and provide
farmers with fertilizers, pesticides, tools, equipment, feed, other noncompeting kinds of
seed, and other needs which farm families regularly purchase. At the same time, store
employees must be highly trained and have complete information on how the farmers
should use all of the products sold. The store should be a center for reliable information
and guidance to farmers.

TRAVELING SALES TRUCKS

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An extremely successful sales innovation has been the traveling sales truck. This is an
insulated van which can transport seed and hold it in safe temporary storage, usually
accompanied by another vehicle to accommodate carrying several staff and the required
sales gear. Before or during planting season, the van is loaded with seed and taken to the
target village or villages. The sales team then holds meetings, often including movies, free
dinners, local entertainment, and other affairs to attract participants. Promotional and
advertising contacts are conducted, ranging from individual contacts to group meetings to
movies to describe the seed and its advantages to the farmers.

When farmers buy seed, it is delivered immediately out of the van truck. Farmers are
always given instructions on how to protect the seed until it is planted, how to plant it for
best results, how to cultivate the crop, and special care in handling treated seed.

After several seasons of operations, the sales truck can set up an advance schedule and
notify villagers of which day the truck will be there. A salesman can make advance visits
to the village, hold meetings with farmers and villagers, conduct sales and public relations
activities, and take orders for seed. This reduces the time the truck must spend in a village,
and the manpower and time required.

A problem which must be avoided in using sales trucks is competition with existing local
suppliers, and incurring their anger. Avoid this at all costs. Another element is that credit
may not be available to farmers in villages which have no dealers; to overcome this, a
representative of the Government (or other) farmer credit program may be asked to
accompany the truck sales team, or the seed company can make other arrangements to help
farmers get credit to buy the seed.

VILLAGE COMMISSION SELLERS

Training a village leader in selling seed and then appointing him as the commission dealer
in his village, has been a successful way to market seed in villages which do not have
access to seed retail dealers.

The village commission dealer must be a respected leader in his village, preferably a
farmer who will use the seed himself for all his crops which can serve as demonstration
fields. Obviously, he should be a good farmer, and the seed company should help him
know and use the best crop production methods. He must be able to communicate with his
neighbors and get them to use the seed. He should know their ability to purchase the seed,
and help arrange credit where possible.

Seed can be delivered through the village commission dealer in either of two ways:

1. The seed company can place a small safe storage at the village commission dealer's
   place, and keep it stocked. This is usually an insulated van body taken off a seed
   transport truck, or a specially-constructed unit even smaller.

2. The village commission dealer can take orders and receive payment, and the seed
   company transport truck can make regular visits to deliver the desired seed.

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It is always helpful to give the village commission dealer an official certificate from the
seed company, appointing him as their local dealer.

The village commission dealer is a good source of information when the Marketing Plan is
being prepared.

BUILDING A RETAIL SALES NETWORK

The seed company must strive to build and maintain a network of retail dealers and sales
outlets which bring its seed within easy reach of all farmers in the target area. However,
dealers must be carefully selected, and then kept supplied with the seed they need and
closely supported in promotion and sales assistance. Initially, a network of dealers must be
established. And, each year new dealers are added, and some often go out of business or
stop handling the company's seed. The seed company must constantly work to maintain a
good dealer network, and must visit and carefully evaluate potential new dealers before
accepting them. It is usual procedure to visit the dealer, discuss with him and examine his
facilities and staff, and quietly inquire locally about his standing.

In selecting dealers, the seed company should be sure that the potential dealer has a good
reputation and good standing among farmers and other local people, and is known for
honesty and fair dealing. The dealer should be active, with good public relations, and with
many good farmer contacts. He should be active in local affairs, with good standing
among merchants and city/district officials.

The dealer must have a good credit rating, with adequate finances and a reputation for
paying his bills on time. The seed company should not have to provide credit to the dealer.
The dealer should also have sufficient contacts and arrangements to help his farmer
customers obtain the credit they need.

The dealer's location should be easily accessible to farmers, preferably in or near a market
which farmers visit frequently, or on a main street or road frequently used by farmers.

The dealer's facilities should be adequate to handle seed safely. He should be willing to
make any changes recommended by the seed company, so that his storage/handling
facilities are improved.

The dealer and his salesmen should display ability to get along well with farmers, to
convince them of the value of improved seed and to sell it to them.

The dealer's record system must be adequate. The seed company should provide him with
record forms for keeping up with his seed stocks.

When a dealer is selected, be sure that he is not in a location, or serving an area, which
will create competition with existing dealers who are active in selling the company's seed.
This can create problems which may alienate both dealers and local farmers.




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                                             9

                      SUPPORTING RETAIL SEED DEALERS




THE SEED DEALER NEEDS SUPPORT!

The retail seed dealer usually--but not always--does not produce the seed he sells, but buys
it from seed production programs and companies, for resale to individual farmers. This is
not only because retail dealers are usually small, but also because buying from larger
production companies enables the dealer to stock a wider range of kinds of seed that his
farmer customers need.

The retail dealer thus does not have first-hand information on the seed and variety, crop
performance, markets, and other factors. To help retail dealers sell seed, it is important
that the seed production company, government agencies, and extension service programs
provide the support and information that the retail dealer must have to sell the higher-
yielding seed.

WAYS TO SUPPORT RETAIL DEALERS

Anything or any information that helps retail seed dealers sell seed is essential support.
The seed production company must support and assist its retail dealers with at least the
following.

1. Keep the dealer well-stocked with the kinds and varieties of seed he needs. The seed
   must be there when the farmer wants to buy it. But, have good sales forecasting--be
   sure the dealer is not overstocked! Overstocking a dealer creates serious problems for
   the dealer and for the supplying seed company.

2. Be sure the seed is packaged in units of the size needed by farmers, and complete
   instructions are on the package.

3. Help the retail dealers get necessary credit, or supply them with credit, so they can
   maintain the seed stocks needed to provide all their farmer customers' needs.
   Supplying credit, however, can be a serious cause of losses unless properly managed.
   Usual practice is to extend credit for 60-90 days to the dealer; dealers who cannot
   maintain good payment records then must pay cash or are dropped.

4. Provide the dealer with complete information and data on seed, seed quality, crops,
   varieties, fertilizers, pesticides, cultural practices, etc., which help the farmer.
   Providing printed material, in numbers large enough to provide a copy for each of the
   dealer's sales personnel, is a good means. However, the seed production company
   should always hold a short training session for the dealer's salesmen, to be sure they
   know and understand the information. Printed information can include materials
   prepared by the seed company, research publications, extension publications, and other
   materials.
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5. Keep the retail dealer up-to-date on crop and market conditions which affect farmer
   use of seed. Help the dealer be able to advise his farmer customers on what is likely to
   be his most productive and most profitable cropping.

6. Provide complete support, guidance, training materials, etc., for promoting and selling
   seed. The seed production company is in a better position to prepare sales posters,
   information sheets, newspaper and radio information and programs, etc., which help
   the dealer sell seed. Remember than every time the retail dealer sells seed, it is the
   same as a sale made by your company.

7. Develop a cost-sharing program for local promotion and sale of seed. Discuss this with
   the retail dealer and get him involved in promotion.

8. Develop special sales campaigns for local areas, and involve the retail dealer.
   Anything that builds the dealer's local prestige helps sell your seed.

9. Set up special sales promotion and encouragement for dealers and their salesmen. For
   example, increase the dealer's commission as the amount of seed he sells increases.
   Also, provide jackets, cash awards, special trips, and other promotions for individual
   salesmen who sell certain high amounts of seed.

10. Be sure to provide the dealer with complete information on your seed program
    policies, procedures and services. Include taking dealers to see your production and
    marketing facilities so they know more about what goes into producing high-quality
    seed. This helps build the dealer's confidence, and also helps him convince farmer
    customers.

COMMUNICATIONS WITH DEALERS

A good means of communication with retail seed dealers is essential. The seed production
company should maintain close contact with all retail dealers before, during and after seed
sales seasons. An ideal means is regularly-scheduled telephone calls to all dealers. This
requires the seed production company to give its sales staff special responsibilities to
telephone each dealer in the area they are responsible for. Contact should be maintained at
least twice each week during seed sale seasons.

Check with the dealer to see how his seed are selling, and if he needs more seed of a
particular kind, and needs new deliveries of seed.

Also, determine if some seed are not selling at a particular location. Sometimes, one dealer
may have surplus seed stocks of particular varieties while other dealers need that kind of
seed. Good and frequent communication with dealers enables the seed production
company to pick up surplus seed from one dealer and deliver it to another dealer who
needs that kind of seed. This reduces production costs for the seed production company
and helps it to achieve higher sales percentages; for the dealers, it helps reduce their
unsold seed and helps meet farmer demands for seed.

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A helpful procedure is to give each dealer a special record form for each kind and variety
of seed he stocks. This record is simply a one-page form on which he notes each sale of
that kind of seed. This helps him keep up with how well that seed is selling, and how
much his remaining stock is. Then, when the seed production company's sales
representative telephones, the dealer can tell him how much seed has been sold, and how
much more should be delivered to the dealer. The form in Figure 17 illustrates the system
used by one seed production company.

                       RETAIL DEALER SEED SALES RECORD
Crop ________________ Variety _____________________ Crop Year _______
Get Seed Stocks From _________________________________ Tel. ___________________
___________________________________________________________________________
 Date                           Farmer                            Amount Sold    Remaining Stock
___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________
(lines extend down full page)

Figure 17. A seed-in-stock record form given to retail dealers by one seed company.

REGULAR DELIVERIES DURING PLANTING SEASON

It is good business practice, and increases profits, to deliver only the seed he needs to a
retail dealer. However, he often may sell more than the estimated amount which is
delivered to him. He must have additional sales, which means he needs more seed. If he
does not get the seed, he loses sales and some of the seed production company's seed does
not get sold.

Along with maintaining telephone contact with retail dealers, learn how their seed are
selling, and if they need more seed.

Before and during planting season, arrange to have seed delivery trucks run on specific
routes once or twice a week. The truck goes from the seed distribution storage, to each
specified seed dealer in turn, and then returns to the distribution storage.

The additional seed each dealer needs is loaded onto the truck so that each dealer's needs
are stacked together and can be unloaded as a unit. The last-visited dealer's seed are loaded
into the truck first, and so on until the seed for the first-visited dealer is the last loaded.
Then, as each dealer's seed is delivered and unloaded, the next seed delivery is in the back
of the truck and can be quickly unloaded.

Each Sales Representative of the seed company is responsible for a certain area, and
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should contact all dealers in his area once or twice a week before and during the seed sales
season. By telephone, he can ask the dealer how much of what kind of seed he has sold
during the past week, if some seed are not selling, and what additional seed the dealer
needs. One or two persons at each dealer outlet should be authorized to discuss with the
Sales Representative, and can order seed immediately by telephone.

The Sales Representative should have a record sheet, similar to that shown in Figure 18,
for each retail dealer. When he makes a telephone contact and gets information and a seed
order from the dealer, he enters it on the record sheet. This is used to guide shipping seed
immediately, and is extremely useful later to help plan production for the next year, and to
plan when seed should be made available to dealers in the next year.

                       RETAIL DEALER SEED ORDER RECORD
Dealer _____________________________ Authorized Person _______________________
Dealer Tel. No. __________ Seed Company Sales Representative _____________________
___________________________________________________________________________
Date/Time                             Amount Sold    Remaining   New Delivery   Comments/
Contacted Crop            Variety     Last Week      Stocks      Ordered        Overstocks, etc.
___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________
(lines extend down full page)


Figure 18. Typical Sales Representative's record of seed sold to each dealer.

INFORMATION ON HOW SEED ARE SELLING THROUGHOUT THE AREA

During the sales season when the seed production company's sales representatives
maintain close telephone contact with all dealers, the amount of each kind of seed sold by
each dealer should be learned. Then, the seed production company can compile data on
how each kind of seed is selling throughout the area. This information can be given, both
by telephone and by mailed "Seed Movement Reports" to all dealers. This is quite helpful
to the dealer, in determining how much seed to stock, and in advising his farmer customers
on what other farmers are doing. It also enables the seed production company, and
subsequently the retail dealers, to reduce prices of seed which are not selling so they are
more attractive to farmers and more of the "slow sellers" can be sold. This reduces the
amount of unsold seed and greatly reduces operating costs.

IDENTIFYING IMPROVED SEED


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The quality of seed cannot be determined by looking at the seed, especially by farmers
who often have little training in seed science and physiology. Thus, one of the most
important aspects of supporting the retail seed dealer who sells to farmers is to identify the
improved seed so there is no doubt about what it is.

The seed supplier, his brand name and his seed must be strongly associated in the farmer's
mind with high quality, trustworthiness, and dependability. In addition to the performance
of the seed, the seed company, and the seed salesman, the seed must be easily and
positively identified so the farmer knows what he is getting. Clear identification is
essential to promote farmer acceptance of the seed and to prevent adulteration and
misrepresentation. This identification must establish the kind of seed, the quality of the
seed, and the seed supplier.

Each seed bag or container must be properly and completely labeled with a tag or label
which is not easily removed. In addition, the lot number should be stenciled or marked on
the bag with paint or ink which will not come off or smear. Use a lot numbering system
which will not give the same number to two different lots; the lot numbering system
should be orderly, so staff can learn it and tell from the lot number what the crop and
variety is (see publication on lot numbering, Egypt or ICARDA, by Dr. Bill Gregg). The
company's logo or trademark should be printed on the bag. If the seed is certified, the
certification emblem should also be printed on the bag. Information about the seed such as
the seed treatment used and care in handling treated seed, should also be printed on the
bag.

To help identify the seed and also to prevent contaminating of the seed, farmers should
always received seed in unopened bags which are labeled and sealed. Never open bags to
deliver a small amount of seed to a farmer.

