Establishment of Oromia Seed Enterprise (OSE)
The availability and increased use of seeds of improved varieties is spotlighted as a pivotal instrument to attain fast and sustainable agricultural development in the country. The Ethiopian government thus, has identified improving the efficiency of the seed systems as the most effective means of meeting the Millennium Development Goals (MoFED, 2006). A seed marketing study of November 2000 commissioned by the Ethiopian Seed Enterprise (ESE) indicated that the potential size of the certified seed market in the country ranges from 0.75 to 2.3 million quintals per annum. On the other hand, the current size of the penetrated market is about 0.2 million quintals per annum (ESE, 2000). Similarly, other studies carried out by Oromia Agricultural Marketing Agency (OAMA, 2008) and Oromia Bureau of Agriculture and Rural Development (OARDB, 2008) indicated that the seed supply at this time only covered 25% of the total seed demand of the region. These studies clearly indicated the wide gap that exists between seed demand and supply nearly for every crop varieties. These studies results are the main directives for the establishment of Oromia Seed Enterprise (OSE) by the Government of Oromia National Regional State through the Regulation No 108/2008 to fulfill the seed demands and contributing to the overall agricultural development and poverty alleviation strategy of the region. OSE was established to ensure the fast and sustainable economic development through the implementation of agricultural and rural development policy and strategy of the country by the production, processing and supplying improved and market-oriented seeds of food and forage crops to farmers and agro-pastoralist. It is also provides a technical support for strengthening and building the small-scale farmers’ capacity for the production and commercialization of quality seeds in the region.
As public enterprise, the Oromia Seed Enterprise has double responsibilities. It has a mission to fulfill the government obligation as well as operate as commercial entity. The government needs the enterprise to produce large quantity of low-profit self-pollinating crops for strategic purpose to support the extension and food-security programs. As business entity, it has also expected to increase production and sales with the aim of achieving marginal profits in order to sustain within country’s seed industry.
Generally, it is rarely possible to profitably supplying some of the crops required by government for strategic process. For instance, in the 2009/10 production season, the enterprise’s business plan showed that only hybrid maize production showed a positive marginal profit (40.8%) while the others had low or negative. As reality, except hybrid maize, other crops should be produced primarily by heavily subsidized government seed programs. Development oriented formal seed systems can only be sustainable as long as political factors allow subsidies to support a generally loss making exercise (Louwaars, 1995; van Gastel et al., 2002). The very idea of farm subside has never been practiced in Ethiopia and the future in this regard is blink, and poses a threat to seed production, processing, handling and marketing. Therefore, a viable strategy is required to produce and disseminate the required quantity of the strategic crops (self-pollinate, low-margin crops) besides achieving higher profits in order to sustain the enterprise in the seed business.