A G R I C U LT U R E A N D R U R A L D E V E L O P M E N T 67207 Agricultural Innovation Systems AN INVESTMENT SOURCEBOOK Agricultural Innovation Systems AN INVESTMENT SOURCEBOOK A G R I C U LT U R E A N D R U R A L D E V E L O P M E N T Seventy-five percent of the world’s poor live in rural areas and most are involved in agriculture. In the 21st century, agriculture remains fundamental to economic growth, poverty alleviation, and environmental sus- tainability. The World Bank’s Agriculture and Rural Development publication series presents recent analyses of issues that affect the role of agriculture, including livestock, fisheries, and forestry, as a source of economic development, rural livelihoods, and environmental services. The series is intended for practical application, and we hope that it will serve to inform public discussion, policy formulation, and development planning. Titles in this series: Agribusiness and Innovation Systems in Africa Agricultural Innovation Systems: An Investment Sourcebook Agricultural Land Redistribution: Toward Greater Consensus Agriculture Investment Sourcebook Bioenergy Development: Issues and Impacts for Poverty and Natural Resource Management Building Competitiveness in Africa’s Agriculture: A Guide to Value Chain Concepts and Applications Changing the Face of the Waters: The Promise and Challenge of Sustainable Aquaculture Enhancing Agricultural Innovation: How to Go Beyond the Strengthening of Research Systems Forests Sourcebook: Practical Guidance for Sustaining Forests in Development Cooperation Gender and Governance in Rural Services: Insights from India, Ghana, and Ethiopia Gender in Agriculture Sourcebook The Land Governance Assessment Framework: Identifying and Monitoring Good Practice in the Land Sector Organization and Performance of Cotton Sectors in Africa: Learning from Reform Experience Reforming Agricultural Trade for Developing Countries, Volume 1: Key Issues for a Pro-Development Outcome of the Doha Round Reforming Agricultural Trade for Developing Countries, Volume 2: Quantifying the Impact of Multilateral Trade Reform Rising Global Interest in Farmland: Can It Yield Sustainable and Equitable Benefits? Shaping the Future of Water for Agriculture: A Sourcebook for Investment in Agricultural Water Management The Sunken Billions: The Economic Justification for Fisheries Reform Sustainable Land Management: Challenges, Opportunities, and Trade-Offs Sustainable Land Management Sourcebook Sustaining Forests: A Development Strategy Agricultural Innovation Systems AN INVESTMENT SOURCEBOOK © 2012 International Bank for Reconstruction and Development / International Development Association or The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org 1 2 3 4 15 14 13 12 This volume is a product of the staff of The World Bank with external contributions. The findings, interpretations, and con- clusions expressed in this volume do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denomina- tions, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to the work is given. For permission to reproduce any part of this work for commercial purposes, please send a request with complete infor- mation to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org. ISBN (paper): 978-0-8213-8684-2 ISBN (electronic): 978-0-8213-8944-7 DOI: 10.1596/978-0-8213-8684-2 Library of Congress Cataloging-in-Publication Data Agricultural innovation systems : an investment sourcebook. p. cm. — (Agriculture and rural development) Includes bibliographical references and index. ISBN 978-0-8213-8684-2 — ISBN 978-0-8213-8944-7 (electronic) 1. Agricultural innovations—Economic aspects. 2. Agriculture—Economic aspects. 3. Rural development. I. World Bank. II. Series: Agriculture and rural development series. S494.5.I5A32213 2012 338.1'6—dc23 2011052338 Cover photograph: Anne Wamalwa/CIMMYT Cover design: Critical Stages CONTENTS Acknowledgments xv Abbreviations xvii Sourcebook Overview and User Guide 1 Module 1: Coordination and Collective Action for Agricultural Innovation 15 Overview 15 Thematic Note 1 National Coordination and Governance of Agricultural Innovation 34 Thematic Note 2 How to Build Innovation Networks 44 Thematic Note 3 Facilitating Smallholders’ Access to Modern Marketing Chains 52 Thematic Note 4 Building Innovation Capabilities in Farmer Organizations 59 Innovative Activity Profile 1 No-Till Networks in Developing Countries 70 Innovative Activity Profile 2 Learning Organizations That Support Innovation: Mexico’s Produce Foundations 75 Innovative Activity Profile 3 Chile’s Foundation for Agricultural Innovation 80 Innovative Activity Profile 4 A Rural Institutional Platform Mobilizes Communities to Become Effective Partners in Agricultural Innovation in Andhra Pradesh 84 Innovative Activity Profile 5 In the Networking Age, Cassava Development Relies on Public-Private Research Partnerships 90 Innovative Activity Profile 6 Rural Productive Alliances: A Model for Overcoming Market Barriers 95 Module 2: Agricultural Education and Training to Support Agricultural Innovation Systems 107 Overview 107 Thematic Note 1 Reforming Public Agricultural Education at the Tertiary Level 122 Thematic Note 2 Curriculum Change in Higher Agricultural Education 131 Thematic Note 3 Education and Training for Technician Development 136 Thematic Note 4 Reforming the Management of In-Service Training/Learning 141 Innovative Activity Profile 1 Reforming India’s State Agricultural Universities 145 Innovative Activity Profile 2 Transforming Wageningen Agricultural University 149 Innovative Activity Profile 3 Curriculum Change in Agricultural Universities Strengthens Links in the Arab Republic of Egypt’s Innovation System 151 Innovative Activity Profile 4 Innovative Training Program for Midcareer Agricultural Extension Staff: The Sasakawa Africa Fund Education Program 154 Innovative Activity Profile 5 Chiang Mai University Links with Rural Communities to Focus Research on Farming Problems and Foster Curriculum Change 157 Innovative Activity Profile 6 EARTH University, Costa Rica: A New Kind of Agricultural University 160 Innovative Activity Profile 7 Technical Skills for Export Crop Industries in Uganda and Ethiopia 163 Innovative Activity Profile 8 Agribusiness Training for Secondary School Graduates in Timor-Leste 165 v Innovative Activity Profile 9 Vocational Training in the Arab Republic of Egypt Combines Technical and Innovation Skills for Agriculture 169 Module 3: Investment in Extension and Advisory Services as Part of Agricultural Innovation Systems 179 Overview 179 Thematic Note 1 Pluralistic Extension Systems 194 Thematic Note 2 Farming as a Business and the Need for Local (Agri-) Business Development Services 204 Thematic Note 3 Extension-Plus: New Roles for Extension and Advisory Services 213 Thematic Note 4 The Role of Innovation Brokers in Agricultural Innovation Systems 221 Innovative Activity Profile 1 Agrodealer Development in Developing and Emerging Markets 231 Innovative Activity Profile 2 Federating Farmer Field Schools in Networks for Improved Access to Services 236 Innovative Activity Profile 3 INCAGRO: Developing a Market for Agricultural Innovation Services in Peru 240 Innovative Activity Profile 4 Combining Extension Services with Agricultural Credit: The Experience of BASIX India 246 Module 4: Agricultural Research within an Agricultural Innovation System 261 Overview 261 Thematic Note 1 Designing Agricultural Research Linkages within an AIS Framework 277 Thematic Note 2 Building and Strengthening Public-Private Partnerships in Agricultural Research 289 Thematic Note 3 Regional Research in an Agricultural Innovation System Framework: Bringing Order to Complexity 297 Thematic Note 4 Codesigning Innovations: How Can Research Engage with Multiple Stakeholders? 308 Thematic Note 5 Organizational Change for Learning and Innovation 316 Innovative Activity Profile 1 Redesigning a Livestock Research Institute to Support Livestock Development within an AIS Approach 326 Innovative Activity Profile 2 An Innovative Approach to Agricultural Technology Development and Transfer in India 331 Innovative Activity Profile 3 The Agricultural Technology Consortium Model in Chile 338 Innovative Activity Profile 4 Linking Research and Development Actors through Learning Alliances 344 Module 5: Incentives and Resources for Innovation Partnerships and Business Development 361 Overview 361 Thematic Note 1 Foundations for Public-Private Partnerships 374 Thematic Note 2 Innovation Funds 381 Thematic Note 3 Accelerating the Development of Agribusiness Enterprises by Using Business Incubators 388 Thematic Note 4 Agricultural Clusters 396 Thematic Note 5 Technology Transfer Offices: Facilitating Intellectual Property Protection for Agricultural Innovation 406 Thematic Note 6 Risk Capital for Agriculture in Developing and Middle-Income Countries 414 Innovative Activity Profile 1 Developing Entrepreneurs through an Agribusiness Incubator at ICRISAT 421 Innovative Activity Profile 2 The China Technology Transfer Project 426 Innovative Activity Profile 3 Agricultural Cluster Development in Nicaragua 430 Innovative Activity Profile 4 Providing Farmers with Direct Access to Innovation Funds 435 Module 6: Creating an Enabling Environment for Agricultural Innovation 449 Overview 449 Thematic Note 1 National Innovation Policy 460 Thematic Note 2 Governance of Innovation Systems 469 Thematic Note 3 Managing Intellectual Property to Foster Agricultural Development 480 Thematic Note 4 Biosafety Regulatory Systems in the Context of Agricultural Innovation 492 Thematic Note 5 Technical Regulations and Standards 501 Innovative Activity Profile 1 Developing an Enabling Environment to Improve Zambian Smallholders’ Agribusiness Skills and Commercial Orientation 512 Innovative Activity Profile 2 Intellectual Property Management in Livestock Veterinary Medicines for Developing Countries 516 Innovative Activity Profile 3 Developing a Subregional Approach to Regulating Agricultural Biotechnology in West Africa 522 Innovative Activity Profile 4 The Supply Response to New Sources of Demand for Financial and Other Services in Rural Andhra Pradesh 526 vi CONTENTS Module 7: Assessing, Prioritizing, Monitoring, and Evaluating Agricultural Innovation Systems 539 Overview 539 Thematic Note 1 Assessing Innovation for Prioritizing Investments 546 Thematic Note 2 Methods for Organizational Assessments in Agricultural Innovation Systems 553 Thematic Note 3 Foresighting Investments in Agricultural Innovation 562 Thematic Note 4 Monitoring Agricultural Innovation System Interventions 569 Thematic Note 5 Evaluating Agricultural Innovation System Interventions 580 Innovative Activity Profile 1 Self-Organizing Networks in Policy and Planning: Experience from Sierra Leone’s Partnership for Agricultural Innovation and Development 589 Innovative Activity Profile 2 Using Net-Map to Assess and Improve Agricultural Innovation Systems 593 Innovative Activity Profile 3 Gender Analysis for the Assessment of Innovation Processes: The Case of Papa Andina in Peru 598 Innovative Activity Profile 4 Scenario Planning to Guide Long-Term Investments in Agricultural Science and Technology in India 603 Innovative Activity Profile 5 A Vision for Agriculture in Chile in 2030 and the Implications for Its Innovation System 607 Innovative Activity Profile 6 Monitoring and Evaluation in the Fodder Innovation Project 610 Innovative Activity Profile 7 Monitoring and Evaluation in the Research Into Use Program 614 Glossary 629 Authors and Their Affiliations 635 Index 639 BOXES O.1 Innovation and Innovation Systems Defined 2 O.2 The World’s Need for Agriculture, Agricultural Development, and Innovation 2 O.3 Examples of Agricultural Innovation and Innovation Processes 3 O.4 Trends in Financing Agricultural Science and Knowledge Systems 5 O.5 Recent Reforms in Public Agricultural Research and Extension 6 O.6 The Role of Information and Communications Technology in Knowledge Exchange and Innovation 8 O.7 Cross-Cutting Themes Addressed in This Sourcebook 12 1.1 Main Terms Used in This Module 16 1.2 Role of Learning Alliances in Enhancing Interaction and Improving Innovation Capabilities in Central America 17 1.3 Factors Essential to Interaction and Coordination for Agricultural Innovation 19 1.4 Thailand’s National Innovation Agency 23 1.5 Fresh Produce Exporters Association of Kenya: A Sectoral Coordinating Body 24 1.6 Indian National Dairy Development Board 25 1.7 A Traditional Company in a Mature Sector Builds Innovation Capabilities 27 1.8 Actions to Build Organizational Capabilities 27 1.9 Capacities and Skills Needed in Coordination and Governance of Agricultural Innovation 36 1.10 The Rural Research and Development Council of Australia 37 1.11 Structure and Mandate of the Indian Council of Agricultural Research 38 1.12 Mechanisms to Articulate Producers’ Needs in Uruguay 39 1.13 Effects of Competitive Science and Technology Funds on Research Governance 41 1.14 Bioconnect: A Networked Research Council in the Netherlands 43 1.15 The Creation and Consolidation of Papa Andina 45 1.16 Benefits of Local and Foreign Collaboration to Develop Equipment for No-Till Agriculture in South Asia 47 1.17 The Roles of Individuals and Organizational Culture in the Development of Innovation Networks: A Mexican Example 49 1.18 Procurement Systems in Modern Marketing Chains in Three Developing Countries 54 1.19 Sourcing Practices Used by Mexican Supermarkets Reveal Experimentation with Contractual Arrangements and Types of Growers 56 CONTENTS vii 1.20 ICTs Improve the Effectiveness of Farmer Organizations 62 1.21 Successful Financing of Farmer Organizations 63 1.22 Benefits of Innovation Capabilities in a Farmer Organization: The Kenya Tea Development Agency 64 1.23 Development of No-Till for Ghana’s Small-Scale Farmers 71 1.24 Organizational Learning in Mexico’s Produce Foundations: Evolution of Priority-Setting Procedures 78 1.25 Mexico’s Produce Foundations Explore New Approaches to Foster Innovation 79 1.26 Mechanisms Used by Chile’s Foundation for Agricultural Innovation to Support Innovation 81 1.27 Purposeful Innovation to Expand Chile’s Olive Oil Industry 82 1.28 Rising Input Use and Agricultural Debt in Andhra Pradesh 85 1.29 Benefits of Community Organization to Pursue More Sustainable Agricultural Practices in Andhra Pradesh 87 1.30 Raising Cassava’s Profile among Policy Makers in Panama 92 1.31 Policy Action to Diversify the Market for Cassava in Costa Rica 94 2.1 Gender-Inclusive AET: The Example of African Women in Agricultural Research and Development 109 2.2 Future Farmers of America: A Unique Young Farmer Organization 110 2.3 Brazil’s National Agricultural Research Program Benefits from Long-Term Investments in Human Resources 112 2.4 The Need for a Broader Skill Set to Foster Innovation 116 2.5 The Potential of ICT for AET and Its Role in an Innovation System 117 2.6 Reforming Higher Agricultural Education in China, 1990–2000 124 2.7 Main Elements of Investment in Direct and Indirect Curriculum Reform 126 2.8 The Pursuit of Relevance Spurs Reform in Bogor Agricultural University, Indonesia 127 2.9 Key Steps in the Reform of Higher Agricultural Education 130 2.10 Regional Universities Forum for Capacity Building in Agriculture: Fostering Capacity for Innovation and Adaptation among Students 133 2.11 Producing Technical Human Resources for the Agriculture Sector in Australia 137 2.12 Specific Lessons from the Community-Based Research Approach Adopted by Chiang Mai University’s Faculty of Agriculture 159 2.13 Seven Steps to Improve Teaching Methods and Introduce Active Learning in Egypt’s Agricultural Technical Schools 170 2.14 Views on the Impact of the Supervised Student Internship Program in Egypt 171 3.1 Extension and Advisory Services, Defined 180 3.2 Past and Current Investment Levels in Agricultural Advisory Services 181 3.3 Benefits of ICTs for Agricultural Extension and Advisory Services 183 3.4 Agricultural Technology Management Agency in India 184 3.5 Farmer Field Schools for Participatory Group Learning 185 3.6 Mobile Telephony for Delivering Animal Health Services 185 3.7 National Agricultural Advisory Services in Uganda 186 3.8 Ethiopia: Investing in Human Resources 187 3.9 Fee-for-Service Extension: Pros and Cons 188 3.10 Global and Regional Coordination to Strengthen Agricultural Advisory Services 189 3.11 Guide to Extension Evaluation 192 3.12 Pluralism in Action: Government-Funded Public, Nongovernmental, and Privately Managed Extension Systems in Mozambique 197 3.13 Effects of Local Business Development Services for Farmers in Uganda 205 3.14 Farmer Agribusiness Promoters in Mozambique 206 3.15 Developing Small-Scale Agribusinesses in Uganda: Strategies and Outcomes 206 3.16 KILICAFE, a Local Agribusiness Service Provider in Tanzania 207 3.17 Casas Agrárias in Mozambique: Lessons from One-Stop Agribusiness Centers 208 viii CONTENTS 3.18 The Cheetah Network Integrates Agricultural Education and Business Incubation in Mali 209 3.19 A Successful Business Model for Mozambique’s Farmers to Provide Environmental Services 210 3.20 Extension-Plus: Examples from the Field 215 3.21 Good Practices and Their Impacts for Kerala’s Fruit and Vegetable Farmers 217 3.22 Experience with Innovative Activity in Kerala Horticulture 219 3.23 The Need for Innovation Brokering: Supplying Potatoes for Processing in Kenya 222 3.24 The Innovation Works Unit at the International Livestock Research Institute as an Innovation Broker 223 3.25 Agricultural Innovation Broker Initiatives in India 224 3.26 Philosophy on Agricultural Development Drives the Approach in Agrodealer Development 232 3.27 Technical Knowledge Transfer: A Public-Private Approach in Bangladesh 233 3.28 Business Linkage Development and Leveraging Resources 234 3.29 Agrodealer Associations Support Common Interests 234 3.30 Diffusion of Fertilizer Deep Placement Technology in Bangladesh 235 3.31 Gender Issues in FFSs 237 3.32 A Kenyan Federation of Field Schools Benefits from Government Programs 238 3.33 Sources of Support for the Innovation and Competitiveness Program for Peruvian Agriculture (INCAGRO) 240 3.34 An Ally Broadens Farmers’ Skills to Articulate and Meet Their Demand for Innovation Services 242 3.35 Using Competitive Grants to Fund Multiple, Synergistic Innovation Services for a New Oilseed Crop in Peru 243 3.36 BASIX Services for Groundnut Farmers in Andhra Pradesh: From Financial Services to Livelihood Triad Services 248 3.37 AGLED Services for Mushroom Cultivation 248 3.38 Contract Farming for Potato: The Need for Strong Farmer Organizations 249 4.1 Financing Agricultural Research and Innovation 271 4.2 ICTs Make Agricultural Research More Inclusive 272 4.3 The Consultative Group on International Agricultural Research and the AIS 274 4.4 Examples of Public-Private Engagement in Prebreeding and Genomics 274 4.5 The Three Innovation Contexts 278 4.6 Research-Extension-Linkage Committees in Ghana: Experience and Lessons 280 4.7 Lessons from Senegal’s Agricultural Services and Producer Organizations Project 281 4.8 Design of the Australian National Agricultural Innovation System 284 4.9 Technology Transfer Pathways 285 4.10 Public-Private Partnerships and the Changing Roles of Public and Private Agents in Agricultural Research 290 4.11 Public-Private Partnership for Participatory Research in Potato Production in Ecuador 291 4.12 Public-Private Partnership for Processing Cashew Nuts in Northern Brazil 292 4.13 Public-Private Partnership for Research on New Wheat Varieties in Argentina 292 4.14 Indicators for Evaluating Public-Private Partnerships in Agricultural Research 294 4.15 Subregional Organizations in Latin America: Strong National Capacity, Commitment to Research, and Alignment with an Emerging Regional Economic Community as Drivers of Success 298 4.16 Creating Sustainable Scientific Hubs: An Example of the Biosciences in Eastern and Central Africa 299 4.17 RUFORUM’s Choice: Regional Center of Excellence, Continentwide Forum, or Both? 301 4.18 Subregional Organizations in Sub-Saharan Africa: Challenges with Secure Funding and Collective Action 306 4.19 Costs and Investments Associated with Codesign 310 4.20 Applying Codesign for Conservation Agriculture in Central Mexico 312 4.21 Features of Papa Andina’s Partnership Programs 313 CONTENTS ix 4.22 Strengthening Capacity in Tanzania through a Client-Oriented Approach to Managing Research and Development 318 4.23 Principles of Accountability 319 4.24 Promoting Agricultural Innovation through a Competitive Funding Scheme in Peru 320 4.25 Organizational and Institutional Changes through a National Innovation Project in India 323 4.26 Building Capacity in Livestock Innovation Systems: Early Results from the International Livestock Research Institute and Partners 327 4.27 Lessons and Operational Issues from the Fodder Innovation Project 329 4.28 Issues and Experience of Partners in Consortiums Funded by the National Agricultural Innovation Project 334 4.29 Achievements by the Bioethanol and Banana Pseudostem Consortiums Funded under the National Agricultural Innovation Project, India 334 4.30 Preliminary Results of the National Agricultural Innovation Project, India 335 4.31 Characteristics and Conditions for Business-Technology Consortiums to Receive Public Financing 339 4.32 A Vine-and-Wine Consortium: Vinnova Merges with Tecnovid in Chile 342 4.33 A Business-Technology Consortium for Potato 342 4.34 Advantages and Impacts of Learning Alliances 345 4.35 How Learning Alliances Change the Work of Development Agencies: The Example of Catholic Relief Services 348 5.1 Research and Development Tax Incentive Law in Chile 365 5.2 Main Aspects of Developing and Implementing Demand-Driven, Sustainable Business Development Services 367 5.3 Critical Choices for Public-Private Partnerships 369 5.4 Different Trajectories of Agricultural Growth and Producer-Consumer Welfare Distribution 370 5.5 Consumers Want to Be Engaged 371 5.6 Additionality Criteria to Use in Deciding Whether to Provide Public Funding 372 5.7 A Public-Private Partnership to Implement Labor Standards in Asia 375 5.8 A Public-Private Partnership to Conserve Genetic Resources in China 377 5.9 The Importance of Policy-Level Monitoring, Evaluation, and Analysis 380 5.10 Getting the Most from Matching Grant Schemes: The Turkey Technology Development Project 384 5.11 Colombia Productive Partnerships Project: Incentivizing Market Inclusion through Matching Grants 385 5.12 Lessons from Competitive Grant Programs in Latin America 386 5.13 Recommended Options for Grant Program Secretariats 387 5.14 Services That Incubators Can Provide 388 5.15 Key Features of Revenue Models for Business Incubators 390 5.16 Typical Numbers of Incubator Staff and Tenants 391 5.17 The Government of India’s Incentives to Support Business Incubators 392 5.18 The Tianjin Women’s Business Incubator 392 5.19 The Agri-Business Incubator@ICRISAT 393 5.20 The Rutgers Food Innovation Center 393 5.21 Real Estate and Management Arrangements Associated with Parquesoft Centers, Colombia 395 5.22 The Wine Cluster in South Africa: Outcomes and Success Factors 401 5.23 Environmental Challenges for Cluster Development: Examples from Kenya and Tanzania 401 5.24 Public-Private Partnership Supports Cluster Development in Uganda’s Fish-Processing Industry 404 5.25 A Joint Action Project in Paraguay Improves Competitiveness of a Sesame Value Chain through the Cluster Approach 405 5.26 Intellectual Property Management at Tsinghua University, China 409 5.27 From University to Industry: Technology Transfer at Unicamp in Brazil 411 5.28 Key Issues to Be Addressed by an Institution’s Intellectual Property Policy 413 5.29 African Agriculture Fund 417 x CONTENTS 5.30 Aakruthi Agricultural Associates: An Incubator Graduate 423 5.31 Agri-Biotech Incubation with Bioseed Research India 424 5.32 Complementary Cluster Development Activities Reinforced the UNIDO Project 431 5.33 The Livestock Cluster in Chontales 432 5.34 The Banana Cluster in Rivas 433 5.35 Innovation Themes Explored in the Local Innovation Support Funds and Competitive Grant Programs 437 5.36 An Example of a Competitive Grant Program Grant: Improved Onion Storage and Marketing in Albania 438 5.37 An Example of a Local Innovation Support Fund Grant: Propagating Podocarpus in Ethiopia 438 5.38 Dynamics of the Local Innovation Support Fund Setup in Cambodia, 2006–10 440 6.1 Plant Variety Rights Legislation in Africa 453 6.2 Economic Impact of Rural Roads in Bangladesh 455 6.3 Chile’s Innovation Strategy 461 6.4 Developing an Innovation Policy 462 6.5 The Creation of Sectoral Science, Technology, and Innovation Funds in Brazil 463 6.6 Unleashing Argentina’s Productive Innovation 465 6.7 A Functional Analysis of a National or Sectoral Innovation System 466 6.8 Benchmarking National Innovation Systems and Policies 467 6.9 Finland Responds to the Challenges of Globalization 472 6.10 Korea Responds to the Asian Crisis of the Late 1990s 473 6.11 A White Paper and Foresight Exercises Facilitate Changes in South Africa’s Innovation Policy 473 6.12 Organizations Involved in Prioritizing and Coordinating Policy in Finland, Korea, and South Africa 474 6.13 Tekes as an Implementer of Innovation Policies in Finland 475 6.14 Strategic Intelligence Capabilities and Activities in Finland, Korea, and South Africa 476 6.15 Beyond TRIPS 481 6.16 IPR Issues in Genetic Resources 481 6.17 BOTEC Harnesses Innovation in Botswana 483 6.18 Patenting a Chilean Invention to Protect Crops from Frost 484 6.19 Colombian Coffee: Trademarks and Geographical Indicators Protect a Valued Brand 485 6.20 Hagar Soya Co., Cambodia: Multiple Benefits from an Innovative Social Business Model 486 6.21 Country and Donor Investments in Intellectual Property Training for Professionals 490 6.22 Building Human Resource Capacity for Biosafety Risk Assessment 493 6.23 Who Benefits from Agricultural Biotechnology? 494 6.24 The Development of Genetically Engineered Food Safety Assessment Guidelines in India 495 6.25 Advancing Agricultural Biotechnology in Uganda: It Takes More Than Good Science 496 6.26 Interministerial Coordination in the Biosafety Regulatory System of Bangladesh 498 6.27 Adaptability in Biosafety Regulation: The Gene Technology Act in Australia 499 6.28 The Approval of Bt Cotton in Burkina Faso 500 6.29 Practical Regulation of Genetically Engineered Foods in Vietnam 500 6.30 International Framework for Setting Quality and Sanitary/Phytosanitary Standards 502 6.31 Standards Induce Innovation throughout the Agriculture Sector 503 6.32 Institutional Arrangements for Improving Systems for SPS and Quality Standards 505 6.33 Actions and Investments for Uganda’s Fish Export Industry to Comply with Standards and Technical Regulations 506 6.34 Innovating to Quickly Respond to Adverse Trade Events 509 6.35 Tailoring Intellectual Property Strategies for Public and Private Partners in Technology Deployment 517 6.36 Internal Capacity Building for Strategic Intellectual Property Management 518 7.1 Main Terms Used in This Module 540 7.2 Questions for Assessing the Theory of Change in Innovation Systems 547 CONTENTS xi 7.3 The Local Economic and Employment Development Project 551 7.4 Questions That Illustrate the Range of Objectives in an Organizational Assessment 555 7.5 Elements of the Organizational Performance Assessment 557 7.6 Sample Question Set for Assessing Human Resource Management Performance 558 7.7 Organizational Learning and Institutional Change 559 7.8 Using Staff Surveys in Assessing Agricultural Extension Services in Six Districts of Ghana 560 7.9 Foresighting to Transform Ireland’s Agrifood Sector (Teagasc 2030) 563 7.10 Foresighting for Jamaica’s Sugar Industry 564 7.11 Rapid Appraisal of Agricultural Knowledge Systems 571 7.12 Outcome Mapping 572 7.13 Most Significant Change: A Form of Participatory Monitoring and Evaluation 576 7.14 Innovation and Institutional Histories 577 7.15 Developing Institutional Change Indicators 578 7.16 Limitations of Traditional Methods for Evaluating Innovation System Interventions in Agriculture 582 7.17 Challenges of Developing Counterfactuals 583 7.18 Propensity Score Matching 583 7.19 Theory-Based Impact Evaluation 584 7.20 Net-Mapping a Poultry Innovation System in Ethiopia 596 7.21 Net-Mapping to Reduce the Risk of Avian Influenza in Ghana 596 7.22 New Market Niches and Value Addition for Small-Scale Growers of Native Potatoes in the Andes 598 7.23 Innovation Fairs to Assess and Recognize Women’s Contributions to Market Chains and the Agricultural Innovation System 601 7.24 Key Issues Raised by “Remarkable People�—Including Opinion Leaders and Policy Makers—in the Scenario Development Process, India 606 7.25 The Vision for Chilean Agriculture in 2030 608 7.26 Summary of Action Plan Recommendations in Six Thematic Areas 609 7.27 Key Elements of the Framework Used to Evaluate Research Into Use 616 7.28 Framework for Tracking Institutional Change 617 7.29 Rationale and Approach for Innovation Studies Based on Institutional Histories of Africa Country Programmes 618 FIGURES O.1 An Agricultural Innovation System 4 1.1 The Institutional Model for Federated Self-Help Groups 86 1.2 The Same Institutional Platform Provides Services to Develop Multiple Livelihood Strategies 87 3.1 Roles of Local Agribusiness Development Services in Relation to Actors in the Agricultural Product Chain and to Support Services 205 5.1 Financing Gap for Small Enterprises 394 5.2 Institutions with Crucial Roles in Agricultural Clusters 398 5.3 Typical Financing Stages for Company Growth 415 5.4 Framework for Business Incubation in ABI 422 6.1 Policy Spheres Shaping the Environment for Agricultural Innovation 450 6.2 Typical Governance Structure of a National Innovation System 472 6.3 Self-Help Groups Constitute a Rural Institutional Platform That Enables the Rural Poor to Acquire the Capacities, Services, Market Access, and Social Safety Nets That Pave the Way for Innovation 527 7.1 Conceptual Diagram of a National Agricultural Innovation System 554 B7.5 Diagram of Organizational Performance Assessment 557 7.3 Final Scenario Plots Developed during the Scenario Design and Consultation Processes 605 7.4 Scenarios for Chile’s Agricultural Innovation System 609 xii CONTENTS TABLES O.1 Defining Features of the Three Main Frameworks Used to Promote and Invest in Knowledge in the Agriculture Sector 6 O.2 Sourcebook Modules 9 1.1 Examples of Coordinating Bodies, Potential Participants, and the Levels at Which They Operate 22 1.2 Indicators of Organizational Innovation 33 1.3 Client Orientation and Participation in Science and Technology Funds That Are Competitive and Specific to Agriculture in Select Latin American Countries 42 1.4 Factors That Influenced the Performance of Four Successful No-Till Networks 72 1.5 Use of No-Till in Select Countries, 2007–08 73 2.1 Current and Potential Future Directions of AET Systems 114 2.2 Measuring the Progress of AET Reforms 120 3.1 Approaches for Developing Effective Extension and Advisory Services 185 3.2 Options for Providing and Financing Pluralistic Agricultural Advisory Services 190 3.3 Extension Service Functions and Service Provider Categories 196 3.4 Investment Opportunities to Foster Pluralistic Extension Systems 199 3.5 Shifting Extension to Extension-Plus 214 3.6 Investments Needed under an Extension-Plus Scenario 215 3.7 Indicators That May Be Useful for Monitoring and Evaluating an Extension-Plus Approach 217 3.8 Activities to Ensure Successful Operation of an Extension-Plus Approach 220 3.9 Typology of Innovation Brokers 225 B3.30 Impacts of Addressing Supply and Demand Issues Concurrently in Diffusing a New Fertilizer Technology 235 3.10 Measures of INCAGRO Project Output 244 3.11 Services Included in the BASIX Livelihood Triad 247 4.1 Schematic of a Monitoring and Evaluation Framework for Assessing the Performance of Agricultural Research within an AIS 276 4.2 Approaches to Strengthening the Articulation of Demand and Interfaces with the Agricultural Research System in Agriculture-Based, Transforming, and Mature Innovation Contexts 279 4.3 Types of Research Subject to Public-Private Partnerships 290 4.4 Six Criteria for Assessing Prospective Regional Research Initiatives for Their Contributions to Regional and National Innovation 304 4.5 Key Approaches or Brands Fitting under the Codesign Umbrella 309 4.6 Examples of Problems, Corresponding Potential Innovations, and Key Potential Components of a Codesign Approach Adapted to Address Those Problems 310 4.7 Priorities for Investment to Support Organizational Change 317 4.8 Consortium Leaders and Partner Institutions in the National Agricultural Innovation Project, India 333 B4.34 Types of Learning Alliances 345 4.9 Key Principles for an Effective Multipartner Learning Alliance 346 5.1 Business Development Instruments Used in Nonagricultural Sectors (and Later Adapted to Agriculture) 364 5.2 Objectives, Instruments, and Financial Support Mechanisms for Business Development and Partnerships 365 5.3 Possible Monitoring and Evaluation Indicators 373 5.4 Comparison of Competitive Research Grants (CRGs), Matching Grants (MGs), and Core (Block) Funding 382 5.5 A Generalized Governance and Management Structure for Grant Schemes 384 5.6 Business Incubator Typology and Overview 389 5.7 The Four Main Technology Transfer Office (TTO) Business Models 407 5.8 Generalized Intellectual Property (IP) Training Needs of Different Groups of Staff in a Technology Transfer Office (TTO) 408 CONTENTS xiii 5.9 The Gap in Access to Enterprise Finance in Africa 415 5.10 Representative Agricultural Investment Funds 417 5.11 Challenges Faced by Agri-Business Incubator Since Its Inception and Solutions 425 5.12 Key Characteristics of Farmer Innovation Fund Grants Made in Several Countries, 2005–10 437 6.1 Enabling Environment Factors and Indicators 458 6.2 Examples of Standards and Technical Regulations Applied to Agriculture and Agrifood Products 503 6.3 Organizational Functions Related to Sanitary and Phytosanitary (SPS) and Quality Standards 505 6.4 Strategic Choices and Responses with Respect to SPS and Quality Standards 509 7.1 Conventional Agricultural Policy Making and Planning Tools 542 7.2 Decision Making and Management Processes and Tools at Different Levels of an Agricultural Innovation System 544 7.3 Roles of Ex Ante and Ex Post Assessments 547 7.4 Ten Functions of Innovation Systems and Related Data Sources 548 7.5 Guidelines for Benchmarks and Indicators for Innovation Systems 549 7.6 Examples of Classic Indicators for Policy and Program Investments Compared with Indicators for AIS Policy and Program Investments 550 7.7 Foresight Tools 566 7.8 Overview of Methods for Monitoring AIS Interventions 573 7.9 Evaluation Approaches Relevant to Innovation System Interventions 586 7.10 Phases of the Participatory Market Chain Approach and Gender Assessment and Related Activities in Each Phase 600 7.11 Timing for Preparing the National Agricultural Innovation Project (NAIP) in Relation to Scenario Development 604 7.12 Partial Results of an Externally and Internally Generated Scoreboard for Monitoring and Learning in the Fodder Innovation Project 613 xiv CONTENTS AC K N OW L E D G M E N T S Agricultural Innovation Systems: An Investment Sourcebook Willem Janssen (LCSAR), Gunnar Larson (ARD), Andrea was made possible by a number of key individuals, donors, Pape-Christiansen (ARD), Riikka Rajalahti (ARD), Florian and partner organizations. The AIS Sourcebook was part Theus (WBI), Ariani Wartenberg (LCSAR), Melissa Williams of the Finland / infoDev / Nokia program “Creating sus- (SASDA), and Douglas Zhihua Zeng (AFTFE). tainable businesses for the knowledge economy,� whose Contributors of material for module Overviews, Thematic contributions together with World Bank funding served as Notes, or Innovative Activity Profiles outside the Bank a foundation for the production of the Sourcebook. included Nuria Ackermann (UNIDO), John Allgood (IFDC), Financing was also provided through a grant from the S. Aravazhi (ICRISAT), Peter Ballantyne (ILRI), Alan Gender Trust Fund and many in-kind contributions from B. Bennett (PIPRA, University of California, Davis), Rupert the following institutions: CATIE, CIAT, CRS, BASIX, FAO, Best (CRS), Regina Birner (University of Hohenheim, for- ICRISAT, IFDC, KIT, LINK Ltd, PIPRA, Prolinnova, Uni- merly IFPRI), Sara Boettiger (PIPRA, University of Califor- versity of Guelph, University of Hohenheim, UNIDO, and nia, Berkeley), Arnoud R. Braun (Famer Field School Foun- USAID. The overall task was managed and coordinated by dation Wageningen University), Alistair Brett (Consultant), Riikka Rajalahti and Andrea Pape-Christiansen (World Judy Chambers (IFPRI), Anthony Clayton (University of the Bank). They collectively assume responsibility for remain- West Indies), Kristin Davis (IFPRI and GFRAS), Kumuda ing errors and omissions. Dorai (LINK Ltd), Deborah Duveskog (Consultant), Javier The preparation of this Sourcebook involved many indi- Ekboir (ILAC), Howard Elliott (Consultant), Wyn Ellis viduals within several units of the World Bank and a variety (Consultant), Josef Ernstberger (Consultant), Josef Geoola of partner organizations. As module coordinators the fol- (GALVmed), Peter Gildemacher (KIT), María Verónica Got- lowing individuals played a key role in the preparation of tret (CATIE), Andy Hall (LINK Ltd., Open University), the individual modules: Javier Ekboir and Riikka Rajalahti Helen Hambly Odame (University of Guelph), Frank (module 1); Charles Maguire (module 2); Kristin Davis and Hartwich (UNIDO), Willem Heemskerk (KIT), Douglas Willem Heemskerk (module 3); John Lynam (module 4); Horton (Consultant), Steen Joffee (Innodev), Trish Kam- Josef Ernstberger (module 5); Han Roseboom (module 6); mili (INRA), S.M. Karuppanchetty (ICRISAT), Godrick and Helen Hambly Odame, Andy Hall, and Kumuda Dorai Khisa (Wageningen University Farmer Field School Foun- (module 7). dation), Laurens Klerkx (Wageningen University), Stanley We are grateful to the more than 70 individuals who made Kowalski (University of New Hampshire), Patti Kristjanson written contributions to module Overviews, Thematic (CIFOR), Anton Krone (SaveAct, Prolinnova), Ninatubu Notes, or Innovative Activity Profiles. Contributors within Lema (NARS Tanzania), Tarmo Lemola (ADVANSIS Ltd.), the Bank included Seth Ayers (WBI, formerly infoDev), David Lugg (FAO), Mark Lundy (CIAT), John Lynam (Con- Marie-Hélène Collion (LCSAR), Luz Diaz Rios (ARD), sultant), Charles J. Maguire (Consultant), Vijay Mahajan Michelle Friedman (LCSAR), Indira Ekanayake (AFTAR), (BASIX), Morven McLean (ILSI), Mohinder S. Mudahar xv (Consultant), Bernardo Ospina Patiño (CLAYUCA), Andy Hall (LINK Ltd.), Willem Heemskerk (KIT), Doug Christopher Palmberg (ADVANSIS Ltd.—now at Tekes), Horton (Consultant), Steven Jaffee (Innodev), Willem Janssen Robert Potter (Consultant), John Preissing (FAO), Ranjitha (World Bank), Nancy Johnson (ILRI), Trish Kammili (INRA), Puskur (ILRI), Catherine Ragasa (IFPRI), Johannes Roseboom Manuel Lantin (CGIAR), Esparanza Lasagabaster (World (Consultant), Silvia Sarapura (University of Guelph), Eva Bank), Tarmo Lemola (Advansis Ltd.), John Lynam (Consul- Schiffer (Consultant), Kiran K. Sharma (ICRISAT), David tant), Charles Maguire (Consultant), Calvin Miller (FAO), J. Spielman (IFPRI), Rasheed Sulaiman V (CRISP), Bernard Dr. Mruthyunjaya (ICAR), Remco Mur (KIT), Gordon Myers Triomphe (CIRAD), Klaus Urban (FAO), K. Vasumathi (IFC), Ajai Nair (World Bank), David Nielson (World Bank), (BASIX), Rodrigo Vega Alarcón (Consultant, formerly FIA), Eija Pehu (World Bank), John Preissing (FAO), Ranjitha Laurens van Veldhuizen (ETC Foundation), Ann Waters-Bayer Puskur (ILRI), Luz Berania Diaz Rios (World Bank), William (ETC Foundation), and Mariana Wongtschowski (KIT). M. Rivera (Consultant), Bill Saint (Consultant), Iain Shuker The Sourcebook was reviewed and refined by a large (World Bank), Amy Stilwell (World Bank), Burt Swanson number of reviewers, whose work is gratefully acknowl- (University of Illinois), Jee-Peng Tan (World Bank), Jonathan edged. The team appreciates the substantive comments, and Wadsworth (CGIAR, formerly DFID), and Johannes Woelcke suggestions from the following peer reviewers, including (World Bank). Adolfo Brizzi, Willem Janssen, and Alfred Watkins (World The Sourcebook team would like to acknowledge Bank); Manuel Lantin and Jonathan Wadsworth (CGIAR); Juergen Voegele and Mark Cackler (World Bank) for their Dr. Mruthyunjaya (ICAR); Tom Mwangi Anyonge, Maria guidance and support to the Sourcebook throughout its Hartl, Shantanu Mathur, and Vineet Raswant (IFAD); Marco preparation. Ferroni and Yuan Zhou (Syngenta Foundation). Technical editing and final editing were done by Kelly In addition to the peer review, several people provided an Cassaday (Consultant). Production of the Sourcebook was overall review of the concept note and module drafts: Gary handled by Patricia Katayama, Aziz Gokdemir, and Nora Alex (USAID), Jock Anderson (Consultant), Regina Birner Ridolfi (EXTOP). The Sourcebook team would also like to (University of Hohenheim), Andreas Blom (World Bank), acknowledge the production assistance of Kaisa Antikainen, Derek Byerlee (Consultant), Montague Demment (University Fionna Douglas, Anthony Stilwell, and Sarian Akibo-Betts of California, Davis, APLU), Grahame Dixie (World Bank), (ARD), as well as Felicitas Doroteo-Gomez (ARD), who Kumuda Dorai (LINK Ltd.), Fionna Douglas (World Bank), provided administrative assistance. xvi ACKNOWLEDGMENTS A B B R E V I AT I O N S AACREA Asociación Argentina de Consorcios Regionales de Experimentación Agrícola (Argentine Association of Regional Consortiums for Agricultural Experimentation) ABI agri-business incubation AERI Agricultural Exports and Rural Income Project AFAAS African Forum for Agricultural Advisory Services AGLED Agricultural, Livestock, and Enterprise Development AIS agricultural innovation system ARDA Agriculture and Rural Development, World Bank ATMA Agriculture Technology Management Agency (India) ATS agricultural technical school ATVET agricultural technical–vocational education and training BACET Building Agribusiness Capacity in East Timor BDS business development services BRAC Acronym is now official name CAADP Comprehensive African Agriculture Development Programme CAC Codex Alimentarius Commission CATIE Tropical Agriculture Research and Education Center CBR community-based research CGIAR Consultative Group on International Agricultural Research CGPs competitive grant programs CIAT Centro Internacional de Agricultura Tropical (International Center for Tropical Agriculture) CILSS Comité Inter-états de Lutte Contre la Sècheresse au Sahel (Committee for Drought Control in the Sahel) CIMMYT Centro Internacional de Mejoramiento de Maíz y Trigo (International Maize and Wheat Improvement Center) CIP Centro Internacional de la Papa (International Potato Center) CIRAD Centre de Coopération Internationale en Recherche Agronomique pour le Développement (Agricultural Research for Development, France) CLAYUCA Consorcio Latinoamericano y del Caribe de Apoyo a la Investigación y al Desarrollo de la Yuca (Latin American and Caribbean Consortium to Support Cassava Research and Development) CMSA community-managed sustainable agriculture CNFA Citizens Network for Foreign Affairs xvii COFUPRO Coordinadora Nacional de las Fundaciones Produce (National Coordinating Agency of Produce Foundations), Mexico CORAF Conseil Ouest et Centre Africain pour la Recherche et le Développement Agricoles CSO civil society organization DHRUVA Dharampur Uththan Vahini (Vanguard of Awakening in Dharampur) (Gujarat) DIPP Disease Intellectual Property Plan EARTH Escuela de Agricultura de la Región Tropical Húmeda (EARTH University), Costa Rica ECOWAS Economic Community of West African States EMBRAPA Empresa Brasileira de Pesquisa Agropecuária (Brazilian Agricultural Research Corporation) EU European Union F2F Farmer to farmer FAO Food and Agriculture Organization of the United Nations FBO farmer-based organization FFS Farmer Field School FIA Fundación para la Innovación Agraria (Foundation for Agricultural Innovation), Chile FIC Fondo de Innovación para la Competitivad (Innovation Fund for Competitiveness), Chile FIF Farmer Innovation Fund FOB free on board FPEAK Fresh Produce Exporters Association of Kenya GAP good agricultural practice GDP gross domestic product GE genetically engineered GFRAS Global Forum for Rural Advisory Services GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (German International Cooperation Agency) GLOBALG.A.P. Global Good Agricultural Practices GM genetically modified GMO genetically modified organism GPSG gobal positioning systems HACCP Hazard Analysis and Critical Control Point HRD human resource development HRM human resource management IAP innovative activity profile ICAR Indian Council of Agricultural Research ICI Imperial Chemical Company ICRISAT International Crops Research Institute for the Semi-Arid Tropics ICT information and communication technology IDRC International Development Research Centre IFAD International Fund for Agricultural Development IFDC International Fertilizer Development Center IFPRI International Food Policy Research Institute IIRR International Institute of Rural Reconstruction ILAC Institutional Learning and Change Initiative (CGIAR) ILO International Labour Organisation ILRI International Livestock Research Institute INCAGRO Innovación y Competitividad para el Agro Peruano (Innovation and Competitiveness Program for Peruvian Agriculture) INSAH Institut du Sahel (Sahel Institute) xviii ABBREVIATIONS IP intellectual property IPO initial public offering IPR intellectual property right(s) IRR internal rate of return ISNAR International Service for National Agricultural Research ISO International Organization of Standardization IT information technology KfW Kreditanstalt für Wiederaufbau (KfW Development Bank, Germany) KHDP Kerala Horticultural Development Programme KIT Koninklijk Instituut voor de Tropen (Royal Tropical Institute), the Netherlands KTDA Kenya Tea Development Agency LBDSs Local business development services LCSAR Latin America and Caribbean Region, Agriculture and Rural Development (World Bank) LISFs Local Innovation Support Funds LSA livelihood services adviser LSP livelihood services provider M&E monitoring and evaluation MOFA Ministry of Food and Agriculture, Ghana MUCIA Midwest Universities Consortium for International Activities NAADS National Agricultural Advisory Services, Uganda NAIP National Agricultural Innovation Project, India NARI national agricultural research institute NARS national agricultural research system NDDB National Dairy Development Board, India NGO nongovernmental organization NIA National Innovation Agency, Thailand NIS national innovation system OECD Organisation for Economic Co-operation and Development OIE Office International des Epizooties (World Organisation for Animal Health) PASAOP Programme d’Appui aux Services Agricoles et aux Organisations Paysannes (Agricultural Services and Farmer Organization Support Program), Mali PIPRA Public Intellectual Property Resource for Agriculture, University of California, Davis PPP public-private partnership PRONEA Programa Nacional de Extensão Agrária (National Agricultural Extension Program), Mozambique PVP plant variety protection PVR plant variety rights R&D research and development RAS rural advisory services RD&D research, development, and deployment RUFORUM Regional Universities Forum for Capacity Building in Agriculture SACCO Savings and Credit Cooperative SAFE Sasakawa Africa Fund for Extension Education SAU State Agricultural University, India SDC Swiss Agency for Development and Cooperation SERP Society for the Elimination of Rural Poverty SHG self-help group SMART specific, measurable, attainable, realistic, and timely SMEs small and medium enterprises ABBREVIATIONS xix SNIC Sistema Nacional de Innovación para la Competitivad (National System of Innovation for Competitiveness), Chile SOCAD State Office for Comprehensive Agricultural Development, China SPS sanitary and phyosanitary SSA Sasakawa Africa Association SSTAB Short-Term Technical Assistance in Biotechnology STI Science, Technology, and Innovation; Office of Science, Technology, and Innovation, Thailand T&V Training and Visit TBT Agreement on Technical Barriers to Trade Tekes Teknologian ja innovaatioiden kehittämiskeskus (Finnish Funding Agency for Technology and Innovation) TIA Technology Innovation Agency, South Africa TN thematic note TRF Thailand Research Fund TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights TTO Technology Transfer Office TVET technical–vocational education and training UCC University of Cape Coast (Ghana) UNESCO United Nations Educational, Scientific, and Cultural Organization UNIDO United Nations Industrial Development Organization UNU United Nations University UPOV Union Internationale pour la Protection des Obtentions Végétales (International Union for the Protection of New Varieties of Plants) VET vocational education and training VFPCK Vegetable and Fruit Promotion Council, Kerala VO village organization WAEMU West African Economic and Monetary Union WECARD West and Central African Council for Agricultural Research and Development WHO World Health Organization WIPO World Intellectual Property Organization WTO World Trade Organization xx ABBREVIATIONS Sourcebook Overview and User Guide Riikka Rajalahti, World Bank ORIGINS AND PURPOSE OF THIS SOURCEBOOK The sourcebook is targeted to the key operational staff in international and regional development agencies and onsensus is developing about what is meant by C “innovation� and “innovation system� (box O.1). The agricultural innovation system (AIS) approach has evolved from a concept into an entire subdis- national governments who design and implement lending projects and to the practitioners who design thematic pro- grams and technical assistance packages. The sourcebook is also an important resource for the research community and cipline, with principles of analysis and action; yet no nongovernmental organizations (NGOs) and may be a use- detailed blueprint exists for making agricultural innovation ful reference for the private sector, farmer organizations, happen at a given time, in a given place, for a given result. and individuals with an interest in agricultural innovation. This sourcebook draws on the emerging principles of AIS This overview begins with a discussion of why innova- analysis and action to help to identify, design, and imple- tion is vital to agricultural development, how innovation ment the investments, approaches, and complementary occurs, and why complementary investments are needed to interventions that appear most likely to strengthen innova- develop the capacity and enabling environment for agricul- tion systems and promote agricultural innovation and equi- tural innovation. It concludes with details on the source- table growth. book’s structure, a summary of the themes covered in each Although the sourcebook discusses why investments in module, and a discussion of the cross-cutting themes AISs are becoming so important, it gives most of its atten- treated throughout the sourcebook. tion to how specific approaches and practices can foster innovation in a range of contexts. Operationalizing an AIS approach requires a significant effort to collect and synthe- INNOVATION AND AGRICULTURAL size the diverse experiences with AISs. The information in DEVELOPMENT this sourcebook derives from approaches that have been tested at different scales in different contexts. It emphasizes Agricultural development enables agriculture and people to the lessons learned, benefits and impacts, implementation adapt rapidly when challenges occur and to respond readily issues, and prospects for replicating or expanding successful when opportunities arise—as they inevitably will, because practices. This information reflects the experiences and agriculture’s physical, social, and economic environment evolving understanding of numerous individuals and changes continually (box O.2). Some changes occur with organizations concerned with agricultural innovation, unpredictable force and suddenness; since June 2010, for including the World Bank. (For a complete list of the con- example, rapidly rising food prices have pushed about 44 tributors, see the acknowledgments.) million people into poverty, and another 10 percent rise in 1 Box O.1 Innovation and Innovation Systems Defined Innovation is the process by which individuals or An innovation system is a network of organizations, organizations master and implement the design and enterprises, and individuals focused on bringing new production of goods and services that are new to them, products, new processes, and new forms of organiza- irrespective of whether they are new to their competi- tion into economic use, together with the institutions tors, their country, or the world. and policies that affect their behavior and performance. Source: World Bank 2006. Box O.2 The World’s Need for Agriculture, Agricultural Development, and Innovation In one way or another, agriculture is integral to the poor households, agricultural development not only is a physical and economic survival of every human being. defense against hunger but also can raise incomes nearly The United Nations forecasts that the global population four times more effectively than growth in any other sec- will reach more than 9 billion by 2050. To feed everyone, tor. These circumstances help to explain why agricul- food production will have to increase 70 percent. Help- tural development is such a powerful tool for reducing ing the world’s farmers and fishers to achieve this target global poverty and eliciting economic development. is challenging in itself, but beyond providing food, Agricultural development demands and depends on agriculture sustains the economies of most countries in innovation and innovation systems. Innovation is widely significant ways, especially in the developing world. recognized as a major source of improved productivity, Across Sub-Saharan Africa, for example, agriculture competitiveness, and economic growth throughout accounts for three-quarters of employment and one- advanced and emerging economies. Innovation also plays third of GDP; 75 percent of the world’s poor live in rural an important role in creating jobs, generating income, areas and have an economic link to agriculture. For very alleviating poverty, and driving social development. Sources: Author; OECD 2009. the food price index could impoverish 10 million more peo- civil society) have also been altering agriculture’s social and ple. Food prices are expected to remain volatile for the fore- economic landscape over the past few decades (World Bank seeable future. 2007b). Agriculture increasingly occurs in a context where Other changes emerge more gradually, but are no less private entrepreneurs coordinate extensive value chains significant. Agriculture is more vulnerable to the increasing linking producers to consumers, sometimes across vast dis- effects of climate change than any other economic sector, tances. A growing number of entrepreneurial smallholders and it uses almost 80 percent of the world’s freshwater—a are organizing to enter these value chains, but others strug- vanishing resource in some parts of the world. A changing, gle with the economic marginalization that comes from less predictable, and more variable environment makes it being excluded from such opportunities. imperative for the world’s farmers and fishers to adapt and In this context, markets, urbanization, globalization, and experiment. They require more knowledge that contributes a changing environment not only influence patterns of con- to sustainable, “green� growth—as well as a greater capacity sumption, competition, and trade but also drive agricultural to help develop such knowledge. development and innovation far more than before. More Like climatic variability, globalizing markets for agricul- providers of knowledge are on the scene, particularly from tural products, far-reaching developments in technology, the private sector and civil society, and they interact in new and equally transformative evolution in institutions ways to generate ideas or develop responses to changing (including new roles for the state, the private sector, and agricultural conditions (World Bank 2006). 2 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK If farmers, agribusinesses, and even nations are to cope, property, food chemistry, resource economics, logistics, compete, and thrive in the midst of changes of this mag- slash-and-burn farming, land rights—the list is far too long nitude, they must innovate continuously. Investments in to complete here. public research and development (R&D), extension, educa- For innovation to occur, interactions among these tion, and their links with one another have elicited high diverse stakeholders need to be open and to draw upon the returns and pro-poor growth (World Bank 2007b), but most appropriate available knowledge. Aside from a strong these investments alone will not elicit innovation at the capacity in R&D, the ability to innovate is often related to pace or on the scale required by the intensifying and prolif- collective action, coordination, the exchange of knowledge erating challenges confronting agriculture. among diverse actors, the incentives and resources available to form partnerships and develop businesses, and condi- tions that make it possible for farmers or entrepreneurs to HOW AGRICULTURAL INNOVATION OCCURS use the innovations. Box O.3 provides examples of how Agricultural innovation typically arises through dynamic innovation has occurred in agriculture. interaction among the multitude of actors involved in growing, processing, packaging, distributing, and consum- Agricultural innovation systems ing or otherwise using agricultural products. These actors represent quite disparate perspectives and skills, such as Research, education, and extension are usually not sufficient metrology, safety standards, molecular genetics, intellectual to bring knowledge, technologies, and services to farmers Box O.3 Examples of Agricultural Innovation and Innovation Processes The instances of agricultural innovation listed here tional agricultural research organizations, universi- came about in different ways. In some cases, markets ties, and development foundations; complex but heightened the pressure to innovate, and the private creative institutional arrangements over ownership; sector played a decisive role in driving the subsequent innovation targeted to poor (nutrient-deficient) innovation. In others, public sector interventions, such users. as policy, R&D, and other incentives, drove the innova- ■ Potato, Peru. Facilitation by an international tion process. research center of the development of new indige- nous potato products with a coalition of researchers, ■ Cassava-processing innovation system, Ghana. smallholders, and multiple private actors (including Research-led development and promotion of new supermarkets, traders, and restaurants). cassava products with a private sector coalition. ■ Cut flower innovation system, Colombia. Continuous In each case, the drivers of innovation and growth innovation in response to changing markets, using were different and the role of research and extension var- licensed foreign technology and coordinated by an ied, but in all cases the actors used similar approaches to industry association. address their challenges and innovate. The challenges ■ Medicinal plants innovation system, India. Mobiliza- included meeting stringent quality standards, remaining tion of traditional and scientific knowledge for rural competitive, responding to changing consumer tastes, communities, coordinated by a foundation. and addressing technological problems. ■ Small-scale irrigation innovation system, Bangladesh. The actors’ ability to improve their interactions and Promotion by a civil society organization of a strengthen their links to one another proved crucial to low-cost pump to create markets; innovation by their success. All of the cases illustrate the importance small-scale manufacturers with the design of pumps of taking collective action, having the benefit of facili- in response to local needs. tation and coordination by intermediaries, building a ■ Golden rice innovation system, global. Complex strong skill base, and creating an enabling environment partnership of multinational companies, interna- for innovation to take place. Sources: Adapted from Bernet, Thiele, and Zschocke 2006; Hall, Clark, and Naik 2007; World Bank 2006; A. Hall, personal communication; R. Rajalahti, personal communication. SOURCEBOOK OVERVIEW AND USER GUIDE 3 and entrepreneurs and to get them to innovate. Innovation interventions include providing the professional skills, requires a much more interactive, dynamic, and ultimately incentives, and resources to develop partnerships and busi- flexible process in which the actors deal simultaneously with nesses; improving knowledge flows; and ensuring that the many conditions and complementary activities that go conditions that enable actors to innovate are in place. beyond the traditional domains of R&D and extension. Figure O.1 presents a simplified conceptual framework These conditions and complementary interventions have for an AIS. The figure shows the main actors (typical agri- not been consistently addressed to date; new, additional cultural knowledge and technology providers and users, as ways and means of doing so are needed. well as the bridging or intermediary institutions that facili- An AIS approach looks at the multiple conditions and tate their interaction); the potential interactions between relationships that promote innovation in agriculture. It may actors; and the agricultural policies and informal institu- offer a more flexible means of dealing with the varied con- tions, attitudes, and practices that either support or hinder ditions and contexts in which innovation must occur. It the process of innovation. considers the diverse actors involved, their potential inter- actions, the role of informal practices in promoting inno- vation, and the agricultural policy context. EFFORTS TO STRENGTHEN KEY COMPONENTS The AIS principles of analysis and action integrate the OF THE INNOVATION SYSTEM more traditional interventions (support for research, exten- Agricultural research, extension, education, and training are sion, and education and creation of links among research, key components of an AIS. The following sections summa- extension, and farmers) with the other complementary rize approaches that have been used to strengthen these interventions needed for innovation to take place. Such components, what they achieved, and continuing concerns. Figure O.1 An Agricultural Innovation System Consumers National Agroprocessors agricultural research system Exporters Producer Bridging and coordination organizations Farmers organizations Input suppliers National extension and National education and Standards business development training organizations agencies services Land agencies Credit agencies Government policy and regulatory framework Informal institutions, practices, behaviors, and attitudes Source: Modified from Rivera et al. n.d. 4 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Agricultural research research organizations result from strong path-dependency in institutional development and slow institutional and pol- A strong science and technology system—encompassing icy change, such as the lack of consensus on a strategic basic, strategic, and adaptive agricultural science as well as vision, ineffective leadership and management, a continued sciences outside agriculture—is widely regarded as con- emphasis on building centralized national agricultural tributing to innovation and sustainable, equitable agricul- research structures rather than on creating partnerships, tural development. Development cannot occur without the loss of highly qualified scientific staff, and weak links knowledge, much of which must be generated and applied with and accountability to other actors involved in innova- nationally and often more locally. For this reason, sustaining tion processes (World Bank 2005). food production and rural livelihoods while reducing Over the years, research organizations have attempted poverty depends to a great extent on how successfully to address these various constraints. Most of these efforts knowledge is generated and applied in agriculture and on have centered on shifting investments away from physical whether the capacity to produce such knowledge is infrastructure, equipment, human resource development, improved. and operating funds and toward improvements in the Aside from budgetary constraints (box O.4), many pub- management of public research organizations—for exam- lic research organizations face serious institutional con- ple, through better planning, improved financial manage- straints that inhibit their effectiveness, constrain their abil- ment, greater accountability, and more relevant programs ity to attract funds, and ultimately prevent them from for clients (developed with oversight from multistakeholder functioning as a major contributor to the innovation sys- boards or through better research-extension linkages). tem. The main constraints associated with many national Box O.4 Trends in Financing Agricultural Science and Knowledge Systems Global public investments in agricultural science, tech- from internally generated resources, which include con- nology, and development have increased significantly tracts with private and public enterprises (26 percent). over the years, rising from US$16 billion (reported in The private sector spends an estimated US$16 billion 1981) to US$23 billion in 2005 purchasing power par- (in 2005 purchasing power parity dollars) on agricul- ity dollars in 2000 (figures from Beintema and Elliott tural research, equivalent to 41 percent of the global 2009; 2000 is the latest year for which comparable investment (public and private). Almost all of these global data are available). The increase is somewhat private investments are made by companies pursuing deceptive, because it has been concentrated in just a agricultural R&D in high-income countries. In addition, handful of countries (Pardey et al. 2006). More recent several international research centers focus on agricul- data indicate that investments in science and technol- tural R&D to produce international public goods. ogy continue to increase. Investments in R&D, including research and advi- Government remains the largest contributor to pub- sory services, have been the World Bank’s major strategy lic agricultural research, accounting for an average of to improve agricultural productivity and innovation 81 percent of funding (of more than 400 government (World Bank 2009b). The World Bank alone invested agencies and nonprofit institutions in 53 developing US$4.9 billion (US$5.4 billion in real million dollars, countries sampled). Only 7 percent of funding is pro- 2010 = 100) into agricultural R&D and advisory ser- vided by donors as loans or grants. Funding supplied vices over the 20 years from 1990 to 2010. The World through internally generated funds, including contrac- Bank’s annual commitments to agricultural research, tual arrangements with private and public enterprises, extension, education, and training have ranged from on average accounts for 7 percent of the funding for US$100 million to US$800 million. The very low com- public agricultural research. Nonprofit organizations, mitments by governments and donors to agricultural which collect about two-thirds of their funding from tertiary education since the early 1990s are an especially producer organizations and marketing boards, are also worrying trend (World Bank 2007a), because they imply more active than government agencies at raising income that a capacity for innovation is not being sustained. Sources: Author. SOURCEBOOK OVERVIEW AND USER GUIDE 5 Much effort has focused on increasing client participa- support innovation. Box O.5 describes recent reforms in tion and on the financing and overall development of plu- agricultural research and extension organizations. ralistic agricultural knowledge and information systems Approaches to international cooperation in agricultural (World Bank 2005). Table O.1 captures the main differences R&D continue to change as well. Growing capacities in large and changes in emphasis in World Bank investments to national agricultural systems such as those of Brazil, China, Table O.1 Defining Features of the Three Main Frameworks Used to Promote and Invest in Knowledge in the Agriculture Sector National agricultural Agricultural knowledge and Agricultural Defining feature research systems information systems innovation systems Actors Research organizations Farmer, research, extension, Wide spectrum of actors and education Outcome Technology invention and Technology adoption and innovation Different types of innovation transfer Organizing principle Using science to create new Accessing agricultural knowledge New uses of knowledge for technologies social and economic change Mechanism for innovation Technology transfer Knowledge and information Interaction and innovation exchange among stakeholders Role of policy Resource allocation, priority Linking research, extension, Enabling innovation setting and education Nature of capacity Strengthening infrastructure Strengthening communication Strengthening interactions between all strengthening and human resources between actors in rural areas actors; creating an enabling environment Source: World Bank 2006. Box O.5 Recent Reforms in Public Agricultural Research and Extension ■ Increasing the participation of farmers, the private posals. Competitive funds have increased the role sector, and other stakeholders in research governing of universities in agricultural R&D in some coun- boards and advisory panels to attain real influence tries. Continuing challenges include limited engage- over research decisions and priorities. The participa- ment with the private sector, sustainability of tion of women farmers is particularly important, funding, the bias against strategic R&D, and the given their crucial role in rural production systems, heavy transaction costs. the special constraints under which they operate ■ Promoting producer organizations to reach eco- (for example, time constraints), and their range of nomies of scale in services and market activities, activities and enterprises, including marketing, pro- increase farmers’ ability to demand better services, and cessing, and food storage. help producers to hold service providers accountable. ■ Decentralizing research to bring scientists closer to ■ Mixing public and private systems by enabling clients and better focus research on local problems farmer organizations, NGOs, and public agencies and opportunities. to outsource advisory services, identify the “best ■ Decentralizing extension services to improve fit� for the particular job, and recognize the accountability to local users and facilitate clients’ private-good attributes of some extension ser- “purchase� of research services and products that vices. For example, approaches based on public respond better to their needs. Matching-grant pro- funding that involve local governments, the pri- grams for farmer and community groups allow vate sector, NGOs, and producer organizations in them to test and disseminate new technologies. extension service delivery may be most relevant to ■ Establishing competitive funding mechanisms that subsistence farmers, whereas various forms of pri- involve key stakeholders, especially users, in vate cofinancing may be appropriate for commer- promoting demand-driven research, setting pri- cial agriculture, extending to full privatization for orities, formulating projects, and screening pro- some services. Sources: World Bank 2005, 2007b, 2010. 6 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK India, and South Africa hold huge potential for increased their roles to improve service provision and act as brokers to South-South cooperation, especially given the number of the more diverse set of clients seen in an AIS. smaller developing countries that lag behind these agricul- The role of information and communications technol- tural research giants. These realities, among others, have ogy (ICT) in producing and disseminating knowledge has impelled the Consultative Group on International Agri- expanded exponentially. ICTs offer striking opportunities to cultural Research (CGIAR)—a global partnership of organ- change how agricultural science, innovation, and develop- izations that fund and conduct research for sustainable ment occur by enabling a variety of stakeholders to interact agricultural development—to examine and revise its and collaborate in new ways to enhance the innovation approach to agricultural R&D through a change manage- process (box O.6). ment process initiated in 2008. Besides giving high priority to effectiveness, accounta- Agricultural education and training bility, cost-effectiveness, and staff quality, research sup- ported by the CGIAR will be based on the development of Education and training institutions are especially significant results-oriented research agendas directed toward signifi- in an AIS because they develop human resources and at the cant and compelling challenges.1 The CGIAR will give par- same time serve as a source of knowledge and technology. ticular attention to enabling effective partnerships, because The absence or decline of these institutions leaves a large the complexity of scientific advances, socioeconomic devel- gap in a country’s innovation capacity. Even so, government opments, and environmental impacts, along with the and donor investments in agricultural education and train- higher costs associated with new lines of research, make ing (AET) have dropped to almost nothing since the early partnerships essential for producing and delivering inter- 1990s (World Bank 2008). national public goods in agriculture. The CGIAR’s contri- For AET, the primary constraint (among many) is that bution to agricultural development through research and institutions have not kept pace with the labor market’s knowledge management must be integrated with the wider demand for knowledge and practical competencies, development goals and activities of other actors, notably especially in agribusiness, business and program manage- countries, international and regional development organi- ment, and the problem-solving and interpersonal skills zations, multilateral organizations, advanced research insti- crucial for actors to function in an AIS. Despite this poor tutes, and the private sector. performance, global experience shows that it is possible to build productive and financially sustainable education systems (World Bank 2007b). Besides the AET system in a Agricultural extension and advisory services number of developed countries (Denmark, Japan, the Like R&D, agricultural extension and advisory services have Netherlands, and the United States), developing countries passed through similar cycles of challenge and reform. The such as India, Malaysia, Brazil, and the Philippines have public services that dominate extension services are plagued established productive AET systems. by widespread problems: limited funding, insufficient technology, poorly trained staff, weak links to research, and LIMITATIONS OF CURRENT INVESTMENTS FOR limited farmer participation (World Bank 2005). Because INCREASING INNOVATION IN AGRICULTURE previous approaches have been ineffective, most extension programs are moving away from centralized systems As shown in box O.4, investments in science and technology and trying to improve links with research and farmers have been a steady component of most strategies to improve (World Bank 2007b). Most programs widely acknowledge and maintain agricultural productivity. The high returns the need to build social capital among farmers, pay greater and pro-poor growth emerging from investments in public attention to the needs of women and youth, and facilitate agricultural research, advisory services, and education better links to markets. reflect a growing spectrum of initiatives to improve the Despite widespread agreement on the need for change, it response to clients’ demands, work with farmer groups, is clear that no single extension model is universally rele- communicate better with partners, and collaborate with the vant. New models need to be developed, based not only on private sector. Yet efforts to strengthen research systems and general principles but also on analyses of the specific farm- increase the availability of knowledge have not necessarily ing systems and social conditions they are expected to increased innovation or the use of knowledge in agriculture address. New models are more important than ever, because (Rajalahti, Woelcke, and Pehu 2005). As noted, complemen- extension services are shifting their focus and changing tary investments are needed to build the capacity for SOURCEBOOK OVERVIEW AND USER GUIDE 7 Box O.6 The Role of Information and Communications Technology in Knowledge Exchange and Innovation For innovation to take place, effective bridging mech- ICTs that serve as information “collectors,� “ana- anisms are often needed to facilitate communication, lyzers,� “sharers,� and “disseminators� are already translation, and mediation across the boundaries positively affecting agricultural interventions in among the various actors in agricultural research and developing countries. Affordable mobile applications, development and between knowledge and action. in particular, provide linkages to previously isolated Such facilitating and bridging mechanisms can actors: information on prices, good farming practices, include diverse innovation coordination mechanisms soil fertility, pest or disease outbreaks, and extreme such as networks, associations, and extension services, weather has expanded farmers’ opportunities to capi- but also ICT. talize on markets, react to unfavorable agricultural ICTs offer the opportunity to improve knowledge conditions more effectively, and better interact with flows among knowledge producers, disseminators, and public service agents. users and, for example, among network partners; sup- Satellite imagery and aerial photography have port the opening up of the research process to interac- increased the capacity of scientists, researchers, and tion and more accessible knowledge use; and more even insurance providers to study farm conditions in cost-effectively widen the participation of stakeholders remote areas and assess damage from climatic chal- in the innovation and governance process. ICTs have lenges like drought. Increasingly affordable technolo- more often been associated with providing advanced gies like radio frequency identification tags and other services to number crunching and data management, wireless devices are improving livestock management, geospatial applications, knowledge-based systems and allowing producers to monitor animal health and trace robotics, and improved farm equipment and processes, animal products through the supply chain. A persist- but less often been considered for connecting diverse ent barrier to innovation, the lack of rural finance, is innovation communities—whether at the local, sub- also lifted by digital tools. sectoral, and national level. Sources: Author, drawing on Manning-Thomas 2009; World Bank 2011. innovation across the spectrum of actors in the AIS and to organization of stakeholders, agricultural education and develop an enabling environment for innovation to occur. training, and research and advisory services). Module 5 is This sourcebook reviews and assesses experiences with concerned with the incentives and resources needed for those complementary investments. It outlines the needs, innovative partnerships and business development, and opportunities, and priorities for such investments and module 6 describes complementary investments that create offers specific tools and guidance to develop interventions a supportive environment for innovation. Module 7 pro- in different contexts. As emphasized in the next section— vides information on assessing the AIS and identifying and which offers more detail on the sourcebook’s contents and prioritizing prospective investments, based partly on what organization—this sourcebook reflects work in progress has been learned from monitoring and evaluating similar and an evolving knowledge base. The emerging principles efforts. A glossary defines a range of terms related to agri- it contains will change as practitioners learn and develop culture, innovation, and development. creative new approaches to innovation for agricultural Each module generally has four parts: development. 1. The module overview introduces the theme (a particular area of investment), summarizes the major issues and SOURCEBOOK MODULES investment options, and points readers to more detailed The content of this sourcebook is presented in line with the discussions and examples in the thematic notes and inno- project cycle or phased approach that practitioners use vative activity profiles that follow the overview. The (table O.2). Modules 1 through 4 discuss the main invest- overview provides substantive contextual information for ments related to innovation capacity (coordination and each topic, including lessons from earlier approaches in 8 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table O.2 Sourcebook Modules Module number Title Sourcebook Overview and User Guide 1 Coordination and Collective Action for Agricultural Innovation 2 Agricultural Education and Training to Support Agricultural Innovation Systems 3 Investment in Extension and Advisory Services as Part of Agricultural Innovation Systems 4 Agricultural Research within an Agricultural Innovation System 5 Incentives and Resources for Innovation Partnerships and Business Development 6 Creating an Enabling Environment for Agricultural Innovation 7 Assessing, Prioritizing, Monitoring, and Evaluating Investments in Agricultural Innovation Systems Source: Author. national agricultural research systems and agricultural will increasingly possess a special mix of skills that con- knowledge and information systems. tribute to the AIS in particular ways. Stronger technical 2. Thematic notes discuss technical and practical aspects of skills are very important, but they must be complemented specific investment approaches and programs that have with functional expertise, because the new ways of working been tested and can be recommended (sometimes with within an AIS require a range of skills: scientific, technical, provisos) for implementation and scaling up. The notes managerial, and entrepreneurial skills and skills and review the considerations, organizing principles, ques- routines related to partnering, negotiating, building con- tions, performance indicators, and lessons that would sensus, and learning. guide the design and implementation of similar approaches or programs. Coordination and collective action for 3. Innovative activity profiles describe the design and high- agricultural innovation (Module 1). Coordination light innovative features of recent projects and activities and organization of stakeholders may serve many pur- related to the area of investment described in the mod- poses, such as building coherence and setting consensus- ule. The profiles pay close attention to features that con- based priorities, strengthening the sharing of knowledge tributed to success and that technical experts can adapt and resources, strengthening collaboration through joint for their own operations. The activities and projects processes and products, and reducing transaction costs described here have not yet been sufficiently evaluated to and reaching economies of scale in extension and market be considered “good practice� in a range of settings, but activities. Without organizations (or brokers) to address they should be monitored closely for potential scaling social and resource imbalances and transaction costs, up. Their purpose is to ignite the imagination of task prospects for participating in innovation processes and managers and technical experts by providing possibilities systems are limited, especially for poor people. Effective to explore and adapt in projects. platforms help to organize stakeholders with different 4. References and further reading offer resources and addi- assets, knowledge, and experience. tional information. Module 1 discusses the capacities and resources required to organize and coordinate stakeholders, pro- viding examples and lessons from previous efforts. The THEMES COVERED IN THE MODULES corresponding areas of investment include innovation Each sourcebook module covers a theme related to assessing coordination bodies (which can be national, multisectoral, and designing investments in a particular area integral to or specific to the agriculture sector), subsector or industry the AIS. The discussion that follows gives readers a broad associations or networks, producer organizations, produc- idea of the content and concerns of the modules. The non- tive alliances, and self-help groups to foster innovation. A agricultural and cross-cutting issues treated in each module range of policies and institutions is also needed to support are presented as well. coordination and collective action at different levels of governance in the AIS. Building the capacity to innovate (Modules 1–4) Agricultural education and training to support AIS For an innovation system to be effective, the capacity of its (Module 2). Agricultural innovation is a product of the diverse actors must be built and strengthened; many actors capacity, resources, and interactions that are brought to SOURCEBOOK OVERVIEW AND USER GUIDE 9 bear by actors from the wide range of fields related to food demand and developing interfaces with other actors (for and agriculture. The capacity to generate new ideas, knowl- example, through codesign, innovation platforms, edge, technologies, processes, and forms of collaboration alliances and consortia, and technology transfer and depends on an extensive array of skills—not only the commercialization), giving special attention to the poten- expected technical, fiscal, and managerial competencies but tial for public-private partnerships and regional innova- also complementary skills in such areas as entrepreneurship, tion systems. The module also provides considerable detail facilitation, conflict resolution, communications, contractual on the incentives and instruments needed for research sys- arrangements, and intellectual property rights. Universities, tem reforms to succeed. research institutes, and other learning institutions will have to reposition themselves to acquire and inculcate these skills. Incentives and resources for innovative The critical functions of research, teaching, extension, and partnerships and business development commercialization must be far more closely integrated. Mod- (Module 5) ule 2 reviews approaches to reorienting agricultural educa- tion and training to better serve the needs of a diverse cadre Economic change entails the transformation of knowledge of AIS actors. The examples and lessons describe long-term into goods and services through partnerships and business reform processes, curriculum reform, technician training enterprises. Strong links between knowledge and business approaches, as well as on-the-job training. development are a good indication of the vitality of an AIS. Partnerships for business development often require appro- Investment in extension and advisory services as priate incentives to create such links, particularly to engage part of AIS (Module 3). Better knowledge sharing and the private sector in R&D, technology transfer, and joint better use of available information and knowledge for business activities (with producers). Module 5 provides les- desired changes are at the center of innovation processes. sons and examples of many potential interventions that pro- Extension and advisory services can become nodes for mote private sector contributions to innovation either exchanging information and services that help to put through service provision, technology commercialization, or knowledge to use; then they become well positioned to other business-related innovation (through business sup- facilitate and support multistakeholder processes. Mod- port). The module describes key instruments for supporting ule 3 describes key principles for developing demand- technology commercialization (the establishment of tech- driven, pluralistic advisory services (including the techni- nology transfer offices, incubators, and science parks); for cal, entrepreneurial, and organizational aspects of this supporting business (the provision of innovation funds, risk process) capable of supporting the heterogeneous client capital, and other resources to initiate and sustain novel base of an AIS. The module reviews investments to sup- partnerships); and for forming clusters, which enable stake- port the shifting roles of advisory systems within an AIS, holders from a particular subsector or value chain to benefit including the provision of market-centered advisory ser- from economies of scale, geographic proximity, and comple- vices and brokering services. mentary public investments. Agricultural research within an AIS (Module 4). Creating an enabling environment for agricultural Agricultural research systems are the source of new knowl- innovation (Module 6) edge and the resulting products, services, and management practices that enable productivity to grow. Locating agri- Farmers and entrepreneurs will not take the risk of innovat- cultural research within an AIS is a means of heightening ing in unfavorable conditions. Researchers will not engage in the performance of research systems through improved long-term activities that are not aligned with the regulatory articulation with demand, more effective, better-differen- system (for example, researchers will not develop innovative tiated international and national institutional partner- plant-breeding processes if they cannot protect the resulting ships, and better market integration. Module 4 provides intellectual property). In many instances, innovation and guidance on how research systems in three innovation business development do not occur without complementary contexts (agriculture-based, transitional, and urbanized investments to create a supportive environment. Module 6 economies) can function more effectively. The module discusses the roles of innovation policy and governance reviews investments in mechanisms for articulating mechanisms, regulatory frameworks (for quality and safety, 10 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK intellectual property, and biosafety), and market develop- This module reviews traditional and other methods that ment in fostering agricultural innovation. It also describes help practitioners to assess and understand learning investments (in infrastructure or financial services, for processes, institutional change, changes in capacities, and example) that have synergistic effects with other instruments other outcomes and to include the various stakeholders in such as innovation funds. Given the resource limitations and the M&E process. numerous choices, investments in an enabling environment must be prioritized and sequenced with great care. Nonagricultural and cross-cutting issues Although the sourcebook focuses on innovation in agricul- Assessing, prioritizing, monitoring, and evaluating ture, it draws on experience and lessons from other sectors, investments in agricultural innovation systems not least because so many “nonagricultural� issues impinge (Module 7) on agriculture and innovation. Such issues include rural AIS investments must be specific to the context and respond finance, business development, innovation policies, and the to the stage of development in a particular country and governance of innovation, among others. agriculture sector, especially the AIS. Given that optimal The sourcebook addresses three major cross-cutting human and financial resources are rarely available, an incre- themes—the role of the public and private sector, climate mental approach is advisable. The scale of operations is also change, and gender—as appropriate (and when examples likely to vary from local or zonal to subsectoral or national. have been identified). These issues are briefly introduced This variation requires investments to be assessed, priori- in box O.7. tized, sequenced, and tailored to the needs, challenges, and resources that are present. THE SOURCEBOOK AS A LIVING DOCUMENT The identification and design of appropriate interven- tions begin with a good understanding of the level of devel- To the extent possible, the modules in this sourcebook opment and the strengths and weaknesses of the AIS. The reflect current knowledge and guidance for investments to status of an AIS and its critical needs can be assessed in sev- support innovation systems in agriculture. Their content is eral ways and at several levels. Module 7 reviews and pro- based on the expert judgment of the authors and thematic vides lessons and examples of tools for assessing AISs, such specialists, as well as reviews by experienced specialists. Yet as AIS frameworks, organizational assessments, NetMap, important gaps in knowledge remain, and new knowledge and benchmarking. will emerge from approaches that are just now being Investments are prioritized based on the needs that are devised and tested. For example, impact assessment meth- identified, but setting priorities is also a political process ods and good M&E practices for an AIS are two areas in involving negotiation to build a consensus. Scoping and which much more knowledge is needed. Future iterations of consultation can help stakeholders to develop a shared this sourcebook will also benefit from additional examples perspective on goals and challenges and to identify spe- of integrated AIS investments to strengthen innovation cific needs, opportunities, and priority interventions. capacity in related areas such as education, research, advi- These processes ideally engage a diverse group of stake- sory services, and brokering, among others. holders from within and outside the sector through This sourcebook is intended to be a living document platforms, committees, alliances, and scenario and fore- that remains open to dialogue and new, imaginative sight exercises. approaches to innovation for agricultural development. Monitoring and evaluation (M&E) of an AIS are essen- Its primary home is not on the bookshelf but online tial for assessment and prioritization, as they allow (www.worldbank.org/ard/ais), where it will be updated insights on impact and change. As technological, institu- and expanded as new experience is gained and new tional, policy, and other innovations arise through inter- approaches and initiatives arise. The authors strongly actions between networks of stakeholders in an innovation encourage readers to update, verify, and offer feedback on process, M&E should encompass quantifiable assessments the information here. Readers are encouraged to adapt (of economic benefits, productivity increases, and so on) key principles and relevant guidelines to their individual and nonquantifiable assessments (of learning by doing, agricultural projects and programs—and to share the institutional reorganization, capacity building, and so on). results widely. SOURCEBOOK OVERVIEW AND USER GUIDE 11 Box O.7 Cross-Cutting Themes Addressed in This Sourcebook The role of the public and private sector. The public sec- tive approaches on knowledge dissemination and adop- tor is expected to remain an important provider and/or tion) are required to identify and develop appropriate funder of R&D, education, and extension services in solutions that contribute to adaptation, mitigation, and developing countries, where 94 percent of the invest- green growth. The modules describe institutional ment in agricultural R&D still comes from public cof- approaches that lend themselves well to generating and fers (World Bank 2007b). Yet if markets now drive adopting climate-smart solutions. much of the agenda for agricultural R&D and new Gender. The AIS approach argues that diversity, actors are more prominent in agriculture, what is the inclusion, and participatory approaches are critical to proper role of the public sector? Each module examines building the quality of social capital needed for resilient the roles of the public and private sector with a view to and sustainable innovation systems. It takes into answering that question. account the many actors along the value chain; diverse Climate change and green growth. Climate change organizational forms to facilitate education, research, adaptation and mitigation are key goals of an agricul- and extension systems; and the practices, attitudes, and tural knowledge system. Technical as well as organiza- policies that frame agricultural production and trade. tional innovations (for example, the use of climate-smart Every module addresses gender issues through exam- and green technologies, coupled with inclusive and effec- ples and/or policy interventions. NOTE United Nations University, New York; Maastricht Economic and Social Research and Training Centre 1. In contrast to the CGIAR’s origins in the 1960s and on Innovation and Technology, Maastricht. www.merit 1970s as a mechanism for funding research divided largely .unu.edu/publications/wppdf/2007/wp2007-014.pdf. along commodity and geographic lines. For more informa- tion on the change management process and on how the ISNAR (International Service for National Agricultural CGIAR has changed as agriculture, approaches to R&D, and Research). 1992. “Service through Partnership: ISNAR’s approaches to funding R&D have changed, see www Strategy for the 1990s.� The Hague: ISNAR. .cgiar.org. Lundvall, B.-Å., ed. 1992. National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning. London: Frances Pinter. REFERENCES AND FURTHER READING Manning-Thomas, N. 2009. “Changing the Emperor: ICT- Beintema, N. M., and H. Elliott. 2009. “Setting Meaningful Enabled Collaboration Transforming Agricultural Investment Targets in Agricultural Research and Devel- Science, Research, and Technology into an Effective opment: Challenges, Opportunities, and Fiscal Reali- Participatory and Innovations System Approach.� Tech- ties.� Paper presented at the Food and Agriculture nical Centre for Agricultural and Rural Cooperation of Organization Expert Meeting “How to Feed the World the ACP Group of States and the European Union. in 2050,� Rome, June 24–26. ftp://ftp.fao.org/docrep/ www.web2fordev.net/component/content/article/1- fao/012/ak978e/ak978e00.pdf. latest-news/70-changing-the-emperor. Bernet, T., G. Thiele, and T. Zschocke. 2006. Participatory Mytelka, L. K. 2000. “Local Systems of Innovation in a Market Chain Approach (PMCA): User Guide. Lima, Globalised World Economy.� Industry and Innovation Peru: CIP-Papa Andina. http://papandina.cip.cgiar.org/ 7 (1): 15–32. fileadmin/PMCA/User-Guide.pdf. OECD (Organisation for Economic Co-operation and Freeman, C. 1987. Technology Policy and Economic Perfor- Development). 2009. “Growing Prosperity. Agriculture, mance: Lessons from Japan. London: Frances Pinter. Economic Renewal, and Development.� Draft Outcome Hall, A., N. Clark, and G. Naik. 2007. “Technology Supply Document from the Experts Meeting “Innovating Out of Chain or Innovation Capacity? Contrasting Experiences Poverty,� OECD, Paris, April 6–7. of Promoting Small-Scale Irrigation Technology in Pardey, P. G., N. M. Beintema, S. Dehmer, and S. Wood. South Asia.� UNU Merit Working Paper 2007-014, 2006. Agricultural Research: A Growing Global Divide? 12 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK IPFRI Food Policy Report 17. Washington, DC: Interna- UNIDO (United Nations Industrial Development Organi- tional Food Policy Research Institute. zation). 2008. “Innovation Systems in Practice, Charting Rajalahti, R., W. Janssen, and E. Pehu. 2008. Agricultural a New Course for UNIDO.� UNIDO Policy Position Innovation Systems: From Diagnostics to Operational Paper. UNIDO, Vienna. Practices. Agriculture and Rural Development Discussion World Bank. 2005. Agriculture Investment Sourcebook. Paper 38. Washington, DC: World Bank. Washington, DC: World Bank. Rajalahti, R., J. Woelcke, and E. Pehu. 2005. Monitoring and ———. 2006. “Enhancing Agricultural Innovation: How to Evaluation for World Bank Agricultural Research and Go Beyond the Strengthening of Research Systems.� Extension Projects: A Good Practice Note. Agriculture and World Bank, Washington, DC. Rural Development Discussion Paper 20. Washington, ———. 2007a. “Cultivating Knowledge and Skills to Grow DC: World Bank. African Agriculture: A Synthesis of an Institutional, Rivera, William M., Gary Alex, James Hanson, and Regina Regional, and International Review.� World Bank, Birner. 2006. “Enabling Agriculture: The Evolution and Washington, DC. Promise of Agricultural Knowledge Frameworks.� Asso- ———. 2007b. World Development Report 2008: Agriculture ciation for International Agricultural and Extension for Development. Washington, DC: World Bank. Education (AIAEE) 22nd Annual Conference Proceed- ———. 2008. Annotated AIS Database FY90–08. Internal ings (unpublished), Clearwater Beach, FL. document. World Bank, Washington, DC. Rygnestad, H., R. Rajalahti, K. Khanna, and E. Pehu. 2007. ———. 2009a. Gender in Agriculture Sourcebook. Washing- “Review of Agricultural Innovation System (AIS) Sup- ton, DC: World Bank. porting Investments in the World Bank’s Agricultural Knowledge and Information Systems (AKIS) FY90–06 ———. 2009b. “Implementing Agriculture for Develop- Portfolio.� Unpublished Agriculture and Rural Devel- ment: World Bank Group Agriculture Action Plan, opment Department Portfolio Review, World Bank, FY2010–2012.� World Bank, Washington, DC. Washington, DC. ———. 2010. “Designing and Implementing Agricultural Spielman, D., and R. Birner. 2008. How Innovative Is Your Innovation Funds: Lessons from Competitive and Agriculture? Using Innovation Indicators and Benchmarks Matching Grant Projects.� World Bank, Washington, DC. to Strengthen National Agricultural Innovation Systems. ———. 2011. Information and Communication Technolo- Agriculture and Rural Development Discussion Paper gies for Agriculture e-Sourcebook. Washington, DC: 41. Washington, DC: World Bank. World Bank. SOURCEBOOK OVERVIEW AND USER GUIDE 13 MODULE 1 Coordination and Collective Action for Agricultural Innovation OV E RV I E W Javier Ekboir, Institutional Learning and Change Initiative (ILAC) Riikka Rajalahti, World Bank EXECUTIVE SUMMARY the innovation systems of developing countries are ham- ctors in an agricultural innovation system (AIS) A pered as well by segmented markets, different technological innovate not in isolation, but through interacting regimes, lack of collaboration cultures, inappropriate with other actors—farmers, firms, farmer organi- incentives, weak channels of communication, and insuffi- zations, researchers, financial institutions, and public cient innovation capabilities. organizations—and the socioeconomic environment. In Effective interaction, coordination, and collective action other words, agricultural innovation is an organizational are based on existing capabilities, appropriate incentives, phenomenon influenced by individual and collective and the empowerment of individuals; thus they rely on vol- behaviors, capabilities for innovation, and enabling condi- untary action. Coordination and interaction can emerge tions. Interaction, coordination, and collective action are spontaneously or be induced by specific public or private based above all on the actors’ capacity to identify opportu- programs. Effective coordination requires (1) a committed nities for innovation, assess the challenges involved, and and capable leadership; (2) appropriate incentives; (3) an access the social, human, and capital resources required for enabling environment, in which important stakeholders innovating, learning, and sharing information. Better coor- that coordinate their activities have the mandate, culture, dination can improve the design and implementation of and freedom to participate; (4) stable support programs; innovation policies by allowing more actors to voice their (5) efforts to strengthen the capabilities for innovation and needs and concerns, resulting in more inclusive policies collective action; and (6) adaptation of public organiza- and faster diffusion of innovations. Stronger interaction tions to participate more effectively in innovation and coordination can also induce all actors in an innova- processes. The organizational innovations (committees or tion system, particularly public research and extension councils, platforms or networks, and diverse associations) organizations, to be more aware of and responsive to the reviewed in this module show that many innovations are needs and concerns of other actors, especially resource- not planned in detail beforehand; instead, they result from poor households. Despite such advantages, interaction and the adaptation of organizational structures in response to coordination have been difficult to achieve for the same emerging problems or opportunities. They also show that reasons that hinder collective action: opportunistic behav- creative and committed individuals guide the adaptation ior; lack of trust, incentives, and capacity; and difficulties in and that an enabling environment allows the organizations setting and enforcing rules. Interaction and coordination in to change. 15 RATIONALE FOR INVESTING IN policies by allowing more actors to voice their needs and COORDINATION AND COLLECTIVE concerns, resulting in more inclusive policies and faster dif- ACTION FOR INNOVATION fusion of innovations.2 Stronger interaction and coordina- tion also induce all actors, especially public research and Many different actors in an AIS generate and disseminate extension organizations, to be more aware of and respon- innovations, including farmers, firms, farmer organizations, sive to the needs and concerns of other actors, especially researchers, financial institutions, and public organizations. resource-poor households. Box 1.2 illustrates the benefits These actors do not innovate in isolation; rather, they arising from one type of interaction: learning alliances (see innovate through interacting with other actors and the also IAP 4 in module 4). The more general economic, socioeconomic environment. Their interactions take differ- social, and environmental benefits of investing in coordi- ent forms, such as consultations to define innovation nation, interaction, and collective action for agricultural policies, joint research activities, or participation in or facil- innovation and in building organizational capabilities are itation of innovation networks and value chains (box 1.1). summarized in the sections that follow. Agricultural innovation is increasingly recognized as an organizational phenomenon influenced by individual and collective behaviors (World Bank 2006). These behaviors, in Fostering economic growth turn, depend on the individual and collective capabilities possessed by the actors, on culture,1 incentives, routines, Better-connected actors with stronger innovation capabili- and the environment (Ekboir et al. 2009). ties help to solve coordination problems among potential The importance of interaction, coordination, and col- partners, build trust for collaboration, build up innovation lective action in innovation systems has been recognized capabilities, and develop a better understanding of the for more than two decades (Freeman 1987; Lundvall 1992; needs and capabilities of other actors in the AIS, especially Nelson 1993). Common reasons for AIS actors to interact marginalized groups. Other economic benefits of coordi- and address issues collectively include improved identifica- nating more capable actors include the following: tion of opportunities for and challenges with innovation; leveraging of human and capital resources; learning and ■ Lowering the cost of searching for and using technical information sharing; and (obviously) economic and/or and commercial information, easing the identification of social benefits. Interaction and coordination may also emerging technical, social, and economic needs and improve the design and implementation of innovation opportunities, facilitating experimentation on alternative Box 1.1 Main Terms Used in This Module Innovation network. A diverse group of actors that vol- formal or informal. Collaboration may take different untarily contribute knowledge and other resources forms, including frequent exchanges of information, (such as money, equipment, and land) to jointly develop joint priority setting for policies and programs, and or improve a social or economic process or product. joint implementation of innovation projects. These networks are also known as innovation platforms. Innovation brokers. Teams of specialists that Farmer organization. An organization integrated combine a strong background in science with knowl- only by farmers seeking solutions to production or edge of business and commercialization and/or commercial problems. the creation of innovation networks. Innovation bro- Value chain. The set of linked activities conducted by kers are also known as change agents or technology the different actors that a firm organizes to produce and brokers. market a product. Innovation capabilities. The skills to build and Organization. A group of actors that collaborate integrate internal and external resources to address over a sustained period. An organization can be either problems or take advantage of opportunities. Source: Author. 16 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 1.2 Role of Learning Alliances in Enhancing Interaction and Improving Innovation Capabilities in Central America A learning alliance is a process-driven approach that organizations working with 33,000 rural families in facilitates the development of shared knowledge among El Salvador, Guatemala, Honduras, and Nicaragua by different actors. Learning alliances contribute to significantly changing the partners’ attitudes and prac- improved development outcomes because lessons are tices. As they became better connected, organizations identified and learned more quickly and because working on similar topics improved their access to stronger links among research organizations and other information and knowledge of rural enterprise devel- actors in the AIS improve the focus on research and opment and their access to improved methods and development practices. tools. Attitudes shifted from competition to collabora- Since 2003, international and local nongovernmen- tion. Partners experienced how working together tal organizations (NGOs), a national university, the enhanced their capacity to serve rural communities International Center for Tropical Agriculture (CIAT), and attract donor funding. The increased effectiveness and the International Development Research Centre of the partners’ projects and the development of more (IDRC) have come together to explore how learning strategic new projects indicate how development prac- alliances can improve links between research and tices and knowledge management improved. These development actors. The learning alliance has worked shifts have contributed to a more efficient innovation with 25 agencies as direct partners, and through their system, as seen in the shared use and generation of networks it has influenced 116 additional organiza- information, joint capacity-building programs, and tions. Over the years, the alliance fostered change in large-scale, collaborative projects. Source: Author, based on CIAT 2010. Note: CIAT = Centro Internacional de Agricultura Tropical. solutions, opening market opportunities, and developing to the needs of nonpublic actors and help them to use tech- competitive capabilities. nical and commercial information, thus strengthening their ■ Integrating more effectively into innovation networks. innovation capabilities. ■ Developing new skills and more effectively using human, social, physical, and financial resources, thus fostering Reducing poverty economic growth. ■ Participating in the development and diffusion of inno- Poor households usually have limited human, social, phys- vations, including action-research projects and new ical, and financial resources (Neven et al. 2009). Individu- approaches to extension. als and organizations with facilitation and/or brokering skills can help these households to pool their limited resources among themselves or with other actors (for Producing public goods example, NGOs or supermarkets) to achieve economies of Individuals and organizations with facilitation and/or bro- scale, enter new markets, or access new resources, such as kering skills (in other words, with the capacity to promote technical information or credit (World Bank 2006). interaction) produce three important public goods. First, by Although the direct impact of farmer organizations on linking public, private, and nonprofit actors, they facilitate poverty seems relatively modest (see TNs 2 and 4), organi- the identification of emerging trends and improve policy zations can have important indirect effects on poverty by dialogues and the design and implementation of innovation fostering economic growth, creating employment, prevent- and agricultural policies at the global and domestic level. ing buyers from benefiting at the expense of suppliers, Second, by interacting more actively with researchers, they building innovation capabilities, and protecting marginal help researchers to generate more relevant scientific infor- groups (such as women or landless farmers) from further mation. Third, by interacting with extension organizations, marginalization (for example, see IAPs 4 and 6). They can they can help extension services to become more receptive also negotiate with authorities on behalf of their members, MODULE 1: OVERVIEW 17 increasing the public resources invested in poverty allevia- needed but does not yet exist, and preparing professionals tion and affirmative action programs. with strong skills in disciplines required by innovating actors.3 To play this role, researchers must interact inten- sively with other actors in the innovation system. While in Improving environmental outcomes recent years public research institutes and universities in Innovations that improve the sustainable use of natural developing countries have been pressed to open up to the resources are usually developed and diffused by networks needs of other stakeholders in the innovation system, few with a diverse set of partners and capabilities (IAP 1). Their have been able to adapt because they do not have the diversity facilitates access to a large pool of technical infor- capabilities and incentives to interact with nonacademic mation, the implementation of participatory and action- agents, have weak research capabilities, and resist change research programs, effective diffusion activities (such as (Ekboir et al. 2009; Davis, Ekboir, and Spielman 2008).4,5 farmer-to-farmer extension), and collective action for the Similarly, most farmers and NGOs have weak links with management of common resources. Individuals and organ- public organizations and governments, including the tradi- izations with stronger capabilities and facilitation and/or tional research, extension, and regulatory agencies as well as brokering skills can also help to articulate environmental local authorities and financing organizations. demands that are often excluded from national policies. The sections that follow review the main elements of These demands are often linked to poverty alleviation, effective interaction, coordination, and collective action, because poor households tend to live in unfavorable and starting with the conditions for effective interaction and fragile environments. coordination and the instruments and incentives needed. The main types of coordinating bodies and organizations are described, and the crucial need to build innovation and CONTENT OF THIS MODULE organizational capabilities in new or existing organizations After looking in detail at past experiences with coordinating is discussed. and fostering collective action for innovation (such as through formal and informal coordination agents and/or organizations), this module describes the conditions, Conditions that foster the effective interaction and coordination of actors for collective instruments, and incentives for coordination and discusses action and agricultural innovation ways of building innovation capabilities in groups of actors in an AIS. It also briefly reviews key policy issues; new direc- Interaction and coordination for collective action and agri- tions, priorities, and indicators that can help to monitor cultural innovation can be successful only if (1) the AIS progress and assess the results of investing in interaction actors perceive that the benefits of contributing to a com- and coordination; and the conditions and capabilities that mon effort are bigger than the associated costs; (2) they have improve the chances of success. the appropriate human and social resources to participate in collective action; and (3) they feel that they can influence the processes in which they participate. Interaction and PAST EXPERIENCE coordination may emerge spontaneously. An effective value Despite their advantages, interaction and coordination have chain, in which actors collaborate (often without formal been difficult to achieve for the same reasons that hinder col- contracts) to supply a particular product to a market, is an lective action: opportunistic behavior; lack of trust, incen- example of spontaneous coordination. Coordination may tives, and capacity; and difficulties in setting and enforcing also arise from deliberate interactions, such as a multistake- rules. Interaction and coordination in the innovation systems holder forum where innovation policies are discussed. of developing countries are also hampered by segmented Effective interaction, coordination, and collective action markets, different technological regimes, lack of collabora- are based on existing capabilities and on appropriate incen- tion cultures, inappropriate incentives, weak channels of tives and empowerment of individuals, and thus they rely communication, and insufficient innovation capabilities. on voluntary action.6 Because effective interactions and trust Interacting in a sustained way has proven difficult, par- seldom emerge spontaneously, programs that support inter- ticularly among research and educational institutions, mediaries and build innovation capabilities are often neces- which have an important role to play in facilitating access to sary to facilitate the process. Box 1.3 lists factors essential to scientific information, generating information that is effective interaction and coordination. 18 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 1.3 Factors Essential to Interaction and Coordination for Agricultural Innovation Every innovation is a new combination of resources, ■ Facilitators work effectively only when financing is particularly ideas, skills, information, different types of sustainable and stable. Private actors will rarely pay capabilities, interorganizational learning and knowl- for services that are initially difficult to define and edge, and specialized assets. Organizational innovations whose real value can be determined only after the are as important as product or process innovations. intervention finishes. For this reason, public funds Individuals or organizations may facilitate the should be made available to support coordinators of exchange of resources and the coordination of actions innovation processes and the implementation of to develop innovations. This process among heteroge- institutional and organizational innovations. neous actors may increase the diversity of resources and ■ Inducing actors to alter their behaviors may require ideas that are available. The greater the variety of these changes in laws and regulations. Given the uncertain factors available to innovators, the greater the scope for nature of innovation processes, such changes should them to be combined in different ways, producing be introduced after they have been tried in pilot proj- innovations that can be both more complex and more ects and after different actors (private firms, public sophisticated. But variety is not enough for effective research organizations, and relevant stakeholders innovation. It is also necessary to have the incentives such as the main ministries, regulators, and NGOs) and capacity to search the pool of ideas and know how have been involved in policy design, consultations, to combine them. In other words, incentives and inno- strategizing, and implementation. It is also impor- vation capabilities determine how actors innovate. tant to invest in preparing high-quality information Effective coordination for innovation occurs when to support decision making, such as background (1) a committed and capable leadership promotes the studies commissioned from national or international collaboration; (2) one organization offers appropriate think tanks and experts, sectoral dialogues between (often new) positive and negative incentives to individu- employers and employees’ unions, and high-level als from cooperating organizations (such as researchers steering groups (see module 6, TN 1 and TN 2). or farmers); (3) important stakeholders that coordinate ■ Interaction and coordination require adaptive man- their activities have the mandate, culture, and freedom to agement to help participating actors to change their participate; and (4) individuals participating in the col- behaviors as new actors join the informal organiza- laboration do not change often (a relatively common tion and the innovation process matures. Adaptive problem with high-level civil servants). management cannot be implemented well without Other factors are also essential to interaction and monitoring and evaluation systems that focus more cooperation: on processes than on outcomes. ■ Many public research and higher education organiza- ■ Interactions and cooperation are not costless or easy tions in developing countries have incubator pro- to implement; therefore, they have to be managed grams to foster the emergence of private firms and with a clear view of the outcomes being sought and other organizations. Before expanding these pro- the associated costs. grams, it is important to assess their capabilities to ■ Interaction and collaboration thrive only if they are manage innovation programs and, if their capabilities based on trust, which fosters greater commitment, are weak, to consider creating new, dedicated agencies, more thorough knowledge sharing, and better con- not necessarily within the public sector. Also consider flict resolution. divesting from obsolete schemes and institutions. ■ Motivated, capable, and autonomous facilitators are ■ “System failures� are prevalent, caused by weak incen- essential for inducing collaboration. Well-connected tives for collaboration, conservative organizational cul- facilitators and collaborators pull promising new tures, lack of trust among potential partners, regulations entrants into their networks and collaborate with a and programs that hamper interactions, and ineffective wide assortment of partners, exposing them to more financing for innovation. By diminishing these failures, experiences, different competencies, and added facilitators or collaborators promote collective action, opportunities. In rapidly changing industries, facili- the production of public goods for innovation, and the tators lacking such connections fail to keep pace. development of the innovations themselves. Sources: Authors, based on Fountain 1999; Axelrod and Cohen 1999; Hakansson and Ford 2002; Fagerberg 2005; Powell and Grodal 2005; Klerkx and Leeuwis 2009; Klerkx, Aarts, and Leeuwis 2010. MODULE 1: OVERVIEW 19 Instruments and incentives for interaction, for most farmers and small companies the tax deductions coordination, and organization of actors for are too small to finance research or innovation projects. agricultural innovation At the macro level, policies can facilitate coordination by Effective coordination and organization of actors for agri- setting new incentives and rules by which agents operate. At cultural innovation can be supported with different instru- other levels of the AIS, successful coordination of actors ments, including building capabilities for innovation (TN requires innovation capabilities (discussed later) and appro- 4); joint priority setting or technology foresight exercises priate incentives, such as effective markets (which create (TN 1), joint research and/or innovation programs, efforts opportunities to benefit from innovations) and innovation to foster the emergence of innovation platforms (module 4, funds (see module 5, TN 2). At lower levels, actors in the AIS TNs 1 and 2) and value chains (TN 3), the creation of ven- coordinate their actions in response to public incentives ture capital (module 5, TN 6), and support for establishing (such as social programs financed by local or international innovation brokers (module 3, TN 4). Innovation councils donors), market opportunities (such as high-value agricul- and advisory committees involving different ministries can ture), or problems that affect whole communities (such as coordinate policies, joint priority setting, and technology the management of natural resources). Programs to pro- foresight exercises, which are often supplemented with tem- mote collaboration at the lowest levels of the AIS include porary stakeholder consultation arrangements (see module funding innovation brokers (see module 3, TN 4), extension 7, TN 3). Innovation forums and market and technology agents, and incubators; fostering the emergence of innova- intelligence can create common visions among agents, thus tion networks (TN 2); providing resources for coordination fostering coordination. activities (such as face-to-face meetings), and building If they do not provide proper incentives for organizations actors’ capabilities so that they can better search for and use and especially individuals, coordination initiatives result technical and commercial information. Finally, because only in formal interactions that have little effect on the AIS. innovators and brokers cannot innovate in an unfavorable Individuals respond to the incentives offered to them. environment, physical and communications infrastructure When organizations do not introduce incentives to support should be developed, institutions must be strengthened, and external collaboration and coordination, their members regulations must be updated periodically to adapt to new (whether researchers, employees, or farmers) simply con- technologies and market requirements (see module 6 on the tinue their normal activities. For example, it has been very enabling environment for AIS). difficult for research and education organizations in devel- oping countries to participate in innovation processes. Types of coordinating bodies and Effective participation of nonacademic actors in the gov- organizations in the AIS erning bodies of research organizations can induce research Aside from the traditional coordinating activities led by min- organizations to interact better with nonacademic agents. istries of agriculture, a wide array of coordinating bodies For this to happen, the nonacademic actors must have a contributes to agricultural innovation. Coordinating bodies good understanding of the dynamics of innovation and and other forms of organizing actors (either individuals or research (Ekboir et al. 2009). When the agricultural tech- organizations) are becoming increasingly important owing nology institutes are part of the agriculture ministry and the to the challenges imposed by globalization, emerging tech- latter has little interaction and no formal links with the nologies, the increasing complexity of science, new forms of offices in charge of general scientific and innovation policies innovation, and global issues such as climate change, access (research councils or other ministries), agricultural research to clean water, and poverty reduction. These bodies do not and innovation policies can be divorced from other science necessarily belong to the public sector but often have links to and technology policies. This separation has two important the highest levels of government (vertical coordination). consequences. First, the incentives offered to researchers Interaction and coordination increasingly are promoted and often discourage interactions with farmers, especially when supported by different agents at the specific level in which these incentives value indexed publications over participa- they operate. Almost any agent can coordinate an innovation tion in innovation processes. Second, incentives for innova- process if it has the personal, financial, and social resources tion are often designed in ways that prevent farmers from to do so. using them. For example, it is common to offer tax incen- Over the years, formal and informal structures that tives for private investments in research and innovation, but coordinate actors within and between different levels of the 20 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK AIS have emerged in almost every country. Informal organ- knowledge about their impacts. Some developed coun- izations (for example, innovation networks or value tries (Finland and the Republic of Korea are examples) chains)7 are increasingly recognized as important sources have set up national science and/or innovation councils at of innovation, because they complement and bond to for- the highest possible level. These councils engage ministers mal organizations through a dense web of personal rela- (such as the prime minister and finance minister) and tions (Hakansson and Ford 2002; Robinson and Flora representatives from universities, public research organi- 2003; Christensen, Anthony, and Roth 2004; Vuylsteke and zations, and industry in developing policy guidelines and van Huylenbroeck 2008). facilitate coherence, consensus building, and coordina- Formal organizations, such as a firm or a national research tion throughout the system. Similarly, several countries council, have a leadership structure defined in by-laws. For- (Chile, the Netherlands, South Africa, Thailand, and the mal, dedicated structures with set agendas do not guarantee United Kingdom are examples) have created science and that actors are coordinated effectively, however. Informal technology councils or other organizations, consisting of organizations lack formal structures but possess all the other public and private research organizations, private firms, features of organizations, such as shared cultures and com- funding agencies, sectoral organizations, and farmer munication codes, governance structures, incentives, and organizations to proactively promote coordination in the routines. Informal organizations have coordinators or leaders innovation system.9 (Simon 1981) who emerge from the organization’s internal A thematic note (module 6, TN 2) discusses the role of dynamics, the relative strength of the partners, and the innovation system governance in greater detail, offering socioeconomic environment. For example, individual small- examples and guidelines on actors, structures (such as holders negotiate with buyers from a disadvantaged position, councils), and capacities needed for good governance. Thai- but they may gain bargaining strength when they organize land’s National Innovation Agency is discussed in box 1.4 as themselves, even if their organization does not have legal sta- an example of the challenges, objectives, evolving functions, tus. Without the organization, leadership in the value chain and learning associated with innovation system governance. rests with the buyers; with the organization, farmers can bet- ter influence the chain (Hellin, Lundy, and Meijer 2009). At the meso level (sectoral, regional, or provin- Interaction and coordination may be strengthened by cial). At the AIS level, governance has been improved by creating new organizations or strengthening existing ones creating formal but effective spaces for dialogue at different (see the discussion on building innovation capabilities). levels of the AIS, building up the actors’ organizations and Both approaches have different challenges. Table 1.1 sum- their capabilities, and improving formal and informal marizes the main types of coordinating bodies and/or regulations (intellectual property rights regimes, the judici- organizations that operate at different levels of the AIS. ary system, customs, and markets) that reduce transaction Given the diversity of coordinating bodies, organizations, costs associated with interaction and collaboration. These instruments, and the roles they play8 (discussed next), it is governance systems typically aim at improving participa- important that decision makers at the highest level, such as tion of stakeholders from producers to consumers; improv- ministers or donors, avoid—to the extent possible— ing transparency and openness associated with decision imposing particular approaches and allow the catalyzing making on funding and priorities; improving responsive- actors to search for the best instruments for the particular ness and accountability to stakeholders; facilitating con- processes they coordinate. sensus building and coherence of policies, strategies, and activities; and building a strategic vision (Hartwich, Alex- At the macro level (national). Several countries have aki, and Baptista 2007). embarked on improving overall innovation system gov- Most efforts to coordinate innovation at the higher levels ernance at the national level. Governance concerns the of the agriculture sector have centered on establishing for- mechanisms by which decisions are made in an organiza- mal apex research councils. In several countries—examples tion, whether public, private, or nonprofit. Governance has include Australia, Brazil, Ghana, India (box 1.11 in TN 1), several dimensions, including power, culture, incentives, and Mexico—these formal research councils or forums leadership, and coordination. In the governance of a assist the government in designing and implementing agri- national innovation system, special attention is given to cultural research policies, setting priorities and agendas, the systems and practices for setting priorities and agen- coordinating the division of labor; managing large parts of das, designing and implementing policies, and obtaining public budgets for research, monitoring and evaluating MODULE 1: OVERVIEW 21 22 Table 1.1 Examples of Coordinating Bodies, Potential Participants, and the Levels at Which They Operate AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Actors that participate Type of Countries where Structure in the coordination coordination it can be found Examples of coordinating bodies Macro (national) level Councils of ministers or Ministries, science councils, Spontaneous when Canada, Finland, Rep. of Research and Innovation Council, Finland, advisory councils to the public bodies, private firms, actors follow the Korea http://www.aka.fi/en-gb/A/Science-in- president or ministries farmers, farmer rules; formal when society/Strategic-Centres-for-Science-Technology- (through policies and organizations, NGOs ministries coordinate and-Innovation/Background-to-CSTIs/; National regulations) policy making Innovation Agency,Thailand, www.nia.org.th Science and innovation Public and private research, Formal and informal Brazil, Chile, European Consejo Nacional de Ciencia y Tecnología, Mexico, councils private firms, funding Union, Finland, India, http://www.conacyt.gob.mx/Paginas/default.aspx agencies, sectoral and Mexico, South Africa, farmer organizations United States Meso (sectoral, regional, or provincial) level Agricultural Mostly public, but the newer Formal and informal Australia, Austria, Indian Council of Agricultural Research, science/research types with public, private, Bangladesh, India, www.icar.org.in; Latin American and Caribbean councils farmer, civil society Netherlands, Norway Consortium to Support Cassava Research and participation Development; Australia Rural Research and Development Council, www.daff.gov.au/ agriculture-food/innovation/council; Bioconnect, Netherlands, www.bioconnect.nl Coordinating bodies (for Public and private research, Formal and informal Argentina, Australia, Asociación Argentina de Productores de Siembra several sectors or private firms, funding Chile, Mexico, Directa, www.aapresid.org.ar; Fundación para la specialized in the agencies, sectoral and Netherlands, Innovación Agraria, Chile, www.fia.cl; Medicinal agriculture sector) farmer organizations Thailand, United Herbs Board/Association, India Kingdom Micro (farmer) level Innovation networks Private firms, farmers, farmer Informal All countries Papa Andina, International Potato Center, organizations, NGOs, www.papandina.org; Bioconnect, Netherlands, funding agencies, researchers www.bioconnect.nl Value chains Private firms, farmers, farmer Informal All countries Numerous examples exist; no specific example is organizations, NGOs given here Product marketing Private firms, farmers, farmer Formal Colombia, Israel, Kenya, Federación Nacional de Cafeteros de Colombia, organizations organizations New Zealand www.cafedecolombia.com; Fresh Produce Exporters Association of Kenya, www.fpeak.org Public-private Private firms, farmers, farmer Formal Almost all countries Bioceres, Instituto Nacional de Tecnología partnerships organizations, research Agropecuaria, Argentina; organizations http://www.bioceres.com.ar/trigo_biointa/trigo_b _regalias.html Innovation parks Private firms, research Formal and informal Almost all countries Waikato Innovation Park, New Zealand, organizations www.innovationwaikato.co.nz Incubators Private firms, farmers, farmer Formal and informal Almost all countries International Crops Research Institute for the organizations, research Semi-Arid Tropics, Agribusiness Incubator, India, organizations www.agri-sciencepark.icrisat.org Source: Authors. Box 1.4 Thailand’s National Innovation Agency Thailand’s National Innovation Agency (NIA), estab- ■ Build up the national innovation system. Although lished in 2003, supports the development of innova- NIA is in an ideal position to propose measures to tions to enhance national competitiveness and gives enhance policy coherence across ministries, its port- significant attention to agriculture and other biologi- folio suggests that it focuses more on discrete and cal sciences. Operating under the overall policy guid- disguised subsidies for firm-level innovation. ance of the Ministry of Science and Technology, in 2009 NIA had a budget of about US$10.8 million. NIA One challenge is that NIA’s definition of its role as is unusual in that it offers direct financial support to “coordinating industrial clusters both at policy and private companies for innovation-related projects. In operational levels, promoting innovation culture, and 2009, it supported 98 “innovation projects� initiated building up innovation systems, with a broader aim to by private companies. The agency essentially shares transform Thailand into an innovation-driven econ- the investment risks associated with innovative, omy� appears to overlap with the mandates of the knowledge-driven businesses through technical and newly established Office of Science, Technology, and financial mechanisms. NIA’s main strategies are the following: Innovation (STI), the National Economic and Social Development Board, National Science and Technology Development Agency, and Office for SME Promotion. ■ Upgrade innovation capability, with a focus on bio- Of particular note is the government’s assignment of business, energy and environment, and design and the mandate to draft Thailand’s 10-year science, tech- branding. NIA encourages the development of start- nology, and innovation policy to the STI rather than the ups and supports commercialization of research. ■ Promote innovation culture within organizations of NIA. In 2010 the NIA was upgraded by government all types. NIA operates an innovation management decree from a project within the Ministry of Science course for executives, National Innovation Awards, and Technology to a public organization. Its new board an innovation ambassador scheme, an Innovation comprises representatives from key government agen- Acquisition Service, and a Technology Licensing cies as well as the private sector, and it is currently Office. chaired by the executive chairman of Bangkok Bank. Sources: Wyn Ellis, personal communication; NIA, www.nia.or.th; Brimble and Doner 2007; Intarakumnerd, Chairatana, and Tangchitpiboon 2002. research programs, and often coordinating and creating exceptions include the Australia Agriculture and Rural improved links between public agricultural research and Development Council (box 1.10 in TN 1) and Chile’s Fun- extension organizations. Research may also be coordinated dación para la Innovación Agraria (FIA, Agricultural Inno- at the regional level (IAP 5 presents an example related to vation Foundation; IAP 3). cassava). However, the effectiveness of these councils varies As few countries have national councils specifically greatly. Many have a narrow representation of stakeholders, mandated to coordinate agents in the AIS, most agricul- consisting primarily of ministerial representatives or tural innovation is coordinated at the subsectoral level via researchers, and their research prioritization is not necessar- product marketing companies and associations, such as the ily consultative or does not rely on rigorous evidence. They Fresh Produce Exporters Association of Kenya (box 1.5) often have little influence on the policy process and how and the Colombian Coffee Growers’ Federation, or farmer- research is conducted. For further details, see TN 1. managed foundations, such as Mexico’s Produce Founda- Given the predominance of national innovation councils tions (IAP 2). and agricultural research councils, there are few “true� agri- Marketing or commodity boards were the first type of cultural innovation councils, mandated to coordinate and coordinating bodies to be created and have been common prioritize investments in agricultural innovation. Notable in both developed and developing countries for many MODULE 1: OVERVIEW 23 Box 1.5 Fresh Produce Exporters Association of Kenya: A Sectoral Coordinating Body Horticulture is the fastest-growing agriculture subsector for six months. Affiliate membership is open to firms in Kenya, earning roughly US$1 billion in 2010. The and/or individuals serving the industry. These include Fresh Produce Exporters Association of Kenya (FPEAK), airlines, consultants, certification bodies, input sup- established in 1975, serves as the premier trade associa- pliers such as seed suppliers, packaging manufactur- tion representing growers, exporters, and service ers, chemical companies, and clearing and forwarding providers in the subsector (fresh cut flowers, fruits, and firms. vegetables). FPEAK is part of a larger Kenya Horticul- What are FPEAK’s strategic goals and activities? ture Council formed in 2007 through a merger between the Kenya Flower Council and FPEAK. The Kenya Hor- ■ FPEAK has developed and implemented the pro- ticulture Council’s role is to enhance the effectiveness tocol for Kenya Good Agricultural Practices and efficiency of resource use and service delivery to (Kenya-GAP), against which growers can be Kenya’s horticultural industry. audited and certified, a process that has involved FPEAK provides a focal and coordination point for wide stakeholder consultation. the horticulture export industry. A recognized partner ■ FPEAK’s information service disseminates news on of the leading agricultural legislation, certification, and technical issues, trade, official regulations, and mar- research bodies and development partners in Kenya, it ket requirements. provides technical and marketing information and ■ FPEAK receives trade inquiries from overseas buyers training, acts as an information center, and runs active and passes them on to members. lobbying and advocacy programs to enhance the sec- ■ FPEAK offers training programs by specialists. For tor’s competiveness. example, farmers, including smallholders, are trained FPEAK structure. FPEAK is registered as a company in GAP and standards compliance in partnership limited by guarantee. Its elected board of directors con- with exporters who are members of the association. sists of members actively engaged in the export business. ■ FPEAK agronomists visit members’ farms and pro- The FPEAK secretariat is responsible for administrative duction sites upon request to advise on readiness for functions and providing services to members. FPEAK compliance, in particular to Kenya-GAP and GLOBAL operates independently of and receives support from GAP (which sets voluntary standards for the certifi- partners. cation of agricultural products). Who qualifies to be a member? To become an ordi- ■ FPEAK coordinates members’ participation in trade nary member, an exporter must have been in business events and assesses emerging markets. Source: FPEAK, www.fpeak.org. decades. After the wave of deregulation in the 1980s, many a diverse group of organizations representing an array of developing countries abolished or privatized marketing goals, structures, and challenges. Examples include India’s boards, but several public marketing boards remain. There National Dairy Development Board (box 1.6), the New is no generally agreed definition of a commodity board. Zealand Dairy Board, Kenya Tea Board, Ghana Cocoa Usually they are formal bodies in which different actors Board, and the Colombian Coffee Growers’ Federation. involved in the production, transformation, and marketing of a product discuss issues of mutual interest and some- At the micro level (organizing farmers). At the micro times regulate their activities. They may also finance or level, farmers form local producer organizations or join pri- implement supporting activities such as managing research vate firms and other actors in innovation networks (either in their own institutes or by contracting external and value chains. Farmer organizations are joined only researchers), implementing generic advertising campaigns, by producers who seek solutions to particular production or and proposing legislation related to a product. In some commercial problems (TN 4).10 The creation of new organ- cases, they also regulate production. Commodity boards are izations for small-scale farmers, especially cooperatives, 24 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 1.6 Indian National Dairy Development Board The Indian National Dairy Development Board ■ Create self-reliant and professionally managed coop- (NDDB) was set up in 1965 by Parliament as a national erative institutions, responsive to members’ eco- institution governed by a board of directors to pro- nomic and social expectations, through cooperative mote, finance, and support producer-owned and development and governance programs to -controlled dairy organizations and support national strengthen capacities of the primary members, man- policies favoring their growth. The board’s work and agement committee members, staff of village Dairy scope expanded under Operation Flood, a program Cooperative Societies, and the professionals and supported by the World Bank from 1970 to 1996. elected boards of Milk Producers’ Cooperative NDDB places dairy development in the hands of milk Unions. Women’s Development and Leadership producers and the professionals they employ to Development Programs are a central activity. manage their cooperatives. The board also promotes ■ Technical and professional skills training at Regional other commodity-based cooperatives and allied Demonstration and Training Centers of NDDB, industries. The government tasked NDDB with prepar- Union Training Centers, and the Mansingh Institute ing a National Dairy Plan for meeting a projected of Technology. Programs are designed for dairy demand for about 180 million tons of milk by cooperative boards, chief executives, managers, field 2021–22. The plan is being implemented with World staff, and workers. Bank support. ■ Technical assistance and engineering inputs for In 2009, India’s 1.3 million village dairy cooperatives clients such as milk producers’ and oilseed growers’ federated into 177 milk unions and 15 federations, cooperative unions and federations and central which procured an average 25.1 million liters of milk and state government. Services offered by NDDB- every day. In 2010, 13.9 million farmers were members qualified engineers include setting up and standard- of village dairy cooperatives. The following are the izing dairy plants, chilling centers, automatic bulk NDDB’s main areas of focus: milk vending systems, cattle feed plants, and infra- structure for agro-based industry projects. ■ Support cattle and buffalo breeding, animal health NDDB’s coordination role has come in for some programs, and biotechnology research to improve milk productivity. criticism. Although the board is strengthening cooper- ■ Add value by testing and transferring product, ative dairies, which supply about 70 percent of mar- process, and equipment technologies as well as ser- keted processed milk, it has not improved the capacity vices for analysis of dairy products and milk quality of the informal dairy sector, based on village vendors, sampling. which produces some 80 percent of the milk in India. Sources: http://www.nddb.org; Rasheed Sulaiman, personal communication. has had mixed results (TN 2). Many were initiated by operating routines in response to unforeseen needs and external agents such as NGOs or research institutes. When opportunities, especially unexpected market and social the new organizations ran into financial problems, the developments; could participate actively in networks of inclination was to provide them with additional support. specialized actors; and could try several institutional This intervention isolated them from potential partners arrangements and routines until they found a configura- and, in some cases, from markets, creating a vicious cycle tion that enabled them to fulfill their mission (Ekboir et al. of dependence on funders (Hellin, Lundy, and Meijer 2009; TN 4 and IAP 2). 2009). Additionally, when organizations responded to the Coordination of actors in the AIS at the meso and objectives of their funders or were captured by elites, they micro levels can also be strengthened by creating self-help provided little benefit to the intended beneficiaries. New groups, such as farmer groups (IAPs 1 and 4). Through the organizations tended to benefit their stakeholders mostly creation of rural productive alliances, which bring com- when the organizations could adapt their objectives and mercial buyers together with producer organizations, MODULE 1: OVERVIEW 25 small-scale producers tap into vital resources for reaching already exist. Collaboration can be reinforced by trans- important markets (IAP 6). forming the actors so that they can contribute better to Farmers may form regional associations to conduct innovation processes. For example, collaboration with for- applied research (like the regional associations of no-till eign agroprocessing and trading companies to expose the farmers in Brazil, described in IAP 1), provide services, agriculture sector to different business cultures and pro- lobby decision makers, or influence the agenda of public vide access to new markets has been very effective. Another research institutes (like the Mexican Produce Foundations effective strategy is to visit other innovators (whether described in IAP 2). Sectoral organizations that facilitate local, domestic, or foreign), especially when the visitors market access to large numbers of small-scale farmers by have strong innovation capabilities and the visits are part setting standards, providing technical and financial assis- of a program to share the information with other innova- tance, and consolidating their output are another common tors at home. Virtual platforms have also been useful when form of coordination at the subsectoral level (TN 1). actors in the AIS have the capabilities to use them. Innova- Innovation networks are groups of agents (including tion brokers can help marginalized groups to develop farmers, private firms, and possibly researchers and farmer these capabilities. organizations) that voluntarily coordinate their actions and Whether one establishes new or strengthens existing contribute knowledge and other resources to develop jointly organizations to support coordination, innovation capabili- or improve a social or economic process or product. The ties are essential (box 1.1). Innovation capabilities depend membership of innovation networks changes often in both on individual traits (creativity, for example) and on col- response to new challenges or opportunities (see TN 2, par- lective factors, such as collective learning mechanisms and ticularly on the Papa Andina network). In contrast, value organizational cultures. In other words, innovation capabili- chains are networks with a commercial focus, one actor (a ties depend not only on innovative individuals but also on supermarket or broker, for example) that “organizes� and internal features of the organization, especially incentives, cul- commands the chain, and a relatively narrow, stable mem- tures, organizational spaces for experimentation, coordinating bership. The strengths of value chains often result from the structures, and collective action (box 1.7). development of organizational innovations (especially the Innovation capabilities cannot be bought or built easily, coordination of actors along the chain) that enable the cre- and their development requires important investments and ation of new business models (see TN 1 and IAP 6). strong leadership over long periods, as exemplified by The importance of innovation brokers is increasingly Whirlpool, a company that transformed itself from selling recognized. Innovation brokers are teams of specialists commoditized appliances in mature markets to generating a that combine a strong background in science with knowl- stream of breakthrough innovations that multiplied the edge of business, marketing, and/or the creation of inno- company’s revenue 20 times in just three years (box 1.7). vation networks. Innovation brokers support linkages Given the complexity and major investments required for among actors in the AIS and help farmer organizations such a large set of interventions, it is unlikely that many and private firms to manage research and innovation proj- countries and donors will implement programs of similar ects. They teach courses on the management of innovation, scope, particularly in the case of agricultural innovations, assess the actors’ innovation capabilities, propose actions to which are often developed by networks of actors—that is, by strengthen them, and may accompany the implementation organizations with very weak hierarchies. of the recommendations. Innovation brokers may also help Often, however, an external event or a few key interven- governments and donors to develop their own innovation tions can trigger a virtuous cycle that builds up innovation capabilities and to explore new instruments to foster inno- capabilities (box 1.8). Innovation capabilities should be vation. NGOs, specialized service providers, or public built within organizations (farmer organizations, civil soci- organizations (including research or educational institu- ety organizations, and private firms), in innovation brokers, tions) can play this role. in supporting organizations (such as research institutes and ministries), and in the enabling environment. Programs to broaden organizational capabilities should be adapted to Building innovation capabilities in coordinating particular configurations of actors, problems to be solved, bodies and organizations and socioeconomic and institutional environments. Given the challenges of developing new organizations, it Building organizational capabilities for innovation is may be more feasible to strengthen organizations that particularly challenging for several reasons. First, the main 26 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 1.7 A Traditional Company in a Mature Sector Builds Innovation Capabilities Instilling innovation as a core competence at Whirlpool ■ The creation of “innovation boards� in each region took a massive, broad-based effort over several years, and each major business unit, made up of senior involving major changes to leader accountability and staff who meet monthly not just to review ideas and development, cultural values, resource allocation, projects, set goals, and allocate resources but to over- knowledge management, rewards and recognition sys- see the continuing innovation capability-building tems, and a whole host of other management practices process. and policies. ■ The organization of big communication events Here are just a few examples of these changes: called Innovation Days, where innovation teams showcase their ideas to other Whirlpool people, the ■ The appointment of vice presidents of innovation at media, and even Wall Street analysts. Sometimes both the global and regional level. these events are also held in suburban shopping ■ The creation of large, cross-functional “innovation malls as a way of collecting feedback and additional teams� in each region employed solely in the search ideas from potential users. for breakthrough ideas. ■ The creation of a comprehensive set of metrics to ■ The introduction of a companywide training pro- continually measure the company’s innovation per- gram aimed at developing and distributing the formance as well as its progress in embedding inno- mind-set and skills of innovation. vation as a core competence. ■ The appointment of more than 600 part-time ■ The establishment of a sophisticated IT [information “innovation mentors� and 25 full-time “innova- technology] infrastructure called Innovation E-Space, tion consultants,� who act as highly skilled advisers which integrates all of Whirlpool’s people into the to new project development teams around the innovation effort and allows them to track progress world. on innovation activities across the corporation. Source: Quoted directly from Skarzynski and Gibson 2008, 7. Box 1.8 Actions to Build Organizational Capabilities ■ Assess the main organizations in the AIS, analyzing stakeholders, including top managers, directors, at least three issues: whether each organization is policy makers, funders, and field staff. necessary, what capabilities it needs to fulfill its mis- ■ Create multistakeholder forums to discuss innova- sion, and how those capabilities can be built. tion policies and programs. ■ Introduce new incentives so that existing organiza- ■ Promote the emergence of innovation brokers and tions, especially public research institutes and uni- new types of interactions for innovation, such as versities, can better innovate and integrate into public-private partnerships or innovation networks innovation networks (see the remaining points and (module 3). modules 2 and 4). ■ Explore new models of extension to promote orga- ■ Create awareness among decision makers of the nizational innovations (module 3). importance and nature of organizational capabilities ■ Support organizations that seek to provide services and of the need for sustained efforts to build them. such as farmer-led research, extension, credit, and ■ Implement training and mentoring programs on the provision of inputs in rural areas (module 3). the management of agricultural innovation; tailor ■ Support exchanges between foreign and domestic these programs to the specific needs of important organizations. Source: Authors. MODULE 1: OVERVIEW 27 factors that influence organizational capabilities are not well innovation networks, but mostly in exceptional cases. The understood. Second, organizations are strongly conservative private sector or nimble NGOs are better equipped to coor- (Christensen, Anthony, and Roth 2004), especially public dinate the development and diffusion of technical and com- organizations that operate under the rules of the civil ser- mercial innovations that adapt to rapidly changing techni- vice. Third, because interventions to build a capacity to cal or economic conditions, such as value chains for innovate must suit the particular needs of each organiza- high-value products, or environmental innovations that tion, the design and implementation of projects to achieve require collective action, such as the management of water this goal require that the implementing agencies themselves resources or forests. possess strong capabilities to innovate. The public sector (including the central, provincial, and local governments) can support innovation by (1) setting up an institutional environment conducive to innovation, KEY POLICY ISSUES including regulations, sanitary services, and intellectual The key policy issues surrounding the organization of actors property regimes; (2) financing programs to support inno- for innovation—the need for coordination, collective action, vation, including support for coordination of actors, sup- and stronger innovation capabilities—concern the kinds of port for venture and angel funds, financing research and institutions needed to foster innovation, the roles of the extension embedded in innovation programs, and strength- organizations involved (including reforms or actions that ening innovation capabilities; (3) allowing innovators to help organizations and marginalized groups to participate experiment with alternative approaches to achieve the pro- more fully), and the sustainability of innovation programs. ject’s goals; and (4) building up the infrastructure, especially transportation networks and public research and extension institutions. Institutional and enabling considerations The nonprofit sector should coordinate innovation An enabling environment (module 6) is a prerequisite for processes that open opportunities for marginalized groups effective coordination and is developed more easily when and represent their interests in policy dialogues. Public governments, donors, and the other actors in the AIS have a organizations may feel threatened when nonpublic actors clear understanding of innovation processes. When such assume a leading role in fostering innovation and try to processes are financed by governments or donors, the latter change how public organizations interact with the AIS. often try to influence the process; governments may also Social responsibility may induce private actors to create resent having to negotiate policies and priorities with other organizations to develop innovations without commercial actors. Finally, coordination is more effective when laws, value, like projects with environmental or poverty allevia- regulations, and interventions by external stakeholders tion goals, but the public sector will continue to have a (especially governments and donors) facilitate transparency major responsibility in these areas. and accountability to all stakeholders in the innovation process. Reform of research and educational organizations Given the organizational inertias that characterize public Roles of the private and public sectors institutions, policy makers should carefully assess whether and civil society to invest in (1) transforming traditional organizations, The private sector has been and is expected to continue (2) supporting existing actors, or (3) creating new institu- being the source of most innovations (Fagerberg 2005). For tions that complement traditional ones. The reform of commercial agriculture in particular, the private sector will public research and educational organizations should start likely continue to lead innovation, including organizing by identifying the roles they should play, considering that value chains and developing agricultural equipment and others in the AIS also produce technical and scientific inputs. To develop these innovations, private firms organize information. It is necessary to understand how public agri- networks with farmers, traders, and eventually strong cultural research institutions can complement private research teams (TN 1). Usually these teams have been research and innovation (for example, a public institution located in developed countries, but a few strong teams from can study relatively unknown plant varieties and develop developing countries have also participated. Public research new material with useful traits that private seed companies and extension agents have coordinated the emergence of can then use in their breeding programs). Once the roles 28 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK have been defined, the resources needed to fulfill the new the representatives possess the skills (literacy, for mandates must be identified—especially investments in example) to participate. Often capacity building is physical, human, and social capital—and plans must be needed as well to prevent the most powerful stakehold- prepared to attain those resources. Finally, new incentives ers from capturing coordinating organizations (World must be defined for managers and researchers so that they Bank 2009). can better integrate into innovation processes. For example, ■ Fostering the emergence of networks that focus on inno- the incentives should not prioritize scientific publications vations appropriate for marginalized populations, such over interactions with actors in the AIS or the generation of as the no-till package developed in Ghana (IAP 1) other types of scientific output, such as new agronomic rec- (Ekboir, Boa, and Dankyi 2002). ommendations; additionally, the incentives should allow ■ At a more general level, institutionalizing gender and researchers to develop long-term research programs. pro-poor policies and planning functions in govern- A complementary approach is to provide resources and ments, projects, and organizations, and opening women incentives directly to innovative researchers and professors and disadvantaged farmers’ desks to guide practitioners so that they can join innovation networks. This approach in mainstreaming affirmative action in planning, budg- somewhat resembles the awarding of funds directly to eting, and implementation. researchers, a process that can have the unintended conse- quence of bypassing their institutes’ formal resource allo- Sustainability of innovation programs cation structures. Actors can coordinate spontaneously in response to a need or opportunity, or they may be induced by specific Social and local considerations, public policies and programs. It is easier to strengthen including gender and equity forms of coordination that have survived for a certain Because innovation capabilities, physical assets, and period, because the actors involved have solved many of power are not distributed equally, the best-endowed the barriers to collective action. Existing organizations, actors can benefit the most from emerging opportunities. especially informal ones, can profit greatly from programs In hierarchical societies in which coordination must that build their capabilities and link them with other include social leaders, greater coordination can award actors in the AIS. Forms of coordination imposed by even more power to dominant local groups or individuals. external partners usually command more resources but Local conditions, especially cultural issues, similarly often are less sustainable. They run a greater risk of influence coordination. Some cultures forbid interaction becoming only formal structures and may lose their between certain ethnic groups, but simply forcing them to autonomy and effectiveness. Failure rates are high in new interact directly may not be as effective as acting through organizations because collectively agreed rules must be intermediaries. defined and effectively enforced. In some cases, the trans- Even though social marginalization is a key aspect of action costs of establishing an organization outweigh the poverty, it is difficult to create and sustain coordination benefits, especially in markets with low transaction costs, organizations that include marginalized actors, especially such as those for undifferentiated commodities (Hellin, women and landless farmers. Such organizations are often Lundy, and Meijer 2009). opposed by civil servants, politicians, middlemen, or For an organization to be sustainable, its stakeholders wealthier farmers who see their power challenged (World must develop organizational capabilities and have incen- Bank 2009). Affirmative action measures, reinforced by dis- tives to contribute to the common effort. They must incentives for wealthier actors, help to reduce gender and effectively influence the organizations they participate income disparities in coordination organizations and can in, and they must also perceive the benefits of participa- include the following: tion. When this happens, stakeholders often invest their financial and political capital to ensure the programs’ ■ Fostering the emergence of organizations of women and continuity. These conditions apply not only to organiza- poor households, such as those used in microfinance tions at the “base� of the AIS (such as farmer organiza- programs. tions or value chains) but also to organizations seeking to ■ Setting aside seats on boards of organizations for rep- coordinate the AIS at the “top,� such as research councils resentatives of marginalized groups and ensuring that or innovation brokers. MODULE 1: OVERVIEW 29 NEW DIRECTIONS, PRIORITIES, AND help to align and allocate limited resources to key innovation REQUIREMENTS FOR INVESTMENT issues (see details in TN 1). IAP 5 describes a regional approach to coordinate innovation actors in the cassava As discussed, agricultural innovation may be coordinated by subsector, particularly researchers. IAP 3 focuses on the strengthening existing individuals and organizations or by Foundation for Agricultural Innovation (Fundación para la setting up entirely new actors and organizations. The com- Innovación Agraria, FIA), a ministry-affiliated foundation mon denominator of these approaches is the need to pro- with independent governance that coordinates and incen- vide incentives, apply appropriate instruments, and build tivizes agricultural innovation in Chile. innovation and organizational capabilities. Because effective Farmer and nonprofit organizations respond mostly to collaboration among innovators is so difficult to imple- their funders, whose interests may not coincide with the ment, however, it is likely that new types of organizations needs of local stakeholders, especially if they are marginal- will need to be supported, as described next. ized groups like women or landless rural households. It is important to provide some means for these groups to influ- Improving governance of the AIS ence the AIS. Possibilities include arrangements for ensur- A number of factors impinge on the efficiency of gover- ing good governance and accountability and for training nance in a national innovation system11 in general and an managers and members about their respective roles in their AIS in particular—in other words, on the extent to which organizations and in the AIS. It is also important to keep policy processes have the greatest effect with a given use of external interventions in NGOs and civil society organiza- resources (OECD 2005). The evidence indicates that effi- tions to a minimum, allowing them to evolve as needed. cient governance depends on certain qualities, which include the following: The rise of networks ■ Legitimacy. The policy actors and approaches adopted in TN 2 in this module examines the nature and dynamics of policy processes have to be appropriate and widely innovation networks, which are becoming more prevalent accepted for the tasks at hand. as the complexity of innovations grows and rapid economic ■ Coherence. The strands of innovation policy and associ- and technological change forces agents to innovate at a ated policy instruments must fit together. faster pace. Innovation networks have developed important ■ Stability. Innovation requires sufficiently stable frame- technical, commercial, and organizational innovations that work conditions, institutions, and policy. have had major economic and social impacts. IAP 1 reviews ■ Adaptive ability. As the environment for innovation and the emergence and evolution of the innovation networks innovation itself keeps evolving, governance actors need that developed no-till technologies for small-scale farmers to be able to adapt. in South America and Ghana. Where they have been ■ Ability to steer and give direction. A related capability is adopted widely, these technologies have increased farmers’ the governance system’s ability to provide direction to incomes, reduced food insecurity, diminished labor require- actors and steer the innovation system as a whole. This ments for the production of staples, allowed poor rural capacity requires commitment and leadership by policy households to engage in new income-generating activities, makers at the highest level. and enhanced the sustainability of agriculture in marginal and well-endowed areas. Although programs to diffuse no- Governance of the AIS can be improved by creating formal till have been documented in more than 60 countries, mas- but effective spaces for dialogue at different levels of the AIS sive adoption has occurred only in the handful of regions (local, sectoral, and national), building actors’ organizations where diverse actors formed innovation networks to and their capabilities, and improving formal and informal develop organizational and technical innovations adapted regulations that reduce transaction costs (such as intellectual to local conditions. property rights regimes, the judiciary system, customs, and markets). At higher levels of the AIS, investment is needed to Innovation brokers: promising, but establish and strengthen effective and responsive coordinat- challenging to implement ing bodies for agricultural innovation, such as innovation councils and subsector-specific bodies that can contribute to Innovation brokers can play a valuable role in an AIS. Sev- collective identification of opportunities and challenges and eral types have evolved, but few have survived without 30 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK support from governments or donors (Klerkx and Leeuwis organizations. TN 4 reviews the conditions that help 2008).12 Innovation brokering services are affected by farmer organizations to emerge and consolidate. It gives severe information uncertainties. Individual actors cannot particular attention to the technical and market conditions know the commitment and the capabilities of potential that make farmer organizations a more effective means of partners in advance. A conflict of interest may exist if the coordinating AIS actors than other institutional arrange- funders’ requirements do not coincide with the needs of ments, such as value chains and innovation networks. It the other actors in the AIS. Giving the funds to users to pay also reviews factors that reinforce farmers’ ownership and for the brokering services may reduce the conflict, but sustain their organizations. effective controls are needed to make sure that funds are IAP 2 examines the emergence and evolution of Mexico’s used appropriately and that actors follow the brokers’ rec- Produce Foundations, which are civil society organizations ommendations. Similarly, users often do not know the that influence the design and implementation of research nature and quality of services offered by innovation bro- and innovation policies and programs. Soon after the fed- kers. They are reluctant to pay for services that are difficult eral government created the foundations in 1996, a few to define beforehand and highly uncertain. farmers pushed for their foundations to be independent of the government; they succeeded, and the remainder eventu- ally followed suit. The foundations created a coordinating Organizing around value chains office that interacts with the government and promotes Small-scale farmers’ access to modern marketing chains, organizational learning. The experience in Mexico shows often organized by supermarkets, is analyzed in TN 3. Chains how a number of interacting factors support successful provide more stable incomes and sometimes higher profits organization building. IAP 2 also analyzes the interplay for their adherents, but participating in chains requires com- between deliberate strategies to build organizations and mercial and technical skills. Recent research has found that strategies that emerge organically from the innovation in the long term few smallholders can survive in these chains process. as suppliers; only the more affluent smallholders, better IAP 4 describes another form of organization—highly endowed with natural resources, infrastructure, access to federated self-help groups for the poor established by the credit, and social capital, tend to participate. Despite poor Society for Elimination of Rural Poverty in Andhra Pradesh. rural households’ limited access to the markets supported by Each tier in the organization of self-help groups functions modern value chains, the chains can bring important bene- as a financial intermediary and provides specialized services fits to rural economies by creating many permanent and to members (and other stakeholder groups) in a variety temporary positions on the farm and in associated services of sectors. such as input supply, sorting and packaging, and transport. More dynamic local economies also create small business opportunities, such as food stalls and professional services. Building capabilities for coordination among individuals and organizations As mentioned, rural productive alliances, which are eco- nomic agreements between commercial buyers and formally As noted, building capabilities for coordination requires organized producer organizations, enable small-scale pro- strong leadership and sustained, major investments. Invest- ducers to reach those markets. The agreements create favor- ments can encompass support for physical, human, and able conditions and incentives for buyers and smallholders social capital (basic education; management and entrepre- to establish mutually beneficial and sustainable relationships neurial skills; learning to participate in social, innovation, (IAP 6). and economic networks; and development of financial capacity), short- and long-term consultancies, formal courses, long-term mentoring, support for innovation bro- Supporting farmer organizations kers, the creation of dedicated bodies (innovation councils and self-help groups or programs to fund innovation), and the transformation of Farmer organizations can participate in the financing, public universities and research and extension organizations development, and diffusion of innovations, manage public (discussed in box 1.8). Transforming public universities and and private funds and programs for innovation, collaborate research and extension organizations is particularly prob- in the design of innovation policies, coordinate other lematic but not impossible. Employees have job security, actors in the AIS, and influence research and extension governments are reluctant to pay locally competitive MODULE 1: OVERVIEW 31 academic salaries that exceed civil servants’ salaries, and it is dynamics of innovation. Not only does every AIS have challenging to hire good, experienced professionals to work many actors with differing goals, but the outcomes of their under difficult conditions (Davis, Ekboir, and Spielman formal or informal cooperation may not appear until 2008).13 In response to these challenges, many countries have many years have passed. Another issue in assessing out- created new public organizations with different conditions comes is that monitoring and evaluation can be used for and adequate working resources. Alternatively, investments different, often conflicting, purposes, like learning and could create the conditions to induce the best employees of accountability. existing organizations to participate in innovation networks Although it is difficult to define valid indicators for mon- regardless of their institutional association. Another major itoring organizational innovations and their impacts, two problem that hampers efforts to build capacity for coordina- principles are valuable to consider. First, the monitoring sys- tion in developing countries is the frequent rotation of capa- tem should be a learning tool. When a project is defined, sev- ble civil servants. A major effort should be made to build the eral critical assumptions are made, representing an explicit capabilities of nonpublic organizations, including political or implicit theory of how stakeholders’ behaviors are parties, private firms, and civil society and farmer organiza- expected to change over the project’s life. The monitoring tions, so that they can influence the policy dialogue despite system should be designed to (1) test these assumptions changes in government. early in the project’s life and adjust the interventions if the assumptions are proved wrong, (2) identify unforeseen problems or opportunities as early as possible in the pro- Organizing around a common vision of major issues ject’s life (Spitzer 2007), and (3) measure changes in stake- Coordination is facilitated when potential partners share a holders’ behaviors and provide feedback to stakeholders so common vision of their problems and opportunities. This that they can learn faster. vision can be created through foresight exercises, studies Second, many indicators, especially those intended to and consultancies, gathering and processing of technologi- measure ill-defined processes such as organizational cal and market intelligence, sectoral dialogues, and inter- innovations, cannot be measured quantitatively. In such ministerial committees. Because the common vision needs cases, qualitative indicators, such as stakeholders’ opin- to be updated in response to technical, social, and economic ions, are appropriate measures that can be tracked with change, these activities must be implemented periodically specially designed techniques (such as Likert or rating and include a broad array of stakeholders, not just those scales). directly linked to the processes being analyzed (Skarzynski The monitoring system should also cover at least four and Gibson 2008). areas: ■ Organizational strengthening. Assess the organization’s Setting agendas and priorities ability to improve its governance, culture, and finances Priorities for collaboration should be defined with partici- and expand its membership. patory approaches and updated periodically, but not too ■ Organizational learning. Assess the organization’s ability often, which would disrupt the development of trust to perform its normal activities better. required for effective collaboration and implementation of ■ Exploration of new instruments to fulfill the organiza- long-term activities. Investments should also build the tion’s mandate. Assess the organization’s ability to capabilities of all stakeholders so that they can participate search for new ways to reach its objectives or to define actively in innovation processes with which they may be new objectives. unfamiliar, such as policy design or the boards of research ■ Changes in the AIS according to the underlying theory of organizations. change. Assess the responses of the actors involved directly or indirectly in the project, especially the evolu- MONITORING AND EVALUATING tion of their interactions. INVESTMENTS AND SCALING UP Finally, some potential indicators of organizational inno- The impact of organizational innovations on the AIS is vation are listed in table 1.2, along with their corresponding notoriously difficult to measure, owing to the complex sources of information. 32 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 1.2 Indicators of Organizational Innovation Indicator Source of information or tools Process indicators 1. Leveraged investments: additional time and resources invested by Surveys of value chains the organizations’ members in joint activities Surveys of innovation networks 2. Consolidation of innovation networks and value chains Case studies Surveys of partners in innovation networks and value chains 3. Improvements in the innovation capabilities of farmer Case studies organizations (for example, changes in governance, learning Surveys of members, stakeholder interviews routines, and experimentation) 4. Changes in the resources invested in building organizational Review of public programs, survey of funders capabilities 5. Number of programs and resources invested in organizational Review of public programs, survey of funders innovation 6. Number and types of innovation programs targeted to Review of public programs, survey of funders marginalized groups Output indicators 7. New products or processes introduced by actors in the Surveys of the organization’s stakeholders organization (or by the organization itself) 8. Strength of the value chains (volume marketed, additional Surveys of supermarkets, brokers, wholesalers, farmers income generated, number of farmers benefiting directly, Trade statistics number of rural jobs created) 9. Changes in value chains, especially in the number of Surveys of supermarkets, brokers, wholesalers, farmers intermediaries, their relative strength, and other institutional Trade statistics changes (from stakeholder platforms and other methods) 10. New partnerships created (number, diversity, types, goals, Review of programs that foster the creation of organizations for achievements) innovation Participatory rural appraisal Surveys of actors in the AIS 11. Expansion of the networks (such as the number and type of Surveys of innovation networks, stakeholder interviews partners, effectiveness, innovations adopted) 12. Changes in curricula that prepare professionals in Case studies organizational innovation Surveys of educational organizations Outcome indicators 13. Number of partnerships that survived after three years Surveys of partnerships 14. Changes in the participation of farmer organizations in Case studies innovation processes Surveys of partners in decision-making processes Stakeholder interviews 15. Improvement in the condition of marginalized groups (women Case studies and landless farmers) thanks to their participation in innovation Surveys of partners in decision-making processes programs Stakeholder interviews 16. Changes in the performance of value chains after three years Surveys of supermarkets, brokers, wholesalers, farmers Trade statistics 17. Changes in asset ownership and market participation induced Case studies by organizational innovations after three years Surveys of farmers and other stakeholders in innovation processes Source: Authors. MODULE 1: OVERVIEW 33 T H E M AT I C N O T E 1 National Coordination and Governance of Agricultural Innovation Riikka Rajalahti, World Bank SYNOPSIS address coordination and collective action for agricultural innovation as part of the wider sphere in which science and any countries could benefit from better coordina- M tion of agricultural innovation at the national sec- toral level, where broad science and innovation policies, strategies, and activities are defined. This note innovation policies, strategies, and activities are defined. Ideally, interventions to improve national coordination and governance of the AIS seek to improve the participation of stakeholders, including end users such as producers and describes the potential benefits and elements of an organiza- enterprises; improve the transparency and openness of deci- tion that successfully coordinates national innovation in agri- sions related to funding and priorities; improve responsive- culture. Ideally, a nationally mandated but independently gov- ness and accountability to stakeholders; build consensus; and erned agricultural innovation council or committee develop consensual, coherent policies, strategies, and activi- (consisting of diverse stakeholders) coordinates the develop- ties that reflect a strategic vision of innovation for agriculture. ment of a strategic vision for agricultural innovation. It also The lack of appropriate coordination and governance for coordinates and formulates the corresponding agricultural agricultural innovation at the national level is a chronic innovation policy (to be increasingly integrated into general problem for many countries. As pointed out in the module science-innovation policy), designs agricultural innovation overview, most efforts to coordinate agricultural innovation priorities and agendas, and monitors and evaluates innovation at the national level have focused on establishing formal programs and their impact. In theory responsibilities for pol- apex research councils, as in Australia, Brazil, Ghana, India, icy making, financing, and implementation should be sepa- and Mexico, to govern multi-institutional national agricul- rate, but experience varies in practice. Many innovation coun- tural research systems. They develop national research cils are advisory and policy-making bodies with no mandate strategies and plans; link research to broader agricultural to channel funds, whereas others have been more effective at policy discussions; channel funds to priority research areas inducing coordination of policy when they control innovation and thus coordinate research across institutions; promote funds. This note reviews lessons emerging from the three collaboration and exchanges among the various parts of the commonly applied modes of coordinating innovation for national agricultural research system; and coordinate exter- agriculture at higher levels to date: the national agricultural nal links (Byerlee and Alex 1998). In several cases, though, innovation council or committee, competitive innovation/ design of the councils has reduced their impact. For exam- research funds, and coordination by theme or subsector. New ple, Brazil’s national (and most important) agricultural approaches could make all three options more effective at research organization, EMBRAPA,1 is also the formal head contributing to coordination and implementation of agricul- of the national agricultural research system and transfers tural innovation policies, strategies, and agendas. resources from its budget to other research organizations. Because of these multiple roles, several stakeholders in the AIS do not see EMBRAPA as an unbiased coordinator. For BACKGROUND AND CONTEXT many years Mexico’s office for coordinating national agri- FOR INVESTMENT cultural research and extension systems2 had no instru- Many countries are gradually addressing challenges to coor- ments to induce coordination, and its attributions and roles dinating innovation within specific agricultural subsectors. had not been defined clearly; not surprisingly, it was largely Even so, far greater impetus is needed at the national level to ignored by the actors it was supposed to coordinate. 34 Despite their presence, national innovation councils and ■ Coordinate the development of a strategic vision for agricultural research councils rarely operate as true agricul- agricultural innovation.3 tural innovation organizations or councils, with a mandate to ■ Coordinate and formulate agricultural innovation pol- coordinate and prioritize investments in agricultural inno- icy, which will be increasingly integrated into general vation at the highest level. This thematic note discusses science-innovation policy. measures that enable coordination processes to improve, ■ Link agricultural innovation to broader agricultural pol- adapt to changing circumstances, and rely on the growing icy and science-innovation discussions. array of stakeholders to improve the governance and impact ■ Continue to contribute to the development of a strategic of agricultural research and innovation. It begins by review- vision of the agricultural sector. ing the characteristics and norms shaping a “true� organiza- ■ Coordinate and design agricultural innovation priorities tion for national coordination and governance of research and agendas. and innovation (mandate and management structure, ■ Coordinate the division of labor and channeling of resources, and operating practices and values). The poten- funds4 to priority innovation areas. tial benefits of such an organization, the policy issues that ■ Monitor and evaluate innovation programs and their impinge on its successful operation, and the many lessons impact. emerging from previous efforts are all discussed in the sec- ■ Promote collaboration and exchanges among the various tions that follow. parts of the innovation system, including external linkages. INVESTMENT NEEDED Ideally, innovation policy making, innovation financing, An organization to foster national (sectoral) coordination and implementation are separate functions. Agricultural and governance of agricultural innovation would be nation- innovation councils or committees should not be responsi- ally mandated but independently governed. The general ble for executing innovation programs, which is the task of outlines of the mandate, governance structure, activities, science, technology, and innovation organizations.5 resources, and practices of an effective national coordinat- ing organization are presented next to provide an idea of the Funding, infrastructure, and capacities kinds of investment needed. Formal, dedicated structures with set agendas do not in themselves guarantee effective coordination of—and action Organization and mandate by—actors. At a minimum, coordinating organizations will The coordinating organization would be formal and inde- need operating funds, physical infrastructure, and commu- pendently governed and managed as defined by its bylaws. nications infrastructure (ICTs, for example) to enable trans- The effectiveness, legitimacy, relevance of, and confidence in parent and open communication and support effective a coordinating organization depend on how effectively it coordination and governance. Coordinating organizations reaches out to stakeholders from diverse areas of the econ- will also need to build capacity among actors and encourage omy. The composition of the organization should reflect the them to address issues collectively. Box 1.9 summarizes the diversity of its stakeholders. The range of stakeholders in capacities and skills needed for innovation coordination matters of agricultural policy such as innovation is likely to and governance to be effective at a higher level. be very wide, including farmers and other actors associated with agricultural innovation (research, education, extension, Operational practices and farmer organizations; private firms; and NGOs), rural territories, and consumers. Representatives from outside the The practices of an organization that coordinates national agricultural sector can add diversity and value to discussions. agricultural innovation will be guided by such values as All should have a voice and be included in decision-making transparency, responsiveness, accountability, consensus, and concerning agricultural innovation strategies and programs. coherence within and between the organization’s activities. A skilled management team (a secretariat, for example) Transparency is achieved if all information regarding would execute the activities identified by the organization’s decisions on funding, priorities, and operations is open and board. A typical mandate and set of activities would be the freely available. This openness implies that central and following: regional governments and agricultural development agents MODULE 1: THEMATIC NOTE 1: NATIONAL COORDINATION AND GOVERNANCE OF AGRICULTURAL INNOVATION 35 Box 1.9 Capacities and Skills Needed in Coordination and Governance of Agricultural Innovation Governance capabilities are defined as the ability to and beyond their policy field—which requires skills in facilitation, negotiation, and consensus-building. ■ Recognize system characteristics (strengths, weak- ■ Implement these policies—which requires policy nesses, problems, development potential)—which capacity. requires facilitation and analytical skills. ■ Learn from previous experience (such as evaluation ■ Define the focus and the topics for political action results)—which requires learning, intelligence, and (agenda setting)—which requires skills in commu- accountability. nication and consensus-building. ■ Make adjustments over the complete policy cycle. ■ Encourage diverse players (through consultation and participation) to coordinate their activities in Source: Adapted from Ohler et al. 2005. will actively communicate and deliver key messages to focus on their own clearly defined share of the work. Coher- stakeholders about what they do and the decisions they take. ence requires strong and effective leadership to ensure that They should use language that is accessible to the general roles and tasks are articulated, understood, and shared as public. Openness also implies that potential beneficiaries agreed (Hartwich, Alexaki, and Baptista 2007). such as farmers and processors have equal access to infor- Australia has developed a multistakeholder, multidisci- mation and funding opportunities (Hartwich, Alexaki, and plinary agricultural research and development council with Baptista 2007). a focus on agricultural innovation (box 1.10). Chile’s FIA Those who govern organizations and societies, as well as plays the roles of innovation coordinator, promoter of inno- the institutions and processes they establish, must be vation, and technological broker, interacting with several responsive to stakeholders. They must prove in some way actors in the AIS, including farmers, private firms, financial that they are acting in response to stakeholders’ priorities institutions, technological institutes, and universities (IAP and generating outputs that meet their needs. Accountabil- 3). Despite Chile’s competitiveness and innovativeness, its ity means that the organization will be fiscally responsible agricultural sector currently is not fully aligned with the rest and use efficient mechanisms to avoid corruption. Regular of the national innovation system and associated policy reporting on the efficient and effective use of project and coordination. program funds, along with evaluations of outputs and impacts, will help to prove that funds are used in the best POTENTIAL BENEFITS and most correct way. In complex innovation systems, many actors are involved in setting priorities and using funds, but The reasons commonly cited for AIS actors to interact and generally the agents that disburse the funds are held address issues collectively include improved identification accountable (Hartwich, Alexaki, and Baptista 2007). of opportunities and challenges related to innovation, better Differing interests need to be taken into account to bal- leveraging of human and capital resources, better learning ance regional and subsectoral development, and the institu- and information sharing, improved implementation and tions involved in agricultural innovation need to reach a results, and economic benefits. Coordination may also broad consensus on which tasks are of general interest and improve the design and implementation of innovation poli- who will play what role in those tasks. Now that the range of cies. Stronger coordination induces all actors, especially tasks required to achieve innovation-led growth in agricul- public research and extension organizations, to be more ture has grown so large, the need for coherence among those aware of and responsive to the needs and concerns of other tasks has become more pronounced. Coherence aids in actors, especially resource-poor households. More actors in coordinating and forming critical masses for innovation, the innovation system can voice their needs and concerns and it also enables innovating agents to be competent—to in the process of designing and implementing innovation 36 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 1.10 The Rural Research and Development Council of Australia Since 1994, the Government of Australia has developed Fisheries, and Forestry to be the government’s inde- rural research and development priorities that reflect pendent, strategic advisory body on rural research and the national understanding of critical needs for invest- development. Its principal goal is to provide high-level ment in agricultural, fisheries, forestry, and food indus- advice and coordination to improve the targeting and try research and development. A shared approach to effectiveness of government investments in rural priority setting among state and territory governments, research and development. The Council’s 10 members industry, and research funders and providers enables represent research, academia, farmers, and the private issues of common concern to be explored in a coordi- sector. The Council works closely with RDCs, industry, nated, cost-effective way. research providers, state and territory jurisdictions, and The priorities complement national research priori- government agencies to strengthen rural research and ties and guide Australia’s Rural Research and Develop- development through improved collaboration, facilita- ment Corporations and Companies (RDCs). As the tion, and prioritization of investment and performance government’s primary vehicle for funding rural inno- measurement and reporting. vation, RDCs are partnerships between government Given its recent establishment, the council’s effec- and industry, created to share funding, strategic plan- tiveness has yet to be rigorously evaluated. Even so, the ning, and investment in research and development and enhanced focus on research and development at the the subsequent adoption of outputs (see TN1 in mod- national level is expected to improve the productivity, ule 4). The RDCs significantly influence the work of profitability, sustainability, and global competitiveness research providers and investors in related fields. of Australia’s agricultural, fisheries, forestry, and food The Rural Research and Development Council was industries, with benefits for individual rural businesses, appointed in 2009 by the Minister for Agriculture, the environment, and the wider community. Source: Rural Research and Development Council (http://www.daff.gov.au/agriculture-food/innovation/council). policies, resulting in more inclusive policies and faster diffu- To enhance transparency, it is better for the functions sion of innovations. of innovation policy making, financing, and program implementation to reside in different organizations. Pol- icy making is ideally the mandate of coordination and POLICY ISSUES policy-making bodies, such as councils, whereas financ- The policy issues involved in developing an organization ing is the mandate of ministries and special agencies, responsible for coordinating agricultural innovation on a leaving the implementation of innovation policy pro- national level resemble the policy issues that apply to coordi- grams to research-innovation entities such as research nation more generally. They include policies to promote the organizations, universities, and private companies, organization’s sustainability and effectiveness and to reflect among others. the needs of all stakeholders, including marginalized groups. Formal coordinating organizations at the national level Beyond the creation of formal coordinating bodies, may be set up or facilitated by public, private, or civil soci- effective coordination of stakeholders depends on stable ety actors. In practice, the public sector often takes the lead. financing and incentives for participating organizations and It is essentially in the public interest to guarantee that employees. Careful attention must be paid to developing society’s resources are allocated to priority issues, identified stakeholders’ capacity to contribute to shared goals, influ- collectively. ence the organizations they participate in, and benefit from their participation in ways that encourage them to continue LESSONS LEARNED AND RECOMMENDATIONS participating. Effective and relevant coordinating organiza- FOR PRACTITIONERS tions will include a wide swathe of stakeholders, differing by geographical location, subsector, gender, and type of insti- The lessons and recommendations emerging to date center tution (public, private, and civil society). on three commonly applied modes of coordinating MODULE 1: THEMATIC NOTE 1: NATIONAL COORDINATION AND GOVERNANCE OF AGRICULTURAL INNOVATION 37 innovation for agriculture at higher levels. The first is the tive at inducing collaboration and coordination when national agricultural research council or committee. The equipped with control over incentives, such as innovation second is the establishment of competitive or noncompeti- funds (IAP 3 and module 5, TN 2). The Indian Council of tive project-based innovation/research funds, with their Agricultural Research (ICAR) functions as a national agri- associated governance and management structures. The cultural research council and executes research as well, as third involves coordination by theme or subsector, which outlined in box 1.11. Although it has operated as a typical can be effective at generating innovations that reflect users’ research-oriented council, it is transforming itself to oper- needs and government policies and strategies. ate more effectively as part of the wider Indian agricultural innovation system. With the state agricultural universities, it is implementing the National Agricultural Innovation Research councils: too many roles, too few Project (NAIP) and pursuing specific activities to catalyze stakeholders, and stark funding and capacity needs and manage change in India’s agricultural research system: Most research councils or forums play an important role in research, development, and policy design, and they often ■ Strengthening communications ability and information collect large parts of public budgets for research. It is capacity (enhancing dialogue and interaction with the important to separate the design of policy from the imple- public at large, the farming community, and the private mentation of agricultural research and innovation, but sector, as well as among all key functionaries in the ICAR experiences and practices related to funding vary among system). research and innovation councils. In practice few apex ■ Forming business development units and offering intel- councils function independently of the ministry in charge lectual property rights (IPR) management. of agriculture and the agricultural research system. Many ■ Undertaking systemwide organizational and manage- have become large research institutes in themselves. In still ment reforms, including improvements in monitoring, other cases, apex councils are advisory bodies without a evaluation, and financial management. mandate to channel funds, following the principle that ■ Undertaking visioning, technological foresight, and pol- ministries and agencies allocate funds (box 1.10). Both icy analyses. arrangements typically lead to failure (Byerlee and Alex ■ Renewing links with the state agricultural universities, 1998). However, some organizations have been more effec- which have tended to be isolated from ICAR’s research. Box 1.11 Structure and Mandate of the Indian Council of Agricultural Research The Indian Council of Agricultural Research (ICAR), agroforestry, animal husbandry, fisheries, home sci- established in 1929, is an autonomous organization ence, and allied sciences. under the Ministry of Agriculture. With 97 institutes ■ Act as a clearinghouse of research and general infor- and 47 agricultural universities, ICAR is the national mation in its areas of competence through its publi- apex body for coordinating, guiding, and managing cations and information system. research and education in agriculture. The members ■ Institute and promote transfer of technology come entirely from the public sector. ICAR has two programs. bodies: (1) the General Body, the supreme authority of ■ Provide, undertake, and promote consultancy ICAR, headed by the Minister of Agriculture and (2) services. the Governing Body, the chief executive and decision- ■ Look into the problems relating to broader areas of making authority of ICAR, headed by the Director- rural development concerning agriculture, including General, ICAR. The correspondingly broad mandate of postharvest technology, by developing cooperative ICAR includes: programs with other organizations such as the Indian Council of Social Science Research, Council ■ Plan, undertake, aid, promote, and coordinate edu- of Scientific and Industrial Research, Bhabha Atomic cation, research and their application in agriculture, Research Centre, and the universities. Source: http://www.icar.org.in/en/aboutus.htm; World Bank 2006c. 38 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Many councils consist of representatives from govern- setting and planning, based on an example from ment or research agencies, with few other stakeholders. It Uruguay. A related lesson is that effective agricultural has been challenging to ensure representation of the wide research councils recognize that they are major stake- spectrum of developing country farmers, which includes holders in, and must form an integral part of, national large-scale farmers or plantations producing traditional innovation councils. export products, small-scale farmers that supply supermar- The effectiveness of many councils is limited not only kets and fast-food restaurants (usually the better-off mem- by a narrow constituency but by a lack of resources. Scarce bers of this group), large-scale farmers who sell through financial resources restrict councils’ influence on stake- local or wholesale markets, and small-scale farmers who holders, the policy process, and the way that research is produce for their own consumption or sell a small surplus conducted. For councils to be more than formal con- in local markets. These groups operate in innovation systems structs, they must command resources, have continuity, that barely intersect. be seen by other actors in the AIS as honest brokers, and This lesson is being learned, however. A movement is those actors, especially top government officials, must be underway to broaden the representativeness of gover- willing to listen to their advice. Coordination at the high- nance bodies (by stakeholder group, geographical loca- est levels of the AIS has been hampered by the fact that tion, and discipline), improve the transparency of deci- formal coordinating structures (research and innovation sion making, reduce bureaucracy, and use more rigorous councils) generally operate in an environment that gives and diverse prioritization tools. Box 1.12 describes other organizations in the AIS no complementary incen- mechanisms and processes to integrate additional stake- tives to foster innovation. Government directives and holders, particularly producers, in research priority agreements reached among organizations often cannot be Box 1.12 Mechanisms to Articulate Producers’ Needs in Uruguay Producers have a significant role in the financing, gov- systems. Meetings are open to all producers interested ernance, and research priority setting of Uruguay’s in attending, as well as other stakeholders (extension- main agricultural research institute, the Instituto ists, representatives from industry, and policy makers). Nacional de Investigación Agropecuaria (INIA). For- The working groups have become a very useful mecha- mal mechanisms foster producers’ participation in nism for formally incorporating inputs for research identifying, prioritizing, and planning research: Pro- planning, monitoring, and evaluation. ducers are active members of the board of directors, INIA also has close links with its clients through a regional advisory councils, and working groups. They specialized unit for diffusing technology. For instance, are involved in planning primarily through wide par- INIA has a long-term agreement with a producer asso- ticipation in identifying and analyzing problems. Spe- ciation to demonstrate new intensive cropping and cific mechanisms to articulate producers’ demands livestock production technologies. The arrangement and transfer technology have been developed as well, has validated promising technologies at the commer- such as experimental units for validation and demon- cial level, facilitating their transfer and providing feed- stration. back to reorient research, and it has been expanded to The five regional advisory councils, set up in 1990, support new technological developments in extensive act as “antennae� for capturing local demands in the livestock production. area served by each experiment station. The councils Round tables are a third means of incorporating are an important forum for regular exchanges of views producers’ demands into national research programs. and close contacts between producers and INIA staff. Composed of specialists from INIA, other public INIA also created working groups for major commodi- research institutes, the university faculty of agronomy, ties at each regional experiment station to strengthen and representatives from different stages in the agroin- farmers’ role in guiding commodity research. In these dustrial chain (from producers to consumers), the groups, INIA staff and farmers discuss research plans round tables operate as self-directed work groups to and results for specific commodities and production identify relevant vertically integrated problems. Source: Allegri 2002. MODULE 1: THEMATIC NOTE 1: NATIONAL COORDINATION AND GOVERNANCE OF AGRICULTURAL INNOVATION 39 implemented because the representatives of national often, boards can be taken hostage by one interest group organizations cannot force provincial or local chapters to that dominates discussions and skews decisions in favor of change their behavior when the only tool at their disposal its constituency at the expense of others. Similarly, boards is reasoning. can be held hostage by politicians. This practice is particu- Another vital lesson is that capacity-building programs larly damaging given the complex and multisectoral nature are often needed to build skills in collaboration, competi- of funding for agricultural innovation systems. A governing tion, and negotiation, particularly among individuals who board is typically supported by a technical advisory com- lead the coordination and governance process. For details, mittee mandated to provide technical input for planning see the module overview. programs and setting priorities and a technical review panel mandated to evaluate, score, and rank proposals and make funding recommendations. A secretariat manages programs Project-based research and innovation funds: and carries out daily operations. Table 1.3 summarizes the governance and management issues principal characteristics of project-based competitive sci- The introduction of project-based (including competitive) ence and technology funds (many of which are closed) in funding schemes for agricultural research and technology five countries. For further details on innovation funds, see transfer has in many instances been associated with changes module 5, TN 2. in the governance of national agricultural innovation sys- In Latin America, many science and technology funds tems. At one time, national agricultural research agencies specific to agriculture—especially funds focusing on adap- received an all-inclusive lump sum based on a broad tive agricultural research and technology transfer—have research mandate and could set research priorities quite acknowledged the need to improve client orientation and independently. More recently, priority-setting responsibili- participation. These funds have adopted strategies that ties have shifted owing to major changes in how society involve farmers in identifying and prioritizing innovation views science and to the introduction of competitive science needs and in developing, selecting, implementing, and and technology funding schemes. funding subprojects. To reach their clients, funds have The extent to which a project-based fund influences pri- adopted decentralized strategies or are in the process of ority setting differs greatly between agriculture-specific and doing so. Although stronger client participation and orien- general project-based funding schemes. Specific, project- tation are generally considered positive, they may also have based science and technology funds tend to define agricul- drawbacks (such as a bias toward short-term research, a lack tural research needs up front, before calling for proposals, of equity, and significant transaction costs). whereas general science and technology funds are somewhat more open. For general science and technology funds, it is Thematic or subsectoral coordination: the value of usually academic relevance that matters most in the selec- delegating to networks tion procedure; in specific, project-based schemes, it is eco- nomic relevance (World Bank 2006b). Project-based funds Owing to the difficulties involved in establishing effective can contribute positively as well as negatively to the gover- national coordination of agricultural innovation, many nance of agricultural research (box 1.13). countries have implemented formal structures to coordinate The good practice for governing and managing project- actors at different levels of the AIS. The module overview based research funds is to maintain separate units for policy mentions several examples, including associations, com- setting, technical evaluation, management, and governance. modity boards, and networks. The delegation of research The main governing responsibility in project-based research governance to networks is increasingly seen as a means of funds should reside with a governing board that ideally con- resolving problems endemic to traditional research funding sists of a distinguished group of senior decision makers. The processes. It can reduce the state’s direct influence on fund- good practice for appointing members to the board is to ing policies, respect the independence of scientific institu- strike a balance among the stakeholder groups pertinent to tions, foster vigorous scientific institutions, and ensure the grant scheme and the wider innovation system. At a scientists’ strong commitment to users’ interests. One exam- minimum, the board should consist of representatives from ple of this new type of research-innovation council is government, research organizations (including universi- Bioconnect, a research-oriented, multistakeholder network ties), extension, farmers, and the private sector. All too for organic agriculture in the Netherlands (box 1.14). 