PREVENTING ADULTERATION AND MISREPRESENTATION

There are many stories of crooks putting low-quality seed in used bags, and selling it as
"the real thing". In one Middle East country, one crook even printed copies of the seed
bags and sold fake seed in them.

Seed bags must be:

1. Labeled to prevent mistaken identity.
2. Marked with an easily recognized trademark or symbol.
3. Sealed to prevent adulteration and re-use of bags.

Farmers should always receive seed in labeled, sealed, unopened bags. Bags should never
be opened to sell smaller quantities. The closing and sealing of the bags should be done by
a method which prevents opening bags and adulterating the seed, or re-using the bags for
fake seed.

Part of the sales system must be to warn farmers of poor-quality seed, and to teach them
what to look for to identify high-quality seed which has not been tampered with.

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ADVERTISING-PROMOTIONAL MATERIALS

The seed company must prepare advertising and promotional material and supply them to
all dealers. The seed company is in a better position to prepare accurate and effective
promotional materials, and can print large numbers at lower per-item cost. Also, this helps
ensure that promotion is accurate and uniform in content, and fits within the seed
company's overall promotion strategy.

Advertising materials must include detailed descriptions of the varieties being sold;
include pictures whenever possible. They should also include descriptions of the seed and
seed treatment, and how the company produces and conditions seed.

AREA PROMOTIONAL CAMPAIGNS

The seed company's Marketing Department must plan and conduct area promotional
campaigns to promote its seed among farmers. It is not the responsibility of retail dealers
to conduct overall promotional activities; remember that whenever a dealer sells a bag of
seed, it is the same as if the seed company sold the bag.

Area promotional campaigns should include advertising through all available mass media,
posters, mail-out information sheets, meetings, demonstration plots and farms, and all
other possible means. Always include Agricultural Extension and local officials and
organizations in promotional campaigns.

Whenever possible, the names and addresses of local dealers and retail outlets should be
included in promotion materials. This ties the dealer into the promotional campaign,
identifies him with the seed company, and tells farmers where they can get the seed.

TRAINING RETAIL DEALER SALESMEN

The seed company's Marketing Specialists should conduct short but intensive training for
retail dealers and salesmen before every planting season. Training should include not only
detailed information on how to sell to farmers, but also descriptions and performance of
the seed company's crop varieties and why they are better than the competition. It should
also cover local crop and weather conditions, marketing conditions, and other factors
which may influence a farmer's purchase of seed. Training sessions should be short, not
more than one or two days, so they do not interfere with participants' duties. If possible,
include tours of fields and other points of interest. Include food and refreshment, so that
participants do not have to leave the training site (they may not come back!). Give
certificates when training is completed; urge participants to display these certificates in the
store.

SALES MANUALS

The seed company must prepare a sales manual, and be sure that each retail dealer and
salesman has a personal copy. These manuals tell the salesman (1) what the seed company
is, what it does, its facilities, etc. (2) what the advantages of the company's seed to the
farmer are; (3) detailed descriptions of the seed varieties and their performance under
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different field conditions; (4) how to sell to farmers, and help them with credit; (5) how to
set up and conduct demonstration fields and plots; and (6) other useful information.

The sales manual can also be used as a text for sales training sessions.

INSPECTING AND IMPROVING DEALER FACILITIES

At least once a year, the seed company's IQC should inspect the facilities of each retail
dealer and outlet, and make sure that any necessary improvements are made. The
Marketing Department should also inspect their sales and display facilities, and suggest
improvements. An IQC Specialist and a Marketing Specialist can come together for the
inspection visit, and work together. Always advise the dealer in advance of the inspection,
and make sure it is done in an off-season when seed are not being sold.

The purpose of the inspections should be to help the dealer improve the safety and cost-
effectiveness of his storage and handling, and the attractiveness and effectiveness of his
display and sales facilities.

MEETINGS WITH DEALER'S FARMER CUSTOMERS

Each year before the seed sale season begins, arrange with each dealer to hold a meeting
with his farmer customers and potential customers. Have the dealer advertise this meeting
well in advance, and personally invite each farmer customer. Seed company specialists and
the dealer can conduct the meetings, with the dealer presiding. Farmers should be given
detailed information on the condition of crops and markets, the seed company's varieties
and how they perform, why this seed is better than competing seed, how to plant, planting
rates, seed treatment, handling the crop, and other useful information.

Always include food and refreshments as an added attraction. Give out advertising
souvenirs, information sheets, etc.

Also, always try to include local Agricultural Extension and Research specialists, and
some important local officials. Try to get local media coverage, with pictures in
newspapers and on TV, and farmer names on radio coverage. Personal publicity is always
appealing to farmers!

PRE-SEASON CONFERENCES WITH DEALERS

Before each seed sales season, hold a pre-planting season conference with each retail
dealer or outlet and its staff. This can be done in conjunction with sales training meetings,
or with farmer meetings.

The purpose of these meetings is to keep retail sales personnel fully informed on crop and
market conditions, seed availability and pricing, selling tips, activities of the competition,
etc. Give them all possible information which will help them sell seed--honestly,
effectively, and aimed at servicing farmers.

SEED COMPANY WORK DURING SEED SALES SEASONS
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During and just before the seed sales season is an extremely busy period for staff of the
seed company. The Marketing staff is on call 24 hours a day to prepare and deliver seed
orders; some of the Marketing staff of the General Sales Section should constantly travel
over the seed sales area, to help retail dealers, identify seed sales variations, and help keep
seed selling smoothly and meet all farmer demands.

If not all seed has been conditioned and made ready for marketing, the seed conditioning
staff must work 24 hours a day, 7 days a week, to get all required seed ready for the
market.

Storage and transport staff also work around the clock, as required to get seed to dealers
and farmers.

Finance and other support staff must make funds and supplies for operations readily
available, and have everything ready in advance.




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                                             10

                    QUALITY CONTROL IN SEED MARKETING


If the seed company does not consistently and reliably provide high-quality seed to dealers,
the seed company will fail.

Every seed company and/or program must have a strong Internal Quality Control
Department. IQC must have very highly-trained personnel, and must be authorized to
monitor, observe, sample and test fields and seed lots at any time at any place within the
company's operations. IQC must also be authorized to stop any operation and modify,
improve, or terminate it so that seed quality will be high and operations will be cost-
efficient. IQC can also stop the stocking or sale of any lot of seed which falls below
standards. IQC is the guardian of the company's seed quality and operating efficiency, and
this is the guardian of its reputation among dealers and farmers, and keeps the company in
business.

PREPARING HIGH-QUALITY SEED

The first role of IQC in ensuring high seed quality for dealers and farmers is to monitor
and guide every field operation in production and harvesting, and every operation in the
conditioning plant and storage, so that all seed is of the highest quality which can be
produced economically. By identifying potential problems and advising the operating
department on how to prevent the problem, seed quality is maintained and seed losses
reduced. By stopping operations and improving them, operating costs are reduced while
seed quality is kept high. By identifying and discarding low-quality seed lots, further
handling costs are reduced, and the company's reputation for quality is maintained.

INSPECTING DEALER FACILITIES

When new dealers are selected, and at regular intervals for all dealers, IQC should inspect
the dealer's storage, handling and display facilities. IQC should identify potential causes of
loss of seed quality, or of problems in cost-effective operations. The dealer, with IQC's
advice and help, should correct these immediately so that seed quality is kept high and
time and costs of receiving/storing/displaying/delivering seed are minimized.

ADVISING DEALERS

IQC should regularly advise retail dealers on their facilities, operations, and seed in order
to maintain high seed quality and keep operating costs low. This service also builds good
relations with dealers, and if properly handled, serves as a selling point with farmer
customers.

Some of the points that IQC should advise dealers on include:

1. If seed production conditions have not been favorable and special care should be taken
   with seed.
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2. Which lots should be sold first. This is based on storability tests (Accelerated Aging).

3. How to handle receiving, storage, and delivery of seed. Also, IQC can advise dealers
   on how to make their seed handling and storage operations a selling point with farmer
   customers.

4. How to identify on the labels when seed lots were tested, and how to ensure that tests
   on all seed lots are still within the validity period.

5. How to sample seed and send it for testing. IQC often does this for dealers.

6. How to cooperate with Seed Law regulatory inspectors.

7. How to impress farmers with the care taken to maintain seed quality, so that these
   operations become selling advantages.

8. A very important point is that IQC--and Marketing Department staff--should always
   advise retail dealers to advise their farmer customers always to save the tags and labels
   off the seed they buy and plant. If necessary, save the bags to show the seed kind and
   lot number. This is important if there is any problem with the seed, and to help the
   farmer and the dealer identify seed and relate its quality to its source. It also helps the
   dealer and seed company if there is a problem with the seed.

TRAINING DEALER PERSONNEL

In addition to the Marketing Department giving sales training to dealer personnel, IQC
should train dealer personnel in handling and storing seed to maintain high quality and
impress customers with the care taken. This should be provided for personnel of all new
dealers, and at regular intervals for all dealers.

Training may be done on an individual basis at each dealer location. However, a good
procedure is to bring dealer personnel to the seed company during off-seasons and give
them group training in the seed company facilities. Be sure to provide food, entertainment
and educational materials along with the training so that these training sessions become a
pleasant learning experience, and dealer personnel look forward to them.

SAMPLING AND TESTING SEED AT DEALERS

Seed Law regulatory inspectors normally will sample and test all seed lots in a retail
dealer's storage, as part of their implementation of the Seed Law. If seed are selling well,
this is usually the only sampling and testing required.

However, IQC must help by sampling and testing any seed on which there are questions, if
seed are left over after the planting season, and at other times when a special need arises. If
a farmer has problems with the seed he purchased, IQC should--in the farmer's presence--
sample and send for testing a sample from seed of that lot which are still in the dealer's
storage.
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IQC RECORDS ON LOTS SHIPPED TO DEALERS

Both IQC and the Marketing Department of the seed company should keep detailed
records on all seed shipped to dealers. This should include lot number and date of test.
When test date may expire before the seed is sold or planted by farmers, IQC should
ensure that a new test--and new labeling--is made before the seed are shipped from the
seed company storage.

IQC should maintain a testing schedule for all seed lots, to show when they should be
retested. A typical form is shown in Figure 19.

                              SEED QUALITY MONITORING RECORD

Year ________ Crop _________________
___________________________________________________________________________
 Variety           Lot. No.     Year Grown   No. of Bags Date Tested   Date for    Quality on
                                                                       Retesting   Retest
___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________
(lines continued down entire page)

Figure 19. IQC schedule for retesting seed lots, to ensure current test results.

HELPING DEALERS WITH FARMER COMPLAINTS

If a farmer ever complains to a dealer about the quality or performance of his seed, the
dealer should immediately contact the seed company IQC. The IQC should immediately--
while the field conditions still exist--send a specialist to investigate the situation.

The dealer or his representative should accompany the IQC specialist to the farmer's field.
Upon arrival, they should advise the farmer that the seed has performed well for other
farmers, but they are concerned about his problem and want to do everything possible to
help. To investigate a complaint, they should:

1. Check the tags, labels, and sales invoice which the farmer has on the seed. Identify the
   seed kind and lot number, to be sure of the identity of the seed.

2. Compare the amount of seed purchased with the area planted. Farmers often buy some
   seed, and then mix local seed with it to plant a larger field area.

3. Go into the field and examine plants throughout the field. For example:

    A. If problems occur only in spots around the field, the cause is local rather than due
       to the seed.
    B. If offtype plants occur out of the drilled row (when grain drills are used), the
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       problem is due to volunteer plants in the field.

4. Find out what crops were grown on the field during the previous 2-3 seasons. This can
   be important; for example, if smut occurs in a field of smut-resistant wheat, the
   problem probably came from volunteer plants from seed remaining in the soil since
   the last growing season, rather than due to the seed.

5. Learn from the dealer's records which other farmers got seed of the same lot. Examine
   their fields to see if they have the same problem; if not, the problem is probably due to
   something in the complaining farmer's field. If other farmer fields are good, without
   problems, take the complaining farmer to see them.

6. Examine the area around the problem field, especially as to isolation and nearness to
   other fields which may have caused problems.

7. If the problem field is irrigated or runoff rainwater from other fields goes through it,
   look to see if the problem could have been brought in by irrigation or runoff water.

8. When germination is a problem, try to determine field problems which could have
   caused loss of germination. Some examples of the many problems which can cause
   loss of seed germination in the field are:

   A. Was weather cold or unusually wet after the farmer planted?
   B. Did rain or excessive irrigation form a crust on the soil, which prevented seed
      germination?
   C. Does the field or local area have a history of problems with soilborne disease or
      insect infestations?
   D. Is there fertilizer burn, indicating that the farmer put seed and fertilizer too close
      together in the soil?
   E. Did the soil remain too wet for too long after planting, so that soilborne pathogens
      caused the seed to rot before they could germinate?

9. How did the farmer store his seed before it was planted? Is it possible that it got wet,
   or was stored close to salt, feed, fertilizer, pesticides, etc.? There have even been
   known cases where the farmer kept the seed in the kitchen of his home, and his wife
   accidentally spilled boiling hot soup on the seed.

10. If any seed are leftover at the farmer's, examine them.

11. Carefully and unobtrusively, try to learn if the farmer is trying to "pull a fast one" or
    get undeserved compensation. What is the farmer's reputation for complaints and
    problems in the past with the seed dealer and other dealers and persons? What do his
    neighbors think? Neighbors are often a good source of information on weather,
    cropping conditions, and a truthful account of what the farmer did. Even when this is
    obvious, make sure that all your actions build good relations.

