This paper reviews case studies on smallholder seed enterprises in Brazil, Côte d'Ivoire and India, as well as relevant world literature in order to identify key issues that facilitate or constrain the development of the seed factor. The final section provides some guidelines on policy design and implementation to promote the development of sustainable seed enterprises at different stages in the evolution of national seed factors. It provides examples of good practices and hence seeks to assist governments in identifying ways in which they can support the development of smallholder seed enterprises that will provide the most appropriate varieties to smallholder farmers in their efforts to boost food production.