40 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 1.13 Effects of Competitive Science and Technology Funds on Research Governance Competitive funds can contribute positively to gover- Competitive funds can also lead to governance nance, leading to problems: ■ Improved identification and prioritization of agricul- ■ By lacking sufficient objectivity. Particularly in small tural research needs, particularly with the more spe- science communities, it can be very difficult to orga- cific, competitive funds. (Note that general science nize impartial reviews of research project proposals. and technology funds, in contrast, usually do not A solution may be to mobilize foreign reviewers, but prioritize research needs beforehand. Because these this alternative remains quite costly to organize and funds leave much of the initiative of selecting manage without good access to ICTs. research topics to individual researchers, the agri- ■ By using a limited time horizon and funding only oper- cultural research agenda may not take into account ational costs. Competitive science and technology the needs of AIS actors or emerging opportunities funding schemes, which usually fund only short-term for innovation.) projects (two to four years), are not necessarily the ■ Improved formulation of research project proposals. best instrument for funding long-term agricultural The introduction of competitive funding schemes research activities, such as plant breeding and strategic requires a strong project culture within agricultural research. The same problem arises because most proj- research and technology transfer agencies; some ect-based funds do not finance researchers’ salaries or take time to adjust to the new rules and regulations. investments in equipment and infrastructure. Universities seem to have more experience with ■ By being relatively inflexible in adjusting project pro- competitive funding schemes. posals and implementation. Strict adherence to selec- ■ More transparent selection of agricultural research tion transparency and procedures can jeopardize projects. All project proposals are reviewed by exter- efficient selection and implementation of agricul- nal reviewers. Research projects that are approved tural innovation projects. Simple mistakes in budg- and selected for financing are listed publicly. Many ets or incomplete documentation sometimes result competitive funds have project databases that can be in outright rejection of project proposals. consulted online. ■ By not fitting within existing bureaucratic procedures. ■ Improved monitoring and evaluation (M&E) of Government agencies often find it extremely diffi- project implementation. In most agricultural cult to administer a research grant within their research and technology transfer agencies, M&E bureaucratic procedures. For example, resources has long been a weak spot. Internal reporting often cannot be transferred to the next financial mechanisms are rare, and sanctions are seldom year. A way to avoid this problem is to administer applied for failure to report on progress. Compet- the research grant through a nonprofit foundation. itive funding schemes, with their more stringent Although this procedure adds to the overall admin- reporting requirements, have introduced innova- istrative costs of an innovation project, timely and tions in M&E. undisrupted disbursement of research resources may create some savings as well. In most countries, this legal construct is widely accepted. Source: World Bank 2006b. Through Bioconnect, all actors in the organic agricul- suggest that this model can induce more interactive and ture value chain, organized by product workgroups, have inclusive ways of working, given that the interaction of decision-making authority in research funding, utilizing researchers and users is built into the system and is a pre- public funds from the Ministry of Agriculture. Early results requisite for obtaining funding. MODULE 1: THEMATIC NOTE 1: NATIONAL COORDINATION AND GOVERNANCE OF AGRICULTURAL INNOVATION 41 Table 1.3 Client Orientation and Participation in Science and Technology Funds That Are Competitive and Specific to Agriculture in Select Latin American Countries Country and competitive fund Client orientation and participation Brazil PRODETAB The fund’s steering committee (mainly government), in consultation with stakeholders, formulates and prioritizes innovation needs. Private sector involvement in project development and implementation is an important criterion for funding. The selection of projects for funding is a centralized process managed by experts. Special attention is given to ensuring geographic equity. FNDCT Agribusiness The private sector has a majority vote on the board. A consultancy firm produced the priority- setting document. Project selection is centralized and managed by experts. Chile Several funds managed by FIA FIA recently initiated regional consultation of farmers and other stakeholders to formulate regional priorities. It also started to issue regional calls for proposals in addition to a national call. A few small information offices have been opened to improve FIA’s regional presence. Project selection is centralized and managed by experts. Most projects, depending on their particular objective, involve farmers. Colombia PRONATTA PRONATTA has about 20 local nodes throughout Colombia to assemble local researchers, extension agents, farmer representatives, government officials, and other interested stakeholders. The nodes identify and prioritize local research needs and develop project profiles, which are submitted to one of five regional coordination units. Projects are selected in two stages, first by a regional panel and ultimately by a national panel (consisting of the chairs of the regional panels). In both cases, a scoring method is used. Only the highest-scoring projects are funded. PRONATTA strongly favors farmer participation in the implementation of projects. Ecuador PROMSA Research priorities are based on past studies and refined at a workshop, where a scoring approach is used to develop priorities in a three-way matrix of commodities, agroclimatic regions, and thematic areas. Farmers’ participation in priority setting has been low. Project selection is centralized and managed by experts, but each project has a reference group consisting of direct beneficiaries (farmers) and other stakeholders (other researchers, extension staff, agribusiness, and so on). Ideally the reference group participates in project design, planning, implementation, monitoring, and evaluation. Mexico CONAFOR/CONACYT The forestry sector is asked to submit its research needs, which form the basis for the call for proposals. Project selection is centralized and managed by experts. SAGARPA/CONACYT Produce Foundations, set up in all 32 states, strongly involve farmers at all levels. Farmers have a Produce Foundations majority vote on the boards of the foundations and provide the board chair. The identification of innovation needs and selection of projects are decentralized to production chains at the state level. Farmers are required to cofinance (usually in kind) technology transfer projects. Project selection is centralized and managed by experts. Source: World Bank 2006b. Note: CONACYT = Consejo Nacional de Ciencia y Tecnología (National Council of Science and Technology); CONAFOR = Comisión Nacional Forestal (National Forest Commission); FIA = Fundación para la Innovación Agraria (Agricultural Innovation Foundation); FNDCT = Fundo Nacional de Desenvolvimento Científico e Tecnológico (National Fund for Scientific and Technological Development); PRODETAB = Projeto de Apoio ao Desenvolvimento de Tecnologias Agropecuárias para o Brasil (Agricultural Technology Development Project for Brazil); PROMSA = Programa de Modernización de los Servicios Agropecuarios (Agricultural Services Modernizatiopn Program); PRONATTA = Programa Nacional de Transferencia de Tecnología Agropecuaria (National Agricultural Technology Transfer Program); and SAGARPA = Secretaria de Agri- cultura, Ganaderia, Desarrollo Rural, Pesca y Alimentacion (Ministry of Agriculture, Livestock, Rural Development, Fisheries, and Food). 42 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 1.14 Bioconnect: A Networked Research Council in the Netherlands Bioconnect is a new type of research “council� for market developments in an effort to ensure that organic agriculture, one that is able to induce an inclu- research innovations have an impact. sive way of working. A knowledge manager is the group’s facilitator, stream- Supportive government policy. To support knowledge lining information flows and mediating between actor development and exchange in organic agriculture, the groups. A theme coordinator informs researchers about government allocates the subsector 10 percent of its workgroup results to ensure that proposals correspond to budget for policy support research and statutory government funding guidelines. The knowledge man- research tasks (€9.6 million in 2008). In 2005, the gov- agers embody the management of the network; a Knowl- ernment delegated responsibility for setting the edge Committee oversees the broad research themes and research agenda for organic agriculture to stakeholders seeks to maintain consistency throughout the program. by creating Bioconnect. The goal is to determine Early results and challenges. Despite the reluctance of whether delegating research governance to networks in some researchers, the model does initiate learning about which users allocate research funding can work for more interactive ways of working. Similarly, despite their other areas of publicly funded, applied agricultural strong commitment to users’ interests, delegation systems research. Farmer-driven research planning exists in the also allow government to determine the macro priorities Netherlands but has not always forged broader linkages within which users can maneuver. As an intermediary in within the innovation system. all aspects of the research process, from priority setting to Bioconnect. Through product workgroups (dairy, disseminating results, Bioconnect occupies a pivotal but glass house horticulture, and so on), the users of neutral position—one that is not easy to maintain. The research (farmers, agrifood supply and processing position of such an intermediary depends on whether it companies, civic advocacy organizations representing promotes institutional learning with regard to the new consumers) unite with researchers, consultants, and roles of the actors involved and helps their goals to con- policy makers to determine how to use public research verge. Bioconnect must constantly balance the interests funding. Working within themes established by the and gain the trust of the range of stakeholders for whom government, workgroups propose topics based on it mediates and on whom it depends for its resources broad demand among their constituencies. They dis- (social and operating capital). As part of this balancing cuss and prioritize the topics with research coordina- act, Bioconnect has to convince research contractors of tors to align research with sector needs. Research is the value of setting research priorities through a single, contracted on the basis of proposals, which are selected multiactor platform; balance the strategic interests of the through a review by the users and funding body and research contractors; and urge government to achieve not solely through peer reviews of scientific merit. Bio- cohesion across ministry directorates with respect to connect facilitates the participatory research arising budgets, macro priorities, and processes for monitoring from the priority setting and links it to legislative and the network. Source: Klerkx, Hall, and Leeuwis 2009; Klerkx and Leeuwis 2008. MODULE 1: THEMATIC NOTE 1: NATIONAL COORDINATION AND GOVERNANCE OF AGRICULTURAL INNOVATION 43 T H E M AT I C N O T E 2 How to Build Innovation Networks Javier Ekboir, Institutional Learning and Change Initiative (ILAC) SYNOPSIS forces partners to use flexible approaches to explore potential solutions. Innovation networks can emerge from he success of spontaneously emerging innovation T networks has sparked interest in deliberate efforts to build new networks and strengthen existing ones. This note describes both spontaneous and deliberately the deliberate actions of actors, as in Brazil with no-till agri- culture (IAP 1), or they can emerge inadvertently as actors perform tasks that require collaboration. In this module, an innovation network is defined as a created innovation networks, discusses the factors related to diverse group of agents who voluntarily contribute knowl- success, and offers lessons and guidelines for creating new edge and other resources (money, equipment, and land, networks or supporting existing ones. To support the emer- for example) to jointly develop or improve a social or gence and consolidation of innovation networks, avoid economic process or product. Innovation networks are a imposing formal organizational arrangements. Promote special form of organization with a nonhierarchical struc- policies that provide incentives (beyond simple subsidies for ture, a collaboration-based culture, consensus-based coor- participation) and an enabling environment for innovation dination (because members are free to leave the network at (especially, creating market and social opportunities for any time), usually no legal personality (especially in their innovation). Consolidate the innovation capabilities of early stages), and often relatively fuzzy objectives (such as networks through policies that support action-research and improving the management of natural resources). They decentralized experimentation with centralized learning, evolve with market opportunities and the technologies they the construction of local and distant interactions, and develop. Different types of actors participate in innovation resources for participatory assessment of innovation capa- networks; in fact, membership changes in response to bilities. Finally, build capabilities of members of innovation emerging problems and opportunities or the development networks by strengthening innovation capabilities in private and diffusion of innovations (IAP 1). firms and civil society organizations, building the capacity Innovation networks have supported the development of of actors willing to be catalytic agents, and promoting important innovations, both in agriculture and agroindus- cultural changes in public institutions that foster their par- tries, such as no-till agriculture and Chile’s wine industry. ticipation in innovation networks. The networks’ flexibility allows groups of actors to minimize transaction costs and minimize risk by adding flexibility. BACKGROUND AND CONTEXT More than any other feature, it is diversity that charac- FOR INVESTMENT terizes innovation networks. Networks’ goals can differ. Innovation networks emerge (and are becoming more Some develop technical solutions to specific problems (like prevalent) because no single actor commands all the the no-till networks), create new business models and new resources required to innovate at the pace demanded by products (like Papa Andina, described in box 1.15), or modern markets (Powell and Grodal 2005). To access the reduce poverty. Others empower marginalized groups by resources and information they lack, actors establish infor- fostering innovations appropriate to their resources and mal collaborations. Innovation networks emerge when the needs—an example is the International Livestock Research problems or opportunities affecting actors in the innovation Institute’s (ILRI’s) innovation platforms to overcome fod- system are not clearly defined. This uncertainty prevents der scarcity1—or develop improved crop varieties. Network effective contracting and structured partnerships, and it membership can encompass farmers, farmer organizations, 44 Box 1.15 The Creation and Consolidation of Papa Andina Since 1998, Papa Andina has fostered agronomic, techni- scale farmers, agricultural service providers, and mar- cal, and commercial innovations in Andean potato- ket chain actors (including chefs, supermarkets, and based food systems to improve farmers’ access to more potato processors). In each participating country, Papa dynamic and lucrative markets. The network, which Andina coordinates its activities with a “strategic part- reaches about 4,000 poor rural households and includes ner� that assumes a leadership and coordinating role about 30 partners in Bolivia, Ecuador, and Peru, pursues in market chain innovation: PROINPA Foundation in several strategies: increasing demand for native and Bolivia, the INCOPA Project in Peru, and the National commercial potato varieties, adding value to potatoes, Potato Program of INIAP in Ecuador. Although the improving contractual arrangements, and facilitating approaches to developing the networks are common access to commercial information. Financed by the Swiss (the participatory market chain approach and stake- Agency for Development and Cooperation and other holder platforms), different organizational arrange- donors, Papa Andina is hosted by the International ments, involving different partners and interaction Potato Center (CIP). patterns, emerged in each project implemented by Based on a participatory method for stimulating Papa Andina. agricultural innovation (Rapid Appraisal of Agricul- Papa Andina’s success resulted largely from the explo- tural Knowledge Systems), in 2000 CIP researchers ration of alternatives to reaching its goal (poverty allevi- started to enhance innovation through a participatory ation), the involvement of different actors in developing market chain approach and stakeholder platforms. and testing innovations, and the continued support of These efforts bring researchers together with small- its funders. Source: Author, based on Devaux et al. 2009. Note: CIP = Centro Internacional de la Papa; INCOPA = Innovación, tecnológica y competitividad de la papa en Perú; INIAP = Instituto Nacional Autónomo de Investigaciones Agropecuarias; PROINPA = Promoción e Investigación de Productos Andinos. private and public firms, researchers, extension agents, many forms and operating modes that innovation networks government agencies, and donors. Innovation networks can adopt and the potential problems that can render net- differ in their origins and their approaches to developing works ineffective or dependent on external funding. and diffusing innovations. For example, private firms or farmers catalyzed no-till networks in South America and INVESTMENT NEEDED relied on farmer associations to diffuse the technology; in contrast, a private firm and NGO catalyzed Ghana’s no-till Because of their informal structure and frequent changes, network but relied heavily on a PhD student and traditional innovation networks need flexible and sustained support, public extension methods (Ekboir 2002). often from innovation brokers. This flexibility does not fit Innovation networks differ from farmer organizations in easily into the usual requirements of publicly funded proj- that farmer organizations have a homogeneous member- ects, especially because it is difficult at first to define clear ship and more formal, stable relations. Innovation networks objectives and the steps that will deliver the innovation. In differ from value chains in that the latter are more stable, are contrast, the private sector has long recognized the special focused on delivering a product or service, and are coordi- nature of innovation and created flexible approaches to sup- nated by a central actor (such as a supermarket) that organ- port it, including venture and angel funds and actions to izes the operation (TN 3). develop capabilities that favor innovation. In recent years, This thematic note describes strategies to foster the some governments, international donors, and multilateral emergence of innovation networks or strengthen existing funding agencies have started to support innovation proj- networks. It discusses the benefits and policy issues involved, ects that include financing for innovation networks—either particularly the need to strike a balance in how the public to support the emergence of new networks or to strengthen and private sector participate. The examples highlight the existing ones. MODULE 1: THEMATIC NOTE 2: HOW TO BUILD INNOVATION NETWORKS 45 Fostering the emergence of innovation networks capabilities to explore new instruments to develop and fos- ter innovations; and (5) facilitate the implementation of Actions to foster the emergence of innovation networks seek joint activities. Investments can include: to create trust among potential partners, identify common goals, establish the bases of collaboration, and develop ■ Resources to consolidate innovation networks, including innovation capabilities. Few developing countries have the implementation of collective action (hire facilitators, programs to foster the emergence of innovation networks; build human resources with formal and informal train- on the other hand, many developed countries support such ing, and support travel, meetings, communications and programs, such as Canada’s Agricultural Biorefinery Inno- communications products, and experimentation). vation Network for Green Energy, Fuels, and Chemicals and ■ Strengthening innovation capabilities of nonpublic actors the Dutch InnovationNetwork. in the AIS, for example, with consulting services, exten- More specifically, the following investments foster the sion activities, technological interchanges, seminars, and emergence of innovation networks: workshops on the dynamics of innovation networks. ■ Creating venture funds to finance the development of ■ Financing catalytic agents—innovation brokers, business innovations, similar to those used in the high-tech incubators, NGOs, researchers, extension agents, and industries. groups of farmers—that assemble potential partners. ■ Fostering the transformation of public research and Their remuneration should be linked to measures of the extension institutions so that they can better integrate consolidation of the network. The milestones should into innovation networks. not be imposed by the financing institution but negoti- ■ Building the understanding of the main actors in the ated between potential partners, funders, and the inno- AIS, especially senior civil servants, of the dynamics of vation broker. When the milestones are defined by the innovation and the nature of innovation networks. funders alone, innovation brokers tend to respond to ■ The no-till networks in South America are examples of their interests instead of those of potential network part- consolidated innovation networks. Initially, they were ners. The catalytic agents should be trained in the differ- supported by agrochemical companies that provided ent methodologies that have been developed to foster the funds and expertise; once they matured, the networks emergence of partnerships (see, for example, Hartwich were managed by farmers and supported by a large num- et al. 2007; USAID 2004). ber of companies and farmers (IAP 1). ■ Giving small, short-term grants to potential catalytic agents of networks to facilitate interactions with poten- tial partners, such as organizing meetings or establishing POTENTIAL BENEFITS electronic platforms for communication. ■ Broadening the mandate of research and extension Innovation networks have many potential benefits: institutions to include promoting innovation networks. Appropriate incentives should be introduced and ■ They can spur the development of innovations thanks to resources made available. increased collaboration and coordination among diverse ■ Establishing a team to develop capabilities and a moni- actors in the AIS; more effective identification of orga- toring and evaluation system to assess the different meth- nizational, commercial, technical, and institutional ods used to promote innovation networks and catalytic opportunities; better exploration of alternative solutions agents. to reach the network’s goals; lower cost of searching for technical and commercial information; easier experi- mentation with alternative solutions; and better develop- Supporting existing innovation networks ment of new ideas and skills. Given their voluntary nature, innovation networks survive ■ More rapid development of social and economic innova- when they can implement collective action. Support for tions can result in stronger economic growth and more existing networks should seek to (1) strengthen their ability sustainable use of natural resources. Strong networks are to assess their strengths and weaknesses and gain access to particularly necessary for innovation when public organ- needed resources; (2) build the capacity of network leaders izations, especially research and extension, are weak. to steer nonhierarchical organizations; (3) implement ■ Human, social, physical, and financial resources are used strategies to gain access to needed resources; (4) develop more effectively for innovation. 46 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK ■ Innovation programs become more efficient as all actors foreign participation in developing small-scale equipment in the AIS, especially governments and donors, expand for no-till agriculture in South Asia. their innovation capabilities. ■ Innovations diffuse faster because the participation of POLICY ISSUES users in the network increases the odds that the results will be useful to farmers and other actors in the AIS. Key policy issues related to the emergence and continued ■ Public institutions become more effective when they par- success of innovation networks include their consolidation ticipate actively in innovation efforts. and sustainability; social considerations (when networks ■ Development is more inclusive when innovations meet form spontaneously, based on the resources that each actor the needs of marginalized groups. contributes, the poorest and most marginalized groups may ■ Institutional innovations become more inclusive and not be included); and the changing roles of public and pri- effective because marginalized groups gain a stronger vate actors in the network. influence on the design and implementation of innova- tion policies. Sustainability Box 1.16 illustrates some of the benefits that an innova- The sustainability of innovation networks depends on many tion network can yield, using the example of local and internal and external factors. Internal factors include the Box 1.16 Benefits of Local and Foreign Collaboration to Develop Equipment for No-Till Agriculture in South Asia No-till agriculture is thought to offer environmental ■ No-till methods were adopted rapidly in irrigated and economic advantages for rice-wheat production rice-wheat systems. No-till was used on about systems in South Asia’s Indo-Gangetic Plains. Farm- 820,000 hectares by 2003–04. ers in Pakistan, India, Nepal, and Bangladesh have ■ The number of small factories making no-till equip- rapidly adopted the practices since 2000. No-till ment grew. By 2003, an estimated 15,700 seeders had approaches used in other parts of the world were been sold in Haryana and Punjab, India. tested and modified to suit local conditions by a ■ Profits for small-scale farmers increased, pollution research consortium led by the International Maize decreased, and water savings increased. Seasonal and Wheat Improvement Center (CIMMYT) and the savings in diesel for land preparation were estimated Indian Council on Agricultural Research. The tech- in the range of 15–60 liters per hectare, representing nology did not take hold until researchers and agri- a 60–90 percent savings. Water savings in wheat pro- cultural engineers from abroad began working with duction were estimated at 20–35 percent and prof- local, small-scale manufacturers to design prototype itability increased by 46 percent. no-till seeders. Particularly important were several ■ Local manufacturers gained access to information exchanges of prototypes between small-scale manu- from different countries in the form of original, facturers from Bolivia and India. The exchanges were nonadapted equipment. mediated by CIMMYT, which worked in both coun- ■ Equipment was more rapidly adapted to smallhold- tries with local artisans and handled the logistics of ers’ conditions. importing the prototypes. Several modifications were ■ Technical and scientific information was generated. made to the original design, and manufacturers now ■ Networks of farmers, equipment manufacturers, produce and distribute a wide array of the new seed- and researchers from international centers and state ers. Results of the interaction between local and for- universities were consolidated. eign actors included: ■ The impact of CIMMYT’s actions was magnified. ■ A market for planting services emerged. Source: Ekboir 2002; World Bank 2006; Laxmi, Erenstein, and Gupta 2007. Note: CIMMYT = Centro Internacional de Mejoramiento de Maíz y Trigo. MODULE 1: THEMATIC NOTE 2: HOW TO BUILD INNOVATION NETWORKS 47 presence of effective leadership that works by consensus, the innovations are developed by networks of productive or development of collective learning routines and trust, effec- social agents. Yet researchers are necessary when problems tive governance mechanisms for collective action, and a cul- require science-based solutions, such as understanding the ture that respects the different partners. Support to sustain changes in soil dynamics induced by conservation practices innovation networks should help build trust among potential or managing native forests that have life cycles that may last partners and encourage a culture of collaboration. External for over a century. In any event, the incentives and cultures factors influencing networks’ sustainability include the emer- within most public offices in developing countries, includ- gence of commercial and technological opportunities, timely ing research and extension institutes, hamper their partici- access to key inputs (particularly to specialized information pation in innovation networks. These restrictive environ- and qualified professionals), the general socioeconomic cli- ments have not prevented many researchers from making mate, and noninterference from governments. important contributions to innovation networks, however, Because of their voluntary nature and low barriers to as illustrated in box 1.17. exit, innovation networks have no formal hierarchy and operate by consensus. Although some actors have more influence than others, they still have to consider the interests Public and private sector roles of other partners if they want them to remain in the net- Membership in innovation networks usually is varied and work. The more focused a network, the better the chances of may include partners from the public and private sectors, its consolidation. It is important to remember, however, that civil society, and international organizations. Generally, motives for joining the network may differ (profit, advance- networks formed only by private partners seek to develop ment of science, and so on) and could eventually conflict. products with commercial value. As some of the examples in this thematic note indicate, however, it is not uncom- Social considerations mon for private firms to team with public or international research institutes to develop commercial innovations, By definition, marginalized populations (poor households, such as improved plant varieties, or innovations with women, and other groups) have few financial, human, and social content, such as no-till packages for small-scale social resources to contribute to innovation networks farmers in southern Brazil (Ekboir 2002). The network (Spielman et al. 2008). Their participation in innovation partners may have had different interests, but they could processes often depends on funds and expertise provided by still collaborate toward a common goal. For example, the other actors (often NGOs or donors). Innovation networks private firms may have wanted to develop a new market, can cater to the needs of marginalized populations in two whereas the public partners wanted to achieve social ways: by organizing them to improve their access to markets objectives. Private firms may participate in innovation and their influence on innovation processes and policies, and by developing innovations that address their specific needs. networks without a commercial focus when they have a The impacts of innovation networks on poverty are not social responsibility policy. Civil society organizations easy to identify. For example, no-till practices caused land have also participated in networks to develop innovations ownership to become more concentrated in southern Brazil. that address their members’ needs. In a few cases, these organizations were the catalytic agents for innovation Many smallholders sold their farms and moved to newly networks. developed areas in central and northern Brazil, where land prices were one-tenth of those in the south. Working on As with other aspects of innovation, the public sector much larger areas, the former smallholders became middle- can play several roles in supporting innovation networks. class farmers. Smallholders who remained in the south also It can provide funds to support innovation activities, implement programs to foster the emergence of networks benefited from no-till, but only after other actors formed (particularly by supporting innovation brokers), or provide innovation networks to develop special no-till packages for specialized assets, such as research capabilities. The public them (Ekboir 2003). sector can offer incentives for private firms to participate in innovation networks, such as tax rebates and matching The role of public researchers in innovation funds, and it can promote reform in public research and networks educational institutions so that they can participate more The participation of public sector researchers is not a con- effectively in innovation networks. Some public research dition for successful innovation networks, because most institutions have taken steps to foster the emergence of 48 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 1.17 The Roles of Individuals and Organizational Culture in the Development of Innovation Networks: A Mexican Example In the early 1980s, a researcher from Mexico’s national dated that their methodology be used in all publicly agricultural research organization crossbred Zebu cat- supported extension activities. They also decided that tle with European breeds in his ranch. The neighbors, GGAVATTs should have priority in accessing support interested in the new animals, soon organized a group programs. The number of GGAVATTs exploded. Most to discuss technology issues, such as breeding tech- of the new groups were created by technicians hired to niques and pasture management. Based on experiences do so, and they did not respond to farmers’ goals as in Argentina with AACREA, an organization of farmer the original groups had done. Farmers joined chiefly groups that conduct on-farm applied research and to gain easier access to public resources. Only a few of share the results with one another, a few researchers the new GGAVATTs improved members’ ranching promoted the creation of similar groups of ranchers in technologies. Most faded away when government sup- the same region of Mexico. The groups started to port ended. exchange information and work on validating tech- This experience contains two important lessons for nologies. The research organization’s authorities supporting innovation networks. First, innovation net- strongly objected to these actions, claiming that they works emerge when different actors find a common were extension activities and thus beyond the man- interest in exploring ways to improve a product or a date for national agricultural research. Researchers process. The spontaneous convergence of interests is responded by meeting on Saturdays to avoid being difficult, however, and facilitating convergence can accused of using their working hours for unauthorized greatly accelerate the emergence of networks. Second, activities. By the late 1990s, the groups—GGAVATTS— facilitation should not be coupled with the disburse- had developed and diffused several important innova- ment of other subsidies. Otherwise farmers join to tions in their region. In the early 2000s, the federal receive the subsidies and not because they are truly authorities acknowledged their performance and man- interested in innovating. Source: Ekboir et al. 2009. Note: AACREA = Asociación Argentina de Consorcios Regionales de Experimentación Agrícola (Argentine Association of Regional Consortiums for Agricultural Experimentation); GGVATTS = Grupos Ganaderos de Validación y Transferencia de Tecnología (Livestock Producer Groups for Technology Validation and Transfer). innovation networks, but often their approach follows a approaches for natural resource management (such as water traditional, linear vision of science. catchment in arid regions) or the development of market niches for poor households (TN 3). The problems and the potential solutions that innovation processes will explore LESSONS LEARNED are rarely well defined at the beginning. Because of their vol- Experiences with innovation networks that develop spon- untary nature, innovation networks have the flexibility to taneously and those that are developed deliberately offer adapt to emerging needs and opportunities, but this respon- useful lessons about when networks are most effective, who siveness can depend on the availability of flexible funding joins, and what they accomplish. Other lessons relate to and on enabling all actors in the AIS (especially public how networks can be catalyzed and otherwise motivated, researchers and extension agents) to participate. how they can be consolidated, and how they can avoid depending on external funding agencies. A network’s origins greatly influence who joins and how it innovates When are innovation networks effective? Innovation networks can emerge because of the interests of Innovation networks are particularly effective for develop- one person—a farmer, a private firm, or a researcher (as in ing and diffusing technical and commercial innovations box 1.17)—or because it is part of a research program, like that deal with ill-defined or complex issues, like new the Ghanaian no-till equipment network (box 1.23 in IAP 1). MODULE 1: THEMATIC NOTE 2: HOW TO BUILD INNOVATION NETWORKS 49 It can originate with field staff and then be integrated with several public researchers and research institutes until he an organization’s work plan, or it can originate with the top gathered sufficient expertise in agronomy and soil science. management. When traditional research organizations The motivation of these researchers was critical to the net- attempt to create innovation networks, they usually empha- work’s success (IAP 1). size the use of scientific experimentation. Other partners are Funders, on the other hand, provide the resources that sought to contribute complementary scientific capabilities, allow the catalytic agent to operate. Once the network has provide farmers’ perspectives, or participate in diffusion. emerged, it is essential for it to establish effective links with This kind of network includes the scientific network that other networks that can provide information, share experi- developed Golden Rice (a more nutritious type of rice)2 and ences, and provide access to critical assets the network lacks. demand-driven innovation networks in which farmers The links are often not provided by the catalytic agent but define the problems and researchers work on solutions by other well-connected partners (“central nodes,� in the (replicating the traditional, linear research pipeline).3 When terminology of Social Network Analysis). In addition to farmers, private firms, or NGOs create innovation networks, these partners (catalytic agents, central nodes, and funders), they emphasize the social and organizational dimensions. innovation networks are populated by individuals and They often adapt techniques without the collaboration of organizations. Like any other organization, each innovation scientists. They establish new kinds of organizations to dif- network develops its own culture, learning routines, heuris- fuse them (like some of the no-till networks) (Ekboir 2002) tics, and modes of interaction. or rely on farmer-to-farmer communication. More recently, social scientists in research institutes (such as CIP, ILRI, and Central nodes facilitate information flows within Wageningen University) have helped to create innovation and between networks networks involving social and agronomic researchers and other actors from the AIS. As all innovation networks Innovation networks facilitate the exchange of knowledge, mature, the importance and roles of the actors change (see, abilities, and resources among their members, but effective for example, IAP 1). networks also interact with other networks and sources of The emergence of innovation networks requires two information (Ekboir et al. 2009) through a few central types of partners to collaborate: a catalytic agent and a nodes.4 Innovation brokers are particularly prepared to funder. Committed and innovative catalytic agents are vital become central nodes. By linking clusters of network actors, to the emergence of innovation networks, because by the central nodes facilitate flows of information and definition only they can induce other partners to invest resources, as exemplified by CIMMYT’s role in developing time and resources in the network, and they also seek part- no-till equipment in South Asia, discussed earlier. Securing ners to contribute the resources needed by the network funding to build these connections has been difficult, (Ekboir et al. 2009). Catalytic agents can have different because the benefits of innovation networks have been organizational affiliations. For example, they can belong to identified so recently. an organization willing to start an innovation network in pursuit of its own interests or can be hired by a project as Supporting innovation networks without an innovation broker. Regardless of organizational affilia- creating dependence tion, to start an innovation network, a catalytic agent must seek partners willing to contribute to the common effort, When donors or governments have tried to use innovation identify which capabilities the network needs, and look for networks to distribute resources, the number of formal new partners that can contribute those capabilities until at groups in the networks has surged, but most were less inno- least one is found. In searching for partners to initiate an vative and had weaker internal cohesion than groups innovation network, it is important to focus both on indi- formed without the incentive. As a result, most disappeared viduals and institutions. Support from top management is when the public program ended, as with the Mexican live- of little help if the people who must participate in field stock groups described previously. Subsidies to create activities are not motivated. For example, the first no-till innovation networks have had similar results; partners did network in Brazil was catalyzed by a researcher from a pri- not develop the social capital to keep the network alive once vate firm. Realizing that no-till required new planters, he the subsidies ended (TN 1). Supporting networks that contacted all the manufacturers in the area until one agreed already exist or supporting innovation brokers that foster to participate in the emerging network. He also contacted 50 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK the creation of social capital among partners are more sus- ■ Create an environment conducive to innovation. tainable alternatives. Eliminate excessive bureaucratic requirements for busi- ness, develop basic infrastructure, and facilitate the formation of partnerships by, for example, training Incentives and structure for innovation networks human resources, supporting exchange visits, holding Innovation networks are made up of individuals, even if meetings, and developing communications facilities they represent an organization. Their contribution to the and material. collective effort depends on the personal benefits they gain ■ Strengthen analytical capacities in the public sector from participation, the incentives offered by their organ- so that it can provide better support to innovation izations, and their organizations’ cultures. It is relatively processes. common for projects in developing countries to start to build a network by signing memoranda of understanding Consolidate the innovation capabilities of networks between public and private organizations. The public through policies that organizations often have weak accountability and lack the incentives and culture to effectively induce their members to ■ Support action-research projects and decentralized collaborate in external networks (Ekboir et al. 2009). Despite experimentation with centralized learning to identify these misaligned incentives, many researchers have partici- new instruments to foster innovation networks and pated in innovation networks out of personal interest. diffuse best practices. Governance and accountability mechanisms are essential ■ Support the construction of local and distant inter- for innovation networks to survive, because one of their actions. When distant ties are missing, create them by major existential threats is opportunistic behavior by mem- linking local networks to international sources of infor- bers. Governance and accountability mechanisms cannot be mation and resources. imposed, however. All members must see such mechanisms ■ Provide resources for participatory assessment of inno- as reasonable and practical. They must be negotiated clearly vation capabilities. and with care, with all involved. Innovation networks should not be pushed to adopt a Build capabilities of members of innovation networks by formal structure. Given the uncertain nature of innovation, formal contracts and intellectual property rights are seldom ■ Providing resources to strengthen innovation capabilities important for the development of innovations that are a lit- in private firms and civil society organizations. For tle more complex than incremental improvements (Rycroft example, use consulting services, innovation brokers, and Kash 1999). innovation incubators, extension activities, technological interchanges, and seminars and workshops on the dynamics of innovation networks. RECOMMENDATIONS FOR PRACTITIONERS ■ Building the capacity of actors willing to be catalytic To support the emergence and consolidation of innovation agents through courses and mentoring. These actors networks, recognize their informal nature. Avoid imposing for- may be dedicated organizations that foster the mal organizational arrangements, and promote policies that exchange of ideas and shape the public debate on par- ticular topics. ■ Provide incentives for innovation by creating market ■ Promoting a change of mentality, management (includ- opportunities, helping to access crucial inputs (credit is a ing incentives), and culture in public institutions, includ- common need), and facilitating the flow of commercial ing research institutes, so that they are more willing to and technical information. participate in innovation networks. MODULE 1: THEMATIC NOTE 2: HOW TO BUILD INNOVATION NETWORKS 51 T H E M AT I C N O T E 3 Facilitating Smallholders’ Access to Modern Marketing Chains Javier Ekboir, Institutional Learning and Change Initiative (ILAC) SYNOPSIS BACKGROUND AND CONTEXT FOR INVESTMENT odern marketing chains can heavily influence M rural employment, poverty, and asset ownership, especially the concentration of land, physical assets, credit, and social capital in the hands of farmers with Modern marketing chains can foster economic growth and alleviate poverty directly and indirectly. Direct effects include higher incomes for farmers who participate in the access to those chains. Only farmers with strong capabili- marketing chain; the development of innovation capabili- ties for innovation can survive in these highly competitive ties (through interactions with other actors in the chain); marketing chains, in which a dominant actor close to con- the diffusion of technical, organizational, and institutional sumers (usually a supermarket or broker) organizes many innovations; and the creation of employment in rural areas. producers and intermediaries and coordinates their Indirect effects include expansion of local economies, interactions. The private sector or nongovernmental organi- exposure of local entrepreneurs outside the chain to the zations (NGOs) will lead the development of modern operation of modern markets, the development of links marketing chains, but the public sector should play an with new actors in the AIS, and the modernization of tradi- important supporting role by improving infrastructure, tional wet and wholesale markets. Given these benefits, facilitating access to input markets and financial services, donors, multilateral organizations, and governments have modernizing traditional wholesale markets and linking assigned high priority to improving poor farmers’ access to them with modern marketing chains, improving rural high-value agriculture and modern marketing chains, yet education, and supporting extension and advisory services. only a fraction of smallholders have managed to succeed, Project managers, field staff, donors, and policy makers either individually or through organizations (Hellin, Lundy, require sound knowledge of the dynamics of modern and Meijer 2009; Wang et al. 2009). marketing chains, niche markets, and innovation processes, What differentiates modern marketing chains from farmer along with the opportunities and challenges they pose for organizations and innovation networks? Modern marketing small-scale farmers. For a group to identify and maintain chains have many features of buyer-driven value chains: an market links, strong leadership with the appropriate expe- actor close to consumers (usually a supermarket or a broker) rience is the most important factor. External facilitation dominates, organizing many producers and intermediaries, can help to access modern marketing chains, but only if deciding who participates in the chain, overseeing all the links it uses appropriate approaches that target farmers with from the farm to the shelf, defining the nature of the inter- strong innovation and managerial capabilities. Building actions and commercial conditions, and setting quality and social capital should be an important component of proj- safety standards. Farmer organizations, on the other hand, are ects to develop marketing chains, and social capital should member organizations that include only one type of actor; be an important criterion in allocating funds to participat- innovation networks are open organizations formed volun- ing groups. Projects should not impose a model of inter- tarily by different types of actors. Other important features action. Interventions generally should not organize the of modern marketing chains are that they focus on market- poorest farmers to sell directly to modern chains but rather ing specific products (vegetables, fruits, meat, and so on), to develop niche markets, sell to wholesalers, or obtain access to the chain is highly restricted, verbal contracts based training for specialized off-farm employment. on trust are common but informal transactions rare, and 52 technologies are generated mostly in developed countries the operation of these chains in three countries where they and imposed by the leading agent. have attained different levels of development. High-value products are commercialized through four The fourth type of modern marketing chain comprises types of modern marketing chain. The first type includes niche markets in their many forms. Examples include the traditional export crops produced on plantations, such as following: coffee, tea, and bananas, and marketed mainly by large companies and traditional agroprocessors. Most innova- ■ Smallholders close to a large city, who sell directly to con- tions in these marketing chains are technical, because the sumers in a process similar to the “locavore� movement organizational aspects have already been resolved. In a few in developed countries. cases, such as the Kenya Tea Development Agency (TN 4, ■ Development projects that create new markets for tradi- box 1.22) or the Colombian Coffee Growers’ Federation,1 tional products or new products based on traditional small-scale farmers have created large, successful organiza- crops (Papa Andina is an example for Andean potatoes; tions that compete internationally. see module 7, IAP 3, and module 4, TN 4. The second type of modern marketing chain, which sup- ■ The Fair Trade movement, which caters to specific pop- plies developed countries with fresh and processed fruits ulation segments in developed countries.2 and vegetables, fish and fish products, meats, nuts, spices, and flowers, started in the early 1980s following trade Some niches are more demanding than others in terms liberalization and improvements in logistics. Traders and of quality and commercial requirements; for example, agroprocessors usually work with large-scale farmers under wealthy consumers in nearby cities are less demanding than different associative forms, although occasionally they pro- consumers from developed countries who buy in Fair Trade vide financing and technical advice to smallholders. Both shops. Participation in these markets depends on farmers’ technical and organizational innovations are important in capacity to meet their requirements. Although niche mar- this chain, and local actors have to develop strong innova- kets have had important impacts on local communities, tion capabilities to remain competitive in global markets. they cannot expand beyond a certain size without becoming The third type of modern marketing chain was triggered commoditized. For this reason, they can make only a limited by the expansion of fast-food chains and supermarkets that contribution to alleviating poverty. supply mostly domestic markets, although increasingly they reach foreign markets. This type of chain is a product of the INVESTMENT NEEDED internationalization of wholesaling and logistics, consolida- tion of rural and urban wholesale markets, emergence of Investments to support modern marketing chains should specialized and dedicated wholesalers who organize pro- support the development of organizational capabilities for curement, growth in vertical coordination, and the intro- innovation along the chain (especially among farmers), duction of private grades and standards. The better-off coordinate actors operating in the chain, and create the smallholders tend to sell through this channel (sellers in tra- enabling conditions for innovation. It is important to rec- ditional channels tend to be less well off); they have more ognize that although modern marketing chains are growing, capital (especially irrigation facilities), easier access to traditional wholesale and wet markets will probably retain credit, and greater specialization in commercial horticulture an important share of high-value agricultural produce and (Reardon et al. 2009). Actors in these chains use sophisti- remain the main marketing option for most smallholders. cated production packages, but the most important innova- As modern marketing chains become increasingly concen- tions are organizational: coordinating production by large trated, it will be harder for smallholders and farmer organi- numbers of farmers of products of consistently high quality zations to access them directly. For this reason, support to (frequently highly perishable) and delivering them to modern marketing chains should be accompanied by pro- numerous distant retail sales points (increasingly abroad). grams to help the farmers who are excluded. The same products that are sold in modern marketing chains are also sold in traditional wet and wholesale mar- Supporting the expansion of modern marketing kets; the difference is that the latter usually handle products chains through targeted investments of mixed quality and operate with spot prices, whereas the modern chains must adhere to high quality standards, and Private actors make most of the investments to develop deliveries and prices are set in advance. Box 1.18 describes modern marketing chains, but targeted public investments MODULE 1: THEMATIC NOTE 3: FACILITATING SMALLHOLDERS’ ACCESS TO MODERN MARKETING CHAINS 53 Box 1.18 Procurement Systems in Modern Marketing Chains in Three Developing Countries Mexico. Supermarket procurement systems have moved and transaction costs to a point where they become from traditional wholesale markets to (1) networks competitive. Modern marketing chains increasingly are based on centralized distribution centers; (2) emerging supplied by a new type of “middle-class� farmer emerg- regional networks; (3) sourcing from a combination of ing between large-scale export farmers and small-scale, specialized wholesalers (which are increasingly backward traditional market farmers. These middle-class farmers integrated into production zones), wholesaler/growers, buy traditional farms and convert pasture and grain and direct relations with grower/packer/shippers; fields to horticultural crops grown with modern pro- and (4) new institutions, such as emerging private duction techniques. quality standards and implicit preferred supplier (quasi- China. The expansion of supermarkets has been contractual) relations. These trends make it very diffi- driven by factors common to other developing cult for most smallholder and even traditional large countries—urbanization, income growth, and liberaliza- wholesalers and medium-scale growers to sell to super- tion of foreign direct investment in retailing—as well as markets. Supplying directly is increasingly the domain of a number of China-specific policies, such as government (1) the large grower/packer/shipper, (2) the backward- investment in the sector and policies promoting conver- integrated, large, specialized wholesaler, and (3) to a cer- sion of wet markets to supermarkets. A feature unique to tain extent the wholesaler and farm company managing China is that poorer households produce the largest contract farming. share of horticultural crops; that share is growing, Kenya. Supermarkets have a relatively small but whereas the share of richer households is falling. At the growing share of urban markets for high-value same time, there is little evidence that modern whole- products. The leading chains began to modernize salers or supermarkets source produce directly in rural procurement by creating systems of preferred suppli- communities. Instead, they rely on urban wholesale ers (farmers and specialized wholesalers) for key markets dominated by small-scale traders; for this rea- products, centralizing procurement into distribution son, little or no effort is made to impose or monitor centers, and starting to use private quality standards. quality or safety standards directly among producers. Smallholders have found it difficult to enter modern Some researchers have reported the incipient emergence chains because most lack the physical, financial, of features common to more developed procurement human, and organizational capital to lower production systems, such as dedicated providers. Sources: Author, based on Reardon et al. 2007; Neven et al. 2009; Wang et al. 2009. in specific markets and chains can trigger virtuous cycles Another type of investment is the facilitation of lead of investment (IAP 3). These investments may support the farmer–outgrower schemes. Lead farmers have proven their formation of farmer groups, finance infrastructure and ability to produce to the standards required by modern specialized equipment, build capabilities for farmers and chains. Supermarkets or specialized wholesalers encourage their organizations to meet the standards required by pri- lead farmers to organize their neighbors to produce to vate companies, and help provide market intelligence. For the same standards; the only incentive the buyers offer is example, a guaranteed market opportunity. For a fee (usually a per- centage of the final sales), lead farmers provide various Sam’s Club required cooled, packed, and delivered raspber- services that may include production planning, technical ries by a group of small farmers in Michoacán (Mexico). assistance, access to inputs, market intelligence, sorting and SEDAGRO/Michoacán [the state department for rural devel- opment] discovered exactly what those requirements are in packing, transportation to market, and financial adminis- joint meetings with the chain and the group, and then pro- tration. Lead farmer programs require less external support vided efficient and targeted help to the group to make those than support for farmer organizations, but the farmers investments. The group then entered the business relationship themselves have to make higher investments (Reardon et al. and that provided further capital to make investments on their 2009; Neven et al. 2009). Investments to support these pro- own. [Reardon et al. 2007, 35] grams include financing farm equipment and capacity 54 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK building for the farmers willing to work with the lead Improving traditional markets to benefit farmer, including paying for the time of the lead farmer. smallholders Identifying opportunities for targeted investments requires Investments to modernize traditional markets and improve fund managers to have the capabilities and incentives appro- farmers’ bargaining power include developing small-scale priate for operating flexible programs. farmers’ human and social capital by fostering the emer- gence of farmer organizations, providing technical and organizational support, and offering training in modern Fostering coordination among actors in modern marketing chains marketing methods. Another useful investment is to facili- tate smallholders’ access to modern infrastructure, espe- Modern marketing chains usually use sophisticated pro- cially ICTs, as well as to services for business registration duction and marketing mechanisms to bring perishable and incorporation, which can facilitate contractual rela- products from rural areas to urban consumers in developed tionships with retailers. It is also important to build the and developing countries. In addition, the technologies capabilities of field staff, project managers, donors, and and market requirements (such as the varieties grown and policy makers to support smallholders; these capabilities packaging methods) change often, forcing farmers to adapt. include a clear understanding of the dynamics of modern Greater coordination along the marketing chain helps marketing chains, niche markets, and innovation processes, smallholders to adapt by facilitating access to up-to-date along with the opportunities and challenges they pose for information and financial resources (IAP 6). Successful small-scale farmers. Finally, another investment to benefit coordination, however, requires coordinating organizations smallholders is to modernize wholesale and wet markets by to respond to the needs of actors in the marketing chain and improving buildings, storage facilities, communications adapt themselves to changing conditions. Otherwise, coor- facilities, and roads. dination results only in formal agreements with little impact on the ground (see, for example, World Bank 2006). Invest- ments include market intelligence, development of market POTENTIAL BENEFITS and farm infrastructure, facilitation of interactions (usually To recapitulate, modern marketing chains can offer the by the actor that dominates the chain), and the formation of following potential benefits: farmer groups, assisted by innovation brokers. ■ More rapid organizational and economic innovation, resulting in stronger economic growth. Developing niche markets ■ Faster creation of wealth for the richer tier of small-scale Niche markets are a particular form of innovation network, farmers through direct participation in modern chains. and the investments resemble those described in TN 2. ■ Creation of jobs in rural areas, some exclusively for These investments include financing innovation brokers women (sorting and grading fruits and vegetables, for and other actors that bring together potential partners and example). strengthening the innovation capabilities of nonpublic ■ For farmers who sell in modern marketing chains and for actors in the innovation system—for example, through smallholders who access niche markets, easier access to consulting services, extension activities, technological input and output markets and other resources for inno- interchanges, or seminars and workshops on the dynamics vation, such as technical advice, innovation networks, of innovation networks. Investments also include small, and participation in action-research projects. short-term grants for potential catalytic agents of innova- ■ Reduced commercial risk for farmers owing to steady tion networks (researchers, extension agents, and groups of demand, more formal transactions, and higher probabil- farmers) to facilitate interactions with potential partners ity of being paid on time. (through meetings or electronic communications plat- ■ More effective use of human, social, physical, and finan- forms), build capacity, and facilitate collective action. Still cial resources for innovation. other investments could create venture funds to finance the ■ Faster creation of wealth and empowerment among development of innovations, similar to those used in high- farmers who can access niche markets. tech industries. Finally, it may be necessary to invest in ■ Better interaction and coordination among actors, result- transforming public research and extension institutions so ing in a more dynamic innovation system for agriculture. that they can better integrate into innovation networks. ■ In the case of niche markets, more inclusive development. MODULE 1: THEMATIC NOTE 3: FACILITATING SMALLHOLDERS’ ACCESS TO MODERN MARKETING CHAINS 55 ■ Cheaper food that often meets higher quality and safety modern chains but should rather organize them to develop standards for consumers. niche markets, sell to wholesalers, or obtain training leading ■ Faster expansion of exports, improving the country’s bal- to off-farm employment as specialized workers. ance of payments. Sustainability and social considerations POLICY ISSUES As with most private firms, the consolidation of modern Key policy issues related to modern marketing chains marketing chains depends on the central actors’ capabilities involve identifying ways for the chains to spur growth and and on socioeconomic conditions (discussed later). Given reduce poverty, ensuring that modern chains are sustainable the international nature of supermarkets and traders, (some may require more public support than others), fos- eventually all central actors develop their own capabilities to tering more equitable access, clarifying appropriate roles for organize most modern marketing chains. public and private investors, and identifying appropriate Niche markets are a different case, given that they are public investments. innovation networks. In addition to external factors, the sustainability of niche markets depends on the presence of effective leadership, on farmers developing strong innova- Can modern marketing chains spur growth and tion capabilities (especially collective learning routines and reduce poverty? trust), on long-term support from donors, and on monitor- As noted, high-value agriculture is expected to continue ing and evaluation systems that allow experimentation over growing and transforming developing country agriculture several years (box 1.19). for the foreseeable future. Instead of trying to impose new The expansion of modern marketing chains has directions on this process, policy makers should identify the increased disparities in asset ownership but has also created main trends guiding the expansion of different markets and employment in rural areas. Smallholders’ access to modern seek interventions that can steer the process in ways that chains depends not only on their assets and organization spur economic growth and alleviate poverty. For example, but on being located in the procurement area for a par- buyers in modern marketing chains clearly prefer to operate ticular crop. Many programs have helped marginalized with the better-off smallholders. They buy from the poorest groups (small-scale farmers and/or women) to organize and only when they have no other option. Interventions should access modern marketing chains, but the failure rate has not induce the poorest farmers to organize to sell directly to been very high. In general, the participation of small-scale Box 1.19 Sourcing Practices Used by Mexican Supermarkets Reveal Experimentation with Contractual Arrangements and Types of Growers Mexican supermarkets have pursued a number of combination of large- and small-scale farmers, or only strategies to source frozen vegetables. Exporters have with smallholders through resource-provision con- used backward integration, relying on their own farms, tracts. A multinational working with large- and small- for “high care� products demanding traceability. Some scale farmers had seven contract types, ranging from supermarkets adopted intense, highly controlled contracts with large-scale farmers under which no outgrower schemes in which they provided resources resources were provided to contracts with the smallest- under contracts with small-scale farmers. Others relied scale farmers under which the company provided on small-scale outgrowers for less-demanding products “specialized inputs and equipment, credit, technical and market segments requiring less traceability and less assistance, and insurance.� These examples show that technology, with the company providing only exten- projects should allow considerable latitude in the types sion services to its outgrowers. Other companies chose of contractual arrangements and organizations that to contract only with large-scale farmers, with a can be financed. Source: Author, drawing heavily on Reardon et al. 2009 (quoted text, p. 1722). 56 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK farmers has depended more on support and expertise several marketing options, increasing the risk of unstable from NGOs and donors than on private traders or super- supply;5 small-scale farmers are more able and willing to markets, and it has been somewhat easier for smallholders follow highly labor-intensive field management practices to participate in niche markets or sell to wholesalers who needed by the companies; and small-scale farmers have supply supermarkets. reduced transaction costs by organizing (Reardon et al. 2009). If a buyer has only small-scale farmers in its pro- curement area, it usually assists them with various inputs, Public and private sector roles credit, and technical advice. As indicated, different types of agents have facilitated small- Social capital should be an important criterion to allocate holders’ access to modern marketing chains. Private agents funds. Social capital is a significant factor in a group’s abil- (brokers and supermarkets) sometimes provide credit, ity to sell in modern marketing chains. Social capital is inputs, and technical assistance (Reardon et al. 2009), and strong within mature groups with strong internal institu- research institutes, NGOs, civil society organizations, and tions, intragroup trust, altruistic behavior, membership in farmer organizations have also managed successful pro- other groups, and ties to external service providers. Older grams.3 The public sector has provided funds, developed groups that have built substantial social capital should be critical market infrastructure (roads, electricity, water, and ranked above newer groups in consideration for support. communications networks), and facilitated interactions Additionally, building social capital should be an impor- among actors in modern marketing chains. tant component of projects that support the development Projects led by nonprofit organizations work with small- of modern marketing chains. Such efforts will require sus- scale farmers or community-based organizations to identify tained commitment and support from external agents, niche markets (see, for example, Poitevin and Hassan 2006; which may include NGOs and innovation brokers. Vermeulen et al. 2008; Devaux et al. 2009). These programs Capable and motivated program leaders are important. usually use participatory methods and may involve other Strong leadership with the appropriate experience is chain actors in the process. Components of such projects regarded as the most important factor for a group to include stakeholder analysis to identify the key people and identify and maintain market links, followed by the qual- organizations that should be invited to participate, visits, ity of external facilitation. It is very difficult for one skill development, organizational aid to small and micro person to have all the required qualifications. Leaders enterprises and community-based organizations, business should be supported by teams of specialists, not just in plan preparation, assessment of markets and of opportuni- marketing and business management but also in the ties to network, and stakeholder workshops. management of innovation. A similar approach has been The private sector will continue to lead the development used in several countries to support innovation in small of modern marketing chains, but the public sector has an firms (see, for example, Shapira 1999). It is important to important supporting role to play by improving infrastruc- offer program leaders incentives to experiment and allow ture, facilitating access to input markets and financial ser- them to change programs as needed. To this end, funders vices, fostering the modernization of traditional wholesale and supervising agencies should set up program commit- markets and helping them to link with modern marketing tees to analyze potential changes or allow program leaders chains, improving education in rural areas, and supporting to use small amounts of money to experiment with new extension and advisory services.4 approaches, and they should review results annually. Firms use such approaches to develop strong innovation capabilities in traditional markets (Whirlpool is one LESSONS LEARNED example; see box 1.7 in the module 1 overview and Because buyers establish different types of commercial rela- Skarzynsky and Gibson 2008). tions, even with farmers in the same area, projects should not try to impose a model of interaction. Commercial chains use RECOMMENDATIONS FOR PRACTITIONERS different suppliers according to the nature of the product and the type of farmers present in the procurement area. In addition to improving the infrastructure and socioeco- They generally buy from small-scale farmers only when nomic policies that are conducive to the consolidation of smallholders dominate a particular market (tomatoes in private firms, facilitating small-scale farmers’ access to mod- Guatemala, guavas in Mexico); large-scale farmers have ern marketing chains requires instruments appropriate for MODULE 1: THEMATIC NOTE 3: FACILITATING SMALLHOLDERS’ ACCESS TO MODERN MARKETING CHAINS 57 each of the four marketing channels identified at the begin- ■ Implement “business linkage� programs, such as busi- ning of this thematic note. ness round tables and conventions, and support travel to To foster the participation of better-off smallholders in those programs by farmers and government officials. modern marketing chains, ■ Foster the emergence and consolidation of farmer organ- izations through technical and organizational support, as ■ Support the development of innovation capabilities in described in TN 4. These organizations, in turn, can large farmer organizations, as described in TN 3. work closely with specialized wholesalers. ■ In conjunction with the actor dominating the marketing ■ Develop new financial instruments to take advantage of chain, define criteria to select farmers for support to the stable relationship between small-scale farmers enter into one of the several contractual modes used in (individually or organized) and the main actors in modern marketing chains. Social capital should be one of modern marketing chains. These actors, operating as the most important selection criteria. intermediaries between banks and farmers, can help ■ Do not impose specific interaction patterns as a condi- farmers obtain credit at market rates. Several countries, tion for participating in projects. including Mexico and Croatia, have implemented such programs. To foster the participation of poor farmers and margin- ■ Develop small-scale farmers’ human and social capital alized groups, through sustained programs that include facilitation to form associations and training in modern marketing. ■ Support the modernization of traditional wholesale ■ Help small-scale farmers obtain bank accounts, register a markets and traditional retailers, and help them to link business, and transact the other business required to with modern marketing chains (one example is China’s incorporate as formal companies that can enter legal, “200 Markets Upgrading Program�).6 Identify high- contractual arrangements with retailers. value products that modern marketing chains must ■ Facilitate access to modern infrastructure, especially ICTs. source from smallholders, such as low-volume and niche products, and support associations of market agents and To support the development of niche markets, small-scale farmers to provide them. ■ Finance investments (cold storage, packaging, and so on) ■ Conduct multistakeholder planning exercises to identify that target specific requirements of specific modern mar- potential niches and define strategies to develop them. keting chains. ■ Apply recommendations in TN 2 for the development of ■ Build the capabilities of field staff, project managers, innovation networks. donors, and policy makers to support small-scale farmers. ■ Finance innovation brokers to support policy makers ■ Develop market intelligence programs that provide and all other participants in the development of niches. detailed, current information on market developments ■ Aim for sustainable results. If niche markets are not and trends. profitable, they can create dependency on donors. 58 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK T H E M AT I C N O T E 4 Building Innovation Capabilities in Farmer Organizations Javier Ekboir, Institutional Learning and Change Initiative (ILAC) SYNOPSIS monitoring and evaluation system that promotes explo- ration and learning. rganizational capabilities for innovation encom- O pass the abilities of the organization’s members (such as specialized knowledge, creativity, and task commitment) and the organization’s key characteristics BACKGROUND AND CONTEXT FOR INVESTMENT (such as culture, governance, communications and learning routines, and resources). Interventions to build organiza- The weakening of public research and extension organiza- tional capabilities for innovation involve building the indi- tions and wider recognition of the complexity of innovation vidual and collective capabilities themselves and making the processes are creating opportunities for farmer organiza- enabling environment more supportive of innovation. tions to develop and diffuse innovations. By pooling Instruments for capacity building have included fostering resources for innovation, connecting with other partners in interactions among actors in the AIS, creating venture innovation processes, and building their individual and capital funds, consolidating innovation brokers, strengthen- collective capacity, farmers who belong to organizations are ing the policy framework for innovation, and setting up participating more effectively in innovation networks and training and mentoring programs and multistakeholder value chains. They are gaining better access to new markets platforms. The environment for innovation improves when and production methods, including methods to manage governments and donors facilitate dialogues to develop natural resources. Farmer organizations acquire new bar- consensual innovation policies, create market and social gaining power in input and output markets and they can opportunities for innovation, facilitate access to crucial also coordinate other actors in the AIS. They increasingly inputs, strengthen flows of commercial and technical infor- participate in designing and implementing innovation and mation, offer public institutions incentives to interact with research policies and programs and join national innova- farmer organizations, and promote a legal environment that tion councils, sectoral coordinating bodies, and the boards supports farmer organizations and encourages decentraliza- of research institutes. They lobby public organizations such tion to empower local farmer organizations. The most as research institutes and industry regulators (World Bank innovative farmer organizations have a federated structure, 2004). They manage research funding and share in the i.e., are composed of small, linked farmer groups, thus com- financing, development, and diffusion of technical, com- bining the best features of large organizations and small mercial, organizational, and institutional innovations. groups. In designing projects to develop farmer organ- Whether farmer organizations participate effectively in izations that can innovate, practitioners should select these processes is strongly determined by their origin, evo- organizations that can learn; avoid overly strict criteria for lution, the enabling environment, and the capabilities they participation; avoid requiring organizations to become develop, as discussed in the module overview. Often farmer formal entities; identify the networks in which the farmer organizations are unskilled in identifying the specific capa- organization participates, because its partners can indicate bilities they lack and in defining strategies to build them up. its own innovativeness; use external consultants and inno- Organizations do not develop capabilities for innovation vation brokers to design training programs; and develop a overnight; they must make a sustained effort, make major 59 investments over the long term, have committed leadership, and/or diffuse them (the ecologically oriented Prolin- and work with specialists in organizational change and nova network is one such organization).1 Other farmer innovation processes. organizations concentrating on innovation include For many years, governments and funders favored the farmers and researchers as equal partners. These farmer creation of cooperatives, but their performance has been organizations use participatory methods to manage the rather disappointing. Lately, farmers and rural households innovation process and may combine top-down and have sought alternative organizational arrangements. These bottom-up approaches. arrangements have had different goals, operate at different ■ Farmer organizations that are service-oriented and net- levels (local, regional, and national), and include commu- worked, such as Mexico’s Produce Foundations, promote nity organizations, self-help groups, associations to manage the emergence of local farmer organizations that form natural resources (such as water user associations), and part of larger networks (IAP 2). Through collective lobbying associations. According to the capabilities they action and participation in local and national forums, develop and the type of interactions they establish with they establish partnerships with other actors in the AIS other actors in the AIS, farmer organizations can be cate- for the provision of services, including research, exten- gorized into four types: sion, training, credit and savings schemes, lobbying (like the West Africa Network of Peasant and Agricultural ■ Traditional, commodity-based farmer organizations, Producers’ Organizations),2 or developing value chains such as the Colombian Coffee Growers’ Federation, (TN 3). India’s dairy cooperatives, or the Kenya Tea Development Agency. Input supply, output processing, and marketing INVESTMENT NEEDED can be done by the organization or outsourced to private firms. Less attention goes to facilitating interactions and No recipe exists to create farmer organizations for innovation cooperation with potential partners in innovation. While (Rondot and Collion 2001). The organizations that carved a the declared goal is usually the diffusion of technical niche for themselves did so by developing: organizational innovations, successful commodity-based farmer organ- innovations, such as a clearly articulated purpose, mission, izations have innovated to coordinate large numbers of and vision; organizational cultures that allowed change; farmers. These organizations often sponsor their own effective learning routines and heuristics (especially the research teams. ability to analyze the organization’s needs and to implement ■ Nontraditional, market-oriented farmer organizations plans to address them); strong technical capabilities; skills to seek to improve market access through collaboration participate in innovation networks, interact with the politi- with key actors in the marketing chain (supermarkets or cal and economic environment, and mobilize the resources brokers). Often this kind of farmer organization is cre- to accomplish the organization’s goals; effective and trans- ated with assistance from NGOs and/or externally parent governance structures (including new incentives) funded projects (Papa Andina is an example). Innova- and leadership that prevented them from being captured by tions are viewed as technical, commercial, and social donors, governments, or elites; and active participation of processes to be addressed through participatory meth- members (Ekboir et al. 2009). ods. Research capabilities reside in local and foreign uni- Successful farmer organizations develop their own orga- versities or international research centers. nizational models. Some emerge spontaneously, such as the ■ Innovation-oriented farmer organizations focus on innovation networks that developed no-till agriculture in developing technical innovations, but they can also Argentina, Bolivia, and Paraguay; others are created by a develop commercial or organizational innovations or a market actor (a supermarket leading a supply chain, for combination of all three (a good example, discussed in example), by a coalition of actors (as usually occurs in IAP 1, is South America’s no-till farmer associations). action-research projects), by outsiders in the framework of These organizations may be created by farmers, NGOs, a project (Papa Andina), or by public programs (after which or public programs, and they may use public or private they assumed a life of their own, like Mexico’s Produce funds. They usually become the coordinating agent of a Foundations). Independent of their origins, farmer organi- diverse network that includes research institutes, private zations have succeeded when they could adapt their original firms, and public programs. Some focus mainly on “business plan� to unexpected problems and opportunities. farmer-developed innovations and seek to improve Adaptation is possible only when farmer organizations have 60 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK the organizational and innovation capabilities to create a communications routines (whether they are hierarchical or shared understanding of the organization’s goals, overcome allow individual exploration of opportunities and horizon- institutional inertias and conservative cultures, train all tal communication); learning routines (the heuristics and members (board members, senior management, and field methods used for collectively accepting new ideas and pro- staff) on the nature of innovation processes, and muster the cedures); the propensity to interact and cooperate with internal and external resources for innovation. Organiza- other actors in the AIS; and resources available for the tional and innovation capabilities cannot be built only with development of innovations (capital and specialized assets) short courses. Nor can they be bought easily. They require a (Davila, Epstein, and Shelton 2006; Ekboir et al. 2009). sustained effort to cultivate. ICTs, which facilitate networking and information sharing, Relatively few publications describe steps for building are one resource that appears inherently suited to improve innovation capabilities in nonprofit organizations, but the potential for innovation among farmer organizations many successful experiences have been documented in pri- (box 1.20). vate firms (for example, see Skarzynsky and Gibson 2008; A comprehensive program for capacity development Davila, Epstein, and Shelton 2006; and Christensen, contains a long list of measures, but often the implementa- Anthony, and Roth 2004). From this literature, this note tion of a few critical actions is sufficient to trigger a virtuous distills the most valuable recommendations for farmer cycle of autonomous capacity building. In fact, each organi- organizations. Programs to build organizational capabili- zation has to develop its own menu of interventions. Possi- ties for innovation feature a complex menu of inter- ble investments include the following: ventions over a sustained period and usually include investments in physical capital, short- and long-term con- ■ An institutional assessment to identify the farmer orga- sultancies, courses, and long-term mentoring.3 The inter- nization’s culture, learning routines, human capital, and ventions can be divided into two categories: building the leadership capabilities.5 The assessment should be the capabilities themselves and making the enabling environ- basis for defining the investments required to develop ment more supportive of innovation. organizational capabilities for innovation. ■ Assess and reinforce the organization’s social capital to prevent opportunistic behavior, strengthen governance Building social capital structures, and establish links with external partners. The lack of social cohesion and capital, including transpar- ■ Train and mentor an innovative leadership group. ent governance mechanisms, often explains why farmer ■ Develop learning mechanisms such as the one used by organizations fail or cannot be sustained for long. Capacity- Mexico’s Produce Foundations (IAP 2). building programs for any particular farmer organization ■ Strengthen channels (including IT platforms) to exchange should identify the extent to which the lack of social capital information on innovative activities. is an issue and determine the type of capacity building that ■ Implement budgeting procedures that allow experimen- can compensate for it. Otherwise, capacity-building invest- tation. ments may not yield the desired results. ■ Create dedicated teams to explore potential innovations. These teams should include groups to design and try innovations; temporary teams of organization members, Developing organizational capabilities for innovation partners, and researchers to generate new ideas and Organizational capabilities for innovation encompass the proposals; an innovation board to screen and fund inno- abilities of the organization’s members and the organization’s vation proposals, both internal and with other actors in key characteristics. Organizational abilities for innovation the AIS; and trained “innovation champions� to guide include specialized knowledge, creativity, and commitment and mentor any member who has an innovative idea. If to the organization; developing a long-term vision for the the farmer organization is too small to have these spe- organization; absorbing information generated by other cialized structures, it should partner with others in the agents (also called the absorptive capacity); creating new AIS that have similar attitudes toward innovation. knowledge; and using this knowledge to develop innova- tions that address commercial, social, organizational, or Farmer organizations cannot survive, let alone improve technological needs or opportunities.4 An organization’s their capacity to innovate, unless they develop sustainable key characteristics include its culture, governance, and financing (box 1.21), based on successful experiences, MODULE 1: THEMATIC NOTE 4: BUILDING INNOVATION CAPABILITIES IN FARMER ORGANIZATIONS 61 Box 1.20 ICTs Improve the Effectiveness of Farmer Organizations In rural areas of many developing countries, farmer national agricultural policy debate through telecen- organizations may be the only organizations on the ters in seven towns and villages, together with local ground. Because information and communication radio stations. In locations throughout Africa, the technologies (ICTs) make it easier to speak for and to Participatory Radio Campaigns of Farm Radio farmers, they can dramatically heighten the capacity for International (a nongovernmental organization) networking, good governance, collective action, and invite farmers’ participation and respond to their innovation in producer organizations and agricultural feedback. Text messaging on cheap mobile phones is cooperatives: proving to be a highly adaptable medium for organ- izations to mobilize members around specific issues ■ ICTs enhance farmer organizations’ connections and and concerns, acquire resources (information, governance. ICTs can facilitate the sharing of market credit, and even insurance) to facilitate production and technical information, help organizations and marketing, and generally become more inte- attract and retain members, and inform members of grated and visible within the innovation system. the organization’s activities on their behalf. In Mali, ■ ICTs can foster innovation. As the examples indicate, Coprokazan (http://www.coprokazan.org), a coop- ICTs can spur farmer organizations to innovate in erative for female producers of shea butter, comput- how and where they operate, with whom, and why. erized its operations to reach a wider market online, The use of ICTs can make organizations more effec- develop more effective training materials for coop tive lobbyists, better at acquiring information or members, and more generally raise its profile. An services from public and private sources, more effec- unexpected outcome of using ICTs was that mem- tive participants in markets and value chains, and bers became more confident in the coop’s gover- more valuable partners in research and development nance after coop staff started using computers for initiatives (such as initiatives to provide early warn- routine administration and to develop visual ing of plant and animal diseases). overviews of yearly accounts and activities. The well-known capacity of ICTs to streamline adminis- Farmer organizations may be aware of the potential trative and accounting tasks of all kinds makes them of ICTs but may not necessarily find it easy to acquire highly useful for administering farmer organiza- and learn to use them. Generally it is governments, tions. In dairy and coffee cooperatives in India and donors, and nongovernmental organizations (NGOs) Kenya, for example, farmers believe that automated that have the funds to develop ICT solutions that measurement and record-keeping systems help benefit farmer organizations. (The software used in the ensure fair compensation from the cooperative. Indian dairy cooperatives mentioned earlier was Automated systems have the added advantages of developed through public-private partnerships, for speeding transactions and reducing spoilage. example; Farm Radio International is an NGO.) ■ ICTs give organizations a stronger collective voice. Another challenge is to sustain the use of ICTs after High-speed connectivity may still be out of reach in external support ends. Significant costs are usually many parts of the world, but individual farmers can associated with equipment, maintenance, training, and still use mobile phones and text messages to “have continuing system development. New technology their say� on agricultural radio. Feedback about must generate enough additional income for an orga- services offered by farmer organizations and local nization to cover its ongoing costs, or it must generate government, when expressed over the airwaves, has enough additional benefits for individual users to be more influence than comments made in a less willing to pay for it. Finally, although ICTs facilitate public forum. In Mali’s Sikasso Province, an ambi- communication, it is important to recognize that they tious project brings farmer organizations into the cannot substitute for building social capital. Source: World Bank 2011. 62 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 1.21 Successful Financing of Farmer Organizations Voluntary contributions. The Argentine Association of them under its own brand name. The surplus from Regional Consortiums for Agricultural Experimenta- these sales was invested in the expansion of the coop- tion (AACREA) is an apex organization of self-help erative movement in the dairy industry. Today farmers groups of commercial farmers in Argentina. Each group organize into village-level cooperatives, which in turn has about 10 members who jointly hire a technical advi- are organized into district-level cooperatives (com- sor and conduct adaptive research and validation. The prising 400–1,000 primary village cooperatives). The group also contributes to the apex organization. The district-level cooperatives federate into a state cooper- latter gathers the information developed by each group ative. At the apex is the National Cooperative Dairy and shares it among its 1,880 members. This structure Federation, which coordinates marketing for all state is an example of decentralized experimentation with cooperatives. The cooperatives currently supply about centralized learning. 70 percent of the processed milk marketed in India Levies. The Colombian Congress can tax specific and provide a wide range of services to members. agricultural products to finance programs to support Government programs. The Mexican government them. A specific law must be enacted for each taxed created a program in 1996 to finance research and product, and the proceeds can be used only to sup- extension projects through Produce Foundations, civil port the product’s market chain. The central govern- society organizations in each state that currently also ment collects the tax. The funds are administered by finance and implement innovation activities. The pres- a contract between the Ministry of Agriculture and a ence of a foundation in each state makes it possible to farmer organization of national reach that represents clearly identify local farmers’ needs and foster the producers of the taxed product. Colombia has 15 emergence of local innovation networks. The Founda- such taxes. tions set the priorities, decide which projects are Sales of goods and services. Starting in 1970, India’s funded, and administer the projects; the federal and National Dairy and Development Board imported state governments audit the use of the funds. See IAP 2 food aid in the form of dairy products and marketed for a detailed discussion. Source: Author. Note: AACREA = Asociación Argentina de Consorcios Regionales de Experimentación Agrícola. voluntary contributions (such as those used in Argentina flow� promoters, and strengthening the policy framework by AACREA),6 levies (used in many countries, including for innovation. Other instruments introduced recently Australia and Colombia), sales of goods and services (Kenya include mentoring programs, multistakeholder platforms, Tea Development Agency and the Indian dairy coopera- knowledge-exchange fairs, and IT platforms to facilitate tives), and partnerships between the government and civil communications and coordination. society organizations (such as the Mexican Produce Foun- dations) (box 1.21). Adding flexibility to the enabling environment Farmer organizations’ ability to change depends on whether Using new and more sophisticated instruments the broad policy and institutional environment enables them to support innovation to change. For this reason, policies that seek to foster innova- In the past, most projects that sought to build capabilities in tion should also consider promoting changes in the enabling organizations supported professional education, short environment. Because so many actors participate and because courses, or consultancies on specific topics. Current projects the enabling environment is loosely governed, however, it is also support interactions among different actors in the AIS very difficult to initiate changes and, once they are intro- (including public-private partnerships), creation of venture duced, to predict the effect of particular actions (Ekboir capital funds, consolidation of innovation brokers and “deal et al. 2009). Given this complexity, governments should use MODULE 1: THEMATIC NOTE 4: BUILDING INNOVATION CAPABILITIES IN FARMER ORGANIZATIONS 63 adaptive approaches to induce changes in the enabling envi- ■ Creating a committee to coordinate the AIS and facilitate ronment. Various instruments can be used to this end: multistakeholder dialogues on innovation policies. ■ Strengthening the participation of farmer organizations ■ Devising capacity-building programs to strengthen the that represent marginalized populations (including understanding that different actors in the AIS, especially smallholders and women) in policy- and decision- governments, donors, extension agents, and research making processes and in the provision of services. organizations, have of innovation processes. ■ Building confidence and promoting coordination POTENTIAL BENEFITS among potential partners, including financing for mul- tiactor programs, innovation brokers, and sustainable Box 1.22 presents an example of the benefits of instilling extension programs. innovation capabilities in a farmer organization in Kenya. ■ Strengthening research capabilities, especially by focus- More generally, farmer organizations with stronger innova- ing on the quality of researchers and changing the cul- tion capabilities can offer the following benefits: ture and incentives of research organizations. ■ Certifying innovation brokers. ■ Faster development of social and economic innovations, ■ Financing programs for innovation, including venture resulting in stronger economic growth and more and angel capital funds and innovation brokers; flexi- sustainable use of natural resources; strong farmer organ- ble financing of action-research projects to explore izations are particularly necessary when public organiza- new instruments; and institutional arrangements to tions (especially research and extension) are weak. foster innovation. These programs could be organized ■ Quicker development and implementation of organiza- as stakeholder-driven and client-controlled mecha- tional and commercial innovations. nisms, in which farmer organizations have a financial ■ Better provision of services when governments are not stake. decentralized or are weak. Box 1.22 Benefits of Innovation Capabilities in a Farmer Organization: The Kenya Tea Development Agency The Kenya Tea Development Agency (KTDA) was hectares and produced in excess of 700 million kilo- created soon after independence as a state company to grams of green leaf. regulate tea production by smallholders, but it repeat- ■ Developing new tea products and opening new mar- edly demonstrated its capacity to innovate over the kets for them. years as it evolved into a major corporation owned by ■ Implementing new programs to support its associates small-scale farmers. It provides production and mar- (affordable credit and input supply, for example). keting services for members, successfully manages tea ■ Developing strong managerial capabilities. nurseries and 59 factories, and represents small-scale ■ Developing strong competitive advantages. The farmers in the Kenya Tea Board. The agency’s innova- agency accounts for 28 percent of Kenya’s exporting tion capabilities include the following benefits: earnings and is the world’s second-largest exporter of black tea. ■ Increasing the income of its associated small-scale ■ Adapting its operations and governance in response farmers. to changes in the socioeconomic environment and ■ Successfully implementing collective action involv- market opportunities. ing hundreds of thousands of small-scale farmers. In ■ Influencing strategic stakeholders to allow organiza- 1963, tea was cultivated by 19,000 smallholders on tional change. 4,700 hectares, with an annual crop of about 2.8 ■ Partnering with private actors and foreign universi- million kilograms of green leaf. In 2009, about ties to develop and diffuse sustainable production 400,000 smallholders grew tea for KTDA on 86,000 practices for small-scale farmers. Source: Author, based on information from KTDA, http://www.ktdateas.com. 64 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK ■ Stronger two-way information flows, conveying techni- subsets of farmers, such as women or poorer farmers) can cal and commercial information to a larger number of ensure that weaker groups have greater influence on the farmers as well as communicating farmers’ needs and farmer organization and that it meets their particular needs. concerns to other actors in the AIS, including researchers These programs succeed, however, only if representatives of and policy makers. ICTs can be important enablers of the marginalized groups have the appropriate capabilities. communication, but they should not be seen as an alter- Often women are illiterate and at a disadvantage in organi- native to building social capital. zations that rely on written information. ■ More effective use of human, social, physical, and finan- cial resources for innovation. Institutional considerations ■ Easier access to input and output markets and to other resources for innovation (technical advice, innovation An enabling environment that allows farmer organizations networks, and participation in action-research projects), to operate effectively and with as little external interference both for commercial farmers and marginalized popula- as possible is a prerequisite for innovative organizations. tions (women and landless farmers, for example). This environment can be achieved more easily when gov- ■ Better interaction and coordination with other actors in ernments, donors, and farmer organizations themselves the AIS. have a clear understanding of innovation processes. When ■ More inclusive and effective institutional innovations governments or donors finance farmer organizations, the when marginalized groups have a stronger influence on funding agencies usually try to influence them. Govern- the design and implementation of innovation policies. ments may resent having to negotiate policies and priorities ■ More relevant and more effective public research and with independent farmer organizations. Finally, farmer extension programs when farmer organizations effec- organizations operate more effectively when laws, regula- tively participate on boards of research and extension tions, and interventions by external stakeholders (especially organizations. governments and donors) facilitate transparency and ■ More inclusive development, especially when affirmative accountability to farmers. action allows more effective participation of marginal- ized groups in decision-making bodies. Sustainability Farmers who organize spontaneously in response to a POLICY ISSUES need or opportunity often demonstrate self-reliance and Farmer organizations have policy issues similar to those of strong and lasting solidarity, but often these farmer innovation networks. They include considerations related to organizations command limited resources. They can social hierarchies and inclusiveness, sustainability and profit greatly from programs to build their capabilities dependence on external funds, and the respective roles of and link them with other actors in the AIS. On the other the public and private sectors. hand, farmer organizations created by external partners usually have more resources but are less sustainable. They run the risk of not attending to members’ priorities, and Social considerations they may lose their autonomy and effectiveness. Bigger Local social considerations inevitably come into play in farmer organizations are better at influencing innovation many farmer organizations. For example, it is difficult to processes—but they are more likely to be captured by introduce organizational or institutional innovations (espe- governments or elites. cially more transparent governance) in societies dominated by elders or clans. Hierarchical societies also stifle technical Public and private sector roles and commercial innovation, reducing opportunities for farmer organizations to benefit members. In such cases, Farmer organizations can substitute for weak private organ- efforts to strengthen farmer organizations may award izations, especially when the commercial private sector is more power to local groups or individuals that are already slow to take over activities abandoned by the public sector, powerful. Affirmative action (reserving seats on the organi- such as input provision. More frequently, farmer organiza- zation’s board for marginalized groups, for example, or tions are seen as substitutes for weak public research and well-designed communications programs to reach all extension organizations, as occurred in Latin America and MODULE 1: THEMATIC NOTE 4: BUILDING INNOVATION CAPABILITIES IN FARMER ORGANIZATIONS 65 sub-Saharan Africa when farmer organizations began to spe- on specific products (the approach of the Colombian cialize in natural resource management (IAP 1). Although Sugarcane Research Center, CENICAÑA)7 or subsectors farmer organizations can effectively implement research and and commercial farmers. Sectoral or national farmer extension programs, this activity should not substitute for organizations can also influence the introduction of insti- research and extension by public programs, because it tutional innovations, either for commercial or small-scale increases the odds that nonmembers will be excluded or that farmers. Finally, local farmer organizations (especially their needs will not be meet. Farmer organizations should community-based organizations) are effective in develop- rather participate in joint research and extension efforts that ing social innovations, including facilitating poor house- complement those of public organizations. When farmer holds’ access to markets, and addressing local problems organizations take the lead in fostering innovation, research that require collective action. These observations, however, institutes may feel threatened, perceiving that farmer organ- are not absolute. In some cases, national associations that izations are essentially trying to change the ways that coordinated local groups have developed important eco- research institutes interact with the AIS. nomic or technical innovations (see, for example, IAP 1). Appropriate policies and incentives may prevent some of these problems and at the same time strengthen farmer Innovative farmer organizations tend to have organizations. In addition to implementing general policies federated structures (such as research policies or policies facilitating the opera- The most innovative farmer organizations are composed of tion of markets), the public sector can support farmer small, linked farmer groups. This structure combines the organizations by introducing new incentives for researchers best features of large organizations and small groups and and other civil servants to work more intensively with benefits the organization’s capacity to innovate. Small farmer organizations; providing resources for organiza- groups have greater internal cohesion, and it is easier to tional facilitators (such as NGOs) and innovation brokers monitor the members. Farmer organizations with strong to create or strengthen farmer organizations (IAP 6); and community ties enable grassroots concerns to be voiced supporting the development of farmer organizations’ inno- more clearly. They facilitate greater upward participation vation capabilities. It is vital that farmer organizations do and downward accountability. The drawback is that they not end up responding to government interests in lieu of command so few resources. By federating into larger members’ needs. groups, they can achieve greater economies of scale, but Nonpublic actors—including private firms, international they can also be more easily captured by elites or govern- research institutes, and NGOs—can play a number of roles. They can induce the creation of farmer organizations, cre- ments and find it harder to control free riding. Examples of ate new marketing channels for small-scale farmers, and federated farmer organizations are India’s milk coopera- work with existing organizations to build their innovation tives (described in box 1.21), the no-till farmer associations capabilities. in South America (IAP 1), and Mexico’s Produce Founda- tions (IAP 2). LESSONS LEARNED Building capabilities for innovation The considerable variety of farmer organizations, experi- in farmer organizations ence with older forms of organization, and new organiza- In helping farmer organizations develop their capacities to tional strategies are yielding a number of lessons about innovate, it is important to focus not only on technical or farmer organizations and innovation. The sections that fol- commercial issues such as accounting or crop management low summarize the conditions that make farmer organiza- but on developing good governance, creating structures and tions effective (especially as innovators), including lessons incentives for innovation, developing external links, and related to their structure, way of operating, capabilities, building strong leadership. Capacity-building activities may financing, and the environment in which they operate. include traditional training in purpose-built facilities, on- the-spot training, consulting services, extension, seminars When are farmer organizations most effective and workshops on the dynamics of organizational innova- at innovating? tion, exchange programs so that managers can see the capa- Farmer organizations are particularly effective for develop- bilities of innovative farmer organizations, tutoring, and ing technical and commercial innovations when they focus mentoring. For example, African managers at the Kenya Tea 66 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Development Agency developed their capabilities by work- civil servants, should be established to review changes to the ing over many years under senior managers from multina- original project design at least once a year. tional companies (Ochieng 2007). Building capabilities for innovation should be a perma- Financing farmer organizations for innovation nent effort, because organizations tend to lose their innova- tiveness once they have found routines that help them reach As noted, some farmer organizations have developed sus- their goals. The conservative nature of organizations is tainable sources of funding by selling products or services, particularly strong when top management lacks a good including lobbying, for members. These organizations do understanding of the nature of innovation processes (Chris- not need special support, but they should be able to access tensen, Anthony, and Roth 2004). The incentives to change all of the programs available to private firms, including in commercial firms are provided by markets; the incentives those that support innovation. in nonprofit organizations come from their associates, their Demanding that farmer organizations be self-financing own sense of duty, and the pressure exerted by donors and is generally not realistic, especially if they include a large governments. This pressure usually is convened through two share of small-scale farmers or if they manage public funds. channels: funding and policy dialogue. When funding is Demanding cofinancing from farmer organizations that conditional on the implementation of capacity-building include marginalized groups may further alienate those programs, funders should be careful not to impose their groups from innovation processes. Even so, farmer organi- objectives on the farmer organizations or alienate manage- zations should ask members to contribute some funding ment from the farmers. Recognizing this problem, the World (even in kind), because it stimulates commitment. A num- Bank and other donors are providing funds for farmer organ- ber of financial arrangements have been used to support the izations to build capacity based on demand (training, innovation activities of farmer organizations, including advisory services, and startup funds for innovative ideas), competitive grants, matching grants (see module 5, TN 2; sometimes requiring matching contributions. The decision IAP 2), credits, funds distributed through government on how to allocate the funds is left to the farmer organiza- channels with no mention of competitive or matching tion’s management, which can contract specialists from a ros- grants, revolving funds for services, beneficiary fees for ser- ter of regularly appraised service providers. This approach vices (such as advisory services, veterinary services, and allows external experts to be truly independent and at the ser- maintenance of group-managed infrastructure), contract- vice of the farmer organization. Such independence is often ing of services, and performance-based contracts. In each harder to ensure when donors select the experts. The World case, the arrangement that is adopted should match the Bank has funded projects with this design in Bolivia, Brazil, needs and capabilities of the organization. Colombia, Guatemala, Mexico, and Panama (IAP 6). Groups to generate technology have been sustainable only when formed Development of innovations requires by commercial farmers flexible management by farmer organizations, governments, and donors Commercial farmers have usually solved their main organi- zational and commercial problems and have resources to Innovations are developed by exploring alternatives. The invest in becoming more efficient. Most noncommercial failed initiatives may seem to have wasted resources, yet fail- small-scale farmers, on the other hand, have limited ure is part of the learning process. Farmer organizations resources and a diversified livelihood strategy, in which agri- must be allowed to explore, but in that case, donors and culture is a dwindling source of income. They can be reluc- governments must strengthen their own capabilities to tant to invest time and money in developing new tech- manage innovation, because the inflexibility of public niques, although they can occasionally benefit from procedures runs counter to the need for flexibility and innovations developed by commercial farmers. adaptability. Courses and consultancies on the manage- ment of agricultural innovation for donors and senior civil A more supportive environment for servants are necessary for flexible management practices organizational innovation to take root. Appropriate controls and audits are also nec- essary to prevent misuse of resources without hindering The level of innovation achieved by farmer organizations exploration. A committee, formed by donors and senior depends on the enabling environment. Governments and MODULE 1: THEMATIC NOTE 4: BUILDING INNOVATION CAPABILITIES IN FARMER ORGANIZATIONS 67 donors can create a more supportive environment for Devaux et al. (2009), Vermeulen et al. (2008), and innovation in many ways. They can create market and Hartwich et al. (2007). social opportunities for innovation (by deregulating mar- Eligibility criteria should not be too strict. Given the diver- kets, for example), facilitate access to crucial inputs (such as sity of farmer organizations and the difficulty in knowing affordable credit), and strengthen the flow of commercial an organization’s true potential for change beforehand, any and technical information (by strengthening universities membership organization should be eligible for support as and innovation brokers, for example). They can offer pub- long as it: (1) is recognized as useful by its members; (2) has lic institutions better incentives to interact with farmer an identity—in other words, a history and effective operat- organizations. Promotions in many research institutes are ing rules that, even if they are informal, regulate relations based mostly on the number of indexed papers published, between members and between members and the outside whereas interactions with farmers are less valued. Action- world; (3) has governing bodies that function effectively; research projects could be implemented to identify new and (4) has demonstrated its willingness to develop its instruments to build innovation capabilities in farmer innovation capabilities. An organization can demonstrate organizations, such as the structure of decentralized its willingness explicitly (for instance, by training members experimentation with centralized learning described in or contacting external advisors to develop a plan to IAP 2 for the Produce Foundations. Policy dialogues could strengthen capabilities) or implicitly (through its formal be set up to develop consensual innovation policies; and informal routines, the nature of its leadership, its cul- national committees for innovation are critical in imple- ture, and its incentives). menting such dialogue and defining the policies, as dis- Do not push farmer organizations to become formal cussed in the module overview and TN 1. Government entities. Experience shows that when a farmer organization could promote a legal environment that supports farmer survives a period of informality, it is more likely to succeed organizations and encourages decentralization to empower because its members have had time to develop a common local farmer organizations. experience and resolve the issues that emerge when imple- menting collective action. Identify the networks in which the farmer organization RECOMMENDATIONS FOR PRACTITIONERS participates. An organization’s partners can indicate its own A few principles are useful to consider in designing and innovativeness. Consider all stakeholders that collaborate implementing projects that focus on developing farmer with the organization in innovation networks and identify organizations that can innovate. the appropriate incentives for them. In particular, public When selecting project participants, support organiza- organizations may face major hurdles to interacting effec- tions that can learn. Organizations tend to be conserva- tively with farmer organizations. tive, and not every organization can develop innovation Identify support and training needs. The leaders and staff capabilities (Christensen, Anthony, and Roth 2004). of farmer organizations usually need help to identify the Organizations that can learn are identified in two ways: capabilities they lack. Even when the needs have been iden- They have already shown their innovativeness, or it can be tified, it is difficult to build the capabilities, especially in evaluated through organizational assessments (see, for organizations formed by marginalized groups, which need example, Ekboir et al. 2009). The assessment is critical to economic, managerial, and technical support. External identify the best approaches to develop innovation consultants and innovation brokers are necessary to iden- capabilities. For example, if the farmer organization is tify these gaps and design training programs for farmer particularly conservative, participatory methods may not organizations, given their generally limited organizational be suitable, because management is likely to oppose experience and resources. Support for these farmer organi- change. The assessment should also look at the organiza- zations should be based on the principle of empowerment. tion’s innovation strategy, identify its mission and vision, Experience shows that building farmer groups for learning determine the resources available for innovation and and reflection often requires continual access to external those that must be secured, and identify the most impor- facilitation (van der Veen 2000). tant current and potential partners. The identification of Seek nonconventional instruments to strengthen farmer important partners can be done using multistakeholder, organizations. The effectiveness of formal courses for build- participatory procedures such as those described in ing innovation and entrepreneurial capabilities is quite low, 68 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK because these capabilities can be developed only by doing tion and only when their organization had reached a cer- and by observing other actors who possess the capabilities. tain maturity. In addition to the instruments mentioned in box 1.8 in the Develop a monitoring and evaluation system that pro- module overview, exchange visits have been very useful in motes exploration and learning. Examples of indicators spurring innovation in farmer organizations, but only that can be used are given in table 1.2 in the module when visitors had the capabilities to absorb the informa- overview. MODULE 1: THEMATIC NOTE 4: BUILDING INNOVATION CAPABILITIES IN FARMER ORGANIZATIONS 69 I N N O V AT I V E A C T I V I T Y P R O F I L E 1 No-Till Networks in Developing Countries Javier Ekboir, Institutional Learning and Change Initiative (ILAC) SYNOPSIS for which there was little use.2 After the first successful his profile summarizes lessons from the networks experiments with no-till,3 ICI realized that a new agricul- T that arose to develop no-till technology. The most innovative aspects of the networks were their composition and the ways in which they operated. Partners tural paradigm was needed. To develop it, ICI set up a research team that eventually settled in southern Brazil in 1970. The team leader recognized that for the herbicide to be of any use, new agronomic techniques, new weed man- and research and extension approaches varied, but in all successful cases, a flexible innovation network emerged in agement approaches, and new equipment were required. which farmers’ participation was important. Innovation Knowing that ICI did not have all the capabilities to develop brokers and catalytic agents played critical roles. Effective the components, the team leader looked for partners. Soon, networks explored organizational innovations until they the network included a state research institute, the Wheat found approaches appropriate to local conditions; they also Research Center of the Brazilian Agricultural Research explored different approaches to organize the generation Corporation (Empresa Brasileira de Pesquisa Agropecuária, and diffusion of the technical innovation. The composition EMBRAPA), a factory for planting equipment, progressive of innovation networks changed as the innovation process farmers, and the ICI team. Once the package was developed, matured and new challenges emerged. Parallel innovation farmer organizations diffused it. efforts contributed to the effectiveness of innovation, A similar process (although with other partners) including efforts by public organizations that gave their occurred in Argentina, Bolivia, and Paraguay. In all cases, employees scope to explore new ideas. the technology diffused very rapidly in the 1990s, thanks to the efforts of very effective no-till farmer associations, the technology’s benefits, and favorable economic conditions. CONTEXT During the same period, no-till diffused to a few other In the 1970s, intensification of agriculture after the Green countries as well. No-till programs have now been identified Revolution created severe soil erosion in many temperate in more than 60 other countries, but adoption has been neg- and tropical countries. At the same time, grain prices started ligible (Ekboir 2002) because no-till methods require con- to fall due to rapid production increases. Reacting to these siderable adaptation to local conditions. No-till was used on problems, farmers and researchers in many countries an estimated 100 million hectares worldwide in 2005, started to explore more sustainable, profitable technologies. mostly in the United States, Brazil, Argentina, Canada, Aus- For centuries, farmers plowed the soil to favor water tralia, Paraguay, and China. Bangladesh, Ghana, India, infiltration and control weeds. In the 1960s, the chemical Nepal, and Pakistan accounted for a relatively small area company, Imperial Chemical Industries (ICI), developed a because no-till is used by large numbers of small farmers herbicide for which there was little demand, but the com- (Derpsch 2010). pany decided that it could create a market for the product if chemical weed control could effectively replace plowing.1 At OBJECTIVES AND DESCRIPTION the time, ICI was not trying to create a more sustainable or profitable technological package; it was just seeking to sell a No-till was developed and diffused by networks that product in which it had invested substantial resources and included several public and private agents such as pioneer 70 farmers, agrochemical firms, equipment manufacturers, THE INNOVATIVE ELEMENT and sometimes researchers and public extension agents. The The main innovation was the emergence and evolution of networks had varied origins. Some were started by private new organizations—innovation networks that involved dif- companies, others by public researchers, farmers, or public ferent partners, including public and private researchers, programs. Massive diffusion occurred only where networks farmers, equipment manufacturers, extension agents, and that developed strong learning capabilities and effective agrochemical companies—that generated, adapted, and dif- interactions emerged. When no-till packages were devel- fused no-till techniques. To reach their objectives, the net- oped with traditional experimental methods or diffusion works innovated in three domains: was organized through conventional approaches, adoption was minimal. ■ Organizational. New modes of interaction among differ- Although the partners and research and extension ent actors in the AIS emerged, as well as new approaches approaches varied, a common factor in all successful cases to research and extension. was the emergence of a flexible innovation network in ■ Equipment. New planters, sprayers, and combines which farmers’ participation was important (Ekboir enabled the consolidation of an innovative agricultural 2002). The uniqueness of no-till processes is exemplified equipment industry. by the Ghanaian experience. To date, Ghana is the only ■ Agricultural practices. New practices were devised for country where a no-till package was adapted for small- planting and fertilization, weed control, management of scale farmers but not for large-scale farmers (box 1.23). soil cover, crop rotations that span several production Table 1.4 shows the partners and defining factors of some cycles, and harvesting. successful networks. Box 1.23 Development of No-Till for Ghana’s Small-Scale Farmers For centuries, Ghanaian farmers used traditional he worked with innovative farmers to develop a weed slash-and-burn agriculture, which is equivalent to no- and mulch management system that small-scale farm- till without mulch. Slash-and-burn was sustainable ers could use and organized a successful extension when abundant land allowed farmers to leave the program that motivated and provided resources to exhausted plots fallow for many years. Demographic public extension agents. The package was dissemi- pressure in the second half of the twentieth century nated to farmers in Ghana’s forest, transition, and forced farmers to shorten or abandon fallows and Guinea savannah zones and rapidly adopted. In 2005, made slash-and-burn unsustainable. In the 1980s, no-till was used by an estimated 300,000 small-scale research to adapt no-till with mulch as a sustainable farmers. alternative to slash-and-burn was initiated by the Unlike other countries, in Ghana the no-till package Crops Research Institute in Kumasi in conjunction responded to small-scale farmers’ needs. Adoption was with the International Maize and Wheat Improvement facilitated by the low-input agricultural practices that Center. Farmers did not adopt the package, because it already prevailed and the fact that few farmers had ani- was difficult to plant with a stick through the thick mals (other than some chickens). There was no need to cover of plant residues in the field. In the 1990s, the develop no-till planters, which were major obstacles in importer of glyphosate (a herbicide), the Crops other countries where no-till was introduced, because Research Institute, and Sasakawa–Global 2000 formed crops were planted with a stick or cutlass (machete). a partnership. Monsanto, trying to emulate its success The lack of equipment proved to be a limitation on in Brazil, later joined the partnership. The partners’ widespread adoption among large-scale and mecha- key action was to fund the doctoral dissertation of a nized farmers, however, because they needed suitable highly motivated soil scientist. As part of his research, machinery to adopt the technology. Source: Ekboir, Boa, and Dankyi 2002. MODULE 1: INNOVATIVE ACTIVITY PROFILE 1: NO-TILL NETWORKS IN DEVELOPING COUNTRIES 71 Table 1.4 Factors That Influenced the Performance of Four Successful No-Till Networks Argentina Brazil Paraguay India Actors that at some point participated in the network – Innovative and committed – Innovative and committed farmers – Innovative and committed – Innovative and committed farmers farmers – Brazilian researchers willing to farmers – Innovative equipment – Argentine researchers willing interact with farmers – Farmer organizations manufacturers to interact with farmers – Innovative equipment – International research centers – International research centers – Innovative equipment manufacturers – International cooperation – State universities manufacturers – State research institutes agencies – Farmer organizations – Farmer organizations – Universities – Foreign researchers – Foreign researchers – Agrochemical companies – Agrochemical companies – International cooperation agencies – International research centers Modes of interaction – Active interactions between – Strong support from agrochemical – Strong links between – Strong support from an researchers, equipment companies Paraguayan and Brazilian international research center and manufacturers, and farmers in – Active interactions between farmers state universities the development phase researchers, equipment – Support from international – Exchange of prototypes between – Initial mild support from manufacturers, and farmers cooperation agencies Bolivian and Indian artisans agrochemical companies, – Effective no-till farmer association – Support from an international enabled the development of which became very strong when organized diffusion programs research center efficient planters the leading firm recognized the – Alliances of several partners – Effective no-till farmer – Active interactions between market potential developed and diffused packages association organized diffusion international researchers, equipment – Effective no-till farmer adapted to small-scale farmers’ programs manufacturers, and farmers association organized needs and resources – Traditional extension services diffusion programs worked with researchers Factors that triggered the development of no-till networks – Curiosity-driven research – Severe soil erosion – Farmers were aware of the – An international research center – Severe soil compaction – A private firm willing to develop a economic and environmental had experience with no-till in market for a new product benefits of no-till rain-fed areas and was willing to experiment in irrigated crops – Severe weed infestation that could be controlled easily with no-till Socioeconomic and environmental factors that facilitated the generation and diffusion of no-till – Well-developed commercial – Well-developed commercial – Well-developed commercial – No-till’s economic benefits agriculture agriculture agriculture – Affordability of planters – No-till’s economic benefits – No-till’s economic benefits – Previous experience with – Existence of market for planting – Research institutes that – Research institutes that allowed no-till services allowed researchers to conduct researchers to conduct curiosity- curiosity-driven research driven research – Widespread use of custom operators for planting and harvesting – Macroeconomic policies reduced the profitability of grain production Source: Author. BENEFITS, IMPACT, AND EXPERIENCE the technology. As noted, this relatively small area is deceiving in the sense that no-till is used by very large num- In all countries listed in table 1.5, except China, no-till was bers of small-scale farmers. No-till practices are expanding adopted mainly by large- and medium-scale commercial in South Africa, Venezuela, New Zealand, France, Chile, farmers. Among countries that have adopted no-till but do Mexico, and Colombia and are in the early stages of adop- not appear in table 1.5, India, Pakistan, Bangladesh, Nepal, tion in other countries (Derpsch 2010). and Ghana together account for 1.9 million hectares under 72 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 1.5 Use of No-Till in Select Countries, 2007–08 Area under no-till Country (hectares), 2007–08 United States 26,593,000 Brazil 25,502,000 Argentina 19,719,000 Canada 13,481,000 Australia 12,000,000 Paraguay 2,400,000 China 1,330,000 Kazakhstan 1,200,000 Bolivia 706,000 Uruguay 672,000 Spain 650,000 Source: Derpsch 2010. No-till had several important impacts on the AIS: the module overview). Innovation brokers and catalytic agents played critical roles in the exploration (TN 2 in this ■ New linkages developed among actors of the AIS and module and module 3, TN 4). Appropriate resources should with foreign sources of technical information. be provided to pay for their services and for the trial of ■ New business models developed. For example, contract- organizational innovations. ing planting and harvesting in South America and India Effective networks explore different approaches to organize allowed more efficient use of specialized equipment. the generation and diffusion of the technical innovation. In ■ New research methods were developed, accelerating the the case of no-till, the research networks used partici- generation of the no-till package. patory, on-farm research approaches, whereas the exten- ■ New approaches were developed to disseminate the sion networks used a larger range of instruments, including package. self-help groups, demonstration days and plots, conven- ■ Some researchers and extension agents changed the way tions, publications, radio and television programs, sales they interacted with other actors in the AIS. forces of agrochemical and equipment companies, and ■ Farmer organizations developed capabilities for effec- farmer-to-farmer communication. In the development of tively exploring alternative technical and organizational complex innovations like no-till, flexible approaches for solutions. research, financing, and evaluation should be used. ■ Existing research and extension capabilities were used The composition of innovation networks changes as the more effectively. process matures and new challenges emerge. No-till networks ■ Effective farmer organizations with strong innovation started as small teams and incorporated new members as capabilities emerged. the innovation process evolved. Despite this commonality, in each country (or even regions within countries) different processes led to the emergence of effective innovation net- LESSONS LEARNED AND ISSUES works. For example, in southern Brazil the catalytic agent FOR WIDER APPLICATION was a private firm (ICI), but later, farmer organizations Effective networks explore different organizational innova- were the key actors in diffusing no-till among commercial tions until they find approaches appropriate to local condi- farmers. In Argentina and northern Brazil, a group of tions. “Research� networks adapted the package to local con- researchers and farmers developed the package, but a coali- ditions and “extension� networks diffused it; these networks tion of innovative farmers and agrochemical companies dif- interacted assiduously, and some actors (especially inno- fused it. In Bolivia and Paraguay, commercial farmers led vative famers) participated in both of them. The most inno- the process, but private firms joined the networks after vative aspects of the process were the composition of the no-till was widely adopted. Innovation projects should rec- networks and the ways in which they operated (box 1.3 in ognize the changing needs of innovation networks and MODULE 1: INNOVATIVE ACTIVITY PROFILE 1: NO-TILL NETWORKS IN DEVELOPING COUNTRIES 73 facilitate the incorporation of partners that possess assets innovation teams depends on the individuals that partici- the network needs and the withdrawal of partners that no pate in them, their interactions, the resources they com- longer contribute to the common effort. In other words, mand, their learning strategies, external constraints, and when promoting the creation of an innovation network, it unforeseen factors. It is impossible to know in advance how is important to (1) search for willing partners, (2) empower effective an innovation team will be; therefore, an effective them to decide on the best strategies to achieve the goals, innovation policy is to have more than one team working on and (3) encourage them to identify constantly what the same innovation (Huffman and Just 2000). There are no resources and information they lack and who can supply precise methods to determine how many teams should be them. Innovation projects should contemplate resources created. The number depends on several factors, including for these search activities. the quality of the individuals involved, the resources they Effective innovation networks use adaptive management to command, the nature of the problem (for example, whether facilitate collective action. When setting up a project to foster it is a major innovation or a minor adjustment), and the innovation, it is important to use participatory methods institutional environment in which they operate. To facili- that help to create trust among potential partners, develop tate learning, however, the teams should interact assidu- approaches adapted to local conditions, and use an adaptive ously among themselves. management approach. In other words, prepare a project Public organizations have to allow innovative employees to plan, implement it, periodically assess its implementation explore new ideas. The public research institutes in South (at most yearly, but at shorter intervals in the first two years) America initially did not recognize the value of no-till, but to identify emerging problems and opportunities, and they allowed individual researchers to explore new ideas. adjust the plans in response to the information collected. This approach contrasts with current trends in the manage- Parallel efforts are necessary for effective innovation. ment of research, which require projects to be clearly Different approaches were used to generate the no-till pack- defined before they are implemented. To increase the con- ages and to create the networks that developed and diffused tribution of public researchers, extension agents, and proj- them. Each approach responded to local human and social ect managers in innovation processes, it is necessary to offer resources and institutional constraints, but distant incentives that favor exploration, calculated risks, and par- groups interacted among themselves. The effectiveness of ticipation in innovation networks (see TN 2). 74 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 2 Learning Organizations That Support Innovation: Mexico’s Produce Foundations Javier Ekboir, Institutional Learning and Change Initiative (ILAC) SYNOPSIS tions could not provide them, producers and other actors in the AIS imported or developed them. The federal gov- number of internal and external factors influenced A the evolution of Mexico’s Produce Foundations (Fundaciones Produce), a federated farmer orga- nization that funds and implements research, extension, ernment also saw technical change as an important instru- ment to boost competitiveness, but it recognized that the public research and extension system was not responding to farmers’ needs. Following the prevalent model of agri- and innovation projects. The Produce Foundations cultural research, the government argued that the main developed strong innovation capabilities that enabled them problem was that the research system was supply driven to search for new ways to support agricultural innovation. and had to be replaced by one that was demand driven. At The main internal factors were the creativity of a few farm- the same time, the federal government restricted its sup- ers on the boards and of some foundation managers; the port for research. Public extension organizations were development of effective collective learning routines; the closed and replaced by a program to develop markets for creation of an organizational culture that valued explo- technical advice. ration, creativity, innovation, and a sense of duty; and flex- ible governance structures. The external factors were the existence of dynamic markets that created challenges and OBJECTIVES AND DESCRIPTION opportunities for farmers and the presence of key policy makers who were willing to allow the foundations to exper- Mexico’s Produce Foundations (Fundaciones Produce) are iment and change. Autonomy and independence proved an example of a federated farmer organization that funds important: there is a positive correlation between a foun- and implements research, extension, and innovation proj- dation’s autonomy from the state government and its ects. They are also examples of learning organizations. institutional development, efficiency in achieving its mis- Mexico has 32 foundations, one in each state. A national sion, and innovativeness. Decentralized experimentation coordinating body (COFUPRO, Coordinadora Nacional de and centralized learning were important to success, along las Fundaciones Produce) facilitates organizational learning with willingness on the part of federal and state govern- and interacts with the federal government. Each Produce ments to let the foundations explore new instruments to Foundation is governed by a board, which is dominated by fulfill their mandate. progressive farmers and also includes representatives from the federal and state governments. Operations are directed by a professional manager. COFUPRO, in turn, has a board CONTEXT integrated by the presidents of some of the foundations, a In the mid-1980s, Mexico began to deregulate domestic representative from the federal government, and another markets and trade and establish a multiparty democracy. from the national agricultural research organization. Day- The central government devolved power to the states and to-day operations are delegated to a professional manage- opened channels for civil society participation. These ment team. changes created new opportunities and increased competi- The Produce Foundations’ main program operates an tion for agricultural producers, who reacted by looking for annual budget of about US$45 million, 85 percent of which advanced technologies. When the public research institu- is contributed by the federal government and 15 percent by 75 the states. The foundations also receive additional funds their independence, but soon they recognized the benefits from public and private sources for special projects. of civil society participation and supported the independ- Individual farmers cannot join the Produce Foundations; ent Produce Foundations. Eventually most foundations instead, a few farmers are invited to participate on the followed suit and requested independent status as well. boards, and each foundation sets the selection criteria.1 The innovative farmers also realized that the individual Individual farmers participate in projects financed by the foundations were too isolated and that a national coor- foundations, both as collaborators and as contributors of dinating office was needed; before long, COFUPRO was resources. Initially, the Produce Foundations financed created. projects that mainly helped commercial farmers; over the Over the years, COFUPRO and the foundations have years, they have increasingly sought to meet the needs of developed a better understanding of innovation processes small-scale farmers while continuing to support commer- and consolidated their structure, operational routines, and cial agriculture. institutional culture. The process entailed a progressive The objective that motivated the creation of the Produce transfer of authority from individual foundations to Foundations was to mobilize additional funds for the COFUPRO. The main benefits of a strong COFUPRO were national agricultural research organization and transform (1) the consolidation of a system of decentralized experi- supply-driven research and extension systems into mentation with centralized learning, (2) stronger lobbying demand-driven systems. After several iterations, the cur- capabilities, (3) more transparent use of resources, and rent objective of the federal government and the Produce (4) more effective operational rules. The learning process Foundations is to explore new instruments to foster inno- was particularly effective. The foundations moved from vation, transform traditional research organizations and financing traditional research and extension projects to universities so that they can better integrate into innova- supporting innovation activities and stable interactions tion processes, explore new methods to diffuse innova- among researchers, technical advisers, firms, and farmers. tions, and influence the design and implementation of Each foundation tried new ways to support innovation research, extension, and innovation policies by participat- and to manage its funds. Once effective operating rou- ing in policy dialogues and educating policy makers on the tines were developed, they were adopted by all of the nature of innovation. foundations. The changes in the Produce Foundations’ objectives The foundations implement a number of activities, but reflect lessons learned by the government and the founda- the most relevant for this module are their priority-setting tions. When the federal government created the foundations methods, allocation of funds, and exploration of new meth- in 1995 as part of its efforts to democratize and establish a ods to foster innovation: new model for agricultural research, it negotiated with each state governor to establish a foundation that would admin- ■ Priority setting. Over the years, the foundations tried sev- ister public and private funds for finance research and eral methods to set priorities. The most important was a extension projects. Each governor handpicked progressive two-year national consultation implemented in 2002, farmers to join the state foundation’s board. Soon after join- which was the basis of all agricultural policies for the fol- ing the boards, a few farmers recognized that they lacked an lowing five years. The process was considered too costly understanding of managing public funds for research and and never repeated. In the following years, each founda- extension, and they started to exchange information on how tion developed its own priority-setting method, but they they operated their foundations. This process enabled inno- are converging on a permanent dialogue among the vative foundations to differentiate themselves from the oth- foundation, researchers, and important stakeholders ers. The foundations were also influenced by the political from the different agricultural clusters. In other words, climate in their respective states, the presence of innovative they have moved from a demand-driven, linear process farmers on their boards, and the backgrounds of the foun- to a continuous dialogue that results in participatory dation managers (especially with respect to their managerial research and innovation (there are several modes of par- experience in large organizations). ticipation, however). In the beginning, when the federal and state gov- ■ Allocation of funds. For many years, the foundations used ernments controlled the Produce Foundations’ boards, a competitive fund to select the projects to be funded. In farmers from about six foundations demanded indepen- 2006, they realized that this method did not induce dence. At first the federal and state governments opposed researchers to abandon their linear vision of science, and 76 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK they started to contract research and innovation projects ■ They helped other actors in the AIS, especially farmer directly with research institutes and other service organizations and policy makers, to understand the providers. Additionally, the foundations started to prior- nature of agricultural innovation. itize projects presented by groups of actors (usually farmers and researchers) that had developed stable LESSONS LEARNED AND ISSUES FOR relationships. WIDER APPLICATION ■ New methods. In recent years, some foundations have played a catalytic role in the emergence of innovation A number of internal and external factors influenced the evo- networks that explore new research and diffusion meth- lution of the foundations. The main internal factors were the ods. These activities have not been evaluated yet. creativity of a few farmers on the boards and of some foun- dation managers; the development of effective collective learning routines; the creation of an organizational culture INNOVATIVE ELEMENT that valued exploration, creativity, innovation, and a sense The Produce Foundations’ relevance resulted from their of duty; and flexible governance structures. The external continued exploration of new mechanisms to foster agricul- factors were the existence of dynamic markets that created tural innovation and to develop organizational capabilities. challenges and opportunities for farmers and the presence This exploration was made possible by the presence of a few of a few policy makers in key positions who were willing to innovative individuals operating in a socioeconomic and allow the foundations to experiment and change. institutional environment that allowed the foundations to Autonomy and independence proved important. There is a change. It was further supported by the development of an positive correlation between a foundation’s autonomy from organizational culture that allowed new alternatives to be the state government and its institutional development, effi- explored. ciency in achieving its mission, and innovativeness. These features result from the presence of more innovative indi- viduals, the greater commitment shown by the board mem- BENEFITS, IMPACT, AND EXPERIENCE bers, and more professional management staff. The Produce Foundations had several impacts on the Decentralized experimentation and centralized learning Mexican AIS: were important. The foundations succeeded because they could explore more effective operating routines and new ■ They funded research projects that opened new export instruments to foster innovation. The emergence of markets, boosted the profitability of agriculture, solved COFUPRO and the foundations’ ability to change resulted serious production constraints (for example, with from the creation of variation (32 foundations, instead of improved pest control), and improved the sustainable one centralized organization) and an effective process of use of natural resources. self-organization, greatly influenced by a few innovative ■ They induced the emergence of networks that explored individuals. The combination of independent foundations new approaches to foster innovation. with strong interactions also became a mechanism to ■ They implemented development projects that benefited explore alternative organizational routines and diffuse the small-scale farmers. most effective ones (box 1.24). ■ They influenced the operations of public research insti- Finally, it was crucial that the federal and state gov- tutes and universities. ernments allowed the foundations to explore new instruments ■ They opened opportunities for researchers to interact to fulfill their mandate (box 1.25). The effectiveness of the directly with farmers, helping them to replace the linear mechanism was hampered, however, by the informality of vision of science with an innovation-based model of the information flows, the lack of methods to guide the science. exploration, weak incentives for unwilling foundations to ■ They influenced the design and implementation of agri- adopt best practices, and the loosely structured activities, cultural policies, especially for research and innovation which made the performance of individual foundations programs. dependent on the personalities of the people in command. MODULE 1: INNOVATIVE ACTIVITY PROFILE 2: LEARNING ORGANIZATIONS THAT SUPPORT INNOVATION IN MEXICO 77 Box 1.24 Organizational Learning in Mexico’s Produce Foundations: Evolution of Priority-Setting Procedures At the beginning, the Produce Foundations had no pre- research demands, first in each state and then at the defined criteria to allocate funds. Farmers on the board national level—an exercise that was not repeated would select projects to finance from among the pro- because it was deemed too expensive. posals freely submitted by researchers. The foundations After a few years, the foundations realized that a soon realized that the projects did not respond to farm- demand-driven system and clearly defined priorities ers’ needs, and they started to search for priority-setting did not guarantee that researchers would provide solu- methods. They learned of a methodology developed by tions that farmers could use, because it still allowed the national science and technology council, which was researchers great latitude in defining the approaches to based on the construction of restriction trees and an ex solve the problems. The next step was to modify the call ante cost-benefit analysis of potential projects. This for proposals. The calls were very narrowly defined methodology was used for a couple of years. (almost down to the title of the project desired), but In 1997, COFUPRO authorities met the research after a few years, the foundations realized that this director of the International Service for National Agri- new method still did not solve their problem because cultural Research (ISNAR), who provided guidelines it was based on a linear vision of science. More for a methodology based on accepted practices for recently, the foundations experimented with different project design. The method involved organizing approaches to define priorities and transform how forums where the various actors in agricultural chains researchers defined their methodologies. Researchers could diagnose their most important problems. Over have been induced to interact more closely with farm- the next two years, the foundations adapted this ers and move from their traditional research domains methodology to the Mexican environment. They rec- to participate in innovation networks. ognized that ISNAR’s methodology was better than The foundations continuously analyzed the lim- the council’s approach because it was based on wider itations of the prioritization procedures in use and criteria than the expected costs and benefits, and it actively sought alternatives. As they collected informa- enabled different actors to help define priorities. The tion, they absorbed it to develop their own methods, foundations implemented the methodology in 2002 which in turn induced changes in resource allocations and 2003 to prioritize agrifood chains and identify and the monitoring of projects. Source: Ekboir et al. 2009. Note: ISNAR was a CGIAR center that closed in 2004. IFPRI absorbed some of its work. 78 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 1.25 Mexico’s Produce Foundations Explore New Approaches to Foster Innovation The Produce Foundations initially financed traditional techniques to identify the most effective research and extension projects, but realized after a few communicators. years that the projects had little impact on agriculture. ■ Creation of a company of small-scale farmers to In 2003, an external evaluation introduced the founda- sell processed sheep meat to domestic and foreign tions to the notion of innovation systems. A second markets. evaluation in 2004 explained how to set up innovation ■ Establishment of a consortium of researchers who projects. Since then, several foundations have imple- interact closely with farmers to validate and dissem- mented innovation projects, while continuing to sup- inate innovations for livestock production. port traditional research and extension activities. The ■ A joint venture with large-scale farmers to finance a innovation projects include the following: stable research program (which included paying a researcher’s doctoral studies) to develop innovations ■ Development of an organization of small-scale for pecan production. farmers and their families that markets dried and ■ With financing from foreign foundations, import- processed hibiscus flowers and uses the by-products ing a small sewage treatment plant for two remote, to feed chickens for egg production. impoverished villages and using the treated water to ■ Development of a farmer-to-farmer system to irrigate greenhouses to produce fresh vegetables. exchange technical and commercial information; ■ Teaming up with Wal-Mart to develop a supply chain the system is based on Social Network Analysis for fresh vegetables produced by small-scale farmers. Source: Author. MODULE 1: INNOVATIVE ACTIVITY PROFILE 2: LEARNING ORGANIZATIONS THAT SUPPORT INNOVATION IN MEXICO 79 I N N O V AT I V E A C T I V I T Y P R O F I L E 3 Chile’s Foundation for Agricultural Innovation Rodrigo Vega Alarcón, Consultant, formerly with the Foundation for Agricultural Innovation (FIA) SYNOPSIS tural sectors. The challenge was to improve Chilean produc- ers’ competitiveness through new technologies and to hile’s Foundation for Agricultural Innovation has C facilitated partnerships, especially between public and private agencies, that promoted technical, organizational, and commercial innovations. The foun- develop alternative crops for regions and farmers affected by imports. At the time, agricultural research and development focused on basic rather than applied science, and little sup- port was given to business innovation. dation coordinates actors in the public sector, academic institutions, private firms, and other entities to understand and meet the innovation needs of different industries and PROGRAM DESCRIPTION agricultural activities. The agency operates as an honest broker, free of special interests, and implements programs In 1994, Chile’s Ministry of Agriculture created the Founda- to generate trust among farmers and other partners. Inno- tion for Agricultural Innovation (FIA, Fundación para la vation initiatives are managed responsively, quickly, simply, Innovación Agraria), a public agency to promote and finan- and not bureaucratically, and as innovation processes move cially support agricultural research, development, and inno- forward, the agency retains organizational flexibility and vation. Initially FIA focused strongly on technology transfer freedom (for example, to form ad hoc, specialized groups to improve competitiveness. It identified products with high and instruments for solving particular problems). economic or commercial value and significant labor requirements that could be adapted to Chilean agriculture. In 2009, FIA became part of Chile’s National System of BACKGROUND AND CONTEXT Innovation for Competitiveness (SNIC, Sistema Nacional In the 1990s, the Chilean economy was liberalized, the gov- de Innovación para la Competitivad). FIA’s strategic objec- ernment reduced tariffs, and free trade agreements came tive is to promote innovation processes for the agriculture into effect. The agricultural sector was at a crossroads; it sector and improve the conditions that favor those had to modernize and become more competitive. Support processes, by cofinancing innovation initiatives, generating for agricultural research, development, and innovation was strategies, and transferring information and results of stepped up. The government adopted policies to promote innovative programs and projects carried out with Chile’s technology transfer and raise productivity. private sector. The subsequent rapid transformation of Chilean agricul- The foundation is guided by a seven-member board of ture into an engine of regional development has become a directors chaired by the minister of agriculture. It is headed familiar story. Current exports from the national food and by a chief executive appointed by the minister of agricul- forest industry (fruit, wine, salmon, wood, white meats, and ture. FIA’s annual budget is about US$18 million, mostly other products) are valued at about US$13 billion per year from the Ministry of Agriculture (US$11 million); other and are expected to reach US$20 billion in coming years. sources of finance include the national Innovation Fund for The transition from a traditional agrarian economy to an Competitiveness (FIC, Fondo de Innovación para la Com- export-based economy was not entirely smooth. Unemploy- petitivad), which is supported by mining royalties (US$6 ment and migration increased as traditional agricultural million). The national innovation policy has three pillars: products such as wheat, corn, milk, and meat were replaced Science and Human Capital are supported by the National by imports from countries with more competitive agricul- Commission for Scientific and Technological Research,1 and 80 Enterprise Innovation is supported by Innova-Chile, the ■ Development of mechanisms and instruments for dissemi- multisectoral innovation agency of the Corporation to Pro- nating projects and programs with commercial potential mote Production (CORFO).2 FIA and other small funds to agrarian enterprises. focus on specific sectors and complement Innova-Chile. ■ Management intervention mechanisms that support col- While FIA works mainly with small- and medium-scale laborative innovation initiatives submitted by clients enterprises, Innova-Chile works with medium- and large- (box 1.26). scale agroindustrial entities and entrepreneurs. ■ Evaluation of technical, economic, and social results of projects cofounded by FIA, prior to their transfer and implementation. INNOVATIVE ELEMENT The efforts of FIA changed the paradigm for agricultural Currently FIA works with the World Bank on redesign- research and development, which had been confined to ing the system for agrifood and forestry research, develop- technology institutions and academia and yielded results ment, and innovation through scenario planning. In this that often lacked commercial application. Aside from facili- context, FIA plays the role of coordinator and broker, tating partnerships across the public and private sector, interacting closely with all parts of the system—agricultural including producers and industry, FIA supports innovation producers, financial agencies, companies, technological in the following ways: institutes, or universities. ■ Strategic development of information and knowledge to BENEFITS, IMPACT, AND EXPERIENCE anticipate future trends and technological developments in global agriculture, through observation, exploration, Since its creation, FIA has promoted the development of and analysis of such emerging issues as climate change, new, high-value agricultural products for the domestic agriculture’s carbon footprint, water, and bioenergy, and international markets. Many of these products among others. have improved farmers’ incomes and living conditions Box 1.26 Mechanisms Used by Chile’s Foundation for Agricultural Innovation to Support Innovation The Foundation for Agricultural Innovation uses sev- assemble and synthesize technical, economic, and/or eral mechanisms to support initiatives and innovation commercial information to aid decisions on future projects, technology transfer, and human resource innovation initiatives. Projects are funded on innova- development. Territorial innovation programs are tions that improve a company’s competitiveness and regional initiatives led by stakeholders and represen- that of the sector to which it belongs. Projects must tatives of an agrifood chain in a particular region or show measurable market effects. Visits to centers of excel- territory. Technology consortiums are joint ventures lence are sponsored in Chile and abroad to observe and between technology agencies (including public evaluate technological, organizational, and managerial research institutes and universities) and private enter- innovations in production systems. Individuals are also prises to create a new technology-based company or sponsored to attend national and international technical pursue innovative research on new commercial tech- events, such as seminars, symposiums, congresses, nologies (for the grape, potato, and dairy industries, for conferences, and technology fairs. FIA also funds specific example). On a smaller scale, technology development events (seminars and conferences) to disseminate and programs promote specific technological development transfer national and international experiences related and innovation led by stakeholders and representatives to products, processes, and innovative tools for market- of an agrifood chain. Innovation in agri-food marketing ing, organization, and management to different actors supports market integration and market development in the AIS. Consultants provide specific skills to enhance tools for micro, small-scale, and medium-scale agri- competitiveness of specific products, processes, or food companies. FIA also conducts numerous studies to organizations and their management. Source: Author. MODULE 1: INNOVATIVE ACTIVITY PROFILE 3: CHILE’S FOUNDATION FOR AGRICULTURAL INNOVATION 81 throughout Chile. An impact evaluation in 2005 deter- based on technology transfer to one that involves building mined that each million Chilean pesos (Ch$) spent by the partnerships (locally, nationally, and internationally) that foundation increased sales in the agricultural sector by foster agricultural innovation and access to highly competi- Ch$5.14 million, leveraged Ch$1.89 million in private con- tive global markets. tributions, and created two permanent jobs in the agricul- A vital role of an innovation agency is to coordinate tural sector (FIA 2005). For example, FIA helped to support actors in the public sector, academic institutions, private development of a successful olive oil–processing and export firms, and other entities to understand and meet the inno- industry (box 1.27), increased sheep meat production by vation needs of different industries and agricultural activi- introducing better breeding stocks, extended cranberry cul- ties. The key is to be participatory and create avenues for tivation to new areas, introduced new varieties of flowers for continuing analysis and discussion in which the experience the export and domestic market, and expanded peony pro- and opinions of all actors can be considered. duction area. FIA has also sponsored investments in ICT Organizations such as FIA that specialize in promoting technologies for rural areas. In organic agriculture, FIA innovation should act as facilitators, linking the demand for supported the first projects in what has become a growing research and development with the suppliers and strength- business, and it advanced the study and commercialization ening the capacity for research and innovation throughout of biological control, using a variety of beneficial insects. the AIS. There should be a distinction, understood by all actors in the AIS, between the roles of innovation-promot- ing agencies and centers for developing or diffusing innova- LESSONS LEARNED AND RECOMMENDATIONS tions (whether they are public, private, nongovernmental, FOR PRACTITIONERS or civil society organizations). As facilitators, innovation Lessons and recommendations from FIA’s experience may agencies should not operate research programs. They must be useful to other agencies that seek to move from a mission remain independent of research and technology institutes, Box 1.27 Purposeful Innovation to Expand Chile’s Olive Oil Industry In the mid-1990s, Chile produced olives on a small ■ Expanding area planted to high-yielding cultivars. scale—approximately 3,000 hectares, of which 350 ■ Acquiring international technical expertise for agro- hectares were for oil production. Yields were relatively nomic and processing problems and marketing. low, averaging 3–4 tons per hectare and 16–18 percent ■ Training specialists in olive cultivation and industri- edible oil. Production relied on outdated practices. The alization. National Olive Development Program, launched in 1995 ■ Establishing modern oil-processing plants. by the Ministry of Agriculture and coordinated by FIA, ■ Developing a brand and marketing Chilean olive oil. addressed problems (agronomic, processing technolo- ■ Conducting international seminars to promote gies, zoning) that limited the industry’s development. It Chilean olives and olive products. involved all agencies under the ministry, plus producers, private companies, and other entities, including Fun- By 2009, planted area reached approximately dación Chile. The ultimate goal was to make olive pro- 21,500 hectares (65 percent of production was destined duction more competitive and stable and improve access for oil and the rest for table olives). Investments in to domestic and international markets (mainly the the sector remain strong and have reached US$50 mil- United States, Spain, and Canada). To that end, FIA lion annually. Exports of extra virgin olive oil from supported the following: Chile have increased tremendously in recent years. In 2003, Chile exported 53.7 tons, with a free-on-board ■ Deepening market research and identifying business (FOB) value of US$158,200; in 2007, Chile exported opportunities. 562 tons, with an FOB value of US$3.1 million; and by ■ Identifying and multiplying new, more appropriate 2009, it exported 1,933 tons with an FOB value of genetic stocks. US$12.5 million. Sources: FIA 2009; CHILEOLIVA 2009. 82 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK universities, the private sector, and agricultural organiza- The processes of managing innovation initiatives must tions. They must be honest brokers, trusted by all, and not be responsive, quick, simple, and not bureaucratic. Other- captured by special interests. wise farmers and businesses have little incentive to partici- Although the private sector is an important force for pate. Innovation programs and the innovation agency itself innovation in agriculture, a public agency that specializes in should be evaluated regularly to verify their effectiveness promoting agricultural innovation, with sufficient human and impact and make corrections in a timely way, if nec- and financial resources, is a vital complement to private essary. The professionals within the agency must receive investments. In many cases, agricultural innovations may training in management techniques for innovation and not be easy to patent or otherwise commercialize, but they technology management, if they are to be of real support to may be critical to the development of the sector (biological farmers and entrepreneurs who seek to foster and manage control programs and information and communications innovation processes. technology infrastructure are two examples mentioned in Needs for innovation (and partners committed to this IAP). It is also likely that the partners involved and the developing them) can be quite location-specific, especially relative levels of public and private investment will vary in a highly ecologically diverse country such as Chile. FIA when innovations are in the developmental stage compared now develops what it calls “territorial innovations� by to when they are being commercialized. In other words, as working with the regions to promote innovation at the innovation processes move forward, a certain amount of local level. The development and adoption of innovations, organizational flexibility and freedom are needed (for especially with smaller-scale and more traditional farmers, example, to form ad hoc, specialized groups and instru- can be slow. The process benefits from complementary ments for solving particular problems that emerge at a par- programs that generate trust among farmers and other ticular stage in the process). partners. MODULE 1: INNOVATIVE ACTIVITY PROFILE 3: CHILE’S FOUNDATION FOR AGRICULTURAL INNOVATION 83 I N N O V AT I V E A C T I V I T Y P R O F I L E 4 A Rural Institutional Platform Mobilizes Communities to Become Effective Partners in Agricultural Innovation in Andhra Pradesh Gunnar Larson, World Bank Melissa Williams, World Bank SYNOPSIS driven development programs in Bolivia and Northeast Brazil beginning in the late 1980s. In the late 1990s, India ommunity organization in the form of small self- C help groups and the federation of these grassroots institutions at higher levels have created support structure that enables the rural poor in Andhra Pradesh to applied these principles in a unique way, mobilizing and federating poor agricultural communities to access credit, markets, and services on better terms. The southern state of Andhra Pradesh, where costly and unsustainable agricul- identify workable strategies to meet their needs—in other tural production practices were creating unmanageable lev- words, to innovate. Each tier in the organization of self-help els of debt (box 1.28), quickly established itself as a pioneer groups functions as a financial intermediary and provides of this approach. specialized services to members and other stakeholder groups in a variety of sectors. Through this rural institutional platform, community members have identified, adapted, PROGRAM OBJECTIVES AND DESCRIPTION used, and spread environmentally friendly agricultural prac- tices, obtained credit, invested in productive assets, and The Society for the Elimination of Rural Poverty (SERP), an improved their food security and health, among other bene- autonomous body established by the Government of fits. Lessons from this experience highlight the importance of Andhra Pradesh, implements the Andhra Pradesh Rural developing local institutions with local people (the local com- Poverty Program.1 Under this program, SERP works in mitment and relevance makes them more likely to innovate communities to mobilize self-help groups (SHGs), each successfully) and of organizing at higher levels (where farm- with about 10–15 members (such as poor women and/or ers gain a collective voice to empower themselves). These farmers), who engage in collective saving, lending, and institutions of the poor plan, manage, monitor, and scale up other activities that enable them to build an asset base. new initiatives and build social capital at much lower trans- As shown in figure 1.1, each tier in the organization of action costs and with much greater purposefulness than is SHGs functions as a financial intermediary and provides possible through more traditional forms of organization, in specialized services to members (and other stakeholder which the rural poor are more often at the periphery than the groups) in a variety of sectors. The SHGs federate into center of service provision and innovation. village organizations (VOs), and each VO manages a capital fund, from which it provides loans to constituent SHGs. The VOs organize into subdistrict federations, which CONTEXT access commercial credit to lend to VOs, and subdistrict Organizing large numbers of poor people around economic federations organize into very large district federations. This activities and mobilizing their combined assets until they platform of federated institutions brings economies of scale collectively achieve a scale of magnitude sufficient to attract and scope that allow community members to build assets, the interest of investors and service providers have a num- smooth consumption, access services and safety nets, and ber of precedents—most immediately in community- invest in livelihoods to raise themselves out of poverty. 84 Box 1.28 Rising Input Use and Agricultural Debt in Andhra Pradesh Andhra Pradesh is one of India’s major producers of (Cropping intensity during 1980–81 and 1990–91 was rice, cotton, groundnuts, and lentils. Agriculture 1.16; gross cropped area declined from 12.5 million accounts for 25 percent of GDP and 60 percent of hectares in 1980–81 to 12.1 million hectares in 2004–05, employment. Most farmers in the state practice con- according to the Government of Andhra Pradesh and ventional, input-intensive farming that relies on peri- Centre for Economic and Social Studies (2008).) The odic purchases of high-yielding seed, chemical pesti- same period saw a reduction in government-provided cides, and chemical fertilizers. As much as 35 percent of public services that left farmers increasingly dependent cultivation costs go to pesticides and fertilizers alone, on moneylenders and input traders. Traders became which is five percentage points above the national aver- many farmers’ sole source of credit, inputs, and related age (NSSO 2003). High production costs generate information. One result of this arrangement was that tremendous pressure to borrow heavily to pay for Andhra Pradesh farmers, ill-informed about the dan- inputs and make ends meet. The average outstanding gers of incorrect input use, applied far more pesticide loan for farmers with small landholdings was more than their counterparts in any other state in India: than twice the national average in 2005. Among farm 0.82 kilograms per hectare annually, compared to the households, 82 percent were in debt—the highest national average of 0.3 kilograms per hectare (Govern- estimated prevalence of debt among farm households ment of Andhra Pradesh, Irrigation and CAD Depart- in India (NSSO 2005). Many farmers used their land as ment 2007). Another result was that many traders and collateral, eventually becoming nothing more than moneylenders entered into buyback agreements with tenant farmers or wage laborers on their own land. farmers at below-market prices in return for their ser- Owing to rising debt, land mortgages, and uncertain vices (Ramanjaneyulu et al. n.d.). Purchasing inputs profit potential, planted area in Andhra Pradesh plum- imposed such a financial burden on smallholders that meted by more than 988,000 acres between 1980 and conventional agriculture no longer offered a viable 2005, along with yields and agricultural growth. livelihood. Source: Authors. INNOVATIVE ELEMENTS agriculture makes farming sustainable from an economic Andhra Pradesh has created an ecosystem of support in perspective. At higher levels, the federation organizes train- which a bottom-up planning process beginning at the ing, engages NGOs and government agencies for additional household and community level and aggregating to higher support, and monitors progress. levels enables the rural poor to identify needs and define Farmers have also used this institutional platform to workable solutions (in other words, to innovate). For practice community-managed sustainable agriculture instance, farming households develop a microcredit plan (CMSA), a knowledge-intensive alternative to input- with the help of their VO and are linked to commercial intensive agriculture. Through their groups, farmers learn banks through their subdistrict and district federations. about the harmful effects of chemical pesticides and fertiliz- Community groups also manage enterprises such as pro- ers on soil, water, and health. They gain access to farmer curement centers for agricultural commodities and milk, field schools, seed banks, equipment centers, finance, and which provide grading, quality control, aggregation, and procurement centers, all organized by their respective VOs. value addition for products. At the subdistrict level, federa- District and subdistrict federations market the CMSA pro- tions invest in enterprises such as chilling centers for milk duce. Through the district federations, farmers can use to increase shelf life. Meanwhile, the district federation funds from the National Rural Employment Guarantee manages a number of support functions, including running Scheme, a social safety net ensuring every rural poor house- an insurance scheme for members through a network of hold has at least 100 days of paid work each year, to pay for call centers. Together, these activities help farmers receive on-farm improvements for sustainable agriculture. Exam- higher prices and foster an environment that favors prof- ples include transplanting tank silt to farms, leveling land, itable agriculture. This support along the value chain of or building structures to capture rainwater. In this way, a MODULE 1: INNOVATIVE ACTIVITY PROFILE 4: A RURAL INSTITUTIONAL PLATFORM MOBILIZES COMMUNITIES IN ANDHRA PRADESH 85 Figure 1.1 The Institutional Model for Federated Self-Help Groups District Federation or Zilla Samakhya District 300,000–500,000 members on average Federation Roles and responsibilities: Conducts market interface, maintains MIS/IT system Subdistrict Federation or Mandal Samakhya 4,000–6,000 members on average, young professional staff Roles and responsibilities: Support to VOs, secure linkage with government Subdistrict departments, audit groups, microfinance functions Federation Village Organization (VO) 150–200 members on average, activists, bookkeepers, and paraprofessionals Village Roles and responsibilities: Strengthening SHGs, arrange lines of credit to Organization SHGs, social action and support activists, village development Self-Help Groups (SHGs) 10–15 members per SHG Roles and responsibilities: Thrift and credit, participatory monitoring, SHG SHG SHG poverty reduction plans, household investment plans Source: SERP and World Bank 2009. safety net entitlement is linked to productive, income-gen- As the discussion has indicated, the benefits of this organiza- erating activities conducted by community organizations. tional structure include improved food security as well as the Largely owing to the effectiveness of the institutional plat- accumulation of financial acumen, new agricultural knowl- form (figure 1.2), poor and marginal farmers have devel- edge and skills, and productive assets. In particular, the oped a more successful livelihood strategy. institutional platform’s success in enabling communities to To improve food security, households belonging to SHGs pursue alternatives to conventional agriculture has led the identify the amount of food they can purchase with their state government to call for the Agriculture Department’s own funds, the amounts obtained through the public safety Agriculture Technology Management Agency (ATMA) to net, and their remaining needs. The VO aggregates the collaborate with the Rural Development Department’s SERP information, ensures that each family gets the safety net to to promote sustainable agriculture and move toward which it is entitled, and then purchases the rest of the food organic agriculture. SERP will train the ATMA staff to use from the market in bulk. Households belonging to the SHG the CMSA model; ATMA will then work with SHGs to pop- can then take a low-interest, long-term loan from the VO or ularize this low-cost, high-return type of agriculture. The SHG to purchase rice on terms they can afford, thereby hope is that it will yield benefits similar to those seen with smoothing their consumption. CMSA (box 1.29). BENEFITS AND IMPACTS OF ORGANIZING LESSONS LEARNED AND ISSUES FOR RURAL COMMUNITIES TO INNOVATE WIDER APPLICATION Through SERP and the rural institutional platform it pro- Experience with the rural institutional platform adopted in vides, communities have organized to meet multiple needs. Andhra Pradesh indicates how the capacity to organize at 86 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Figure 1.2 The Same Institutional Platform Provides Services to Develop Multiple Livelihood Strategies • Federates about 300 VOs Self-Help • Secures links with Group • Federates about government (SHG) 20 SHGs departments • Arranges lines of • Audits VOs • Federates about 40 credit for SHGs • Microfinance functions subdistrict federations Self-Help Group (SHG) Village Subdistrict District Organization Federation Federation (VO) Farmer SHG • Develops village • Manages NGO • Manages convergence Farmer sustainable agriculture • Services, community resource with government SHG plan persons, pricing centers programs • Organizes farmer field • Organizes training • Manages marketing ties schools programs and bank with private sector • Manages community linkages • Maintains MIS/IT seed bank, procurement information systems center, and agricultural equipment center Source: Authors. Box 1.29 Benefits of Community Organization to Pursue More Sustainable Agricultural Practices in Andhra Pradesh Savings and incomes increased. A survey of 141 farm- per acre for paddy and rice. Although CMSA brings ers found that production costs were 33 percent lower higher labor costs, farmers are meeting this challenge under CMSA than conventional agriculture (US$180 by working together to manage pests and increase soil versus US$280 per acre). The savings translate directly fertility. Demonstrations of multicropping and inter- to increased incomes for farmers. For crops raised cropping alternatives are helping more small-scale and without pesticides and fertilizer, farmers command a marginal farmers in Andhra Pradesh realize the bene- premium of 14–33 percent. Even though CMSA pro- fits of diversification. Farmers on nearly 319,000 acres duce is not yet certified organic, consumers (espe- now plant one or two crops in addition to the main cially in urban retail markets) increasingly recognize crop. the benefits of pesticide- and fertilizer-free food. Communities obtained debt relief. In a survey of five Yields remained stable and diversification increased. districts, of 467 families who had mortgaged their To track changes in paddy yields after farmers switched farmland, 386 had paid off their debt and reclaimed to CMSA, 400 farmers’ fields in five districts were their land within two years through the savings from monitored closely. Yields remained the same, ranging CMSA. The social empowerment associated with from 1,900 kilograms per acre to 2,200 kilograms getting their land back from moneylenders and (Box continued on next page) MODULE 1: INNOVATIVE ACTIVITY PROFILE 4: A RURAL INSTITUTIONAL PLATFORM MOBILIZES COMMUNITIES IN ANDHRA PRADESH 87 Box 1.29 Benefits of Community Organization to Pursue More Sustainable Agricultural Practices in Andhra Pradesh (continued) farming on their own land is very significant for farm- farm implements. About 5,400 small-scale and mar- ers, perhaps as important as the economic relief it ginal farmers are generating additional income by provides. operating vermi-composting units. Families increased their investments in productive Food security improved. Data collected by SERP from assets and sustainable land and water management. 22,000 CMSA farmers in Khammam District show that Communities dug more than 10,000 composting pits household expenditures on food grains declined by half and 1,200 farm ponds. Fertile tank silt has been applied owing to higher yields of food grain crops and the to more than 13,000 acres of farmland. Lower produc- introduction of a second crop. Families purchased tion costs and higher net incomes have made farmers 44 percent less food grain from the market. less risk averse. Primary surveys by SERP show that Human and environmental health benefited. Farm- families are leasing additional land for cultivation, ers reported a noticeable drop in pesticide-related resulting in additional income for households. Farmers health problems. Women, who traditionally sprayed are also bringing fallow and government-assigned land the crops—and suffered the effects—are now strong under cultivation. advocates of the new practices. In three districts, hos- Communities saw greater business innovation and pitalizations from pesticide poisoning declined by new livelihood opportunities. Villages have begun to 40 percent, from 242 cases per year to 146 cases. Vil- benefit from jobs and enterprises catering to inputs lages that completely stopped pesticide applications for CMSA and by providing services such as quality are benefiting from the elimination of pesticides control and procurement for CMSA produce. At least from groundwater and soil. Insects and birds, no 2,000 jobs have been created in villages through shops longer targeted by broad-spectrum pesticides, are that supply biopesticides, organic nutrients, seed, and returning to the fields. Sources: Authors. several levels fosters innovation and adaptation in the local to achieve a large-scale transformation in smallholder context, with local people, and contributes to success on a farming. These institutions of the poor plan, manage, larger scale as well: monitor, and scale up new initiatives at much lower transaction costs and with much greater purposefulness ■ Institutions (and their designers) matter. Initiatives than is otherwise possible. Building social capital is a designed by the farmers who will participate in them necessary investment in transforming human, natural, carry real advantages over initiatives that outsiders and economic capital. might design for them. Many of these advantages relate ■ Small-scale and marginal farmers need a creative to the fact that the people who plan and implement approach to the delivery of agricultural extension ser- activities are the same people who benefit from them. vices. Practicing farmers should be the central stake- Their ownership of the initiative greatly increases the holders contributing to an extension system. Where the likelihood that it will be sustainable. The social capital system has failed to meet their needs, they should be they cultivate and build upon in working together for enlisted as active extension agents. Their presence in common goals changes the rules of the game for farmers the village makes them easily accessible and more in relation to the market and the government. In organ- familiar with local conditions and challenges. For izing and mobilizing at higher levels of aggregation, example, the use of successful CMSA farmers as com- farmers gain a collective voice and empower themselves, munity resource persons was critical to building and which is something that cannot realistically be done for scaling up the program. The experience of the resource them from the outside. Supporting their initiatives by persons gives their messages greater credibility among investing in a process that over time comes to involve farmers. NGOs can facilitate extension-related ser- millions of rural people, especially women, has helped vices, but eventually the community resource persons 88 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK assume this role, as they are better equipped to under- look at the cost-effectiveness of options and not focus stand farmers’ needs. only on yields. ■ Farmers can experiment and develop technologies in their fields and test innovations through their local field schools. CMSA has already been taken to the state of Bihar with Once technologies are proven, they can be standardized considerable success, and it will be further scaled up for a wider audience through training workshops. In through India’s National Rural Livelihoods Mission. The CMSA, the menu of technology options continues to achievements in Andhra Pradesh were very much the result grow, and farmers no longer have to rely on the limited of tailoring solutions specifically to local contexts, and options available through external research and other replicating those achievements elsewhere will require pur- sources in the market. Farmers should be encouraged to poseful adaptation to local conditions. MODULE 1: INNOVATIVE ACTIVITY PROFILE 4: A RURAL INSTITUTIONAL PLATFORM MOBILIZES COMMUNITIES IN ANDHRA PRADESH 89 I N N O V AT I V E A C T I V I T Y P R O F I L E 5 In the Networking Age, Cassava Development Relies on Public-Private Research Partnerships Bernardo Ospina Patiño, Latin American and Caribbean Consortium to Support Cassava Research and Development (CLAYUCA) SYNOPSIS countries sought to establish strategic alliances to con- tinue agricultural research and development. In 1999, the LAYUCA transcended the traditional country- C based model of cassava research to develop a regional research and development network that attracted nontraditional partners and funding. All mem- Latin American and Caribbean Consortium to Support Cassava Research and Development (CLAYUCA, Consor- cio Latinoamericano y del Caribe de Apoyo a la Investi- gación y al Desarrollo de la Yuca) was formed as a bers participate in planning, financing, and implementing regional mechanism to plan and coordinate research for prioritized activities for cassava research and development the cassava subsector. while sharing costs, risks, and benefits. An emphasis on competitiveness and a value chain approach helped CLAYUCA to focus on issues limiting efficiency in produc- THE CLAYUCA MODEL tion, processing, and utilization, in which the private and CLAYUCA is a network operating through collaborative public sector had common research interests. CLAYUCA agreements between its members—public and private demonstrates the importance of allowing different interac- entities—in which all members participate in the planning, tion, coordination, and innovation mechanisms to emerge financing, and implementation of prioritized activities to and of coordinating value chain actors to contribute to accomplish jointly established objectives while sharing all policy debates related to cassava (especially support for costs, risks, and benefits. An executive committee defines public-private-CSO-NGO collaboration). Another lesson priorities and lines of activity, and coordinates and evalu- is that facilitating partnerships between public and private ates research undertaken by the consortium. Each member organizations will become increasingly challenging unless country elects one representative (not necessarily from the stable financing is available and public organizations main- public sector) to serve on the committee; the participating tain their expertise. international organizations also elect a representative. The committee approves the entry of new countries into the net- work and elects the executive director, who coordinates CONTEXT CLAYUCA’s activities. Initially a regional network for Latin Cassava, the fifth most important crop in the world, can America and the Caribbean, CLAYUCA has attracted mem- compete with coarse grains in animal feed, partially sub- bers from other regions, and member countries now include stitute for maize and other starchy crops in food products, Colombia, Costa Rica, Ecuador, Guyana, Haiti, Mexico, serve as a source of industrial starch, and be used to Nicaragua, Panama, Peru, Trinidad and Tobago, and process ethanol. The crop is especially important in Venezuela, as well as Ghana, Nigeria, South Africa, China, Latin America, sub-Saharan Africa, and Asia. Although and the United States. national and international organizations have conducted A Technical Committee defines the research agenda, cassava research at least since the 1970s, many of these which is developed in detail by one representative per mem- institutions experienced radical changes in the 1990s as ber country. Research focuses on competitiveness, given the public funding for agricultural research evaporated tremendous challenges in identifying and strengthening and the need for a less linear, more participatory model of market opportunities for cassava and moving from tradi- agricultural innovation became clear. Institutions and tional to more competitive modes of production. 90 Aside from the collaborative agreements with its mem- Examples of technology and other knowledge generated bers, CLAYUCA operates through a formal agreement and shared through CLAYUCA include the following: between its executive committee and CIAT. CIAT is a strategic partner, hosting the consortium, providing core ■ Technology platforms for more competitive cassava pro- funding, legal support, administering CLAYUCA funds, and duction and utilization. Technology platforms include facilitating the use of the laboratories, fields, equipment, and equipment as well as the methodologies, instructions, offices under a fee payment scheme. CLAYUCA’s activities processes, training, and other elements to use it correctly. are partially financed through an annual membership fee of CLAYUCA has developed a number of platforms: (1) for US$15,000 per country. In some countries, a private insti- producing high-quality, refined cassava flour for human tution pays the fee; in others, a public agency pays (the and industrial use; (2) for producing and using cassava Ministry of Agriculture, for example). In Costa Rica and leaves in animal feeding systems; (3) for producing and Colombia, the annual quota is paid by a group of public and using sweet potato in human food and animal feed; private entities. Additional funding is obtained through spe- (4) producing hydrated ethanol for local use with cas- cial projects and consultancy services. These resources are sava, sweet potato, and sweet sorghum (the technology is invested only in activities defined collectively by the members. small-scale, low-cost, and easily operated and managed by small-scale farmers); and (5) for producing cassava commercially (mechanized planting, partially mecha- THE INNOVATIVE ELEMENT nized harvesting, and soil fertility, pest, and disease man- The innovative aspect of CLAYUCA is its role as a regional agement practices). facilitator of public-private alliances for cassava research ■ Planting and breeding materials. CLAYUCA has facili- and development, using a value chain approach and empha- tated access to improved, elite cassava germplasm devel- sizing competitiveness. Different actors in a member coun- oped by CIAT and other advanced research centers. try’s cassava subsector identify where cassava’s overall com- ■ Communications. CLAYUCA communicates relevant, cur- petitiveness can be improved along the value chain rent information on cassava technologies to stakeholders (production, processing, or utilization). They identify orga- in the form of websites, electronic bulletins, training nizational and technical constraints and formulate and events, annual meetings, study tours, and technical books implement technological interventions. The new empha- and bulletins. sis on competitiveness, a prerequisite for private sector ■ Human resources development. Through training offered involvement in cassava-based industries, has motivated at CIAT and in member countries, CLAYUCA has farmers, especially small-scale farmers, to adopt improved strengthened technical capacity in such areas as cassava production technologies such as better varieties and processing, crop management, product and market improved crop and soil management practices. Increased development, tissue culture, and cassava germplasm competitiveness on the supply side is complemented by pri- evaluation and selection. vate investments and contributions to processing capacity and management. The network’s regional and international During its first decade, CLAYUCA has benefited various character offers particular advantages for countries where actors in the cassava subsector of each member country. It cassava research has been limited by small national budgets also generated the regional benefits described in the sections and little external interaction. that follow. BENEFITS AND IMPACT Benefits to the public sector CLAYUCA’s structure enables members to have better con- Public institutions have taken advantage of the presence of trol of the regional research and development agenda for CLAYUCA in their countries, supported by the strong cassava and participate more equitably in the distribution of research background of CIAT, to improve their capacities in benefits. The consortium also facilitates better access for areas such as managing genetic resources, training technical public and private agencies to technologies generated by personnel, and improving knowledge and information international and advanced research centers. Those centers, about modern technologies for cassava production, process- in turn, benefit from participating in a regional agenda for ing, and utilization. At the country level, it is difficult for cassava research with relatively little investment. one single institution to possess the interdisciplinary MODULE 1: INNOVATIVE ACTIVITY PROFILE 5: CASSAVA DEVELOPMENT RELIES ON PUBLIC-PRIVATE RESEARCH PARTNERSHIPS 91 capacity to scale up new technologies into commercial China, Europe), allowing members to see technologies in activities. Through CLAYUCA, national and regional net- operation and make informed investment decisions. working ensures that experience and knowledge are shared. The wealth of cassava genetic resources in germplasm In some cases, the presence of CLAYUCA has helped to banks at international and advanced research centers will reconfigure relationships between the public and private enable cassava to cope with the effects of climate change, sector and farmer organizations. among other needs. CLAYUCA has helped member coun- At a relatively low cost, CIAT benefited from tries and farmer groups gain better access to this genetic CLAYUCA’s role as a regional forum for planning, financ- diversity for their own in-situ evaluation and selection pro- ing, and implementing cassava-based research and devel- grams. CLAYUCA has also facilitated farmer groups’ access opment to reestablish itself as a stronger actor in the to improved varieties with higher yield potential and greater regional innovation system for cassava. Public and private adaptation to biotic and abiotic stresses. Farmers have ben- institutions that require technologies generated by CIAT efited from the new markets, additional income, and now have access facilitated through CLAYUCA. At the employment opportunities represented by the cassava- same time, CIAT receives stronger feedback from based agroindustries established in some CLAYUCA coun- CLAYUCA stakeholders on the performance of its tech- tries. Through CLAYUCA, some farmers have gained access nologies and emerging problems and priorities in the to special services such as production credits under very cassava subsector. favorable terms (box 1.30). Benefits to the private sector LESSONS LEARNED AND ISSUES FOR (producers and processors) WIDER APPLICATION CLAYUCA is a technology clearinghouse, constantly search- The lessons and issues emerging from CLAYUCA’s work ing worldwide for competitive technologies and transfer- over more than a decade reflect its experiences in inducing ring this information to its stakeholders. Many companies collaboration throughout a large network of diverse lack the budget, time, and capacity to seek this information participants. on their own. A processing technology for cassava starch would be more expensive if obtained in Europe than in Public-private partnerships are built Brazil or in China. The difference in the initial investment on trust and history cost could affect a private entrepreneur’s decision to estab- lish a cassava processing plant in a given country. CLAYUCA The establishment of partnerships among public and pri- organizes study tours to other countries and regions (Brazil, vate actors, farmers groups, NGOs, and other entities is Box 1.30 Raising Cassava’s Profile among Policy Makers in Panama The Panayuca Project, Panama’s stakeholder in infrastructure and handles logistics and marketing. CLAYUCA, is a strategic alliance between Panayuca, a Before Panama’s cassava subsector was affiliated with private company, and the Association of Small and CLAYUCA, credit lines for cassava at premium rates were Medium Agro-producers of Panama (APEMEP). not available to small-scale producers. The government Panayuca’s main goal is to raise living standards in did not regard cassava as a priority crop. After intense Panama’s poorer rural areas by producing cassava and its lobbying led by Panayuca, the government included cas- derivatives. APEMEP is an association of more than 300 sava as one of the crops eligible for credit at very low, organizations, including farmer unions, cooperatives, almost subsidized rates. This policy decision benefits a women’s groups, and indigenous groups, with more large group of small-scale farmers, facilitates their part- than 60,000 individual members. APEMEP members nership with the private sector, and enables farmers and produce the cassava; Panayuca develops the industrial industry to operate at a competitive commercial level. Source: Author. Note: APEMEP = Asociación de Pequeños y Medianos Productores de Panamá. 