In all cases, make sure that all of your actions are aimed at building good relations with
this farmer and with his neighbors. It should be plain that the seed company and the retail
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dealer are interested in providing high-quality seed and good reliable service. Your
investigation should determine the cause of the problem, and if it is due to the company's
seed, make immediate restitution. In this regard, the company must make every effort to
ensure that seed is good, and should have a legally-binding limiting disclaimer on the sales
invoice. However, even if it is the farmer's fault (and he is not obviously trying to cheat the
seed dealer and shift blame on him; if he is trying to cheat, or has a local reputation for
cheating, that is a different matter), if possible the company and dealer should help him by
offering a discount on his next seed purchase.




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                                            11

                  STORAGE IN SEED MARKETING CHANNELS


Good seed storages are usually built at the conditioning center. However, seed IS STILL
IN STORAGE until the farmer plants it. To keep the seed alive and vigorous, it must be
kept in safe storage conditions at all times.

Safe seed storage, for crop seed, means that it must be kept dry, cool, and protected from
damage. Damaging agents, in addition to moisture and heat, are insects, mechanical injury,
fertilizers, salt, chemicals, etc.

DISTRIBUTION STORAGES

Storages at seed distribution centers usually handle larger volumes of seed, and are similar
to safe proper storages at seed conditioning centers. Some guidelines for storages at seed
conditioning centers and distribution centers are:

1. Place the storage in a dry area which has ready access to roads, and adequate space for
   trucks to be loaded and unloaded.

2. Preferably, seed storages are longer, rectangular buildings. The narrow ends should
   point east-west, to minimize solar radiation (sun heat) on the storage walls.

3. Raise the floor of the storage up to the height of the truck bed. Trucks should never
   enter the storage; they should be loaded and unloaded from the loading dock at the
   storage's loading door.

4. The storage floor should be reinforced concrete with a very smooth finish so it will not
   hold seed, and can be easily cleaned. A plastic and bitumen vapor seal should be
   installed under the floor, above the subfloor.

5. Walls should be smooth, so they can be cleaned and do not harbor insects or insect
   eggs. Wall height should provide for the planned seed stacking height plus one meter
   for air circulation above the stacked seed bags. Walls should be painted a light
   reflective color inside and outside; outside, this reflects the sun's heat; inside, this
   makes the storage area lighter. No windows should be placed in the walls.

6. The roof should be supported by a frame, preferably of pipes so birds cannot build
   nests on them. The roof should extend 1.5-2.0 meters past the walls, to shade walls
   from the sun's rays. The roof should be painted a light reflective color, such as
   aluminum paint, to reflect as much as possible of the sun's heat. No translucent light-
   transmissive panels should be installed in the roof, as these pass large amounts of solar
   heat. If possible, install thermal insulating batting of glass wool or similar material,
   equivalent of 3 inches insulation, directly beneath the roof. Ventilators should be
   installed in the roof crest, to allow hot air to escape from the storage.
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7. Only two loading doors should be provided, one in the center of each narrow end.
   Doors should never be located in side walls, as this results in loss of storage space
   inside the building. One personnel door should be provided, in one end beside the
   loading door. All doors should be metal and ratproof, with metal frames and sills. The
   doors should fit tightly on all sides, with no gap wider than 1/4 inch (about 6 mm) so
   that rats and mice cannot enter. Doors should be kept closed as much as possible, to
   keep out birds and rats. The loading doors should be fitted with transparent plastic
   hanging "birdproof) strips to keep out birds when the doors are open. A concrete floor-
   level loading dock should be constructed outside each loading door, of adequate size
   for easy loading of trucks. A roof with a wide overhang of at least 2 meters on each
   side should cover each loading dock.

8. Lights should be fluorescent, mounted in the overhead support frame at a height that
   they will not be damaged during stacking operations. Incandescent lights generate
   more heat, and should not be used.

9. Seed bags should be stacked on pallets which provide 3-5 inches air flow space. never
   stack bags directly on the floor or against walls.

10. Never store fertilizers, pesticides, salt, chemicals, feed, etc., in a seed storage. Keep the
    storages rigorously clean at all times. At regular intervals, spray the walls, ceiling and
    floors with a residual insecticide, and use a space spray to control flying insects.
    Regularly fumigate seed with hydrogen phosphide.

RETAIL DEALER STORAGES

Even retail dealer seed outlets should have special seed storages, of a smaller size, to keep
their seed in good condition. If the retail dealer's work area is air-conditioned, seed may be
kept in this area. This is particularly suitable for seed packets and small bags. Seed should
always be stacked on pallets, never directly on the floor. NEVER store seed outside, even
under a roof overhang. Do not store seed near glass windows or doors where they may
receive solar heat or splashed-in rain.

If a larger amount of seed is to be stored at a retail outlet, a special seed storage unit can be
constructed inside an existing building. This is usually a small pre-fabricated insulated
storage room.

Do not place seed outside or in hot or sunshiny places for a display. Displays should either
be of empty bags or posters, pictures or similar material.

Careful storage and handling at the retail outlet not only keeps seed quality high, but is
also a promotional advantage; it impresses farmer customers with the care taken to keep
the seed in good condition.

FARMER STORAGE AND HANDLING

When farmers buy seed, the retail dealer salesman should warn them that, although the
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seed they are buying is of the best quality available, the seed are alive and they must
handle it carefully. While they are taking it home, keep it dry and out of the sun. At home,
before it is planted, keep it dry, cool and protected from insects, pests and chemicals.
Never drop or throw seed bags. Many farmers keep seed in their homes, in a special dry
place.

VAPORPROOF BAGS

Low-moisture (less than 9% for cereal seed, 6% for oil crop seed and most vegetable seed)
seed packed in sealed vaporproof bags maintains its quality during distribution. Very dry
seed withstand higher temperatures. Placing low-moisture seed in sealed vaporproof bags
prevents the seed from gaining moisture from the air, as moisture and vapor cannot
penetrate into the bag. The bag thus keeps them at low moisture levels; seed respiration,
insect and fungi damage is prevented. For example, maize seed packed in sealed
vaporproof bags at 8% moisture content were stored in distribution centers in tropical
areas for 3 years without significant loss of germination. Very dry seed, however, are more
susceptible to mechanical injury and the bags must be handled gently. Never toss bags--
ordinary bags or vaporproof bags--down from a stack!

Special drying systems and bag filler/sealers are required for sealed vaporproof bags.
However, these systems usually pay for themselves by preventing loss of seed viability,
and providing more flexibility in storage handling and in storage periods. Proper
vaporproof bags and careful handling also have considerable promotional value.

SEED OUT OF STORAGE

When seed are being moved, the transport should also provide good storage conditions.
When seed is out of storage, as for transport, it should be kept out of good storages for a
minimum time. For example, at the distribution storage, seed should be loaded into the
transport van only at the last minute before departure. As soon as the transport van arrives
at the destination dealer's, seed should immediately be taken out and put into storage.
Never leave seed out of safe storage for unnecessary time, such as overnight.

HANDLING SEED IN STORAGE

When seed is in storage, and at any time the seed is handled, it must be handled carefully
to maintain seed germination and quality. These guidelines should be followed at all
times:

1. Seed should never be stacked directly on the floor or against walls, no matter how
   good the vapor barrier in the structure. Always stack bags on pallets which provide at
   least 3-5 cm of air space beneath the bags. Never stack bags so close to walls that a
   person cannot walk between the stack and the wall. This is the minimum space
   required for air circulation essential to prevent high moisture in the air near the floor.

2. Never throw bags, or drop them from stacks. Always handle bags gently; dry seed can
   suffer mechanical injury from impacts, and these can reduce or destroy the germination
   of the seed.
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3. Always stack different crops, varieties, and lots in different stacks. If different lots of
   the same variety are in the same stack, have a definite barrier between them, such as a
   tarpaulin or sheet of heavy plastic. Never stack different kinds of seed so close together
   that an uneducated laborer may take the wrong bags.

4. Always ensure that each bag is properly labeled with a tag and at least a lot number
   stenciled on the bag.

5. When seed bags are taken from storage for delivery to a farmer, always check the tag
   and lot number on each bag, to make sure that the proper seed is delivered.

6. In larger storages, handle seed on pallets by forklift; place bags 4-5 high on pallets, and
   then stack the loaded pallets in the storage. In smaller storages, use 2-wheeled hand
   bag trucks to move bags. These, and other labor-saving devices, reduce labor costs and
   speed up delivery of seed. It is more economical to deliver seed quickly than to use
   several cheap laborers to handle the bags. Further, laborers are more apt to mix in bags
   from the wrong stack.

7. Always keep exact records of how much seed of each kind is stored, and its exact
   storage location. To facilitate this, the floor of the storage can be marked off into
   numbered squares. When seed is received in or delivered out, always bring the record
   up-to-date to show the exact amount remaining.

8. When seed comes in, always check the test date on the tags on the bags. If the test date
   is old or nearing the expiration date, or if there is any question, take a sample and have
   the seed retested before it is sold.

9. Seed should be delivered from storage only on the basis of a written delivery order
   from the salesmen, cashier, or marketing personnel. This should show the number of
   bags, weight of each bag, crop, variety, lot number, and name of the receiving farmer.
   Two copies should be sent, one for the farmer to keep and the other for the warehouse
   or storage in-charge to keep.

10. Keep the storage doors closed when seed are not being moved. Proper ventilation, with
    doors on ventilation openings to close them when outside air is humid, can be
    maintained through screen-covered openings.

PEST CONTROL

Rats, mice, birds, insects and other pests are always problems with stored seed and grain.
Always keep the storage and the outside area around the building scrupulously clean, to
minimize attraction and cover for pests. Maintain a daily inspection of the storage for
signs of pests, and keep rat poisons in place at all times. When insects are found, fumigate
the storage.

CARE AND MAINTENANCE OF STORAGES

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Storages must be kept clean and free of trash or spilled seed. When a bag is torn, clean up
the spilled seed and discard the entire bag, rather than run the risk of other seed being
mixed in with the good seed. Keep the storages in good repair, and well-painted with light-
colored paint. Inspect the storages regularly for damage to walls, leaks, etc. Make repairs
immediately, especially if leaks are found.

COOPERATING WITH SEED LAW REGULATORY INSPECTORS

The Seed Law Implementing Agency regularly sends inspectors to sample seed in all
marketing channel units, for testing to see that the seed meets Seed Law quality and
labeling requirements. Always cooperate fully with the inspectors, and help them in every
way possible; if they find low-quality seed in your storage, they are helping you by
advising you so you can stop sale of poor seed before it damages your reputation with
farmers. As an added promotional benefit, when the inspector comes to sample seed,
introduce him to farmers who may be in the store at that time, and explain to them what
the inspector is doing, and how this helps ensure that farmers receive high-quality seed.




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                                             12

                           CREDIT IN SEED MARKETING


A limitation to seed marketing is that farmers do not have ready cash to purchase seed, and
dealers do not have funds to stock the amounts that could be sold.

Seed producers, suppliers and retail dealers must have credit to finance their facilities and
operations, and farmers must have credit to be able to buy and use improved seed. A
problem in getting credit for seed operations is that seed supply--due to poor marketing
and managing--has been a high-risk business, sensitive to time and any condition that
affects farmers and agriculture. Farmer credit has been a problem because of repayment
problems (default) and tendency of small farmers to get credit for one thing, and then
spend the money for something else.

GOVERNMENT ACTIONS TO ENSURE ADEQUATE CREDIT

Credit should be available from any financial institution or bank. It should be at
concessional rates for farmers, to enable even poor farmers to improve their productivity.
It should be at special rates for seed producers, to encourage investment in seed supply.

Credit for both seed producers and seed users is often available only at interest rates which
are too high, making it impossible to use improved seed, or adding too much to seed
production costs to make seed production attractive. To ensure general farmer use of
improved seed and adequate seed production, Government should establish favorable
credit systems. This requires an effective Credit Policy with the effect of law, and a Credit
Guarantee System which establishes credit rates and availability as well as backs up credit
offered by lending institutions.

Specific actions the Government credit system should take include:

1. Establish specific credit policies which provide concessional credit rates for
   investment in supplying high-yielding seed, and for farmers to purchase the seed.

2. Guarantee seed loans made by any lending institution to any reliable seed supplier,
   under specified conditions.

3. Ensure that credit policies include all financial institutions, and credit supports
   development of the seed industry and private sector.

4. Ensure that farmers can buy seed on credit from any reliable supplier, and that credit is
   available to all farmers.

5. Support credit with concessions on essential equipment import, taxes, etc.

6. Require use of improved seed in all farmer crop production loans and crop promotion
   programs.
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An effective Government-established credit system is shown in Figure 20.


                        Supportive Government Credit Policy

                                     V
     Central Bank Guarantees, Special Funds, Procedures, Special Interest Rates, etc.

                            V
CREDIT AND LENDING INSTITUTIONS:

-Government Banks
-Commercial Banks
-Government Credit Programs/Associations
-Accredited Lending/Financing Agencies

      ______________________
 ----> FARMER SEED USERS
      ______________________

Seed suppliers:
      _____________________________________________________
 ----> SEED PRODUCERS, FARMER CONTRACT GROWERS
      _____________________________________________________

      _____________________________________________________
 ----> SEED CONDITIONING/SUPPLY COMPANIES/PROGRAMS
      _____________________________________________________

      _____________________________________________________
 ----> SEED DISTRIBUTORS/STOCKERS/WHOLESALERS
      _____________________________________________________

      _____________________________________________________
 ----> RETAIL SEED DEALERS, MERCHANTS
      _____________________________________________________

      _____________________________________________________
 ----> FARMER COOPERATIVES WHICH SUPPLY SEED
      _____________________________________________________


Figure 20. Potential credit supply system for seed producers/suppliers and farmer seed
            users. Stable and supportive Government policy and participation is essential.


