China food security: why counterfeit seeds are stalling innovation in the agricultural sector

More than 800 seeds registered with Chinese authorities have been cancelled in the past two years for being copies

The sector is highly fragmented and its track record in commercialising seed innovations is weak, according to experts

Leaning over her market stall piled high with tomatoes, Ling Fen explains to a customer why she is charging a premium for her product.

“This is a variety introduced from the Netherlands. It’s sweeter, softer and juicier,” said the vegetable vendor in central Shanghai.

“You may see sellers in other places also claiming to have such tomatoes, but I can assure you mine are authentic.”

It is unclear how many bogus tomato varieties are doing the rounds in Chinese markets, but Ling’s sales pitch touches on a thorny problem for China’s government, seed companies and farmers.

Stopping the circulation of counterfeit seeds has been a priority for the Ministry of Agriculture and Rural Affairs since 2021, when it launched a “market clean-up” in conjunction with the government’s “seed industry revitalisation plan”.

More than 800 crop seeds registered with authorities have been cancelled in the past two years for being copies of popular breeds, the ministry said in a statement in February.

China’s government is calling for a biotechnology breakthrough in the seed industry to improve food security, an issue that has gained urgency amid worsening ties with the United States and its allies – many of which are important food exporters – and Russia’s invasion of Ukraine.

The sector is highly fragmented and its track record in commercialising seed innovations is weak, according to experts.

China has established a system that grants intellectual property rights to new varieties called New Plant Variety (NPV) rights.

In 2021, the government took a major step by improving protection of NPV rights for breeders through an amended seed law that introduced the concept of Essentially Derived Varieties (EDV), which are deemed lacking innovation.

“There have been calls for innovation and entrepreneurship in nearly every sector in China, and in the seed sector, such calls seem to be more urgent,” said Yuan Jia, an associate professor specialising in intellectual property law from the Law School of Sichuan University.

In a national conference on agriculture at the end of last year, President Xi Jinping called seed breeding one of the two “crucial points” in agricultural production for China, the world’s most populous nation and biggest food importer.

The reality is that a large amount of low-quality and counterfeit seeds dominate the Chinese market, Yuan said, which has influenced agricultural productivity and harmed domestic seed innovation.

“If counterfeit seeds prevail and such a trend is not stopped, then owners of seed technologies get less reward from innovation, which will affect development of the entire sector,” he said.

Shen Ruogang, deputy general manager of Shanghai Wells Seed, said the industry was dominated by thousands of smaller breeders who have not bothered to invest in independent research.

“They would look out for popular varieties, resorting to third or even fourth-hand seeds if they can’t find first or second-hand ones. So you may find 10 different names for one variety in the market,” said Shen, whose company primarily breeds vegetable seeds.

There are more than 7,300 crop seed breeders in China, but only about 100 of them are capable of independent research and development, the state-owned China Newsweek magazine reported last year.

Among them, only 15 have net assets of more than 1 billion yuan (US$145.3 million), Song Weibo, general manager of state-owned China National Seed Group, was quoted as saying.

China’s expansion in the global seed sector was marked by a few high-profile acquisitions years ago, including ChemChina’s purchase of top agricultural chemical producer Syngenta in 2016, and the takeover of Dow Chemical’s corn seed business in Brazil by Citic Agri Fund, which is associated with seed firm Longping High-Tech in 2017.