92 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK facilitated when they already have a shared history and greater voice for the cassava subsector in the policy debate. significant knowledge and trust of one another. CLAYUCA’s The case of Panayuca (described in box 1.30) is one exam- development was strengthened by the effects of previous ple of the relationship between policy and the success of a partnerships and activities between CIAT, civil society, and public-private partnership facilitated through CLAYUCA. farmer groups in many member countries. Another example comes from Costa Rica (box 1.31). After more than a decade of functioning through public- private partnerships, CLAYUCA is well aware that such Different interactions and innovation partnerships have a greater impact when they are sustained mechanisms are important by a group of well-funded technical experts with sufficient Some countries coordinate their CLAYUCA agenda time to dedicate to the needs of the partnership’s stakehold- through a public agency, but in others the private sector or ers. For example, CIAT provided strategic core support for a combination of both sectors is more active. Other mem- CLAYUCA staff, operations, logistics, and management. ber countries have strong traditions of cooperatives and This funding enabled successful institutional learning, the industry associations. Still others have policies that empha- formation of a long-term network of partners, capacity size the social and economic feasibility of a dualistic agri- building, and organizational innovation. The availability of cultural sector, in which small- and large-scale producers such funding cannot be taken for granted, considering the coexist and develop. Others have policies that emphasize dynamic environment in which institutions such as CIAT the importance of science and technology in agricultural operate. Leaving the financing of public-private partner- development. These different traditions, practices, and atti- ships to stakeholders alone may not be sufficient for those tudes have allowed different forms of interaction and coor- partnerships to have an impact. CLAYUCA participants in dination to emerge in work funded by CLAYUCA and its each country must be creative to find complementary partners: strategies for supporting the financial requirements of the partnership. ■ Partnerships between CIAT, cooperative processing plants, and the national agricultural research organiza- Improve coordination in value chains tion in each member country. ■ Creation of an apex association to link cooperatives in Another lesson emerging from CLAYUCA’s experience is processing and marketing innovations. that more attention should be given to coordination across ■ Creation of a research-focused network comprising a value chains. Because public-private partnerships operate in regional consortium, the industry (with its small-scale an environment heavily influenced by policy, stakeholders farmer base), national and international research organ- benefit from operating in a coordinated manner, both inside izations, government, and financial organizations, all and outside the partnership boundaries. For example, in linked to domestic, regional, and international markets. Colombia, the Ministry of Agriculture’s official policy is to support agricultural development and technology genera- tion through “agro-productive value chains.� The cassava Enabling environment for public-private subsector has not organized itself into a centrally coordi- partnerships nated value chain, so cassava projects do not meet govern- The success of public-private partnerships depends greatly ment requirements for funding. They are forced to seek on a supportive policy environment. Most Latin American funding indirectly through more organized value chains and Caribbean countries (excluding the Southern Cone (livestock, poultry, animal feed, bioenergy, human food, and countries, except for Chile) import large quantities of cere- so forth). als to manufacture animal feed. Most governments sought to meet growing demand for feed through policy instru- ments that caused producers of traditional starchy staples Public agencies require sufficient capacity to form productive partnerships such as cassava to compete with imported cereals at a sub- stantial price disadvantage. CLAYUCA has sought to In each CLAYUCA country, public agencies play a central counter this problem in a number of ways: through its role in research and advisory services to improve the com- efforts to develop more efficient production and processing petitiveness of the cassava subsector. These agencies are methods, new cassava-based products and markets, and a often seriously affected by frequent changes in their MODULE 1: INNOVATIVE ACTIVITY PROFILE 5: CASSAVA DEVELOPMENT RELIES ON PUBLIC-PRIVATE RESEARCH PARTNERSHIPS 93 Box 1.31 Policy Action to Diversify the Market for Cassava in Costa Rica Costa Rica’s cassava area is not very large, but intensive Ministry of Agriculture created a country-level Cassava cassava production and processing operations have con- Committee to promote the use of cassava in animal feed verted Costa Rica into the world’s leading exporter of and thus diversify the market for the cassava crop. This frozen cassava and paraffin-coated cassava, principally policy decision means that a large group of institutes to markets in the United States and Europe. In 2008, and entities that were working independently will begin Costa Rica exported 75,000 tons of frozen and paraffin- working in a coordinated fashion. CLAYUCA’s Costa coated cassava, with a market value of US$60 million, Rica group is a member of the new committee and will but a significant share of cassava is not harvested play an important role in transferring CLAYUCA tech- because it does not meet export standards. In 2010, the nologies for growing and processing cassava for feed. Source: Author. institutional, political, and financial environment, however. Instability and frequent changes in government Rarely can they implement long-term strategies to support support for research cassava farmers and enhance the subsector. The skills and In many countries, every change in the central government scientific capacity of technical personnel in some (such as a new president or minister of agriculture) brings a CLAYUCA countries must be strengthened. In some cases wave of new policies that alter support for agricultural the private sector is willing to finance such training, but research and development. Public support for cassava some of the burden must be shared by public agencies, or research in Colombia, for example, has run the gamut from they will not be able to form productive partnerships with full to negligible support and funding for cassava technol- private organizations. Successful partnership will be facili- ogy development projects. It is vital for public-private part- tated if public agencies allocate specific funding for training nerships to seek independent, stable financing sources to through specific projects, competitive grants, donor sup- avoid the vagaries of public funding and successfully pursue port, and other means. partners’ research priorities. 94 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 6 Rural Productive Alliances: A Model for Overcoming Market Barriers Marie-Hélène Collion, World Bank Michelle Friedman, World Bank SYNOPSIS enter into and benefit sustainably from modern agricultural value chains. The “supermarket revolution� has changed the ural productive alliances are formal agreements that R bring commercial buyers together with producer organizations. The alliances aim to increase incomes and employment for rural producers through their parameters of market demand: Exporters, agribusinesses, and supermarkets require large quantities of consistently high-quality goods that meet sanitary and phytosanitary standards and arrive on time. Owing to the scale of their participation in modern supply chains, sometimes with a production, high transaction costs, and inability to pro- particular emphasis on lagging regions or indigenous pop- vide goods of consistent quality, small-scale producers ulations. Producers overcome market barriers and gain sta- often are consigned to selling in less demanding but less bility through consistent, higher prices while buyers receive rewarding markets, such as open-air markets, or through a consistent, reliable supply of goods meeting their quality intermediaries. Smallholders’ lack of information regarding standards. Alliances are initially funded through grants for markets, especially their poor knowledge of distribution technical assistance (in production, management, and mar- channels and prices (in relation to product characteristics keting) for the producer organization, along with infra- and timing of delivery), undermines their ability to negoti- structure and equipment. Grant recipients in some organi- ate with buyers. zations repay a share of the grant to the organization to create revolving funds that will provide credit to members when external funding ends. Projects to support rural pro- PROJECT OBJECTIVES AND DESCRIPTION ductive alliances can build upon lessons from earlier proj- ects by, for example, involving financial institutions such as A rural productive alliance is an economic agreement commercial banks from the beginning; working with buyers between formally organized producers and at least one to sustain and scale up activities when project funding ends; buyer. The agreement specifies: product characteristics, analyzing producer organizations’ ability to use a grant pro- such as size and varieties to be produced; quantity to be ductively; and assessing the risk that a buyer or producer produced/bought; production modalities, such as how a organization may leave the alliance. Producer organizations product will be delivered, by whom, and when, as well as need to build marketing skills and may benefit from a third- grading and packing requirements; payment modalities party agent or broker to enter particular high-value mar- and price determination criteria; and the buyer’s contribu- kets. Buyers can improve the alliance through sensitization tion, such as technical assistance, specific inputs, and to the benefits and transactions costs of working with small- arrangements for input reimbursement (for example, at the scale producers and through support to optimize the mar- time of sale). ketability of niche products. Projects require a handover strategy so that domestic actors can fund, implement, and The project cycle scale up activities when project support ends. The project cycle begins with a call for proposals, often from the agriculture ministry to producer organizations and their CONTEXT commercial partners. The producer organization starts the Whether they are selling to domestic or export markets, process by preparing a basic profile of a potential business smallholders worldwide find it increasingly challenging to plan, which if selected is developed into a full-fledged 95 business plan with the help of a private service provider. with the objective of monitoring implementation of the The private service provider also produces feasibility stud- business plan. The committee facilitates communication ies, which are reviewed by a multistakeholder committee to between buyer and seller. determine the business plan’s feasibility. Plans with satis- factory technical, financial, and market feasibility receive Types of alliances funding. Alliances can be balanced fairly evenly between producers and buyers. They may also be dominated by either produc- Who funds rural productive alliances? ers or buyers. World Bank project funds are transferred to producer orga- In well-balanced alliances, buyers compete to source nization accounts in installments, based on evidence that from organized producers. Producers can meet the buyer’s the organization has used the previous installment accord- demands and accrue individual benefits from collective ing to the business plan and that expected outputs have efforts. Producers in this situation improve their bargaining been achieved. Grants from the project are matched with power with the buyer. Success comes from the productive contributions from the producer organization and the use of technical assistance and the buyer’s ability to market buyer (in the form of technical assistance and inputs) and the product based on its particular characteristics, such as possibly funding from public and/or private institutions, whether it is organic or has been produced for a specific such as municipal governments or commercial banks. niche market. In Quindio, Colombia, plantain producers have a strong foothold in determining the prices of their products. The What do the grants finance? buyer provides technical assistance as needed, and both the The grants finance technical assistance in production, man- buyer and producer organization are more competitive at agement, and marketing for members of the producer orga- their respective stages in the plantain value chain than nization. The technical assistance mitigates risks for the before. buyer and builds trust between partners, which is essential In alliances dominated by a single buyer, the producer to maintaining and sustaining the relationships. The grants organization has limited room to negotiate, even if both par- also cofinance infrastructure or equipment such as irriga- ties benefit from being in the alliance. In instances where the tion equipment for individuals or collective storage and buyer is the dominant actor, the buyer helps the producers packing facilities. In certain instances, project grants fund access the market. The added value of collectively organizing seed or startup capital for inputs to help smallholders over- and creating the alliance will probably go to the buyer, how- come initial financial barriers when dealing with commer- ever, unless special efforts are made to help producers cial banks. develop negotiating skills to increase their leverage. In other situations, with a diversity of marketing possibilities for the producers, there is a risk that producers will circumvent the Creating savings and sustainable funding buyer and sell directly to alternate markets. In several countries, members of producer organizations One alliance of this type is Agrìcola Cafetelera Buena agree to repay to their organization a share of the grant they Vista, a coffee alliance in Bolivia. The buyer provides pro- receive from the project. (Technical assistance is typically ducers with technical assistance to ensure that the coffee is not reimbursed.) This repayment creates a “revolving fund� certified organic. In this instance, the buyer is very involved that the producer organization will use to provide credit to with the producer organization and works to ensure good its members when project support is over. quality conditions for the producers. Given the high costs of organic coffee production and lack of marketing capability, the single buyer corners the market, however, leaving pro- Implementing the rural productive alliances ducers with little room to negotiate. For each alliance, a business agreement is signed between the agency in charge of project implementation, the com- THE INNOVATIVE ELEMENT mercial partner, the technical service provider, and the pro- ducer organization. An Alliance Management Committee is In summary, rural productive alliance projects enable pro- formed, which includes representatives from each actor, ducer organizations to overcome the problems faced by 96 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK individual, small-scale producers in accessing markets differentiate their products from mainstream products (buyers) in a sustainable way. A well-functioning producer while meeting new consumer demands. organization is key to the success of the model. Working through their own organization, producers achieve LESSONS LEARNED AND ISSUES FOR economies of scale and can ensure product quality and WIDER APPLICATION traceability as required by the market. The revolving fund managed by the producer organization enables the organi- The lessons from unsustainable alliances have been useful in zation to develop financial management skills as well as developing recommendations to increase the likelihood that seed capital to secure future credit for members, thereby other rural productive alliances will be implemented suc- providing a means to maintain competitiveness after the cessfully and become sustainable. The recommendations project has ended. focus particularly on actions to ensure that alliances remain strong and can continue even after external support ends. BENEFITS, IMPACT, AND EXPERIENCE Lessons Benefits to producers include the following: A main risk of any alliance is that either the producer orga- ■ Around 600 rural productive alliances have been estab- nization or commercial buyer will default from the partner- lished in the four countries that have already begun ship. Of the 170 alliances implemented through the first implementation (Colombia, Bolivia, Panama, and phase of the Colombia project—the oldest of the rural pro- Guatemala), benefitting around 32,600 rural families. ductive alliance projects in Latin American and the ■ Members of producer organizations and the organiza- Caribbean—39 have not received World Bank financing for tions themselves have increased their technical and man- at least two years. Of these, 26 have maintained commercial agement skills and improved their market intelligence, agreements with their buyers or have identified new ones, even if the alliance between the commercial buyer and representing a success rate of 67 percent. producer organization is not sustained. Other alliances have not endured, for several reasons. ■ In some countries, producer organizations and their Often more than one factor contributes to the demise of an members have improved their access to private financial alliance. markets. ■ Women producers benefit. In Colombia, for example, ■ Producers revert to previous practices. Producers have 22 percent of the beneficiaries are women producers. defaulted because there is a net benefit for them in ■ The overall result is higher agricultural incomes and returning to their traditional markets, despite having increased rural employment, especially for agricultural secured the buyer’s partnership. The default arises when workers and women working in postharvest activities. producers, owing to technical or managerial problems, cannot sustain the stringent requirements of high-value Benefits to buyers include the following: markets (see below). ■ Producer organizations lack social cohesion. Producer ■ Buyers secure access to products of consistently high organizations can be dysfunctional in various ways. The quality. They meet the sanitary and phytosanitary stan- failure of representatives and members to communicate, dards that are applicable to international markets and poor management, lack of capacity to manage conflicts, increasingly important for domestic markets. In addi- and lack of social cohesion will all negatively affect the tion, by providing improved inputs (seed, in particular) functioning of an alliance. In Colombia, lack of social and training, buyers can obtain raw materials of the cohesion and inability to manage conflicts were perhaps quality they require. the main reasons that alliances failed. This situation ■ Through the alliance, private companies invest in a com- often occurred when the producer organization was munity, which is a time-tested way for companies to encouraged to include more smallholders to make the secure producer loyalty. proposed alliance more socially or economically justifi- ■ Companies that buy locally, from local small-scale able. Because the strength of the producer organization is producers, enhance their image of being socially and a prerequisite for a successful alliance, it is important to environmentally responsible. This image helps them to identify such weaknesses early on and provide support to MODULE 1: INNOVATIVE ACTIVITY PROFILE 6: RURAL PRODUCTIVE ALLIANCES: A MODEL FOR OVERCOMING MARKET BARRIERS 97 improve organizational and management skills. In risk that a buyer or producer organization may default some cases, there is a need for additional support after from the alliance. Feasibility studies look into the market subproject implementation. and technical aspects of the alliance, but often they fail to ■ The producer organization cannot provide services to its analyze how the organization functions and its capacity members. Producer organizations are often under social to manage a partnership with a buyer. pressure from the rural community at large to make ser- ■ To sustain participation in high-value markets, the pro- vices accessible to nonmembers. Producer organizations ducer organization needs to build its marketing skills. should provide services, but only to members. This strat- For example, the organization could benefit from a egy keeps membership attractive and encourages pro- third-party market agent or broker to assist in breaking ducers to market through the organization so that it can into particular markets. Productive alliance projects continue complying with contractual arrangements should consider establishing such brokers, whose role made with the buyer. Otherwise the organization is likely would be to scout the market for opportunities and iden- to fail. tify the producer groups that can take advantage of them. ■ The producer organization lacks adequate commercial or These brokers should be private sector agents. professional skills. Producer organizations also require ■ Three key areas of support could help buyers improve management, organizational, and marketing skills to the sustainability and productivity of the alliance:1 provide services of good quality, such as the capacity to (1) sensitization to the benefits of working with small- manage a revolving fund. In Colombia, alliances that scale producers; (2) support to optimize marketability of continued for at least two years after the project ended niche products; and (3) sensitization to the transaction often involved two-tier producer organizations: grass- costs associated with working with small-scale produc- roots organizations and their union. The first-tier ers. Initially buyers need support to manage their rela- grassroots organizations are involved in managing pro- tionship better with small-scale producers. An example is duction. At the union level, the organization deals with being aware of smallholders’ cash constraints and the procuring inputs, marketing, and financing, with paid difficulties they face in managing deferred payments, professional staff. especially with supermarkets. ■ During implementation, projects need to address the constraints to sustainability that alliances may face after Recommendations project support ends. As discussed, a well-functioning After nearly a decade of implementing rural productive revolving fund is fundamental for ensuring that alliances alliances in Latin America and the Caribbean, it is possible can be sustained. It enables producers to access credit to identify several recommendations to ensure successful within their own organization and to demonstrate to implementation and sustainability of the alliances: financial institutions their ability to manage savings and credit. It needs to be promoted more forcefully during ■ Projects should emphasize cofinancing from commercial project implementation. credit sources in addition to matching grants to fund ■ Projects need to include a handover strategy so that business plans. Involving commercial banks means that domestic actors can fund, implement, and scale up activ- the issue of collateral and guarantees must be resolved. ities when project support ends. At the moment, only the Some projects establish guarantee funds to spread the Colombia project is concerned with these issues. By risks to commercial banks and encourage them to part- focusing on scaling up its activities through the public ner in funding rural alliances. Involving financial insti- sphere, however, the project is likely to face serious obsta- tutions at the beginning of the project can also build cles, such as the lack of technical capacity, budgetary their trust in producer organizations and help producer pressures on public officials, and political problems organizations learn to deal with commercial banks. This (changes in government easily lead to changes in people, learning on both sides is important to ensure that priorities, and policies). An alternative would be to work smallholders can access credit and partnerships can be on the side of the buyers. Producer organizations consti- sustained. tute one source of procurement for an agricultural good ■ More thorough and realistic feasibility studies of busi- that buyers need for their business, and they may be the ness plans must analyze the ability of the producer orga- main source if it is produced mostly by smallholders. nization to use the matching grant productively and the Once the project has demonstrated the potential that 98 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK producer organizations represent, buyers should be the future, a good approach may be to combine the focus on interested in continuing to invest in producer organi- producer/buyer partnerships with a value chain approach. zations, providing technical support, and prefinancing The objective would be to create better productive inputs. conditions—for example, by improving the quality of ser- vices provided to actors in the chain; improving the capac- ity of agencies that control compliance with sanitary and ROOM TO INNOVATE IN RURAL PRODUCTIVE phytosanitary standards; supporting research, development, ALLIANCES BY SUPPORTING VALUE CHAINS and innovation; addressing the administrative and institu- Future rural productive alliance projects should build upon tional aspects of certification; promoting organic produc- the lessons of earlier projects, especially lessons about tion or access to other high-value niches; and improving involving commercial banks from the start and working on market intelligence. Productive infrastructure, trade facilita- the side of buyers and agribusinesses to sustain and scale up tion services, and the business environment are additional activities when external funding ends. Scaling up is an issue, areas that a value chain approach could address. This as rural productive alliances are still relatively small-scale emphasis could promote opportunities for promising sub- interventions; another issue is the need to improve the com- sectors and can help roll out the alliance model on a petitiveness of supply chains that benefit smallholders. In national scale. MODULE 1: INNOVATIVE ACTIVITY PROFILE 6: RURAL PRODUCTIVE ALLIANCES: A MODEL FOR OVERCOMING MARKET BARRIERS 99 NOTES Thematic Note 1 Module 1 Overview 1. Empresa Brasileira de Pesquisa Agropecuária (Brazilian Enterprise for Agricultural Research). 1. For example, a culture of collaboration among stake- holders was a major factor facilitating collaboration and 2. Sistema Nacional de Investigación y Transferencia de innovation in Finland and Korea (see module 6, TN 2). Tecnología (SNITT, National System of Research and Tech- nology Transfer). 2. Not all interactions result in collaboration. Interactions can also be antagonistic and result in conflict. 3. Government as well as leaders of the various innovation-promoting participants in the AIS need a broad, 3. Module 4 discusses the role of, functions of, and long-term perspective on agricultural development and investments that research organizations require to per- change, along with a sense of what is needed for such form well in an AIS. TN 2 discusses public-private development. They will need not only to identify innovation research partnerships and IAPs 2 and 3 describe the for- and development opportunities but also to understand the mation of research consortia supported by competitive historical, cultural, and social complexities in rural areas grants. Module 5 provides further detail on innovation and among consumers. A strategic vision usually describes a funds, including competitive research grants and match- set of ideals and priorities, a picture of the future—but the ing grants. strategic vision is also a bridge between the present and the 4. Despite this weakness, a few researchers with strong future, and it should be shared by the actors involved. research capabilities are often found in these organizations. 4. However, the actual financing and allocation of funds 5. The analysis of how public research organizations can should belong to another entity, such as ministry or other be transformed to better integrate into the AIS exceeds the special agency. scope of this module. This issue is discussed in module 4 5. For comparison, see module 6, TN 2 on innovation sys- and in Davis, Ekboir, and Spielman (2008). tem governance. 6. Every individual in an organization has at the very least the power to boycott the organization’s activities. 7. As noted, a “value chain� is the set of linked activities Thematic Note 2 that a firm organizes to produce and market a product 1. Fodder innovation project, http://www.fodderinnovation (Porter 1985). The value chain is a network with a commer- .org/. cial focus, one actor that “organizes� and commands the chain (Christensen, Anthony, and Roth 2004), and a rela- 2. Golden Rice Project, http://www.goldenrice.org/. tively narrow and stable membership. 3. For an example of this type of research and its problems, 8. In terms of coordination, some organizations coordi- see Hall et al. 2001. nate other organizations (for example, a commodity board 4. Networks with this combination of actors are said to coordinates producer organizations, traders, and manufac- exhibit a “small-world structure.� turers); some coordinate individuals (for example, a farmer organization); and others coordinate both organizations and individuals (as in a value chain). Thematic Note 3 9. For an example from Chile, see http://www.cnic.cl/ 1. See http://www.federaciondecafeteros.org/particulares/ content/view/469646/Un-camino-de-desarrollo-para-Chile en/. .html; for one from the United Kingdom, see http://www 2. According to Fairtrade Labelling Organizations Inter- .innovateuk.org/; for one from the Netherlands, see national (2011), Fairtrade-certified sales amounted to http://www.innovatienetwerk.org/en/organisatie/toon/11/. approximately €3.4 billion worldwide in 2008. Sales of 10. Rural households can also form community associa- Fairtrade-certified products grew 15 percent between 2008 tions to solve local problems, such as problems with water and 2009. supply or education, but these organizations are not dis- 3. A research institute (CIP) organized Papa Andina, the cussed in this module. Andean potato network; the NGO Africare supported 11. See module 6, TN 2 on innovation system governance. smallholders’ access to markets, as have civil society organi- 12. Module 4, TN 4 provides further details on innovation zations (such as the Mexican Produce Foundations) and brokers. farmer organizations (IAP 2). 13. Despite their institutional weakness, most universities 4. Providing public support for extension and advisory and research and extension organizations have some very services does not mean that they are provided by tradi- good professionals. tional public organizations. In the past two decades, many 100 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK institutional arrangements that include public organizations, est width and depth needed to obtain proper coverage of the private partners, and civil society have been tried (module 3). seed. Conventional tillage practices involve multiple tractor 5. Since it is not possible to produce high-value products passes to accomplish plowing, harrowing, planking, and of uniform quality, wealthier farmers who produce large seeding operations; no-till requires only one or two passes volumes sell their produce through more than one channel. for spraying herbicide and seeding. In addition to reducing The poorest farmers, on the other hand, have to sell at the the number of operations, no-till requires less powerful farm gate or in local markets. tractors and reduces equipment depreciation. While no-till 6. For a description, see Nandakumar et al. (2010). principles are the same everywhere—minimum soil distur- bance, keeping soil covered, and using crop rotations—the actual packages differ greatly by location. Thematic Note 4 1. See http://www.prolinnova.net/. Innovative Activity Profile 2 2. ROPPA, Réseau des organisations paysannes et des 1. Boards for many foundations, research institutes, and producteurs agricoles de l’Afrique de l’Ouest (http://www firms operate in this way. The Produce Foundations are .roppa.info/?lang=en). legitimate representatives of farmers because other actors in 3. The module overview lists the capabilities required the AIS recognize them as such, not because farmers elect (box 1.7); IAP 3 presents an example of developing them their authorities (Ekboir et al. 2009). over the long term. 4. The specialized literature refers to the creation of knowledge as “invention.� An invention becomes an “inno- Innovative Activity Profile 3 vation� only when it is first used in a product that reaches 1. CONICYT (Comisión Nacional de Investigación Cientí- the market or produces a change in a social process. fica y Tecnológica) (www.conicyt.cl). 5. See Ekboir et al. (2009) for an example. 2. Corporación de Fomento de la Producción (http://www 6. AACREA is the Asociación Argentina de Consorcios .corfo.cl/acerca_de_corfo/emprendimiento_e_innovacion/ Regionales de Experimentación Agrícola (Argentine que_es_innovachile). Association of Regional Consortiums for Agricultural Experimentation). Innovative Activity Profile 4 7. Centro de Investigación de la Caña de Azúcar de Colombia (http://www.cenicana.org/index.php). 1. Financed through community savings and thrift, the Government of Andhra Pradesh, commercial banks, and the World Bank. Innovative Activity Profile 1 1. ICI’s role is described in detail because it provides Innovative Activity Profile 6 important insights into the dynamics of innovation. In par- 1. Currently no support is offered to buyers in the rural ticular, it shows that (1) demand-driven approaches often productive alliance projects in Latin America and the miss important opportunities—the most important innova- Caribbean. tions start as curiosity-driven projects that eventually result in something valuable; (2) innovation processes are essen- tially uncertain, and it is difficult to set clearly defined objec- REFERENCES AND FURTHER READING tives; (3) motivated leaders are critical for success; and (4) Module 1 Overview building an innovation network is also an uncertain process that requires a lot of experimentation. Axelrod, R., and M. D. Cohen. 1999. Harnessing Complexity: 2. Innovators have often found themselves in a similar Organizational Implications of a Scientific Frontier. New situation—that is, they have a product that provides a new York: Free Press. service for which there is limited demand. Subsequent inno- Brimble, P., and R. F. Doner. 2007. “University-Industry vations are necessary to create a market for the original Linkages and Economic Development: The Case of Thai- innovation. Examples include the telephone, Internet com- land.� World Development 35 (6): 1021–36. merce, computer hard drives, and mobile telephones Christensen, C. M., S. D. Anthony, and E. A. Roth. 2004. (Christensen 2003). Seeing What’s Next: Using the Theories of Innovation to 3. No-till is defined as planting crops in previously unpre- Predict Industry Change. Boston: Harvard Business pared soil by opening a narrow slot or trench of the small- School Press. MODULE 1: NOTES, REFERENCES AND FURTHER READING 101 CIAT (International Center for Tropical Agriculture). 2010. Intarakumnerd, P., P. Chairatana, and T. Tangchitpiboon. “Diversified Livelihoods through Effective Agro-enter- 2002. “National Innovation System in Less Successful prise Interventions: Creating a Cumulative Learning Developing Countries: The Case of Thailand.� Research Framework between CIAT and Development NGOs in Policy 31 (8–9): 1445–57. Central America.� Alianza de Aprendizaje, http://www Klerkx, L., N. Aarts, and C, Leeuwis. 2010. “Adaptive .alianzasdeaprendizaje.org/salon-del-conocimiento/ Management in Agricultural Innovation Systems: The item/60-diversified-livelihoods-through-effective-agro- Interactions between Innovation Networks and Their enterprise-interventions-creating-a-cumulative-learn- Environment.� Agricultural Systems 103 (6): 390–400. ing- framework-between-ciat-and-development-ngo-in- Klerkx, L., and C. Leeuwis. 2008. “Balancing Multiple central-america. Interests: Embedding Innovation Intermediation in the Davis, K., J. M. Ekboir, and D. Spielman. 2008. “Strengthen- Agricultural Knowledge Infrastructure.� Technovation ing Agricultural Education and Training in Sub-Saharan 28 (6): 364–78. Africa from an Innovation Systems Perspective: A Case ———. 2009. “The Emergence and Embedding of Innova- Study of Mozambique.� Journal of Agricultural Education tion Brokers at Different Innovation System Levels: and Extension 14 (1): 35–51. Insights from the Dutch Agricultural Sector.� Technologi- Dosi, G., R. R. Nelson, and S. G. Winter. 2000. “Introduc- cal Forecasting and Social Change 76 (6): 849–60. tion: The Nature and Dynamics of Organizational Capa- Lundvall, B.-Å., ed. 1992. National Systems of Innovation: bilities.� In The Nature and Dynamics of Organizational Towards a Theory of Innovation and Interactive Learning. Capabilities, ed. G. Dosi, R. R. Nelson, and S. G. Winter. London: Frances Pinter. New York: Oxford University Press. Nelson, R., ed. 1993. National Innovation Systems: A Com- Ekboir, J., K. Boa, and A.A. Dankyi. 2002. “Impacts of parative Analysis. Oxford: Oxford University Press. No-Till Technologies in Ghana.� CIMMYT Economics Neven, D., M. M. Odera, T. Reardon, and H. Wang. 2009. Program Paper 02-01. “Kenyan Supermarkets, Emerging Middle-Class Horti- Ekboir, J. M., G. Dutrénit, G. Martínez V., A. Torres Vargas, cultural Farmers, and Employment Impacts on the Rural and A. Vera-Cruz. 2009. Successful Organizational Learn- Poor.� World Development 37 (11): 1802–11. ing in the Management of Agricultural Research and OECD (Organisation for Economic Co-operation and Innovation: The Mexican Produce Foundations. IFPRI Development). 2005. Governance of Innovation Systems. Research Report 162. Washington, DC: International Vol. 1: Synthesis Report. Paris: OECD. Food Policy Research Institute. Porter, M. E. 1985. Competitive Advantage: Creating and Sus- Fagerberg, J. 2005. “Innovation: A Guide to the Literature.� taining Superior Performance. New York: Free Press. In The Oxford Handbook of Innovation, ed. J. Fagerberg, Powell, W. W., and S. Grodal. 2005. “Networks of Innova- D. C. Mowery, and R. R. Nelson. New York: Oxford tors.� In The Oxford Handbook of Innovation, ed. J. Fager- University Press. berg, D. C. Mowery, and R. R. Nelson. New York: Oxford Fountain, J. E. 1999. “Social Capital: A Key Enabler of University Press. Innovation.� In Investing in Innovation: Creating Research Robinson, L. J., and J. L. Flora. 2003. “The Social Capital Par- and Innovation Policy That Works, ed. L. M. Branscomb adigm: Bridging across Disciplines.� American Journal of and J. H. Keller. Cambridge, MA: MIT Press. Agricultural Economics 85 (5): 1187–93. Freeman, C. 1987. Technology Policy and Economic Perfor- Simon, H. A. 1981. The Sciences of the Artificial. 2d ed. Cam- mance: Lessons from Japan. New York: Frances Pinter. bridge, MA: MIT Press. Hakansson, H., and D. Ford. 2002. “How Should Companies Skarzynsky, P., and R. Gibson. 2008. Innovation to the Core: Interact in Business Networks?� Journal of Business A Blueprint for Transforming the Way Your Company Research 55 (2): 133–39. Innovates. Boston: Harvard Business School Press. Hartwich, F., A. Alexaki, and R. Baptista. 2007. Innovation Spitzer, D. R. 2007. Transforming Performance Measurement: Systems Governance in Bolivia: Lessons for Agricultural Rethinking the Way We Measure and Drive Organizational Innovation Policies. IFPRI Discussion Paper 00732. Success. New York: AMACOM. Washington, DC: International Food Policy Research Vera-Cruz, A., G. Dutrénit, J. M. Ekboir, G. Martínez V., and Institute. A. Torres Vargas. 2008. “Virtues and Limits of Competi- Hellin, J., M. Lundy, and M. Meijer. 2009. “Farmer Organi- tive Funds to Finance Research and Innovation in the zation, Collective Action, and Market Access in Meso- Agricultural Sector: The Case of the Mexican Produce America.� Food Policy 34 (1): 16–22. Foundations.� Science and Public Policy 35 (7): 501–13. 102 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Vuylsteke, A., and G. Van Huylenbroeck. 2008. “Coordination Action for Market Chain Innovation in the Andes.� Food of Collective Action in the Agro-food Sector.� Presented at Policy 34 (1): 31–38. the Twelfth Congress of the European Association of Agri- Ekboir, J. M. 2002. “Developing No-Till Packages for Small- cultural Economists, August 26–29, Ghent. Scale Farmers.� In World Wheat Overview and Outlook, World Bank. 2006. “Enhancing Agricultural Innovation: ed. J. M. Ekboir. Mexico, D.F.: International Maize and How to Go Beyond the Strengthening of Research Sys- Wheat Improvement Center. tems.� World Bank, Washington, DC. ———. 2003. “Innovation Systems and Technology Policy: ———. 2009. “Gender in Agriculture Sourcebook.� World Zero Tillage in Brazil.� Research Policy 32 (4): 573–86. Bank, Washington, DC. Ekboir, J. M., G. Dutrénit, G. Martínez V., A. Torres Vargas, and A. Vera-Cruz. 2009. Successful Organizational Thematic Note 1 Learning in the Management of Agricultural Research and Innovation: The Mexican Produce Foundations. IFPRI Allegri, M. 2002. “Partnership of Producer and Government Research Report 162. Washington, DC: International Financing to Reform Agricultural Research in Uruguay.� Food Policy Research Institute. In Agricultural Research Policy in an Era of Privatization, Hall, A., G. Bockett, S. Taylor, M. V. K. Sivamohan, and N. ed. D. Byerlee and R. G. Echeverria, 150–21. Oxon, U.K.: Clark. 2001. “Why Research Partnerships Really Matter: CABI. Innovation Theory, Institutional Arrangements, and Byerlee, D., and G. Alex. 1998. Strengthening National Agri- Implications for Developing New Technology for the cultural Research Systems: Selected Issues and Good Prac- Poor.� World Development 29 (5): 783–97. tice. Washington, DC: World Bank. Hartwich, F., J. Tola, A. Engler, C. Gonzalez, G. Ghezan, Hartwich, F., A. Alexaki, and R. Baptista. 2007. “Innovation J. M. P. Vazques-Alvarado, J. A. Silva, J. J. Espinoza, and Systems Governance in Bolivia: Lessons for Agricultural M. V. Gottret. 2007. Building Public–Private Partnerships Innovation Policies.� Washington, DC: International for Agricultural Innovation. Washington, DC: Interna- Food Policy Research Institute (IFPRI). tional Food Policy Research Institute. Klerkx. L., A. Hall, and C. Leeuwis. 2009. “Strengthening Innovation Network. 2011. http://www.innovatienetwerk Agricultural Innovation Capacity: Are Innovation Bro- .org/en/. kers the Answer?� International Journal of Agricultural Resources, Governance, and Ecology 8 (5-6): 409–38. Laxmi, V., O. Erenstein, and R. K. Gupta. 2007. Impact of Klerkx, L., and C. Leeuwis. 2008. “Delegation of Authority Zero Tillage in India’s Rice-Wheat Systems. Mexico, in Research Funding to Networks: Experiences with a D.F.: International Maize and Wheat Improvement Multiple Goal Boundary Organization.� Science and Center. Public Policy 35 (3): 183–96. Powell, W. W., and S. Grodal. 2005. “Networks of Innova- Ohler, F., W. Polt, A. Rammer, and J. Schindler. 2005. tors.� In The Oxford Handbook of Innovation, ed. J. Fager- “Governance in Austrian Information Society Policy.� berg, D. C. Mowery, and R. R. Nelson. New York: Oxford In Governance of Innovation Systems, Vol. 2. Paris: University Press. Organisation for Economic Co-operation and Develop- Rycroft, R. W., and D. E. Kash. 1999. The Complexity Chal- ment (OECD). lenge: Technological Innovation for the 21st Century. Sci- World Bank. 2006a. Agriculture Investment Sourcebook. ence, Technology, and the International Political Econ- Washington, DC. omy Series. New York: Cassell. ———. 2006b. “Institutional Innovation in Agricultural Spielman, D. J., K. E. Davis, M. Negash, and G. Ayele. 2008. Research and Extension Systems in Latin America and Rural Innovation Systems and Networks: Findings from a the Caribbean.� Washington, DC. Study of Ethiopian Smallholders. Discussion Paper 00759. ———. 2006c. National Agriculture Innovation Project. Washington, DC: International Food Policy Research World Bank Project Appraisal Document, Washington, Institute. DC. USAID (U.S. Agency for International Development). 2004. “Toolkit for Alliance Builders.� Washington, DC: USAID. http://pdf.usaid.gov/pdf_docs/Pnada827.pdf. Thematic Note 2 World Bank. 2006. “Enhancing Agricultural Innovation: Devaux, A., D. Horton, C. Velasco, G. Thiele, G López, How to Go Beyond the Strengthening of Research Sys- T. Bernet, I. Reinoso, and M. Ordinola. 2009. “Collective tems.� World Bank, Washington, DC. MODULE 1: NOTES, REFERENCES AND FURTHER READING 103 Thematic Note 3 Wang, H., X. Dong, S. Rozelle, J. Huang, and T. Reardon. 2009. “Producing and Procuring Horticultural Crops Devaux, A., D. Horton, C. Velasco, G. Thiele, G. López, with Chinese Characteristics: The Case of Northern T. Bernet, I. Reinoso, and M. Ordinola. 2009. “Collective China.� World Development 37 (11): 1791–801. Action for Market Chain Innovation in the Andes.� Food Policy 34 (1): 31–38. World Bank. 2006. “Enhancing Agricultural Innovation: How to Go Beyond the Strengthening of Research Sys- Fairtrade Labelling Organizations International. 2011. tems.� World Bank, Washington, DC. “Facts and Figures. FairTrade International. http://www .fairtrade.net/facts_and_figures.html. Hellin, J., M. Lundy, and M. Meijer. 2009. “Farmer Organi- Thematic Note 4 zation, Collective Action, and Market Access in Meso- America.� Food Policy 34 (1): 16–22. Christensen, C. M., S. D. Anthony, and E. A. Roth. 2004. Nandakumar, T., K. Ganguly, P. Sharma, and A. Gulati. 2010. Seeing What’s Next: Using the Theories of Innovation to “Food and Nutrition Security Status in India: Opportu- Predict Industry Change. Boston: Harvard Business nities for Investment Partnerships.� ADB Sustainable School Press. Development Working Paper 16. Asian Development Davila, T., M. J. Epstein, and R. Shelton. 2006. Making Bank, Manila. Innovation Work: How to Manage It, Measure It, and Neven, D., M. M. Odera, T. Reardon, and H. Wang. 2009. Profit from It. Upper Saddle River, NJ: Wharton School “Kenyan Supermarkets, Emerging Middle-Class Horti- Publishing. cultural Farmers, and Employment Impacts on the Rural Devaux, A., D. Horton, C. Velasco, G. Thiele, G. López, T. Ber- Poor.� World Development 37 (11): 1802–11. net, I. Reinoso, and M. Ordinola. 2009. “Collective Action Poitevin, B., and S. Hassan. 2006. Marketing Extension: A for Market Chain Innovation in the Andes.� Food Policy 34 Powerful Process in 6 Steps. Dhaka: Livelihoods, Empow- (1): 31–38. erment, and Agroforestry Project. Ekboir, J. M., G. Dutrénit, G. Martínez V., A. Torres Vargas, Reardon, T., C. B. Barret, J. A. Berdegué, and J. F. M. Swin- and A. Vera-Cruz. 2009. Successful Organizational nen. 2009. “Agrifood Industry Transformation and Small Learning in the Management of Agricultural Research and Farmers in Developing Countries.� World Development Innovation: The Mexican Produce Foundations. IFPRI 37 (11): 1717–27. Research Report 162. Washington, DC: International Reardon, T., J. A. Berdegué, F. Echánove, R. Cook, N. Tucker, Food Policy Research Institute. A. Martínez, R. Medina, M. Aguirre, R. Hernández, and Hartwich, F., J. Tola, A. Engler, C. Gonzalez, G. Ghezan, F. Balsevich. 2007. “Supermarkets and Horticultural J. M. P. Vazques-Alvarado, J. A. Silva, J. J. Espinoza, and Development in Mexico: Synthesis of Findings and M. V. Gottret. 2007. Building Public-Private Partnerships Recommendations to USAID and GOM.� Report sub- for Agricultural Innovation. Washington, DC: Interna- mitted to USAID/Mexico and USDA/Washington, tional Food Policy Research Institute. August 10. N.p: N.p. Ochieng, C. M. O. 2007. “Development through Positive Shapira, P. 1999. “Manufacturing Extension: Performance, Deviance and Its Implications for Economic Policy Challenges, and Policy Issues.� In Investing in Innova- Making and Public Administration in Africa: The Case of tion: Creating Research and Innovation Policy that Works, Kenyan Agricultural Development, 1930–2005.� World ed. L. M. Branscomb and J. H. Keller. Cambridge, MA: Development 35 (3): 454–79. MIT Press. Rondot, P., and M.-H. Collion, eds. 2001. Agricultural Pro- Skarzynsky, P., and R. Gibson. 2008. Innovation to the ducer Organizations: Their Contribution to Rural Capac- Core: A Blueprint for Transforming the Way Your ity Building and Poverty Reduction. Washington, DC: Company Innovates. Boston: Harvard Business School RDV and World Bank. Press. Skarzynsky, P., and R. Gibson. 2008. Innovation to the Core: Vermeulen, S., J. Woodhill, F. J. Proctor, and R. Delnoye. A Blueprint for Transforming the Way Your Company 2008. “Chain-wide Learning for Inclusive Agrifood Innovates. Boston: Harvard Business School Press. Market Development: A Guide to Multi-stakeholder van der Veen, R. 2000. “Learning Natural Resource Man- Processes for Linking Small-scale Producers with Modern agement.� In Deepening the Basis of Rural Resource Markets.� International Institute for Environment and Management: Proceedings of a Workshop, ed. I. Guijt, Development, London; Wageningen University and J. Berdegue, and M. Loevinsohn. The Hague: Interna- Research Centre, Wageningen. tional Service for National Agricultural Research. 104 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Vermeulen, S., J. Woodhill, F. J. Proctor, and R. Delnoye. 2007 y 2008. http://www.cnic.cl/content/view/468181/ 2008. “Chain Wide Learning for Inclusive Agrifood Hacia-una-Estrategia.html. Market Development: A Guide to Multi-stakeholder de Ferranti, D., G. E. Perry, W. Foster, D. Lederman, and Processes for Linking Small-scale Producers with A. Valdés. 2005. Beyond the City: The Rural Contribution Modern Markets.� International Institute for Environ- to Development. World Bank Latin American and ment and Development, London; and Wageningen Caribbean Studies. Washington, DC: World Bank. University and Research Centre, Wageningen. FIA (Fundación para la Innovación Agraria). Various years. World Bank. 2004. “Module 1: Strengthening the Capacity Memorias anuales [annual reports]. Santiago: FIA. of Farmer Organizations to Influence Agricultural http://www.fia.cl/QueacuteesFIA/tabid/55/Default.aspx. Policy.� In Agriculture Investment Sourcebook. Washing- ———. 2005. “Evaluación de impacto de programas y ton, DC: World Bank. proyectos FIA.� Informe Consultoria. GPI, Santiago. ———. 2011. Module 6 in Information and Communica- http://bibliotecadigital.innovacionagraria.cl/gsdl/cgi- tion Technologies for Agriculture e-Sourcebook. Washing- bin/library.exe?l=es. ton, DC. http://bit.ly/ICTinAG. ———. 2009. Impacto en innovación agraria: Diez rubros exi- tosos. Santiago: FIA. http://www.innovacionagraria.cl/ Innovative Activity Profile 1 LinkClick.aspx?fileticket=AkVeFwcosUQ%3D&tabid= 64&mid=590. Christensen, C. M. 2003. The Innovator’s Dilemma. New Ministerio de Economía Chile. 2009. “Politica nacional para York: HarperCollins. la innovación y la competitividad.� Santiago: Ministerio Derpsch, R. 2010. “No-tillage, Sustainable Agriculture in the de Economía. http://www.economia.cl/1540/articles- New Millennium.� www.rolf-derpsch.com. 188772_recurso_1.pdf. Ekboir, J. M. 2002. “Developing No-till Packages for Small- scale Farmers.� In World Wheat Overview and Outlook, Innovative Activity Profile 4 ed. J. M. Ekboir. Mexico, DF: International Maize and Wheat Improvement Center. Government of Andhra Pradesh, Irrigation and CAD Ekboir, J. M., K. Boa, and A. A. Dankyi. 2002. “Impact of Department. 2007. “Andhra Pradesh Community Based No-Till Technologies in Ghana.� CIMMYT Economics Tank Project Implementation Plan.� Hyderabad. Andhra Paper 02-01, International Maize and Wheat Improve- Pradesh Community Based Tank Project. http:// ment Center, Mexico, D.F. www.apmitanks.in/Templates/files/OperationalManuals/ Huffman, W., and R. E. Just. 2000. “Setting Efficient Incen- PIP_20070228.pdf. tives for Agricultural Research: Lessons from Principal- Government of Andhra Pradesh and Centre for Economic agent Theory.� American Journal of Agricultural Economics and Social Studies. 2008. Human Development Report 82 (4): 828–41. Andhra Pradesh 2007. Hyderabad: Government of Andhra Pradesh. NSSO (National Sample Survey Organization). 2003. Innovative Activity Profile 2 Income, Expenditure and Productive Assets of Farmer Ekboir, J. M., G. Dutrénit, G. Martínez V., A. Torres Vargas, Households, 2003. NSS Report 497. Delhi: NSSO. and A. Vera-Cruz. 2009. “Successful Organizational ———. 2005. Situation Assessment Survey of Farmers, 2005. Learning in the Management of Agricultural Research NSSO Report 498. Delhi: NSSO. and Innovation: The Mexican Produce Foundations.� Ramanjaneyulu, G. V., M. S. Chari, T. A. V. S. Raghunath, IFPRI Research Report 162. Washington, DC: Interna- Z. Hussain, and K. Kuruganti. 2009. “Non-Pesticidal tional Food Policy Research Institute. Management: Learning from Experiences.� In Integrated Pest Management, Vol. 1: Innovation-Development Innovative Activity Profile 3 Process, ed. R. Peshin and A. K. Dhawan, 534–74. New York: Springer. CHILEOLIVA. 2009. Informe anual de mercado nacional de SERP (Society for Elimination of Rural Poverty) and World aceite de olive: 2009. http://www.chileoliva.cl/files/ Bank. 2009. “Ecologically Sound, Economically Viable: INFORME%20ANUAL%20DEL%20MERCADO2%20 Community Managed Sustainable Agriculture in Andhra 2009.pdf. Pradesh, India.� Washington, DC: World Bank. CNIC (Consejo Nacional de Innovación para la Com- petitividad). 2007. Estrategia nacional de innovación, MODULE 1: NOTES, REFERENCES AND FURTHER READING 105 Innovative Activity Profile 5 R. Best. Cali: International Center for Tropical Agricul- ture (CIAT). Cox, T. P. 2010. “Cassava Development in the Networking Age.� New Agriculturalist, May. http://www.new-ag.info/ World Bank. 2006. “Enhancing Agricultural Innovation: en/focus/focusItem.php?a=1586. How to Go Beyond the Strengthening of Research System.� Washington, DC. Gottret, M. V., and B. Ospina. 2004. “Twenty Years of Cassava Innovation in Colombia: Scaling up under Different Political, Economic, and Social Environments.� Innovative Activity Profile 6 In Scaling Up and Out: Achieving Widespread Impact through Agricultural Research, ed. D. Pachico and Berdegué, J. A. S. 2001. Cooperating to Compete: Associative S. Fujisaka, 105–26. Cali: International Center for Tropi- Peasant Business Firms in Chile. PhD thesis, Wageningen cal Agriculture (CIAT). University. Henry, G., B. Ospina, and R. Best. 1999. “Development by Collion, M.–H., and M. Friedman. 2010. “Rural Productive Linking Small Farmers to Growth Markets: Cassava in Alliance Tour of Bolivia and Colombia: Lessons Learned Latin America.� In Sustainable Agriculture and Envi- and Scope for Improvement.� Washington, DC: World ronment: Globalisation and the Impact of Trade Lib- Bank. eralisation, ed. A. K. Dragun and C. Tisdell, 271–86. Fearne, A., D. Ray, and B. Vorley. 2007. Regoverning Cheltenham, U.K.: Edward Elgar. Markets: A Place for Small-Scale Producers in Modern Mytelka, L., and I. Bortagaray. 2005. “Strengthening the Agrifood Chains? Burlington, VT: Gower Publishing Agricultural Innovation System in Colombia: An Analy- Company. See also http://www.regoverningmarkets sis of the Cassava and Flower Sectors.� Background paper .org/. for World Bank project. KIT (Royal Tropical Institute), Faida MaLi (Faida Market Ospina, B. 2001. “CLAYUCA: Latin American and Link), and IIRR (International Institute of Rural Caribbean Consortium to Support Cassava Research and Reconstruction). 2006. Chain Empowerment: Support- Development.� In Cassava’s Potential in Asia in the 21st ing African Farmers to Develop Markets. Amsterdam, Century: Present Situation and Future Research and Arusha, and Nairobi: KIT, http://www.kit.nl/smartsite Development Needs. Proceedings of the 6th Regional .shtml?id=SINGLEPUBLICATION&ItemID=1952. Workshop, February 21–25, 2000, Ho Chi Minh City, Labaste, P., and C. M. Webber. 2010. Building Competi- 632–40. Cali: International Center for Tropical Agricul- tiveness in Africa’s Agriculture: A Guide to Value Chain ture (CIAT), Institute of Agricultural Sciences of South Concepts and Applications. Washington, DC: World Vietnam (IAS), and Nippon Foundation. Bank. Ospina, B., S. Poats, and G. Henry. 1994. “Integrated Cassava Quintero, J. F. 2010. “Evaluación de la sostenibilidad comer- Research and Development Projects in Colombia, cial de las alianzas productivas en Colombia: 12 estudios Ecuador, and Brazil: An Overview of CIAT’s Experi- de caso.� World Bank, Washington, DC. ences.� In Cassava Flour and Starch: Progress in Research World Bank. 2007. World Development Report 2008: and Development, ed. D. Dufour, G. M. O’Brien, and Agriculture for Development. Washington, DC. 106 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK MODULE 2 Agricultural Education and Training to Support Agricultural Innovation Systems OV E RV I E W Charles J. Maguire, Consultant EXECUTIVE SUMMARY financing, and stakeholder involvement. Another invest- gricultural Education and Training (AET) has a ment priority—wide-ranging, systemic reform—requires A major role as a creator of capacity and supplier of the human resources that populate key segments of the AIS and enable that system to function more effec- internal and external consultations with stakeholders and an analysis of gaps between stakeholders’ expectations and current academic programs. Other priorities for investment tively. Past neglect and low levels of investment have pre- include reforming curricula and teaching methods; building vented many national AET systems from equipping grad- capacity and stakeholder partnerships for technical educa- uates to meet the needs of modern agriculture and tion and training; and developing effective in-service and contribute to the AIS. Aside from the technical knowledge life-long learning capacity among public workers who inter- that is the traditional focus of AET, graduates require the act frequently in the AIS. Such reforms can be supported by knowledge and tools to recognize innovative ideas and investments in capacity building and infrastructure for ICTs technology, catalyze communication between other AIS to facilitate learning, research, and global and local net- actors, and provide feedback to researchers and investors. working and communicating. Investments in accreditation Graduates particularly require new, “soft� skills, such as or in a regional resource for advanced degrees may also leadership, communication, negotiation, facilitation, and improve the likelihood that AET delivers content that meets organizational capabilities. Employers increasingly stakeholders’ needs. demand these skills, which foster active participation in Regardless of the chosen reform target, any change the AIS. initiative will be subject to resistance, and leadership and Serious constraints to quality education and training commitment will be needed to see reforms through to the include weaknesses in policies that guide AET, the divided end. Depending on the location, capacity, commitment, responsibilities for parts of the AET system, poor gover- and leadership for change, the time focus may shift to nance of AET institutions, continuing isolation of AET sys- require longer-than-anticipated support; in other cases, tems from key stakeholders, and serious underinvestment in reforms and changes may proceed faster than expected. AET systems. The major priority for reform is to develop a A broad lesson for practitioners in planning reform pro- policy framework and (innovation) policy management grams of any length is to pay close attention to building capacity to guide AET. This reform underpins all others; it constituencies of stakeholders at all levels to help ensure has wide implications for AET, interministerial cooperation, the program’s sustainability. 107 WHY INVEST IN AET TO SUPPORT At this critical juncture, AET remains the main supplier AGRICULTURAL INNOVATION? of human resources for many of the public, private, and civil-society constituents of the AIS, through its network of Complementary investments in agricultural education have agricultural universities, faculties of agriculture, vocational been neglected but are essential to ensure a new generation and technical colleges, and farmer training centers which, of agricultural scientists and leaders (World Bank 2004). together, constitute the AET system. The central question in The growing focus on innovation systems in agriculture this module is whether corrective investments in particular presents agricultural education and training (AET) with a AET models, programs, and activities will enable the AET challenge and an opportunity. The AIS creates demand for system to take its place as a forceful and valued agent of skills not traditionally developed in agricultural education— innovation in agriculture, keeping in mind that major especially the “soft skills� that enable people to communicate investments in AET systems occurred decades before the better, listen more carefully and efficiently, nurture leader- concept of “innovation systems� could influence their ship, work cooperatively, and generally contribute more design and that much work remains to be done. effectively to the AIS. The emphasis on the innovation sys- The general outlines of an AET system that is capable of tem as a dynamic, highly interactive marketplace for ideas operating successfully within an innovation system must rec- challenges AET to strengthen its role as one of the critical ognize that the innovation system in which it operates is actors in agricultural innovation. All too often, agricultural dynamic. The AET system itself will need to be agile, flexible, education is failing to impart the knowledge, skills, and atti- attuned to the needs of stakeholders in the innovation system, tudes that can enable countries to feed growing populations, and acutely aware of developments in technology, communi- participate in international agricultural value chains, and cations, and markets as well as challenges to production stem- cope with climate change, especially in the midst of grinding ming from high energy costs, declining water resources, and rural poverty. climate change. It will also need to channel advice to decision The importance of enhanced skills for graduates who makers on policies to guide AET at all levels. will interact with a wide spectrum of actors in the AIS is These generalizations aside, not all AET systems are not in question; in fact, such skills assume even greater equal. Some need deep, fundamental reform and strength- importance, given that they will have to compensate for a ening, whereas others may require only minor adjustments considerable educational deficit among the population in to become more effective within the AIS. Before discussing general. The majority of people with whom skilled AIS specific investment needs and strategies over the short, actors will interact in most developing countries have not medium, and long term, this module presents a broad had access to much more than basic education. The World review of AET—its structure, weaknesses, and strengths. Bank (2007b, 9) notes that education levels in rural areas The module then describes investments in education and worldwide tend to be dismally low—an average of four training that will equip actors in the agricultural sector to years for rural adult males and less than three years for negotiate the rapidly changing agricultural landscape with rural adult females in sub-Saharan Africa, South Asia, and greater skill, resilience, and innovation. The need for these the Middle East and North Africa. Research in the 1980s investments to foster gender inclusiveness in AET systems is established the relationship between primary education incontestable (for one example, see box 2.1). Above all, this and annual farm output (Lockheed, Jamison, and Lau module will emphasize that fostering a capacity for innova- 1980; Jamison and Lau 1982; Jamison and Moock 1984). tion on this scale will require equally large measures of Basic education is a critical element for communication, persistence and collaboration—from the agricultural and understanding, and assessing innovations in the interactive education sectors and also from government, civil society, process that prevails in the AIS. and rural people. For a very long time, governments and donors have invested very little, or only very intermittently, in AET (Willett 1998; Eicher 1999; Rygnestad, Rajalahti, and Pehu 2005; World THE STRUCTURE OF AET SYSTEMS Bank 2007b). The results are deteriorating physical infrastruc- ture for education, overcrowded classrooms and residential “Agricultural education and training� covers a range of accommodations, the exodus of teaching staff, outdated cur- organized programs and activities that serve the need for ricula, inadequate teaching and learning materials, and gradu- information, knowledge, and skills among those who work ates’ limited skills and employment options. in various parts of the agricultural sector and the broader 108 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 2.1 Gender-Inclusive AET: The Example of African Women in Agricultural Research and Development In agriculture as in other domains, innovation requires seeks to strengthen the research and leadership skills of communication of many kinds at many levels. The dis- African women in agricultural science, empowering semination of knowledge, information, and innova- them to contribute more effectively to poverty allevia- tions poses a special problem among women. Few tion and food security in sub-Saharan Africa. The two- women graduate from agricultural education pro- year career development package builds on four cor- grams—too few to work with women in societies where nerstones: establishing mentoring partnerships; women are excluded from rights to land and other nat- building science skills; developing leadership capacity, ural resources. Women are also marginalized from agri- and tracking, learning, monitoring, and evaluating cultural events, activities, and programs led by men or fellowship-holders’ progress. The program does not not permitted to communicate with men outside the provide funds for the fellows’ academic studies or offer family. Essentially, “women have been . . . underrepre- research grants, although fellows can apply for research sented at all levels of AET institutions, from postsec- attachment opportunities. ondary to tertiary and higher education, although Sixty outstanding women agricultural scientists detailed gender-disaggregated data are available only received AWARD fellowships in July 2010, and the proj- very sporadically or not reported at all� (World Bank ect currently supports 180 African women working in 2009, 181). An innovative program that aims at increas- agricultural research and development who have com- ing the numbers of females with higher degrees in pleted bachelor’s, master’s, or doctoral degrees in Africa may be the beginning of a change in the gender selected disciplines. The fellows come from Ethiopia, balance in academic and research institutions. Ghana, Kenya, Malawi, Mozambique, Nigeria, Rwanda, African Women in Agricultural Research and Devel- Tanzania, Uganda, and Zambia. opment (AWARD, http://awardfellowships.org) is a AWARD is a US$15 million, five-year project with project of the Gender and Diversity Program of the plans to expand to a second phase starting in 2013. It is Consultative Group on International Agricultural supported by the Bill and Melinda Gates Foundation, Research (CGIAR). This professional development pro- the United States Agency for International Develop- gram was launched in 2008 after a successful pilot in ment, and the CGIAR. AWARD partners with more East Africa supported by the Rockefeller Foundation. It than 75 national agricultural research institutions. Sources: Author. rural space. At the apex of the system for AET are the terti- technical-vocational education and training� (ATVET) or ary educational institutions such as agricultural universi- “vocational education and training� (VET), prepares tech- ties or faculties and colleges of agriculture within compre- nicians in a variety of specializations in agricultural subsec- hensive universities. Traditionally, higher agricultural tors. Some secondary schools offer agriculture as an elective education produced graduates who found employment in (Tajima 1985), but in most developing countries these pro- public agricultural research (see module 4) and extension grams have a checkered history, influenced by the qualifica- programs (see module 3) and other technical services tions and experience of the teachers assigned to the subject offered by ministries of agriculture. Over the years, as these and the motivation of the students who enroll. Probably the public agencies greatly curtailed hiring, holders of agricul- most successful secondary agricultural education model is tural degrees, diplomas, and certificates have been more the vocational agriculture program offered in largely rural likely to seek employment with agribusinesses or with districts in the United States. The program offers academic NGOs operating agricultural programs. and practical subjects in school and, through a supervised Other institutions in the AET system include the youth organization (Future Farmers of America), helps stu- polytechnics, institutes, or colleges that prepare technicians dents develop leadership skills and technical prowess by at the diploma level (the postsecondary, subdegree level). participating in contests and undertaking a supervised proj- This category of education, often termed “agricultural ect (box 2.2). MODULE 2: OVERVIEW 109 Box 2.2 Future Farmers of America: A Unique Young Farmer Organization Future Farmers of America (FFA) was founded in 1928 ness); placement (the student gets a job on a farm or at and brought together students, teachers, and agribusi- an agricultural business, school, or factory laboratory); ness to solidify support for secondary agricultural edu- research and experimentation (the student plans and cation. Today (circa 2011), the FFA has some 523,000 conducts a scientific experiment, usually related to agri- members (38 percent are female) aged 12–21 in all 50 culture); or exploratory (the student attends an agricul- states. Of these, 27 percent live in rural farm areas, tural career fair or creates a report or a documentary on 39 percent in rural nonfarm areas, and the remaining the work of a veterinarian or extension worker). 34 percent in urban and suburban areas. Now known as Through this program, more than 11,000 FFA advis- the National FFA Organization, FFA—with its motto of ers and teachers deliver an integrated model of agricul- “Learning to Do, Doing to Learn, Living to Serve�—is tural education that provides students with innovative dedicated to making a positive difference in the lives of and leading-edge education, enabling them to grow into students by developing their potential for premier lead- competent leaders. The FFA provides 23 national career ership, personal growth, and career success through development events through which members are chal- agricultural education. lenged to real-life, hands-on tests of skills to prepare The FFA is an integral part of the secondary-level them for more than 300 agricultural careers. Agriculture Vocational Agriculture program, which has three parts: is the largest employer in the United States. More than classroom instruction, the FFA, and Supervised Agri- 24 million people work in some sector-related activity. cultural Experience (SAE). Students develop their SAE Industry values the FFA program and its graduates, con- projects in one of four categories: entrepreneurship tributes to the National FFA Foundation, sponsors pro- (the student owns and operates an agricultural busi- grams, and provides individual scholarships. Source: Adapted from www.ffa.org, accessed December 2010. Agricultural training, frequently delivered in training and feedback flow between institutions and allow for centers or training institutes, is offered to public employees adjustments and improvements on a continuous basis. Agri- as in-service training and/or to farmers as farmer training. cultural education and learning (AEL) is a variation on AET Ministries of agriculture are usually responsible for agricul- that reflects a more student-centered approach to formal tural training programs. Public extension services offer programs (Ochola and Ekwamu 2008). training (largely to farmers) through formal presentations, In many countries, responsibility for education and lecture-demonstrations, field days, crop and animal field training for agriculture and rural development has been, trials, farm tours, and various other media. Public agricul- and continues to be, divided between ministries of agricul- tural research systems provide educational opportunities ture and education. Typically, higher agricultural education for farmers and extension staff, usually in the form of field has been the responsibility of the education ministry, days combined with lectures. Public sector researchers also whereas training for agriculture and its subsectors has been act as resource persons in formal, higher-level education the responsibility of the ministry of agriculture. In some programs, work with extension staff to train farmers, or countries, the ministry of cooperatives is responsible for provide in-service training for extension staff. providing training for a variety of cooperatives that deal with a range of topics, including agriculture. Given the increasing interest in farmer organizations (see module 1, Formal AET TN 4 and IAP 2) (especially as precursors to large, organized Traditionally, agricultural education has been supplied and agricultural cooperatives), cooperative colleges are becom- supported largely by the public sector. Although the various ing an important aspect of formal AET. elements in the AET delivery chain are often referred to col- Whether it is part of a robust, well-integrated system or lectively as a “system� (Bawden 1998, 1999; Rivera 2008), in not, agricultural education is weakened by the division of many developing countries it is questionable whether these responsibilities among ministries, the isolation of individual elements form a robust system in which communication ministries, and their failure to collaborate in designing and 110 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK delivering education and training in a manner that meets example of this kind of skill development, which makes the needs of all AET stakeholders. Under these circum- important contributions to human resource capacity in stances, a broad vision for AET is rarely in place. As a result, agriculture. policies and strategies for modernizing agricultural educa- tion are seldom developed. PAST INVESTMENTS IN AET As a small but specialized element in the bigger educa- tion picture—which includes primary, secondary, and The 1950s, 1960s, and 1970s saw substantial, dedicated higher education together with vocational and technical investments in AET. One of the largest investments, education and training, teacher training, and a number of launched by USAID in the mid-1950s, was a long-term pro- special adult education programs—agricultural education gram that established universities similar to the United tends to lack bargaining power when investment decisions States land-grant universities in Latin America, Asia, and are made. This relative lack of visibility and clout is all the Africa. This ambitious program included technical assis- more critical because the mounting pressure for change in tance for administrative and academic activities and cur- AET chiefly comes from developments in agriculture that riculum development, provided links to overseas advanced are outside the control of AET institutions. degree programs, modernized libraries, and paired the new universities with counterpart land-grant universities. The USAID program modernized the way that agriculture was Informal AET taught and learned in many developing countries; enhanced Alongside the formal AET system, a dynamic, informal the quality of education, research, and extension; provided learning system greatly influences how information, knowl- current teaching materials; and created an international edge, and skills are channeled and used in agriculture. At the network of agricultural education professionals. heart of this system are farmers, farming families, the ser- The impact of the investment was impressive but not vices they receive, and the contacts they make on a regular always sustained. The quality of teaching and learning dete- basis. Informal agricultural education involves awareness- riorated. Changes in leadership, reduced funding, and the raising and training provided to farmers by public extension winding down of collaboration with individual overseas and research services, by traders who purchase farm prod- universities all reduced performance. On the other hand, a ucts and supply farm inputs, and by the media, which con- number of universities established under the program vey a variety of information to rural communities. thrived and have continued to provide education leadership Farmer-to-farmer communication (see also module 3, long after the investment program closed (the Brazilian sys- especially IAP 2) is one of the most powerful forces for educa- tem is a case in point; see box 2.3). tion within the informal system. Farmers communicate easily During the same period, multilateral organizations with their peers, observe the techniques and skills used by oth- such as the World Bank, Food and Agriculture Organiza- ers, and quickly adopt what they perceive as successful prac- tion (FAO), International Labour Organization (ILO), and tices. The actors in this AET system are linked with one the United Nations Educational, Scientific, and Cultural another and within the broader AIS. The many roles played by Organization (UNESCO) supported AET through free- graduates of AET, regardless of how structured or organized it standing agricultural education projects, training may be in a given setting, are detailed in modules 3 and 4. components in agricultural projects, and seminars, work- shops, conferences, and in-country and international courses. With the exception of free-standing agricultural In-service training and development education projects, most of the other activities were of Public and private in-service training and development, short duration. The impact of the free-standing projects which can be categorized as formal AET, serves employers, depended heavily on the recipient ministry’s or country’s employees, extension workers, NGO technical staff, and commitment to sustaining the new investment. The choice vocationally oriented, self-directed learners (Rivera 2008). of participants for seminars, workshops, and training Similarly, the innovation system benefits from the commu- courses proved decisive in terms of the usefulness of these nications and technical skills obtained by rural youth, either activities and the effectiveness with which the participant in or out of school, through participation in a variety of transferred knowledge and/or technology to the parent young farmers’ organizations. The Future Farmers of Amer- organization—a lesson that should not be forgotten in ica, described in box 2.2, is a very successful but unique designing AET projects (see TN 4). By the end of the MODULE 2: OVERVIEW 111 Box 2.3 Brazil’s National Agricultural Research Program Benefits from Long-Term Investments in Human Resources In 1963, the Brazilian government took a high-level deci- Agricultural Research Corporation (EMBRAPA) to coor- sion to build a human capital base for a modern agricul- dinate its national agricultural research program, tural sector. With financing from the United States EMBRAPA continued to invest in human resources. It Agency for International Development, four American launched a massive human capital improvement pro- land-grant universities assisted four Brazilian universities gram that sent 500 agricultural researchers for PhD pro- in strengthening BSc level training for a decade followed grams and spent 20 percent of its budget from 1974 to by another four years of support for postgraduate educa- 1982 on training in Brazil and abroad (World Bank tion. In 1971–72 more than 900 Brazilian graduate stu- 2007a, 39). Today, one-third of EMBRAPA scientists have dents were studying agricultural sciences in United States a PhD, half have an MSc, and the balance have a BSc or universities. This experience with building human capi- equivalent. The most important lesson from this experi- tal in programs in agriculture is directly linked to politi- ence is that Brazil did not reduce public expenditure on cal decisions by the Federal Government and the Min- its core agricultural institutions some 40 years ago when istry of Education to pass the University Reform Act of foreign investment waned. Instead, by mobilizing high- 1968, which linked promotions to higher graduate level political support, Brazil built a strong human capi- degrees and required academic staff to work full time. In tal base to sustain a globally competitive agricultural 1972, when the government established the Brazilian research and extension base. Source: Author. Note: EMBRAPA = Empresa Brasileira de Pesquisa Agropecuária. 1970s, funding for AET began to decline dramatically teachers and is weakened by poor cooperation between v of (Willett 1998), overtaken by other development priorities. education and agriculture. Numbers of AET specialists in many international organi- A 2005 review of investment in AET in projects sup- zations and bilateral donor agencies decreased. Despite ported in Africa by the World Bank found that the same pleas by numerous observers and organizations to govern- weak level of investment had persisted since the end of the ments, donors, and universities to rehabilitate and reform 1970s (Rygnestad, Rajalahti, and Pehu 2005). One outcome deteriorating agricultural education programs and facili- of the weaknesses and low investment in AET is the reluc- ties, AET continued to drop even lower on the develop- tance of students to choose agriculture as their preferred ment agenda. academic pursuit (Pratley 2008; Rivera 2008; Mulder 2010). A number of generic weaknesses in the planning and In countries where higher education is at a premium, this delivery of AET in developing countries have persisted.1 reluctance inevitably creates a situation where many of the Briefly, these weaknesses include a lack of university auton- students who enroll in agricultural programs have a greater omy, weak links to stakeholders, lack of accountability for interest in possessing an academic degree or certificate than quality or employability of graduates, outdated curricula in making a career in agriculture. and teaching approaches, weak training in practical skills, the variable quality of programs, weak adoption of ICTs, KEY POLICY ISSUES and low remuneration of faculty and staff. Diploma-level AET also exhibits weaknesses, including Sound policies are essential to address the recurring weak- the absence of supporting policies, weak links to stakehold- nesses of AET systems, yet weak and fragmented AET sys- ers, programs that fail to reflect labor-market needs, inade- tems cannot present a united front to government or policy quate and inconsistent funding, and a shortage of skilled makers and gain support for increasing the effectiveness of teachers/instructors. Agricultural training at the secondary AET. Policy guidance and support are needed above all to: level, which is not universally offered, is often chosen as an Clarify the role of AET. Divided ministerial responsibility “easy pass� by students. It also suffers from a lack of qualified for agricultural education, especially for public agricultural 112 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK universities and faculties of agriculture, prevents AET from be in place. The policy would also support gender balance in realizing its potential. Without a sense of urgency and col- the faculty and teaching staff of universities, TVET institu- laboration between ministries of agriculture and education, tions, and training centers. The presence of female teachers, higher agricultural education will not be reoriented and instructors, or trainers can make a difference when female modernized to reflect the needs of a changing agricultural students make decisions about pursuing a qualification in and rural environment. Clarifying roles and responsibilities agriculture. of agricultural education in the development agenda (with Create a favorable environment for investing in AET and clear links to the agendas of the respective ministries) would improve the balance of investments in agricultural research, open the door to reforms that enable these institutions to extension, and education. Investment is uneven in research, fulfill stakeholders’ expectations. extension, and education—the three pillars of agricultural Ensure sustainable, regular funding. The allocation and knowledge and information systems. Investors find it easier to disbursement of funds for AET on a sustainable and regular deal with research or extension agencies, with their clear lines basis is essential for maintaining the quality and relevance of authority and organized networks, than with multitiered of education programs. Policies that underpin AET need to educational systems, which answer to more than one ministry recognize agriculture’s broad contributions to the economy: and are often isolated from research and extension. Policies as a producer of basic and export commodities, source of should be in place to ensure that research, extension, and edu- employment, provider of nutritional health, and engine of cation work together to capitalize on their respective strengths poverty reduction. It is essential that these policies are in and present a holistic picture of their interdependence in place and implemented and updated as changes occur in the bringing knowledge and services to the sector. See module 6 sector. for a broader discussion on an enabling environment. End political interference in university administration. Because most agricultural universities, TVET colleges, and INVESTING IN CHANGE: PRIORITIES AND NEW training institutes are public entities, they are subject to DIRECTIONS FOR AET political influence of one kind or another. Demand for edu- cation, especially at the tertiary level, can cause politicians to Given this background—the declining quality of many AET decree increases in enrollment without providing the phys- systems, the general failure to articulate a strong policy ical, human, and financial resources to accompany higher framework for agricultural education, and the correspond- enrollments. The lack of resources guarantees that educa- ing failure of educational institutions to build a strong and tional standards will fall as facilities become overcrowded, vocal constituency within the agricultural sector—it is clear teacher–student ratios become unmanageable, students that many AET systems must change. This section discusses struggle to study and learn in unfavorable surroundings, some of the priorities and new directions that could reposi- experienced teachers and researchers leave, and large num- tion AET systems as catalysts and beneficiaries of innova- bers of underqualified graduates flood the job market. tion. These changes—carefully managed, with sustained Appropriate policy instruments, strictly enforced, can help commitment—should enable AET to attain the autonomy, prevent interference of this kind. agility, and human and financial capacity to produce gradu- Improve governance in higher agricultural education. A ates who meet the needs of the agricultural sector and its related policy issue is that agricultural universities and facul- diverse stakeholders. ties of agriculture lack autonomy. Typically, universities have Priorities and new directions are discussed first to pro- little or no control over budgets, hiring or firing of staff, links vide a broad sense of the kinds of reform that AET systems with stakeholders, or accountability for the fate of graduates might undertake. Because the success of any reform once they leave. Policies are required to correct these weak- depends to a great extent on how it is managed, the next nesses and improve the credibility and usefulness of higher section briefly presents guidelines, based on experience, for agricultural education. Universities and other third-level managing change in AET. To support this kind of change in entities need control over their programs, budgets, and staff. AET systems, decision makers, AET entities, and donors They also need to interact with stakeholders to better under- can choose among a range of specific investments, which stand the changing agricultural sector and amend curricula are discussed next. These investments can be of long, to reflect these changes. (See also module 1, TN 1.) medium, or short duration, depending on the agreed Address the gender imbalance. An appropriate policy that objectives, identified needs, support time horizon, and stipulates active recruitment and quotas for females should funding availability. MODULE 2: OVERVIEW 113 Table 2.1 provides a useful checklist of future directions more effective, this list gives an indication of the range of for AET in relation to current conditions. options for reform and the issues that often prove to be the most important. Investment priorities Develop a policy framework and (innovation) policy What are the most important investments to make AET a management capacity. A major investment priority is to forceful contributor to the innovation system? Although seek policies from government to guide AET, enable it to every case in every country will differ, and although it is develop effective education and training strategies, and hoped that new ways will always be found to make AET provide it with high visibility in sector and national Table 2.1 Current and Potential Future Directions of AET Systems Higher agricultural education now Future directions Weak, unenforced, or absent policies Clear AET policies with responsibilities defined and enforced Weak governance Strong governance inclusive of stakeholders Little autonomy Autonomy that enables staff decision making, financial control, and standards setting Uncertain funding Steady and regular funding guaranteed Isolation (academically and from stakeholders) Academic, rural community, and stakeholder connections established and maintained Programs not accredited Accreditation the norm Curriculum now Future directions Outdated Updated and current with stakeholders’ needs No stakeholder input Stakeholder consultations; input solicited and incorporated in changes; stakeholders participate in governance Teaching Learning Theory Theory and practical application No student attachments Regular, organized, and supervised attachments Inappropriate pedagogy Effective pedagogy tailored to subject matter and learner needs Little use of external teaching resources External resources used in team teaching to expand knowledge and skill pool Little use of ICT Use of appropriate ICT the norm Technical training now Future directions Heavily supply driven Mostly demand driven Managed by the public sector Managed through public-private partnerships Poorly qualified and remunerated instructors Qualified and fairly remunerated instructors Qualifications not certified by professional bodies Certification ensured Equipment in short supply and outdated Equipment/practice areas obtained through public-private partnerships Management of human resources now Future directions Weak human resource management leadership Qualified human resource managers and trainers Selection of trainees not based on need All selection based on need and future tasks Training needs assessments are not undertaken Needs assessments are standard procedure Little supervisor/manager involvement Supervisors/managers consulted and involved No evaluation of trainee performance on the job On-the-job performance measured Trainers not trained to instruct/teach Qualified trainers standard Source: Author. 114 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK development planning and implementation. This reform Change what is taught and how it is taught. Very alone has wide implications for AET, as well as major often it is a priority to invest in reforming curricula and implications for interministerial cooperation, financing, teaching methods—in many instances, such changes are and stakeholder involvement. Specific investments to long overdue. Coursework will include practical as well as develop a policy framework might include the facilitation of academic knowledge and skills. Traditional teaching interagency dialogue, technical assistance to help draft methods will be replaced by a learning approach that policies, consultations with affected parties at draft policy enables students or trainees to discover and internalize stage, and policy launching where all key stakeholders are knowledge and skills and thus equip the AIS with people represented. This investment priority underpins follow-up who know how to communicate and share their knowledge investments that would fund needed organizational and with others. Potential employers of graduates from the AET academic reforms—in other words, all of the other investments system consistently report that they seek (and often do not listed here, whether they are pursued together or separately. find) problem-solving skills, the ability to listen, the This reform effort also requires capacity-building efforts for capacity to analyze situations, and skill with information policy management and the design of innovation policies. technology (including computer applications), among Most countries experience a chronic lack of capacity to other skills (box 2.4). design and implement public policies, and the capacity to design and implement policies that foster agricultural In-service training: continue investing in human innovation is even more limited (OECD 2005; Rajalahti, resources. In-service training is an investment priority for Janssen, and Pehu 2008).2 See also module 6, TN 1 and TN 2 continuing enrichment of the innovation system. for education policy and governance processes. Continuing training and learning maximizes use of previously acquired knowledge and skills, adds the lessons Support wide-ranging, systemic reform. Once the policy of practical peer experience, and expands human capacity framework is in place, AET system reforms are the next major by introducing new and updated technical and social priority. Such reforms enable universities and other information and knowledge. Well-managed, high-quality, institutions of higher education to clarify their roles in relation flexible in-service training and learning for public, private, to the educational system, to their stakeholders, and to the and civil-society clients expands the network of people in wider needs of the agricultural sector. Then they can make the the innovation system with relevant information and necessary adjustments to governance, administration, knowledge. In many cases, they gain specific skills in curricula, pedagogical methods, the provision of in-service communicating more effectively and supporting others in and life-long education for graduates and civil society, and assessing the suitability and viability of agricultural partnerships and links with stakeholders, including the innovations. private sector. In this “inside-out� approach to reform, the system itself Tap the power of ICTs. Investments in capacity building (and especially the tertiary institutions) undertakes the and infrastructure that enable ICTs to facilitate learning reform process from within and reaches out to stakeholders and research, improve the delivery of subject matter, and to measure expectations and satisfaction with existing pro- support global and local networking and communicating grams. Gaps between the supply, content, and quality of are critical for effective interaction within an education education and training and demand in the labor market system and AIS. The ICT revolution has vastly increased point to reform measures that need to be taken. Investments the flow of information and ideas throughout the rural in system reform, especially at the university level, must space. It has also increased stakeholders’ expectations of support internal dialogue, interaction between the educa- AET graduates, who should be familiar with the range of tional institution and those who make policy and decisions, ICTs and use them to communicate technical and stakeholder consultations, analysis of gaps between stake- managerial information to others in the AIS. The holders’ expectations and current academic programs, for- Information and Communication Technologies for mulation of the reform strategy, a schedule for its imple- Agriculture e-Sourcebook (World Bank 2011) shows how mentation, and the related costs. External facilitators (see ICTs are used increasingly to provide advisory services, also module 3, TN 4) are required to manage the reflection capture and disseminate market information, and process, carry out the needs assessment, formulate the facilitate research, learning, and communication of all reform strategy, and determine the final reform agenda. kinds (box 2.5). MODULE 2: OVERVIEW 115 Box 2.4 The Need for a Broader Skill Set to Foster Innovation Effective innovation systems need technical specialists require managerial, entrepreneurial, leadership, nego- to investigate and elucidate the complex technical tiation, intellectual property law, facilitation, and part- aspects of innovations. Effective innovation systems nering skills that educational institutions rarely cover. also require a cadre of professionals whose mindset To be capable of fostering agricultural innovation, and skill set extend beyond a particular specialization graduates of the various levels of the AET system to encompass (for example) markets, agribusiness, should possess a wide variety of skills, which may intellectual property law, rural institutions, rural include: finance and credit facilitation, systems analysis, and Basic skills and digital literacy: Reading, writing, conflict management. To foster these capacities, uni- numeracy, and the ability to use digital technology and versities must reform their curricula to include innova- access and interpret information. tion systems approaches and shift toward more client- Academic skills to pursue disciplines in advanced oriented, vocational courses. educational institutions, such as languages, mathemat- The demands placed on agricultural education pro- ics, history, law, and science. grams are shifting so rapidly that programs in many Technical skills: Academic and vocational skills locations cannot produce human resources capable of required by specific occupations and knowledge of cer- the sorts of innovation that the world’s agricultural tain tools or processes. economies require. To respond to these requirements, Generic skills such as problem solving, critical and AET programs will need to balance a highly technical creative thinking, the ability to learn, and the capacity curriculum with training in a wide range of skills and to manage complexity. competencies. Researchers, extension agents, and other “Soft� skills such as the ability to work and interact service providers will need to bolster their professional in teams, in heterogeneous groups, and across cultures; training with skills that support interaction with communications skills; motivation, volition, and ini- diverse actors to collaboratively address new challenges tiative; and receptiveness to innovation. and opportunities and to share information and Leadership skills: Building and leading teams, knowledge. For example, extension agents need to coaching and mentoring, lobbying and negotiating, know how to build social capital by organizing rural and coordinating, with a clear understanding of ethical actors, provide diverse services from technology trans- behavior; fer to marketing, and serve as facilitators or intermedi- Managerial and entrepreneurial skills to put inno- aries among actors (see module 3). Researchers, rather vations into practice and enable organizations to adapt than sequestering themselves in labs and field stations, and respond in competitive environments. Source: Adapted from Snapp and Pound 2008, OECD 2010. Despite the evolution from traditional lecturing to inter- Meet recognized standards for quality. Investing in active, student-centered learning, many AET systems still accreditation or certification provides universities and operate in the “chalk-and-talk� era. Some systems of higher training institutes an incentive to raise their academic quality agricultural education rely on dated lecturer’s notes as the to recognized standards. Investments that develop close only teaching aid, and some vocational and technical pro- working relationships with preeminent educational grams cannot provide students with an opportunity to institutions are another means of raising academic practice on equipment or use laboratories as they learn. standards. For institutes of higher education especially, these Even when teachers and instructors are willing to use ICTs, alliances lead to collaborative learning programs involving budgets are insufficient to purchase them, or unreliable information sharing, staff and student exchanges, and joint supplies of electricity make their use unpredictable. Invest- research. The local institution, its staff, and its graduates ments in institutional or curriculum reform for tertiary gradually become much stronger contributors to the AIS. agricultural education, agricultural TVET, or in-service training should include provisions for introducing and/or Provide a regional resource for advanced degrees. updating ICTs and training staff to use them. Given the limited resources in many AET systems, many 116 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 2.5 The Potential of ICT for AET and Its Role in an Innovation System Many AET systems in developing countries do not The International Institute for Communication employ even low-level ICT in the teaching/learning and Development (IICD), a nonprofit foundation process. Reasons for this include poorly trained teaching that specializes in ICT as a development tool, has staff who have not been exposed to ICT in their training, helped to introduce a number of ICT solutions in the lack of funds to purchase ICT, unreliable power access, education sector, which indicate the potential for ICT and no supervisory pressure to adopt and use ICT. ICT within AET. For example, teachers in Burkina Faso can improve the quality of teaching and learning and learned to build websites, find materials on the web, raise the quality and relevance of AET for greater impact and use video, web publishing, and other applications within the AIS through a number of means: to improve their lessons. Social media training helped these teachers start an active online community for ■ Improved competencies among teachers. Teachers sharing teaching materials with schools across the and trainers are trained in basic ICT skills and ICT- country. In a similar project, Bolivian teachers based teaching methods. learned to create videos and CD-ROMs to support ■ Improved competencies among graduates. The lessons; its success inspired the Bolivian government effectiveness and employability of AET graduates to launch a national program to put computer labs in improves because they possess ICT skills. 1,000 schools. At the Copperbelt College of Education ■ Better educational materials. ICT enables teachers in Zambia, one initiative requires that all graduating to access information sources and create, update, teachers be able to prepare lessons digitally. ICT skills and share learning materials. also benefit vocational training and help make youth ■ Distance education and e-learning. ICT is integral more employable. In Zambia, IICD helped set up a to creating opportunities for distance and electronic computer lab in a youth center, where young people teaching and learning. learn basic ICT skills and access the web. As users ■ Improved education administration and manage- learned more about the potential of ICT, the com- ment. Throughout the AET system, ICT enables puter lab began to offer additional services, including more effective and efficient management of human secretarial and marketing support. Now ICT is also and financial resources and monitoring of student used to support training for tailors, carpenters, and performance. mechanics. Source: Author and www.IICD.org. universities cannot provide teaching and research objectives. Changes in AET systems, whether sweeping or opportunities at the level of excellence needed to produce piecemeal, do not always conform to the expected process or graduates who can assume leadership roles in the AIS. timeframe, and practitioners should plan for adjustments. Investments to create a center of excellence within a region Depending on the location, capacity, commitment, and lead- can provide opportunities for qualified candidates from ership for change, the time focus may shift to require longer- smaller or less-well-endowed educational systems to pursue than-anticipated support; in other cases, reforms and changes studies at a higher level. These candidates, on returning to may proceed faster than expected. their academic bases, can contribute to the development of new knowledge and enhance the local AIS. See also module Long-term investments (five or more years; 4, TN 5 for lessons on organizational change. sometimes much longer). Regardless of whether the pressure for change is internal or external, long-term investments to support change in AET systems largely Long-, medium-, and short-term opportunities involve wide reforms. Such investments require to revitalize the AET system considerable preparation in the form of discussion, creating The discussion here indicatively classifies investment a vision for AET (see also module 7, IAP 4 for lessons on opportunities as long, medium, and short term to empha- a vision-building process), stakeholder agreements, size the commitment required to achieve various kinds of catalyzing inputs from facilitators, and field visits to MODULE 2: OVERVIEW 117 successful reform initiatives. Important investment Curriculum Change. Some twenty years ago, the University opportunities include: of Chiang Mai developed a highly influential learning and Reform of agricultural universities or faculties of agri- research model that integrated faculty, students, and rural culture in comprehensive universities. This type of reform communities. Feedback from the community experience can be classified as internally led change even though the continues to influence the university’s research focus, its cur- impetus for change may originate outside the university. riculum, its role in the AIS, and its international standing. Long-term “twinning� or collaborative links to univer- IAP 6: EARTH University, Costa Rica: A New Kind of sities recognized as leaders in AET. These links can rein- Agricultural University. Founded in 1990, the private, force reforms and lead to productive growth opportunities autonomous EARTH University is an example of an institu- in research, teaching, and learning through staff and student tion that was newly developed to address the need to edu- exchanges. cate and train young people to deal with the region’s numer- Investments in the creation, capacity building, and con- ous agricultural, social, and political problems in rural tinuing support for regional institutions that offer special- areas. Its model blends academic work with practical expe- ized degrees, especially at the master’s and doctoral levels. rience and collaboration in agrarian communities and These entities could become centers of excellence in partic- agribusiness. ular fields of research and education. IAP 8: Agribusiness Training for Secondary School The availability of competitive funds that are tied to an Graduates in Timor-Leste is a relatively short-term invest- agreement to bring about reforms. ment that requires longer-term support to be sustained. The establishment of new, privately funded and man- aged agricultural universities—new in approach, vision, Medium-term investments (three to five years). and autonomy, not merely newly built—also fits into the Medium-term investments are tied to reforms and long-term investment category. improvements in education and training organizations, in Examples of long-term investments to support reform in the quality of education and pedagogical skills, in shifting agricultural education are included in one TN and several from teaching to learning, boosting the acquisition of IAPs: practical skills, and providing life-long education and TN 1: Reforming Public Agricultural Education at the training. More specifically, they can include needs Tertiary Level. The process, benefits, risks, and lessons from assessments with stakeholders at all levels in the AET comprehensive reform in higher agricultural education are system; reforming the curriculum; improving teaching and described, and an example from China is presented in learning methods; building staff capacity; enhancing detail. Efforts in other settings (Australia, Ireland) are dis- communications skills; using, applying, and facilitating cussed in passing. access to ICTs; introducing or strengthening programs for IAP 1: Reforming India’s State Agricultural Universi- technicians; creating policies to underpin higher ties. This IAP encapsulates lessons from a major effort to agricultural education and TVET; modernizing governance modernize university administration and management; structures at universities, colleges, and training entities; update the curriculum; make related changes in pedagogy, gaining accreditation for higher agricultural degree learning materials, and infrastructure; set new standards for programs, technical diploma programs, and certificate higher agricultural education; and improve human resource qualifications; strengthening the management of in-service management in state line departments that worked closely training; evaluating the impact of training programs on with the agricultural universities. work performance; and establishing or strengthening IAP 4: Innovative Training Program for Midcareer university capacity to offer outreach education and training Agricultural Extension Staff: The Sasakawa Africa Fund to external stakeholders, including the private sector and Education Program. This long-term investment focused on communities. A medium-term investment could also fund expanding the skills of midcareer professionals through competitive grants to catalyze such changes. degree programs featuring fieldwork as well as academic Several TNs and IAPs in this module discuss medium-term training. The program developed strong links between investments: universities, the public sector, and rural communities that TN 2: Curriculum Change in Higher Agricultural Edu- benefited all concerned. cation. Practical steps involved in designing programs to IAP 5: Chiang Mai University Links with Rural Commu- foster curriculum change are discussed, along with useful nities to Focus Research on Farming Problems and Foster supporting investments and policies. 118 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK TN 3: Education and Training for Technician Develop- rural youth organizations, investments could support ment. TVET colleges or institutes produce technicians with organizer training, youth programs and competitions, study the practical skills to manage farm and agribusiness enter- visits, and the production of educational and media prises, provide practical leadership to farm organizations materials. and agricultural banks, and become entrepreneurs in their While short-term activities do contribute to the strength own right. This TN reviews newer approaches to technician and capacity of AET, it should be recognized that interven- education and training, including public-private and tions designed to strengthen AET systems are, for the most agribusiness approaches. part, a long-term undertaking: “Only through a long-term IAP 2: Transforming Wageningen Agricultural Univer- outlook on change can AET systems contribute to the devel- sity. In 1997, the Netherlands Ministry of Agriculture initi- opment of more dynamic and competitive agricultural ated a major investment in the knowledge infrastructure for economies that engage farmers, entrepreneurs, extension agriculture that led Wageningen University to change its agents, researchers, and many other actors in a wider system focus, structure, programs, and staffing and cooperate with of innovation� (Davis et al. 2007). This observation is a wider research, social science, and stakeholder network. echoed by Eicher (2006), who reported that a number of IAP 3: Curriculum Change in Agricultural Universities successful AET reforms took sixty years or more and Strengthens Links in Egypt’s Innovation System. Curricu- required a continuing commitment on the part of donors or lum change in five universities has enabled course content other partners. to respond to the needs of potential employers and proven Short-term investments are featured in: to be a good entry point for wider institutional change. TN 4: Reforming the Management of In-Service Train- IAP 7: Technical Skills for Export Crop Industries in ing/Learning. This note describes the rationale and steps Uganda and Ethiopia. Through cooperation between a involved in improving the management of in-service train- donor, training institution, and commodity group, workers ing and the capacity of trainers to assess needs, design pro- in high-value export crop industries in Uganda and grams, deliver training in a variety of modes, and evaluate Ethiopia acquired better technical skills. Demand from its impact. employers triggered the training. IAP 9: Vocational Training in Egypt Combines Technical IAP 8: Agribusiness Training for Secondary School and Innovation Skills for Agriculture. Vocational agricul- Graduates in Timor-Leste. A one-year certificate course on tural education programs in 25 secondary schools in Egypt agribusiness, piloted for three secondary schools of agricul- were transformed to introduce students not only to practical ture in Timor-Leste, highlights the value of such programs training but to higher-level skills such as problem solving, as well as the considerable challenges, especially in rural critical thinking, and decision making. This effort involved areas of fragile states. additional changes in pedagogy and school management. Short-term investments (one to five years). Even Reforms require reformers short-term investments can greatly enhance the capacity of those involved in AET to be more effective communicators It is worth emphasizing again that the duration of reforms and agents of innovation. For example, in-service training and the examples provided here are indicative. Short-term programs or programs of farmer training can be improved programs have become longer-term programs when stake- by offering short courses to teachers, facilitators, and holders have championed their goals; many long-term pro- demonstrators to enhance quality, make the content more grams have foundered when they are not institutionalized in effective, and improve the delivery of the programs. a sustainable way. A broad lesson for practitioners in planning Specialized study programs for key sector staff also fit under reform programs of any length is to pay close attention to this category of investment, provided that they are based on building constituencies of stakeholders at all levels to help clearly defined needs and that recipients return to ensure the program’s sustainability. undertake a work program that is more effective as a result. In-country, regional, or international sites may be chosen MONITORING AND EVALUATING INVESTMENTS for specialized learning depending on need and the quality TO REFORM AET of programs offered. Support for attachments, work experience assignments, and student community Monitoring and evaluation help to determine whether interaction also falls into this category of investment. For investments are contributing to desired outcomes, enable MODULE 2: OVERVIEW 119 institutions to rally support for continued reforms, and elements, regardless of whether the reform encompasses enable institutions to adjust programs and administrative entire systems or institutions or whether it addresses a spe- processes. Although each particular investment in AET will cific aspect of AET, such as curriculum reform. require a specific set of progress and impact indicators, most Table 2.2 shows corresponding indicators for investments investments to reform agricultural education have common in each major type of reform described in this module: Table 2.2 Measuring the Progress of AET Reforms Comprehensive reform in entities offering higher agricultural education Intended outcome Selected indicator Needed action/step – University an active member of the AIS. – Tripartite body (ministries in charge of – Initiate dialogue between ministries in – Improved sector productivity through a education, agriculture, and finance) charge of education, agriculture, and more effective role in the AIS. established to coordinate higher-level AET. finance. – University offers life-long learning – Representative stakeholder membership – Prepare budgets on annual basis. opportunities to stakeholders. of university board. – Present reforms to key stakeholder groups. – University seen as reliable and – Annual university budget prepared and – Campaign to institutionalize reforms competent source of advice and in- submitted to tripartite body. undertaken with decision makers. service learning/training. – Annual budget approved and funds – Carry out and analyze needs assessment – Improved, higher-level governance of allocated. to identify gaps between current AET, underpinned by clear policy and – Legal status of reforms finalized and program and labor-market expectations. financial resources. available to the public. – Describe and undertake curriculum – Reforms institutionalized. – Reforms presented to tripartite body adjustment. – Quality of university degree programs for approval and endorsement. – Update pedagogy to focus more on assured through accreditation. – University senate approves reforms. learning than teaching. – Stakeholders participate in university – Staff pedagogical skills updated. – Improve staff remuneration and incentives governance, and university has closer – Use of ICT for learning becomes the to attract and retain good personnel. ties with communities and employers of norm. – Improve student intake selection and graduates. – Curriculum reform approved by gender and minority group balance. – University actively participates in and university senate and tripartite body. – Hold student population to manageable contributes to national, regional, and – Community outreach program in place. numbers to assure quality education. international AET networks. – Student attachment mechanism working – Increase use of ICT to bring higher AET well. into contact with new sources of – Increase in master’s and doctoral knowledge and support. program enrollment. – Forge links with universities at home and – Staff reflect improved gender balance. abroad. Reform of ATVET and VET Intended outcome Selected indicator Needed action/step – Role of agricultural technical education – Role and management of ATVET – Clarify responsibility for management of and training is defined. officially approved. ATVET. – Institution offering life-long education – Policies officially approved. – Establish links to the AET system. and training opportunities. – Public-private cost-sharing formula for – Establish attachment and work – Instructors’ and teachers’ skills enhanced, ATVET publicized. experience programs, and agree on the including student-centered pedagogy. – Public-private partnership agreements in rules and evaluation criteria. – Policies in place to underpin ATVET. place for funding ATVET. – Undertake training needs assessments. – Active stakeholder role in governance of – Programs certified to agreed standards. – Train instructors/teachers in student- ATVET. – Employment rates for graduates centered pedagogy. – Functioning network of ATVET/VET satisfactory. – Undertake survey of employers and institutions and stakeholder groups in – Employer satisfaction with quality and graduates. place. skills of graduates high. – Carry out facilities and equipment needs – Status of ATVET/VET qualifications – Courses certified by recognized assessments. improved because of certification and authorities. – Review and adapt pay scale for support from employers. – Employer and student/trainee instructors/teachers. – Facilities and equipment adequate for satisfaction with training/learning – Funding arrangements between the supporting quality ATVET programs in impacts. public and private sector and trainees place. and their sponsors agreed. – Remuneration levels in place attract – Courses/programs designed to meet qualified instructors. needs of labor market and stakeholder employers. (Table continues on the following page) 120 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 2.2 Measuring the Progress of AET Reforms (continued) Curriculum change (reform) Intended outcome Selected indicator Needed action/step – Curriculum reflects knowledge and skills – Curriculum change team appointed and – Identify leadership group to spearhead that graduates need to meet labor- terms of reference and work program the reform process. market expectations. defined. – Explain curriculum change to key – Strategy for implementing – New curriculum shared with key stakeholders. reform/change developed and stakeholders. – Conduct needs assessment involving key implemented. – Reformed curriculum approved by stakeholders. – Functioning mechanism for continuous education entity and responsible – Define clear strategy and reform monitoring of sector changes in place. ministry/ministries. process steps and assign responsibilities – Staff adopt appropriate pedagogy. – Feedback from employers positive. for all steps in the process. – Mechanism in place for continuously – Teaching staff use improved teaching – Identify curriculum gaps and prepare monitoring the effectiveness of the materials. new curriculum to bridge them. curriculum. – Widespread use of ICT in teaching and – Plan and implement training program for learning. teachers and instructors. – Student satisfaction with curriculum. – Field-test curriculum and amend as necessary. – Design, test, and produce materials to support curriculum. – Train teachers/instructors in using new curriculum. – Lessons from university-community interactions conveyed to curriculum change managers. – Design monitoring and evaluation plan. – Survey employers for satisfaction with graduate performance. Training management and quality enhancement Intended outcome Selected indicator Needed action/step – Training replaced by learning. – Commitment to improved HRM agreed – Managers and supervisors identify – Clear role defined for the management and announced. training needs. of agricultural sector human resources. – HRM strategy in place. – Prepare academic and training – Capacity for and regulations governing – Responsibility for HRM assigned. achievement profiles of all staff. HRM developed and in place. – Qualified persons appointed to manage – Create HRM management capacity – Training program design and trainee HRM. within units. selection improved and based on needs – Budgetary support for HRM made – Conduct HRM orientation for manager- assessment and analysis. available. level staff. – Training/learning records maintained and – Training/facilitating staff skills updated – Impart needs assessment skills to up-to-date. regularly. training/learning staff. – Merit-based hiring and promotion. – Training/learning materials updated and – Hire designers and create HRM database. appropriate. – Revisit job descriptions to indicate skill – Higher staff morale and client packages required. satisfaction reflected in surveys. – Upgrade trainer/facilitator pedagogy. – HRM program results reviewed regularly – Acquire appropriate ICT equipment and at ministry level. tools. – Circulate detailed annual – Develop and allocate budgets. training/learning reports. – Update teaching/learning materials. – Prepare regular and detailed documentation on HRM activities. – Survey impact of training/learning programs on workplace performance. Source: Author. Note: ATVET = agricultural technical–vocational education and training; HRM = human resource management. MODULE 2: OVERVIEW 121 T H E M AT I C N O T E 1 Reforming Public Agricultural Education at the Tertiary Level Charles J. Maguire, Consultant SYNOPSIS finding employment, or stakeholders report dissatisfaction with the quality of graduates. Yet policies are rarely in place pproaches for reforming higher agricultural edu- A cation vary but may include comprehensive, sys- temwide reform, curriculum reform, or program- matic reform to increase the quality and number of to help universities identify and correct structural and pro- grammatic weaknesses before they become serious. A strat- egy to correct those weaknesses would help universities organize themselves to develop and deliver programs that degree-level graduates. Factors determining the scope of build the technical capacity and other skills required to fos- investments to reform higher education include the size and ter effective innovation, interaction, and communication scope of the AET system. In large systems, decisions about with others in the AIS. whether the reform will include all institutions or pilot Reforms that bring about meaningful, lasting change in institutions are particularly important; reforms of smaller higher education are hard to implement. They demand systems can be more focused. The level and type of invest- leadership, time, financial resources, and persistence. ment are also influenced by the time horizon to which gov- Reforms on this scale are not one-dimensional. They must ernment, the university, and donors are committed. Classic often encompass policy and strategy formulation, stake- examples of reform in higher education have spanned ten to holder cooperation and involvement, governance changes, sixty years, but shorter investments can yield positive results increased university autonomy, curriculum updating, peda- and sometimes catalyze more thoroughgoing reform. Stake- gogical capacity building, increased practical work by stu- holders must agree on the need for reform, the impedi- dents, and stronger links to rural communities. The weak- ments, and the steps to create an environment for successful nesses of agricultural education at the tertiary level in most reform within the AET system. Investment should not pro- developing countries are sufficient in themselves to make a ceed until key stakeholders recognize that reforms are diffi- convincing case for reform, but amid the challenges of per- cult to implement and understand that reforms will lead to sistent rural poverty, globalization of markets, climate improved university autonomy, funding, policy guidelines, change, and continuing demand to feed a large population and governance. Proposed reforms should either fit the from a stressed natural resource base, the case for reform is existing rules governing administrative and structural more urgent than ever. change in public entities, or changes should be negotiated to Enabling graduates to operate effectively in the innova- ensure that essential reforms can be accommodated. Prereq- tion system can lead to increased agricultural productivity, uisites for successful reform include support for change at better livelihoods, and less poverty. These outcomes are the highest levels and leadership that is prepared to sustain more assured when agricultural education plays an effective reform over a considerable period. role in the innovation system for agriculture. Although the particular approach to reform may vary, the priorities for BACKGROUND AND CONTEXT reform are similar in many cases. The approaches to reform FOR INVESTMENT and elements of investment discussed in the remainder of this note reflect these priorities: Institutions that provide higher agricultural education are often aware that their graduates are not meeting the needs ■ Develop or update policies that describe and guide of the agricultural labor market. Perhaps graduates are not higher agricultural education in the broader educational 122 system and in the agricultural sector. The policies that or the path (direct, indirect) taken, all efforts to foster guide AET must be aligned with agreed recommenda- change require consensus among stakeholders, support for tions for reform. change at the highest levels, and leadership to sustain ■ Pursue an agenda of agreed, specific reforms within change over time. agricultural universities, faculties of agriculture, and It is critical to remember that investments to reform agri- agricultural colleges to revitalize management and cultural education, especially at the higher levels, are also governance, increase autonomy, improve teaching meth- long-term investments in a more robust AIS and in greater ods, update curricula, ensure financing, strengthen rela- productivity throughout the agricultural sector. With this tionships with clients, encourage the use of ICTs to enrich ultimate goal in mind, this section introduces alternative learning, and focus on stakeholders’ needs as well as approaches to reforming and modernizing higher agricul- external influences, such as climate change and global tural education, lists the main investment elements in each, trade in agricultural commodities. and presents examples of good practice. ■ Institutionalize reforms to ensure that reforms are agreed by decision makers and university administra- Comprehensive (“big bang�) reform tors, clearly documented, approved by the university The most direct path to reform, often catalyzed by external governing body, incorporated in guidelines and policy pressure, leads the agricultural university or faculty of agri- instruments, and available to all stakeholder groups. culture to compare stakeholders’ expectations with program ■ Attain accreditation of reformed universities and their offerings and use the gaps between the two to create an programs to give them, their staff, and their degree pro- agenda for change. The change agenda needs buy-in from grams national, regional, and international credibility. university management and, when implemented, needs to be ■ Base curriculum reform on consultation with stake- institutionalized through policy, regulations, and formal holders to ensure that the resulting degree and diploma recognition by the ministries in charge of education and/or programs are relevant. agriculture. This “big bang� reform requires leadership and ■ Link curriculum reform closely to pedagogical reform, prior agreement among a number of actors, including uni- especially to adopting a student-centered, practical versity management, faculty, and staff; decision makers at the approach to learning. resource allocation and policy levels; stakeholders who employ graduates; and students and their families. The main elements of investments in this type of reform include: INVESTMENT NEEDED The heterogeneity of AET systems across the world suggests Facilitating dialogue between the main stakeholders to agree that the kind of investments required will be similarly on the need for and scope of the intended reforms and to diverse. Reforms will need to be tailored to the prevailing assign responsibility for each reform step and activity. situation, including the needs of specific groups of stake- Undertaking a needs assessment (skills gap assessment) holders (farmers, processors, marketers, and consumers of that reflects differences between the capacity of present agricultural commodities, for example). Innovations in the graduates and the expectations of those that hire them. management, relevance, and quality of higher agricultural Analyzing the outcome of the needs assessment and design- education will depend on factors such as the quality of lead- ing a change agenda. ership at a given university, the incentives to undertake Formulating a strategy for implementing the change agenda reform, the university’s capacity to accept that gaps may and supplying the facilitation capacity to move the strat- exist between current programs and standards and stake- egy forward. holders’ expectations and needs, and the level of support Convening stakeholder meetings to apprise all involved with from decision makers who finance and guide education and progress and resolve difficulties in implementing the agricultural development and management. Reforms may change agenda. encompass single or multiple universities; they may be long Finalizing the list of change-promoting activities and clearly or short term; and they may be funded by government specifying their implications for governance, organiza- and/or external donors. tions, personnel, and budgets. The impetus for reform in AET can come from different Presenting the detailed change strategy to university man- sources, and organizations can pursue many different paths agement and to policy and decision makers at high levels to reform. Regardless of the source of pressure for reform in the government. MODULE 2: THEMATIC NOTE 1: REFORMING PUBLIC AGRICULTURAL EDUCATION AT THE TERTIARY LEVEL 123 Undertaking preparatory activities to develop a refocused A concrete, stepwise example of a complex, long-term, academic program, such as leadership strengthening, national effort to reform higher agricultural education curriculum adjustment, improved pedagogy, administra- comes from China (box 2.6). In addition to China, a diverse tive capacity enhancement, information technology group of countries has undertaken reforms in higher upgrading, strengthened links to stakeholder/employers, agricultural education. India implemented a large, externally and community outreach. funded project to reform its State Agricultural Universities Box 2.6 Reforming Higher Agricultural Education in China, 1990–2000 By the late 1980s, as China gained momentum in mov- constraints identified and integrate them with national ing toward a market economy, the higher education sys- institutional reform. This step was taken jointly in 1993 tem for agriculture (created in the 1950s in the image of by MOA and the Ministry of Education (MOE), with the Soviet system) recognized that its graduates would support from central government. The second step, not have the skills to perform well in the changing labor undertaken from 1993 to 1995, was to initiate pilot market. Developed for a planned economy and operat- reforms at some universities. These pilots, which focused ing under a centralized administrative system, China’s on internal structural reform and merging institutions, institutions of higher agricultural education had little tested the reform concept and contributed to an action autonomy. They had no control over staff recruitment plan for large-scale reform in higher agricultural educa- and finances. They struggled to accommodate to the tion. In the third step, the agricultural education institu- changes brought about by the market economy. tions, MOA, and MOE synthesized their experiences with Catalysts of reform. External and internal factors cat- the pilots. Based on the outcome of this learning exercise, alyzed the decision to reform China’s higher agricultural MOA formulated an action plan for launching the education system. The three principal external factors national reform in higher agricultural education in 1996. were: (1) better-qualified, better-skilled graduates were The fourth step was to implement the reform throughout needed to solve emerging technical and managerial prob- China from 1996 to 2000. That process was guided by lems in the agricultural sector; (2) government pressure MOA and MOE in cooperation with provincial govern- to improve the efficiency of investments in education and ments. In some cases, the reform process continues. reduce costs; and (3) lessons from reforms in other coun- Stakeholders and their contribution or involve- tries. Internal pressure for reform included: (1) demand ment. Many institutions collaborated and cooperated from higher education institutions to gain greater in the reform. The MOA helped formulate the reform authority to plan agricultural education, develop curric- strategy and action plan. The MOE was involved in ula, and manage personnel; (2) the need to rationalize the designing and implementing the curriculum reform use of academic staff and bring about efficiencies in and merging institutions. Central government partici- teaching and research; (3) the realization that teaching pated in the earlier stages, and provincial governments staff and institutions had to merge if they were to deliver participated in merging institutions. Employers sup- graduates with the desired skills; (4) the need to use agri- ported curriculum and employment reform, and cultural education infrastructure more efficiently; and students and their parents pressured the higher agricul- (5) the need to reduce staff and personnel costs. tural education institutions to improve internal educa- Steps in the reform process. Reform began toward the tion management and bring about financial reform. end of the 1980s with an analysis of internal and external Staff of agricultural education institutions participated problems and constraints that emerged from implement- in planning and implementing internal structural ing reforms in the national economic system. This reforms, and education research institutions provided process—initiated mainly internally by the agricultural concepts and guidance with regard to the reform. education institutions and the Ministry of Agriculture Changes emerging from the reform. The major (MOA)—was informed by the outcomes of a conference changes emerging from the reform included: and several meetings. Reforms were implemented in four main steps. The first was to formulate a reform strategy, • decentralizing the administrative structure to the concept, and guidelines to address the problems and provincial government level and giving more (Box continues on the following page) 124 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 2.6 Reforming Higher Agricultural Education in China, 1990–2000 (continued) decision-making responsibility to higher agricul- New teaching methods introduced by the College of tural education institutions; Rural Development set a good example for further • changing curricula and pedagogical approaches; reforms in teaching methods for other faculty. changing student enrollment; aligning employment Lessons learned. Some aspects of the reforms were patterns more closely with labor-market expectations; very specific to the national context. For example, once • changing internal administrative structures to reform was agreed upon, it proceeded according to plan. enable better recruitment and motivate staff; and All key actors cooperated in meeting a major economic reforming logistical systems (leading to efficiency challenge that demanded better-educated and trained and financial savings). graduates from higher agricultural education institutions. Even amid strong collaboration and support, the Note that no gender reforms were needed. The reforms took a decade to achieve their main objectives, institutions involved did not have gender discrimina- and the process continues to evolve. The lesson is that tion in recruitment or promotion of professional if higher agricultural education is to be reformed in a staff. comprehensive way, the investment in time and contin- Other results of reform. Institutions involved in ued support will be substantial. In China, even with higher agricultural education gained more autonomy in strong agreement over the reforms, the reforms did not implementing and managing education and research always work smoothly, especially when institutions and in balancing agricultural market needs with national were merged and the rapid rise in enrollment placed education guidelines. A performance-linked staff high pressure on teachers and on space. recruitment and remuneration system was integrated Reforms had winners and losers among educational into the management system for these institutions. Edu- institutions and staff as the entire system was made cation efficiency improved significantly. Funding also more cost-effective. Notably, reforms in student enroll- improved, because student fees were raised and enroll- ment and placement systems did not seem to improve ment rose by 10–15 percent. Curricula and teaching employment among graduates, who found it more dif- methods are better, more flexible, and more student- ficult to gain employment owing to greater competi- friendly since the reforms took place. The establishment tion for jobs. Government funding is still less than of a Rural Development section (faculty) has con- required, especially for higher agricultural education tributed to meeting the challenges of rural development. institutions in poorer areas. Source: Liu and Zhang 2004. (IAP 1); the established, respected Wageningen Agricultural stakeholders (IAP 3). Curriculum reform can be undertaken University in the Netherlands made major adjustments to directly as a project within the university or faculty of management and curricula when faced with declining stu- agriculture (see TN 2) or less directly by strengthening dent numbers and imminent restructuring (IAP 2). links with rural communities as in the cases of Indonesia (box 2.8), Thailand (IAP 5), and Africa (IAP 4). In the less direct approach, when university research and teaching staff Curriculum reform and students become involved with farming families and An often effective though less direct approach to institu- communities, their understanding of agricultural and rural tional reform can begin with curriculum change across problems improves, giving rise to innovative solutions and degree programs. TN 2 discusses curriculum reform in to curricula that are relevant and that reflect the real cir- detail, but here the point is that while curriculum change is cumstances of rural communities. Once the value of being implemented, often it exposes other organizational reforms in the curriculum or graduate-level courses is rec- and academic problems and leads to further and deeper ognized and appreciated, a movement for deeper reform reforms. Egypt provides an example of this type of invest- arises from within the organization. ment. Five Egyptian universities undertook radical curricu- Another approach to curriculum change is to repackage the lum and pedagogical change and forged strong links with traditional agricultural degree as a number of better-focused MODULE 2: THEMATIC NOTE 1: REFORMING PUBLIC AGRICULTURAL EDUCATION AT THE TERTIARY LEVEL 125 programs that attract student interest and support. Ireland include civics, ethics, communications skills, and entrepre- offers a recent example of such an approach. In response to neurship. declining student numbers, Ireland’s public universities Box 2.7 describes the main investment elements of direct changed their enrollment procedures during academic year and indirect curriculum reform. The elements of direct 2000/01 so that new students could apply to nine agricul- reform echo the experience in China (described in box 2.6) tural degree programs (each with a specific focus) rather and India (IAP 1). The elements of indirect reform echo the than to one generically defined “agriculture� program. This experience in universities such as Chiang Mai University change greatly increased the number of students choosing (IAP 5) and even (on a smaller scale) in postsecondary edu- agriculture, an increase that has been sustained (Phelan cation (in Timor-Leste, IAP 8) and in-service training (in 2010; MacConnell 2010). Ghana and beyond, IAP 4). Curriculum enhancement to better prepare graduates for the demands of the modern agriculture sector is Reforms catalyzed by increasing the number and another method of supporting curriculum change. quality of graduates with higher degrees Ethiopia launched a Rural Capacity Building Project (2006) that focused on new, university-level courses that would Yet another indirect approach to reform is to invest in new respond to labor-market needs. The courses added would or upgraded doctoral or master’s degree programs that Box 2.7 Main Elements of Investment in Direct and Indirect Curriculum Reform The elements of investment in direct curriculum ■ Adjusting or revising curricula, based on the results reform include: of M&E and user feedback. ■ Facilitating dialogue between the main stakeholders The main investment elements in indirect curriculum to reach agreement on the need for and scope of the reform through community outreach include: intended reforms and assign responsibility for each reform step and activity. ■ Facilitating dialogue between university manage- ■ Organizing and facilitating a series of meetings ment, faculty, and community leaders to agree on between university managers, academic staff, and the need for university-community cooperation representatives of key stakeholder groups to identify and on the operational approach. gaps between stakeholders’ expectations and the ■ Agreeing on the details of the university-commu- quality of graduates from the academic entity. nity program, including its goals and the responsi- ■ Undertaking a skill gap analysis to better understand bilities of both sides. what kind of curriculum change must be considered. ■ Arranging for university staff and students to visit ■ Reviewing and updating the curriculum, using and reside in communities. external expertise if needed. ■ Adjusting curricula to incorporate community ■ Packaging revised curricular materials to suit a vari- involvement in the academic program. ety of learning styles—for example, offer material in ■ Facilitating staff and student experiences and obser- several media such as print, CD-ROMs, DVDs, vations in communities and translating these activ- video, learning management systems (Moodle is ities into processes for developing technical and open-source software to create online learning sites) social solutions. and formats (textbooks, teachers’ aids, case studies, ■ Organizing meetings with communities to share and so forth). results of university-community interaction. ■ Pedagogical upgrading for teaching/facilitating ■ Accommodating feedback from university- staff. community experiences in an adjusted curriculum. ■ Designing a monitoring and evaluation (M&E) ■ Funding the logistical arrangements for student and instrument and implementing M&E. faculty involvement in community links. Source: Author. 126 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK strive for excellence. These programs will produce human ■ Supporting academic staff capacity with training and resources with a better capacity to generate knowledge and pedagogical skills and tools. greater leadership ability (among other skills). Graduates ■ Underwriting some or all of the cost (fees, travel, subsis- will staff agricultural universities and faculties of agriculture tence) of students accepted from smaller universities to and, through their work, catalyze reform. The key invest- attend the center of excellence. ment elements in achieving curriculum and program ■ Subsidizing research costs in candidates’ home countries reform indirectly, by improving the quality and quantity of while they fulfill their degree requirements. This item higher agricultural degrees, include: would include students’ costs in undertaking research and supervisors’ costs in undertaking visits to the research sites. ■ Identifying academic institutions that could become centers of excellence or hubs for obtaining higher Anticipating future knowledge and skill needs for degrees. the sector. Investment in brainstorming about future ■ Facilitating dialogue between the centers of excellence knowledge and skill needs for the changing agricultural and universities that could potentially supply them with sector can lead to better education planning and resource degree candidates. Those universities may be unable to allocation (box 2.8 presents an example from Indonesia). afford the staff or infrastructure to support the volume In the United States, the Association of Public and Land- or quality of higher degrees needed. Grant Universities launched the Kellogg Commission on the ■ Upgrading facilities at the centers of excellence. Future of State and Land-Grant Universities in 1999,1 and Box 2.8 The Pursuit of Relevance Spurs Reform in Bogor Agricultural University, Indonesia Bogor Agricultural University—Institut Pertanian The curriculum was transformed by introducing Bogor (IPB)—was a pioneer in higher agricultural edu- more programs that involved additional stakeholders, cation in Indonesia. It developed the first four-year most importantly the community. To reinforce the undergraduate degree program in 1974 and Indonesia’s involvement with stakeholders, IPB emphasized the first graduate school of agriculture in 1975, actively formation of a network and good working relationship recruited students from high schools throughout the among the various stakeholders in the Bogor area. country, introduced community extension programs, Aside from IPB, these stakeholders consist of research and established a regional planning board. More institutions, the private sector, NGOs, farmers, and recently, IPB envisioned additional changes in manage- rural communities. Examples of collaboration that are ment, organization, academic programming, commu- already in place include the Integrated Pest Manage- nity participation, and international outreach to ment and Biological Control project in northern West continue developing and remain relevant. Java and southern Sumatra, a shrimp restocking proj- These changes were reflected in the university’s ect in Sukabumi, an animal husbandry project, and decisions to: reengineer the academic and administra- reforestation and community participation projects. tive functions in education, research, and community An entrepreneurial spirit was developed by involving services; develop human resources; undertake activi- students, communities, and the private sector in joint ties to generate revenue; revitalize the financial and projects (such as a fish-processing project currently funding systems, infrastructure, and infrastructure underway), by refocusing research at university cen- management; and strengthen the management of ters, encouraging the development and submission of information systems and IT facilities. Improved gover- patents by the university community, encouraging nance was a prerequisite for these changes, including agribusiness incubator programs, renewing the focus the creation of a board of trustees and an academic on community outreach and rural mediation pro- senate, the use of auditors, the development of univer- grams, emphasizing programs featuring student- sity organizations, and portfolio analyses by all uni- centered learning, and developing effective international versity units. networks and linkages. Source: Wirakartakusumah 2007; www.IPB.org. MODULE 2: THEMATIC NOTE 1: REFORMING PUBLIC AGRICULTURAL EDUCATION AT THE TERTIARY LEVEL 127 the Secondary Vocational Agricultural Education Program the role of higher education in agricultural development, undertook a three-year (1996–99) program, Reinventing give educational institutions the autonomy to provide Agricultural Education for the Year 2020, with funding from high-quality education and cooperate with stakeholders, the W.K. Kellogg Foundation (National Council for and guarantee the financial resources to underpin compre- Agricultural Education 2000). See also module 7, TN 3 and hensive reforms. IAPs 4 and 5 for foresighting and visioning. LESSONS LEARNED Designing new agricultural education programs An important general lesson is that the reform of tertiary Occasionally opportunities arise to create a new educational agricultural education is a complex undertaking, involving institution, giving designers the freedom to develop a cur- numerous actors with varied interests in the outcomes and riculum and adopt pedagogical approaches that best suit the requiring considerable commitment on the part of reform- new institution’s mission and goals. New, privately funded ers, the university or other institutions involved, stakehold- universities were established in Costa Rica (IAP 6) and ers, and decision makers. In many respects, reform needs to Honduras (in Zamorano, to produce graduates with the be continuous if higher agricultural education is to respond technical and entrepreneurial capacity to work as self- to needs that will always be changing. The following sec- directed entrepreneurs or as employees in agribusiness, the tions discuss the conditions needed for reform to succeed, public sector, or NGOs). factors that influence the level of investment in reform, and more specific lessons from reforms undertaken over the years. POTENTIAL BENEFITS OF INVESTMENTS TO REFORM HIGHER AGRICULTURAL EDUCATION Conditions for reform Reform that is supported by the academic entity and taken to a satisfactory conclusion can have a number of important Investment in AET reform is appropriate when the impacts on the effectiveness of the innovation system. As reform/change, regardless of its source, is supported from mentioned, higher agricultural education can contribute within the system. Even then, high-level decision makers, more effectively to agricultural and rural development by university administrators, and other key stakeholders must producing human resources who can solve problems related clearly understand that reforming higher agricultural edu- to technical agriculture, social issues, and external factors cation is a long-term process that must be seen to its con- such as the changing climate and globalizing markets. The clusion. Experience indicates that the length of the process AIS functions better, because graduates are better at listen- depends on where the reforms are undertaken, but periods ing, analyzing technical and social situations, proposing of 10 to 20 years are not unusual. In fact, if the reform is solutions, and interacting well with all actors in the AIS. truly successful, the change process continues as the higher Investments in higher education foster greater scope in agri- education system monitors changing needs for knowledge cultural research systems to identify and internalize com- and skills and encourages organizational responses on an munity issues and problems and make them part of the ongoing basis. In other words, a short-term project research agenda. Finally, investments in higher education approach to reforming major educational entities or an can endow extensionists with the technical and soft skills to entire system is unlikely to have a lasting impact. build a better two-way bridge between researchers and their Another important condition for reform (recall the rural clients, because extensionists become more proficient example from China) is that the ministries in charge of edu- in identifying, analyzing, and communicating issues and cation and agriculture must agree on the responsibilities of technical responses. each ministry for the reformed entity and must be willing to modify those responsibilities if the assured future of the university is at stake. POLICY ISSUES Decision makers and the higher education entity must The policy issues that apply to AET in general (see the mod- also understand that change will almost certainly include ule overview) are relevant for reforming public agricultural greater autonomy for the university. The lack of autonomy education at the tertiary level. Such policies would clarify is a key generic weakness of higher agricultural education. It 128 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK curtails institutional agility in responding to developments education funding to support the outcomes of reform. in the agricultural sector and stakeholders’ concerns. The Because AET is a small element in the larger national edu- lack of autonomy prevents university administrators from cation picture, a very convincing case must be made. managing a range of human resource issues, from the hiring of staff with new skills to the termination of nonperforming personnel, and the lack of autonomy prohibits financial RECOMMENDATIONS FOR PRACTITIONERS decisions from being made at the entity level. Donors, in addition to committing to the reform process, Stakeholders must be involved in formulating as well as should be prepared to create a suitable setting in which dia- implementing the reform program. In this process, the logue between stakeholders can bring about a common needs of women and minority groups must be taken into understanding of the need for reform, the impediments to account. Equity and gender balance concerns should be reform, and the steps that must be taken to create an envi- debated in formulating the reform investment program and ronment within the university or university system where set of achievable indicators. reform can succeed. The amount of dialogue and interac- tion that should occur among stakeholders before reforms can be initiated must not be underestimated. Sufficient time Deciding on the level of investment must be allocated to enable that phase of interaction. The level of investment is influenced by the size and scope Once decision makers—ministers of education and/or of the AET system. In some countries, a network of univer- agriculture—and managers in the university/faculty of agri- sities and colleges offers higher agricultural education culture agree on the approach to reform, the details should (China, Brazil, India, Indonesia, and South Africa are exam- be developed by the university or faculty of agriculture or a ples). In such large systems, decisions about the scope of joint working group comprising high-level ministry person- reform are particularly important: Will the investment nel and a representative reform team from the university. cover all institutions in the AET system or only selected When systemwide reform is the objective, considerable institutions to begin with? Other countries typically have investment must be made in ensuring that all key actors in only one or two higher education institutions in their AET the reform process participate in the conceptualization and systems, so reform initiative can be more focused. design of the reform. (See also module 6, TN 2.) Another important decision that influences the level and Investment should not proceed until all key stakeholders type of investment is the time horizon to which govern- recognize that reforms are difficult to implement and can be ment, the university, and donors are committed. Although affected by political, economic, and social factors. Nor should educational institutions are conservative and slow to investment proceed until it is evident that well-articulated change, slowness can provide a sense of continuity. Paarl- reforms are supported by decision makers who are convinced berg (1992) has observed that “while the pace of change in that change is needed and will persist until reforms are our institutions and rhetoric has been too slow, some lag institutionalized. does permit accommodation without inducing chaos.� Investments in major reforms should proceed based on Reforms take time and require adjustments as the reform the understanding that reforms will lead, among other out- process unfolds. comes, to improved university autonomy, funding, policy The classic examples of reform in higher education have guidelines, and governance (with clear lines of responsibil- spanned periods from ten to sixty years, but shorter invest- ity for university oversight and stakeholder involvement). ments can yield positive results and sometimes catalyze Reforms should also lead to greater staff support for meet- more thoroughgoing reform. Stakeholders’ roles in the ing standards for higher agricultural education and better process also have an important influence on the type and faculty and staff remuneration and incentives. See modules scope of reforms. External stakeholders can often articulate 6 and 7 for a broader discussion. demands to policy makers more freely than those who work Leadership is vital to remain focused and maintain in the AET system, and their influence can convince deci- momentum. Reform leaders need to be identified and sion makers to support organizational and curriculum exposed to examples of effective reform programs in other change. Another factor shaping the investment is the ability entities of higher agricultural education so that they may of the AET system and its supporters to persuade the min- provide the leadership and articulate the vision for the istry of education that AET merits an adequate share of process to succeed. MODULE 2: THEMATIC NOTE 1: REFORMING PUBLIC AGRICULTURAL EDUCATION AT THE TERTIARY LEVEL 129 Box 2.9 Key Steps in the Reform of Higher Agricultural Education The key steps in the reform of higher education ■ A timeframe for implementing the change agenda, include: the human and other resources requirements, and cost estimates are produced. ■ Decision makers agree on the reform strategy and ■ The reform proposal is presented to decision mak- its content, which is publicized to university/faculty ers for approval and funding. administrators, staff, and other key stakeholders. ■ The change agenda is implemented. In some ■ A timetable for the reform is drawn up. It identifies instances, the strategy is piloted in a limited number tasks and responsibilities in detail for all stakeholder of locations in the AET system. Later, reforms are groups. scaled up across the system. ■ Academic programs are analyzed with the help of ■ As reforms proceed, the process is adjusted, based facilitators. on lessons learned. ■ Consultations with key stakeholders are conducted. ■ Decision makers formulate appropriate policies to ■ Gaps are identified between current program con- support the reforms. tent and stakeholders’ needs and expectations. ■ Reforms are institutionalized within the higher edu- ■ A change agenda is drawn up to bridge the gaps. cational institution. Source: Author; Liu and Zhang 2004. The capacity of organizational units to implement changes should be negotiated to ensure that essential tasks in the reform process must be assessed (See also reforms can be accommodated. This critical issue is dis- module 7, TN 2 in particular) before it starts. Investors cussed in detail in TN 4. Once stakeholders agree on the need to understand the rules that govern administrative scope of the reform and understand the commitments and structural change in public entities. Proposed reforms needed, a series of logical steps must be taken to develop in the AET system should either fit the existing rules, or and implement a practical reform agenda (box 2.9). 130 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK T H E M AT I C N O T E 2 Curriculum Change in Higher Agricultural Education Charles J. Maguire, Consultant SYNOPSIS capacity, and monitoring and evaluation. This expanded agenda, its cost implications, and the time needed to gricultural curricula require frequent updating to A remain relevant to the agricultural sector, its many stakeholders, and the AIS. Updated curric- ula must reflect technological and social change, con- complete the change process, must be considered when making investments in curriculum change. sumers’ preferences and concerns, external phenomena BACKGROUND AND CONTEXT (climate change, globalization), and governance issues FOR INVESTMENT related to natural resources. Modern agricultural curricula feature a learning approach centered on students, use a For the agricultural sector, the AIS, and the rural space more range of technology for instruction, and emphasize practi- widely, agricultural curricula require frequent updating to cal experience gained at university laboratories, farms, reflect technological and social change as well as consumers’ other facilities or external sites. Curriculum change can be preferences and concerns, external phenomena such as cli- undertaken directly through the academic institution, key mate change and globalization, longstanding agricultural stakeholders, and faculty or indirectly through student and and social issues affecting the rural poor, and governance faculty links to rural communities and other stakeholders. issues related to natural resources, including legal rights to Key recommendations are to take the time needed to com- those resources (Villarreal 2002). Aside from technical municate with all key stakeholders, base changes on a thor- knowledge, awareness is growing that students also require ough analysis of needs as perceived by all stakeholders, skills in listening, analyzing problems, seeking innovative institutionalize changes to the curriculum and in the roles responses, and communicating if they are to work effec- of stakeholders within and outside the university, and press tively in any setting. Although specific reforms will be for adequate, sustained financial resources. If new skills driven by clearly defined needs, curricula that fit the human (beyond the technical and production agriculture skills tra- resource requirements of modern agriculture have been ditionally taught in AET systems) are identified in the described (Ruffio and Barloy 1995; Wallace 1997; McCalla needs analysis, the question of how and where they will be 1998).1 taught must be answered. Establish a mechanism for regu- Universities typically are alerted to the need to revise, larly monitoring and evaluating the impact of curriculum update, and reform curricula by concerned stakeholders, change; this information is important for decision makers international exposure of staff to other university curric- who make policies supporting higher agricultural educa- ula, and the internal realization that students are not well tion. Ensure that curriculum change is sustained through prepared for the world of work. Curriculum change, once organizational mechanisms that involve all key stakehold- the need is recognized internally, is perceived as less threat- ers on a regular, ongoing basis. Encourage links with uni- ening than major organizational reform and can usually be versities that have completed or are in the process of imple- completed in a shorter time. The danger of opting for cur- menting curriculum change. Finally, changing the content riculum reform, however, is that the institution may be of the curriculum may be the easiest part of investing in avoiding true organizational reform (Hansen 1990). Given curriculum change. Additional investments will be that a relevant curriculum must reflect the labor market’s required in organizational arrangements, staff and faculty needs for graduates, however, sooner or later the university 131 may be forced to confront and correct the governance, A critical area for support is to ensure that the new administrative, and academic weaknesses that prevent it curriculum reflects and improves links to stakeholders in the from meeting the needs of stakeholders in the agricultural agricultural sector. Such links have been weak in AET in devel- sector. oping countries. Curriculum change places new pressures on administrators and faculty, and investments in capacity build- ing are needed for these groups to cope with new and more INVESTMENT NEEDED intensive demands from stakeholders and students. Additional The specific investments that make agricultural curricula investment will be required to establish a mechanism that more relevant can be divided into those that catalyze cur- ensures continuous contact with stakeholders and reviews and riculum reform and those that support the individual activ- analyzes feedback to adjust the curriculum. ities through which a curriculum is revised and integrated One of the most important opportunities that arise dur- into academic programs. Although external actors—whether ing curriculum reform is the opportunity to use stakehold- they are government, donor, or other stakeholders—can ers as external learning resources. The wealth of knowledge, catalyze the decision to revise the curriculum, the AET insti- skills, and goodwill for agricultural education among most tution itself must assume the role of champion. Internal stakeholder groups can be captured and presented to stu- leadership that mobilizes faculty, staff, and key stakeholders dents in the classroom or at practical work sites. A signifi- in favor of curriculum change is critical to success. cant means of improving links between the university and Investments for catalyzing reform include: external learning resources in the agricultural sector is to develop practical skills programs in which students are ■ Support for stakeholder interactions that examine the attached to stakeholders. To initiate and manage these pro- relevance of the present curriculum to labor-market grams, support is needed to visit field sites where such needs. schemes have been implemented successfully and, based ■ Resources to ensure that a strategy for undertaking cur- on these visits, to design a local attachment program. riculum change is developed. Next, the program concept has to be shared with potential ■ Investments that support the curriculum change strategy participants—such as farm owners and agribusinesses (see may include: also module 5 and module 3, TN 2)—to further define and ■ Support for staff to design, develop, and produce new establish the program. Once agreement to initiate the pro- content for the curriculum and the corresponding learn- gram is reached, it is vital to clearly state the terms under ing methods and materials (IAP 3 provides an example which it will be implemented, including statements of the from the Arab Republic of Egypt). responsibilities of trainees, hosts, and the university or edu- ■ Training for teachers, instructors, and facilitators to cational institution. The issue of cost sharing must be part ensure that they are comfortable with the new material of the attachment program design and must be agreed in and have the confidence to guide students in a learning negotiation with attachment site hosts. rather than a teaching mode. As a final note, it is important to recognize that all cur- ■ Support for teaching and facilitating staff to learn to use riculum change initiatives will lead to the realization that ICT effectively in teaching, learning, and more effective some aspects of implementation require investments communication in the wider AIS. beyond amending or updating content and packaging. ■ Training to ensure that practical sessions are planned and implemented effectively (see the discussion that follows). Staff and students who are unaccustomed to practical POTENTIAL BENEFITS skills programs will require orientation. The programs Curriculum change can be undertaken directly, with the themselves will require added inputs to ensure that they academic institution and the involvement of key stakehold- meet high standards and are delivered well. ers and faculty, or indirectly through student and faculty ■ Faculty and staff may need to be introduced to the suc- links to rural communities, which channel real issues in cessful use of external resource persons for enriching rural livelihoods back to the university, where they influence academic programs (see the discussion below). the research program and curriculum. Either way, curricu- ■ Support for university-community interaction to foster lum change can have a number of impacts. curriculum change indirectly (see the section on “Poten- Decision makers as well as prospective students and tial Benefits�). employers come to see higher education institutions as a 132 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK prime source for human resources for the agricultural sec- 5) work with rural communities to better understand real- tor. In Costa Rica, where the EARTH University curriculum life challenges and identify researchable topics. was designed to meet a range of stakeholders’ needs, the evi- The morale of faculty and staff is boosted by interaction dence that considerable value is placed on the university is with stakeholders and new approaches to teaching and reflected in its admission applications; requests for places learning (the Egypt Curriculum Change project described outnumber slots by 40 to 1 (IAP 6). in IAP 3 reflects such an interaction). Graduates of the institution are well prepared to meet The institution gains a heightened awareness of the employers’ needs (the labor market) and the challenges of importance of organizational reforms beyond curriculum the agricultural sector and rural development. Graduates change, perhaps including reforms to improve governance, from EARTH University and Zamorano University (the increase autonomy, and improve remuneration and benefits Pan-American agricultural school in Honduras) are in high for faculty, staff, and administrators. demand because their mix of skills prepares them for a wide The higher educational institution attracts additional variety of employment and entrepreneurship. resources because it prepares human resources effectively Graduates are confident and involved in the AIS as for the agricultural sector. For example, through the researchers, service providers, observers, listeners, commu- Sasakawa Africa Fund for Extension Education (SAFE), stu- nicators, and contributors of innovative ideas and solutions dents in Africa undertake a supervised enterprise project in to agricultural and rural development problems. communities that brings in support from the private sector The higher educational institution is aware of research- (IAP 4). The Regional Universities Forum for Capacity able issues and problems through its interactions with Building in Agriculture (RUFORUM) includes a commu- stakeholders. Faculty and students from Bogor University in nity-based master’s research program that has attracted Indonesia (box 2.8, TN 1) and Chiang Mai in Thailand (IAP considerable donor funding (box 2.10). Box 2.10 Regional Universities Forum for Capacity Building in Agriculture: Fostering Capacity for Innovation and Adaptation among Students The Regional Universities Forum for Capacity Building donors, including the Bill and Melinda Gates Founda- in Agriculture (RUFORUM) is a consortium of 25 agri- tion, have made grants to the organization. Fundraising cultural universities and faculties in Eastern, Central, will be key to the consortium’s future, as donor grants and Southern Africa. To date, its main activity is to offer will eventually end. a small grants program for MSc studies in agriculture, Under its competitive grant program for MSc stu- although the program is being expanded to include dents, RUFORUM awards around US$60,000 to enable doctoral studies. Through its community action two students to work under faculty supervision for two research program, RUFORUM also provides grants for years. Relevance of the studies to African agriculture is strengthening the links between rural communities and a key criterion in making the awards. Each MSc thesis member universities. RUFORUM’s mission is to “foster must focus on a topic of local importance for agricul- innovativeness and adaptive capacity of universities tural development. engaged in agricultural and rural development to RUFORUM provides MSc students with field- develop and sustain high quality in training, innovative tested, problem-solving skills that many African uni- and impact-oriented research, and collaboration.� versities are still unable to provide. During the first RUFORUM was originally sponsored by the Rocke- semester of year two of the study program, students feller Foundation and covered 12 universities in Eastern are based in the field and their work is supervised in and Southern Africa. It was established as a consortium several visits by the faculty supervisor. After five under African ownership and management in 2004 and years of experience, RUFORUM has succeeded in is registered as a nongovernmental organization in connecting graduate students directly with farmers, Uganda with a secretariat in Kampala. Each member rural communities, and the reality of African university pays an annual fee and several international agriculture. Source: RUFORUM 2010. MODULE 2: THEMATIC NOTE 2: CURRICULUM CHANGE IN HIGHER AGRICULTURAL EDUCATION 133 POLICY ISSUES LESSONS LEARNED Demand for curriculum change articulated by the AET sys- Important lessons from previous attempts at curriculum tem and supported by key stakeholders is an important pre- change concern the impetus for change (who demands condition for gaining support from the ministries in charge change, and who supports it); the steps that must be fol- of education and agriculture as well as from planning and lowed in the change process; and the possibility that cur- finance decision makers. In turn, those stakeholders play a riculum change will reveal the need for further reform. Cur- crucial role by clarifying the policies and channeling the riculum reform is not a one-off activity. To be meaningful, resources that will support change. curriculum changes must continue to be updated as tech- Curriculum change has implications for the administra- nological innovation develops new approaches to produc- tors, staff, students, and external stakeholders of higher ing, storing, processing, and marketing agricultural prod- educational institutions. These institutions, as bureaucra- ucts. Curriculum change must be institutionalized in AET cies, are often slow to agree to change. Change often pro- systems and given the approval and recognition that ensures ceeds slowly, caused by the perception that it is not the sustainable, continuous evolution of the curriculum. approved at higher levels of government, that the old cur- riculum is good enough, that incentives to change are unat- Impetus for change tractive, and that, given time, the pressure to change will decrease. Policies are required to support curriculum As noted, the need for change may be articulated by change, to make it clear that change is a priority, that employers who are dissatisfied with the graduates of agri- administrators and staff of educational institutions are cultural degree programs, signaled by a serious drop in required to implement the changed curriculum as part of applicants to the degree program, or emerge from an inter- their terms of reference, that stakeholders’ input will con- nal awareness that the degree program is obsolete. Even if tinue to be integral to evaluating the impact of the new cur- the pressure for change comes from one or more external riculum on graduates’ performance, and that adequate groups of stakeholders, support for change must come from funding will be made available to make the changed cur- inside the higher educational institution as well. riculum work. Some of the most important policies encourage educa- Steps to bring about curriculum change tional institutions to monitor the quality and relevance of their programs in relation to the evolving needs of agricul- The previous section refers to some of the steps in curricu- ture and rural development. Such policies provide guidance lum change, but it is important to list them in their entirety. on governance of the educational institution, especially the Based on experience with curriculum change in a variety of role of stakeholders in providing feedback on graduates’ settings, these steps appear to work well, although processes readiness for the modern agricultural workplace and in will differ from one place or time to another: alerting the institution to changing requirements for knowl- edge and skills. ■ All key stakeholders participate in describing shortcom- High-level decision makers outside higher educational ings in the current graduate knowledge and skill mix institutions must be aware that they require a continuing and/or needs not identified by educational institution. flow of information to update or create policies that give ■ Draw up a clear “roadmap� for implementing curricu- the institutions the authority to act. Managers of educa- lum change and make it available to all. tional institutions must establish systems that continu- ■ Clearly spell out roles and responsibilities of the educa- ously and critically evaluate their programs (especially tional institution and other stakeholders in the change needs assessments that capture changes in the agricultural process. sector). This information, regularly provided to policy ■ Describe incentives for participation in the change makers, should help to prevent educational policy from process (for example, capacity building for faculty and falling out of step with the needs of agricultural education administrators or out-of-pocket expenses for stakehold- institutions and their stakeholders throughout the agricul- ers who have to travel to participate in meetings). tural sector. An essential policy, of course, is one that allo- ■ Select milestones for reviewing progress in curriculum cates funds to support change and ensures that such fund- change. Such milestones could include: presentation of ing is sustained. the analysis of the needs assessment; drafts of new 134 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK content for specific subject matter; proposed pedagogical curriculum change and support its sustainability. Key rec- changes to support the revised curriculum; infrastruc- ommendations include: ture and teaching/learning tools required; and curricu- lum field test results and indicative amendments. Share ■ Take the time needed to communicate with all key stake- these milestones with all stakeholders in workshop set- holders. While this may seem to delay the commencement tings. Note and act upon stakeholders’ comments. of curriculum change, it is critical that all parties under- ■ Submit the final draft of the proposed new curriculum stand why the change exercise is being undertaken, support for peer review by regional and international entities in the objectives of the changes to which they have agreed, higher agricultural education. Act upon the relevant and appreciate their roles in ensuring a successful outcome. comments. ■ Changes to curricula must be based on a thorough analy- ■ Present the new curriculum to policy makers and key sis of knowledge and skill needs as perceived by all stake- stakeholder groups, highlighting the changes and seeking holders approval. ■ Press for institutionalizing changes to the curriculum, ■ Develop or purchase materials to support the implemen- roles of university faculty as well as stakeholders from tation of the updated/new curriculum. outside the university, and adequate and uninterrupted ■ Train faculty and staff to use the new curriculum, espe- financial resources. cially in the area of pedagogy, student-centered learning, ■ Underline the need for a mechanism for regular monitor- field visits, and attachments to employer sites. ing and periodic evaluation of the impact of curriculum change. This information is important for decision makers, who will want to be convinced that there is a positive return The “iceberg� phenomenon from investments in curriculum change and who will make Achieving curriculum change appears to be a relatively simple the policies that support higher agricultural education. objective, but it can be like the tip of an iceberg: The immedi- ■ Ensure that curriculum change is sustained through ate task (changing the curriculum) is the visible part of the ice- organizational mechanisms that involve all key stake- berg, although in fact a number of less-visible, interconnected holders on a regular, ongoing basis. tasks must be undertaken for curriculum change to be effec- ■ Encourage links between universities (in country, tive. In addition to revising or developing a curriculum, it may regionally, or internationally) that have completed or are also be necessary to improve capacity for pedagogy, update in the process of implementing curriculum change. teaching materials, involve teachers in managing practical ■ Modern and modernizing employers in the agricultural agricultural activities, and create and maintain active networks sector seek graduates with skill sets that go beyond tech- with stakeholder groups that include agribusiness, NGOs, and nical and production agriculture. This requirement pre- communities. This potentially expanded agenda, its cost sents a major challenge to curriculum reform. If new implications, and the time needed to complete the change skills are identified in the needs analysis, the question of process, must be considered when making investments in cur- how and where they will be taught must be answered. riculum change projects or programs. ■ Be conscious of the fact that changing the content of the curriculum may be the easiest part of investing in curricu- lum change. Additional investments will be required in RECOMMENDATIONS FOR PRACTITIONERS organizational arrangements, staff and faculty capacity, and The technical process of curriculum change needs to be pre- monitoring and evaluation. The need for these investments ceded by dialogue with key stakeholders. It should conclude may not be obvious, but failure to make them will jeopard- by putting mechanisms in place to monitor the impact of ize the success of the investment in curriculum change. MODULE 2: THEMATIC NOTE 2: CURRICULUM CHANGE IN HIGHER AGRICULTURAL EDUCATION 135 T H E M AT I C N O T E 3 Education and Training for Technician Development Charles J. Maguire, Consultant SYNOPSIS BACKGROUND AND CONTEXT FOR INVESTMENT he modern agricultural sector demands that tech- T nical vocational colleges or institutes produce highly skilled personnel who can manage a variety of farms and production units, run processing enterprises, Technicians interact on a regular basis with other actors in the AIS and are a unique repository of knowledge and—more important—skills that enable farmers and others to decide service market chains, manage and repair farm and process- whether to adopt innovations. Public and private entities in ing machinery, monitor food quality and safety issues, and agriculture have always relied on educated and trained techni- support AIS actors in assessing the suitability of a particular cians to undertake a range of tasks and activities that support innovation for specific persons, communities, farming sys- production agriculture and form links in the value chain that tems, and value chains. In addition to technical knowledge, leads to the local or international consumer. This reliance has technical personnel need critical behavioral skills such as been heightened by growth in agribusiness and the adaptation teamwork, diligence, creativity, and entrepreneurship. of advanced technology for producing, processing, and dis- Reforms in the governance and management of training tributing agricultural goods and services (see also module 5). colleges and institutes are needed for traditional ATVET and Despite the need for skilled technical personnel gener- VET programs to deliver this array of skills in an equitable, ated by modern, knowledge-based commercial agriculture, gender-sensitive way. Demand for and content of vocational with its emphasis on value-added and marketing, the education and training must be clarified through dialogue demand for appropriately educated and trained technicians with key sector actors (ministries of education and agricul- exceeds supply, and agribusiness entrepreneurs have diffi- ture, employers of TVET/VET graduates, and staff and culty hiring suitably qualified people. The shortage of qual- administrators of entities that train them for the public and ified technicians persists amid significant reductions in private sectors). If the system produces graduates valued by public employment opportunities for technicians. stakeholders in the labor market, those stakeholders will The shortage of skilled technicians is not new (it was help to sustain the system financially. The VET system must noted during the 1970 FAO, UNESCO, and ILO Conference be underpinned by clear and supportive policy that defines on Higher Agricultural Education). This shortage has been the role of VET; guarantees public financial contributions to exacerbated in some countries by filling technician-level VET; clarifies roles and contributions of stakeholders who jobs with graduates who do not necessarily possess techni- employ graduates; and spells out governance arrangements cians’ practical skills and knowledge, to work directly with for the system. Based on documented needs and stakehold- farmers (Muir-Leresche, pers. comm., 2010). A 2009 study ers’ expectations, invest in the capacity of teachers and (Blackie, Mutemba, and Ward 2009) showed that African instructors; develop certified programs that meet stakehold- university graduates typically lacked the hands-on skills and ers’ needs (begin with a small number of good programs); capabilities that farmers value most. and encourage cross-sector dialogue, because agricultural Government, the private sector, and civil society have a TVET/VET is often linked to other sectors’ programs and stake in ensuring that enough qualified, skilled agricultural development plans (the environmental sector is a good technicians are available for the labor market. The prepara- example). IAPs 7, 8, and 9 examine specific investments in tion of technicians, traditionally sponsored largely by the TVET and lessons learned. public sector, can be expensive. It involves equipment, land, 136 qualified instructors, and a low student-to-instructor ratio. processing machinery, and monitor food quality and While rapidly industrializing countries are investing heavily safety issues (see also module 6, TN 5). in technical education and training to meet high demand for In addition, employers in many economies seek workers engineering and IT workers, public investments in formal who possess behavioral skills such as teamwork, diligence, agricultural diploma education (usually classified as ATVET) creativity, and entrepreneurship, which are essential to or certificate training (described as VET) vary and are thrive in rapidly evolving, technologically driven, and glob- unpredictable. The unevenness of investment gives rise to alized economies (Blom and Cheong 2010). For this reason, fluctuating student enrollment, poor staffing, weak program improvements only in workers’ technical and vocational content, and a variable supply and quality of graduates. skills will not always meet employers’ needs. Systems that As mentioned, modern agriculture emphasizes greater build skills will also have to ensure that these added behav- productivity, value added activities, and agribusiness. ioral attributes are in place (Blom and Cheong 2010). Any Agricultural products increasingly are consumed by realistic attempt to train technical personnel who can meet growing urban populations or, in the case of high-value these various needs for 21st century agriculture must revi- crops, sold in international markets. The focus on inten- talize the knowledge and skills provided by traditional sive farming and sustainability has created management ATVET and VET programs (box 2.11) and reform the gov- complexity, altered energy requirements compared to tra- ernance and management of training colleges and institutes. ditional agriculture, and led to unforeseen consequences for human and animal health. The modern agricultural INVESTMENT NEEDED sector is also quite knowledge intensive. It demands highly skilled technical personnel who can manage a vari- Investment in technical education and training for agricul- ety of farms and production units, run processing enter- ture has, like investment in all AET, been low. Much recent prises, service market chains, manage and repair farm and World Bank funding for formal TVET is industry-related, Box 2.11 Producing Technical Human Resources for the Agriculture Sector in Australia In Australia, technicians for the agricultural sector are The council covering vocational training in the agri- trained through public and private institutions ranging cultural sector, Agrifood Skills Australia, was established from comprehensive technical and further education in 2004 as one of 11 Industry Skills Councils to provide institutes or colleges, specialist agricultural colleges, accurate industry intelligence on current and future skill private companies, and not-for-profit organizations needs and training requirements for the agrifood indus- operating as registered training organizations. Australia’s try. Agrifood is a public company with an industry-led six states and two territories have legislative responsi- board of directors and industry advisory committees. bility for education. The national government has Funding is provided under contract by the Department become more active in vocational education over the of Education, Employment, and Workplace Relations. In past twenty years, developing a national system for New South Wales (NSW), Tocal College is a Registered vocational training, providing significant funding to Training Organization within the NSW Department of deliver training, and organizing national curricula Primary Industries (DPI). A trademarked brand around the principles of competency-based training. name—PROfarm—is used for all short courses for Each sector of the economy, including agriculture, is farmers run by DPI technical specialists through Tocal covered by a comprehensive suite of competencies College. Attendance at PROfarm courses from the third known as a “training package.� The content of these quarter of 2009 to the second quarter of 2010 was 4,309, training packages is based on the needs of the economy and the projected income was 862,377 Australian dol- and industry, which are communicated through Indus- lars. Full-time courses at this college have a 90 percent try Skills Training Councils. completion rate. Source: Agrifood Skills (http://www.agrifoodskills.net.au) and Cameron Archer (Principal, Tocal College, Paterson, NSW, Australia; see cameron.archer@industry.nsw.gov.au and www.tocal.com), personal communication, 2010. MODULE 2: THEMATIC NOTE 3: EDUCATION AND TRAINING FOR TECHNICIAN DEVELOPMENT 137 and recent projects supported in China and India reflect this POTENTIAL BENEFITS trend.1 In both countries, projects were designed to meet The presence of skilled agricultural technicians has the growing deficits in the availability of skilled workers, partic- potential to strengthen all links in the agricultural value ularly in engineering and IT. These investments reflect the chain and lead to still other benefits: economic importance of engineering, manufacturing, and IT in both economies. ■ Greater productivity and efficiency in public and private Innovative aspects of more recent TVET projects outside entities employing technically educated and trained agriculture include:2 graduates of the AET system. ■ Greater industry involvement in defining training stan- ■ A VET system that is networked with stakeholders in the dards. public and private sectors and with civil society organi- ■ Development of public-private partnerships that enable zations (CSOs). costs to be shared. ■ Well-crafted and successfully implemented policies to ■ Creation of attachments and apprenticeships (see guide VET for the agricultural sector. module 4, TN 2; and module 5, TN 1). ■ Financing of TVET/VET on a sound footing that ■ A change in focus from training inputs to training out- includes public and private contributions and fees levied comes (that is, competency-based training). on trainees or their sponsors. ■ Encouraging life-long learning by offering modular cur- ■ Assured quality of TVET/VET through certification of ricula that enable learners to enter and exit and continue courses and programs by internal and external accredita- to upgrade skills. tion bodies. ■ Making the shift from teacher-centered to learner- ■ TVET/VET pedagogy that reflects a student-centered centered pedagogy. approach to learning, coupled with attachments and ■ Seeking accreditation for programs. work experience opportunities with stakeholder enter- prises, farms, and CSOs. In Africa, these innovative aspects can be seen in Ethiopia, ■ TVET/VET networked with other parts of the AET where TVET is provided to the agricultural sector under the system. management of the Ministry of Agriculture and to other sec- ■ Well-qualified and high-performing graduates of tors through the Ministry of Education and the Regional TVET/VET enrich the AIS through their interactions Education Bureaus. A 2004 World Bank Post-Secondary with a variety of actors in the system. Education Project included a small component for TVET innovation to expand and deepen system reforms spear- Investments in the production and upgrading of techni- headed by the Ministry of Education. Agriculture was not cal sector specialists ensure that the continued moderniza- included in the project, but the project’s five pillars of TVET tion and growth of agriculture and its numerous areas of transformation would be a good fit for vocational training in focus meet the needs of a public sector that requires techni- agriculture: (1) decentralization of service design and deliv- cians to disseminate technology and undertake regulatory ery; (2) strengthening partnerships among stakeholders, functions; of a private sector that invests in agribusiness, especially between training providers and employers; input supplies, and domestic and international marketing; (3) development and implementation of a trades testing and of farmers’ associations and cooperatives that represent pro- certification system; (4) cost sharing by beneficiaries; and ducers; and of consumer organizations that rely on food (5) an orientation to market-based demand to shape training. supplies that are fresh and healthful. A 2006 World Bank project in Ethiopia, the Rural Skilled technicians with the potential to be self-employed Capacity Building Project, included an agricultural TVET entrepreneurs who, in turn, create rural employment and component. The Project Appraisal Document notes that serve as role models for farmers and others with whom they “capacity-building of middle-level technical workers is an interact in the AIS. important factor in the drive to enhance productivity, stim- ulate economic competitiveness, and raise people out of POLICY ISSUES poverty.� Implementation of the TVET component is encountering some difficulties, in part due to the lack of A major policy challenge is to arrive at an agreed formula cooperation between the Ministries of Agriculture and Edu- for financing TVET/VET. Should the public sector fully cation and between central and regional governments. underwrite such education and training, or should 138 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK employers and students share the costs? Given that stake- Policy to remedy this and other weaknesses of agricul- holders’ involvement in describing the real needs of the tural vocational education cannot be formulated in a labor market has been minimal and that the standards set vacuum. A precondition for sound policies is the develop- by VET entities have been poor, the private sector has had ment of a clearly expressed and understood needs state- little incentive to share the cost. Incentives for cost sharing ment from the concerned stakeholders. Policymakers must emerge only when programs and courses meet labor- be convinced that technician education and training, if market needs, standards of education and training are performed to a high standard, will produce graduates who high, and education and training entities are flexible and will contribute to the productivity of the agricultural sec- responsive to change. tor. To clarify the demand for and content of vocational Aside from policies that improve TVET financing, education and training, key sector actors need to be policies must ensure fair and equitable recruitment of involved in a series of dialogues. The key actors include students/trainees from all segments of society and seek a ministries of education and agriculture, employers of gender balance that reflects societal structure and labor- graduates from TVET/VET, and staff and administrators market needs. of education entities that offer programs and courses that Policies are also needed to support more effective gover- educate and train technical personnel for the public and nance of TVET. Such policies would formalize stakehold- private sectors. ers’ contribution to the content and focus of curricula and Clearly, the sustainability of a quality VET system is based programs. They would also clarify the roles of ministries on its utility to the labor market. If the system produces and regional bureaus in a decentralized education system graduates that are needed and valued by stakeholders, and end the administrative paralysis that stems from poorly resources will be made available by those stakeholders. The defined roles. VET system must be underpinned by clear and supportive Policy guidance is also needed to ensure that apprentice- policy that defines the role of VET; guarantees public sector ship and attachment programs are well designed, that financial contributions to VET; clarifies the roles and contri- responsibilities of TVET/VET entities and hosts are clearly butions of stakeholders who employ graduates of the system; defined, and that evaluation of student/trainee performance and spells out the structure of the governance arrangements is fair and open. Finally, policies must guide TVET/VET for the VET system. entities to seek accreditation or certification for their educa- The diverse and fragmented nature of the agricultural tion and training programs and courses. sector robs it of the high-profile, high-energy features of modern high-technology industries that generate jobs, export earnings, and strongly pressure decision makers to LESSONS LEARNED support education and training for those industries. Evi- Supply-driven VET for agriculture has not been very suc- dence of this phenomenon can be seen quite clearly in the cessful for a number of reasons, including: weak or absent lopsided investment profile in technical education and links to employer stakeholders; the poor quality of gradu- training in recent times. ates resulting from inappropriate curricula and the poor availability and quality of teachers and instructors; inter- RECOMMENDATIONS FOR PRACTITIONERS mittent funding; poor governance of the VET system; and the related absence of good policies to guide VET. Courses By and large, developing countries have neglected TVET for are rarely certified and competencies rarely tested, with the the agricultural sector, but the time is right for new instru- result that only a low value is placed on the VET system and ments to support the human resource needs of modern its products. agriculture. Successful investments in ATVET require inno- Another lesson is that divided ministerial responsibility vative governance and technical approaches, but they have is a primary source of poor support for and performance of high potential for making positive contributions to sector VET entities (just as it is a fundamental problem for all pub- productivity. Recommended steps and considerations lic agricultural education). For example, the ATVET com- include: ponent of the rural capacity project in Ethiopia proved difficult to implement because of poor coordination and ■ Initiate dialog with key stakeholders to clarify needs and cooperation between the Ministries of Education and Agri- expectations and share supply capacity and constraint culture at the national and regional levels. information and data. MODULE 2: THEMATIC NOTE 3: EDUCATION AND TRAINING FOR TECHNICIAN DEVELOPMENT 139 ■ Invest in dialogue with major stakeholders to arrive at a ■ Begin with a small number of good courses or programs widely understood and supported view of the impor- that meet stakeholders’ most important human-resource tance of TVET/VET. needs. ■ Involve stakeholders in high-level governance of ATVET. ■ Form an active network with other TVET and VET sys- ■ Create a shared and well-documented message for tems and, when resources allow, undertake study visits. decision makers to get policy and material support for ■ Ensure that TVET/VET is linked to AET. VET. ■ Encourage cross-sector dialogue, because agricultural ■ Encourage decision makers to clarify responsibility for TVET/VET is often linked to other sectors’ programs and TVET. Is TVET solely a public responsibility, or is development plans. responsibility shared with the private sector? ■ Seek certification of all TVET programs to ensure quality. ■ Undertake a collaborative assessment of labor-market ■ Include environmental considerations in the preparation needs and expectations from the TVET/VET system. of technicians for agriculture, because the sector is rec- ■ Obtain agreement on funding for TVET, based on doc- ognized as a major contributor to pollution and environ- umented needs and stakeholders’ expectations. For mental stress. Programs and courses for technicians example, TVET could be funded through public-private should identify the issues of concern and underline the partnerships that provide private support in cash or need for environmental sensitivity on the part of their kind (equipment, facilities). graduates. The environmental focus of the curriculum ■ Invest in the capacity of teachers and instructors; it is would be examined in certification and accreditation important for the viability of TVET. exercises undertaken by internal and external bodies. 140 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK T H E M AT I C N O T E 4 Reforming the Management of In-Service Training/Learning Charles J. Maguire, Consultant SYNOPSIS in projects; consider investing in higher degrees for qualified HRM candidates; and identify potential partnerships n public agencies or projects, the benefits of in-service I training include enhanced capability to contribute to growth in the agricultural sector and operate in the AIS; in private enterprises, benefits of in-service training include between public and private entities to add to in-service training capacity. more productive workers and higher profits. Opportunities BACKGROUND AND RATIONALE FOR for improving human resource development (HRD) and INVESTMENT human resource management (HRM) through training arise when countries develop national, agricultural, or rural Investments to improve how capacity building is designed, development strategies or their poverty reduction strategies; implemented, and managed—especially in public agricul- when new projects are planned; or in discussions about tural organizations and development projects undertaken in adjustments or extensions of current projects. Similar the public sector—add knowledge and skills that make pub- opportunities arise when the private sector is creating lic organizations and projects more effective and enable the demand for skilled human resources. The three main invest- public sector to participate more effectively and actively in ments in HRD and HRM include building capacity in pub- the AIS. People who interact with the rural population on lic agencies, developing specific capacities in development behalf of public or private agencies and projects are work- project personnel, and building capacity in private enter- ing exactly where some of the most important possibilities prises. Elements in improving in-service training in the for knowledge sharing, innovation dialogue, observation, public sector include a clear policy articulating responsibil- assessment, and adoption occur. They are a critical vector in ities for HRD; training personnel to implement the HRD the innovation system. Investing in, adding to, and sharpen- approach; linking with learning providers; and supporting ing their skills should be a priority. Investments can also be specific, short-term programs as well as life-long learning considered in building human and institutional capacity in programs. Investments in project-related training begin private agricultural enterprises, especially where there is when projects are being developed and include (1) assessing scope for joint activities through public-private partner- capacity needs, (2) evaluating capacity-building activities in ships. It is also important to distinguish between building every component of project-related training, and (3) sup- capacity to implement projects and broader institutional porting training in communications and problem-solving capacity-building. The former is undertaken to ensure that skills in every component for effective participation in the each individual has the knowledge and skills to perform AIS. Large private enterprises with a long-term need for project-related responsibilities effectively, whereas the latter personnel will build capacity in human resources through is concerned with the capability of the organization (min- joint ventures with the public sector; smaller entities may istry, department, unit, private business) to implement its be more comfortable purchasing training packages from terms of reference. While individuals collectively contribute the AET system. Major recommendations include: provide to the capacity of an organization, factors such as policy training for faculty and staff managing in-service training; frameworks, organizational structures, links, management, include training/learning specialists in project design and financing, and interface with clients or stakeholders also implementation; keep capacity-building objectives realistic influence this capacity. 