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					Seventh Eastern and Southern Africa Regional Maize Conference
11th – 15th February, 2001. pp. 474-479

MARKET STRUCTURE AND CONDUCT OF THE HYBRID MAIZE SEED INDUSTRY, A
     CASE STUDY OF THE TRANS NZOIA DISTRICT IN WESTERN KENYA

                       Elizabeth Nambiro 1, Hugo de Groote2 and Willis Oluoch Kosura 1
             1
              University of Nairobi, Department of Agricultural Economics, PO Box 30197, Nairobi, Kenya.
        2
         International Maize and Wheat Improvement Center (CIMMYT), PO Box 25171-00603, Nairobi, Kenya
                                                2
                                                 corresponding author.


                                                             ABSTRACT

      To understand the organization of the market and assess the degree of competition in maize hybrid seed production and
retailing, the structure and conduct of the market was analyzed in Trans Nzoia District, a major maize producing area in
Western Kenya. The structure of the market was analyzed in four aspects, namely: market concentration, product
differentiation, market integration and conditions for entry in the hybrid maize seed business. The market conduct
considered behaviour and activities of the participants, in particular concerning pricing and promotion. Primary data were
obtained randomly from a random sample of 30 traders, out of a total of 46 who sell hybrid maize seed within the district,
and 30 farmers within the district. Data were collected at the peak of the planting season in the months of February to April
2000. Results show that there is some impact of the liberalization of the seed industry on the distribution side, but it is
minimal on the production side. The major impact in the district is that the previous Kenya Farmers’ Association’s
monopoly of seed distribution has been reduced and that now there are many seed traders in retail. Analysis of the market
structure reveals that several factors favour imperfect competition in the hybrid maize seed marketing at the retail level,
including include unequally distributed shares of transactions among traders, product differentiation, and barriers to entry.
The distribution, with a Gini Coefficient of 0.6 in the district, is categorized as oligopolistic, with 61.67% of the market share
going to the 4 largest firms. Interviews with traders indicate that conditions for competition were lacking mainly due to
barriers to entry such as institutional restrictions and high initial capital. However, traders did not collude among themselves
to decide on prices or control sales volume. On the production side, Kenya Seed Company still provides 96.7% of the hybrid
maize seed sold in Trans Nzoia District, with Pioneer Company providing the remaining 3.3% of the market share, a clear
monopolistic seed production. Farmers showed their preference for the variety H614. They also complained about KSC’s
perceived inefficiency, and lack of purity of their seed. Unfortunately, they have few alternatives since only KSC offers the
late maturing varieties recommended for the moist transitional and highland zones, while the Pioneer variety available
(PHB3253) is of intermediate maturity. Recommendations for the seed industry include improved inspection to improve the
seed quality, increased access to credit for traders to increase entry, and increased competition in the seed production
through encouraging the development of new late maturing varieties, reducing the requirement to release new varieties, and
reducing the import tax on seed.

Keywords: Hybrid maize seed industry, seed companies, liberalization of seed marketing, monopolistic, oligopolistic.


