Indian Seed Sector Perspective

in the Covid Crisis

April 19th, 2020

C. Vamsi Krishna
MANAGE 2004-06
National Sales Manager – HM Clause India

Note:
The views & thoughts published & presented here, are purely personal views of the author.
They are based on the sectoral experience and expertise & are not connected with the organization information 1
 Modus Operandi

1 Overview of the situation

2 Lockdown Effects on seed supply chain

3 Key stakeholders pain points

4 Organizational approach

5 Estimated Impact on the states & sectoral business

6 Input firms responsibility

7 Govt. support suggestions

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 Overview of situation - “Optimism with Extreme Caution”

Optimism Caution
Fortunate - basic sector of the  Though “Essential commodities”
economy (Agri-inputs) as essential commodity. lapse at ground level in implementation

Disruption is low comparatively

 Mar to May - very crucial to make
MHA guidelines post April 20th, 2020 seeds ready for monsoon sowing to farmers

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 Lockdown 1.0 – Effects on Seed Supply Chain
Seed Input Supply Chain
Hybrid Seed
R&D Hand off Seed Parent Parent Seed Hybrid Seed Finish &
Field
Parent Seed purity Multiplication Harvest Delivery
Production

 Rabi seed production key for commercial seed sales & majorly reached plant

 Status - Corn(85-90%), Paddy(Just started & Impacted), Hybrid Vegetables (80-90%)

 Cotton, Millet, Wheat - Done

Seed Output Supply Chain

Seed Processing Plant
Farmers Retailers Distributors C&F Warehouse

 Operations at 30-60% of normal capacity in major season

 Primary transport & secondary transport effected

 Post Apr 20th delivery clutter & transport load expected

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 Key stakeholders Pain Points in the Covid crisis

Seed Output Supply Chain

C&F
Farmers Retailers Distributors
Warehouse

 Stuck with Harvest  No cash flow  Dispatches hit

 Produce sales hit  Fixed costs without operations  High transport costs

 Impacted income  Poor Receipt from distributors  Poor receipt of

stocks
 Credit oriented  Dependent on Distributors/Firms
purchase credit period  Dependent on firms
payments

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 Organizational approach – Scenario Based Model
Finance Sales

 Prioritization of payments with cash flow in 3 scenarios  Prioritize placement plan

 Additional cash plan – cost optimization & discipline,  Order generation

Delay Capex expenditure, Bank credits

 Maintain rapport with banks, supply chain  Mobile Connect with key field connects
partners & vendors
Scenario-wise plan  Explore options of space
normalcy expected from –
1) Apr 20th onwards
 Prioritize packing plan 2) May 3rd onwards  Flexible with transport providers
3) June 1st onwards

 Analyse gap in packing plan & outsource  Prioritize on daily basis for locations

 Staff safety to avoid the risk of factory closure  Explore for last mile connectivity of farmers

 Collaborate for vehicles pool-up

Plant Operations Customer Service

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 Estimated Impact on the Indian States

Total Area Under labour intensive field crops –

Agri. Workforce wages range
Paddy, Wheat, Groundnut, Cotton & Sugarcane

Ag. workforce
impacted states –

• AP
• TS
• MH
• MP
• UP

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 Estimated Impact within sectoral business
(Needs to be further analyzed till the sowing months )

Risks
►Vegetables household consumption can result
veg acreage growth
►Can impact sales of PGRs, Micro- Nutrients, specialty
►Herbicides usage might grow pesticides (China dependent raw materials)

►Labor intensive crops – Paddy, Wheat, Cotton,

►Inputs Credit extension oriented firms, dealers Sugarcane, Okra
will influence the farmer purchase
►Transplanted & stalking crops – Tomato, Hot Pepper,
►Leasing of farm implements expected to Okra
increase
►Due to low meat consumption – Corn

►Tractors & farm machinery sales

Opportunities

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 Agri – Input firms responsibilities to farming community

 Last mile connectivity by collaboration

AVAILABILITY  Local authorities connect for pass generation

 Leverage digital tools for farmer connect

DIGITAL
CONNECT  Digitalization of covid safety campaign & product lead generation

 Avoid farmer cluttering during purchase of inputs

SAFETY  Recommend dealers & farmers on hygiene conditions

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 Govt. Support to sector

DBT to farmers
FTO for harvested produce
MSP purchase

Govt. support suggestions to

 Subsidy on farm machinery, irrigation, polyhouse
 Crop insurance implementation
 Seed subsidy scheme

Agri Input Sector  e-NAM auction availability

 Online pass generation with vehicle details

 Tax exemption to Seed firms and distributors

 Stimulus package to ag. input sector

 PPP model for contract farming

 Incentivize the FPOs, SHGs

 Strict vigilance against hoarding of stocks

 District level ag. Dept stocks monitoring

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