141 INVESTMENT NEEDED development, and regional and international training agencies. Three main types of investments can be considered to build ■ Build AIS-ready skills capacity. Provide selective sup- capacity in the staff of public agricultural agencies and port for specific, short-term programs for in-service development projects and those in the private sector who training using public funding or with public-private- provide a variety of agriculture-related services and supplies partnership resources. Specific responses may include: to farmers, processors, marketers, and civil society. The first study visits; short-term overseas training; attachments to type builds capacity in public agencies; the second builds research, community, or private enterprises; or acquiring private sector capacity; and the third develops specific urgent adaptation strategies for dealing with the impact capacities in development project personnel. of natural phenomena, such as insect or disease out- breaks or climate change. Managing and improving in-service training in ■ Create capacity for life-long learning. Support may be ministries of agriculture given for the development of seminars and short learning In-service training in ministries of agriculture is generally activities at universities. These options would be available poorly managed. Managers exert weak oversight of training to public sector decision makers, senior technical man- programs and impacts. Ordinarily, personnel appointed to agers, private sector managerial and technical personnel, plan and implement training/learning programs are not and CSOs. This investment category serves to increase selected from a pool of professionally qualified or practic- knowledge and skills as well as to exchange experiences ing human resources development specialists. Nor are min- and ideas among influential actors in the AIS. istry and other public sector staff systematically identified for specific training and learning experiences that prepare Investments in building private sector capacity them for future responsibilities. Seniority in the civil ser- These investments include support for mutually beneficial vice is often the criterion that decides who is selected and joint ventures in which, for example, the public sector supplies promoted in the system; competence is not always a decid- in-service or life-long-learning opportunities for private ing factor. Shrinking budgets in the public sector have left workers and the private sector supplies skilled operatives as smaller cadres of professional research, technical, and teachers, facilitators, demonstrators. The private sector may extension staff to deal with additional responsibilities that also offer practical training internship spaces for public require enhanced knowledge and skills. Under these cir- employees or students from the AET system (IAPs 3, 8, and 9). cumstances, government agencies must make their capac- See also module 5 on private sector development. ity-building efforts a priority and ensure that they are as effective as possible. Key elements in bringing about change include: Investing in project management and implementation personnel ■ Policies. Following high-level management commitment Almost all development projects for the agricultural sector to adopting change, a policy directive is issued describing seek to strengthen the capacity of the people who imple- responsibilities for human resource development ment them.1 A variety of training and learning activities are (HRD). often funded for these staff through the project’s larger ■ Capacity to implement the policy. Personnel to imple- capacity-building components. The range of capacity- ment the new HRD approach are selected and enrolled in building activities for project personnel and beneficiaries is appropriate training programs. wide. Although there are generic lists of activities that can ■ Review of training/learning programs. HRD and human meet basic needs, each situation and its particular needs will resource management (HRM) rules, needs assessments, determine the shape, content, duration, and participants in training/learning responses, selection criteria, and mon- the capacity-building intervention. itoring and evaluation of training/learning impacts are These activities may be labeled capacity-building com- reviewed in detail and adjusted, based on the new ponents or training components and typically are funded at approach to HRM. about two or three percent of project costs. Such compo- ■ Links to learning resources: Establish links with learning nents are project specific. They operate alongside in-service providers such as the research system, universities, TVET training programs provided by public agencies for agricul- entities, private sector leaders in agriculture and rural tural sector staff. A project’s capacity-building components 142 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK are usually managed by a unit subsidiary to the project observe relatively quickly how a capacity-building component management unit. Not surprisingly, the quality of manage- benefits implementation and sustainability. Success at the ment varies from project to project. project level can convince management of the benefits of As noted, investments in project-related training need to adopting a more comprehensive HRD approach at the min- begin when projects are being developed. The team prepar- istry or department level. With respect to the duration of the ing the project should include expertise in capacity building investment, it is important to note that installing quality man- at every stage. Managers from the beneficiary entity should agement of human resources in a ministry or department is a be briefed on the importance of the project’s capacity- process dictated by organizational and civil service rules, the building component and advised to appoint suitably quali- pace of learning, satisfaction with progress and results on the fied staff to manage the component. Managers from the part of senior management, and on the commitment of beneficiary entity should provide a profile of each appointee donors to see the process through to the end. The source of (qualifications, experience, and training history). They demand for enhanced in-service training influences the most should receive technical assistance to be able to undertake appropriate investment response. In the case of short-term needs assessments, propose corresponding learning pro- investments in specific courses, study visits, or attachments, grams or activities, create (with the help of resource persons requests may originate from government or from project in the network) training/learning content, and plan and implementers through government channels. Responses from implement training/learning activities for carefully selected investors may be made bilaterally or through existing project project staff. They should learn techniques to measure the channels. The duration of such investments can range from impact of training and learning, to inform managers of the weeks to one year. Support for the development and imple- results, and to maintain clear, up-to-date records of all mentation of seminars or short learning activities at universi- capacity-building activities. ties would most likely cover an agreed time period measured Capacity-building specialists should be included in proj- in years (or in numbers of events without time constraints). ect preparation teams (in the case of World Bank projects, Underwriting the strengthening of advanced degree programs during the time from identification to appraisal) to ensure at regional or hub universities would fit in a medium- to long- that training for project personnel is relevant, clearly term framework of support. Scholarship support for candi- defined, and can be implemented in time for the project to dates would take into account the normal cycle for completing operate smoothly and achieve its objectives. Project funds advanced degrees, so an initial commitment might be for ten will need to be allocated specifically to train staff assigned to years, dictated by successful completion of programs. project management to ensure that they understand the In the case of public-private partnerships, much depends project’s overall objectives and can manage its components. on the type and size of the private enterprise. When the pri- Resources will also be needed to (1) assess capacity needs, vate enterprise is, for example, involved in production, pro- (2) evaluate capacity-building activities in every component cessing, and marketing nationally and internationally, it will of project-related training, and (3) provide support in each have a long-term need for personnel and will be keen to capacity-building component of the project for training in invest in building capacity in human resources. It can bene- communications and problem-solving skills (for effective fit from technology training from academic and research participation in the AIS). institutions and from offering internships to students that it can assess and possibly hire. Smaller private entities may be more comfortable purchasing training packages from the FACTORS DETERMINING THE TYPE AND AET system and offering a small number of internship or DURATION OF INVESTMENT IN ENHANCED attachment places for which the AET system would pay. A IN-SERVICE TRAINING minimum commitment of five years would give both part- The most powerful factor guiding in-service training invest- ners time to adjust the program in light of experience and to ments (as in higher and technical education investments) is evaluate the impact of the partnership. the realization among stakeholders and within the organiza- tion that change is needed. Investors should initiate a dialogue POTENTIAL BENEFITS that highlights the benefits of changing the way that human resources are managed and details the steps that need to be Benefits of interventions to improve how HRD is managed in taken. The short implementation span of projects and pro- public agencies or projects can include: enhanced capability grams enables decision makers and project management to of a ministry, department, project management unit, and MODULE 2: THEMATIC NOTE 4: REFORMING THE MANAGEMENT OF IN-SERVICE TRAINING/LEARNING 143 individuals to contribute to growth in the agricultural sector; LESSONS FOR PRACTITIONERS heightened capability of individuals and service units to Opportunities for discussing the effectiveness of in- operate effectively in the AIS; greater clarity of purpose in service training and project-related training can arise capacity-building goals and activities; heightened morale of when countries are developing their national, agricul- better-educated, better-trained, and more confident public tural, or rural development strategies or their poverty sector staff; greater respect for public service providers among reduction strategies; when new projects are planned; or farming and rural communities; and more successfully in discussions about adjustments or extensions of cur- implemented projects. Private enterprises can benefit from rent projects. Similar opportunities arise when the agri- more productive workers and increased margins of profit. cultural private sector is creating demand for skilled human resources. Several points are critical in taking action to improve IMPLEMENTATION ISSUES IN MINISTRIES in-service training and learning. Perhaps the most impor- AND DEPARTMENTS tant point is to be certain that decision makers are com- In a practically oriented government ministry such as agri- mitted to reforming in-service and project-related training culture, it is often difficult to gain support for in-service and that civil service rules and regulations allow organiza- training and learning, especially for reviewing and reforming tional change in HRM. Keep decision makers informed of the content and management of that training. The applica- design and implementation progress and problems. Con- tion of technology developed through agricultural research sider investing in scholarships for qualified HRM candi- dominates the service activities that support growth in agri- dates to earn higher degrees, and provide training for fac- culture. Compared to these practical pursuits, capacity ulty and staff with responsibility for managing in-service building and HRM can be perceived in the public sector as training. Include training/learning specialists in project less important, “soft “ areas that do not justify funding when design and implementation. Given project timeframes and other ministry tasks are so urgent. (In the private sector, the capabilities of implementation staff, keep capacity- capacity building and HRM are connected clearly to profit building objectives realistic. Be prepared to invest in short- and loss and get much more attention from managers.) Yet term support for in-service training and capacity building. capacity building in public entities is usually a small fraction Identify potential partnerships between public and private of total project costs or ministry operations. Few truly qual- entities to add to in-service training capacity, and discuss ified persons are assigned to capacity building. Even at these partnerships at decision maker and AET manage- higher ministry levels, this phenomenon holds true. ment levels. 144 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 1 Reforming India’s State Agricultural Universities Charles J. Maguire, Consultant SYNOPSIS source of research funding for the universities. A long-term goal of the reforms was to establish an Agricultural Educa- major, systemwide reform of India’s state agricul- A tural universities (SAUs) aimed to modernize administration and management, update curricula and pedagogical approaches, upgrade teaching materials and tion Council with statutory power to set norms and stan- dards in agricultural education. For more on ICAR and India, see also module 1, TN 1; and module 4, IAP 2. In the 1960s and 1970s, the SAU system was strengthened laboratories, set new norms and standards for higher agri- and expanded under a large USAID project (Busch 1988). In cultural education, and improve human resource manage- the 1990s, concerned about declining standards in the sys- ment in state line departments working closely with the tem, ICAR approached the World Bank about the need to agricultural universities. The process, initiated with four uni- reestablish SAUs as centers of high-quality agricultural edu- versities, was viewed as a ten-year effort but confined to a cation. The resulting project concentrated initially on four project of six years (1995–2001). The project improved the SAUs. quality and relevance of India’s SAUs by establishing an Accreditation Board, demand-oriented curriculum reforms, and complementary investments in staff training and educa- PROJECT OBJECTIVES AND DESCRIPTION tional infrastructure. The quality and diversity of student The five-year project was the first phase in a long-term pro- intake and the quality of faculty improved. In hindsight, gram to improve agricultural HRD. Estimated project cost however, it is clear that the process could have been intro- at appraisal was US$74.2 million (World Bank US$37.1; duced more slowly, with fewer objectives and a longer time India US$37.1). The project had four components: frame to institutionalize the reforms. The capacity, readiness, (1) strengthening ICAR; (2) university programs; (3) in- and commitment of project actors could have been better service HRD and HRM; and (4) manpower needs assessment. assessed. The project might have done better to focus on Through these components, the project initiated several higher education alone, reserving human resource manage- broad reforms: ment in line agencies for a separate project. Donor coordi- nation should have been emphasized to prevent universities ■ It assisted India’s drive to modernize its agricultural sec- from attaining funds that made it possible to delay reforms. tor by promoting changes in the way the center and states developed and employed human resources. ■ It supported these changes with policy and institutional CONTEXT reforms. By working with a small number of universities, a project ■ It began related processes of (1) improving the quality sought to create a compelling demonstration of the poten- and relevance of higher agricultural education and in- tial benefits of systemwide reform in India’s state agricul- service training programs and (2) strengthening the tural universities (SAUs). As state institutions, SAUs receive capacity of participating states to develop and manage funding from their respective states but also from central agricultural human resources. government and other sources. At the national level, the agricultural university system is coordinated by the Indian To foster academic improvement, the project strength- Council of Agricultural Research (ICAR), which is also a ened capability within ICAR to establish norms and 145 standards in agricultural education and monitor compli- It upgraded the relevance and quality of in-service train- ance with these standards. While the proposed Agricultural ing, increased client involvement in identifying training Education Council was being established, ICAR’s Education needs, modernized training facilities, and enhanced staff Division was strengthened, and the Norms and Accredita- knowledge and skills. tion Committee was restructured. It emphasized the management of human resources in The project encompassed four subprojects from three line departments to ensure that staff knowledge and skills participating states—one each from Haryana and Andhra were of the highest quality and that human resources were Pradesh and two from Tamil Nadu—selected as good can- employed effectively. didates for demonstrating the effects of reforms to other It initiated the reform process with four universities and states. The subprojects sought to reform the curriculum used the experience to scale up reforms to other universities and syllabus, improve faculty quality, revitalize teaching in the SAU system. methods, organize faculty exchanges within India and with foreign universities, modernize university administration IMPACT and management systems, upgrade infrastructure (teach- By and large, the project achieved its development objec- ing laboratory equipment, computer systems, communica- tives, although the Project Completion Report (June 2002) tions, farms, libraries, and hostels), and establish placement identified some design flaws and less-than-satisfactory centers and programs for student attachments to agroin- outcomes. dustries. The project also promoted initiatives to involve The quality and relevance of higher agricultural educa- university clientele more in university management tion was improved by establishing an Accreditation Board, and programs and improve education-related financial demand-oriented curriculum reforms, and complementary management. investments in staff training and educational infrastructure. To upgrade human resource management, at the state level A participatory system of institutional accreditation was the project supported: developed, and ICAR was implementing it throughout the SAU system. Academic norms for all undergraduate and ■ In-service HRD and HRM programs in 14 line depart- postgraduate programs were revised and implemented. ments that worked closely with SAUs. This support Education programs were more relevant. Curricula included training focused on job-oriented needs; system- were updated for 11 undergraduate and 32 postgraduate atic training needs assessments; training of trainers; eval- programs. Courses were introduced in new areas such as uation of training effectiveness; better instructional facil- biotechnology, computer applications, agribusiness man- ities; and improved management of state agricultural agement, and sustainable agriculture. Coursework was employees. broadened to include skills-oriented, hands-on training ■ Manpower needs assessment, involving the establish- programs developed through wide consultation with ment of broad-based Manpower Advisory Councils to stakeholders. sponsor rigorous studies of labor-market requirements These changes were reflected in new and improved and trends (that is, to begin developing labor-market teaching materials (laboratory manuals, course modules, intelligence) within each state. Data from the studies textbooks, and so forth) and methods, along with substan- were expected to provide state authorities and university tial investments to train research and teaching faculty and officials with technically sound information for crafting upgrade classrooms, laboratories, libraries, and IT facilities. public policy, academic programs, budgets, and adjust- These efforts improved the quality and relevance of the ments to university intake numbers. education programs and the teaching/learning environment. In-service training improved in quality and relevance INNOVATIVE ELEMENTS through the establishment of needs-based training programs, In the context of India’s SAU system at the time, the project greater client involvement (farmers, agroindustry, input delivered some innovative interventions. suppliers, and others), modernized training facilities, and It raised academic and administrative standards in the investments in staff training. Improved training programs SAUs through updated curricula, improved pedagogy and and the adoption of more effective practices to disseminate teaching/learning materials, an emphasis on practical expo- agricultural technology appear to have improved extension sure for students, and accreditation of academic programs. performance. 146 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK The capacity of participating states to develop and man- through positive demonstration effects. Line departments age agricultural human resources was enhanced by the also experienced changes in their attitude to, and organiza- creation of skills, institutional capacity, and infrastructure. tion of, personnel and training matters. These new resources enabled line departments to assess their HRD needs, formulate and implement human Sustainability resource management plans, provide in-service training, and liaise with other relevant institutions. When the project ended, changes in institutions and proce- dures, including managerial and administrative changes, were partly internalized, and the relevant stakeholders Additional positive results favored continuing the reform program (for example, by Policy changes improved the quality and diversity of student addressing governance reform and individual performance intake through a nationwide testing system and the intro- incentives). Staff from SAUs and line departments reported duction of national talent scholarships and research fellow- a greater sense of achievement and job satisfaction. Overall, ships. A state-level Common Entrance Test was in place, and the sustainability of the project was rated as “likely.� The examinations were revitalized through a system of internal likelihood of a follow-up project provided incentives to and external assessors. Aside from the training mentioned continue project activities. Yet as the next section will show, previously, a National Eligibility Test helped to improve the these expectations were not fulfilled. quality of faculty. To enforce national norms and standards in agricultural LESSONS LEARNED education, ICAR set up a monitoring unit. A system of rewards and incentives was put in place to speed the adop- The process could have been introduced more slowly, with tion of norms and encourage self-improvement in educa- fewer objectives. The capacity, readiness, and commitment tional standards in SAUs and among students. A manual for of project actors could have been better assessed. The proj- accreditation was issued. By the end of the project, 32 of ect might have done better to focus on higher education 35 colleges in the project SAUs had been accredited by the alone, reserving human resource management in line agen- newly established Accreditation Board. All project SAUs cies for a separate project. Donor coordination should have were accredited, and the process was continuing with other been emphasized to prevent universities from attaining SAUs throughout the country. funds that made it possible to delay reforms. University governance had improved with the establish- Some lessons are particular to the project: ment of broad-based Advisory Groups and an expansion of In hindsight, the project overestimated the capacity and the University Board of Management to include representa- readiness for reform in the government and implementing tion from the private sector. Financial powers were dele- agencies. Many assurances obtained when the project was gated to deans and heads of departments, among other negotiated did not materialize within the agreed timeframe. financial reforms. Students’ records and evaluations of Implementing agencies’ capacity to identify priorities and teachers were digitized. needs and develop workable annual plans for procurement, Although Educational Technology Development Cells financial management, and training were overestimated. and the Student Counseling Centers were set up, by the time The project was too complex. It should not have the project ended, their impact on graduate employment attempted to initiate and manage change in institutions had not been evaluated. (universities and line departments) with widely differing organizational structures, cultures, and objectives. Effects on institutional development The project did not give enough attention to monitoring The new accreditation system enabled SAUs to analyze their and evaluation. It used an undifferentiated list of indicators strengths and weaknesses, develop strategic plans for aca- that were not prioritized, quantifiable, or possible to sub- demic excellence, and formulate action plans to improve the stantiate. No benchmarks were in place for progress to be quality of agricultural education by involving all stakehold- assessed more objectively. The project lacked a framework to ers. Administrative, financial, and governance changes, link the project’s various activities clearly with its objectives. especially closer links with clients in the agricultural sector, The manpower needs assessment was not satisfactory. are likely to continue and spread to other universities Data were delivered late, were not used, and the substance MODULE 2: INNOVATIVE ACTIVITY PROFILE 1: REFORMING INDIA’S STATE AGRICULTURAL UNIVERSITIES 147 and style of teaching did not change in any substantial way, turn their attention elsewhere, reforms in governance will even though trainers were using more instructional aids. not continue, and the initiatives started by the project will not be sustained. Creating or strengthening these con- Other lessons arising from the project have broader stituencies requires delegation, decentralization, and application: empowerment of different functionaries as well as the As emphasized in the module overview, the case for institutionalization of key reforms, such as changes in uni- reform needs to come from within the system—in this versity statutes that give a genuine voice to the private sec- instance, from the coordinating body for higher agricultural tor or “teeth� to student evaluations. Projects need to be education. The weak impetus for reform underlies the other designed in ways that will initiate and elicit such gover- lessons presented here. nance and institutional reforms, perhaps by phasing in Reform takes time. Although this project recorded many project investments that are explicitly linked to realizing successes, the difficult issues were not resolved. A second agreed elements of reform. phase of the project, which would have institutionalized the Although the project devoted attention to building up reforms, was never funded. management and implementation capacity at various lev- The number of universities in the project was limited to els, in retrospect the ability of the implementing agencies to four to achieve a convincing demonstration effect. This manage procurement, financial management, and selection decision, in a system as large as India’s, was perhaps good— and placement of staff for overseas training was overesti- but it remains an open question. mated. It is critical to make a thorough assessment of Human resource management—intended to make train- capacity and readiness for reform before designing the ing more meaningful in the state line departments that project in detail. worked closely with the SAUs—proved more difficult to man- Finally, when supporting university reform in entities age than expected, because the universities and line depart- that focus on teaching, research, and extension, it is impor- ments were administratively separate. (As noted, it may have tant for donor organizations to ensure that they do not offer been preferable to focus on line agencies in a separate project.) those entities competing funds that would allow adminis- Unless a project can tap into or build durable con- trators or faculty to ignore the more difficult elements of the stituencies for reform, the “champions for change� will reform agenda and delay or derail the process. 148 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 2 Transforming Wageningen Agricultural University Charles J. Maguire, Consultant SYNOPSIS The agricultural sector’s poor image was reflected in low student enrollment in agricultural education programs. Ministry of Agriculture decision to make a major A investment in the knowledge infrastructure for agriculture, strengthen research, and make research more accountable to its clients induced Wageningen Agricul- Budget negotiations in 1994 suggested shifting agricultural education and research (one-third of the ministry’s budget and staff) to the Ministry of Education. The response was to create a strong education and research center— tural University to change its focus and work with a wider the Wageningen University and Research Center—to research network and with stakeholders. The change process strengthen the Ministry of Agriculture’s position and give it began in 1997 when the university merged with the Ministry a guiding/steering role. For more information on research of Agriculture’s research department to create the Wagenin- networks in the Netherlands, see module 1, TN 1. gen University and Research Center. The vision for education at Wageningen University and Research Center is to create a content-inspired international learning environment based REFORM OBJECTIVES AND DESCRIPTION on (1) an orientation to competencies (knowledge, skills, The reform was a total reorganization that involved budget and attitude), (2) professional and academic education, and cutting, staff reductions, rationalization of course offerings, (3) diverse, dynamic, and flexible learning tracks. To achieve and a public relations campaign to inform future students this vision, the university has undertaken major administra- and the public of new and revised academic programs. The tive, staffing, and program changes, in the course of which it university also reached out to partner with other education has merged with other education and research entities. A bet- institutions, private sector clients, and the European and ter balance was attained between discipline-oriented and world network of academic agricultural education and integrated courses and between a focus on the development research institutions. of knowledge and skills and on the competencies needed to More specifically, 24 academic chairs were eliminated, sev- use knowledge in society. Students were expected to under- eral education programs closed, and 280 staff positions cut. stand the synergy between natural and social sciences to A strategic plan developed and introduced in 1999 helped increase the societal relevance of the university’s programs. As bring about desired improvements in organizational relevance it continues to evolve, the new organization has attracted and enrollment. A key element in the strategic plan was that more students and funding, become more client oriented, the university abandoned the generalized “agricultural� track and expanded its international cooperation network with to focus on “life and social sciences,� given that health, food, academic institutions. nutrition, lifestyles, and livelihoods had gained importance. Research institutes that were under the Ministry of Agriculture, Nature, and Food Quality merged with the uni- CONTEXT versity and now operate in so-called Science Groups on ani- The transformation of Wageningen Agricultural University mal, environmental, food, plant, and social sciences. Van into the Wageningen University and Research Center Hall Larenstein, a college of higher agricultural and voca- (www.wageningenuniversity.nl/uk/) reflected the Ministry tional education, joined Wageningen, and the former tropi- of Agriculture’s desire to regain its high profile in the econ- cal school for higher vocational education relocated to omy and improve agriculture’s image and political clout. Wageningen from Deventer. 149 INNOVATIVE ELEMENT more students to pursue a career in agriculture. Student numbers have risen since the reorganization, and the num- An innovative aspect of the reform was the leadership from ber of students entering the university from secondary the Ministry of Agriculture, which saw the importance of school doubled. This trend was reinforced by many initia- creating a strong, competitive research and education center tives to inform the general public and students in secondary that would give the ministry a prominent guiding/steering education about the university’s new mission and emphasis role and strengthen its political position. Equally innovative on exploring nature to improve the quality of life. was the university’s capacity to see change as an opportunity The university has more than 11,000 students. Approxi- to increase its competitive power by combining different mately 7,000 participate in the bachelor-level program, and levels of research and education that included the university, of the university’s 2,500 MSc and 1,600 PhD students, more research centers, experiment stations, and professional than half are from abroad. The relatively large number of education, complemented by special centers for knowledge doctoral students signifies the university’s true research valorization, business schools, and professional midcareer character and international scope (it draws students from training and capacity building. more than 100 countries). A new campus with cutting-edge teaching and research facilities is under construction. The university has developed a flexible funding structure that EXPERIENCE attracts financing for research fellowships; its scientific The Wageningen University and Research Center’s vision excellence helps to secure operational funding. It partici- for education is to create a content-inspired international pates in international research programs oriented to devel- learning environment based on (1) an orientation to com- opment and plays a leading role in large, privately funded petencies (knowledge, skills, and attitude), (2) professional programs set up by foundations. The university uses core and academic education, and (3) diverse, dynamic, and flex- funding to support development-oriented research to help ible learning tracks. The university’s reformulated mis- solve important societal problems and at the same time to sion—“to explore the potential of nature to improve the build skills and competencies of partners and partner insti- quality of life�—has given rise to programs that attract tutions in developing countries. 150 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 3 Curriculum Change in Agricultural Universities Strengthens Links in the Arab Republic of Egypt’s Innovation System Charles J. Maguire, Consultant SYNOPSIS CONTEXT alling enrollments and mismatch between graduates’ Egypt’s agricultural universities were losing students. Out- F skills and labor-market requirements inspired a curriculum change project in five agricultural uni- versities in Egypt. The project’s strategy was to strengthen dated courses and limited contact with prospective employers produced a significant number of unemployed graduates whose skills did not match labor-market requirements. The connections between important institutions in the inno- quality of education had deteriorated because faculty lacked vation system (universities, private firms, and commercial the resources to conduct research or pursue professional farms) while transforming academic programs. Leaders development. The Institutional Linkage Project, a component from the academy and the private sector participated in a of the USAID-funded Agricultural Exports and Rural Income steering committee that guided the project’s implementa- (AERI) Project, was designed to help five agricultural univer- tion. Based on a skill gap analysis that revealed the human sities in Upper Egypt reassess their course content and create resource needs of private employers and the correspon- a model curriculum that other universities could adopt. (See ding weaknesses in academic programs, faculty updated also IAP 9.) core courses and made them more consistent in content as well as academic standards. The project also trained PROJECT OBJECTIVES AND DESCRIPTION faculty, instituted active learning and recognition of good teaching, and improved the use of teaching aids. An over- The strategy of the AERI Linkage Project was to strengthen seas study tour formed the basis for significant institu- connections between important institutions in the innovation tional changes in the participating universities; for exam- system (universities, private firms, and commercial farms) ple, the universities organized external advisory while transforming academic programs. The process began committees to provide feedback on sector development with a skill gap analysis that revealed the human resource and labor-market needs to university management. The needs of private employers and the corresponding weaknesses universities also established internship programs and in academic programs. Based on this analysis, three broad career resource centers. Additional links were forged steps emerged to support the project’s overall goal: between the university and others in the AIS through the establishment of extension-outreach centers, which ■ Step 1. Active teaching and learning methods were intro- enabled universities to provide direct assistance to com- duced to faculty to develop the higher cognitive skills munities and, in turn, learn about real community needs. (such as critical thinking, problem solving, and decision The main lesson from the design and implementation of making) that private employers were seeking in graduates. this project is that curriculum reform is complex, involv- ■ Step 2. Content of the “core courses� (taken by all agri- ing many aspects of the academic program, the university cultural students) was updated. administration, and stakeholders. One approach to ensure ■ Step 3. Based on a strategic planning exercise by academic institutionalization of the reforms would be for the proj- and private sector leaders, the universities organized ect to include a mechanism for continuing high-level dia- external advisory committees and internship programs as logue with stakeholders. well as career resource and extension outreach centers. 151 INNOVATIVE ELEMENTS methods. These two-day events focused on the science, mechanics, and art of teaching as well as skills to elicit learn- Innovations in project design and implementation included: ing. The workshop emphasized active, problem-based learning strategies. Educators from the United States ■ Leaders from the academy and the private sector partici- conducted three follow-up workshops with 139 faculty pated in a Steering Committee that guided the project’s members who had completed the first round of workshops. implementation. Outstanding Egyptian teachers who emerged from the first ■ A skill gap analysis identified knowledge and skill deficits workshops organized additional in-service workshops for in recent graduates. faculty who did not speak English. Nine such workshops ■ Academic staff participated in redesigning and improv- were conducted for 234 faculty members from all five ing courses and learning materials. universities. ■ University deans and private sector leaders gained first- hand views of overseas university systems. ■ External Advisory Committees were created and pro- Leadership study tour generates ideas for change vided feedback on sector development and labor-market needs to university management. Nineteen deans and department heads traveled with private ■ Student internship programs were developed. sector leaders interested in strengthening the universities to visit four United States land-grant universities with impor- tant faculties of agriculture. The tour emphasized how each Details on the project’s experience with these innova- university worked closely with the private sector to modify tions follow. the curriculum, established internship programs, operated career centers, and incorporated practical skill training into Role of the steering committee their respective academic programs. During a two-day A Steering Committee of Egyptian academic and private sec- strategic planning workshop following the tour, participants tor leaders guided planning and implementation of the proj- discussed and developed the elements of a plan to incorpo- ect’s capacity-building component. Their participation rate similar ideas in their universities. The tour enabled par- helped bridge the gap in understanding and cooperation ticipants to see the value of advisory committees involving between the private sector and the participating institutions. the private sector, including their potential to promote part- The committee met periodically to review and approve all nerships between the private sector and the university sys- major project activities and to select and/or approve nomi- tem. The conclusion was that the study tour “formed the nees for major activities such as overseas study tours. basis for significant institutional changes in the participat- ing universities� (Swanson, Barrick, and Samy 2007). Skill gap analysis The skill gap analysis involved 254 private employers and Course development workshops 1,000 university graduates who had been out of school The skill gap analysis demonstrated the need for the univer- and/or working for at least one year. Private firms and recent sities to change their curricula, but that would be difficult in graduates agreed that university students needed to develop view of the time and effort needed for the Supreme Council critical thinking, problem solving, and decision-making for Higher Education to approve the modifications. As an skills, as well as effective communication and teamwork alternative strategy, the basic structure of the curriculum skills. The common method of teaching through lectures did was retained and individual courses were modified to reflect not actively involve students in learning. It emphasized the current knowledge base in each field of study. The focus knowledge recall at the expense of higher cognitive skills shifted to updating basic course content and teaching meth- such as analysis, synthesis, and evaluation. The first step in ods and developing common academic standards across all providing students with the skills they lacked was to trans- five universities, especially for the common core courses. form the teaching/learning methods at the universities. Course development workshops, attended by faculty members and teaching assistants responsible for the core Active teaching and learning courses, adapted courses to become more consistent in con- Altogether, 239 university faculty members participated in tent as well as academic standards. The Midwest Universities seven in-service workshops on active teaching/learning Consortium for International Activities (MUCIA) selected 152 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK outstanding teachers from partner universities in the United of graduates from agricultural universities, and it success- States to conduct the workshops. They brought their rec- fully engaged university administrators and faculty in ommended book for the particular course plus an array of bringing about those changes. Among the achievements teaching materials (such as the course outline or syllabus, noted in mid-term project reviews were: PowerPoint presentations, videos, and classroom exercises, quizzes, and examinations). ■ Active teaching/learning methods. Sixty-seven percent of professors had adopted and thirty-three percent had partially adopted the new methods. The methods seem Implementing faculty development to have improved interactions between professors and programs at United States universities students. Faculty development programs consisted of a six-week pro- ■ Course development workshops. All participants gram split between two United States universities in MUCIA found the workshops conducted to review courses and or a four-week program at one university. The vast majority introduce new material relevant to their particular of participants (93 percent) intended to modify their teaching courses; 53 percent fully adopted the recommended methods in various ways, by promoting greater student- modifications to their course. The remaining 47 per- teacher interaction, encouraging more use of the Internet, cent adopted some of the materials or recommenda- making courses more market driven, bringing in more guest tions. (Note that the project also supplied computers lecturers, stressing practical applications, increasing field vis- and LCD projectors to use with the updated teaching its, and promoting more team-based learning. materials.) ■ Links to private employers. The study tour was effective in convincing university administrators that public- Developing external advisory committees private cooperation benefits future employers of gradu- Workshops led by MUCIA specialists helped to organize ates and the university. this institutional innovation. Following the first workshop, three follow-up workshops were organized to discuss progress. At a separate, one-day workshop held later (April LESSONS LEARNED AND ISSUES FOR 2006), academic leaders from each university and the pri- WIDER APPLICATION vate sector members of their respective committees met to The main lesson from the design and implementation of compare experiences and outline plans for building public- this project is that curriculum reform is not as straightfor- private partnerships. ward as it might seem.1 It is a complex process involving many aspects of the academic program, the university Forming internship programs and other administration, and stakeholders. For example, a revised links in the innovation system or updated curriculum without improved teaching mate- rials and appropriate pedagogical skills is unlikely to have The external advisory committees promoted the develop- much impact. The benefits of a revised curriculum will ment of student internship programs in collaboration not be sustained unless the curriculum keeps pace with with private firms. Additional links were forged between stakeholders’ evolving needs. Key stakeholders inside and the university and others in the AIS through the estab- outside the university must contribute their perspectives lishment of Extension-Outreach Centers. The centers on the knowledge and skills needed in a developing agri- enabled universities to provide direct assistance to com- cultural sector. To ensure support for curriculum change, munities and, in turn, learn about real community needs. teaching staff, administrators, and stakeholders must be The establishment of Career Resource Centers helped consulted and engaged as partners in making the desired students plan coursework and prepare themselves for changes. Despite impressive reforms in the curriculum, seeking employment. capacity building for academic staff, and improved links to agribusiness, the question of whether these five universi- ties can sustain their efforts appears unanswered. One PROJECT IMPACT AT MID-TERM approach to ensure institutionalization of the reforms The project created greater awareness of the importance of would be for the project to include a mechanism for con- supporting major change in the knowledge and skill profiles tinuing high-level dialogue. MODULE 2: INNOVATIVE ACTIVITY PROFILE 3: CURRICULUM CHANGE IN EGYPT’S AGRICULTURAL UNIVERSITIES 153 I N N O V AT I V E A C T I V I T Y P R O F I L E 4 Innovative Training Program for Midcareer Agricultural Extension Staff: The Sasakawa Africa Fund Education Program Charles J. Maguire, Consultant SYNOPSIS education, especially in sub-Saharan Africa, where students lack practical experience gained through demonstrations, he Sasakawa Africa Fund Education Program T builds capacity of midcareer practicing extension workers by enabling them to participate in degree programs. This opportunity enriches university under- field visits, and interactions with rural communities. Univer- sity graduates who work in agriculture ministries and their subsidiary agencies often lack the skills and confidence to understand, respond to, and communicate effectively with standing of field conditions and problems (leading to more sector stakeholders. To respond to this need and boost field focused curriculum content), benefits participating com- experience in the leadership ranks of the extension service, munities, enhances the status of the university in the agri- Sasakawa Africa Association (SAA), an NGO funded by the cultural sector and rural space, gives ministry of agriculture Nippon Foundation, launched the Sasakawa Africa Fund for services greater credibility and effectiveness, and confers Extension Education (SAFE) (http://www.safe-africa.net), in greater skills, status, and influence on midcareer extension 1993. A pilot program was implemented in Ghana in collab- workers—all of which is beneficial to the AIS. The process oration with Winrock International Institute for Agricultural began in 1993 with cooperation between Ghana’s Ministry Development, a nonprofit NGO based in the United States. of Food and Agriculture, the Sasakawa Africa Fund for Extension Education (SAFE), and Winrock International Institute for Agricultural Development. By January 2008, PROGRAM GOALS 2,292 students had benefited from the program. One key to the program’s success was the Supervised Enterprise Proj- The SAFE program has four objectives: ects (SEP) undertaken by each midlevel extension worker accepted to the program, which forged the links between 1. Create midcareer training opportunities to improve the extension, the university, and the community. The main les- technical and human relations skills of outstanding male son is that initiating a program of this type requires consid- and female field-based extension staff with certificates erable discussion with higher-level decision makers and and diplomas in agriculture and related fields. university managers so that the potential value of the pro- 2. Help reform agricultural extension curricula in selected gram is understood. Agreement on program design is essen- African universities. Coupled with this reform, partici- tial to ensure that the community attachment portion of the pating universities are assisted to acquire relevant program (SEP) is implemented effectively. Careful selection instructional materials and to network with other uni- of candidates for the degree program is vital. The financial versities in the SAFE program to build strong pan- lesson is that SEP is expensive to implement, as it requires African academic partnerships. See also module 3. supervision and travel for faculty and students. 3. Develop agricultural leaders for extension organiza- tions in sub-Saharan Africa. This objective does not necessarily imply helping extension staff to occupy high CONTEXT positions within the extension organization. Rather, it The persistence of formal teaching methods characterized by means helping them achieve the more important goal of the lecture model is a generic weakness of agricultural developing new, positive attitudes towards their work 154 and responsibilities and to become systems thinkers, cat- education). The second option is a two-year postdiploma alysts, facilitators, and effective managers of change program. Both programs lead to a BSc in Agricultural within their extension organizations. Extension. 4. In the long term, bring about institutional reform within African universities, not only in the development Innovative elements of responsive agricultural extension curricula, but also in the wider institutions themselves. The program’s innovative feature—aside from its focus on the untapped potential of midcareer professionals—was its In summary, SAFE strengthens the in-country capacity off-campus Supervised Enterprise Project (SEP). After an of African universities to be adaptable organizations that initial period on campus, students return to their work can develop client-focused training programs, acquire rele- environment to undertake a SEP for 4–6 months. These vant core instructional materials in agricultural extension community-based experiences facilitate experiential learn- and related fields, mobilize internal and external resources ing as well as linkages between the major subsystems of the to sustain the programs, and forge partnerships with other agricultural knowledge system: the farmer subsystem, which local and international institutions and agencies. Specific includes agribusiness, the extension and education subsys- problems that SAFE addresses are (Zinnah 2003): tem, and the research subsystem. The SEP embodies the innovative link that connects the university and the com- ■ Outdated extension curricula that do not reflect chang- munity, thereby enhancing AIS interaction. Through the ing needs of providers and users of extension services, student extension workers, the SEP conveys community including the private sector. problems and successful practices to university researchers ■ Inadequate off-campus, farmer- and client-focused prac- and enriches the curriculum. tical training activities for students in agricultural col- leges and universities. Impacts of the Cape Coast program ■ Lack of appreciation of the experience of midcareer extension professionals in the agricultural and rural The main beneficiaries of the SAFE Program are: development process. ■ Lack of appreciation for midcareer professionals, espe- ■ Frontline extension staff of MOFA, because without the cially certificate and diploma holders, as a prospective program, they would have little chance to get a BSc, given group of learners. the perceptions of diploma and certificate holders ■ Lack of appropriate training opportunities for midcareer among university admission officers. extension staff. ■ Farmers, because the SEPs concentrate on farmers’ prob- ■ Lack of partnerships among agricultural colleges and lems and have generated income-producing projects. universities and employers/clients of their graduates. ■ Academic programs at the university, which are exposed to real farming community problems and concerns. ■ UCC, through heightened visibility and links to MOFA, SAFE’S DEVELOPMENT AT THE UNIVERSITY farmers, extension staff, NGOs, and District Assemblies. OF CAPE COAST, GHANA The university received international recognition for the To develop the SAFE pilot, in 1992 Ghana’s Ministry of innovative nature of the program. Food and Agriculture (MOFA) and its NGO partners ■ MOFA, which gains an infusion of newly motivated staff requested the University of Cape Coast (UCC) to create a with practical skills and experience who serve in key needs-based BSc degree program in agricultural extension positions and supervise the work of other extension staff. for midcareer extension staff with diplomas and certificates (qualifications possessed by some 85 percent of Ghana’s By 1999, 51 students (22 percent female) had completed extension staff). These men and women would undertake BSc degrees; of these, 22 percent gained first-class honors. the program on a leave of absence from their jobs and Seventy-six students, including three from Nigeria and one would return to work when they completed their studies. from Mozambique, were enrolled (29 percent were female); The resulting program has two options. The basic option 51 were certificate and 25 were diploma holders. The partic- is a four-year program offered to extension workers who ipation of the women in particular should increase the have passed a certificate course (two years of postsecondary gender balance in the upper levels of the extension service. MODULE 2: INNOVATIVE ACTIVITY PROFILE 4: THE SASAKAWA AFRICA FUND EDUCATION PROGRAM 155 A seven-member Consultative Committee was formed with A relevant program that shows positive results creates fur- representatives from MOFA, UCC, SAA/Winrock, and ther demand among academic entities and potential farmers/agribusiness to provide recommendations, includ- enrollees. ing recommendations for fund raising. Greater interaction Including a practical stage (the SEP) in the program was was fostered between field staff of some bilateral agencies central to success, because it fostered the alliances that and NGOs, UCC, and students because of the SEP. spread the benefits to all participants. Communities gained By January 2008, 246 enrollees at UCC had obtained BSc from the external contacts. Ministries of agriculture gained degrees and 231, a diploma. At the same time, 81 persons better-trained staff with more field experience, which made were enrolled in the degree program and 112 in the diploma their contribution to sector development more effective. program. Universities gained greater community visibility and access to real rural training settings and challenges, and university research programs and curricula were enriched to reflect WHAT IS THE FUTURE OF SAFE IN AFRICA? changes in agriculture on the ground. It is becoming evident that partnerships are the only Aspects of the program can be improved. The four-year solution to the multifaceted problem of training Africa’s certificate program is too long for some midcareer workers agricultural extension staff. In extension education (in who would be content with a diploma rather than a degree. fact, throughout the AIS), the tradition of working alone The program also needs more diversity, especially with in a competitive rather than a collaborative mode is no respect to female recruits, but the pool of midcareer women longer valid. No single player has the capacity to cover all extension workers for the program remains small. education and training needs, and partnerships with One lesson for implementing this kind of program is that donor agencies will continue to be critical in this poorly the need for qualified and committed core staff is para- resourced area. mount. The lack of such staff has been a big constraint, The motives and methods of the SAFE program res- affecting not only the implementation but the long-term onated with African universities outside Ghana. Following sustainability of the program. Because the SAFE concept is the UCC pilot, other universities in Ghana and elsewhere new to the university and the extension service, administra- joined, including: Kwadaso Agricultural College (Ghana); tive and academic staff members must be oriented to the University of Abomey-Calavi (Benin); the Polytechnic it. University staff members must acquire the improved University of Bobo-Dioulasso (Burkina Faso), Alemaya pedagogical methods and skills to better meet midcareer University of Agriculture and Hawassa University students’ learning needs. The acquisition of such skills is (Ethiopia); the Rural Polytechnic Institute of Training and facilitated by staff involvement in the SAFE program Applied Research and Samako Agricultural Institute (Mali); through team teaching and joint supervision of SEPs. Bunda College of Agriculture (Malawi); Ahmadu Bello Uni- Financing is crucial. SAFE, with its strong off-campus versity and Bayero University (Nigeria); Sokoine University focus, is expensive to run, even if the returns on investment of Agriculture (Tanzania); and Makerere University are large. A clear exit strategy for the funding partners is (Uganda).1 Donor support for the SAFE program was vital to enable the university to develop its own means of lengthy (UCC Ghana, the pioneer university, was supported continuing the program. In Ghana, MOFA is considering from 1992 to 2002), but once universities and diploma- including the SAFE program in its budget. Incentives also granting institutions accumulated sufficient experience help universities adopt the program. At UCC, for example, with running the new curriculum, direct support ended. a multipurpose building (the Sasakawa Center) was com- A number of lessons were learned as SAFE expanded to pleted and is used to generate income for the SAFE program new settings. Perhaps the most important lesson was that the at the university. It remains vital to build constituencies that seemingly impossible task of bridging the technical- can pressure decision makers on behalf of the university; professional gap in civil service employment could be some administrators continue to regard SAFE as extra work solved for midcareer, technically qualified extension staff. rather than a strategic necessity. 156 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 5 Chiang Mai University Links with Rural Communities to Focus Research on Farming Problems and Foster Curriculum Change Charles J. Maguire, Consultant SYNOPSIS communities. The university has established a center to strengthen research by systematically accessing new research his reform fostered interaction between the Uni- T versity of Chiang Mai and communities to iden- tify problems and find solutions jointly through Community-Based Research (CBR). In the ten years since funding and strengthening faculty research capacity. A fac- ulty research manager encourages faculty, staff, and students to engage more actively in research. Research performance is a major criterion for promoting faculty members. the program began, students and researchers have gained Yet the Department of Agricultural Extension in the Fac- hands-on experience in communities; through this interac- ulty of Agriculture at Chiang Mai University realized in the tion, they identified researchable topics that enriched the 1990s that students and faculty were poorly prepared for university’s research program. The curriculum also bene- work in rural areas. Students and faculty were unfamiliar fited from the enhanced understanding of rural problems with rural living conditions, technical agricultural chal- and challenges. The innovative aspects of the university- lenges, and social problems. The university placed heavy community link were that it used an ongoing project (the emphasis on classroom learning, literature reviews, and lab- CBR project) as a vehicle for introducing students to the oratory experimentation but offered little contact with realities of rural life; it created a university Center for communities. Many undergraduates had little capacity to Community-Based Research; and it used CBR projects analyze and synthesize information on social situations or created from this center as a learning resource for under- conduct community-based research, and their facilitation, graduate and graduate students. Apart from the core fac- communication, and writing skills were poor. In 1996, the ulty in the Center for Community-Based Research, other Thailand Research Fund (TRF) had resources to support a faculty members began to adopt this approach to building Community-Based Research (CBR) program to answer student capacity to deal with real problems in rural com- the question: “How can research findings be used by local munities. The university became a visible and active actor people—the users of research results?� in the farming community and the AIS. The integration of learning/teaching, research, community service, and fac- ulty required considerable collaboration among the CBR THE COMMUNITY-BASED RESEARCH PROGRAM projects and communities, the Practical Training Unit, the Student Affairs Unit, and the Department of Agricultural The CBR program employed an empowerment and people- Extension. At the same time, the program required sup- centered approach that: port from the national research funding agency as well as financial support and collaborative organization inside the ■ Identified problems and research questions in a partici- university and with communities. patory manner with local residents. ■ Involved local people as community research in the CBR program (farmers, women leaders, village leaders, school CONTEXT teachers, administrative officers, community develop- A major policy of Thailand’s Chiang Mai University is that ment workers, community extension workers, doctors, research should be of world-class quality and serve local monks, and youth groups). 157 ■ Planned projects with care and implemented agreed five CBR communities supported by staff from the Center for actions to solve problems. Community-Based Research in the Faculty of Agriculture. The university’s Practical Training Unit staff learned, for the first Each CBR project would be developed and implemented time, how to organize such training in rural communities and in 12–18 months and would receive a grant of how to communicate with community members and under- 200,000–300,000 baht (B). To facilitate CBR projects, CBR graduate students. A practical training manual was prepared centers were set up. Through counselors and staff, they for the 2004 program. As a result, the Faculty of Agriculture would identify community researchers, identify local prob- has allotted an annual budget for this training activity. It was lems, develop research questions, develop a CBR proposal also the first time that communities had hosted 30 university and action plan, sign research contracts, and monitor the students for a five-day visit, helped organize the practical CBR from the beginning to final report phase. training program, and interacted closely with such a group of In 1998 the Extension Department saw that CBR projects visitors. For the students, the visit was a true learning experi- could provide an opportunity for students to become involved ence. For the first time, students lived with rural families, com- in communities. Student learning was integrated with com- municated, understood the realities of rural life, and appreciated munity research through a number of initiatives. Students the value of local wisdom in dealing with livelihood issues. enrolled in Extension Communications visited active CBR projects and, as an exercise, could write an article on their INNOVATIVE ELEMENT observations and village issues; produce a script to be broad- cast over community radio; or submit an article for commu- The innovative aspects of the university-community link nity newspapers. Students specializing in Media Production were that it used an ongoing project (the CBR project) as a for Extension visited CBR projects and developed media vehicle for introducing students to the realities of rural products that reflected the needs of community researchers, community life; it created a university Center for Commu- such as posters, newsletters, photographs, DVDs, and radio nity-Based Research; and it used CBR projects created from programs. Graduate students enrolled in Agricultural Com- this center as a learning resource for undergraduate and munities Studies undertook study visits to CBR communities; graduate students. Apart from the core faculty in the Center participated in discussion and dialogue; listened carefully for Community-Based Research, other faculty members when interacting with CBR researchers, counselors, and staff; began to adopt this approach to building student capacity to took detailed notes; and produced a review of their visits. The deal with real problems in rural communities. materials produced, together with their experiences in the communities, formed the basis of their thesis topics. IMPACT Efforts to widen the interaction between the broader uni- versity community, the research funding agency, and CBR In a relatively short period, the program established the CBR communities proved difficult to achieve. For this reason, a link with communities and dramatically raised awareness project specific to the university—the Research Management among students and faculty of how isolated the university Fund—was established in 2002 with support from TRF to had been from life in rural communities. Research has foster wider collaboration among the faculty of agriculture, become more focused, and the curriculum reflects the knowl- TRF, and CBR communities for integrating teaching/ edge and skills needed by graduates who will meet technical learning, research, and community service. The ultimate and social needs in rural areas. The university, through its fac- objective was to create a learning community of undergrad- ulty and students, has gained visibility and stature among its uate students based on CBR projects. To reach this objective, stakeholders and has become an active AIS actor. a Center for Community-Based Research was established in By 2007, 650 CBR projects had been funded with grants the Faculty of Agriculture to develop CBR projects as a from TRF, and 264 had been implemented, facilitated by the means of empowering community researchers. In 2003, 11 core research team that runs the Center for Community- CBR projects were developed. Based Research. The center collaborated with the Practical The next challenge was to get the university’s Student Training Unit in the faculty to enable second- and third- Affairs Unit and Practical Training Unit involved in using CBR year undergraduate students to undertake “practical train- projects as a learning community base for undergraduates. A ing� in communities. start was made during the practical training period in 2003, Additionally, these students were encouraged to practice when 120 second-year students undertook practical training in further “student activity� in the communities through 158 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK various student clubs. Through this learning process, LESSONS LEARNED students, the Faculty of Agriculture, the Center for To summarize, the CBR program—initiated through one Community-Based Research, the TRF, and local communi- university department in the faculty of agriculture—created ties have gradually developed collaborative interaction. For and sustained links between students, teachers, researchers, example, research problems identified by community mem- and rural communities, all of whom benefit. The university bers have increased the effectiveness of the students’ clubs. can focus on real-life problems through research; supervis- Local communities have increased their ability to manage ing teachers gain from the field experience; students learn “student practices� as a vehicle for identifying community how to communicate with rural people; and communities problems, to analyze causes of problems, and to develop gain solutions to problems based on academic and local solutions through a participatory research process in which knowledge and see the university as a development partner. students and faculty become their co-researchers. Box 2.12 lists specific lessons from the program. Box 2.12 Specific Lessons from the Community-Based Research Approach Adopted by Chiang Mai University’s Faculty of Agriculture ■ The need for change in academic programs can be ■ Through the CBR projects, academic knowledge was identified from within the educational institution. applied to problems that community members ■ Available resources (in this case, the Thailand could not solve by themselves. Research Fund) can be tapped to begin the change ■ The involvement of faculty and students with com- process. munities brought the university to the field and ■ Involving students and researchers in the change strengthened AIS linkages between the university process is likely to ensure that the change model is and a major stakeholder group. sustainable. ■ The collaboration of the CBR projects and commu- ■ It was not easy to convince all faculty members to nities, the Practical Training Unit, the Student Affairs adopt the CBR model, especially because projects Unit, and the Department of Agricultural Extension run from 12 to 18 months, whereas mainstream stu- contributed to the integration of learning/teaching, dent research projects run only from 6 to 8 months. research, community service, and faculty. ■ Collaboration within the university and with com- ■ Information and knowledge generated by CBR proj- munities is essential. ects can be used to develop research projects for ■ The participation of academic staff as co-researchers undergraduate and master’s students. At the same allows them to increase their knowledge and facili- time, community service is built in throughout the tating skills and to change their world view. For research process and culminates in the development example, teachers adopted a participatory learning and use of new knowledge to improve life in the process, respected local wisdom, and recognized vil- communities. lagers’ tacit knowledge. These practices inspired ■ As noted, the CBR program was successful but changes in their teaching style, which has become required financial support and collaborative organi- more participatory and facilitates learning more zation inside the university and with communities, effectively. and the support of the research funding agency. Source: Author. MODULE 2: INNOVATIVE ACTIVITY PROFILE 5: CHIANG MAI UNIVERSITY LINKS WITH RURAL COMMUNITIES TO FOCUS RESEARCH 159 I N N O V AT I V E A C T I V I T Y P R O F I L E 6 EARTH University, Costa Rica: A New Kind of Agricultural University Charles J. Maguire, Consultant SYNOPSIS of a group of largely Costa Rican business, academic, and government leaders, EARTH was founded in 1990 with sig- ARTH University, an autonomous educational E entity, was newly designed and established in Costa Rica in 1990. Although a significant part of the plan of study focuses on agriculture and natural resource man- nificant investments from USAID and the W.K. Kellogg Foundation, with strong support from the government of Costa Rica. The support provided by USAID allowed for the establishment of an endowment that covers between one- agement, the university’s core purpose is to prepare leaders third and one-half of the university’s annual expenses. capable of promoting sustainable development in the EARTH University was established in response to urgent tropics. EARTH’s unique educational model is based on problems in Central and South America, including rural technical and scientific knowledge, entrepreneurial mental- poverty, high population growth, low productivity, migra- ity, values and ethics, and social and environmental com- tion to cities, destruction of fragile ecosystems, and political mitment. In addition to inculcating practical skills that instability and war throughout the region. EARTH is a pri- benefit interactions at many levels throughout the AIS, vate, nonprofit, international university, autonomous and EARTH’s experiential curriculum balances theory and independent of political pressure. It has an international practice through work experience, community develop- faculty, a student body originating from 25 Latin American ment, the academic program, entrepreneurial projects, and and Caribbean countries, a small number of students from internships. The emphasis on entrepreneurial skills equips Africa, and is small, with 400 students and 40 faculty. The graduates with a greater range of career choices, and expo- university’s 3,300-hectare farm is used for training as well as sure to rural communities is vital for producing graduates commercial, income-generating crop production. dedicated to serving the sector and rural people. A major lesson is that the development of robust rural economies requires individuals capable of applying knowledge and PROJECT OBJECTIVES AND DESCRIPTION skills from across disciplines, often in very practical and Although a significant part of the plan of study at EARTH applied ways. Faculty must engage directly with their stu- focuses on agriculture and natural resource management, dents in production, processing, and marketing as well as in the university has defined its core purpose as preparing research and extension. Reward and promotion criteria leaders capable of promoting sustainable development in must be designed to encourage innovative teaching and the tropics. The curriculum is highly integrated and engagement as well as research. Assured funding combined transdisciplinary. While the acquisition of technical and with continuous fund raising enable the university to scientific skills and expertise is obviously important, the maintain high academic and infrastructure standards. development of values, leadership, commitment, and a diverse set of skills, abilities, and attitudes are considered equally important. CONTEXT The development of EARTH in the 1980s coincided EARTH—an acronym for the university’s name in Spanish, with a significant change in the agricultural sector and a Escuela de Agricultura de la Región Tropical Húmeda—is a marked shift in the structure of employment opportuni- private, international, four-year undergraduate institution ties in agriculture. Whereas previous generations of located in the Caribbean lowlands of Costa Rica.1 An initiative agronomists and other professionals had found relatively 160 abundant employment in Ministries of Agriculture, working with companies in the region in such areas development banks, and other public agencies, by the as: crop management techniques and practices for melons, 1980s structural adjustment programs and other changes sugarcane, rice, and citrus; livestock management practices; had largely eliminated these possibilities. Consequently, small-scale and industrial aquaculture; and regional efforts EARTH’s academic program was focused largely on in alternative energy generation from wind, geothermal, preparing professionals for the private sector. Providing solar, and sugarcane-derived sources. Students also learn graduates with entrepreneurial skills and abilities became about water management and biodiversity in the dry trop- fundamental to the program. The centerpiece of entrepre- ics in relation to each of the above-mentioned activities. neurial training at EARTH is the Entrepreneurial Project ■ Entrepreneurial Projects. Students develop a business course (see the next section). venture from beginning to end during their first three years at EARTH. Small groups of 4–6 students, of different nationalities, decide upon a business activity related to INNOVATIVE ELEMENTS agriculture and natural resources and conduct a feasibility To create the type of leader capable of responding to the study (including financial, social, and environmental crite- social and environmental problems facing rural communi- ria). If the study is approved by a panel of professors, other ties of the humid tropics, EARTH developed a unique edu- students, and external experts, the university loans money cational model based on four pillars: technical and scientific to the company, and the team implements the project, knowledge, entrepreneurial mentality, values and ethics, including the marketing and sale of the final product. and social and environmental commitment. As part of this After repaying their loan, with interest, the group shares model, EARTH created an experiential curriculum that bal- the profits. The Entrepreneurial Project is accompanied by ances theory and practice. Five keystone programs within a series of classroom modules related to business organi- EARTH’s curriculum are based on experiential learning: zation, accounting, marketing, and similar themes. ■ Internships. In their third trimester of their third year, ■ Work Experience. This course is taken by all first-, sec- students leave campus and take part in an internship ond-, and third-year students and continues in the program with a host organization such as a business, fourth year as the Professional Experience course. In the NGO, or farm. This internship program lasts 15 weeks first and second years, students work in crop, animal, and and is a crucial component of the student’s experiential forestry production modules on the EARTH farm. In the education. Using knowledge and skills acquired in their fourth year, students identify work sites or activities on first three years at EARTH University, students obtain campus or in surrounding communities that correspond real-world practical experience upon which they can with their career goals and develop and implement a reflect during their fourth and final academic year. work plan, dedicating a minimum of 10 hours per week to the “job.� These programs give students opportunities to develop ■ Community Development. In their second year, in an planning and leadership skills, foster responsibility, encour- extension of the Work Experience course, students work age them to become decision makers and critical and creative on an individual basis with small-scale, local producers thinkers, improve their ability for analysis, synthesis, and on their farms and with organized groups in sustainable evaluation, and apply technical and scientific knowledge in community development. During this experience in the real situations. community, students try to resolve problems facing the region’s inhabitants. The community transmits real- IMPACT world experience and provides learning opportunities for students. In its twenty years of operation, EARTH University has grad- ■ Academic Program at EARTH-La Flor. In their third year, uated some 2,000 students, the majority of whom have students spend seven weeks living with a host family near returned to their home countries to work in agriculture and EARTH’s education and research center in Guanacaste, a rural development. The EARTH educational model is widely province in the dry tropics of Costa Rica, where they have recognized as suitable for developing graduates who have the the opportunity to become actively involved in the region’s academic and practical knowledge, skills, and confidence to development process. Students contribute to improve- take leadership positions in the sector. Many graduates cre- ments in the communities and also gain experience by ate their own businesses and become employers. MODULE 2: INNOVATIVE ACTIVITY PROFILE 6: EARTH UNIVERSITY, COSTA RICA: A NEW KIND OF AGRICULTURAL UNIVERSITY 161 LESSONS LEARNED needs of most developing countries. An emphasis on entre- preneurial skills equips graduates with a greater range of The key to graduating professionals capable of successfully career choices. Exposure of students and faculty to agricul- promoting change and sustainable rural development is to tural communities leads to better communication, greater begin with young people who have a vocational interest in understanding of rural living conditions and livelihood agriculture, natural resource management, rural develop- challenges, and the formulation of technical and social ment, and related areas. Such graduates are likely to return solutions. to rural areas and engage in the complex and difficult work A favorable student-to-faculty ratio (10–1 at EARTH) that drives development. Investment in choosing and allows for quality interaction and instruction. Faculty have recruiting new students is a major contributor to the pro- to be willing to get their hands dirty and to engage directly duction of graduates dedicated to serving the sector and with their students in production, processing, and market- rural people. ing as well as in research and extension. Reward and pro- Universities have to be engaged with rural communities. motion criteria must be designed to encourage innovative Too often, universities are located in the capital city and lack teaching and engagement as well as research. At the same the resources (or the will) to get faculty and students into time, teachers and professors must be provided decent com- rural areas to engage directly with farmers and their fami- pensation for their service. Substandard salaries and work- lies. Frequent and direct contact with the realities of rural ing conditions only serve to drive the best out of education, life and the challenges of agricultural production are essen- leaving the mediocre in charge. tial in the formation of future change agents. Agricultural institutions, faculties, and schools require Higher education in agriculture has become increas- investment and must be equipped with the latest technolog- ingly specialized, with the result that many graduates have ical advances to make a meaningful contribution to build- great difficulty integrating knowledge across disciplinary ing human resources for agriculture. Although assured boundaries. Yet the development of robust rural economies funding enables the university to maintain high academic requires individuals capable of applying knowledge and and infrastructure standards, fund-raising remains a con- skills from across disciplines, often in very practical and stant task for a private autonomous university, since its applied ways. Particularly at the undergraduate level, a gen- future depends on such income. eralist formation would seem to be more relevant to the 162 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 7 Technical Skills for Export Crop Industries in Uganda and Ethiopia Charles J. Maguire, Consultant SYNOPSIS and training programs at various levels, ranging from short courses for farm workers to certificate and diploma courses shortage of skilled technical personnel and high A demand from commercial producers led to the cooperation between a donor, training institution, and commodity group to provide technical skills for workers and bachelor’s and master’s degree programs. PROJECT OBJECTIVES AND COMPONENTS in high-value export crop industries (floriculture and horti- The overall objective of the project was to expand the num- culture) in Uganda and Ethiopia. The innovative element of bers of qualified technical workers for the export flower the project was the introduction of competence-based train- industry in Uganda and Ethiopia. The project had two com- ing, which ensured that trained technicians were equipped ponents. The first identified the knowledge and skills with work-ready skills; in fact, trainees completing the pro- required and designed corresponding training activities. gram had a high level of employment. A lesson learned from The second developed a new pedagogical approach. operating the program over three years is that demand from To develop training programs, two consortia, with employers can trigger technical/vocational training and that experts largely drawn from the same institutions (the close cooperation between a qualified training supplier and Department of Education and Competence Studies of clients can lead to a successful outcome. Wageningen University, PTC+, the Agricultural Economics Institute, and a practical research center in horticulture), worked with local stakeholders. The consortia are working CONTEXT with the respective grower associations and academic insti- Floriculture is a large market in East Africa. Local and for- tutions (in Uganda with the Mountains of the Moon Uni- eign investors have developed flower farms that produce versity in Fort Portal and Bukalasa Agricultural College in large quantities of roses and chrysanthemums. Dutch flower Wobulenzi and in Ethiopia with Jimma University College growers are also active in this market, which is understand- of Agriculture and Veterinary Medicine). The short courses able, since flower auctions in the Netherlands trade one- have been effective at the thematic level. Farm supervisors third of the global market for flowers and plants. The agro- and assistant managers of various departments, such as the nomic and economic conditions for raising high-value greenhouse, “fertigation� (fertilization and irrigation), export crops are favorable in many parts of East Africa: postharvest and handling, and pest management, com- Cheap land, labor, and energy combine with good soil, pleted the training and were able to apply their new skills water, and climatic conditions. Despite this potential, the immediately. In Ethiopia, the development and implemen- associated growers in Uganda and Ethiopia (the Ugandan tation of the curriculum is still underway, but the first reac- Flower Exporters Association and Ethiopian Horticulture tions are positive. An impact study will be undertaken to Producers and Exporters Association) lacked well-trained show the real effectiveness of the approach. middle management workers. Various farmers were hiring A competence development philosophy was employed in managers from abroad, mostly from India or Kenya. Pro- developing the curriculum. A group of staff members went ducers and growers felt the need to train local workers and to the Netherlands for a Training of Teachers (ToT) pro- students and proposed a project to the Netherlands Foun- gram. Apart from floriculture and horticulture training, dation for International Cooperation to develop education they also learned principles of competence-based education 163 (Mulder 2007; Mulder et al. 2009). They were expected to INNOVATIVE ELEMENT disseminate the knowledge obtained in the ToT program to The innovative element of the project was the introduction lecturers in their colleges. The core of the competence-based of competence-based training, which ensured that trained education philosophy is that the flower (or other) industry technicians were equipped with work-ready skills. articulates the need for training. Through a labor-market analysis and needs assessment, all stakeholders obtain a pic- ture of how the educational program should be structured. BENEFITS, RESULTS, AND LESSONS LEARNED Occupational profiles and competency profiles are devel- As noted, the farm supervisors and assistant managers of oped. The competency profiles contain knowledge, skills, various floriculture departments were able to apply their and attitudes. new skills immediately after training. In Uganda, the first A major premise in competence-based education is that batch of sixteen diploma students graduated, and 14 are knowledge alone is not sufficient to bring about improved working on flower farms. Because of the training program’s practice. In many cases, unbalanced concentration on competence focus, employers appreciate the trained techni- knowledge develops graduates who may know a lot but can- cians. Placing students in internships was not difficult. Some not apply their knowledge in practice. Applying knowledge farms asked for as many students as were available. Various in practice, however, is exactly what is needed in many farms retained the interns and offered them labor contracts developing countries. A matrix comprising eight principles (Mulder, pers. comm., 2010). and four competence-based implementation levels was used The lessons from this experience to date are that demand to decide the extent to which the horticulture training from employers can trigger technical/vocational training would be competence-based. The matrix structure resem- and that close cooperation between qualified training sup- bles that of models used by the European Foundation for plier and clients can lead to a successful outcome. Quality Management. 164 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 8 Agribusiness Training for Secondary School Graduates in Timor-Leste Charles J. Maguire, Consultant SYNOPSIS of the program in light of lessons from the first phase of implementation and the fragile, postconflict setting. n Timor-Leste, capacity improvements are needed at all I levels and across the spectrum of participants in the agricultural sector (public agencies, agribusinesses, individual farmers, cooperatives, and others). Building CONTEXT Timor-Leste is a postconflict, fragile state that depends Agribusiness Capacity in East Timor (the BACET project) heavily on agriculture, which accounted for 31.5 percent of offers supplementary training in agribusiness skills through GDP in 2007 and employs about 84 percent of the popula- a one-year, postsecondary certificate program. The project— tion. Food security is critical for most people in Timor- implemented by the National Directorate of Agricultural Leste, where agricultural productivity is low in comparison Education and Training in the Ministry of Agriculture and to neighboring countries. Agricultural development is Fisheries (MAP) and Land O’Lakes (an international essential for improving food security, promoting stability, agribusiness)—graduated the first set of students in 2008 and ensuring conservation of environmental and natural (121) and the second set in 2009 (111). For BACET stu- resources. dents, the overarching goal is to learn the problem-solving The human and institutional capacity to bring about and other skills required to begin careers as agribusiness agricultural innovation and development suffered greatly entrepreneurs, agricultural extension workers, and middle during the conflict that ravaged the country for a quarter of managers to benefit communities in Timor-Leste. The grad- a century. Education programs were disrupted; experienced uate of this program is envisioned to be a learner rather and educated individuals fled; there was much loss of life; than a passive absorber of information, capable of con- institutions were destroyed. By one estimate, 53 percent of tributing to practical solutions in agribusiness. The curricu- rural people have never attended school. Capacity improve- lum’s focus on agribusiness and its emphasis on learning by ments are needed at all levels and across the spectrum of doing and practical application of theoretical classroom participants in the agricultural sector—public agencies, materials were innovative in Timor-Leste. Teacher skills that agribusinesses, individual farmers, cooperatives, and many emphasized learning versus teaching were another novel others. In this context, only long-term investment can build aspect of the project and considered fundamental to suc- the foundation for the country to recover. cess. A major lesson from the experience is that the capacity of staff and facilities needs to be carefully assessed prior to PROJECT OBJECTIVES program design, especially in countries classified as fragile states. Sites for the project must be chosen carefully to take Building Agribusiness Capacity in East Timor—the BACET into account logistics and the availability of services. Pro- project—was designed to supplement agricultural training gram design needs to incorporate lessons from implemen- at the secondary level with training in agribusiness skills. tation in redesigned curricula. To sustain the program over The one-year, postsecondary certificate would be offered to the long term, one strategy would be for MAP to shift the graduates of the three-year program at three of Timor- BACET program from the certificate level to a formal, two- Leste’s agricultural secondary schools. A five-year project year diploma course, similar to those offered by other coun- costing US$6 million, BACET was funded by USAID. It was tries in the region. Flexibility is needed to shape the future implemented by the National Directorate of Agricultural 165 Education and Training in the Ministry of Agriculture and help students understand the professional recruitment Fisheries (MAP)1 and Land O’Lakes, an international process and secure jobs in agribusiness. An agribusiness agribusiness. The project, which started in 2006, was to run education program will be coordinated to enroll young peo- for two years, but that timeframe proved insufficient to eval- ple in the one-year agribusiness course, which will be uate and refine the curriculum, and the project was extended handed over to the Ministry of Agriculture and Fisheries to 2011. The target for each secondary school was to produce (MAP) in June 2011. 50 graduates from the BACET program each year, beginning in 2007. The first set of BACET students graduated in 2008 Program content: skills and coursework (121) and the second set in 2009 (111). For more information on agribusiness skills, see also module 3, TN 2; and module 5. For BACET students, the overarching goal was to learn the problem-solving and other entrepreneurial skills required to begin careers as agribusiness entrepreneurs, agricultural Overarching objectives extension workers, and middle managers to benefit com- The project’s initial objectives (2006–08) were to: munities in Timor-Leste. During the one-year certificate program, students build their knowledge of agricultural ■ Develop and deliver an agribusiness curriculum that systems, with a particular emphasis on markets and practi- provides practical skills in crop and livestock production, cal training. They learn to apply their agricultural knowl- agricultural mechanics, English language, IT, and busi- edge practically and effectively in agribusiness, demon- ness management. Courses would include instruction in strate practical agricultural skills and transfer them to rural basic bookkeeping, organizational management, market- communities, analyze issues and problems and find appro- ing, financial analysis, cooperative business, and farming priate solutions, and adapt to changes and needs of the systems in Timor-Leste. agricultural systems in Timor-Leste. Students also develop ■ Develop an ongoing agribusiness at each school and sup- their capacity to be independent and reflective in their port agricultural enterprises and improved production in practices and to perform their duties in a moral and posi- nearby communities. These efforts might include the tive manner. development of a functioning poultry business (eggs) at The core of the BACET curriculum is agribusiness, with the Fuiloro School and horticultural crops (a nursery, an emphasis on agribusiness management and planning. In orchard, and vegetables) and livestock (goats) at the addition, students learn the principles of cooperative business Natarbora and Maliana schools. Train students and fac- models, farming as a business (see module 3, TN 2), and pro- ulty in the respective technical disciplines at each school viding business services to agricultural producers. Additional with a view to taking a lead role in operating the business. courses required by agricultural professionals included pro- ■ Develop local and regional agribusiness case studies and duction agriculture (plant science, crop production, animal identify published case studies appropriate for use in science, and livestock production); agricultural mechanics; Timor-Leste. Train teachers in the use of case studies as a computers and IT; and English. All of these courses are linked teaching tool. to the core agribusiness focus. Other themes that students ■ Develop career advancement services for BACET gained exposure to included sustainable agriculture, gender graduates. awareness, healthy lifestyles, and ethics. In Phase 2 (2009–11), Land O’ Lakes, using feedback INNOVATIVE ELEMENTS from the Ministry of Agriculture, USAID, teachers, and stu- dents, enhanced the initial program to reinforce practical The curriculum’s focus on agribusiness was an innovation and market-oriented skills. Ideally, in this phase, the project in Timor-Leste. The emphasis on learning by doing and will finalize an agribusiness course that can supply gradu- practical application of theoretical classroom materials was ates to be problem solvers and meet labor-market needs for also innovative. The graduate of this program is envisioned agribusiness entrepreneurs, agricultural extensionists, and to be a learner rather than a passive absorber of informa- agricultural middle managers. The project will continue to tion, capable of contributing to problem solving and practi- facilitate enterprise creation at schools and in communities cal solutions to agribusiness. Teacher skills that emphasized and expand school outreach to farming communities. This learning versus teaching are an innovative aspect of the phase of the project will also develop a placement system to project and considered a fundamental principle for success. 166 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK IMPLEMENTATION HIGHLIGHTS: BACET program. Graduate student placement services were BENEFITS AND IMPACT part of the project’s design. The service is labor intensive and difficult to institutionalize, but the benefit to the With project assistance, infrastructure for water and sanita- schools is that they can learn where their graduates go to tion, dormitories, and school buildings was improved. Each work and gain information on where job openings can be school has enough land for practical work and demonstra- found. As of September 2009, 42 percent of the initial group tions, but additional investment is needed in fencing, irriga- of 121 graduates (2008) was employed, and 26 percent were tion, livestock facilities, and storage. The computer centers continuing their education. A slightly higher percentage of and Internet connections at each school are important proj- women graduates were employed. Groups of graduates have ect contributions. Support from MAP is limited, and Inter- established their own farming businesses and many others net connection costs are high. Priority should be given to have gained employment as community agriculture exten- sustaining the existing computer and Internet arrangements sion workers or with agriculture livelihood NGOs. and planning the expansion of the facilities. The variation in capacity at the three schools affected implementation of the BACET project. Project designers Government commitment overestimated faculty capacity: The new program required skills that are not found in traditional, technology-oriented The government was strongly committed to the BACET programs. The curriculum was adjusted quickly to take fac- program. Memoranda of Understanding were signed with ulty capacity into account, but clearly faculty capacity build- GIZ2 (for teacher development in Indonesia); with Land ing must continue. O’Lakes (for sharing responsibility for the program, includ- Texts for the various courses were prepared in Bahasa ing curriculum development, agribusiness support, infra- Indonesia by consultants and with inputs from staff and structure, technology, operational support, and phased-in BACET coordinators, but they proved too difficult for support for teacher’s salaries and student scholarships from teachers to use as testing materials and for students to 2009); and with Udayana University in Indonesia (to enroll understand. In response, the curriculum was streamlined agricultural school teachers to pursue bachelor’s degrees). and revised courses are being used. The curriculum is Financial commitment from government proved difficult designed to be 80 percent practical and 20 percent theoreti- because of the overall national economic situation, but in- cal, which proved challenging for teachers more familiar kind support was provided. As noted, MAP will assume full with rote theoretical learning in a classroom setting. During responsibility for the agribusiness course in mid-2011. the remaining project implementation period, a detailed syllabus for the BACET program will be completed. LESSONS LEARNED Recruiting students is another challenge, perhaps partly owing to the fluidity of society in a postconflict country. The Lessons include implications for the program’s long-term BACET program competes with university recruitment. operation as well as the initial lessons from the attempt to Efforts are being made to publicize the program, and the mid- augment secondary education with subject matter and term evaluation notes that “enrollment is likely to fluctuate teaching methods that were innovative in the context. Flex- until the BACET program is well established, with adequate ibility is needed to shape the future of the program in light school facilities, a clearly defined curriculum, and recognition of lessons from the first phase of implementation and the of the enhanced skills and knowledge of the graduates.� fragile, postconflict setting. The program established successful internships with about 18 organizations, even if some placements were less Long-term strategy for a diploma course than satisfactory. Students appreciated the widening of their To sustain the program over the long term, one strategy horizons, and some employers offered jobs to interns after would be for MAP to shift the BACET program from the cer- graduation. A big gain was the increase in student confi- tificate level to a formal, two-year diploma course, similar to dence after completing the internships. those offered by other countries in the region. Presently, graduates of BACET and the agricultural secondary schools Employment of graduates are expected to work as technicians with agricultural skills, Timor-Leste is a country of high unemployment. Finding a field managers, and extension workers, but in the future the job is difficult for all graduates, including those from the agricultural sector would benefit from a pool of graduates MODULE 2: INNOVATIVE ACTIVITY PROFILE 8: AGRIBUSINESS TRAINING FOR SECONDARY SCHOOL GRADUATES IN TIMOR-LESTE 167 trained to the diploma level. There is logic in focusing on the geographic location of the schools and the condition of roads practical planning and agribusiness aspects of commercial and communications. The midterm evaluation observed that agriculture in the first year, followed by a second year of fur- it would have been better to start with one school and, based ther training and skills development in technical specialties. on that experience, scale up. Finally, few students or staff A strategy to upgrade to a diploma course could have the members were familiar with Portuguese (the official curricu- following elements: continue to seek donor support to lum language). Although Tetum is the national language, increase teachers’ level of education (this support is needed Bahasa Indonesia is widely used. Teaching materials were not because of government budget shortages); send teachers to available in Bahasa and had to be developed. Udayana University in Indonesia to improve skills and The midterm evaluation contained a number of other knowledge; review the curriculum periodically; and enhance observations. Students should be involved in two types of and upgrade facilities (such as laboratories, libraries, and enterprises while in school. One is a school-sponsored agricultural equipment) to facilitate learning. enterprise in which students interact with the public by marketing school produce and work in production projects on school farms. The second enterprise, based on the school Lessons from the midterm evaluation farms, should have activities structured as agribusinesses, At midterm, it is clear that the difficulties of establishing the with annual budgets and financial records to improve new agribusiness curriculum were underestimated. As management and to use in teaching. Budgeting by farm noted, the greatest challenge was that the initial curriculum enterprise can help with planning and management. Some was too academic and difficult for students, and the faculty farm enterprises will be profitable and some will not, but lacked the knowledge and pedagogical skills to teach it. this is a good teaching/learning situation for students. Grad- Owing to the new subject matter, developing new courses uate enterprises established after students leave the program and teaching the new material was a challenge. An addi- should receive continuing support from BACET and from tional complication was that 80 percent of the curriculum the agricultural secondary schools. GIZ will help graduates involved practical work, which required considerable inno- who wish to start their own enterprises. vation and flexibility to plan production and marketing Faculty training should also be emphasized. School man- activities, manage machinery workshops, and guide com- agement should be strengthened so that all responsibilities puter work that maximizes practical learning. for administering BACET will reside with BACET when A second challenge was the poor infrastructure (from san- external support ends. Finally, semiannual or annual tripar- itation and housing to the kinds of equipment needed to sup- tite reviews should take place to plan for sustainability port training). Logistics were another problem, because of the beyond project completion. 168 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 9 Vocational Training in the Arab Republic of Egypt Combines Technical and Innovation Skills for Agriculture Charles J. Maguire, Consultant SYNOPSIS equipment is in short supply, and audio-visuals are rarely used. Each school has a farm of about 25 acres, but it is not pilot intervention in 25 agricultural technical A (secondary) schools in Upper Egypt introduced students to higher-level cognitive skills including problem-solving, critical thinking, and decision making, as used for practical demonstration or practice by students. PROJECT OBJECTIVES AND DETAILED well as practical training, and grew into a four year project PROJECT COMPONENTS (2008–12) involving 54 such schools. The project was The pilot project aimed to improve teaching methods used funded by USAID with US$4.9 million and implemented by by over 1,600 agricultural teachers in the 25 selected ATSs. It the Midwest Universities Consortium for International would provide lesson plans, teaching aids, and overhead Activities (MUCIA) from 2003 to 2007. The reforms projectors. It would also introduce active learning, which involved pedagogy, practical training skills, and school would promote instructional activities involving students in management. Using technical school farms to train students doing things and thinking about what they were doing. in the production of export crops proved difficult to imple- Educators moved from knowledge recall and comprehen- ment. On the other hand, the Supervised Internship Pro- sion toward more advanced cognitive skills, including gram, which enabled students to participate in practical analysis, synthesis, and evaluation of information and activities on commercial farms and with fruit and vegetable knowledge to solve problems. The school farms enabled stu- producers and exporters, proved very successful. dents to produce export crops and provided them with the skills to become mid-level technicians on agribusiness CONTEXT farms. The project approach included seven steps, described in box 2.13. See also IAP 3. Egypt has 130 secondary-level agricultural technical schools (ATS), each with an average enrollment of 2,750 students. These vocational agricultural high schools have about 154 INNOVATIVE ELEMENTS teachers each, of which 42 percent teach agricultural In summary, the innovative elements of the project were its courses. The teachers are organized into technical depart- revitalization of the agricultural technical curriculum, espe- ments that include field-crop production, livestock produc- cially through teachers’ improved capacity to use new peda- tion and animal health, horticulture, agricultural econom- gogy centered on student learning and equip students with ics, and agricultural mechanics. the skills and confidence to become problem solvers. All ATSs follow the same basic curriculum, and teachers Another innovation was the repurposing of the ATS farms prepare students for standardized tests at the end of each for practical work and high-value agriculture. school year. Most technical agricultural teachers have had no training in pedagogy or preparing lesson plans. Teaching fea- BENEFITS AND IMPACT tures lectures and rote learning, so little attention is paid to higher-level cognitive skills. Because graduates of ATSs are The project’s initial phase was successful in introducing poorly prepared to use the knowledge and skills obtained in active learning and raising the quality of the curriculum. the courses, their employment level is very low. Teaching The Ministry of Education supported an expansion and 169 Box 2.13 Seven Steps to Improve Teaching Methods and Introduce Active Learning in Egypt’s Agricultural Technical Schools Step 1: Training the ATS teacher in active teaching-learning Step 4: Headmaster study tour to the Netherlands. A methods. Forty-five Egyptian university faculty members one-week study tour for headmasters was implemented from different subject matter areas were trained by two in the Netherlands. The objective was to introduce the highly experienced teacher-educators from partner uni- headmasters to the Dutch vocational education system versities in the Midwest Universities Consortium for and to investigate innovative ideas that could be used in International Activities (MUCIA). The teacher-educators Egypt’s ATS system. conducted a 28-hour practical workshop on active learn- Step 5: Refocusing ATS school farms and using them ing strategies for the faculty members, who would serve for practical skill training. MUCIA sent a university as future trainers. During the workshop, 15 active learn- farm manager to develop a work plan that would ing strategies were taught and practiced. The most effec- change the focus of the ATS school farms toward the tive faculty members emerging from the workshop were production of high-income, labor-intensive export selected to conduct similar workshops for teachers from crops and give more emphasis to hands-on practical the agricultural technical schools (ATSs). The MUCIA training for students. The project provided a grant to specialists handed over full implementation of the each school to purchase inputs, including seed, equip- process to the Egyptian trainers over a series of three ment, facilities, and tools. The goal was to have these workshops, and these trainers were given the task of con- innovations become operational by the beginning of ducting 20 two-day active learning techniques workshops the 2007/08 school year. for over 1,000 ATS teachers. Step 6: Training ATS teachers in the use of lesson Step 2: Developing instructional materials for ATS plans and instructional materials. A series of two-day teachers. A four-person MUCIA team worked in Egypt workshops enabled teachers to effectively use the les- for two weeks to initiate this second step. It became son plans developed in Step 3. The methodology for clear that ATS teachers did not have access to audiovi- running the workshops was the same as used in Step sual equipment, so the team emphasized developing 1 (training teachers in active teaching-learning transparencies that could be produced cheaply and eas- methods). ily and distributed to ATS teachers. Action plans were Step 7: Assessing progress and refining the lesson developed for the procurement of audiovisual materi- plans and instructional materials. Project manage- als suitable for the ATSs. Some 4,000 new transparen- ment would meet with ATS teachers and their stu- cies were produced in Arabic and distributed to ATSs. dents to assess the value and impact of the different In addition, 1,100 overhead projectors and screens have innovations in improving the teaching-learning been purchased and installed in each ATS classroom. process at the 25 ATSs. Adjustments would be made Step 3: Developing lesson plans for each ATS course. to selected lesson plans and transparencies. The Min- Lesson plans were prepared, following the basic content istry of Education expressed interest in having lesson of each course derived from the textbook used in the plans and transparency sets for each of the 33 courses ATSs. A workshop was planned to help teachers use the reproduced and made available to teachers in all 104 lesson plans (Step 6). ATSs. Source: Author. continuation of the project to cover 54 ATSs for 2008–12. To ■ Over 3,700 ATS teachers have been trained to use active date, results from the expanded project include: teaching-learning methods, and they have been using these new methods in their classrooms. ■ Administrators and headmasters of the 54 ATSs have ■ Classrooms and laboratories at each of the 54 ATSs have been introduced to new approaches to managing techni- been equipped with 386 computers, 910 overhead pro- cal schools, providing a more effective teaching-learning jectors, and 54 LCD projectors and screens. Overhead environment, and identifying skills needed by the private transparencies for 51 technical agricultural courses firms through observation study tours in the Nether- (approximately 120 transparencies per course) were lands and Greece and through in-country training. developed and are in use. 170 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK agribusiness firms. The internship program, which is Box 2.14 Views on the Impact of the Supervised Student Internship part of the USAID-funded Value Chain Training initia- Program in Egypt tive, has been highly successful in increasing capacity and confidence in both students and the teachers who super- vise their practical experience (box 2.14). Employers “These are absolutely the best employees who have have been impressed at the capability and dedication of ever worked on my farm and in my packing station,� the student trainees and have hired many of them in full- said Mr. Samy Ibrahim, Managing Director and time or part-time positions. owner of CELF, one of Egypt’s leading exporters of ■ Career development activities provided communication, horticultural products to Europe. He was referring leadership, and personal growth skills to 7,500 students to the 122 agricultural technical school interns his company had hired since 2008. Mr. Hussein to prepare them for successful careers in agriculture. Mohamed, a teacher who participated in the intern- ■ Student competence and confidence improved as a result ship training as supervisor, noted that “The greatest of the new pedagogical approach. impact of internship on students is that they gain ■ Demand for the newly graduated students from the proj- more than just skills. They learn about their ect has increased. strengths, interests, problem-solving skills, and abili- ties to deal with clients. They also gain greater under- standing of science-based agriculture and develop a LESSON LEARNED positive attitude about working in agriculture.� This relatively low-cost approach to transforming the Source: Adapted from USAID Egypt, n.d. teaching-learning process is directly applicable to the other ATSs in Egypt and to vocational agricultural programs throughout the developing world. ■ More school farms at selected ATSs are being trans- The initial phase that focused on creating teacher and formed to provide more practical and hands-on training administrator capacity to manage the new approach to for students, especially related to export crops. learning and on creating links to potential employers of ATS ■ Supervised Student Internship Programs paid by com- graduates enabled all parties to evaluate progress and mercial farms and Ownership Programs helped more impact. The result was very favorable and led to an exten- than 8,000 students to improve their technical and man- sion of the project for four more years and involving 54 agerial skills in horticulture and livestock farms and additional schools. MODULE 2: INNOVATIVE ACTIVITY PROFILE 9: VOCATIONAL TRAINING IN THE ARAB REPUBLIC OF EGYPT 171 NOTES Innovative Activity Profile 4 Module 2 Overview 1. Adapted from Adjepong (1999) and Akeredolu and Mutimba (2010). 1. These generic weaknesses have been identified and doc- umented by individual researchers and by gatherings of spe- cialists around the world. See, for example, FAO, UNESCO, Innovative Activity Profile 6 and ILO (1970); Busch (1988); Hansen (1990); GCHERA (1999); Magrath (1999); Foster (1999); Csaki (1999); 1. This activity profile has been adapted from Sherrard Maguire (2000, 2007); Hazelman (2002); Muir-Leresche (2009) and Zaglul (2011). (2003); FAO and UNESCO (2003); Eicher (2006); Ochola and Ekwamu (2008). 2. Globally, few educational institutions consistently pro- Innovative Activity Profile 8 vide learning opportunities in public policy management, a 1. Ministério da Agricultura e Pescas. need that requires further attention from governments, 2. Now GIZ (Gesellschaft für Internationale Zusammenar- educational institutions, and donors alike. beit, http://www.giz.de/). Thematic Note 1 REFERENCES AND FURTHER READING 1. Association of Public and Land-Grant Universities, “Kellogg Commission on the Future of State and Land- Module 2 Overview Grant Universities,� http://www.aplu.org/page.aspx? Bawden, R. 1998. “Agricultural Education Review. Part II: pid=305, accessed July 2011. Future Perspectives.� Washington, DC: AKIS Rural Development Department, World Bank. ———. 1999. “Education Needs of the Rural Sector: Look- Thematic Note 2 ing to the Future.� AKIS Discussion Paper, based on a 1. See also “Kellogg Commission on the Future of State workshop on Education for Agriculture and Rural Devel- and Land-Grant Universities,� APLU, http://www.aplu opment: Identifying Strategies for Meeting Future Needs, .org/page.aspx?pid=305. December 1–3, World Bank, Washington, DC. Busch, L. 1988. “Universities for Development: Report of the Joint INDO-U.S. Impact Evaluation of the Indian Agri- Thematic Note 3 cultural Universities.� AID Project Impact Evaluation 1. In China, the World Bank has supported the Guangdong Report No. 68. Washington, DC: United States Agency Technical and TVET Project (2009), Vocational Education for International Development (USAID). Reform Project (1996), Vocational and Technical Project Chacharee, N., and S. Chinnawong, 2009. “Farmer Partici- (1997), Vocational Education Reform Project (2003), and patory Approach for Sustainable Agricultural Develop- Liaoning and Shandong Technical and Vocational Educa- ment: A Case Study on GAP in Vegetable Production tion and Training Project (2010). In India it has supported Extension in Nakhon Pathon Province, Thailand.� Paper the Technical/Engineering Education Quality Improvement presented at the 4th International Conference on Agri- Project (2003) and the Third Technician Education Project cultural Education and Environment of the Asia-Pacific (2001). Association of Educators in Agriculture and Environ- 2. Based on Liang (2010) and World Bank (2010). ment (APEAEN), 3–6 August 2009, Obihiro, Japan. Csaki, C. 1999. “Change in Higher Agricultural Educa- tion.� In Leadership for Higher Education in Agriculture: Thematic Note 4 Proceedings of a Conference Held in Amsterdam, the 1. These tasks include implementing the project’s larger Netherlands, July 22–24, 1999, edited by D.G. Acker. capacity-building components for beneficiaries, who are a Ames: Iowa State University, Global Consortium of significant constituency within the AIS. Higher Education and Research for Agriculture (GCHERA). Pp. 67–70. Davis, K., J. Ekboir, W. Mekasha, C.M.O. Ochieng, D.J. Spiel- Innovative Activity Profile 3 man, and E. Zerfu, 2007. “Strengthening Agricultural 1. This section draws on Swanson, Barrick, and Samy Education and Training in Sub-Saharan Africa from an (2007). Innovation Systems Perspective: Case studies of Ethiopia 172 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK and Mozambique.� IFPRI Discussion Paper No. 736. Jamison, D.T., and L.J. Lau. 1982. Farmer Education and Washington, DC: International Food Policy Research Farmer Efficiency. Baltimore: Johns Hopkins. Institute (IFPRI). Jamison, D.T., and P.R. Moock. 1984. “Farmer Education Eicher, C.K., 1999. “Institutions and the African Farmer.� and Farmer Efficiency in Nepal: The Role of Schooling, Issues in Agriculture 14. Washington, DC: Consultative Extension Service, and Cognitive Skills.� World Develop- Group on International Agricultural Research (CGIAR). ment 12:67–86. ———. 2006. “The Evolution of Agricultural Education and Lockheed, M.E., D.T. Jamison, and L.J. Lau. 1980. “Farmer Training: Global Insights of Relevance for Africa.� Staff Education and Farm Efficiency: A Survey.� In Education Paper No. 2006-26. East Lansing: Department of Agricul- and Income, edited by T. King. World Bank Staff Working tural Economics, Michigan State University. Paper No. 402. Washington, DC: World Bank. Falvey, L. 1996. Food Environment Education: Agricultural Magrath, C.P. 1999. “Reforming U.S. Higher Education.� Education in Natural Resource Management. Melbourne: Chapter 14 in Leadership in Higher Education for Agricul- Crawford Fund for International Agricultural Research ture: Proceedings of the Inaugural Conference of the Global and Institute for International Development Limited. Consortium of Higher Education and Research for Agricul- FAO and UNESCO (Food and Agriculture Organization and ture, July 22–24, Amsterdam, edited by D.G. Acker. Ames: United Nations Educational, Scientific, and Cultural Iowa State University. Pp. 23–30. Organization). 2003. “Higher Education and Rural Devel- Maguire, C.J. 2000. “Agricultural Education in Africa: Man- opment: A New Perspective.� Chapter 5 in Education for aging Change.� Paper presented at Workshop 2000, spon- Rural Development: Towards New Policy Responses, edited sored by the Sasakawa Africa Association in Accra and at by D. Atchorena and L. Gasperini. Rome and Paris. the University of Cape Coast, Ghana. FAO, UNESCO, and ILO (Food and Agriculture Organiza- ———. 2004. “Effective Educational Strategies for Poverty tion, United Nations Educational, Scientific, and Cul- Alleviation.� In Proceedings of the 2nd International Con- tural Organization, and International Labour Organiza- ference on Agricultural Education and Environment, Octo- tion). 1970. “Report of the World Conference on ber 2004, Souwon, Korea. Bangkok: Regional Office for Agricultural Education and Training, July 28–August 8, Asia and the Pacific, Food and Agriculture Organization Copenhagen.� Rome. (FAO). Foster, R.M. 1999. “From Local to Global: The Challenge of ———. 2007. “Preparing for the Future: Revisiting Agricul- Change in Agriculture and the Food System.� Chapter 11 ture and Environment Education in Asia.� In Proceedings in Leadership in Higher Education for Agriculture: Pro- of the 3rd APEAEN Conference on Agriculture and Envi- ceedings of the Inaugural Conference of the Global Consor- ronment, held at Munoz City, Nueva Ecija, Philippines. tium of Higher Education and Research for Agriculture, Bangkok: Regional Office for Asia and the Pacific, Food July 22–24, Amsterdam, edited by D.G. Acker. Ames: Iowa and Agriculture Organization (FAO). State University. Pp. 71–76. Moulton, J. 2001. Improving education in the rural areas: GCHERA (Global Consortium of Higher Education and Guidance for rural development specialists. Unpublished Research for Agriculture). 1999. Leadership for Higher paper for AKIS, World Bank, Washington, DC. Education in Agriculture: Proceedings of a Conference Held Muir-Leresche, K. 2003. “Transforming African Agricultural in Amsterdam, the Netherlands, July 22–24, 1999, edited Universities and Faculties: Examples of Good Practice.� by D.G. Acker. Ames: Iowa State University. Paper prepared for the International Seminar series, Hansen, G.E. 1990. “Beyond the Neoclassical University: Sustainability, Education, and the Management of Agricultural Higher Education in the Developing Change in the Tropics (SEMCIT). N.p.: n.p. World—An Interpretive Essay.� USAID Program Evalua- Mulder, M. 2010. Personal communication. tion Report No. 20. Washington, DC: United States Mulder, M., and N. Ernstman. 2006. “The Public’s Expecta- Agency for International Development (USAID). tions Regarding the Green Sector and Responsive Practices Hazelman, M. 2002. “The Need for Change: From Agricul- in Higher Agricultural Education.� In Proceedings of the ture Education to Education for Rural Development.� 8th European Conference on Higher Agricultural Education, In Searching for New Models of Agriculture Education in The Public and the Agriculture and Forestry Industries, the a Disturbed Environment: Proceedings of the 1st Interna- Role of Higher Education in Questioning Assumptions and tional Conference on Agriculture and the Environment, ˇ Matching Expectations, edited by M. Slavík and P. Záková. Los Baños, Philippines. Bangkok: Regional Office for Prague: Czech University of Agriculture. Pp. 35–53. Asia and the Pacific, Food and Agriculture Organiza- Munshi, K. 2004. “Social Learning in a Heterogeneous tion (FAO). Population: Technology Diffusion in the Indian Green MODULE 2: NOTES, REFERENCES AND FURTHER READING 173 Revolution.� Journal of Development Economics ———. 2007b. World Development Report 2008: Agriculture 72(1):185–213. for Development. Washington, DC. Ochola, W.O., and A. Ekwamu, 2008. “Agricultural Educa- ———. 2009. Gender in Agriculture Sourcebook. Washington, tion and Learning: Challenges, Opportunities, and Expe- DC. http://web.worldbank.org/WBSITE/EXTERNAL/ riences from Eastern and Southern Africa.� Paper pre- TOPICS/EXTARD/EXTGENAGRLIVSOUBOOK/0,, sented to the Conference on Improving Agricultural contentMDK:21348334~pagePK:64168427~piPK:641684 Education and Learning through Collaboration and 35~theSitePK:3817359,00.html, accessed July 2011. Partnerships, December 1–5, Maputo. ———. 2011. Information and Communication Technologies OECD (Organisation for Economic Co-operation and for Agriculture e-Sourcebook. www.ICTinagriculture.org, Development). 2005. Synthesis Report. Vol. 1 of Gover- http://bit.ly/ICTinAG. Washington, DC. nance of Innovation Systems. Paris. ———. 2010. The OECD Innovation Strategy: Getting a Head Start on Tomorrow. Paris. Thematic Note 1 Pratley, J. 2008. “Workforce Planning in Agriculture: Agri- Liu, Y., and J. Zhang. 2004. “The Reform of Higher Agricul- cultural Education and Capacity Building at the Cross- tural Education Institutions in China: A Case Study.� roads.� Farm Policy Journal 5(3): 27–41. Rome and Paris: Food and Agriculture Organization Psacharopoulos, G., and M. Woodhall. 1985. Education for (FAO) and International Institute for Education Plan- Development: An Analysis of Investment Choices. New ning (IIEP). York: Oxford University Press. MacConnell, S. 2010. “Greater Demand for Agri-food Courses Rajalahti, R., W. Janssen, and E. Pehu. 2008. “Agricultural Drives up CAO Points.� The Irish Times, Aug. 28. Innovation System: From Diagnostics to Operational National Council for Agricultural Education. 2000. “The Practices.� Agriculture and Rural Development Discus- National Strategic Plan and Action Agenda for Agricultural sion Paper 38. Washington, DC: World Bank. Education. Alexandria, VA. http://www.teamaged.org/ Rivera, W.M.2008. Transforming Post-secondary Agricul- council/images/stories/pdf/plan2020.pdf, accessed July tural Education and Training by Design: Solutions for 2011. Sub-Saharan Africa. Unpublished report for the World Paarlberg, D. 1992. “The Land Grant College System in Bank (AFTHD), Washington, DC. Transition.� Choices Magazine, third quarter. Rygnestad, H., R. Rajalahti, and E. Pehu. 2005. Agricultural Phelan, James, University College Dublin 2010, personal Education and Training in Sub-Saharan Africa communication. FY’98–’04. World Bank, Washington, DC. Wirakartakusumah, M.A. 2007. “Government-University Snapp, S., and B. Pound 2008. Agricultural Systems, Agro- Relations and the Role of International Cooperation: An ecology, and Rural Innovation for Development. Experience of Bogor Agricultural University.� Presenta- Burlington, MA: Elsevier. tion at the 5th GCHERA Conference, March, San José, Tajima, S. 1985. Types, Development, Processes, Character- Costa Rica. istics, and Trends of World Agricultural Education. World Bank. 2007a. “Cultivating Knowledge and Skills to International Encyclopedia of Education. Oxford: Grow African Agriculture: A Synthesis of an Institu- Pergamon. tional, Regional, and International Review, 2007.� Report Willett, A. 1998. Investment in Agricultural Education and No. 40997-AFR. Agriculture and Rural Development Training 1987–1997. AKIS, World Bank, Washington, DC. Department and Africa Region Human Development World Bank. 2004. Agriculture Investment Sourcebook. Department. Washington, DC. Washington, DC. http://web.worldbank.org/WBSITE/ ———. 2007b. World Development Report 2008: Agriculture EXTERNAL/TOPICS/EXTARD/EXTAGISOU/0,,menuP for Development. Washington, DC. K:2502803~pagePK:64168427~piPK:64168435~the- SitePK:2502781,00.html, accessed July 2011. Thematic Note 2 ———. 2007a. “Cultivating Knowledge and Skills to Grow African Agriculture: A Synthesis of an Institutional, Hansen, G.E. 1990. “Beyond the Neoclassical University: Regional, and International Review, 2007.� Agriculture Agricultural Higher Education in the Developing and Rural Development Department and Africa Region World—An Interpretive Essay.� A.I.D. Program Evalua- Human Development Department. Report No. 40997- tion Report No. 20. Washington, DC: United States AFR. Washington, DC. Agency for International Development (USAID). 174 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK McCalla, A.F. 1998. “Agricultural Education, Science, and Case Studies.� Working Paper No. 190. World Bank: Modern Technology’s Role in Solving the Problems of Washington, DC. Global Food Resources in the 21st Century.� Paper pre- Liang, X. 2010. “Global Trends in Technical and Vocational pared for the conference “Globalizing Agricultural Education and World Bank Support in China.� Presenta- Higher Education and Science: Meeting the Needs of the tion at the Innovation Workshop, Quingdao, June 11–12. 21st Century,� National Agricultural University of UNEVOC (International Project on Technical and Voca- Ukraine, Kiev, September 28–30. tional Education). 1996. “Current Issues and Trends in Regional Universities Forum for Capacity Building in Agri- Technical and Vocational Education.� Study No. 8. Paris: culture (RUFORUM). 2010. “Report of the Strategic Section for Technical and Vocational Education, United Reflection Meeting of the Regional Universities Forum Nations Economic, Scientific, and Cultural Organization for Capacity Building in Agriculture (RUFORUM), April (UNESCO). 12–16, 2010, Bellagio, Italy.� World Bank. 1991. “Vocational and Technical Education and Ruffio, P., and J. Barloy. 1995. “Transformations in Higher Training: A World Bank Policy Paper.� Washington, DC. Education in Agricultural and Food Sciences in Central ———. 2004. Ethiopia Post Secondary Education Project. and Eastern Europe.� European Journal of Agricultural Report No. 28169-ET. Internal document. Washington, Education and Extension 2(2):11–19. DC. Swanson, B.E, R.K. Barrick, and M.M. Samy. 2007. “Trans- ———. 2006. Ethiopia Rural Capacity Building Project (ID forming Higher Agricultural Education in Egypt: Strategy, number PO79725). Internal document. Washington, Approach, and Results.� In Proceedings of the 23rd Annual DC. Meeting of the Association for International Agricultural and ———. 2010. “Governance of Technical Education in India: Extension Education: “Internationalizing with Cultural Key Issues, Principles, and Case Studies.� A. Blom and Leadership.� Pp. 332–45. AIAEE, http://www.aiaee.org/ J. Cheong (eds). Working Paper No. 190. World Bank, attachments/484_Compiled.pdf, accessed February 2011. Washington, DC. Villareal, R. 2002. “Status of Agriculture and Natural Resources Management Education in Southeast Asia.� Paper presented at SEMCIT, Session IV, Maejo Univer- Thematic Note 4 sity, Chiang Mai, September 29–October 5. World Bank. n.d. “Indonesia: Tree Crops Human Resources Wallace, I. 1997. “Agricultural Education at the Crossroads: Development Project.� http://web.worldbank.org/ Present Dilemmas and Possible Options for the Future in external/projects/main?pagePK=64283627&piPK=7323 Sub-Saharan Africa.� International Journal of Educational 0&theSitePK=40941&menuPK=228424&Projectid=P00 Development 17(1):27–39. 3899, accessed July 2011. World Bank. 2007a. “Cultivating Knowledge and Skills to Grow African Agriculture: A Synthesis of an Institu- Innovative Activity Profile 1 tional, Regional, and International Review, 2007.� Report No. 40997-AFR. Agriculture and Rural Development Busch, L. 1988. “Universities for Development: Report of the Department and Africa Region Human Development Joint INDO-U.S. Impact Evaluation of the Indian Agri- Department. Washington, DC. P. 58. cultural Universities.� AID Project Impact Evaluation Report No. 68. Washington, DC: United States Agency for International Development (USAID). Thematic Note 3 World Bank. 1995. “India: Agricultural Human Resources Development Project.� World Bank Report 13517. Asian Development Bank (ADB). 2008. Education and Washington, DC. Skills: Strategies for Accelerated Development in Asia and ———. 2002. “Implementation Completion and Results.� the Pacific. Manila. Report 24287. Washington, DC. Blackie, M., M. Mutema, and A. Ward. 2009. A Study of Agri- cultural Graduates in Eastern and Central Africa: Demand, Quality, and Job Performance Issues. Report prepared for Innovative Activity Profile 2 the Association for Strengthening Agricultural Research in Kropff, M. 2010. “Connecting Knowledge and Society: Sci- Eastern and Central Africa (ASARECA), Entebbe. entific Capacity Building for Impact.� Presentation to the Blom, A., and J. Cheong (eds.). 2010. “Governance of Tech- RUFORUM Ministerial Meeting on Education in Agri- nical Education in India: Key Issues, Principles, and culture in Africa (CHEA), November 15–19, Kampala. MODULE 2: NOTES, REFERENCES AND FURTHER READING 175 Mulder, M. 2010. Personal communication. prepared for SEMCIT Seminar Session V, Oslo, Norway. Rabbinge, R., and M.A. Slingerland. 2009. “Change in ILN-Africa, http://www.iln-africa.net/uploads/documents/ Knowledge Infrastructure: The Third-generation Univer- case_studies/Case_Study_Sasakawa.doc, accessed February sity.� In Transitions towards Sustainable Agriculture and 2011. Food Chains in Peri-urban Areas, edited by K.J. Poppe, C. Temeer, and M. Slingerland. Wageningen: Wageningen Academic Publishers. Pp. 51–62. http://www.onderzoek Innovative Activity Profile 5 enadvies.org/wp-content/uploads/2010/01/ Opatpatanakit, A. 2007. “Community-Based Research transitions.pdf, accessed July 2011. (CBR) Approach as a Research Methodology to Enable Students to Empower Rural Community.� Presented at the 3rd Asia Pacific Association of Educators in Agricul- Innovative Activity Profile 3 ture and Environment (APEAEN) International Confer- ence on Agriculture, Education and Environment, 4–7 Swanson, B.R., K. Barrick, and M.M. Samy. 2007. “Trans- November 2007, Philippine Carabao Center, Munoz, forming Higher Agricultural Education in Egypt: Strat- Nueva Ecija. egy, Approach, and Results.� In Internationalizing with Cultural Leadership, Proceedings of the 23rd Annual Con- ference of the Association for International Agricultural and Extension Education (AIAEE), 20–24 May, Polson, Innovative Activity Profile 6 Montana, edited by M. Navarro. Pp. 332–42. AIAEE, Sherrard, D. 2009. “A Private University’s Model and http://www.aiaee.org/attachments/484_Compiled.pdf, Vision for Agricultural Education – EARTH University, accessed February 2011. Costa Rica.� Seminar at the World Bank, October 14, Vreyens, J.R., and M.H. Shaker. 2005. “Preparing Market- Washington, DC. Ready Graduates: Adapting Curriculum to Meet the Zaglul, J. 2011. Paper in Proceedings of the 4th International Agriculture Employment Market in Egypt.� In Proceed- Conference on Agriculture Education and Environment, ings of the 21st Annual Conference of the Association for August 3–6, 2009, Obihiro University of Agriculture and International Agricultural and Extension Education Veterinary Medicine, Obihiro, Hokkaido, Japan. Bangkok: (AIAEE), San Antonio, Texas. Pp. 227–235. http://www Food and Agriculture Organization (FAO), Regional .aiaee.org/proceedings/119-2005-san-antonio-texas Office for Asia and the Pacific. .html, accessed July 2011. Innovative Activity Profile 7 Innovative Activity Profile 4 Mulder, M. 2007. “Competence: The Essence and Use of the Adjepong, S.K. 1999. “The University and National Devel- Concept in ICVT.� European Journal of Vocational Train- opment: An Overview of an Innovative Programme at ing 40:5–21. [Available in FR, DE, ES, and PT.] the University of Cape Coast, Ghana for Mid-career ———. 2010. Personal communication. Agricultural Extension Staff.� Presentation to World Mulder, M., J. Gulikers, H. Biemans, and R. Wesselink. 2009. Bank staff at Rural Week, Washington, DC. “The New Competence Concept in Higher Education: Akeredolu, M., and J.K. Mutimba. 2010. Winrock Interna- Error or Enrichment?� Journal of European Industrial tional, Kano presentation at the First Intercontinental Training 33 (8/9): 755–70. Meeting of the Global Forum for Rural Advisory Services and the 16th Annual Meeting of the Neuchatel Initiative Viña del Mar, Chile, 2–5 November 2010. Innovative Activity Profile 8 Sasakawa Africa Association. 2008. “SAFE.� Feeding the Future: Newsletter of the Sasakawa Africa Association Land O’Lakes Inc. n.d. “Building Agribusiness Capacity in 24:10–11. http://www.saa-tokyo.org/english/newsletter/ Timor Leste. http://www.idd.landolakes.com/PROJECTS/ pdf/issue24.pdf, accessed July 2011. Asia/ECMP087511.aspx, accessed July 2011. Zinnah, M.M. 2003. “Innovations in Higher Agricultural Land O’Lakes Inc. n.d. “Young Women in Timor-Leste Find Education in Africa: The Case of Sasakawa Fund for Opportunity and Income from Agribusiness Training.� Extension Education (SAFE) Programme in Selected http://idd.landolakes.com/PROJECTS/Asia/ECMP2- Universities and Colleges in Sub-Saharan Africa.� Paper 0113018.aspx, accessed July 2011. 176 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Land O’Lakes Inc. 2009. Cooperative Agreement # 486-A- with Cultural Leadership.� Pp. 332–45. AIAEE, http:// 00-06-00011-00 Program Update. USAID, http://pdf www.aiaee.org/attachments/484_Compiled.pdf, accessed .usaid.gov/pdf_docs/PDACO315.pdf, accessed July 2011. February 2011. USAID (United States Agency for International Develop- Swanson, B., J. Cano, M. M. Samy, J. W. Hynes, and B. Swan. ment) and Land O’Lakes Inc. 2009.� Building Agribusiness 2005. “Introducing Active Teaching-Learning Methods Capacity in East Timor (BACET).� http://www.idd and Materials into Egyptian Agricultural Technical Sec- .landolakes.com/stellent/groups/public/documents/web_ ondary Schools.� In Proceedings of the 23rd Annual content/ecmp0095377.pdf, accessed July 2011. Meeting of the Association for International Agricultural and Extension Education (AIAEE), Polson, Montana. Pp. 343–51. AIAEE, http://aiaee.tamu.edu/2007/Accepted/ Innovative Activity Profile 9 343.pdf, accessed September 2011. Swanson, B. E., R. K. Barrick, and M. M. Samy. 2007. “Trans- USAID (United States Agency for International Develop- forming Higher Agricultural Education in Egypt: Strat- ment) Egypt. n.d. “Success Story: Turning Internships into egy, Approach, and Results.� In Proceedings of the 23rd Jobs: Major Agricultural Exporters Hiring Upper Egypt Annual Meeting of the Association for International Agri- ATS Students,� MUCIA, http://www.mucia-vct.org/ cultural and Extension Education: “Internationalizing successstories/Internship-%20En.pdf, accessed July 2011. MODULE 2: NOTES, REFERENCES AND FURTHER READING 177 3 MODULE 1 Investment in Extension and Advisory Coordination and Collective Action for AgriculturalPart of Agricultural Services as Innovation Innovation Systems OV E RV I E W Kristin Davis, Global Forum for Rural Advisory Services (GFRAS) Willem Heemskerk, Royal Tropical Institute (KIT) EXECUTIVE SUMMARY climate change, food security, and equipping rural people to deal with risk in general. xtension and advisory services are integral to the E AIS, where now more than ever they play a broker- ing role, linking key actors such as producer organ- izations, research services, and higher education. This To better serve their constituencies and influence poli- cies, advisory services need a stronger voice at the global and regional level. There is a need for evidence-based direction regarding investment priorities and programming options module looks at the history and current status of extension for agricultural advisory services within innovation systems. and advisory services and examines important topics such Policy issues related to pluralistic advisory services and as pluralism, new roles for extension, new kinds of service extension include the changing roles of various extension providers, ICTs, and agribusiness. providers, the comparative advantage for different providers For strong extension and advisory services, it is impor- in carrying out specific extension functions and advisory tant to have coordination and linkage within pluralistic, services, sustainability, and equity. Paradigm shifts—from multistakeholder AIS. Less traditional actors such as farmer the perception that research knowledge can drive inno- organizations and agrodealers are important extension and vation to the notion that change in the whole system is advisory service providers who are vital to include in the needed for innovation—must take place not only in the design of investments and programs. Extension and advi- programs and the thinking of field staff but in the thinking sory services must be ever-adapting to the needs of clients, of extension administrators and policy makers. and they must monitor and evaluate their services. Perhaps the broadest challenge is the tremendous need for new capacities within extension. Throughout the DEFINING AGRICULTURAL EXTENSION AND developing world, evolving demands and new roles for ADVISORY SERVICES FROM AN INNOVATION advisory services in the wider innovation system will SYSTEMS PERSPECTIVE require investments in the capacity of individual extension workers and organizations for value chain approaches, in Many definitions, philosophies, and approaches to agricul- market-oriented extension, in group and organizational tural extension and advisory services exist, and views of development, in agribusiness, and in mechanisms to share what extension is all about have changed over time. When information (networks, platforms, and the like). Recent agricultural extension services were implemented widely in global developments require advisory services to focus on developing countries in the 1970s, the needs, expectations, 179 has proven to be a cost-effective means of increasing eco- Box 3.1 Extension and Advisory Services, nomic returns for farmers and has had significant and pos- Defined itive effects on knowledge, adoption, and productivity (see, for example, Birkhaeuser, Evenson, and Feder 1991). A CGIAR meta-analysis of 292 research studies found median In this module, extension and advisory services are rates of return of 58 percent for investments in advisory ser- defined as systems that facilitate the access of vices (Alston et al. 2000; Dercon et al. 2008). farmers, their organizations, and other value chain Apart from yielding significant financial returns, and market actors to knowledge, information, and advisory services have also yielded positive social returns, technologies; facilitate their interaction with part- particularly for women, people with low literacy levels, and ners in research, education, agribusiness, and other farmers with medium landholdings (as shown by CGIAR relevant institutions; and assist them to develop research on extension by Davis et al. 2010b). Some exten- their own technical, organizational, and manage- sion programs, such as Farmer Field Schools (FFSs), have ment skills and practices as well as to improve the shown positive impacts on the environment and health management of their agricultural activities. (Praneetvatakul and Waibel 2006). Sources: Birner et al. 2009; Christoplos 2010. Despite calls for privatization, government must play a continuing role in extension (see Rivera and Alex 2004; Swanson and Rajalahti 2010). Although a variety of public and private services are available to farmers, many tasks of perceptions, and tools that defined extension differed from extension and advisory services have a public goods nature, those we have today. At that time, extension focused very including tasks related to regulation, quality control in the much on increasing production, improving yields, training produce supply chain, the coordination of service provi- farmers, and transferring technology. Today extension is no sion, and natural resource management, as well as the longer viewed as an agency but as a system that is integral provision of services to marginal groups, which are unlikely and central to innovation systems and that focuses on facil- to access or afford private advisory services. The public sec- itating interaction and learning rather than solely on train- tor’s role is to fund the provision of advisory services ing farmers. CGIAR research on agricultural extension from (directly or through outsourcing) where demand for services is not being met, to support advisory services in an innovation systems perspective shows that it has a vital addressing issues of long-term social and ecological role to play in helping to strengthen capacities to innovate sustainability (including food security), and to manage and broker linkages (Spielman et al. 2011). Box 3.1 explains extension and advisory services (including quality control how the term “extension and advisory services� is used in and knowledge management). The public sector can also this module. Many other extension terms are included in provide incentives for nonpublic actors to play a greater the glossary for this sourcebook. role in providing services. In pluralistic extension systems, space can be created by the public sector to shift some pub- lic investment toward the management of extension sys- OTHER ROLES AND IMPACTS OF EXTENSION tems and strengthening of private actors’ capacities, AND ADVISORY SERVICES although this shift can come about only when there is Besides being an important part of innovation systems, ownership within the public sector for such changes extension and advisory services contribute directly to (Christoplos 2010; Spielman et al. 2011). Embedded economic growth, poverty reduction, and environmental advisory services in input supply services are widespread well-being. Extension is an essential tool for dealing with and increasing (IAP 1), but coordination by the public sec- the serious challenges facing agriculture—such as climate tor at the local level is needed to regulate and certify those change, high food prices, and the degradation of natural services (to prevent them from providing biased informa- resources—while helping to increase productivity and tion, for example) and to facilitate interaction between reduce poverty (Davis 2009). Other roles for advisory ser- public and private service providers. vices therefore involve such diverse functions as providing market information, phytosanitary and epidemiological EVOLUTION OF EXTENSION AND information, information on access to credit, or the facilita- ADVISORY SERVICES tion of access to sources with this information (see also TN 1 and TN 4). Although it is very difficult to show the impact The renewed prominence of agriculture on the develop- of extension services, and while evidence on the impact of ment agenda has renewed the focus on agricultural exten- some major extension models has been mixed, extension sion and advisory services. At the same time, strong 180 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK demands for “more extension� have emerged from unex- discuss these issues at length (see, for example, Leeuwis pected sources: the growing need to provide more climate and van den Ban 2004; Birner et al. 2009; Christoplos information, increasing food security programming, the 2010; Hoffmann et al. 2009; and Swanson and Rajalahti changing aid-for-trade agenda, value chain development 2010). Here we briefly examine the changing nature of programs, and comprehensive reform in global agricultural extension investments over time, outline how and why research for development. These demands imply a need to advisory services have evolved, and present some of the apply existing knowledge as well as a need to explore the rel- newer approaches and their goals. evance of changing extension forms within new develop- ment agendas, aid architectures, and institutional structures Changing investment levels (Christoplos 2010, 6,9). Despite the recognition that traditional approaches to Extension investments have been made by donors, various advisory services are not always appropriate or effective, governments, (international) NGOs, and the private sec- no consensus has emerged on what expanded extension tor. The type and level of investments varied considerably services should actually include. Past mistakes will be over the past few decades, especially as extension repeated if there is not greater awareness of what has approaches rose and fell in popularity (box 3.2). worked and what has not, what has proven sustainable and Many governments have over the years reduced their what has not, and who has accessed and benefited from investment in extension and advisory services, leaving the different forms of extension services. Several publications services without operational resources and forced to Box 3.2 Past and Current Investment Levels in Agricultural Advisory Services Numerous donors, investors, private companies, and around US$120 million per year during 2007 and 2008, virtually all governments invest in extension, although with a significant share going to Africa. Annual lending the precise amounts of their investments are difficult to to these subsectors has fluctuated widely, with lows of obtain. Global public investments in extension were around US$100–126 million in some years (2003, 2008, estimated at US$6 billion in 1988, and currently two and 2007) and highs of US$499 million in 2006, US$ initiatives seek to update this estimate. The Food and 582 million in 2009, and around US$300 million Agriculture Organization (FAO) recently surveyed in 2010. investments in nine agricultural sectors worldwide, World Bank investments in extension services often including extension. With the International Food consist mainly of small investments accompanying Policy Research Institute, FAO is also conducting a investments in improved agricultural productivity and worldwide extension assessment that will provide a market linkages. Notable exceptions have included large better idea of investments in physical and human capi- investments in research and extension system linkages tal, as well as other data, in the near future. as well as sweeping reforms of extension systems. For Bilateral and multilateral donors have invested in example, with World Bank and other support, govern- national extension systems and in extension approaches ments have invested heavily in designing and imple- such as Farmer Field Schools and farmer research menting new extension models such as Uganda’s groups. World Bank lending to the agricultural sector National Agricultural Advisory Services approach more than doubled between 2006 and 2009, to US$5.3 (described in box 3.7) and Ethiopia’s farmer training billion in FY09 from US$2.9 billion in the baseline years center approach. The private sector has also invested in 2006–08. Agricultural research, extension, and educa- extension, including British American Tobacco, Nestlé, tion services did not benefit from this increase nearly as and horticultural and brewing companies. In many much as other agricultural subsectors. Most of the addi- (particularly East African) countries, the export crop tional lending went for productive infrastructure and subsectors have organized the delivery of services, policy lending. World Bank support for agricultural including extension, by sector, financed through export research, extension, and agricultural education has been levies and district marketing fees and taxes. Sources: Swanson, Farner, and Bahal 1990; Davis 2008; Davis et al. 2010b; World Bank Rural Portfolio Team. MODULE 3: OVERVIEW 181 continue providing blanket recommendations promoted (Benor and Baxter 1984) was superseded by approaches through ever-repeated demonstration trials. The newly pioneered on a small scale by NGOs, FAO, and bilaterally developing extension constituency, based on strengthen- funded projects. These approaches emphasized participa- ing farmer organizations, the private sector, and NGO- tory learning and action models, with farmer participa- supported advisory services, has evoked strong attention to tion and more tailor-made services, including facilitation extension in the Comprehensive African Agriculture Devel- of access to financial services and access to markets. opment Programme (CAADP) and the related Framework National and international efforts to revitalize extension for African Agricultural Productivity. Outside Africa, brought about a variety of institutional reforms (Rivera increased attention to extension is expressed through the and Alex 2004), informed primarily by market-led and Global Forum for Rural Advisory Services (GFRAS). demand-driven perspectives. For an example from India, CAADP and the corresponding compact agreements at the see box 3.4. country level advocate sharpening the focus and efficiency Particularly in open and democratizing societies, and of service provision by basing it on farmers’ actual demands, especially through innovations in communications, farmers avoiding blanket recommendations, working with existing are drawing information from an increasing range of farmer groups, aiming for matching funds from value chain sources. Their knowledge and innovation system has actors, and using new tools such as ICTs (box 3.3). The sus- become quite diverse (Engel and Salomon 1997). Modern tainability of service provision has become an important advisory service systems reflect this diversity and complex- part of advisory service strategies. CAADP compact agree- ity in the range of approaches they use, their content, and ments also commit national governments to invest more in their interaction with public and private entities. The term extension and not to rely on donor funding. In Uganda, for “pluralistic� is often used to capture the emerging diversity example, the percentage of the national budget allocated to of institutional forms for providing and financing agricul- extension (the National Agricultural Advisory Services— tural extension (TN 1). New actors are offering and funding NAADS) gradually increased from 0.3 percent in 2003 to 2.6 advisory services, including NGOs, farmer organizations, percent in 2011, while significantly increasing as a percent- the private sector, and community-based organizations. age of the agricultural budget. This pluralism is almost certain to prevail and deepen with respect to organizational forms, methods, and institutional structures. Changing approaches Traditional approaches to extension changed as they Emerging innovative approaches encountered criticism for being top-down, unaccountable to users, biased against women, oriented to production and Group-based and participatory approaches to providing technology rather than to markets, and focused on blanket advisory services are gaining ground. These methods have recommendations that did not take the diversity of farm the potential to overcome barriers to participation, foster households’ circumstances into account. Such criticism inclusiveness, and lead to more demand-driven services. generally stemmed from a combination of factors: a lack They all aim to strengthen the voice of farmers and chan- of relevant technology; failure by research and extension nel their knowledge into agricultural extension, eventually to understand and involve their clients in defining and solv- contributing to farmer empowerment in service delivery ing problems; a lack of incentives for extension agents; and and in value chain development (Nederlof, Wennink, and weak links among extension, research, farmers, and market Heemsekerk 2008; KIT, Faida Mali, and IIRR 2006). actors (Davis 2008). In many countries, policies that favor Farmer groups (contact groups) were introduced in the economic liberalization have enabled farmers to become T&V extension model, mainly because it was more efficient more market-oriented and entrepreneurial, creating the to transfer information to groups rather than individuals. demand for extension services to advise farmers not only on Subsequent experience with farmer extension groups in par- production issues but on issues related to accessing mar- ticipatory planning and field schools (FFSs) has expanded kets. Training in marketing skills has become much more farmer organizations’ involvement in providing extension important for extension workers (Dixie 2005). services and in farmer-to-farmer (“F2F�) extension, further A number of approaches sought to overcome these facilitated by mobile telephony (subjects discussed in boxes problems and meet new demands on advisory services. The 3.3 and 3.5–3.6). For example, in the district participatory more traditional training and visit (T&V) extension model planning model used in Mozambique, farmer consultative 182 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 3.3 Benefits of ICTs for Agricultural Extension and Advisory Services Researchers associated with the Consultative Group on Many NGOs, research organizations, and national International Agricultural Research have shown that ministries have improved access to technologies and telecommunications infrastructure helps to reduce knowledge for their rural advisory services by means poverty and provide opportunities to people in devel- of rural telecenters and online forums. oping countries (Torero, Chowdhury, and Bedi 2006). In the context of rural advisory services that support Throughout the developing world, ICTs are being innovation, ICTs have three broad functions: integrated into rural advisory services in a variety of forms, including rural radio, television, Internet, and ■ ICTs address the need for localized and customized mobile services. The advice and information pro- information—adapted to rural users in a compre- vided via ICTs is becoming more varied, ranging hensible format and appropriate language—to give from information about specific technologies and small-scale producers as well as providers of advi- practices to information that enables climate change sory services adequate, timely access to technical mitigation and adaptation; disaster management; and marketing information. early warning of drought, floods, and diseases; price ■ ICTs store information for future reference. In many information; political empowerment; natural cases, information on technologies and good practices resource management; agricultural information; pro- is available only in hardcopy, and data are incomplete, duction efficiency; and market access. ICTs also open scarce, or useless. Local and indigenous knowledge is new channels for farmers to document and share often transmitted orally, records are often unavailable, experiences with each other and with experts. The or the information is dispersed. A proper information Information and Communication Technologies for system for rural users with standardized formats to Agriculture e-Sourcebook (World Bank 2011) features compile, document, and share information renders many examples of these applications. that information more useful, secure, and accessible. Although many extension and advisory service ■ ICTs facilitate the creation of networks locally, providers are using “e-extension� or “cyber-extension� regionally, and globally, leading to collaborative and to improve their outreach to farmers and farmers’ interdisciplinary approaches to problem-solving access to information, most of these initiatives are at and research diversification through shared knowl- early pilot stages and limited empirical evidence is edge bases, online forums, and collaborative spaces. available on the effectiveness of ICTs in extension. Sources: World Bank 2011; Davis and Addom 2010. councils orient the investment of district economic develop- offer specific kinds of extension advice (see World Bank ment funds in local projects developed by farmer associa- 2011 and an example for animal health services in Kenya in tions. The associations receive support to develop business box 3.6). At the same time, informal advisory systems, such plans for the selected projects, many of which include as farmer-to-farmer dissemination of knowledge and tech- the provision of extension services (see TN 2). The FFS nology, are increasingly recognized and built upon in plu- approach (see box 3.5 and IAP 2) enhances interactive learn- ralistic extension systems (see TN 1, box 3.12). ing between farmers and between farmers and service providers. More recently, the involvement of farmer groups PRINCIPLES FOR DEVELOPING EFFECTIVE has been emphasized in the formation of “modern� cooper- EXTENSION AND ADVISORY SERVICES atives to develop enterprises and access financial services— savings and credit cooperatives (SACCOs) are an example The specific level of investment in extension and the partic- (Heemskerk and Wennink 2004; Wennink, Nederlof, and ular reform strategies to be followed will depend on the Heemskerk 2007). national context, including the current configuration of the ICTs have created more options for providing advisory actors in the extension and advisory service system (Birner services (box 3.3, table 3.1) and are increasingly used to cir- et al. 2009). It is not sufficient to find an approach that culate market, price, and weather information as well as to worked in one country or district and implement it in MODULE 3: OVERVIEW 183 Box 3.4 Agricultural Technology Management Agency in India The Agricultural Technology Management Agency who have started producing and marketing specific (ATMA) is a market-oriented, decentralized approach products. to extension that many regard as a successful model of ■ Extension must formally establish steering or advi- extension reform. The ATMA model attempts to sory committees to identify the specific needs and increase farm income and rural employment by inte- priorities of representative farmers in each district, grating extension programs across line departments, including rural women. For example, under the linking research and extension, and using bottom-up ATMA model, 30 percent of the places on each planning. Building blocks of ATMA include empower- Farmer Advisory Committee and Governing Board ment of farmers through farmer interest groups (FIGs), were allocated for rural women. delivery of services to FIGs by diverse service providers, ■ Extension can better serve male and female farmers use of bottom-up planning relying on FIG representa- by allowing private firms to play a role in “dissemi- tives (consultation on farmers’ needs and demands), nating� product innovations and focusing public and autonomy of the extension system. Coordination extension services more on process innovations, in of extension service providers is an essential element. which extension personnel serve as facilitators or The impact of ATMA is well detailed (Swanson and innovation brokers (see TN 4). Rajalahti 2010, 114). ■ Innovative farmers play a key role in identifying and Among the many lessons learned from ATMA, then scaling up process innovations (in farmer-to- one of the most valuable is that extension should be farmer extension). more decentralized and bottom-up for the following reasons: Scaling up of the ATMA model has been attempted with varying success. Successful scaling up often relied ■ Like agroecological conditions, markets for high- on sufficient attention to capacity-building to public value crops and products are location-specific. extension providers (bottom-up planning, group for- Extension and farmers must identify and consider mation, new extension methodology) as well as the which high-value crops have the highest potential allocation of sufficient resources for operational costs. for success in each area. The most effective approach In the absence of these characteristics, the model was is to identify innovative farmers within similar areas less successful. Sources: Singh et al. 2006; Anderson 2007. another. Even though extension reforms must be tailored to provision of services. Examples include NAADS in Uganda local conditions, it is valuable to begin designing and devel- (box 3.7) and the National Agricultural Extension Program oping more effective and sustainable extension and advisory (PRONEA, Programa Nacional de Extensão Agrária) in services by considering several approaches to reform. These Mozambique (see box 3.12 in TN 1). Ethiopia has embarked include reforms in governance structures, reforms in capac- on an ambitious plan to bring advisory services to its most ity and management, and reforms in advisory methods local administrative level. An intensive review of the exten- (table 3.1). Investment options and examples of these prin- sion system was led by CGIAR researchers in 2009 (box 3.8). ciples are provided in TN 1–4. Decentralization and the demand for market-oriented Many countries, especially those under pressure from services have heightened the need for district and provin- democratic decentralization, have embarked on reforms cial governments to involve private service providers in that bring services closer to farmers. Under these reforms, extension, either through close coordination with private participatory planning and resource allocation occur at the agencies or by contracting them to provide services. district level, and district agricultural offices coordinate the These kinds of outsourcing models exist in Uganda, 184 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 3.5 Farmer Field Schools for Box 3.6 Mobile Telephony for Delivering Participatory Group Learning Animal Health Services Farmer Field Schools (FFSs) consist of groups of FARM-Africa, an NGO working in Kenya in people with a common interest, who get together conjunction with the government and other stake- on a regular basis to study the “how and why� of holders, developed a decentralized animal health- a particular topic. The FFS is particularly suited care system in its Kenya Dairy Goat and Capacity and specifically developed for field studies, where Building Project (KDGCBP). To link key partici- hands-on management skills and conceptual pants in the system, the project approached the understanding (based on nonformal adult educa- Safaricom Corporation, the corporate social tion principles) are required. responsibility arm of the mobile phone company So what are the essential and original elements Safaricom. The KDGCBP system works with a of FFSs? FFSs are a participatory method of community animal health worker, who purchases learning, technology development, and dissemi- a veterinary drug kit and mobile phone at a sub- nation based on adult-learning principles such as sidized price. The project also installs community experiential learning. Groups of 20–25 farmers phones, which have solar panels and batteries typically meet weekly in an informal setting on where there is no electricity, at veterinary shops. their farms with a facilitator. The defining char- The owner of the community phone is responsible acteristics of FFSs include discovery learning, for repairs and can make a profit by charging for its farmer experimentation, and group action. The use; for the private veterinarians, the phone is a approach is an interactive and practical method means of diversifying income. Animal health assis- of training that empowers farmers to be their tants and vets working with the project also receive own technical experts on major aspects of their mobile phones. The phone system allows animal farming systems. Farmers are facilitated to con- healthcare providers to update one another, share duct their own research, diagnose and test prob- information, and conduct referrals. This system has lems, come up with solutions, and disseminate reduced transaction costs and increased the effi- learning to others. ciency of animal healthcare in the area. Source: Davis 2008. Source: Kithuka, Mutemi, and Mohamed 2007. Table 3.1 Approaches for Developing Effective Extension and Advisory Services Approach Definition What is needed* Reform of governance structures Decentralization and Based on the subsidiarity principle, the planning, financing, General decentralization policies that are effectively deconcentration and administration of extension services occur at the implemented; demand-driven services for diverse farming lowest possible state administrative level. systems; limited public goods character and nonlocal externalities of the extension messages; earmarking of funding in case of fiscal decentralization of extension to local governments; political will to build and maintain capacity for extension at the local level. Strengthening of Local extension systems that are based on coordination Capable service providers from private and third sector,** or pluralism through between public and private service delivery, sufficient resources to build this capacity; competition among outsourcing complemented by contracting for services based on service providers; recognition of the governance and between public needs. procurement problems involved in outsourcing and adequate and private sector steps to overcome them, including building the extension agency’s capacity to manage contracts. Involving farmer Farmer involvement in extension service provision, Existing social organizations (social capital); absence of strong organizations from participatory planning to procurement to social hierarchies; availability of sufficient resources to invest farmer-to-farmer extension and paying for services. in social mobilization and group formation, especially if previous conditions are not met. (Table continues on the following page) MODULE 3: OVERVIEW 185 Table 3.1 Approaches for Developing Effective Extension and Advisory Services (continued) Approach Definition What is needed* Privatization and Services (partially) paid by farmers themselves, Commercialized farming systems with adequate market public-private directly or indirectly. infrastructure; suitable business climate for the agribusiness partnerships sector; required market-oriented extension services. An example is the marketing extension approach, based on farmer training and market information. Cost-recovery Part of the operating costs of services paid by farmers Commercialized systems; possibility to embed in contract in cash or kind to ensure that they get what they want farming or link to the sale of inputs; possibilities to raise and that the system is more financially sustainable. levies on commodities (such as export crops). Reform of capacity and management New public Use of private sector principles such as those for human Fit with general public sector reform approaches and relatively management and financial resource management (performance autonomous extension organizations. contracts, costing, and financial transparency). Business process The analysis and design of workflows and processes In reviewing hierarchical structures and reporting systems. reengineering within an organization. Reform of advisory methods Farmer Field Schools Farmer-centered learning groups, eventually facilitated Complex technologies that require substantial learning (for by farmers (farmer-to-farmer extension). example, technologies that must be adapted to diverse agroecological conditions) and/or behavioral changes. Use of information ICTs as a means for wider access to information. Adequate countrywide ICT infrastructure. Capacity of users and communication (e.g., literacy) required in many cases. Appropriate language technologies (ICTs) needed. Source: Birner et al. 2009. * See “New Directions, Priorities, and Requirements for Investment� (in this module) and TN 1 for ideas on how to implement advisory services of this kind. ** Consisting of NGOs and organizations based on collective action. Box 3.7 National Agricultural Advisory Services in Uganda The Government of Uganda created the National Agri- has had its challenges, such as public extension work- cultural Advisory Services (NAADS) through the 2001 ers’ dissatisfaction with short-term, performance-based NAADS Act to provide a decentralized, pluralistic, contracts and the lack of a civil service job guarantee. contract-based agricultural advisory system that would Another challenge was the limited availability of improve farmers’ productivity and livelihoods. Local resources to train and improve the skills and knowledge governments contract for NAADS advisory services of the “new� privately employed advisors, who needed based on needs identified by local farmer groups, to know how to organize farmer groups and train dif- organizations, and farmer forums. District govern- ferent types of farmers, including women, to diversify ments provide some additional funding for those their crop/livestock farming systems. Along with creat- extension activities and help set priorities. ing a new management structure and hiring new Creating a totally new organizational and manage- employees, the decentralized, private NAADS system ment structure for a national extension system takes had to arrange for new facilities (offices), equipment, considerable time, both for hiring new staff and for transportation, and a communications system. Because organizing farmers to help set extension priorities, the advisory services were to be managed by new monitor extension programs, and track expenditures. farmer-based organizations, about 80 percent of the Under NAADS, public extension workers were phased organizational and operational costs were still financed out progressively across regions of the country. Most of by donors as of 2008. In addition, the central govern- these workers were rehired by the private firms and ment covered 8 percent of the recurrent costs, local NGOs that participate in NAADS and were assigned to governments financed about 10 percent, and 2 percent new positions and service areas. This transformation were financed by the farmers themselves. (Box continues on the following page) 186 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 3.7 National Agricultural Advisory Services in Uganda (continued) In 2007/08, NAADS reached 760,000 households in parallel extension programs operated by NGOs and 712 subcounties in 79 of the 80 districts, which is still private service providers. less than 20 percent of all farming households that The investment in Phase I of NAADS (2001–09) accessed agricultural extension advice. Apart from was estimated at about US$110–150 million. For Phase NAADS, Uganda had 1,600 public extension agents II (2010–15), an investment of US$300 million is (due to be fully integrated in NAADS in 2010) and foreseen. Sources: Authors; for more information on NAADS, see www.naads.or.ug; Benin et al. 2007; Heemskerk, Nederlof, and Wennink 2008; and Swanson and Rajalahti 2010. The private sector increasingly finances extension ser- Box 3.8 Ethiopia: Investing in Human Resources vices for specific objectives and/or value chains. Contracting public extension workers for specific tasks is a common practice among NGOs as well as specific commodity devel- Recently the government of Ethiopia invested heavily in putting farmer training centers (FTCs) opment programs, such as the program for cashew produc- in every local administrative area (there are 18,000 tion in Mozambique. Some export commodity chains nationwide) and three extension agents at every finance extension services through a government-instituted training center. From 2000 to 2008, the number of export levy, as in Mozambique and Tanzania. The private extension agents increased from 15,000 to at least sector also finances extension services directly, as is the case 45,000, with a goal of reaching about 66,000. with large tobacco companies in Malawi and Mozambique. Reaching that goal would probably give Ethiopia Many of these arrangements are in transition to become the world’s highest ratio of extension agents to systems of cost-sharing with farmers, first by assuring farmers (see box figure). effective demand for relatively costly services and eventually 15.7 by having farmers fully finance extension services, as a com- 14.0 plement to services they already provide one another (F2F 11.0 extension) (box 3.9). To increase efficiency and performance, service provision 4.0 systems financed by the public sector increasingly apply 3.0 2.0 principles from the private sector, such as the development of a business plan for service provision, the costing and Ethiopia China Indonesia Tanzania Nigeria India financial transparency of services provided for farmers, and Total # of 45 k 700 k 54 k 7k 5k 60 k the use of performance contracts for service providers. agents Agent: These reforms are generally referred to as “new public man- 1:635 1:714 1:909 1:2500 1:3333 1:5000 Farmer agement� (Heemskerk et al. 2003). Source: Davis et al. 2010b. KEY POLICY ISSUES In conjunction with efforts to make advisory services more Mozambique, Mali, and Tanzania, among other countries effective, what key policy issues must be considered? Exten- (Heemskerk, Nederlof, and Wennink 2008). sion and advisory service systems need to build new Farmer organizations are becoming much more involved constituencies if they are to influence policies. Constituen- in delivering extension services. Their involvement is grow- cies could be based on alliances of public and private ing because group approaches are becoming more common service providers with farmer organizations and key value (as mentioned earlier) and improve the cost-effectiveness of chain actors from the private sector. National networks providing extension services. can relate to international networks such as GFRAS MODULE 3: OVERVIEW 187 ■ Proceed with extension system reform without relying Box 3.9 Fee-for-Service Extension: Pros and Cons on a single grand model, as one model cannot accom- modate all situations: Extension is to be location- and Fee-for-service extension is provided by the public even value chain-specific.1 (or another) sector and paid for by farmers. Small ■ Move toward pluralism in extension service provision groups of farmers usually contract the services. while retaining public financial commitments and coor- This arrangement allows clients to “vote� on the dination (see TN 1). programs and the scale of the programs they want ■ Increase downward accountability to farmer organiza- by paying for them. Most examples of this model tions (also through decentralization and based on the come from developed countries, such as New subsidiary principle) (see table 3.1 and related text). Zealand, where agricultural advisory services are ■ Create an effective, efficient market for service completely privatized. providers, which will control the costs of scaling up In addition to providing feedback to public promising experiences by different public and private extension efforts, fee-for-service extension also can actors (see IAPs 3 and 4). provide revenue to public extension. It is suitable ■ Face the enormous need for human capacity develop- for rival and excludable products. Hanson and Just argue that universal paid extension is not in the ment in management and implementation; extension public interest but that there is an optimal mix of workers, to cite just one example, need a wide range of public, private, and paid extension. A problem new skills. with implementing this type of extension service ■ Move away from projects to programs based on long- in developing countries is that farmers who do not term vision and commitments (move toward national produce for the market may purchase fewer ser- extension systems based on public-private partnerships). vices. One solution to this difficulty is to stratify ■ Balance investments in extension supply and extension farmers, allowing commercial farmers to purchase demand, because both types of investment are needed services and offering public extension services to for effectiveness (introduce new public management smaller-scale, poorer farmers. principles). Sources: Hanson and Just 2001; Anderson and Feder 2004. ■ Focus on institutions rather than grand methodological or technological solutions (see IAPs 3 and 4). As noted, extension approaches must be adapted locally, and there is no single correct method (emphasize institutional (http://www.g-fras.org/en/) and the African Forum for innovations and organizational change). Agricultural Advisory Services (AFAAS, http://www.afaas- ■ Move from standard packages to tailored services pro- africa.org/) for effectively influencing policy (both forums vided at the right place, at the right time, and in the right are discussed in box 3.10). format. Critical thinking and problem solving are inte- gral to developing tailored services. (Participatory plan- General policy issues for extension ning as part of decentralization and deconcentration— and advisory services including downward accountability—and facilitation Two main opportunities for developing policies will improve rather than teaching are crucial, as well as an emphasis the effectiveness of advisory services, based on evidence on learning and business plan development.) of what really works. The first opportunity is provided by the ■ Address equity issues. It remains a challenge to ensure many lessons and pilot experiences emerging from struc- that extension adequately reaches different groups of tural reforms to develop pluralistic, demand-led, and market- farmers and entrepreneurs: women, youth, the land- oriented extension systems. The second opportunity lies in less, resource-poor farmers, minority ethnic groups the new requirements for advisory services to meet the and castes, and others. (Different extension strategies demands arising from climate change, food security pro- are needed for small-scale commercial farmers, emerg- gramming, the new aid-for-trade agenda, and reform in the ing commercial farmers, and farmers producing for agricultural research-for-development agenda (Christoplos food security, subsistence, or part-time. Women 2010). In realizing these opportunities, several important require specific extension programs. Priority setting challenges must be addressed (Christoplos 2010): needs to be addressed in this context for younger and older farmers as well as male and female farmers and 188 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 3.10 Global and Regional Coordination to Strengthen Agricultural Advisory Services Many stakeholders recognize that advisory services The African Forum for Agricultural Advisory Ser- require a more formal, dynamic, and proactive struc- vices (AFAAS) (www.afaas-africa.org, established in ture to gain a more credible, authoritative voice. Two 2004), was conceived when the leadership of the forums provide advocacy and leadership for advisory National Agricultural Advisory Services realized that services at the regional and global levels. extension services, unlike research services, had no The Global Forum for Rural Advisory Services mechanism to share experiences. AFAAS envisions (GFRAS) (www.g-fras.org, established in January agricultural advisory services that “effectively and effi- 2010) is designed to provide a voice within global pol- ciently contribute to sustained productivity and prof- icy dialogues and promote improved investment in itable growth of African agriculture� in ways that are rural advisory services; support the development and oriented toward countries’ individual development synthesis of evidence-based approaches and policies for objectives. Through increased professional interaction improving the effectiveness of rural advisory services; and information sharing, AFAAS participants build on and strengthen actors and forums in rural advisory ser- lessons learned in agricultural advisory initiatives and vices through interaction and networking. GFRAS will enhance the use of knowledge and technologies by link closely to regional networks such as AFAAS. actors in agricultural value chains. Source: Authors. farmers oriented more to markets or more to food as the “third sector,� consisting of NGOs and organizations security). based on collective action. These providers can be organized on the basis of who provides and who finances the services Other policy issues related to pluralistic advisory ser- (table 3.2). The functions of service provision and financing vices and extension include the changing roles of various often are separated to ensure that services are financed by extension providers and the comparative advantage for dif- clients or the corresponding sector and reflect their ferent providers in carrying out specific extension func- demands. Combinations of implementation and financing tions and advisory services. For instance, publicly funded of services are presented in each cell of table 3.2.2 advisory services should not involve themselves directly in the provision of physical inputs (including credit). Also, Institutional base for sustainability many bureaucrats still regard extension in a very linear way that focuses on extension functions such as transferring Different aspects of sustainability can be considered with technologies to ensure better food security. Paradigm shifts respect to advisory services, but most often the concern must take place not only in the programs and the thinking involves the sustainability of financing. Several approaches of field staff but in the thinking of extension administrators have been criticized for their lack of financial sustainability, and policy makers. Finally, the sustainability of extension including the T&V system promoted in the 1980s and the institutions is another major issue for policy to address more recent FFS approach (Quizon, Feder, and Murgai (Swanson and Rajalahti 2010), as is equity. These three top- 2001; Anderson 2006). Current FFS programs, especially in ics (the respective roles of public and private extension Africa, address sustainability in various ways, including providers, sustainability, and equity) are covered in the revolving FFS funds, self-financing, and FFS loan and sections that follow. repayment schemes. The use of farmer facilitators reduces costs dramatically.3 More agribusiness development ser- vices and market-oriented advisory services aim for farm- Public and private sector roles ers, the subsector, or the commodity chain to pay at least In principle, agricultural advisory services can be provided partially for services. and financed by the public sector, the private sector (indi- Sustainability can also be addressed through innovative vidual farmers or companies), and what can be referred to modalities for financing advisory services. Cost-sharing MODULE 3: OVERVIEW 189 Table 3.2 Options for Providing and Financing Pluralistic Agricultural Advisory Services Finance provider Third sector: Service Private sector: Private sector: Farmer-based provider Public sector Farmers Companies Third sector: NGOs organizations (FBOs) Public sector Public advisory Fee-based public Private companies contract NGOs contract staff FBOs contract staff from services advisory services staff from public advisory from public advisory public advisory services (different degrees services services of decentralization) Private Publicly funded Private companies Embedded services: NGOs contract staff FBOs contract staff from sector: contracts to private provide fee-based Companies provide from private service private service Companies service providers advisory services information with input sale providers providers or marketing of products Third sector: Publicly funded Advisory service Private companies contract NGOs hire own NGOs contracts to staff hired by NGO staff to provide advisory staff and NGO providers NGO, farmers advisory services provide services pay fees free of charge Third sector: Publicly funded Advisory service NGOs fund advisory FBOs hire own advisory FBOs contracts to staff hired by service staff who are staff and provide FBO providers FBO, farmers employed by FBO services free to pay fees members Sources: Birner et al. 2009, adapted from Anderson and Feder (2004, 44). arrangements (such as those used in Uganda’s NAADS pro- oriented toward the development of businesses, markets, gram) allow resources to be mobilized from various sources. and enterprises. Apart from absorbing these individual These resources can be pooled and distributed to end-users capacities, public providers of advisory services will have to based on demand. undertake major organizational changes, such as the use of Stakeholder forums consisting of farmer groups create a performance-based contracts and incentives. Institutional critical mass for services required from either public or pri- development is also important (IAP 2). Public advisory vate bodies and can reduce service costs. Forums empower services must develop the institutional capacity to coordi- farmers to identify and use selected qualified service nate and manage local extension systems. For example, they providers (Government of Kenya 2005). Other potential will need the capacity to facilitate interactive learning methods for mobilizing and managing funds include levies between different extension service providers. on export commodities (Tanzania, Kenya), community- driven development funds (Guinea, Kenya), and contracting Gender and equity considerations by the government (Mozambique) (Rivera and Alex 2004). Financing for advisory services may also come from Women make up 60 percent of the rural population world- resources provided through decentralization programs, the wide (Hafkin and Taggart 2001), yet they receive only 2–10 involvement of farmer associations and NGOs, contracting- percent of extension contacts and 5 percent of services out of extension services, public-private partnerships, pri- (Swanson, Farner, and Bahal 1990). In sub-Saharan Africa, vatization, and embedding advisory services in other types where women play a major role in agriculture and account of contracts (Anderson 2007). More information on these for more than half of agricultural output, they continuously subjects is available in module 3 of the Agriculture Invest- receive a less-than-proportional share of the total investment ment Sourcebook (World Bank 2006b). in agriculture (Blackden et al. 2006; Quisumbing 2003). Financing alone cannot guarantee the institutional sus- Only 7 percent of extension resources are spent on African tainability of advisory services. Capacity within the advisory women (Blumberg 1994, cited in Haug 1999). African service is another major concern. Extension workers must women remain especially disadvantaged in interventions be able to apply new approaches that focus more on facili- relating to education, extension, capacity strengthening, tating processes than on teaching models and are more empowerment, and market access (Rahmato 1993; Alawy 190 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK 1998; Frank 1999; Haug 1999). This problem is especially This topic is somewhat outside the scope of this sourcebook, pronounced in areas emerging from conflict (World Bank, yet it must be considered for investments in extension. The UNDP, and UNIFEM 2010). extent of attention to such issues as nutrition, community Despite this evidence of neglect, recent studies conclude organization, microenterprise development, health, youth that some programs have reached women farmers by taking activities, women’s empowerment, and rural development practical steps to address the lack of inclusiveness in provid- varies. There may well be a case for extension to facilitate off- ing advisory services (Davis et al. 2010a; Gender and Gover- farm employment as a means of improving opportunities for nance Research Team 2009). A major first step is to develop agricultural commercialization. transparency in service provision by segregating data on the The thematic notes and innovative activity profiles in participation of men and women, young and old, and dif- this module offer an array of strategies that may be adapted ferent categories of farmers (subsistence, emerging, and to meet these needs for investments, policies, and innovative small-scale commercial) in all activities, from planning and approaches: training to monitoring and evaluation. This information can form the basis for developing joint action plans to ■ TN 1: Pluralistic Extension Systems. Pluralistic exten- address any problems with inclusiveness for any of these sion recognizes the inherent plurality and diversity of groups. Second, extension agents and others (including pol- farmers and farming systems and the need to address icy makers and local government officials) must be challenges in rural development with different services equipped with the skills to respond to the needs of a diverse and approaches. This note describes pluralistic systems, clientele with respect to age, gender, socioeconomic back- their strengths and challenges, investment opportunities, ground, ethnic differences, age, livelihood source(s), and so policy issues, and emerging lessons. on. For more information see Christoplos (2010). ■ TN 2: Farming as a Business and the Need for Local (Agri-) Business Development Services. Farming as a small-scale business requires access to markets, financial NEW INVESTMENT DIRECTIONS, PRIORITIES, services, and inputs, as well as a suitable mix of farmer AND REQUIREMENTS entrepreneurial skills and attitudes and bankable busi- In Africa, CAADP and the compact agreements are guiding ness plans. This note discusses approaches to address advisory services into efficient and well-focused service farmers’ business development needs, such as reorienting delivery at the center of the AIS. This is a complete para- programs and staff, recruiting new staff, involving com- digm shift from the perception that research knowledge can munities as agribusiness promoters, and developing drive innovation to the notion that change in the whole sys- multistakeholder platforms to support agribusiness tem is needed for innovation. development. Throughout the developing world, similar evolving ■ TN 3: Extension-Plus: New Roles for Extension and demands and new roles for advisory services in the wider Advisory Services. Extension can move beyond its tradi- innovation system will require new investments—among tional technology transfer role to operate as a nodal others, investments in the capacity of individual extension agency within the AIS, providing technological and non- workers and organizations for value chain approaches, in technological services to farmers. This “extension-plus� market-oriented extension, in group and organizational approach emphasizes locally developed strategies for development, in agribusiness, and in mechanisms to share participants to learn through experimentation and adap- information (networks, platforms, and the like). Recent tation. It is a “best fit� rather than a “best practice� global developments require advisory services to focus on approach, requiring changes in extension and other climate change, food security, and equipping rural people to institutions in the AIS. deal with risk in general. There is a need for evidence-based ■ TN 4: The Role of Innovation Brokers in AISs. Some direction regarding investment priorities and programming extension agents and other actors (such as researchers options for agricultural advisory services within innovation and staff of NGOs) have chosen to operate as innovation systems. To influence policies and better serve their brokers. Innovation brokering expands the role of agri- constituencies, including the poor and women, advisory ser- cultural extension. Extension is no longer a simple, one- vices need a stronger voice at the global and regional level; to-one intermediary between research and farmers but box 3.10 describes approaches to achieve this goal. Finally, an intermediary that creates and facilitates many-to- investment in nonagricultural issues will be essential. many relationships (a key concern within AISs). MODULE 3: OVERVIEW 191 ■ IAP 1: Agrodealer Development in Developing and Box 3.11 Guide to Extension Evaluation Emerging Markets. Agrodealers have an increasing pres- ence as providers of advisory services. A holistic, market- oriented approach to agrodealer development facilitates The Global Forum for Rural Advisory Services improved efficiency in resource allocation, operations, (GFRAS) publishes a guide to conducting more and economic performance and helps to develop sus- comprehensive, rigorous, credible, and useful tainable input supply systems. extension evaluations. The guide describes differ- ■ IAP 2: Federating Farmer Field Schools in Networks for ent types of evaluation, explains how to select the Improved Access to Services. By federating, farmer approach that is most appropriate to the particular groups increase their effectiveness in obtaining the advi- context, and identifies additional sources of theo- sory services they identify as important at the local level, retical and practical information. It includes guid- often at a lower cost. ance on such issues as preparing terms of reference ■ IAP 3: INCAGRO: Developing a Market for Agricultural and links to evaluation manuals in different sec- tors. The guide is intended to be used primarily by: Innovation Services in Peru. This case study of INCAGRO describes how Peru developed a demand-driven market for ■ Those commissioning and managing evalua- agricultural innovation services; two competitive grant tions. funds were important features of the program. ■ Professional evaluators and staff responsible for ■ IAP 4: Combining Extension Services with Agricultural monitoring systems. Credit: The Experience of BASIX India. Recognizing ■ Those involved in knowledge- and results- that agricultural credit alone did not equip India’s rural based management within a range of organiza- poor with the knowledge, skills, and support services to tions involved with extension. improve incomes, BASIX developed a triad of integrated ■ Staff of public extension agencies, farmer services—financial services; agricultural, livestock, and associations, and other organizations directly enterprise development services; and institutional devel- or indirectly engaged in providing extension opment services—to improve livelihoods. services. ■ Professionals involved in training and educat- ing evaluators. MONITORING AND EVALUATING ■ Researchers looking for ways to synergize their INVESTMENTS AND SCALING UP efforts with evaluation initiatives. To ensure the proper implementation of extension invest- Source: Adapted from the website for the guide at ments, M&E exercises and tools are crucial. Because GFRAS, http://www.g-fras.org/index.php/en/knowledge/ gfras-publications/file/20-guide-to-extension-evaluation, attempts to monitor and evaluate extension and advisory accessed July 2011. services have been weak or nonexistent, GFRAS developed a guide for the evaluation of extension and advisory services (box 3.11). General studies find high rates of return to investments in advisory services, but the challenges and dif- Indicators are needed for judging the effectiveness of ficulties in estimating the benefits are many. Efforts to extension programs, including the share of farmers with strengthen the understanding of how to improve M&E in regular access to services and their perceived satisfaction extension continue, but it is already clear that some of the with the services. Such indicators should not be limited to most important components of M&E are participation by farmers but also developed for male and female producers, all parties; the clear definition of objectives, indicators, out- other (mostly private) actors in the chain, and (local) gov- puts, outcomes, and desired impact; continual assessment ernments (Spielman and Birner 2008). To monitor and throughout the investment period; and the collection of evaluate pluralistic advisory services, output indicators baseline data. Important indicators include benchmark and include capacity level in terms of business development baseline indicators as well as input, output, outcome, and services and local certification services; management of impact indicators (Swanson and Rajalahti 2010). For exten- pluralistic extension systems at the district level; and learn- sive lists of indicators, see Swanson and Rajalahti (2010) and ing taking place between agencies. Outcome indicators include Rajalahti, Woelcke, and Pehu (2005). the quality of investment plans to improve associations and 192 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK indicators measuring whether the voices of female farmers considered for use on a wider scale through a specific strat- are heard in farmer forums. egy for scaling up. Given the increasingly pluralistic character of exten- The process of scaling up agricultural practices is com- sion systems, many innovations—technological as well as plex and influenced by many factors. Scaling up can largely institutional—will develop. The system needs a mechanism concern the more quantitative aspects of increasing the for monitoring and learning from new, often very local, number of farmers adopting or adapting technology to their practices and experiences, which is a major new task for own situations, but it can also concern the policy, institu- extension management. Management will have to be open tional, and organizational aspects of implementing a prac- to experiences from the private as well as the public sector, tice on a wider scale. Based on innovation system concepts, involving all key innovation system stakeholders. Local the factors potentially influencing success in scaling up good good practices can be identified, documented, and then practices need to be analyzed ex ante.4 MODULE 3: OVERVIEW 193 T H E M AT I C N O T E 1 Pluralistic Extension Systems Willem Heemskerk, Royal Tropical Institute (KIT) Kristin Davis, Global Forum for Rural Advisory Services (GFRAS) SYNOPSIS rural life and needs should be matched by diversity in services, approaches, and providers. Differences between the luralistic extension recognizes the inherent diversity P of farmers and farming systems and the need to address challenges in rural development with differ- ent services and approaches. It is characterized by the coex- poor and resource-poor farmers; crop, livestock, and fish- eries systems; production and conservation objectives; and local and export value chains—to name only a few—will affect which organizations can best provide services and by istence of multiple public, private, and mixed extension sys- which methods. These differences are a major reason for tems and approaches; multiple providers and types of encouraging pluralistic systems. services; diverse funding streams; and multiple sources of Farmers, often impelled by market opportunities but information—all of which benefit from some degree of also by environmental, labor, and land productivity chal- coordination and regulation that facilitates interaction and lenges, look for information and knowledge to strengthen learning. Ideally, the outcome of pluralistic extension ser- their production systems. Trends such as market liberaliza- vices is that different client groups in different contexts are tion and development, as well as democratization and the satisfied with their access to services that they have communications revolution, drive farmers to obtain agri- demanded. Although pluralism in advisory services makes it cultural information through a wider range of means and possible to capitalize on the competitive advantages of dif- from a wider range of sources than ever before. Even tradi- ferent actors, one of pluralism’s greatest challenges is to tional mass media such as (community) radio,1 television, coordinate organizations that have vastly different mindsets and newspapers can reach quite different audiences. For and worldviews. A key message is that the public sector’s farmers, public extension services are just one source of primary role is to ensure that this mix of providers achieves information, often the one focusing purely on production jointly developed objectives. Public coordination and man- issues (Spielman et al. 2011). Farmers procure other, more agement of pluralistic extension services should be based on business-related services in the private sector and access a program for action developed jointly by multiple stake- facilitation services (for group processes, as well as interac- holders and service providers. The action program should tion with input and market actors) through NGOs and reflect stakeholders’ agreement on the roles for the different farmer organizations. Technology and information are no service providers and on who is best suited to perform each longer transferred through a linear system (Wennink and function under the program. The variety in services Heemskerk 2006), leaving national extension and advisory demanded is then matched with the existing variety of ser- systems in many parts of the developing world struggling to vice providers. The emphasis is on coordination, which can meet new demands from farmers and other actors in the lead to regulation and performance-based contracts for innovation system. additional services, all based on complementarity. A useful alternative is the coordination and management of pluralistic extension services based on a program for WHY PLURALISTIC SERVICE SYSTEMS? action developed jointly by multiple stakeholders and ser- vice providers. The action program reflects stakeholders’ Many types of advisory service providers and approaches agreement on the roles for the different service providers exist side by side. This situation is good, as the diversity of and on who is best suited to perform each function required 194 by the program. The variety in services demanded is then work together to provide extension services. Services can be matched with the existing variety of service providers. provided by: The emphasis is on coordination, which can lead to regu- lation and performance-based contracts for additional 1. Subsectoral bodies representing private, market-oriented services, all based on complementarity. Some systems are farmers, such as a coffee board or national commodity self-organized (value chains driven by the private sector) association. This practice often occurs in cash crop sub- and do not require this public role in coordinating service sectors such as coffee in Colombia, cotton in Benin, provision. cashews in Tanzania, or the Kenya Tea Development Agency (see box 1.22 in TN 4 of module 1). 