Seed Market: To Encourage Innovation, China Updates Seed Law.

To introduce new crop varieties and stimulate more innovation with greater emphasis on developers' rights, china has updated its seed law to make it easier for seed companies.

Among more than 20 crops like rape oil, potatoes and peanuts etc for which new seeds will no longer be subject to lengthy approvals but can be registered directly with authorities, according to the revisions approved by the country's top legislature, the National People's Congress.

The updated law was published on the parliament's website and comes into effect on Jan. 1, 2016. The cumbersome approval process, which requires participation in government-run trials and can take up to four years, remains unchanged for rice, corn, wheat, soybeans and cotton, China's most important commodity crops.

According to the agriculture ministry, China's seed industry is the world's second largest, worth 104 billion yuan ($16 billion) in 2012. Generous government subsidies for farmers' seed purchases has supported rapid development of the sector and attracted investment from multinationals.

Business is tough, so with more than 5,000 companies competing for a share of profits eroded by a thriving trade in counterfeit products and severe overcapacity.

Xinhua quoted parliament head Zhang Dejiang as saying during the debate on the proposed amendments, the revised law will "encourage breeding innovation, safeguard farmers' interests and promote the healthy development of China's seed industry while ensuring food security."

Guolian Securities analyst Wei Zhenya said that Much of China's huge growth in grain output in past years came from heavy use of fertilisers and pesticides but under pressure to better protect the environment, farmers will need to use better seeds for ongoing productivity.

He wrote in a report that the new emphasis on plant variety protection and larger fines for infringement of those rights will encourage more seed companies to invest in new products.

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