Public-private partnerships in the development and delivery of crop variety innovations: lessons from the MasAgro consortium for hybrid maize in Mexico

Over the last three decades, public-private partnerships (PPPs) in the Consultative Group on International Agricultural Research (CGIAR) emerged as an alternative for the accelerated development and dissemination of crop variety innovations to farmers in developing countries. For many years, PPPs in seed sector development have attracted and continue to attract investments from developed and developing country governments, CGIAR institutions and donor agencies. A general common assumption when implementing PPPs is that small and medium enterprises (SMEs) have the capacity to produce and distribute high-quality affordable seed to low-income farmers in remote markets. A second general assumption is that competitive high-quality high-yielding seed varieties will make their way to farmers without the need to pay much attention to seed distribution and marketing. However, in today’s highly concentrated maize seed markets, the challenges of delivering innovations developed through PPPs go far beyond the development of superior materials and the production of high-quality seed. This research uses the experience of the MasAgro consortium, a PPP for hybrid maize in Mexico involving the International Maize and Wheat Improvement Centre (CIMMYT) of the CGIAR, the main Mexican public breeding National Agricultural Research Systems (NARS), the Mexican government, and sixty-nine domestic maize seed SMEs to build evidence of the contribution of PPPs to seed sector development and their limitations for bringing affordable quality seed on a large scale to low-income farmers in developing countries. Results show that the MasAgro PPP was very successful in generating a large flow of agronomically competitive maize hybrids and SMEs successfully incorporated these varieties into their product portfolios and into the market. However, MasAgro PPP's success in scaling up the dissemination of these varieties has been limited and MasAgro hybrids achieved a limited share of the market. Two possible reasons for the relatively limited market penetration of MasAgro PPP hybrids were explored: the role of agro-dealers in the promotion of seed and their influence on farmers’ buying decision-making; and whether brand loyalty and high prices signalling quality affect farmers’ willingness to buy new recently released maize hybrids. The review and empirical results show that agro-input retailers may be well placed to influence seed purchasing decisions, but their role is limited by the effect of product quality cues and out-store marketing stimuli influencing farmers' variety choices. The results also indicate that farmers are loyal to the brands of multinational companies, especially Pioneer. Moreover, while a high reference price does not significantly affect a farmer’s perceptions of quality of ii hybrid maize, a reduced price significantly decreases perception of sacrifice. Brand loyalty and perceived sacrifice have a significant negative impact on perceptions of value and therefore on farmers' willingness to buy new unknown hybrids. The research argues that PPPs are an effective means for developing and delivering competitive seed varieties to smallholder farmers in low-and-middle-income countries, and SMEs are willing and able to incorporate these varieties into their product portfolios and into the market. However, product quality cues, out-store marketing stimuli, well-positioned brands with prices signalling quality and farmers' brand preferences in highly concentrated markets represent a barrier for domestic SMEs and PPPs to achieve large-scale dissemination of publicly bred hybrids. The development of competitive high-yielding seed varieties is not enough in itself to disrupt concentrated maize seed markets, capture market shares from global market leaders and promote sufficient competition in the maize seed industry. If PPPs are to succeed in their objective of bringing affordable high-quality seed on a large scale to smallholder farmers in developing countries, there is an urgent need to incorporate a marketing perspective along all steps of the plant breeding and dissemination process, to closely examine market structure and private sector marketing strategies, and to adopt a consumer behaviour lens for understanding farmers’ adoption and buying decision-making. The research makes the first attempt to incorporate marketing and consumer behaviour into the conceptualization of seed systems in developing country contexts. It shows how market structure, private marketing and farmers' behaviour influence their development and growth, and the dissemination of improved seed varieties. While it provides some pioneering insights, further research is essential to advance the development of the adoption and seed systems literature in this direction.