11.1 Forces for Change

In the developing world the declining relative importance of agriculture for economic growth, the increasing education and wealth of smaller populations of rural producers, and the increasing use of externally purchased inputs have changed the nature of publicly funded extension services. This has led to a questioning of the means of delivery of extension services by governments. In developing countries, however, publicly funded extension is considered to be important as the contribution of agriculture to the national economy and employment is still high, but still questions are raised about the structure and forms of extension delivery.

  • Globalization
Coincidental with a shift toward more conservative political ideologies and free-market economics, global developments suggest increased competition in agriculture. While countries will focus more on their comparative advantages, they also in many cases, still face national food security concerns and abject rural poverty.

  • Resource Scarcity for Public Extension

Governments in recent times are less able to continue providing all the services previously provided. With costs rising, limited resources available, and changes in the prevailing philosophy of the appropriate extent of government intervention, governments have been slow to increase appropriations for many publicly funded activities. Some functions of government have been curtailed, and others have been privatized. Such changes have been particularly significant in the formerly centrally managed economies.

 

While the unit cost of extension staff in many countries is low, large staff sizes translate into large government outlays. As a result of financial concerns, many countries have examined alternative structural arrangements, including the feasibility of reducing public sector extension expenditures (with associated staff reductions), changes in tax raising and charges for government extension services, as well as commercialization and privatization. A number of countries have moved towards reducing, recovering, or shifting the burden of the costs associated with provision of public sector agricultural extension, particularly by transferring "private good" functions to private industry.

 

Concerns about the costs of extension need to be judged against the economic and social returns associated with successful extension. While more research is needed on measuring the economic payoff from investment in public sector extension services, available research tends to indicate, in contrast to some current criticisms, that extension in many instances provides high rates of return and is, therefore, a profitable public investment.

In addition, not all extension expenditure can be measured by benefits from technology transfer and the benefits of extension concerned with human development are difficult to quantify in the short term.
  • Strategies for Change

Public sector extension faces criticism for its cost and its lack of efficiency and for not pursuing programmes that foster equity, and is confronted with a number of possibilities for change.

There has been a trend, perceptible throughout various extension systems undergoing adjustment, of greater flexibility and multiple partners in funding agricultural advisory services. The three major policies adopted by government and farm organizations regarding privatization of extension include:

1. Public financing by the taxpayer only for the kinds of services that are of direct concern to the general public

 

2. Direct charging for some individual services with direct return (in the form of improved income)

 

3. Mixed funding shared between public and private professional association contributions for some services where the benefits are shared.

 

A pervading development in new forms of financial support for extension is the trend towards using mixed sources of funding and using strategies aimed at gaining access to additional sources of funding. In several developing countries, public-private extension coordination is already established. Alternative patterns indicate a fostering of private corporate initiatives, encouraging cooperative ventures by farmers, coordinating public-private extension services, and privatizing the public system.

 

The need for improved and expanded extension activities, together with a strengthening philosophical view of less government involvement in national economies, has led to a number of strategies for changing the way extension services are delivered.

  • Commercialization

In some countries agricultural advisory service now operate under user-pay and commercial criteria. The consulting fees received from farmers and contractual arrangements with government for the supply of policy information and rural intelligence to government are the sources of income for the agencies involved in offering the advisory services.

Figure 15: large commercial farm

  • Cost Recovery

Other public extension systems have moved toward cost-recovery approaches. Some countries have developed a fee-based system among large-scale farmers.
  • Voucher Systems

Some countries have replaced public extension delivery systems with vouchers that are distributed by government services for farmers to use in hiring private extension consultants. Coupons attached to agricultural bank loans, committing a certain percentage of the loan for extension services, have also been used.

  • Privatization

Some countries have transferred their public extension service with initial government financial support, to the farmer associations. The elements of the extension service responsible for linking research and the privatized extension services, policy preparation, implementation, promotion and regulatory tasks remain under the aegis of the Ministry of Agriculture. The "privatized" extension service is governed by a board on which farmers' organizations and the government are equally represented.

 

A review of extension services determined that, for government-provided services conferring essentially private benefits to individuals, rather than cost recovery by government fee charging, it is more desirable and more efficient that private advisers deliver such services. However, because of the complexities of extension service delivery and the varying nature and levels of development of different agricultural sectors, a number of constraints were identified which precluded universal application of such a principle.

 

In most cases, governments have not actually "privatized" their agricultural extension services. In its pure sense, privatization implies a full transfer of ownership (usually by way of sale) from government to a private entity, with that entity meeting all costs and receiving any profits. In the case of extension, governments have followed a number of distinct pathways such as commercializing the service while retaining it as a public agency, shifting public sector delivery services to private sector delivery of the service while maintaining oversight and basic funding of delivery, or pursuing cost-recovery measures to pay for the service. Thus the phrase "privatization of agricultural extension" generally is misleading.

 

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This Learning Resource was Created by the Regional MSc AICM Program at the Haramaya University RDAE Department with Support of AgShare Project.