                    INTRODUCTION                                                Kenya shows signs of following this general trend. The
                                                                         seed industry is subject to the "Seeds and Plant Varieties
       The maize industry in Africa is undergoing rapid                  Act" of 1991. Unfortunately, a clearly stated seed policy is
changes. After independence, most governments continued                  still missing (Ochuodho et al., 1999). Formerly, research,
the policies of tight market control that were put in place by           production and distribution was a government monopoly,
colonial governments, in order to protect the farmers and                dominated by public enterprises such as the Kenya
stabilize prices. Over the years, it became clear that the               Agriculture Research Institute (KARI), Kenya Seed
exclusion of market forces and reliance on bureaucracies was             Company (KSC), and the Agricultural Development
not an efficient way to harmonize supply and demand, and                 Corporation (ADC). In 1996, liberalization of the seed
the system became increasingly inefficient. Under pressure               industry was implemented, to improve efficiency in the
from the donor community, many countries liberalized the                 industry and increase seed purity, among other objectives.
food crop marketing as well as the fertilizer market (Byerlee            Experience from other countries has shown that deregulating
and Heisey, 1997). Pressure for liberalization in the seed               the trade of inputs can lead to significant increases in the
industry also led to reforms in this sector. Across countries,           range and quality of inputs available to farmers, which in turn
the maize seed industry development seems to follow a                    raises productivity and income (Gisselquist and Grether,
common path (Morris, Rusike and Smale. 1998). In the early               2000).
stages of the seed industry, only the public sector can make                    The growing size and increased commercialization of
the necessary heavy investment for research, development,                the global maize economy have been accompanied by an
and marketing of seed. However, when the sector expands                  expansion in the industries that provide inputs used in maize
and develops, seed production and distribution becomes                   production especially improved seed, chemical fertilizers,
increasingly interesting for the private sector. In the final            pesticides and machinery.
stages, the private sector can take over increasing parts of the                Over time as the global maize seed industry has
research too.                                                            matured, it has undergone a series of restructuring and


                                                                   474
NAMBIRO ET AL.: MARKET STRUCTURE AND CONDUCT OF THE HYBRID MAIZE SEED INDUSTRY                                                475

