17 March 2001

Direct buying plan alarms seed trade

By Gilly Johnson

CHEAPER seed, fast delivery and technical back-up from the specialists who know the most about the variety you are growing. These are persuasive arguments for buying your seed direct from the plant breeder, instead of the seed merchant.

Its good news for growers, perhaps – but an alarming prospect for the seed trade. The company which has set the cat among the pigeons is major British plant breeder, CPB Tywford, with the announcement that certain rape and maize varieties will be offered direct to growers, supplied exclusively from the breeder, in a new company identity as CPB Direct, headed by ex-Cargill seed specialist, Nick Hartwell.

This summer, orders for CPB Twyfords new winter rape hybrid Disco – a disease resistant, fully restored variety with better yields than Gemini or Pronto – will be taken either by phone, or on-line from the companys website; on-line payment is being explored as a future option. There will be enough seed available for 9,000ha, which is standard for a new introduction. Joint managing director Theo Labuda promises 48-hour delivery, comprehensive agronomic support and "a better deal" on price.

"The retail mark-up on hybrid rape seed can be anything from £10-13/ha," says Mr Labuda. Its unlikely that the company would pass on all this potential saving to the grower, because some costs will be incurred through selling direct. But it does open the door to significantly cheaper seed.

As a high value, low volume product, rape seed lends itself to this approach. However, seed from other crops – particularly cereals – would be more difficult to supply direct, because of production logistics. Stressing that this is a "measured entry" into direct selling, Mr Labuda does not rule out extending the CPB Direct crop range for the future; the company has already dabbled by selling some spring wheat seed direct. But he wants to emphasise that this is not a full-frontal attack on the seed trade, which will remain the primary route to the market, particularly for cereals.

CPB Twyford has a wide portfolio of other varieties, and so needs the support of merchants. "Were not expecting a backlash from the trade," says Mr Labuda. "But if it were to happen, then wed have to ride it out." None of the major seed suppliers – Dalgety, Banks Cargill, SCATS and Allied – welcomes the breeders move into direct sales, but they are taking a pragmatic stance.

"We can understand why CPB Twyford has done this," says Tim Hirst of SCATS. "We dont necessarily agree with it, but we will continue to work with the company and will watch the development with interest.

Stiff competition

"Direct selling of varieties would appear to be an answer to CPB Twyfords problem of having varieties that no-one else wants to sell," points out Allied Grain Groups Ian Douglas.

CPB Twyfords Disco will face stiff competition from other hybrid varieties, in particular Royal from Syngenta Seeds, which pips it on yield. No doubt the seed trade would allow itself some secret satisfaction, were Royal to be a runaway success at Discos expense.

Dalgetys Barry Barker downplays the initiative. "We do not see this as anything significant. Our customers tell us they prefer to continue to source their seed through merchant distribution channels, where they can receive specific regular on-farm agronomic advice, and have the freedom to choose from a range of varieties that meet their own performance criteria."

Selling direct is not revolutionary; some other plant breeding companies do deal with farmers. For example, Nickerson UK has retained a 13-strong retail salesforce. The crucial difference is that the Nickerson sales team operates in partnership with distributors, providing technical back-up and sales support. Varieties are not sold exclusively by Nickerson alone.

Syngenta Seeds is exploring other ways of marketing, including on-line ordering, although does not intend to move into direct sales, says Nigel Padbury: "At least for the moment. But well be watching developments; its always interesting to see someone else put their heads over the parapet." A website for rape ordering is under development as www.oilseeds.com; however, seed will be supplied through traditional merchant channels.

Bram van der Have from Advanta Seeds has also been looking at the cost of seed distribution, but stops short at direct sales. "Farming is under economic pressure and so is the seed trade. Weve been forced to consider other distribution systems – for example, shortening the chain, and working in partnerships. But one thing is clear – as a plant breeding company, we cant hunt with the hare and run with the hounds…"