CREDIT FOR FARMER SEED USERS
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Most farmers need credit to purchase inputs and operate during the crop growing season,
when they have no income. Crop production credit for farmers should:

1. Be adequate to cover their needs, including the full cost of purchasing the required
   seed.

2. Require that they purchase and use high-quality seed.

3. Permit farmers to purchase seed from any registered seed dealer, not just from
   government seed programs.

4. Ensure that farmers spend the loan funds for seed rather than on other things. This
   requires "credit in kind", rather than cash credit. An ideal system is to give credit in the
   form of coupons which can be exchanged for seed at registered seed dealers.

5. Extend for the period from seed buying time until the farmer receives payment for the
   crops he produces. Too often, the credit becomes due and payable immediately at
   harvest time, which puts pressure on farmers to harvest early and sell immediately,
   when prices are low. Especially for farmer contract seed producers, crop payment is
   often made only some time after the crop harvest period.

Farmers often must pay exorbitantly high interest rates. They need credit at concessional
low rates, to ensure that all farmers can fully utilize improved seed and other higher-
yielding inputs. At the same time, there must be some system of guaranteeing that the
farmers will repay the loans when they sell their harvested crops.

Usual suppliers of credit to farmers for purchasing seed, other inputs, and crop operating
and production costs are shown in Figure 21.

CREDIT FOR SEED PRODUCERS AND SUPPLIERS

Seed producers and suppliers need credit for capital investment of building and equipping
plants and facilities, and operating capital for producing and stocking inventories of seed.
Credit for capital investment should be long-term, as the payback on investment in seed
facilities normally runs 20 years or longer. Credit for operating capital should be at special
low concessional interest rates so the supplier can provide seed at the lowest possible cost.
In too many cases, the cost of getting operating loans is so high that seed companies
cannot operate, because to recover all costs they must sell seed at a price higher than
farmers are willing to pay.

Credit for capital investment in seed facilities and equipment should be:

1.   Long-term.
2.   Low interest.
3.   Cover a high percentage of total costs.
4.   Accept the completed facilities as all or at least a major part of the collateral.

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Credit for operating capital to produce seed should:

1. Be low interest.

2. Span the time from contracting with farmer seed growers until after the following
   planting season when seed have been sold and the supplier has received payment from
   retailers.

3. Provide the full cost of purchasing raw seed from contract growers and conditioning.

4. Accept the inventory of high-quality seed as inventory.

        ___________________________________________
         Government Farmer Credit Programs          _________
        ___________________________________________

        ___________________________________________
         Local Banks and Lending Agencies           _________
        ___________________________________________

        ___________________________________________
         Local Money Lenders, Individuals, Relatives _________
        ___________________________________________

        ___________________________________________
         Local Merchants, Dealers, Suppliers        _________
        ___________________________________________

        ___________________________________________
         Farmer Cooperatives, Associations          _________
        ___________________________________________

        ___________________________________________
         Government-Sponsored Crop Programs         _________
        ___________________________________________

        ___________________________________________
         Other Sources                              _________
        ___________________________________________

                                                       ___________________________
                                                            Farmer Borrowers
                                                       ___________________________

Figure 21. Flow of crop production credit from lending agencies to farmers who use
            improved seed.




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One operating credit system which has been used successfully in some developing seed
industries is to establish a "bonded seed warehouse", in cooperation with one selected
credit supplier or bank. This system operates as follows:

1. The seed company builds a modern seed storage incorporating all technical aspects for
   maintaining stored seed at high quality. The storage is built as a separate building, with
   limited access; however, it is located so that seed can be moved efficiently into storage
   from conditioning.

2. The seed company hires and maintains on its payroll a "bonded warehouseman", with a
   posted bond to ensure honest operations. The warehouseman is trained in maintaining
   seed in good condition, controlling storage pests, accounting, and commercial
   warehousing procedures. The bonded warehouseman is actually a part of the bank or
   credit agency staff, but his salary and costs are paid by the seed company.

3. When the seed is fully conditioned, it is moved into the bonded warehouse under the
   supervision of the bonded warehouseman. After the seed is sampled, tested, and shown
   to be of high quality, the bonded warehouseman issues a "bonded warehouse receipt"
   to the seed company for that amount of seed. The seed company then takes this bonded
   warehouse receipt to the bank or credit supplier and exchanges it for cash. In effect, the
   seed is now the property of the bank or credit supplier.

4. Before the seed company needs to sell the seed, he goes to the bank/credit supplier and
   "buys back" the amount of seed he needs to sell. Before each sale, the seed company
   buys back the required amount of seed. At the end of the seed sale season, the seed
   company usually must buy back any remaining seed.

This system has provided credit during the period between seed conditioning and seed
marketing. Participating seed companies have arranged most of their operations so they
can pay for their purchases of seed, etc., during this period.

Commonly-used sources of credit for seed producer/supplier companies are shown in
Figure 22.

CREDIT FOR RETAIL SEED DEALERS

Retail seed dealers need credit to maintain their seed inventories. This credit should:

1. Be of low interest rate, so the retailer can supply seed to farmers at lower cost.

2. Span the time from when the retailer must stock seed before planting season begins
   until after planting season, when all seed are sold.

3. Provide full cost of purchasing the seed.

4. Use high-quality seed inventory as collateral.

Credit for retail seed dealers has usually been supplied by local banks or lenders. However,
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retail dealers should be included in a national system of credit for seed supply.

Often-used credit sources for retail seed dealers are shown in Figure 23.

CONSIGNMENT SALES

"Consignment sales" are sales by producers/suppliers to retailers, who takes a shipment or
consignment of seed without paying for it. The retailer then sells all the seed he can and
pays for it. Unsold seed is returned to the producer/supplier.

        ___________________________________________
         Government Banks                           _________
        ___________________________________________
        ___________________________________________
         Commercial Banks                           _________
        ___________________________________________
        ___________________________________________
         Special Government Programs                _________
        ___________________________________________
        ___________________________________________
         Insurance Companies                        _________
        ___________________________________________
        ___________________________________________
         Financial/Savings & Loan Institutions      _________
        ___________________________________________
        ___________________________________________
         Individuals, Private Lenders               _________
        ___________________________________________
        ___________________________________________
         Sale of Shares/Stock, Stockholders         _________
        ___________________________________________
        ___________________________________________
         Other Sources                              _________
        ___________________________________________

                                                          ___________________________
                                                             Seed Producer/Suppliers
                                                          ___________________________

Figure 22. Flow of credit for capital investment and operating capital, from lending agencies
            to seed companies who produce and supply improved seed.

This system, actually a very liberal form of credit to the retailer, has probably caused the
collapse of more seed operations than any other single factor. Its problems include:

1. Most importantly, when the retailer does not have to pay for unsold seed, he is not
   motivated to sell the seed. Thus, in the retailer's sales activities, this seed does not
   receive priority, usually is not actively promoted, and is sold only after other seed is

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   moved.

2. The producer/supplier is stuck with a lot of unsold seed at the end of the planting
   season, when it is too late to try to sell the seed in other places.

3. Often, one retailer will hold excess seed while another retailer needs this seed to meet
   farmer demands. Sales are thus lost when the seed could have been sold.

4. The producer/supplier must produce a much larger amount of seed, thus increasing his
   overall production costs.

5. Seed returned by retailers is usually deteriorating due to unfavorable storage
   conditions, and will be lost. This adds more to the producer/supplier's operating costs.

Seed companies should NEVER make sales on consignment. The only exception to this is
when low-moisture seed are packaged in sealed vaportight bags, and the retailer has a
technically advanced storage and handling system. Under these conditions, seed quality
can be kept high, so there is a possibility of selling the seed the next year.

Instead of consignment sales, the best policy is to sell for cash, with no returned seed, but
provide major help to the retailer in his marketing. This should include:

1. Detailed information on markets, potential sales, and forecasting seed sales.

2. Selling aids, publications, posters, training to dealers and their salesmen, etc., to help
   them sell the seed.

3. Deliver only a reasonable amount of seed to the retailer at the beginning of the planting
   season. Then, contact him regularly, twice a week, and determine his seed needs. Then,
   make overnight deliveries of additional seed to keep him supplied.

4. Explain to the retailer that unsold seed does not add to the retailer's profit, and
   consignment sales have been risky for the supplier, and the policy is not to make
   consignment sales. Instead, the supplier helps in sales promotion and in realistic seed
   delivery and supply, which reduces the risk for the supplier and increases the profits of
   the retailer.

CREDIT SUPPLY BY SEED PRODUCERS AND RETAILERS

Supplying credit is not a part of the business of seed producers and retailers; their business
is producing and supplying seed. Seed firms have no special training and facilities in credit
operations, and cannot collect if the farmer defaults. And, in some areas, farmer default
rates are high. Many otherwise good seed companies in many countries have gone
bankrupt because of the number of farmers who defaulted on repayment of their credit.

Seed producers and retailers should not offer credit, but should be thoroughly familiar with
the credit available. When a farmer asks for credit, they should advise him that they cannot
provide credit, but will go with him to the local credit agency and help him arrange credit
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there.

However, as one exception, seed dealers can offer credit if they are the agency which will
purchase the farmer's crop, provided that there is no other place he could sell his crop to
avoid repayment of the loan. Also, seed producers often offer some forms of credit to
farmer contract growers who have been producing seed for several years and have
established a reputation for good performance.

         ___________________________________________
          Government Banks                           _________
         ___________________________________________
         ___________________________________________
          Commercial Banks                           _________
         ___________________________________________
         ___________________________________________
          Special Government Programs                _________
         ___________________________________________
         ___________________________________________
          Insurance Companies                        _________
         ___________________________________________
         ___________________________________________
          Financial/Savings & Loan Institutions      _________
         ___________________________________________
         ___________________________________________
          Individuals, Private Lenders               _________
         ___________________________________________
         ___________________________________________
          Suppliers, Distributors, Seed Companies    _________
         ___________________________________________
         ___________________________________________
          Other Sources                              _________
         ___________________________________________

                                                          ___________________________
                                                               Retail Seed Dealers
                                                          ___________________________

Figure 23. Flow of credit for seed inventory and sales to retail seed dealers who sell
            improved seed to individual farmers.



GOVERNMENT INVESTMENT PROMOTION

In the overall scheme of social and economic development of a country, there are usually
special priority areas which should be developed and improved. To attract investment in
these areas, Government should establish and maintain special "Investment Promotion
Programs". These programs offer special credit, tax and other incentives to firms or
individuals which invest in a priority area. Seed production and supply is usually a priority

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area. Different activities can be added to or removed from the list of priority areas, as
needed to channel investment into these areas. Government incentives, which are a form
of credit, offered for investment in a priority area often include:

1. Freedom from business and income tax for a specified number of years.

2. Loans at concessional rates or even zero interest to establish facilities and for operating
   capital.

3. Freedom from import duties to import equipment, special supplies, and technical
   assistance.

4. Special rates on government-supplied utilities such as water and electricity.

5. Special prices on land or facilities in specified industrial park areas.

6. Other concessions and benefits.




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                                             13

                                     SEED PRICING


PRICES--TOO HIGH OR TOO LOW?

The farmer must be able to buy high-quality seed at a price he can afford, in terms of the
profit it will make for him through improved crop yield and quality, and lowered
production costs.

At the same time the seed producer/contract grower, the conditioner and seed company,
and wholesale/retail dealers must make a reasonable profit. And for those who still have
doubts, profit is not "sinful"; it is the salary earned by the money, time, effort, risk and
management/operating skills invested by those who own and operate the business.

VALUE TO FARMERS

Farmers have strongly-conceived ideas about what they can or will pay for inputs. For
seed, this is often based on the cost of grain or farmer-saved seed they have been using.
Their ideas about seed prices are not realistic in terms of the costs and price of improved
seed which requires considerably more expense to produce with the required technology.

A major factor in establishing a price for seed is the ability of the seed salesman to point
out to farmers the value of the seed to them, even if its price is higher. Farmers usually are
not trained to calculate the value to them of spending more for a higher-yielding input.

A part of the educational promotion and advertising for improved seed must be education
on what is involved in producing and preparing improved seed. Farmers must be educated
on the costs of putting the extra value in high-quality seed. This is the reason why field
days at seed production fields during roguing seasons, field days at conditioning and
storage plants, etc., are an important part of seed marketing.

Even after demonstrating the extra costs of providing improved seed, the farmer must still
see the value of the seed to the farmer himself. The seed promotion must include field and
plot demonstrations under farmer conditions (NOT conditions of a Government-run
research station! Farmers often do not trust, or relate to, such trials) which show how
much increased yield or improved crop quality and value are produced by the improved
seed. The seed salesman must then be prepared to work with each farmer, and calculate
with him that (1) the improved seed costs X amount as compared to Y amount for low-
quality seed, but (2) yields X amount as compared to Y amount for low-quality seed,
which is (3) and increase in yield of Z amount, which is (4) worth Z amount to the farmer,
who has thus gained Z amount of money from spending X-Y amount more for his seed.

The additional price of the seed must produce an additional profit for the farmer.

As an example of the value of higher-priced seed, let's examine a recent case in America
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involving the extra cost of Bt-gene (genetic resistance to bollworm) cotton seed. At a
planting rate of 10 pounds per acre, the seed cost $30 per acre; the seed treatment
(fungicides and systemic insecticides) cost $48 per acre; the royalty payment to the owner
of the Bt-gene patent was $32 per acre; total cost for seed was $110 per acre for the Bt-
gene seed, as compared to about $60 for other seed which was delinted and treated.

