Early Generation Sweetpotato Seed Production: Can public sector and national agricultural research institutes shift to a business orientation?

In this blog Margaret McEwan, Senior Project Manager with the International Potato Center (CIP), shares her insights and reflections from discussions during the 7th annual Sweetpotato for Profit and Health Initiative meeting in Addis Ababa, Ethiopia, which took place from 7-8 October 2016.

During this year’s annual Sweetpotato for Profit and Health Initiative (SPHI) meeting in Ethiopia, we held a panel discussion with senior managers of sub-Saharan African institutes engaged in sweetpotato pre-basic seed production. The institutes are part of an effort by the Sweetpotato Action for Security and Health in Africa (SASHA) project and partners to strengthen pre-basic sweetpotato seed programs. The aim is for these programs to be sustained financially by channelling revenue from seed sales back into future seed production.

Here are three fascinating insights I gained from George Momanyi from the Kenya Plant Health Inspection Service (KEPHIS) and Stella Ennin from Crop Research Institute (CRI) Kumasi, Ghana.

  1. There are examples of successful internal revenue generation by national agricultural research institutes (NARIs)

Stella noted that for CRI, commercialization of research results is mandatory, and there is considerable political capital involved. CRI has developed models for short term training targeted at extension staff from NGOs, private sector and farmers. They are also exploring licensing of varieties they have developed and seed multiplication including mango, rubber and pepper.

Panel discussion participants (L-R) Graham Thiele (RTB), George Momanyi, Stella Ennin and Srini Rajendran

Panel discussion participants (L-R) Graham Thiele (RTB), George Momanyi (KEPHIS), Stella Ennin (CRI) and Srini Rajendran (CIP). Photo A. Ndayisenga/CIP

George told us about the Centre for Phytosanitary Excellence (COPE), which advertises and runs courses on a cost recovery basis. KEPHIS also has functions such as inspections, plant health sample analyses and tests for which they can levy charges to raise revenue. The charges for these services are gazetted, however, some of these charges do not make business sense. Therefore the services are not provided as a business, based on a cost-benefit analysis, but are used just to try to raise some revenue.

George highlighted that they have now adopted a business orientation for pre-basic sweetpotato seed production. They have developed a business plan, which they have marketed to management and are in the process of institutionalizing. They discovered that they had exaggerated the cost of producing pre-basic seed, so are carrying out real time data collection, and hope that their pricing will be more realistic and thus more attractive to customers. George explained that they are also working on seed demand estimates, so that their production is aligned to an existing market. George is confident that the business plan is something that will make KEPHIS’ pre-basic seed production successful.

  1. There is flexibility to allow internally generated revenues to be re-invested by the institution in future production activities

There are different options available to them to manage the proceeds from pre-basic seed sales. For example, George explained that it was not necessary to open a separate bank account; instead at his station they opened a sub-ledger specifically for sweetpotato seed sales to be able to clearly track revenue. A management committee provides oversight to approve disbursements related to seed production costs.

Schematic of the sweetpotato seed system. Courtesy SPHI

Schematic of the sweetpotato seed system. Courtesy SPHI

  1. Innovative profit sharing models which provide incentives to staff

At CRI, there is a well-developed profit sharing model. Srini Rajendran, CIP Agricultural Economist, who has been supporting KEPHIS and CRI in real time cost data collection asked Stella to give more details on how this model works.  Stella explained that at the beginning of a project, those involved record their names and their contribution. She said, “we know who brought in the market, mostly it is breeders working in the field. The proportion (share of the profit) is regulated: 10% for the hunters, 30% for the team of workers who did the business, divided according to their percentage contribution, and 60% for institutional costs, which might include electricity and water.” Stella also pointed out that they have realized that some stages in their work flow have to be improved, because some business opportunities generated more profit if they were outsourced rather than implemented by CRI itself.

Finally, in the wrap-up, the panel chair, Graham Thiele, Program Director of the CGIAR Research Program on Roots, Tubers and Bananas (RTB) said that he was encouraged by the progress in using functional business tools, and excited that there is buy in from senior leadership. As Graham said: “the proof of success will be in the revenues generated.”

Read the post on the Sweetpotato Knowledge Portal website