There are VERY LARGE CORPS that do massive scale farming here. These corps receive large subsidies from the government here, mostly because they negotiated freakishly one-sided deals many years ago when the government was a baby and prone to being taken advantage of. These corps get "free and unimproved seeds" from the government and it is important that those policies change so these large corps actually start having to buy their seed and so that they sell quality food to Mozambicans.
I work and spend every day with very poor Mozambicans. They do not buy their seed. By the way, the time frame on that co-operation policy was to do that by November 2012. Again, I am with poor, subsistence farmers in Mozambique every day. They are not buying expensive seeds and being locked into some expensive cycle. They harvest their crops, replant what they can from their crops, purchase from each other the seed they don't have from their own crops.
Also, it's worth noting that the report The Guardian is quoting from has a bullet point RIGHT BELOW the one you bolded and hyped. Here it is: Implement approved regulations governing seed proprietary laws which promote private sector investment in seed production (basic and certified seed).
This is just to point out that the government here is thinking about making sure that proprietary seed DOESN'T lock poor farmers into some expensive cycle. I know it makes for a shocking story to pretend like things are black and white/good and evil but, at least here in Mozambique, there is more than just "ZOMG, THINK OF TEH POOR AFRICANS AND THEIR FARMS!"