CCPIT Sub-council of Chemical Industry
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Without seeds, no agriculture. More than 60 billion dollars are dedicated to grains and seedlings per year worldwide.
Yet, it is far from making the headlines in the economic press! Who knows that France is the world champion in seed exports? The industry is very dynamic, ready to meet the food and environmental challenges of tomorrow.
The seed market is a strategic sector for agriculture and society
Seeds represent one of the major levers for meeting the three major challenges of tomorrow's agriculture: food production for all, adaptation to climate hazards and respect for the environment. Feeding more than nine billion people in 2050 is a difficult challenge. It is estimated that we will have to produce more over the next 50 years than we have over the last 10,000 years, and this on decreasing agricultural land. Already the available arable land per person has dropped by half since 1961 (source FAO), and the trend is expected to continue.
Expansion of the seed market
Seed companies are fully committed to increase crop productivity, in particular through improved varieties and technological progress. This is reflected in the growth of the sector and the surge in international trade, both in volume and value. In 2020, more than 4 million tons of seeds were traded. And since 2000, the global seed market is estimated to have tripled to nearly $60 billion.
The seed industry is concentrated in the most developed economies. For field seeds, the United States, China and the European Union are the main producers. For exports, France is the world leader, ahead of the United States. In 2020-21, the French seed sector had a turnover of 3.5 billion euros (Semae figures). The trade balance surplus exceeded the one billion euro mark: €1,106 million for 2020-21. One out of two seeds get exported! It should be noted that exports are made from French production or from imports that are processed in France.
The countries of the European Union are the main customers of France (about 70% of the total exports). Germany and Spain are in the lead, the former for maize, rapeseed, beet and sunflower species, the latter for maize and potatoes. Exports are also important to Italy, for corn, oilseeds and cereals. Concerning France's trade with the Netherlands or Denmark, the balance of trade may show a deficit depending on the year, due mainly to imports of vegetable or forage seeds. Compared to other countries, French exports are dynamic. We can note in particular the good performances towards the Western CIS, the Maghreb, the African countries, as well as those of the Near and Middle East. France must nevertheless import certain species, such as corn, sunflower, and some vegetables. The largest suppliers are the United States, Chile, New Zealand and Turkey.
Although the seed trade is flourishing, it is no less complex. Importing and exporting countries can overlap even within the same species category. Hungary, for example, imports maize or sunflower mother seed and exports the resulting hybrid seed. The Netherlands may subcontract the multiplication of forage and vegetable seeds, notably to France, but it does the processing and conditioning itself, for re-export.
France, first European seed producer
The European Union benefits from both a favorable climate and know-how in seed production. The surface area has been increasing steadily over the last few years. France is the leading European producer with nearly 400,000 ha in 2021. This year, seed multiplications have slightly decreased overall, and more significantly for sunflower (-13%) and forage crops (-10%). The Russian-Ukrainian conflict partly explains this decline.
French farmers, attracted by the high prices of cereals or rapeseed, have made certain trade-offs against these less profitable seed productions. There has also been a drop in yields of these crops, due to the abnormally hot and dry weather conditions this summer. Tensions on seed stocks are foreseeable, especially for corn. The heat waves of the summer of 2022 have affected the entire European Union. In Romania and Hungary, respectively the 2nd and 3rd largest producers of corn seed in the EU, yields have been severely impacted. More seriously, Ukrainian production is forecast to be down by 50%. At the end of 2022, the seed industry was mobilized. The French Union of Seed Producers (UFS) called on the government to support the industry in order to maintain its leadership and excellence, which is essential for food sovereignty.
Italy is the second biggest seed producer, among European countries, with 205,500 ha, followed by Germany (195,000 ha). The comparison is not easy, as some countries are specialized in only a few species. In 2022, significant decreases in area were noted due to drought, particularly in Romania, Greece and Slovenia.
The diversity of species applies to France as well as to the world. At the global level, corn represents the most important market (42% of the total), followed by soybeans (20%). The growth of these two crops, both in volume and in value, has been stimulated by GMO varieties. In third place comes rice, driven by demand in Asia-Pacific. Wheat is also one of the most multiplied species.
In France, the main groups of seed species are, in order of importance: corn and sorghum, vegetables and flowers, oilseeds and fibers, cereals and protein crops, forage and turf, beets and chicory.