2. Producer/farmer organizations and cooperatives, not BACKGROUND AND CONTEXT on the national level but at the meso level—for example, FOR INVESTMENT when a farmer association provides services through vol- Aside from the trends mentioned earlier, the provision of unteer members, as in Mozambique’s National Union of advisory services to smallholders in developing economies Smallholders or Mexico’s Produce Foundation (see mod- is influenced by the decentralization of governments and ule 1, IAP 2)—and on the individual level (for example, governance as well as by the deconcentration of public a milk producer cooperative or a vegetable producer service delivery processes. In such dynamic environments association). national agricultural extension services are starting to play 3. Local NGOs usually working with farmer groups and new roles, based largely on principles of demand-driven community-based organizations, mostly in subsectors planning, management, facilitation, and learning through that do not involve cash commodities but increasingly in interaction. market-oriented services. All of the newly recognized actors in advisory services 4. International NGOs (mostly donor-funded) usually can equally bring about new ideas and innovations in agri- working with farmers’ groups and community organiza- cultural extension, contributing to a system in which the tions in subsectors for cash and noncash commodities, different roles can lead to synergy. National agricultural which may at times overlap, but also agri-agencies of advisory service systems are attempting to capture these developed country farmer organizations. institutional innovations by contracting-in different ser- 5. Governments that support activities under 1, 2, 3, and vices at the district, provincial, and sometimes national lev- sometimes 4 in a sort of “joint venture� at the national, els. Advisory services are growing more varied; rather than provincial/regional, or local/district level; or public being limited to technology services, they are offering more agencies working with civil servants. In the public sector, general information and brokering services (see TN 4). different extension systems (for example, for crops, live- They also facilitate access to other services, such as financial stock, and forestry) can exist side by side within the same and market information services, through different means, or different ministries. Many countries have taken a step including the mass media and social media. forward in coordinating this multiplicity of public exten- Advisory service providers increasingly vary as well. Tra- sion programs by adopting a unified (public) extension ditionally, the private sector provided the more market- system. oriented and business development services (TN 2), and the 6. Input suppliers and agrodealers supplying agrochemicals public sector provided services focused on using technology and veterinary products and buyers of products (such as to enhance agricultural productivity. In pluralistic extension buyers of flowers and fresh vegetables) (see IAP 1). systems, the services in demand are supplied by the right 7. Private business contacts and relationships that provide mix of providers. Certain service providers often perform informal advisory services, like playing a brokering role specific advisory functions (as shown by the “x� in (TN 4). Increasingly, local business development services table 3.3). The matrix in table 3.3 will differ in every situa- are also provided by financial services (microcredit tion and context. It can be used to develop the best mix of organizations and banks), actors in the value chain, and services required and can ultimately lead to pluralistic other private actors (TN 2). extension, as described in box 3.12. 8. Village/community extension workers, often connected Under pluralistic systems, different types of agricultural to input supply programs (such as cashew spraying ser- and agribusiness advisory services or different providers vices or chicken vaccination). Lead farmers and local MODULE 3: THEMATIC NOTE 1: PLURALISTIC EXTENSION SYSTEMS 195 196 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 3.3 Extension Service Functions and Service Provider Categories (the number of “x’s� indicates the general prevalence of specific services) Functions Producer International Input Private Community versus providers Sectoral bodies organizations Local NGOs NGOs Governments suppliers business sector extension workers Information Sector-specific Only general Market Market info Training and advice x xx xx x Quality xxx Quality Technology testing Cash crops x x xx Demos xx Business development x x x xx xx xxx AIS linkage facilitation/ x xx Only w/ x brokerage research Institutional development Bonding, bridging, xx xx Bonding Market links Research linking linkage social Bonding Bridging capital* Legal advice Land rights group Outgrower registration contracts Green services Ecosystem services xx x Certification Source: Authors. * Bonding social capital through strengthening the group, bridging social capital through federation and unionizing, and linking social capital through developing the capacity of groups to interact with other stakeholders (Heemskerk and Wennink 2004). Box 3.12 Pluralism in Action: Government-Funded Public, Nongovernmental, and Privately Managed Extension Systems in Mozambique Mozambique became independent in 1975, but civil because the public sector remains the cornerstone of strife prevented the government from establishing pub- Mozambique’s pluralistic extension system. Extension lic extension services for its farmers until 1987. The activities are coordinated at the district level by local government used (international) public funds to con- government officials. They coordinate NGOs, farmer tract several local and international NGOs to organize organizations, and private service providers, whereas and provide extension services to farmers in selected provinces (and also districts) may also outsource specific regions. Over the years, the size of the public and NGO assignments complementary to the public extension sys- extension systems has fluctuated from around 600 to tem. Long-term public financing for extension is crucial, 800 extension workers each. The government has also as it will be difficult, if not impossible, for low-income outsourced some extension services. For example, it men and women farmers to pay for extension services contracted several private, large-scale farmers, compa- themselves. Poor farmers will pay for specific services, nies, and NGOs and hired an additional 200 extension such as cashew spraying and veterinary services, as these workers under short-term contracts to focus on specific are embedded extension services, but they are generally assignments. These combined actions have resulted in unwilling and unable to pay for advisory services that an average of 10–14 extension workers in each rural deal with “public� knowledge and information. district, who reach between 10 and 20 percent of farm The current publicly financed extension system households. has three main programs laid out until 2015. First, it The interplay of NGOs, the private sector, farmers, and will strengthen service provision in the public sector, their organizations in extension has led over time to a new, the private/NGO sector, and farmer-to-farmer exten- pluralistic extension system in Mozambique. The public sion. Second, it will empower farmer associations in sector concentrates on strengthening and gradually planning, pursuing economic activities, and providing expanding the size and improving the quality, accounta- services. Lastly, it will emphasize the coordinated man- bility, and relevance of its public extension services, agement of service provision at the district level. Sources: DNEA 2007; Swanson and Rajalahti 2010. facilitators such as those working with FFSs are also regional), and national levels, particularly in providing providing such services. coordination, technical backstopping, and knowledge management. The public sector should facilitate learn- The brokering and facilitation function can be per- ing and scaling up, as well as ensure quality assurance formed by any of the entities listed above. This function in and oversight. Advisory service systems supported by particular has become more important with the growing public funds are increasingly planned, financed, imple- realization that catalyzing innovation involves more than mented, and coordinated at the district level. The meso transferring knowledge and requires strong interaction level coordinates and implements crosscutting services between a variety of actors (Klerkx, Hall, and Leeuwis 2010; (mostly on contracts), such as seed services, environ- TN 4). Such interaction responds to a key concern within mental management services, food security services, and AIS (TN 4). other services that extend beyond district boundaries. The public sector at the national level plays a supportive and backstopping role for all service providers and pro- INVESTMENT NEEDED FOR INNOVATIVE vides the enabling environment—conducive policies, AND PLURALISTIC EXTENSION SERVICES strategies, and regulations. The principles discussed in the following list are central to ■ Decentralization. As local governments are empowered pluralistic extension systems: to run their own affairs, it is becoming common (notably in Anglophone and Lusophone Africa) for district gov- ■ Deconcentration. The public sector has an important ernments and administrations to operate a budget but differentiated role at the local, meso (provincial, obtained from the treasury and allocated on the basis of MODULE 3: THEMATIC NOTE 1: PLURALISTIC EXTENSION SYSTEMS 197 an integrated district development plan. Agricultural actors. District extension systems need to be supported by planning priority is shifting from sectorwide agricultural provincial and national services and knowledge centers in planning to higher-quality district agricultural develop- case demand for knowledge services extends beyond the ment plans. district level, as this is part of the new extension. ■ A system for providing multiple services. Extension managers and partners recognize that the quality of ser- Depending on the needs identified in a given situation, vice provision can be improved through performance- investments can be made to support the conditions that based contracts and that the choice of provider must be will enable extension to become more pluralistic and meet based on the comparative advantages of the public sec- those needs. As indicated in table 3.4 and the discussion tor, private sector, and civil society. The best mix of ser- that follows, capacity strengthening is a major area for vices can be identified for every situation, depending on investment, and investment is needed at all levels. the demand for and availability of services. ■ Farmer empowerment. Farmer organizations represent Capacity development: A major area of investment the voice of their clients, but they are also partners in extension when it comes to planning, allocating In general, capacity can be considered with respect to insti- resources, M&E, and providing services. Empowerment is tutions, organizations, and individuals. In supporting twofold, consisting of economic empowerment as well as extension services that enhance innovation dynamics, there involvement in decision making. As farmers’ economic is in general a shift from strengthening organizations to empowerment in value chains and local economic devel- strengthening extension systems. System or organizational opment grows, farmers gain a more forceful role in setting learning requires five core capabilities: (1) to commit and priorities, planning, and providing services. In pluralistic engage; (2) to carry out the mandate and deliver results; systems, downward accountability and user involvement (3) to link with, attract, and mobilize resources; (4) to adapt make quality control possible only at the local level. and self-renew; and (5) to balance coherence and diver- Downward accountability of service providers to farmers sity (ECDPM 2008). Capacity development is the external becomes more important for quality control than upward facilitation of this internal learning process. System or orga- accountability to financers (see also module 1). nizational learning processes can be effective and lead to ■ Outsourcing services. Local governments (districts, innovation only if the actors involved have adequate capac- communes, and so forth) are contracting-in the services ity to participate, to actively engage, and to potentially facili- directly demanded by farmers in district agricultural tate innovation processes. They also require the mindset development plans, based on the comparative and com- and flexibility to allow others to participate. petitive advantages of the various service providers. This In different contexts (under various governance struc- trend should improve synergy and complementarity in tures, for example), investments in developing capacity will service provision. require adjustments, including a move away from agricul- ■ Partnerships. Example of partnerships and linkages tural sector programs and a link to more local economic between agricultural advisory services and other actors development programs. Programs will need to focus not in the innovation system and services include partner- only on the public sector but also on community extension ships between advisory service providers and agricul- workers and private agencies. Two particular opportunities tural research agencies, agricultural chambers of com- for investment, described in greater detail in the next merce, microfinance organizations, and agroprocessing section, are (1) to develop national capacity (independent services. agencies, universities, and other mediums) and higher edu- ■ Extension approaches. A major challenge is to continue cation courses for a new type of advisory service provider in shifting extension from a top-down approach offering the public and private sector and (2) to develop capacity at blanket, production-oriented recommendations toward a the district level to coordinate and manage pluralistic exten- more interactive learning approach. The interactive sion systems. approach provides room to differentiate among cate- gories of clients, messages, and approaches. Extension Specific areas of capacity strengthening officers play more of a facilitating role; based on their technical expertise, they stimulate learning among farmers The capacity of new extensionists is central to the success (as in FFSs) and with other actors, particularly market of pluralistic extension systems. They must master highly 198 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 3.4 Investment Opportunities to Foster Pluralistic Extension Systems Mechanisms and principles Examples of investment Cases and references* Deconcentration Programs to develop capacity in managing and implementing National Agricultural Extension Program (PRONEA), extension at the local level, including planning, monitoring, Mozambique (DNEA 2005, 2007) and evaluation. Differentiation of the public sector’s roles at the local, meso, and central level in technical backstopping, coordination, and quality assurance. Decentralization Develop integrated local government planning skills, as Agricultural Sector Development Program, Tanzania well as local governance skills and mechanisms, including skills to deal with downward accountability. Multiple service Develop the capacity among service providers to coordinate PRONEA, Mozambique (box 3.12) provision and use learning mechanisms and skills. Support the development of local private service provision through capacity development and local matching investment funds for service providers. Develop farmer advisory service providers. Farmer Develop associations and cooperatives to articulate clients’ Many international NGO programs and the Farmers empowerment demands, empower them economically, and improve Fighting Poverty Program (www.agricord.org); see also service delivery. module 1 Develop the triangle of (1) entrepreneurship, (2) access to (cooperative) credit, and (3) higher-level farmer lobby organizations. Outsourcing Develop capacity in the local government to contract for NAADS, Uganda (box 3.7 in overview) and the Agricultural services services based on principles of complementarity, Service and Producer Organization Support Project synergy, and subsidiarity. (PASAOP, Programme d’Appui aux Services Agricoles et Provide matching fund to contract local services based on aux Organisations Paysannes), Mali cost-sharing and cost-recovery arrangements. (www.maliagriculture.org) Partnerships Develop public-private partnerships to deliver services. PRONEA, Mozambique (see above) Develop the capacity for coaching and facilitation. Extension Strengthen facilitation skills and capacities to use learning Farmer Field School program and marketing extension approaches approaches such as the Farmer Field Schools. (http://www.farmerfieldschool.info/) Strengthen the market orientation of services at the African Forum for Agricultural Advisory Services national and district levels. (AFAAS–FARA 2009, TN 2); many (mostly international) Strengthen the targeting and differentiation of services NGO programs for different categories of farmers and households, based on demand. Source: Adapted from DNEA 2007. Note: See also table 3.1 in the overview for definitions and needs. * The seven principles and/or a mix of them are applied in a number of national programs with support from organizations such as the Interna- tional Fund for Agricultural Development (IFAD) and the World Bank. technical information and skills as well as sophisticated ent kinds of stakeholders in the value chain or innova- facilitation and process skills (Blewett et al. 2008). More tion system are needed. specifically, extension workers and their clients require: ■ Extension management skills. As emphasized previ- ously, the presence of multiple actors and approaches in ■ Specific skills for planning and collaboration. Stronger pluralistic systems means that there is a strong need for capacity is needed at the local level for planning, man- coordination to avoid duplication of effort and wasted agement, and coordination. As noted, major attention resources. Managing pluralistic extension systems at the must be given to enhancing facilitation skills. These local level requires individuals to develop new knowl- skills are instrumental in the multistakeholder platforms edge, skills, and attitudes. Management of synergetic ser- and processes that foster capacity development across vices for local economic development, outsourcing, stakeholders in innovation systems. Skills for commu- M&E, and quality assurance must take place in a satis- nication with male and female farmers as well as differ- factory manner. New performance plans and indicators MODULE 3: THEMATIC NOTE 1: PLURALISTIC EXTENSION SYSTEMS 199 must be established. Management for performance and demanded. Pluralistic extension systems provide services on outcomes must be a focus. demand as identified in the joint planning process, and ■ Skills related to understanding and improving account- based on the services available for each demand. ability. Clients must gain the capacity to participate in, Models and lessons of pluralistic advisory services monitor, and evaluate extension. They must be equipped include Mozambique’s PRONEA (box 3.12), Uganda’s to express their perceptions of the performance of advi- NAADS (box 3.7 in the module overview), and the pro- sory services, both in an upward (local, provincial, and grams in Mali (PASAOP) and Tanzania (Agricultural Sector national government) and downward (famer groups, Development Program) cited in table 3.4. farmer forums, district councils) direction. ■ Technical knowledge and skills are required for relevant POLICY ISSUES OF PLURALISTIC actors in the value chain (production, processing, and ADVISORY SERVICES marketing), including knowledge about access to all assets of the livelihood system. The policy issues pertaining to pluralistic advisory services ■ Other skills that improve the quality of service provi- are correspondingly diverse. As discussed below, some of sion. At the local level, the variety of demand for the more pressing issues involve ensuring the sustainabil- services and the supply of services will present chal- ity of pluralistic advisory services and preventing them lenges not only for coordination but also for super - from exhausting public resources; ensuring that services vision and quality control. Service providers need to are provided in a more equitable way; promoting the insti- be registered and certified using established criteria tutional development of advisory systems; attending to the and conditions in a transparent manner, mostly at the growing demand for advice on a host of environmental meso level. To a large extent, the actual quality of ser- issues; and clarifying the changing roles and contributions vice providers’ performance must be controlled by of the public sector, private sector, and civil society within users themselves. a pluralistic extension system. Other investment needs Sustainability This sourcebook presents other examples of investments to Pluralistic extension systems are in principle more effective support pluralistic extension services. Examples in this than other kinds of extension, but the outsourcing of pub- module include enhancing facilitation and coaching skills lic services will act as a major drain on public resources if (TN 4), capacity development in extension management not properly implemented. Outsourcing whole systems and and the development of agribusiness services (TN 2), and creating parallel structures is costly and not very effective, as green services (TN 2). shown by the experience with NAADS and pilot activities in Mozambique (Heemskerk, Nederlof, and Wennink 2008). Instead it has proven more effective and cost-efficient to POTENTIAL BENEFITS OF outsource specific functions, such as the development of PLURALISTIC EXTENSION bankable business plans. Enhanced coordination between To recapitulate, the need for pluralistic extension arises public and private services at the local level will also make from the perception that specific services are needed for the system more efficient, while quality control of service specific contexts, economic enterprises, livelihood func- provision will make it more effective. The best mix of public tions, and above all different farmer categories, based on and private service provision and the level of public financ- differences in entrepreneurship, poverty and gender. The ing of such pluralistic systems will be subject to national and development of pluralistic extension systems should local policies. These policies in turn will be determined by enhance the competitiveness of local agricultural produc- the broad national vision for rural development, by locally tion within the context of local economic development, empowered smallholders, the level of focus of local devel- enhance local livelihoods, and ultimately reduce rural opment plans, and the relative strength of public and pri- poverty, improve food security, and promote greater gender vate service provision. Other services can be provided in a equality. Ideally, the outcome of pluralistic extension ser- better, or at least a more cost-effective, way by community vices is that different client groups in different contexts are extension workers. In local development plans, coordina- satisfied with their access to services that they have tion is planned and financial sustainability can be pursued. 200 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Social considerations: Equity, gender pressure on land, questions of access to land, market demands for sustainably produced products, and climate Agricultural production is one of the main economic and change. Public sector coordination of environmental income-generating activities for rural people, yet not all and/or green services is needed to ensure that services are rural households have the same objectives in economic provided synergistically by the array of actors involved, development, and they can place wide-ranging demands such as: on advisory services. Local agricultural development plans can clarify the priorities for different categories ■ Farmers themselves, providing ecosystem services with of farmers (small-scale commercial, emerging and sub- and without incentives. Examples include maintaining sistence, food-security-focused, or part-time farmers, for biodiversity or soil fertility or receiving premium prices example) and between male and female farmers. Services for using sustainable production methods. for local economic development need to differentiate ■ The private sector, dealing in CO2 emission rights or among many categories of clients (households based on the certification of sustainable and/or organic pro- their different objectives, for example, and clients based duction. on gender, age, and physical abilities). The emphasis on ■ The public sector, engaging in climate change mitiga- market-oriented services, cost-sharing arrangements, and tion, erosion control, watershed management, and the increasing role of community extension workers will similar public good activities in environmental man- influence access to services among different categories of agement. clients. In users’ assessments of service providers’ perfor- mance, as well as in the downward accountability of ser- In local development planning, an integrated approach vice providers and extension managers, the consideration to environmental management and the role of different ser- of equity issues remains important (Nederlof, Wennink, vice providers is needed. and Heemskerk 2008). Institutional considerations Public and private sector roles Pluralistic extension systems are expected to better address Private extension service provision, although publicly the wide variety of demands and at the same time make funded, contributes to the development of a new incentive better use of the variety of service providers available. system in which the quality and content of extension pro- Although eventually the right mix of services is determined vision is more responsive to farmers’ priorities. The transi- by the client and through payment for services, in the fore- tion to a system with privatized extension modalities and seeable future the public sector will still finance many of the improved incentives takes time, public investment, and required services (also based on cost-sharing arrangements appropriate long-term plans. Private extension provision but adjusted for different categories of farmers). requires well-trained service providers and a certain level of Pluralistic extension systems aim to develop better service capacity among farmers and local governments. Farmers’ provision for all, based on the complementarity and synergy organizations must increase their capacity to contract, of the public and private sectors. This public sector (at the manage, and evaluate private extension provision. Decen- local, meso, and national levels) will need to play a strong tralized political structures need the capacity to manage role in managing and coordinating extension activities in such systems. such a way that demand is adequately addressed, service An evolution toward private extension modalities should providers are accountable, quality is assured, and lessons are begin with themes that are most likely to elicit farmer learned among service providers, who are in competition at demand and investment and are rarely provided by the pub- the same time. Eventually this coordination and accounta- lic sector, such as the demand for agribusiness development bility role will gradually shift to farmers and their organiza- services, particularly at the local level. Farmers in Ethiopia, tions, once they will finance these services themselves. Uganda, Mozambique, and Kenya have all identified the need for agribusiness development services (see TN 2). The public sector is likely to retain its responsibility for financ- Environmental implications ing extension on themes such as environmental protection, Demand for services related to wider environmental although private delivery modalities may prove useful issues is increasing, owing to such factors as increasing (Chapman and Tripp 2003). MODULE 3: THEMATIC NOTE 1: PLURALISTIC EXTENSION SYSTEMS 201 LESSONS LEARNED providers also need to design, in close participation with the rural poor, services that respond effectively to poor people’s The lessons summarized here draw on several sources that needs. Offering diverse services for different groups of have recently examined innovations and experiences with clients will require different financing strategies. Some ser- advisory services. The clusters of challenges identified vices for the very poor will have more of a social nature and include the management of pluralistic advisory service sys- be supported by the public sector, community, or farmer tems; the quality of the demand for advisory services, the organizations. Business development services, in contrast, quality of the supply, and the quality of the enabling envi- will evolve gradually from cost sharing to full payment ronment (Nederlof et al. 2008). (direct or indirect) by clients. The deployment and financ- ing of service providers and services at the local government Management of pluralistic advisory level must be managed and coordinated to enhance the service systems coherence and synergy of services, increase the efficient use The decentralization of advisory service systems to the of services by the rural poor, and stimulate interaction and provincial or district level provides a major opportunity to learning between service providers. The public sector also improve the coordination of services at the local level. In has an important responsibility to control the quality of ser- most cases, to deliver a mix of public and private services vice provision (through registration and certification, for effectively, local governments and authorities will need to example) and prevent bias (among agrodealers providing improve their capacity to coordinate, manage, and direct embedded services, for example). services and service systems. Areas such as the facilitation of To provide services that are relevant and of high quality joint planning, the facilitation of learning among stakehold- in a financially sustainable way, effective linkages are ers, the regulation and certification of service providers, and needed between (1) productive investment and technolog- quality control all need strengthening. It may be necessary ical innovation and (2) financial services, risk manage- to begin by building capacity in the institutions responsible ment, and the reduction of vulnerability. Intermediary for training administrators. and facilitation services (not just the dissemination of information) are needed to secure those links (Nederlof, Wennink, and Heemskerk 2008; Wennink and Heemskerk Capacities of the rural poor as service users 2006) (see also TN 4). Investments are also needed for farmers and farmer organi- zations to strengthen their capacity to articulate their Enabling policies and institutional arrangements demands. To identify and address opportunities, small- for pro-poor services holders need information about production, markets, and financial services. The more vulnerable farmers need spe- For pluralistic extension systems to grow and thrive, they cific services related to household food security. Farmer will need to draw on evidence from the experiences of organizations must be able to: (1) lobby for an enabling pol- their wide stakeholder base to influence policy. Policy icy and institutional environment; (2) give the rural poor a changes are likely to be needed to promote innovation, voice; (3) influence the adoption of socially inclusive decentralization, and public-private partnerships and to research and advisory service agendas; and (4) become empower rural people. Institutional innovations are also involved in the implementation of research, advisory, and likely to be needed to foster interaction between farmer business development services. organizations and the private sector as well as research and advisory organizations. Examples include platforms for interaction, funding mechanisms, regulations, and cer- Provision of relevant, sustainable, tification mechanisms. Access to rural services will not and high-quality services improve without continuous interaction and flows of Extension services need to be relevant, sustainable, and of information between rural service providers and the rural good quality. Service providers need to differentiate their poor to prevent information asymmetry. Policies that sup- offerings depending on the intended clients and their port the strengthening of social capital and farmer net- demands—for example, some services may focus specifi- works will create additional institutional pathways for cally on vulnerable groups to enhance social inclusion, improving interaction among stakeholders and enhancing whereas others focus on value chain empowerment. Service the performance of the AIS. 202 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK RECOMMENDATIONS FOR PRACTITIONERS ■ Open up the public service delivery system by introduc- ing downward accountability mechanisms and perfor- The experience with pilot and larger programs for pluralis- mance contracts, and involving farmer organizations in tic extension systems offers a number of recommendations service procurement (see IAP 3 for examples). for practitioners. Practical, step-by-step recommendations ■ Make provisions for local authorities to manage the include: coordination of service provision, contract services locally, and handle integrated budget management. For ■ Sensitize and get agreement among actors at all levels on example, local authorities (such as farmer groups) may the need to: (1) strengthen interaction and learning to acquire a legal identity. between public and private service providers; (2) involve ■ Empower farmer groups and organizations to articulate public and private service providers on the basis of com- demand (for example, in planning and M&E). parative and competitive advantage; (3) make an inven- ■ Develop local capacity for small-scale service providers. tory of existing service providers (public, private, and ■ Develop capacity to use new extension approaches based embedded services); and (4) strengthen coordination at on participatory action learning, such as the FFSs, Farm the local level between service providers by enhancing Business Schools, and so on. downward accountability (for example, to farmer organ- ■ Develop the capacity of local smallholders’ private ser- izations). vice providers. ■ Make sure that an enabling environment is in place for ■ Develop, use, and manage local performance contract a pluralistic extension service system to develop. and outsourcing mechanisms. Specifically, develop a sectoral or local government ■ Develop local extension management capacity, including policy that supports public-private interaction in ser- capacity in planning, M&E, and downward accountabil- vice delivery. ity and transparency. MODULE 3: THEMATIC NOTE 1: PLURALISTIC EXTENSION SYSTEMS 203 T H E M AT I C N O T E 2 Farming as a Business and the Need for Local (Agri-) Business Development Services Willem Heemskerk, Royal Tropical Institute (KIT) Kristin Davis, Global Forum for Rural Advisory Services (GFRAS) SYNOPSIS BACKGROUND AND CONTEXT FOR INVESTMENT mall-scale farmers, local farmer organizations, and S other local entrepreneurs (such as traders and processors) benefit from advisory services with a business orientation. By helping these groups to access mar- A new appreciation of small-scale entrepreneurship has emerged with the growing awareness that subsistence agri- culture cannot eliminate rural food insecurity and that the kets, financial and input supply services, as well as knowl- commercialization of smallholder agriculture is integral to edge oriented to their particular value chains, local (agri)- economic growth and development in many countries business development services (LBDSs) support innovation (Pingali and Rosegrant 1995; UNDP 2004b; DFID and SDC and entrepreneurship. Capacity to provide LBDSs must be 2008; Jaleta, Gebremedhin, and Hoekstra 2009). Welfare developed at the individual, organizational, and institu- gains from market-oriented production arise from spe- tional levels. National universities and business schools need cialization that builds on and creates comparative advan- to develop curricula that reflect an entrepreneurial mindset tages, from the potential for large-scale and/or intensive in public and private service delivery. Farmer organizations production, and from the dynamic effects of technological, have an important role to play in articulating demands organizational, and institutional change that arise through related to local economic development plans, lobbying for the flow of ideas from exchange-based interactions (Jaleta, the right type of business services, and providing services Gebremedhin, and Hoekstra 2009). themselves. The development of private LBDSs for small- Small-scale farmers and their emerging enterprises holders will require public investments. Many programs require local services that help them integrate into value have realized that working with smallholders to strengthen chains (chain empowerment) and relate to other chain agribusiness management, business plan development, and actors (traders, processors) and services (value chain other elements of agricultural enterprises benefits from a finance) (Webber and Labaste 2010; KIT, Faida Mali, and process approach that starts with existing business service IIRR 2006; KIT and IIRR 2008, 2010). These “local providers. If agribusiness services are fully subsidized, they agribusiness development services� (LBDSs) improve the may not reflect agribusiness demands and their sustainabil- performance of a small-scale enterprise oriented to agri- ity will remain uncertain, yet services supported fully by cultural production, be it individual or cooperative, in demand will not be inclusive. Involving other value chain accessing markets, financial services, and enhanced actors in financing local services for enhanced quality of agribusiness environments.1 LBDSs encompass training production increasingly appears to be the most sustainable and advisory services, market information services, tech- approach. The primary element for success in establishing nology, and business linkage information (UNDP 2004a). local business development organizations is to base the By improving the efficiency and competitiveness of intervention on local human and financial resources, which agribusinesses in specialized and quality production, agro- means that practitioners must emphasize linking with prod- processing, input use, and produce marketing, LBDSs help uct marketing and processing, creating links with savings to close a critical two-way gap between smallholders and and credit activities, developing cooperatives, and building markets: Small-scale, entrepreneurial farmers need better capacity. links to markets and value chains, while market actors 204 (including small-scale traders, processors, manufacturers, actors in the value chain, including national and interna- and exporters) need sustainable sources of produce from tional exporters.2 The limited individual, organizational, smallholders. Figure 3.1 depicts the roles of LBDSs in rela- and institutional capacity to develop small-scale agribusi- tion to local product value chains. Box 3.13 summarizes nesses locally clearly remains a major constraint to market- the effects of successful LBDSs in Uganda. oriented production. Capacity for providing business services is generally confined to nonprimary production and/or medium-scale enterprises in the private sector in urban areas. In rural INVESTMENT NEEDED areas, the public sector and civil society provide most advi- Different forms of investment can strengthen agribusiness sory services and concentrate on agricultural production. development services catering to diverse groups of farmers In their current form, these advisory services cannot cope and entrepreneurs. These strategies include reforming with farmers’ growing demand for services oriented to public extension systems (building capacity and balancing markets and value chains. Nor can they cope with growing public and private service provision), developing the demands for sustainable sources of produce from other capacity for private LBDSs, and developing agribusiness centers for service provision and learning. In practice, a mix of strategies is usually followed, as in pluralistic exten- Figure 3.1 Roles of Local Agribusiness Development sion systems (TN 1). Services in Relation to Actors in the Agricultural Product Chain and to Support Services Reforming public service providers and offering services through public and private channels Farming Input supply enterprises Public extension systems can respond to demands for local business development through various combinations of Local agribusiness reforms involving capacity building, reorganization, and Trading Financial enterprises development services complementary public, private, and nongovernmental ser- services vice provision. Some public systems strengthen competen- Processing cies in business development by reorienting programs and Markets enterprises staff; others choose to recruit personnel with the required skills (usually recent graduates of universities and profes- Sources: Adapted from Wilk and Fensterseifer 2003; Roduner 2007; NAADS 2010 (unpublished); and KIT and IIRR 2010. sional training institutes). Mozambique strengthened capacity to provide more market-oriented, demand-driven services by outsourcing some services to large-scale farm- ers, companies, and NGOs (see box 3.12 in TN 1) and Box 3.13 Effects of Local Business Development involving more smallholders in Farm Business Schools and Services for Farmers in Uganda in developing business plans. At the district level, Mozambique organized farmer-promoters to supply advisory services and inputs (box 3.14). In Ethiopia and In Uganda, local business development services Uganda, business services were provided by cooperative were identified as offering the key support unions to primary cooperatives (see http://apf-ethiopia required to prepare business appraisals, develop .ning.com/page/business-development and http://apf- marketing plans, apply for bank credit, and uganda.ning.com/page/farmers-organisations). Some busi- obtain advice on financial and legal matters. ness development services are simply unavailable from Farmers’ demand for these services widened the public advisory system and need to be outsourced to the involvement of private agricultural service the private sector or civil society, as with NAADS in providers in helping farmers with market- oriented production. Uganda (box 3.15) (Friis-Hansen and Aben 2010; van Weperen 2011). Sources: NAADS 2010 (unpublished); Friis-Hansen and Some countries leave the provision of business develop- Aben 2010. ment services solely to private entities such as produce boards (for any number of commodities, such as cotton, MODULE 3: THEMATIC NOTE 2: FARMING AS A BUSINESS AND THE NEED FOR LOCAL (AGRI-) BUSINESS DEVELOPMENT SERVICES 205 coffee, and cashews) or value chains with their own brands Box 3.14 Farmer Agribusiness Promoters (box 3.16). The risk is that services geared to the demands in Mozambique from particular subsectors or value chains will exclude many small-scale farmers and entrepreneurs. One possi- Owing to major public and international NGO bility is to provide startup capital for private providers of investments in agribusiness at the district level in business development services at the local level, based on Mozambique, farmers’ demand to become more business plans and matching funds, and at the same time market-oriented has grown rapidly. Because only a offer incentives for current public and private business ser- limited number of public extension workers could vice providers to meet the needs of small-scale entrepre- meet that demand, District Services for Economic neurs rather than focusing exclusively on medium-scale Activities (SDAE, Serviço Distrital de Actividades operations, as done in Mozambique.3 Económicas) involved large numbers of farmer- An important aspect of these various innovations in promoters in different advisory services. Farmer offering LBDSs is that public advisory systems need mech- promoters are involved in small-scale input supply anisms to capture and share the lessons emerging from and related advisory services, such as cashew spraying, chicken vaccination, groundnut pest them. They must open up and develop alliances and net- control, and similar activities. Smallholders with works for learning and interaction between different actors knowledge related to market access increasingly from different value chains and services, especially through participate in the development of smallholder partnerships, multistakeholder platforms, and networks business plans, as pioneered by NGOs in various (www.kit.nl; http://www.delicious.com/tag/apf_ethiopia). Local Economic Development Projects. The Farmer Field School (FFS) program, in which farmers serve as facilitators, has been expanded to Developing private capacity to deliver all provinces. The Field School approach is also local business services used widely for enhancing market-oriented farm Service providers’ skills can be strengthened through a series management in Farm Business Schools. of related investments at different levels. Often an initial Sources: DNEA 2007; Kahan 2007, 90–92. step is to develop the capacity of existing, often urban- based private organizations to work in rural areas with Box 3.15 Developing Small-Scale Agribusinesses in Uganda: Strategies and Outcomes The National Agricultural Advisory Services (NAADS) As a result of these efforts, more small-scale com- program sought to enhance small-scale entrepreneur- mercial farmers started to emerge, and their produc- ship through efforts to develop value chains and widen tion rose to such an extent that more organized mar- access to market-oriented production services. Since keting and agroprocessing facilities were needed. The 2002, NAADS have made considerable progress. About private enterprises and private service providers 50 enterprises have been selected for development and emerging to support this growth still require capacity promotion, more than 45,000 farmer groups were building and enabling policies to sustain their devel- engaged in market-oriented enterprise development opment. Other challenges remain in scaling up the and promotion, and 200 higher-level farmer organiza- successful aspects of NAADS. Access to credit and tions were established. Public-private partnerships inputs can be problematic, and farmers’ empowerment were formed to support a substantial number of out- in value chains is still limited by a lack of capacity, grower schemes involving “nucleus� farmers. The information asymmetries, poor links among key play- nucleus farmer strategy encourages small-scale farmers ers along the value chain, and markets characterized by to increase their market orientation by providing low activity, low volumes, and other symptoms of poor value-adding and agroprocessing facilities as well as competitiveness. Additional public investment is links to markets. needed to complement the efforts of the private sector in developing agribusinesses at the smallholder level. Sources: Authors; Benin et al. 2007; Friis-Hansen and Aben 2010. 206 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 3.16 KILICAFE, a Local Agribusiness Service Provider in Tanzania KILICAFE is the name of a brand and farmer organiza- KILICAFE provides technical advisory services and tion for specialty Kilimanjaro coffee. The smallholders training, such as training farmers in production meth- who are members of KILICAFE have come to play a ods to improve the quality of their product, training in major role in interactions with agricultural service central pulping unit operations, and training in busi- providers, including providers of research, advisory, ness management. These services are provided at the financial, and input services. Aside from linking pro- Farmer Business Group level through seminars that are ducers to markets, traders, and millers, KILICAFE pro- open to all members. In addition, leadership training vides a range of services to its members. At the Farmer is conducted at the chapter level for all Farmer Business Business Group level, KILICAFE provides pulping ser- Group Management Committee members (chairper- vices; at the chapter level, it works to strengthen Farmer sons, secretaries, and treasurers). This leadership train- Business Groups; and at the national level, it offers ing empowers smallholder farmers to own fixed assets, marketing and financial services. Services include which can be used as collateral for bank loans. KILI- credit links and financial management of loans for CAFE also provides communication services such as a working capital and for establishing central pulping quarterly newsletter, radio broadcasts, and website units. KILICAFE sources financing from donors and/or (www.kilicafe.com), all containing information on cof- financial institutes to purchase central pulping units fee price trends, a farm activities calendar, association and issues repayments from coffee sales to the Farmer events and activities, and new developments. Business Group on four-year term loans. Input credits Farmer Business Group members also demand are organized at the chapter level, where each chapter other services from KILICAFE, such as supplying Annual General Meeting sets limits on how much to agricultural inputs well in advance. Some groups want spend on inputs per kilogram. These credits are not KILICAFE to clearly specify coffee processing quality cash loans but guarantees to input suppliers for future standards and ensure adherence by all Farmer Busi- payments. Marketing is done by sending green coffee ness Groups. To achieve uniform quality and obtain samples to the Coffee Board (for buyers at local auc- premium coffee prices, producers need to use only rec- tions) and shipping samples directly to overseas coffee ommended technologies, although low prices also influ- roasters (for direct exports). ence the adherence to quality-enhancing standards. Source: Wennink, Nederlof, and Heemskerk 2007. entrepreneurial smallholders (TN 4). Another important institutes, and vocational training institutes need support to building block is to strengthen the capacity of private busi- update their curricula to reflect the growing demand for ness development service providers in rural areas to support capacity in agribusiness, marketing, and entrepreneurial local development of basic farm business plans, market skills. A vital part of curriculum change is for these institu- studies, and feasibility studies (DNEA 2007). Comple- tions to develop the capacity to train, coach, and support mentary investments involve developing multistakeholder local providers of agribusiness development services (see innovation platforms or networks to assemble all actors in a http://ruforuminnovationsproject.blogspot.com). One such particular value chain at the local level (to initiate collective initiative is Business Minds Africa: Professionals for Agri- action for local business development) and at the national cultural Entrepreneurship in East-Africa (http://www level (primarily for advocacy). Investments in Farm Busi- .businessmindsafrica.org), a partnership between East ness Schools, such as those implemented through FAO African Universities, RUFORUM (see module 2), Interna- in Botswana, Kenya, Malawi, Nigeria, and Zambia, will tional Institute of Rural Reconstruction (IIRR), the Royal assist farmers in expressing demand for LBDSs (Kahan Tropical Institute, and Van Hall Larenstein University of 2007:90–92; Malindi 2011). Finally, management capacity Applied Sciences, Wageningen. will be needed at the district or local government level to match the demand and supply of LBDSs (TN 1) in addition Business development service centers to registering, supervising, and evaluating them. The source of human resources to provide LBDSs Another potential area for investment is to provide services must not be neglected. Universities, professional education through a “one-stop shop� mechanism, in which any MODULE 3: THEMATIC NOTE 2: FARMING AS A BUSINESS AND THE NEED FOR LOCAL (AGRI-) BUSINESS DEVELOPMENT SERVICES 207 number of services (technological, business development, POTENTIAL BENEFITS financial, and input supply, for example) are offered in a The potential benefits of LBDSs for smallholder farmers central location. These services centers can have additional include increased entrepreneurial knowledge, better market objectives of learning and training and are mostly run linkages, enhanced access to credit, and better marketing through public-private partnerships. Examples include opportunities. Smallholders have expressed this demand and agribusiness centers (box 3.17), agribusiness incubators, given the opportunity will refocus extension on these more and local economic development agencies, all of which market- and value chain-oriented agricultural advisory ser- could be designed to provide integrated LBDSs for small- vices (Webber and Labaste 2010; Friis-Hansen and Aben scale farmer entrepreneurs. Services could include starting 2010; KIT, Faida Mali, and IIRR 2006). Services to develop and registering a business, farm business planning, access to local farming businesses provide support to producers, finance, training, and technical advice. Agribusiness incuba- traders, processors, and other actors farther along the value tor programs support emerging small-scale farm businesses chain. Each group has different needs and requires different and build capacity through learning by doing (box 3.18; funding arrangements, which can be local, regional, or see also TN 3 in module 5). Local economic development national. Service providers can also support the development agencies, funded by the public sector, foster public-private of local economic development plans and strategies. Antici- partnerships at the local level (examples have been docu- pated impacts among smaller-scale farmers and entrepre- mented in Mozambique; see UNCDF 2009). neurs include enhanced rural income (both directly and Investments are also needed at a higher level for mentor- through employment) through enhanced small-scale entre- ing and coaching these services. As part of public invest- preneurial activity, based on the use of local resources and ment programs, national capacity should be developed for competitiveness (Webber and Labaste 2010). supporting business development services at the district level, with the aim of establishing and strengthening private POLICY ISSUES local providers (boxes 3.14 and 3.18). In Mali (box 3.18) and Mozambique (Eduardo Mondlane University’s Sustainable LBDSs, public as well as private, need an enabling envi- Trade Academy in Chibuto), an agribusiness incubator con- ronment to make an impact. Wherever options and oppor- cept was also used to improve university graduates’ capacity tunities exist with respect to financial services, and wherever in small-scale enterprise development. markets and market infrastructure exist and function Box 3.17 Casas Agrárias in Mozambique: Lessons from One-Stop Agribusiness Centers Around the town of Lichinga in Mozambique’s Niassa (four to five) from public or nongovernmental agencies, Province, farmer associations established Casas Agrárias trained in input and output marketing. Important with support from OIKOS (a Portuguese NGO) and lessons from the Casas Agrárias are that investment in Estamos (a local NGO). Casas Agrárias are agribusiness these centers must focus on developing capacity centers for marketing crops—for example, they can among at least four to five people for each center to offer temporary storage and processing facilities—and maintain its services, training staff and farmers facilitating access to credit, inputs, and agricultural in agribusiness management, and offering specialized advice. The centers’ processing activities include milling training in storage and input supply for farmers maize, processing rice, and extracting vegetable oil from and cooperatives. Another lesson is that Casas groundnuts and sunflowers. The Casas Agrárias are spe- Agrárias need to become sustainable and autonomous. cial entry points for supporting public-private partner- As soon as possible, they must be handed over to ships, developing capacity in farmers’ cooperatives, farmer cooperatives and unions to operate, supported and involving national and provincial farmer organiza- with adequate financial and administrative manage- tions. Farmer management committees manage these ment training, and linked with district savings centers, which have a limited number of extension staff schemes. Source: Authors. 208 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 3.18 The Cheetah Network Integrates Agricultural Education and Business Incubation in Mali Business incubators are programs designed to accelerate develop more skills and change mindsets related to the successful development of entrepreneurial activities promoting small-scale agribusiness in Mali and the through an array of business support resources and United States. services, developed and orchestrated by incubator man- The Cheetah Network supported male and female agement and offered both in the incubator and through graduate students from the agricultural university in its network of contacts. Incubators vary in the way creating a number of entrepreneurial incubators they deliver their services, in their organizational struc- (essentially, small clusters of small-scale enterprises ture, and in the types of clients they serve (see module 5, focused on a similar goal). One cluster involved a TN 3). women’s cooperative in Zantiebougou focused on Mali’s national agricultural research organization producing, processing, and storing shea butter for (Institut d’Economie Rurale, IER), national agricul- export and on developing a high-quality market tural university (Institut Polytechnique Rural de for its products in the United States and Canada. Formation et de Recherche Appliquée, IPR/IFRA), Another cluster involved the production of certified United States universities, and small-scale subsistence seed potatoes in Borko and Gao for regional export. farmers formed an alliance to develop the Mali The entrepreneurial incubators have strong elements Agribusiness Incubator Network (“Cheetah Network�). of learning for farmers as well as graduate students Through its business incubators, the network identifies and staff. They aim at institutional sustainability and assists entrepreneurs in efforts related to agricul- through their links with research and the university ture. The alliance led university staff and graduates and at financial sustainability through the introduc- to review and revise course curricula significantly to tion of fee-for-service systems. Source: USAID 2009. properly, LBDSs can be appropriate. National policies and ■ Local governance. Local governance influences the local local government regulations (for example, those governing development context (including prevailing policies), input supply and marketing) must foster the development which influences investments in developing private of entrepreneurship by ensuring a level playing field, and agribusiness services (Friis-Hansen and Aben 2010). public agencies must not interfere in input and output mar- Elements of the local development context that influence kets. Additional policy issues for LBDSs include: LBDSs include: (1) the emphasis on local public-pri- vate partnerships, (2) synergy between local economic ■ Social targeting. Small-scale agribusiness entrepreneurs development programs oriented to value chains and often constitute only 1–2 percent of rural households, yet livelihood systems, (3) the involvement of farmer organ- emerging small-scale entrepreneurs may constitute up to izations; and (4) local capacity to manage multistake- 25 percent. Another large category of households has holder platforms, networks, and interaction between limited capacity for risk, focuses on food security, and service providers (TN 1). relies on multiple income sources (remittances, local ■ Public and private sector roles. Policies influence agricultural labor, petty trading, and others). Policies whether and how interaction between value chain actors that support efforts by these groups to organize—in and private supporting services are brokered by public cooperative enterprises, outgrower schemes, contract agencies, locally and nationally (Webber and Labaste farming, and farmer shareholding in marketing and pro- 2010). Locally, the public sector is more prominent in cessing enterprises—make it easier to address their var- empowering farmers through local economic develop- ied entrepreneurial capacities and level the playing field. ment, whereas the private sector often predominates in Close attention should also be given to the implications value chain development. These roles need to become of gender in value chain development and agribusiness synergetic for value chain integration (KIT, Faida Mali, development services.4 and IIRR 2006). Three additional considerations affect MODULE 3: THEMATIC NOTE 2: FARMING AS A BUSINESS AND THE NEED FOR LOCAL (AGRI-) BUSINESS DEVELOPMENT SERVICES 209 public and private sector roles in LBDSs. First, LBDSs ■ Sustaining local service provision. For LBDSs to be sus- facilitate integration between farmers and others in the tainable, they must be supported by the value chain value chain, increasing the likelihood that value chain actors or customers involved (see module 5). In the tran- partners will provide financial services for farmers (KIT sition to more value chain- and market-oriented produc- and IIRR 2010). Second, private LBDSs tend to have tion, however, the public sector has a role in providing greater capacity for facilitating access to financial ser- services, especially to smallholders who cannot afford vices. Third, public support is needed to develop the them at first. Farmers indirectly finance services for capacities of service providers, coordinate local traditional export commodities and are beginning to do providers, empower farmers, and provide professional so in emerging value chains (IAP 3 gives other examples and vocational training in business development.5 of embedded services).6 Some national programs ■ Local entrepreneurs and environmental services. LBDSs have partial fee-based systems for delivering LBDSs, can support smallholders in identifying incentives for including Uganda (for NAADS; see box 3.7 in the mod- sustainable production, coping with the effects of climate ule overview) and Azerbaijan (Lamers et al. 2008). change, supplying green services (to enhance farmers’ ecosystems or sustain the environment), and addressing LESSONS LEARNED demands from specific value chains (organic food). Incentives can include sharing in the profits from As the examples in this note indicate, much of the experience forestry concessions, hunting licenses, and carbon emis- in providing LBDSs to small-scale farmers, cooperatives, and sion rights; premium prices for certified organic pro- other agricultural entrepreneurs has been gained through duce; or agronomic strategies promoted by the public pilot projects funded by donors and NGOs. National pro- sector to prevent soil nutrient mining (Odada et al. 2008; grams for advisory services, such as those in Tanzania, Pyburn, van der Lee, and ter Heegde 2011; box 3.19). Mozambique, and Uganda, have started to incorporate these Box 3.19 A Successful Business Model for Mozambique’s Farmers to Provide Environmental Services With the support of a specialized service provider, and the fires that they prevent. For example, Felicio Envirotrade, a prize-winning community project in Lucas Melo, 33, has two plots that can sequester over Mozambique developed a successful business model for 55 tons of CO2 per year, earning him US$244 in direct the sale of carbon offsets to support the conservation of payments and an additional US$25 that is paid into the forests and the planting of new ones. The scheme, one community carbon fund, which is used for improve- of three winners of an international climate grant com- ments to schools, clinics, and wells. petition, is being rolled out to other environmentally Envirotrade is a Mauritius-based company with sensitive sites in Africa.a Sustainable farming practices offices in both the United Kingdom and South Africa introduced as part of the Nhambita Community Car- and project operations in Mozambique. Its business bon Project increased cashew and fruit yields and model is not a substitute for resolute international improved livelihoods for about 1,300 families. Since its action to address the issues associated with human- launch six years ago, the initiative, based in the buffer induced climate change, but it offers a means for con- zone of the Gorongosa National Park, has traded more cerned businesses and individuals to link with forest than 120,000 tons of CO2, earning the community over farmers in developing countries to change how natural US$1 million. Participants are paid for carbon stored resources are used and reduce harmful environmental by the trees they plant, the forests that they manage, impacts. Source: “Cash from Carbon,� Spore (143) October 2009, http://spore.cta.int/index.php?option=com_content&task=view& lang=en&id=1016&catid=7, accessed July 2011. a. Another green community program, the Kakamega Forest Again Project in Kenya, also won the top US$35,000 prize in the contest, organized by Hyundai Motor America and Carbonfund.org, in conjunction with the Climate, Community, and Biodi- versity Alliance. 210 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK experiences in the drive toward more value chain- and profitably; postharvest handling; and improving market market-oriented agricultural advisory programs and systems arrangements (KIT, Faida Mali, and IIRR 2006). (van Weperen 2011). Demand from farmers and their organ- Farmer organizations have an important role to play in izations for high-quality business development services at articulating demands related to local economic develop- the local level is burgeoning. Confirmation of this demand ment plans and in lobbying for the right type of services. emerged in an analysis by the AgriProfocus country focus They also have a central role in ensuring that services program with farmer organizations and their supporting remain oriented to their demands and in providing some agencies in Ethiopia, Kenya, Mozambique, Niger, Rwanda, services themselves (boxes 3.14–3.16). Higher-level farmer Uganda, and Zambia.7 Many countries have sought to meet organizations are needed to influence the agribusiness con- the demand for local business services through an increasing text and interact with actors farther along the value chain. emphasis on local economic development planning at the district level, with the involvement of key local stakeholders in the public and private sector (see http://go.worldbank Building agribusiness service capacity .org/EA784ZB3F0). It is clear, however, that demand for An analysis of the capacity development context for busi- LBDSs cannot be met by public service providers unless they ness services is key. Often the capacity to strengthen receive adequate public funding. providers of agribusiness services to smallholders does not Based on the large number of pilots to date, a number exist. Nor is there capacity at the district level to manage of lessons have emerged for practitioners. The lessons are local public-private partnerships to provide such services. grouped around key issues: (1) creating awareness; The capacity gaps are particularly wide among local service (2) building agribusiness service capacity; (3) implementa- providers and in the capacity available to develop, mentor, tion; (4) and developing dedicated agribusiness service and coach these providers, leading to a need for capacity organizations. development at the individual, organizational, and institu- tional levels. National universities and business schools still aim to Creating awareness and enhancing produce civil servants rather than self-employed service demand articulation providers. Aside from skill development, a special challenge At the start of a program for LBDSs, the level of commer- for these institutions is to develop an entrepreneurial cialization of smallholder agriculture and the correspon- mindset in public and private service delivery. Interaction ding demand for different types of service providers must between course programs and the professional sector is be analyzed. Demand is strongly determined by the eco- needed for curriculum improvement based on demand (see nomic, regulatory, and service context (Jaleta, Gebremedhin, module 2 and Spielman et al. 2008). and Hoekstra 2009). The development of private providers of local agribusi- An inventory of available local agribusiness service ness services for smallholders also requires public invest- providers at different levels and by sector (public, private, ments, preferably through training and matching grants/ NGO, and civil society) can avoid duplication and con- credits for starting small-scale agribusiness services based tribute to synergy based on public-private partnership. This on a business plan. kind of inventory is often the basis for a local farmer entre- Different types of agribusiness development services are preneur development strategy, as part of a local economic needed for different types of entrepreneurs and farmers. development strategy. These services will often be specific to certain value chains Farm Business Schools and cooperatives have an impor- or even to different levels of a given value chain. Many pro- tant learning role in promoting entrepreneurship among grams developed to offer small-scale agribusiness services farmers, but initially they require external facilitation. Farm have realized that working with smallholders to strengthen Business Schools facilitate learning about production, man- agribusiness management, business plan development, and agement, business finance, and marketing. Useful tools have other elements of agricultural enterprises requires a been developed for this purpose by FAO (Dixie 2005) and process approach. Programs often begin by working with the Swiss Agency for Development and Cooperation (SDC) existing associations and individuals, some of which, (Poitevin and Hossein 2006), including modules on under- through coaching and facilitation over time (often two standing the market; supply and demand; helping farmers years), develop and graduate into small-scale entrepreneurs decide what to do; producing for the market; producing and enterprise cooperatives. A typical process like this in MODULE 3: THEMATIC NOTE 2: FARMING AS A BUSINESS AND THE NEED FOR LOCAL (AGRI-) BUSINESS DEVELOPMENT SERVICES 211 Mozambique cost US$300 to move a loosely formed asso- that the innovation required for farmers to improve the ciation through seven steps to become a registered, market- quality of their produce cannot be sustained by farmer oriented cooperative qualified to obtain financial services. organizations without proper incentives or premiums (box 3.16). Implementing business development services at the local level Developing dedicated agribusiness service organizations Business development is about chain development, facili- tated by chain mapping and assessment (market orienta- The primary element for success in establishing local busi- tion and risk assessment; local versus international mar- ness development centers is to base the intervention on local kets; fostering an enabling business environment); chain human and financial resources, which means that practi- engagement (developing a vision; building trust); chain tioners must emphasize linking with product marketing and development (participatory approach and ownership; processing, creating links with savings and credit activities, addressing risks and savings; engineering an organizational developing cooperatives, and building capacity. More development program; promoting entrepreneurial atti- specifically (see the discussion of incubators in module 5): tudes); chain monitoring and evaluation; and chain learn- ing and innovation (KIT, Faida Mali, and IIRR 2006, Web- ■ An agribusiness center requires a critical mass of staff ber and Labaste 2010). trained in agribusiness management (at least four or five Services to develop small-scale farming businesses have a people) to maintain its services. Ideally it is governed central role in facilitating access to input and financial ser- with involvement from the private sector, but for small- vices, but they have no role in directly supplying inputs and holder producers it is often also supported by the public rural finance, which occurs in embedded services (IAP 3 sector. Centers require adequate links with market actors, and Roduner 2007). A distinction must be made between input suppliers, and financial services, including local business development services and financial services. The credit and savings schemes. public sector has a role in providing LBDSs to smallholders ■ Incubators can incorporate an element of capacity build- but not in directly providing financial services. ing for more business-minded and market-oriented ser- Who pays for LBDSs remains a major dilemma. If vice providers through interactions with universities or agribusiness services are fully subsidized, the services business schools. This interaction builds capacity in the provided may not genuinely arise from agribusiness staff of the business development center, builds capacity demands, private services may be crowded out, and the in the students involved in the work, and influences the financial sustainability of the services will remain uncer- content of the related academic programs. tain. If services are to be fully supported by the demand, ■ Through training in financial and administrative man- larger enterprises may be able to pay, but others may be agement, centers must become autonomous as soon as excluded. Involving other value chain actors in financing possible and handed over to farmer organizations (local local services for enhanced quality of production increas- and national) and/or the private sector. ingly appears to be the most sustainable approach (KIT and IIRR 2010). All programs directed at developing local agribusiness To be scaled up, successful models of agribusiness services must give considerable attention to fostering a development require a systems approach that pays atten- long-term commitment to building these institutions in a tion to access to credit, access to high-quality inputs, the stable policy environment as well to strategies that will development of farmers’ capacity, and the formation of ensure financial sustainability, based on cost sharing for the public-private partnerships (box 3.15). A final lesson is services that are delivered (World Bank 2010). 212 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK T H E M AT I C N O T E 3 Extension-Plus: New Roles for Extension and Advisory Services Rasheed Sulaiman V, Centre for Research on Innovation and Science Policy (CRISP) SYNOPSIS There is an increasing realization that new extension approaches need to emerge locally, based on experimenta- Extension-plus� is a framework for investment in “ strengthening and reforming extension to be a strong partner and nodal agency within the AIS, providing technological and nontechnological services to farmers. The tion, learning, and adaptation to prevailing circumstances. The need for extension to partner with other organizations and individuals with varied skills and competencies to pro- vide integrated support (technical, organizational, market- larger goal of investments in extension-plus is to strengthen ing) to producers is also apparent. A number of examples the capacity of extension and advisory services to play a emerging in the public and the private sectors illustrate how much wider role (a bridging role) and at the same time the conventional technology transfer role of extension is enhance the ability of other actors in the AIS to support being expanded to improve its relevance to contemporary producers in an integrated way. All current extension-plus agricultural and rural development (Sulaiman and Hall arrangements have emerged from small pilot efforts that 2004a, 2004b). Many of these examples appear to demon- have expanded their scope and service provision based on strate the value of an expanded mode of extension referred experimentation, learning, and adaptation to local circum- to as “extension-plus� and provide important guidelines on stances over time. Investments should focus on encouraging design and implementation of new investments. and enabling staff capacity to initiate small experimental Extension-plus is a framework for investment in strength- projects in partnership with other organizations. Promoting ening and reforming extension to be a strong partner in the vision of extension-plus will prove challenging among the AIS. It is especially relevant in the context of reforming public extension organizations unless reforms target the public extension organizations in developing countries, macro-institutional and policy context in which extension is where extension is struggling to find a relevant role to deal practiced. Extension-plus can flourish only in organiza- with contemporary rural and agricultural development tional settings that have a culture of experimentation and challenges. The key elements of extension-plus are: learning. For cultural change in this direction to occur, it must be supported and legitimized unambiguously at the ■ A broad scope of service provision (beyond technology most senior levels of the extension service and allied organ- transfer). izations. Before designing the program and operational ■ The extensive use of partnerships to fulfill an expanded strategy for investment, it is advisable to undertake an insti- mandate. tutional diagnosis to understand the range of organizations ■ A learning-based approach. within the AIS, their expertise and activities, and their pat- ■ Negotiations with a wide range of stakeholders for devel- terns of interaction. The scope of the specific extension oping workable and effective service arrangements. investment and the priorities will vary in relation to the ■ An institutional mechanism to represent clients’ interests national, district, and local situations. at the management level, so the program remains accountable to its clients. BACKGROUND AND CONTEXT FOR INVESTMENT The larger goal of investments in extension-plus is to The limitations of a single model of extension and advisory strengthen the capacity of extension and advisory services services for all kinds of situations are now well recognized. to play a much wider role (a bridging role) and at the same 213 Table 3.5 Shifting Extension to Extension-Plus Aspect of extension Shifts from: Shifts to: Form/content of extension Technology dissemination Supporting rural livelihoods Improving farm productivity Improving farm and nonfarm income Forming farmer groups Building independent, farmer-operated organizations Providing services Enabling farmers to access services from other agencies Market information Market development Monitoring and evaluation Input and output targets Learning Planning and implementation strategy Doing it alone Through partnerships Sources of innovation in extension Centrally generated blueprints Locally evolved (through ensuring right kind of support for for wider implementation local experimentation), with diverse approaches and multiple partners Role of technical research Technology development Source of technical expertise and supporting adaptive research Approaches Fixed/uniform Evolving/diverse Capacity development of staff Training Learning by doing, facilitated experimentation Capacity development of extension Personnel and infrastructure Development of linkages and networks system Policy approach Prescriptive/blueprints Facilitating evolution of locally relevant approaches Introducing new working practices Staff training Changing organizational culture through action learning Underpinning paradigm Transfer of technology Innovation systems Source: Sulaiman and Hall 2004a. time enhance the ability of other actors in the AIS to sup- 3.20 provides three examples—two from India and one port producers in an integrated way. Table 3.5 describes key from Bangladesh—of initiatives that served as nodes linking shifts needed to operationalize extension-plus. producers to technology and nontechnology services, including marketing. Each initiative supported the devel- opment of user groups that became the basic units for INVESTMENT NEEDED implementing programs. For example, in India’s Kerala The most innovative investment element of this approach is State, where smallholder and marginal farmers dominate the explicit acknowledgment that investment should be agricultural production, almost 93 percent of land holdings concerned with creating or enhancing the capacity of the are marginal (less than 1 hectare), and about 5 percent are current innovation system for interaction and coordinated small (1–2 hectares). Kerala imports around 80 percent action, so that the producers receive a wider range of sup- of its fruit and vegetable requirements, primarily from port and services. Extension organizations traditionally neighboring states. In view of this dependency, the larger have some capacity for interaction with research. In this objective of the program described in box 3.20 was to case, however, extension has to widen its networks to develop a replicable model for horticultural development connect producers with different sets of service providers. to diversify agriculture. The model, piloted in seven dis- This means that extension should partner with a number tricts, was scaled up to cover all districts in the state after of different agencies and develop specific arrangements in donor funding ended. line with local circumstances. Investments should focus In the second example in box 3.20, BRAC (an inter- on encouraging and enabling staff capacity to initiate small national NGO) shifted from community development in experimental projects in partnership with other organi- Bangladesh toward a more targeted approach based on vil- zations. By facilitating small projects experimentally and lage organizations in 1977. Currently BRAC’s operations assisting staff to reflect on their meaning and outcomes, reach about two-thirds of the population of Bangladesh. these investments will build skills related to experimen- BRAC’s outreach covers all 64 districts and 78 percent of tation and learning. Table 3.6 summarizes the kinds of villages in Bangladesh. Eighty percent of its funds are inter- investments needed under extension-plus. nally generated. All current extension-plus arrangements have emerged In the second example from India in box 3.20, a program from small pilot efforts that have expanded their scope and to foster horticultural production in South Gujarat service provision based on experimentation, learning, and expanded from 44 families in 1982 to more than 23,000 adaptation to local circumstances over a period of time. Box families in 2010. Most activities are now managed by 214 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 3.6 Investments Needed under an Extension-Plus Scenario Major investment areas Purpose Pre-project phase – Analyze past and ongoing interventions by different agencies. – Institutional diagnosis to understand the patterns of interaction among the different agencies and the institutional and policy environment. – Understand demand for support. – Develop a shared vision of objectives and potential approaches and identify potential partners. Institutional and human – Place staff with diverse expertise (networking, technical knowledge, organizational development, market/ capacity strengthening business development, credit and financial operations). – Develop a new organizational culture that focuses on experimentation, openness to new ideas, reporting and learning from mistakes, regular staff reflection, incentives for good performance, and guidelines for staff assessment. – Encourage appropriate institutional changes to enhance the organization’s ability to act as a nodal agency, capable of brokering relations with other actors, by broadening its mandate and using partnership and learning as the key operational strategies. Technical support – Address the current weaknesses in technology use and find opportunities to bring in new technologies for production, postharvest handling, value addition, and export through contract research, recruitment or secondment of technical specialists in the program, or bringing experts on short consultancy assignments. Credit and financial – Identify the current bottlenecks related to the availability of credit at reasonable rates and address them. support This process might include bringing the credit issue to the right policy actors and negotiating with financial institutions. Organizational – Organize producers to enhance their capacity to deal with different agencies, work collectively, and development evolve new governance arrangements (see module 4, TN 5, on organizational change). Market development – Improve farmers’ ability to negotiate and receive a fair price for their produce. This process would involve strengthening the existing value chains, developing more equitable institutions related to procurement and pricing, and, at times, creating new value chains by linking producers to new markets. Source: Author. Box 3.20 Extension-Plus: Examples from the Field Kerala Horticultural Development Programme, India. it ended in December 2001, KHDP reinvented itself Conceived in 1992, the Kerala Horticultural Develop- as the Vegetable and Fruit Promotion Council, Kerala ment Programme (KHDP) aimed to improve the cir- (VFPCK, www.vfpck.org), a company in which 50 per- cumstances of Kerala’s fruit and vegetable farmers by cent of the shares are held by producer groups. Since increasing and stabilizing their incomes, reducing pro- then, VFPCK has expanded its activities, coverage, duction costs, and improving the marketing system. and funding sources, obtaining some funds from gov- The KHDP worked with fruit and vegetable farmers to ernment programs. All programs related to fruit and promote self-help groups. It trained three farmers from vegetable promotion are undertaken through VFPCK, each group to become master farmers who could deal whose approach was eventually extended to all districts with production, credit, and marketing. It promoted in Kerala. The company directly reaches more than the concept of credit to farmers who leased land, pro- 132,000 vegetable and fruit farmers in Kerala. moted group marketing, and established modern seed BRAC’s Economic Development Programme. The processing and fruit processing plants. To generate and Economic Development Programme of BRAC (an access locally relevant technical knowledge, KHDP international NGO that originated as the Bangladesh entered into contract research with the local agricul- Rural Advancement Committee) is the cornerstone for tural university and strengthened the skills of farmers all of BRAC’s development work in Bangladesh. The in participatory technology development. The total Development Programme covers microfinance, insti- outlay for KHDP was €36.76 million, of which the tution building, income-generating activities, and European Commission contributed 78 percent and the program support enterprises (such as seed production, state government contributed the remainder. Though disease diagnostic labs, and produce processing and (Box continues on the following page) MODULE 3: THEMATIC NOTE 3: EXTENSION-PLUS: NEW ROLES FOR EXTENSION AND ADVISORY SERVICES 215 Box 3.20 Extension-Plus: Examples from the Field (continued) marketing). While BRAC believes that microfinance is Foundation, works in 200 tribal villages in Valsad, necessary to break the cycle of poverty, it places equal Navsari, and Dangs Districts of South Gujarat. importance on microenterprise development services DHRUVA’s Wadi Programme, which facilitated the to maximize the return obtained by the poor. Unlike establishment of fruit orchards (wadis) on land belong- standard business development programs, which offer ing to poor tribal families, started with 44 wadis in some mix of generic training and marketing services, 1982. Village-level peoples’ organizations have been BRAC has developed an integrated, sector-specific pivotal in implementing the Wadi Programme’s activi- approach to enterprise development for the poor. ties. The organization encouraged the formation of a BRAC has identified six sectors in which large numbers cooperative for wadi farmers in the Vansda area to help of low-income women can be productively engaged at them market their produce collectively. Produce from or near their homes: poultry, livestock, fisheries, seri- cashew and mango trees is sold to the cooperatives, culture, agriculture, and social forestry. For each of which in turn sell them to the apex cooperative. these sectors, BRAC has developed a set of services that DHRUVA helped the cooperative design appropriate comprises training in improved technologies, ongoing systems to preserve and process horticultural produce supply of technical assistance and inputs, monitoring (including cashews, mango pickles, jams, and jellies) and problem solving as needed, and marketing of and access local and urban markets under its Vrindavan finished goods. BRAC evolved this model through brand name. Today, over 23,000 families from 400 vil- continuous iteration and experimental learning. This lages have adapted the wadi model. Huge tracts of program has so far organized 8.45 million poor and wasteland have been converted into orchards, which landless people into 284,825 village organizations, have contributed to improved livelihoods and the which are the basic units of the program. regeneration of natural resources. The project received The Wadi Programme of Dharampur Uththan funding from donors (including KfW) as well as Vahini, India. Dharampur Uththan Vahini (DHRUVA, government support for rural employment, tribal “Vanguard of Awakening in Dharampur�), an associate development, and funds from the National Bank for organization of the BAIF Development and Research Agriculture and Rural Development. Sources: Bhamoria 2004; VFPCK 2009; BRAC 2010; DHRUVA 2010. producer cooperatives and village organizations, with only POLICY ISSUES marginal support from the NGO that initiated the program. Promoting the vision of extension-plus will prove chal- The initiative has been acclaimed worldwide as a sustainable lenging among public extension organizations unless the and replicable model for alleviating poverty. reforms target elements of the macro-institutional and policy context in which extension is practiced. Extension- plus can flourish only in organizational settings that have POTENTIAL BENEFITS a culture of experimentation and learning. For cultural A potential benefit of investing in extension-plus is the change in this direction to occur, it must be supported and development of a sustained capacity for innovation. For legitimized wholeheartedly and unambiguously at the instance, the most important contribution of the invest- most senior levels of the extension service and allied ments in KHDP, BRAC, and DHRUVA has been the devel- organizations. opment of a capacity for continuous innovation even after the end of external funding. Many externally funded Institutional issues projects fail to deliver once funding ends because they fail to develop the capacity to keep innovating. Box 3.21 As indicated, some of the underlying “institutions� (norms, summarizes the impact of some good practices from values, routines, and attitudes) that govern or shape KHDP/VFPCK. Table 3.7 lists some of the indicators that extension in its current form constrain the adoption of could be used to evaluate an extension-plus approach. extension-plus. For instance, many countries continue to 216 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 3.21 Good Practices and Their Impacts for Kerala’s Fruit and Vegetable Farmers The good practices followed by KHDP and its succes- US$20 million. The council supports these commit- sor organization, VFPCK, produced a number of tees with infrastructure on a limited scale. impacts: ■ Through its modern seed-processing plant, VFPCK produced more than 38 tons of seed for 19 vegetable ■ The program promoted the concept of organizing varieties in 2008–09, thereby contributing 50 per- self-help groups of vegetable and fruit farmers and cent of Kerala’s internal seed production. Through training certain farmers from each group in specific participatory technology development trials with skills. VFPCK currently works with about 6,800 self- farmers, the council is promoting the cultivation of help groups, of which 405 are run by women, and vegetables in the cool season. reaches more than 132,000 farmers. ■ The council established a modern fruit-processing ■ By working closely with 11 commercial banks, the factory with farmers as stakeholders. Products from program could help farmers obtain credit for this factory are traded in domestic and international cultivation of leased land. More than US$5.6 mil- markets. lion in credit was distributed in 2008–09, and ■ An external evaluation and impact study of KHDP VFPCK also developed credit-linked insurance by the Xavier Labour Research Institute reported a for farmers. significant increase in area under fruit and vegetables ■ Group marketing was promoted by establishing in 86 percent of the self-help groups and increased markets where farmers could bulk their produce for incomes in 75 percent of the groups. The same study sale to traders and improve their bargaining posi- also reported that the number of farmers receiving tion by obtaining information on market prices credit increased from 21 percent in the pre-KHDP inside and outside Kerala. In 2008–09, more than period to 41 percent by 1999, with an increase in the 200 VFPCK Farmers’ Markets operating across efficiency of loan disbursal and an increase in the size Kerala sold 87,000 tons of produce valued at of the loans. Sources: XLRI 1999; VFPCK 2009. Table 3.7 Indicators That May Be Useful for Monitoring and Evaluating an Extension-Plus Approach Output indicators Outcome indicators – Farmer groups or producer associations formed; groups’ – Increase in income, production, productivity; additional sustenance, maintenance of records employment created – Formation of new markets; marketing and price realization – Sustenance of the arrangement; continuance, expansion, and impact – Training organized – Enhanced capacity for collaboration and continuance of good practices; – New inputs and technologies distributed and/or purchased new partnerships formed; other institutional changes generated and used – New funding generated – Access to credit; credit use and repayment – Ability to respond to new demands – New value-added products developed – Governance mechanisms: how different stakeholder views are – Infrastructure developed; capacity utilization expressed and quality of response – Partnerships, new working arrangements, or new areas of collaboration; quality of interactions – Reforms promoted; changes in guidelines related to funding and collaboration Source: Author. plan, implement, and evaluate extension centrally, which tradition of assessing performance in terms of technology can stifle any divergence from prescribed procedures and adoption and upward accountability for resource utilization restrict innovation and learning, particularly by mid- and rather than by examining whether outputs were achieved lower-level staff. In many instances, extension maintains a and whether clients are satisfied. The reluctance to change MODULE 3: THEMATIC NOTE 3: EXTENSION-PLUS: NEW ROLES FOR EXTENSION AND ADVISORY SERVICES 217 is reinforced by an extension policy dialog that continues LESSONS LEARNED to be couched in terms of a narrow conceptualization Implementing the extension-plus approach can involve a of extension as an agency transferring technology and number of challenges: improved practices from research stations to farmers (Sulaiman and Hall 2005). ■ The fact that the final program details cannot be visual- ized in the beginning can make donors and national gov- Public and private sector roles ernments slightly uncomfortable. As the approach can be implemented only as a series of experiments, resource A first step in operationalizing extension-plus is to reach allocation in the initial stages can only be tentative. broad agreement that extension must be reinvented as a ■ The approach requires high-quality human resources nodal agency that provides technological and nontechno- at different levels, representing more diverse kinds of logical services to farmers. In other words, extension will expertise. Human resource costs as a percentage of the need to partner with a large number of other public, pri- total investment can be quite high. vate, and NGO agencies that provide many of the addi- ■ Partnering with organizations with diverse types of tional services that will be in demand. In most settings, expertise is critical. Partnering is not an easy task for partnership among these agencies has been the exception organizations that have a long history of isolated or inde- rather than the rule, given the great level of mistrust among pendent functioning. In such cases, implementation them. Extension can play its wider role only after under- could be slow. going large-scale restructuring and institutional changes, ■ Only when the organization has sufficient flexibility to which extension bureaucracies often have been reluctant deal with administrative and financial issues will this to undertake. Some of these changes include a broadened approach flourish. The program should have opportu- mandate, partnership and learning as key operational nities for reflection and learning and sufficient flexibility strategies, and freedom and support for staff at district and to respond to the demands and opportunities emerging block levels to experiment with alternative strategies. from the field as the program evolves. These operational issues are not insurmountable. The Human resource issues program should be fully aware of them and find ways of To implement this approach, extension organization would engaging the government and the donors to resolve some of require new expertise. One way of obtaining this expertise these concerns. Box 3.22 describes how the KHDP/VFPCK is to create a core group of specialists with skills such as program met these challenges. market development, organizational development, enter- prise development, and agribusiness management. The Some of the lessons learned from implementing extension- extension curricula of universities and the content offered plus in varied settings are: in extension training centers will also need to be reviewed to ensure that perspectives such as extension-plus are ade- ■ The goals of the investment should be broad enough to quately covered. provide integrated support to producers, improve com- petitiveness of the sector, or upgrade the production sys- tem to improve livelihoods, and so on. Broad goals are Sustainability issues necessary to challenge extension to broaden its agenda. To sustain the institutional changes and capacity developed ■ The investment should provide for hiring a mix of global through this approach, a clear exit strategy must be agreed and local expertise to support program implementation. upon by the donor and the stakeholders. Building commu- It would be useful to get human resources on a long-term nity-based organizations (user groups, cooperatives, village basis, starting with the design and inception of the pro- organizations, self-help groups), shifting the operation and gram, to provide continuity and a shared vision of the management of the program to these organizations, and objectives and approaches for implementation. enhancing the capacity of these organizations to perform ■ Partnership with other organizations having varied skills their responsibilities and raise fresh resources are all should be the basic philosophy guiding the interventions. important steps toward sustaining the approach, even after ■ Continuous experimentation, reflection, and learning donor support ends. should be the basic approach for identifying relevant 218 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 3.22 Experience with Innovative Activity in Kerala Horticulture The most attractive feature of the program developed then, the program has promoted participatory tech- for fruit and vegetable producers by KHDP and its suc- nology development and testing. Initial serious set- cessor organization, VFPCK, was the concept of inte- backs in group marketing also caused the program to grating three main components of agricultural devel- reflect and learn to overcome the problems. An addi- opment: production (including support for research tional problem was that traders perceived farmers’ and development), credit, and markets. markets to be a threat, and considerable persuasion To implement this concept, KHDP created a new became necessary to convince them of the benefits organizational structure and management strategy. they would receive from cooperating with the farm- It hired the services of international and national ers’ markets. consultants to support key areas of its operation: credit, In the beginning, KHDP envisaged providing credit implementing an agroprocessing program, technology, to farmers through cooperative credit societies. After and training. The expatriate experts, who were on a encountering difficulty in mobilizing funds on its own, long-term consulting assignment, brought new knowl- the program decided to arrange for commercial banks edge and fresh perspectives to the program as it trans- to supply the credit. Although the banks were reluctant lated its vision into action. to provide credit to landless farmers, KHDP’s willing- Another interesting feature of the program was ness to deposit its own funds with those banks encour- the flexibility to change the type and nature of inter- aged them to take the risk. ventions as and when problems arose. This flexibility The program paid explicit attention to learning along allowed the program to evolve over the years. In its the way. It established a monthly review meeting of proj- early years, KHDP quickly found that it needed to ect managers that provided a forum for sharing knowl- organize farmers into groups to promote new tech- edge and experience from implementation on the nology, help access credit, and strengthen negotiat- ground and served as the program’s learning laboratory. ing power through collective marketing. It entered Without this forum, the program probably would never into a contract research arrangement with the state have learned from its initial experiments, some of which agricultural university for technical backstopping, failed. The donor (the European Commission) sup- and when it found this arrangement was unsuccess- ported management’s changes to the initial design, ful, it realized the importance of involving farmers which to a large extent allowed the program to achieve directly in technology development and testing. Since its goals. Source: Author. strategies for implementation. The program should have by raising questions on the nature of extension’s tasks, sufficient flexibility to shift approaches based on this recognizing the need for new expertise, facilitating a review learning. of extension’s current interactions, and highlighting the ■ Accountability to clients is important. Clients should be importance of institutional changes. These tasks are impor- part of the governance structure. tant for developing and sustaining a capacity for innova- ■ A well-thought-out exit strategy should be in place before tion, which should be the main focus of investing in this funding ends. Activities in the final year of implementa- kind of approach. tion should focus on how to sustain the investment’s pos- Before designing the program and operational strategy itive outcomes. for investment, it would be better to undertake an institu- tional diagnosis to understand the range of organizations within the AIS, their expertise and activities, and their pat- Recommendations for practitioners terns of interaction. The scope of the specific extension Extension can and should expand its role, given its signifi- investment and the priorities will vary in relation to the cance for the larger AIS. The principles of extension-plus national, district, and local situations. For instance, forming provide an opportunity for expanding the role of extension groups of farmers could be the starting point in one MODULE 3: THEMATIC NOTE 3: EXTENSION-PLUS: NEW ROLES FOR EXTENSION AND ADVISORY SERVICES 219 Table 3.8 Activities to Ensure Successful Operation of an Extension-Plus Approach Phase or aspect of operation Activity Pre-project phase – Conduct individual consultations, workshops, sample surveys – Identify key partners – Develop a shared vision for the program Institutional and human development – Recruit experts that can bring specific skills – Negotiate to get the right kind of staff on deputation – Identify and contract consultants (short and long term) – Conduct training, exposure visits, case analysis – Conduct an organizational and management review Technical support – Identify best technologies and refine or adapt them to local conditions – Direct recruitment – Make available on time the best and most efficient inputs, either by producing them directly or brokering arrangements with other suppliers – Recruit qualified technical staff and train them so that they remain up to date – If necessary, fund adaptive research Credit and financial support – Understand the financial/credit landscape – Negotiate with financing agencies – Guarantee transactions, set up revolving funds – Organize producers for group lending – Influence policies to help mainstream credit operations Organizational development – Form producer organizations (self-help groups, commodity interest groups, federation of self-help groups, producer companies, and similar groups) – Enhance skills through appropriate training programs (for example, skills in group dynamics or office management, including financial management) Market development – Analyze and strengthen market chain – Negotiate with different actors in the value chain – Create new markets if needed – Develop new products Source: Author. location, whereas linking farmers to new or emerging mar- Investment should focus on potential ways for strength- kets could be the priority in another. It would be ideal to ening and sustaining the capacity for innovation during the source expertise and other inputs by forging links with project period and after its end. Developing a new office other actors rather than trying to do everything through (administration/financing) manual; making arrangements one program. If reliable sources of expertise and inputs do for monitoring, learning, and impact assessment; creating not exist, however, the program will have to start its own opportunities for communication and engagement with initiatives. policy; and ensuring adequate funds for addressing evolv- Specific activities that can ensure success at different ing challenges are also critical for implementing this stages and for different aspects of an extension-plus approach. approach are listed in table 3.8. 220 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK T H E M AT I C N O T E 4 The Role of Innovation Brokers in Agricultural Innovation Systems Laurens Klerkx, Wageningen University Peter Gildemacher, Royal Tropical Institute (KIT) SYNOPSIS complexity has made cooperation for innovation less straightforward. To function, an AIS required shared Innovation brokers� are persons or organizations “ that, from a relatively impartial third-party position, purposefully catalyze innovation through bringing together actors and facilitating their interaction. Innova- visions, well-established links and information flows among the actors, and incentives that enhance cooperation (World Bank 2006). Interaction between stakeholders that are different enough to have new knowledge but related tion brokering expands the role of agricultural extension enough to understand each other seems particularly to lead from that of a one-to-one intermediary between research to innovation—a relationship described aptly by Granovet- and farmers to that of an intermediary that creates and ter (1985) as “the strength of weak ties.� facilitates many-to-many relationships. As an organization Creating and fostering effective coalitions among actors and function, innovation brokering differs from traditional is often hindered by incomplete information about what extension and R&D because it represents the institutional- potential partners can offer, by different incentive systems ization of the facilitation role, with a broad systemic, mul- for public and private actors, differences between indigenous tiactor, innovation systems perspective. Preliminary lessons and formal knowledge, social differences that cause exclu- from experience are that innovation brokers help build sion of certain actors, or ideological differences (Pant and synergy in agricultural innovation systems, but their Hambly-Odame 2006). Innovation scholars (Burt 2004, “behind-the-scenes� mode of operating conceals their Obstfeld 2005) emphasize the importance of having people impact and may limit financial support for their role. Their who act as brokers in networks, connecting stakeholders that contributions to building capacity for collective innovation are not familiar to each other but may provide the “new and preventing innovation-system failures offer a rationale combinations� essential to innovation. It is also recognized for public investment in their activities, but such invest- that a dedicated actor can fulfill this role of “innovation bro- ments must be accompanied by improved methods for ker� (Smits and Kuhlmann 2004; Howells 2006). measuring the impact of innovation brokering. As “honest Innovation brokers act as “systemic intermediaries� in brokers,� innovation brokers need considerable room to innovation systems, forging many-to-many relationships. maneuver in building and facilitating networks from a While the term “broker� has the connotation of a strategi- credible position. Given that countries may have different cally acting go-between who benefits from the separation cultures of collaboration and different stages of innovation between actors and pursues objectives mainly out of self- system development (with corresponding system imperfec- interest, the concept of “innovation broker� derives from tions), a context-specific design is required for innovation the notion of an “honest broker,� who brings people brokers to attain a credible position. together mainly for altruistic purposes (Obstfeld 2005). The role of the honest broker resembles a broadened notion WHAT IS THE RATIONALE FOR INVESTING of the role of a process facilitator (Klerkx and Leeuwis IN INNOVATION BROKERS? 2009). In other words, innovation brokers are facilitators of Over the past decades, the stakeholders in agricultural interaction and cooperation in innovation systems, and innovation have become more numerous and their inter- their activities extend throughout innovation processes that actions more complex (World Bank 2006). This increased last several years. 221 In the agricultural sector, innovation is vital for sustain- mindset and lack the capacity to fulfill this role (Rivera and able economic, social, and ecological development. Efforts Sulaiman V. 2009; Devaux et al. 2009). Innovation brokers to overcome the many barriers to effective communication, can also be independent, specialized organizations with a cooperation, and ultimately innovation are thus central to skill set especially tailored to innovation brokering. A broad the public interest and justify public investments. range of specialized innovation brokers has emerged, for example, in the Netherlands (Klerkx and Leeuwis 2009). Developing countries such as Kenya (boxes 3.23 and 3.24) WHO CAN BROKER AND HOW? and India (box 3.25) have done the same in recent years Any advisory service or related individual or organization (Klerkx, Hall, and Leeuwis 2009). can broker, connecting farmers to different service Innovation brokering typically comprises the following providers and other actors in the agricultural food chain. functions, to be applied in a flexible and iterative manner Examples include research organizations such as those of (Klerkx and Leeuwis 2009; Kristjanson et al. 2009): the CGIAR, national and international NGOs, specialized consultancy firms, temporary projects, government pro- ■ Analyzing the context and articulating demand. The grams, and farmers’ organizations (see Klerkx, Hall, and participatory assessment of problems and opportunities Leeuwis 2009 for examples). Although public organizations through quick system diagnosis identifies promising such as extension services and research organizations could entry points (in terms of prospective markets), support- perform innovation brokering as part of their mandates ive policy, and constraining factors to be overcome. The (see TN 3), many retain a linear, transfer-of-technology analysis provides information to stipulate a shared vision Box 3.23 The Need for Innovation Brokering: Supplying Potatoes for Processing in Kenya In Kenya, DEEPA Industries Ltd. expanded its potato constant supply of potatoes did not materialize. The crisp production capacity from 2 to 12 tons a day, but processor had to scale down his ambition of exporting its fully automated production line required a steady to other East African countries. supply of high-quality potatoes. The International A structured and sustained innovation brokering Potato Center (CIP) and the Kenya Agricultural effort could have made a big impact by building a Research Institute (KARI) organized and facilitated a working coalition between the different stakeholders in meeting in 2005 to see if an arrangement could be bro- the innovation process. A more harmonized and effec- kered between the processor and potato producer tive contribution by research, extension, the private groups in Bomet District. During the meeting, agree- sector, and producers would have been possible ments were reached on a fixed price for farmers’ pro- through a clearly mandated broker. duce, transport arrangements, and the regular supply Three years later, in the context of a development of produce. The parties also agreed that the local pub- project funded by the Common Fund for Com- lic extension office would support the producer organi- modities (CFC), CIP and KARI renewed efforts to zation’s efforts to supply the processor. No stable source broker organizational innovation. Meetings are being of funds for continued brokering beyond this one-off organized to build trust and structure communica- meeting could be identified to continue supporting tion and economic interactions between the actors. development of this emerging beneficial relationship Currently research, agricultural extension, producer between actors. groups, and DEEPA are innovating within the pro- The transporter of the first shipment sold the high- duction chain by using high-quality, clean seed, con- quality potatoes destined for the processor elsewhere tract farming, direct purchasing, local collection of for a higher price and replaced them with potatoes of the produce, and testing new genetic material for lower quality. The processor declined to accept further quality in crisp processing. These initiatives resemble deliveries from the producers because they did not types 1, 2, 3 in the typology of innovation brokering meet the quality requirements, with the result that a presented in table 3.9. Sources: D. Borus and P. Gildemacher, CIP, Nairobi. 222 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 3.24 The Innovation Works Unit at the International Livestock Research Institute as an Innovation Broker The Innovation Works Unit of the International Live- of local pastoral Maasai communities as equal partners stock Research Institute (ILRI) sought to facilitate in drawing up a land-use master plan, in which local pro-poor innovation related to livestock husbandry and scientific knowledge were combined. The Maasai through efforts with a local as well as a systemic focus. gained a voice in the policy debate from which they had The unit created several learning platforms for public been excluded. A major achievement was that the facil- and private stakeholders in particular projects. The itators tackled the huge power imbalances across their platforms, which were mediated by local facilitators multipartner project team, such as the often unrecog- hired by the different projects, can be characterized as nized power of scientific experts. To build trust and hybrids of an innovation consultant and a systemic demonstrate respect for the knowledge of all partners intermediary (see the typology in table 3.9). The differ- in the project, the facilitators pursued multiple strate- ent projects funded innovation brokering through the gies, such as hiring local community members as mem- platforms. bers of the core project research team and encouraging The platforms often took the form of safe havens— the joint creation of knowledge by a hybrid team of sci- environments outside each of the participating organi- entists and community members. zations that provided a more neutral space conducive Despite these achievements, this kind of mediation to creativity and co-creation, bypassing dominant often remains unrecognized and undervalued. It was groups committed to maintaining the status quo. A difficult to make it a central function of an institute concrete example involved facilitation of the inclusion such as ILRI and get it funded. Source: Kristjanson et al. 2009; see also www.ilri.org/innovationworks. and articulate demands for technology, knowledge, fund- described here can be found elsewhere, the typology is ing, and other resources. subject to further research and amendment (Klerkx, Hall, ■ Composing networks. Facilitate linkages among relevant and Leeuwis 2009). actors—specifically, by scanning, scoping, filtering, and Innovation brokers have been found at the supranational matchmaking possible partners that have complemen- (across several countries), national (country), regional tary resources such as knowledge, technology, and fund- (province, district), and (sub)sectoral or commodity level ing. This also includes matching demand and supply in (such as dairy or horticulture), but these levels may also mix pluralistic advisory and research systems. (for example, when dealing with cross-cutting value chain ■ Facilitating interaction. Action planning, along with the innovations). With respect to their level of ambition, some identification of and support to those taking leadership innovation brokers focus mostly on incremental innova- in multistakeholder activities, has the main objective of tions at the farm level, in a demand-driven and bottom-up building functioning stakeholder coalitions. Considering fashion. They may be reactive, responding to clients’ ideas, the different backgrounds of the actors involved, coali- or they can more pro-actively approach prospective clients tion building requires continuous “translation� between and offer a context analysis and demand articulation session actors, the building of trust, establishing working proce- (Klerkx and Leeuwis 2008). Other innovation brokers typi- dures, fostering learning, motivating, managing conflict, cally focus on radical innovations that comprise complete and intellectual property management. (sub)sectors or value chains, dealing with complex prob- lems that require a systemwide change process. In this case, Different types of innovation brokers have been innovation brokers are often proactive initiators of observed, working at different levels of the innovation processes and act as change agents. With respect to thematic system and varying in their level of ambition and the- scope, some innovation brokers focus on one sector (dairy matic scope. Table 3.9 presents a tentative typology based alone, for example), whereas others address all kinds of sec- on the Dutch landscape of specialized innovation brokers tors within a region, and still others focus exclusively on a (Klerkx and Leeuwis 2009). Although several of the types specific activity (rural tourism, for example). The optimal MODULE 3: THEMATIC NOTE 4: THE ROLE OF INNOVATION BROKERS IN AGRICULTURAL INNOVATION SYSTEMS 223 Box 3.25 Agricultural Innovation Broker Initiatives in India Several types of innovation brokers have emerged in initiatives use ICT and social media to identify and India. They have taken different organizational forms, build awareness of little-known innovations. Partici- they operate at different levels in the innovation sys- pants can share experiences and scale up successful tem, and their scope of innovation differs. efforts. These initiatives are hybrids of an innovation International Development Enterprises. In India consultant, a peer network broker, and a ICT-based and Bangladesh, an international NGO, International platform that helps to articulate demands and build Development Enterprises (IDE), acted as a broker in networks. Examples include the HoneyBee Network the process of developing innovations for low-cost irri- and Villagro Network, which scout for innovations for gation pumps. (In Bangladesh, aside from coordinating their databases and connect innovators to supporting interaction among actors in the irrigation pump supply agencies such as India’s National Innovation Founda- chain, IDE also coordinated interaction with policy tion. The networks also help participants to patent makers.) Because of IDE’s intervention, the focus innovations and find investors to develop products. broadened from developing a particular technology to Sustainable inventions from the Honey Bee database realizing the vision of effective irrigation water provi- comprise 34 categories, including agricultural tools sion for the poor. Institutional innovations were the and techniques, water conservation, health, education key to realizing that vision and included changing the innovation, food and nutrition, traditional medicine, incentives for public and private actors and creating and industrial and household goods. (Example of spe- effective demand for the technology so that a self- cific innovations include a motorcycle-driven plow sustaining market could emerge. IDE acted as a local for farmers who cannot afford tractors or bullocks innovation consultant as well as an instrument for sys- and matchsticks made of natural fibers sourced from temic innovation. agricultural waste.) Still other efforts use ICT-based Using ICT and social media to build awareness of brokering instruments (“infomediaries�) to share innovations and other information. To truly benefit operational (market and production) information from farmers’ creativity and experimentation, several (rather than strategic information) for innovation. Sources: Authors; Gupta et al. 2003; Hall, Clark, and Naik 2007; Murthy 2010; see also www.ideorg.org, www.honeybee.org, and www.villagro.org. innovation system level, ambition level, and thematic scope result of unwillingness to interact but of a lack of capaci- of the work can be determined only in the course of the ties, structures, and incentives to interact effectively. interaction between innovation brokers and their clients. Through investments in innovation brokering, communi- This uncertainty implies that sometimes clients will need to cation between the multiple actors can improve greatly. By be referred to another type of innovation broker than the providing fresh insights and a mirror for self-reflection, one they originally started to work with. In other instances, innovation brokers stimulate clients to look beyond their several complementary innovation brokers are involved current situation and constraints. For example, farmers within a single innovation process (Klerkx, Aarts, and and other agrifood stakeholders can think about new pos- Leeuwis 2010, Devaux et al. 2010). sibilities to improve their businesses, or producer organiza- tions, researchers, and extension service providers can think about innovative manners of communicating. WHAT ARE THE POTENTIAL BENEFITS OF Impartial, honest brokers, because of their less-biased posi- INVOLVING AND INVESTING IN INNOVATION tion and the overview of the system that they can provide, BROKERS? can forge contacts between parties that would normally not The current imperfect interaction between the actors cooperate. They can also mediate more easily in the case of essential for agricultural innovation—farmers and their conflict (see the first point in the section, “What Key Issues organizations, researchers, extension, agricultural service Should Be Considered?,� later in this TN). Hence they can providers, local government, agribusiness—is often not a assist in promoting more perfect information. 224 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 3.9 Typology of Innovation Brokers Type of broker* Focus 1. Innovation consultants, aimed at Connect farmers/agrifood SMEs with relevant collaborators and service providers and also with individual farmers and small and sources of funding and policy information. Generally incremental innovation; short time horizons. medium enterprises (SMEs) in the agrifood sector 2. Innovation consultants aimed at Similar to type 1. The main difference is that they work with collectives, first connecting farmers or collectives of farmers and agrifood agrifood SMEs with similar interests and then connecting these actors with relevant collaborators, SMEs service providers, and sources of funding and policy information. Generally incremental innovation; short time horizons. 3. Peer network brokers Aim to bring farmers together to exchange knowledge and experience at the interpersonal and group level—in other words, to facilitate enterprise development through peer-to-peer learning resembling concepts such as Farmer Field Schools. An explicit objective is to involve actors from weak networks (surpassing regional and sectoral networks) by inviting entrepreneurs from other regions or sectors and subject matter specialists. 4. Systemic intermediaries for the Catalyze radical systemwide innovation (such as an entire production chain, societal systems, or support of innovation at higher policy systems) by: (1) managing interfaces between (sub)systems in the innovation system; system level (2) building and organizing (innovation) systems; (3) stimulating strategy and vision development; (4) providing an infrastructure for strategic intelligence; and (5) providing a platform for learning and experimenting. Involve several societal actors, including farmers, supply and processing industry, civic advocacy organization, and policy makers, for example. Generally radical/system innovation and transition trajectories; medium to long time horizons. 5. Internet-based portals, platforms, Portals and platforms differ with regard to their prospective audiences, which may be selective (such and databases that disclose relevant as farmers), all agrichain actors, or project-related audiences. Portals and platforms may have a knowledge and information rather passive matchmaking role. Some portals create order in a wealth of information sources and give an overview but do not serve as a selection aid. Interactive tools exist, however, to allow the provision of services adapted to users’ needs. Addressing both operational or tactical problems and strategic innovation issues; short time horizons. 6. Research councils with innovation Management of multiactor R&D planning networks (involving farmers, supply and processing agency industry, civic advocacy organization, policy makers)—e.g., facilitating a demand-driven research agenda and priority setting. Facilitation of participatory/collaborative R&D (involving end-user participation), also addressing the creation of an enabling environment for enhancing research result uptake. Incremental and radical innovations; short to medium time horizons. 7. Education brokers Aimed at curricular innovation. Provide educational establishments with the latest insights from practice and research to enhance the fit of their education programs with business and societal needs. Source: Adapted from Klerkx and Leeuwis 2009. * Hybrids of different types of innovation brokers are possible within a single organization, as well as involvement of different types of innovation brokers within a project. Broadly, innovation brokering can be expected to have formed between stakeholders, the result should be more immediate and long-term results. Direct results are market-oriented research and advisory services, more effec- expected through market innovations that arise when pro- tive agricultural value chains, and a more conducive policy ducers respond better to the needs of agribusiness and environment—in other words, a better-functioning innova- agribusiness operators develop a better understanding of tion system (Klerkx and Leeuwis 2008; Klerkx, Aarts, and production systems, as in the case of potatoes for the snack Leeuwis 2010; see also box 3.24). food industries in Kenya and Peru (box 3.23 and the description of Papa Andina in module 1, TN2). Brokering WHAT ARE THE MAIN INVESTMENTS can facilitate technical innovation by improving how agri- NEEDED FOR INNOVATION BROKERING? cultural research service providers target serious bottlenecks in production or processing or by inducing required insti- The main investments to mainstream the use of innovation tutional change on the part of policy makers and legislators. brokers to support agricultural development are: Over the longer term, and beyond the immediate results of a single innovation brokering effort, brokering should ■ Improving the recognition and evidence that innova- improve how the overall innovation system functions. Once tion brokering is useful. Funding the innovation broker contacts have been made and working coalitions have role is problematic. Even when organizations involved MODULE 3: THEMATIC NOTE 4: THE ROLE OF INNOVATION BROKERS IN AGRICULTURAL INNOVATION SYSTEMS 225 in agricultural development see this role as central to interventions should be local and context-specific and their core missions, they lack the opportunity and free- aim to build durable and, ideally, self-sustaining systems dom to execute the innovation broker role within their of continuous capacity improvement. mandate (Kristjanson et al. 2009). To widen awareness of brokers’ potential role in innovation and show that an WHAT KEY ISSUES SHOULD BE CONSIDERED investment in their role is justified, more structured doc- IN POLICIES TO ESTABLISH INNOVATION umentation of successes and failures (specifically in BROKERS? developing countries) is required, followed by the publi- cation and promotion of the outcomes. A number of criteria determine whether an organization ■ Improving the understanding of how to implement can play a role in brokering between actors in an AIS innovation brokering effectively as a tool for develop- (Klerkx, Hall, and Leeuwis 2009). The most important are: ment. Implementers should take care to not simply copy innovation brokering models from one context to ■ A legitimate mandate and credibility in the eyes of sys- the other, as best-fit solutions should be sought tem stakeholders. A key factor for the legitimacy of (Berdegué and Escobar 2002). Different approaches are innovation brokers is that they must have a trusted needed depending on asset positions, favorable or position as a relatively neutral “honest broker.� They unfavorable production environments, gender issues, should have a reputation that instills a degree of inde- and power distribution (Kristjanson et al. 2009). To pendence from the major stakeholders in the process increase the understanding of effective approaches of and the overall innovation system. This stance is not innovation brokering, action-learning cases need to be easy to maintain, because stakeholders may exert pres- initiated and documented in different countries and sure to compose and facilitate networks in a way that agricultural systems. fits their particular objectives. An apparent connection ■ Improving human capacity to play the role of innova- to an organization may negatively influence credibility tion broker. First and foremost, innovation brokering as a neutral, honest broker, which seems to indicate that requires skills related to process facilitation: leadership, innovation brokers might work best as independent, multistakeholder facilitation, trust building, and com- specialized organizations. Innovation often challenges munication; it also requires tools for managing group prevailing role divisions, power relations, and profit processes (Anandajayasekeram, Puskur, and Zerfu distribution. To build productive innovation networks, 2010). A system overview is required to permit stake- sometimes parties with vested interests need to be holders to understand and “translate� between each bypassed. other. This skill set cannot be obtained through formal ■ Both technical and methodological know-how and a education alone but must be developed through a com- clear role division. Innovation brokers should have suf- bination of formal education and practical experience. ficient technical knowledge but should not become so Investments are required to develop capable facilitators involved with projects that they take over detailed man- of innovation within organizations motivated to sup- agement and take away ownership from the innovation port agricultural innovation through brokering. A criti- network partners. They should also give equal attention cal mass of experts and organizations in this field is still to the goals and interests of each of the partners. lacking, as reflected by the experience with NAADS in ■ Funding sustainability. A durable source of funding is Uganda (Kibwika, Wals, and Nassuna-Musoke 2009) an important requirement for effective innovation bro- and the reorganization of agricultural service provision kering. Often funding is on an ad hoc, project basis, and in Mozambique (Gêmo 2006). Traditional research and especially in times of fiscal austerity innovation broker- extension organizations must “retool� if they are to ing services are often discontinued, despite high client develop their innovation brokering capacity and satisfaction (Klerkx and Leeuwis 2008). Because the abandon a mere transfer-of-technology paradigm impact of innovation brokers is difficult to make visible, (Devaux et al. 2009). The implication is that they must durable public, donor, or private stakeholder funding is develop a service delivery philosophy and a mindset that hard to obtain (box 3.24). Ways need to be found to recognizes multidisciplinarity (including topics such assess the impact of innovation brokers and better justify as agricultural economics, sociology, and gender public or donor spending, starting with detailed docu- issues), as well as facilitation skills. Capacity-building mentation of specific cases. 226 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK LESSONS LEARNED approaches are available, such as the facilitation of multi- stakeholder interaction and value chain development. Inno- Well-documented experiences with innovation brokering vation brokers can benefit from using such methods, to are limited, but there appears to be a growing recognition avoid “reinventing the wheel.� of professionals in research, extension, and advocacy who may have the skill set and honest broker status that we are looking for in innovation brokers. The development of The role of AIS theory should be innovation brokering services requires continued local appropriately modest experimentation, adaptation, and learning (Klerkx, Hall, The real proof of concept is in practice. It is important for and Leeuwis 2009). So far several general lessons have been practitioners to keep in mind that it is the experience in learned, discussed below. practice that steers the development of theory. Considering that innovation brokering has been recognized only recently Context analysis is needed prior to or as as an important and deliberate function in AIS, practition- part of the innovation broker establishment ers are often pioneers. This situation implies that they should make decisions based on their own understanding, It is essential to adequately map and diagnose the strengths experience, and judgment rather than search for answers and weaknesses of the relevant innovation system (see from AIS theory. While trial-and-error learning may incur Gildemacher et al. 2009) to get a clear view on missing link- some inefficiencies in regard to effective spending of funds ages and/or deficient interaction. In doing so, it should also (Klerkx and Leeuwis 2008), experimentation appears to be become clear whether some parties already fulfill an inno- needed to create locally adapted innovation brokers, as there vation brokering role and the extent to which they may is no one-size-fits-all model (Klerkx, Hall, and Leeuwis complement or overlap with the envisioned task of the 2009). proposed innovation broker. Such a preparatory phase of context mapping and consultative talks with stakeholders prior to innovation broker establishment may take between Perfect innovation brokers do not exist one and two years. When listing the skills and attitudes required in a good inno- vation broker, an apparently endless list of required qualities Some innovation brokering functions are generic will emerge. These qualities are impossible to find combined in a single person. Still, the role of innovation broker will To bring structure into the process of innovation brokering, depend on these imperfect individuals. Each individual will several generic steps in the process can be distinguished: have to develop a personal style as a broker that fits his or her (1) context analysis; (2) initial network composition; strengths and weaknesses. (3) participatory needs and opportunity assessment, includ- ing network recomposition when necessary; (4) action planning; (5) network facilitation/coordination, problem A structured exchange of experiences solving, and conflict resolution; and (6) exit strategy. As supports capacity building progress in innovation processes is rather unpredictable, no As this field is new and capacity building is needed, peers fixed time allocations can be given for these phases. involved in innovation brokering need to invest time and effort in exchanging experiences. As a reference point, the Netherlands took about fifteen years to develop a diverse Innovation brokers can use existing tools, methods, and approaches, but innovation field of innovation brokers and recognize their role (Klerkx brokering is learning while trying and Leeuwis 2009). A structure of peer-to-peer exchange and support will directly improve performance as well as Attention for integrated innovation brokering in agricul- help to build capacity. tural development is new. The capacity to play the role of innovation broker cannot be fully obtained through formal Innovation brokers should negotiate and training. However, many practitioners will recognize the defend the freedom to explore options role of innovation broker as a role they have played or seen being played. Although innovation brokering is thus not yet Once established, an innovation broker should be given a very well-articulated and recognized role, tools from other considerable freedom to explore new options and establish MODULE 3: THEMATIC NOTE 4: THE ROLE OF INNOVATION BROKERS IN AGRICULTURAL INNOVATION SYSTEMS 227 new linkages. Brokers should not be tied to prescribed and brokering. The biggest potential for impact is, however, input-output schemes by either their employers or funders. through the long-term outcome of improved collaboration between actors, transforming the innovation system in such a way that it becomes responsive and contributes to a Monitoring and evaluation are needed for learning durably competitive agriculture sector. Innovation is by definition an unsure process. It involves invention, adaptation, and changing directions as a response to the insights that are gained. It is difficult, even RECOMMENDATIONS FOR PRACTITIONERS, detrimental, to monitor progress through rigid and SMART POLICY MAKERS, AND PROJECT LEADERS milestones (Klerkx and Leeuwis 2008). Methods of M&E From the lessons learned so far, several recommendations that focus on learning lessons are more suitable. Alternative can be distilled for brokers themselves, policy makers, proj- M&E indicators should be identified by the stakeholders ect leaders, and those who champion innovation brokering. involved as relevant proof of progress, but (more impor- tant) these indicators should also serve as points of refer- ence for learning to improve the process of innovation. Recommendations for prospective innovation brokers Recognize the difficulty of distinguishing ■ The problems and challenges that need to be tackled by and attributing outcomes innovation brokers may be different. Although not The primary work of innovation brokers is to improve the exclusive to developing and emerging countries, but quality of interactions, which is a process that includes maybe even more severe and pressing in light of rural many intangible contributions. Innovation brokers will poverty and natural resource scarcity and degradation, have to deal with the dilemma that they should sufficiently problems that need to be addressed include: dealing with emphasize the impact of their role but not take all the credit competing claims on natural resources, inclusion of the (which may annoy stakeholders and diminish their owner- poor and giving them a voice in the development ship). While attribution is already a perennial challenge for process, and equitably integrating smallholder farmers in extension programs, it is possibly even more problematic global value chains. For this reason, different approaches for innovation brokers, given their “behind-the-scenes� are needed in designing the brokering role. Prior to mode of operating. Because it is hard to distinguish and setting up an innovation broker (which may be an indi- attribute the impacts of innovation brokering, it is also dif- vidual, a unit in an existing organization, or a new orga- ficult to make the innovation broker role self-sufficient; nization) in a region or sector, start with an analysis of willingness-to-pay is typically low among private actors. innovation system imperfections, and assess the need for Long-term public investments appear to be needed in view an innovation broker and willingness of stakeholders to of persistent innovation system failures such as fragmenta- support and/or work with a broker. Gain the confidence tion and lack of coordination. A focus on short-term fund- of stakeholders, and work to gain credibility as an honest ing may engender a vicious circle of short-term funding, broker in the innovation system. leading to the disappearance of the innovation broker and ■ Plan for the nature of the different innovation broker renewed funding of a similar innovation broker. functions (particularly context analysis, demand articula- tion, and initial composing of networks as first steps) in the different steps of the innovation process. Do not apply Short-term results and long-term outcomes them as a blueprint, however. Be flexible at the same time. It is important to keep in mind the two levels of results, Assist in reassessing the context, needs, and opportunities direct and indirect, of innovation brokering. Direct and when needed, and help networks to adjust accordingly. concrete activities and results are needed to keep the inno- The facilitation of interaction is a dynamic activity, given vation coalition together long enough to build trust and that changing visions and networks require constant build relationships. Without direct and concrete results and attention to mutual understanding and trust. activities, it is impossible to keep actors motivated to invest ■ The nature and intensity of the innovation broker’s role in interaction and collaboration. Direct innovation results will most likely change over time. It should shift gradu- are also needed to justify investments in coalition building ally from actively taking the initiative to handing over the 228 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK initiative and daily project management to project par- ■ When establishing innovation brokers, avoid maintain- ticipants and acting in the more distant role of project ing an overly close organizational and ideological con- monitor. nection with the respective policy domain. Distance will ■ A broker will have to deal with multiple accountabili- enable the innovation broker to develop a clean, “honest ties and conflicts of interest in the innovation process. broker� image and sufficient operational maneuvering Conflict management and intermediation skills are space. Do not try to use innovation brokers as messen- important. Brokers must prepare to deal with contrasting gers to bring about government interventions. Some- demands and the opposition of incumbent actors in the times radical innovation goes against current govern- innovation systems who do not favor change. As an inno- ment policy. vation broker, try to be as transparent as possible about ■ Accept that innovation brokers, by counteracting the “what� and “why� of certain actions or interventions, imperfections in the innovation system, also change the to avoid giving false impressions. Perception manage- innovation system’s configurations and interaction pat- ment is essential. In some countries with weak gover- terns. Although such actions may challenge certain pol- nance, additional challenges need to be dealt with, such icy lines, policy makers who champion the role of honest as corruption and favoritism. Due to resource dependen- brokers should accept this situation and defend it with cies an innovation broker may nevertheless become a their constituencies and peers in the policy domain. more or less “hidden messenger� for government or ■ Allow sufficient freedom to forge unexpected linkages another party—a perception that may be detrimental to (for example, to connect agriculture with the gaming the broker’s impartiality, credibility, and hence longevity. industry) and experiment (touching themes that at first ■ Take care in assigning credit for results. As the inno- sight do not have anything to do with current ways of vation process evolves and results materialize, the inno- agricultural production), but agree upon certain deliver- vation project partners, other actors in the innovation ables. Such deliverables could include the number of new system, and funding agencies should be made aware of concepts developed or the number of productive innova- the broker’s contribution in achieving these results. tion networks forged, supported by narrative case Brokers themselves should avoid taking credit from reports of innovation dynamics. A supervisory board project participants. drawn from the different domains with which the inno- ■ Expect the greatest reward and sign of accomplishment vation broker works should be installed to monitor the to be that an innovation broker may no longer be extent to which these deliverables have been realized. The required when local innovation capacity has been built. board members are ideally well and widely respected but The broker should withdraw rather than force his or her at the same time visionary and open to change. presence between actors. Brokers should think about an ■ As in the case of market failure, innovation system fail- exit strategy from the beginning. ure justifies public investment, even though innovation is unpredictable and difficult to plan. Investment in innovation typically is of a “best bet� nature, and stimu- Recommendations for policy makers in government, lating innovation means that investments are made in research organizations, and other organizations projects with an unknown and sometimes unviable out- come. Despite innovation brokering, failure may occur, ■ Before establishing an innovation broker, assess innova- but this does not mean that innovation brokering does tion system failures and current innovation broker not merit investment. capacity to avoid duplication of effort. Remember that ■ Stimulate the development of M&E indicators that in some cases the need for context specificity may justify capture the rather intangible activities of innovation the coexistence of several innovation brokers. It is essen- brokers, particularly indicators that move beyond case tial to stimulate interaction between different innovation documentation and satisfy the need for quantitative brokers to demarcate mandates and complementarities. justification of investment. Methods and indicators are In the absence of coordination, overlap and even compe- especially needed to capture causal relationships between tition between innovation brokers can arise, engendering innovation network performance and the activities of confusion among clients about who is facilitating what innovation broker activities as well as the spillover effects and reducing the synergies that innovation brokers of innovation brokers in innovation systems. Method- should induce in innovation systems. ologies such as social network analysis may be promising MODULE 3: THEMATIC NOTE 4: THE ROLE OF INNOVATION BROKERS IN AGRICULTURAL INNOVATION SYSTEMS 229 in this regard (see Spielman, Ekboir, and Davis 2009). ■ Establish a clear division of tasks in innovation process Stimulate policy learning and institutional memory in management, to avoid overlap and a lack of project own- relation to the roles and effects of innovation brokers to ership. Depending on the innovation network’s internal avoid a vicious circle in which innovation brokers capacity to manage innovation processes, the intensity appear, only to disappear and reappear. of the broker’s involvement may vary. Generally, daily ■ Creating innovation brokering capacity within an project management is a principal task of project leaders/ existing organization, such as an extension or research implementers and/or innovation champions, while organization, requires the proper institutional condi- issues like process monitoring and conflict mitigation are tions to be shaped. Innovation brokering cannot be a principal task of innovation brokers. The involvement judged on the basis of traditional performance criteria of innovation brokers implies that reflection on project for research and extension, such as publications or num- progress, the role of different partners, the viability of the bers of field visits. Furthermore, management and staff vision, and objectives becomes an integral part of the need to gain an understanding of the role of innovation project. brokering so that it is not seen as extrinsic to the organi- ■ Coordinate actions of the innovation network partners zation’s core mission. and the innovation broker when forming the network, ■ Brokering is influenced by the nature of the AIS and to avoid confusion among the parties approached as to institutional frameworks as well as cultures of collabo- whom they should regard as their main contact person. ration. Many countries are characterized by “immature� ■ Recognize that the innovation broker cannot always innovation systems that lack a functioning knowledge take a clear stand in advocating the interests of the infrastructure (research, education, advisory services) innovation project versus external parties, although the and by inadequate institutional frameworks (in terms of broker is regarded as part of the innovation network. well-functioning legislation, markets, and interaction Advocacy is needed to some extent, but within certain patterns). Policy makers should keep in mind that differ- limits. Innovation brokers that become too institutional- ent cultures of collaboration may affect the potential ized in the project may benefit from having another effectiveness of innovation brokers (for example, in innovation broker give a “second opinion.� building trust, achieving a collective goal) because of the ■ Although innovation brokers are often subsidized, if a cultural organization of interaction among actors at dif- private contribution is requested, realize that this ferent social and economic positions and issues like investment is generally compensated by a lower failure clientelism, social exclusion, nepotism, and corruption. rate and better access to external resources. In general, integrate the cost of innovation brokering in the overall project sum, and do not see it as an unnecessary invest- Recommendations for project leaders, project ment lowering the research budget. implementers, and/or innovation champions ■ Accept that innovation brokers cannot perform mira- cles. Some obstacles may be of such magnitude that they ■ Prepare to give up preconceived ideas. Stimulating crit- require prolonged action by innovation brokers (for ical and creative “out-of-the box� thinking is a key role of example, through mediation) but nonetheless cannot be innovation brokers. overcome. 230 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 1 Agrodealer Development in Developing and Emerging Markets John Allgood, International Fertilizer Development Center (IFDC) SYNOPSIS technologies to achieve favorable economic returns. The functions performed by agrodealers in developing and holistic, market-oriented approach to agrodealer A development facilitates improved efficiency in resource allocation, operations, and economic performance and helps to develop sustainable input supply emerging markets are substantially influenced by the stage of agricultural development and the prevailing macro environ- ment (for example, the government’s role in agricultural input markets, the availability of finance to buy inputs, and systems. The benefits of agrodealer development accrue at so on).2 various levels in the value chain and reach stakeholders at In an early phase of development, agriculture is mostly the micro and macro level. Developing agrodealers’ techni- extensive; the sector is characterized by weak, seriously cal capacity allows them to provide high-quality advisory underdeveloped agricultural input and output markets. The services to farmers, accelerates the introduction of technol- public sector typically dominates the supply of agricultural ogy, and enhances the potential economic returns for inputs to farmers. In almost all cases, public systems farmers who invest in yield-improving technologies. Devel- that perform the function of agrodealers focus on logistics oping their business acumen is paramount for improving management with little (if any) emphasis on stimulating dealers’ operations, cost-effectiveness, and potential for demand (through farmer advisory services or technology long-term economic success in serving farmers. Developing promotion campaigns, for example). Public systems rely business linkages is critical in enabling agrodealers to capi- strongly on the agriculture ministry and public extension talize on opportunities to improve the cost and operational service to create awareness and educate farmers. In the early efficiency of value chain and credit management and to phase of market development, private agrodealers’ role usu- expand the scope of their operations. It is vital to tailor each ally is limited to bridging the gap between suppliers of agri- agrodealer development intervention to the specific condi- cultural inputs and farmers, often in competition with the tions and market characteristics of a given country and public sector. Private agrodealers perform the essential basic region. Agrodealers learn best either through direct, one- functions of determining the product mix, physical distri- on-one assistance or through group participation with bution, pricing, and sales. hands-on interaction. Longer-term interventions are more In markets where agriculture is more developed, as in effective than short ones (program continuity allows for India and Pakistan, agrodealers may assume more complex timely interaction with policy makers and donors). Broad- roles. In addition to providing convenient and timely access based stakeholder involvement and attention to cost sharing to appropriate, high-quality products, they may provide (when feasible) are essential to sustaining progress. farmers with advisory services, participate in campaigns to introduce new technologies, and provide sales on credit to CONTEXT their best farmer customers. In more advanced markets, Agrodealers play a crucial role in servicing farmers’ needs agrodealers may serve as an important source of information related to agricultural inputs.1 Ideally that role includes pro- that is useful from both a commercial and policy perspective. viding farmers with (1) affordable, convenient access to As the final link in the agricultural input value chain,3 appropriate, high-quality technologies to enhance yields and those entities (public and private) that function as (2) proper advisory services on the best way to use those agrodealers are able both to influence farmers’ demand for 231 yield-improving technologies and to improve the transfer linkage development, and efforts to strengthen the support of knowledge related to the proper, safe use of agricultural systems needed for agrodealers to become successful in a inputs. They have a major influence on farmers’ incomes. competitive marketplace. The following focal areas are a pri- Efforts to improve food security and accelerate income ority for IFDC in the design and implementation of activi- growth in rural areas can be significantly affected by the ties to accelerate agrodealer development. presence and effectiveness of agrodealers. Technical knowledge transfer INNOVATIVE ELEMENT Strengthening the technical capacity of agrodealers The International Fertilizer Development Center (IFDC) allows them to provide high-quality advisory services to takes a holistic, market-oriented approach to agrodealer farmers, accelerates the introduction of technology, and development, whether the challenge is to improve effi- enhances the potential economic returns for farmers who ciency in public systems or strengthen the capacity of invest in yield-improving technologies. Efforts to private agrodealers (box 3.26). Improving the performance improve dealers’ knowledge and understanding of agri- of the members of the value chain, thereby achieving cultural input products focus on analyzing problems in operational and cost efficiencies that directly benefit soil and crop health management and on the field per- farmers, is a priority. The IFDC approach to agrodealer formance of products (for example, in maintaining soil development incorporates the marketing concept—an and plant health); their safe use, storage, and handling to agrodealer’s long-term success can best be achieved through minimize human and environmental damage; and proper better serving its farmer customers—in all activities directed application to achieve maximum efficiency from use and at capacity building and promotion. optimum economic returns. Two crucial steps in increas- ing farmers’ demand for agricultural inputs are to create FOCAL AREAS AND INTERVENTIONS awareness and transfer knowledge related to yield- enhancing technologies. Particularly in developing coun- Focal areas in agrodealer development comprise technical tries, the “seeing is believing� concept is highly effective knowledge transfer, business acumen development, business in educating agrodealers and farmers and stimulating farm-level demand for inputs. Some of the most effective Box 3.26 Philosophy on Agricultural approaches for promoting agricultural inputs include the Development Drives the Approach design and implementation of collaborative technology in Agrodealer Development demonstration plots as well as technology field days and crop cuttings. IFDC also provides agrodealers with point- of-purchase technical leaflets, wall hangings, and poster The philosophy on agricultural development at boards that build farmers’ awareness and knowledge of IFDC encompasses two premises: agricultural input use (box 3.27). ■ Improved use of agricultural inputs (such as fertilizer, high-quality seed, or crop protection Development of business acumen products) is essential, along with good water management, to sustainable improvement in Strengthening the business acumen of agrodealers is para- agricultural productivity per unit of land. mount for improving dealers’ operations, cost-effectiveness, ■ Efficiency in resource use can be maximized by and potential for long-term economic success in serving employing a market-oriented approach to farmers. Agrodealer development activities of IFDC, CNFA, development. and others emphasize improving dealers’ understanding of the financial, marketing, and management functions that The IFDC goal in agrodealer development is to foster the development of agrodealers so that they must be performed well for a business to survive and grow. may effectively serve farmers’ immediate and long- Training sessions cover the basics of marketing and business term agricultural input needs. management; strategic planning to ensure that sufficient inputs are supplied in a timely manner to farmers; record- Source: Thompson 2003, 2005. keeping to support profitability analysis, business plan- ning, and credit management; understanding the total cost 232 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK awareness of new technologies, offers opportunities to real- Box 3.27 Technical Knowledge Transfer: A Public-Private Approach ize economy-of-scale benefits through joint procurement, in Bangladesh improves access to credit through banks and supplier cred- its, and facilitates the expansion of dealer networks. IFDC fosters business linkage development through workshops, In Bangladesh, IFDC conducts a range of technical direct technical assistance, publication of monthly market knowledge transfer activities, engaging both the news bulletins, study tours, training programs, and the public sector (such as the Department of Agri- development of alliance agreements (box 3.28). cultural Extension, DAE) and private fertilizer deal- ers. Providing education to DAE field staff improves their awareness of appropriate agricultural tech- Strengthening support systems nologies, the best practices for using them, and the resulting benefits through a “train-the-trainer� Advantages in market development are afforded by forming approach to knowledge transfer. Building the capac- groups in a manner that does not impede competition. Mar- ity of dealers to provide advisory services to farmers ket efficiency requires a relatively high degree of market is a well-accepted practice. Various knowledge transparency at all levels; market information is essential to transfer activities are used and target agrodealers as successful planning and decision-making. Various support well as DAE staff, including classroom training ses- systems facilitate agrodealer development. IFDC often works sions that last one to three days, collaborative field to create agrodealer associations and build their capacity to demonstrations/field days, and direct, one-on-one provide dealer education programs, advance technology technical support through site visits. When a new technology is introduced, rapid introduction, provide policy advocacy, facilitate business penetration promotion campaigns are effective. linkage development, improve access to commercial finance, Specific tools to introduce the targeted technol- and enhance market transparency (box 3.29). The emphasis ogy include technical leaflets, signboards, point is on creating agrodealer associations that provide a formal of purchase displays, billboards in heavily popu- structure to support long-term dealer interests. lated areas, and open sky shows. It is important to tailor each agrodealer development intervention to the specific conditions and market charac- Source: IFDC 2011. teristics of a given country and region. Human capacity building is emphasized in all activities. Educational pro- grams and the provision of resource materials are crucial. incurred in the agrodealer business and the associated One or more combinations of the following may be record-keeping needs for marketing and accounting; included: formal (classroom-type) training programs tai- price determination and pricing strategies; the design and lored to a particular audience on specific subject matter;4 implementation of promotional campaigns to improve development/dissemination of an agrodealers’ handbook; sales; procurement planning and negotiation; credit man- informal, one-on-one site visits with agrodealers to provide agement; and extending agrodealer networks to improve guidance on business management, product display, prod- geographic coverage. IFDC’s experience is that short uct storage, and safe input use and handling practices; and group training sessions with a blend of lectures, group regional and international study tours to observe agrodeal- exercises, and case studies are highly effective in building ers and technology suppliers in more advanced markets. business acumen. Cost-sharing (for technology demonstrations and field days, for instance) is emphasized. As an example of the type of resource material provided to agrodealers, an agrodealer Business linkage development handbook was developed in Uganda and Bangladesh to Business linkage development is critical in enabling serve as a ready reference for agrodealers. agrodealers to capitalize on opportunities to improve the The scope of interventions may range from a one-time cost and operational efficiency of value chain and credit event such as a two-day training program to a more exten- management and to expand the scope of their operations. sive, multiyear, comprehensive market development effort Strengthening linkages within the agricultural input value that includes agrodealer development. It is important to be chain generates several advantages. It allows for efficiencies aware of the peak agricultural input use season and avoid in logistics planning and inventory management, improves scheduling programs at those times. MODULE 3: INNOVATIVE ACTIVITY PROFILE 1: AGRODEALER DEVELOPMENT IN DEVELOPING AND EMERGING MARKETS 233 BENEFITS AND IMPACT Box 3.28 Business Linkage Development and Leveraging Resources A holistic, market-oriented approach to agrodealer develop- ment facilitates improved efficiency in resource allocation, operations, and economic performance. The benefits of Global Development Alliance. In collaboration agrodealer development accrue at various levels in the value with the United States Agency for International chain and impact stakeholders at the micro and macro lev- Development and the Eurasia Group (Pioneer, John els. For instance, beginning in 2008, the Government of Deere, DuPont, and Monsanto), IFDC helped to Bangladesh endorsed fertilizer deep placement as a technol- create a Global Development Alliance in Kyrgyz- stan. The alliance has been instrumental in intro- ogy that would help to improve rice production systems ducing technology and building human capacity substantially, thereby contributing to food security and through cost-sharing and in linking Kyrgyzstan’s farmers’ incomes. IFDC, with support from USAID and the agrodealers to suppliers of improved technologies. Government of Bangladesh, designed and introduced a pro- Linking South Asian and African entrepre- gram to diffuse the technology and concurrently address neurs. IFDC is organizing study visits and technical demand and supply issues. The role of agrodealers in workshops to link suppliers of fertilizer briquette Bangladesh continues to evolve and is having a substantial machines in Bangladesh and agrodealers in Kenya, impact on food security, farmers’ incomes, and the national Nigeria, and Rwanda. The emphasis is on creating budget (box 3.30). awareness and establishing business contacts among agrodealers, entities that directly impact their businesses (including banks and microfinance LESSONS LEARNED institutions), and agricultural input distributors/ wholesalers with local, national, regional, and IFDC’s long experience in working with agrodealers in international markets. emerging markets throughout the world can help practi- tioners plan or support similar activities. Key lessons are Sources: IFDC, unpublished project documents, 2009 summarized below. and 2010. ■ Understand the challenge. The agrodealer market envi- ronment and challenges faced by farmers differ from Box 3.29 Agrodealer Associations Support country to country. A key lesson is that a “one-approach- Common Interests serves-all� philosophy does not work. Each intervention must be tailored to the prevailing conditions in the target The role and benefits of agrodealer associations are area. Achieving success in agrodealer development reflected in improvements in four key areas: access requires a clear understanding of the overall agricultural to finance, advocacy, communication, and educa- input marketing system, the stage of development, and tion. IFDC implemented the Fertilizer Distribution the influence of macroenvironmental factors at a given Improvement (FDI) II project in Bangladesh dur- time. ing 1987–94 with funding from the United States ■ Engage the public agricultural extension service to the Agency for International Development. With FDI maximum extent feasible and use its extensive networks II project support, the Bangladesh Fertilizer Associ- to provide knowledge-building services to farmers. A ation (BFA) was established in June 1994. A decade key lesson is that the extension service, other public offi- and a half later, the BFA is a 7,000-member-strong cials, and private agrodealers must provide farmers with association that provides varied services to its a consistent, clear message on the need for and appropri- members, including policy advocacy, knowledge ate and safe use of agricultural inputs. transfer, and improved market transparency. It is important to avoid dependency on donor ■ Keep learning practical and interactive. A key lesson is funds for association operations. Long-term survival that agrodealers learn best either through direct, one-on- requires the association to create a revenue flow that one assistance or through group participation with comes substantially from membership dues. hands-on interaction. Study tours in more advanced markets often are beneficial to build business linkages Source: USAID 1996. and to further awareness and knowledge of technologies and the advisory role of agrodealers. 234 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 3.30 Diffusion of Fertilizer Deep Placement Technology in Bangladesh In close collaboration with the Department of Agri- ■ Stimulating supply system development: Over cultural Extension (DAE) and private dealers in 18 months, IFDC stimulated private entrepreneurs Bangladesh, IFDC is supporting the rapid diffusion of to invest (on a cost-sharing basis) in 157 FDP prod- fertilizer deep placement (FDP) technology. Increasing uct briquette machines. Eighteen training programs farmers’ demand for FDP technology and stimulating targeting entrepreneurs were conducted. The results the supply and marketing system to improve farmers’ of concurrently addressing demand and supply access to the technology are crucial to sustainable suc- issues related to diffusing FDP are impressive (see cess. At the macro level, the focus is on gaining govern- table B3.30). ment and donor endorsement of the technology. At the micro level, the primary focus is on: Table B3.30 Impacts of Addressing Supply and Demand Issues Concurrently in ■ Creating farmers’ awareness and demand for FDP Diffusing a New Fertilizer technology: Over four cropping seasons, IFDC com- Technology pleted 3,880 farmer training programs, installed Rice area under fertilizer deep 386 technology demonstration plots, completed placement (FDP) technology 94,380 ha Number of farm families adopting FDP 408,000 109 FDP technology field days, and conducted Incremental rice production 24,000 t 67 train-the-trainer programs for DAE staff. Advertis- Farm family income increase US$8 million ing activities included (among others) the installation Urea fertilizer savings 7,000 t of more than 2,000 signboards and billboards, the GOB subsidy reduction US$1.6 million development/dissemination of 135,000 technical New urea briquette machines at brochures and the development of 72 cinema slides. dealer level 121 Source: IFDC unpublished project documents, 2009–11. ■ Duration and continuity are important. A key lesson is the ministry in charge of agriculture, the public exten- that while one-time interventions in the priority areas sion service, commercial bankers, donors, and other rel- described earlier are beneficial, they are less effective than evant development agencies to the maximum extent in longer-term interventions that provide agrodealers with agrodealer development initiatives. Establish links with continued support for development. Both remedial and other projects to achieve synergies when possible. To more advanced training are important for achieving a achieve an element of ownership, dealers’ cost-sharing is sustainable impact. Program continuity allows for timely emphasized when feasible. The feasibility often depends interaction with policy makers and donors. upon the stage of market development. In seriously ■ Foster broad-based stakeholder involvement. Strength- underdeveloped input markets, where demand from ening dealers’ capacity, building knowledge, fortifying farmers is weak and risks are high, cost-sharing opportu- support systems, and establishing business linkages are nities are quite limited. Dealers lack the resources to essential, but they are not enough to ensure productive make a significant contribution to development. In more agriculture and sustained economic development. A key advanced markets, dealers’ cost-sharing may range from lesson is that broad-based stakeholder involvement is providing the inputs for technology demonstrations to essential to sustaining progress. It is important to engage covering a portion of the costs involved in field days. MODULE 3: INNOVATIVE ACTIVITY PROFILE 1: AGRODEALER DEVELOPMENT IN DEVELOPING AND EMERGING MARKETS 235 I N N O V AT I V E A C T I V I T Y P R O F I L E 2 Federating Farmer Field Schools in Networks for Improved Access to Services Arnoud R. Braun,Wageningen University Godrick Khisa, Farmer Field School Promotion Services Deborah Duveskog, Consultant Kristin Davis, Global Forum for Rural Advisory Services (GFRAS) SYNOPSIS as an unforeseen effect of the IFAD/FAO East African Inte- grated Pest and Production Management project con- ield school networks, which mostly developed sponta- F neously, consist of informal or formal groupings of FFS groups with a common interest that draw their membership from all the FFSs within a given geographical or ducted with the Government of Kenya. The FFS networks took off because farmers wished to continue with the dynamics and positive attributes generated by the first phase of the project, even without external funding. To administrative boundary. Common interests at the network date, at least nine FFS networks in Eastern Africa support level are mainly marketing, advocacy, sharing information and about 2,000 FFSs with close to 50,000 direct beneficiaries. experience, access to finance, and representation. From an They have no support from the initial project that estab- innovation systems perspective, the role of extension and lished the field schools but have established new partner- advisory services here is to assist in developing the needed ships and collaboration with other stakeholders. capacity and linking producers to markets and service providers. Network operations are supported through sub- scription fees from constituent FFSs and other sources of Definition of an FFS network income, such as interest on revolving funds, commissions on FFS networks consist of informal or formal groupings of sales, registration fees, profits from input sales, and grants. FFS groups with a common interest that draw their mem- Many networks operate a revolving loan system and therefore bership from all the FFSs within a given geographical or generate more funds to support operations and activities. administrative boundary. Each FFS elects one representative Although the networks have shown themselves to be sustain- to the higher network level. These networks offer a number able, their strength varies. Management, leadership, and of services to FFS member groups and individual farmers. organizational skills are needed to federate FFS networks. The networks are characterized as FFSs clustered in an asso- Networks are also vulnerable to individual motivation and ciation or not-for-profit company. They usually have an capacity, since they are mostly managed by voluntary efforts elected core executive board and at least three working com- among members and committee members. The networks that mittees, such as finance and planning, loans, and market have been most successful are those with very committed, information service. They have a constitution, by-laws, are dynamic, and democratic leaders. Facilitating the formation of registered, and have a bank account. The operations are FFS networks should be considered in large-scale agricultural supported financially by member FFS through subscription projects as a means to make a larger impact and make greater fees, commission on bulk sales, shares, or profit from the use of the social capital they generate. Lessons learned from sale of farm inputs. the networks are that market information, while needed, is not obtained easily, and that network capacities for financial management, standards, and use of ICTs must be developed. Evolution from individual groups into networks As the number of FFS groups in the program grew and CONTEXT broadened their level of operation, new challenges and Networks of Farmer Field Schools (FFSs) (see box 3.5 in this issues emerged that could not be solved by individual module’s Overview) started emerging in East Africa in 2000 groups. There were also increased opportunities for the FFS 236 to take advantage of economies of scale, necessitating Box 3.31 Gender Issues in FFSs more interaction and coordination. Based on these devel- opments and exchange visits and interactions between farmers, facilitators, trainers, and project staff in Western FFSs have been shown to change gender relation- Kenya in early 2000, FFS networks emerged. The networks ships, mainly because they introduce a formal were formed mainly by FFS graduates. Aside from taking group structure but also because they operate advantage of the opportunities just mentioned, the gradu- under agreed group norms and rules. All issues ates wanted to continue the dynamics generated by the FFS brought to the group are accepted for discussion, process—to build local institutions to ensure the continua- so fewer subjects are off-limits. As a result, the tion of farmer-led FFS and gain a stronger voice in express- position of women participating in FFSs has ing their demand. generally strengthened. In some East African com- The inherent attributes of the FFS approach of cultivat- munities, women dominate FFSs. Men are less ing cohesion and a willingness to learn together while solv- interested in working in groups, although in some cases, they join at later stages of the FFS process. ing problems that affect them as a community help to build their social capital. Common interests at the network level Source: Authors. are mainly marketing, advocacy, sharing information and experience, access to finance, and representation. There is therefore no conflict of interest when different FFSs come together to form the network. As a precursor to transforma- To assist members in access to affordable inputs of reli- tion, the level of empowerment and organization developed able quality, such as seed and fertilizer, the networks have in an FFS is critical and can have a significant impact on the arranged bulk purchases of inputs for resale among mem- marginal returns of a subsistence-based farming system. bers in smaller quantities, thus improving access and reduc- This strong cohesion within and among FFS groups is one ing costs. Many networks also operate small input kiosks at of the main factors contributing to the emergence of higher- their offices. level federations1 like the FFS networks. By joining together, FFSs also gained access to technical and advisory services not normally available to individual FFSs or farmers. Government and other extension agents BENEFITS TO FARMERS, IMPACT, have been very responsive to requests for assistance by the AND EXPERIENCE networks, because they can reach more people. FFS network members state a range of benefits experi- Networking acts as a safety net and sustains the FFS enced by the networks. Important benefits appear to be process long after a given project ends. By jointly applying increased voice and power and access to services and mar- for/guaranteeing loans for individual members or groups kets. Some of these benefits are especially important for and helping each other in the development of proposals, the women (box 3.31). federations have found it easier to obtain formal credit. Fur- Despite the market barriers experienced by smallhold- ther, a savings fund is in place in most networks from which ers, the networks have been able to arrange collective mar- individual FFSs can borrow money through informal credit keting with its many advantages. The networks have arrangements. assisted in identifying markets and collecting marketing Finally, farmers appreciate the sharing of information information. A network-based monitoring and record and experience that networks facilitate. Through connec- system helps group members track the availability and tions with other networks, member farmers exchange quantity of their produce, making it possible to plan bulk technical knowledge and new farming ideas in addition to sales and negotiate with buyers in advance of harvests. By benefitting from the social network in terms of mentoring, selling in larger quantities, FFSs reduce transaction costs, encouragement, and a feeling of togetherness. Farmers gain bargaining power, and thus command better prices attribute their involvement in network activities to the for their products. They have also been able to break or social bonding and trust building taking place within the weaken manipulative relationships with market inter- FFS. After networking and strengthening their capacity for mediaries and thereby gain access to more lucrative mar- collective action, member of FFSs have in many instances kets for their produce. Obtaining funds from government gained access to governance and policy processes, and they programs also appears to be easier for federated FFSs have also been invited by the government and other service (box 3.32). organizations to represent farmers in official functions. MODULE 3: INNOVATIVE ACTIVITY PROFILE 2: FEDERATING FARMER FIELD SCHOOLS IN NETWORKS 237 Box 3.32 A Kenyan Federation of Field Schools Benefits from Government Programs As a result of becoming federated, the Kakamega FFS ducing financial diversification and the role of credit in Network has obtained funds from government pro- agriculture, and teaching an agricultural planning grams such as Njaa Marufuku (“ban hunger in Kenya�) process called “plant-to-meet-market.� The network and the Kenya Agricultural Productivity Project also received 2.8 million Kenya shillings (K Sh) (KAAP), a World Bank-funded program. For example, (US$40,000) from KAPP for coordinating marketing the network obtained US$10,000 from the Livelihoods activities and agricultural commodity marketing. The Diversification and Enterprise Development Fund for funds were used mainly to purchase computer hard- building marketing capacity of network leadership, ware and software, provide training in agribusiness and developing and introducing a farming-as-a-business value chain management, and support service curriculum, establishing a marketing office that uses a providers. Finally, through the network three FFS blend of appropriate technology, developing links to Groups obtained K Sh 120,000 (US$1,715) each for established agricultural commodity exchanges, intro- vegetable production and marketing. Source: Authors. SUSTAINABILITY committee members. The networks that have been most successful are those with very committed, dynamic, and FFS networks ensure their sustainability in a range of ways. democratic leaders. Financially the operations of the networks are supported Environmental sustainability is supported by using envi- by the constituent FFSs through regular contributions in ronmentally sound farming methods. FFS learning revolves the form of subscription fees. Other sources of income around principles of integrated production and pest man- include interest charged on revolving funds, commissions agement, in which farmers balance the ecological and eco- on bulk network sales, registration fees, fines or penalties, nomic implications of particular practices for their farms donations and grants, shares from FFS members, and prof- and businesses. its from sales of inputs. Many networks operate a revolving loan system and therefore generate more funds to cover operations and fund activities. Some have managed to SCALING UP secure donor support. Politically and institutionally the networks can be consid- In most locations where a considerable number of FFSs ered independent of government and development support. have been implemented, FFS networks have spontaneously The networks are fully locally grown, owned, and managed. emerged. Currently FFS networks operate at different levels Donor support, where involved, has provided infrastructure in many districts of East African countries (Kenya, Uganda, and education. In no case have donors supported the net- and Tanzania) and elsewhere in Africa (mainly Sierra works’ recurrent operations. Running of FFSs by FFS net- Leone). Most networks have emerged in relatively high- works is one way to reduce the costs of running FFSs; FFS potential (high-rainfall) areas, although some operate in networks have lower operating costs owing to lower trans- semiarid and arid areas. As noted, the replication of FFSs is port costs, lower overheads, and cheaper facilitators (most stimulated by FFS graduates’ wish to continue the dynamics are farmer facilitators). generated by the FFS process and the recognized need to To date the networks have shown themselves to be sus- build local institutions. Through various modes of informa- tainable; all are still active. Their strength varies, however. tion sharing, networking is also promoted when farmers Management, leadership, and organizational skills are hear success stories from other places. In East Africa, the vir- needed to federate FFS networks. Networks are also vulner- tual network “Linking Local Learners,� which connects able to individual motivation and capacity, since they are farmer groups and networks online, contributed to the mostly managed by voluntary efforts among members and growth and development of FFS networks. 238 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK The emergence and expansion of FFS networks has In the case of the East African FFS networks, market also been attributed to the “foci model�2 adopted for the information clearly was crucial for enhancing farmers’ establishment of FFSs in East Africa. In this model, succes- access to markets. Market information is not always easy sive FFSs are established in the immediate neighborhood of for rural, often illiterate farmers to obtain. Extension advi- existing ones to form a cluster. This strategy has enhanced sors often are uncomfortable or incapable of changing their the frequency of interaction, experience sharing, and the role from providing technical messages to acting as more of horizontal flow of information among groups. The model an information broker. The need to rethink the role of also reduces the cost of implementing collective activities extension and (re-)train extension agents accordingly, dis- because the FFSs can procure inputs and market their cussed throughout this module, is clear. produce in bulk. Facilitating the formation of FFS networks Based on needs realized and expressed by networks, there should be considered in large-scale agricultural projects as is a demand for more attention to capacity building in a means to make a larger impact and make greater use of financial management, marketing, standards and quality, the social capital they generate. and the use of ICT tools. Much of the current extension practice is targeted at improving technical skills, not man- agement skills. LESSONS LEARNED AND ISSUES The principle of federating upon graduation must be FOR WIDER APPLICATION incorporated into the curricula of all FFSs. As FFS net- Farmer Field Schools are considered “stepping stones� to works grow and take on more complex initiatives, net- networks, federations, and associations and are an effective works will need investments to acquire and learn to use platform for farmer organization and empowerment. ICTs to bridge the information gap, enhance the diversi- These networks serve an important role for farmers both in fication of business opportunities, and improve opera- terms of social and technical support. The probability that tional efficiency. Computer and Internet access and skills networks will form can be increased if projects give atten- are high priorities. Revolving funds need to be developed tion to the longer-term prospects, if farmer facilitators and into more sustainable and long-term investments by sup- FFS alumni receive follow-up support, and farmer-driven porting networks in identifying viable income-generating network development is encouraged. activities. MODULE 3: INNOVATIVE ACTIVITY PROFILE 2: FEDERATING FARMER FIELD SCHOOLS IN NETWORKS 239 I N N O V AT I V E A C T I V I T Y P R O F I L E 3 INCAGRO: Developing a Market for Agricultural Innovation Services in Peru John Preissing, Food and Agriculture Organization of the United Nations (FAO) SYNOPSIS BASIC PROJECT DATA he INCAGRO project seeks to establish a national The Innovation and Competitiveness Program for Peru- T agricultural science and technology system that is decentralized, pluralistic, demand-driven, and led by the private sector. The project achieves this objective by vian Agriculture (INCAGRO, Innovación y Competitividad para el Agro Peruano) contributed to the development of a market for agricultural innovation services by paying close strengthening the market for agricultural innovation ser- attention to how demand for such services is generated and vices, increasing strategic competencies in agricultural how those services are supplied. INCAGRO has led to tech- research for development, and promoting the institutional- nical innovations that bolstered production and productiv- ization of policies, information, and the quality of innova- ity and institutional innovations that fostered potentially tion services. The most notable innovation of INCAGRO sustainable models for delivering innovation services. was the emergence of a demand-driven market for agri- INCAGRO’s primary partner has been the Ministry of cultural innovation services that was more extensive and Agriculture and the national agriculture research and inno- inclusive than before. This achievement came about as a vation institute (Instituto Nacional de Innovación Agraria) result of empowering clients to formulate, cofinance, regu- (financing details are shown in box 3.33). late, implement, monitor, and evaluate extension services through the mechanisms and tools offered through two Box 3.33 Sources of Support for the Innovation competitive funds. One fund increased the demand and and Competitiveness Program for supply of extension services through competitive bidding, Peruvian Agriculture (INCAGRO) and the other expanded the number and quality of exten- sion providers. Another innovation of INCAGRO is that it provided effective national yet decentralized support The first phase of the INCAGRO research and through regional offices and a central headquarters. The extension program (November 1999–January 2005) potential long-term impact or sustainability of the model was financed through a World Bank Adaptable Pro- has not been established (more care is needed to document gram Loan (US$9.6 million), the Government of ex post impacts), but it is clear that with appropriate Peru (US$1.44 million), and local counterparts backstopping farmers can become authentic drivers of (US$2.78 million), for a total of US$13.82 million. agricultural extension systems. The competitive grant The second phase (October 2005–December 2010) funds owed their success to transparent policies and rigor- was financed through a second Adaptable Program ous selection and monitoring. A small staff functioning as Loan (US$25 million) in addition to US$6 million agricultural innovation brokers throughout Peru promoted from the Government of Peru and US$12 million efficiency and effectiveness within the agricultural innova- from local counterparts, for a total of US$43 mil- tion market. Organizational development is needed to lion. As of this writing, financing for a third phase remains under review by the Government of Peru work with underserved groups (and also larger groups of and the World Bank. farmers to decrease administrative costs). The emphasis must shift to developing a more sustainable system based Source: Author, based on INCAGRO project documents on private cost recovery, funding partners, and government and World Bank 2005. support. 240 CONTEXT agribusiness leaders rate the proposals and determine which projects will be funded. The panels may also recom- Peru’s public extension services grew considerably from mend changes in the content or size of the proposed projects. the mid-1950s to the mid-1980s, but in the years that fol- The INCAGRO team receives guidance from the evaluation lowed, a range of factors led to their decline. The number panels for adjusting proposals with the farmer organizations. and range of services supplied by Peru’s public extension The exercise of developing a business plan, submitting pro- system became financially unsustainable owing to gov- posals for competitive review, negotiating with INCAGRO ernment financial limitations, privatization trends, and “innovation brokers,� and the follow-up monitoring and the inhibiting presence of the Shining Path guerilla group evaluation data demonstrates, particularly to farmers, that a (Ortiz 2006). The system was considered too top-down, positive return can be made on the investment in agricul- too supply-driven in its focus on technology transfer, and tural innovation services. too centralized. Although large-scale commercial produc- Proposals range from using innovation services to ers could still obtain extension services, small and medium improve agricultural production and productivity to using producers came to rely on sporadic support from NGOs. them to improve agricultural products and agroindustry. A common concern with the extension services supplied To date, extension service projects covering 40 annual crops, by NGOs was that those organizations were not well inte- 26 perennial crops, 10 kinds of farm animals, 11 kinds of grated with the AIS and its knowledge and information fish, and 18 agroprocessing efforts have been funded. Crops subsystem. include basic food crops as well as export crops, some raised Because the provision of agricultural innovation services organically. to Peru’s small and medium-sized farmers was particularly An important aspect of the FTA model is that farmers weak, in 1999 the government signed a letter of intent with own the project. They contract extension providers to com- the World Bank to promote agricultural innovation through plete a specified number of activities. Farmer groups are the Bank’s Adaptable Loan Program in three phases: the required to make a financial contribution in cash, plus establishment of the innovation system; scaling up the sys- any in-kind contributions. The cash contribution ranges tem; and a final consolidation phase (presently under dis- between 15 and 30 percent of the total costs for extension cussion). A key feature of the resulting INCAGRO project is projects. Farmers must form legal entities to sign contracts the use of competitive funding schemes to promote a mar- and receive government support. To meet these require- ket for agricultural innovation services. ments, participants must be willing to collaborate, handle considerable legal paperwork, and have the capacity to man- DEVELOPING A MARKET FOR AGRICULTURAL age and implement their projects. INNOVATION SERVICES The FTA fund makes it possible for farmer groups to gain organizational and project development skills by con- INCAGRO’s main objective is to establish a national agri- tracting an “ally� (aliado), a private individual or a public or cultural science and technology system that is modern, private agency, to assist in formulating the project proposal, decentralized, pluralistic, demand-driven, and led by the private sector. The project’s three components are designed developing the corresponding business plan, identifying to achieve this objective by: (1) strengthening the market for the right extension supplier, and managing project imple- agricultural innovation services; (2) increasing strategic mentation on behalf of the farmer group (box 3.34 pro- competencies in agricultural research for development; and vides an example from the project). An ally is a new but (3) promoting the institutionalization of policies, informa- critical innovation in the development of a functioning tion, and the quality of innovation services. market for extension services. (For more on this concept, see the discussion of innovation brokers in TN 4.) Competitive funds have expanded the market for exten- Agricultural technology fund: Competitive grants to sion service providers through various means. Producer improve the demand and supply side of the market organizations have hired their own extensionists, contracted for agricultural innovation services individual private extension providers, signed agreements The Agricultural Technology Fund (Fondo de Tecnología with NGOs, and partnered with cooperatives for the provi- Agraria, FTA) has financed projects developed by farmer sion of extension services. The FTA guidelines for project organizations for support in agricultural extension. Proj- proposals support a more holistic approach to agricultural ect proposals are based on business plans and use stan- innovation by including collaborating entities in the project dardized logframes. Independent, three-member panels of proposal, such as private input and marketing firms in the MODULE 3: INNOVATIVE ACTIVITY PROFILE 3: INCAGRO: DEVELOPING A MARKET FOR AGRICULTURAL INNOVATION SERVICES 241 business plan and use the ally to assist them in implement- Box 3.34 An Ally Broadens Farmers’ Skills to Articulate and Meet Their Demand ing the adaptive research project. The research entity can be for Innovation Services a public or private institution or an individual with specific competencies required for the project. In this case, the farmer organization must meet 5 percent of project costs. Through the Agricultural Technology Fund, three cacao cooperatives in Huánuco Region partnered with an ally to acquire technical assistance and Strategic Services Development Fund: training in a project to increase the productivity Improving the supply side of the market of cacao, obtain certification for organic cacao for agricultural innovation services production, and increase the marketing of their organic cacao. CAFÉ PERÚ (Central de Organ- The Strategic Services Development Fund (FDSE, Fondo izaciones Productoras de Café y Cacao del Perú) para el Desarrollo de Servicios Estratégicos) uses competi- served as the ally and implementing agency for the tive matching grants to promote basic and applied strategic project. The cooperatives received market analysis research, focusing on genetic resources, biotechnologies, and specific training in cooperative management plant and animal protection, natural resource management, and product promotion. Starting from zero in postharvest technologies, and conservation agriculture. It is the project’s first year, more than 1,200 producers a demand-driven system (box 3.35 provides examples). had obtained organic certification by the end of These strategic research areas were defined through national year three. Over the same period, cacao productiv- as well as decentralized workshops, with actors in the value ity rose from 340 to 600 kilograms per hectare, and chain for all of Peru’s major agricultural products, and on the cooperative markets some 1,500 tons of the basis of in-depth studies. organic cacao. Although cacao prices have risen Projects must involve strategic alliances of at least two overall, the productivity increases and the switch to organic production enabled producers’ returns major stakeholders in the research. A specific entity must to rise from US$ 546 to US$ 1,543 per hectare. make the proposal and lead the research; collaborating The total project cost was US$ 158,716 over the research organizations are encouraged and increase the three years. INCAGRO staff, along with CAFÉ competitiveness of a proposal. Funding is capped at PERÚ, played an important role in brokering the US$125,000 per project. Grant recipients must match this arrangement between national and local partners. funding by 50 percent or more through actual or in-kind resources. National, independent, three-member panels Source: Author, INCAGRO (http://www.incagro.gob.pe). comprised of researchers evaluate proposals for funding. A second purpose of the FDSE—to improve the supply of agricultural extension services—has proven useful for value chain as well as public agencies. Together, these col- developing service providers. Competitive grants are laborators form a strategic alliance that is formalized in an awarded to train extension providers to establish exten- Agreement of Participation. The agreement establishes the sion services; use specific extension methods; learn roles and responsibilities of each member of the alliance, particular crop and livestock practices, laboratory proce- their respective contributions to the project, and the final dures, and postharvest storage practices; write and ana- disposition of any items obtained as a result of the project. lyze business plans; and conduct market analysis. One The idea is that a strong strategic alliance will raise the prob- example of how these funds are used is the training given ability of success. by the Lambayeque Institute for Agricultural Develop- In addition to developing extension-based projects, ment to extension providers in how to price and market farmer organizations can develop adaptive research projects their services. Another example is the value chains and to verify the technical and economic suitability of research improvements in value chain training on small livestock findings in the local setting. The research is participatory, in Arequipa by the Institute for Development of the Infor- requiring the producer-clients to become involved in iden- mal Sector–Arequipa (IDESI, Instituto de Desarrollo del tifying problems or opportunities in their fields and Sector Informal). Extension training providers have contribute actively during all stages of the research. Produc- included cooperatives with their own staff, universities, ers can use the strategic alliance framework to include other national and regional research institutes, and national actors in the value chain as part of the adaptive research and regional NGOs. While this training has been useful 242 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 3.35 Using Competitive Grants to Fund Multiple, Synergistic Innovation Services for a New Oilseed Crop in Peru Competitive grants awarded by the Agricultural Tech- standardizing production, making production of nology Funda and Strategic Services Development organic Sacha Inchi more competitive, and improving Fundb for nine interrelated projects provided exten- producers’ agribusiness skills. These projects reached sion services for producers, adaptive research, and 450 producers directly. Adaptive research projects strategic research for the development of Sacha Inchi, a included testing and validating two technology pack- native Amazon oilseed plant with high levels of omega ages, one for organic production methods and the fatty acids. The projects involved actors all along the other for production and processing methods; these value chain, including the Ministry of Agriculture and projects had 220 direct and 670 indirect beneficiaries. Institute of Peruvian Amazon Research, rootstock The four in-depth strategic research projects focused providers, regional producers’ associations, extension on integrated pest management methods, the identi- providers, and processing and marketing associations. fication and improvement of genetic lines of Sacha Extension services were offered to community-based or Inchi, the generation of elite lines, and asexual propa- regional producer organizations on improving and gation methods. Source: Author, INCAGRO (http://www.incagro.gob.pe). a. Fondo de Tecnología Agraria; b. FDSE = Fondo para el Desarrollo de Servicios Estratégicos. for improving the quality of the extension services mar- competitive funding cycles and have greater success in win- ket, it represented just 10 percent of the projects. Accord- ning rounds. Stratifying the funds and providing direct ing to the World Bank (2009), this low percentage reflects assistance to targeted low-income groups were key features the small number of providers, the weakness of current of INCAGRO’s second phase. and potential training institutions, and a lack of commu- nication between the potential providers and suppliers. RESULTS AND INNOVATIONS The most notable innovation of INCAGRO was the emer- Monitoring, evaluation, and policy development to gence of a demand-driven market for agricultural innova- support a high-quality market for agricultural tion services that was more extensive and inclusive than innovation services before. This achievement came about as a result of empow- A key activity under the third component of INCAGRO has ering clients to formulate, cofinance, regulate, implement, been to develop an effective project monitoring and report- monitor, and evaluate extension services through the ing system that is agile and robust. For each project, baseline mechanisms and tools offered by the two competitive funds information is collected as part of the business plan pro- (J. Ramirez-Gaston, personal communication, April 19, posal required for submitting the requests for funds. During 2010). The demand and supply of extension services was the life of each project, data are collected during the “critical increased through the FTA competitive bidding process, path� steps. At the end of each project, a final financial and while the number and quality of extension providers technical report is prepared by the project executor. INCA- increased through the FSDE. GRO has developed strong, web-based tools (spreadsheets Another innovation of INCAGRO is that it provides and templates) to aid in this analysis. Data for all of the effective national yet decentralized support through seven projects are compiled for analyses by region, crop, type of regional offices and a central headquarters. Approximately intervention, gender, and other critical features.1 60 consultants led or supported the overall project, with an Periodic evaluations helped to improve how INCAGRO average of four per regional office (this number has fluctu- is implemented. For example, based on initial findings ated over the life of the project, based on competitive fund- from the World Bank’s Independent Evaluation Group, the ing and activity levels). All INCAGRO staff members are competitive fund strategy was redesigned to ensure that consultants rather than permanent government employees. disadvantaged groups would have greater access to the To improve their integration into the ministry, most INCA- MODULE 3: INNOVATIVE ACTIVITY PROFILE 3: INCAGRO: DEVELOPING A MARKET FOR AGRICULTURAL INNOVATION SERVICES 243 GRO offices are located at stations of the national agricul- percent, 77 percent of participants were willing to partially tural research service, unless they are quite distant from a pay for extension services, the number of extension and city center. research providers grew by 23 percent, and the diversity The impact of the individual projects funded by the and quality of services increased by 25 percent. The same grants has been significant, but challenges remain in ensur- study calculated an internal rate of return between 23 and ing a sustainable market for agricultural innovation ser- 34 percent, higher than typical returns for agricultural vices. There is no evidence yet that effective, sustained development projects. The benefit-cost ratio was esti- demand for technical assistance services exists or that the mated at two to one, and net present value at US$15 mil- capacity to pay for these services (through increased lion (2009). Using a different sample, the World Bank incomes) will suffice to maintain them. In fact, one institu- study concluded that the economic rate of return for the tional challenge to the continued market for agricultural FTA projects was 39 percent. The Bank’s study also reports extension is the plethora of providers from NGOs and other that Barrantes et al. (2004) calculated an average eco- government projects (some also funded by the World Bank) nomic rate of return of 76 percent for a selected number which provide technical assistance gratis or without com- of extension projects. petitive funding. Indicators of sustainability are discussed in Based on these analyses, INCAGRO appears to have been the benefits section below. a sound investment and successful project. Equity remains a concern, however: The greatest beneficiaries were medium- BENEFITS, IMPACT, AND EXPERIENCE TO DATE to large-scale producers rather than the most disadvantaged producers, including women. Strategies were adopted in the Two recent evaluations assessed the impact of INCAGRO second phase to target more vulnerable groups with sepa- (World Bank 2009; Ministry of Agriculture 2009). These rate funding, more support, and training. The results of this and the INCAGRO database provide information on the effort are not clear, but it has led to a perception that costs project’s near-term benefits and outcomes, but they are not per client have become higher. Finally, while it is possible to conclusive on the potential long-term impact or sustain- conclude with confidence that the competitive grant proj- ability of the model. Over eight years of INCAGRO’s imple- ects represented strong investments, INCAGRO itself must mentation, thousands of farmers demanded and received be judged against its broader goal of generating a sustain- extension support (table 3.10). Over half of the funds used able model for an agricultural innovation market for exten- in the competitive grant projects came from financing pro- sion services. vided by farmers and service providers, though much was in the form of in-kind contributions. The two evaluation studies, using nonrandomized sam- LESSONS LEARNED AND ISSUES ples due to data limitations, reached positive findings on FOR WIDER APPLICATION the project’s impact. The Ministry of Agriculture study Peru now has many new competitive funding schemes sup- estimated that 56 percent of producers were likely to adopt porting agriculture, including at least two other schemes the technology innovations, productivity increased by 86 managed by the Ministry of Agriculture and others by sci- ence and technology and innovation units. In interviews, Table 3.10 Measures of INCAGRO Project Output these funders credit INCAGRO for much of the success Projects supported of competitive funding schemes, including their role in through grants Outreach and funding developing competitive funding strategies; in building Funding cycles: 36 72,000 farmers reached the capacity of producer organizations to follow rigorous FTA extension projects: 580,000 indirectly affected 34% to indigenous groups* 16% indigenous population* funding protocols and implement projects; preparing a 12% to women’s groups* 5.5% women farmers reached cadre of professionals that now manage other funds; devel- 1,211 proposals directly* oping a pool of competent service providers; and creating 330 approved US$43.7 million expended competitive funding mechanisms and tools that were FDSE extension training: 53% from cofinancing 349 proposals 67% used strategic alliances directly adopted by the new funding agencies. These are 51 approved actually some of the strongest signs of INCAGRO’s sustain- ability, if not as a program then as a concept. The long-term Sources: INCAGRO (http://www.incagro.gob.pe); Benites and Wiener 2008. sustainability of individual extension service providers is * Some of these beneficiaries may be indigenous women. not guaranteed through competitive funding schemes, but 244 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK such schemes may represent a sustainable model for exten- functioning as agricultural innovation brokers throughout sion provision. Quite possibly, future markets for agricul- Peru served to promote efficiency and effectiveness within tural innovation services will include multiple competitive the agricultural innovation market. Further, by basing staff funding schemes that seek efficiency and responsiveness on throughout the country, INCAGRO supported national the part of extension providers and effective demand from decentralization goals. Smaller projects dominated the farmers. This model or market may grow, shrink, or change market for extension services, incurring higher administra- focus based on who funds it and on what producers tive costs. Organizational development is needed to work demand of it. with underserved and also larger groups of farmers to In summary, major lessons and issues have emerged decrease administrative costs (IAP 2). While it is important from INCAGRO. Farmers can become authentic drivers of to focus on establishing funding cycles and tools, eventually agricultural extension systems, but initially they require the emphasis must shift to developing a more sustainable professional backstopping (by “allies�). Transparent poli- system based on private cost recovery, funding partners, cies and rigorous selection and monitoring procedures are and ongoing government support. Finally, more deliberate keys to the success of competitive grant funds. INCAGRO’s care is needed to document ex post impacts, including the operating procedures, information systems, and communi- careful and limited use of control groups to reach clearer cation strategies were essential. A small number of staff conclusions on INCAGRO’s impact. MODULE 3: INNOVATIVE ACTIVITY PROFILE 3: INCAGRO: DEVELOPING A MARKET FOR AGRICULTURAL INNOVATION SERVICES 245 I N N O V AT I V E A C T I V I T Y P R O F I L E 4 Combining Extension Services with Agricultural Credit: The Experience of BASIX India Vijay Mahajan, BASIX Group K. Vasumathi, BASIX Group SYNOPSIS cattle feed) as well as irrigation pumps and crossbred cat- tle, but BASIX realized that financial services alone could ince 1996, BASIX has piloted and scaled up liveli- S hood promotion initiatives in which an integrated triad of services—financial services, agricultural, livestock and enterprise development services, and insti- not raise farmers’ incomes. Farmers also needed awareness of better agricultural practices and preventive animal healthcare to reduce risk and costs. In other words, they needed a range of agricultural and livestock development tutional development services—is delivered on a fee-for- services to gain the knowledge to improve crop and live- service basis. BASIX has reached as many as 3.5 million stock production, mitigate risk, and develop stronger links poor households across 19 states in India. The emphasis to markets. has been less on increasing agricultural production than on reducing production costs through a variety of agricultural and business development services. A thorough analysis OBJECTIVE AND DESCRIPTION and understanding of particular subsectors (paddy, BASIX (www.basixindia.com) began in 1996 “to promote a groundnut, dairy, and soy, among others) helped identify large number of sustainable livelihoods, including for the opportunities for increasing incomes and develop appro- rural poor and women, through the provision of financial priate products and services. Facilitating linkages with services and technical assistance in an integrated manner.