The advantages of the Bt-gene seed and its extra cost were: (1) the seed treatment
fungicide helped ensure a stand without replanting, and the systemic insecticide seed
treatment meant the seedlings were protected from field sucking insects for the first 4
weeks, so the farmer did not have to spray the field; (2) the seed were of high germination
and, with the protection offered by the seed treatment, the farmer could almost plant to a
stand, which eliminated the cost of thinning; (3) the Bt-gene protected the maturing cotton
from bollworm, which meant that the farmer did not have to spray the crop, or at least had
to spray only 2-3 times as compared to a normal 10-20 sprays; and (4) the Bt-variety
yielded some 15% more than older varieties. So, the higher price for seed reduced
production costs and produced more, so it resulted in a significant profit for the farmer.
However, most farmers are not trained to make this kind of calculations; the seed salesman
must be prepared to help them.

WHAT THE PRICE MUST COVER

The selling price of seed must cover the costs involved, and allow a reasonable profit for
the seedsman's investment, management skills, and risk factor. If seed cannot be sold at
such a price, the seed company will fail.

This is one of the reasons why a seed company--when it is first established, and in advance
of each year of its operations--must go to a great deal of effort to prepare (1) a realistic
Business Plan and (2) a realistic marketing plan.

If the seed company is to be successful, the price of seed must include:

1. Fixed costs: cost of buildings, equipment, vehicles, salaries, social costs of staff,
   mortgage and interest payments on loans for capital outlay, etc.

2. Variable costs: the costs of seed production, operating vehicles and equipment,
   electricity, water, seed treatment, seed bags, equipment repair and maintenance,
   interest on loans for operating capital, marketing and promotion costs, distribution
   costs, etc.

3. Dealer discounts: the discount allowed to retail dealers is their income from selling the
   seed; this must be adequate.

4. Cost of unsold or lost seed: while this may be included in variable costs, it is often a
   major cost item because of poor market planning, poor marketing strategies and
   performance, etc. It must be considered as a major item until marketing is good enough
   to keep unsold seed to an absolute minimum. Careful operations and internal quality
   control are also essential to minimize seed lost due to quality problems or damage.

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5. Profit: a reasonable profit must be included in the price. Profit is actually the salary
   earned by the money invested in the seed business, the owner's risk for investing his
   money, and to pay for his management skills. For example, if an investor has money to
   invest and can get 5% return on his money by investing in a seed company, 6% by
   depositing the money in the bank, or 15% by investing in an automobile sales agency,
   which would be his best use of his money?

In a successful seed company, seed prices will cover costs and allow a profit. However, no
matter what the costs are in a specific company, the sale price of seed cannot be set so high
that farmers will not buy the seed. It is essential that the seed company operate very cost-
efficiently, with a very good internal quality control system which helps keep costs low
and losses minimized. If the company can operate at low cost levels, seed prices can be
kept at reasonable levels and still cover costs and leave a profit.

VOLUME OF SALES REQUIRED TO SHOW THE REQUIRED PROFIT

Overhead or fixed costs of buildings, equipment, vehicles, personnel salaries, personnel
social costs, etc., are of a specific amount each year and must be paid whether or not seed
are sold, and regardless of the amount of seed sold. These must be charged to the seed
sold, on a pro rata basis. For example, if 1,000 tons of seed are sold and overhead fixed
cost is $200,000, the overhead cost is $200 per ton of seed sold. On the other hand, if
5,000 tons of seed can be sold, the overhead cost is reduced to $40 per ton of seed sold.
This has a major effect on the price at which seed can be sold, and the profit margin which
can be earned from the seed.

Thus, it is essential to prepare a realistic Business Plan and Marketing Plan to determine
accurately about how much seed can be sold, and at what price. The market price--price
farmers are willing to pay--is still the controlling factor in setting the price of seed. If
overhead costs cannot be covered in the price at which seed can be sold, one solution is to
market more seed.

The Marketing Plan shows how much seed the company can expect to sell, and the going
market price. Taking overhead and other cost items from the Business plan, the financial
management must determine if the seed can be profitably sold, or if the company will lose
money on it.

COST ACCOUNTING

A successful seed company must have a very good Cost Accounting Section. It must help
the operating sections to identify cost items, so costs can be determined realistically. Then,
the Cost Accounting Section must calculate what is the amount of each cost item, and total
costs, which must be charged to each ton or kilogram of seed. This must be done
separately for each kind of seed which has different cost input items. For example, clover
seed have different cost items than wheat seed; some varieties of the same crop may
require more intensive roguing, or different seed treatment, or have different rates of loss
in conditioning. In these cases, a management/marketing decision must be made as to
whether the high cost of one variety can be charged entirely to that variety, or whether it
must be spread over all varieties (which means that other varieties are subsidizing the
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high-cost variety).

The Cost Accounting Section's figures, combined with the Marketing Plan, are also the
means by which the seed company decides (1) to produce seed of a specific crop variety or
(2) not to produce its seed. If only a small amount of the seed can be sold, it may not be
profitable to produce the seed, so it should not be produced. On the other hand, if there is a
small but consistent market for that kind of seed, it may be to the company's advantage to
continue producing it (and spreading the extra cost over other variety seed), so that the
company can provide all a farmer's seed needs. It is essential to be able to provide a farmer
all he needs, to keep him coming back to you for his seed.

A very long list of cost items are involved in producing, harvesting, conditioning, storing,
and marketing seed. Seed companies often overlook some of these cost items, so their cost
figures are not fully accurate. Gregg and van Gastel prepared a guideline to costing seed
operations, which listed most of the cost items by seed operation; the seed company
should do the same thing in its operations, and be sure all cost items are accounted for.

UNSOLD SEED

When the Marketing Plan is weak or is not used to guide production, there may be
significant amounts of unsold seed. Most of this seed will be lost, because it will lose
germination before the next year's planting season and must be discarded. The seed
company has already invested costs in producing this seed, and this cost must be covered
by the income from seed which was sold.

The major cause of unsold seed is either poor market planning to guide production, or
poor sales promotion by retail dealers. Unless management and Market Planning are good,
unsold seed can become a major cost item which significantly reduces profits.

Some unsold seed results because the Production Section must always include more in
their production area than the Marketing Plan indicates is needed. This, however, is
usually a relatively small amount and is a normal part of operations. A typical seed
company with a good Marketing Plan and reliable data on contract growers will produce
an additional 5% to allow for losses and to permit market expansion. Extra production in
an amount determined by local conditions is essential to allow for unexpected low yields,
loss of fields, failure of contract growers to deliver seed, and other reasons why seed
received by the company may not be as much per hectare as it should be. However, unsold
seed and losses of unsold seed must be kept to a minimum.

Some means of reducing the amount of unsold seed and lost seed include:

1. Construct some good carryover storage at the conditioning plant. When each lot is
   conditioned, test it for storability (such as Accelerated Aging Test) as well as for
   germination. Lots with a high storability rating, in the projected excess amount of seed,
   can be immediately moved into the carryover storage. Here it can be stored in good
   condition until the next year's planting season; if it is needed for sales this season, it
   can be taken out of the carryover storage as soon as it is needed.

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2. Have a good Marketing Plan, which gives accurate information to guide the
   Production Section so that it does not over produce any seed kind.

3. Have a good Marketing Section, and effective retail dealers. Work diligently with
   retail dealers and their salesmen, so they are effective and can sell the seed effectively
   to farmer customers. Conduct promotional campaigns to reach and gain more farmer
   customers.

4. Once or twice a week, contact all retail dealers and learn their seed sales, remaining
   stocks, new deliveries needed, seed which is not selling, etc. If one dealer has excess
   stocks of a seed variety while another dealer needs this seed variety, the seed
   company's delivery trucks can pick up the excess seed and transport it to the dealer
   who needs it.

5. Offer bonuses and special awards to retail dealers and to their individual salesmen for
   outstanding sales performance. Common methods include prices or cash (or even
   vacation trips!) for salesmen who sell different amounts of seed, plaques for
   outstanding salesmen and retail dealers, increased discount margins to retail dealers
   who sell larger amounts of seed, etc.

6. Special promotions to dealers and salesmen who sell larger amounts of specific seed
   kinds. This may also include increasing the discount margin to retail dealers for
   specific seed kinds which are in over-supply.

7. Sometimes, farmer price of seed in over-supply can be reduced in order to sell the
   excess seed. However, this is a dangerous practice and must be handled carefully,
   especially in promotion. It must be called "a special sale event to show our
   appreciation to our customers", "special prices to introduce you to our high-quality
   seed", etc. It must never be described, either in promotion or orally by salesmen, as a
   means of selling overstocked seed.

DECIDING TO PRODUCE OR NOT PRODUCE A VARIETY

Almost every year, a management decision must be made to continue or discontinue one
or more seed varieties. This occurs regularly, when the sales level of certain varieties
drops to a point that it may not be cost-effective to continue producing it. Data of the Cost
Accounting Section on per-ton production/conditioning costs, and data of the Marketing
Plan on how much can be sold, provide the basis for these evaluations.

When a variety is clearly not profitable and farmers are shifting to other varieties, the seed
company should drop it from the production and marketing plan. However, if there is an
"old stand-by farmer favorite" which is sold in only small amounts but which is regularly
demanded by some farmer customers, it may be preferable to continue producing the seed
so that those farmers can be kept as customers. The philosophy of the seed company and
its retail dealers must always be "to supply all the farmer's seed needs", to keep him from
going to other seed dealers.

The seed company must often produce and supply such "loss leader" seed varieties.
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Sometimes, however, it may be more cost-effective to buy this seed from another
production company and put it in your bags for re-sale, than to produce the seed.

DEALER DISCOUNTS

The income of the retail dealer is the discount allowed to him on seed from the seed
company. For example, if the farmer sale price is 10 and the retail dealer gets a 10%
discount, the dealer pays the seed company 9, and earns income of 1 for every bag he sells.

Discounts are essential to ensure that the retail dealer has enough income from selling the
seed. If he does not, he will not sell the seed and the seed company not only loses sales,
but may lose the dealer.

A problem in developing seed industries is that the seed companies do not allow sufficient
discount to cover the dealer's costs, risks, and reasonable profit. For example, in one
country the retail dealers were allowed a discount of 5% on seed. This was inadequate, and
the dealers did not put the required effort into selling the seed, so sales were low. The seed
company then went to consignment sales, which resulted in significant costs and losses.
The entire situation could have been corrected or avoided if the seed company had allowed
the retail dealers a higher discount margin, and had helped train and support promotion
and marketing by the retail dealers and their salesmen.

The amount of discount margin used and which is reasonable varies with local conditions
and how well the seed sells. For example, 10-12% is sometimes used for seed which sells
readily without much promotional effort by the retail dealer. For other seed, 20-25%
discount margin may be allowed. In all cases, the seed company must maintain a
promotional campaign in the areas served by the retail dealers, and must provide training
and materials to support the retail dealers and their salesmen.

NEW VARIETIES

When a new variety is released, it is usually accompanied by a major promotional
campaign extolling its advantages. Farmers thus know about the new variety and are
anxious to get seed of it. They are willing to pay a higher price, so seed companies raise
prices to the maximum that the Marketing Section calculates is possible while still selling
all seed.

As time passes and farmers being saving some of their own production for seed, they are
less willing to pay high prices for the seed, so the seed company must begin lowering its
price for this seed one or two years after the variety has been introduced.

This is a normal market phenomenon, and must be allowed for in planning. In fact, seed
companies which have breeding programs and develop their own varieties must plan on
charging high prices for seed in the first and a few subsequent years in order to recover the
costs of breeding and variety development. They know that after a few years, farmers will
not pay such high prices for the seed variety, so seed prices must be reduced accordingly.



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                                               14

                           SEED MARKETING PERSONNEL


Seed are purchased by farmers on the basis of how well the salesman informs them and
how well they trust him, his seed, and his seed dealer or company. To sell seed
successfully, the dealer, company and salesman must be able to hold the farmer's trust and
inform him fully and accurately. Sales staff must always remember: They are working to
sell seed only secondarily; the first priority is to serve the farmer! If this is achieved,
seed will be sold, the seed dealer and company will prosper and remain in business, and
the seed salesman will have a job.

HUMAN RELATIONS ABILITIES

The first requirement in seed selling is to be able to gain the farmer's trust, establish a
personal relationship with him, create empathy with him, and make him feel (and this
must be the fact!) that you are selling seed but if it is not good for the farmer, you will not
sell it to him.

The ability to establish and maintain good human relations with farmers is the first and
most critical requirement of seed marketing personnel. Never "talk down" or act superior
to farmers; always think first of the farmer's interest, and let this show in your relations
with him. Some highly-trained persons have been complete failures in seed marketing,
because their personality left the farmer feeling that the salesman "thought he was better
than me".

This requires an understanding of farmers, farm families, rural and farm conditions, and
other aspects of the farmer's life, needs and potentials. "City boys" can be excellent seed
salesmen, but they must remember that they must deal at a level which the farmer
understands and relates to his personal conditions. The salesman cannot always "act like a
sophisticated city man", although he must be technically trained, competent, and able to
advise the farmer.

The salesman should always dress neatly and cleanly, although he should never dress
ostentatiously. He should use language which farmers understand; never use sophisticated
language or words, and strenuously avoid using dirty or foul language. The salesman
should respect every person's beliefs, social customs, religion, politics, and personal status
and integrity. Never argue with them; focus discussions mostly on their crops and seed
requirements, characteristics and advantages of the seed you are selling. If soccer
(football), fishing, or other popular sport or activity is of great interest to local farmers, be
able to discuss it intelligently with them, but argue about teams only in a friendly way!

Holding this kind of personal relationship with farmers requires extra work and extra time,
such as helping the farmer in other matters, contacting and visiting the farmer to see what
his conditions and needs are, and other matters. For example, a seed salesman may make a
trip out to the farmer's home, to show him and his neighbors a better way of planting the
seed, or how to do a crop production operation better. Selling seed is a full-time job!
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These guidelines apply not only to the salesmen, but also to the dealer, office staff,
warehouse and delivery staff, truck drivers, and all other employees who come in contact
with farmers! All these persons influence the farmer's feeling about the seed dealer and
willingness to come back next year to buy more seed.

