EUROPEAN-SEED.COM I EUROPEAN SEED I 31 and estimates of the value of the global seed market. However, these statistics are misleading for several reasons. First, esti- mates of the global seed market can vary considerably by source, and some appear to be too low – which gives the impres- sion of higher market concentration. For instance, many estimates focus only on commercial sales but don’t include farm- saved seed, which is especially impor- tant in the developing world. Moreover, because GM seed is more expensive, this approach implicitly overstates the role of firms active in markets where GM seeds are more important – in particular corn and soybean in North and South America. But perhaps most importantly, a global estimate says very little about concentra- tion in a specific seed market: some mar- kets may be more concentrated than the global figure suggests, while others may be less concentrated. To overcome these problems, the OECD study relies on detailed infor- mation from the Kleffmann Group’s amis®AgriGlobe® database. The data- base uses surveys of farmers and distrib- utors, as well as expert input, to estimate market shares of plant breeders for spe- cific crops in specific countries. Data is available for maize, soybeans, wheat and barley, rapeseed, sunflower, potato, sugar beet, and cotton (although the number of country observations varies by crop). In some cases, estimates from other stud- ies were used as well. These data make it possible to measure and compare market concentration at a fine-grained level – for instance for sunflower seed in Hungary or for maize in France – rather than painting with the broad brush of global aggregates. To measure how concentrated a market is, the OECD study uses a stand- ard tool of competition analysis known as the Hirschman-Herfindahl Index (HHI). Most concentrated Least concentrated 1000 2000 3000 4000 5000 HHI Mexico Brazil United States South Africa Uruguay Argentina Paraguay Brazil United States Ukraine South Africa Hungary Bulgaria Ukraine Romania Russia Spain France France Germany Ukraine Poland Denmark South Africa Greece Bulgaria Spain Mexico Brazil United States Argentina Austria Romania Germany France Poland Belarus Denmark Canada France Belarus Bulgaria Germany Romania Ukraine United Kingdom Poland Netherlands Germany Mexico Romania Bulgaria United Kingdom Austria Ukraine Germany Russia Cereals Potato Rapeseed Maize Sugar beet Sunflower Soybean Cotton FIGURE 2: MARKET CONCENTRATION IN SEED MARKETS, 2016 Source: OECD (2018) using the Kleffmann amis®AgriGlobe® database. The HHI is defined as the sum of squared market shares of all firms in the market. For instance, if a single firm has a 100% market share, the HHI would reach its maximum value of 10.000. As another example, if four firms each had 25% of the market, the HHI would be 2.500. Markets with an HHI above 2.500 are typically considered “highly concentrated” by competition authorities. Using this meas- ure, we are able to compare the levels of market concentration in a large number of seed markets as shown in figure 2 (data for some countries is not shown to avoid making the chart hard to read; full data can be found in the OECD study). What is remarkable is the variation in concentration levels across markets. The market for cotton seed in Mexico is extremely concentrated: before the merg- ers, Bayer and Monsanto together held nearly 100% of the market (Bayer has sold its business to BASF). By contrast, market concentration appears to be much lower for some crops such as cereals (which here refers to wheat and barley only) and some countries, especially in Central or Eastern Europe. Interestingly, the data suggests that there are systematic differ- ences between crops. A statistical analysis confirms that seed markets for sugar beet, sunflower and cotton tend to be much more concentrated than seed markets for wheat and barley, for instance. The picture Koen Deconinck, Agricultural Policy Analyst at OECD