organizational changes. The nature and pace of these changes       market structure and conduct. We will test that by studying if
have varied among countries, reflecting differences in stages      new companies have entered the market, if farmers' access to
of development and the structure of production from one            hybrid maize seed has improved, and if their price has
country to the next, as well as differences in the economic,       decreased. The study was limited to the Trans-Nzoia district,
political and institutional climates. The net result has been a    the district with the highest maize production in the country.
global maize seed industry comprising a conglomerate of
different types of national seed industries that vary widely in                MATERIALS AND METHODS
their organization and performance (Morris, 1998 ;CIMMYT
1994).                                                             2.1. Selection of the sample and data collection
       In most industrialized countries, the maize seed
industry is now largely in the hands of the private sector. The           The sampling frame was a list of all 46 hybrid maize
roles of the public institutions like the universities, research   seed retailers from the licensing department of Trans Nzoia
institutes, and extension organizations, which once                district (Figure 1). Of this group, a random sample of 30
dominated maize research and technology transfer activities,       retailers was chosen. Primary data were collected through use
have diminished as private companies have steadily                 of a structured questionnaire, by single visit personal
expanded their sphere of influence to take advantage of profit     interviews. The data included sales volumes for February–
opportunities offered by an increasingly commercialized and        April 2000, by variety. A group of 30 farmers were
input-dependent maize economy (Morris, Rusike and Smale,           randomly selected from a list of farmers in the district;
1998). Public organizations continue to play an important          available at the district agricultural office, Ministry of
role in the technology development and transfer process, but       Agriculture. Data were collected through use of a structured
they do so within an increasingly narrow and specialized           questionnaire, by single visit personal interviews in April
realm. For instance, the focus of publicly funded research has     2000. The data were collected between February and April
shifted towards more basic research. Very few publicly             because this is the peak planting season.
funded maize researchers now operate towards the applied                  Secondary data were obtained from various seed
end of the research spectrum, for example developing and           companies, published and unpublished reports, public
testing finished hybrids because private companies have            libraries, KARI and any past studies carried out were used as
assumed these functions. Many technology transfer activities       sources of secondary information
have also been carried out by the private sector. For instance,           To detect product differentiation in the market, the
today a maize farmer in Europe or the United States is likely      packages offered for sale were listed. In addition, traders
to look first to their input dealer rather than the local          were interviewed to reveal different after sales services they
government extension agent for technical advice on how to          receive from wholesalers. The services traders provided to
manage their crop.                                                 farmers were also recorded. The types of maize seed sold in
       If the steadily growing world maize economy has             terms of kg per packet were examined for retailers. The
provided the impetus for the private sector seed industry to       retailers were asked if the farmers asked for specific
expand, economies of scale in research and seed production         kg/packet of maize seed or if they asked for a specific variety
have contributed to its increasing concentration. The 1980s        of maize seed. The above questions were aimed at finding out
and 1990s have witnessed an unprecedented wave of mergers          the farmers’ awareness of the differentiated products in the
and consolidations during which a large group of                   market.
independent seed companies have been bought out by, or                    Market conduct explains the behavioral characteristics
merged with, larger competitors. In the United States, for         in the market place. Price and promotions are the two
example, although the 7 largest companies currently control        variables which were used to determine the market conduct.
about 70% of the market for maize seed, 300 other                  Traders were asked whether they set prices of hybrid maize
companies also produce and sell maize seed. (Norskog,              seed individually or by colluding with each other, and also if
1995).                                                             they jointly restricted the amount of seed for sale to raise the
       In developing countries, the maize seed industry is         market price. Traders were also asked the type of promotions
more variable in organization and performance (Tripp, 2000).       they carried out to advertise the hybrid maize seed. The
In countries where maize is produced mainly by small-scale,        degree of integration also shows the power of participants in
subsistence–oriented farmers using low levels of purchased         making price decisions. Thus vertical integration may
inputs, private firms have demonstrated an understandable          eliminate price as a coordinator between market levels,
reluctance to enter the market. In these countries, maize          especially when the market is informal or weak. Integration
research, seed production and seed distribution are generally      in the hybrid maize seed market is examined by determining
carried out by public organizations. (Morris, Rusike and           if there are contracts on quantity of seed delivered by seed
Smale, 1998).                                                      companies to wholesalers or by wholesalers to retailers.
       Ndambuki (1998) indicated in his case study that in         Other forms of integration such as extension of credit
seed marketing three closely associated aspects have to be         between traders were assessed.
considered and they were products, customers and the                      Barriers to entry were determined by establishing the
competitors in the seed industry. He failed to elaborate           threshold capital required for starting business. At the same
further on the market structure and conduct of the three           time, sources of the funds and the current operational costs
aspects mentioned above. This gap leads to this study, which       were analyzed to determine both the diversity and ease of
analyzes the market structure and conduct thus clarifying the      access to credit to facilitate entry. The role of Government in
elaborate relationships of the three aspects named above.          licensing, checking quality standards and creating
       The present paper aims to analyze if the deregulation of    bureaucratic laws were analyzed as part of possible barriers
the Kenyan seed industry had the desired effect. We want to        to entry.
test the hypothesis that liberalization resulted in increased             Interviews with 30 farmers were conducted to
competitiveness in hybrid maize seed market, by studying the       determine the popular maize varieties and the problems
476