The ultimate in human relations abilities is exemplified by Dr. Petcharat Wannapee, now-
retired Director-General of the Department of Agricultural Extension, Bangkok, Thailand.
Although Dr. Wannapee had some 14,000 people working under him, he never forgot that
the program existed to serve farmers. When they were driving down the highway and saw
a farmer plowing his small field with a pair of water buffaloes, Dr. Wannapee would ask
his drive to stop the car. Pulling off his shoes and rolling up his trousers, Dr. Wannapee
would go into the field, talk with the farmer, and take a round or two plowing the water
buffaloes. He would then give the farmer a sample of certified seed, explain their
advantages to the farmer, and discuss the farmer's needs and problems.

HONEST AND SERVICE-ORIENTED

Holding the farmer's trust is a full-time job, and applies to every action or comment of the
seed salesman or dealer. One false step, which makes the farmer feel that he has been
betrayed, will destroy years of effort to hold the farmer's confidence.

The seed salesman, dealer, and all marketing personnel should prepare themselves
thoroughly before the seed sale season begins. Learn crop conditions, variety
characteristics, seed characteristics/prices/availability, market conditions, crop production
requirements, etc. Be able to advise the farmer completely and always honestly. Don't be
afraid to tell the farmer "I don't know precisely, and I don't want to tell you unless I know
for sure." Then add "But, I'll find out and let you know as quickly as I can." Another
important aspect is "Never lie about the seed you or selling, or claim it will do everything.
Know your seed, and be honest enough to say ‘it is not the right one for you’ when that is
the case".

And, most importantly--The seed must always be of high quality and purity, and must
perform as promised. One bad bag of seed, and the farmer customer is lost forever. This is
the reason why it is often said that "the seed contract grower, seed production department,
seed conditioning department and seed storage are some of the best seed salesmen."

TECHNICAL TRAINING AND EXPERIENCE

It cannot be stressed enough that seed salesmen and all marketing personnel must be well-
trained and informed. They must have some technical training in seed technology, and
know what goes into certifying, producing, conditioning and handling pure seed. They
must know local conditions of climate, soils, insect pests and diseases, crop markets, farm
size, farmer income and purchasing ability, and all other factors which affect farmer
operations. They must also be familiar with farmer life styles and habits.

Technical training is essential, in crop production, seed technology, social structure, and
farm operations. As they work, salesmen and marketing personnel should always keep an
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open mind and learn from experience. It has been said that "some people can work for 50
years and get one year's experience 50 times. Other people work for 50 years and get 50
years of experience." Make a strong effort to be one of the latter, and study and learn every
day. One seed salesman had a sign in his office that said "Count that day lost when you
don't learn something new about your seed and customers."

SEED COMPANY MARKETING PERSONNEL

The marketing operations of a seed company fall into two basic categories--planning and
dealer/farmer servicing. All are essential parts of marketing. All persons assigned to
specific tasks must have strong capabilities in that area, as well as good human relations
abilities and personal enthusiasm. In larger companies, different persons are assigned
different tasks; in smaller operations, one or a few persons may handle all or many of these
tasks. General responsibilities include:

1. Market Research and Planning:

    Market analysis
    Market planning
    Advertising and promotion
    Sales analysis
    Forecasting sales
    Production and inventory control
    Production scheduling
    Distribution quotas
    Sales territory establishment

2. General Sales:

    Market study and reporting
    Field sales organization
    Sales offices control
    Customer (dealer and farmer) service
    Forecasting (in cooperation with Market Planning and Research)
    Product (seed kinds) service

All these tasks must be taken care of, in detail and in a timely and realistic manner. The
number of persons involved depends on the size of the seed company and its volume of
operations and ability to hire staff. The critical thing is that these tasks must be done, and
the staff must do a good job while being a strong and enthusiastic part of the overall sales
team and able to work well with dealers and farmers.

RETAIL DEALER MARKETING PERSONNEL

The retail dealer's business is normally not production, but dealing with "the public", his
farmer customers, and selling to them. Retail dealer marketing operations include:

   Receiving, handling and delivering seed
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   Storing seed
   Displaying seed available for sale
   Advertising and promotion
   Record keeping and cost accounting
   Sales and farmer contacts
   Forecasting sales
   Ordering seed from the seed company, and maintaining seed sources and stocks
   Stocking, handling and selling related items (equipment, pesticides, etc.)

Since retail dealers range in size from "a one man show" to large operations, the number of
staff varies widely. However, in some manner and to some degree, the retail dealer must
be able to take care of the above tasks. The completeness with which he handles these
tasks is a major factor in controlling the growth and success of his business.

The seed company can and must provide retail dealers with as much information and
support as possible. The seed company can often provide much of the above tasks as
services; this builds strong ties between the seed company and the retail dealer, and helps
ensure that local farmers continue to buy your seed.

RETAIL SEED SALESMAN

An effective seed salesman must be able to relate the seed to his farmer customer's needs.
To do this, the salesman must have detailed knowledge about the product he sells and the
customers who buy it. The salesman can get formal education in seed/crops/selling, can
take part-time training, and can study on his own while working. Probably the most
important means of learning about his seed and farmer customers is to keep an open mind
and try to learn in daily contacts and operations. At the minimum, he should know:

The Seed

1. Know the characteristics of his varieties and competing varieties/farmer seed, and be
   able to point out differences which are useful to the farmer.

2. Be able to give appropriate and complete advice on fertilizer, weed and pest control,
   crop management and harvest, etc. This must not be "Government recommendations";
   it must be in methods to which the farmer can relate and use

3. Be able to give the farmer other factual information, such as where he can sell his crop,
   present market prices, and what market prices are likely to be after harvest.

4. Know what the characteristics of seed quality and genetic purity are, and how they are
   put into seed, and how they are tested. Be able to explain this to farmer customers in a
   manner which educates the farmers.

5. Be able to explain to farmers how to use germination and purity percentages           to
   calculate pure live seed, to determine field plant populations, and use these         to
   determine how much seed to plant and planting spacing. Be able to explain how         to
   plant to ensure good field emergence, and to use this to minimize the labor cost      of
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   thinning. Also, be able to explain how excessive plant populations in the field can
   sometimes reduce yield. Although you may sell less seed, it will ensure that the farmer
   respects you and will come back.

The Farmer Customers

6. Know something about the farmer's financial ability, ability to spend money, need for
   credit, and other factors. Be able to help him when necessary.

7. Know something about likes, dislikes, prejudices and preferences of local farmers and
   people. Be able to fit your seed--honestly--into his pattern of thinking and acceptance.

8. Know what the farmer's personal conditions are, and help him select varieties and seed
   to fit them.

9. When a farmer customer knows what he wants, don't argue with him. However, if you
   have something which would be better for him, explain it and its advantages to him. A
   world of caution--be sure it is better for the farmer, and will perform as expected!

10. Know your local Agricultural Extension and Research people, and get as much
    information and help as possible from them.

REGULAR TRAINING AND INFORMING

The seed company should regularly conduct intensive training in crop varieties and seed,
and in selling/promotion techniques for seed salesmen at retail outlets. This should be
done before each planting season, and include all possible new information. Training can
be both in formal group sessions at the seed company or at the retail dealer's, as well as in
individual sessions with salesmen.

BACK-UP AND SUPPORT

The seed company must provide complete support to the retail dealer's salesmen. This
includes support in local area promotional campaigns, sales support materials, information
on the seed and varieties, etc. And, most importantly, support must include getting the
seed to the retail outlet so the salesman can sell it when the farmer needs it!

VISITS TO PRODUCTION AND CONDITIONING

At least once a year, all retail salesmen should be taken to the production fields, the seed
conditioning plant, quality control lab, and field demonstration plots. Salesmen should
know and understand what goes into supplying seed, and should have an opportunity to
see the different varieties and seed performing in the field under local conditions.




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                                             15

                             FORECASTING SEED SALES




Considerable lead time is required to produce seed; it cannot be made available within a
short time. The multiplication sequence of Breeder seed to Foundation seed to Registered
seed to Certified seed requires four years minimum time. Normally, the early seed
multiplication generations involve relatively small amounts of seed; Breeder and
Foundation seed are often produced and put into medium-term (several years) storage, as
reserve stocks.

The main seed crop, of the Certified generation, requires one year, or one growing season,
lead time to produce. After it is decided how much seed to produce, the seed production
crop must be planned, planted, harvested, conditioned, and made ready for marketing.

This long lead time makes it critical to know in advance how much seed will be needed to
meet farmer demands and supply retail dealers.

WHY FORECAST SALES?

Unless farmers buy and plant the improved seed which is produced, the investment in the
seed is wasted and the seed producer soon goes bankrupt.

Developing seed programs often have surplus seed, although many farmers still do not use
improved seed. At the same time, production of some seed kinds may be far below the
demand, or the amount that farmers would buy if the seed were easily available to them.

Seed production must be according to demand both confirmed and realistically potential--
as to amount, kind, variety, quality, price time and place. Without the guidance of
adequate market intelligence, production increases disproportionately to what farmers will
buy. Suddenly, seed produces face an artificial surplus situation.

Over-production increases costs due to the cost of carryover and of seed lost due to
deterioration in storage. Under-production is costly to the agricultural economy, since not
all farmers can get improved seed. It is costly to the seed marketing system and the seed
company, because they cannot reliably meet farmers' demands, and the farmers do not
have full confidence and reliance in them.

THE MARKETING PLAN

As described in the Marketing Plan discussion, the chief effort in forecasting sales is in the
Marketing Plan. This is a complete, detailed, in-depth analysis of potential farmer demand
for seed and the conditions affecting it. Marketing Planning is synonymous with careful
and realistic sales forecasting.

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MARKET INTELLIGENCE

For stable, effective and profitable seed supply and seed company operations, production
must be based on reliable market intelligence. When this is done, production matches the
real demand, and the marketing system can constantly create new demand, because
farmers come to rely on the seed supplier.

Market intelligence must include detailed information on (1) what farmers have been
planting, (2) how much seed they have been buying, and (3) what they are willing to buy
and under what conditions. It also includes details on how many farmers there are, where
they are, their ability to purchase, and other in-depth information.

Simply stated, market intelligence means intelligent knowledge of what farmers are using
and what they will buy. The opposite of market intelligence is "market stupidity", in which
seed are produced without really knowing what farmers need and will take.

Market intelligence--reliable information on the seed that farmers can and will purchase--
should include:

1. Total area of each crop cultivated each season, rainfed or irrigated.

2. Relative importance of each crop, both to individual farmers and to the region. This
   must include what farmer income from the crop is, and how this affects how much he
   can spend on producing the crop.

3. Number of farmers growing the crop, the range and average size of crop grown by
   individual farmers, how much farmers will spend to produce the crop, and what their
   income should be from the crop and/or could be improved by better seed.

4. Crop production problems and methods practiced by the target farmers.

5. How much improved seed of higher-yielding varieties is already being used, and who
   sells it at what price. And, how much of the seed is farmer-grown and saved, and what
   is its quality.

6. Farmer preferences for crops and varieties, seed package size and kind, seed quality
   and price. And, how much can farmers be educated or convinced to change.

7. Most effective kinds of publicity and promotion to reach farmers and have an
   influence on their thinking and their choices. What types and intensiveness of
   educational promotion is necessary?

8. Prices, sources and amounts of improved seed likely to be available this season.

9. Weather, market, supply, prices, etc., likely to affect framers' planting plans and use of
   seed.

10. Farmer experience, education, outlook, attitudes, economic status and purchasing
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   power, limitations, problems, willingness to use improved inputs and seed.

11. Improved varieties available which can be produced and sold to farmers, and what
    advantages they offer to the farmer.


SALES FORECASTING

With adequate market intelligence, accurate forecasts of what/how much seed will be sold,
can be made. Accurate sales forecasts are essential. To prevent constant swings from
surplus to shortage, production must be market-oriented and integrated with dynamic
marketing, with both based on adequate and accurate market intelligence.

To forecast sales and produce seed according to what can be sold to farmers, the seed
company/program must know:

1. What seed, crops and varieties should be used by farmers?

2. What is the real and potential demand for seed--what kind, how much, when, by
   whom, where, at what price?

3. What seed crops and varieties should be produced? How much? Where? When? How?
   At what quality? At what cost?

4. To whom can the seed be marketed? Where? How/ How much? In what package size?
   At what price? At what promotion and distribution cost?

Sales or farmer demand forecasts should be used to guide seed production and marketing.
These forecasts should be based on reliable "feedback" of information from farmers
through:

1. Retail seed dealers.
2. Extension programs.
3. Research agencies.
4. Market reports and forecasts.
5. Government targets, reports, etc.
6. Credit and price support programs.
7. Farmer cooperatives, associations, organizations, and all other possible sources.

SOURCES OF INFORMATION

All sources of information, as described in the Marketing Plan, should be utilized to get as
much information as possible on crop conditions, crop markets, farmer needs/purchasing
power/planting intentions, and all factors influencing farmers' purchase of seed.

USING THE FORECASTS PREPARED

Forecasts of seed sales, as described in the Marketing Plan, are the basis on which the seed
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company plans and conducts its work for the year. Forecasts--and the Marketing Plan--are
used to:

1. Plan and conduct the seed production program.

2. Plan harvest, purchase of seed from contract growers, delivering to the conditioning
   plant, and scheduling and conducting seed conditioning.

3. Plan and conduct seed distribution and marketing.

4. Plan and conduct seed company financial operations, including purchase of supplies,
   obtaining operating capital loans, and other arrangements.