An increasingly concentrated industry
The seeding sector is becoming increasingly concentrated. Companies are specializing, grouping together to intensify their variety research efforts. There is also a growing integration between the seed and agrochemical activities. On a global level, mega mergers and tie-ups have been taking place recently. In 2015, U.S. groups Dow Chemical and DuPont-Pioneer merged, creating three entities, including one dedicated to agrochemicals, Corteva. In 2017, the Chinese state-owned conglomerate ChemChina took control of the Swiss agrochemical group Syngenta. The deal was one of the largest Chinese acquisitions by a foreign company. In 2018, the American Monsanto, the world's leading seed company was acquired, in turn, by the German Bayer. Currently, barely a dozen groups dominate the market: Bayer, Corteva, Syngenta, Vilmorin, KWS, BASF...
In France, too, the number of companies involved in the breeding business is shrinking year by year: 52 companies in 2021 (compared with 66 in 2011, according to Semae figures), and around 130 research centers. In contrast to the recent consolidation of the global giants, there are still many independent companies in France, some of which are family-owned. In seed production, there are 199 companies in 2021, compared to 253 in 2011. The number of farms exceeds 3,300 and they work on about 55 field crop and forage species and about 40 vegetable species. About 6,800 different varieties are multiplied each year.
Impressive crop research budgets
The intensity of R&D is a distinctive feature of the seed industry. Despite the emergence of new breeding tools, the creation of a variety is a long process, requiring at least eight to ten years of research. In the United States, the total amount of private spending on plant breeding has been steadily increasing since 1960. In the public sector, budgets remain substantial but are increasing less. The Department of Agriculture (USDA) focuses on long-term basic research, such as the development of new breeding techniques. On a global scale, international agencies continue to play a major role in plant breeding for developing countries. The International Rice Research Institute (IRRI) and the International Maize and Wheat Improvement Center (CIMMYT) are presented as key players in the Green Revolution.
In France, firms spend about 11% of their turnover on research. By comparison, according to INSEE, the country devotes barely 2.5% of its GDP to R&D, and according to the Ministry of Research, the pharmaceutical industry's research budget/sales ratio does not exceed 9%. The research activity in France occupies nearly 3,000 jobs, out of the 17,000 in the seed sector. Staff numbers have increased mainly in biotechnology-related positions. We also note that most of the international seed companies in the world have research stations in France. We note that the network of seed multipliers is weakening slightly, but remains at the high level of about 18,000.
Dynamic and efficient plant breeding
The seed sector scrambles, driven by innovation. In the United States, the creation of corn hybrids, followed by the use of transgenesis, in particular for the soybean and corn species, has boosted the sector and accelerated the creation of new varieties. In France, GMOs are prohibited, but plant breeding is nonetheless very active. Thanks to a better knowledge of genomics and the use of molecular markers, progress has been significant. Each year, about 600 new varieties are registered in the French Official Catalogue.
According to FranceAgriMer surveys, for soft wheat, the annual gain in yield potential (between 2005 and 2019) is about 0.5 q/ha. According to the General Association of Corn Producers (AGPM), the trend is the same for corn. For more than 60 years, genetic progress in yield is estimated at 1.2%/ha/year.
Initially, plant breeding focused mainly on yield. This was called the "green revolution". Then improvements were directed towards more qualitative aspects: nutrient content of corn, protein richness of soybeans, baking value of wheat... Today, the "agro-ecological transition" requires the use of so-called "resilient" varieties, which are both resistant to disease and pest attacks and capable of adapting to very contrasting climatic episodes.
The seed industry is ready to take up the challenge of an agriculture that uses fewer inputs. New plant breeding techniques, such as NBT (new breeding technologies), or high-speed phenotyping, are very promising. The decoding of the genome is within reach. Millions of data must now be analyzed to select the right varieties. The breeding profession has entered the "big data" era.
IT at the service of seed innovation
The profession has necessarily had to turn to new tools, such as the RnDExp™ plant breeding software developed by the company Doriane. Just as farmers now use DSTs (decision support tools) - sensors and connected objects, plot management software, aerial and satellite imagery, agricultural robots, etc. - to better manage their farms, breeders can no longer do without software suites for recording observations, statistical analysis, sharing and managing data flows, and comparing and interpreting data. In plant breeding, tools such as Doriane's RnDExp™ have become unavoidable.