The Chinese government is giving domestic seed companies tax breaks, engineering consolidations, and setting up a jerry-rigged system of supplying publicly-funded seed research to private companies to prop up its seed industry. The aim is to stem the dominance of multinational companies in China's seed market and preserve "seed sovereignty."
The official China News Network reported on the seed industry strategy discussed by Ministry of Agriculture officials at a seed industry trade fair in Changsha, Hunan on September 16. In a series of documents issued since 2011, China's State Council has identified the seed industry as a "strategic foundational industry" essential to agricultural development and food security. The Government has issued supportive policies and is preparing a revision of the "seed law" which purportedly promises a "golden age" welcomed by the (Chinese) seed companies.
While China has the second-largest number of seed varieties in the world, its big seed companies are said to have only 0.8 percent of the global seed market. The "loss of quality seed resources" is said to be a serious concern. With multinational companies flooding into the market, the country's "seed sovereignty" is said to be threatened.
The seed companies have been granted a waiver of business taxes said to be valued at 650 million yuan (over US$ 100 million) in 2013. Official policy is to promote mergers and acquisitions to whittle down the vast number of small seed companies. The "threshold" has been raised for staying in the seed industry. The number of seed companies declined 30 percent, from 8700 in 2011 to 5200 now.
The revised seed law seems to envision a melding of public research with private marketing for the seed industry. Most seed breeding is conducted by publicly-funded research institutes. The government plans to increase spending on research while seed companies are described as the main players in commercializing new seed varieties. The government also seems to have a role in seed propagation. Hainan Province has a plan to set aside 50,000 mu of land for seed breeding and propagation.
Relying on public funding of research is more tricky than it sounds because government funds often fail to appear or they appropriated for use by bureaucrats and self-interested institutes to waste on flashy buildings, vehicles, and overseas trips. In a perhaps not-unrelated announcement, authorities are investigating the misappropriation of funds appropriated for research on genetic-modification of crops since 2008. 2-to-3 billion yuan was budgeted annually over that period, but "effective oversight was lacking." Some high-level researchers were in charge of research projects on GM crops while also operating or holding stock in companies. This may be why the seed law is being revised to "clearly separate" research institutes from companies.