farmers encounter when using hybrid seed                            dominated by Open Pollinated Varieties (OPV), while maize
                                                                    seed in the high potential areas, including Trans Nzoia, is
                         ANALYSIS                                   almost uniquely hybrid seed.
                                                                           Much of the seed of improved crop varieties has
       The perfect competition market model is often used in        reached farmers through the formal sub-sector, which was
economics as a standard by which structure and conduct of           until recently a government monopoly. Research, production
markets can be compared and evaluated. Large numbers of             and distribution was dominated by public enterprises such as
buyers and sellers, low barrier to entry, product homogeneity       the Kenya Agriculture Research Institute (KARI), Kenya
and complete knowledge of alternative choices on the part of        Seed Company (KSC), the Agricultural Development
producer and consumer characterize the competitive market           Corporation (ADC) and the Kenyan Farmers’ Association
model.                                                              (KFA). Although the Kenya Seed Company has the structure
       Structure influences market performance and conduct.         of a private company, at the time of the study the majority of
Knowledge regarding structure can give indications about            shares in the company (52%) were still owned by the
competitiveness. The variables used to explain market               government, the rest by KFA and private individuals. After
structure are the degree of market concentration, vertical and      liberalization, new companies entered the hybrid seed
horizontal integration, and condition of entry in the market        market, in particular the Oil Crop Development Company
and magnitude of product differentiation. A market                  (OCD), Monsanto, Pioneer, and Western Seed Company.
concentration ratio is a measure of the percentage share of                Seed quality control was previously in the hands of
the market controlled by a specified percentage of firms            KARI, but with the liberalization a regulatory agency, the
ranked in order of market share from the largest to smallest        Kenya Plant Health Inspectorate Service (KEPHIS), was
(Karugia, 1990). High concentration and inequality indicate         established. KEPHIS is responsible for the National
oligopolistic tendencies, while conversely, low concentration       Performance Trials (NPT), in which varieties need to show
suggests tendencies towards competition provided there are          good results before they can be released. After release,
no serious barriers to entry into the market (Bain, 1951,           KEPHIS inspects seed farms and production plants, and
1968).                                                              certifies the seed if the required standards are met.
       To measure market share, the monthly turnover (in kg         Certification of seed is a legal requirement in Kenya.
of maize seed) of each of the 30 retailers was recorded. The
retailers were divided into 5 classes. From the stratification it                      MARKET STRUCTURE
was found which class controls the highest percentage of
transactions. From the above turnover, the Lorenz curves                   Trans-Nzoia produced 232,560 tons of maize in 1998,
were constructed. Also, to assess retailer concentration the        more than any other district in Kenya. It also has the highest
average monthly seed sales of retailers were recorded during        yield, 3.6 t/ha (estimates of the Ministry of Agriculture). The
the survey and sales shares of the first 4 and 8 largest            1999 census counted 575,000 people in Trans-Nzoia district,
retailers in the sample calculated. The Gini Coefficient is a       with a population growth of 2.9 %/year. Extrapolating for
comparative measure of inequality in share distribution that        1998, the maize production was 416 kg/person, also the
is the most commonly used in income distribution studies. It        highest in the country.
