Using Regulatory Flexibility to Address Market Informality in Seed Systems: A Global Study

The legal and regulatory environment for seed impacts all stakeholders, including those in the informal sector, through shaping who can participate in the market and the quality and diversity of seed available. This paper addresses a gap in the current literature regarding the role of law and regulation in linking the informal and formal seed sectors and creating more inclusive and better governed seed systems. Inclusive seed systems that deliver high-quality seed of new and improved varieties across a range of crops can be catalytic for agricultural transformation, improvements in productivity, and food security. Seed markets and the regulatory enabling environment function as interconnected systems. The term "seed systems" refers to the totality of processes that are part of development, maintenance, production, storage, and diffusion of cultivars. The term "enabling environment" refers to the multi-layered system of policies, laws, regulations, and other measures that govern seed systems and other aspects of agricultural development. Within seed systems, scholars and experts often make an important distinction between "formal seed systems" and "informal seed systems." Formal seed systems tend to include both government regulation and public institutions that govern private industries engaged in scientific plant breeding. In many countries, the formal seed sector centers around registered and certified seed, mainly of hybrid crops, and encompasses activities along the seed value chain carried out by seed companies, distributors, breeders, importers, and exporters. Informal or "farmer" seed systems include small-scale farmers who usually produce and exchange their own varieties, primarily open-pollinated or vegetatively propagated varieties, often for non-commercial purposes. The interface between formal and informal seed systems plays a major role in the introduction, dissemination, and scaling of seed production of new and improved varieties that benefit smallholders at the last mile. Two dynamics are particularly important in considering the connection between informal and formal seed systems and the role of law and regulation at their intersection. First, farmers need increased choices of high-quality crop seeds and planting materials to diversify their portfolios and improve livelihoods. This diversity at the last mile is essential for farmers to absorb and adapt to shocks, thus increasing resiliency. Second, farmers should be able to determine how they wish to operate in the market. Regulatory flexibilities address both dynamics and can be a catalyst for increased farmer choice and agency. These flexibilities can be a catalyst for increased farmer choice and agency. The authors have identified these flexibilities based on an existing methodology and prior work as well as interviews with seed system experts and illustrative country case studies. The goal is to highlight examples of regulatory flexibilities around two key thematic study areas that connect the informal and formal seed sectors: expanding market frontiers so that farmers have enhanced choices and assuring the quality of seeds and planting materials. Regulatory systems often dictate who can sell what seed and in which markets. These aspects are typically governed through measures such as registration of seed dealers and functions, which sometimes include venues. Governments may also restrict the sale of seed to registered entities selling formally certified seed, leaving smaller farmers outside of recognized market channels. These regulatory aspects can limit the ability of farmers to access high-quality seeds and planting materials, thereby reducing their choices and increasing their vulnerability to shocks. The authors evaluate the interplay between formal and informal systems within the agricultural sector in terms of regulatory design and, to the extent possible, implementation. The study focuses on two key dimensions: extending market frontiers and liberalizing seed quality control mechanisms. The authors find that flexible regulatory approaches and practices play a central role in building bridges between formal and informal seed systems, guaranteeing quality seed in the market, and encouraging market entry for high-quality traditional and farmer-preferred varieties.