ADVANCE ORDERS AND SALES

A good help in planning operations and forecasting sales is to contact farmers and dealers
a year in advance, or before the seed production crop is planted, and take advance orders
and make advance sales. With advance orders, the ordering dealer or farmer makes a cash
deposit of 10-15% of the seed price; with advance sales, the dealer or farmer pays the
entire cost of the seed in advance. With advance sales and orders, the purchaser is
guaranteed delivery of the seed at the time desired, and is also given an additional discount
on the seed price.

Advance seed sales and orders are especially suitable for dealers and farmers when new
varieties will be released, or short supply is expected of seed of particular varieties. For the
seed company, advance sales and orders are a great help in planning production, and
provide an advance source of cash to help finance operations.

CARRYOVER STORAGE

When the seed company can construct safe carryover storage and operate it safely and
cost-effectively, it is quite helpful in smoothing out sales variations due to market swings.
If surplus stocks seem likely early in the conditioning season, lots with best storability test
results can be moved into carryover storage. On the other hand, if last year's surplus is in
safe carryover storage, it can be used to reduce production this year or to meet unexpected
demand this year.

Carryover storage is also used for the normal extra reserve seed produced, and this stock
helps meet unexpected demand.




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                                            16

                                 MARKETING PLAN




MARKETING PLAN--KEY TO SURVIVAL

Whether Government or private sector, a seed program must operate in a businesslike
manner, making a profit or at least not losing or wasting money. In seed supply, risks are
high, costs are high, inputs and technology are intensive, and profit margins are narrow.
To avoid losses and failures, the program must know where it is going and how it will get
there. If it plunges blindfolded into production and operations, it will go bankrupt.

The first and most important management tool is a realistic, practical Marketing Plan.
Every seed company must prepare a realistic annual Business Plan and Financial Plan.
Much of the same data can also be used to prepare the subsidiary--but urgently essential--
Production Plan, Operating Plan, and Marketing Plan.

The Business Plan defines overall what the company will do--technically, operationally
and financially. The Marketing Plan is a realistic analysis of what can be sold,
where/when/ how and for what price. The Production Plan is based on the Marketing Plan,
and is designed to produce efficiently the seed needed to fulfill the Marketing Plan. The
Operational Plan defines how the produced seed will be handled and moved into the
marketing channels.

WHAT THE MARKETING PLAN IS

The Marketing Plan is a detailed, in-depth analysis of what seed that farmers in the target
area need and are likely to buy, when they will buy it, what prices they are likely to be
willing to pay, how the seed can be sold, and what the company's share of total seed sales
is likely to be. On this basis, the Marketing Plan identifies how much of what kind of seed
the company should be able to sell.

HOW THE MARKETING PLAN IS USED

The Marketing Plan is used to:

1. Guide all your operations!

2. Advise the Production Section on what, how much and when to produce Seed.

3. Advise the Conditioning Section to have how much, of what seed, ready to sell by
   what dates.

4. Tell the Management what can be done, what sales can be expected, so a Business
   Plan can be prepared, and management and operations can be aimed at achieving this
   in the most cost-effective and efficient manner.
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5. Tell the Financial Section what seed can be sold at what price--i.e., sales and income
   to expect, so a Financial Plan can be prepared, seed prices established, a budget
   prepared, and the company's operations financed.

6. Tell the Marketing Section what/where/when they need to sell, and how to do it, so
   they can plan and prepare to market the seed.

The Marketing Plan is our operating road map! But--it must allow flexibility, in case we
encounter "detours"

The company's key management effort is the Marketing Plan. It must realistically identify
what the company can sell, how/where/when/to whom it can be sold, and at what price.
This information can then be put into the Production, Operational, Financial and Business
Plans to see if the company can earn a profit, or at least operate cost-effectively, within the
ultimate parameters identified by the marketing plan. The first step is to prepare a detailed
Marketing Plan to get a realistic evaluation of how much seed can be sold.

In brief, the Marketing Plan is used in the following manner:

1. Prepare the Marketing Plan.

2. Prepare a Financial Analysis of the Marketing Plan.

3. Use the Marketing Plan and Financial Analysis to prepare a Business Plan, which
   guides the entire management and operations.

4. Then, prepare:

     A. A budget (or Financial Plan) to show financial needs, uses, sources, etc., required
        to achieve the Business Plan (which is based on the Marketing Plan).
     B. A Production Plan, showing what is required/how to achieve the Business Plan.
     C. A Conditioning Plan, showing what is required/how to achieve the Business Plan
        and permit implementing the Marketing Plan.

WHAT THE MARKETING PLAN SHOWS

The Marketing Plan shows in considerable detail the seed crop and variety kinds that can
be sold, where they can be sold, how much seed can be sold, and details about the sales
and promotion efforts required.

The Marketing Plan shows:

1.   What crops and varieties of seed can be sold.
2.   How much of each can be sold.
3.   Where each can be sold.
4.   How each can be sold (dealers, sales trucks, directly, etc.).
5.   What promotion and sales efforts and costs will be required.
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6. When each seed kind can be sold.
7. What price (approximately) can be charged for each seed kind.

IT'S A LOT OF WORK!

A Marketing Plan (as is a Business Plan, Financial Plan, etc.) requires a lot of research and
effort to develop the necessary information; a lot of effort to analyze the information
obtained; and a lot of careful thought to prepare the Plan. Some people say "I won't make a
Marketing Plan. It's too much work."

These are usually the people who either go bankrupt, or barely earn enough to live. Seed
supply and any other business is risky, and the successful person must plan carefully, and
then follow the plan.


                   Prepare a realistic, accurate Marketing Plan


               Make a realistic Financial Analysis of the Marketing Plan


                                         V
  Prepare a Business Plan, based on the Marketing Plan and its Financial Analysis


                                                      V
                                                   Prepare a Budget (Financial Plan) as
                                                   required to achieve the Business Plan


                                     V
                          Prepare a Conditioning Plan adequate to achieve the
                          Business Plan and Marketing Plan

      V
 Prepare a Production Plan, adequate to achieve
 the Business Plan and the Marketing Plan.


                                         VVV
 Follow these plans (with modifications required as changed conditions are encountered),
 work cost-effectively and time efficiently, supervise and follow-up closely, and manage
            effectively for profitable operations and a program which endures


Figure 24. How the Marketing Plan is used to ensure profitable, efficient operations and to

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           provide good service to farmer customers.
SOURCES OF INFORMATION

All possible sources of information must be fully utilized to ensure that the Marketing
Plan is realistic and accurate. Some useful sources of information are:

1. Profile of the market area: This information must be obtained from many sources. It
   includes total cropped area, production of livestock, rainfed and/or irrigated
   conditions, number of farms, average size of farms, number of farms in each size
   category, markets for farm products, average income of farmers in different size
   categories, off-farm employment, and many other items which affect farming.

2. Farmer surveys: The Marketing personnel and personnel of retail seed dealers should
   make follow-up visits to farmers who purchased seed. These visits, and sales
   promotion visits to farmers who did not purchase your seed, can be used to survey
   farmer intentions for cropping and seed purchase in the coming year.

3. Farmer seed usage and preferences, relative use of purchased or home-grown seed:
   This very important information is often available from Agricultural Extension. If not,
   it can be developed on the basis of calculations of how much seed is planted vs. how
   much was sold by different seed suppliers. Farmer surveys, follow-up visits, and sales
   promotion visits can also be used to develop this information.

4. Distribution and marketing channels available and their effectiveness: First-hand
   knowledge gained by the company's Marketing Department and its retail dealers can be
   used to outline the available marketing channels and how effectively they serve
   farmers.

5. Retail dealers and other seed sales outlets: Existing dealers and outlets used by this
   company, known to work with other seed companies, etc. can be compiled. Visits to
   cities, villages and markets, combined with discussions with your retail dealers and
   their farmer customers, can identify others.

6. Crop production records and plans: Government, Agricultural Extension, etc., agencies
   often have crop production records in varying details. Visits to farmers can also help
   compile this information, along with farmer production plans for the coming year.

7. Previous seed sales: The seed company, and each of its retail dealers, should keep
   detailed records of seed sales. These provide invaluable information to help project
   future sales.

8. Government data, reports and projections on crop production: Many Government
   agencies--research, extension, statistics, credit, crop bureaus, etc.--maintain very useful
   records on crop production and trends. These are usually available to the public.

9. Market information, trends and crop prices: Information on markets and prices for
   crops produced by farmers--which influences their choice of crops and thus their needs
   for seed--can usually be obtained from Government agencies concerned with crop
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   production, marketing, export and import, credit, etc. Many seed companies also have
   contacts with companies and industries handling other commodities, who have
   valuable information they are willing to share.

10. Agricultural Extension and Research personnel and reports: Agricultural Extension
    works closely with farmers, and is often in a position to describe farmer and crop
    conditions. Agricultural Research is usually well-informed on the latest developments,
    trends, and new expectations. These can have a significant impact on seed sales.

11. Crop production conditions, plagues and trends: Seed company Marketing Personnel
    and their retail dealers often have up-to-date information on crop conditions in the
    field, crop disease or insect outbreaks, and trends in crop and variety usage.
    Government agencies and other industries also often have information they are willing
    to share.

12. Variety performance, use trends and new releases: Extension and Research personnel
    usually are the best sources of information on variety performance and use, and on new
    varieties which may soon be released. Retail seed dealers and farm suppliers also often
    have current information.

13. Crop use records and trends, and new user/outlet developments: Information can be
    obtained from Government agencies, Agricultural Extension and Research, industrial
    publications, from farmers by the seed company and retail dealers, local officials, and
    other industries.

14. Other seed suppliers operating in the area, and details of their operations: This
    information can be best obtained from farmers and others who have patronized the
    suppliers.

15. Credit available and farmer willingness to purchase seed: Banks, Government credit
    agencies, lenders, etc., can provide information on credit availability and farmer use.
    Visits to farmers can add further insight.

FINANCIAL ANALYSIS

To implement the Marketing Plan will necessitate the concentrated efforts of the
Production Department, the Conditioning Department, the Quality Control Department,
the Marketing Department, and all supporting Administrative and Financial Departments.
The entire expenditures of the company are aimed at implementing the Marketing Plan.

In addition, the seed sold under the Marketing Plan determine the gross income of the
company. Thus, the Marketing Plan has critical impact on the financial operations and
profitability of the seed company. A careful financial analysis must be made of the
Marketing Plan, to determine if the potential sales can generate the income and profit
required for the company to stay in business. Some of the financial aspects which must be
included in a financial analysis of the Marketing Plan include:

1. Estimated seed production and supply costs: What will it cost to produce, dry,
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   condition, bag, transport and market the seed that the Marketing Plan shows can be
   sold? In addition to direct costs of these operations, this analysis should show costs of
   breeding and research work, overhead costs, and all other costs associated with
   operating the seed company and producing the seed. Finally, this cost should be
   prorated on a per-kg or per-bag cost, and for each different kind of seed. Are there
   possibilities of reducing costs while still maintaining high quality?

2. Analysis of current seed prices and farmer willingness to pay: What prices are farmers
   currently paying for seed, including our seed and other seed which could be used in
   competition with ours? How much could farmers be expected to be convinced to pay?
   Will seed selling price be enough to cover seed supply costs, dealer discounts,
   company overhead and other costs, and still provide a reasonable margin of profit?

3. Cost/price comparison of seed already sold in the market: What is the difference
   between cost and selling price of seed already being sold? Is there an adequate profit
   margin? How does this compare with the cost required to produce our seed? Can we
   still make a profit?

4. Volume and profitability analysis: Prorated on a per-kg or per-bag basis, how much
   seed must we produce and sell to cover our costs and allow a reasonable profit margin?
   Does the Marketing Plan indicate that we can sell that much seed? Or, will we lose
   money? Should we continue in the seed supply business?

FINALIZING THE MARKETING PLAN

The Marketing Plan must include complete information, and spell out details for total
production and for each crop variety. A simplified form of Marketing Plan follows. Under
each section is a very brief description of the information which should be developed in
detail.




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                              MARKETING PLAN



                                       for the

                            19__ - 19__ CROP YEAR




     THE SUCCESSFUL SERVICE-ORIENTED SEED COMPANY




Prepared by

The Marketing Department




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                    The Successful Service-Oriented Seed Company
                               Marketing Department
                                   ______, Manager



Market Research & Planning Section

______, Manager

______, Market Analysis
______, Market Planing
______, Advertising & Promotion
______, Sales Analysis
______, Sales Forecasting
______, Inventory Control
______, Production Scheduling
______, Distribution Quotas
______, Sales Territory & Dealer Establishment


General Sales Section

______, Manager

______, Market Study & Reporting
______, Field Sales Organization
______, Sales Offices Control
______, Customer Service
______, Sales Service Representative
______, Sales Service Representative
______, Sales Service Representative



                             MARKETING PLAN
              THE SUCCESSFUL SERVICE-ORIENTED SEED COMPANY
                           19__ - 19__ CROP YEAR
Introduction
Review of last year's sales, problems and successes; conditions expected this year. Include tables.

Profile of the Market Area
Summarize the total cropped area, amount planted to different crops, size range of farms, number of farmers
in each size category, farm income expected from each hectare of each crop, transport and communications
available, trends in crop production, seed supply competition, etc. Summarize pertinent data in a format
similar to the following.

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_______________________________________________________________________________________
  Crop      Variety       Total   No. of Ave. Ha Ave.Planting Total        Present
                          Area    Farms   Per Farm    Rate     Seed Use  Seed Sources
_______________________________________________________________________________________

_______________________________________________________________________________________

_______________________________________________________________________________________
 (lines extend down entire page)
_______________________________________________________________________________________

Status Review of Crops and Varieties
Trends in production of different crops and varieties, expected production area of different crops and
varieties, expected use of each variety, expected new varieties, expected farmer production and seed demand
for different varieties this year. Include tables; chart farmer use of different crops, varieties and seed over the
past few years to show trends.