� high-end markets also resulted in a net increase in produc- BASIX, recognized as a pioneer in livelihood promotion, ers’ incomes. Because products and services were tailored to now operates in over 40,000 villages across 19 states in India customers’ diverse needs, they were willing to pay for with more than 3.5 million poor households. them. The mix of services enabled customers (primarily For the first five years, BASIX delivered what it called the rural poor) to increase their incomes from their crops, “microcredit plus� services to clients. The “plus� compo- livestock, and other enterprises. While it is widely under- nents were Technical Assistance and Support Services stood that financial services alone are insufficient for (TASS), provided through various programs: promoting livelihoods, BASIX provides an innovative strategy for offering such integrated services in a finan- ■ Dryland Agriculture Productivity Enhancement Pro- cially sustainable manner. gram (DAPEP). DAPEP introduced new crops or vari- eties; arranged for inputs such as seed, fertilizer, and pesticides (including biopesticides); provided exten- CONTEXT sion support for new agronomic practices to cut costs More than 80 percent of India’s roughly 90 million farm and increase yields; and arranged for collective trans- households operate on a small or marginal scale, farming port, processing, and purchase of produce by local less than two hectares. Most of them also usually have one agencies and companies. or two buffaloes or cows, reared for milk and dung. Given ■ Inter Borrower Exchange Program (IBEX). IBEX focused that most small-scale and marginal farmers fall below the on the exchange of expertise among borrowers on better poverty line, any improvement in their income will help to management practices and local innovations. reduce overall poverty in India. Credit can help farmers ■ External Resource Person Advisory Program (ERAP). obtain yield-enhancing inputs (improved seed, fertilizer, ERAP invited experts to serve as resource persons to 246 deliver advisory services on required topics and prac- (See TN 2, which discusses the need for financial services, and tices. IAP 2, which explains how to build strong federations of ■ Self Help Group Quality Improvement Program farmer groups to obtain better services.) In 2002, BASIX (SHGQIP). A microfinance agent model for promoting developed a “livelihood triad� strategy to provide comprehen- self-help groups was tested under this program. sive livelihood promotion services to poor rural households. ■ Rural Infrastructure Revival (RIR). Local community Box 3.36 describes how services evolved for one particular resources were activated to rehabilitate lift irrigation, the subset of clients. electricity supply, milk chilling plants, and other infra- structure. INNOVATIVE ELEMENT These programs delivered services on a full grant basis As mentioned, the livelihood triad strategy includes the or 50:50 or 75:25 cost sharing by customers and BASIX, provision of financial inclusion services; agricultural, live- depending on need and customers’ willingness to pay. stock and enterprise development services; and institu- Under the triad strategy described in the next section, these tional development services detailed in table 3.11. Under services evolved into the services listed in table 3.11. Agricultural, Livestock, and Enterprise Development (AGLED) services, BASIX currently provides services to farmers growing several crops (cotton, groundnuts, soy- RATIONALE FOR BASIX’S TRIAD STRATEGY beans, pulses, paddy rice, chilies, vegetables, mushrooms) In 2001, BASIX asked the Indian Market Research Bureau, an (box 3.37) and lac (a form of organic resin) and producing independent external agency, to assess the impact of BASIX milk and livestock (poultry, sheep, and goats). among recipients of its services. Only 52 percent of customers Nonfarm business development services are also provided who had received at least three rounds of microcredit had sig- for selected activities such as tailoring, woodworking, bam- nificantly improved their incomes, compared with a control boo work, retail stores, and niche handicrafts and hand- group who received no credit. Income levels did not change looms. An example of the need for institutional development among 25 percent of customers; 23 percent reported a decline. services beyond financial assistance is given in box 3.38. BASIX carried out a detailed study of those who had expe- rienced no increase or a decline in income and concluded that ACHIEVEMENTS this outcome arose from unmanaged risk, low productivity, and limited access to markets, combined with poor terms for Today BASIX works in more than 40,000 villages through a buying inputs and selling output. The analysis clearly identi- network of over 250 branches, each with five field execu- fied several needs: to improve farmers’ productivity, offer ser- tives under a team leader. Each field executive supervises five vices to mitigate risk, improve producers’ links to markets, livelihood service advisers (LSAs). Each LSA covers about and organize producers to gain a stronger bargaining position. 10 villages, originating credit, selling insurance, collecting Table 3.11 Services Included in the BASIX Livelihood Triad Agricultural, livestock, and Financial inclusion services enterprise development services Institutional development services Savings (directly in districts where Improved productivity through higher On an individual level, develop awareness, BASIX has a banking license and yields from improved seed or practices skills, and entrepreneurship through other banks elsewhere) Credit: agricultural, allied, and nonfarm, Improved productivity through cost reductions Form producer groups, federations, cooperatives short and long term Insurance for lives and livelihoods, Risk mitigation (other than insurance), such as Functional training in accounting and management including index-based weather livestock vaccinations information systems, using information insurance for crops technology Money transfer, for migrant workers Local value addition, such as processing cotton Build collaboration to deliver a wide range into lint (fiber) before selling of services Experimental products such as Alternative market linkages: input supply and Sector and policy work: analysis and advocacy micropensions and warehouse receipts output sales for changes and reforms Source: Vijay Mahajan, BASIX. MODULE 3: INNOVATIVE ACTIVITY PROFILE 4: COMBINING EXTENSION SERVICES WITH AGRICULTURAL CREDIT: BASIX INDIA 247 Box 3.36 BASIX Services for Groundnut Farmers in Andhra Pradesh: From Financial Services to Livelihood Triad Services In 2001–03, BASIX was working in Anantapur District, These interventions offered little for rainfall-depend- which had 700,000 groundnut farmers, with support ent farmers affected by drought, however. Dairy produc- from ICICI Bank. Based on recommendations from tion was promoted as an alternative livelihood strategy research institutes,a the program introduced drought- in 2003. BASIX identified villages to form milk collec- tolerant cultivars and agronomic practices to reduce the tion routes, educated farmers in dairy farming, helped effects of drought, but three years of severe drought villagers grow fodder where some irrigation sources dashed efforts to raise groundnut yields. BASIX had were available, and negotiated linkages with nearby greater success with improving groundnut marketing. bulk chilling centers established by the Andhra Pradesh BASIX formed a farmer cooperative and facilitated it Dairy Development Cooperative Federation. The market to lease a local factory to shell groundnuts—an activity linkages facilitated with the federation led to the revival formerly done by intermediaries. This value-adding step of chilling centers in Kalyandurg and Kannekal. Chill- enabled farmers to sell their produce at a higher price. ing center capacity increased from 2,000 liters to 10,000 Women’s self-help groups bought groundnuts produced liters. Outreach to women, for whom dairy became a under irrigation in the rabi (winter) crop cycle and primary livelihood activity, increased. Migration from processed them for sale. Large hand-processed nuts the area declined. Many such efforts have led to the were sold as seed for the upcoming kharif (summer BASIX “livelihood triad� of services (financial inclusion monsoon) crop cycle, and smaller ones were sold for services; agricultural, livestock, and enterprise develop- bird feed. ment services; and institutional development services). Source: S. Amarnath and K. Vasumathi, BASIX. (a) The International Crops Research Institute for the Semi-Arid Tropics and the Central Research Institute for Dryland Agriculture. Box 3.37 AGLED Services for Mushroom Cultivation BASIX seeks to enhance clients’ awareness of good ■ An assessment of mushroom beds for progress practices related to their investments. One example is of mycelium growth. Training is provided to con- the fee-based Mushroom Development Services Pack- duct regular inspections of beds to ensure regular age, which BASIX offers to customers who have suffi- growth of mycelium, avoid losses, and enhance cient space to raise mushrooms as an additional source production. of livelihood. The package includes: ■ Training in measures to mitigate the effects (and risks) of high temperatures and low humidity. ■ A review of the primary requirements for mush- ■ Training in producing two value-added products. It room cultivation. A suitable location and the use of can sometimes be difficult to sell raw mushrooms. specific materials are key factors for good mush- Value-added products such as mushroom pickles room production. and soup always fetch higher prices and increase ■ Mushroom bed installation (including straw-cut- profits for producers. ting techniques, soaking straw in water, preparing ■ Input market linkages for spawn and polythene. the bed using spawn and feeding material), aftercare BASIX helps customers identify sources of good for optimum production, identification of poison- spawn and facilitates the procurement of polythene ous mushrooms, and precautions to be taken. and spawn. Source: Tapaskumar Pati, BASIX. 248 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK are women. BASIX distributes product brochures in Box 3.38 Contract Farming for Potato: The Need for Strong Farmer regional languages telling customers what services they can Organizations receive and explaining the service conditions. Customers pay 450 rupees (Rs) (US$10), including a service tax, for a year of AGLED services. BASIX became involved with financing the potato In 2010, AGLED services had over half a million customers. value chain in Jharkhand in 2005. PepsiCo was About half of them used agricultural and livestock services, already buying potatoes from some farmers in and the remainder used services related to nonfarm activities. Jharkhand but on a very limited scale. It Among the agricultural services, BASIX provided a soil-testing approached BASIX to facilitate contract potato service for more than 30,000 farmers, integrated pest manage- farming on a larger scale. BASIX had strengthened ment or integrated nutrient management services to nearly its capacity as a facilitator and subsequently helped negotiate contracts between PepsiCo and small- 160,000 crop customers, and field surveillance to more than scale potato farmers to supply agreed quantities 85,000 farmers. It connected most customers to input markets of potatoes at a specified quality and price to (seed, fertilizer, pesticide, and bio-inputs such as vermi- PepsiCo’s chip-making factory in Kolkata. compost and organic pesticide) and output markets. BASIX Although in the first years the contract resulted in provided index-based weather insurance to more than 10,000 increased yields and higher incomes for farmers, in farmers for different crops in different agroclimatic zones in later years farmers’ yields were affected by prob- 2009, in collaboration with private insurance companies. lems with seed quality, heavy disease infestations, BASIX also conducted health checkups of nearly 450,000 and unfavorable weather. Sometimes their pota- animals, vaccinated nearly 165,000, and dewormed 200,000 toes were rejected at the factory because of poor animals. It trained more than 170,000 customers in feed, quality, and other times they resorted to the open fodder, and other improved practices for dairying. More market, where they obtained better prices. Clearly than 60,000 farmers were linked to milk marketing chains the partners needed more than finance to continue their association productively. BASIX invested in supported by cooperatives or private companies. More than strengthening the relationships with partner 120,000 animals were insured in collaboration with private organizations and the farming community to companies. ensure that contracts operated fairly. Source: Mishra 2008. LESSONS LEARNED It has taken BASIX about seven years to reach the scale described, and it has learned many lessons along the way. payments, and selling AGLED services. Repayment schedules Lessons that may prove useful for similar initiatives are depend on the crop, cropping season, and household cash summarized here. flows and range from 6 to 11 months and 1–3 installments. BASIX has more than 4,000 LSAs. ■ It is vital to respond proactively to farmers’ needs. BASIX field executives identify and select villages or In its first two years, BASIX emphasized market clusters of villages to receive services. A cluster is a group of research to identify which services farmers needed. The villages within a radius of 6–8 kilometers, which offers a organization also conducted action-research through reasonable base for delivering services effectively and effi- many pilot interventions. This research, which featured ciently to customers. The branches start enrolling customers numerous field visits and group interactions with for services in villages where at least 30 borrowers engage in farmers, showed that small-scale farmers preferred either crop or livestock activities. cost-saving and risk-reducing interventions over yield- BASIX has a cadre of over 1,000 livelihood services enhancing interventions requiring greater cash outlays. providers (LSPs). While LSAs function as salespeople, LSPs BASIX also learned that it was not possible to handle resemble extension agents. An LSP works with BASIX on a such interventions for a large number of crops, so it regular basis and is typically a high-school graduate trained focused on a few crops grown by a large number of as a para-extension worker or para-veterinarian. He or she farmers, such as groundnuts in southern Andhra covers 200–400 customers for one crop or activity. More Pradesh, cotton in northern Andhra Pradesh, and soy- than 10 percent of the LSAs and over 15 percent of the LSPs beans in western Madhya Pradesh. MODULE 3: INNOVATIVE ACTIVITY PROFILE 4: COMBINING EXTENSION SERVICES WITH AGRICULTURAL CREDIT: BASIX INDIA 249 ■ In designing services, focus on reducing costs. Produc- service delivery through mobile phones so farmers can tivity can be increased by raising yields as well as by report LSPs for poor service or missed visits. reducing the costs of producing the same amount of out- ■ Sustainability and extension of services to larger farmers. put. Local agricultural universities and research stations The income from AGLED services in 2010 was nearly had developed many practices for increasing yields, so Rs 148 million (US$3 million). BASIX made a modest profit BASIX decided to focus on reducing costs. One example (nearly Rs 22 million or US$450,000) by providing these of this approach was to apply pesticide on cotton stems services to over half a million customers. With more LSPs to reduce pest multiplication and reduce pesticide appli- reaching the breakeven number of customers, profitability cations later in the season. Another example was the is likely to improve. BASIX also plans to move some basic introduction of soil testing to enable more precise, eco- facilities like soil-testing labs and artificial insemination cen- nomical fertilizer use. For dairy animals, simple practices ters under its own control to improve its service to farmers. like vaccination and periodic deworming were more cost-effective than procuring high-yielding crossbred Although BASIX agricultural credit operations are aimed animals. at small-scale and marginal farmers, the organization plans ■ Customized services enhance willingness to pay. BASIX to extend AGLED services to larger farmers to whom it does staff learned how to customize AGLED services to differ- not extend credit in the same villages. In improving their ent agroclimatic zones, which enhanced farmers’ willing- yields, these farmers will generate additional production as ness to pay for services. Customer satisfaction surveys well as employment opportunities for the landless poor, conducted by independent audit teams found that the outcomes aligned with the BASIX mission. So far BASIX has satisfaction level was nearly 80 percent; the main cause of worked mainly in poorer dryland districts. It is considering dissatisfaction was inadequate visits from LSPs. To providing AGLED services in irrigated districts and for improve service, field executives introduced tighter mon- large-scale farmers where it has no credit operations itoring of service delivery through passbooks, acknowl- through its new BASIX Krishi company. With these changes, edgement receipts, and service cards, but this practice BASIX is confident of reaching two to three million farmers was expensive. BASIX is piloting a strategy to monitor with AGLED services by 2015. 250 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK NOTES eksyst/doc/country/pf/mozambique/index.htm, accessed July 2011. Module 3 Overview 4. KIT and IIRR (2012). Women’s skills and techniques can 1. It is useful to have a conceptual and analytical frame- be assets for entrepreneurship, and services should be tai- work for implementing and analyzing extension reforms lored to their circumstances as individual entrepreneurs and with a focus on pluralistic extension. Such a framework within groups. Capacity-building strategies and programs has been developed by a multidisciplinary group of with a gender focus are helpful (Kahan 2007: 90-92). researchers, and it distinguishes four sets of factors that 5. A priority of AFAAS (www.afaas-africa.org). need to be considered: the policy environment, the capac- 6. Examples include sesame, peppers, and organic and Fair ity of potential service providers, the type of farming sys- Trade produce (Jaleta, Gebremedhin, and Hoekstra 2009; tems and the market access of farm households, and the Kristjanson et al. 2009). nature of the local communities, including their ability to cooperate. The analytical framework then “disentangles� 7. AgriProfocus (http://www.agri-profocus.nl) fosters con- the major characteristics of agricultural advisory services certed efforts by public and private agencies to support for which policy decisions must be made (“choice vari- smallholders’ farming entrepreneurship. ables�): governance structures, capacity, management, organization, and advisory methods. Implementation of Innovative Activity Profile 1 the resulting extension programs and reforms should focus on “best fit� rather than “best practice.� For more informa- 1. This IAP focuses primarily on agrodealers who contin- tion see Birner et al. (2009). uously engage in supplying inputs. In reality, businesses 2. Many of the points in the table and this section are that supply agro-inputs operate on a seasonal basis in many based on Birner et al. (2009). emerging markets. They often sell inputs as complemen- 3. These strategies and lessons are relevant for other advi- tary products to their core general merchandise business. sory service programs; for more information, see Braun and Subdealers, or “stockists,� play a key role in improving Duveskog (2009) and Davis et al. (2010a). farmers’ access to inputs. This IAP focuses on agrodeal- ers and only alludes to the development of subdealers/ 4. See the discussion of the scaling-up tool developed by stockists. ZALF (the Leibniz Centre for Agricultural Landscape Research), described in Herberg and Schoening (2010). 2. Macroenvironmental factors (in particular the govern- ment's role in a country) substantially influence agrodealer participation in agricultural input markets. Thematic Note 1 3. The terms “value chain� and “agricultural input supply 1. Farm Radio International (www.farmradio.org), an and marketing chain� are considered synonymous in this NGO that reaches millions of rural people, is one example. IAP. For consistency, this IAP uses the more contemporary “value chain� terminology. 4. Activities are varied and may include lectures, group Thematic Note 2 discussions, role-playing, case studies, problem solving, 1. Others refer to these services as “value chain oriented hands-on analysis (such as the use of soil test kits), indi- services� (KIT, Faida Mali, and IIRR 2006; Webber and vidual and group presentations, special studies to design Labaste 2010), “Market-Oriented Agricultural Advisory promotional programs, observation/hands-on applica- Services� (Chipeta, Christoplos, and Katz 2008), and tionn of agricultural inputs, product displays, and videos, “marketing extension� (FAO, http://www.fao.org/ag/ags/ among others. agricultural-marketing-linkages/marketing-extension/ en). Innovative Activity Profile 2 2. These actors have (re-)discovered the need to address small-scale farmers’ demands; see, for example, the 1. Federations in this paper are defined as farmer organi- roundtable for a sustainable cocoa economy (www.round- zations that have emerged from bottom-up empowerment tablecocoa.org) and the sustainable spices initiative processes (such as the training of farmers’ groups), leading (http://www.kit.nl/spiceconference). to a higher level of organization at a given administrative or 3. “Republic of Mozambique: Country Programme Evalu- geographical level. ation, IFAD http://www.ifad.org/evaluation/public_html/ 2. Growing from a nucleus outwards. MODULE 3: NOTES, REFERENCES AND FURTHER READING 251 Innovative Activity Profile 3 and Evidence.� Research Paper No. 2006/37. Tokyo: United Nations University World Institute for Develop- 1. Information on INCAGRO’s subproject management ment Economics Research. and M&E tool (SIGES, Sistema de Gestión de Sub Proyectos) is available at http://www.incagro.gob.pe/WebIncagro/ Braun, A.R., and D. Duveskog. 2009. The Farmer Field detalleArticulosBanner.do?c_codigoArticulo=000166. School approach: History, global assessment, and success stories. Unpublished report for the IFAD Rural Poverty Report 2009, International Fund for Agricultural Devel- REFERENCES AND FURTHER READING opment (IFAD), Rome. Module 3 Overview Chema, S., E. Gilbert, and J. Roseboom. 2003. “A Critical Review of Key Issues and Recent Experiences in Reform- Alawy, A.S. 1998. Accessibility of Women’s Groups to Agricul- ing Agricultural Research in Africa.� ISNAR Research tural Extension Services in Kenya: An Exploratory and Report No. 24. The Hague: International Service for Descriptive Study of Factors, Needs, and Problems. National Agricultural Research (ISNAR). Unpublished PhD thesis, Ohio State University, Columbus. Christoplos, I. 2010. Mobilizing the Potential of Rural and Alston, J., C. Chan-Kang, M. Marra, P. Pardey, and Agricultural Extension. Rome: Food and Agriculture T.J. Wyatt. 2000. “A Meta-analysis of Rates of Return to Organization of the United Nations (FAO) and the Agricultural R&D: Ex Pede Herculem?� IFPRI Research Global Forum for Rural Advisory Services (GFRAS). Report No. 113. Washington, DC: International Food Davis, K. 2008. “Extension in Sub-Saharan Africa: Overview Policy Research Institute (IFPRI). and Assessment of Past and Current Models and Future Anderson, J.R. 2006. “Training and Visit (T&V) Extension Prospects.� Journal of International Agricultural and Method.� In the Sustainable Funding for Agricultural Extension Education 15(3):15–28. Innovation Systems Electronic discussion (http://www ———. 2009. “The Important Role of Extension Systems.� .dgroups.org/groups/worldbank/LAC-AgInnovations/ Brief 11 in “Agriculture and Climate Change: An Agenda index.cfm), which includes the Anderson video clip for Negotiation in Copenhagen.� 2020 Vision Focus (http://www.gdln-lac.org/wms/Agriculture_Message_ 16. Washington, DC: International Food Policy Research Series-08-15-2006-high%20bandwidth.WMV), accessed Institute (IFPRI). September 2011. Davis, K.E., and B.K. Addom. 2010. “Sub-Saharan Africa.� Anderson, J.R. 2007. “Agricultural Advisory Services.� Back- In ICTs for Agricultural Extension: Global Experiments, ground paper for World Development Report 2008, Agri- Innovations, and Experiences, edited by R. Saravanan. culture for Development, World Bank, Washington, DC. New Delhi: New India Publishing Agency. Anderson, J.R., and G. Feder. 2004. “Agricultural Extension: Davis, K., E. Nkonya, D.A. Mekonnen, E. Kato, M. Odendo, Good Intentions and Hard Realities.� The World Bank R. Miiro, and J. Nkuba. 2010a. “Impact of Farmer Field Research Observer 19(1):41–60. Schools on Agricultural Productivity, Poverty, and Benin, S., E. Nkonya, G. Okecho, J. Pender, S. Nahdy, Farmer Empowerment in East Africa.� IFPRI Discussion S. Mugarura, and G. Kayobyo. 2007. “Assessing the Paper. Washington, DC: International Food Policy Impact of the National Agricultural Advisory Services Research Institute (IFPRI). (NAADS) in the Uganda Rural Livelihoods.� IFPRI Dis- Davis, K., B. Swanson, D. Amudavi, D.A. Mekonnen, cussion Paper No. 724. Washington, DC: International A. Flohrs, J. Riese, C. Lamb, and E. Zerfu. 2010b. “In- Food Policy Research Institute (IFPRI). depth Assessment of the Public Agricultural Extension Benor, D., and M. Baxter. 1984. Training and Visit Extension. System in Ethiopia and Recommendations for Washington, DC: World Bank. Improvement.� IFPRI Discussion Paper No. 01041. Birkhaeuser, D., R.E. Evenson, and G. Feder. 1991. “The Eco- Washington, DC: International Food Policy Research nomic Impact of Agricultural Extension: A Review.� Eco- Institute (IFPRI). nomic Development and Cultural Change 39(3):607–40. Dercon, S., D.O. Gilligan, J. Hoddinot, and T. Woldehanna. Birner, R., K. Davis, J. Pender, E. Nkonya, P. Anandajayasek- 2008. “The Impact of Agricultural Extension and Roads eram, J. Ekboir, A. Mbabu, D. Spielman, D. Horna, and on Poverty and Consumption Growth in Fifteen S. Benin. 2009. “From Best Practice to Best Fit: A Frame- Ethiopian Villages.� IFPRI Discussion Paper. Washing- work for Analyzing Agricultural Advisory Services ton, DC: International Food Policy Research Institute Worldwide.� Journal of Agricultural Extension and Educa- (IFPRI). tion 15(4):341–55. Dixie, G. 2005. Horticultural Marketing. Marketing Exten- Blackden, M., S. Canagarajah, S. Klasen, and D. Lawson. sion Guide No. 5. Rome: Food and Agriculture Organi- 2006. “Gender and Growth in Sub-Saharan Africa: Issues zation of the United Nations (FAO). 252 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Engel, P., and M. Salomon. 1997. Facilitating Innovation for Volume 1 of Handbook: Rural Extension. Weikersheim: Development. Amsterdam: Royal Tropical Institute Margraf. (KIT). KIT (Royal Tropical Institute), Faida Mali, and IIRR (Inter- Frank, E. 1999. Gender, agricultural development, and food national Institute of Rural Reconstruction). 2006. “Chain security in Amhara, Ethiopia: The contested identity of Empowerment: Supporting African Farmers to Develop women farmers in Ethiopia. Unpublished paper, United Markets.� Amsterdam, Arusha, and Nairobi. States Agency for International Development (USAID), Kithuka, J., J. Mutemi, and A.H. Mohamed. 2007. “Keeping Washington, DC. up with Technology: The Use of Mobile Telephony in Gender and Governance Research Team. 2009. Gender and Delivering Community-based Decentralised Animal Governance in Rural Services: Insights from India, Ghana, Health Services in Mwingi and Kitui Districts, Kenya.� and Ethiopia. Washington, DC: World Bank and Interna- FARM-Africa Working Paper No. 10. London: FARM- tional Food Policy Research Institute (IFPRI). Africa. Government of Kenya. 2005. National Agricultural Sector Leeuwis, C., and A. van den Ban. 2004. Communication for Extension Policy (NASEP). Nairobi: Ministry of Agricul- Rural Innovation (Rethinking Agricultural Extension). ture, Ministry of Livestock and Fisheries Development, and Oxford: Blackwell Science. Ministry of Cooperative Development and Marketing. Nederlof, E.S., B. Wennink, and W. Heemskerk. 2008. “Access Hafkin, N., and N. Taggart 2001. “Gender, Information Tech- to Agricultural Services.� Background paper for the Inter- nology, and Developing Countries: An Analytical Study.� national Fund for Agricultural Development (IFAD) Washington, DC: Academy for Educational Development Rural Poverty Report 2010. IFAD, http://www.ifad.org/ and the Office of Women in Development, Bureau for rural/rpr2010/background/3.pdf, accessed September Global Programs, Field Support and Research, United 2011. States Agency for International Development (USAID). Praneetvatakul, S., and H. Waibel. 2006. “Impact assessment Hanson, J.C., and R.E. Just. 2001. “The Potential for Tran- of farmer field school using a multi-period panel data sition to Paid Extension: Some Guiding Economic Prin- model.� Presented at the 26th conference of the Interna- ciples.� American Journal of Agricultural Economics tional Association of Agricultural Economists (IAAE), 83(3):777–84. Brisbane, 12–18 August 2006. Haug, R., 1999. “Some Leading Issues in Agricultural Exten- Quisumbing, A.R. (ed.). 2003. Household Decisions, Gen- sion: A Literature Review.� Journal of Agricultural Educa- der, and Development: A Synthesis of Recent Research. tion and Extension 5(4):263–74. Washington, DC: International Food Policy Research Heemskerk, W., N. Lema, D. Guindo, C. Schouten, Z. Sem- Institute (IFPRI). galawe, H. Verkuijl, B. de Steenhuijsen Piters, and P. Quizon, J., G. Feder, and R. Murgai. 2001. “Fiscal Sustain- Penninkhoff 2003. A Guide to Demand-driven Agricul- ability of Agricultural Extension: The Case of the Farmer tural Research: The Client-oriented Research Manage- Field School Approach.� Journal of International Agricul- ment Approach. Amsterdam: Institut d’Economie Rural tural and Extension Education (Spring):13–23. (IER), Department for Research and Development, Rahmato, D. 1993. “Land, Peasants, and the Drive for and Royal Tropical Institute (KIT). http://www Collectivization in Ethiopia.� In Land in African Agrarian .kit.nl/smartsite.shtml?id=SINGLEPUBLICATION&It Systems, edited by T.J. Bassett and D.E. Crummey. emID=1500, accessed July 2011. Madison: University of Wisconsin Press. Heemskerk, W., and B. Wennink. 2004. “Building Social Rajalahti, R., J. Woelcke, and E. Pehu. 2005. “Monitoring and Capital for Agricultural Innovation: Experiences with Evaluation for World Bank Agricultural Research and Farmer Groups in Sub-Saharan Africa.� KIT Bulletin Extension Projects: A Good Practice Note.� Agriculture No. 368. Amsterdam: Royal Tropical Institute (KIT). and Rural Development Discussion Paper No. 20. Wash- Heemskerk, W., S. Nederlof, and B. Wennink. 2008. “Out- ington, DC: The World Bank. sourcing Agricultural Advisory Services: Enhancing Rivera, W.M., and G. Alex. 2004. “Extension Reform for Rural Innovation in Sub-Saharan Africa.� KIT Bulletin Rural Development.� Agriculture and Rural Development No. 380. Amsterdam: Royal Tropical Institute (KIT). Discussion Paper No. 10. Washington, DC: World Bank. Herberg, L., and A. Schoening. 2010. “Sustainet: Scaling up Spielman, D.J., and R. Birner. 2008. “How Innovative Is Your Sustainable Agriculture.� Rural21: The International Jour- Agriculture? Using Innovation Indicators and Bench- nal for Rural Development 44(2):21–23. marks to Strengthen National Systems.� Agriculture and Hoffmann, V., M. Gerster-Bentaya, A. Christinck, and Rural Development Discussion Paper No. 41. Washington, M. Lemma (eds.) 2009. Basic Issues and Concepts. DC: World Bank. MODULE 3: NOTES, REFERENCES AND FURTHER READING 253 Spielman, D.J., K. Davis, M. Negash, and G. Ayele. 2011. sub-Saharan Africa: An innovative approach to rural “Rural Innovation Systems and Networks: Findings from development. Proposal for a Partnership Programme. a Study of Ethiopian Smallholders.� Agriculture and Blewett, T.J., A. Keim, J. Leser, and L. Jones. 2008. “Defining Human Values 28(2):195–212. a Transformational Education Model for the Engaged Sulaiman, S.V., and A. Hall 2002. “Beyond Technology Dis- University.� Journal of Extension 46(3). semination: Can Indian Agricultural Extension Re- Chapman, R., and R. Tripp. 2003. “Changing Incentives for invent Itself?� ICAR Policy Brief No. 16. New Delhi: Agricultural Extension: A Review of Privatized Extension International Council of Agricultural Research (ICAR). in Practice.� ODI Agricultural Research and Extension Swanson, B., and R. Rajalahti. 2010. “Strengthening Agricul- Network Paper 132. London: Overseas Development tural Extension and Advisory Systems: Procedures for Institute (ODI). Assessing, Transforming, and Evaluating Extension Sys- DNEA (Direcção Nacional de Extensão Agrária). 2005. tems.� Agricultural and Rural Development Discussion “Programa Nacional de Extensão Agrária (PRONEA).� Paper No. 44. Washington, DC: World Bank. Maputo: Ministry of Agriculture. www.IIAM.gov.mz Swanson, B.E., B.J. Farner, and R. Bahal 1990. “The Current ———. 2007. Extension Master Plan 2007–2016. Maputo: Status of Agricultural Extension Worldwide.� In Report of Ministry of Agriculture. http://www.iiam.gov.mz/images/ the Global Consultation on Agricultural Extension, edited stories/pdf_files/%20plano_eg.pdf. by B.E. Swanson. Rome: Food and Agriculture Organiza- ECDPM (European Centre for Development Policy Manage- tion of the United Nations (FAO). Pp. 43–76. ment). 2008. “Capacity Change and Performance: Insights Torero, M., S. Chowdhury, and A. Bedi. 2006. “Telecommu- and Implications for Development Cooperation.� Policy nications Infrastructure and Economic Growth� Chapter Management Brief 21. Maastricht: ECPDM. 5 in Information and Communications Technology for FAO, KARI, and ILRI (Food and Agriculture Organization of Development and Poverty Reduction, edited by M. Torero the United Nations, Kenya Agricultural Research Institute, and J. von Braun. Baltimore: Johns Hopkins. and International Livestock Research Institute). 2003. Wennink, B., E.S. Nederlof, and W. Heemskerk (eds.). 2007. Farmer field schools: The Kenyan experience. Report of “Access of the Poor to Agricultural Services: The Role of the FFS Stakeholders’ Forum, March 27, 2003, Nairobi, Farmers’ Organizations in Social Inclusion.� KIT Bulletin Kenya. No. 376. Amsterdam: Royal Tropical Institute (KIT). Gêmo, H., C.K. Eicher, and S. Teclemariam. 2005. Mozam- World Bank. 2006a. “Enhancing Agricultural Innovation: bique’s Experience in Building a National Extension System. How to Go Beyond the Strengthening of Research Sys- East Lansing: Michigan State University. tems.� Washington, DC: World Bank. Heemskerk, W., and B. Wennink. 2004. “Building Social ———. 2006b (revised). “Investment in Agricultural Exten- Capital for Agricultural Innovation: Experiences with sion and Information Services.� Module 3 in Agriculture Farmer Groups in Sub-Saharan Africa.� KIT Bulletin 368. Investment Sourcebook. Washington, DC: World Bank. Amsterdam: Royal Tropical Institute. www.worldbank.org/ard/ais, accessed july 2011. ———. 2005. “Stakeholder-driven Funding Mechanisms ———. 2011. Information and Communication Technologies for Agricultural Innovation: Case Studies from Sub- for Agriculture e-Sourcebook. http://bit.ly/ICTinAG. Saharan Africa.� KIT Bulletin 373. Amsterdam: Royal Washington, DC. Tropical Institute. World Bank, United Nations Development Programme Heemskerk, W., S. Nederlof, and B. Wennink. 2008. “Out- (UNDP), and United Nations Development Fund for sourcing Agricultural Advisory Services: Enhancing Women (UNIFEM). 2010. Presentation from Session 4: Rural Innovation in Sub-Saharan Africa.� KIT Bulletin Governance and Fragility and Session 2. Challenges for 380. Amsterdam: Royal Tropical Institute. Service Delivery for Women in Post Conflict States. Klerkx L., A. Hall, and C. Leeuwis. 2010. “Strengthening Innovations and New Directions in the World Bank and Agricultural Innovation Capacity: Are Innovation Bro- the United Nations. New York. kers the Answer?� International Journal of Agricultural Resources, Governance, and Ecology 8(5–6): 409–438. Nederlof, E.S., B. Wennink, and W. Heemskerk. 2008. Access Thematic Note 1 to agricultural services. Background paper for the IFAD AFAAS–FARA (African Forum for Agricultural Advisory Rural Poverty Report 2010. http://www.ifad.org/rural/ Services and Forum for Agricultural Research in Africa) rpr2010/background/3.pdf and Neuchatel Initiative. 2009. Capacity development Spielman, D.J., K. Davis, M. Negash, and G. Ayele. 2011. for market-oriented agricultural advisory services in Rural innovation systems and networks: findings from a 254 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK study of Ethiopian smallholders. Agriculture and Human Heemskerk, W., S. Nederlof, and B. Wennink. 2008. “Out- Values 28 (2): 195–212. sourcing Agricultural Advisory Services: Enhancing Swanson, B., and R. Rajalahti. 2010. “Strengthening Agricul- Rural Innovation in Sub-Saharan Africa.� KIT Bulletin tural Extension and Advisory Systems: Procedures for No. 380. Amsterdam: Royal Tropical Institute (KIT). Assessing, Transforming, and Evaluating Extension Sys- Hoffmann, V., A. Christinck, and M. Lemma (eds.). 2009. tems.� Agricultural and Rural Development Discussion Examples and Background Material. Volume. 2 of Hand- Paper No. 44. Washington, DC: World Bank. book: Rural Extension. Weikersheim: Margraf. Wennink, B., and W. Heemskerk (eds.). 2006. “Farmers’ Hoffmann, V., M. Gerster-Bentaya, A. Christinck, and Organizations and Agricultural Innovation. Case Studies M. Lemma (eds.) 2009. Basic Issues and Concepts. Volume 1 from Benin, Rwanda, and Tanzania.� KIT Bulletin 374. of Handbook: Rural Extension. Weikersheim: Margraf. Amsterdam: Royal Tropical Institute. Jaleta, M., B. Gebremedhin, and D. Hoekstra. 2009. “Small- Wennink, B., E.S. Nederlof, and W. Heemskerk (eds.). 2007. holder Commercialization: Processes, Determinants, and “Access of the Poor to Agricultural Services: The Role of Impact.� Discussion Paper No. 18. Nairobi: International Farmers’ Organizations in Social Inclusion.� KIT Bulletin Livestock Research Institute (ILRI). 376. Amsterdam: Royal Tropical Institute. Kahan, D.G. 2007. “Farm Management Extension Services: A Review of Global Experience.� Agricultural Manage- ment, Marketing, and Finance Occasional Paper No. 21. Thematic Note 2 Rome: Food and Agriculture Organization (FAO). AFAAS. 2011. http://www.afaas-africa.org. KIT (Royal Tropical Institute). 2011 (forthcoming). “Gen- Benin, S., E. Nkonya, G. Okecho, J. Pender, S. Nahdy, der in Value Chains.� www.kit.nl. S. Mugarura, and G. Kayobyo. 2007. “Assessing the Impact KIT (Royal Tropical Institute), Faida Mali, and IIRR (Inter- of the National Agricultural Advisory Services (NAADS) national Institute of Rural Reconstruction). 2006. “Chain in the Uganda Rural Livelihoods.� IFPRI Discussion Paper Empowerment: Supporting African Farmers to Develop No. 724. Washington, DC: International Food Policy Markets.� Amsterdam, Arusha, and Nairobi. Research Institute (IFPRI). KIT (Royal Tropical Institute) and IIRR (International Chipeta, S., I. Christoplos, and E. Katz. 2008. Common Institute of Rural Reconstruction). 2008. “Trading Up: Framework on Market-Oriented Agricultural Advisory Building Cooperation between Farmers and Traders in Services. Lindau: Agridea for Neuchâtel Group. Africa.� Amsterdam and Nairobi. Christoplos, I. 2010. Mobilizing the Potential of Rural and ———. 2010. “Value Chain Finance: Beyond Microfinance Agricultural Extension. Rome: Food and Agriculture for Rural Entrepreneurs.� Amsterdam and Nairobi. Organization of the United Nations (FAO) and the Global ———. 2012. Gender in Value Chains. Amsterdam, The Forum for Rural Advisory Services (GFRAS). Netherlands: Royal Tropical Institute; Arnhem, The DFID (UK Department for International Development) Netherlands: AgriProFocus, and Nairobi, Kenya: Interna- and SDC (Swiss Agency for Development and Coopera- tional Institute of Rural Reconstruction (in press). tion). 2008. Perspectives on The Making Markets Work for Kristjanson, P., R. Reid, N. Dickson, W. Clark, D. Romney, R. the Poor (M4P) Approach. Bern: SDC. Puskur, S. MacMillan, and D. Grace. 2009. “Linking Dixie, G. 2005. Horticultural Marketing. Marketing Exten- Research Knowledge with Action: Lessons from Sustain- sion Guide 5. Rome: Food and Agriculture Organization able Development Livestock Projects. PNAS, http://www of the United Nations (FAO). .pnas.org/content/suppl/2009/03/16/080741 DNEA (Direcção Nacional de Extensão Agrária). 2007. 4106.DC Supplemental/Appendix_PDF.pdf, accessed Extension Master Plan 2007–2016. Maputo: Ministry of July 2011. Agriculture. http://www.iiam.gov.mz/images/stories/pdf Lamers, J.P.A., P.R. Feil, N. Bayverdiyeva, Y. Guliyeva, and F. _files/%20plano_eg.pdf, accessed July 2011. Djafarov. 2008. “From Kolchoz Systems to Fee-based Pri- Friis-Hansen, E., and C. Aben. 2010. “Rise and Fall of Private vate Agricultural Extension: Achievements with a Client- Agricultural Service Providers in Sorti District Uganda.� oriented Training and Advisory Concept as Support for Presentation at the GFRAS Conference, Chile, http:// Private Farming in Azerbaijan.� Journal of Applied Bio- www.rimisp.org/FCKeditor/UserFiles/File/documentos/ sciences 8(1):262–71. docs/proyecto261/16.%20Rise%20and%20Fall%20of% Malindi, G. 2011. “Agricultural Advisory Services under 20PSP2_Esbern%20Friis.pdf, accessed July 2011. Value Chain Agriculture. A Case from Malawi.� Presented Hanlon, J., and T. Smart. 2008. Do Bicycles Equal Develop- at AFAAS conference, Accra, April 12, 2011, www.afaas- ment in Mozambique? Rochester: James Currey. africa.org. MODULE 3: NOTES, REFERENCES AND FURTHER READING 255 NAADS (National Agricultural Advisory Services). 2010. tural Education and Hatching Agribusiness Incubator Agribusiness Development. Unpublished working paper, in Mali.� Washington, DC. Kampala. van Weperen, W. 2011. “Market-Oriented Advisory Services Odada, E.O., R.J. Scholes, K.J. Noone, C. Mbow, and W.O. Approaches and Processes: Toward a Guide for Piloting Ochola (eds.). 2008. A Strategy for Global Environmental MOAAS in AAS Systems.� Presented at AFAAS confer- Change Research in Africa: Science Plan and Implementa- ence, Accra, April 12, www.afaas-africa.org. tion Strategy. Stockholm: International Geosphere- Webber, C.M., and P. Labaste. 2010. “Building Competi- Biosphere Programme (IGBP) Secretariat. tiveness in Africa’s Agriculture: A Guide to Value Chain Pingali, P.L., Y. Khwaja, and M. Meijer. 2005. “Commercial- Concepts and Applications.� Washington, DC: World izing Small Farmers: Reducing Transaction Costs.� Bank. FAO/ESA Working Paper No. 05-08. Rome: Food and Wennink, B., E.S. Nederlof, and W. Heemskerk (eds.). 2007. Agriculture Organization of the United Nations (FAO). “Access of the Poor to Agricultural Services: The Role of Pingali, P.L., and M.W. Rosegrant. 1995. “Agricultural Com- Farmers’ Organizations in Social Inclusion.� KIT Bulletin mercialization and Diversification: Process and Policies.� No. 376. Amsterdam: Royal Tropical Institute (KIT). Food Policy 20(3):171–85. Wilk, E. de O., and J.E. Fensterseifer. 2003. “Towards a Poitevin, B., and S. Hossain. 2006. “Marketing Extension: A National Agribusiness System: A Conceptual Frame- Powerful Process in 6 Steps.� Dhaka: Livelihoods, work.� International Food and Agribusiness Management Empowerment and Agroforestry (LEAF) Project, Inter- Review 6(2):99–110. cooperation, and Swiss Agency for Development and World Bank. 2006. “Enhancing Agricultural Innovation: Cooperation (SDC). How to Go Beyond the Strengthening of Research Sys- Pyburn, R., F. van der Lee, and M. ter Heegde (2011, forth- tems.� Washington, DC. coming). “Green Services: Getting Payment for Small- ———. 2010. “Designing and Implementing Agricultural holder Contributions to NRM.� Working Paper. Amster- Innovation Funds: Lessons from Competitive Research dam: Royal Tropical Institute (KIT). and Matching Grant Projects.� Report No. 54857-GLB. Roduner, R. 2007. “Donor Interventions in Value Chain Washington, DC. Development.� Working Paper. Community of Practice ———. 2011. Rural Alliances in Bolivia. A World Bank on Value Chains in Rural Development. Berne: Swiss Case. http://web.worldbank.org/WBSITE/EXTERNAL/ Agency for Development and Cooperation (SDC). COUNTRIES/LACEXT/B OLIVIAEXTN/0,, Spielman, D.J., J. Ekboir, K. Davis, and C.M.O. Ochieng. contentMDK:22781102~pagePK:1497618~piPK:217854 2008. “An Innovation Systems Perspective on Strength- ~theSitePK:322279,00.html, accessed July 2011. ening Agricultural Education and Training in Sub- Saharan Africa.� Agricultural Systems 98:1–9. Thematic Note 3 Swanson, B., and R. Rajalahti. 2010. “Strengthening Agricul- tural Extension and Advisory Systems: Procedures for Alex, G., W. Zijp, and D. Byerlee. 2002. “Rural Extension Assessing, Transforming, and Evaluating Extension Sys- and Advisory Services: New Directions.� Rural Strategy tems.� Agricultural and Rural Development Discussion Background Paper No. 9. Washington, DC: The World Paper No. 44. Washington, DC: World Bank. Bank. UNCDF (United Nations Capital Development Fund). BRAC (Bangladesh Rural Advancement Committee). 2009. “The State of Local Economic Development in 2010. Program information from www.brac.net, Mozambique.� Prepared by P. Penninkhoff for United accessed July 2011. Nations Capital Development Fund. Development Policy Bhamoria, V. 2004. Tribal rehabilitation for livelihood and Practice. Amsterdam: Royal Tropical Institute (KIT). enhancement: Experience of DHRUVA. Document pro- UNDP (United Nations Development Programme). 2004a. duced for the IWMI-Tata Water Policy Programme, Business Development Services How to Guide. Bratislava: Anand. UNDP Regional Centre. DHRUVA (Dharampur Uththan Vahini). 2010. Program __________. 2004b. Unleashing Entrepreneurship; Making Busi- information from www.dhruva.org.in, accessed July 2011. ness Work for the Poor. Commission on the Private Sector Echeverria, R. 2003. “Twenty Years of Reforming Exten- and Development, Report to the Secretary-General of sion in Latin America: Are We There Yet?� Presented at the United Nations. New York. the Regional Workshop on Operationalising Reforms USAID (United States Agency for International Develop- in Agricultural Extension in South Asia, New Delhi, ment). 2009. “Building Partnerships on Higher Agricul- May 6–8. 256 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Farrington, J., I. Christoplos, A.D. Kidd, and M. Beckman. Anandajayasekeram, P., R. Puskur, and E. Zerfu. 2010. 2002. “Extension, Poverty, and Vulnerability: The Scope “Applying Innovation System Concept in Agricultural for Policy Reform: Final Report of a Study for the Research for Development: A Learning Module.� Nairobi: Neuchâtel Initiative.� Working Paper No. 155. London: International Livestock Research Institute (ILRI). Overseas Development Institute (ODI). Berdegué, J., and G. Escobar. 2002. “Rural Diversity, Agri- Neuchâtel Group. 2002. “Common Framework on Financing cultural Innovation Policies, and Poverty Reduction.� Agricultural and Rural Extension.� Lindau: Swiss Centre Agricultural Research and Extension Network Paper for Agricultural Extension and Rural Development. No. 122. London: Overseas Development Institute Rivera, W.M., M.K. Quamar, and L.V. Crowder. 2001. “Agri- (ODI). cultural and Rural Extension World Wide: Options for Burt, R. S. 2004. “Structural holes and good ideas.� American Institutional Reform in the Developing Countries.� Journal of Sociology 110(2):349–99. Rome: Extension, Education and Communication Ser- Devaux, A., D. Horton, C. Velasco, G. Thiele, G. Lopez, T. vice, Research, Extension and Training Division, Sustain- Bernet, I. Reinoso, and M. Ordinola. 2009. “Collective able Development Department, Food and Agriculture Action for Market Chain Innovation in the Andes.� Food Organization of the United Nations (FAO). Policy 34(1):31–38. Sulaiman, R.V., and A.J. Hall. 2002. “An Innovation System Devaux, A., J. Andrade-Piedra, D. Horton, M. Ordinola, G. Perspective on the Restructuring of Agricultural Exten- Thiele, A. Thomann, and C. Velasco. 2010. “Brokering sion: Evidence from India.� Outlook on Agriculture Innovation for Sustainable Development: The Papa And- 30(4):235–43. ina Case.� ILAC Working Paper No. 12. Rome: Institu- __________. 2004a. “Towards Extension-Plus: Opportunities tional Learning and Change (ILAC) Initiative. and Challenges.� Policy Brief No. 17. New Delhi: National Gêmo, H.R. 2006. Recurcos humanos na extensão agrãria Centre for Agricultural Economics and Policy Research pública em Mocambique (1987–2006). Estudos sobre (NCAP). investigação e extensão agrária. Vol. 1. Maputo: Ministry __________. 2004b. “India: The Emergence of Extension-Plus: of Agriculture. Future for Extension beyond Technology Transfer?� In Gildemacher, P.R., W. Kaguongo, O. Ortiz, A. Tesfaye, G. W.M. Rivers and G. Alex (eds.), Extension Reform for Woldegiorgis, W.W. Wagoire, M. Wakahiu, C. Leeuwis, Rural Development. Vol. 1. Washington, DC: World Bank. and P.C. Struik. 2009. “Improving Potato Production in Pp. 19–29. Kenya, Uganda, and Ethiopia: A System Diagnosis.� __________. 2005. “Extension Policy at the National Level in Potato Research 52(2):173–205. Asia.� Plant Production Science 8(3):308–19. Granovetter, M. 1985. “Economic Action and Social Struc- Swanson, B.E. 2006. “The Changing Role of Agricultural ture: The Problem of Embeddedness.� American Journal Extension in a Global Economy.� Journal of International of Sociology 91(3):481–510. Agricultural and Extension Education 13(3):5–18. Gupta, A.K., R. Sinha, D. Koradia, R. Patel, M. Parmar, Vaswani, L.K., V. Venkatakrishnan, R. Upadhyay, and J. Talati. P. Rohit, H. Patel, K. Patel, V.S. Chand, T.J. James, 2003. “Agricultural Market Linkages: Evaluating and A. Chandan, M. Patel, T.N. Prakash, P. Vivekanandan, Evolving a Conceptual Framework in Indian Context.� and other members of Honey Bee Network. 2003. NABARD Occasional Paper 28. Mumbai: National Bank “Mobilizing Grassroots’ Technological Innovations and for Agriculture and Rural Development (NABARD). Traditional Knowledge, Values, and Institutions: Articu- VFPCK. 2009 “Progress Report, 2008-09.� Vegetable and lating Social and Ethical Capital.� Futures 35(9):975–87. Fruit Promotion Council Kerala (VFPCK), Kochi. Hall, A., J. Clark, and G.C. Naik. 2007 “Technology Supply XLRI (Xavier Labour Research Institute). 1999. “Report of Chain or Innovation Capacity? Contrasting Experiences the Impact Evaluation of Kerala Horticultural Devel- of Promoting Small-scale Irrigation Technology in South opment Programme.� Bhubaneswar: Xavier Labour Asia.� UNU-MERIT Working Paper No. 2007-014. Maas- Research Institute. tricht: United Nations University (UNU) and Maastricht Economic and Social Research and Training Centre on Innovation and Technology (MERIT). Thematic Note 4 Hartwich, F., V. Gottret, S. Babu, and J. Tola. 2007. “Building Alex, G., W. Zijp, and D. Byerlee. 2002. “Rural Extension and Public-private Partnerships for Agricultural Innovation Advisory Services: New Directions.� Rural Development in Latin America.� IFPRI Discussion Paper No. 00699. Strategy Background Paper No. 9). Washington, DC: Washington, DC: International Food Policy Research World Bank. Institute (IFPRI). MODULE 3: NOTES, REFERENCES AND FURTHER READING 257 Howells, J. 2006. “Intermediation and the Role of Interme- Innovative Activity Profile 1 diaries in Innovation.� Research Policy 35(5):715–28. IFDC (International Fertilizer Development Center). 2011. Kibwika, P., A.E.J. Wals, and M.G. Nassuna-Musoke. 2009. “Improved Livelihood for Sidr-Affected Rice Farmers “Competence Challenges of Demand-led Agricultural (ILSAFARM) Project.� Final Report, submitted to the Research and Extension in Uganda.� Journal of Agricul- USAID-Bangladesh. Muscle Shoals. tural Education and Extension 15(1):5–19. Thompson, T.P. 2003. A perspective on the IFDC strategy Klerkx, L., N. Aarts, and C. Leeuwis. 2010. “Adaptive for agribusiness development. Unpublished paper, Inter- Management in Agricultural Innovation Systems: The national Fertilizer Development Center (IFDC), Muscle Interactions between Innovation Networks and Their Shoals. Environment.� Agricultural Systems 103(6):390–400. ———. 2005. “Agricultural Investment Note: Promoting Klerkx, L., A. Hall, and C. Leeuwis. 2009. “Strengthening Private Sector Fertilizer Markets.� Washington, DC: Agricultural Innovation Capacity: Are Innovation Bro- World Bank. kers the Answer?� International Journal of Agricultural Resources, Governance. and Ecology 8(5/6):409–38. USAID (United States Agency for International Develop- ment). 1996. “Privatizing Fertilizer Distribution: Klerkx, L., and C. Leeuwis. 2008. “Matching Demand and Bangladesh Case Study.� USAID Evaluation Highlights Supply in the Agricultural Knowledge Infrastructure: No. 54. Washington, DC. http://pdf.usaid.gov/pdf_docs/ Experiences with Innovation Intermediaries.� Food Policy PNABS524.pdf, accessed July 2011. 33(3):260–76. ———. 2009. “The Emergence and Embedding of Innova- tion Brokers at Different Innovation System Levels: Innovative Activity Profile 2 Insights from the Dutch Agricultural Sector.� Technologi- cal Forecasting and Social Change 76(6):849–60. These sources can be accessed through http://www.info bridge.org/ffsnet/; if not uploaded a single copy can be Kristjanson, P., R.S. Reid, N. Dickson, W.C. Clark, D. Rom- obtained from support@farmerfieldschool.net ney, R. Puskur, S. MacMillan, and D. Grace. 2009. “Link- ing International Agricultural Research Knowledge with Braun, A. 2006. Farmer Field School networks in Western Action for Sustainable Development.� Proceedings of the Kenya: Evolution of activities and farmers’ priorities. National Academy of Sciences 9(13):5047–52. Unpublished report, FAO, Rome. Murthy, R. 2010. “India’s Rural Inventors Drive Change.� Braun, A., J.R. Okoth, H. Khaamala, and G.S. Khisa, 2007. Asia Times Online, January 29, 2010, http://www.atimes “Building FFS Networks in East Africa.� LEISA Magazine .com/atimes/South_Asia/LA29Df03.html, accessed July 23–1:18–19. 2011. Braun, A.R., and D. Duveskog. 2009. The Farmer Field Obstfeld, D. 2005. “Social Networks, the Tertius Iungens School approach: History, global assessment, and success Orientation, and Involvement in Innovation.� Adminis- stories. Unpublished report for the IFAD Rural Poverty trative Science Quarterly 50(1):100–30. Report 2009, International Fund for Agricultural Devel- Pant, L.P., and H. Hambly-Odame. 2006. “Multi-stakeholder opment (IFAD), Rome. Deliberation on Dialectical Divides: An Operational Davis, K., E. Nkonya, E. Kato, D. A. Mekonnen, M. Odendo, Principle of the Systems of Innovation.� Knowledge Man- R. Miiro, and J. Nkuba. 2010. “Impact of Farmer Field agement for Development Journal 2(3):60–74. Schools on Agricultural Productivity and Poverty in East Rivera, W., and R. Sulaiman, V. 2009. “Extension: Object of Africa.� Discussion Paper No. 00992. Washington, DC: Reform, Engine for Innovation.� Outlook on Agriculture International Food Policy Research Institute (IFPRI). 38(3):267–73. http://www.ifpri.org/sites/default/files/publications/ifpri Smits, R., and S. Kuhlmann. 2004. “The Rise of Systemic dp00992.pdf, accessed July 2011. Instruments in Innovation Policy.� International Journal FAO (Food and Agriculture Organization), 2006. Farmer of Foresight and Innovation Policy 1(1/2):4–30. Field School networks operational manual. Unpublished, Spielman, D.J., J. Ekboir, and K. Davis. 2009. “The Art and FAO–Uganda, Kampala. Science of Innovation Systems Inquiry: Applications to Gallagher, K., 2001. Self-financed field schools: Helping Sub-Saharan African Agriculture.� Technology in Society farmers go back to school in IPM/IPPM. Unpublished, 31(4):399–405. http://www.share4dev.info/ffsnet/documents/3201.pdf, World Bank. 2006. “Enhancing Agricultural Innovation: accessed July 2011. How to Go Beyond the Strengthening of Research Sys- ———. 2002. “Self-financing Access to New Technologies: tems.� Washington, DC. East African Farmer Innovations.� SDI 7-23/1. SDI/UGF 258 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK World Summit 2002. Share4Dev, http://www.share4dev nization of the United Nations (FAO) and the Global .info/kb/documents/3202.pdf, accessed July 2011. Forum for Rural Advisory Services (GFRAS). Khisa, G., 2006. First Regional Meeting Report: Expansion INCAGRO (Innovación y Competitividad para el Agro Peru- of Farmer Field School Programme in Eastern and ano). http://www.incagro.gob.pe/WebIncagro/inicio.do, Southern Africa. Unpublished. accessed May 2010. Khisa, G., and E. Heinemann. 2005. “Farmer Empower- Ministry of Agriculture. 2009. “Evaluación de impacto del ment through Farmer Field Schools.� In “Bright Spots INCAGRO: Proyecto de Investigación y Extensión Agrí- Demonstrate Community Successes in African Agricul- cola (PIEA).� Lima: Ministry of Agriculture. ture,� edited by F.W.T. Penning de Vries. Working Paper Ortiz, O. 2006. “Evolution of Agricultural Extension and No. 102. Colombo: International Water Management Information Dissemination in Peru: An Historical Institute (IWMI). Pp. 71–83. Perspective Focusing on Potato-related Pest Control.� KIT (Royal Tropical Institute), Faida Mali, and IIRR (Inter- Agriculture and Human Values 23(4):477–89. national Institute of Rural Reconstruction). 2006. “Chain Swanson, B. 2008. Global Review of Good Agricultural Empowerment: Supporting African Farmers to Develop Extension and Advisory Service Practices. Rome: Food Markets.� Amsterdam, Arusha, and Nairobi. and Agriculture Organization of the United Nations Okoth, J.R., G. Khisa, and J. Thomas, 2002. “Towards a (FAO). Holistic Farmer Field School Approach for East Africa.� World Bank. 2005. “Implementation Completion Report on LEISA Magazine 18–3. a Loan in the Amount of US$ 9.6 Million to the Repub- ———. 2003. “Towards Self-financed Farmer Field Schools.� lic of Peru for an Agricultural Research and Extension LEISA Magazine 19–1: 28-29. Project.� Washington, DC. Okoth, J., A.R. Braun, R. Delve, H. Khamaala, G. Khisa, ________. 2006. “Enhancing Agricultural Innovation: How and J. Thomas. 2006. “The Emergence of Farmer Field to Go Beyond the Strengthening of Research Systems.� Schools Networks in Eastern Africa.� Paper presented Washington, DC. at the CAPRi Research Workshop on Collective Action __________. 2009. “Project Performance Assessment Report: and Market Access for Smallholders, 2–5 October, Republic of Peru, Agriculture Research and Extension Cali. Project.� Washington, DC. Innovative Activity Profile 3 Barrantes, R., C. Trivelli, R. Morales S, and J.J. Miranda. 2004. Innovative Activity Profile 4 “Análisis económico, social y financiero de la inversiones Vijay Mahajan, and K. Vasumathi. 2010. “Combining Exten- en innovación y evaluación ex ante de los retornos del sion Services with Agricultural Credit: The Experience of proyecto INCAGRO.� Lima: Innovación y Competitivi- BASIX India.� IFPRI Brief. Washington, DC: Interna- dad para el Agro Peruano (INCAGRO). tional Food Policy Research Institute (IFPRI). Benites, J.R., and H. Wiener. 2008. “INCAGRO: Converting http://www.ifpri.org/sites/default/files/publications/focus ideas into values.� Lima: Innovación y Competitividad 18_13.pdf, accessed March 2011. para el Agro Peruano (INCAGRO). Mishra, B.S. 2008. “Contract Farming for Potato: An Attempt Christoplos, I. 2010. Mobilizing the Potential of Rural and to Include Poor Farmers in the Value Chain.� Enterprise Agricultural Extension. Rome: Food and Agriculture Orga- Development and Microfinance 19 (4): 331–43. MODULE 3: NOTES, REFERENCES AND FURTHER READING 259 4 MODULE 1 Agricultural Research within an Coordination and Collective Action for Agricultural Innovation System OV E RV I E W John Lynam, Consultant EXECUTIVE SUMMARY representation. The latter tend to involve novel organizational arrangements, such as farmer councils and innovation plat- nvesting in agricultural research within an AIS frame- I work complements the traditional internal focus on capacity and research priorities with an external emphasis on better articulation of client demand and forms, new methodologies, organizational change within research institutes, and financing arrangements that support the increased transactions costs inherent in improved external connectivity. Farmer participation in the codesign of innova- effective institutional partnerships. Agricultural research tions is characteristic of these organizational arrangements, as a producer of new knowledge requires effective institu- and it may be facilitated by innovation brokers. Financing is tional arrangements to apply that knowledge. The types of almost solely based on public sources and will tend to be organizations and nature of these partnerships in the gen- organized around research foundations or agricultural eration of innovation will depend on the market orienta- research councils. There is an inherent tendency for research tion of the agricultural sector and private investment in within an AIS to focus on market-driven applications, often agro-industry. In urban and transforming economies, within a value chain framework, and particular strategies are these institutional partnerships will tend to focus on required to ensure that research continues to contribute to the research linkages to agricultural input or processing reduction of rural poverty. industries, often within the frame of public-private part- nerships, including technology transfer arrangements, and often facilitated by public financing arrangements. Such RATIONALE FOR INVESTMENT research linkages to the private sector and other actors will tend to be organized around clusters, and financing As the globe enters a period of increasing constraints on will often be in the form of competitive grants with cofi- land, water, and nutrient supplies, a tight balance between nancing from the private sector. food supply and demand, and the certainty of climate In agrarian economies, on the other hand, external change, new knowledge from agricultural research systems connectivity of research is primarily through bridging will be essential to maintain growth in agricultural produc- organizations, particularly extension services, farmer associa- tivity and in world food supplies. Locating agricultural tions, trade associations, and NGOs, and farmer demand is research within an AIS is a means of heightening the perfor- articulated through nonmarket mechanisms with farmer mance of research systems through improved articulation 261 with demand, more effective, better-differentiated institu- research units distributed throughout ministries of agricul- tional partnerships, and better market integration. ture and other ministries were brought under a single, inde- An innovation systems framework adds a set of new pendent administrative structure. The assumptions ruling dimensions to the investment in agricultural science and this restructuring were that economies of scale and scope technology. An AIS framework focuses attention on: (1) an could be achieved in agricultural research, budgetary expanded range of technologies (particularly postharvest resources allocated much more efficiently, and personnel and mechanical) provided by a differentiated set of suppli- policies freed from public civil service bureaucracy. Large ers; (2) demand responsiveness, particularly better connec- countries such as Brazil and India developed a complex fed- tivity and interaction of agricultural research with actors eral and state system of national research institutes, state beyond farmers; and (3) adaptation to and facilitation of agricultural universities, and state research institutes. Donor organizational innovations in credit, markets, insurance, investment in agriculture was at an historical high, at least farmer groups, and extension services. in percentage terms. The CGIAR network of international The reframing of technological innovation coincides with agricultural research centers expanded, and donors led by the emphasis on market-led approaches for smallholder the World Bank and USAID funded programs that focused development, which have emerged in the wake of structural on training, infrastructure development, and program for- adjustment and market liberalization in the 1990s. Orienting mulation within the newly formed NARIs. research to markets, often through work in specific value chains, has become a principal vehicle for delivering new technologies and for combining them with the organiza- From national research institutes tional and institutional innovations that so often accompany to research systems technical change in the agricultural sector. The dominance of the NARI gave way quite quickly in the In this sense, an AIS approach represents a relatively evo- late 1990s to reform based on the development of more lutionary form of institutional change in agricultural pluralistic, decentralized systems, in which research fund- research, with a particular focus on enhancing the research ing and execution were separated, often through a com- system’s external responsiveness. Yet improved responsive- petitive grants modality. The intent was to move away ness in the short term must be balanced with the investment from reliance on a single research institution and toward strategies needed over the long term for a research system to the development of a broader-based national agricultural be productive. In the process of balancing these short- and research system (NARS). At the same time, support for long-term imperatives, research organizations will arrive at agriculture in aid budgets was declining, and domestic fis- a better alignment between internal research capacities and cal budgets came under pressure from structural adjust- external partnerships and consortiums, increasingly with ment. The rapidly growing Asian economies could support the private sector. agricultural research from expanding tax revenues, and in Latin America market liberalization allowed greater partic- ipation of the private sector. In Africa, however, the reform PAST EXPERIENCE IN ORGANIZATIONAL of NARIs took place amid severely restricted budgets, often CHANGE IN AGRICULTURAL RESEARCH within a small-country context. The World Bank remained Investment strategies for agricultural research over the past virtually the only donor investing in national agricultural three decades have gone through a series of approaches, research. Selective investment caused a few relatively strong often requiring major organizational restructuring. Research NARSs to develop, leaving a majority of systems with lim- restructuring has been much more pervasive in small ited capacities. countries than in large, which has given systems such as EMBRAPA in Brazil continuity in addition to significant lev- Decentralization and participatory research els of investment. The sections that follow describe these var- ious approaches to investing in agricultural research. This period also saw the rise of participatory research and the recognition that NARIs had to become more respon- sive to demand. Improved responsiveness was the principal Building national agricultural research institutes justification for reforms that decentralized management Broadly defined, the 1980s and early 1990s were the period within NARIs and created autonomous research councils. of the national agricultural research institute (NARI), when The councils, which often had farmer representation, 262 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK now controlled the funding decisions (World Bank 2006), research. Competitive funds can be an important vehicle for but their effectiveness varied greatly. Many had a narrow research financing and have a strategic role to play in pilot- representation of stakeholders, consisting primarily of min- ing new ways of working, or focusing research on new top- isterial representatives or researchers, and their research ics; but they are most likely to make a sound and lasting contribution when they complement a relatively strong prioritization process was not necessarily consistent and public sector framework for research (in this respect, rigorous. The councils often had little influence on the pol- prospects were brighter to begin with in Brazil and Colom- icy process and how research was conducted. Many did not bia than they were in Nicaragua and Peru). Public funding separate funding allocation and implementation effectively is essential for agricultural innovation systems and private (see module 1). Decentralization was already a feature of funding complements rather than substitutes for higher lev- large federal systems, but it involved significant tradeoffs in els of public funding. small systems. Scale economies in areas such as plant breeding were sacrificed, and operational budgets were In Latin America, small-country systems became much directed to more adaptive research. more reliant on research outputs from CGIAR centers and spillins from private sector sources globally. Some countries even terminated public agricultural research altogether. Shifting funding Efforts to building core research capacities in sub-Saharan Shifting funding to competitive grants had different Africa, Central America, and the smaller South American impacts depending on the capacity of the research system. countries got lost during this period of restructuring. In In larger systems with strong capacity, competitive mecha- Africa, core research capacities remain largely underdevel- nisms were used to improve research quality. Larger oped after three decades of experimentation. While African research systems used competitive grants to provide fund- governments committed themselves to increasing invest- ing based on scientific peer review. They particularly aimed ment in agriculture to 10 percent of the overall national to: focus scientists’ efforts on high-priority research or new budget, by 2009 only a few countries had met the target.2 fields of expertise; improve the relevance and quality of agricultural research, extension, and training; promote Limited operational funding research partnerships and leverage research resources; and Operational funds are vital to research that results in inter- help to develop a more efficient and pluralistic research sys- action with rural communities outside the research station tem (World Bank 2010). In smaller research systems, where (on-farm adaptive research, multilocational testing net- financial constraints already limited core capacity, competi- works, participatory plant breeding, disease surveillance tive grants were often used as a mechanism for farmers to programs, and soil fertility trials, for example). Because soil articulate their demands for research more clearly, and and biotic constraints are more severe in farmers’ fields, car- farmers would participate in the grant review process. Such rying out research in farmers’ conditions increases the rele- mechanisms reinforced the shift to adaptive research. vance of the results. The use of competitive grants tended to undermine long- The lack of operational funds is the first most binding term strategic planning, however. A new crop variety can constraint on the productivity of agricultural research, and take ten years or more to develop; so does a locally adapted the shortage of funds was particularly binding in Africa, conservation agriculture system or a system to manage ani- where it limited the demand articulation that decentraliza- mal disease. The longer-term nature of agricultural research tion was supposed to provide. Ensuring access to operational has produced significant debate on the extent to which funds is essential for research performance, but where budg- research systems can respond to demand by allocating ets are highly constrained, such funding is the first to be cut resources (often based on contestable funding mechanisms) to assure salaries, station running costs, and maintenance of to applied research as opposed to allocating resources (core core resources such as germplasm banks. Productive scientists funding) through longer-term strategic planning in relation are usually those who obtain external funds at the expense of to priority needs in the agricultural sector.1 According to the integrity of the overall research program. World Bank (2009, xii–xiii), a review of four World Bank projects in Latin America that employed competitive grant schemes for agricultural research, The small-country problem A principal lesson concerns the importance of strengthening There remained a pervasive sense, especially among bilateral the capacity of research organizations, not just financing and multilateral investors, that agricultural research in the MODULE 4: OVERVIEW 263 public sector was not meeting the performance standards Key lessons from reforms that were expected. This perception tended to apply to Possibly the most important lessons drawn from attempts research systems in smaller countries with little private sec- at restructuring agricultural research are: tor capacity in agricultural research and with systemic mar- ket constraints. ■ One size does not fit all. Context and path dependence Agricultural research in this context faces what is best matter in the design of an agricultural research system. termed a “small-country problem,� in which limited market ■ The productivity of agricultural research differed signif- size, constraints on achieving economies of scope and scale, icantly between large and small countries and between constrained fiscal budgets, and ineffective farmer demand countries with well-functioning market economies and for new technologies significantly limit the productivity those without. of research. Research capacity is needed even to borrow ■ Some period of consolidation was necessary for technology, and in some conditions, technology can rarely researchers to adapt to reorganization. even be borrowed. In sub-Saharan Africa, the potential for ■ Leadership was a crucial factor in NARIs that performed international spillins is very often limited because of the well. crops that are grown (they are not widely grown elsewhere) ■ The lack of sustainable funding and weak capacity con- and the particular constraints on farmers’ productivity tinued to limit the performance of agricultural research (Pardey et al. 2007). Improving institutional performance institutes in small countries. under such circumstances is difficult, but the justification for investing in research in agrarian economies remains very The shift in investment in agricultural research from a strong, because agriculture remains the engine of growth focus on NARIs to a focus on NARSs and subregional for the overall economy. research organizations took place as markets were liberal- ized, civil society expanded, and collective action increased in rural economies. To a significant degree, these develop- Support to subregional research ments were preconditions for investing in agricultural One approach to the small-country problem, particularly research within an AIS framework. One framework for in Africa, was to organize agricultural research at the sub- needs assessment for agricultural research systems argues regional level to achieve scale economies and organize to (1) get the resources right, (2) get the priorities right, spillins efficiently. Since the late 1990s, many donors have (3) get the linkages right, and (4) get the incentives right shifted funding into subregional research organizations (Howard Elliott, personal communication). In an AIS, the and the regional apex body (the Forum for Agricultural investment framework shifts to focus on linkages and Research in Africa) and away from NARSs (see TN 3 on incentives and on identifying where further organizational regional research). Initially subregional research organi- change is oriented to external responsiveness. Whether this zations became a mechanism for coordinating regional reorientation at this early period in the development of research undertaken by CGIAR centers, but since the mid- AISs can produce self-correcting change in both resource 2000s they have been a mechanism to “retail� research and capacity constraints is still largely untested, at least for grants to national programs. The lost connection with research systems in small countries. The rest of this international research centers left no framework to overview will focus on the evolving practice of undertak- develop scale economies in these regional approaches, ing agricultural research within an AIS framework. although two large projects funded by the World Bank (the East Africa Agricultural Productivity Project and West RESEARCH WITHIN AN AIS Africa Agricultural Productivity Project) were partially designed with that goal in mind. In Africa, the centraliza- Knowledge and information are the engines of an AIS, and tion represented by subregional organizations further a market economy provides the incentives to search for diminishes farmers’ ability to articulate demand (Sumberg improved products and processes that lead to overall gains 2005) in a context where the prospect of spillins is quite in productivity within the agricultural economy. In many (if small, agroecologies extremely diverse, and the commod- not most) agricultural economies in the developing world, ity structure of the food system very heterogeneous however, resources, capacity, and market constraints retard (Pardey et al. 2007). the development and functionality of innovation systems 264 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK for agriculture. The World Development Report 2008 (World increasing array of organizations to promote their interests, Bank 2007) differentiates between agrarian, transforming, most often in relation to government policy but also in rela- and urbanized economies: tion to establishing norms of operation within their respec- tive subsectors. ■ Agrarian economies are almost always relatively small, The proliferation of formal seed, chemical, and fertilizer mostly in sub-Saharan Africa, depend primarily on sta- associations, agroprocessing associations (for example, the ple food crop production, and rely on agriculture for Thai Tapioca Trade Association), animal feed milling asso- their economic growth. Their agricultural markets are ciations, and commodity organizations (in module 1, the not well integrated, transport and logistics are costly, and overview as well as TNs 3 and 4 provide examples) (from private investment in rural areas is still limited. wheat and oilseed milling to horticultural exports) reflects ■ Transforming economies, including China and India, are the higher and more concentrated end of the value chain. In mostly in Asia, where economic growth is now led by the higher-value commodity chains, farmer organizations usu- industrial sector and the economy is rapidly urbanizing. ally form around a particular commodity and often build Growing urban demand, especially for higher-value off of cooperatives (dairy industries and the Colombian products such as livestock and horticultural crops, is coffee federation are two examples). Such an organizational resulting in structural shifts in the agricultural economy. matrix balances competition with cooperation and organ- Even so, large areas of the rural economy still have high ized collective action to further the interests of the subsector. poverty rates and are not integrated into the growth Information flows are good: The subsector’s needs are easily process. articulated, and appropriate institutional linkages and ■ Urbanized economies have most of their population in arrangements formulated, usually on a task basis. urban areas, are primarily located in Latin America, and At this stage of market development in the agricultural the agricultural sectors are well integrated into global sector, an AIS is self-organizing. Public sector research has markets. Poverty is principally an urban problem. to be very responsive and flexible indeed, primarily to needs articulated through input-supply or agroprocessing firms, Compared to the agrarian economies, transforming and or it will quickly become an anachronism. urbanized economies invariably have better developed transport infrastructure and agricultural markets, a larger and more vibrant private sector, deeper R&D capacity, more Innovation systems and the shift effective agricultural institutions, and greater investment in to a market context ICT. These in turn are some of the preconditions for more As farmers integrate into the market economy, they rely functional innovation systems, particularly systems driven more on inputs as a source of increased productivity and by expanding opportunities in more dynamic agricultural sell an increasing percentage of their production. Often they markets. first diversify into higher-value crops and then specialize in The sections that follow describe the contrasting roles particular production activities. Such intensification is facil- of research and AISs in well-functioning market contexts itated by a widening array of innovations provided through and underdeveloped market contexts. A discussion of AIS markets for inputs and agricultural services. These innova- approaches used to promote technological innovation is tions increasingly respond to changing urban demand, both followed by an overview of key policy issues related to for specific commodities and for specific quality character- agricultural research in an AIS context, evolving areas of istics in commodities. investment, and approaches for monitoring, evaluating, Public agricultural research has continually wrestled with and scaling up agricultural research within an AIS. the issue of how to be more responsive to demand and, in a modernizing agricultural economy, how to balance farmers’ needs with improved consumer acceptance. For example, in Well-functioning markets and AISs plant breeding and seed systems, seed companies are the The functionality of an AIS rests on increasing connectivity translation point in the seed value chain between farmers’ within a widening organizational “matrix� in the agricul- production constraints (how to produce a seed that farm- tural sector. A growing private sector, increasing commodi- ers will buy) and consumers’ quality requirements (if con- tization, and expanding market opportunities lead to an sumers and marketing agents want the product, then their MODULE 4: OVERVIEW 265 preference feeds back to farmers in the form of a price pre- public research and subsector needs, science parks adjacent mium for the commodity/variety). Plant breeding innova- to research institutes that focus on areas of joint R&D, and tion by seed companies bridges the interests of producers venture capital funds that invest in developing products and and consumers, but only within a functioning, competitive markets based on research innovations. seed market. Other areas of applied agricultural research are less well Private research capacity develops principally where served by the private sector, however, and constitute more agricultural markets function well, as in Latin America and classical public goods, such as pulse and grain legume Asia, especially in the large countries with their large mar- breeding, crop disease surveillance, development of forages kets. As agricultural economies modernize and the private for ruminants, and especially crop management and natural sector becomes more active in funding its own agricultural resource management research. Agricultural research insti- research, innovation turns more to the application of fron- tutes within dynamic agricultural sectors have to strike a tier science, and public research tends to support private balance between the more basic research that complements companies by developing new products (hybrid rice, for the private sector’s interests and the more applied research example) or supporting private sector research. that farmers need. This balance will become even more In agriculture, molecular biology and genomics repre- important with the increasing focus on using water and sent this kind of frontier science, which is often supported nutrients efficiently and reducing environmental externali- through competitive grant schemes and in which universi- ties in production systems. ties often have a comparative advantage. For example, Even transforming agricultural economies have a role for India’s National Agricultural Innovation Project (NAIP) public sector research in lagging rural areas with high has a competitive grant scheme that funds innovation clus- poverty rates, usually associated with underdeveloped mar- ters around more basic research with potential applications kets. External connectivity in these cases usually focuses of interest to the private sector. In Thailand, similar efforts on bridging organizations, particularly NGOs and exten- are led by the Ministry of Science and Technology through sion services. In these cases, the AIS essentially reduces to its National Innovation Agency and BIOTEC program; the traditional partnerships between farmers, research, they also focus on funding clusters of research and related and bridging organizations, but those organizations pro- applications. In addition, BIOTEC has set up two inde- vide a range of services beyond advisory services, includ- pendent research programs, the Rice Gene Discovery ing savings and credit schemes, farmer mobilization, and Unit (applications of genomics and molecular biology in improved market access. rice breeding) and the Cassava and Starch Technology India’s NAIP is an example of a funding program that Research Unit (molecular approaches to understanding stratifies its platforms or clusters based on relative market starch synthesis and quality, with a particular focus on the development and associated rural poverty. In more com- Thai starch industry). mercialized areas, NAIP’s platforms involve public-private In these cases, public sector research is increasingly partnerships, and in lagging areas they involve traditional divorced from farmers as the primary clientele, relying research and bridging organizations. instead on input markets as the mechanism for articulating For smaller research institutes, this kind of stratification farmer demand. Occasionally the interests of farmers and creates a dilemma. Should they focus on the more commer- input companies do not coincide, however, as exemplified cial areas and associated partnerships or focus on the lag- by the tensions surrounding pesticide use and the scaling up ging areas? The potential for innovation will be higher in of integrated pest management programs in Asia. the commercial areas, but the public interest may reside Under these market-driven conditions, investments in with the lagging areas. The tendency within an AIS will be public agricultural research tend to focus more on institu- toward the former, whereas the public role will in most tional innovations that reinforce the ties between research instances lie in the latter. and the private sector. IPRs are emphasized, for example, often as much to ensure open access to publicly generated Research within underdeveloped market contexts innovations as to protect innovations developed in the pri- vate sector. IPRs are often the basis for contractual arrange- The more agrarian economies, particularly those in sub- ments in public-private partnerships. This connectivity can Saharan Africa, can be characterized as primarily dependent be reinforced by competitive grants that insist on public- on smallholder, rainfed agriculture. Farmers face conditions private partnerships, brokers that can mediate between of incomplete and unintegrated input and output markets, 266 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK asymmetric information, and high transaction costs. Increasing private sector linkages. In general, public Markets for insurance and credit are virtually nonexistent. agricultural research, especially within a NARI, is organized around core capacities involving some combination of plant Combining technical and institutional innovations. breeding, disease and pest management, integrated crop For agricultural research to be effective under these management, soil and water management, livestock and conditions, technological innovations must usually be fisheries, and potentially forest and rangeland management. combined with organizational and institutional inno- Virtually all of these areas focus on improving land vations, primarily to compensate for the lack of markets as productivity and have farmers as their principal clients, an organizational impetus for innovations. Moreover, either directly or through bridging organizations such as innovations tend to follow more orchestrated trajectories NGOs, farmer associations, and extension services. (Rajalahti, Janssen, and Pehu 2007)—in other words, the The large change in organizing research within an AIS innovation process tends to be facilitated by external actors, is the development of linkages between research and an and technical innovations are often integrated with emerging private sector. Research and bridging organiza- organizational innovations. tions are not well organized to effect such linkages (Larsen, For example, the deployment of improved sorghum Kim, and Theus 2009). In small agrarian economies, the varieties, microdosing of fertilizer, and pit technology private sector is not very prominent in rural areas. Large- for water harvesting in Sahelian countries becomes much scale processing tends to locate in major urban markets. more profitable for farmers to adopt if farmers form asso- Many nonfarm activities to generate income in rural areas ciations around warehouse receipt systems. In this way, are based in the household, such as brewing beer or pro- technical innovations are combined with organizational cessing root crops.3 Haggblade (2009:A1-2) noted that innovations that compensate for incomplete input and “rural manufacturing remains limited across most of credit markets and foster efficient bulking for output Africa . . . but, overall, local rural services, commercial and markets. Orchestrated trajectories are further facilitated other business activity account for 80 percent of rural by policy changes that legalize banks’ acceptance of nonfarm earnings.� warehouse receipts, often initially with a loan guarantee Innovations that have broad impact on the rural non- program. farm economy thus tend to focus on organizational inno- vations that improve marketing efficiency or on small-scale Bridging organizations. Where markets are incomplete processing where initial market conditions exist to special- and unintegrated, bridging organizations—particularly ize outside the household. The development of technology extension services, farmer associations, trade associations, for small-scale processing relies primarily on mechanical and NGOs—link the research and knowledge domain with innovations that usually come either from private industry, the production and emerging market domain. These international borrowing, or occasionally (for specialized organizations deliver and adapt research products as well processing) from university engineering departments or as develop supporting organizational innovations that industrial research institutes (Haggblade, Hazell, and Rear- provide greater access and efficiency in processing and don 2007). The availability of specialized processing equip- marketing. ment depends, however, on the presence of local private Bridging organizations are an imperfect mechanism for capacity for manufacturing and distribution. articulating consumer and farmer demand unless that What then provides the basis for effective linkages demand is organized around a specific value chain. Value between agricultural research and the private sector in chains have become a dominant framework for orchestrated agrarian economies? Strategies include vertical integration, innovation platforms. Within an AIS, the emphasis on value brokering, and public-private partnerships. chains will drive the organization of agricultural research In larger-scale processing, such as maize milling or feed back to a more centralized commodity approach. It will production, a company’s interest lies in procuring stable sup- tend to drive the organization of farmer associations along plies of raw material of a certain quality at a competitive similar lines. Where markets are already well developed, like price. Where cost structures and margins permit, a company markets for horticultural exports, organization along com- can vertically integrate across the value chain, as in export hor- modity lines is already evident. The Fresh Produce ticulture. Alternatively it can rely on imports, like the wheat Exporters Association of Kenya (see module 1, box 1.5 in the milling industry of coastal West Africa. Under these condi- overview) is but one example among many. tions, there is no incentive for public-private partnerships. MODULE 4: OVERVIEW 267 If a company relies on domestic production supplied by extent possible on ensuring that farmers will be able to use market trading, however, it will be interested in combining the final product, principally to improve farm productivity. higher farm productivity and lower costs with more effi- Ensuring that technical design is congruent with farmer uti- cient assembly, bulking, and marketing. An agroprocessing lization is a central tenet of farmer participatory research firm has little incentive to invest in increased farm-level pro- (including participatory plant breeding) and its antecedent, ductivity unless there is a quasi-monopoly on purchases of farming systems research, as the design process often entails feedstock, such as for oil palm or sugarcane processing. iterations with farmers in testing and design modification— Innovation platforms for staple food crops tend to focus on or rather codesign (see TN 4). linking innovations in assembly and bulking by small-scale marketing agents with technologies for farmers to improve Innovation platforms. In practice, approaches to tech- crop productivity. In value chains with significant returns to nical innovation within an AIS often take the form of improved quality (for example, specialized coffee or dairy), project-based innovation platforms (TN 1; see also coordination is usually needed from the farm to the final module 1, TN 2). Projects usually operate for a limited time; processing point. The mechanism for coordinating all of the unsurprisingly they tend to focus on quick solutions to actors in the value chain is usually provided by a specialized technical problems identified within the platform. This time NGO with public funds (in other words, by a brokerage frame orients research institutions to adapt existing agency). The scope for public-private partnerships in agrar- knowledge and technology. Nevertheless, research institutes ian economies is quite circumscribed, and enhanced farm must balance this increasing demand for capacity to productivity will generally continue to be the objective of conduct shorter-term adaptive research with the longer- partnerships or platforms. term research capacity required to expand the set of Another principal sphere of interaction between research technical options. Farming systems research units were institutes and the private sector surrounds agricultural often successful locally but had difficulty achieving any inputs. In this sphere, the potential interactions are more significant scale in the adoption of adaptive research directly complementary. Public research provides varieties results. A value chain framework, which usually focuses on for seed companies, can target fertilizer blends and integrate applied research, expands the specification of the problem them with organic sources, and can develop integrated pest and usually integrates technical innovation with institu- management packages for safe horticultural production. tional innovations in farmer organization and marketing to In crop breeding, the nature of public-private partner- ensure that results are used throughout the value chain. Yet ships changes as competition and product development in many cases it is difficult to scale up results that are evolve in the seed market. Evolving private sector capacity in specific to particular value chains and contexts, as seen with input markets, tied to responsive public research programs, warehouse receipt systems in underdeveloped grain markets can provide a direct channel for disseminating the products such as those in Sahelian countries. of public research. The public sector can focus its research A research institute can also foster the development of on areas where input companies do not invest, which tend innovation platforms by establishing a specialized unit or to be areas with high rates of poverty and ineffective farmer through funding arrangements such as those in Latin demand. American research foundations or competitive grant pro- grams. Through these units or funding arrangements, research institutes respond to some form of “articulated� Technical innovation through AIS approaches demand, which may come only from a limited proportion An evolving AIS has an increasing capacity to innovate, and of the farming population. Alternatively, the research insti- agricultural research plays a key role in technical innova- tute may take a more proactive role and initiate an innova- tion. Kline and Rosenberg (1986) observed that “contrary to tion platform itself, especially if it believes it has a technical much common wisdom, the initiating step in most innova- innovation with a good chance of success and that an inno- tions is not research, but rather design� (quoted in Sumberg vation platform is an effective means of ensuring its use. 2005). In this sense, applied agricultural research is probably This approach can be described as “linear,� but it is only a misnomer, as its central focus is on technology design, another form of applying existing knowledge. whether it is the design of an improved variety, an IPM sys- tem, a system to manage animal disease, or an agroforestry Scale of innovation platforms. The scale of innovation system. In such instances, the design process focuses to the platforms has not been much explored (Hall, Dijkman, and 268 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Sulaiman V. 2010). In Africa, innovation platforms often As discussed, in India, NAIP (IAP 2) has managed the operate at the district level, where the constraints lie in the trade-off between market-driven innovation and innova- heterogeneity of production systems and the location in tion for lagging areas by creating two funding streams to relation to markets. In value chain platforms, scale is deter- support different types of innovation clusters. In lagging mined by the problem, market size, coordination require- areas, funding supports the transaction costs involved in ments, and structure of the value chain. In Rwanda, for establishing innovation platforms and organizing partner- example, the conversion of the coffee subsector to high- ships. These platforms are bound by the duration of the value, specialty blends was done at a national, subsectoral grant, however, and either the problem focus has a short- level. In comparison, the development of organic horti- term horizon, the results can be seen as a pilot for which cultural value chains is often organized at the district level larger-scale funding would be sought, or the funding is or lower. Scale is often a key design criterion in the devel- structured so that follow-up grants would be awarded to opment of a value chain platform. It determines whether promising longer-term problem areas. However, a NARI the platform operates at the national, regional, or district such as the one in Kenya must internalize these trade-offs level, whether it involves individual versus institutional within the frame of its own research programming, the partnerships, and whether policy change is a key element in number of partnerships it can manage, the duration of the the platform’s activities. partnerships, and in the end the public good objectives Platforms that are not structured around value chains that drive these decisions. In other words, it must priori- and that have poverty or food security objectives tend to tize whether to invest in more scientific capacity or collab- approximate rural development programs and rely on pub- orative capacity. lic sector or civil society participants. Introducing an inno- vation perspective into what are essentially facilitation and Taking note of long-term needs. Planning for longer- service delivery platforms requires methodologies that are term needs in regard to technical innovation tends to take more participatory, focus more on the problem, and allow place in well-developed market economies and tends to greater scope for experimentation. These requirements focus on capacity needs in relation to basic and strategic often limit the scale of operations and introduce higher research. At this stage in the development of the agricultural implementation costs, however. Smaller-scale innovation economy, there is a strong sense that new science will be a platforms may be required, which will feed into and support principal engine of continued agricultural growth and broader rural development programs. competitiveness in world markets. Scenario planning is often used to gauge alternative futures in relation to the Innovation platforms with poverty objectives. There evolving structure of the agricultural economy and to chart is a tendency in an AIS to focus primarily on value chain longer-term investment needs in agricultural R&D. approaches, as for example with the Kenya Agricultural In developing countries, the private sector does not Productivity Program (KAPP). After Kenya liberalized its invest in scenario planning, although multinationals such as markets in the 1990s and the private sector became Monsanto do use such approaches, and a clearer division of increasingly active, Kenya generated successful market-led labor emerges between public and private R&D. In develop- approaches to develop smallholder tea, horticulture, and ing basic research consortiums, NAIP used foresight sce- dairy production as well as a fertilizer market. Despite these nario planning (see module 7, TN 3) to define longer-term achievements, rural poverty remains very high in marginal needs. Tapping the potential of genomics and molecular agricultural areas and densely populated areas around Lake biology as well as the potential of bioenergy often becomes Victoria. Most smallholders are still net buyers of maize, the a key focus in supporting continuing structural change principal staple—only 18 percent of maize producers are in the overall economy. net sellers and only 2 percent of producers account for 50 percent of sales (Jayne, Mather, and Mghenyi 2006). The KEY POLICY ISSUES Kenya Agricultural Research Institute, like many small- country agricultural research institutes, faces the dual The key policy issues surrounding agricultural research in challenge of innovating through market-led approaches an innovation system range from the very broad (the need while attempting to expand market participation or for an environment conducive to organizational interaction) minimally improve household food security for the to the very specific (the need for particular policy instru- majority of smallholders. ments that reduce the transaction costs of organizational MODULE 4: OVERVIEW 269 collaboration). Policies that promote decentralization and transaction costs inherent in developing organizational democratization can also have a positive effect on rural linkages and platforms. Where benefits to collaboration are innovation. clear, particularly for the private sector, such transaction costs are a necessary component of investments in the inno- vation process. For public sector research, however, financ- Incentives for organizational interaction ing these costs requires explicit budgeting categories and Within AISs, framework policies provide the broad incen- clarity on how these expenditures will support institutional tives for increased organizational interaction in support of outcomes. To overcome the inherent risk and uncertainty agricultural innovation: market policies, administrative and cover transaction costs for participation, special agri- policies, and financing mechanisms. Policies in general cultural innovation funds (module 5, TN 2) have been should enhance collaboration, collective action, and what developed (World Bank 2010). might be termed “functional sufficiency� in innovation— the participation of a diversity of actors that bring a suffi- Decentralization and equity issues cient set of skills to the innovation process. As noted, mar- ket liberalization policies have been a critical driver of The trend toward democratization is often reflected in investments in the agricultural sector, market participation, greater administrative and financial decentralization, in and growth linkages in the rural economy. which the delivery of public services is managed at the dis- With the trend toward market liberalization, govern- trict level and the public agencies involved become more ment’s role has shifted to improving marketing efficiency accountable to local constituents, including women and and defining standards for market participation, particu- men farmers. Decentralization has had a major impact on larly the development of grades and standards in com- the organization of advisory services, animal and plant modity markets and quality and safety standards in input health services, and the development of infrastructure, markets. Seed certification, varietal testing and release, especially for water and rural roads. Democratization is also biosafety regulation, plant breeders’ rights, and IPRs (see accompanied by an expansion in civil society organizations, module 6) all set the rules under which product innova- including the rebuilding of farmer organizations. In many tion takes place. They define the rules of competition (for respects, these processes are fundamental to creating capac- example, between seed companies) and provide incentives ity for rural innovation. In areas where local government is for collaboration (for example, between integrated pest particularly responsive, they can facilitate innovations such management firms and horticultural producers). The reg- as the Land Care movement in the Philippines. ulatory environment in turn provides incentives for the private sector to increase its investment in research, which often initially provokes competition with public research EVOLVING AREAS OF INVESTMENT and then evolves into more collaborative modalities. The IN RESEARCH WITHIN AN AIS tension then becomes whether public research, especially How will research investments continue to evolve in an AIS if jointly funded by the public and private sector, is done context? Investments are expected to continue supporting under exclusive rights to particular companies or whether the wider connections that lead to innovation. They will the research supports the whole agricultural sector. In encompass new forms of collaboration and institutional general, public research turns its attention to more structures as well as new technologies and systems that upstream research that has longer time horizons and increase the flow of information among actors in an inno- addresses issues of less importance to the private sector, vation system. such as natural resource management, poverty reduction, In some instances, greater collaboration and communi- gender, and equity. cation between actors in an innovation system will change where agricultural research occurs, who conducts and funds it, and its priorities. In Africa, however, public research Financing for transaction costs inherent in AISs agencies will be even more challenged to respond to the Financing mechanisms are possibly the most effective pol- proliferation of small-scale innovation processes. Research icy instruments for increasing organizational connectivity investments will also be critical for counterbalancing the (box 4.1). Aside from providing incentives, financing heavy market orientation of AISs and promoting greater mechanisms are also critical for supporting the increased inclusiveness and equity in innovation processes. 270 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 4.1 Financing Agricultural Research and Innovation Agricultural research in developing countries is char- organized clusters in which firms’ market, processing, acterized by significant underinvestment, especially in and management expertise were matched with expertise Africa. It remains very much a public activity that pro- from public research institutes (IAP 3). Three govern- duces public goods. Government remains the largest ment agencies, each with a slightly different mandate, contributor to public agricultural research, accounting managed the funding. In India a similar program was for an average of 81 percent of funding. Internally gen- managed by a program office organized within a World erated funds, including contracts with private and Bank loan (IAP 2). The primary funding mechanism was public enterprises, account for only 7 percent. Because competitive grants, awarded to specific types of partner- continuity of financing is so critical to the productiv- ships, often with explicit contractual terms. ity of agricultural research, new approaches to funding To diversify and sustain funding, the beneficiaries of have been piloted over the past two decades. As the the research are increasingly required to contribute. In precursors of funding strategies for AISs, they offer Kenya, for example, levies have funded research on insight into the potential challenges involved. export crops (tea and coffee). In Uruguay, producer The new approaches shared two fundamental char- associations invested directly in national commodity acteristics. They separated funding decisions from the research programs. More generally, tax incentives have execution of research and they expanded the sources encouraged companies to invest in R&D by hiring their and sustainability of financing. own researchers or contracting with public agencies. In To ensure accountability and a research agenda all of these arrangements, the research supported is that met users’ needs, representatives of the private defined much more specifically to reflect users’ sector, farmers, and the public sector decided which demands, ensure that appropriate products are devel- research to fund, primarily through competitive oped, and promote accountability. grants. This separation required new organizational Such funding sources are still a small component of arrangements to manage the increased transaction overall funding for agricultural research, however. costs, most often in the form of a research foundation, Large parts of the agricultural sector still rely almost a national agricultural research council, or a govern- entirely on public funds to meet their needs, especially ment agency that managed competitive grants (see for plant breeding research in staple food crops and module 6, TN 2). Experience with research foundations natural resource management research. yielded lessons on ensuring clients had a voice in fund- The key lesson is that a strong market and commer- ing decisions and on developing sufficient capacity to cial orientation, if not bias, appears to exist in financ- manage the funding within a strategic framework. ing arrangements that move away from financing Research foundations and competitive grant funds research and toward financing innovation within an have focused on funding projects that foster critical AIS. A primary challenge is to ensure that research and partnerships in the AIS, usually between public scien- innovation to generate public goods will be adequately tific institutes and the private sector. For example, Chile supported. Sources: Agricultural Science and Technology Indicators (http://www.asti.cgiar.org); Byrnes and Corning 1993. Increasing connectivity between research or services to the private sector. For a public research and other innovation actors agency, the degree of exclusivity in the use of its particular In an AIS, research is chiefly oriented toward integration product or service, which is often under IP protection, often with the rest of the innovation actors, be they private, pub- defines the contractual arrangement (see TN 2 in this mod- lic, or civil society entities. In practice, most efforts have ule and module 5, TN 1). focused on interactions between the public and private sec- Science parks create a useful nexus between commercial tors. Partnerships between public and private agencies enterprises and research institutes by taking promising involve a range of contractual arrangements, from informal research products to market and providing backstopping in to formal, under which research institutes provide products product modification. They function best where private MODULE 4: OVERVIEW 271 investment capital and industrial engineering expertise Box 4.2 ICTs Make Agricultural Research coexist (see the overview in module 5). More Inclusive The development of new markets for agricultural prod- ucts often calls upon public expertise in agronomic and breeding research and relies on services ranging from bro- ICTs are making agricultural research more inclu- kering contracts and partnerships and assembling invest- sive and at the same time more focused on devel- ment capital to developing capacity in the private sector. opment goals, because they change how, where, The costs of research for these niche markets often cannot and to whom information flows. Information can be justified for public research institutes with their broad flow in many directions; it can be highly dispersed public good mandates. This issue is explored further in and accessible; it can also be highly targeted and module 3, TN 4. location specific. ICTs are significant in the research process but may be even more significant Value chain platforms, the most informal approach to as a catalyst throughout the wider innovation sys- linking publicly funded research and the private sector, tem, in: collecting, storing, and analyzing data, seem to function best when coordination is needed to pro- with or without human interaction; geospatial duce a specialized product like high-quality coffee. They applications; decision support and knowledge- require external funding and facilitation, and their effective- based systems and robotics; embedded ICTs in ness in generating innovation for a range of commodities farm equipment and processes (agrionics); con- and market conditions remains to be tested (see module 1, necting communities and enabling learning; col- TN 2 and module 5, TN 4). laboration with stakeholders across the research process; and the management of competitive inno- vation funds. Enhancing access to information and communication Sources: Agricultural Science and Technology Indicators (http://www.asti.cgiar.org); Byrnes and Corning 1993. Enhanced information flows will improve the integration of an AIS. The facilitating role of ICTs is vital for researchers and other stakeholders in an AIS involved in gathering and They are more than a mechanism for two-way flows of manipulating data or interacting with global information information. Kenyan farmers use them to obtain market resources (see box 4.2) (see World Bank 2011).4 Informa- prices, verify the certification of seed and fertilizer sellers, tion flows among actors in an AIS in developing countries and obtain recommendations on which fertilizer and seed have always been particularly costly, often asymmetric, and to choose. Equipped with GPS and cameras, mobile phones generally incomplete. New ICTs could significantly improve are becoming a very efficient means for researchers and access to information and the availability of communication farmers to collect farm-level information. For example, a and collaboration tools, although access to information is network of sentinel farmers in the Great Lakes region of only one component of the innovation process in agricultural Africa monitors two cassava disease pandemics, the systems. The design of technology in agricultural research hybridized form of cassava mosaic virus and two species of oriented to increased farm productivity depends on a two- cassava brown streak virus. A data template has been way flow of information between farmers and researchers. developed with the service provider, and farmers provide Farm-level innovation requires contextualized information photographs of suspected new outbreaks. This effort could (a particularly difficult problem, especially where farmers’ evolve into an interactive disease surveillance and control level of education is limited), access to research products, and system. The potential of mobile phones for such interactive a significant learning-by-doing process. Researchers in turn information flows between researchers and farmers will need to understand the heterogeneity of farming systems and continue to evolve. the constraints on farm productivity to inform their technol- ogy design and testing systems and ensure that they respond Market intelligence units. Within an AIS, research to farmers’ needs. Some emerging areas of investment are dis- institutes will increasingly have to balance farmers’ demands cussed in the sections that follow. with those of the private sector, which will affect farmers indirectly through research that produces innovation Mobile phones as an information exchange device. elsewhere in the value chain. Within commercial agri- Mobile phones are becoming pervasive in some rural areas. cultural economies, information flows are increasingly 272 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK specific to the needs of each subsector. Market intelligence and genomics research in support of the private sector or becomes an important public good in improving the toward breeding for areas not covered by the private sector efficiency of the market and directing investment in the (box 4.4). subsector, including research investment. In countries such In sub-Saharan Africa the market and agricultural as Brazil, the Brazilian Institute of Geography and Statistics research context remains quite different, requiring NARIs collects basic census and production data,4 while agri- to balance traditional research focusing on productivity cultural economic research institutes collect information with an emergent private sector that has almost no capac- on prices, domestic trade volumes, agroprocessing output, ity to undertake research. Finding this balance, improving and international markets and undertake analytical work connectivity to the private sector to improve farmers’ access in support of market development. to markets, and developing more effective linkages to bridging organizations that provide services to farmers are Learning alliances. Learning alliances provide a platform all on the agenda of how the NARI improves its connectiv- for networking often disparate R&D institutions around a ity within the AIS. common focal area involving program or project In many cases, approaches will vary depending on loca- development and implementation. They focus especially on tion and commodity, as research organizations have a role the learning associated with scaling up innovations, which even in postconflict situations. In all cases, enhanced part- usually involves the interaction of research, capacity building, nerships with a diversity of NGOs, farmer organizations, project implementation, and evaluation. These platforms and civil society organizations are critical to effective per- move beyond the scope of a traditional monitoring and formance. evaluation (M&E) system and focus on broader learning With their persistent funding constraints, African objectives across institutions. Learning alliances are NARIs face an increasing dilemma in organizing them- particularly intensive in the use of facilitation and selves to respond to an expanding range of innovation information synthesis and require external funding to processes, which are often grouped around relatively micro operate. See IAP 4. market and development niches. As Hall, Dijkman, and Sulaiman V. (2010: 4) have argued, “Innovation diversity is central to research design, emphasizing that there is no Organizational change of research optimal approach or way of organizing research into use within an evolving AIS for innovation and impact; rather it is context-specific and Organizational change within a research system reflects path-dependent.� How African NARIs address the diversity increasing differentiation and specialization in the produc- question in their external linkages while organizing their tion of new knowledge, products, and services. This differ- limited internal resources around the biotic, natural entiation among R&D organizations is driven by improve- resource, and impending climate change challenges facing ments in their ability to respond to changing demands African agriculture will be a persistent driver of organiza- within the agricultural sector as organizational linkages tional change within NARIs. Such change is best built on within the sector improve (TNs 1 and 5; box 4.3). Closer experimentation, piloting, and continuing enhancement of interaction between publicly funded agricultural research skills in developing external institutional arrangements, and an expanding private sector and civil society has orga- while evolving increased flexibility in designing research nizational implications for research because interaction products and services. shifts the locus of agricultural research, research priorities, and research financing. Pro-poor innovation This shift is most apparent in the rapidly growing economies of Asia, which are experiencing increasingly The market orientation of AIS raises a number of challenges dynamic organizational change. Private investment in agri- with respect to pro-poor innovation; in many ways these cultural research is expanding rapidly, especially in plant challenges echo the debate over the equity impacts of the breeding. Hybrid maize led the movement of seed compa- Green Revolution. First, the rural poor are primarily found nies into breeding, but they have since expanded into horti- in contexts characterized by poorly developed markets, culture, hybrid rice, and plantation crops. In Asia and Latin either because of inadequate transport infrastructure, dis- America, public plant breeding has responded to these tance to markets, or low population density. The poor often developments by either moving toward more prebreeding reside in marginal areas bypassed by private investment MODULE 4: OVERVIEW 273 Box 4.3 The Consultative Group on International Agricultural Research and the AIS The institutional role of the 15 centers of the Consulta- ment under frameworks such as integrated natural tive Group on International Agricultural Research resource management, agricultural research for (CGIAR) in agricultural innovation has been a source of development (AR4D), and knowledge to action pro- debate and has changed significantly over time. The issue grams—all forerunners or embodiments of AIS. is most often framed in terms of where the centers oper- Demand articulation was embedded in each of these ate within the research-to-development spectrum. approaches, and organizational and institutional innovation were seen as critical complements to ■ For the first two to three decades, the centers’ role technical innovation. The institutional matrix was defined in terms of a division of labor with the within which the centers worked expanded again. NARIs (the centers would mostly develop technolo- gies and NARIs would refine and disseminate In its current incarnation, the CGIAR intends for its them). Significant investment in training and capac- 15 centers to function more as a system than as ity building within NARI research programs were autonomous centers. They will operate through multi- made to develop a technology pipeline. center CGIAR Research Programs (CRPs). Financing ■ Farming systems and participatory research in the will return to longer-term core funding allocated by 1980s and 1990s expanded the institutional matrix funders through a Fund Council that is legally sepa- within which the centers operated (and the num- rate from the centers; centers will be governed by a ber of centers themselves expanded). The focus Consortium Board. CRPs will be managed within a shifted from pushing the supply of technology to results-oriented framework and evaluated with respect understanding farmers’ demand for research and to their contributions to four system-level outcomes. conducting more work on natural resource man- The new arrangements incorporate elements of an agement. Core funding shifted to competition for AIS approach, with a focus on measurable results project funding. The shift heightened the emphasis (which are reflected in the contractual arrangements on achieving development outcomes—but within between each CRP and the Fund Council). This a less strategic, more project-driven modality. results orientation will have to differentiate between ■ The 2000s saw Centers consolidate their down- innovation-induced rural change and structured stream research and focus methodological develop- implementation of development projects. Source: Author. Box 4.4 Examples of Public-Private Engagement in Prebreeding and Genomics Thailand has invested in higher-end genomics research The same trends are apparent in Latin America, and molecular breeding, not in the Ministry of Agri- although not to the degree of Indonesia and culture and Cooperatives but rather in the Ministry of Philippines. Colombia, Uruguay, and Argentina fund Science and Technology. This high-end science is research on coffee, rice, sugar, and oil palm from levies organized in clusters with private companies. on commodity sales. Chile has a number of specific In Indonesia and the Philippines, the private sector competitive funds, all of which require collaboration accounts for one-fifth of agricultural R&D, partly with industry. These trends suggest that agricultural because of the plantation structure of significant parts research is moving away from direct involvement of the agricultural economy. In turn, the Indonesian with farmers and that private companies are increas- Research Institute for Estate Crops generates a signifi- ingly the intermediaries between researchers and cant portion of its budget from contract research and farmers. commercial seed sales. Source: Beintema and Stads 2008. 274 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK until rural wages start to increase dramatically in other Impact at the farm level is attributed to the AIS rather than areas. The potential for developing sustainable links to mar- the agricultural research institutes. In the overall AIS, the kets under such circumstances is often limited. monitoring of agricultural research organizations shifts Second, where market development is possible, the rural toward process-oriented assessment (Daane 2010), the poor often lack the resources to access markets. Ensuring characterization of systemic linkages between agricultural the participation of women is even more challenging. research and other domains within an AIS, and their func- Women’s roles in the value chain and the services that sup- tionality. Ragasa et al. (2010) used this approach in devel- port those roles may need to be differentiated. Organiza- oping an M&E system for agricultural research in Nigeria. tional innovations may also be needed to ensure that At the project level in an AIS, M&E in many ways is more women participate in and benefit from the formation of comprehensive and tends to be organized around value farmer groups. chains, innovation platforms, public-private partnership Finally, agricultural research linked to development arrangements, or competitive grants. In such contexts, agri- agencies often has a significant role in improving food cultural research will be only one of many organizational security for more subsistence-oriented households, includ- partners in the M&E framework. The focus will be on ing food-based nutritional approaches (especially for understanding and adapting processes, often within an households affected by AIDS), limiting the “hungry sea- action-research modality (an iterative process of diagnosis, son,� and improving the resilience of the farming system. planning, action, evaluation, and reflection). The M&E sys- An AIS framework requires a very different institutional tem will serve several functions, particularly (1) monitoring mix and methodologies to support innovation in such project progress; (2) learning and change; (3) collecting data contexts, potentially extending into learning alliances. For for testing hypotheses, often in relation to scaling up project AIS approaches, the incentives for researchers tend to results; and (4) project management (Njuki et al. 2010). come from more commercial producers, especially when Data will be collected on a combination of quantitative and researchers are working with value chains. A pro-poor qualitative indicators, the latter often collected through a innovation process requires more orchestrated investment participatory M&E process with project participants. approaches and in the end much more experience and Defining the scope of innovation outcomes is often not evaluation of how the innovation process can be sure to straightforward. The outcomes reflect the application of include the poor. new knowledge, products, or services within a context of organizational or institutional innovations. Investors will want to know the impact of these innovation outcomes and MONITORING, EVALUATION, AND SCALING UP whether the organizational innovations are more cost effec- Monitoring the performance of agricultural research within tive than current institutional arrangements. an agricultural innovation framework presents a number of In a few cases, as in the sub-Saharan Africa Challenge Pro- conceptual and implementation issues. Optimally an M&E gram of the CGIAR, experimental and quasi-experimental system will function at a project level, at a research institute methods have been employed to test the comparable effi- and research system level, and at the level of the overall AIS, ciency gains from using innovation system methods over tra- and indicators developed at lower levels will aggregate to ditional research and extension approaches (FARA 2009). higher levels. Virtually all of the experience with M&E in Such tests are very expensive, however, and in the end not as innovation systems is at the project level, however. rich as adaptive approaches employing M&E data in pro- Spielman and Kelemework (2009) have developed an AIS gressively improving the efficiency of AIS methods and performance index and tested it in Ethiopia and Vietnam. processes. They divided the AIS into organizational domains, one of Table 4.1 provides selected indicators for topics covered which was the knowledge and education domain, which in this module. includes agricultural research. Performance in this domain was measured in terms of knowledge production, reflected ORGANIZATION OF THIS MODULE primarily in scientific publications. When innovation outcomes are defined at the level of Agricultural research within an AIS framework is still in quite the overall AIS, the performance measure for agricultural early stages of development, and the experiences and applica- research shifts from farmers’ adoption of technology to the tions described here have been drawn from a number of con- role of agricultural research as a producer of knowledge. texts and often within a piloting modality. This material has MODULE 4: OVERVIEW 275 Table 4.1 Schematic of a Monitoring and Evaluation Framework for Assessing the Performance of Agricultural Research within an AIS Domain Indicator Innovation outcomes/research impact – Technology adoption – Increased farm productivity and incomes – Increased efficiency within the value chain – Increased total factor productivity – Increased agricultural GDP Demand articulation – Forums for farmer voice – Joint priority setting – Participatory or codesign research – Number of public-private partnerships (PPPs) Organizational interfaces/partnerships – Number of innovation platforms, clusters, or consortiums – Number of PPPs – Value chain platforms – Scientist participation in networks Organizational change – Involvement of stakeholders in planning, priority setting, and evaluation – Presence of mechanisms or units for managing partnerships and for brokering innovation processes Research productivity – Number of competitive grants received – Number of peer reviewed articles published – Number of varieties released – Number of on-farm trials Knowledge flows – Number of hits on website – Articles or programs in mass media – Citation index – Extension bulletins produced and distributed Source: Author. Note: All indicators should be disaggregated by gender when possible. been organized by typology in this overview and by theme in tural research (TN4), and management structures and orga- the notes that follow (except for TN 1). nizational change (TN 5). The typology emphasizes that the market, organiza- The TNs are followed by profiles of innovative approaches tional, and economic context needs to be understood in to agricultural research within an AIS framework. IAP 1 dis- deciding on investment approaches for AIS. The themes cusses the redesign of an international agricultural research covered in the notes enter into more detail on alternative center to align with an AIS approach. Two profiles focus on the areas of investment in important domains of AIS. They implementation of agricultural innovation funds, especially in include a discussion of demand articulation and external facilitating public-private partnerships, in India and Chile organizational interfaces (TN 1); public-private partner- (IAPs 2 and 3). Another describes experiences with learning ships (TN 2), regional research (TN 3), codesign in agricul- alliances (IAP 4) 276 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK T H E M AT I C N O T E 1 Designing Agricultural Research Linkages within an AIS Framework David J. Spielman, International Food Policy Research Institute (IFPRI) Catherine Ragasa, International Food Policy Research Institute (IFPRI) Riikka Rajalahti, World Bank SYNOPSIS this new landscape in agricultural development. To reach this goal, public research organizations will have to increase onsensus is growing that new ways of conducting C agricultural research are needed. To date, the oper- ational implications of these changes and strate- gies for making them efficient, effective, and sustainable their relevance, their capacity to respond to a changing landscape, and their ability to produce goods and services that can be put to use in a socially or economically produc- tive manner. have been discussed very little. Lessons on strengthening These statements are not a call for paying less attention the connectivity between agricultural research and other to the quality of scientific inquiry and expertise in disci- innovation system actors are viewed through the lens of plinary fields. They are rather a call for greater interaction three types of economies—agriculture-based, transform- between researchers and other knowledge producers and ing, and urbanized—and two strategies: (1) investing in users to maximize the quality of science and its impacts “demand articulation� mechanisms to better identify the on society and the economy. Increased interaction means needs of different user groups and (2) designing “organi- that public research organizations will continue to play a zational interfaces� that help transform research into real role in developing country agriculture but that their role goods and services. There is a case for both market and must change. The key to this change will be flexible insti- nonmarket approaches to improving demand articulation tutional arrangements that encourage dynamic, rapid and organizational interfaces. They include investment in responses to changing circumstances from public research formal mechanisms that provide stakeholder input to organizations. research organizations, more participatory mechanisms This TN examines specific investments in key design that bring researchers and farmers together to solve prob- elements and approaches in three innovation contexts lems, innovation platforms that address larger, more (box 4.5) similar to those discussed in the module overview. complex challenges with diverse actors, commercialization It focuses on key investments in articulating demand (iden- programs that move research into the marketplace, and tifying the needs of different user groups for the knowledge financing mechanisms that encourage collaborative and information produced by research organizations) and research. Careful adaptation to the specific innovation designing organizational interfaces (modalities that help contexts, strategies, and mechanisms is prerequisite for transform this knowledge and information into socially and success. economically relevant goods and services). Research systems have undergone any number of BACKGROUND AND CONTEXT reforms, ranging from rebuilding after a crisis to redesign- Agricultural research needs to be examined within the ing more complex and advanced systems. Little evidence broader analytical framework of an innovation system, points to which reforms actually work well in different types which means recognizing that innovation in agricultural of research organizations and how these reforms might ulti- development may occur in collaboration with, separately mately affect agricultural productivity and poverty. Without from, or even in spite of agricultural research organiza- sufficient evidence, it is often difficult to provide conclusive tions. The challenge is to make public research organiza- insights into the returns on investing in large-scale reforms tions more responsive, dynamic, and competitive within of research systems. The next best option is to examine 277 Box 4.5 The Three Innovation Contexts (1) Agriculture-based countries. In these countries, guide the contribution of agricultural research to farmers have limited access to agricultural markets, the wider innovation system. Many developing which in many cases do not function well. Most countries in South Asia, East Asia and the Pacific, the countries in sub-Saharan Africa are in this cate- Middle East, and North Africa are in this category. gory. In agriculture-based countries, research (3) Mature innovation countries. These countries organizations must develop an interface with have innovation systems in which agricultural their clients—primarily small-scale farmers, markets function relatively efficiently and farmers extension systems, and government decision are effective market players. Most countries in Latin makers—and with the rest of the national, America and the Caribbean and many in Europe regional, and global research system. The private and Central Asia are in this category. In transform- sector engages mostly in licensing technologies to ing and mature countries, research organizations public breeding programs, multiplying improved should take greater notice of market demand and seed developed by public breeding programs, dis- rely on market-based approaches to guide their tributing inputs such as chemical fertilizer, or pro- contribution to the wider innovation system. viding other small-scale and localized agricultural Research organizations are required to interface products and services. with a wider set of clients—smallholders and com- (2) Transforming countries. Transforming countries mercial producers, diverse private sector actors host innovation systems in which agricultural mar- (input suppliers, processors, wholesalers, retailers, kets are expanding and developing. A subset of industry associations, exporters), other service farmers gain from good connections to markets. providers, and consumers—to create venues for Transforming countries can be characterized by an them to express their needs and align national pri- increased reliance on market-based approaches to orities to research agendas. Source: Authors, based on World Bank (2007). different reform processes to understand the impact path- Table 4.2 summarizes the approaches, their purposes, ways through which they are expected to work. and the key knowledge assets used and exchanged as part of each approach. The approaches or mechanisms can be selected and combined to fit the particular need for innova- INVESTMENT NEEDED tion in a given context. This note describes nonmarket and market-based approaches to investment, starting with approaches that fit particularly well with agriculture-based contexts and moving to more Strengthening information sharing and commercial, market-oriented approaches. The note does demand articulation in research systems through formal coordination organizations, not provide an exhaustive list of investment mechanisms enhanced communication, and ICTs but features the mechanisms that are most relevant for developing countries: In many countries, formal organizations facilitate regular exchanges of information and identify research prior- 1. Strengthening information sharing and demand articu- ities. These organizations include committees, agencies, lation in research systems through formal coordination and other formal bodies that obtain farmers’ input on organizations, enhanced communication, and ICTs. research results (for example, their opinions of the per- 2. Promoting greater participation of farmers and other formance of new cultivars), on longer-term priorities for clients in technology development processes. research and/or competitive research funds, and on the 3. Technology transfer and commercialization approaches. wider policy issues associated with agricultural production 4. Financing mechanisms for multistakeholder approaches. and markets. 278 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK The public sector often leads and manages the process particularly fit agriculture-based contexts and tend to of setting up these formal organizations. Often they focus on consultation and receiving farmers’ input on include representatives of farmers, extension services, the research results. research system, and ideally other actors in the public sec- Organizations that operate at the national level use a tor, private sector, and civil society. Both centralized and more sophisticated set of tools for priority setting aside decentralized approaches are applied. Organizations at the from stakeholder consultations, including tools for scenario provincial/zonal level, such as the Research Extension– and technology foresight, information databases, and M&E Farmer–Input–Linkage System in Nigeria or the Research of research programs. Examples include the Senegal Agri- and Extension Linkage Committees in Ghana (box 4.6), cultural Services and Producer Organizations Project Table 4.2 Approaches to Strengthening the Articulation of Demand and Interfaces with the Agricultural Research System in Agriculture-Based, Transforming, and Mature Innovation Contexts Approach Purpose Key assets Examples (sources) Formal Information exchange, Scientific information; Agriculture-based: Research Extension–Farmer–Input–Linkage System coordination priority setting, extension and advisory (REFILS) in Nigeria (Koyenikan 2008); Research and Extension organizations coordination, services Linkage Committees (REALCs) in Ghana (World Bank and IFPRI fund allocation 2010); Senegal Agricultural Services and Producer Organizations Project Transforming and urban: Fund governance and national research/innovation councils or forums Communication Share information; See Information and Communication Technologies for Agriculture and ICT demand articulation Sourcebook (World Bank 2011, forthcoming). Participatory Engage farmers in Scientific information; Participatory plant breeding (Sperling et al. 2001; Morris and Bellon research research priority extension services; 2004) setting, selection, capacity/methodology Central America Learning Alliance (Faminow, Carter, and Lundy testing, and in participatory 2009); CIALs in Colombia, Honduras, Ecuador, Bolivia, and experimentation approach Nicaragua (CIAT 2006; Quiros et al. 2004) Codesign Engage diverse stake- Scientific and local Liu (1997); Almekinders, Beukema, and Tromp (2009); Hocdé et al. approaches holders in the entire information; (2009); Bernet et al. (2006, 2008) R&D cycle capacity in codesign approach Innovation Promote co-innovation; Public and private Agriculture: Civil society partnerships: Papa Andina (Thiele et al. platforms exchange information; technologies; capacity to forthcoming; Devaux et al. 2009, 2010; Horton et al. 2010; Smith identify opportunities reach commercial and and Chataway 2007) and set priorities; underserved markets; Transforming: Agricultural innovation networks in Argentina (Ekboir promote policy private financing; farmer- and Parellada 2002; Trigo et al. 2009), Bolivia (Monge et al. 2008), change private sector-policy Mexico (Ekboir et al. 2009), Andean South America (Devaux et al. maker linkages 2009, 2010; Horton et al. 2010), and the Netherlands (Klerkx, Aarts, and Leeuwis 2010); Research consortiums: CLAYUCA on cassava (Patiño and Best 2002; see IAP 5 in module 1) Urban: Netherlands (Janssen and Braunschweig 2003; Klerkx and Leeuwis 2009a) International and regional research networks: CGIAR, FARA, ASARECA, APAARI Consortiums Australia; NAIP India (IAP 2) Technology Acquire technology Scientific information and Agriculture: Material transfer agreements between international and transfer tools; capacity for national research centers for wheat improvement (Dubin and dealing with international Brennan 2010; Louwaars et al. 2005) and biotechnology (Byerlee agreements and Fischer 2002) Urban: Agricultural biotechnology (Byerlee and Fischer 2002); drought-tolerant maize research (AATF 2011) (Table continues on the following page) MODULE 4: THEMATIC NOTE 1: DESIGNING AGRICULTURAL RESEARCH LINKAGES WITHIN AN AIS FRAMEWORK 279 Table 4.2 Approaches to Strengthening the Articulation of Demand and Interfaces with the Agricultural Research System in Agriculture-Based, Transforming, and Mature Innovation Contexts (continued) Approach Purpose Key assets Examples (sources) Commercialization Commercialize Public technologies; capacity Transforming: ICSRISAT Hybrid Parents Research Consortia for programs public research to commercialize new sorghum and pearl millet (Gowda et al. 2004; Pray and Nagarajan products 2009); Sustainable Commercialization of Seeds in Africa (SCOSA) (Jones 2006) Urban: Cooperative R&D agreements (Day-Rubenstein and Fuglie 2000); Plant genetic IP management (Louwaars et al. 2005) Public-private Develop new products Scientific information, tools, East Coast fever vaccine development (Smith 2005; Spielman 2009); research and materials; managerial agricultural research (Spielman, Hartwich, and von Grebmer partnerships capacity 2010); see also IAP 2 in module 6 Science parks and Develop new products Scientific information and CIAT and ICRISAT (Spielman, Hartwich, and von Grebmer 2010); business tools; managerial capacity; see also TN 3 and IAP 1 in module 5 incubators private and public capital University-industry Promote co-innovation; Public technologies; capacity Agricultural biotechnology (Ervin et al. 2003) research commercialize public to commercialize new collaborations research products Alternative Farmer-funded research; Financing from financial Competitive grants and innovation funds (World Bank 2006, 2010; funding finance research markets and donors; Gill and Carney 1999); Research prize schemes (Masters 2003); mechanisms specialized scientific farmer levies (Klerkx and Leeuwis 2009b); market segmentation services schemes (Kolady and Lesser 2008; Lybbert 2002) Source: Authors. Note: APAARI = Asia Pacific Association of Agricultural Research Institutions; ASARECA = Association for Strengthening Agricultural Research in East- ern and Central Africa; CIALS = Local agricultural research committees; CGIAR = Consultative Group on International Agricultural Research; CLAYUCA = Latin American and Caribbean Consortium to Support Cassava Research and Development; FARA = Forum for Agricultural Research in Africa. Box 4.6 Research-Extension-Linkage Committees in Ghana: Experience and Lessons In Ghana, Research-Extension-Linkage Committees research grant scheme was based on the RELCs’ iden- (RELCs) include producers, researchers, and extension tification of farmers’ problems. Thirteen research proj- agents from the Ministry of Food and Agriculture ects from seven regions were approved for funding. (MoFA). The committees facilitate dialogue and elicit Despite this effort at planning from the farm level better guidance from producers about local research up, the RELCs proved ineffective in strengthening links and extension efforts. Five RELCs were piloted, one in between research and others in the AIS. Funding for each of the country’s major agroecological zones, implementing RELC initiatives has been limited, partly under the World Bank–funded Agricultural Services because responsibility for allocating operating funds is Project. Eventually the committees were expanded to divided between the national research institute (the cover each of Ghana’s 10 regions. Each regional RELC Council for Scientific and Industrial Research) and has 15 members, including two representatives of MoFA. Perhaps owing to these financial constraints, the farmer organizations, one representative from a non- RELCs have not engaged greater numbers of farmers governmental organization, one representative of and end users and have had little influence on the agribusiness, and representatives from research and research agenda. Sustainable financing for farmers’ and extension.a Under the Agricultural Services Project, end users’ participation in the RELCs is likely to have the second call for proposals from the competitive made them more effective. Source: World Bank 2007; Riikka Rajalahti, personal communication. a. According to the project’s 2002 procedure manual. 280 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK (box 4.7), research councils (module 1, TN 1), and compet- Promoting participation of farmers and itive funds (module 5, TN 2). other actors in technology development Improved awareness of research programs, results, and Participatory research approaches, codesign, and innova- applications—among research partners (national, interna- tion platforms offer pathways for farmers and other clients tional) and other stakeholders, including clients—are to develop agricultural technology with researchers. The important for articulating demand in increasingly decen- next sections discuss these approaches and specific corre- tralized AISs and developing a platform for information sponding investments. The concluding discussion focuses sharing and collaboration. The key investment elements on the potential for research consortiums to strengthen include development of a communications strategy and links between research and other actors in the AIS. program; capacity building for staff on communications and ICTs; hardware and software for collecting and storing Participatory research approaches. Participatory data, and a telecommunications and Internet platform. For approaches identify farmers’ demands and bring farmers’ details and examples, see World Bank (2011). knowledge as well as researchers’ knowledge to bear on Box 4.7 Lessons from Senegal’s Agricultural Services and Producer Organizations Project The Agricultural Services and Producer Organizations the National Fund for Agricultural Research Project (PASAOP) strengthens end-users’ demand for (FNRAA). services and public research institutions’ ability to meet ■ Engage producer organizations in decision making their demands. In its first phase (1999–2006), PASAOP as genuine advocates of proposals. Producers also established a network of producer organizations in chair the management committee of FNRAA to 142 of 320 rural council areas, along with decentral- ensure that research programs are relevant to their ized, demand-driven agricultural services. In its second needs. phase (2006–11), the project further strengthens the ■ Link producers through a network of rural consul- institutional framework, extends the coverage of agri- tative forums (CLCOPs) in 152 rural council areas cultural advisory services nationwide, supports the so producers contribute fully to defining, imple- emergence of private service providers, strengthens menting, and evaluating research and extension research capacity and focus, and further empowers programs. Producer organizations have also estab- producer organizations, while increasing their social lished and manage their own Demand Driven Rural accountability and representation. Both project phases Services Fund, which allocates resources to micro- have built on the following approaches: projects prepared by producer organizations. ■ Restore the focus of ministries active in agriculture on Benefits their core public functions: policy formulation, mon- To date, PASAOP has helped improve the quality and itoring, and evaluation. Create specific directorates selling price of groundnuts, level and quality of com- for policy analysis, forecasts, and statistics. Decentral- munity seed stocks, beneficiaries’ incomes (12 percent ize services with the creation of regional directorates. higher), and nonfarm household income. Producer sat- ■ Replace the traditional technology transfer model isfaction with services is 80 percent against a target of with demand-driven support. Decentralized advisory 100 percent. Food security increased among 62 percent services are managed jointly (including planning and of producers against a target of 60 percent. In producer evaluation) by a semipublic National Agency for Agricultural and Rural Advisory Services (ANCAR), organizations, 45 percent of members adopted at least producer organizations, and private agribusiness. one technology in their production systems against a tar- ■ Establish transparent, competitive financing for get of 50 percent. The agricultural research system gen- research on agriculture and agroprocessing through erated 22 technologies. Cofinancing of FNRAA by other (Box continues on the following page) MODULE 4: THEMATIC NOTE 1: DESIGNING AGRICULTURAL RESEARCH LINKAGES WITHIN AN AIS FRAMEWORK 281 Box 4.7 Lessons from Senegal’s Agricultural Services and Producer Organizations Project (continued) stakeholders (government, other donors, commodity ■ Two channels for research proposals (from organizations, and the private sector) is expected to researchers and from users) provided flexibility. reach 30 percent. They made it possible to respond to producers’ immediate concerns as well as opportunities identi- Lessons fied by scientists. ■ Complement core funding with competitive fund- ■ Invest in producer organizations. Local institu- ing. Together, these two mechanisms guarantee that tions can responsibly and efficiently implement institutional development continues. Funding for their activities and limit the need for a project to operating costs goes directly to research teams work- establish an implementation unit. Producer fed- ing on projects relevant to users, to whom they are erations with adequate project support improved accountable. Core funding for developing human their efficiency and internal governance (quality resources is essential to elicit relevant proposals of of records, meetings, actions taken, satisfaction good quality. of members). Demand-driven funds that sup- ■ Specific pro-poor strategies must be designed into ported physical investments and equipment were the project. The project’s second phase seems to more effective than those focused only on soft have had a greater impact in richer households than investments. poorer households. Sources: Diaw, Samba, and Arcand 2009 on impact assessment of Phase 2 of PASAOP; World Bank Project Appraisal Documents for Phases 1 and 2 of PSAOP; World Bank Implementation and Completion Report for PSAOP. Note: PSAOP = Programme d’Appui aux Services Agricoles et aux Organisations Paysannes; ANCAR = Agence Nationale de Conseil Agricole et Rural; FNRAA = Fonds National pour la Recherche Agricole et Agro-Alimentaire; CLCOP = Cadre Local de Consultation des Organisations de Producteurs. agricultural problems. Farmers (and others) participate in government officials in the iterative, adaptive, and flexible monitoring and evaluating the results. Some participatory process of developing innovations. The core principles of research is done in farmers’ fields. This approach is codesign include joint planning, implementation, and particularly suited to agriculture-based countries in which decision making related to all activities that foster resources are at a premium and farmers are often isolated innovation; close coordination among stakeholders at all from others in the AIS. The approach allows research strategic and operational levels; and combining scientific, organizations to complement their programs in cultivar other technical, and local knowledge and other resources. improvement and crop management with work on more Codesign is often used when problems are complex integrated and natural resource management issues, such as and/or the scale involved is challenging. Examples include common resource management of pastures, shared water the shared management of a dwindling natural resource resources, fisheries, and communal forests, and incorporate held in common (a forest or water source, for example); the gender and community-based development perspectives period of adjustment to new policies or market operations; through farmer organizations, forest user groups, and local the development of shared understanding of problems and savings and credit associations. their solutions, when there is potential to do so; and prob- lems for which previously designed solutions or scientific Codesign approaches. Codesign approaches (discussed in and technical knowledge are not available. Given the issues detail in TN 4) seek better articulation between the supply of scale involved in such a large group of actors and their of research (from researchers) and demand for research numerous concerns, codesign relies on at least some of (from users). Researchers engage systematically with a the concerned stakeholders to have the experience and heterogeneous set of actors, which may include farmers, skills to facilitate, coordinate, and negotiate multistake- input suppliers, traders, processors, researchers, NGOs, and holder efforts (module 1). The Papa Andina program 282 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK implemented in Bolivia, Ecuador, and Peru successfully need the skills involved for organizing actors, coordinat- combined and applied codesign and innovation platform ing activities, and consulting, negotiating, monitoring, approaches (TN 4, box 4). and evaluating. ■ Invest in other partners’ skills. Farmers, universities, Innovation platforms. Innovation platforms (or net- NGOs, the private sector, and others will need skills in works and forums) assemble stakeholders to share infor- designing partnerships, building trust, and effective mation, identify opportunities, discuss problems, and agree communication. Farmer organizations often need help on joint activities related to a shared interest, often with a in learning how to articulate their demands, establish specific commodity/cluster focus. They usually provide a links to local government, and engage in social learning means for many participants to exchange opinions but tend and experimentation to innovate rather than simply to imply less commitment to addressing the needs demonstrate or accept technological “fixes.� identified, compared to codesign approaches, consortiums, ■ Invest in bringing people together. Operational funds or competitive grant schemes. Innovation platforms focus are needed to run committees and cover the costs of face- on all kinds of innovation, not necessarily research alone, to-face, facilitated group meetings (coordination, facili- and they may be led by actors other than researchers. Even tation) and the collective action that are inherent to so, they present an important venue and opportunity for collaboration at all stages of the codesign process. many research organizations to engage with other AIS ■ Invest in innovation brokers. A good facilitator or a actors, improve their understanding of how they can best project team is required to take an initiative forward. fit into the AIS, and develop partnerships. In transforming Innovation brokers can limit the failures that occur countries, innovation platforms are likely to be more when different interests and conflicting agendas frus- mature than in agriculture-based countries, where public trate initiatives designed to foster partnership. They support and funding are prerequisites for success. The key can also reduce competition between the public and assets or contributions by each actor in the interface may private sectors, creating a more coordinated approach be explicit (for example, they may consist of scientific or to problem solving. Innovation brokers do not often market information, tools, and materials, both proprietary emerge of their own accord. Their facilitation role and nonproprietary) or more implicit (such as the needs to be funded, supported, and linked to activities capacity to manage complex projects, move technologies in research, extension, and the broader innovation through regulatory processes, or market and distribute system. new products). ■ Invest in incentives for participation. These incentives Examples of innovation platforms include the Central often take the form of funding that makes partnerships America Learning Alliance, a multistakeholder network that work: operational costs and costs of joint R&D. promotes rural enterprise development (IAP 4), and the ■ Invest in value chain analysis and development. Invest- innovation network that promoted zero-tillage cultivation ments in value chain development are a key entry practices in Argentina (module 1, IAP 1). Papa Andina point for research organizations in transforming countries (TN 4) and the client-oriented research management to contribute solutions that enhance the benefits (and approach (box 4.22 in TN 5) apply both nonmarket and lower the costs) to actors along the value chain. Tools market-based strategies. such as value chain analyses—including participatory approaches to such analyses—can identify constraints Investment needs in participatory and codesign and market opportunities at different stages of the value approaches and innovation platforms. Specific invest- chain as well as entry points for support. ments improve the likelihood that these approaches and platforms will function more successfully. Research and innovation consortiums. Consortiums are more formal mechanisms than networks or innovation ■ Invest in researchers’ capacity to work in innovation platforms. They bring together diverse partners around a systems. Researchers must have the capacity to diagnose specific and common problem requiring research innovation systems and the ability to participate in and investment, jointly define R&D strategies, and finance and sometimes facilitate group processes involving people implement the subsequent research-innovation project. with diverse stakes in a commodity or value chain. Aside They often—but do not necessarily—focus on applied from their technical and scientific expertise, they will R&D. Consortiums often require multidisciplinary teams MODULE 4: THEMATIC NOTE 1: DESIGNING AGRICULTURAL RESEARCH LINKAGES WITHIN AN AIS FRAMEWORK 283 consisting of private, public, civil society, and producer Technology transfer and commercialization actors. Most consortiums have a lead organization, and approaches to integrating private actors each partner has a specific role and commits resources. Technology transfer is the foundation of many research pro- Contributions from a range of actors, including private grams in agriculture-based countries and prevalent in trans- enterprises, cover various aspects of R&D (demand forming and urbanized countries. Transforming and more identification, R&D investment, technology transfer and mature innovation contexts increasingly rely on formal adoption). Consortiums are often funded through com- transfers of technology from public research organizations, petitive grants (which match funds to resources mobilized universities, and the private sector. Such technology may by partners) for a limited period. require IP protection and/or other legal agreements that Australia (box 4.8) and the Netherlands (box 1.14 in transfer property rights to commercial or international module 1, TN 1) are examples of mature urban innovation partners. Many of the technology transfer and commercial- contexts where a consortium approach helped R&D meet ization approaches in these countries build on approaches specific challenges. Consortium approaches have shown introduced earlier, but they require a higher level of capac- promise in transforming countries; see the discussions of ity with respect to advanced science and technology, approaches in India (IAP 2) and Chile (IAP 3). complex regulatory systems, IP protection, sophisticated Box 4.8 Design of the Australian National Agricultural Innovation System Australia’s AIS is one of the most dynamic and success- demand to academic centers of excellence in joint ful in the world. Direct engagement of producers problem-solving. through their financing and oversight of commodity- Traditionally Australia has invested relatively heav- focused (mainly applied) research was the primary ily in agricultural research through a blend of public mechanism for gaining insight into the needs and and private (producer levy) funds, which were largely demands of key user-groups. Sharpened priority set- used by federal and state government agencies with ting, increasingly involving ex ante economic analysis some producer oversight through farmer membership of competing proposals along with ex post impact on various advisory committees and an institutional assessments, has been the hallmark of the approach. watchdog (the Productivity Commission for institu- Agricultural research intensity has been maintained at tional learning and ensuring accountability). Producer nearly 0.04 of agricultural GDP, among the highest lev- funding was matched equally by federal government els in the world, and total factor productivity for agri- support of up to 1 percent of respective commodity culture has been close to 2 percent per year since the GDP. major reforms in the agricultural research system A key lesson is that a charismatic change leader with began in the mid-1980s. a relevant vision is critical. In this case, it was a minis- A key feature of the reforms is the creation of ter of primary industries, who was insightful and Cooperative Research Centres (CRCs), which are joint effective (originally a farmer, then a research agricul- agreements between research providers to undertake tural economist and a politician). The strong (albeit R&D in particular areas. CRCs must comprise at least less than perfect) accountability mechanisms built one Australian end-user (either from the private, into the new processes, such as the CRCs, surely public, or community sector) and one Australian helped greatly. A major lesson for other countries institution of higher education (or research institute is that, given the inherent complexity of the AIS, it is affiliated with a university). These institutions work critical for public policy analysts to keep pursuing for a limited period (generally seven years) to resolve their understanding of the realities and opportuni- technological problems in a multidisciplinary fashion. ties in agricultural research as it evolves and to keep The involvement of universities and their disciplinary a sharp eye on the effectiveness of institutional expertise is especially important for linking industry arrangements. Source: Jock Anderson, personal communication. 284 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK markets and market infrastructure, and international trade technology transfer offices, other pathways to technology considerations. transfer may be applied (summarized in box 4.9). The capacity to manage formal technology transfer Some technology transfer offices also host incubators to mechanisms is critical to engage effectively in public- help technology-oriented firms (often established by private partnerships and, increasingly, to transfer technolo- researchers) commercialize new technology. Incubators gies that can be disseminated through market channels. provide hands-on management assistance, access to Technology transfer offices are special units affiliated with a financing, business and technical support services, shared research organization or university with a mandate to iden- office space, and access to equipment. For details, see mod- tify and protect as well as facilitate the use and commer- ule 5, TN 3. cialization of research results. These offices can expand the recognition of the research organization’s work (thereby Science park approaches. Science parks (also called tech- strengthening public perceptions of its value), move tech- nology or research parks) are a mechanism for fostering nologies to end-users (seed companies, farmers) on an public-private partnerships in more mature innovation exclusive or nonexclusive basis, and generate revenues to contexts.1 Science parks are organizations managed by fund continuous research. specialized professionals, whose main aim is to increase local Technology transfer offices can provide special expertise wealth by promoting a culture of innovation and improving on IP protection and/or legal agreements and contribute to the competitiveness of local businesses and knowledge-based formal transfers of technology from public organizations institutions. A science park stimulates and manages the flow or universities or from the private sector to commercial or of knowledge and technology among universities, R&D international partners (see box 6.20 in TN 3 of module 6 institutions, companies, and markets; facilitates the creation and TN 5 in module 5. Several examples of this interface and growth of innovation-based companies through have been used successfully to disseminate hybrid parent incubation and spin-off processes; and provides other value- lines of pearl millet and sorghum in India, with substantial added services together with high-quality space and facilities. improvement in the availability of improved seed and Science parks function best where there is investment yields for small-scale farmers in semiarid and arid tropics capital from the private sector, industrial engineering (Gowda et al. 2004; Pray and Nagarajan 2009). Aside from expertise, and a sufficient knowledge and technology base. Box 4.9 Technology Transfer Pathways Technology transfer agreements. The classic example Commercialization programs. These programs cre- of technology transfer agreements is the formal ate windows for private companies or entrepreneurs to exchange of breeding materials for crop improvement, access public research outputs and move them into typically from international research centers or univer- commercial use. Often this approach is used to move sities in industrialized countries to national research improved breeding material from public research organizations in developing countries. Scientists and organizations to private seed companies. For example, research managers in developing countries require the Hybrid Parents Research Consortiums of the Inter- additional skills to understand the increasingly com- national Crops Research Institute for the Semi-Arid plex material transfer and intellectual property agree- Tropics have provided more than 35 Indian companies ments that govern technology transfer; they must also with improved sorghum, pearl millet, and pigeonpea expand their linkages to international and regional sci- lines for commercial use. The program for Sustainable ence networks. Great success has been achieved with Commercialization of Seeds in Africa, the Eastern and technology transfer programs (for example, for wheat Southern Africa Seed Alliance, and the West Africa Seed and rice improvement in Asia, NERICA rice in Africa, Alliance are also designed to improve the private sec- and orange-fleshed sweet potato in several postconflict tor’s access to breeding materials and strengthen its countries in Africa). seed marketing capacity. Source: Authors. MODULE 4: THEMATIC NOTE 1: DESIGNING AGRICULTURAL RESEARCH LINKAGES WITHIN AN AIS FRAMEWORK 285 As discussed in the module overview, they are a useful nexus stakeholders (see module 6, IAP 1 for a matching grant between the private sector and research institutes (particu- scheme to develop agribusiness in Zambia). Matching larly universities), taking promising research products to grants require a financial commitment from the beneficiar- market and providing backstopping for product modifica- ies (farmers, entrepreneurs) and therefore may be more tion. Their diverse services include facilitating the creation effective than competitive research grants at enhancing the of public-private partnerships for research, providing infra- dissemination and use of knowledge and technology. They structure, and providing other services, including business are also better suited for funding overall innovation and development. The scope of this note does not allow the activities requiring private sector engagement. numerous science parks to be discussed in detail (including Both competitive research grants and matching grants China’s agricultural demonstration and technology parks; involve short- to medium-term funding arrangements. CIAT’s Agronatura, and France’s Agropolis); see module 5, They should complement, never substitute for, stable IAP 1 on the incubator affiliated with the Agri-Science Park funding for long-term research, private sector develop- of the International Crops Research Institute for the Semi- ment, human resource development, and infrastructure Arid Tropics (ICRISAT). maintenance and development. Financing mechanisms for multistakeholder POTENTIAL BENEFITS approaches The immediate benefits of these investments are straight- Transforming and mature countries often demonstrate a forward. Research organizations gain greater relevance and higher level of complexity and capacity when it comes to responsiveness, ultimately leading to greater impact on agri- funding research organizations and activities, especially cultural development, food security, and poverty reduction. where functioning markets exist alongside an organized agri- In many agriculture-based countries, these impacts are cultural sector. Aside from public core funding for research, a measured in terms of increased yields (output per unit of great number of funding mechanisms or other arrangements land) and production (total output). (such as levies on sales, public-private partnerships, cofinanc- Where markets operate with some degree of efficiency, ing with farmer organizations and trade associations,2 R&D potential benefits may include higher returns to crop cul- tax deductions, joint ventures, or research partnerships, see tivation (Kaaria et al. 2009; Thiele et al. forthcoming; IAP 3 on Chile) incentivize and reduce the transaction and Devaux et al. 2009, 2010; Cavatassi et al. 2009). Potential risk management costs associated with collaborative research benefits also extend to improvements in gender aspects of (for a summary on financing agricultural innovation, see agricultural development, such as changes in the house- module 5, TN 6). This TN briefly describes the two main hold assets owned by men and women. mechanisms—competitive research grants and matching Beyond the immediate benefits to productivity, output, grants—which are described in detail in module 5, TN 2. and welfare, these approaches carve out a niche for research Competitive research grants are a common mechanism for organizations within a rapidly changing agricultural land- funding basic, strategic, and applied research through compe- scape. They provide research organizations with new clients tition based on scientific peer review. The aim is to focus sci- and markets as well as access to new resources and assets. In entists’ efforts on high-priority research or new fields of urbanized systems particularly, an improved interface expertise, improve the relevance and quality of agricultural between research and other AIS actors may accelerate the research, promote research partnerships, and leverage research rate of innovation by bringing the best science to bear on resources (from the public or private sector). See IAP 2 for an real problems and ensuring that sufficient resources are example of a competitive research grant scheme to promoting allocated to solving problems. The research system will multistakeholder consortiums in India (World Bank 2010). become more responsive to the demands of society because Funds for competitive grant schemes usually come from the users such as farmers and consumers have many different public sector and are managed by a public or semiau- pathways to express their needs. tonomous organization. Competitive grants have been used to fund consortiums working on specific research themes. POLICY ISSUES Matching grants are used for financing near-market tech- nology generation, technology transfer and adoption, or Most issues related to the policies and governance struc- business-related innovation, often by including multiple tures that enable research institutions to participate more 286 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK fully and successfully in the AIS are detailed in LESSONS LEARNED module 6. A few key issues should be mentioned here, The following lessons related to designing agricultural however. research linkages within an AIS are grouped into general les- sons, lessons on the approaches that are best in particular ■ Sustainability requires managerial and structural innovation contexts (agriculture-based, transforming, and reforms. Research organizations often organize their per- mature urban countries), and lessons related to particular sonnel and assets by discipline, but this form of organi- mechanisms linking research to other AIS actors. zation makes it costly to bring personnel and assets together to resolve problems in agricultural value chains. General lessons: Management and structural reforms are vital to over- come this barrier; see the discussion in TN 5. ■ While large structural reforms are a good investment, ■ Institutional change and reform require stable, long- smaller, more evolutionary, and incremental approaches term support. Efforts to encourage research organiza- to systemic change sometimes work best. Invest in tions to interface with other user-groups and respond to stepwise efforts to engage diverse user-groups, define their demands require considerable time, effort, and problems collectively, build joint action plans, develop resources. Policy makers must commit the time, space, internal capacity, and learn through iterative processes. and funding to implement reforms and build the related Such interventions sometimes involve only short-lived capacity. projects, marginalized administrative units, short-term ■ The participation of civil society, including women, bridge financing, or small team initiatives, but they fos- may require specific policy initiatives. Farmer associa- ter responsiveness, dynamism, and competitiveness. tions and community-based organizations cannot Often they are more grounded in a specific innovation operate in their members’ interests in an environment challenge. hostile to grassroots and women’s participation. Poli- ■ Experiences from industrialized countries can prove cies to foster equitable participation and social mobi- instructive. For example, Australia’s approach to formaliz- lization can (for example) provide operational funds to ing joint public and industry funding for its rural research build marginalized groups’ capacity to participate, program, and its regular and broadly consultative review cover the costs of their participation, and require that of progress, could be effective in other contexts. financing mechanisms have specific criteria to promote ■ Invest in a mix of integrated approaches. The appropriate inclusiveness. mix depends on the specific circumstances of a country’s ■ Are public funds used where they are most needed? A agricultural research system, but it could involve a combi- value chain approach with a focus on multiple stake- nation of formal research/innovation governance arrange- holders can lead public research organizations to serve ments, participatory or codesign research approaches, and those who need their services least. Research organiza- more commercially oriented approaches and financing tions typically struggle with such trade-offs. For exam- mechanisms. ple, should they develop technologies for high-potential ■ Approach capacity strengthening more comprehen- agricultural areas where the gains are likely to be high, sively and iteratively than in the past. Bench scientists or should they concentrate on technologies suited to require management training to interact effectively with both high- and low-potential areas? Decisions on how other AIS stakeholders and ultimately improve the qual- to address these tradeoffs require strong leadership ity and impact of their research. Develop courses and from policy makers to ensure that public funds are used learning materials based on experimentation and rigor- as intended. ous assessments of approaches that work or do not work ■ Foster a conducive investment environment. The key in different contexts. To create a critical mass of policy issue for a mature innovation system is to create a researchers with skills suited to the AIS, integrate partic- climate that supports private sector participation and ipatory processes and innovation network techniques development. Policies are needed for public research to into agricultural education systems. contribute to private participation (through sound regu- ■ Organizations also need new capacities and incentives to latory frameworks, for example) and also to ensure that reform. The ability of researchers and research organiza- women and the poor are included in the activities and tions to leverage constructive interactions at some lower benefits of innovation. experimental level depends on the signals—authorization, MODULE 4: THEMATIC NOTE 1: DESIGNING AGRICULTURAL RESEARCH LINKAGES WITHIN AN AIS FRAMEWORK 287 encouragement, or financing—from higher levels. In Lessons related to specific mechanisms: designing and implementing strategies to facilitate inter- actions and linkages, incentives and motivating factors ■ Pay careful attention to the design of multistakeholder among staff and leaders of research organizations (and approaches and platforms, because they do not work in other organizations with which they interact) must be all contexts. These platforms need good facilitation to assessed with care. Organizations need to enhance support bring stakeholders (with their potentially divisive power for risk-taking managers and collaborative teams experi- relationships, capacity differences, and levels of interest) menting with learning approaches—but coupled with together. To sustain these programs, enhance negotiation periodic external evaluations. Change of the kind and conflict management, improve the representation of described here requires strong, long-term leadership and poor and marginalized farmers, fully fund communica- political commitment in addition to incentives. tion and knowledge management, and clearly define roles and functions of advisory committees, secretariats, Lessons specific to particular innovation contexts: and members. Engagement of high-level policy makers is often crucial. ■ In agriculture-based countries, improve researchers’ ■ It takes time to form and sustain networks or platforms. responsiveness to farmers’ needs and increase access to These interfaces require clear priorities, roles, and mile- global science and technology through a diversified, stones. Substantive capacity strengthening of all partners cross-cutting approach to participatory research and in partnership design, trust-building, and effective com- technology transfer. Strengthen individuals’ capacity to munication is required for these approaches to work, use participatory approaches by building skills in facili- along with incentives for participation. tation, negotiation, conflict prevention and resolution, ■ Consortium approaches have the advantage of a building relationships and trust, and developing the rules problem-oriented focus. This focus permits the defini- of the game. Broaden research organizations’ access to tion of partners’ objectives, goals, and responsibilities, technology by expanding their links to international sci- which in turn permits better management and evalua- ence networks and their understanding of complex tion of the collaborative effort. The disadvantage is that material transfer and IP agreements. the reason for collaboration ends the moment that the ■ In transforming countries, use combined market/non- problem ceases to need attention. market approaches (making use of the skills just ■ Innovation brokers play an important role in facili- described) to engage the private sector more actively tating change in an innovation system. More formal and encourage opportunity-driven entrepreneurship. approaches to innovation brokering include the use of Public sector orchestration and financing are key to research coordination councils, committees, and other addressing transaction costs (of collective action and bodies (see module 1, TN 2). negotiation, for example), reducing risk, and providing ■ Analyze the pros and cons of new funding mechanisms incentives. Innovation networks and platforms are vital carefully before introducing them. Matching grants tools to identify opportunities, set priorities, and influ- may better suit innovation contexts where private sec- ence the research agenda. tor engagement is crucial and where dissemination ■ In urban countries, policy makers and practitioners can requires significant attention. Competitive research invest in sophisticated competitive funding mecha- grants can develop high-quality research portfolios, nisms. The channels through which user groups articu- but they tend to have high operational costs and have late their needs should be advanced enough to ensure been ineffective in engaging the private sector and that science, technology, and innovation respond to mar- disseminating knowledge and technology. Small ket opportunities and that public research organizations research systems may not allow sufficient scope for real work alongside the private sector and other stakeholders. competition. 288 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK T H E M AT I C N O T E 2 Building and Strengthening Public-Private Partnerships in Agricultural Research Frank Hartwich, United Nations Industrial Development Organization (UNIDO) SYNOPSIS match of interests and jointly deliver products and ser- vices.2 In agricultural research, PPPs can be seen as arrange- ften the challenges of developing country agri- O culture can be met only by pooling the limited public and private resources available and unleashing innovative potential out of critical interaction. ments that bring together partners with different skills and knowledge to contribute jointly to the generation, adap- tation, and/or diffusion of an innovation. Usually the partnership agreement is in the form of a contract that Investments that support the building and conduct of establishes each partner’s commitments and the distribu- research partnerships can lead to more substantial and tion of benefits. viable research that fosters social and development needs PPPs in agricultural research can be set up not only to while not getting overshadowed by private interests. Before generate knowledge via research but to foster the diffusion providing financial support to public-private partnerships, and application of knowledge among private actors public and development agencies must determine whether (agribusinesses, farmers) as well as public actors (universi- the partners’ interests and objectives are sufficiently mutual ties, research institutes, and extension agencies). In this and whether the partnership will generate synergies from respect, PPPs can be distinguished by their contributions to joint use of knowledge and resources. If these conditions are the research-development continuum (table 4.3). Some met, brokering a partnership arrangement is a powerful partnerships also engage in a mix of types of research and means to foster agricultural research. development; research-based activities precede the stage of product development. RATIONALE FOR INVESTING IN PUBLIC- PPPs can be distinguished further according to the part- PRIVATE RESEARCH PARTNERSHIPS ners engaged. Common partners are research institutes, The innovation system approach extends the conventional universities, extension agencies in the public sector, and argument for public investments in agricultural research1 by producer associations, businesses, and individual producers saying that a single organization, be it private or public, may in the private sector. Many partnerships involve a public not be able to assemble the necessary resources, capacities, research organization that has the main responsibility for and knowledge to generate and diffuse innovations. (See also conducting the research, but in others a private entity con- module 5, TN 1.) The increasingly blurred roles of the public ducts the research and public agencies diffuse and/or fund and private sectors in agricultural research can be seen in the the research. Other types of organizations engaged in part- rise of public-private partnerships (PPPs). The two sectors nerships include farmer and community groups, private are redefining their traditional division of labor as their over- associations, investment and sector development promo- lapping interests and the benefits of combining resources lead tion bodies, and funding agencies. Often more than two both of them to engage in both types of research (Hall et al. parties are engaged; depending on the leading partner one 2001; Hartwich and Negro 2010; Muraguri 2010). Some of can distinguish PPPs led by private enterprises, research the implications of this mixed panorama in agricultural institutes and universities, government (ministries), and so research are summarized in box 4.10. on. For an example of PPPs among public research organi- In PPPs, at least one public and one private organiza- zations, the private sector, and farmer organizations, see tion share resources, knowledge, and risks to achieve a module 5, IAP 2. 289 Box 4.10 Public-Private Partnerships and the Changing Roles of Public and Private Agents in Agricultural Research ■ PPPs are more than an organizational solution ■ To develop and improve their image in line with between market and hierarchy; they are arrange- public goals and respond to corporate responsibility ments that maximize benefits by using the creativity criteria, private companies will partner with the and synergy of collective action to respond simulta- public sector. Corporate social responsibility alone neously to public and private needs. is not a good motivation for PPPs that want to pro- ■ Public-private partnerships (PPPs) generate social mote sustainable businesses, however. benefits in the way that they leverage resources from ■ It is simplistic to reduce the private sector’s interest the private sector and combine them with public in agricultural research to the development of pri- resources. In this way, additional resources and vate goods that can be protected by IPRs. In fact, capacities become available to address pressing private partners in only a small fraction of 124 PPPs research issues. in agricultural and agro-industrial research in Latin ■ PPPs can be instrumental in increasing the overall America were interested in protecting property volume of agricultural research, although develop- rights; the few examples occurred only in seed com- ing countries may not replace public funds substi- panies. Apparently private companies benefit more tuted by private funds (and match levels of private from the synergistic use of resources than from investment in more developed countries). protecting the IP of research results. Source: Hartwich and Tola 2007. Table 4.3 Types of Research Subject to Public- development and diffusion of a new pest-management Private Partnerships technology simply because they are not informed about their common interest and complementary capacities. In Type of research Example fact, potential partners from the public and private sector Creative research partnerships that Biotechnological exploration generate and explore new scientific of compounds in often fail to collaborate because each lacks knowledge finding pharmaceutical plants about the other sector and the potential benefits of a part- Applied research partnerships that use Development of a plant nership. A funding agency could improve information an existing research methodology to variety that resists a generate new solutions new pathogen flows by financing meetings and a platform where these Development-oriented research Development of a new players can start interacting and identify common interests partnerships that focus on the potato chip to develop a common work agenda. development of products Second, PPPs constitute funding mechanisms in their Diffusion-oriented partnerships that A seed multiplication promote the dissemination of program supporting own right that enable a funding agency to engage with developed knowledge and dissemination of a actors in agricultural innovation, particularly the private technology particular plant variety sector. (See also IAP 2 and module 5, TN 2 and IAP 2.) For Source: Author. example, a development agency or donor can use a PPP to support the efforts of an international agribusiness spe- cializing in dairy products to work with small-scale dairy producers who initially lack the capacity to participate in INVESTMENT OPTIONS FOR SUPPORTING the dairy value chain. The funding agency would ensure PUBLIC-PRIVATE RESEARCH PARTNERSHIPS that activities under the partnership would also generate PPPs become interesting subjects for investment in two social benefits, particularly for the small-scale producers. ways. First, they constitute product development mecha- Quite a number of PPPs have been set up over the past nisms that foster collaboration for innovation that other- ten or more years in developing country agriculture wise would not occur. For example, a private company and (Hartwich and Tola 2007; Spielman and Hartwich 2009). In a public research institute may not collaborate in the many cases the public and private organizations involved 290 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK found that partnering in research is to their benefit. Exam- ■ Investments in fostering better planning. Investments ples include partnerships where research reduces the costs can support the design of partnerships that facilitate effi- of processing primary products, partnerships that cient work and fair distribution of benefits within the improved product quality to access higher-value markets, partnership framework. or partnerships to exchange planting material and out- ■ Investments to partly fund the operation of the partner- source seed multiplication to the private sector (boxes ship, complementing the public contribution. An exam- 4.11, 4.12, and 4.13.) ple of such investments is a fund that provides grants to The failure of PPPs to fulfill their potential provides the research projects conducted in partnership between vari- context for a range of public investment opportunities to ous organizations. (See also IAP 2 on NAIP in this mod- build and improve PPPs for agricultural research. But in ule and TNs 1 and 2 on PPPs and innovation funds in which PPPs should development agents invest? In general, a module 5.) The fund’s contribution to the partnership precondition for investment in PPPs in agricultural research usually depends, among other considerations, on the is that they should count on financial support from govern- partnership’s ability to respond to certain public interests. ment and development agencies; they should address prob- ■ Investments to set clear legal rules and framework con- lems of public concern that require collective action; and ditions for partnering. Many public institutions still lack they should pool capacities for innovation. Specific invest- clear rules to determine when and how they can work ment opportunities include: with the private sector; in the end, individual initiatives determine whether partnerships are set up. Many ■ Investments in bringing partners together—specifically, research institutes leave it to their legal departments to in identifying partners, their common interests, available screen and approve collaborative research projects. resources and competencies, and potential synergies. ■ Investments in coaching partners to ensure that public One option is to invest in the organization of platforms and private benefits reach the partners and society. that allow public and private organizations interested in Often it is not enough to help organizations to set up a developing and adopting agricultural innovations to promising partnership. During the partnership, con- meet, exchange information, and develop joint projects. flicts may arise, partners fail to comply with promises, Often a neutral broker is needed to facilitate the plat- and certain framework conditions can change. Support form; see module 1 and module 3, TN 4 for examples. during the partnership (for example, through a partner- Box 4.11 Public-Private Partnership for Participatory Research in Potato Production in Ecuador An international potato chip producer operating in After some months of negotiation, the partnership Ecuador could not procure enough potatoes of suitable was set up and a formal agreement signed. INIAP pro- quality to use all of its local processing capacity. The vided research and extension capacities while the pri- company tried to provide incentives to farmers through vate company provided funding. A national research contract farming and higher prices, with unsatisfactory fund contributed additional public funds. The partner- results. The company finally determined that on its ship ended after some years because the company had own it could not persuade small-scale farmers to achieved its objectives. deliver more and higher-quality potatoes. It partnered Factors that enabled the partnership to succeed with the National Agricultural Research Institute included a good match of interests (INIAP sought to (INIAP, Instituto Nacional Autónomo de Investiga- support small-scale farmers, from whom the company ciones Agropecuarias) to focus on identifying, develop- wanted to buy quality potatoes). The partners’ compe- ing, and distributing potato varieties with the required tencies were also well matched: INIAP was expert in processing qualities. The partnership had an extension developing and disseminating improved potato vari- component in which INIAP helped farmers adopt the eties, and the company had expertise in evaluating the new varieties, grow them with appropriate manage- cost-reduction and product-improvement potential of ment practices, and increase productivity and output. the potato varieties. Source: Author. MODULE 4: THEMATIC NOTE 2: BUILDING AND STRENGTHENING PUBLIC-PRIVATE PARTNERSHIPS IN AGRICULTURAL RESEARCH 291 Box 4.12 Public-Private Partnership for Processing Cashew Nuts in Northern Brazil In the late 1990s, Brazil’s cashew nut sector was in EMBRAPA constantly exchanged information with ruins. Competition and price variation on the world growers and the exporter about the appropriateness market, along with poor product quality and misman- and readiness of the technology. Growers slowly agement, caused the processing industry to go bank- became familiar with the technology and started to rupt, taking a large number of small-scale producers adapt it to their own needs. Eventually farmers gained with it. Producers’ crop remained without buyers, and substantial capacity in cashew processing and the they had few alternatives to cashew production. commodity was once again, through the exporting Brazil’s national agricultural research institute, partners and soon through competing exporters, sold EMBRAPA, partnered with a cashew-exporting com- internationally. Farmer incomes benefited signifi- pany and a number of organizations of small-scale cantly as farmers regained a market for their primary growers to develop and diffuse microprocessing units product and profited from the value added by their for cashews that would be owned and managed by the primary processing units. The exporting company grower organizations. Researchers adapted large-scale also increased its profits, which benefitted employees processing technology to develop much smaller pro- and shareholders. The partnership succeeded because cessing units they called “minifactories� (minifabricas). EMBRAPA’s advance project identification and plan- The export company provided knowledge of market ning were good, the market for cashews remained demand, product quality, and processing requirements, strong, and EMBRAPA and the exporting company as well as some quite limited funding for training had complementary knowledge and skills (processing farmers. EMPRAPA covered the main costs of the technology in EMPRAPA and market information in partnership, which involved laboratory research and the exporting company). on-site testing of growers’ processing units. Source: Author. Note: EMBRAPA = Empresa Brasileira de Pesquisa Agropecuária. Box 4.13 Public-Private Partnership for Research on New Wheat Varieties in Argentina A private European company specializing in wheat, certain varieties that it had developed but not tested, sorghum, and maize seed wanted to benefit from released, or multiplied. The two organizations entered Argentina’s rapidly expanding market for cereal seed a partnership that envisioned the exchange of certain but knew little of Argentina’s wheat breeding program genetic materials to develop and multiply seed of new over the years. For example, it did not know which spe- varieties. The IP for the resulting varieties would cific resistance and tolerance traits had been introduced remain with the public sector, but the seed company (and failed) and which varieties, lines, and breeding would benefit from seed sales and pay royalties to the strategies had been used to raise wheat yields. The public institute. The partnership was phased out after a national agricultural research institute (INTA, Instituto number of years and the company (among others) now Nacional de Tecnología Agropecuaria), partly funded caters to a well-established market for wheat seed. Fac- through a levy on the agricultural sector, had down- tors that contributed to the partnership’s success sized its wheat breeding program and was looking for included their complementary skills (INTA’s excellence a partner with whom it could exchange information in wheat breeding and the company’s advantages in and genetic material. It was also interested multiplying seed multiplication and marketing). Source: Author. 