This paper outlines proposed research, using concepts of New Institutional Economics, to identify the factors constraining the emergence of a market for domestically produced improved seed potatoes in Mali. It uses the Principal –Agent model to outline how to investigate the feasibility of developing a domestic seed potato industry in Mali by applying the concepts of efficient contract designs and other institutional arrangements. This research will contribute to the literature on: (a) contract and institutional design in the context of asymmetric information and uncertainty typical of agricultural markets in low-income countries and (b) design of improved seed production systems, particularly for clonal crops, in developing countries. The Malian potato sub-sector has expanded rapidly over the past 20 years due to increasing domestic and regional demand. Despite the expansion, the production is constrained by the high cost of seed due to Mali’s total reliance on imported improved potato seeds. Recently, Dr. Bretaudeau and his research team at the school of agriculture at the University of Bamako have used tissue culture techniques to develop locally produced improved virus-free potato mini and micro tubers (potato seed) from the laboratory. In collaboration with researchers, farmers, input traders, and other actors involved in potatoes sub-sector, this research will help me investigate two hypotheses to respond the following question: what are the conditions necessary to go from this lab-based production to a local private-sector potato seed industry that would be competitive with the imported seed potatoes?