Recognizing that grain of inbred crops will be retained by farmers for use as seed if it is possible to do so, the challenge for the seed industry is to convert as much as possible of the unofficially traded seed to certified or labelled seed sales. The factors which affect demand Demand, to the seed seller, is the quantity that buyers are willing and able to purchase at a particular price. This is called effective demand and is not the same as the seed requirement. It is important to distinguish between the amount of seed farmers will actually buy and how much they would like to buy, or indeed how much the government would like them to buy. The total amount of certified or labelled seed sold may be quite a small proportion of the total requirement.
Many factors have to be considered when assessing and forecasting demand.
This will form the basis of sales' forecasting and production planning. The effect of price and farm income on demand In general, 'the higher the price the lower the quantity purchased', especially where there are substitutes available. In addition to price, farm income is the major limiting factor affecting what a farmer will spend on inputs. The farmer will have to balance the cost versus the benefit before being persuaded to spend money on inputs such as seed and fertilizers. Unfortunately, seed is often the one item that the farmer believes it is possible to save money on, even though less is usually spent on seed than on any other input.