292 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK ship support unit) may be useful. The unit could also and Vonortas 2000:568). In others, particularly in small help partners set up an efficient system for monitoring developing countries, partnerships may be instrumental in and evaluating the partnership. For example, CIAT’s bringing together the scarce but necessary research partnership development and facilitation unit has resources. played this role. Aside from potential benefits, potential risks exist. Risks related to uncertainty and failure are inherent in any research endeavor, but every partnership also carries a risk POTENTIAL BENEFITS OF INVESTING IN that the partners may not contribute to the partnership as PUBLIC-PRIVATE RESEARCH PARTNERSHIPS initially negotiated. Partnership agreements may not be met For a number of important reasons, public and private for any number of reasons, including changes in the market organizations participate in research partnerships and and business environment for which the partnership’s prod- governments encourage them to do so. First, supporting ucts are geared. The legal and government framework may PPPs in agricultural research provides an opportunity to prove too inflexible for the partnership to progress, or the improve the performance of agricultural research opera- framework can change to prevent the public partner from tions. Research partnerships can also broaden the scope of fulfilling its commitment. Finally, the relationship between research activities, increase efficiency and synergy, access the partners can run into difficulties because of misunder- complementary resources, and promote organizational standings, a clash of cultures, and distrust. For this very rea- learning among the partners (Hagedoorn, Link, and son, partnerships often benefit from investments in building Vonortas 2000). The potential benefits from funding mea- trust, brokering, and partnership development—both ini- sures that initiate PPPs and help them operate successfully tially and indeed throughout the partnership. can include: (POLICY) ISSUES OF OUTSOURCING, ■ Better use of existing research capacity by allowing pub- SUSTAINABLE FUNDING, lic and private partners to form and draw from a greater AND PUBLIC GOODS critical mass of scientific capacity. ■ The research process becomes more creative when allow- Governments often use PPPs to outsource service provision ing public and private partners to join complementary to private companies (improving service provision through competencies. “bringing in private sector efficiency�). In agricultural ■ Agricultural research productivity and results improve research in developing countries, where research capacity is when public and private partners develop synergies insufficient both in the public and private sectors, outsourc- through the combined use of resources. ing is hardly relevant. Instead PPPs aim to maintain public ■ Cost-efficiency in agricultural research improves when research facilities and strengthen them with contributions public and private partners share costs and benefit from from and collaboration with the private sector to attain a more efficient private sector management practices. critical mass in research. ■ Research results can arrive more quickly owing to the Partnerships must not persist over time. They are private partner’s drive for more immediate results. agreements that help partners reach an end but they are ■ Investments in agricultural research for social benefits not an end in themselves. Sustainability over the duration increase by identifying compatible private and public of the PPP depends on the partnership’s capacity to cover interests and combining private and public sources of the related costs of human resources, infrastructure, and funding. equipment as well as operations, which in itself is posi- tively related to the negotiations and the setting of bind- Boxes 4.11 and 4.12 illustrate how the efficient collabo- ing contractual relationships at the start. More than other ration of public and private agents in the Ecuadorian potato contractual relationships, however, partnerships are industry and the Brazilian cashew nut industry yielded prone to financial risks. If one partner loses interest, some of these benefits. changes the strategic focus, or becomes insolvent, the It is important to note that these are potential benefits. partnership will lose part of the anticipated contributions They will be achieved only if a number of conditions are despite any prior commitments. met. In certain situations partnerships may even “block Core funding is a prerequisite for PPPs established in the competition� and “create monopolies� (Hagedoorn, Link, public interest. Competitive grants that require public and MODULE 4: THEMATIC NOTE 2: BUILDING AND STRENGTHENING PUBLIC-PRIVATE PARTNERSHIPS IN AGRICULTURAL RESEARCH 293 private collaboration (or vice versa) are one instrument to Partnering may not always be the best option develop PPPs. Evidence from competitive grant schemes Public research organizations and development funding for agricultural research in Latin America indicates that agencies that seek to support partnerships need to separate without a solid core budget, public organizations cannot the wheat from the chaff. Promoting and financing part- enter such partnerships from a sufficiently strong position nerships simply for their own sake is not useful. Partner- to negotiate an agreement that reflects their interests ships may not produce good results, and in many situations (Echeverría 1998a). another solution is more appropriate. For example, a pub- lic research agency may consider contracting the services of LESSONS LEARNED a private laboratory. A private company may prefer to set up its own research unit rather than collaborate with pub- Despite the numbers of successful PPPs, the concept is still lic researchers. under development. In many situations PPPs fail to meet their potential to improve agriculture and rural livelihoods in developing countries, for two reasons. First, the number Motivation matters of PPPs is still very low and cannot match the opportunities Governments and funding agencies that want to support to conduct research and develop innovations by means of partnerships need to assess prospective partners’ motiva- PPPs. Second, many efforts to build partnerships among tions for entering a partnership. According to Spielman public research organizations and the private sector fail to and Hartwich (2009), one can distinguish between: bring sufficient benefits to both partners; usually one part- ner profits at the expense of the other (Hartwich and Tola ■ Representational partnerships, in which one partner 2007). Nor do most PPPs use their complementary joins the partnership for prestige without contributing resources effectively to produce substantial social benefits. knowledge and/or resources. Planning can be weak. Prior to initiating their partnership, ■ Outsourcing partnerships, in which one partner seeks to partners do not engage in the necessary negotiations to outsource research and diffusion activities to another. clarify their common interests, each partner’s commit- ments, and the redistribution of benefits. Usually these partnerships collapse as soon as resources become scarce Box 4.14 Indicators for Evaluating and/or accrued benefits are not shared equally. Public-Private Partnerships Experience on the best strategies for supporting collabo- in Agricultural Research rative agricultural research and PPPs is mixed (Hall 2006). Specialists in plant breeding and biotechnology research ■ Costs of interaction among the partners, stress the value of strengthening public institutions’ aware- including time for negotiation as well as cost of ness of and capacity to manage IPRs (Lewis 2000; Byerlee communication and monitoring compliance. and Fischer 2002). Other analysts emphasize the impor- ■ Contribution of each partner to the partnership tance of negotiating not only IP issues but other aspects of in terms of human resources and expenditure. benefit sharing and resource commitment (Rausser, Simon, ■ Strengths, weaknesses, opportunities, and threats and Ameden 2000; Vieira and Hartwich 2002; Hall et al. of the partnership as perceived by partners, ben- 2003). The following sections discuss some of the most eficiaries, and other stakeholders. important lessons from various studies and experiences. ■ Mapping of communication and information flows among individuals in the partnership. ■ Anecdotal information on the history and func- Public-private partnerships as funding opportunities tioning of the partnership as perceived by part- ners, beneficiaries, and other stakeholders. PPPs are a mechanism through which funding agencies can ■ Joint authorship of publications by partners. build collaborative research as well as an arrangement into ■ Attribution of patents and user rights. which they can inject public funds. In a partnership to ■ Intensity of use of research results by each of develop wheat varieties such as the one in Argentina the partners. described in box 4.13, public research funds (for example, a competitive grant) would support the partnership finan- Source: Author. cially while ensuring that social benefits are met. 294 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK ■ Competency-led partnerships, in which one partner is Learning and evaluation trying to tap into the competencies of another. M&E is a particular challenge in partnerships. Many crite- ■ Finance partnerships, in which one partner aims to ria can be used to evaluate the outcomes and impacts of secure complementary funding. agricultural research, but evaluating collaborative processes ■ Co-innovation partnerships, in which one or both part- is different and onerous for several reasons. First, partner- ners try to reach a critical mass in research and synergy ships can involve multiple and heterogeneous partners and in developing innovations. stakeholders with different goals. Second, it is difficult to monitor the joint use of knowledge and other resources by This last type of partnership, with its focus on adding partners. Third, partnerships change over time and in value through collaboration, is the partnership in which response to internal and external conditions. Finally, there public development agencies will mostly want to invest. is the inherent difficulty in attributing benefits to the col- laboration itself and not to partners’ individual activities Importance of brokers (de Bruijn and van der Voort n.d.). A unified framework for the evaluation of research partnerships does not exist, Evidence from Latin America indicates that PPP-promoting and little progress on this issue has been reported in the agents, acting as brokers in the public interest, play a crucial literature (Hagedoorn, Link, and Vonortas 2000; Serafin, role in building partnerships, particularly to motivate poten- Bustamante, and Schramm 2008). Box 4.14 lists some tial partners, build trust among them, and provide credibility indicators that, despite these difficulties, may help in mon- to partnership initiatives (Hartwich et al. 2007). Gradually, as itoring and evaluating the success of collaborative research common interests are identified and partnerships are for- processes. malized, the roles and contributions of partners need to be negotiated to ensure that partnership arrangements are in alignment with partners’ interests, their capacities, and the RECOMMENDATIONS TO BUILD SUPPORT FOR prevailing technological and market opportunities. PUBLIC-PRIVATE RESEARCH PARTNERSHIPS Public funding agencies that want to invest in PPPs should consider five minimum conditions that must be met before- Lack of planning hand (Hartwich et al. 2008): Through inappropriate planning and management, PPPs often fail to use their complementary resources effectively ■ The existence of a common interest which, during initial and benefit both the public and the private sector. It helps to negotiations, needs to be agreed upon by the partners. develop a clear contract specifying the resources each partner For example, setting up a partnership for developing a will commit over the project period as well as the use of the new pesticide could unleash substantial synergies among research results, including IPRs and payment of royalties the partners, but the pesticide itself could be so harmful (boxes 4.12, 4.13). It can also be useful to strengthen partners’ to people and the environment that public involvement capacities in negotiating partnerships as well as in planning could not be justified. and implementing activities under partnership agreements. ■ Each partner must show a clear commitment that goes As noted, for many PPPs, protection of IP is not always a beyond shared interest. Commitments must come in the priority. IPRs often are of minor or no concern to the pri- form of time and resources allocated to the partnership. vate partners, who are interested instead in public sector ■ The individual benefits of each of the partners must out- support to obtain primary materials for newly developed weigh their individual costs; otherwise partners have no and/or quality products and eventually market them to con- incentive to engage in the partnership. sumers. Research on new varieties may be the exception ■ Benefits must be distributed proportionally. One partner here. In the partnership described in box 4.13, any varieties cannot reap a large share of the benefits while the other developed remained public goods, and the seed company receives only a marginal payoff. had to pay royalties on sales of those varieties. The main aim ■ Overall benefits must outweigh overall costs. Without of the seed company was to market very good varieties this synergy, there is no justification to engage in any (which it could not develop on its own) to complement its partnership. The costs of collaborating would outweigh existing product portfolio. (See module 6, TN 3 on IPR and the benefits, and for one of the partners it would be bet- module 5, TN 5 on technology transfer offices.) ter to pursue the goal alone. This last condition puts MODULE 4: THEMATIC NOTE 2: BUILDING AND STRENGTHENING PUBLIC-PRIVATE PARTNERSHIPS IN AGRICULTURAL RESEARCH 295 PPPs in the context of innovation systems, suggesting that evolve spontaneously in the search of funding oppor- that mechanisms of collective action, joint learning, and tunities or prestige. complementary use of resources are all operational in the A public funding agency may find few of these partner- development and diffusion of innovation. ships in place, however, and could consider helping to build adequate partnerships. If after a period of support and bro- In conclusion, investing in PPPs makes sense where kerage a PPP shows signs of complying with the criteria just there is agreement on objectives, strong commitments, mentioned, it can be considered for further funding. some added value through partnering, and a fair distribu- Finally, any PPP that is up and running can benefit from tion of benefits. PPPs that are badly designed, fragile, continuous support to its management that helps sustain it and/or result in a public subsidy to private organizations until the end. Given the complex relations prevalent in part- do not represent value for public investment. Partnerships nerships, tension is to be expected, and a funding agency should also have a limited time period. Funding agencies should consider the support for partnership management as should particularly exclude from funding any partnerships a promising opportunity. 296 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK T H E M AT I C N O T E 3 Regional Research in an Agricultural Innovation System Framework: Bringing Order to Complexity Howard Elliott, Consultant SYNOPSIS BACKGROUND AND CONTEXT pontaneous self-organization will not be sufficient Regional agricultural research has a long history rooted in S for a strong regional AIS to emerge. The emergence of a regional AIS will require compatible organiza- tions and institutions that can bond, a timely and adequate colonial initiatives and commercial crops (in West Africa or South Asia, for example). In most instances these ini- tiatives came to an end with independence. Regional and concentration of resources, and a sustained infusion of subregional organizations emerged again in the 1980s, resources. Proposed initiatives should be assessed against when several regions sought to address challenges they six basic criteria for their contributions to national and would or could not address alone. They also wanted to regional innovation systems. First, participants in a strengthen their influence over the networks of interna- regional arrangement must developed and share a vision of tional centers operating in their regions. The new arrange- mutual benefit and make a formal commitment prior to ments were expected to lead to greater regional ownership concrete investments. Second, the regional arrangement of research and economies of scale and scope. Not all should lead to greater efficiency in research for develop- regions were organized in the same way. All evolved in ment, especially through economies of scope and scale. path-dependent ways. Participants must understand that the gain from research is not where the expenditure is made but where the benefits ■ Asia and the Pacific had APAARI,1 which included both are used. Third, the research design and approval process giants like India and China and the microsystems of the must ensure research quality and relevance. Investment in Pacific without any subregional associations. strong M&E is necessary to gain political support. Fourth, ■ The Near East and North Africa was covered by a simi- regional arrangements must improve national capacity, lar organization, AARINENA,2 without differentiation. especially in the smaller countries. Fifth, a regional AIS ■ In sub-Saharan Africa, the rationale for subregional should foster collective action on shared challenges that programs focused on economies of scale and scope, the cannot be addressed by a single nation, especially trans- development of regional public goods, and the need to boundary problems of a regional public good nature. At create regional capacity to compensate for weak NARSs. some point, an innovation system may emerge as partici- In addition, the subregional organizations emerged pants become aware of their connectedness and begin to politically to bring coordination and ownership to net- coordinate through information flows, markets, and new works run by the CGIAR research centers. The pioneer organizations. A sequence of many small investments lead- subregional organization for Africa was SACCAR,3 cre- ing towards collaboration, collective action, and stepwise ated in 1984 to serve the frontline countries surrounding integration is needed. Finally, sustainable regional organiza- then-apartheid South Africa. It was followed by CORAF tions will require a higher-order political and financial in 1987 (as a Francophone group), ASARECA in 1994,4 mechanism committed to a regional strategy. Self-sustaining and CORAF/WECARD in 1997 (to include Anglophone regional centers can emerge when a host-country institution countries).5 accepts a regional role and has a business model that sustains ■ In Latin America, PROCISUR6 served as the forerunner it through a national core commitment, research grants, ser- and model for other subregional organizations: PRO- vice fees, and projects. CIANDINO in the Andes, PROCITROPICOS in the 297 Amazon,7 and in Central America and the Caribbean. Despite these issues, the need for collective regional activity Successful regional commodity programs also developed. is greater than ever, because more problems and opportuni- ties are transnational. Every subregional organization evolves within its unique On the demand side, investment is needed in the combination of constraints and driving forces. Latin Amer- capacity to exploit market-driven agricultural opportuni- ica offers several rich experiences from which sub-Saharan ties and to negotiate rules and standards for better compe- Africa can benefit. Latin American countries have used their tition. On the supply side, investment in knowledge for middle-income status to invest in agriculture as a dynamic addressing emerging challenges, such as transboundary sector. Strong rural organization and fiscal systems that diseases, climate change, water scarcity, and increased leave resource-based revenues in the regions are often price volatility in global markets. All of these challenges important elements in this strategy (box 4.15). have significant implications for the knowledge system Many regional and subregional initiatives have strength- and do not recognize country borders. Moreover, oppor- ened particular components of an innovation system at the tunities provided by advances in biotechnology require national level, but they have been faced variously with concentrated investments in infrastructure, advanced national free-riding, avoidance of responsibility or inability computing, and scarce human capacity that call for central to carry out commitments to collective action, and sensi- hubs and platforms that offer economies of scale (as in the tivities with respect to “equitable sharing of the benefits.� example in box 4.16). Box 4.15 Subregional Organizations in Latin America: Strong National Capacity, Commitment to Research, and Alignment with an Emerging Regional Economic Community as Drivers of Success Created 1980, PROCISUR has been an autonomous economic activity in the region. Despite this success, in regional organization since 1981, located with IICA in recent years, the smaller members of Mercosur have the headquarters of Mercosur (the Southern Common increasingly resisted deeper economic and regulatory Market). In its evolution, PROCISUR came to focus on integration. Finding a common policy has become themes affecting all countries of the region, including more difficult. biotechnology policy and intraregional trade. PRO- South America has also seen the emergence of CISUR’s success in generating political and financial commodity consortia funded by the region to address support for itself and its members reflects the influence special needs for research or integration with the rest of of two strong research systems, Argentina and Brazil, as the innovation system. The Latin American Fund for well as a functional regional economic community, Irrigated Rice (FLAR) collaborates with CIAT but takes Mercosur. PROCISUR has been adept at championing responsibility for irrigated rice in temperate countries. projects that bring together national universities and CONDESAN was created with the help of CIP to national research institutes with regional and interna- involve more than 30 actors in the potato innovation tional partners, thus closing a gap at the national level system. After 25 years of public research on cassava, that may exist. (LOTASSA, a research project on forage CLAYUCA’s role has evolved into organizing public legumes, is one example.) As the regional community, and private organizations to promote uses for cassava MERCOSUR has several redistributive measures to in addition to food. The concept of a regional innova- support the smaller members of the community. The tion system seems to be taking shape. Convergence of integration of markets and realignment of production policies, market integration, and some equalization have created incentives for investment and relocating measures are important factors. Source: Author. Note: CLAYUCA = Latin American and Caribbean Consortium to Support Cassava Research and Development; CONDESAN = Consorcio de Desarrollo Andino/Consortium for Andean Development; FLAR = Fondo Latinoamericano para Arroz de Riego; IICA = Instituto Interamericano de Cooperación para la Agricultura; LOTASSSA = Lotus Adaptation and Sustainability in South America; Mercosur = Mercado Común del Sur, Mercado Comun do Sul; PROCISUR = Programa Cooperativo para el Desarrollo Tecnológico Agroalimentario y Agroindustrial del Cono Sur. 298 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 4.16 Creating Sustainable Scientific Hubs: An Example of the Biosciences in Eastern and Central Africa The entry into biosciences research usually begins by has been controversial. Should it be based in a separate developing capacity in a central location to serve a center, faculty of science, or faculty of agriculture? number of clients, such as university scientists, com- The business models for sustainable research in modity breeding programs, and often nonagricultural biotechnology differ in universities and national research as well. Major indivisibilities in laboratory agricultural research institutes, and given scale con- and computing facilities for genomic research, for siderations, stable funding arrangements will be a example, mean that there are significant economies of determining factor. BecA estimates that it will have to scale in creating a hub. Over time, and with the falling generate at least 50 percent of its funds from hosted cost of more applied operations, decentralized capac- research projects to sustain its capacity. Growth will ity is developed. One new platform for biosciences, the come through an expansion of target countries, BecA-Hub (Biosciences Eastern and Central Africa), broadening the scope of activities, a good synergy of benefited from major support from the Canadian African and international partners, and incubation/ International Development Agency to upgrade facili- innovation projects. ties at the International Livestock Research Institute BecA currently supports staff from 6 international (ILRI) in conjunction with the New Partnership for centers, has helped 60 MSc and PhD students advance Africa’s Development (NEPAD). their research, and has hosted 41 projects (17 in crops Located at ILRI’s Nairobi campus, BecA is one of and 24 in livestock). A NEPAD “BecANet� provides three regional initiatives championed by NEPAD. The resources for national agricultural research systems hub’s sustainability depends on whether it builds on its and university scientists to use these resources to sup- role as an international facility, serves its clients in East port their own priorities. In West Africa, the Alliance and Central Africa, and generates strong international for a Green Revolution in Africa supports the West collaborative research program on animal disease. The Africa Center for Crop Improvement, a regional post- location of a regional hub at an international research graduate training program at the University of Ghana, center brings many logistical and administrative facil- Legon. The center, which benefits from a faculty insti- ities in addition to economies of scale and scope. tute for biosciences and backstopping from Cornell From the earliest days of biotechnology in devel- University, has attracted scientists from francophone oped countries, the location of a biotechnology facility countries as well. Source: BecA website, http://hub.africabiosciences.org/. This TN discusses two central questions. First, how can elements are needed to ensure the necessary concentration, investments in regional programs and institutions better connectivity, and continuity for a self-sustaining regional strengthen national AISs? Second, how can they support the innovation system to emerge: emergence of a regional AIS? This TN argues that if more complex systems are to emerge, they will require (1) compat- ■ Support consensus on a regional vision and agreement. ible organizations and institutions that can bond, (2) a timely The most important element is that participants in a and adequate concentration of resources, and (3) a sustained regional arrangement share a vision of mutual benefit infusion of resources over a sufficient period (Elliott 2010). and make a formal commitment. Support for this dia- The agenda, science, and methods are changing rapidly at all logue and agreement on vision, research priorities, and levels, and it is difficult to design organizations to deal with a cost and benefit sharing are needed prior to concrete moving target. Spontaneous self-organization will not be investments. A mutual accountability framework must sufficient for a strong regional AIS to emerge. be developed and provide incentives for all partners to deliver on their commitments.8 ■ Select a committed host organization. A regional INVESTMENT NEEDED research system must be led by a committed and capable While there is no model for a regional research system that host institution, preferably the most effective research is well integrated within an AIS, a few main investment organization in the region. The host institution needs a MODULE 4: THEMATIC NOTE 3: REGIONAL RESEARCH IN AN AGRICULTURAL INNOVATION SYSTEM FRAMEWORK 299 business model that sustains the effort through a POTENTIAL BENEFITS national core commitment, research grants, service fees, Regional research efforts may create different types of ben- and projects. In other words, the host organization efits. Often such efforts are designed to gain efficiency in the should have a sustainable research program that ensures production of research for development in a given priority its continued ability to serve a regional demand. area, primarily through economies of scale and scope. ■ Support national partners. A successful regional Participants can share costs for infrastructure, software, research system requires sufficient national capacity for laboratory equipment, and highly specialized scientists, as research, dissemination, and coordination (national and in BecA (box 4.16). Regional efforts also put institutional regional) to avoid competition and duplication and to arrangements into place that facilitate the use of research reach synergies. Support is needed to address the human results. Their financial sustainability requires special atten- resource gaps, perhaps by investing in MSc programs at tion, however. the national and regional levels to give government, NGOs, and aid organizations the staff they require to participate in the initiative. POLICY ISSUES ■ Design a governance structure. The regional initiative requires a board with representatives from participat- The policy issues that are particularly relevant to whether ing countries, including financial decision makers, and how regional research might contribute to the emer- political allies that ensure continuity, and other relevant gence of a regional innovation system are discussed in the stakeholders. The board is expected to recruit strong following points. Perhaps the central issue is the tension leadership, ensure a strategy is in place, oversee its between national and regional priorities and the consider- implementation, and support the regional mission. Gov- able challenges of collective action at a regional level. ernance structures have to be capable of changing strate- gies and adapting governance itself to new conditions. ■ Achieving balanced growth of innovation system com- ■ Base a strong secretariat in the host organization. A sec- ponents through regional collaboration. Coordination retariat performs the day-to-day administrative functions among NARIs, universities, and technology dissemina- of a regional network, platform, or hub as mandated. The tion is often weak or even resisted at the national level. secretariat must have staff and skills to support efforts to The source of this problem may be unbalanced growth meet clients’ needs, generate and communicate new among the components, their sequential development, information to members, and raise funds. different scales of operation, and different bases for ■ Maintain regional funding authority. A regional organization (agroecological, political administrative, or research arrangement requires a regional funding centralized for economies of scope and scale). Regional authority to maintain its scale of operations and com- facilities may allow a national knowledge system to mitment to a regional role. National commitment and operate at a higher scale by avoiding the need for large support from the host government are required. Reliance fixed investments in one or more sectors through on donor funding is not a sustainable solution.9 regional borrowing. ■ Develop procedures for selecting, monitoring, and eval- ■ Partnerships in producing regional public goods. uating regional research projects. Clear and transparent National research systems, subregional organizations, procedures, taking notice of stakeholders’ concerns, are and international agricultural research centers all con- needed to ensure both quality and relevance of research. tribute in complementary ways to the production of Such procedures would permit the balanced articulation public goods. Pingali (2010) warns that an unintended of demand, base the selection and approval of projects consequence of the CGIAR research centers’ shift toward on strong and independent scientific evaluations, specify product adaptation and dissemination relative to inno- the financial and reporting requirements, and outline vation and product development is a potential break in requirements for objective ex ante evaluations, program the R&D pipeline that supplies public good research and monitoring, and ex post evaluations. See module 5, TN 2 technologies to raise agricultural productivity in devel- on innovation funds for details on sound procedures. oping countries. Improved partnership is the elusive solution to issues of competition and crowding out, but Box 4.17 presents an example of the challenges presented it requires behavioral and institutional change (Horton, in developing a regional research system. Prain, and Thiele 2009). 300 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 4.17 RUFORUM’s Choice: Regional Center of Excellence, Continentwide Forum, or Both? The Regional Universities Forum in Africa (RUFORUM), it meet the needs of its 25 university member-owners? initiated in 2004, grew out of the Rockefeller Foundation Second, should it consolidate activities at a meaningful project (FORUM) to help 5 countries and 10 universities subregional scale, with tangible results for participating specialize around particular themes, create university countries, or should it follow donor pressure to expand centers of excellence, and train graduate students and assume additional functions? Third, how can it from participating countries. Its challenge was “to build manage the sustainable addition of functions as it a national and regional research for development moves from network to advocacy platform to possibly (R4D) innovation system based on partnerships and dia- more intensive service functions? logue between all actors, impact-oriented and well- RUFORUM’s Business Plan 2011–2016 describes coordinated, where universities are an integral part.� how balanced growth would allow it to take on an RUFORUM is recognized as an international nongovern- expanded function as a continental forum. Documen- mental organization and is supported by the European tation of lessons from the “RUFORUM model� in Community and the Bill and Melinda Gates Foundation. eastern and southern Africa would create legitimacy Experience to date. RUFORUM planned to roll out and credibility beyond its current region. Continental seven regional thematic programs, each assigned to a action would require both changes in governance and lead university, and train more than 800 MSc and full cost recovery by new initiatives to avoid competi- 150 PhD students by 2013. Students from participat- tion with delivering RUFORUM’s flagship MSc pro- ing countries would receive local tuition and living grams, which serve national and regional AIS needs allowances. The attractiveness of the concept (and the directly. As seen with the effort to create a hub for the absence of another body with a similar mandate) biosciences in East and Central Africa (box 4.16), sus- caused membership to grow from the original 12 to 25 tainable financing for a platform or hub depends on universities in Eastern and Southern Africa alone. In many things: a subsidy from the host country, contin- 2010 a strategic reflection meeting identified the uous donor commitment, or integration of national challenging trade-off between a sharp focus and an and regional activities through products and services. expansion in scope and scale, including a proposal for Regional efforts often founder when the national host RUFORUM to expand to West Africa. A ministerial cannot or will not continue its regional role, so select- Conference on Higher Education in Agriculture called ing the host for a center of excellence is a critical for universities to (1) create a pan-African university, decision. Many major universities were created with (2) contribute fully to NEPAD-CAADP processes,a support from Ford and Rockefeller Foundations and (3) link to the private sector as a potential source of bilateral aid programs. A handful emerged to play funding and internships, (4) engage in policy formula- sustained regional roles, whereas others’ regional tion and implementation, and (5) coordinate with presence diminished in the wake of purely national ministries in the national innovation system. Another decisions and crises or a host institution’s inability to resolution that emphasized the AIS was to include sustain regional commitments beyond donor fund- investment in agricultural higher education within the ing.b The Conference on Higher Education in Agri- NEPAD-CAADP 10 percent budget allocation (pro- culture pushed for a continental forum rather than a vided it did not dilute the commitment to agriculture). consolidation of action at the subregional level or a Lessons. RUFORUM faces at least three large definition of subregional communities that are natu- challenges arising from its initial success. First, how can ral partners. Source: RUFORUM 2005, 2010, 2011. a. Under NEPAD (the New Partnership for Africa’s Development), African heads of state committed to allocating a 10 percent share of their national budgets to agriculture. CAADP (the Comprehensive Africa Agriculture Development Programme) is a NEPAD program with wide support from international, regional, and national actors that is designed to increase Africa’s agri- cultural productivity. b. The breakup of the East African Community broke up the University of East Africa. The creation of dozens of new state uni- versities in Nigeria siphoned experienced staff from the University of Ibadan, who gained promotion to top management, pro- fessorships, and department heads just when Ibadan’s renaissance was attracting students from neighboring Francophone and Anglophone countries. MODULE 4: THEMATIC NOTE 3: REGIONAL RESEARCH IN AN AGRICULTURAL INNOVATION SYSTEM FRAMEWORK 301 ■ Sustainable funding. A corollary of the previous point creating these institutions rather than designating coor- is that R&D mandates have to come from funding bod- dinators is justified. ies that can commit to sustained funding of regional activities. Regional centers of excellence will be sustain- LESSONS LEARNED AND GUIDANCE able only if it is national policy to play a regional role FOR FUTURE INVESTMENTS and maintain that role through resources from the government or institute. It helps if the governance The long experience with regional research efforts offers a mechanism for agricultural research includes people considerable number of lessons and other guidance. The with access to decision makers if not the decision mak- issues with the greatest relevance for regional research ers themselves. Regional initiatives must be seen to gen- and innovation systems are discussed in the sections that erate tangible benefits with clear value added to follow. national efforts. ■ Shared regional goals and a policy-making frame- High-level policy support work. Regional policies presume there must be some regional policy maker with the power to fund regional High-level policy frameworks such as the NEPAD-CAADP challenges and organize regional collective action. The commitments are important if they succeed in raising real current overlapping of regional economic communities financial contributions by national governments. Such and lack of coherence with R&D structures needs to be high-level organizations have not previously been successful resolved. Regional agricultural R&D priorities must be in implementing scientific programs, but if they raise embedded in the strategic agendas of regional eco- national commitments or create frameworks for regional nomic communities. economic communities to finance regional collective action, ■ Subsidiarity and equity considerations. Regional collec- they play their role. tive action to deal with inequality, gender, and social unrest across national borders is extremely difficult to organize. Border populations are sometimes marginal- Appropriate level of coordination ized within their own country or even in opposition to Ensuring that regional research programs integrate with the the central government,10 so transboundary problems national AIS is a matter of how well the national system is sometimes may not attract central policy makers’ con- integrated with its own subregional organization or benefits cern. Gender mainstreaming is a widely accepted concept from alternative mechanisms. Contracts, networks, strategic at the regional level but can be implemented only at the alliances, partnerships, and mergers are all ways of achiev- national level. Finally, regional collective action takes ing coordination. Researchers can coordinate around tasks, place in an environment of overlapping mandates and problems, target communities, commodities, and scientific resource competition; the result is that sometimes a challenges. Their linkages with the farmers, the private sec- national priority is underfunded because it is perceived tor, and advisory services will differ among activities and as something that others will fund. countries. For this reason, innovation usually emerges ■ Policies for international markets. Whether regional through self-organization. Subregional organizations can research contributes to the emergence of a regional design mechanisms to coordinate the activities of interna- innovation system is linked to the development of the tional centers through regional programs but wisely do not wider environment: regional economic communities, fight activities that escape their control.11 Attempts to removal of trade barriers, and mechanisms to compen- impose “coordination� run the risk of imposing costs that sate the losers for their participation in the wider exceed efficiency and relevance gains. system. Seed policy harmonization, common standards, and certification requirements have fostered seed indus- Particular outcomes will be context-specific tries within regions. Regional seed associations emerge and often path-dependent as seed markets grow; some national companies become international; and many small companies flourish by The examples presented here describe a diversity of finding a niche in areas where multinationals have little approaches designed to deal with issues of centralization interest. Policies and institutions that widen regional and decentralization, governance and ownership of a pro- markets can facilitate these developments. Investment in gram, political and financial sustainability, responsiveness 302 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK to demand, and quality of science. It is possible to analyze or potential gains from cost reduction. Regional efforts proposed investments in light of experience with these designed to share the cost of “lumpy� infrastructure, costly approaches. software or laboratory equipment, and highly specialized scientists are logical arguments but may not be seen as compelling reasons for collective action by policy makers. Analyze the AIS prior to investment Agreement on regional priorities that create an “effective in individual components demand� for research output by pooling the demand of First, recognize that an AIS of some type already exists in a small users assumes that markets and mechanisms exist for country. It may not be consciously defined, and it may have research outputs to be used and final agricultural products missing pieces, but it can be described in terms of a system’s to be sold. This outcome requires all components of the five elements: its objectives, its components, its resources, system to move in a convergent way, however. Economic its means of coordination, and its environment (context). integration among countries, at least in the targeted sectors, Second, analyze both external and internal drivers of helps achieve wider markets and greater demand for change. The external drivers include the global and regional research. Important investments for innovation could focus economic environment, opportunities for innovation that on (1) strengthening the ability of the regional economic trade may open for small countries, the global advance of community to create wider markets, (2) creating regional science and technology, and external finance. Other critical seed associations, (3) harmonizing policy, and (4) building factors may be partly or fully endogenous, such as the regional buffer stocks. national capacity to profit from new technology, regional arrangements for accessing and using technology, and ease Efficiency in the production of research for of access to different markets. Third, since institutions development. The regional arrangement should lead to evolve, formulate scenarios around their most likely life greater efficiency in the production of research for devel- cycles. Understanding path dependency allows one to build opment in a given priority area. Some gains may be made on it or to overcome it. Finally, to overcome undesirable by eliminating duplication of low-technology research, but path dependency, institutional innovation requires leader- much larger gains in research productivity will come ship, financial commitment, and sustained effort by through economies of scale and economies of scope,12 and national decision makers, investors, and donors. often the hard decision of where to locate a regional center of excellence will have to be made. A regional arrangement may also bring better access to global knowledge and state-of-the- Assess and design interventions against art technology, along with an understanding of how to use a checklist of six basic criteria it and better share its benefits across recommendation Proposed initiatives can be assessed against six basic crite- domains cut by national borders. ria for their contributions to national and regional innova- Given the heterogeneity of small systems, allocating tion systems. The six criteria are summarized in table 4.4 problems at the regional level through breeding networks along with an interpretation of their meaning. Readers will allow better use of limited capacity. In some cases, less should look for examples of their application in the boxes complexity may be called for. Commodity programs on that accompany this TN or apply them to cases with which water-efficient maize and orange-fleshed sweet potato have they are familiar. The six criteria are not exclusive but serve regional specificity that is organized along a narrow value as a checklist of common elements in the success or failure chain. of regional action. They are elaborated in the sections that Mechanisms for benefit sharing must be put in place. follow with potential actions to facilitate innovation. Participants in the arrangement must understand that the gain from research is not where the expenditure is made but Fit with regional vision, context, and priorities. A where the benefits are used. national innovation system either works within its regional environment and constraints or attempts to overcome Quality and relevance of science. The processes by them. The most important element is that participants in which research is designed and approved need to ensure a regional arrangement share a vision of mutual benefit. both the quality and relevance of that research. A proper Threats of loss may be more compelling promoters of col- balance is needed between the articulation of demand (by lective action than opportunities for expanded production technology users) and the response from scientists as MODULE 4: THEMATIC NOTE 3: REGIONAL RESEARCH IN AN AGRICULTURAL INNOVATION SYSTEM FRAMEWORK 303 Table 4.4 Six Criteria for Assessing Prospective Regional Research Initiatives for Their Contributions to Regional and National Innovation Criteria and indicators Interpretation or specific examples (1) Fit with regional vision, context, and priorities Shared vision at national and regional levels – Do countries have the same perception of potential gains and losses from an initiative? – Is it a shared challenge with the same sense of priority or urgency? Potential for technical spillovers and spillins – How much of the recommendation domain is found in each member country? – How much of the targeted area is found in each country? Economic impact and incentives for – Are spillovers beyond the research area highly likely to occur without frictions? regional action – Do mechanisms exist to share benefits of regional investments? Evidence that policies, standards, and regulations – Is there clear analysis of spatial distribution of benefits along the value chain? encourage spillovers and spillin benefits – Do regulations favor cross-border investment in markets, transportation, and freedom of trade? Components of innovation system are evolving in – Are institutional strategies addressing new issues such as climate change, adaptation compatible way and in line with new challenges needs, water scarcity? – Do educational institutions produce future researchers or competent technical staff? (2) Efficiency in the production of research for development Research located in the most effective site in – Is the network hub located where research capacity and infrastructure, the region ICT, and administrative depth are present? – Does it cluster with other AIS components to serve as a center of excellence? – Is it located in the appropriate agroecological zone if relevant? Economies of scale can be gained in research – Can a centralized capacity draw on a wide testing network for rapid feedback on from lumpy capital, specialized software, adapted or adaptable cultivars/results? scarce human resources – Does the hub have a sustainable program of research that ensures its continued ability to serve a regional demand? Economies of scope can be realized from locating – Is there a mixture of disciplines and a balance of strategic and applied research to the program in multi-interest center or cluster serve multiple commodities, themes, or functional groups? Research taps into global knowledge cost-effectively – Do research contracts and partnership arrangements ensure cost-effective access to global science and technology? – What incentives linked to location, special skills, or environment attract foreign partners? – Can strong ICT compensate for size? (3) Quality and relevance of science Project approval based on strong and independent – Are program and project review subject to formal evaluation according to agreed scientific evaluation criteria and processes? – Do governance and management respect scientific evaluation? Mechanism for project approval of projects includes – How are the private sector’s and farmers’ concerns included in analysis, consultation, key stakeholder concerns and decision-making processes? – Do processes help build participation and demand by key stakeholders? The balance between long-term strategic and – Is scientific quality and feasibility ensured by peer review? short-term problem-solving research is appropriate – Is relevance ensured by governance mechanisms or financial support by client? Access to advanced breeding, biotechnology, or – How do regional platforms remain open to partners across public, private, and NGO analytic techniques helps problem-solving research sectors? – What internships, training awards, and fee structures make advanced facilities accessible to downstream demand? Mechanisms for objective ex ante evaluation, program – Does a functional M&E system provide objective evidence of performance against monitoring, and ex post evaluation development objectives at the national level? – What peer review from regional experts exists for regional program? – What mechanism exists for subregional partners to ensure performance? (4) Contribution to national capacity and functioning of national AIS Regional initiative provides support for – Does regional program build national capacity in sustainable way? long-term staff development at national level – How does regional program reinforce gender mainstreaming? – Do standards for regional awards raise the standard for national research? – How does program reduce net regional brain drain? (Table continues on the following page) 304 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 4.4 Six Criteria for Assessing Prospective Regional Research Initiatives for Their Contributions to Regional and National Innovation (continued) Criteria and indicators Interpretation or specific examples Gap-filling by regional initiative is temporary, linked to – Does regional staff contribute to training and refrain from crowding out national staff? training, and does not compete for funds – Where regional program provides training or equipment, does the national authority assume responsibility for maintenance and replacement? Regional program enhances ability of national – Does regional research meet a national as well as regional need? research-for-development institutions to generate – Do regional projects enhance the reputation and credibility of national scientists? political and financial sustainability – Do regional projects connect with the national agricultural innovation system or do they work only on regional and global public goods? (5) Facilitation of collective action Increased ability and incentives for collaboration – Does initiative identify and address problems that partners could not address on their own? – Does collaboration reduce research costs through complementary skills, resources, or access to partners? – Does addressing transboundary issues enhance regional food security? Planning and priority setting processes identify – Do processes help identify regional problems that can be addressed by collective “regional public goods� research for development? – Will initiative bring in issues that were previously believed to be beyond research, such as postdisaster or postconflict recovery? Compensatory or redistributive mechanisms to – Do countries that are not part of the hub have funds to access transborder services ensure sense of “fairness� of arrangements from neighbors? – Do their scientists participate equally in regional missions (travel, per diem, consultancy fees) written into initiatives? (6) Political and financial sustainability Design of program and equity in benefit sharing builds – Is host country of regional program willing to maintain commitment to regional financial commitment by governments of the region collaboration in the absence of donor funding? – Is it able to sustain a regional role on basis of core funding and generation of research contracts? – What sanctions are there for governments who evade their commitments? Governance structure of initiative brings in financial – Are relevant ministries represented in governance of the initiative if necessary to decision makers or political allies that ensure ensure political and financial support? continuity – How are key stakeholders maintained as allies of the initiative? – How are nongovernmental regional stakeholders included in the governance? Regional hierarchy supportive of initiative? – To what degree can a regional innovation system emerge without a hierarchical structure at the regional level? – What arrangements by regional economic communities are needed to ensure a favorable environment for uptake of research results? Source: Author. Note: The criteria in this table were identified inductively by the author from experience with strengthening agricultural research systems and used deductively in applying an AIS perspective to regional research arrangements that are currently being initiated. suppliers of knowledge and technology. Not all countries in Contribution to national capacity. National capacity is a regional organization will have the same priorities, and often the scarcest factor. A regional program with large and how priorities are funded is important enough to be a small members may help to build capacity in the smaller separate criterion. Investment in strong M&E is necessary to units, if only to enable them to play their role in a regional gain political support. The success stories of CGIAR effort. It is important to identify whether regional efforts research centers usually focus on two things: either genetic compete among themselves or compete with the national breakthroughs leading to increased productivity or programs for scarce scientific capacity and whether there is successful control of plant diseases and pests (especially sustainable national support for this area of research. The cassava pests). Better methodologies are needed to evaluate politics of higher education make it intensely national. returns to natural resource management to ensure proper Investment in MSc programs at the national and regional attention to this aspect of research at the national level. level is needed to give government, NGOs, and aid MODULE 4: THEMATIC NOTE 3: REGIONAL RESEARCH IN AN AGRICULTURAL INNOVATION SYSTEM FRAMEWORK 305 organizations the staff they require (as discussed in box 4.17 Political and financial sustainability. Sustainability on RUFORUM). of regional arrangements depends on the incentives for participation by all parties. A regional role allows a host Facilitation of collective action. Collective action—in country to move to a higher level of complexity in its sci- the very specific sense that parties assemble to address shared ence. The collapse of regional organizations is precipitated challenges that they would not or could not address alone— most often by national decisions by a member country that should increase. It may often address transboundary free rides, shirks responsibility, becomes unable to carry out problems of a regional public good nature, such as regional commitments to the collective action, or determines it is not economic policies, transborder watersheds, diseases and sharing equitably in the benefits. pests, and postconflict/postdisaster rehabilitation. At some These problems need to be addressed by governance and stage, an innovation system may begin to emerge from the financing mechanisms, methods of ensuring access to and interaction of components and reach a point where sharing of benefits, and some formal policing of commit- components become aware of their connectedness and begin ments. Sustainable regional organizations will require a to coordinate through information flows, markets, and new higher-order political and financial mechanism committed organizations. The system may become “emergent� and to a regional strategy. Self-sustaining regional centers can create new complexity. Various governments and donor emerge when a host-country institution accepts a regional programs may consciously attempt to strengthen linkages or role and has a business model that sustains it through a create human and institutional capacities to overcome national core commitment, research grants, service fees, and binding constraints that exist at a given time, but the system projects. A mutual accountability framework that provides may become conscious and self-correcting. A sequence of incentives for all partners to deliver on their commitments many small investments leading towards collaboration, is necessary. collective action, and stepwise integration is needed. In a Box 4.18 describes the continuing challenges of sub- changing environment it is unlikely that a fully designed regional organizations in sub-Saharan Africa to secure system can be imposed from above. funding. Box 4.18 Subregional Organizations in Sub-Saharan Africa: Challenges with Secure Funding and Collective Action In Africa, the three subregional organizations— International Development or the World Bank. Free- ASARECA, CORAF/WECARD, and SADC-FANR—are dom from regional political direction facilitated quite different.a They shared a common goal of increas- research collaboration, even among countries whose ing African ownership and control of research funded unstable borders provoked political conflict, but the by donors and the centers of the Consultative Group on absence of political coverage limited financial sustain- International Agricultural Research (CGIAR). Their ability and commitment to action. In 2007 ASARECA separate evolution reflects the composition of their ini- created a mixed board (representatives of donors, tial memberships, the role of donors under the Special national research institutes, and stakeholders), dis- Program for African Agricultural Research (SPAAR), banded its networks, and consolidated their work into and path dependency imposed by historical structures seven programs with donor funding through a trust and objectives. Different SPAAR donors had different fund held in the World Bank. The national agricultural motivations for creating subregional organizations, research institutes have not divided up management of and the original memberships reflected their interest the new programs, which remain centralized in and funding. Entebbe for administrative rather than scientific rea- ASARECA. ASARECA was an association of 10 sons. Unlike Latin America, in sub-Saharan Africa no directors of national agricultural research institutes; its single regional economic community is present to cre- geographic spread was defined by countries included in ate the environment for wider market integration and the regional offices of the United States Agency for policy harmonization. (Box continues on the following page) 306 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 4.18 Subregional Organizations in Sub-Saharan Africa: Challenges with Secure Funding and Collective Action (continued) CORAF/WECARD. In West and Central Africa, the ment in Southern Africa (CCARDESA) was estab- SPAAR strategy of base centers and regional programs lished in 2010. was a familiar model, especially in the Francophone Lessons from Sub-Saharan African subregional countries. The need to bridge Anglophone/Franco- organizations. No subregional organization has phone structures involved integration on a North/South achieved significant financial support from its member (interior/coastal country) basis within ECOWAS. governments. Political fragmentation, overlapping Southern Africa. The Southern African Center for regional economic communities, and membership in Cooperation in Agricultural Research and Training multiple regional units has prevented the subregional (SACCAR), an autonomous center composed of organizations from taking on significant collective frontline states, brought the CGIAR’s regional pro- challenges such as climate change, postconflict rehabil- grams under a mixed board of national research insti- itation, and development of regional markets. It would tute directors, university representatives, and a donor be a true example of “collective action� if the gov- committee. Donors coordinated their efforts under ernments in each region had assumed responsibility Cooperation for Development in Africa, subsumed for funding. Through their scientific networks, how- under SPAAR when the World Bank became the dom- ever, the subregional organizations have successfully inant donor to research. With the end of apartheid addressed some transboundary emergencies and chal- and opening of South Africa, the frontline states lenges. For example, ASARECA helped Burundi remained wary of SPAAR’s message of strong “base overcome a banana wilt attack with replacement culti- centers� and “regional programs,� which implied cen- vars. The cultivars were developed and maintained in tralization around a scientifically dominant South Uganda and multiplied with help from Kenya and Africa. When SACCAR disbanded in 2001, its func- Uganda under reallocated funding from regional tions were brought under a directorate of the SADC donors. Like PROCISUR, their next step (and an Secretariat. It has taken almost ten years for a new sub- essential element in regional innovation) is to regional research organization, similar to ASARECA strengthen technologies, institutional linkages, and and CORAF, to replace SACCAR. The Center for policies of the regional economic communities that Coordination of Agricultural Research and Develop- integrate markets. Source: Author. a. ASARECA = Association for Strengthening Agricultural Research in Eastern and Central Africa. CORAF/WECARD = Con- seil Ouest et Centre Africain pour la Recherche et le Développement Agricoles (West and Central African Council for Agricul- tural Research and Development). SADC-FANR = Southern Africa Development Community–Food, Agriculture, and Natural Resources. MODULE 4: THEMATIC NOTE 3: REGIONAL RESEARCH IN AN AGRICULTURAL INNOVATION SYSTEM FRAMEWORK 307 T H E M AT I C N O T E 4 Codesigning Innovations: How Can Research Engage with Multiple Stakeholders? Bernard Triomphe, Agricultural Research for Development, France (CIRAD) SYNOPSIS public and private stakeholders. Individual researchers and research systems need to change and expand the scope of odesign aims at achieving better articulation C between research supply and user-driven demand for problem-solving. It implies that researchers engage systematically with multiple stakeholders in the their research, methodologies, and core skills. Since the 1990s, “new� research approaches have emerged and been consolidated to ensure that researchers interact and collaborate effectively with users in identifying and produc- iterative, adaptive, flexible, and nonlinear process of devel- ing the knowledge and innovations to respond to a rapidly oping innovations. Core codesign principles include: changing local, national, or international environment, be it (1) joint planning, implementation, and decision making biophysical or socioeconomic. These codesign approaches related to activities aiming to foster innovation and include well-tested and documented “branded� approaches (2) close coordination among stakeholders at the strategic (table 4.5; boxes 4.20 and 4.21). Each “brand� has its speci- and operational levels, combining scientific, technical, and ficities but also borrows more or less explicitly from related local knowledge and other resources. Codesign may be approaches, so the boundaries between approaches are implemented at any scale, depending on the nature of the blurred. problem, the innovation being developed, and the types of “Codesign� is a generic term referring to any approach by stakeholder involved. Investing in codesign approaches which researchers contribute explicitly to developing inno- implies covering the costs of coordination, facilitation, and vations together with other stakeholders (or users) at all or collective action inherent to working collaboratively at all most stages of the innovation process by making use of four stages of the codesign process. Investment is also needed to underlying principles (adapted from Liu 1997): build capacity required by different stakeholders, includ- ing researchers. 1. The processes of producing knowledge and solving users’ problems have equal strategic importance and run con- BACKGROUND AND CONTEXT currently during codesign. Research is not necessary for innovation to take place, but 2. All stakeholders involved have the right and a fair oppor- often research is an important part of an innovation tunity to take part in all stages of the codesign process. process. Innovations usually result from a process of net- Research does not have an inherently stronger input than working and interactive learning among a heterogeneous other stakeholders have. Researchers do not necessarily set of actors, which may include farmers, input suppliers, lead or even initiate the process. traders, processors, researchers, NGOs, and government 3. Goals, objectives, ethical values, and the way that they officials. Many research organizations and researchers in are effectively translated into approaches, governance, developing countries have some experience in research col- operating structures, and activities are subject to laboration with other public sector professionals and with explicit initial and periodic negotiations and formal farmers (often within the framework of competitive agreements. research grants), yet they generally lack the more wide- 4. Periodic reflection on the progress achieved and the con- ranging exposure, related skills, and attitudes to engage sistency of the approach in relation to the stated goals is effectively in collaborative research with more diverse integral and essential to an effective codesign process. 308 Table 4.5 Key Approaches or Brands Fitting under the Codesign Umbrella Approach Key references Key features and focus Examples Participatory technology or Veldhuizen, Waters-Bayer, and Systematized steps and methods to develop PROLINNOVA program innovation development de Zeeuw (1997); Sanginga et al. production or natural resource management (www.prolinnova.net) (PTD/PID) (2008) innovations, with a strong focus on local people, knowledge, and resources Participatory action-learning Liu (1997); Almekinders, Negotiating common goals and setups, combining ASOSID (box 4.20)b and action-research (PAR) Beukema, and Tromp (2009); production of knowledge and problem-solving Hocdé et al. (2009); Faure et al. (2010) Participatory market Bernet et al. (2006, 2008) Add value by creating interactions and coordination Papa Andina Box 4.21 chain approach among stakeholders along an existing or new value chain Companion modeling Bousquet, Trébuil, and Cerf (2005); Combining and representing different types of New irrigation (ComMod)a Béguin and Cerf (2009) knowledge and exploring scenarios for collective arrangements in action in natural resource management northern Thailand Source: Author. a. See http://cormas.cirad.fr/ComMod/en/index.htm. b. Asociación para la Agricultura Sostenible en base a Siembra Directa (Association for Sustainable Agriculture Based on Direct Seeding). In codesign, the concurrent and explicit application of ■ At least some of the concerned stakeholders have prior these four principles contrasts strongly with more conven- experience with the skills necessary for the negotiation, tional R&D and other so-called participatory or collabora- facilitation, and coordination of multistakeholder efforts. tive approaches, even though the latter may appear to share ■ Codesign requires a positive, open attitude, motivation, some characteristics of codesign. and sufficient degrees of freedom among individuals and While this module treats general issues related to the role institutions toward multistakeholder collaboration. This of research in AIS, this TN focuses on how research may condition implies, among other things, that stakeholders engage in AIS in practice, drawing from recent experience can recognize the legitimacy of all other stakeholders in with codesign approaches to improve agricultural produc- being part of the process, an incentive structure com- tivity, develop market chains, and manage natural resources patible with codesign exists, and participants have the in developing countries. ability to operate outside the established rules and para- digms within each institution. INVESTMENT NEEDED Conducting an effective codesign innovation process typ- Ideally, codesign approaches should be applied only when ically involves organizing three main interlinked and over- the context, the problems to be solved, and the stakeholders lapping phases: (1) exploratory phase, (2) implementation are well suited to such approaches (table 4.6). Usually the phase, and (3) a dissemination and exit phase. Investing circumstances are right when one or several of the following heavily in capacity-building of all stakeholders involved, conditions are met: with regard to specific thematic issues as well as the princi- ples and approach of codesign, will be necessary (Triomphe ■ Concerned stakeholders face changes in their socioeco- and Hocdé 2010). Box 4.19 summarizes the associated costs nomic or biophysical environment, or problems that and investments. typically cannot be solved by one of them alone, because of the complexity and/or scale involved. Examples Exploratory phase include managing a dwindling common natural resource or adjusting to new policies or to changes in how markets Three goals may be pursued: (1) diagnosing the situation function. faced by stakeholders; (2) identifying and characterizing con- ■ A shared understanding of the problems and their solu- cerned stakeholders, their demands, and needs; and (3) nego- tions can be reached. tiating the overall goals of the codesign process and the ■ Current scientific and technical knowledge and pre- related institutional and operational mechanisms and designed solutions to address the issues at hand are inad- arrangements, all of which influence the effective imple- equate or inaccessible. mentation of codesign activities during the next phase. MODULE 4: THEMATIC NOTE 4: CODESIGNING INNOVATIONS: HOW CAN RESEARCH ENGAGE WITH MULTIPLE STAKEHOLDERS? 309 Table 4.6 Examples of Problems, Corresponding Potential Innovations, and Key Potential Components of a Codesign Approach Adapted to Address Those Problems Examples of components of an adapted Types of problems or issues Types of innovations codesign approach – Reducing costs or increasing profitability – New cropping or farming systems – Joint experimentation of cropping or farming systems, making – New arrangements and institutions – Creation of multistakeholder alliances and platforms farming more environmentally friendly – Multiscale networking – Unequal access to irrigation among different – New irrigation or grazing techniques – Joint experimentation types of farmers in a given watershed – New rules or institutions at – Role-playing games – Conflicts for common resource use community watershed level – Participatory and simulation modeling (such as pastureland) – Reducing deforestation – New farming systems – Territorial multistakeholder committees – Managing erosion and natural resources – New land uses and new policies – Participatory land use and policy planning (such as biodiversity) and/or regulations for land use – Creation of multistakeholder alliances, platforms, and similar mechanisms – Responding to farmers’ and consumers’ – New germplasm – Participatory plant breeding needs related to crop and food quality – Geographical indications – Limited access of poor farmers to – Infrastructure development – Approaches for pro-poor market chain innovation high-value markets – New food processing techniques (such as development of geographical indications) – Farmer organization for marketing – Supply chain coordination – Public-private partnerships Source: Author. Box 4.19 Costs and Investments Associated with Codesign Codesign approaches require that proper funding (or 7. The establishment and implementation of a formal, cofunding) be made available for a number of specific rigorous, and participatory monitoring and evalua- expenses, especially: tion system, which is necessary to provide feedback to guide the direction and content of the codesign 1. Holding all necessary initial negotiations among process. concerned stakeholders: travel and meetings. 8. Sufficient funding should be made available to doc- 2. Enlisting researchers from several disciplines ument the codesign process and its major outcomes (biophysical and social sciences), as required. in diverse media, from classical scientific and tech- 3. Ensuring sufficient staff involvement from key nical publications to videos, Internet-based prod- stakeholders, and funding the time of those who are ucts, and policy briefs. There should be as many for- not in a position to support themselves. mats and products as types of stakeholders involved 4. Expenses related to the proper functioning of multi- or concerned by the problem. stakeholder coordination instruments and mecha- nisms, such as multistakeholder platforms, steering Other costs typically associated with a codesign committees, and facilitation costs, without forget- approach may not differ much from the costs of other ting the funding needed for corresponding commu- approaches: the cost of running a multisite, on-farm nications strategies. experimentation scheme, costs of a large-scale dissem- 5. Resources to hire a full-time or at least part-time ination strategy, costs of specific research activities, facilitator or innovation broker (these resources and so forth. It may be possible to share some of the might be especially critical). costs among the partners, and as encouraging results 6. A multifaceted capacity-building program directed at strengthening the capacities and skills of each and are generated, it may be possible to leverage further every stakeholder on a variety of topics over the investment. duration of the codesign process. Source: Triomphe and Hocdé 2010. 310 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK The perspective and perceptions of each stakeholder researchers, and extension agents are often conducted. about problems and opportunities need to be brought These same trials support field visits and hands-on train- shared, understood, and recognized by others as legitimate ing during which stakeholders may be invited to share so that suitable solutions may be identified collectively. their experiences and assess the results. Diverse diagnostic methods can be used to achieve an accu- ■ When the goal is pro-poor market chain innovation, the rate collective representation of the situation; they usually implementation phase will usually involve developing involve developing some sort of a conceptual model (or and testing new products, or finding safe paths for small- simplified representation) of the problem, as proposed in scale farmers to enter high-value markets. This work the ARDI method (actors, resources, dynamics, interaction) involves not only technical research and innovation (to described in Etienne (2005). develop both pre- and postharvest technology) but also In characterizing stakeholders, the key is to understand economic and organizational innovation (for example, the actual motivation and goals of each stakeholder, its his- to test the viability of new products or organize stake- tory and trajectory, its strengths and weaknesses, its actual holders more effectively along the value chain). political clout, and its past and current interactions with ■ Successful technical and commercial innovation often other stakeholders. Specific methods and tools have been requires changes in organizations and institutional arrange- developed to elicit this understanding, such as stakeholder ments. Institutional innovation may require experimenta- mapping or the analysis of sociotechnical networks. tion with new coordination or collective-action mecha- Intense negotiations in bilateral and multilateral arenas nisms, such as a new farmer organization in charge of are needed to identify the mutually acceptable overall goals collecting products for subsequent joint marketing. and objectives of the codesign process. Negotiations also revolve around identifying and agreeing on the roles and In a codesign approach, participatory M&E focuses on functions of each stakeholder and on the resources that each outputs, the process itself, and on providing the elements must commit or find. Negotiations need to come up with needed to assess the continued relevance of the goals and effective mechanisms for managing the codesign process the methods used to solve the problems identified during during implementation at the strategic/governance and the exploratory phase. Participatory M&E thus provides operational levels, such as steering and implementation strategic inputs for guiding and dynamically adjusting the committees. At the strategic level, goals and objectives need overall codesign process. to be reassessed dynamically and adjustments made period- ically to refocus the collective energies and to solve any ten- sions or conflicts, which frequently arise during multiple Dissemination and exit phase stakeholder endeavors. At the operational level, a key con- An important task is to conclude the codesign process in a cern is effective implementation and dealing successfully way that will lead to sustained and scaled-up application of with technical, logistical, and financial issues. Who is the innovations developed or enable the process to be used selected to represent the various stakeholders in these com- for other issues, in other settings. A priority is to document mittees will greatly influence their eventual effectiveness. and take stock collectively of what was achieved, both the expected and unexpected outcomes. The outcomes can take many forms; examples include innovations of different types, Implementation phase new knowledge, individual and collective learning, strength- All activities are conducted in effective multistakeholder ened capacities, and new institutional norms and behaviors. fashion, and the implementation is expected to reflect the In this phase, some activities also aim at sharing some of the overall goals, governance, and operational mechanisms results as well as scaling them up or out. Successful codesign established as an output of the exploratory phase. Joint processes often pave the way for launching activities or pro- experimentation and participatory M&E are two important grams pursuing one or more of the following goals: activities occurring in this phase. In joint experimentation, the nature of the experimenta- ■ Consolidating and expanding the use of pilot innova- tion depends on the types of innovations sought: tions to achieve more significant and sustainable impacts (scaling up). ■ When new cropping or farming systems are being ■ Tackling new problems in the same area, with the same designed, agronomic trials codesigned by farmers, stakeholder group. MODULE 4: THEMATIC NOTE 4: CODESIGNING INNOVATIONS: HOW CAN RESEARCH ENGAGE WITH MULTIPLE STAKEHOLDERS? 311 ■ Expanding the codesign/innovation process to new Some stakeholders might not wish to collaborate further; areas and new stakeholder groups, or institutionalizing they may view the costs and time as too high or too uncer- the corresponding approaches within existing or new tain. What is important under such circumstances is to min- institutions. imize the potential long-term damage that an unmanaged failure (usually in the form of a conflict or crisis) might At times, a codesign approach may also need to be cause to future collaboration. terminated before a satisfactory outcome has been achieved, For examples of codesign processes in Mexico and the because conditions for continuing are no longer favorable. Andean Region, see boxes 4.20 and 4.21. Box 4.20 Applying Codesign for Conservation Agriculture in Central Mexico How it started: identifying a common problem and a eted conservation agriculture program in the Bajío. It potential solution. In early 2000, a small group of inter- soon became apparent that such a program would be national researchers met with representatives from the complex, involving numerous diagnostic activities, tri- private sector and the government of Guanajuato State als and demonstrations, the introduction of new in Central Mexico. They discussed the opportunities equipment, training of technicians and farmers, and and challenges of a joint effort to develop and diffuse monitoring and evaluation, among other activities. In conservation agriculture in the Bajío (lowland) region, 2002, all stakeholders agreed that the rather informal where a crisis in environmental sustainability was coordination started in 2000 had to make way for a underway. Thousands of mechanized smallholders pro- more formal one in the shape of a nonprofit associa- duced high-yielding cereals (wheat, barley, maize, and tion, ASOSID AC.a The key stakeholders were the sorghum) in the Bajío using large amounts of fertilizer founding members of ASOSID, which became the rec- and irrigation water. Production costs had soared, mak- ognized agency for implementing the program. ing the profitability of grain production uncertain. The role of research and the results obtained. Competition for scarce irrigation water was increasingly Throughout the process, research played key roles. fierce. Conservation agriculture, internationally her- Unusually, it was a major innovation champion in the alded for its potential to reduce costs and save water, was initial stages, assuming the role of innovation broker by seen as a relevant solution. Conservation agriculture enrolling key stakeholders and tirelessly negotiating had been successfully tested for years in the region, but (bilaterally, multilaterally) the common objectives and residual technical problems and poor coordination approach. At the same time, it produced technical, eco- among stakeholders prevented its significant adoption. nomic, and social knowledge about the situation, devel- Launching the codesign process. Researchers did oped new cropping systems in close collaboration with not add to the pile of experiments showing the poten- farmer innovators, and helped shape the enabling envi- tial or drawbacks of conservation agriculture. Nor did ronment to establish ASOSID. It strengthened stakehold- they develop a participatory scheme to fine-tune and ers’ capacity—an investment that continues. Aside from test even more locally adapted conservation agricul- the creation of ASOSID (a major institutional innova- ture with a handful of farmers. Instead, research broke tion), key results included the increasingly wide adoption away from well-established paradigms. A flurry of of conservation agriculture and related water-saving negotiations followed with key local or national stake- techniques. The capacity and reach of farmers’ local and holders in the Bajío, including farmer-managed local regional water-user associations expanded. The associa- and regional water associations, the state extension tions decided to venture beyond their original mandate to agency, high-level policy makers from the state gov- manage irrigation water and gradually got involved in ernment, the private sector (input providers, no-till advisory services and alternative crop marketing. equipment manufacturers), national research, and Although it has gone through several stages, ASOSID is at funding agencies. A major objective was to establish a work ten years later, long after international research means of coordinating and implementing a multifac- ceased to be a major force in its agenda and activities. Source: Author, based on Triomphe, Hocdé, and Chia 2006 and www.asosid.com. a. Asociación para la Agricultura Sostenible en base a Siembra Directa (Association for Sustainable Agriculture Based on Direct Seeding). 312 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 4.21 Features of Papa Andina’s Partnership Programs Papa Andina is a regional partnership funded by the fresh potatoes for the wholesale market, a new native Swiss Agency for Development and Cooperation and potato chip product and brand, and the first brand of other donors. It involves the International Potato Cen- high-quality native potatoes to be marketed in ter (CIP) and national agricultural research organiza- Peruvian supermarkets. Technological innovations tions in Bolivia, Ecuador, and Peru. Since its inception improved pest and disease management and the selec- in 1998, Papa Andina has shifted its focus from imple- tion of harvested produce. A national platform, menting a regional research agenda to developing a CAPAC-Peru,b was established to promote the market- regional learning agenda and strengthening national ing of quality potato products and innovation, in capacities for innovation. which local actors are gradually taking more responsi- Organizational interface. Papa Andina’s participa- bility as their capacity and trust increases. CAPAC tory market chain approach (PMCA) features facili- helped organize small-scale farmers to supply potatoes tated, face-to-face meetings that involve diverse market meeting the more demanding market requirements. chain actors, researchers, and other agricultural service When a multinational entered the market, Papa And- providers in exploring options for market chain innova- ina began to work on corporate social responsibility to tion. The facilitating R&D organization then conducts balance corporate interests with the interests of com- or arranges for R&D on specific innovations. A project munity suppliers and the environment. Other indirect team based at CIP (with external funding) has contin- results include the popularization of native potatoes ued to facilitate interactions between researchers, mar- in Peru’s urban cuisine and the establishment of ket actors, and decision makers at various policy levels Peru’s annual National Potato Day, which caused the (in theory this task should eventually pass to the market United Nations to declare 2008 the International Year actors). This group sees itself as an innovation broker of the Potato. and plays a lead role in a Learning Alliance that has been established to promote exchanges among different Key lessons groups working on market chain innovation and devel- opment in Peru. Full-time facilitators and innovation ■ Approaches such as PMCA require substantial time brokers reduce some of the transaction costs and coor- and resources for capacity development if they are dination issues related to partnerships and networks. to strengthen linkages between researchers, eco- Financial sustainability beyond donor funding remains nomic actors, and policy makers. controversial and problematic for Papa Andina, both in ■ Traditional evaluation approaches based on objec- CIP and in national research organizations. tives and logical frameworks do not work for Outcomes. PMCA and stakeholder platforms have innovation processes and innovation brokers’ per- achieved higher prices for native products, increased formance. The processes and tasks involved are too farmers’ revenues, developed more stable markets for complex and results often take some time to be producers of native potatoes (partly through successful apparent. branding and marketing), and increased farmer’s self- ■ A pro-poor focus is vital to market chain approaches esteem. In Bolivia, new potato products sold to super- and innovation networks, which run the risk of ben- markets enable farmers to receive 30–40 percent higher efiting those who are better able to take advantage of prices than they received in traditional markets. The new market opportunities and innovations. In Peru, innovation network in Ecuador (Plataforma) enabled native potato varieties have evolved from “poor peo- farmers to raise yields by 33 percent, improve input- ples’ food� to a source of national pride, and the output ratios by 20 percent, and increase gross margins main beneficiaries have been the smallholders from per hectare fourfold.a the high Andes who preserved and grew them over New products and markets. Other key outcomes thousands of years. include the creation of a new brand of high-quality Source: Devaux et al. 2009, 2010; Horton et al. 2010; author. a. Impact statistics from Cavatassi et al. 2009. (b) CAPC = Cadenas Productivas Agrícolas de Calidad en el Perú (Quality Agri- cultural Productivity Chains in Peru). MODULE 4: THEMATIC NOTE 4: CODESIGNING INNOVATIONS: HOW CAN RESEARCH ENGAGE WITH MULTIPLE STAKEHOLDERS? 313 POTENTIAL BENEFITS for different stakeholders’ livelihoods or their respective places and influence in the institutional and political land- Benefits of codesign are diverse and depend greatly on the scape. In some cases, codesign empowers the weakest stake- specific goals of each codesign experience. Generally speak- holders, but empowerment is not automatic; it may be ing, benefits include a mix of: necessary to overcome tensions arising from the resistance and inertia of traditionally powerful stakeholders. ■ More suitable and diverse innovations that are more Codesign may affect the strategic positioning of research appropriate, easier to adopt, and developed more rapidly and its role in the innovation landscape. Research may than innovations generated through conventional decide it is legitimate to go beyond its traditional role as a approaches. producer of neutral knowledge and invest explicitly in such ■ Involved stakeholders, whose individual and collective areas as innovation brokering or documenting stakehold- capacities for action, research, and problem-solving are ers’ positions and rationales in conflicts over resource strengthened. If attention has been duly paid to the management. weakest stakeholders, their technical, social, and at times Public research organizations may also need to become political endeavors may be empowered. better acquainted with innovation development initiatives ■ Institutions develop better routines and capacities to and modes of collaboration led by private stakeholders, who implement their respective missions and goals, owing to often exhibit more responsiveness than public stakeholders their involvement in codesign. to emerging opportunities and who possess the skills and ■ New institutional arrangements allowing better coordi- tools to deal with consumers and markets. On the other nation and synergies among stakeholders. hand, research may play a vital role in innovation programs ■ A virtuous, sustainable circle through which, at the end by ensuring that public goods are identified, produced, and of the codesign process, the various stakeholders are protected and that political agendas and concerns relating to more willing and able to keep innovating as needs or sustainability, poverty reduction, and equity are duly opportunities arise. In short, a greater capacity for stake- reflected in the collaboration. holders to take their destiny into their own hands. For research, experience and skills in applying codesign LESSONS LEARNED approaches can result in several additional benefits, such as a greater ability to work in an interdisciplinary fashion and Experiences with codesign show that efforts to innovate are to think systemically. The approach helps to renew and open most successful when they tackle innovation in its broad the research agenda and to reduce the typical divide sense and diverse dimensions, including technological, between research and societal needs. organizational, and institutional dimensions. In ASOSID and Papa Andina, innovations ranged from production techniques (new pest management techniques) to new insti- POLICY ISSUES tutions. A narrow focus on predefined solutions is not likely Strengthening the capacities of stakeholders involved in to yield effective innovation. codesign is an essential part of the process and improves By necessity, codesign is a highly iterative, dynamic their ability to interact with each other and with their insti- approach. The unfolding of an actual innovation process is tutional and socioeconomic environment. Such interactions by nature highly iterative and dynamic. It typically involves allow the visions and concerns of a specific stakeholder overlapping and interlinked phases and activities, including group to become visible and legitimate to other stakehold- participatory identification of demands and problems, ers, and hence may eventually influence the scope and stakeholder mapping and enrollment, the development of nature of the innovations being developed, the distribution rules and modalities for collective action, joint experimen- of benefits among stakeholders, and other outcomes. tation on different innovative solutions, capacity building, Practitioners must be prepared to deal with the strong participatory monitoring and evaluation, joint learning ethical and political dimensions of codesign processes. among stakeholders, and the sharing and dissemination of Large power asymmetries can prevail among stakeholders. results and outcomes among stakeholders. Codesign processes frequently deal with or uncover conflic- Codesign is really a set of guiding principles. It is not a tive situations. The process can have different consequences blueprint or a ready-built, standard approach, method, or 314 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK toolbox that can be implemented “as is.� Codesign is only Stakeholder coordination needs to be formalized, how- one of many possible and complementary approaches that ever, via specific instruments (such as steering committees researchers may need and decide to use, after having and multistakeholder platforms) to allow joint strategic thought carefully about its justifications, advantages, intrin- decision making and effective joint implementation of sic complexities, and the limits of what it can or cannot con- activities. tribute. Approaches for codesigning innovations still represent a Innovations may be codesigned on a small to large scale, novel field of investment, requiring investments in developing depending on the issue at hand and the stakeholders involved. new roles and new methods. To increase the chances that While most experience with the approach has been gained researchers and their organizations will be successful in such at a local or limited scales (in problems affecting a few com- endeavors, they need to critically assess the roles they usu- munities at a time, for example), proponents of codesign ally play in an innovation process and take appropriate steps now tend to work at multiple scales and/or involve institu- to develop new roles and skills that may be needed, such as tions, supply chains, and networks operating at a regional, skills in facilitation, negotiation, building and nurturing national, or even international scale. partnerships, understanding power relationships and how Codesign requires strong bottom-up, participatory to deal with them, and reflection. They also need new con- processes shaped by interactions among key individuals ceptual frameworks and tools for assessing problems; (“champions�) acting autonomously rather than along exist- understanding the diversity of stakeholders’ objectives, ing hierarchical and institutional channels and routines. perceptions, and criteria; exploring new scenarios and inno- Different stakeholders need to be involved. As noted, each vations effectively and ex ante; and assessing impact in its stakeholder has a unique legitimacy, role, knowledge base, tangible and intangible dimensions. and contribution to the codesign process, depending on its Allow flexibility with project proposals. Donors need to own stake in the outcome, demands, desires, needs, and pre- adapt their guidelines for acceptable proposals to co-design vious experience, capacities, and skills in relation to the spe- approaches. Donors usually require clear proposals and cific issues and objectives being addressed. For their part, funding plans that outline several years of activities, with end-users of innovations need to be given a fair opportunity detailed explanations of what, where, when, and how activ- to play a central role throughout the innovation process. ities will occur and at what cost. In contrast, when funding Mapping and analyzing stakeholders is an effective way to “true� codesign approaches, donors should allow the maxi- increase the chances that a codesign approach will be realis- mum level of flexibility by those submitting proposals. This tic as well as successful. flexibility includes giving proper consideration to conduct- Demonstrable, early progress with tangible (visible) ing a true exploratory phase (whose outcome, by definition, innovations is important for keeping stakeholders moti- cannot be known beforehand), allowing a significant mar- vated and actively engaged throughout the codesign gin of freedom for plans and budgets to be developed and process. It also increases their sense of ownership. adjusted as and when needed, and allocating sufficient There are no theoretical limitations to the types and funding for the typically significant transaction costs and number of stakeholders that can or should be involved. In other specific costs related to operating a codesign practical terms, however, the ability to effectively coordinate approach. Since conditions for an effective codesign process multiple stakeholders and maintain “reasonable� transac- are not always suitable, one outcome of the exploratory tion costs can reach a limit. An important lesson for process phase may be a decision not to engage in codesign after all. management is to keep stakeholders’ involvement as flexible Far from being a negative or undesirable outcome, a deci- and dynamic as possible, with stakeholders entering or exit- sion of this kind should be viewed as an excellent way of ing the process, or becoming more or less active, depending preventing limited resources from being wasted on a poten- on the phase of the codesign process. tially ill-fated process. MODULE 4: THEMATIC NOTE 4: CODESIGNING INNOVATIONS: HOW CAN RESEARCH ENGAGE WITH MULTIPLE STAKEHOLDERS? 315 T H E M AT I C N O T E 5 Organizational Change for Learning and Innovation Douglas Horton, Consultant SYNOPSIS ment and more effective in linking research to the practical needs of clients and society more broadly. arlier sections of this module identified strategies E for agricultural research organizations to work more effectively with partners in an AIS. This note dis- cusses the changes that research organizations may need in INVESTMENTS NEEDED This section highlights the importance of change manage- their management practices, structures, and incentives if ment and capacity development. It identifies the main areas they are to use these strategies effectively. It emphasizes the in which agricultural research organizations may need to need for agricultural research organizations to become change and where investments may be useful. Priorities for “learning organizations� that are responsive to changes in investment to support organizational change are summa- their environment and innovative in their policies, manage- rized in table 4.7. ment practices, and structures. Becoming a learning organi- zation frequently requires: shifting from closed innovation strategies to more open ones; shifting from simple, hierar- Capacity development and change chical organizational designs to more complex ones that fea- management strategies ture multidisciplinary teamwork and multi-organizational The shift from a linear model of technology generation and collaboration; shifting from traditional planning and imple- transfer to an innovation system model, which involves a mentation systems to adaptive management; expanding range of stakeholders from the start, requires new compe- evaluation functions to encompass both accountability and tencies related to communication, participatory planning, learning; and incorporating societal concerns and priorities facilitation of teamwork, and learning-oriented evaluation. into performance incentives. Conventional capacity development has concentrated on developing the knowledge and skills of individuals, but research organizations that perform effectively in innova- BACKGROUND AND CONTEXT tion systems also require changes in policies, management This thematic note outlines changes in organizational struc- systems, and incentives. tures, management systems, and incentives that agricultural There are two basic approaches to organizational change: research organizations can make to improve their perfor- top-down (deliberate) change and bottom-up (emergent) mance in AISs. It develops a number of themes introduced change. In recent years, agricultural research organizations previously and offers practical suggestions for improving with weak leadership have implemented numerous but dis- research-action linkages and partnering in the day-to-day connected strategies, often driven by external donors. This work of agricultural research organizations. The changes type of bottom-up change fragments decision-making and discussed may apply to organizations operating at the local jeopardizes the coherence of an organization’s programs. or zonal research level, national agricultural research insti- Transforming an agricultural research organization into a tutes, regional or subregional bodies, and international agri- learning organization requires that bottom-up initiatives be cultural research centers. Whatever the case, the aim is to complemented with strong leadership from the top, to ensure make agricultural research organizations more open and that organizational learning takes place and that useful orga- responsive to changes in the external operating environ- nizational innovations are mainstreamed.1 Leadership within 316 Table 4.7 Priorities for Investment to Support Organizational Change Organizational element Priority for investment and change Capacity development and Develop new competencies related to communication, facilitation, and mediation needed to work with diverse change management stakeholders in identifying and developing new opportunities for technical and institutional innovation Strategy formulation Shift from production of research outputs to fostering innovation processes that contribute to broad socioeconomic goals Accountability and governance Include representatives of diverse stakeholders, including smallholders, market agents, and consumers, in governance bodies Partnership policies Formulate policies for working with partners, including the objectives and types of partnership and principles for decision making, communication, and sharing of costs and benefits Planning and priority setting Develop practical procedures for systematic planning and priority setting, which combine stakeholder inputs with analysis of costs and benefits Monitoring and evaluation (M&E) Develop learning-oriented M&E systems that clarify “impact pathways,� monitor progress in relation to these markets, and use results to improve the design and implementation of ongoing and future work Incentives for change Reward teamwork and partnerships that produce practical results. Develop competitive grant schemes for innovation projects Administration and finance Increase flexibility in arrangements to allow adaptive management and responsiveness to emerging needs and opportunities Organizational arrangements Develop mechanisms or units to manage inter-organizational partnerships with multiple lines of accountability Beyond the agricultural research Develop specialized innovation brokerage units outside of the national agricultural research organization organization Source: Author. the organization is needed to formulate appropriate goals and crops and livestock. In an AIS, the mission and strategy strategies, improve policies and management systems, and should focus on fostering innovation processes that address adjust organizational structures where appropriate. broader social goals, including poverty reduction; improved Organizational change is a highly political process, food security; improved health and nutrition; and sustain- because there are winners and losers. For that reason, change able management of natural resources. initiatives need to have a powerful guiding coalition and Reformulating the strategy of an organization is not the local support. Effective capacity development and change job of a management consultant or senior manager. It needs management require experts, local and international, who to be done in a participatory fashion, involving representa- possess not only technical expertise but skills in coaching, tives of a cross-section of management and staff, to build a process facilitation, and management development. strong coalition for change within the organization. For agricultural research organizations to shift their focus from doing research to using research to foster innovation, they Accountability and governance are likely to need changes in the following areas: strategy formulation; accountability to end-users and beneficiaries; Accountability refers to the processes and practices that an partnership policies; planning and evaluation systems; organization uses to keep its stakeholders informed, take into incentives; administration and finance; and organizational account and balance their interests, and ensure adequate arrangements. Box 4.22 describes how a Tanzanian capacity- responses to their concerns (Blagescu and Young 2005) (box development program addresses some of these needs. 4.23). In agricultural research institutes, accountability proce- dures usually focus on meeting the needs of funding bodies (the public treasury and donors) and pay little attention to Strategy formulation the needs and interests of partners and intended users of Reformulation of the basic goals, values, mission state- research products and services (development programs, ments, and strategy documents of agricultural research farmers, market agents, consumers). In particular, small-scale organizations can be a crucial area for investment, because farmers have little voice and influence in decision making. this information influences the motivation and guides the Investors can encourage agricultural research organiza- behavior of all the organization’s members and programs. tions to include representatives of different stakeholders, The mission and strategy of agricultural research organiza- including smallholders, in their governance bodies (see tions traditionally focused on producing research for major module 1, TN 1) and to incorporate principles of good MODULE 4: THEMATIC NOTE 5: ORGANIZATIONAL CHANGE FOR LEARNING AND INNOVATION 317 Box 4.22 Strengthening Capacity in Tanzania through a Client-Oriented Approach to Managing Research and Development Tanzania’s Ministry of Agriculture and Food Security District Agricultural Development Plans. Researchers wanted to internalize a strong orientation to clients in participated in Farmer Field Schools and farmer all of its services. The ministry’s Client Service Charter, groups, including farmer research groups. The capacity adopted in 2002, required the ministry to establish ser- to develop effective research proposals for national and vice contracts with clients. The national agricultural international research funds improved. research system adopted a Client-Oriented Research and Lessons. Lessons from this capacity-strengthening Development Management Approach (CORDEMA) program include: in 2003. Under the multidonor Agricultural Sector Development Programme (2006–13), public and pri- ■ A comprehensive framework is needed for change vate providers of agricultural research use the management. It should include regular reflection CORDEMA approach to provide more relevant and based on close monitoring of the framework, insti- effective services. Funding for services comes from tutional support, flexibility, and links between all performance-based contracts and Zonal Agricultural management areas. Research and Development Funds (ZARDEFs) (com- ■ Build awareness of the need for a client and service petitive grants). Organizational change involves training public orientation at all levels, among staff of the research researchers and their partners, who also develop a col- organization at the national level, ministerial deci- laborative, market-focused agenda for R&D. Funding sion makers, and national policy makers. Broad, is available to plan and competitively fund collabora- effective awareness cannot be achieved by zonal and tive R&D. Change management focuses on developing district champions alone. capacities in (1) human resource management, ■ Provide resources for training and sustained learn- (2) financial management, (3) partnership and linkage ing with follow-up funding. To maintain the management, (4) planning, monitoring, and evalua- momentum for change created during training, fund tion, and (5) output orientation, dissemination, and at least part of the subsequent organizational change information management. activities as well as win collaborative research pro- The capacity development program includes all posals. Otherwise the momentum is lost. 24 research managers (national and zonal), 30 zonal ■ Durable change in research organizations concerns CORDEMA facilitators, and more than 280 researchers and partner agencies competing for grants. It began not only researchers but all staff. It includes service with the development of a National Facilitation Team units and financial administrators as well as support and subnational training teams. The curriculum was staff and field assistants. developed collaboratively by the Ministry of Agricul- ■ Trained and competent facilitators are needed ture, a university, a farmer networking organization, nationally and locally. To avoid conflicts of interest, and the Royal Tropical Institute of the Netherlands. facilitation should not be combined with resource Results and benefits. Although it is too early to ver- management or implementation. ify whether agricultural innovation has increased and ■ Monitoring organizational and institutional influenced the impact of research on development, the change is essential to maintain momentum and CORDEMA program has improved awareness that inform decision-makers. research should be managed as a performance- ■ Research organizations need autonomy for full oriented, demand-driven service. Among other results, the program increased interaction between research, institutionalization of CORDEMA. In Tanzania, the private sector, and farmers. These “innovation tri- implementation was slowed by a hierarchy of policy angles� benefited from research funds available makers, many of whom were not directly involved through the grant program and activities related to with or committed to the change process. Sources: Personal communication from Willem Heemskerk (KIT), Ninatubu Lema (Department of Research and Training), and Zainab Semgalawe (World Bank); www.agriculture.co.tz; www.kit.nl; DRT 2008; Hawkins et al. 2009; Heemskerk et al. 2003; Lema, Schouten, and Schrader 2003; Schrader et al. 2003. 318 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK innovative partnership policies can go beyond local benefits Box 4.23 Principles of Accountability and include valuable contributions to general knowledge. As indicated in TN 2, procedures for selecting partners and The One World Trust has formulated four princi- managing relationships are quite different for upstream ples that agricultural research organizations can research partnerships than they are for downstream part- apply to improve their accountability, not only to nerships to promote innovation. These differences need to funding bodies but to key stakeholders and part- be built into partnership policies and management systems. ners in innovation processes: Planning and evaluation systems ■ Participation. The organization should involve stakeholders in its decision-making processes Planning and evaluation in agricultural research organiza- and activities. tions are often ad hoc and externally driven. An important ■ Transparency. The organization should make area for investment is the development of simple but effec- information about its aims and activities avail- tive institutional systems and procedures for planning, able to its stakeholders. priority setting, monitoring, evaluation, and impact assess- ■ Evaluation. The organization should reflect on ment. The goal should not be to introduce the most sophis- and learn from past experiences and provide evidence for reporting on progress and impact. ticated methods available but to develop local institutional ■ Feedback management. The organization capacity and commitment to continue with systematic plan- should invite and respond to feedback, com- ning and evaluation after the initial investment project has ments, and critiques of its activities. been completed. Source: One World Trust, www.oneworldtrust.org. Planning and priority setting. Planning and priority setting assume even greater importance in the changing context for public agricultural research. As competitive accountability into the rules and procedures of their boards grants come to replace core funding and block grants for of trustees and other governing bodies. agricultural research, as the goals of agricultural research organizations proliferate and become more complex, and as Partnership policies agricultural research organizations work with more partners, they need more systematic planning and priority-setting Although agricultural research organizations already work procedures that combine stakeholder inputs with analysis of with partners, whose numbers will only grow as AIS the research costs and benefits. Module 7 in this sourcebook approaches become mainstreamed, few agricultural research provides guidance on planning and assessment approaches organizations have formal partnership policies, leading to and bodies (such as research-innovation councils, research frequent confusion, inefficiency, and conflict. A priority for networks, and subsector networks, platforms, or asso- organizational reform and for investment in this area is to ciations) that can perform planning and priority setting. The support the formulation of appropriate policies for working sourcebook on planning agricultural research (Gijsbers et al. with partners in research and innovation processes. Partner- 2001) and the collection on prioritizing agricultural research ship policies need to define: (Raitzer and Norton 2009) provide useful approaches and methods for planning and priority setting. The value of well- ■ The objectives the organization seeks by engaging in facilitated priority-setting exercises goes beyond their partnerships. empirical results. By engaging partners and external ■ The main types of partnerships employed by the organi- stakeholders in a process of shared reflection over the zation. validity of assumptions underpinning impact pathways, ■ Principles for working in partnership, including decision priority-setting exercises also promote collective learning making, communication, and sharing of costs and bene- and strengthen relationships among stakeholders. (Raitzer fits (including intellectual property). and Norton 2009, 2). Since there is little experience in this area to date, the Monitoring and evaluation. As noted, agricultural payoff to investment projects that support development of research organizations typically employ monitoring and MODULE 4: THEMATIC NOTE 5: ORGANIZATIONAL CHANGE FOR LEARNING AND INNOVATION 319 evaluation to satisfy accountability requirements and report institutional evaluation systems for agricultural research to external funding bodies. M&E programs are seldom organizations are discussed in the inception report for designed to draw lessons from experience to improve the establishing a CGIAR independent evaluation arrangement design and implementation of programs. Similarly, ex post (Markie and Compton 2011). impact assessment is done mainly to document results of past investments and justify future funding, rather than to Incentives for change learn from experience with a view to improving future programming (Kelly et al. 2008; see also module 7). Another priority for investment projects is to ensure that Improving M&E systems is an important area for invest- researchers have adequate incentives to communicate and ment. Innovative evaluation approaches are needed to: work effectively with others—other researchers in other dis- ciplines, development professionals, agricultural service ■ Articulate “theories of change� and “impact pathways� providers, and farmers and other market chain actors—to for projects and programs, with clearly defined progress promote agricultural innovation. There are two main ways markers. to provide such incentives. The first is through human ■ Monitor and evaluate progress and results in relation to resource management policies and practices that reward these markers. teamwork producing practical results. The second is through ■ Use the results to improve the design and implementa- competitive grant schemes for innovation projects. Without tion of ongoing and future research and research-related such incentives, individuals are more likely to continue pro- activities. ducing research publications, regardless of their relevance, than to work with partners to ensure that research results are Module 7 provides guidance on M&E, and useful relevant and useful. Module 5 describes various approaches approaches are also presented by Raitzer and Norton (2009) for implementing competitive grants schemes; box 4.24 and Walker et al. (2008). Issues and ideas for developing below provides an example from Peru. Box 4.24 Promoting Agricultural Innovation through a Competitive Funding Scheme in Peru During the 1990s, Peru took important steps to liberal- administratively independent of the national agricul- ize the economy, but smallholders did not share in the tural research institute (INIA, Instituto Nacional de benefits. Public expenditures on research represented Innovación Agraria). INCAGRO’s innovative features only 0.2 percent of agricultural GDP. In 1999, the Gov- included: ernment of Peru and the World Bank initiated a pro- gram to increase the competitiveness of the agricultural ■ An approach and tools for rigorous and transpar- sector through the adoption of environmentally sound ent funding (clear rules, an independent vetting technologies generated and disseminated by a decen- committee, and an efficient and transparent moni- tralized technology innovation system led by the pri- toring system). vate sector. The new program relied on a competitive ■ Empowerment of producer groups to plan and carry funding scheme to promote innovation. A Fund for out agricultural innovation projects and demand Technical Assistance supported extension services for extension services. producer groups and field-level adaptive research. A ■ Use of business plans to estimate expected economic Strategic Services Development Fund supported benefits. research as well training for extension providers. Fur- ■ Cofinancing of innovation projects through pro- ther support aimed at developing institutional capacity ducer groups and/or alliances. in the public sector to formulate and implement ■ Establishment of regional offices with staff to facil- agricultural innovation policy in conjunction with the itate and coach the producer groups and alliances. private sector. INCAGRO, the program coordination ■ Innovation project budgets that include funds for unit, resided in the Ministry of Agriculture and was hiring technical experts as innovation brokers. (Box continues on the following page) 320 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 4.24 Promoting Agricultural Innovation Through a Competitive Funding Scheme in Peru (continued) ■ A database management system that covers all aspects of these institutional innovations remain to be aspects of the project cycle. worked out and the future of INIA is uncertain, the competitive funding model to promote agricultural Results. The program reached most regions of the innovations has proven effective. country and appears to have increased the volume and Lessons. The main lessons from this experience quality of available extension services. The research include: fund also appears to have contributed to setting national priorities for research funding, developing a ■ Institutional success did not depend on designing an research agenda, strengthening researchers’ capacities institutional model for agricultural innovation for for innovation, strengthening producer organizations, the country but on sound implementation of the and achieving research impacts. An ex post cost-benefit competitive funds themselves (in other words, the study found that a sample of 171 agricultural extension power of the model was that it created institutional subprojects financed through INCAGRO had an aver- capacities on the demand side). age internal rate of return of 54 percent. ■ Despite the significant risks involved in promoting Not unexpectedly, establishing the competitive innovative approaches from outside the predomi- funding mechanism outside of INIA created resistance, nant institutional structures, specific circumstances and a 2008 law placed INCAGRO under INIA. Even so, can justify such an approach. INCAGRO had helped create institutional capacity in ■ Transparent policies and selection and monitoring the regions, including producer organizations and procedures are keys to successful competitive funds. public-private alliances which could compete for new INCAGRO’s operating procedures, information sys- cross-sectoral innovation funds established by the gov- tems, and communication strategies were important ernment. The largest fund was based on the INCAGRO in implementing the program effectively. model and designed by former INCAGRO staff. ■ Placing INCAGRO staff throughout the country A recent law requires INIA to promote the establish- supported national decentralization goals. Other ment of a national, pluralistic, demand-driven agricul- competitive funding programs in Peru noted the tural innovation system. Though many practical strength of this decentralized approach. Sources: Klaus Urban, FAO (personal communication); Días Avíla, Salles-Filho, and Alonso 2010; INCAGRO 2010; Fresco 2010; Vargas Winstanly 2010; López Heredia 2010; http://www.incagro.gob.pe/WebIncagro/inicio.do. Note: More nuanced findings on the Peruvian case are presented in World Bank Independent Evaluation Group (2009). http://lnweb90.worldbank.org/oed/oeddoclib.nsf/InterLandingPagesByUNID/DB83D0B3CC8500D085257 8330014721A. Administration and finance regional, thematic, or value chain mandates can help bring administration and finance “closer to the field.� Another As innovation processes are inherently dynamic and unpre- option is to establish semiautonomous bodies (such as foun- dictable, working to promote pro-poor innovation requires dations) that may use administrative and accounting proce- considerable flexibility in administrative and financial dures that are simpler and more flexible than those which are arrangements. Yet flexibility can be difficult to achieve in common in the national agricultural research organization traditional public administrative systems, which demand within the public sector. PROINPA in Bolivia is a successful considerable forward planning of activities and expendi- example of a foundation dedicated to agricultural research tures. Working to promote innovation processes also and development (Gandarillas et al. 2007).2 requires extensive work “off campus� that is difficult to monitor. Agricultural research organizations that support or Organizational arrangements engage in pro-poor innovation may need to adjust their administrative and financial procedures to gain more flexi- By themselves, changes in organizational structure are unlikely bility and responsiveness to unanticipated needs and oppor- to produce the behavioral changes for agricultural research tunities. Decentralizing decision making to units with organizations to promote innovation more effectively, MODULE 4: THEMATIC NOTE 5: ORGANIZATIONAL CHANGE FOR LEARNING AND INNOVATION 321 although some new organizational arrangements can be use- the full cost of their operations—hence the key role for public ful. They include specialized units responsible for spanning investment. institutional boundaries and for innovation brokering. Looking beyond the agricultural Boundary management. Working across institutional research organization boundaries is essential for the effective operation of innovation systems. The development of units responsible As the previous paragraphs indicate, the changes required for managing interorganizational relations and partnerships for agricultural research organizations to contribute more is a new and promising area for investment in agricultural productively to innovation systems are not all within agri- research for development. Agricultural research organ- cultural research organizations themselves. To establish legit- izations have tended to partner exclusively with other imacy and trust, it might be necessary to assign innovation research entities, but they require a more diverse set of brokerage functions to organizations that are independent partners to promote innovation. The idea is not to partner from the main participants in agricultural innovation for the sake of partnering, but to partner when and where processes. Peru’s competitive grant scheme (see also module it is essential to achieve impact. One way to achieve this 5, TN2) to promote pro-poor innovation was established in outcome is for specialized bodies to manage communication the Ministry of Agriculture and operated independently and relations between agricultural research organizations from the national research institute (box 4.24). and other key stakeholders in innovation processes. It is essential that boundary management units have lines POTENTIAL BENEFITS of responsibility and accountability to groups on both sides of the organizational boundary and not report only to the Effective capacity development and change management in agricultural research organization (Cash et al. 2003:8086). the areas highlighted previously are essential for imple- Because the benefits of boundary management units may menting the approaches recommended in other thematic accrue to several organizations, there are limited incentives notes of this module (linkages, public-private partnerships, for any one organization to take the initiative and bear the regional programs, and codesign of new technologies). The full costs. For this reason, boundary management consti- benefits that can be expected from these measures are tutes an important area for investment by national govern- described in the other thematic notes and innovative activ- ments or external donors that wish to promote pro-poor ity profiles. Box 4.22 describes the likely direct benefits innovation. from capacity strengthening (CORDEMA, Tanzania), box 4.24 describes benefits from changes in incentive and fund- Innovation brokerage. The establishment of sustainable ing schemes (INCAGRO, Peru), and box 4.25 describes innovation brokerage units (see module 3, TN4) is another benefits arising from sweeping organizational change potentially high-payoff area for public investment. (NAIP, India).3 Innovation brokerage is less concerned with linking Given the complex nature of organizational change researchers in a research organization to external stakeholders and the emergent nature of the results, it is notoriously than with fostering innovation processes and bringing in difficult to evaluate and measure the benefits of organiza- needed research products or services from wherever they tional change processes. The types of benefits that may be reside. Brokering innovation processes is related to boundary expected to result from well-managed organizational management but focuses on articulating demands for change processes carried out under favorable conditions can research products and services, forming stakeholder networks be summarized as follows: for innovation, and managing innovation processes (Klerkx, Hall, and Leeuwis 2009, 413). In performing these functions, ■ Greater awareness on the part of researchers of the innovation brokers enable other organizations to work importance of working in coalitions with other stake- together and innovate. These functions may be performed by holders in innovation processes. independent bodies or by units within or attached to ■ Improved relations between agricultural researchers, agricultural research organizations. Innovation brokerage policy makers, and economic actors (producers, market units have played useful roles in stimulating and facilitating agents, consumers). innovation processes, but the participants (particularly small- ■ Changes in the research portfolio to emphasize research scale farmers and market agents) have been reluctant to cover with higher short-term potential impact. 322 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 4.25 Organizational and Institutional Changes through a National Innovation Project in India The National Agricultural Innovation Project (NAIP) is gave public sector scientists direct experience of the a major reform initiative implemented over six years challenges involved in partnering with a wide range of (2006–12) by the Indian Council of Agricultural nonconventional partners critical for innovation. Les- Research (ICAR), with funding from the Government sons from this experience have not been systematically of India and the World Bank. NAIP seeks to accelerate documented to date, but interactions with scientists the collaborative development and application of agri- involved in NAIP suggest the following organizational cultural innovations involving public research organi- and institutional outcomes: zations, farmers, the private sector, and other stake- holders. ICAR is responsible for catalyzing institutional ■ Greater appreciation of the range of skills needed change through initiatives in the areas of policy, strat- for innovation and the complementary roles of egy, governance, financial management, and accounta- diverse partners. bility mechanisms and through a massive human ■ The importance of broad consultations with a range resource development initiative. NAIP has established of actors before conceiving project ideas and devel- 51 market-oriented collaborative research alliances of oping concept notes. public, private, and nongovernmental organizations as ■ Better understanding of how to develop large-scale well as farmer groups and international organizations. projects with multiple partners, which can achieve Applied research focuses on technological innovation significant impact. in disadvantaged rural areas. Basic/strategic research ■ More frequent project reviews with partners at reg- focuses on such areas as biotechnology, nanotechnol- ular intervals. ogy, and postharvest technology. Nearly 60 percent of ■ Improved facilitation of partnerships and brokering the research funding provided under NAIP is chan- of innovation processes. neled through competitive grants to research partner- ■ Increased confidence of scientists to work with ships involving public, private, and nongovernmental private and nongovernmental organizations. organizations. ICAR faced several challenges in implementing Lessons. Externally funded programs such as NAIP NAIP because of the scale of the project, its broad provide useful opportunities for researchers to learn vision of joint technology development by public and how to work with the wide range of actors needed for private organizations, and the formation of coalitions innovation, but such partnerships are challenging for with a wide range of partners. It addressed these chal- organizations with a long history of working in isola- lenges through extensive awareness campaigns prior to tion. Aspects of research project management (review, initiating the grant program; a helpdesk to support financing, procurement, and so forth) in public potential project partners; a sophisticated monitoring organizations must change to provide the support and and evaluation system; and partnership guidelines that flexibility for partnerships to flourish. Systematic provide for management of intellectual property and assessment of and reflection on the experience gained sharing of capital expenditures. through NAIP will yield valuable insights to further Results. The project’s main results and benefits reform the national research system and enable good relate to organizational and institutional change. NAIP practices fostered by NAIP to take root and multiply. Sources: Rasheed Sulaiman V, Centre for Research on Innovation and Science Policy (CRISP), Hyderabad (personal communica- tion); Mruthyunjaya 2010; NAIP 2010. ■ Greater influence on policy processes. POLICY ISSUES ■ Better mobilization of resources to support research and Organizational change directed at enabling public research innovation processes. institutions to participate more fully in the innovation sys- ■ Improved uptake and use of research results. tem must give particular attention to three policy issues. ■ Expanded socioeconomic and environmental benefits. They include gender and equity issues, the national MODULE 4: THEMATIC NOTE 5: ORGANIZATIONAL CHANGE FOR LEARNING AND INNOVATION 323 commitment to change, and the possibility that broader rizes useful lessons on what works and why (World Bank reforms may be needed to support innovation. Independent Evaluation Group 2008). Dealing with gender and equity issues LESSONS AND RECOMMENDATIONS in organizational change A number of lessons and recommendations provide guid- Investment projects are convenient mechanisms for sup- ance for initiating organizational change that makes it pos- porting agricultural research organizations in addressing sible for public research organizations to participate more important and complex issues, such as gender, equity, and fully in the AIS, especially as proponents of pro-poor inno- empowering poor people. In fact, having access to external vation. They are discussed in the sections that follow. resources and legitimacy can often be crucial for agri- cultural research organizations to begin working on these Investment projects may be useful vehicles issues. Gender and empowerment issues are especially for initiating and mainstreaming changes important for pro-poor agricultural innovation, because women feature so prominently in the target population. Organizational change efforts are fraught with difficulties Additionally, empowering farmers and strengthening their and often lose momentum or veer off course. Participants organizations may be essential for the success of multistake- within the organizations concerned may lack or lose legit- holder processes. The Gender in Agriculture Sourcebook imacy and can benefit from external support and guid- (World Bank, FAO, and IFAD 2009) presents principles and ance. For these reasons, it is useful to organize organiza- approaches for introducing gender work into agricultural tional change efforts as “institutional projects� with research organizations. defined leadership, goals, capacity development strategies, budgets, timelines, evaluation procedures, and lines of accountability. In this sense, investment projects play a Key role of national leadership useful role in organizational change. One thing to keep in and commitment to change mind, however, is that while external agents can play use- In any organizational change effort, it is important to keep ful roles in supporting and legitimizing change processes, in mind that while external agents can motivate and support leadership for organizational change must come from change, local commitment and leadership are essential for within the organization. Experience shows that it is easier the initiative to succeed. A key role for external change to introduce changes through externally funded projects agents is to assess and cultivate local commitment and lead- than to mainstream changes in agricultural research ership among policy makers for the organizational changes organizations. On the other hand, a large-scale project that will enable the agricultural research organization to such as NAIP (box 4.25), which has allowed ICAR to promote agricultural innovation more effectively. The local develop, fund, and operate a large number of consortia, commitment of resources to the change process is a key can help change efforts to reach a critical mass and indicator of commitment. Where local leadership and become embedded in organizational routines. From the financial commitments for change are not forthcoming, the very start of a project that aims to promote organizational appropriate decision might be to not proceed with the invest- change, it is important to develop strategies for main- ment project. streaming innovations. Need for broader public sector reform Adaptive management Is needed for organizational change projects As public agricultural research organizations are part of larger public administrative systems, successful efforts to Change processes are highly dynamic and inherently unpre- introduce changes needed to perform more effectively in the dictable. For this reason, it is inappropriate to attempt to AIS may require changes in the broader system of public plan organizational change projects in great detail and then administration. For this reason, modernizing agricultural implement them rigidly as planned. Adaptive management research organizations is best viewed as part of a broader is needed for change projects, and project managers in initiative of public sector reform. A recent evaluation of external funding bodies may need to be creative to main- World Bank experiences with public sector reform summa- tain the required accountability without imposing undue 324 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK limitations on the local teams who need to spearhead orga- titles and boundaries of various organizational units—yet nizational change. day-to-day activities are more often influenced by formal and informal rules and norms enshrined in an organiza- tion’s “standard operating procedures.� Deep changes in Developing internal capacity for organizational organizations also produce losers as well as winners, and the innovation is crucial for agricultural research potential losers often fight long and hard to retain their sta- organizations tus and privileges. The high rate of turnover of managers To keep up with rapid alterations in the social, economic, and researchers in many agricultural research organizations environmental, and technological landscape, agricultural presents another important challenge. Innovation system research organizations need the capacity to adjust their poli- approaches are seldom taught in agricultural universities cies, management practices, and structures as conditions and must be introduced to new staff members when they change. The continuing success of an agricultural research join the organization. If staff turnover is high, these “new organization will depend on its capacity for organizational approaches� may need to be introduced again and again. innovation. Agricultural research organizations often fail to develop this capacity because of the lack of continuity in Strengthening capacity needs to be skillfully policies and leadership in agricultural research. meshed with managing organizational change Public organizations are often perceived as resisting change. Bringing about cultural change takes time Many seek capacity—the ability to get things done—but not and multipronged approaches change—a different way of doing old and new things. In Organizational changes (institutional change) may take working with agricultural research organizations, it is considerable time to take root; withdrawing support too important to understand which aspects of the status quo are quickly can jeopardize the sustainability of results. Change amenable to change and which ones are not, so that an agents and donors need to keep this in mind. In many cases, appropriate capacity development initiative can be designed the changes that are needed to allow agricultural research and appropriate alliances can be forged with progressive ele- organizations to contribute more effectively to pro-poor ments in agricultural research organizations, NGOs, the innovation amount to a significant shift in culture, and policy community, and the private sector. The case of organizational cultures are notoriously resistant to change. EMBRAPA in Brazil illustrates how an agricultural research Past organizational change has focused on formal struc- organization can successfully embrace both capacity devel- tural issues—position titles, reporting relationships, and the opment and organizational change. MODULE 4: THEMATIC NOTE 5: ORGANIZATIONAL CHANGE FOR LEARNING AND INNOVATION 325 I N N O V AT I V E A C T I V I T Y P R O F I L E 1 Redesigning a Livestock Research Institute to Support Livestock Development within an AIS Approach Ranjitha Puskur, International Livestock Research Institute (ILRI) Peter Ballantyne, International Livestock Research Institute (ILRI) Patti Kristjanson, World Agroforestry Centre (ICRAF) SYNOPSIS PROJECT OBJECTIVE AND DESCRIPTION he International Livestock Research Institute The objective—redesigning ILRI to support livestock devel- T (ILRI) has undertaken significant institutional change as it attempts to shift its research from a linear, science-driven approach to an innovation systems opment within an AIS approach—was attempted by devel- oping an approach that uses innovation systems and value chain perspectives to design and implement an expanding approach through the adoption of a research-for- portfolio of research-for-development (R4D) projects with development strategy, fostering of new partnerships and an emphasis on developing innovation capacity among sys- knowledge brokering roles, reorganizing and refocusing its tem actors with external funding (box 4.26). Adopting this research focus, and by adjusting its skills and human approach has required considerable innovation in how live- resource needs. To illustrate these changes and their stock research is done and in the issues it addresses. That rationale, this profile draws on lessons from a wide range innovation was supported by developing a new research of projects and research into linking knowledge with strategy and approach, impact orientation, changes made to action. human resource and discipline mix, partnership manage- ment, and strategic communication (described in more detail under “innovative elements�). CONTEXT The imperative to invest in agricultural research that pro- INNOVATIVE ELEMENTS vides more benefits to more poor people is driven by the increasing numbers of poor throughout the world, the Over the past decade, ILRI’s organizational structure and global food crisis, and evidence of mounting climate research approaches have evolved to pursue the new agenda. change, among many other forces. Livestock are a key Some of the key and innovative elements are: asset for poor households, especially women, and they often contribute to better health and livelihoods. Yet ■ A research-for-development strategy and approach. the capacity of livestock-related research to produce ILRI’s research strategy features a holistic systems per- measurable reductions in poverty has been questioned, spective extending from production and markets to indicating that perhaps other, less linear approaches merit institutions and policy. Its R4D projects balance techni- evaluation. cal and process issues through orchestrated innovation Livestock systems and mixed crop-livestock systems are networks, in which coalitions of actors along particular inherently complex and diverse. National agricultural value chains (such as those for dairy or small ruminant research and extension systems in developing countries are production) identify knowledge required by target relatively weaker at working on livestock than on crops. groups and test options to address them. The networks Public services for animal breeding, health, and market emphasize joint action and learning. information are grossly underinvested and often underde- ■ A knowledge brokering role. ILRI engages as a knowl- veloped, and private participation remains quite limited. edge partner that integrates or bundles complementary These conditions make it especially challenging to develop knowledge and technologies to promote pro-poor livestock innovation systems. livestock development. It uses knowledge to influence 326 Box 4.26 Building Capacity in Livestock Innovation Systems: Early Results from the International Livestock Research Institute and Partners A starting point for building capacity in livestock inno- ■ Partners from public, private, and nonprofit vation systems is to make it easier for the actors to organizations developed and tested index-based innovate—through organizing, partnering, and linking livestock insurance in Kenya’s Marsabit District in in a number of ways. This form of capacity building is a project initiated in 2009. The insurance proved a major element of recent projects by the International commercially viable and will be scaled up for use Livestock Research Institute (ILRI) and its partners. in Ethiopia. The first pilot involved Equity Networking actors. The Fodder Innovation Project Bank of Kenya, UAP Insurance, and Swiss-Re as (funded by the UK Department for International commercial partners. More than 2,000 contracts Development) works with partners within and outside have been issued, covering livestock worth over government in India and Nigeria to form innovation US$1 million and attracting premiums exceeding networks that enable actors in local livestock systems to US$77,000. organize for innovation. Working with a diverse set of ■ A vaccine against East Coast fever has existed for actors in the system made it possible to address broad more than three decades. Highly effective and in system constraints rather than narrow technical issues. great demand, the vaccine has been produced in Partner organizations have started to institutionalize ILRI’s laboratories, but more widespread distribu- this approach (see box 4.27 for details). tion would require an effective cold chain. To scale Designing interventions around a service hub. The up production and make the vaccine more widely East Africa Dairy Development Project, initiated in late available, the Global Alliance in Livestock Veteri- 2007, has built upon ILRI’s experiences in Kenya and nary Medicines is partnering with ILRI and private elsewhere to design interventions around a “service companies to establish viable commercial produc- hub� that develops a network of actors to introduce, tion and delivery systems (module 6, IAP 2). test, and offer a range of services, technical options, and information. New partnerships broaden the participation of the Forming public-private partnerships to reach poor. Several new projects respond to zoonotic diseases clients. Several projects engendered new partnerships such as avian influenza by building the capacity of vet- between public and private agencies: erinarians and public health officials in early detection, diagnosis, and response. The projects mitigate disease ■ The Livestock, Livelihoods, and Markets project risk by improving coordination at the national level. An (LiLi), started in 2007 with the International Crop “ecohealth� project initiated in 2009 in Southeast Asia Research Institute for the Semi-Arid Tropics, pro- develops community-led options to prevent and con- motes better delivery of livestock services and market trol emerging zoonoses. A group of regional health and participation of smallholder goat and cattle keepers disease surveillance networks and institutions catalyzed in Southern Africa. Through an innovation platform this effort. Under the Safe Food, Fair Food Project, ini- facilitated by the Namibia National Farmers Union tiated in 2008, ILRI and its partners promote risk-based in the LiLi Project, AGRA (a commercial agricultural approaches to improve food safety and the participa- cooperative) sponsors a veterinary outlet as part of tion of the poor in informal markets for livestock prod- its Social Responsibility Outreach Program. ucts in West Africa. Source: Authors; www.fodderinnovation.org; http://www.ilri.org/ibli/; www.GALVmed.org; http://www.ilri.org/EcoZd; http://www.ilri.org/SafeFoodFairFood; http://www.slideshare.net/ILRI/using-hubs-to-increase-smallholder-farmers-access- to-services-experiences-from-the-east-africa-dairy-development-project; http://mahider.ilri.org/bitstream/10568/1787/1/ InnovationPlatformMozambique.pdf. actions globally and in target regions, facilitates and con- ■ Reorganizing and refocusing research. There is no venes livestock R&D actors around pro-poor livestock perfect way to organize human resources, but ILRI rec- issues, and identifies gaps in knowledge and technologies ognized that impact depended on replacing discipline- to fill. based and geographically specific research projects with MODULE 4: INNOVATIVE ACTIVITY PROFILE 1: REDESIGNING A LIVESTOCK RESEARCH INSTITUTE 327 a new culture of working across disciplines and thematic greatest potential to create impact. Extracting meaningful, areas. ILRI has built up multi- and transdisciplinary practical principles and lessons from these context-specific, research capacities and added capacity for poverty and path-dependent innovation processes makes it complicated gender research and impact assessment. Its Science Advi- to scale up successful approaches or replicate them. Practi- sory Panel helps to assure research quality, renew intel- tioners must give rigorous attention to learning what works lectual capital, and provide an informal, outside evalua- where and how, and then make judicious use of the ele- tion of ILRI’s work. Links between strategy, planning, ments. Building on the social capital of actors, their history and research implementation have been strengthened. of collaboration, successes, and current initiatives can over- ■ Aligning human resources and skills. ILRI began to come some of these challenges. change its culture by building a new mix of capacities One question is whether innovation system approaches (scientific, managerial, and business and partnership need to be expressed through projects. Is it possible to management) and testing staff evaluations that reflected build coordinating mechanisms into innovation systems the multifaceted roles involved in its new way of work- without bureaucratizing and immobilizing them in a top- ing. Financial and other systems were reformed in paral- down program? Where should ownership be located? In lel. ILRI emphasizes larger projects to improve the effi- the national agricultural research system? Are the most ciency of human resources, finance, and administrative appropriate contexts for an innovation system approach support. in commodity research, in regional programs, or in pro- ■ Forging strategic R&D partnerships. As indicated in box grams based on agroecological areas? These questions 4.26, ILRI engages proactively with key enabling partners are part of a long list of queries that practitioners will (policy makers, regulators) and implementing partners need to consider in deciding on the best means of achiev- (farmers, market agents’ organizations, private compa- ing their goals. nies, NGOs, and government) and provides incentives to research managers to do so. Its R&D partnerships bene- Orchestrating coalitions and building fit from complementary competencies and capacities innovation capacity and its work is aligned with broader government, NGO, and private initiatives. A partnership strategy and guide- Spaces and environments have to be created to facilitate lines (ILRI 2008) support these efforts. interaction and communication among actors in the inno- ■ Strategic communications and knowledge management vation system. They need a place to articulate demands and play a key role in engaging and supporting partnerships, promising solutions and create the “pull� that elicits inno- influencing the global and regional livestock agenda, and vation. The scale (national, regional, district, or village) of making ILRI’s research outputs accessible. Its communi- such platforms depends on the problem being addressed, cations strategy differentiates the information needs of coordination requirements, and structure of the value its stakeholders and networks of influence. chain. Experience shows that effective projects require a year simply to lay the groundwork. This important issue needs to be highlighted and negotiated with donors. For BENEFITS, LESSONS, AND ISSUES FOR example, the Fodder Innovation Project created loose net- WIDER APPLICATION works of actors around the issue of fodder scarcity at the Lessons and issues for wider application from the new district level, but as the networks emerged, it became clear approaches, as well as from the “Linking Knowledge with that the focus needed to be at the broader level of the live- Action� study (Kristjanson et al. 2009), are summarized in stock value chain. the sections that follow. Box 4.27 presents detailed lessons Are partnerships among individuals or organizations? from the Fodder Innovation Project, which was instrumen- Often projects identify like-minded individuals in organiza- tal in the design of subsequent projects and reflects an AIS tions, with personal contacts and relations playing a big approach. role. This means of operating is inherently unstable in the longer term. It is critical to test and learn how networking can become a routine in the organizations involved and not Designing livestock innovation systems and processes be limited to select individuals. Localized innovation systems (often established around Boundary spanning and brokerage functions are critical. sharply defined value chains) are most effective and have the Brokers by definition have to be good communicators who 328 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 4.27 Lessons and Operational Issues from the Fodder Innovation Project The Fodder Innovation Project provided practical tasks. Traditional logframes and monitoring and guidance for implementing other projects with an evaluation systems are inadequate for measuring innovation systems orientation: many of the indeterminate outcomes of innovation systems (see module 7, IAP 6 and Lilja et al. 2010). ■ Fodder was too narrow a theme for building a net- ■ Financial management and planning must be work. It is more appropriate to build networks and flexible and adept at accommodating emerging innovation capacities around crop-livestock value opportunities and challenges. chains that mobilize wider coalitions of partners ■ Engage policy actors from the beginning to identify and more interest. Appropriate technology intro- windows for influence and for ownership of duced through partnerships that ILRI had made research results. Policy stakeholders have observed prior to the project proved to be a useful catalyst to that the evidence of impact is very valuable but the involve new stakeholders and raise and address evidence base is too small. broader system constraints. ■ Building true partnerships, facilitating stake- In its examination of the Fodder Innovation Project holder platforms, and building innovation capaci- (among others), the “Linking Knowledge with Action� ties take time. These processes and projects need study concluded that projects are more likely to link longer time frames to mature and gain currency in knowledge with action when they (1) recognize that policy debates and organizational change. scientific research is just one “piece of the puzzle,’’ ■ Innovation processes need one or more organiza- (2) apply systems-oriented strategies, and (3) engage tions or individuals to assume the critical roles of the partners who are best positioned to transform broker, connector, and catalyst. An organization’s knowledge jointly created by all project members into ability to do this depends on its particular situation. actions (strategies, policies, interventions, technolo- The history of the partners and stakeholders, their gies) leading to better and more sustainable livelihoods. social capital, and the legitimacy and credibility they The knowledge flows both ways between practitioners/ bring are all critical factors. implementers/policy makers and researchers—making ■ Monitoring and evaluating the processes and the emphasis on linking with action rather than linking resulting changes are essential but far from trivial to action an important one. Sources: Authors; Kristjanson et al. 2009; de Haan et al. 2006. are skilled at supporting collaboration and interactive It seems much more logical that ILRI should focus processes that involve different types of stakeholders. A instead on building the capacities of key partners to play critical function of brokers is to manage and deal with large these roles. This approach poses its own challenges: The asymmetries of power among actors. Brokering roles can skills required cannot be mastered easily in formal training be played by local government, extension services, CSOs, alone. They require substantial coaching and mentoring on national research systems, or even the private sector, the job. Two vital questions for project designers to answer depending on the constellation of skills, capacities, social are who is best placed to play this role, and who is responsi- capital, legitimacy, and credibility they possess. Engaging ble for setting arrangements in motion. nontraditional partners like the private sector is still a Researchers will need to hone their skills to assume the challenge for NGOs and government as well as public roles that the innovation system requires, and researchers research institutes. ILRI has found that assuming these from complementary disciplines rarely found in traditional brokerage roles is not always the best solution, given that research organizations will need to be engaged: anthropolo- these intensive, long-term, and local processes demand gists, political economists, communications specialists, and continuous engagement that is rarely supported by short project managers, among others. New institutional arrange- project periods. ments will make it possible to work more effectively with MODULE 4: INNOVATIVE ACTIVITY PROFILE 1: REDESIGNING A LIVESTOCK RESEARCH INSTITUTE 329 partners to capitalize on the competencies and human links in these complex adaptive systems and attribute spe- resources they bring. cific changes to specific interventions. Impact assessment frameworks and methodologies are still imperfect tools for demonstrating impacts and proof of concept. More appro- Monitoring, evaluation, and impact assessment: priate tools must be developed and tested. new approaches urgently needed In research-for-development projects, finding the right bal- Pro-poor partners help make innovation pro-poor ance between the production of international public goods and the achievement of local development impact is a recur- The Fodder Innovation Project showed that working ring challenge for international organizations like ILRI. through and with partner organizations that had an explicit When such projects attempt to build innovation capacity, pro-poor mandate and agenda helped target interventions they often must choose between a capacity-building better and ensure pro-poor outcomes through negotiation approach aiming for sustainability, with much wider and in the networks. Although service delivery generally deeper potential impacts, or an approach that seeks the improved in Fodder Project areas owing to the networks’ rapid “adoption� of research products to raise productivity actions, better service delivery did not guarantee that the and incomes (often only for a short time). Projects are poor would benefit. The possibility that they would benefit needed that blend the implementation of a good develop- increased only when champions in the network negotiated ment strategy with rigorous scientific research. the conditions to ensure that outcome. It is vital to gain Research projects are much more likely to link knowl- greater clarity on which alternative mechanisms will ensure edge with action when they are designed as much for learn- pro-poor outcomes if partner organizations are not specifi- ing as for knowing. These projects are openly experimental, cally committed to those outcomes. embracing failures so as to learn from them throughout the project’s life. This kind of learning does not occur unless Policy engagement risk-taking managers are funded and rewarded; these man- agers also must be evaluated regularly by external experts Innovation is more likely to occur if it is fostered by specific (Kristjanson et al. 2009). policies and institutional arrangements. The evidence and It is important to develop M&E frameworks to track learning from research projects can inform policies so that both processes and outcomes and serve the twin objectives they result in better outcomes and impacts. Although many of learning and accountability. In the typical three- to four- organizations tend to assume that they understand policy year research-for-development project, it is difficult to makers’ needs for information and knowledge, in practice demonstrate change, because it often depends on complex research organizations often seem to lack an adequate processes and interactions among diverse organizations and understanding of policy processes and the best mechanisms individuals coming together for the first time. In the Fodder to incorporate evidence and knowledge into policy deci- Innovation Project, technical, institutional, and organiza- sions. Engaging policy actors from the outset is one strategy tional changes appeared to reinforce each other and gener- for enabling policy makers to influence and own research ate improvements in livestock systems that could improve results. Engagement in policy processes demands special livelihoods. In reality, it was difficult to draw clear causal expertise and targeted, strategic communication. 330 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 2 An Innovative Approach to Agricultural Technology Development and Transfer in India Mohinder S. Mudahar, Consultant SYNOPSIS OF PROJECT DATA need to develop public-private partnerships, integrate tech- nology development and transfer mechanisms, and finance Project: National Agricultural Innovation Project research through competitive research grants. The project’s Cost: US$250 million (IDA amount: US$200 million) development objective is “to contribute to sustainable trans- Date: September 18, 2006 to December 31, 2012 (now formation of agriculture and accelerate the collaborative extended to June 30, 2014) development and application of agricultural innovations Contact: Paul S. Sidhu, World Bank between public research organizations, farmers, the private sector, and other stakeholders.�1 DEVELOPMENT CONTEXT The project seeks to achieve this objective by strengthen- ing the role of the Indian Council for Agricultural Research lmost 85 percent of India’s poor live in rural areas A and depend on agriculture for their livelihood. Despite the large potential of India’s agricultural sector, overall growth in agricultural production and produc- (ICAR) in catalyzing and managing change in the NARS and by financing agricultural research through innovative consortiums of public organizations, universities, private enterprises, NGOs, and other stakeholders. Activities pur- tivity is low. Agricultural practices for managing natural sued under the project include: resources (land, water, and biodiversity) remain unsustain- able, and the transition to a market-oriented, globally ■ Strengthening ICAR’s technology foresight and policy competitive agricultural sector has been slow. The Govern- analysis to envision and plan for future needs. ment of India views agricultural R&D as a critical means of ■ Strengthening ICAR’s communications and information improving agricultural productivity and increasing agricul- capacity through better dialogue and interaction with tural growth. Strengthening institutional capacity in the the public at large, farming community, private sector, NARS, improving coordination among institutions within and within the ICAR system itself. and outside the agricultural research system, and promoting ■ Reinforcing the research system’s capacity through partnerships between national agricultural research institu- national and international training. tions, the growing private sector, and NGOs are essential to ■ Improving technology transfer and commercialization speed the transition to a more competitive agricultural sector. through business planning and development units and The National Agricultural Innovation Project (NAIP), fourth IPR management. in a series of projects funded by the World Bank to improve ■ Adopting organizational and management reforms such agricultural research and technology in India, addresses these as M&E, procurement, and financial management challenges by changing the way in which scientists, farmers, throughout the ICAR system. and agricultural entrepreneurs interact in the national AIS. The project also promotes the development of three kinds of multistakeholder, multidisciplinary consortiums of PROJECT OBJECTIVES, DESCRIPTION, public and private organizations, universities, NGOs, and AND EVOLUTION others focusing on three high-priority research themes. NAIP incorporates lessons from the three earlier projects Market-oriented, collaborative research alliances focus on (representing almost 25 years of experience), including the sustainably improving the productivity, profitability, and 331 sustainability of selected agricultural value chains. Liveli- contributions lead to significant synergies and value hood research alliances focus on strategies to sustain secure addition in the design and implementation of their rural livelihoods in about 110 disadvantaged districts, research projects. ICAR and NAIP management have mostly in rainfed, hilly and mountainous, dryland, tribal, invested considerable time in building partnerships and and coastal areas. Basic and strategic research alliances focus providing support through meetings, workshops, and on well-defined areas of frontier science with potential the Helpdesk. applications for problems in Indian agriculture. ■ Helpdesk. The Helpdesk was established to support the Promising consortiums and research alliances are new and more challenging partnerships that the con- selected through a competitive process, and NAIP funds sortiums represent. The project outsourced Helpdesk their proposed research. Members of each consortium are functions to one national institute and informed the jointly responsible for the governance, design, and imple- prospective consortiums that it was there to help them mentation of their research programs; maintaining satisfac- in a number of ways: by providing guidance for tory fiduciary and safeguard arrangements; applying the preparing concept notes and full research proposals, resulting innovations; and disseminating new knowledge assisting in matching consortium partners, and help- through conferences, innovation marketplaces, networks, ing to overcome initial problems in managing the and communications strategies. consortiums. The Helpdesk does not charge for its services. The experts managing the Helpdesk under- stand all of the process and details involved in forming INNOVATIVE PROJECT ELEMENTS consortiums; developing, selecting, and approving India has one of the world’s largest public agricultural concept notes and full proposals; and the priority research systems.2 In this context, NAIP produced three research themes. Users found the Helpdesk effective in critical innovations: scenario planning, new kinds of part- facilitating the proposal selection process and forming nerships, and the Helpdesk. consortiums. The Helpdesk used a number of tools in its work: the Helpdesk portal, e-learning and multime- ■ Scenario planning. ICAR and World Bank teams con- dia modules, databases of potential partner institu- ducted a scenario planning exercise that identified and tions and organizations, case studies of agricultural analyzed critical policy and institutional challenges fac- projects using direct e-mail responses to potential con- ing the agricultural sector and identified corresponding sortium members. reforms that would strengthen the research system’s abil- ity to meet those challenges. Scenario planning enabled BENEFITS, IMPACT, AND EXPERIENCE ICAR management to assess the consequences of alter- native reform scenarios, including their likely benefits NAIP was approved in April 2006 and the approval of con- and impact, and identify specific reforms to be sup- sortiums was completed only in December 2009. The sec- ported through NAIP. This process has not only tions that follow describe some of the early results. Readers increased government ownership of the reforms but also interested in tracking the project’s progress are directed to its commitment to implement them. the NAIP website (http://www.naip.icar.org.in). ■ Expanding capacity and resources via partnerships. The underlying principle of NAIP is the formation and Overwhelming national interest management of consortiums that bring research institu- in the consortium approach tions together with those who use research results. The collaborative arrangements developed by these stake- The number of consortiums was three times the number holders optimize the use of research resources in an anticipated, far exceeding expectations. The overwhelming enhanced process of innovation, value addition, com- response enabled consortium leaders to assemble the mercialization, and technology transfer that solves consortium partners with relative ease. From a total of 188 specific agricultural development problems. Research consortiums, 142 were selected through a two-stage com- proposals prepared by the consortiums clearly define the petitive review, and the remaining 46 were sponsored. The roles of the consortium leader and the other partners, average consortium budget is about US$1.4 million, of including the budget for each institute. The broad array which approximately 62 percent of the committed amount of participants and clarity about their specific roles and went to the 188 consortium leaders and 38 percent to the 332 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK 646 consortiums’ partners. Table 4.8 summarizes the types Focus on high-priority agricultural research themes of participating institutions, their relative commitments, Through the competitive selection process, a number of and their budgets. potentially high-quality and high-impact subprojects were selected to address the research themes described earlier. EXPANDING THE INSTITUTIONAL BASE The focus on value chains is intended to solve practical FOR AGRICULTURAL RESEARCH problems in commercial agriculture and agribusiness (box 4.29 describes achievements in research for two value NAIP introduced greater pluralism into agricultural chains). At the other end of the spectrum, work in 110 dis- research, given that 38 percent of consortium institutes advantaged districts with NGOs has given researchers (leaders and partners combined) come from outside the opportunities to address poverty and growth problems. ICAR–state agricultural university system. Through NAIP, ICAR has promoted public-private partnerships on a large scale for the first time. The project has provided the Improved quality and relevance of research opportunity for ICAR and the state universities to collab- The synergy created through partnerships has improved the orate with the Indian Institutes of Technology (IITs), the quality and usefulness of research results. Agricultural sci- Indian Institutes of Management (IIMs), general univer- entists now have access to unique skills (in ICT and biotech- sities, and institutes in the Council for Scientific and nology, for example) and research facilities provided by the Industrial Research. The main motivations for these insti- scientists who had generally never worked with scientists tutions to participate in NAIP are the opportunity to from the national agricultural research system. Through work with agricultural scientists and access their skills their work with the private sector and NGOs, more public and facilities, the opportunity to work in ICT and sector researchers have been exposed to the perspectives of biotechnology applications in agriculture, and the avail- these partners and their sense of urgency for solving clients’ ability of research grant funds. practical development problems. Box 4.30 summarizes the project’s preliminary results and likely impact. Positive experience from partnerships Institutional development As of this writing, field visits, workshops, and supervision missions indicate that the consortiums have been working By sponsoring formal training and, even more important, smoothly. There is consensus in ICAR and among consor- developing new kinds of partnerships, the project has tium partners that the consortium approach has promoted strengthened the institutions that serve agriculture, pluralism, synergy, teamwork, value addition, learning, and agribusiness, and livelihood security and is preparing them better research; they believe that as a result the development to deal with the development challenges of 21st century impacts will be much larger. On average, each consortium agriculture. A vital element of institutional development is has four partners. Box 4.28 summarizes the main issues the continuous interaction between public, private, and raised by partners. NGO sectors and the willingness of ICAR institutes to work Table 4.8 Consortium Leaders and Partner Institutions in the National Agricultural Innovation Project, India Institutions as Institutions as Share of participating institutions Type of institution consortium leaders (%) consortium partners (%) in the NAIP budget (%) ICAR institutes 46.5 37.2 50.8 State and central agricultural universities 30.9 22.9 26.3 International institutes 2.7 1.4 1.9 Central institutes 8.0 7.1 6.6 State institutes – 2.0 0.6 Private agencies 3.2 10.4 3.9 Other universities 3.2 2.3 2.4 NGOs 2.7 13.3 6.3 Other institutions 2.7 3.4 1.2 Source: NAIP Project Implementation Unit. MODULE 4: INNOVATIVE ACTIVITY PROFILE 2: AN INNOVATIVE APPROACH TO AGRICULTURAL TECHNOLOGY DEVELOPMENT 333 Box 4.28 Issues and Experience of Partners in Consortiums Funded by the National Agricultural Innovation Project The 188 consortiums consist of 188 consortium lead- Not Satisfactory. Milestones were developed to upgrade ers (one leader for each consortium) and 646 part- their performance. Instances of problems with staff ners, coming from about 370 public, private, and commitment, staff skills, and the flow of funds to part- nongovernmental organizations. (Together, the con- ners have occurred. Most consortium partners had sortium leaders and their partners comprise 834 problems with World Bank fiduciary requirements project-implementing units.) Many consortium part- (procurement and financial management), environ- ners are working together for the first time in addition mental and social safeguard requirements, and moni- to participating in a World Bank-funded project for toring and evaluation. They find the requirements too the first time. In this situation, implementation chal- rigid, especially the reporting requirements. Often lenges are expected. They are being addressed as part funds have been delayed. Most of these issues have been of the learning process for the consortium approach. or are being addressed. Finally, capacity has been The coordination of the consortiums generally strengthened through training, workshops, the appears to be working well, but some partners have Helpdesk, and manuals. Although some problems con- experienced problems arising from poor coordination. tinue, the project implementation team is committed The performance of 188 consortiums was rated in 2010 to addressing them and learning how to make the con- using a scorecard system, and 15 (8 percent) were rated sortium approach more sustainable for all involved. Source: Based on surveys conducted by NAIP Project Implementation Unit. Box 4.29 Achievements by the Bioethanol and Banana Pseudostem Consortiums Funded under the National Agricultural Innovation Project, India A value chain model for producing bioethanol from structure of the unit is designed to manage the supply sweet sorghum in rainfed areas through collective chain. One ton of stalks produces 269 liters of juice and action and partnerships. This consortium is led by the 50 kilograms of syrup. Syrup production costs were International Crops Institute for the Semi-Arid Tropics reduced by increasing juice recovery, syrup recovery, (ICRISAT) and six partners (five research institutes, and labor efficiency. The syrup is sold to the bioethanol, one private company). Although it is only partway food, and pharmaceutical industries. Although farmers through its research program, the consortium has who cultivate sweet sorghum and raise livestock have increased awareness of sweet sorghum’s multiple uses benefitted from this arrangement, the profitability of in the project area (food, feed, fodder, and fuel) and bioethanol production ultimately depends on crude oil organized farmer groups to produce the sweet sorghum prices. crop. Farmers increased sweet sorghum yields by grow- A value chain of banana pseudostem for fiber and ing improved varieties and using better management other value-added products. This consortium is led by practices, and new farm equipment provided under the a university and four other partners participate (one project reduced the drudgery of farm operations. research institute and three private business partners). Farmers now use sorghum grain for food and feed, Banana pseudostem is generally regarded as a waste stalks for syrup production, and bagasse for fuel and product and source of pollution after bananas are har- fodder. A crushing unit (owned by the private partner) vested. In seeking to develop a value chain for banana using ICRISAT’s bioethanol conversion technology was pseudostem, the university and research institute have established to produce syrup and the organizational focused on the backward linkages (to banana farmers) (Box continues on the following page) 334 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 4.29 Achievements by the Bioethanol and Banana Pseudostem Consortiums Funded under the National Agricultural Innovation Project, India (continued) and the private sector has focused on the forward link- prospects for various products (and conducting exper- ages (developing useful, marketable products from iments on producing yarn from banana and synthetic banana pseudostem). Consortium members have fiber). Farm income has improved because farmers already been able to produce fiber, yarn, paper, candy, have been able to sell pseudostem through the project, woven fabric, artificial leather, cellulose powder, vermi- and the conversion of banana pseudostem into various compost, and liquid fertilizer from banana pseu- products has generated employment. dostem; the machinery needed to produce these value- These examples demonstrate achievements that added products has already been designed, fabricated, would not have been possible without the complemen- and commissioned under this project (although not yet tary resources provided by each consortium partner. commercially available in India). Having demonstrated These examples also demonstrate substantial economic that these products are technically feasible, the consor- and social impact through value addition for all the tium is currently analyzing the financial and economic stakeholders and the country. Source: Based on information provided by NAIP Project Implementation Unit and the consortiums. Box 4.30 Preliminary Results of the National Agricultural Innovation Project, India Catalyzing and managing change in the national foods, and maize and maize products—among others. agricultural research system. Knowledge can be a pow- Preliminary results for most of these value chains erful change agent, and NAIP has given considerable appear promising with respect to the new technologies attention strengthening research capacity through the used and the potential economic gains. For example, it provision of knowledge. Students, teachers, and scien- may be possible to develop a new industry involving a tists now have access to a much deeper knowledge large number of small-scale entrepreneurs in produc- base. Over 2,000 scientific and professional journals ing and distributing briquettes. can be accessed in 124 libraries; 155 of 368 e-courses Research on more sustainable and secure rural have already been developed; 6,000 PhD theses have livelihoods. Subprojects encompass a wide range of been digitally uploaded; electronic information on topics, including: scaling up crop production technolo- agriculture is available through an “agro-web�; and gies; increasing water storage capacity through 10 business planning and development units have been improved natural resource management (extremely established. Significant formal training should have a important in drought-prone parts of India); backyard long-term effect on the human resources available to poultry production; generating employment through the national research system (and wider AIS): already various natural resource management interventions; 1,611 experts have been trained (1,441 nationally, 170 expanding irrigated area; improving grain storage internationally). capacity through storage bins; vermi-composting units; Research to strengthen value chains. The project rice-fish-poultry farming; drought mitigation mea- supports research for value chains representing a wide sures; and water harvesting. A few consortiums report spectrum of potentially high-value agricultural prod- early results in improving yields of maize (by 30 per- ucts: banana pseudostem, briquettes from industrial cent), rice (37 percent), soybeans (22 percent), wheat residues, industrial agroforestry, oceanic tuna, potato (32 percent), sorghum (24 percent), and cotton (126 and potato products, natural dyes, bioethanol, coconut, percent). Improved resource-use efficiency and seed of spices and flowers, millet foods, sorghum increased productivity are likely to raise incomes (Box continues on the following page) MODULE 4: INNOVATIVE ACTIVITY PROFILE 2: AN INNOVATIVE APPROACH TO AGRICULTURAL TECHNOLOGY DEVELOPMENT 335 Box 4.30 Preliminary Results of the National Agricultural Innovation Project, India (continued) among marginal and small-scale farmers. To main- improve agricultural productivity, quality, and value stream the best practices they develop, some consor- added in staple crops, horticultural products, livestock, tiums are establishing sustainability funds. and fish. Promising results include the identification of Basic and strategic research (frontier science). 30 genes specific to cotton fiber development; 10 Results from these subprojects are expected to advance herbal extracts to control ticks in cattle; a chip-based scientific knowledge and yield economic benefits for biosensor and a micro-well chip platform to detect farm families, the agricultural sector, and the economy ultra trace concentrations of pesticides and adulter- as a whole. Subprojects focus on natural resource ants in milk; and a prototype rubber dam for small- management innovations as well as innovations that scale watersheds. Source: Information provided by NAIP Project Implementation Unit and consortiums. outside their system. ICAR has started to mainstream the but complex to develop, review, revise, and approve. The consortium approach and competitive selection process involvement of new partners from diverse backgrounds and throughout its institutes. If these actions continue on a large inclusion of research issues that the public research system scale, the process, interventions, and impacts initiated is formally pursuing for the first time (value chains and sus- through NAIP are likely to be sustained and substantial. The tainable livelihood security) also extended project selection consortium approach has encouraged partner institutes to and approval. If future projects fund a larger-than-expected consider new strategies for solving real agricultural prob- number of subprojects, they must make appropriate lems. The technical solutions emerging from the consor- arrangements to handle the increased workload for man- tiums appear to have benefited from increased interaction agement, procurement, financial management, monitoring, and creativity, given their quality, economic potential, effec- evaluation, and safeguard management. Otherwise imple- tiveness, and level of appropriateness to clients’ needs. mentation will be delayed. From the start, all consortiums must be aware that they are required to follow agreed procurement procedures and LESSONS LEARNED AND ISSUES receive appropriate procurement training. The procure- FOR WIDER APPLICATION ment of goods (especially scientific equipment and sup- The formation of consortiums, partnerships, and the plies), services, and works must keep pace with the imple- competitive selection process has been a major but time- mentation of the project and research subprojects. consuming achievement. Innovation is needed to shorten Procurement under NAIP was very slow, especially in the this process without sacrificing quality and pluralism. All beginning. Most consortium partners had never worked heads of research organizations must be encouraged to with Bank-funded projects. It took some time to convince reach out to scientists whose work complements the pro- and train them to use World Bank procurement procedures. ject’s research themes and overall benefits—a strategy that The Helpdesk seems to be a best practice to adopt in col- should be pursued for all agricultural research, irrespec- laborative programs for agricultural research. In NAIP, the tive of the funding source. Based on experience to date, Helpdesk portal has been extremely useful in forming con- the consortium approach is likely to emerge as a best sortiums and preparing proposals, and it should be available practice for agricultural research, if indeed it ensures high to address implementation problems as they arise, especially returns to investments in agricultural research and pro- considering the large array of consortiums and organiza- motes collaboration throughout the wider AIS. tions involved in the project. It could also be useful for dis- Project teams must develop a strong sense of the number seminating success stories. of proposals that are likely to be submitted and plan accord- At the beginning, establish an effective M&E system for ingly. Subproject selection and review in NAIP were delayed internally tracking the project’s progress and performance by 18 months by the high number of proposals submitted as well as its likely impact. A good M&E system provides for consideration. The proposals were not only numerous regular feedback to project management about potential 336 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK problems as well as progress, results, and impact. Supple- and experience about consortiums that perform well, and ment the internal M&E system with an independent share the emerging outcomes of the project with policy external M&E system for the benefit of the project man- makers, the scientific community, and general public. The agement team. communications system will use a range of media and for- Establish an effective outreach and communications sys- mats (not simply print, or scientific journals, but electronic tem from the start. This system should promote emerging and visual media in appropriate languages) if it is serious best practices, share success stories, disseminate knowledge about reaching stakeholders and the public. MODULE 4: INNOVATIVE ACTIVITY PROFILE 2: AN INNOVATIVE APPROACH TO AGRICULTURAL TECHNOLOGY DEVELOPMENT 337 I N N O V AT I V E A C T I V I T Y P R O F I L E 3 The Agricultural Technology Consortium Model in Chile Rodrigo Vega Alarcón, Consultant, formerly with the Foundation for Agricultural Innovation (FIA) SYNOPSIS 2007b). In conjunction with this strategy, a new institu- tional framework was developed to give priority to eco- his IAP presents and discusses the main objectives, T results, and lessons from Chile’s experience with agricultural technology consortiums. These formal alliances promote joint work between industry and science nomic sectors exhibiting the highest growth potential, create appropriate instruments to realize that potential, and allocate more public and private resources to research, development, and innovation.2 within a market framework. Chile is regarded as a pioneer New policies and instruments have been designed and in using this model to focus public policy on innovation. implemented to further innovation. They include the strate- Consortiums are a good option when industry is strongly gic use of mining royalties; tax deductions for research, committed to the process and the partners possess the tech- development, and innovation; the organization of clusters nological capabilities to develop the kinds of products they (high-priority areas for innovation); and the establishment seek. When these conditions are not met, a strictly corporate of technology consortiums. This note discusses the main model such as the one used in Chile may not work. Special objectives, results, and lessons from Chile’s experience with programs may be needed, for example, if consortiums are agricultural technology consortiums, which promote joint intended to include small-scale producers. research and innovation by industry and science within a market framework. BACKGROUND AND CONTEXT Chile is considered a pioneer in using consortiums to align public research with national innovation policies, and Chile’s economy has grown at a remarkable pace since the the government issued its first tender for a Technology Busi- mid-1980s. The country has pursued consistent economic ness Consortium in 2004. The Chilean consortiums were reforms, including market liberalization and important free initially modeled on Australia’s Cooperative Research Cen- trade agreements, and it has developed an export model tres, established in 1990 (see box 4.4 in the overview of this relying on its abundant natural resources and commodities. module). The Cooperative Research Centres linked acade- These reforms have benefited from political and social sta- mia, public research institutes, business, and producers bility, underpinned by sound democratization. through a forum for dialogue, which proved to be the key to An important warning signal emerged in the second half developing trust and a meaningful relationship between the of the 1990s, however, when economic growth began to flag. parties. This process allowed researchers to understand the The decade that followed saw near-zero growth in total fac- problems and needs of private industry and producers and tor productivity.1 In response, the government adopted a seek specific solutions. It also allowed industry and produc- new innovation policy to make Chile’s economy more ers to understand the importance of research and innova- competitive. The National Council on Innovation for Com- tion to their business strategies. petitiveness (Consejo Nacional de Innovación para la Com- petitividad) was formed to advise the president on strategies OBJECTIVES AND DESCRIPTION and policies to foster innovation and increase competitive- OF CONSORTIUMS ness in the medium and long term. The resulting national innovation strategy has three pillars: science, human capital As noted, Chile’s technology consortiums are expected to development, and business innovation (CNIC 2007a, strengthen links between research communities and local 338 and global business communities, thereby improving com- Public agencies3 fund and manage the consortium pro- petitiveness and opening new business opportunities gram. The maximum contribution of the public sector to a (�lvarez et al. 2010). Their specific objectives are to: single consortium is US$6 million, and each consortium can operate for up to five years. The maximum yearly pub- ■ Increase national competitiveness by encouraging com- lic contribution to a consortium’s total budget is 25 percent panies to invest in research, development, and innova- for research activities, with an additional contribution of tion. 10 percent for human capital development and 15 percent ■ Implement programs for research and development that for research infrastructure. This funding is matched by target long-term profits. cofinancing of 50 percent from nonpublic consortium ■ Encourage links between science and industry. members. Box 4.31 describes the conditions that consor- ■ Develop and strengthen scientific skills and techniques. tiums must meet to receive public financing. Like a corporation, a consortium is run by a board com- A consortium is defined as a technology company in posed of representatives from academia and industry in a which one or more companies agree to carry out joint proj- number according to their capital ratio. Their responsibility ects with universities, institutes, and/or technology centers is to define the consortium’s strategic aims, determine to develop new technologies that can improve and add value which research projects to pursue, and allocate funding to to production processes and products (�lvarez et al. 2010). each. A general manager reporting to the board is responsi- The theoretical justification for this type of instrument is to ble for consortium administration and management. The discover solutions for market failures limiting innovation manager’s main responsibility is to coordinate all activities by an enterprise and encourage partnership strategies to of the consortium. Several consortiums have also estab- incorporate knowledge externalities, coordinate the use of lished technical committees (appointed by the board) com- complementarities, and share the risk of investment in tech- posed of researchers and business professionals who are not nology innovation. involved directly with the research; their role is to monitor Box 4.31 Characteristics and Conditions for Business-Technology Consortiums to Receive Public Financing The consortiums and the projects under them must: The following conditions are expected to be met: ■ Produce results that contribute to economic growth ■ The objective justifies the need for different enter- in Chile. prises and research institutions to undertake a sus- ■ Create permanent capacity for research, develop- tained R&D effort through the consortium. ment, and innovation in Chile. ■ The consortium’s work will significantly strengthen ■ Use mechanisms to generate, transfer, and adopt existing industries and stimulate the emergence of knowledge that will achieve the anticipated impacts. new ones. ■ The projected work requires public funding to be ■ Identify suitable participants for collaborative work, performed. based on their capacity (including managerial ■ The resources requested are consistent with the skills), the proposed mode of collaboration between projects and their anticipated results. universities, research institutes, and private compa- nies, and the level of commitment to achieve the Consortiums are generally formed by enterprises that desired results. seek to use cutting-edge research to satisfy the needs of ■ Provide sufficient cofinancing. The commitment of their particular productive sector. An integral part of the the partners is expressed in the proportion of cofi- business model for these enterprises (and usually a pre- nancing they are prepared to commit and the requisite for their participation in a consortium) is the returns they envision as a result. development of patentable results that can be licensed and generate spinoffs (in the form of new businesses). Source: Author, based on information from CONICYT. MODULE 4: INNOVATIVE ACTIVITY PROFILE 3: THE AGRICULTURAL TECHNOLOGY CONSORTIUM MODEL IN CHILE 339 research and ensure that it is being conducted as planned, risen considerably since the consortiums were estab- evaluate new research proposed by the consortium, make lished. related recommendations to the board. ■ Consortiums have demonstrated the capacity to identify and implement projects relevant to business or industry and to achieve economies of scale in applied research. INNOVATIVE ELEMENT ■ Industries’ and companies’ demands for specific applied Technology consortiums have several novel aspects. The research spurred the formation of appropriate institu- institutional setup of the consortiums was a major inno- tions and stronger research teams to develop technology. vation because it gave a market orientation (from the ■ Participants gained access to knowledge that otherwise companies) to research on technical solutions (to the would have been very difficult for them to acquire. science-based institutions). This intermediate approach ■ In some initiatives, the participation of experienced and does not imply that research and business should change emerging businesses allowed the companies to learn in any fundamental way; it is simply a means to from one another. In the wine industry, for example, strengthen the relationship between private enterprise most developing vineyards work with more established and science. Companies and research centers forge links companies. by pursuing applied research for profit. Members act ■ The trust engendered in the course of the research is together “upstream� when they develop technology but likely to have important long-term implications for the act in competition “downstream� in the marketplace. actors involved, increasing the potential for further col- Companies determine the priorities and corresponding laboration. research projects, which are executed by research insti- tutions (either as consortium members or externally Given the consortiums’ short duration and the applied contracted agencies). When a group of companies or an research they generally conduct, applications for IP protec- industry identifies common priorities, problems, or tion are still very low. For the same reason, the companies in opportunities and sets priorities, resources are allocated the consortiums have not yet achieved major technological more efficiently to address them. Greater trust and under- breakthroughs. standing among the actors will increase their propensity to share information and achieve synergies for industry LESSONS LEARNED AND GUIDANCE and advances for research. FOR THE FUTURE Studies in Chile and in Latin America more broadly suggest BENEFITS AND IMPACT that various factors influence consortium partners’ willing- The previous discussion has given an idea of the kinds of ness to exchange knowledge, collaborate in R&D, and thus benefits, tangible and intangible, that can emanate from produce innovations (�lvarez et al. 2010): technology consortiums. As the Chilean experience with this model is so recent, however, the empirical evidence of ■ The greater the number of partners, the less profitable impact is limited. Most of the consortiums studied have the results. focused on improving the competitiveness of productive ■ The more that consortium partners compete directly in sectors rather than on improving capacity to pursue inno- the final market for goods or services, the more they pro- vative activities. The consortiums’ main contributions are duce results of limited impact. Not all firms that compete improved access to technological and other kinds of knowl- in final markets produce results of limited value when edge (such as marketing, international market regulations they partner in consortiums, however. Firms that negoti- and requirements, and staff with specific kinds of exper- ate clear agreements for managing IP before they join a tise) and joint technology development by researchers with consortium produce better results, because their fears of companies. On-going assessments have identified the fol- losing trade secrets or failing to recover R&D costs are lowing trends: alleviated. ■ The greater the geographical distance between partners, ■ The large public investment in these consortiums lever- the less profitable the results. aged significant private resources for research, develop- ■ The greater the partners’ experience, the better the ment, and innovation. These private investments have results. 340 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK ■ The greater the number of employees in R&D or other consortium must have a very good full-time manager and technical areas in the consortium, the better the results. constant support from government agencies with a voice— ■ The more frequent the interaction between partners, the but no vote. better the results. A corporate model may not be suitable for all types of ■ The more satisfied the partners are with the contractual consortiums. Consortiums are a good option when industry provisions to protect IP and resolve conflicts, the better is strongly committed to the process and the partners pos- the results. sess the technological capabilities to develop the kinds of ■ The greater the trust and goodwill between partners, the products they seek. When these conditions are not met, a better the results. strictly corporate model may not work. For example, if consortiums are intended to include Empirical evaluations of consortiums have yielded other small-scale producers, a number of other considerations lessons. One lesson is that the long startup times of consor- become important, such as the potential social and eco- tiums (about one year) in relation to their duration acts as a nomic importance of smallholders’ participation in the disincentive to participation. Startup delays usually involve subsector; government’s commitment to support their uncertainty over who will participate, what kind of formal participation in a consortium; guidance for smallholders relationship they will adopt, what resources each will pro- to form and function in organizations; and advisory ser- vide (social capital, physical capital, counterpart funding), vices that enable smallholders to manage new technology and the IP arrangements. and practices successfully. Potato production in Chile is Part of the application process should be a formal pre- dominated by smallholders with few assets and thus lim- sentation by the parties of the consortium’s objectives, the ited capacity to participate in consortiums. A special pro- issues it will address, and its projected business model, gram could establish better links between these farmers governance model, IP arrangements, legal status, national and research institutions (box 4.33), fostering the trust and international partners, and other important features. and experience that could make them more effective part- The consortium can operate for a startup period of up to ners in a consortium, or a less formal association could be one year with financial support to assess whether to con- devised. tinue or terminate the relationship. This “pre-consortium� Two strategic elements should be taken into account period can be useful to define both the business and when implementing a consortium (Lavados 2009): governance models that the consortium will adopt. It is essential that the business and governance models be con- ■ Business model. From the outset, the business model sistent with one another. The final structure chosen for needs to be clear. Is the consortium geared to develop a any single consortium will not necessarily work for single product or multiple products? (To date, most another because in each case the business model is likely Chilean consortiums have attempted to develop a port- to vary. folio of products.) Are local or global markets targeted? The preconsortium stage is also the time to define IP How will the partners acquire their medium-term rev- arrangements. It is better to define these arrangements enues (royalties, licensing, product sales, or some other before any revenue is generated to avoid conflicts later when mechanism)? revenue begins to flow. The alternatives are for the IP to be ■ Portfolio of programs and projects. Research projects owned by the joint venture or consortium or for each part- usually deliver results in the medium and long term. To ner to own a share of the IP. In that case, the consortium acts attract private sector partners, consortiums will need to as a technology broker, charging a fee for administering any develop a portfolio of projects that is balanced between royalties or commissions. short- and long-term marketable products. Another lesson is that governance and management make a difference. An active, committed board and techni- Another lesson is that Chilean scientific and technologi- cal committees as well as fluid dialogue between partici- cal capacity is not always sufficient to address companies’ or pants and high-level management are essential. One con- industries’ increasingly complex needs for R&D. A proactive cern expressed by companies and research centers alike is plan must be implemented to generate local knowledge that the difference in their objectives is the greatest obstacle and/or import knowledge and expertise from abroad to their success in consortiums (box 4.32 provides an exam- (immigration of specialists, alliances with international ple from the wine industry). To address this problem, the R&D centers). MODULE 4: INNOVATIVE ACTIVITY PROFILE 3: THE AGRICULTURAL TECHNOLOGY CONSORTIUM MODEL IN CHILE 341 Box 4.32 A Vine-and-Wine Consortium: Vinnova Merges with Tecnovid in Chile The quality and prestige of Chilean wine have risen to logical disorders in Merlot grapes; the fermentative the extent that Chile now ranks among the top five capacity of various strains of yeast, and winemaking nations in global wine sales. Two consortiums, Tec- processes that yield higher levels of antioxidants in the novid and Vinnova, have joined forces to maintain and final product. enhance this position and achieve the economies of The anticipated benefits and results of the collabo- scale required for successful R&D. The R&D require- ration include: positive and synergistic interaction ments are set by the companies and executed by uni- between academia and the wine industry (all teams versity research teams. The consortium ultimately seeks consist of business professionals and university to become a viable enterprise that manages continuous researchers); a competent professional team attuned to innovation in the wine industry, from processing to corporate and business requirements channels the marketing. industry’s needs for research and innovation; and Through their merger, the consortiums will improve research that not only solves scientific problems but the productivity of the wine industry, develop pro- produces results that can be incorporated into an enter- grams for disseminating and adopting knowledge that prise’s management and marketing. will enable the wine industry to use research results Lessons include the importance of sound leadership, quickly and efficiently, and develop the human capital of working with mature enterprises, and of focusing on needed to innovate at high scientific and technological innovations that are important to the national econ- levels. The research programs focus on improving the omy and the industry. To meet global challenges, the quality, productivity, and differentiation of wines and wine industry increasingly needs collaboration on developing sustainable production practices. For upstream in R&D, needs to acquire additional technol- example, researchers are studying which wines are most ogy and knowledge, and needs to increase its competi- competitive among consumers, nationally and interna- tiveness in the wine market. If the best expertise to tionally; strategies to ensure that planting material is reach those goals does not exist in Chile, industry must free of disease and pests; the origins of certain physio- seek it abroad. Sources: Vinnova and author. Box 4.33 A Business-Technology Consortium for Potato Potatoes, an important part of the Chilean diet, are (representing 1,500 small- and medium-scale farmers grown by 15,000 producers on 50,000 hectares, mostly who operate 4,500 hectares in various locations) and 2 on small farms. The potato subsector contributes only are research entities: the Instituto de Investigaciones a fraction of agricultural GDP. A business-technology Agropecuarias (Institute of Agricultural Research) and consortium has been formed to improve the competi- Los Lagos University. tiveness of Chile’s potato industry through stronger The Consortium has five lines of action: developing participation in the international market for potato technology, strengthening human capital, adding seed, potato for consumption, processed products, and value, management, and transferring and diffusing potato varieties. The Consortium has taken the form of technology. It pursues research to develop production a new company, Consorcio Papa Chile SA, through technologies adapted to particular agroecological con- which a large part of the potato industry (mainly ditions and market requirements and is developing small-scale producers) entered into a formal associa- new potato varieties with better postharvest character- tion with technology institutes. The company has 17 istics and traits that match consumers’ preferences. It shareholders, of which 15 are producer organizations has implemented a market intelligence system as well. (Box continues on the following page) 342 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 4.33 A Business-Technology Consortium for Potato (continued) The main benefit of the Consortium, aside from assem- actors, for which the products generated are essentially bling commercial and public partners to produce public goods. A second important lesson is that a cor- innovations requested by the industry, is that it is likely porate structure does not seem to be the best match to increase private investments in science and technol- for a subsector with these characteristics. Finally, ogy for the subsector. given the characteristics of the subsector and hetero- One lesson from the potato Consortium that may geneity of the partners, a special program is needed to prove useful elsewhere is that it is quite difficult to foster trust between partners (producers, companies, launch a consortium in an industry with multiple, and technology institutions) if they are to work diverse, geographically dispersed, and heterogeneous toward a common goal. Source: Potato Consortium and author. Finally, the role of public agencies in designing, imple- whole must be reviewed. The technical, administrative, and menting, and evaluating the work of consortiums must be financial procedures used in consortiums should also be reconsidered. The specific capacities required in personnel analyzed with a view to learning which practices enable con- charged with tracking and monitoring consortiums as a sortiums to produce the best research outcomes. MODULE 4: INNOVATIVE ACTIVITY PROFILE 3: THE AGRICULTURAL TECHNOLOGY CONSORTIUM MODEL IN CHILE 343 I N N O V AT I V E A C T I V I T Y P R O F I L E 4 Linking Research and Development Actors through Learning Alliances Mark Lundy, International Centre for Tropical Agriculture (CIAT) María Verónica Gottret, Tropical Agriculture Research and Education Center (CATIE) Rupert Best, Catholic Relief Services (CRS) SYNOPSIS research and development actors through learning alliances (defined in box 4.34). earning alliances view research and development L outputs as inputs to processes of rural innovation that are place- and time-specific. Methods and tools will change as users adapt them to their needs and realities. OBJECTIVE AND DESCRIPTION The chosen thematic focus of the Central America learning Understanding why adaptations occur, the extent that these alliance, consisting of international and local NGOs, an lead to positive or negative changes in livelihoods, and doc- international agricultural research center, a national univer- umenting and sharing lessons learned are key objectives. sity, and the International Development Research Centre The learning alliance approach differs substantially from the (IDRC), was rural enterprise development.1 Learning common practice of attempting to train development prac- alliances were proposed as a process-driven vehicle through titioners in new methods through short, one-off training which the effectiveness of investments in rural livelihoods courses. Learning alliances rely on an iterative learning could be augmented. process jointly undertaken among multiple stakeholders During the first phase of the learning alliance (starting with a common interest or goal through a series of learning in 2003), process facilitation and knowledge management cycles, typically over 12–24 months. The Central American were managed by CIAT. In 2008, these functions were learning alliance improved connectivity between organiza- devolved to the Tropical Agriculture Research and Educa- tions working on similar topics, provided better access to tion Center (CATIE, Centro Agronómico Tropical de Inves- information and knowledge on rural enterprise develop- tigación y Enseñanza) in Central America based on a ment, and access to improved methods and tools. Attitudes regional agreement and cost-sharing strategy. In its second have shifted from competition to collaboration as partners. phase, the Central American Learning Alliance continues to promote sustainable rural economic development, consid- CONTEXT ering the following objectives: Millions of dollars are spent each year on R&D initiatives to improve rural livelihoods in the developing world. Despite ■ Facilitate joint learning processes between development this expenditure, rural poverty remains an intractable prob- agencies, technical and financial cooperation, universi- lem in many places. Among the multiple causes of this situ- ties and research centers, and state and private actors, ation is the limited collective learning that occurs between based on the development, validation, and dissemination researchers, development workers, cooperation agencies, of strategies, concepts, methodologies, and tools for policy makers, and private enterprise. As a result, useful developing effective rural economic development. research does not benefit the poor, lessons learned do not ■ Enhance knowledge management to influence the design influence research, cooperation and policy agendas are less of public and private policies that provide incentives for relevant than they could be—and development falters. the development of sustainable rural commodity chains, Starting in 2003, a group of actors in Central America came based on the implementation of research activities rele- together to explore how to improve the links between vant to sustainable rural economic development. 