Like many industry segments worldwide, the forage tall fescue seed industry historically has been fragmented. In some countries, consolidation of the forage tall fescue seed industry is diminishing the fragmentation of the industry structure and will shorten the distribution channel from the seed producer to the livestock owner. In a fragmented seed industry, it is difficult to distinguish between the levels in the distribution system because companies may serve multiple roles-seed producer, wholesaler, distributor, and retailer.
Producers may be large specialized companies, or they may be specialized growers who supply seed to other producers, wholesalers, distributors, and retailers. Seed producers have three options for selling their seed: (i) direct sales, where seed is sold directly to forage seed wholesalers, distributors, or retailers at the price of the day; (ii) contracts, in which growers enter into production contracts or forward price contracts to supply seed of a certain specification and quantity on an agreed date; and (iii) brokerage sales, in which growers retain a broker to sell the seed on their behalf.
Wholesalers and distributors are also difficult to delineate because many seed producers and seed production companies are also active in wholesaling and distribution. Seed movement from company to company has created opportunities for brokers, who function as wholesalers without owning product inventory. In some countries, wholesalers have invested substantially in the development and marketing of technologies that add value to forage tall fescue products. The intellectual property laws have provided the opportunity to make adequate financial returns on this investment while bringing the benefits of new technologies to livestock and pasture owners. Retailers include independent retailers, farmer-owned cooperatives, multiple-product dealers, and farmer dealers.
In countries where the forage seed market is immature, improved plant cultivars are developed mainly through public sector research and released to farmers. In countries where the forage seed market is mature, the primary source of new cultivars is from private sector companies. Their involvement is stimulated by well-regulated markets and protection of intellectual property rights via patents or plant variety protection laws. In this case the public sector concentrates on basic breeding and releasing new genetic material.
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