In many parts of Africa, shortcomings in agricultural research and extension (R&E) services have contributed to disappointing agricultural results. In turn, funding for R&E continues to decline. How can the best use of available funding be made? Research by Oxford Policy Management argues that the standard of management of existing resources is as important a factor as overall levels of funding. Efficiency savings, better targeting of R&E and use of private finance for particular purposes can boost returns to smallholder farmers.

The study findings, initially published by the Overseas Development Institute and forthcoming as a monograph, probe the economics of R&E, review alternative financing mechanisms for R&E, and suggest specific ways to improve the management of funds. A key conclusion of this study is that research and extension systems in SSA need to be devised from the starting point that they will only be effective, and public funds used cost-effectively, if the public role is defined so as to complement what the private sector can and will fund and deliver.

While acknowledging great variations between African countries, and further recent shrinkage of budgets, the deterioration in R&E funding has not been as widespread or severe as often believed. Neither has Sub-Saharan Africa suffered particularly from this compared with other parts of the developing world. In this context, the way forward is to combine two broad approaches: reducing the scope of state financing, and improving cost-effectiveness.

Towards these goals, clearer priorities for public funding must be set. Alongside such targeting improvements, the privatisation of certain services and the introduction of user contributions, service charges, competitive bids and improved management practices can deliver better services. An analytical framework is provided to guide discussion of financing options and mechanisms by which financing can be shifted towards service beneficiaries. Consideration is also given to enhancing the effectiveness of those services which remain state financed, and to approaches by which service users, including smallholders, can control or at least influence the spending of these funds. A review of international experience is supplemented with case studies which illustrate reform processes in the finance and delivery of agricultural research services in Kenya and Zimbabwe, and of extension services in Chile.

It is made clear that the scope for using alternatives to state funding will be limited where farms are small and poor or where problems of food security are severe. But for other aspects of R&E, a number of positive measures are described and their likely fiscal and practical impacts assessed. General policy implications include the following:

• Public sector resources should be restricted to R&E which enhances the public good: the scope for increased payment by users is probably greater than is generally recognised.
• Financing reforms should concentrate on reallocation within public R&E budgets, rather than reduction.
• The design of public R&E programmes to achieve poverty alleviation or food security goals should be weighed against other possible ways of achieving those aims, which may be partial alternatives.

More specific policy recommendations highlighted in the paper urge that:

• The state should eventually withdraw from most applied research. Public finance should focus on strategic research, particularly those kinds unlikely to attract private finance, such as health, safety and environmental issues
• The state should withdraw from providing commercial extension advice, focusing instead on general advice, mass media broadcasting and extension regarding health, safety and environmental matters
• Prior to such a withdrawal, efforts must be made to create the right framework for the private sector to step into R&E roles no longer covered by state provision
• Greater regional collaboration in research: international agricultural centres have a crucial role to play
• User charges for many R&E services should be increased, aiming toward full cost recovery. Subsidies for the poor might be appropriate but only where alternatives would be less efficient or for reasons of health, safety or environmental security
• Other income-generating activities should be considered, such as the sale or lease of surplus facilities
• Measures to strengthen farmer's associations are needed; government R&E staff should be trained in participatory approaches to needs assessment
• In the short term, flexibility is needed in donor funding to supportchanges.

Source(s):
1. Financing of Agricultural Research and Extension for Smallholder Farmers in Sub-Saharan Africa. ODI Natural Resource Perspectives No.15, November 1996 Full document.
2. Monograph forthcoming: Financing Agricultural Research and Extension - Options for Smallholder Farmers in Sub-Saharan Africa

Funded by: Department for International Development (DFID), UK

id21 Research Highlight: 1998-Apr-17

Further Information:
Stephen Akroyd (Economist)
Oxford Policy Management
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Oxford Policy Management, UK

Other related links:
ODI Natural Resource Perspectives

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