has the range 0 to 1 and oligopolistic behaviour increases as              In the district, 46 traders are licensed to sell seed. A
the coefficient approaches 1 while the market becomes most          sample of 30 was selected for the survey. Hybrid maize seed
competitive as the Gini Coefficient tends to 0 (Scheid and          is only a small part of their commercial activities. Most stores
Sutenan, 1979; Andic and Peacock, 1961). If all traders are         are first of all hardware stores or they sell agricultural
divided into k classes by decreasing volumes of seed sales,         inorganic inputs. Average monthly hybrid seed sales for the
the Gini Coefficient R can be expressed as: R= Σik=2 (Pk –1 qk -    study period, February to April 2000, ranged from Kshs.
Pkqk-1) * 1/10,000 where: P = the cumulative percentage of          11,200 (100 kg) to Kshs. 12,096,000 (108 tons). Older firms
traders by class k; k = the order of class of traders; and q =      were generally firms with high turnover, had been in
the cumulative percentage of volume or values of commodity          existence for a long time and had earned consumer loyalty
sold by each group of traders.
                                                                    Table 1. Average monthly value of hybrid maize seed
                         RESULTS                                       transacted by sample retail traders (February-April
                                                                       2000), (organised in six classes according to sales
History of the seed industry in Kenya                                  volume)
                                                                    Average value of                            Total monthly       Class
                                                                                       Number        Class
       In the seed industry, formal and informal sub-sectors           seed sales                                value of seed      % of
                                                                                          of        Relative
                                                                     (Million Kshs                                   sales          total
can be distinguished. The informal sub-sector deals mostly in         per month)a
                                                                                       retailers   frequency
                                                                                                                (Million Kshs)      sales.
farmers' own local seed, which is either saved from own
                                                                         <0.5           11           36.6            1.92             4.0
production, bought from the local market, or obtained seed
from neighbours. In the formal seed sub-sector, on the other            0.5-1.0          7           23.3            4.50             9.4
hand, there is an established and legal process for the                 1.0-1.5          5           16.6            5.82            12.1
movement of seed from research, over seed producer, to the
farmer. The informal seed sector is important in the low                1.5-2.0          2            6.6            3.90             8.1
potential areas at the coast (Wekesa et al., 2003), around              2.0-2.5          1            3.3            2.24             4.7
Lake Victoria (Saylasya et al., 1998) and the dry zones                  > 2.5           4           13.3           29.57            61.7
(Muhammad, 2003). The formal seed sector dominates in the
high potential areas such as the moist transitional (Ouma et             Total          30          100.0           47.95           100.0
al., 2002) and the highlands (Hassan et al., 1998). Improved        a
                                                                     Average retail price of 1 kg of hybrid maize seed = 114 KSh,
seed from the formal sector in the low potential areas is           $US 1 = Ksh 74.
NAMBIRO ET AL.: MARKET STRUCTURE AND CONDUCT OF THE HYBRID MAIZE SEED INDUSTRY                                                477