Farmer Preferences in Seed
Summary of survey and analysis of farmer purchase of seed, use of home-grown seed, acceptable prices,
desire/acceptance for seed treatment, bag size, etc.

Sources of Seed and Percentage of the Market
Summarize the seed companies selling in the target area, how much seed they sold, and how much farmer-
grown seed is used for each crop. Compare these to total seed used, as a percentage and amount. Emphasize
this company's market share of each crop and variety, and estimate how much this could be increased with a
reasonable and possible increase in marketing effort. Show tables and graphs to summarize the data, and show
trends.

Company Sales Last Year and Sales Trends
Show, for each District or village area, and for each retail outlet, the seed this company sold last year. If seed
have been sold for several years, prepare graphs to show trends. Show this for each crop and variety.

Prices Expected at Which Seed Can/Will be Sold This Year
Describe and compare the company's seed prices last year with prices of other seed suppliers, cost of farmer-
saved seed, and estimated prices farmers are willing to pay. Prepare this for each crop and variety. Establish a
recommended price for seed of each crop and variety.

Dealer and Retail Outlet Performance
Describe the performance of all retail dealers and outlets last year, and list the dealers, outlets and retail sales
methods planned for use this year.

Transport Requirements
Specify the amounts of seed which must be transported to each District or Dealer in each week of the seed
sales season. Identify the transport, back-up vehicles, and storage facilities required.

Marketing Budget
Describe the marketing budget required. List all items with the expected amount required. Include number of
marketing personnel and salaries, operating expenses, promotional and advertising expenses, transport and
delivery expenses, storage and handling expenses, and all other items.

New and/or Discontinued Crop Varieties
Crops and varieties which have been discontinued, and new crops and varieties added to the seed production
list, and reasons why they were added/dropped. For new crop varieties, describe them and their cropping
conditions, and their expected seed market position.

Other Considerations
Other aspects, factors, considerations, etc., which will influence seed marketing.


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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
                                                   111

Marketing and Promotion Strategy and Planned Activities
Describe the marketing activities planned to achieve the marketing targets, what promotional efforts are
planned, retail dealer support efforts planned, etc.

Summary of Marketing Expected and Planned for This Year
Describe in detail amounts of seed expected that the company can sell this year, for each District, retail outlet,
crop and variety. Prepare tables for total sales, each crop/variety, each District, and each retail outlet.

Total Sales

Describe total sales expected. Summarize them in a form similar to the following.
____________________________________________________________________________________
 Crop      Variety         Total Sales Amount of Sales per Districts              Dates Sales Expected
                                                                                  Begin Peak       End
____________________________________________________________________________________

____________________________________________________________________________________

____________________________________________________________________________________
(extend lines down entire page, as required)
____________________________________________________________________________________

Sales by District
Describe sales expected in each District; summarize them as follows.

District _____________________________
____________________________________________________________________________________
 Crop       Variety     Total Sales Amount of Sales in the Following Weeks Comments
____________________________________________________________________________________

____________________________________________________________________________________

____________________________________________________________________________________
(extend lines down page as required)
____________________________________________________________________________________



Sales by Retail Outlet
Describe sales expected by each dealer and other retail outlet; summarize them as follows.

Dealer or Outlet _______________________________________________
____________________________________________________________________________________
 Crop      Variety       Total Sales Amount of Sales in the Following Weeks Comments
____________________________________________________________________________________

____________________________________________________________________________________

____________________________________________________________________________________
(extend lines down page as required)
____________________________________________________________________________________




Sales by Crop Variety
Describe sales expected by each crop variety; summarize them as follows.
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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
                                                112


Crop and Variety ________________________________________________
____________________________________________________________________________________
 District Dealer/Outlet Total Sales Amount of Sales in the Following Weeks Comments
____________________________________________________________________________________

____________________________________________________________________________________

____________________________________________________________________________________
(extend lines down page as required)
____________________________________________________________________________________

Projected Income and Costs
A projection, from the Financial Department, of total cost of producing the planned amount of seed, income
generated, and profit level for the company.

What Other Departments Must Do
A summary of activities of the Production, Conditioning, Quality Control, etc., Departments to achieve the
goals of the Marketing Plan, and the need for them to reduce costs while maintaining high seed quality.

Approval
After detailed discussion with company top officials and managers of Production, Conditioning, Finance,
Personnel and other concerned persons, the Plan should be agreed to by all involved, and then approved by
the company President or General Manager.

_________________________________________________________________________________________



NORMAL RESERVE STOCKS

A seed program cannot exist if it produces excessive amounts of seed, or kinds of seed
which cannot be sold to farmers. There is no benefit to farmers, and no profit to the
program, for seed which is produced and then stays in the storage. However, standard
procedure is to produce around 5% (or a reasonable amount, based on previous
experience) more seed than the initial marketing plan indicates. This allows for unforeseen
replanting, reaching new farmer customers, and other unexpected needs. It must be
emphasized, however, that this amount of extra seed is not seed which is not wanted by
farmers; it is of the kinds of seed which farmers want and are willing to buy, but is over
and above the amount that the marketing plan indicates can be sold.

This allowance is for growth potential and extra sales; it does not replace the extra
production field area planted to compensate for low yields, lost crops, rejected fields and
growers who do not deliver all their seed production.

This amount of extra seed, usually determined by the management, is produced in addition
to the goals in the Marketing Plan.




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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
                                          113



                                            17

        SUPPORT FROM EXTENSION AND GOVERNMENT AGENCIES


Farmer use of improved seed depends directly on the farmer's perception of its value to
him and his family, in direct and immediate benefits. However, Government also has a
stake in the farmers' use of higher-yielding seed. Government is concerned with total
production, feeding urban populations, and foreign exchange earnings from exports. To
ensure achieving Government needs and targets, the Government must take actions which
make it profitable for the farmer, as an individual, to spend his personal money for higher-
yielding seed and to produce more.

GOVERNMENT ACTIONS

To help achieve the adequate food production which Government must ensure,
Government must take active leadership in guiding production and supply of high-yielding
seed, and getting farmers to use it. This does not mean that Government must produce and
supply seed; this has been tried in many countries and has never been completely effective
nor economically efficient. The best role for Government appears to be for the private
sector to produce and supply seed, while Government takes an active role in farmer
education, seed use promotion, social stability and development, and market development.

To encourage general farmer use of high-yielding seed, Government should:

1. Establish a National Seed Policy, with the effect of law. This should specify needs,
   participants, their roles, and Government guarantees and actions.

2. Establish specific credit policies, providing concessional credit rates for investment in
   supplying higher-yielding seed.

3. Guarantee loans to reliable seed suppliers under specified conditions. For operating
   credit, seed stocks should be accepted as collateral.

4. Ensure that credit policies include all financial institutions, and credit supports
   development of the seed industry and private sector.

5. Ensure that farmers can get credit to buy seed from any reliable dealer, and that credit
   is available to all farmers.

6. Support credit with concessions on essential equipment import, taxes, etc.

7. Ensure that all government extension, research and other agencies which deal with
   farmers actively promote and encourage development of the seed industry and farmer
   use of higher-yielding seed.


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                                          114


INVESTMENT PROMOTION

Most national Governments establish programs to encourage investment in specified areas
where development and improvement are considered a national priority. Because of the
importance of high-yielding seed and varieties, supply of improved seed is often a
development priority which receives investment promotion incentives.

Investment promotion incentives are designed to provide special benefits from
investments made in a specific activity. An activity, such as production and supply of
certified seed, may be on the List of Promoted Investments for a relatively long period, for
the time required to help establish stable operations. Incentives offered are reduced costs,
tax exemption, and other concessions which reduce the cost of establishing and operating
a business, and thus improve its profitability and reduce its risk of operating profitably.
Incentives are usually offered equally to domestic and foreign investors.

Some of the investment incentives which are offered include:

1. Freedom from income tax for a specified number of years.

2. Freedom from business, sales and other taxes for a specified number of years.

3. Freedom from import taxes on importing necessary equipment, operating supplies and
   expatriate personnel.

4. Special loans from Government, at low or no interest.

5. Freedom to hire Government personnel, sometimes without the employee losing his
   Government retirement benefits.

6. Government-supplied services, such as electricity and water, at concessional prices.

7. Freedom from taxes on land, buildings, vehicles and other real property used in the
   operations, for a specified number of years.

8. Land for offices/factories in special Government-designated industrial areas, at
   reduced prices or not cost.

9. Guaranteed freedom from competition by Government agencies, such as Government
   seed programs.

10. Assistance from all Government Agencies, such as Agricultural Extension and
    Research.

11. Freedom from taxes, and sometimes subsidies, on exports of seed produced above the
    national requirements or market demands.

12. For foreign investments (either joint ventures or wholly-owned), freedom to repatriate
    earnings without taxation.
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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
                                         115



EXTENSION PROMOTION OF IMPROVED SEED

The goal of agricultural extension is to increase agricultural production and farmer
income. Improved seed is a major part of this increase, and Extension must promote
production of improved seed, and farmer use of improved seed.

To increase crop production by using yield-increasing seed, farmers must understand:

1. What improved seed is.
2. How improved seed directly benefits farmers, personally.
3. How they can get improved seed, and where they can get credit to buy it.

Farmers must understand and accept improved seed not just for one planting season, but as
a continuous practice to use, every planting season of every year. Farmers cannot be
educated to do this by "hard sell" methods. This requires educational promotion, the
approached used by Agricultural Extension to transfer technology to farmers.

All promotion methods used by seed suppliers seek to convince farmers (1) that improved
seed help them, and (2) that they should use improved seed. This is done by extension
educational promotion methodology. Seed suppliers must work closely with Agricultural
Extension to learn their methods.

However, seed suppliers cannot afford--within the costs they can recover by selling seed at
prices farmers will pay--to conduct all the educational promotion. Government
Agricultural Extension must conduct part of this, much of the educational promotion part,
as a public service in the good of the entire nation and to achieve Government objectives.
Working together, Agricultural Extension and seed suppliers can prepare and conduct
promotion to get farmers to used improved seed.

Agricultural Extension itself must be deeply involved in promotion farmer acceptance and
use of higher-yielding seed, as improved seed is a yield-increasing crop production input.
It is a means of reaching Extension's goal of improving farm production and living
standards. Extension should:

1. Emphasize use of higher-yielding seed in all crop-related extension programs.

2. Have seed specialists, who develop and conduct seed promotion and use programs.

3. Have special extension programs to demonstrate, educate and promote farmer use of
   higher-yielding seed.

4. Include use of improved seed in all farmer meetings and extension crop production
   materials.

5. Work with seed producers to help improve quality of seed and cost-efficiency of seed
   production. For example, extension specialists can train farmer contract seed growers.

______________________________________________________________________________________
Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
                                         116


ORGANIZING TO ENCOURAGE GOVERNMENT SUPPORT

Government has many demands for its funds and services, almost always more that it can
satisfy. As one Government official put it, "We can't do everything. The wheel which
squeaks the loudest is to one which gets the grease."


                            Extension Seed
                            Specialists

                                     V
       Extension Agents, Crop Specialists & Local Extension Staff and Workers

                          V
PROMOTE IMPROVED SEED PRODUCTION AND USE BY:

- Seed/crop/variety publications
- Demonstration plots
- Demonstration farms
- Farmer meetings & training courses
- Tours & visits to seed fields & plants
- Regular newspaper & magazine columns
- Regular radio & TV programs
- Posters, signs, etc.
- Seed grower & farmer yield contests
- Fairs
- Individual farmer contacts
- Crop production packages and practices

- Help farmers locate good seed
- Help seed producers/suppliers locate farmers who need good seed
- Help farmer seed growers produce high-quality seed
- Help Certification inspectors check fields & guide farmer contract seed growers
- Help farmers get credit to buy seed and crop inputs
- Help seed growers get credit to produce seed crops
       ______________________
  ----> FARMER SEED USERS
       ______________________
       _____________________________________________________
  ----> SEED PRODUCERS, CONTRACT GROWERS & SUPPLIERS
        _____________________________________________________


Figure 25. Responsibilities of Extension Technology Transfer, Education and Promotion in
            promoting farmer use of improved seed.



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Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997
                                             117


To ensure Government support to seed supply and to this critical aspect of food and crop
production, all seed persons, firms, marketers and dealers should join together to form a Seed
Industry Association. The Association should accept associate members who are not actively
involved in seed supply, but are interested in supporting seed improvement. This can include
farmers, farm input suppliers, and agencies which buy and sell farm products. Acting together
as one group with a common interest, and with an Association to represent a large number of
people, seed suppliers can speak with a louder voice and encourage more and better
Government and Extension support to the supply of improved seed. In addition to
strengthening the seed industry and farmer use of improved seed, this results in increased
national production.




                                        REFERENCES




   Most of the material presented here is taken from personal experience of the authors, and
   from discussions with persons actively engaged in marketing and marketing management
   in the seed industry. It is practical experience compiled in written form for the first time.

   In addition, material from the following sources is included.

   1. Gregg, Bill. 1993. Marketing seed. WANA Seed Network. ICARDA. Aleppo, Syria.
      31 pp.

   2. Gregg, Bill. 1980. Practical seed marketing. 2nd Association of Southeast Asian
      Nations (ASEAN) Seed Technology workshop. Oct. Bangkok, Thailand. 35 pp.

   3. Law, A.G., B.R. Gregg, P.B. Young, and P.R. Chetty. 1971. Seed marketing. National
      Seeds Corp. New Delhi, India. 185 pp.

   4. Wheeler, W.A., and D.D. Hill. 1975. Grassland seeds. D Van Nostrand. Princeton, NJ.
      734 pp.




   ______________________________________________________________________________________
   Managing Seed Marketing. Gregg & van Gastel. 1997         WASDU Publication No. 1, 1997

								
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