Department of Agricultural, Food, and Resource Economics Food Security Group

Legume seed systems in many developing countries are characterized by low availability of certified seeds because the private sector is often absent, and the public sector has limited capacity to produce such seeds. Farmer seed enterprises (FSEs) are therefore increasingly promoted as alternative suppliers of certified and in some instances, quality declared and truthfully labelled seeds. In this study, we assess the commercial viability of FSEs that produce chickpea and green gram certified seeds by comparing average seed production cost, inclusive of opportunity costs and expected profits, with consumers’ willingness to pay (WTP) price. The cost of seed production data come from a survey of 63 FSEs and the data on WTP are from the Becker, DeGroot, Marschak (BDM) bidding experiments conducted with 512 farmers from the Central Dry Zone of Myanmar. We find that the post-harvest storage cost during the 7–8 months between harvest and the next planting season contributes significantly to the total cost of producing seeds. Forty-seven percent of chickpea farmers and 53% of green gram farmers were willing to pay equal to or higher than the average minimum cost of producing certified seeds. which is as an upper bound estimate of potential market share for FSEs’ certified seeds. This potential customer base of FSEs can be further increased by reducing the cost, especially post-harvest and labor costs. What role government, private companies, and NGOs could play in reducing the cost and increasing the demand for certified seed are important policy research questions discussed in the paper.