Figure 2: Lorenz curve for the traders of hybrid maize           control only 10% of sales volume, while the largest 15% lof
   seed in Trans Nzoia                                           traders control 60%.

                                                                            PRODUCT DIFFERENTIATION

                                                                        Nine hybrid maize seed varieties are currently being
                                                                 sold in Trans Nzoia District. Six are varieties of KSC’s late
                                                                 maturity 600 series (H614, H622, H625, H626, H627, H628),
                                                                 two represent KSC's medium maturity series (H511, H512),
                                                                 and one variety is from Pioneer namely PHB3253. The KSC
                                                                 seed is bought straight from the producer, who is based in
                                                                 Kitale, center of Trans-Nzoia, while Freshco Company, a
                                                                 marketing agent of Pioneer seed, distributes PHB3253. The
                                                                 survey showed that 96.7% of the retailers sold seed from the
                                                                 Kenya Seed Company while only 3.3% sold seed from
                                                                 Pioneer Company. KSC does not allow their distributors to
                                                                 sell seed from other companies.
                                                                        The packaging of Kenya Seed Company varieties was
                                                                 in packets of 2kg, 5kg, 10kg, and 25kg. The KSC could
                                                                 occasionally package 50kg on order from an individual
                                                                 consumer. Within a variety the different sizes of packets are
Table 2. Prices of maize seed in Trans-Nzoia, per package        rightly regarded as differentiated product lines. The traders
   and per kg                                                    revealed that 100% of their customers were aware of the
                     price/package           price/kg            various variety types in the market, the size and rang, and
                                                                 buyers often based their choices on these factors. KSC has,
Package size     2     5    10    25    2    5     10    25      however, a strict constant price policy: retailers are required
KSC seed        225 560 1120 2800 113 112         112    112     to sell all seed at the same price, regardless of package, type
Pioneer seed    335 750 1599           168 150    160            (hybrid or open pollinated), or place (centre of the city or
                                                                 rural market).
                                                                        Occasionally some traders provide different after sales
                                                                 services to the farmers. Transport services to the nearest bus
loyalty over time.
                                                                 station were provided by 36.7% of the traders while 3.3% of
                                                                 the traders provide extension services to the customers. The
       To study market concentration, the retail traders were
                                                                 moment product differentiation sets in homogeneity
divided into 6 groups (see Table 1 for specifications), by
                                                                 decreases and so does market competition
segments of 500,000 Ksh (1 $US = Ksh 74, at the time of the
study, February-March 2000). The retail traders have also
been classified into small, medium and large-scale with                           BARRIERS TO ENTRY
arbitrary cut-off levels of hybrid maize seed values.
       Traders with sales of less or equal to Ksh. one million          The retailers frequently mentioned two barriers to entry
per month comprise 60% of the total number of traders            in the hybrid maize seed market retailing system: institutional
sampled, but only have a small market share (13% of the          restrictions and initial capital requirements. The initial capital
total sales). The medium size traders (between 1 and 3           requirement was at least Kshs. 50,000, relatively high
million Ksh per month) comprised 27% of the total traders        compared to the wage rates in the country. 0f the traders
and had a market share of only 24.67% of the total sales. The    interviewed, 60% said that it was difficult to obtain the initial
group of large traders (> 3 million Ksh/month) comprised         capital. Only 6.7% obtained a loan from the bank, 10%
only 13.3% of the total traders but had more than 61% of the     received funding from the cooperatives, and one trader
total market.                                                    obtained initial capital from Pioneer Seed Company. So 80%
       Following Bain's classification (Bain 1951), based on     of the traders relied on savings only for their initial capital.
distribution of sales over the different groups, the Trans       Due to the fairly high initial capital requirement, entry for
Nzoia hybrid maize seed retailing system was judged as           seed sellers is difficult and provides protection to those
being moderately to highly concentrated.                         already established.
       An alternative way of studying the degree of market              The Kenya Seed Company requires retailers to be
concentration is by drawing the Lorenz curve, which depicts      recommended by the divisional agricultural officer. Most
the cumulative distribution of sales against cumulative          seed sellers expressed disgust at the nightmares they had to
distribution of traders (Figure 2. The surface of the area       go through before getting a letter of recommendation from
between the Lorenz curve and the diagonal of the graph (A),      the divisional agricultural officers in the Ministry of
divided by the area under the diagonal (A+B) represents the      Agriculture. KSC then provides the retailer with a licence
Gini coefficient, an indicator of inequality in distribution     card to sell the seed. Unfortunately, the issue of this card can
ranging from 0 to 1 (0 = absolute equality, 1 = complete         take months, sometimes years.
inequality). The Gini coefficient for inequality in market              The regulatory framework requires a traders’ license
shares was found to be 0.63. A Gini Coefficient higher than      from the government, but this is generally issued without any
0.4 can be considered as oligopolistic (Parker and Connor,       problems. The license is issued annually by the municipal
1979) so the retail market for hybrid maize seed in Trans        councilman, and amounts in practice to a tax by the local
Nzoia exhibits clear oligopolistic tendencies. The Lorenz        government. The cost of the license depends on the total sales
curve shows, for example, that the smallest 50% of traders       volume of the trader, including maize seed. In most cases
478

traders start their business without a license, which the           varieties and can easily identify the different varieties in the
municipal council will eventually issue after assessing the         mixed seed. Ninety-six point seven percent of the farmers
sales volume realized. None of the traders limited themselves       admitted that they did not use the new PHB3253 seed
to seed, as they indicated that seed retailing was a seasonal       because it was low yielding and easily rots in storage. The
business and not a reliable source of income during the rest        two main reasons as to why the PHB3253 seed is unable to
of the year.                                                        penetrate the market is that it is a seed for mid-altitude zones
                                                                    and so cannot yield highly in highlands like the H600 series
      INTEGRATION AND CONTRACTUAL                                   produced by the Kenya Seed Company and farmers are aware
              AGREEMENTS                                            of that. Also due to the high import duty imposed on it, it
                                                                    further reflects on the high buying prices and so becomes
      The survey revealed that there is some horizontal             more expensive than the locally produced seed of the Kenya
integration: four of the hybrid maize seed retailers                Seed Company thus raising production costs.
interviewed owned two shops and one had three shops. It
would be difficult to accept the notion that retailers acquired       CONCLUSIONS AND RECOMMENDATIONS
more than one seed shop so as to improve their efficiency.
Since KSC determines the prices, the integrated shops can                   The analysis of market structure reveals that there are
only achieve to increase their turnover and hence the profits.      factors that favour imperfect competition in Trans Nzoia
Vertical integration was depicted by KSC, which acted as a          hybrid maize seed marketing at the retail level. These include
manufacturer, wholesaler and retailer as it contained a seed        unequally distributed shares of transactions among traders,
shop, which sold seed to consumers at retail price. Again, this     the existence of product differentiation and barriers to entry.
integration is not expected to increase efficiency but only to      However, based on the Gini Coefficient of 0.6 the market is
increase the sales volume of the company.                           categorized as oligopolistic. The impact of liberalization
                                                                    intended for the seed industry has so far had minimal impact
                  MARKET CONDUCT                                    on the production side in the seed industry, but some impact
                                                                    on the distribution side. The only impact in the District is that
      Farmers can buy their maize seed directly from KSC,           the monopoly of distribution of the seed initially done by
or from agents, subagents and retailers. The prices differ at       KFA has been reduced and now there are many traders in
the various marketing channel levels, but are all set by KSC.       seed retailing. In spite of the fact that the government
The KSC prices are uniform all over the country and do not          allowed other companies in the seed industry, KSC still has
consider transportation costs. Pricing in any one given year        96.7% of the market share in the District indicating that there
or season is fixed but is reviewed periodically and                 is still a monopoly of seed produced.
determined by seed producing companies. Traders on the                      Some recommendations for the seed industry include
outskirts of Kitale town made minimal profits as                    improved inspection, increased access to credit, and
transportation costs were incurred, further reducing the profit     increased competition. First, KEPHIS should introduce stern
margins. Due to lack of incentives by the traders outside           punishment for the seed companies who give adulterated
town to sell seed, farmers were forced to travel to Kitale to       seed to unsuspecting farmers and ensure that farmers get pure
purchase seed. The effect was that some farmers purchased           seed. Second, the government should facilitate easier access
enough seed for two seasons so as to lower costs of going           to credit so more traders can enter the business. One way is to
back to Kitale to search for seed.                                  encourage micro-finance organizations to offer credit to
      The survey also revealed that since Pioneer 's                traders so that they can expand their businesses. Third,
introduction in Trans Nzoia, it has hardly been able to             competition in the seed production sector should be
penetrate the market, with a share of only 3.3% of sales.           encouraged. Finally, The Kenya Agricultural Research
Pioneer’ seed is more expensive (Table 2), but its major            Institute should develop more late maturing varieties and
problem is that the variety offered (PHB3253), is of                offer them to different seed companies. Barriers to entry for
intermediate maturity, while KSC offers late maturing               importers could be relaxed, in particular the costly mandatory
varieties in their 600 series, which are recommended for the        three year National Performance Trials. Finally, Government
area.                                                               should consider lowering the import tax on seed, as it did for
      Seed promotions are mainly undertaken by Kenya Seed           fertilizer, to make agricultural inputs cheaper to farmers.
Company at places such as the Agriculture Society of Kenya
and Harambee shows, and through the mass media.                                    ACKNOWLEDGEMENTS

Farmers' view of the hybrid maize seed industry                           The authors appreciate the financial support from the
and the seed performance.                                           Syngenta Foundation for Sustainable Development through
                                                                    the Insect Resistant Maize for Africa (IRMA) project, and the
H614 variety was ranked first by almost all the farmers             technical and logistical support from CIMMYT- Nairobi and
followed by H625 and H628. The farmers gave the                     the University of Nairobi. Special thanks go to the traders
advantages of H614 mainly as being: high yielding, disease          and farmers who graciously offered their time for our
and insect resistant, less rotting in fields and during storage,    discussions.
less lodging and finally good tasting. The farmers
complained about the impurity of the seed from Kenya Seed                                 REFERENCES
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when the crop starts tasseling in the field they observe that, it        income, 1947-1957. Journal of the Royal Statistical
was a mixture of different varieties of seed. The farmer is              Society part 2.
well aware of the tasseling characteristics of different
NAMBIRO ET AL.: MARKET STRUCTURE AND CONDUCT OF THE HYBRID MAIZE SEED INDUSTRY                                         479

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