344 Box 4.34 Advantages and Impacts of Learning Alliances Learning alliances rely on an iterative learning process ■ Cumulative and shared knowledge about jointly undertaken among multiple stakeholders with a approaches, methods, and policies that work in dif- common interest or goal. Typically, stakeholders might ferent places, cultural contexts, and times (as well as include research organizations, development and those that do not), and the reasons for success or cooperation agencies, universities, policy makers, and failure. private businesses. Learning alliances facilitate the ■ Learning opportunities across organizational and development of cumulative, shared knowledge between geographical boundaries through the establishment these stakeholders about what works, what doesn’t, and and support of communities of practice around spe- why in temporal and spatial contexts. Shared and acces- cific topics. sible knowledge in this sense contributes to improved ■ Synergy among multiple actors by providing a vehi- development outcomes as lessons are quickly identified cle for collaboration, helping to highlight and develop and learned. Improved links among research and devel- diverse solutions to problems that may appear opment actors improve both research focus and devel- intractable to the individual actors. opment practice. As funds diminish, increased effi- ■ Contribute to healthy innovation systems by build- ciency becomes paramount in achieving positive ing bridges between islands of experience, helping to livelihood change. Finally, jointly developed proposals assess how these results were achieved, and what are also more attractive for funding agencies as they others can learn from these experiences. have a higher potential for scaling out and up and ■ Capacity development for implementing, scaling therefore to achieve broader impact. out, and improving innovative approaches and A well-functioning learning alliance achieves the methods. following outputs: Table B4.34 Types of Learning Alliances Type Need Focus 1 Building capacity and skills base Training and learning to use concrete, practical approaches and proven methods 2 Developing new methods, tools, Action-research that generates methodological guides based on good practice, which and approaches is then validated through capacity-development learning cycles 3 Generating information that can Conventional socioeconomic research to understand principles and lessons across lead to policy influence experiences Sources: Authors and Best, Ferris, and Mundy 2009. Common principals applied by the development issues to research hypotheses. Partners select a market-oriented alliance small number of these options for development as full Collaborative processes require agreement on certain basic learning cycles. Attempts are made to target areas where principles to govern collective work. Table 4.9 lists and partners have both an interest and ongoing projects, to align describes these principles. the learning process with concrete results that are useful for improving existing projects or contribute to the develop- ment of new proposals. Agenda setting The selection of themes and topics in the learning alliance is Learning cycles: A shared process based on dialogue among partners to identify knowledge or of documentation and reflection skill gaps that limit the success of their interventions. Once a topic has been selected, the interested partners define the The learning alliance approach differs substantially from central learning questions, which may range from basic the common practice of attempting to train development MODULE 4: INNOVATIVE ACTIVITY PROFILE 4: LINKING RESEARCH AND DEVELOPMENT ACTORS THROUGH LEARNING ALLIANCES 345 Table 4.9 Key Principles for an Effective Multipartner Learning Alliance Principal Description Clear objectives Multiple stakeholders have different objectives and interests. A learning alliance is based on the identification and negotiation of common interests, needs, and capacities of participating organizations and individuals. What does each organization bring to the alliance? What complementarities or gaps exist? What does each organization hope to achieve through the collaboration? How can the alliance add value to partner activities? Shared responsibilities, Organizations and individuals participate in learning alliances when: (1) they perceive benefits from this association, costs, and benefits (2) transaction costs are lower than expected benefits, (3) benefits from collective action are perceived to be greater than those obtained individually, and (4) results do not conflict with other key interests. Learning alliances seek to benefit all parties. Therefore, transaction costs and responsibilities, as well as benefits and credit for achievements, are shared among partners in a transparent fashion. Outputs as inputs, Rural communities are diverse and no universally applicable recipe for sustainable development exists. Learning documentation, and alliances view research and development outputs as inputs to processes of rural innovation that are place- and time- experience sharing specific. Methods and tools will change as users adapt them to their needs and realities. Understanding why adaptations occur, the extent that these lead to positive or negative changes in livelihoods, and documenting and sharing lessons learned are key objectives. Differentiated but linked Learning alliances have a diverse range of participants. Identifying each group’s questions and willingness to participate learning mechanisms in the learning process is critical to success. Flexible but connected learning methods are needed. Long-term, trust-based Rural development processes stretch over many years or decades. To influence positive change and understand why relationships that change has occurred requires long-term, stable relationships capable of evolving to meet new challenges. Trust is the glue that cements these relationships, but develops gradually as partners interact with each other and perceive concrete benefits from collaboration. Source: Lundy and Gottret 2007. practitioners in new methods through short, one-off ■ National learning fairs are based on the Most Significant training courses. It involves establishing a series of “learn- Change method developed by Davies and Dart (2005). ing spaces,� typically over 12–24 months (Best, Ferris, and ■ Web-based tools are used principally for documentation Mundy 2009). and dissemination among partner agencies. The development of feedback loops and space for reflec- tion as a way to improve practice is the final method used by INNOVATIVE ELEMENT: LEARNING the learning alliance. It is implemented through face-to-face ALLIANCE PROCESS AND TOOLS meetings as well as web-based tools. The learning alliance approach is made up of four inter- ■ Capacity-strengthening workshops are used to train related strategies: local partners for implementing new approaches and methods developed by learning alliance partners based 1. Capacity development activities seek to strengthen or on best practice and action-research. Follow-up is pro- improve partners’ capacities in the selection, use, adapta- vided by learning alliance partners. Results are docu- tion, and improvement of specific approaches, methods, mented and feedback given to improve these new and tools. This process is directly linked to specific learn- approaches and methods. This process is critical for ing cycles. Capacity building is not limited to training action-research and strategic research results to be scaled workshops but focused on practical, field-level use, fol- out and up. low-up, adaptation, and improvement, with continuing ■ Backstopping is carried out by an alliance member with support as partners implement the prototype. As a result, more experience with a specific tool or approach who partners strengthen their ability to use specific tools and pays periodic visits to other partners who are adapting approaches, adapt them to their needs, and discern when the tool to their needs. specific methods might or might not be useful. ■ Write shops are used to help distil lessons learned into 2. Targeted action research responds to specific knowledge documents. They are especially useful with partners who gaps identified with partner agencies. In this strategy, key have difficulties finding time to write up results from research questions are identified and fieldwork designed their work. The learning alliance adapted methods and and implemented in collaboration between research tools developed by IFAD (Berdegué et al. 2002) and and development agencies. Outcomes and findings are Douthwaite et al. (2007) for this purpose. shared with other partner agencies, selected decision 346 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK makers, and the public in general in workshops and in Guatemala, and El Salvador. With a four-year budget of electronic formats. US$499,000, the alliance leveraged an additional 3. Connectivity and knowledge management strive to US$990,000 in in-kind and additional funding, exceeding increase the relationships that form the basis of the budgeted counterpart funding by a factor of ten. The learning alliance. The “densification� of networks and alliance website (www.alianzasdeaprendizaje.org) is a key personal connections is critical to the success of the site for practitioners focused on rural enterprise develop- alliance. To achieve this, the alliance makes use of face- ment in Latin America. to-face meetings, training, and exchange visits, as well as Strengthened networks and knowledge management virtual tools such as a website and a list server. contribute to improved processes of collaboration between 4. Evidence-based decision-making in partner organiza- partners. Partner agencies report the use of methods and tions, public entities, cooperation agencies, and private tools from the alliance in 46 occasions in ongoing projects. firms. This strategy has been markedly less successful Community-level assessment in 2007 led to the identifica- than the previous three in engaging nonpartners. Despite tion of 30 cases of most significant change that highlight the this difficulty, the learning alliance partners feel that this positive impact of these tools on income generation, natural is a critical capacity that should be developed to leverage resource management, and the role of women. higher-level change based on field results. Work in this This initiative started a new phase in July 2009 when five direction is being piloted with the public sector in Hon- of the organizations that participated in the Learning duras and Nicaragua (Swisscontact, Catholic Relief Alliance during its first phase—Catholic Relief Services, the Services, and CATIE) and Colombia (CIAT); with coop- Netherlands Development Organization (SNV), the Swiss eration agencies in Guatemala and the Dominican Foundation for Technical Cooperation (Swisscontact), Republic (CIAT, Oxfam Great Britain, Sustainable Food Oxfam Great Britain, and CATIE signed a Cooperation Lab); and with the private sector in Guatemala (Oxfam Agreement for five years to support a Coordination Unit Great Britain and the Sustainable Food Lab). that is being facilitated by CATIE. This new phase started with the first jointly developed project cofunded by IDRC, “Leveraging Information and BENEFITS AND IMPACT Knowledge for Inclusive and Sustainable Agricultural Value By 2007, the Central American Learning Alliance had con- Chains Development� (K4ValueChains) with the participa- tributed to significant changes in partner knowledge, atti- tion of CATIE, CIAT, Catholic Relief Services, SNV, and tudes, and practices. Evidence showed improved connectiv- Swisscontact. This action-research project aims to leverage ity between organizations working on similar topics, better the development of sustainable and inclusive value chains access to information and knowledge on rural enterprise through the strategic access and use of information and development, and access to improved methods and tools. communication technologies to improve the participation Attitudes shifted from competition to collaboration as of the poor in overall chain governance and decision mak- organizations witnessed that working together enhances ing, contributing to value chain competitiveness, sustain- their capacity to serve rural communities’ needs and receive ability, poverty reduction, and food security. cooperation funds rather than undermining it. Rural enter- With the collaboration of the World Bank’s Agricultural prise development practices and knowledge management Risk Management Team (ARMT) and the Regional Unit for have improved, as shown by increased effectiveness in exist- Technical Assistance (RUTA), the learning alliance has also ing projects and more strategic new projects. These shifts in started a pilot learning cycle on price risk management with turn contribute to a more efficient innovation system in seven coffee cooperatives in Nicaragua. With a five-year favor of rural enterprise development, as evidenced by the (2009–13) core budget of US$25,000, the regional learning shared use and generation of information, joint capacity alliance has already leveraged an additional funding of building programs, and large-scale, collaborative projects. US$940,310 for strategic learning, and US$206,400 for The first phase of Central American learning alliance capacity development in Nicaragua, where the Deutsche worked with a total of 25 direct partner agencies and Gesellschaft für Internationale Zusammenarbeit (GIZ) and through their networks influenced 116 additional organi- Lutheran World Relief (LWR) are also participating. zations. In total the learning alliance contributed to change Participation in learning alliances has transformed the in organizations working with 33,000 rural families work of development partners and has broadened the work (approximately 175,000 people) in Honduras, Nicaragua, of research centers. The changes that the learning alliance MODULE 4: INNOVATIVE ACTIVITY PROFILE 4: LINKING RESEARCH AND DEVELOPMENT ACTORS THROUGH LEARNING ALLIANCES 347 Box 4.35 How Learning Alliances Change the Work of Development Agencies: The Example of Catholic Relief Services The learning alliance approach has been successfully sets required the integration of several sectors (e.g., adopted within Catholic Relief Services’ (CRS) Agricul- microfinance, agriculture, water, and enterprise devel- ture and Environment Program. It highlighted the opment). interdependence of development actors and how, A research-development partnership was estab- through partnership and collaboration with appropri- lished between CRS, CIAT, and the International Insti- ate research and development actors, real gains can be tute of Tropical Agriculture–FOODNET in which they made in achieving common goals. The reasons that led pooled agroenterprise skills and expertise with the to CRS’s adoption of the learning alliance approach methodologies and tools that they had been developing included: to help smallholder farmers link to markets. Together they mapped out an iterative process of learning, ■ A desire to demonstrate the benefits of market-led putting into practice what had been learned, and then approaches in relief and development. analyzing and reflecting on the results. From small ■ Frustration with the effectiveness of traditional beginnings in East Africa and Central America in training programs. 2002–04, CRS is now involved in agroenterprise devel- ■ A disappointing record of adoption of innovations opment learning alliances in 5 regions, with participa- in methodologies, technologies, and partnerships tion of around 30 countries. based on traditional training methods. In countries where the learning alliance has been ■ A lack of feedback in more typical learning processes. most active, CRS agriculture programming has under- ■ Insufficient impact assessment and follow-up. gone a radical change. Where formerly CRS’s attention was narrowly focused on a low-input/low-output, sub- Prior to adopting the alliance approach, almost all sistence farming-oriented approach to food security, the farmer training undertaken by CRS and its part- now CRS programs integrate the goal of enabling ners dealt with a single skill set (for example, how to small-scale producers to enter competitive markets by increase production of a particular commodity, or identifying market opportunities, strengthening rural basic business and marketing skills). CRS and the Inter- enterprise, and converting poorly coordinated supply national Center for Tropical Agriculture (CIAT) came chains into value chains. Many learning alliance partic- to understand that self-sustaining growth and develop- ipants sum up this change by saying that they are help- ment of farmers requires multiple sets of skills. The ing farmers transition from “struggling to sell what learning alliance partners also realized that these skill they have produced, to producing what sells.� Sources: Author and Best, Ferris, and Mundy 2009. experience brought to the work of CIAT and Catholic Relief systems where “the competition� also participates. Second, Services are detailed in box 4.35. clear and shared objectives, applicable results, personal commitment, and flexibility are key elements. An effective innovation system adds value to individual participants in LESSONS LEARNED AND ISSUES diverse ways by leveraging a collective motivation to work FOR WIDER APPLICATION smarter, learn, and share with others. Finally, the facilitation Several important lessons can be extracted from the learning of an innovation system is an art in itself. The learning alliance for innovation systems work. A key lesson is the need alliance taught the partners to value diversity of opinion to increase connectivity and information flows between indi- and tension as a crucible of creative ideas. viduals in a transparent fashion, facilitated by an honest In the hopes of contributing to more effective innovation broker. This process is critical to build trust among partici- systems in the future, there are also several critical issues pants. The experience highlights the importance of individ- and/or errors that can be taken from the learning alliances. uals as opposed to organizations as well as the need to avoid These include: (1) the difficulty of selling a process in a proj- organizational standard bearers who feel threatened by open ect- and outcome-driven context; (2) a lack of causality in 348 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK many of the results, which makes evaluation and reporting Once a minimum level of trust exists, the use of ICT-based difficult in more formal channels; (3) an initial excessive communication tools is useful. Sequencing is important emphasis on web-based tools when what seems to work best is here. Trust is the basic building block without which techni- face-to-face exchanges to build trust and innovation; (4) the cal fixes are of limited use. A second key type of intervention difficulty in securing on-going funding for a sometimes focuses on increased information access and flow. Partici- “fuzzy,� demand-driven process; (5) the need to proactively pants in the learning alliance value new ideas about how to involve more members of the overall food system (such as resolve constraints, short case studies illustrating the appli- public policy makers and the private sector) from the outset; cation of these ideas in diverse contexts, access to people and (6) the need for eventual buy-in from key decision mak- with experience using these tools, and feedback mechanisms ers in the organizational “home� of the innovation system. to share their experiences with others. Investments in sim- Specific interventions highlighted by partner agencies to ple process documentation (for example, contracting local support innovation systems projects or programs focus on reporters), knowledge-sharing fairs, and web-based plat- connectivity and information. Key interventions in connec- forms as well as support for write shops to make sense of tivity include face-to-face exchanges and trust building. outcomes are useful here. MODULE 4: INNOVATIVE ACTIVITY PROFILE 4: LINKING RESEARCH AND DEVELOPMENT ACTORS THROUGH LEARNING ALLIANCES 349 NOTES Thematic Note 3 Module 4 Overview 1. Asian and Pacific Association of Agricultural Research Institutes. 1. New Zealand reformed its agricultural research system in the early 1990s, creating separate research institutes 2. Association of Agricultural Research Institutes in the under a research funding foundation based on short-term Near East and North Africa. contestable grants. By 2005 government policy was 3. The Southern African Center for Cooperation in Agri- reformed: “The aim appears to be a move away from short- cultural Research and Training. term contestable funding and a move toward long-term 4. Association for Strengthening Agricultural Research in commitment of resources to individual providers to plan Eastern and Central Africa. their own priorities� (Johnson 2006:8). 5. CORAF/WECARD = Conseil Ouest et Centre Africain 2. By 2009, only Chad, Ethiopia, Madagascar, Malawi, pour la Recherche et le Développement Agricoles (West and Mali, Namibia, and Niger had met the target, but for many Central African Council for Agricultural Research and if not most of these countries (Malawi, for example), the Development); ASARECA = Association for Strengthening new funds were directed more to short-term interventions, Agricultural Research in Eastern and Central Africa. especially fertilizer subsidy programs, rather than to longer- 6. Programa Cooperativo para el Desarrollo Tecnológico term investments in agricultural research. Agroalimentario y Agroindustrial del Cono Sur (Coopera- 3. In Sub-Saharan Africa nonfarm rural income is about tive Program for Technological Development in Agrifood 34 percent of total income, compared to 51 percent in Asia and Agroindustry in the Southern Cone). and 47 percent in Latin America (Reardon, Berdegué, and 7. Cooperative Agricultural Research and Technology Barrett 2007). Transfer Program for the Andean Subregion (Programa 4. IBGE, Instituto Brasileiro de Geografia e Estatística. Cooperativo de Innovación Tecnológica Agropecuaria para la Región Andina) and the Cooperative Program on Research and Technology Transfer for the South Thematic Note 1 American Tropics (Programa Cooperativo de Investi- 1. For other definitions and functions, see the Interna- gación y Transferencia de Tecnología para los Trópicos tional Association of Science Parks, http://www.iasp.ws/ Suramericanos). publico/intro.jsp. 8. The ASARECA priorities assume potential benefits 2. Examples include cofinancing through trade organiza- across frontiers are counted equally. They may not be real- tions and farmer associations to pay for research and steer ized if trade is banned during periods of drought and mar- priorities toward the needs of farmer-members. Examples ket access is restricted by informal barriers. include research interfaces with such organizations as La 9. Regional economic communities need to assume Fundación Nacional del Arroz (FUNDARROZ, National responsibility for funding regional public goods, whereas Rice Foundation) in Venezuela. For such arrangements donor funding may be channeled through funding author- to work, the associations must develop the capacity to ity for specific activities/projects. articulate their needs. The provision of research and 10. Efforts by CGIAR research centers in Eastern and extension services will need to be pluralistic (that is, Southern Africa to develop a postdisaster and postconflict involving many potential providers with the skills to pro- program classified 17 of 25 countries as belonging to these vide those services). categories, but countries were very resistant to becoming involved in their neighbors’ internal problems or found bor- der areas too difficult to target. Thematic Note 2 11. Many well-focused, tightly organized initiatives by 1. The conventional rationale for investing in agricultural CGIAR research centers and the Bill and Melinda Gates research suggests that governments and development agents Foundation do not come through subregional organizations. should finance agricultural research when the private sector 12. Economies of scale occur when the cost per unit of “underinvests.� This condition is usually given when tech- research output fall with the number of units of output pro- nology is a public good—in other words, when others can- duced, usually through better use of major fixed investment not be excluded from its use and the private sector cannot or specialized skills. Economies of scope occur when the recover the costs of developing it (Anderson 1998; Pray and cost of a desired output falls with an increase in the number Umali-Deininger 1998; Day-Rubenstein and Fuglie 1999). of different research outputs being produced. These gains 2. Horton, Prain, and Thiele (2010) discuss PPPs in the occur when there is cross-commodity or cross-disciplinary broader context of partnerships. learning as an external economy. 350 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Thematic Note 5 learning alliance, topics covered included the identification of market opportunities with producer groups, participatory 1. The World Bank Institute’s Capacity Development supply chain analysis and upgrading strategies, and inclusive Results Framework (Otoo, Agapitova, and Behrens 2009) innovation in products and processes. For a current list of presents a useful step-by-step guide and associated methods themes, see http://www.alianzasdeaprendizaje.org. and tools for planning, implementing, and evaluating inter- ventions to develop capacity. 2. It should be noted, however, that PROINPA’s autonomy REFERENCES AND FURTHER READING from the national government has sometimes led to strained relations with public-sector bodies responsible for Module 4 Overview agricultural research and development. Beintema, N., and G.J. Stads. 2006. “Agricultural R&D in 3. For a more extensive discussion of NAIP with a some- Sub-Saharan Africa: An Era of Stagnation.� Washington, what different emphasis, see IAP 2. DC: International Food Policy Research Institute (IFPRI). ———. 2008. “Agricultural R&D Capacity and Investments Innovative Activity Profile 2 in the Asia–Pacific Region.� Research Brief No. 11. Wash- ington, DC: International Food Policy Research Institute 1. For a detailed description of NAIP, see World Bank (IFPRI). (2006) and http://www.naip.icar.org.in. Byrnes, K., and S. Corning. 1993. Programming for Sustain- 2. India’s national agricultural research system consists of ability: Lessons Learned in Organizing and Financing Pri- ICAR as well as a large network of state and central agricul- vate Sector Agricultural Research in Latin America and the tural universities. ICAR is an autonomous organization Caribbean. Washington, DC: Bureau for Latin America under the Ministry of Agriculture. At present, there are over and the Caribbean, United States Agency for Interna- 90 ICAR institutes and 50 state (45) and central (5) agricul- tional Development (USAID). tural universities. Daane, J. 2010. “Enhancing Performance of Agricultural Innovation Systems.� Rural Development News 1:76–82. Innovative Activity Profile 3 FARA (Forum for Agricultural Research in Africa). 2009. “Sub-Saharan Africa Challenge Programme: Research 1. Recent studies have shown that TFP [total factor pro- Plan and Programme for Impact Assessment.� Accra. ductivity] growth depends heavily on at least two factors that are very important to this Council: the quality of Haggblade, S. 2009. “Bringing the Poor into a Growth human resources and spending on research and develop- Agenda: What Role for Africa’s Rural Nonfarm Econ- ment (Bitran Colodro and González Urrutia 2010). omy?� East Lansing: Michigan State University. 2. The government plans to raise the contribution to Haggblade, S., P. Hazell, and T. Reardon (eds.). 2007. research, development, and innovation from 0.7 percent of Transforming the Rural Nonfarm Economy: Opportunities GDP to 2.5 percent of GDP by 2025. At the same time, it will and Threats in the Developing World. Baltimore: Johns reallocate a large share of the public investment in research Hopkins. to the private sector. Two-thirds of public expenditures on Hall, A., J. Dijkman, and R. Sulaiman V. 2010. “Research Into research currently go to the public sector and one-third goes Use: An Experiment In Innovation.� LINKLook, to the private sector; in the future, the allocations will be just www.innovationstudies.org, accessed March 2011. the reverse. Jayne, T., D. Mather, and E. Mghenyi. 2006. “Smallholder 3. InnovaChile-CORFO is the most important multisec- Farming under Increasingly Difficult Circumstances: toral public innovation agency (CORFO is the Corporación Policy and Public Investment Priorities for Africa.� MSU de Fomento de la Producción) along with CONICYT International Development Working Paper. East Lansing: (Comisión Nacional de Investigación Científica y Tecnológ- Michigan State University. ica) and FIA (the Foundation for Agricultural Innovation / Johnson, R. 2006. “Whither the Crown Research Institutes? Fundación para la Innovación Agraria). Funding Issues.� Paper presented at the New Zealand Agricultural and Resource Economics Society Confer- ence, Nelson, August 25–7. Innovative Activity Profile 4 Kline, S.J., and N. Rosenberg. 1986. “An Overview of Inno- 1. “Rural enterprise development� is a catch-all phrase that vation.� In The Positive Sum Strategy: Harnessing Technol- includes methods and tools to facilitate market linkages ogy for Economic Growth, edited by R. Landau and for small producer associations. In the first phase of the N. Rosenberg. Washington, DC: National Academy Press. MODULE 4: NOTES, REFERENCES AND FURTHER READING 351 Larsen, K., R. Kim, and F. Theus. 2009. Agribusiness and Inno- and Social Change. Wageningen: Wageningen Academic vation Systems in Africa. Washington, DC: World Bank. Publishers. Njuki, J., P. Pali, K. Nyikahadzoi, P. Olaride, and A. Bernet, T., A. Devaux, G. Thiele, G. López, C. Velasco, Adekunle. 2010. Monitoring and Evaluation Strategy for K. Manrique, and M. Ordinola. 2008. “The Participatory the Sub-Saharan Africa Challenge Program. Accra. Market Chain Approach: Stimulating pro-poor market- Pardey, P., J. James, J. Alston, S. Wood, B. Koo, E. Binenbaum, chain innovation.� ILAC Working Paper No. 21. Rome: T. Hurley, and P. Glewwe. 2007. Science, Technology and Institutional Learning and Change Initiative (ILAC). Skills. Minneapolis: International Science and Technology Bernet, T., G. Thiele, and T. Zschocke, 2006. Participatory Practice and Policy (InSTePP), University of Minnesota. Market Chain Approach (PMCA) - User Guide. Lima, Ragasa, C., S. Babu, A.S. Abdullahi, and B.Y. Abubakar. 2010. Peru: CIP-Papa Andina. http://papandina.cip.cgiar.org/ “Strengthening Innovation Capacity of Nigerian Agri- fileadmin/PMCA/User-Guide.pdf. cultural Research Organizations.� IFPRI Discussion Byerlee, D., and K. Fischer. 2002. “Accessing Modern Sci- Paper No. 01050. Washington, DC: International Food ence: Policy and Institutional Options for Agricultural Policy Research Institute (IFPRI). Biotechnology in Developing Countries.� World Develop- Rajalahti, R., W. Janssen, and E. Pehu, E. 2007. Agricultural ment 30(6): 931–48. Innovation Systems: From Diagnostics toward Operational Cavatassi, R., M. Gonzalez, P. Winters, J. Andrade-Piedra, Practices. Washington, DC: World Bank. P. Espinosa, and G. Thiele. 2009. “Linking Smallholders to Reardon, T., J. Berdegué, and C.B. Barrett. 2007. “Household the New Agricultural Economy: An Evaluation of the Income Diversification into Rural Nonfarm Activities.� Plataformas Program in Ecuador.� ESA Working Paper No. In Transforming the Rural Non-farm Economy, edited by 09-06. Rome: Food and Agriculture Organization (FAO). S. Haggblade, P.B.R. Hazell, and T. Reardon. Baltimore: CIAT (International Center for Tropical Agriculture). 2006. Johns Hopkins. The CIALS at a Glance. http://webapp.ciat.cgiar.org/ Spielman, D., and D. Kelemework. 2009. Measuring Agricul- ipra/ing/glance.htm, accessed February 2011. tural Innovation System Properties and Performance: Illus- Day-Rubenstein, K., and K.O. Fuglie. 2000. The CRADA trations from Ethiopia and Vietnam. IFPRI Discussion model for public-private research and technology trans- Paper 851. Washington, DC: IFPRI. fer in agriculture. In Public-Private Collaboration in Sumberg, J., 2005. “Systems of Innovation Theory and the Agricultural Research: New Institutional Arrangements Changing Architecture of Agricultural Research in and Economic Implications, edited by K.O. Fuglie and Africa.� Food Policy 30:21–41. D.E. Schimmelpfenning. Ames: Iowa State University. World Bank. 2006. Agriculture Investment Sourcebook. Devaux, A., J. Andrade-Piedra, D. Horton, M. Ordinola, Washington, DC. G. Thiele, A. Thomann, and C. Velasco. 2010. “Brokering Innovation for Sustainable Development: The Papa ———. 2007. World Development Report 2008: Agriculture Andina Case.� ILAC Working Paper No. 12. Rome: Insti- for Development. Washington, DC. tutional Learning and Change Initiative (ILAC). ———. 2009. “Agricultural Research and Competitive Devaux, A., D. Horton, C. Velasco, G. Thiele, G. Lopez, Grant Schemes: An IEG Performance Assessment of Four T. Bernet, I. Reinoso, and M. Ordinola. 2009. “Collective Projects in Latin America.� Washington, DC. Action for Market Chain Innovation in the Andes.� Food ———. 2010. “Designing and Implementing Agricultural Policy 34:31–8. Innovation Funds: Lessons from Competitive Research Diaw, A., M. Samba, and J.L. Arcand. 2009. Analyse de l’im- and Matching Grant Projects.� Report No. 54857-GLB. pact du Programme des Services Agricoles at Organiza- Washington, DC. tions de Producteurs-Phase 2 (PSAOP II) sur la sécurité ———. 2011. Information and Communication Technologies alimentaire des ménages ruraux. Unpublished study pre- for Agriculture e-Sourcebook. http://bit.ly/ICTinAG. pared by team from University of Gaston Shepherd, Washington, DC. Senegal, and CERDI-Université d’Auvergne, France. Dubin, H.J., and J.P. Brennan. 2010. “Combating Stem and Leaf Rust of Wheat: Historical Perspective, Impacts, and Thematic Note 1 Lessons Learned.� In Proven Successes in Agricultural AATF (African Agricultural Technology Foundation). 2011. Development: A Technical Compendium to Millions Fed, “Water Efficient Maize for Africa.� http://www.aatf- edited by D.J. Spielman and R. Pandya-Lorch. Washington, africa.org/wema/, accessed February 2011. DC: International Food Policy Research Institute (IFPRI). Almekinders, C.J.M., L. Beukema, and C. Tromp. 2009. Ekboir, J.M., G. Dutrénit, V. Martínez, A.T. Vargas, and A.O. Research in Action: Theories and Practices for Innovation Vera-Cruz. 2009. “Successful Organizational Learning in 352 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK the Management of Agricultural Research and Innova- to Take Advantage of Market Opportunities and Improve tion: The Mexican Produce Foundations.� Research Livelihoods.� In Innovation Africa: Enriching Farmers’ Report No. 162. Washington, DC: International Food Livelihoods, edited by P.C. Sanginga, A. Waters-Bayer, S. Policy Research Institute (IFPRI). Kaaria, J. Njuki, and C. Wettasinha. London: Earthscan. Ekboir, J., and G. Parellada. 2002. “Public-Private Interac- Pp. 167–85. tions and Technology Policy in Innovation Processes Klerkx, L., and C. Leeuwis. 2009a. “The Emergence and for Zero Tillage in Argentina.� In Agricultural Research Embedding of Innovation Brokers at Different Innova- Policy in an Era of Privatization, edited by D. Byerlee and tion System Levels: Insights from the Dutch Agricul- R. Echeverría. Oxon, UK: CABI. tural Sector.� Technological Forecasting and Social Ervin, D., T. Lomax, S. Buccola , K. Kim, E. Minor, H. Yang, Change 76: 849–860. L. Glenna, E. Jaeger, D. Biscotti, W. Armbruster, ———. 2009b. “Operationalizing Demand-Driven Agricul- K. Clancy, W. Lacy, R. Welsh, and Y. Xia. 2003. University- tural Research: Institutional Influences in a Public and industry Relationship: Framing the Issues for Academic Private System of Research Planning in the Netherlands.� Research in Agricultural Biotechnology. Philadelphia: Pew Journal of Agricultural Education and Extension Initiative on Food and Biotechnology. 15(2):161–75. Faminow, M.D., S.E. Carter, and M. Lundy. 2009. “Social Klerkx, L., N. Aarts, C. Leeuwis. 2010. “Adaptive Entrepreneurship and Learning: The Case of the Central Management in Agricultural Innovation Systems: The America Learning Alliance.� Journal of Developmental Interactions between Innovation Networks and their Entrepreneurship 14(4):433–50. Environment.� Agricultural Systems 103(6): 390–400. Gill, G., and D. Carney. 1999. “Competitive Agricultural Kolady, D., and W. Lesser. 2008. “Can Owners Afford Technology Funds in Developing Countries.� Natural Humanitarian Donations in Agbiotech: The case of Resources Perspective 41:1–10. Genetically Engineered Eggplant in India.� Electronic Gowda, C.L.L., B.V.S. Reddy, K.N. Rai, and K.B. Saxena. Journal of Biotechnology 11(2):1–8. 2004. “ICRISAT Collaboration with the Seed Industry in Koyenikan, M.J. 2008. “Issues for Agricultural Extension Asia.� Paper presented at the Asian Seed Congress 2004, Policy in Nigeria.� Journal of Agricultural Extension September 13–17, Seoul. In APSA Technical Report No. 12(2):52–62. 38. Bangkok: Asia and Pacific Seed Association (APSA). Liu, M. 1997. Fondements et pratiques de la Recherche- Hocdé H., B. Triomphe, G. Faure, and M. Dulcire. 2009. Action. Paris: L’Harmattan. “From Participation to Partnership—A Different Way Louwaars, N.P., R. Tripp, D. Eaton, V. Henson-Apollonio, for Researchers to Accompany Innovation Processes: R. Hu, M. Mendoza, F. Muhhuku, S. Pal, and J. Wekun- Challenges and Difficulties.� In Innovation Africa: Enrich- dah. 2005. Impacts of Strengthened Intellectual Property ing Farmers’ Livelihoods, edited by P.C. Sanginga, Rights Regimes on the Plant Breeding Industry in Develop- A. Waters-Bayer, S. Kaaria, J. Njuki, and C. Wettasinha. ing Countries: A Synthesis of Five Case Studies. Wagenin- London: Earthscan. Pp. 135–50. gen: Centre for Genetic Resources. Horton, D., B. Akello, L. Aliguma, T. Bernet, A. Devaux, B. Lybbert, T.J. 2002. “Technology Transfer for Humanitarian Lemaga, D. Magala, S. Mayanja, I. Sekitto, G. Thiele, and Use: Economic Issues and Market Segmentation C. Velasco. 2010. “Developing Capacity for Agricultural Approaches.� IP Strategy Today 5:17–25. Market Chain Innovation: Experience with the ‘PMCA’ Masters, W.A. 2003. “Research Prizes: A Mechanism to in Uganda.� Journal of International Development 2:367. Reward Agricultural Innovation in Low-income Janssen, W., and T. Braunschweig. 2003. “Trends in the Regions.� AgBioForum 6:71–4. Organization and Financing of Agricultural Research in Monge, M., F. Hartwich, and D. Halgin. 2008. “How Change Developed Countries: Implications for Developing Agents and Social Capital Influence the Adoption of Countries.� ISNAR Research Report 22. The Hague: Innovations among Small Farmers: Evidence from Social International Service for National Agricultural Research Networks in Rural Bolivia.� IFPRI Discussion Paper No. (SNAR). 761. Washington, DC: International Food Policy Jones, R. 2006. “The Concept of Seed Enterprise Enhancement Research Institute (IFPRI). and Development Services (Seeds).� Electronic Newsletter Morris, M.L., and M.R. Bellon. 2004. “Participatory Plant of the African Seed Trade Association, http://www.seed Breeding Research: Opportunities and Challenges for the quest.com/seed/associations/international/afsta/news International Crop Improvement System.� Euphytica letters/pdf/06dec_e.pdf, accessed March 2011. 136(1):21–35. Kaaria, S., J. Njuki, A. Abenakyo, R. Delve, and P. Sanginga. Patiño, B.O., and R. Best. 2002. “Strategic Alliances of Cas- 2009. “Enabling Rural Innovation: Empowering Farmers sava Farmers with Private and Public Sectors: A New MODULE 4: NOTES, REFERENCES AND FURTHER READING 353 Approach for Development of the Cassava Crop in Latin World Bank. 2006. “Institutional Innovation in Agricultural America.� Paper presented at the 9th Japan International Research and Extension Systems in Latin America and Research Center for Agricultural Sciences (JIRCAS) the Caribbean.� Washington, DC. International symposium, Value Addition to Agricultural ———. 2007. World Development Report 2008: Agriculture Products, October 16–17, Ibaraki. for Development. Washington, DC. Pray, C.E., and L. Nagarajan. 2009. “Pearl Millet and ———. 2010. “Designing and Implementing Agricultural Sorghum Improvement in India.� IFPRI Discussion Innovation Funds: Lessons from Competitive Research Paper No. 919. Washington, DC: International Food Pol- and Matching Grant Projects.� Washington, DC. icy Research Institute (IFPRI). ———. 2011 (forthcoming). Information and Communica- Quiros, C.A., B. Douthwaite, J.I. Roa, and J. Ashby. 2004. tion Technologies for Agriculture e-Sourcebook. Washing- “Colombia, Latin America, and the Spread of Local Agri- ton, DC. cultural Research Committees (CIALS): Extension World Bank and IFPRI (International Food Policy Research through Farmer Research.� In Demand-Driven Approaches Institute). 2010. “Gender and Governance in Rural Ser- to Agricultural Extension. Vol. 3 of Extension Reform for vices: Insights from India, Ghana, and Ethiopia.� Wash- Agricultural Development, edited by W. Rivera and G. Alex. ington, DC. Washington, DC: World Bank. Pp. 10–19. Smith, J. 2005. “Context-bound Knowledge Production, Thematic Note 2 Capacity Building, and New Product Networks. Journal of International Development 17(5): 647–59. Anderson, J.R. 1998. “Selected Policy Issues in International Smith, J., and J. Chataway. 2008. “Learning from the Periph- Agricultural Research: On Striving for International ery: The CGIAR and Civil Society Partnerships.� Inno- Public Goods in an Era of Donor Fatigue.� World Devel- gen Working Paper No. 72. Edinburgh: Innogen. opment 26(6):1149–62. Sperling, L., J.A. Ashby, M.E. Smith, E. Weltzien, and S. Byerlee, D., and K. Fischer. 2002. “Accessing Modern Sci- McGuire. 2001. “A Framework for Analyzing Participa- ence: Policy and Institutional Options for Agricultural tory Plant Breeding Approaches and Results.� Euphytica Biotechnology in Developing Countries.� World Develop- 122(3):439–50. ment 30(6): 931–48. Spielman, D.J. 2009. “Public-Private Partnerships and Pro- Day-Rubenstein, K. and K.O. Fuglie. 1999. “Resource Allo- poor Livestock Research: The Search for an East Coast cation in Joint Public-Private Agricultural Research.� Fever Vaccine.� In Enhancing the Effectiveness of Sustain- Journal of Agribusiness 17(2):123–34. ability Partnerships: Summary of a Workshop, edited by de Bruijn, J.A., and H.G. van der Voort. n.d. “Public-private D. Vollmer. Washington, DC: National Academies Press. Partnership in Scientific Research: A Framework for Spielman, D.J., F. Hartwich, and K. von Grebmer. 2010. Evaluation.� Consultative Committee of Sector Councils “Public-Private Partnerships and Developing-country for Research and Development (COS), the Netherlands. Agriculture: Evidence from the International Agricul- Echeverría, R.G. 1998a. “Agricultural Research Policy Issues tural Research System.� Public Administration and Devel- in Latin America: An Overview.� World Development opment 30(4):261–76. 26(6):1103–11. Spielman, D., and D. Kelemework. 2009. “Measuring Agri- ———. 1998b. “Will Competitive Funding Improve the cultural Innovation System Properties and Performance: Performance of Agricultural Research?� ISNAR Discus- Illustrations from Ethiopia and Vietnam.� IFPRI Discus- sion Paper No. 98-16. The Hague: International Service sion Paper No. 00851. Washington, DC: International for National Agricultural Research (ISNAR). Food Policy Research Institute (IFPRI). Hagedoorn, J., A.N. Link, and N.S. Vonortas. 2000. Thiele, G., A. Devaux, I. Reinoso, H. Pico, F. Montesdeoca, “Research Partnerships.� Research Policy 29:567–86. M. Pumisacho, J. Andrade, C. Velasco, P. Flores, R. Esprella, Hall, A. 2006. “Public-Private Sector Partnerships in an A. Thomann, K. Manrique, and D. Horton. Forthcoming. Agricultural System of Innovation: Concepts and Chal- “Multi-stakeholder Platforms for Linking Small Farmers lenges.� UNU-MERIT Working Paper No. 2006-002. to Value Chains: Evidence from the Andes.� International Maastricht: United Nations University (UNU) and Journal of Agricultural Sustainability. Maastricht Economic Research Institute on Innovation Trigo, E., E. Cap, V. Malach, and F. Villarreal. 2009. “The and Technology (MERIT). Case of Zero-tillage Technology in Argentina.� IFPRI Hall, A., G. Bockett, S. Taylor, M.V.K. Sivamohan, and Discussion Paper No. 915. Washington, DC: Interna- N. Clark. 2001. “Why Research Partnerships Really Mat- tional Food Policy Research Institute (IFPRI). ter: Innovation Theory, Institutional Arrangements, and 354 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Implications for Developing New Technology for the Partnerships in Science and Technology.� Science Tech- Poor.� World Development 29(5):783–97. nology Industry Review 23. Paris. Hall. A., R. Sulaiman V., N. Clark, and B. Yoganand. 2003. Pray, C.E., and D. Umali-Deininger. 1998. “The Private Sec- “From Measuring Impact to Learning Institutional Les- tor in Agricultural Research Systems: Will It Fill the sons: An Innovation Systems Perspective on Improving Gap?� World Development 26(6):1127–48. the Management of International Agricultural Research.� Rausser, G., L. Simon, and H. Ameden. 2000. “Public– Agricultural Systems 78(2):213–41. Private Alliances in Biotechnology: Can They Narrow the Hartwich, F., M.V. Gottret, S.C. Babu, and J. Tola. 2007. Knowledge Gaps between Rich and Poor?� Food Policy “Building Public–private Partnerships for Agricultural 25(4):499–513. Innovation in Latin America: Lessons from Capacity Serafin, R., C. Bustamante, and C. Schramm. 2008. “What Is Strengthening.� IFPRI Discussion Paper No. 699. Wash- Current Practice in Evaluating Cross-sector Partnerships ington, DC: International Food Policy Research Institute for Sustainable Development?� TPI Working Paper No. (IFPRI). 1/2008. London: The Partnering Initiative–International Hartwich, F., and C. Negro. 2010. “The Role of Collaborative Business Leaders Forum. Partnerships in Industry Innovation: Lessons Learned Spielman, D., and F. Hartwich. 2009. “Public-private Part- from New Zealand’s Dairy Industry.� Agribusiness nerships and Developing-country Agriculture.� In: I. 26(3):1–25. Scoones and J. Thompson, Farmers First Revisited. Bour- Hartwich, F., O. Quirós, and J. Garza. 2009. “Partnerships ton on Dunsmore, Rugby, U.K. Practical Action for Agroindustrial Research and Development in Costa Vieira, L-F., and F. Hartwich. 2002. “Approaching Public- Rica and El Salvador.� In Fuelling Economic Growth: The Private Partnerships for Agroindustrial Research: A Role of Public-Private Sector Research in Development, Methodological Framework.� Coronado, Costa Rica: edited by M. Graham and J. Woo. London Practical International Service for National Agricultural Research Action Publishing. http://www.idrc.ca/en/ev-135830- (ISNAR). 201-1-DO_TOPIC.html. Hartwich, F., and J. Tola. 2007. “Public–private Partnerships for Agricultural Innovation: Concepts and Experiences Thematic Note 3 from 124 Cases in Latin America.� International Journal Beintema, N., and H. Elliott. 2009. “Setting Meaningful on Agricultural Resources Governance and Ecology 6 (2). Investment Targets in Agricultural Research and Devel- 240–55. opment: Challenges, Opportunities, and Fiscal Realities.� Hartwich, F., J. Tola, A. Engler, J.J. Espinoza, G. Ghezan, C. Paper prepared for the Expert Meeting on How to Feed Gonzalez, J.A. Silva, and J. Vásquez. 2008. “Guidelines for the World in 2050, Food and Agricultural Organizations, Building Public-private Partnerships for Agricultural June 24–26, Rome. FAO, ftp://ftp.fao.org/docrep/fao/ and Agroindustrial Innovation.� Food Policy in Practice. 012/ak978e/ak978e00.pdf, accessed March 2011. Washington, DC: International Food Policy Research CGIAR (Consultative Group on International Agricultural Institute (IFPRI). Research). 2010. “Embracing Change.� CGIAR, http:// Horton, D., G. Prain, and G. Thiele. 2010. “Perspectives on w w w. c g i a r. o r g / ch a n g e m a n a g e m e n t / e m b r a c i n g Partnership: Highlights of a Literature Review.� ILAC change2/embracing_change_june8_2010.html, accessed Brief 25. Rome: Institutional Learning and Change Ini- March 2011. Report on outcome of Global Conference on tiative (ILAC). Agricultural Research for Development. Update on devel- Lewis, J. 2000. “Leveraging Partnerships between the Public opment of Consortium Mega-programs and strategic and Private Sector: Experience of USAID’s Agricultural results framework. Progress report on creation of the Donor Biotechnology Program.� In Agricultural Biotechnology Fund. and the Poor: Proceedings of an International Conference, Coleman, J.S., with D. Court. 1993. University Development edited by G.J. Persley and M.M. Lantin. Washington, DC: in the Third World: The Rockefeller Foundation Experi- Consultative Group on International Agricultural ence. New York: Pergamon. Research (CGIAR). Cox, T. Paul. 2010. “Cassava Development in the Network- Muraguri, L. 2010. “Unplugged! An Analysis of Agricultural ing Age.� New Agriculturalist, http://www.new-ag.info/ Biotechnology PPPs in Kenya.� Journal of International en/focus/focusItem.php?a=1586, accessed August 2011. Development 33(3):289–307. de Janvry, A. 2010. “Agriculture for Development: New Par- OECD (Organisation for Economic Co-operation and adigm and Options for Success.� In The New Landscape of Development). 1998. “Special Issue on Public/Private Global Agriculture. Proceedings of the 27th Conference of MODULE 4: NOTES, REFERENCES AND FURTHER READING 355 the International Association of Agricultural Econo- http://www.ruforum.org/category/documents-taxonomy/ mists. New York: Wiley. ruforum-policy-documents/, accessed August 2011. Elliott, H. 2010. Regional Agricultural Innovation Systems: ———. 2010. Realigning the Regional Universities Forum Emergence or Intelligent Design? Draft manuscript and for Capacity Building in Agriculture (RUFORUM) to a PowerPoint presentation for the RUFORUM Strategic Changing Mandate and Emerging Challenges. Report of Reflection Meeting, Bellagio, June. Discussion of the con- the Strategic Reflection Meeting of RUFORUM, Bellagio, ditions under which a regional agricultural innovation sys- April 2010. Unpublished. tem may emerge and the historical lack of coordination of ———. 2011. “Business Plan 2011-2016: Consolidating efforts in time, emphasis, and duration. Lessons and Success for Balanced Growth.� http://www Horton, D., G. Prain, and G. Thiele. 2009. “Perspectives on .ruforum.org/category/documents-taxonomy/ruforum- Partnership: A Literature Review.� CIP Working Paper policy-documents/, accessed August 2011. No. 2009-3. Lima: International Potato Center (CIP). A World Bank. 2007. Project Appraisal Document for West good review of partnership activity, both conceptually and Africa Agricultural Productivity Program (WAAPP) in the way the CGIAR research centers have tried to imple- Support Project. Internal document, Washington, DC. ment it. Draws on global literature, center policies, and Detail of adaptable program loan for West Africa. CGIAR Science Council discussion. ———. 2009. Project Appraisal Document for East Africa IFPRI and ASARECA (International Food Policy Research Agricultural Productivity Program. http://web.world- Institute and Association for Strengthening Agricultural bank.org/external/projects/main?menuPK=51521804&p Research in Eastern and Central Africa). 2006. “Strategic agePK=51351007&piPK=64675967&theSitePK=40941& Priorities for Agricultural Development in Eastern and menuPK=64154159&searchMenuPK=51521783&the Central Africa.� IFPRI Research Report No. 150. Wash- SitePK=40941&entityID=000350881_20091124093008 ington, DC. Identification of priority crops by development &searchMenuPK=51521783&theSitePK=40941, domains and spillovers among countries for regional accessed March 2011. Detail of adaptable program loan to investment in eastern and central Africa. Ethiopia, Kenya, and Tanzania for creation of Regional Johnson, S. 2010. Where Good Ideas Come From: The Natu- Centers of Excellence and outreach. ral History of Innovation. New York: Riverhead Books (Penguin). Thematic Note 4 North, D.C. 1990. Institutions, Institutional Change, and Economic Performance. Cambridge: Cambridge Univer- Almekinders, C.J.M., L. Beukema, and C. Tromp. 2009. sity Press. Classic work by Nobel Prize-winning new insti- Research in Action: Theories and Practices for Innovation tutional economist. and Social Change. Wageningen: Wageningen Academic Publishers. Pardey, P., J. James, J. Alston, S. Wood, B. Koo, E. Binen- baum, T. Hurley, and P. Glewwe. 2007. Science, Technol- Béguin, P. 2003. “Design as a Mutual Learning Process ogy and Skills. Minneapolis: International Science and between Users and Designers.� Interacting with Comput- Technology Practice and Policy (InSTePP), University of ers 15(5):709–30. Minnesota. Discussion of innovation, incentives for collec- Béguin, P., and M. Cerf (eds.). 2009. Dynamique des savoirs, tive action, and “technological distance� to argue that geo- dynamique des changements. Toulouse: Octares. graphical proximity may not necessarily translate into Bernet, T., G. Thiele, and T. Zschocke, 2006: Participatory spillover potential and that regional cooperative agree- Market Chain Approach (PMCA). User’s Guide. Interna- ments may not be the most efficient way to capitalize on tional Potato Center (CIP), Lima, Peru. spillovers. Bernet T., A. Devaux, G. Thiele, G. Lopez, C. Velasco, K. Pingali, P. 2010. “Global Agricultural R&D and the Chang- Manrique, and M. Ordinola, 2008: “The Participatory ing Aid Architecture.� In The New Landscape of Global Market Chain Approach: Stimulating Pro-poor Market- Agriculture. Proceedings of the 27th Conference of the driven Innovation.� ILAC Brief No. 21. Rome: Institu- International Association of Agricultural Economists. tional Learning and Change Initiative (ILAC). New York: Wiley. Bousquet F., G. Trébuil, and B. Hardy (eds.). 2005. Com- RUFORUM (Regional Universities Forum for Capacity panion Modeling and Multi agent Systems for Integrated Building in Africa). 2005. “Ten Year Strategic Plan 2006- Natural Resource Management in Asia. Los Baños, 2015: Fostering Innovation and Adaptive Capacity of Philippines: International Rice Research Institute (IRRI) Universities to Develop and Sustain High Quality in and Centre de Coopération Internationale en Recherche Training, Impact-oriented Research, and Collaboration.� Agronomique pour le Développement (CIRAD). 356 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Cavatassi, R., M. Gonzalez, P. Winters, J. Andrade-Piedra, P. B. Triomphe, L. Temple, and H. Hocdé. Versailles: Quae. Espinosa, and G. Thiele. 2009. “Linking Smallholders to Pp. 197–203. the New Agricultural Economy: An Evaluation of the Triomphe, B., H. Hocdé, and E. Chia. 2006. “Quand les Plataformas Program in Ecuador.� ESA Working Paper agronomes pensent innovation et les institutions trans- No. 09-06. Rome: Food and Agriculture Organization fert: des malentendus sur la forme ou des visions (FAO). différentes sur le développement? Le cas du Bajio guana- Devaux, A., J. Andrade-Piedra, D. Horton, M. Ordinola, juatense (Mexique).� In Agronomes et innovations, edited G. Thiele, A. Thomann, and C. Velasco. 2010. “Brokering by J. Caneill. 3ème édition des entretiens du Pradel. Actes Innovation for Sustainable Development: The Papa And- du colloque des 8–10 septembre 2004. Paris: L’Harmat- ina Case.� ILAC Working Paper No. 12. Rome: Institu- tan. Pp. 247–66. tional Learning and Change Initiative (ILAC). Veldhuizen, L. van, A. Waters-Bayer, and H. de Zeeuw. 1997. Devaux, A., D. Horton, C. Velasco, G. Thiele, G. López, T. Developing Technology with Farmers: A Trainer’s Guide for Bernet, I. Reinoso, and M. Ordinola. 2009. “Collective Participatory Learning. London: Zed Books. Action for Market Chain Innovation in the Andes.� Food Policy 34:31–38. Thematic Note 5 Etienne, M. 2005. “Co-construction d’un modèle d’ac- compagnement selon la méthode ARDI : guide Blagescu, M., and J. Young. 2005. Partnerships and account- méthodologique.� Avignon: Institut National de la ability: Current thinking and approaches among agen- Recherche Agronomique (INRA). ComMod, www cies supporting civil society organizations. Working .commod.org, accessed March 2011. Paper 255. London: Overseas Development Institute. Faure, G., P. Gasselin, P., B. Triomphe, L. Temple, and Cash, D., W. Clark, F. Alcock, N. Dickson, N. Eckley, D. Gus- H. Hocdé. 2010. “Innover avec les acteurs du monde ton, J. Jager, and R. Mitchell. 2003. “Knowledge Systems rural : la recherche-action en partenariat.� [Innovate for Sustainable Development.� Proceedings of the with rural stakeholders: Action-research in partnership.] National Academy of Sciences 100(14):8086–91. Versailles: Quae. CGIAR (Consultative Group on International Agricultural Hocdé H., B. Triomphe, G. Faure, and M. Dulcire. 2009. Research). 2011. “A Strategy and Results Framework for “From Participation to Partnership—A Different Way the CGIAR.� Washington, DC. for Researchers to Accompany Innovation Processes: Días Avíla, A.F., S. Salles-Filho, and J.E. Alonso. 2010. Challenges and Difficulties.� In Innovation Africa: Enrich- Impacto de la I&D Agraria en el Perú: La experiencia de ing Farmers’ Livelihoods, edited by P.C. Sanginga, INCAGRO. Lima: INCAGRO. A. Waters-Bayer, S. Kaaria, J. Njuki, and C. Wettasinha. DRT (Department of Research and Training). 2008. London: Earthscan. Pp. 135–50. “Enhancing Service Delivery for Agricultural Sector Horton, D., B. Akello, L. Aliguma, T. Bernet, A. Devaux, Development: CORDEMA Training Modules.� Moro- B. Lemaga, D. Magala, S. Mayanja, I. Sekitto, G. Thiele, goro: DRT, Sokoine University of Agriculture, MVI- and C. Velasco. 2010. “Developing Capacity for Agri- WATA, and Royal Tropical Institute. cultural Market Chain Innovation: Experience with the Fresco, H.W. 2010. “Promoviendo el Mercado de Servicios ‘PMCA’ in Uganda.� Journal of International Develop- de Extensión Agraria en el Perú: La experiencia de INCA- ment 2:367. GRO.� Lima: INCAGRO. Klerkx, L., N. Aarts, and C. Leeuwis. 2010. “Adaptive Gandarillas, A., J. Blajos, G. Aguirre, A. Devaux, and G. Thiele. Management in Agricultural Innovation Systems: The 2007. “Changing Paradigms for Organising R&D: Agri- Interactions between Innovation Networks and Their cultural Research and the Creation of the PROINPA Environment.� Agricultural Systems 103(6):390–400). Foundation in Bolivia.� International Journal of Agricul- Liu, M. 1997. Fondements et pratiques de la Recherche- tural Resources Governance and Ecology 6(2):256–76. Action. Paris: L’Harmattan. Gijsbers, G., W. Janssen, H. Odame, and G. Meijerink. 2001. Sanginga, P.C., A. Waters-Bayer, S. Kaaria, J. Njuki, and Planning Agricultural Research: A Sourcebook. Wallingford, C. Wettasinha (eds.). 2008. Innovation Africa: Enriching UK: CABI Publishing in association with the International Farmers’ Livelihoods London: Earthscan. Service for National Agricultural Research (ISNAR). Triomphe, B., and H. Hocdé. 2010. “Financer une Hawkins, R., W. Heemskerk, R. Booth, J. Daane, A. Maat- recherche-action en partenariat : stratégies et pratiques.� man, and A.A. Adekunle 2009. “Integrated Agricultural In Innover avec les acteurs du monde rural : la recherche- Research for Development (IAR4D): A Concept for action en partenariat, edited by G. Faure, P. Gasselin, the Forum for Agricultural Research in Africa (FARA) MODULE 4: NOTES, REFERENCES AND FURTHER READING 357 Sub-Saharan Africa Challenge Programme (SSA-CP).� Raitzer, D., and G. Norton (eds.). 2009. Prioritizing Agricul- Accra: FARA. ICRA, http://www.icra-edu.org/objects/ tural Research for Development. Wallingford, UK: CABI. anglolearn/IAR4D_concept_paper.pdf, accessed April Schrader T., E. van Poelje, G. Sempeho, A. Cissé, and J. Kam- 2011. pen, 2003. “Business Unusual: Making Public Sector Agri- Heemskerk W., N. Lema, D. Guindo, C. Schouten, Z. Sem- cultural Research Organizations More Responsive to galawe, H. Verkuijl, B. de Steenhuijsen Piters, and P. Pen- Clients’ Needs.� Amsterdam: Royal Tropical Institute ninkhoff. 2003. “A Guide to Demand-driven Agricultural (KIT) and Directorate General for International Cooper- Research: The Client-oriented Research Management ation (DGIS). Approach.� Amsterdam: KIT Publishers. Royal Tropical Vargas Winstanly, S. 2010. “Investigando para innovar, inno- Institute (KIT), http://www.kit.nl/smartsite.shtml?id= vando para investigar: La experiencia de INCAGRO.� SINGLEPUBLICATION&ItemID=1500, accessed April Lima: INCAGRO. 2011. Walker, T., M. Maredia, T. Kelley, R. La Rovere, D. Temple- Kelly, T., Ryan, J., and Gregersen, H. 2008. Enhancing ex post ton, G. Thiele, and B. Douthwaite. 2008. “Strategic Guid- impact assessment of agricultural research: the CGIAR ance for Ex Post Impact Assessment of Agricultural experience. Research Policy 17 (3):201-212. Research.� Rome: Standing Panel for Impact Assessment, López Heredia, D.A. 2010. “Mejorando la oferta de exten- Consultative Group on International Agricultural sionistas agrarios en el Perú: La experiencia de INCA- Research Science Council. GRO.� Lima: INCAGRO. World Bank, FAO (Food and Agriculture Organization), and ILRI (International Livestock Research Institute). 2008. IFAD (International Fund for Agricultural Development). “ILRI’s Partnership Strategy and Management System.� 2009. Gender in Agriculture Sourcebook. Washington, DC. Nairobi. World Bank Independent Evaluation Group. 2008. “Public INCAGRO. 2010. “Proyectos de I&D+ Innovación Agraria: Sector Reform: What Works and Why?� Washington, DC. Productos y Resultados en Cifras.� Lima. ———. 2009. “Agricultural Research and Competitive Grant Klerkx, L., A. Hall, and C. Leeuwis. 2009. “Strengthening Schemes: An IEG Performance Assessment of Four Projects Agricultural Innovation Capacity: Are Innovation Bro- in Latin America� Report No. 49149. Washington, DC. kers the Answer?� International Journal of Agricultural Resources, Governance, and Ecology 8(5/6):409–38. Innovative Activity Profile 1 Lema N.M., C. Schouten, and T. Schrader (eds.). 2003. de Haan N, Romney D, Bezkorowajnyj P, Olufajo O. 2006. “Managing Research for Agricultural Development.� Pro- Feeding livestock through partnerships. Knowledge Man- ceedings of the national COR workshop, Moshi, 27–28 agement for Development Journal 2(3):123–35. May 2003. Dar es Salaam: Department for Research and ILRI (International Livestock Research Institute). 2002. Development (DRD) and Royal Tropical Institute (KIT). “Livestock—A Pathway out of Poverty: ILRI Strategy to Markie, J., and J. Compton. 2011. Establishment of a CGIAR 2010.� Nairobi. Independent Evaluation Arrangement (IEA): Inception ———. 2008. “ILRI’s Partnership Strategy and Manage- Report for Consideration of the CGIAR Fund Council, ment System.� http://hdl.handle.net/10568/566, accessed 5–6 April 2011. Unpublished report. April 2011. Mruthyunjaya, Dr. 2010. “Context, Design and Approach of Kristjanson, P., R.S. Reid, N. Dickson, W.C. Clark, D. Rom- NAIP: Experience of Implementation.� Paper presented ney, and R. Puskur. 2009. “Linking International Agricul- at the Workshop on Enhancing Capacity for Innovation: tural Research Knowledge with Action for Sustainable Learning from Practice, 5–6 May, Hyderabad. Development.� Proceedings of the National Academies of NAIP (National Agricultural Innovation Project). 2010. Science 106(13):5047–52. “Half Yearly Progress Report (April–September 2010).� Lilja, N., P. Kristjanson, and J. Watts. 2010. “Rethinking Delhi: Project Implementation Unit, National Agricul- Impact: Understanding the Complexity of Poverty and tural Innovation Project, Krishi Anusandhan Bhawan II, Change: Overview.� Development in Practice 20(8): 917–32. Indian Council of Agricultural Research. Otoo S., N. Agapitova, and J. Behrens. 2009. “Capacity Innovative Activity Profile 2 Development Results Framework: A Strategic and Results-oriented Approach to Learning for Capacity Avila, A.F.D., and R.E. Evenson. 2005. Total factor produc- Development.� Washington, DC: World Bank Institute. tivity growth in agriculture: The role of technological http://wbi.worldbank.org/wbi/about/capacity-and- capital. Unpublished draft, Economic Growth Center, results, accessed April 2011. Yale University, New Haven. 358 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Evenson, R.E., C.E. Pray, and M.W. Rosegrant. 1999. Agri- users/3/181868/files/18813/Reporte_PANEL.pdf, accessed cultural Research and Productivity Growth in India. August 2011. Research Report No. 109. Washington, DC: International Intelis Center, University of Chile. 2010a. “Análisis Institu- Food Policy Research Institute (IFPRI). cional de Instrumentos Consorcios Tecnológicos Empre- Pal, S., and D. Jha. 2007. Public-private partnerships in sariales (CTE) y Evaluación de Medio Término de Con- Agricultural R&D: Challenges and Prospects. In Institu- sorcios Conicyt e Innova Chile.� Final report. Santiago de tional Alternatives and Governance of Agriculture, edited Chile. by V. Ballabh. New Delhi: Academic Foundation. ———. 2010b. FIA Analysis Consortium. Final report. World Bank. 1998. “India: National Agricultural Technology Santiago de Chile. Project, Project Appraisal Document.� Report No. 17082- Lavados, G., J. 2009. “Instrumento Consorcios en Chile: IN, Rural Development Sector Unit, South Asia Regional Transitando hacia la Segunda Etapa.� Presentation for the Office, Washington, DC. Primer Encuentro de Consorcios Agropecuarios, April, ———. 2006. “India: National Agricultural Innovation Puerto Varas, Chile. FIA, http://www.fia.cl/difus/notici/ Project, Project Appraisal Document.� Report No. 34908- InstrumConsorcioChile170409VF.pdf, accessed March IN, Agriculture and Rural Development Sector Unit, 2011. South Asia Region, Washington, DC. ———. 2007. World Development Report 2008: Agriculture Innovative Activity Profile 4 for Development, Washington, DC. Berdegué et al. 2007. Sistematización de experiencias locales de desarrollo rural: Guía metodológica. FIDAmerica and Innovative Activity Profile 3 PREVAL. Mayo, 50p. http://preval.org/documentos/guia �lvarez, R., J.M. Benavente, C. Contreras, and J.L. Contreras. _metodologica.pdf. 2010. “Consorcios Tecnológicos en América Latina: Una Best, R., S. Ferris, and P. Mundy (eds.). 2009. “Working primera exploración de los casos de Argentina, Chile, Together, Learning Together: Learning Alliances in Agro- Colombia y Uruguay.� Technical Note No. IDB TN-127. enterprise Development.� Baltimore: Catholic Relief Ser- Washington, DC: BID (Banco Interamericano de Desar- vices. USAID, http://pdf.usaid.gov/pdf_docs/PNADQ286 rollo). http://idbdocs.iadb.org/wsdocs/getdocument.aspx? .pdf, accessed August 2011. docnum=35242324, accessed March 2011. Davies, R., and Dart, J. 2005. “The ‘Most Significant Change’ Benavente H., J.M. 2009. Untitled presentation for the (MSC) Technique: A guide to its use.� CARE Interna- Primer Encuentro de Consorcios Agropecuarios, April, tional, United Kingdom; Oxfam Community Aid Puerto Varas, Chile. Slide share, http://www.slideshare Abroad, Australia; Learning to Learn, Government of .net/cnicchile/consorcios-tecnolgicos-agropecuarios- South Australia; Oxfam New Zealand; Christian Aid, 1400911, accessed March 2011. United Kingdom; Exchange, United Kingdom; Ibis, Den- Bitran Colodro, E. and C.M. González Urrutia. 2010. “Pro- mark; Mellemfolkeligt Samvirke (MS), Denmark; ductividad Total de Factores, Crecimiento e Innovación: Lutheran World Relief, United States of America. April, Documento de Referencia. Santiago de Chile: Consejo 104p. http://www.mande.co.uk/docs/MSCGuide.pdf Nacional de Innovación para la Competitividad Douthwaite, B., Alvarez, B. S., Cook, S., Davies, R., George, (CNIC). http://biblioteca.cnic.cl/content/view/1021165/ P., Howell, J., Mackay, R. and Rubiano, J. “Participatory Productividad-Total-de-Factores-Crecimiento-e-Inno- impact pathways analysis: a practical application of pro- vacion.html#content-top, accessed August 2011. gram theory in research-for-development�. Canadian CNIC (Consejo Nacional de Innovación para la Competi- Journal of Program Evaluation, 22(2), Fall 2007. tividad). 2007a. Hacía una estrategia nacional de inno- CRS and RII-CIAT (Catholic Relief Services and Rural vación para la competitividad. Vol. 1. Santiago de Chile: Innovation Institute–International Center for Tropical CNIC. http://bligoo.com/media/users/3/181868/files/ Agriculture). 2007. “Preparing Farmer Groups to Engage 18144/Presentacion(5).pdf, accessed March 2011. Successfully with Markets: A Field Guide for 5 Key Skill ———. 2007b. Hacía una estrategia nacional de innovación Sets.� Baltimore: Catholic Relief Services. para la competitividad. Vol. 2. Santiago de Chile: CNIC. Ferris, S., P. Mundy, and R. Best (eds.). 2009. “Getting to http://www.cnic.cl/content/view/472445/Presentacion Market: From Agriculture to Agroenterprise.� Baltimore: .html, accessed March 2011. Catholic Relief Services. ———. 2010. Evaluation Report of National Innovation Lundy, M. 2008. Diversified livelihoods through effective Strategy for Competitiveness, Chile. International Evalua- agro-enterprise interventions: creating a cumulative tion Panel, March 2010. http://biblioteca.cnic.cl/media/ learning framework. Unpublished final project report MODULE 4: NOTES, REFERENCES AND FURTHER READING 359 presented to the International Development Research CORAF/WECARD http://www.coraf.org/ Centre (IDRC), Ottawa. PROCISUR www.procisur.org Lundy, M., and M.V. Gottret. 2007. “Learning Alliances: RUFORUM http://www.ruforum.org/ Building Multi-Stakeholder Innovation Systems in Agro- SADC-FANR http://www.sadc.int/fanr/ enterprise Development.� In Learning Alliances: Scaling WACCI www.wacci.edu up Innovations in Water, Sanitation, and Hygiene, edited by S. Smits, P. Moriarty, and C. Sijbesma. Technical Paper No. 47. Delft: IRC International Water and Sanitation Innovative Activity Profile 1 Centre. Pp. 37–57. CGIAR Research Program on Livestock and Fish http:// Lundy, M., M.V. Gottret, and J. Ashby. 2004. “Building livestockfish.wordpress.com Multi-stakeholder Innovation Systems through Learning East Africa Dairy Development Project www.eadairy.org Alliances.� ILAC Brief No. 8. Rome. Ecosystem approach to managing emerging zoonotic dis- eases http://www.ilri.org/EcoZd USEFUL WEBLINKS Fodder Innovation Project www.fodderinnovation.org Index Based Livestock Insurance (IBLI) Project Thematic Note 3 http://www.ilri.org/ibli/ AGRA (Alliance for a Green Revolution in Africa) Global Alliance in Livestock Veterinary Medicines http://www.agra-alliance.org/ www.GALVmed.org ASARECA http://www.asareca.org/ Safe Food, Fair Food http://www.ilri.org/SafeFoodFairFood Bill and Melinda Gates Foundation http://www.gatesfoun dation.org/Pages/home.aspx Innovative Activity Profile 3 BecA-Hub (Biosciences Eastern and Central Africa) http://hub.africabiosciences.org/ Vinnova-Tecnovid www.vinnova.cl CLAYUCA http://www.clayuca.org/ FIA www.fia.cl CONDESAN http://www.condesan.org CORFO-Comité Innova Chile www.corfo.cl 360 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK 5 MODULE 1 Incentives and Resources for Innovation Coordination and Collective Action for Partnerships and Business Development Agricultural Innovation OV E RV I E W Josef Ernstberger, Consultant EXECUTIVE SUMMARY Support for business incubation helps to scale up small overnments in developing countries increasingly G and often newly formed enterprises that bring innovative intervene actively in supporting private sector technologies and services to market. Developing countries development through diverse means. Public invest- require broader, less intensive, and more diverse incuba- ments in business development can direct private invest- tor services to develop entrepreneurial, innovative cul- ments towards areas of significant public interest and areas tures and business environments. Agricultural clusters where the private sector alone would generally underinvest. foster innovation through proximity; they encompass They can facilitate or stimulate private investment through a interdependent firms in a value chain, service providers, conducive policy, legal, and institutional environment. Pub- and associated institutions. Cluster-based approaches lic investments for business development can also comple- have increased agricultural productivity, innovation, and ment private investments (for example, by funding services business formation. or basic research). Such public-private partnerships need to The key policy issues for agricultural business develop- become a strategic element of the agricultural development ment and PPPs involve their potential for altering develop- agenda. Formal technology transfer mechanisms (IPRs, ment priorities, the potential welfare effects of agricultural licensing) offered through specialized technology transfer innovation and growth driven by private interests, welfare offices are critical to engage effectively in PPPs and dissemi- concerns related to gender and social equity, and prospects nate technology through market channels. for building a “shared responsibility system� capable of The appropriate funding mechanisms to support innova- balancing the sometimes divergent interests of the public tion by collaborating public institutions, private entrepre- sector, private sector, and civil society. Finally, in an envi- neurs, and other actors depend on the public good to be ronment characterized by increasing private involvement in produced and the role of the public sector. Useful alterna- agricultural innovation, very clear criteria will be needed to tives include specialized innovation funds and matching determine when public intervention is justified and at what grants to provide incentives for collaboration and risk tak- level. Every publicly supported partnership or business ing. The use of venture capital funding has been limited in development program must have a clear time frame and exit developing countries, but small and medium agricultural strategy. If the temporary nature of public involvement is enterprises require risk capital to capture opportunities pre- not clear at the outset, private investors’ decisions and busi- sented by agricultural innovation. ness plans will be biased. The sustainability of social and 361 environmental services, on the other hand, is often assured growth in several ways. They can direct private investments only through long-term public support. towards areas of significant public interest and areas where the private sector alone would generally underinvest. They can facilitate or stimulate private investment through a con- RATIONALE FOR PUBLIC INVESTMENT ducive policy, legal, and institutional environment. Public The power of the private sector to innovate and foster eco- investments for business development can also complement nomic growth is a critical driver of long-term, sustainable private investments (for example, by funding services or development in agriculture. Development programs apply basic research). two major instruments to engage with the private sector for The agricultural sector is characterized by specific mar- this purpose: agricultural business development, which aims ket failures that are less prominent in other sectors, includ- to stimulate general economic growth, and public-private ing the problem of scale, the time lags, and the multitude of partnerships (PPPs), which aim to address development partners. To overcome these and other initial obstacles to issues in conjunction with the private sector. private investment and enable new products or technologies Agricultural development aims to achieve three objec- to be introduced, the public sector can provide incentives tives: national food security, income for rural people, and the such as tax incentives, grants, and guarantees. Many govern- sustainability of natural resources. These interdependent, ments support investments in new agricultural products or sometimes conflicting objectives must be finely balanced; production systems until they can be commercialized or for example, food security must not be attained regardless support the commitment of actors throughout an industry of the cost to the environment. The private sector’s primary (in production, processing, and marketing) until a secure goals are to generate income and economic growth, and its and mature business foundation develops. Most of the involvement in agricultural development carries the risk recently subsidized biofuel production programs were justi- that development will be inequitable. The challenge is to fied on these grounds. find the common interests that will enable the private sector A typical problem in developing agribusinesses is that to use its many advantages to encourage balanced agricul- the number and diversity of market players in a given value tural development and innovation. chain is often high. A chain’s production base often consists Public sector support for and cooperation with the pri- of large numbers of small-scale, unorganized, geographi- vate sector are generally considered justified, valuable, or cally scattered producers. In circumstances such as these, even necessary to: (1) compensate for market failures that which the market alone cannot improve, it makes little sense prevent or hinder necessary private investments, (2) stimu- to introduce new production processes and products. late growth and help businesses become established; (3) gen- Public funds are needed to facilitate the vertical and hor- erate and/or direct innovation in areas considered important izontal linkages that will make the value chain efficient—for for society; or (4) reduce some of the risk inherent in com- example, to organize farmers into cooperatives and associa- mercializing new technologies. tions and create platforms for institutional cooperation. For example, China’s government supports farmer-company or farmer-company-researcher arrangements, in which farmers Support for agricultural business development organize to partner with investors in processing/marketing For agricultural business development, the most important industries, contract research institutions to develop certain objectives are to generate qualitative and innovation-led products, or move into processing and marketing their economic growth and income opportunities. “Qualitative products themselves (see IAP 2). growth� is associated with a range of additional public goods that especially reduce extreme poverty, provide food Support for public-private partnerships security, narrow structural inequalities, protect the environ- ment, or sustain the growth process itself (Thomas et al. Public support for PPPs in agriculture moves beyond busi- 2000). “Innovation-led� growth is based on innovative tech- ness development and facilitation and makes direct use of nologies, processes, products, markets, or organizational individual private sector actors to generate public goods. Many arrangements rather than on large additional uses of natu- governments and development agencies recognize that it ral resources. can be more effective and sustainable for the public sector to Public investments for business development are impor- work with the private sector to generate public goods in tant because they can accelerate and improve the quality of ways that enable each sector to build on its comparative 362 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK advantages. Such direct cooperation can benefit both part- partners; at the same time, they foster the adaptation and ners and is particularly useful in the following areas: dissemination of new research results or existing knowl- edge and technologies. This kind of collaboration helps ■ Social services. Governments and development agencies to overcome problems of underinvestment and acceler- use cooperation with private partners to invest directly ates technological progress. in the delivery of social services. Public support ranges from providing favorable conditions for private invest- Notably in agricultural PPPs farmers play an important ments in targeted poor or remote areas to contractual role as partners and providers of public services. This agreements between public institutions and private involves the mobilization and organization of farmers in investors to deliver specific social goods and services. formal or informal associations, cooperatives, or groups as a Such partnerships can offer a number of benefits, not first step; then these organizations can partner with public only to small, local companies but to large multinational services organizations or participate in wider partnerships firms, which have come under increasing scrutiny to with public and private organizations. Most commonly this ensure that they operate in socially responsible ways. For partnering involves training and extension services but can example, under a PPP supported by GIZ and the multi- also include adaptive research and technology testing or national food company Tchibo GmbH, factories in social and environmental services. Bangladesh, China, and Thailand are trained to imple- Table 5.1 summarizes some of the instruments used in ment production and labor standards with worker par- business development, including PPPs. ticipation and sustainably improve employees’ working conditions (GIZ 2009). In this way, PPPs pave the way PAST EXPERIENCE for the development and adoption of international social standards. Agricultural development agencies traditionally have been ■ Environmental services. The protection and sustainable ambivalent about business development. Attitudes range from use of natural resources in agricultural production are seeing business as an obstacle to agricultural development— important public goods. To preclude private entities from at worst, the “evil middleman� that must be controlled—to externalizing environmental costs or the costs of using regarding business as a necessary link between farmers natural resources, governments traditionally apply two and markets and finally to regarding business development sets of instruments: (1) regulations and controls and as a driving force for agricultural innovation, growth, and (2) incentives and disincentives in the form of financial development. instruments, such as subsidies for water-saving tech- Business development is a relative latecomer to the agri- nologies or planting trees on eroded hillsides. The sec- cultural development agenda, but starting in the mid-1990s ond set of instruments has recently become much more the business sector came to be widely recognized as an diverse and has created a new line of business in agri- important driver of agricultural development. Agricultural culture. Payments for environmental services involve development programs and projects started to address the not only payments for avoiding environmental costs (for development of the private sector, particularly small and example, payments for not cropping in watershed areas medium enterprises (SMEs) and value chains, and to seek of reservoirs) but payments for actively generating envi- ways of improving the business environment and facilitat- ronmental benefits. Farmers in the European Alps are ing business operations. Table 5.2 presents a more schematic subsidized to continue livestock production to maintain view of the relationship between business development and the characteristic alpine landscape, for example. Many partnership objectives and instruments. countries use carbon sequestration funds to support farmers’ efforts to plant trees, protect grasslands, use Business development and biogas, or pursue similar activities that reduce green- partnership instruments house gas emissions. ■ Innovation and technology adoption. Agriculture in Recognition of the business sector’s role in agricultural particular suffers from significant underinvestment in innovation and growth was accompanied by business devel- R&D (see module 4, TN 2) because of the high degree of opment services (BDS) similar to those employed in non- externalities (such as benefits not being captured by the agricultural sectors for many years. While most of these investor). PPPs lower the risk for individual private instruments are applied for general business development MODULE 5: OVERVIEW 363 Table 5.1 Business Development Instruments Used in Nonagricultural Sectors (and Later Adapted to Agriculture) Type of instrument Target firms Key features Tax incentives – All firms (generally more attractive for – Motivate companies to invest in R&D and innovation (for R&D) larger firms) – R&D tax credit to reduce a firm’s tax liabilities, based on the amount spent to develop new products or improve existing products – Large enterprises paying more tax will benefit more than small firms Business advisory – Small and medium enterprises (SMEs) – Broad business support, including training and advisory services services – Acts as primary service provider – Basically supply driven Business development – SMEs – Broad business support, including training and advisory services services provided to individual businesses (more on a demand-driven basis than advisory services) – Often coordinates other service providers – Focus on building capacity within the business development service industry Business incubation – Startups and SMEs with high growth – Integrated mix of intensive strategic and operational support potential (dynamic enterprises) provided to entrepreneurs and businesses selected for their growth potential – Focus on helping firms manage risk and build competitiveness through early, high-risk growth stages – Support typically ends when clients “graduate� by reaching particular milestones – May be linked with educational or research institutions Science and – Emerging and established technology – Focus on helping relatively mature businesses accelerate growth technology parksa businesses, but may target specific industries – May use incubation as way to source future clients – May be linked to national, cluster-driven development strategies Industry clustersb – Related and supporting businesses and other – May be linked with educational or research institutions organizations linked by a shared value chain – May use incubation to source future clients (vertical) or shared final market (horizontal) – May be linked to national competitiveness strategies – Concentrated in technology industries Public-private – Mature, strong, experienced companies – Addresses delivery of public goods more directly partnerships (PPPs) (sharing of responsibilities) – Addresses diverse set of public goods (social, environmental – Private partners can be diverse, from small goods and technologies) to multinational – Can have sustainability problems (e.g., if social or environmental goods are targeted) Source: infoDev Monitoring, Evaluation, and Impact Assessment Study, n.d. a. For more information about technology parks, see infoDev, http://www.infodev.org/itparks. b. A practical application of Michael Porter’s indus- try cluster theory, explored in The Competitive Advantage of Nations (1990). or private sector partnerships, they can also be tailored to than small firms will benefit proportionately (World Bank particularly stimulate and direct private sector development 2006). Even though the use of tax incentives is widespread for R&D and innovation. (over two-thirds of OECD members have tax incentives, as well as many developing countries), evidence of their cost Tax incentives for R&D and innovation. R&D tax incen- effectiveness is not clear. Box 5.1 describes the experience in tives have been used to encourage more spending on R&D. Chile, which has yet to undergo a closer impact evaluation. Such tax incentives are usually provided in the form of tax In general, tax incentives tend to benefit larger companies deductions based on the amounts spent in financing agri- with large-enough revenue streams. Small and start-up cultural research and innovation. They can be a suitable companies may have difficulties benefiting from tax deduc- instrument to overcome market failure resulting in under- tions because their revenue base is limited. investment in R&D as they motivate companies to invest in Other forms of tax incentives used in some countries innovation. Although such incentives may not always be include personal income tax deductions for individuals limited to large corporations but include small and medium investing in startup businesses (effective only if the investor enterprises, clearly large enterprises that pay more tax is paying any substantial income tax) and tax relief on 364 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 5.2 Objectives, Instruments, and Financial Support Mechanisms for Business Development and Partnerships Business development and partnership instruments BDS Incubators Science parks Clusters TTOs PPPs Specific public goods (e.g., social, environ- Overall Qualitative, innovation-led economic growth and income opportunities mental, innovations with high public good content) Business startups Business growth Generation of Objective innovations of public interest Intermedia te Business growth Commercialization of new technologies Transfer and application of technologies Efficiency gains (e.g., through synergies, reduced transaction costs, among other means) Most incubators Complementary public funding subsidized, fee (e.g., infrastructure, public Financial support Often initial public collection and cost sector institutions) mechanisms funding, but recovery difficult Tax breaks and other financial Initial public Matching grants service fee incentives (e.g., subsidies, funding collection public sector credit replaced by Competitive grants important for guarantees) are common service fees sustainability Risk capital Commercial financing Matching grants Source: Author. Note: BDS = business development services; TTO = technology transfer office; PPP = public-private partnership. Box 5.1 Research and Development Tax Incentive Law in Chile Chile was one of the first Latin American countries to I Thirty-five percent of the payments private compa- introduce competitive funding programs for agricul- nies make to the research center against an R&D tural research. These programs have helped to increase contract are considered a credit against corporate the volume and quality of Chilean agricultural and taxes. nonagricultural research significantly. Another step was I The remaining 65 percent of the payment is auto- to introduce tax incentives. matically considered expense for tax purposes. The main objectives of the incentives are to: The main requirements to qualify are: I Increase private investment in R&D. I Research centers need to be registered. The criteria I Strengthen the link between research centers and to be included in the registry include years of oper- companies. ation, research capabilities, and good accounting practices to ensure appropriate enforcement. The R&D tax incentive works as follows: I Contracts need to be approved by CORFO, the Chilean development and innovation agency. I Companies hire registered R&D centers through a I The company and research center cannot be related. previously approved R&D contract. Source: Adapted from Noe 2007. MODULE 5: OVERVIEW 365 donations to research foundations or endowments. Infant ■ Crowding out private competitors. Delivering services at firms can benefit from incentives such as tax grace periods highly subsidized rates distorts markets and hampers the while they grow, which may be an important strategy in emergence of commercially viable service providers. countries that tax firms even before they start production. Reducing taxes on importing equipment and supplies In contrast, the new BDS market paradigm highlights needed in R&D can help innovative projects. Innovation the need to deliver services at cost-covering rates and for can be further encouraged by establishing special economic providers to operate in a demand-driven, business-like zones offering tax and regulatory relief, especially to stimu- manner. Service providers should either be private compa- late cooperation with foreign partners. nies or public entities organized like firms with respect to their incentive systems, personnel, culture, and attitudes. Business development services. Business development Services should be regarded as commercial products, and services (BDS) comprise a wide range of nonfinancial ser- the companies that receive services should be regarded as vices provided by public and private suppliers (BDS customers rather than beneficiaries. Providers should providers) to entrepreneurs who use them to operate more always charge fees high enough to secure the provider’s efficiently and expand their businesses. BDS thus may financial sustainability (box 5.2). include training, consultancy, and advisory services, mar- keting assistance, information, technology development and Business incubators. Incubation first emerged in devel- transfer, and business linkage promotion. The high cost and oped countries in the 1980s, operating alongside many low impact of many BDS approaches has caused govern- other generic business development services and evolving to ment and international donors to shift from providing provide narrow and deep services for a small, select group of highly subsidized BDS toward a demand-led, market-based companies. Developing countries picked up the concept, approach based on undistorted private service markets. The and today more incubators are based in developing than most frequently mentioned weaknesses of the former developed countries. Observers and the “global business approach include (Altenburg and Stamm 2004): incubation community� estimate that of about 5,000 busi- ness incubators worldwide, at least 1,000 are based in Asia ■ Lack of financial sustainability. Because most services (approximately half in China), 1,000 in North America, 900 are highly subsidized, service providers come to depend in Europe, and close to 400 in Latin America (with a sizeable on continuous public support. Most countries are cut- and robust industry in Brazil). ting back on public expenditures, including business As the name implies, incubators nurture young firms, support measures. helping them to survive and grow during the startup period ■ Insufficient outreach. Even in times marked by high gov- when they are most vulnerable. Incubators provide hands- ernment revenues, deficit spending, or substantial inflows on management assistance, access to financing, and business of foreign aid, business services usually only reach a rela- and technical support services; they frequently also provide tively small percentage of the target group. shared office space and access to equipment. Although ■ Lack of business orientation. Public service providers they work with a broad spectrum of business development can share some of the less admirable tendencies of pub- models, the vast majority of business incubators fall into licly administered programs. Budget allocations are not two general categories: technology (focusing on commer- linked to program performance, employees do not act in cializing new technology and transferring technology) or a business-like fashion, and beneficiaries are not treated mixed use (serving a wide range of clients). Hybrid models, as clients. Incentives—both for support institutions and combining outreach, virtual, and broader services with the people working within them—often are not designed more traditional incubation for new and existing busi- for them to actively seek links with the business sector nesses, have emerged in many developing countries, partic- and strive for client satisfaction. ularly those with smaller economies, limited generic business ■ Poor quality. Service providers and clients work under support services, weak cultures of entrepreneurship, diffi- different incentive systems, operational routines, and cult business environments, and limited resources to sup- even mindsets, with the result that service supply often is port innovation. In these circumstances, the demand for not tailored to clients’ needs. In addition, products deliv- intensive, narrowly focused, and deep incubation services ered at low cost or for free may induce a debilitating is minuscule. Instead, broader, less intensive, and more dependency and cynicism over quality and value. diverse services are needed to extend impact and develop 366 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 5.2 Main Aspects of Developing and Implementing Demand-Driven, Sustainable Business Development Services Market assessment and reasoned justification of any and independently monitored and evaluated. The two public intervention. Well-intended government inter- subsystems of service provision (funding and delivery) ventions may be harmful for the long-term develop- need to be evaluated according to different perfor- ment of markets for business services and business mance criteria. Within the organization that manages development services, because they may distort the funds, the cost-benefit ratio of the previously prices, create bad habits, and crowd out private com- established objective(s) should guide the evaluation. petitors. For this reason, intervention, rather than At the level of service delivery, the evaluation should nonintervention, in markets for business develop- focus on the proven impact and efficiency of links ment services has to be justified on the basis of a clear between the provider and small and medium enter- analysis of the situation. prises (SMEs). Separating funding from service delivery. Major Establishing a direct link between performance problems arise with subsidized service provision and resource allocation. Monitoring and evaluation when the service provider and the organization are not objectives in their own right but should be managing and administering the funds are identical. used for continuously improving the system. The Without relatively complex external supervision most effective way to ensure the system’s responsive- arrangements, it is nearly impossible to commit this ness is to link the allocation of funds directly to the “system� to an efficient and cost-sensitive execution of performance of those who supply services. The suc- its tasks. Inefficiencies often result from an explicit or cess of effective service providers is largely based on implicit obligation to spend funds in a given period, incentive systems that provide financial rewards for disregarding careful targeting and the best possible good performers. cost-benefit ratio. Separation of funding and delivery Compulsory cofinancing. To ensure that SMEs feel functions will reduce the risk of crowding out private some ownership of the services they receive, every suppliers, especially when private companies can apply transaction should be partly financed by the customer. for public funding to provide services. This kind of The proportion of cofinancing will depend on the competition increases the transparency of service mar- character of the service and the final objective of ser- kets and provides additional information on whether vice provision. Additional factors to consider include there still is a case for public intervention. the business environment and changes in the institu- Improved accountability. Many service providers tional setting. Services with predictable and appropri- offer a more or less ample set of services, often without able outcomes should be largely financed by the having established an accountability system to measure customer, while in some strategic areas it will be neces- the cost and the income generated by each service sary to step up the share of funds transferred. When offered. It is highly important to improve account- SMEs operate under conditions of economic growth or ability and enable service providers to monitor market at least stability, a higher proportion of private financ- success and cost-related aspects of each and every ser- ing should be expected. On the other hand, when vice offered. Service providers with a public function or macroeconomic conditions are volatile and competi- mission may then decide to cross-subsidize different tion is becoming life-threatening for many companies, services to maintain important services that cannot be governments or other funding organizations may opt provided on a cost-covering basis. for a higher share of subsidies, stressing short-term Monitoring and evaluating performance. Public impact and outreach and temporarily sidelining service provision must be continuously, transparently, aspects of financial sustainability. Source: Altenburg and Stamm 2004. entrepreneurial and innovative cultures and business envi- Technology parks and clusters. Technology parks (also ronments. For more information on how an incubation known as science parks or research parks) are usually linked approach may contribute to business development and with educational or research institutions and provide infra- innovation in agriculture, see TN 3. structure and support services for businesses, particularly MODULE 5: OVERVIEW 367 real estate and office space. Technology parks can foster busi- private sector’s role in agricultural development has led to ness-driven development and innovation because they focus innovative partnerships in which the public and private sec- on creating links and collaboration among diverse busi- tors are true business partners, producing public goods. The nesses, many of them large, established businesses for partners bring their complementary skills to a program or technology transfer and economic development. Business project, with varying levels of involvement and responsi- incubation shares some of the features of technology parks bility (TN 1). Partnerships range from global strategic and industry clusters, in that each involves a “place,� alliances to specific forms of cooperation in individual processes, and companies with potential for growth. The development projects. In true PPPs, the financial and man- main difference is that business incubation focuses on agerial strength and experience of the private partners is startup companies that eventually graduate from the incuba- important (box 5.3), but many development programs have tor service, whereas companies in clusters or parks usually difficulty working with financially strong and experienced intend to maintain their association. Technology parks often companies and are concerned that the partnership will have their own business incubators dedicated to “growing� weaken their focus on poverty. The objective of PPPs is not tenants for the park, and some clusters have a business incu- to support weak businesses through public contracts, how- bation component as well.1 ever, but to engage with the private sector as a reliable part- ner that can deliver a public good efficiently. A comparison Technology transfer offices. Technology transfer with the procurement of public works is useful, because it translates agricultural research innovations into applica- follows requirements for bidders based on size, past experi- tions. The vast majority of agricultural innovations in ence, financial strength, and reliability. developing countries arise from publicly sponsored research centers that typically are inexperienced and unprepared to Funding mechanisms engage in formal mechanisms of technology transfer. Tech- nology transfer offices (TTOs), which are usually affiliated A range of innovative funding mechanisms can be used to with research organizations or universities, have the man- support innovators and their links to public institutions, date to identify and protect research results2 with a view to private entrepreneurs, and other actors.3 Rather than fund- facilitating their use and commercialization. Some TTOs ing innovation through block grants, many countries use also host incubation services for businesses to commercial- specialized innovation funds to provide incentives for col- ize technology. TN 5 offers a detailed discussion of TTOs. laboration and risk taking. For example, competitive research grants target research-related activities to mobilize Industry clusters. Since 2000, industry clusters have public and private research capacity. Matching grants are become an increasingly popular model for organizing widely and increasingly used to stimulate engagement strategies and policies to promote regional development. between the private sector and farmers in activities related Clusters are agglomerations of strongly interdependent to technology generation, technology dissemination, and firms (including specialized suppliers) linked to each other innovation processes. in a value-adding production chain, service providers, and Matching grants show greater promise than competitive associated institutions in a particular field. Some clusters research grants in fostering business-driven innovation encompass strategic alliances with universities, research development, as they tend to be better at promoting plural- institutes, knowledge-intensive business services, bridg- ism in applied technology development, transfer, and ing institutions (brokers, consultants), and customers. adoption by enhancing ownership among actors. They are Cluster-based approaches for business development and also well suited to overall development of agribusiness innovation have increased agricultural productivity, because they can be adapted to support productive part- innovation, and business formation (Gibbs and Bernat nerships, provide technical assistance and other services, 1998; Andersson et al. 2004; World Bank 2009b). TN 4 promote productive activities by farmer groups, support summarizes key lessons from cluster-based business devel- value-added activities, and build small-scale infrastructure opment and innovation. (World Bank 2010). TN 2 reviews experiences with grant schemes and the various opportunities they present; IAP 4 Partnerships. At first, private partners in agricultural provides examples. development initiatives focused on developing and Venture capital funding is explicitly designed for invest- strengthening businesses, but growing appreciation of the ment in a high-risk business or security of some type. It has 368 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 5.3 Critical Choices for Public-Private Partnerships Before entering into any partnership project or pro- introducing new technologies, or competitive and gram, the rationale for the investment must be fully matching grants to “buy� public goods from the pri- understood, along with the problem(s) to be fixed or vate sector. For environmental and social services, outcomes to be achieved. These considerations have temporary or permanent subsidies are more com- critical implications for the choice of: mon instruments. For creating an enabling business environment, legislative instruments are comple- ■ Institutions and partners. If delivery of a public mented by direct investments in services, infrastruc- good is the main objective of the partnership, it ture, and facilities. must involve organizations that are capable of gen- ■ Exit strategy. Every support program must have a erating the good (or that can undergo institutional clear time frame and exit strategy. The public sector development to acquire this capability). This issue is intervenes to support private investment until explored in the discussion of institutions and part- industries mature or technologies are proven and ners later in this module. adopted. If the temporary nature of public involve- ■ Financing instrument. The appropriate financing ment is not clear at the outset, private investors’ instrument depends on the type of public good to be decisions and business plans will be biased. The sus- produced and the role of the public sector. When tainability of social and environmental services, on governments act as brokers in these sorts of partner- the other hand, is often assured only though long- ships, common instruments include government term public support. guarantees, risk or venture capital for developing and Source: Author. been used widely outside agriculture to support business- Food supply versus rural incomes driven development, but its application in agriculture has Building on business development and business-driven been limited. Small and medium agricultural enterprises innovation, agricultural development is likely to see pri- require risk capital to fully capture the opportunities pre- orities shifting toward growth and income generation and sented by agricultural innovation, however. TN 6 sum- possibly away from regional and global food security. marizes experiences with and applicability of risk capital Business development is driven by the interest of pro- investment models for agriculture in developing and ducers, processors, or traders of agricultural products in middle-income countries. generating profits (for example, by increasing factor pro- ductivity, adding value, or developing new products and markets) and capturing a meaningful proportion of these KEY POLICY ISSUES gains as additional income rather than passing them on to The key policy issues for agricultural business devel- consumers. opment and PPPs involve their potential for altering Increasing factor productivity in primary agricultural development priorities, the potential welfare effects of agri- production is the main approach to increase food produc- cultural innovation and growth driven by private interests, tion, but increased factor productivity does not always welfare concerns related to gender and social equity, translate into higher profits for producers over the long run. and prospects for building a “shared responsibility system� Historical trends show that after early adopters of a tech- capable of balancing the sometimes divergent interests of nology achieve their initial high gains, most of the ensuing the public sector, private sector, and civil society. Finally, in productivity gains are passed on quickly from producers to an environment characterized by increasing private consumers in the form of absolutely or relatively lower involvement in agricultural innovation, very clear criteria prices for foods. This scenario offers little to interest key will be needed to determine when public intervention is business actors, with the possible exception of the input justified and at what level. supply industry (box 5.4). MODULE 5: OVERVIEW 369 Box 5.4 Different Trajectories of Agricultural Growth and Producer-Consumer Welfare Distribution From an economic welfare perspective, additional agri- new demands for agricultural food and nonfood prod- cultural economic growth and ultimately additional ucts. For example, agricultural raw materials like maize, welfare in a society are generated by higher levels of pro- sugarcane, or cassava could be used in new ways for ductivity, which in turn depend strongly on innovation. energy production; consumers’ changing preferences Technologies that increase the volume of production could be served through market differentiation, brand- (such as a higher-yielding crop variety) would shift the naming of products, and so on; an agricultural raw supply function to the “right� and increase welfare, but material could serve as the basis for chemical or phar- this shift would largely come at the expense of producers maceutical products; or agricultural products could be because of a price-decreasing effect. Technologies that designed as functional foods. While the vast majority of reduce the cost of production (such as insect-resistant Bt agricultural production is still destined to meet the cotton, which reduces the use of costly pesticides) would world’s basic requirements for food, market differenti- shift the supply function “downward� again, with a sig- ation and new products and uses will increasingly play nificant welfare gain that would in this case be shared a role in raising the overall value of agricultural pro- more equally between consumers and producers. duction, especially in middle- and higher-income An alternative option for growth is possible by countries, with production coming from developed actively addressing the demand function or creating and developing countries. Source: Author. Distributional effects of business-driven erations, with the risk that a growing role of the private sec- agricultural growth tor could further erode social equity in agricultural devel- The distributional aspects of agricultural innovations are opment. For example, women make up most of the rural related to the food security issue just mentioned. As workforce (70 percent), but in comparison to men, women explained in box 5.4, the nature and type of innovations and still have far fewer resources (land, capital, and access to technologies influence both absolute growth and welfare knowledge) to carry out their tasks (World Economic gains as well as the distribution of welfare gains between pro- Forum 2011). The growing influence of civil society and ducers and consumers. Agricultural innovations and growth shared responsibility for social and gender issues by the driven by business interests not only open new growth public and private sector are positive, continuing develop- opportunities but are likely to move agricultural develop- ments, but on their own they will not ensure that gender ment in a different direction. Although innovation generated and equity considerations are reflected in agricultural by the private sector can be important in securing continued development. Governments need to incentivize the private gains in agricultural productivity, particularly from the agri- sector and promote and safeguard gender and social equity cultural input side (in the form of new seed or chemicals, for in all business development activities, PPP contracts, ser- which royalties can be sufficiently protected), the private sec- vices, and access to resources and knowledge. Specifically tor will probably give much more attention to adding value targeted PPPs can make an important contribution to gen- in agricultural production and production systems. This der and social equity goals (for an example, see IAP 2 on emphasis will favor agricultural industry (companies sup- the China Technology Transfer Project). plying inputs and processing or marketing products) and possibly farmers as the primary producers, but it could put A shared responsibility system with poor consumers of staple foods at a disadvantage. new roles for stakeholders A well-functioning society provides a range of checks Gender and social equity and balances to keep the agricultural development agenda in Compared to the public sector, private interests are not line with the desired priorities. Many companies have started equally sensitive to gender or other social equity consid- to integrate social and environmental responsibilities in their 370 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK long-term business concepts because they understand distort markets unduly. Two key questions need to be that this strategy is important for long-term commercial answered: First, is public investment justified? Second, what success. A balance between private commercial interests is the right amount or level of support? The generation of a and the interests of society is not attained automatically, public good is a necessary condition for intervention, but it however. It is the product of smooth interaction among is not sufficient justification. Public funds need to generate governments, civil society, and the private sector, under a additional positive economic net returns that would not shared responsibility system (for example, see Henckes et have been generated without public investment. In other al. 2004). words, the public sector should not pursue investments that While PPPs and business development activities can be the private sector is likely to undertake on its own. For prac- interesting for most countries, these activities are unlikely tical purposes, this determination can be difficult to make, to deliver the desired results in the absence of a minimum however. Nor is it easy to determine the right level of public level of governance and sufficient control mechanisms in sector support (box 5.6). TN 1 describes methods for deter- civil society (box 5.5). A capacity analysis is a prudent step mining additionality. to take before investing in PPPs and business develop- ment in a given setting. The analysis should assess risks NEW DIRECTIONS, PRIORITIES, AND and risk mitigation measures and determine whether REQUIREMENTS FOR INVESTMENT supportive capacity building is needed. To work well, a shared responsibility system requires a high level of trans- Given that business development and PPPs are becoming parency, sensitization, and sufficiently effective mecha- important drivers for innovation and growth in agriculture, nisms for society to influence policies as well as private policy makers and development agencies need to consider a sector decisions—conditions that are anything but perfect range of issues related to supporting partnerships and busi- in most countries. ness. Among these considerations, developing a vision of the priorities and strategic choices related to agricultural devel- opment is perhaps the most fundamental. Agriculture pro- Market distortion vides more than food. It produces essential commodities Market failure is the main justification for public sector that increasingly include energy, environmental services, interventions, but efforts to address market failures often and a wide range of social goods. Given that three-quarters Box 5.5 Consumers Want to Be Engaged Civil society itself has developed a wide range of instru- are a win for consumers, business, and society, yet only ments to express its interests and preferences and influ- 53 percent feel that companies effectively encourage ence governments, development agencies, and private them to speak up on corporate social and environmen- companies. “Mature and sensitive� societies signifi- tal practices and products. A majority of consumers cantly influence the direction of technology develop- want to be engaged on four key pillars of responsible ment and business opportunities. For significant num- business, including how a company conducts its bers of consumers in these societies, the value of a food business (85 percent), its products and packaging product lies not only in its taste, nutritional value, and (83 percent), its support of social and environmental chemical and physical properties but in the resources issues (81 percent) and its marketing and advertising used to produce it, the impact on the environment, the (74 percent). Consumers are prepared to dedicate time contribution to global warming, and the social condi- and money to help influence corporate social/environ- tions and safety of farm or factory workers. mental practices through surveys and research (70 per- According to the 2010 Cone Shared Responsibility cent), buying or boycotting a company’s products Study, 84 percent of Americans believe that their ideas (44 percent), or through email, phone, or employee com- can help companies create products and services that munications (32 percent), among other activities. Sources: Author; Cone 2010. MODULE 5: OVERVIEW 371 Box 5.6 Additionality Criteria to Use in Deciding Whether to Provide Public Funding Public investment decisions need to be based on an eco- Additionality is a key consideration in programs to nomic and a financial analysis. The economic analysis support private sector development. Certainly com- determines whether an investment is likely to generate panies will enjoy public support and will give any additional benefits at minimum rate of return for pub- assurance to donors that they would not have lic capital investments. The financial analysis shows invested without such support. This assertion needs to whether public funds are required at all. It helps to be proven. Especially in matching grant programs, the ascertain, for example, if an investment is unattractive risk is high that public funds will simply replace to private investors, and it determines the level or private funds. This substitution is not only inefficient amount of public funds needed (the share of public but disturbs and biases competitiveness among pro- grants or level of subsidy, for example). ducers or businesses. Source: Author. of the world’s poorest people live in rural areas, agricultural and advisory services, business incubators, technology development goals are often torn between delivering low- parks, and cluster development. Formal technology transfer cost food using increasingly scarce and more expensive mechanisms, such as intellectual property protection and resources and providing income for poor farmers. Effective legal agreements that transfer property rights to commercial partnering and business development must be guided by a or international partners, are becoming critical to engage vision for agricultural development that sorts through these effectively in PPPs and disseminate technology through issues, sets priorities, and makes strategic and often difficult market channels. TTOs are an interesting option, especially choices. if they are affiliated with research organizations or universi- The roles of the public and private sector must also be ties or host incubation services—in other words, if they defined clearly. Business-driven agricultural development, focus on nurturing businesses that aim at commercializing combined with PPPs, will require a definition or redefinition technology. of the roles and responsibilities of the public and private sec- Working in isolation, public institutions and private tors. Many governments already find it challenging to define companies are less and less likely to address global, regional, and implement clear policies of what the public sector or even local agricultural development challenges. New should do in relation to the private sector. Ministries of partnerships need to be encouraged, from global strategic agriculture and their subordinate institutions often still partnerships and alliances to innovative PPPs and individ- engage directly in enterprises related to agricultural produc- ual stakeholder partnerships. Such partnerships need to tion, such as input supply or food processing facilities. They shift from being ad hoc initiatives to becoming a strategic will need to reassess these enterprises with a view to facili- element of the agricultural development agenda. tating participation by the private sector and partnering With the growing diversity of partners and institutional with private entities. arrangements, the demand for more innovative funding mech- A fundamental role of government is to create conditions anisms is growing as well. The significant experience with enabling the private sector to generate economic growth some of these mechanisms, such as competitive research through innovation and the development of new busi- grants and matching grants, can be built upon; at the same nesses. The lifeline of an enabling business environment is a time, new applications for other funding mechanisms, such as strong legal and institutional framework capable of protect- risk capital funding, are beginning to emerge. ing investors and intellectual property. Module 6 gives examples of strategies to develop an enabling environment MONITORING AND EVALUATING INVESTMENTS for agricultural innovation. The public sector also intervenes actively in supporting Tracking and attributing the results of a business innova- private sector development through business development tion or partnership program is highly challenging. The 372 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK particular challenges relate to the timeframe, complexity of For example, the PAID framework includes process indica- the processes, great array of stakeholders, and external tors (P), used to track the first stage of a program; action influences. Key aspects of M&E include clarifying the indicators (A), used to track activities and inputs provided program’s objectives, identifying appropriate indicators, by the program; investment indicators (I), used to track establishing appropriate M&E arrangements, following investments and co-investments by the private entities common monitoring practices, and evaluating impacts. receiving support; and delivered results (D), used to measure For complex business innovation or partnership pro- final outcomes.4 Table 5.3 provides examples of indicators grams, a multistage grouping of indicators may be useful. for designing monitoring systems. Table 5.3 Possible Monitoring and Evaluation Indicators Program type Type Indicator Grant PPPs Incubator Cluster Process Analytical activities (competitiveness, availability of infrastructure, capacity X X X X indicators of institutions) Memoranda of understanding X X X X Agreed schedules and levels of participation (including aspects of gender or X X X X other social equity) Other milestones in process for designing and establishing a business support scheme (for example, private sector mapping) Action Technical assistance provided X X X X indicators Completion of strategies X X Completion of action plans with responsibility split among representatives X X Delivery: Number of subprojects terminated within a year after the planned date X X X Success rate: Number of subprojects that have achieved the planned milestones X X Punctuality: Ratio of realized and planned time for subproject execution X X Length of subproject cycle (number of months) X X Number of incubatees supported X Investment Outsourcing for efficiency: Share of contracted research within subproject activities X indicators (percentage of total) Additionality of resources attracted by mechanism (from clients, government, X X private sector, and partners) Business formation: Number of new business registered X X Value of newly registered capital X X Accessed financing during the incubation process X Business retention: Percentage of graduates staying in the community X in which they were incubated Business success: Percentage of incubator graduates staying in business X National and foreign investment attracted X Delivered Factor productivity (crop yields, labor productivity) X X X results Trends in natural resource degradation (soil erosion rates) X X X Social rate of return to research (percentage) X Absolute and relative poverty rates (percentage) X X Scientific quality and spillover benefit (publications, citations, peer evaluations) X Increase in the value of sales, farmer value-added, the quality of produce of farmers X X X engaged in partnerships Increase in the income/profitability or competitiveness of target actors X X X X (agribusiness, farmers, and others) Increase in innovation (technical, organizational, and other) among the target actors X X X X Public return on investment (e.g., tax revenue versus public spending) X X Sector or subsector growth rates X Employment X Sources: World Bank 2010; World Bank 2009b; author. MODULE 5: OVERVIEW 373 T H E M AT I C N O T E 1 Foundations for Public-Private Partnerships Josef Ernstberger, Consultant SYNOPSIS from cooperating on an individual project, to generating ideas and innovations in a specific field or for a specific pur- overnments and bilateral and multilateral devel- G opment agencies are engaging the private sector to deliver a range of services traditionally delivered by the public sector. Such PPPs involve new arrangements pose, to major strategic alliances that address major con- cerns in the development of the agricultural sector. PPPs implemented through individual development projects are characterized by a relatively clear and specific expected under which governments obtain services through contracts outcome or service for which the private partner provides with direct payments or various forms of subsidization. know-how and technical solutions. In infrastructure projects PPPs are also increasingly valued as a means of unleashing this kind of arrangement is generally known as a “design- the private sector’s capacity to generate innovation in the build,� “design-bid-build,� or “design-build-operate� con- rural sector. This note discusses the opportunities and con- tractual arrangement. For example, an IT company may be straints of PPPs, including their institutional settings, the invited to develop and implement a tailored search engine capacities and skills on both sides, partnership arrange- for a local Internet-based agricultural extension system. ments (especially the need for contracts that clearly define When PPPs are used to generate ideas and innovations, the outcomes and ensure accountability), and the need for public sector defines more or less specific fields and objec- independent supervision and monitoring of PPPs. tives in which it seeks progress (environmental health, social welfare, agricultural growth, and so forth) and issues a call for proposals to public and private entities, who submit BACKGROUND AND CONTEXT their ideas for collaborative work to generate the desired Public-private partnerships (PPPs) bring the complemen- innovations. The proposals are submitted for review, and if tary skills of the public and private sectors to a program or they are selected for funding, the public and private partners project in which each partner has a different level of involve- implement the programs. ment and responsibility, with the objective of providing pub- Strategic alliances usually involve long-term cooperation lic goods or services. These partnerships leverage the (ten or more years), multinational companies, or groups of strength and reflect the interests of the individual partners. companies. Examples include the development and intro- These partnerships are not intended primarily for business duction of minimum social and environmental standards development, for which business development programs are for agricultural or forestry products, fair trade arrange- a better alternative, but for bringing about a public good ments, and similar ambitious programs. outcome in partnership with the private sector. The public In agriculture, PPPs are more promising in some areas sector is interested in cooperating with the private sector to than others. They can be quite effective for introducing use technologies, capital, and know-how and (ideally) to environmental and/or social production and processing benefit from the comparatively greater flexibility, innovative standards, which then become national and sometimes even capacity, and efficiency of private companies. For the private international standards (box 5.7). Examples of collaborative partners, the incentive is generally that the collaboration projects that subsequently resulted in national legislation opens an interesting new line of business. include projects on standards for organic and fair trade food PPPs in agriculture mainly target opportunities for envi- production, control of child labor, and the protection of for- ronmental, social, or equitable growth. They range in scope est biodiversity. 374 laboratories to regulate biosafety hazards, control animal Box 5.7 A Public-Private Partnership to Implement Labor Standards in Asia diseases, detect genetically modified ingredients in food, and enforce restrictions on seed imports or exports, among other activities. Many international companies produce goods in developing countries where international labor standards are not followed and in any case are IMPLEMENTATION ARRANGEMENTS challenging to monitor. A public-private partner- AND INVESTMENT NEEDED ship run by GIZ and Tchibo GmbH engages work- ers in factories in Bangladesh, China, and Thailand Countries require a governance framework that brings in implementing the International Labour Organi- together the capacities for designing and executing PPPs. In zation’s core labor standards and improving work- most countries, line ministries or lower-level government ing conditions. Since the project started, 13 local institutions execute PPPs, which may require public officials training providers have acquired the specialized to master new skills. They must know how the private sec- knowledge and tools to advise suppliers on setting tor operates and design collaborative programs accordingly. up company structures for dialogue and imple- They must assess the risks and incentives that make collab- menting social standards. Forty firms are taking oration attractive and do not waste taxpayers’ money. They part in the pilot, and the number is rising. All have need skills to negotiate and manage contracts, and to avoid designed and implemented action plans, including disturbing markets, they need to be able to assess the long- plans for electing staff representatives, avoiding term implications of their partnership programs for indus- forced labor, and reducing overtime. try structure and competiveness. A new way to provide these Source: GIZ 2009. capacities is to establish PPP units within cross-sectoral Note: GIZ = Deutsche Gesellschaft für Internationale ministries such as finance or planning (Dutz et al. 2006). Zusammenarbeit. These units can operate in several ways. For example, they can provide information and guidance to other government departments for designing and preparing PPPs, provide PPPs have also helped governments or development advisory support and funding to line departments or agen- organizations direct innovation toward specific areas of cies, or directly approve PPPs. public interest. Governments or development organizations The execution of PPPs entails numerous steps, beginning either acquire innovations directly from the private sector with the selection of private sector partners. For most PPPs, or, through competitive research grant schemes or idea specially convened committees—whose membership comes competitions, challenge the private sector to pursue innova- from government and the private sector but should not be tive ideas and technologies of public interest. Efforts could dominated by the government representatives—select the be as specific as identifying a solution to a particular plant private partners. Depending on the nature of the partner- disease or as general as improving energy use in agricultural ship envisaged, the committee may also include farmers production systems. (See table 5.1 in the module overview; or representatives of farmer organizations, agricultural see also module 4, IAPs 2 and 3, for examples from India education, extension, or NGOs. Competitive application and Chile.) and selection procedures are common. The objectives of the A number of countries have started to use private organ- partnership program, the conditions for application, and izations or NGOs to provide specialized services (such as the funding arrangements are publicly advertised. One or agricultural advisory services) that public agencies once more rounds of proposals follow. In evaluating proposals, provided. Development organizations have turned to com- the selection committee often calls upon additional exper- mercial or noncommercial NGOs to deliver extension or tise in the form of a technical expert group or individual training to farmers or train cooperatives and agricultural experts. These experts might prepare a short list of candi- processors. For more detail, see module 3. dates, but the final decision remains with the committee. With technologies and production processes becoming After selecting the private and public partners, it is a good more complex and technically demanding, governments practice to formalize the partnership through a contract or increasingly use private sector capacity for regulatory con- signed memorandum of understanding. trols and enforcement. Partnerships have been formed with Generally PPPs are managed by project implementation leading enterprises or specialized private companies and units established for this purpose and supported by a MODULE 5: THEMATIC NOTE 1: FOUNDATIONS FOR PUBLIC-PRIVATE PARTNERSHIPS 375 secretariat with appropriate technical and administrative cultural ventures such as plantations or seed companies. For capabilities. Every PPP also requires a framework for M&E these reasons, PPPs can aggravate rather than resolve uncer- to ensure that the program is on track and make adjust- tainty over what each sector should properly do. ments as needed. It is vital for the partners to agree before- Many PPPs also suffer from a lack of suitable public insti- hand on the M&E framework and the practical arrange- tutions and legislative arrangements. Donor programs often ments for implementing it. The framework must be flexible bridge this gap by setting up their own program- or project- enough to handle an unpredictable timeframe and out- specific implementation units and operational manuals. comes, given that many of the key variables will have a sig- While project-specific arrangements may be necessary, as nificant amount of uncertainty. An independent but mutu- long as an overall institutional and legislative framework is ally accepted monitoring agency or organization should lacking, it will be challenging to implement PPPs as a regu- implement the framework. lar feature of government procedures and programs. Particularly in the agricultural sector, PPPs require sup- As discussed, poorly designed PPPs can easily distort plementary funding to build capacity in most or all private markets, and many PPPs probably do so. Major market dis- partners. Capacity building can extend from the applica- tortion occurs when public funds are invested in activities tion process to proposal development and program imple- that the private sector would pursue in any case (crowding mentation. out private investment) or when private companies partici- pating in PPPs achieve an unfair and unjustified market or production advantage over their competitors. POTENTIAL BENEFITS To attract public investment, private companies tend to As mentioned, the major benefits of PPPs derive from emphasize their social or environmental responsibility, but using the complementary strengths of the public and pri- their ultimate (and legitimate) interest is to generate rev- vate partners to: enue. PPPs will remain sustainable and private partners will meet their obligations in the long run only if this ■ Attain efficiency gains. Many public goods can be deliv- interest is appropriately factored into partnership arrange- ered by private partners more cost-effectively, especially ments acceptable to all participants. The simplest PPPs use if contracts are output oriented and give the private part- public funds to pay private enterprises to deliver public ners the flexibility to identify the most cost-effective goods. More complex arrangements pay for the delivery of technical solutions. public goods by incorporating the price of the public ■ Mobilize resources and investments. PPPs have signifi- goods (such as social or environmental services) into out- cant potential to mobilize additional resources and fund- put prices. ing. Sometimes only limited or even no public funds are Although PPPs can reduce the gap between technology needed to trigger significant private investment (box 5.8; development and adoption and make public research insti- IAP 3). tutions more effective, responsive, and demand driven, they ■ Develop innovative solutions. PPPs can encourage the do have risks. Private interests can supersede public interests private sector to come forward with creative ideas. in public research agendas. Governments can lose the public ■ Reduce risk. Transferring part of the project risk to private research capacity that is critical for developing technologies partners can be one of the key benefits of PPPs and result that may not be commercially attractive but are in the pub- in better control over public spending, the service delivery lic interest. time frame, and quality of service. Output- or delivery- based payments can be effective for reducing risks. LESSONS LEARNED The experience with PPPs can be distilled into guiding prin- POLICY ISSUES ciples to help practitioners develop and invest in partner- PPPs often require the public and private sector to redefine ships while avoiding problems such as market distortion and their respective roles and responsibilities. This issue requires poor sustainability. Over the years, important lessons have particular attention from policy makers. Many governments been learned about which private enterprises and farmer already find it difficult to separate the functions of the two organizations make successful partners for the public sec- sectors; they may subsidize private enterprises without clear tor and which strategies work best for selecting them. Issues justification or operate what appear to be commercial agri- related to contracts, the partnership’s time frame, the 376 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 5.8 A Public-Private Partnership to Conserve Genetic Resources in China The Chinese government maintains important genetic for visitors. The higher prices of meat from these pigs stocks for animal breeding at a number of stations compared to conventionally produced pigs reflect the throughout the country. In Anhui Province, the govern- higher costs of the more environmentally and socially ment contracted a medium-scale company engaged in oriented process used to produce them. The govern- pig breeding and processing to protect an endangered ment provided a share of the initial financing for the pig variety called Wei Pig, which was close to extinction. company and its contract farmers. This partnership The company undertook to commercialize the variety made it possible to close a government facility and as a niche product while continuing with its mainstream sustainably protect genetic resources without public pig production business. The market strategy for Wei funding, once the cofinancing ended. The partnership pig involved a special “near nature� production process, succeeded owing to a combination of private technical in which poor, small-scale farmers in mountainous know-how and experience, an innovative business and areas raised pigs under contract for the company, which marketing concept, and significant private financial operates a breeding center that also functions as a park resources, complemented by public startup funds. Source: Author. capacity gaps that may need to be filled, and arrangements for improve its reputation by demonstrating social or envi- M&E are also important to consider before the partnership ronmental responsibility), but in most cases the desired begins. Details of these guidelines, lessons, and issues follow. benefits are legitimate financial profits. It is important to understand the benefits required by all partners to pre- vent the partnership from being abused. For example, the Guiding principles for partnership real incentive for private partners may be to gain closer Guiding principles for PPPs involve the clarity of their polit- ties to government to pursue a hidden agenda such as ical objectives, potential mutual benefits, additionality, influencing political decisions or obtaining an unfair competition and transparency, and sharing of risks and advantage over competitors. responsibilities: ■ Additionality. Public funds should support PPPs only when the private sector would not undertake a similar ■ Consistency with political objectives. The public partner activity to achieve the same outcome, either on its own or must clearly define the larger political objective that as required by law. motivates the partnership. For example, government ■ Competition and transparency. Like other forms of may want to stimulate agricultural growth as an instru- public investment, PPPs must give all competent private ment to address rural poverty and reduce increasing partners an equal opportunity to compete for the income disparities in a society (equitable growth). It may business opportunities supported. Setting priorities for want to protect specific natural resources and future funding, selecting partners and programs, allocating livelihood systems (such as forest products for tradi- resources to partnerships, implementing and monitoring tional medicine), support specific vulnerable groups (by partnership programs, and all other decisions must be improving labor conditions, promoting pro-poor transparent. growth, or improving gender equity). It may want to bol- ■ Sharing risks and responsibilities. In PPPs the commit- ster national food security. ment of partners is generally demonstrated by an appro- ■ Mutual benefits. As discussed, all partners must benefit priate sharing of risk and responsibilities. A major differ- sufficiently from the partnership to honor their commit- ence between PPPs and traditional public contracts such ments for as long as required. The public sector benefits as infrastructure contracts is that the participating pri- if the PPP proves to be effective and efficient at generat- vate companies contribute financial and/or human ing the desired public goods. Benefits to the private resources (for example, through cofinancing, matching sector can be indirect (for example, its participation will funds, and other arrangements). MODULE 5: THEMATIC NOTE 1: FOUNDATIONS FOR PUBLIC-PRIVATE PARTNERSHIPS 377 Selecting the right partners with the right capacity ■ For PPPs, the public good outcome is the primary objective, and it must be clearly defined (an innovation, an environ- The financial and managerial strength and experience of mental or social service, the performance of a traditional private partners are important for the success of partner- public service by a private partner, and so on). Confused ships. As mentioned in the module overview, PPPs have to objectives are a common defect of many programs, be clearly distinguished from programs to support SMEs: which fail to clarify whether their primary objective is to SME development focuses on the enterprises themselves support or develop businesses or to deliver specific pub- by helping them to become fully established or providing lic goods. venture capital, but PPPs focus on achieving public good ■ Clearly define the criteria that a private partner must meet outcomes. Partnerships with financially strong, experi- to participate, especially the type of partner (private enced companies are more likely to succeed in delivering company, farmer group, and so on), legal status (perhaps those public good outcomes efficiently and reliably. As dis- farmer organizations must incorporate to participate), cussed in the module overview, properly constructed PPPs size, previous experience, and technical, financial, and do not support weak business with lucrative public con- managerial capacity. tracts; nor do they weaken the public sector’s or donor ■ Clearly specify the contribution expected from each part- agency’s focus on poverty. These problems can be avoided ner. Contributions can take many forms: financial if the public sector performs due diligence and thoroughly resources, human resources, risk-sharing arrangements, assesses prospective partners beforehand on the basis of sharing of innovations, or access to confidential or inter- minimum criteria related to their financial strength, man- nal information (financial data, income, cash flow, tech- agement capacity, and demonstrated ability to deliver the nical processes). It is rarely in the interest of companies kinds of public goods required. to share information related to innovative technologies, Farmers can be effective partners in PPPs and improve business concepts, or financial status, but if this informa- their impact in rural communities, yet very few farmers tion is necessary to achieve the partnership’s objectives, have the capacity to perform in PPPs without some form of this requirement must be very clear before potential assistance. Most PPPs involving farmers have a strong com- partners apply for funds. This point reinforces the earlier ponent for organizing farmers and providing the skills they point that absolute clarity at the outset can prevent con- need to perform their role in the partnership. Partnerships flicts from derailing a partnership. with farmer organizations work best when the organ- ■ Provide transparent information on modes of public izations have a clear and narrow interest or focus. For financing and decision making. Information about the example, water user associations have become strong public size of and conditions for public financing is generally partners in many countries and have successfully assumed straightforward. The problem lies more with the lack of traditional public service functions. Farmer-managed graz- clarity over government procedures and the time they ing associations or other natural resource management require. Private companies are especially frustrated by organizations have successfully regulated access to and use complex and lengthy public procurement procedures of common resources. and bureaucratic clearances, but if they are aware of pro- Farmer organizations are increasingly important com- cedural requirements beforehand they may cope better. mercial partners, given that the most efficient agricultural value chains emanate from a strong, organized producer community. Forming these organizations will help to bal- Contracts ance the power among the partners and is practically the only feasible way for government and companies to interact Like any business relationship, each PPP should be based on with producers, because organization substantially reduces a signed contract between the partners, usually representa- the cost of interacting with large numbers of smallholders. tives of the government partner, company, and farmer orga- nization, as relevant). At a minimum, the contracts must: Preparing the way for successful partnerships ■ Define each expected outcome, the corresponding indi- The administrative steps in selecting partners and imple- cators (measurable and conducive to monitoring), and menting programs were discussed earlier. The next points time-bound targets. This level of specificity may seem describe practical steps to lay the groundwork for successful challenging for PPPs intended to develop innovations, partnerships. because of the organic nature and unpredictability of the 378 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK process. The intended outcome is already clear, however, organizations have used this kind of arrangement once ini- for specific partnerships based on a proposal to provide tial public support for their activities ends. Private food an innovative business idea, technology, or public good quality testing laboratories receive a fee for performing or service, and the partners need to be assessed against public-service functions. their progress in achieving that outcome. ■ Specify the resources committed by the partners, along Capacity building with a detailed financing and implementation plan. ■ Include a monitoring framework with agreements on the A precondition for involving farmers in PPPs is to form monitoring arrangements and contract supervision by organizations and equip the members with the skills to be an accepted third-party monitoring institution or indi- effective partners, as discussed earlier. Aside from needing vidual (see the concluding part of this section). to acquire management skills and an understanding of ■ Define the exit strategies and follow-up arrangements (as managerial procedures, farmer organizations may also discussed next). require training related to agricultural production and pro- cessing, quality standards, participating in adaptive research, testing technology, and providing social and envi- Exit strategies and sustainability ronmental services. The best practice for PPPs is separate PPPs generating social or environmental goods may end supporting activities in capacity building very clearly from once a good has been delivered, or they may need to con- the actual funding of PPPs. One option, for example, would tinue for as long as the public good is required (ideally be to include capacity building as a separate component of without public support). For example, if the social or envi- the project. ronmental value of a particular good becomes a critical part of the marketing concept (as with many organic and Monitoring and evaluation fair trade products), the level of commercial interest may be sufficient for the government to withdraw public support. If a PPP encompasses more than a single project, the M&E If the partnership pilots environmental technologies or system should provide information corresponding to sev- social standards that are eventually embodied in mandatory eral levels of activity. First, at the level of individual projects regulations, they will be sustained if compliance with regu- (often called “subprojects� when they are part of a large pro- lations is assured. gram that funds numerous small projects), the M&E system PPPs generating innovations require an exit strategy should provide information on adherence to contractual based on transferring and adopting the innovation. Many arrangements and outcomes from each subproject. Second, PPPs are designed to include elements of technology trans- at the program level, the M&E system should provide infor- fer. For example, World Bank-supported grant programs in mation on the program’s processes, outcomes, and attrac- Albania and Armenia required PPPs to earmark a certain tiveness. Third, at the policy level, the M&E system should percentage of funds for publicizing and/or transferring their generate feedback on the program’s broad effects on eco- innovations to farmers or small businesses. Because it is not nomic growth (the causal link between the program and the in the interest of private companies to share innovative ideas resulting innovation and factor productivity) and wider or new technologies with potential competitors without social benefits. compensation, future ownership of any innovation devel- oped by the partners and any obligations to share informa- Project or subproject level. As mentioned, project-level tion must be spelled out in the PPP design and clarified in M&E combines contract supervision as well as outcome mon- the contract. Many arrangements have been developed to itoring and evaluation, and it should be done by an inde- protect financial and other incentives to share technology pendent, third-party M&E institution that is acceptable to and information. all partners. The basis for M&E of individual projects (sub- PPPs that shift public service provision to private part- projects) is established when partners enter the proposal ners can be sustained by institutionalizing partnership development and approval process. No proposal should be arrangements. For example, private partners can be organ- approved for funding unless it possesses a set of clearly ized and authorized to collect user fees, which must be high defined objectives linked to measurable and monitorable enough to assure financial sustainability and/or maintain outcome indicators and time-bound targets. The indicators the business interest of the private partner. Many water-user should distinguish between the public good objectives (such MODULE 5: THEMATIC NOTE 1: FOUNDATIONS FOR PUBLIC-PRIVATE PARTNERSHIPS 379 as the provision of an environmental or social good or an scenarios to assess their effectiveness, because designing innovation for scaling up) and the financial or commercial control groups or control scenarios is difficult. Program objectives (such as target figures for production, sales, or M&E should also provide information on the overall use of income and benefit sharing). These detailed indicators and funds, factors driving the use of funds, and mechanisms for targets are included in the contract between the individual delivering funds. All of this information will improve how partners. The contract also specifies detailed input and out- similar projects are designed and implemented. put parameters, such as the financial and other resources that the partners have each committed to provide. Policy level. Some of the most difficult issues in monitor- ing and evaluating PPP programs relate to whether and to Program or project level. Program/project-level M&E what extent a PPP program has influenced overall economic should aggregate the achievements of individual subprojects growth, whether it experienced or caused interference with and devote most of its attention to examining the effective- other parts of the economy, what its wider social or envi- ness and efficiency of the PPP program. Many programs ronmental implications (positive and negative) may have report outstanding achievements of individual subprojects been, the sustainability of its impacts, and finally the policy but offer very little information, for example, on whether measures that should be taken as a consequence of these the program proved attractive for investors, partners, and findings. The list of failed government interventions in the beneficiaries; on any design flaws that emerged; or on private sector is long, and the effects have sometimes been whether investments were taken up slowly or quickly. Few significant. On the other hand, sound analyses of the effects programs use “with-program� and “without-program� of PPPs will be invaluable for formulating policy (box 5.9). Box 5.9 The Importance of Policy-Level Monitoring, Evaluation, and Analysis The economic effects of public-private partnerships also important for determining whether PPPs are the (PPPs) can be very large. For example, many govern- right instruments for achieving certain objectives (for ments responded to skyrocketing energy prices by example, taxes or regulations could be used instead of launching programs to generate and support innova- PPPs to induce compliance with social or environmen- tions in renewable energy. Some of these programs tal goals). related to biofuels have had far-reaching consequences Policy-level evaluations of PPPs can also determine for agriculture and food production that remain con- whether more extensive policy measures might be war- troversial and are not yet completely understood. ranted. For example, the China Agricultural Technology Another example of the economic effects of PPPs comes Transfer Project supports a number of PPPs with private from China, where the government promoted PPPs companies to develop and test new technologies for (among many other strategies) to develop a modern manure treatment. Cattle manure treatment plants of dairy industry. The result was an enormous overstimu- different sizes, using different fermentation processes, lation of milk production. The subsequent collapse of are being tested in Heilongjiang Province; special tech- the dairy market and bankruptcy of many producers nology to treat duck manure was developed in Anhui was accelerated by scandals over contaminated milk but Province. Aside from introducing and testing technical was probably inevitable, given the inappropriate level of solutions, partners in these projects are analyzing their market interference. commercial and financial parameters to learn, for exam- Most PPPs will not have such vast economic effects, ple, how the competitiveness of the livestock industry because they are small and locally confined, but the would be influenced if manure treatment were to positive or negative macroeconomic and policy impli- become mandatory. In other words, aside from stimulat- cations even of small programs should be analyzed ing technical innovation, these PPPs are preparing the and understood. Policy-level M&E and analysis are ground for decisions about future policy measures. Source: Author. 380 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK T H E M AT I C N O T E 2 Innovation Funds Josef Ernstberger, Consultant Riikka Rajalahti, World Bank SYNOPSIS competitive funding is irrelevant (World Bank 1999a). Insti- tutional core funding does not easily lend itself to innova- his note summarizes experiences with the two T main mechanisms used to fund agricultural inno- vation, competitive research grants (CRGs), and matching grants (MGs). It offers lessons and guidelines for tion processes that engage diverse stakeholders, however, even though much innovation can result from tapping the vast pool of creative ideas they possess. In many instances, those ideas never translate into innovation because the designing and implementing innovation funds, drawing on incentives and human and financial resources that enable information and analysis published in World Bank (2010). collaboration and innovation are lacking. That report primarily analyzed experience with World Bank To compensate for this failure, many countries are using investments, but the lessons are relevant in other contexts. innovation funds in the agricultural sector to strengthen The decision to use a grant scheme to fund innovation and innovation-promoting links among public institutions, the choice of scheme require a rigorous decision on the private entrepreneurs, and other actors, such as groups of objective, which must be embedded in a strategic vision of rural producers. These funds—often in the form of grants— the innovation system. CRGs are often used in the larger create platforms for innovative activity by providing incen- context of agricultural research system reform programs. tives to improve research collaboration and quality. They MGs tend to work best when combined with complemen- complement traditional core funding allocated annually to tary investments (infrastructure, financial services). specific public research institutions to pursue their core Significant costs can be associated with setting up and research agenda. administering a grant program, and the cost-effectiveness of Competitive research grants (CRGs) fund research based procedures to keep overhead low must be balanced against on national competition and scientific peer review. Trans- the need to ensure accountability and transparency of oper- parent procedures are used to select the proposals that will ations. Funding priorities must be set with stakeholders, receive funding, based on rigorous criteria. Grants can who should participate in the governance of the grant or accomplish objectives that may be difficult to achieve program and provide continuous feedback on implementa- through core funding, such as innovation in specific areas of tion. Transaction costs associated with participation in a research (perhaps through adaptive on-farm research proj- grant scheme may be significant and reduce the pool of pri- ects that require organizations and farmers to work vate applicants. Grant recipients are often not adept at ful- together) or innovation in a target region. If they are well filling M&E requirements and will benefit from specific designed, grants can bring greater contestability to the inno- training and hands-on support. vation process; the funding may not necessarily flow to the traditional recipients. Grants can promote research partner- BACKGROUND AND CONTEXT ships, leverage research resources, and help develop a more Institutional core funding from public resources has been the efficient, demand-driven, and pluralistic research system by most common means of funding research and innovation, involving clients in setting priorities and financing, execut- as many core research activities require long-term support. ing, and evaluating research (World Bank 2009, 2010). For Core funding also facilitates the development of integrated an example of using competitive grants to promote multi- research programs to address major problems, commodity stakeholder collaboration in India, see module 4, IAP 2. needs, or geographical areas. Many core research activities, Matching grants (MGs) can be used to finance research but such as plant breeding, have only one research provider, so increasingly promote near-market technology generation, 381 technology transfer and adoption, private economic activ- give grants to reduce the high costs of production caused ity, and overall innovation, often by including multiple by their absence. stakeholders. By focusing greater attention on demand and ■ The lack of economies of scale. No single enterprise is use from the very beginning, basically by attracting users of large enough to make the lumpy investments needed to technologies and knowledge in partnerships (and requiring overcome this problem. In this case, grants do not auto- a matching commitment), MGs may be more effective than matically help, although it may help for governments to CRGs at enhancing the use of technology and knowledge by support collective action for making lumpy investments. farmers and other entrepreneurs. Funds from the granting ■ High risk, arising (for example) from the long gestation organization (usually a public agency) are matched with periods for certain investments, political instability, lack funds from the beneficiary. Table 5.4 compares the three of transparency in government policy, or natural disas- financing modes. ters. Private insurance schemes can handle some risks, The use of MGs in particular warrants caution. They and governments should first deal with any deficiencies should be used for public good investments, such as gener- in their own policies and performance before consider- ating technical or institutional innovations with positive ing grants. economic, social, or environmental externalities or revers- ■ High costs of protecting property rights. In general, gov- ing market failures. They can thus be used for addressing ernments should establish and protect property rights knowledge gaps and reducing the risk for investment when and provide subsidies (grants) only where the costs of the market fails to produce a necessary or desirable good, enforcing those rights are too high. but at the same time other public sector instruments may be ■ Lack of commercialization of the economy. In such an more effective and less costly. economy, the development of financial services is espe- The following list indicates when grants may or may not cially slow. Grants should not be used in these cases for be a good choice (van der Meer and Noordam 2004; Dono- subsidizing credit, but they may be justified for training, van 2006): developing management information systems, or helping to expand rural outreach of credit providers and install ■ The lack of public goods such as infrastructure, legisla- new technologies. tion, or information. In this case, the appropriate solu- ■ Lack of technology, information, or trained staff. Grants tion is to invest in these public goods. It will not help to may be useful to solve these problems. Table 5.4 Comparison of Competitive Research Grants (CRGs), Matching Grants (MGs), and Core (Block) Funding Issue CRGs MGs Core (block) funding Primary Basic, strategic, and adaptive research – Demand-driven, near-market technology Long-term strategic objectives (and extension) development, dissemination, and adoption research and and activities and overall innovation processes institution building – Private sector activity, including agribusiness and strengthening and productive partnership creation Key stakeholder Primarily research system actors, increasingly Farmers, private sector, NGOs, research Public research also private sector institutes, extension services, other service organizations providers based on objective Capacity – Requires a critical mass of staff and a steady – More flexible with capacity requirements Little additional capacity requirements operational budget to allow true competition of participants or the administrative burden required for success and result in improved research quality – Business understanding, ability to partner, – Capacity to compete and administer and monitoring and evaluation requirements (including technical review) crucial for success great Cost sharing Limited, due to ownership issues High for demand-driven activities Limited to in-kind resources Overhead and Significant, due to management and monitoring Varies; can be significant depending upon the Low or nonexistent transaction and evaluation degree of decentralization of the program costs and the overall purpose and actors involved Incentives for Fair, depending on criteria High Limited partnership Sustainability Limited unless complement long-term funding Limited unless complement long-term funding High Source: Authors, adapted from World Bank 2010. 382 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK INVESTMENT OR ACTION NEEDED units, communication, administrative procedures, and requirements of the grants), potential applicants (under- A number of investments and actions are needed for inno- standing the procedures, proposal development, partnering, vation funds to perform successfully. They are briefly financial management, and M&E), and potential service explained in the sections that follow. See World Bank (2010) providers (proposal development skills, technical skills, and for detailed explanations and examples. M&E capacity). Establish a fund for financing projects Establish a governance and management system A grant scheme requires a fund that provides financing for the selected subprojects. The fund is usually situated within Grant schemes require effective governance and strong a ministry of agriculture and managed and disbursed to the management. A good practice is to maintain separate units winning participants by the fund secretariat (which is inde- for policy setting, technical evaluation, management, and pendent of the ministry). The actual size of the fund impact evaluation. The main governing responsibility depends on the anticipated portfolio of subprojects (that is, resides with a governing board (sometimes also called an the size of subprojects, the size of the grant subsidy, and the “advisory board� or “coordinating committee�). Table 5.5 anticipated number of subprojects). Successful grant describes the typical governance and management struc- schemes supporting subprojects may range from several ture for a grant scheme. Grant schemes require a secre- hundred dollars for small farmer groups and initiatives to tariat to handle day-to-day administrative functions such more than US$1 million. as communication, processing, coordination, and M&E. The capacity and placement of the secretariat is of signifi- cant importance for the success of a grant program. The Establish rules regulating the terms of options range from placing the secretariat within a public the competition and implementation institution managing the fund or outsourcing it to private Transparency of management, institutional arrangements, or civil society. eligibility of applicants, projects and expenditures, selection criteria and processes (calling for proposals, approval, con- POTENTIAL BENEFITS tracting, disbursement, financial management, audits, pro- curement, safeguard management requirements, and M&E The major benefits of grant schemes arise from their procedures) are the most critical elements for a successful capacity to tap into a vast pool of creative ideas. For grant scheme. Significant preparatory work is required to designers and implementers of grant schemes, the emerg- identify and define appropriate operational procedures. ing innovations (technological and organizational) are one of the most exciting and often surprising features. By mobilizing new partners, grant programs facilitate signifi- Conduct a communications campaign cant opportunities for synergies in technology and institu- Successful grant schemes require a rigorous awareness rais- tional innovation development. Some schemes stipulate ing and communications campaign, managed by the grant particular partnership arrangements, such as company- administrator (secretariat), targeting the potential appli- research or company-farmer partnerships (as in China and cants. A communications campaign (either a nationwide Vietnam). In Turkey, a matching grant program helped to information campaign or a more targeted marketing promote scientific and technical collaboration and tech- approach) guarantees that potential grant applicants learn nology development (box 5.10). about the innovation fund and related capacity-building CRGs in particular, with their clear, outcome-oriented opportunities. Communications campaigns may use diverse design, can significantly increase the chances that research means, such as mass media, a specific Internet site, and/or will succeed and that research resources will be used effectively. more targeted communications (such as stakeholder meet- When grants focus on specific themes or activities, the ings and face-to-face contact). approach of inviting proposals provides a good opportunity to receive the best ideas and select only proposals with a high likelihood of achieving the desired outcome. Build capacity of participants and service providers MGs in particular have a strong business orientation Most grant schemes need to build capacity in grant- (expectation of revenue) from the outset and result in more implementing units (related to the role of implementing business-driven innovations. Because users determine what MODULE 5: THEMATIC NOTE 2: INNOVATION FUNDS 383 Table 5.5 A Generalized Governance and Management Structure for Grant Schemes Unit Composition Responsibilities Governing Often consists of representatives of key stakeholders Responsible for overall program policy. Oversees operations, board associated with the grant scheme, such as government, establishes program priorities, awards grants, and farmers, agribusiness, and finance. A nonvoting represents program with funding agencies. Ensures close representative of the secretariat usually participates. connection between the selection criteria used to evaluate proposals and the system-level objectives to which the competitive research grant scheme should contribute. Secretariat Composition depends on the type and size of grant scheme. Responsible for managing programs and carrying out daily The secretariat should have administrative capacity, including operations. Provides support for governing and technical capacity to manage contracts and procurement; technical bodies and facilitates communications about program expertise (for example, in agribusiness); and M&E experience. operations. The capacity and stability of the secretariat are often crucial for the success of the grant scheme. Technical This committee may be a subcommittee of the governing Provides technical input for planning programs and setting advisory board or may be combined with the technical review priorities, advises on peer reviewer selection, and committee panel described below. monitors technical quality of research subprojects. Technical Often composed of 3 members selected from a pool of Responsible for evaluating, scoring, and ranking proposals. review approved experts, including technical and financial experts. Makes funding recommendations. panel The size and complexity of the proposals will determine the number of experts required. Proposals for small subprojects may require one reviewer, whereas larger or technically new or more complex proposals may require 2–3 reviewers. Appeals body Often managed by the grant secretariat. Appeal decisions are Responsible for handling any petitions that may arise from made by steering committee or governing council associated the decisions by the reviewers or the approval committee. with the project or host institution. Source: Adapted from World Bank 2010. Box 5.10 Getting the Most from Matching Grant Schemes: The Turkey Technology Development Project Perhaps the most notable legacy of the Turkey Technol- In 1992, TTGV began to cofinance R&D subprojects ogy Development Project (a US$100-million project in the private sector with the assistance of the World approved in 1991) was the construction of the Tech- Bank. Proposals were solicited twice yearly. Of 273 pro- nology Development Foundation of Turkey (TTGV). posals submitted by April 1998, 103 (37.7 percent) had The Foundation provided funds for Challenge Pro- been approved for funding. The funded projects grams, which stimulate applied research and technol- elicited US$99 million in funding—US$44 million ogy development by industry through a mix of match- from TTGV and the remainder from private matching ing grants, income notes, and conditional loans. TTGV funds. The majority of the approved subprojects (84) stimulates private investment in the development of were for technology development; 67 of these sub- industrial technology by providing seed capital (match- projects had concluded by the time the project’s Imple- ing funds) for market-driven research and develop- mentation Completion Report was submitted in 1998. ment (R&D) subprojects in a host of critical industrial A large majority of subprojects funded through those sectors, including agro-industry. grants succeeded technically as well as commercially. Source: World Bank 1999b, 2006. ¸ Note: TTGV = Türkiye Teknoloji Gelistirme Vakfi. kind of innovation they require, the resulting innovations POLICY ISSUES often have fewer problems with adoption or transfer. The The policy issues related to innovation funds resemble those innovations must pass the test of commercial usefulness, for many of the other investments discussed in this source- which increases the attractiveness and efficiency of the book (sustainability, equity), but special concerns are funds used in such grants. 384 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK related to the potential fragmentation of the research limitations inherent in the funding, which could favor par- agenda and distortion of markets. ticular themes or areas and unwittingly discriminate against CRGs can be an effective component in a portfolio of certain groups of applicants (World Bank 2010). In Colom- funding mechanisms, but they must complement rather bia, MGs were used to incentivize collaboration between than substitute for long-term public funding for strategic smallholder groups and the private sector (box 5.11). For research through block grants. When institutional block other examples of MG schemes, see IAP 2 on China in this grants fall below 40–50 percent of the funding portfolio, module, IAP 6 in module 1, and IAP 1 in module 6. the viability of long-term research may be compromised The risk of “projectization� and the accompanying fail- (EMBRAPA, IDB, and World Bank 2000). Competitive ure to build capacity are acute in grant schemes, especially grant schemes—either for research or other activities— in CRGs, which do not require the counterpart funding may introduce instability into the funding structure of implicit in MGs and PPPs. Competitive grants may be used institutions that compete for grants. Sustainability is also as stopgaps to gain resources that cannot be obtained threatened by the fact that most grant schemes funded by through the national research system or financial services. donor organizations provide financing for only a limited This inappropriate use of competitive grants yields a set of number of years, and donor-initiated schemes are rarely ad hoc research projects that contribute to no overriding mainstreamed into government programs. Inequitable research strategy (World Bank 2010). access poses a challenge for grant schemes, particularly Finally, many grants by definition interfere in markets as competitive ones. Grant schemes may be inaccessible for they try to resolve market failures. As observed, poorly administrative reasons, lack of capacity to participate, or designed grants can easily distort markets by directing Box 5.11 Colombia Productive Partnerships Project: Incentivizing Market Inclusion through Matching Grants The Colombia Productive Partnerships Project creates was terminated only in 13 percent of partnerships. favorable conditions for large buyers and small sellers A particular set of incentives, infrastructure, and mar- to establish mutually beneficial and sustainable rela- ket conditions is needed to create and sustain well- tionships. It offers matching grants to complement functioning, productive partnerships. The key lessons producers’ own resources and/or funding from other for success were: sources (local governments, municipalities, commer- cial partners). Producer organizations use the grants to ■ A stronger producer organization yielded a more obtain technical assistance and build their capacity (for successful partnership. Social cohesion and business example, to meet quality standards, bargain, or skills were difficult to achieve and are emphasized enhance their entrepreneurial and negotiating skills). more strongly in the second phase of the project. Through the grants, producer organizations gain the ■ A rigorous, transparent, and competitive selection ability and incentives to invest in collective goods such process ensured the credibility and integrity of the as storage facilities and packing facilities. The grants grant scheme. also enable individual small-scale producers to invest in ■ Technical service providers as facilitators were fun- productivity-enhancing infrastructure and gain startup damental to building trust with the commercial capital to meet buyers’ requirements. The types of part- buyers. ners have varied: over half have been food processors, ■ Management and support of partnerships should one-third wholesalers, and the remainder supermarkets be outsourced to local service providers at the end of and retailers (for domestic and international markets). the project. By the end of the project’s first phase, of 136 part- nerships financed initially, 118 were sustainably oper- This project was the first World Bank project of its ating in a wide range of markets. The average income of small-scale producers had increased by 77 percent type in Latin America and the Caribbean. Since its incep- and their employment by 70 percent. Success varied, tion, similar projects have been initiated in Brazil, Bolivia, but the relationship between the buyer and producer Guatemala, Honduras, Jamaica, Panama, and Peru. Source: Collion, forthcoming. MODULE 5: THEMATIC NOTE 2: INNOVATION FUNDS 385 money to activities that would have attracted private fund- CRGs are often used in the larger context of agricultural ing anyway and by conferring undue advantages on some research system reform programs. MGs on the other hand companies at the expense of others (see TN 1). tend to work best when combined with complementary investments such as infrastructure, financial services, collec- tive action, and market development. They also tend to LESSONS LEARNED benefit from complementary policies that are similarly intro- The lessons learned from implementing innovation funds duced to provide enabling conditions that make overall are briefly and partially discussed here. For a more compre- investment more effective, and more attractive to prospec- hensive discussion, see World Bank (2010). tive investors. The decision to use a grant scheme to fund innovation and Significant costs can be associated with setting up and the choice of the scheme require a rigorous decision on the administering a grant program. Many programs set overhead objective, which must be embedded in a strategic vision of costs at 10 percent of the budget, but one analysis found the innovation system. Weak objectives lead to incoherent pri- overhead costs of competitive grant schemes to be 25 per- orities and funding rules and an inefficient use of resources. cent or more in some cases (World Bank 1999a). The cost- Caution is advised with CRGs, given the tendency to distort effectiveness of procedures to keep overhead low must be long-term research agendas and markets (box 5.12). No short- balanced against the need to ensure accountability and term grant scheme can substitute for long-term funding for transparency of operations. research, private sector development, human resource devel- Funding priorities must be set with stakeholders, who opment, or infrastructure maintenance and development. should participate in the governance of the grant or program Box 5.12 Lessons from Competitive Grant Programs in Latin America Do not just finance research; strengthen the capacity the strong and the weak. Competition between alter- of research organizations. Competitive funds can be an native service providers breaks down when the range of important vehicle for financing research, piloting new providers is limited and many potential providers lack ways of working, or focusing research on new topics, the skills to prepare viable proposals. but they are most likely to make a sound and lasting The competitive model itself has not spurred large contribution when they complement a relatively strong growth in the role of the private (for-profit) sector as a public sector framework for research. Public funding is provider of agricultural research and extension, but it essential for agricultural innovation systems. Private has contributed to the broader process of private sec- funding complements rather than substitutes for tor development. Commercial firms have played a higher levels of public funding. smaller role as providers relative to public and private To compete for funding, research institutions nonprofit agencies. To the extent that commercial firms require a minimum core budget and critical mass of have played a role, they have largely done so outside the staff. All institutions need some core funding to main- framework of competitive grant schemes. On the other tain and improve their physical and human resources. hand, under the competitive schemes, through the The sustainability of the public research apparatus and medium of subproject copayments, producers have competitive funding alike will depend on continuous provided private funds as a complement to public sec- public funding. Grants usually fund operating costs tor grants; they have received training in the prepara- over two to three years. A grant model is unlikely to tion of business plans; and they have become more flourish in a climate of fiscal austerity because there is market-oriented owing to partnerships with producer only limited scope for private funds to substitute for associations that have been facilitated by competitive public money. funding agreements. In this sense, the competitive fund The competitive fund model is more likely to model has contributed to the broader goal of private strengthen the strongest agencies providing research sector development without entailing a major role for and extension than it is to reduce disparities between commercial firms as service providers. Source: World Bank 2009. 386 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK and provide continuous feedback on implementation. Qual- that use MGs, a second field appraisal may facilitate progress ifying stakeholders to fulfill these vital roles entails an invest- with the grant scheme. In some cases eligible proposals are ment in capacity building, as discussed earlier. selected by ranking. Board composition and transparency of activities require Consider limiting the grant contribution in the overall careful attention. Boards can easily be taken hostage by one business portfolio of an enterprise and in the budget of a interest group that skews decisions in favor of its con- public research institution. Businesses receiving MGs stituency at the expense of others (World Bank 2010). The should not use them as the main source of financing for a capacity and institutional location of the secretariat is also startup business. Grants can easily be abused in this way, crucial (box 5.13). replacing commercial financing (risk or venture capital If the absorptive capacity is low, grant schemes will have funding) or core public funding. fewer participants, lower-quality proposals, and a tendency Transaction costs associated with participation in a grant to favor well-established research or private business enti- scheme may be significant and reduce the pool of private appli- ties. In CRGs this situation will limit the chances for inno- cants. To retain applicants’ interest in a grant scheme, the vative ideas, and in MGs established businesses may abuse secretariat needs appropriate administrative and communi- grants to strengthen their business positions and dominate cation skills. Procedures for application and implementa- a market. tion need to be as streamlined and clear as possible. Simpli- Calls for proposals can target an entire nation, specific fied procurement methods (shopping or commercial regions, and/or stakeholders. A two-stage selection process, practices) are often more suitable for business grantees, starting with concept notes and followed by full proposal since it is in their interest to use funds efficiently. Tracking development, is recommended to winnow out ineligible and documenting the outcomes of innovation funding are applications at an early stage. Given that most MGs target too often neglected in grant schemes, yet a sound M&E sys- farmer groups or enterprises, often all proposals that meet tem enables grant schemes to identify and address problems the minimum eligibility criteria will be funded. A good prac- as they arise. Specialized M&E personnel can be employed tice is to carry out a field appraisal before accepting a concept in the grant secretariat; the responsibilities can be out- note for further development. The field appraisal is helpful sourced to independent experts; or a combination of both for verifying the information and identifying needs for tech- options may be used. Grant recipients often are not adept at nical assistance (for example, for developing the full pro- fulfilling M&E requirements and will benefit from specific posal). In large and/or new and technically complex projects training and hands-on support. Box 5.13 Recommended Options for Grant Program Secretariats ■ An existing public institution, such as a ministry or ary practices or social/environmental safeguards, local government agency, can generate additional for example). political buy-in, institutional sustainability, and ■ Creating an autonomous public/private unit. leverage. The same public institution may also be ■ Using the services of a NGO when independence the key stakeholder within the grant and innovation and flexibility are most important and local capacity system and provide a higher chance of sustainability is very low. NGOs bring knowledge about donor or institutional mainstreaming. Disadvantages arise requirements but may entail higher costs, problems from the tendency of such institutions to be bureau- with long-term institutional sustainability, and a cratic, interfere politically, and lack commercial acu- lack of business acumen. men and understanding. ■ If outsourcing to a competent body is not feasible, it ■ An existing private entity that brings an aptitude is usually best to provide sufficient capacity building for business and less bureaucracy but could be to the staff of the hosting organization, and/or sup- affected by conflicts of interest or unwillingness to plement it with technically and administratively meet donor requirements (procurement and fiduci- appropriate staff. Source: Authors. MODULE 5: THEMATIC NOTE 2: INNOVATION FUNDS 387 T H E M AT I C N O T E 3 Accelerating the Development of Agribusiness Enterprises by Using Business Incubators Seth Ayers, World Bank Institute SYNOPSIS by many factors, including the difficulty of coordinating the diverse partners required to develop and deploy new his note explores business incubation as a mecha- T nism for effectively and sustainably accelerating the growth of startup enterprises that bring inno- vative technologies and services to market. Typically technologies successfully; market failures that discourage private investment; lack of access to financing; limited engagement of end-users in product development; and poor alignment of complementary roles for the public and startup enterprises face a number of challenges in growing, private sectors (Boettiger and Alvarez 2010). It is critical to including the lack of technical assistance, appropriate find effective ways to help SMEs to sustainably scale up their financing, networks of partners and customers, and infra- operations. structure. Business incubators have effectively supported Business incubators occupy the space between mechanisms the growth of enterprises across many sectors, including such as business development services (BDS), technology agriculture. Although the number of agribusiness incuba- parks, and other platforms for business development. The tors is limited, interest is growing in expanding them and core of business incubation is a focus on emerging enter- learning from experience in other sectors. This note sum- prises. Services can range from mentoring to seed financing marizes experiences with two agribusiness incubators and to influencing policies (box 5.14). offers key lessons learned from others around the world, Since 2000, as awareness of their usefulness has grown, including business plan development (for example, a ten- the number of business incubators has expanded substan- year financing and sustainability plan) based on a detailed tially in developing countries.1 Countries such as Brazil and market assessment and structuring an effective manage- India have established large domestic networks of incuba- ment team. tors, facilitated by a national association. Table 5.6 provides BACKGROUND AND CONTEXT Box 5.14 Services That Incubators Can Provide Especially in emerging economies, SMEs play a major role in economic development. Formal SMEs contribute up to ■ Capacity-building, training, and mentoring 45 percent of employment and up to 33 percent of GDP in services. developing economies; these numbers are significantly ■ Technology testing, demonstration, and certifi- higher when the estimated contributions of SMEs in the cation facilities. informal sector are included (IFC 2010). Enterprises are ■ Technology transfer and IP policy advisory ser- particularly important for generating innovations in vices. response to market demand. ■ International networking and collaboration. ■ Policy advocacy and market intelligence. For these reasons, creating links with business devel- ■ Links to investors and other financing sources. opment is one of the most important challenges facing ■ Infrastructure (IT and office facilities, for exam- agricultural innovation in developing countries. The agri- ple). cultural sector has consistently struggled to bring new tech- nologies, services, and business models to market at a scale Source: infoDev (www.infodev.org). that can have substantial impact. Efforts have been limited 388 Table 5.6 Business Incubator Typology and Overview Context and features Strengths (broad) Challenges (broad) Mixed portfolio business incubation – Targets high-growth firms in a range of – Can align with regional and national strategies, – Where new competitive sectors are under sectors germinate new areas of competitive capacity, development, time to achieve impact and – May select sectors that align with the and provide a locus for innovation in this scale may be long overall regional or national regard – Where there is little entrepreneurship, competitiveness strategy – In environments with little entrepreneurial attracting clients with high growth – May exist in environments with little activity, may include extensive “pre-incubation� potential can be a challenge; it may not be entrepreneurial activity and education to source entrepreneurs and possible to operate at the scale necessary businesses to support the incubator’s business model Technology business incubation – Targets high-growth technology firms – Can be an economic resource by attracting – May be challenging to scale businesses – Requires foundation of strong technology and developing research, skills, and businesses beyond seed stage because of lack of and human capital infrastructure – Can develop technology as a new source of financing and difficulties entering – Where this infrastructure and human competitive capacity international markets capital are weak, may require extensive pre-incubation activities – May exist in economies in transition Business incubation with university relationships – Frequently the university or academic – Opportunity to bridge the gap between – Can create “cultural� tensions if academics institution has a role as founder and is research and commercialization or seen as good researchers but poor a source of resources such as research, technology transfer managers or if the university is seen as expertise, space, and/or funds – Access to intellectual property and the too bureaucratic or risk-averse – Typically targets technology firm, potential to develop competitive businesses but may work with other sectors from it – Often provides financial stability for incubators Agribusiness incubation – Targets firms in the agricultural sector – Can often have significant economic and – Requires both business and community – Aim is to commercialize innovative social impact by improving the livelihoods of development skills practices or transform sector firms from communities – May be challenging to enter markets slow growth to growth – Can have an agritechnology focus and focus beyond local communities on commercialization Source: infoDev, “Incubation Models,� http://www.idisc.net/en/Page.MEIA.Incubator.Models.html. an overview of the types of business incubators that can be ■ In a mixed-portfolio model, the incubator will incubate a deployed in different markets. business in any sector, pursuing any business activity from technology to agriculture, as long as it believes that the business is scalable. (Scalability is key to ensuring that INVESTMENT NEEDED the incubatee will be able to pay for rent, services, and The incubator must be designed based on market demand, possibly royalties.) A mixed-portfolio incubator is often a which is reflected in a detailed ten-year business model that more appropriate choice in developing countries, because outlines how the incubator will be sustainable. In estab- the pool of scalable SMEs in a specific sector is limited, lishing a business incubator, the main issues and areas of and a sector-specific model is not viable without a sub- investment include selecting the appropriate model, estab- stantial and ongoing subsidy. For examples, see Fundación lishing a successful management and governance appara- Chile, which is a unique, one-stop business incubator, and tus, and accumulating the appropriate physical assets.2 Technoserve of Mozambique, which leverages BDS to The broad choice in selecting which type of incubator to transform entire sectors (infoDev 2011). develop is between a mixed-portfolio incubator and a sector- ■ A sector-specific incubator is appropriate if there is a specific incubator, such as an incubator for technology or sufficient pool of clients (incubatees) and demand for the agricultural sector (subsector) (table 5.6). For the agri- agribusiness development. It will be important to lever- cultural sector, both models can be relevant and can support age other actors in the sector, including well-established businesses that provide services, products, or new technolo- enterprises that can be potential clients for the enter- gies contributing to agricultural innovation. prises being incubated. For examples, see box 5.20 on MODULE 5: THEMATIC NOTE 3: ACCELERATING THE DEVELOPMENT OF AGRIBUSINESS ENTERPRISES 389 Rutgers University later in this note and infoDev (2011) objectives (infoDev 2009). A committed and skilled man- on Fundacion Jalisco in Mexico. ager can guide entrepreneurs through the development ■ A technology-oriented incubator is particularly appro- process and act as their on-site management counselor. priate when technology transfer and commercializa- This person should have business experience, the ability to tion are desired. In that case, the incubator supports analyze the issues facing client entrepreneurs as they actors (often affiliated with research centers or universi- develop their businesses, the ability to develop networks ties) in commercializing a technology. For an example, that will serve clients, and the ability to work with stake- see box 5.19 on ICRISAT later in this note and infoDev holders to retain their support for the program. Box 5.16 (2011) on CENTEV/UFV (the Federal University of describes typical staff and tenant levels. Vicosa in Brazil). In a business incubator, the board of directors provides strategic guidance to management and helps build comple- The choice of business model determines how the incu- mentary relationships in the community where the incu- bator will sustain its operations—in other words, what bator operates. The board is composed of representatives types of services the incubator will offer to attract the tar- from the management of the incubator (often the incubator geted clients and generate revenue.3 Broadly speaking, three manager) and from external partners, including those revenue models have been developed for different business that provided the financial and material resources to estab- incubation environments (box 5.15). Most business incu- lish the incubator (Medeiros et al. 1992). Board members bation environments will combine elements of each model. should be selected from every area in which the incubator For agriculture, revenue from tenants and other clients, has needs. complemented by public support, may be the most appro- Finally, the physical assets associated with an incubator priate model, as used in the Agri-Business Incubator. range from the availability of IT equipment to real estate As with any business, a key factor for the success of with sufficient space for the incubator office, offices for business incubator is strong leadership and management, incubatees, and other services/equipment. The level of which can develop a sustainable business plan, adjust the physical assets is determined by the business model, client plan as needed, and ensure that business meets the desired pool, and incubator type. The two most common choices Box 5.15 Key Features of Revenue Models for Business Incubators Revenue from tenants and other clients. Rent (40–60+ This model can help ensure the incubator’s sustainabil- percent) is the most common source of revenue in this ity while aligning both the incubator and client busi- model, but fees for the business support provided ness to growth of the business and its revenue. The (business incubation fees) and for the use of facilities model requires stakeholders to have a long-term vision, and other services can be just as important. Hot-desk- because it can take ten years to develop revenue streams ing fees (renting a desk and computer connected to the that will sustain operations into the future. The model Internet by the hour) can be important for broader also requires managerial sophistication, a well- incubation models. This model is financially self-suffi- developed business environment (to form and protect cient, given that the incubator relies on “free� buildings, an investment), and functioning capital markets (if it has minimum economies of scale, and often has anchor relies on brokerage fees from finance raised). tenants. Ongoing government or donor funding. A long- Revenue from sharing in clients’ success. This term commitment from government, a donor, and/or model is based on small equity positions or royalty other organization finances the incubator. This model agreements on gross sales and brokerage fees on raising is potentially risky, because it has no additional revenue finance. For example, ParqueSoft in Colombiaa requires streams. If funding is discontinued, the incubator is clients to pay 20 percent of their sales as commission. likely to close. Source: infoDev’s Online Incubator Toolkit (www.infodev.org/idisc). (a) Described in box 5.21. 390 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK soft funding such as grants (for an example from India, see Box 5.16 Typical Numbers of Incubator Staff and Tenants box 5.17). Since most incubators operate as nonprofit organizations, the public sector can play an important role in providing physical space for the incubator as well as The typical incubator will have 20 or more client financing to cover operating costs. companies (tenants), some of whom may be virtual Business incubators can target specific sectors such as agri- clients who are not physically located in the incu- culture or certain segments of society, such as women entre- bator but receive technical assistance and other ser- preneurs. Incubators that have a specific focus may require vices. A building of about 2,000 square meters additional public support, given that they aim to serve a small should easily handle 20 tenants. At a minimum, subsegment of the market and not the market as a whole, staffing should include a manager with business which means that they are more challenging to sustain. In experience who has been trained in incubator Tianjin, China, an incubator for women’s businesses has had operation, possibly an administrative assistant, sec- considerable impact on the growth and sustainability of retary/receptionist, and at least one business coun- selor who provides technical services directly to enterprises that women own and manage (box 5.18). tenants. A minimal maintenance staff is probably also required, but numbers will vary by location. BENEFITS Source: infoDev’s Incubator Toolkit (www.idisc.net). The benefits of business incubation range from direct financial benefits in terms of tax revenues to significant improvements in SME sustainability, through which new are to establish a stand-alone business incubator in an exist- technologies, services, and business models can be deliv- ing building or use a complementary organization already ered and scaled up. In addition, business incubators raise in operation to house and operate the incubator. The awareness of entrepreneurship. They create a cluster of ICRISAT incubator, for example, is housed within the entrepreneurial activity around a particular sector, such as ICRISAT facility, which offers both physical space and access agriculture, as the incubator becomes a primary point of to new technologies and equipment. contact for actors working in the sector. The National Business Incubator Association (NBIA), based in the United States, estimates that over 7,000 incuba- POLICY ISSUES tors operate around the world, with more than 1,100 in the The policy issues4 that arise most often with business incu- United States alone (of which 94 percent operate as non- bators include their sustainability, the public sector’s role profit organizations). In the United States, the impact of in creating an environment in which business incubators business incubation has been well documented (University can operate successfully, and adapting incubator models to of Michigan et al. 1997; Knopp 2007). For example, every address social concerns. US$1 of public investment in an incubator has yielded Sustainability is a key factor in designing the business US$30 in local tax revenue; 84 percent of incubator gradu- model for an incubator. The design must consider the ates stay in the community where they were incubated; and potential client pool (what is the existing market for 87 percent of incubator graduates remain in business. The prospective tenants?) and mix of services that will create a economic impact and investment return from business sufficient income base and cover operating costs. incubators, as demonstrated by the experience in the The more business-friendly the market environment is, United States, indicates the opportunities for agriculture, the more likely a business incubator is to succeed. The World particularly in developing countries, to use business incu- Bank’s annual Doing Business report ranks countries based bation for developing and mainstreaming new agricultural on the extent to which their market environments facilitate technologies. common business operations and transactions. The report and corresponding website (www.doingbusiness.org) pro- LESSONS LEARNED AND RECOMMENDATIONS vide recommendations for creating a supportive market FOR PRACTITIONERS environment for business, including business incubators. Specific policy instruments that governments can use to The experience gained from using business incubators in a support incubators include tax incentives and early-stage number of settings, within and outside agriculture, offers MODULE 5: THEMATIC NOTE 3: ACCELERATING THE DEVELOPMENT OF AGRIBUSINESS ENTERPRISES 391 countries without a substantial subsidy. To sustain their Box 5.17 The Government of India’s Incentives operations, most incubators in developing countries must to Support Business Incubators operate as mixed-portfolio incubators by providing ser- vices to scalable SMEs in all sectors. ■ Incubators and small and medium enterprises An example of a successful sector-specific incubator is (SMEs) that are clients of incubators are the agribusiness incubator located within ICRISAT in exempt from service tax and corporate tax. Hyderabad, India (box 5.19). The incubator benefits not ■ Foreign equity ownership of incubated SMEs only from a large market but also from the substantial pool can be as high as 100 percent. of R&D available to be commercialized (see IAP 1 for ■ Seed funds for SMEs (US$230,000 per fund) details). The incubator played a key role in building a busi- are managed by selected incubators. ness around a new seed technology and providing shared Source: Department of Science & Technology, Govern- equipment for processing sweet sorghum into ethanol. ment of India (http://dst.gov.in). Develop a comprehensive business plan that captures lessons and evolves to suit changing needs Box 5.18 The Tianjin Women’s Business As noted in the case study of the Rutgers Food Innovation Incubator Center (box 5.20), preparing a comprehensive business plan, including a seven-year financing strategy, was essential The Tianjin Women’s Business Incubator (TWBI) is to success. The Center’s iterative approach to design and China’s first women’s incubator, started with a grant implementation allowed it to test the business plan before of US$300,000 contributed by infoDev, a building investing substantially in building the center. Incubator contributed from the Tianjin Municipal Govern- development must allow for iteration; ideally, the invest- ment, and a cash investment from the Tianjin ment should permit modifications over time. Women’s Federation along with three other local government authorities. As of 2009, TWBI worked with 48 on-site tenants and 10 off-site tenants. At Incubator management and board must be strong that point, the incubator had graduated 16 com- Strong management will attract clients and help the incuba- panies, creating new jobs for more than 3,000 peo- tor become viable. For example, a key aspect of the business ple; assisted 2,000 women entrepreneurs to obtain model used by iPark, an incubator in Jordon, was to recruit microfinance; and provided business training to successful (serial) entrepreneurs to bring a mix of entrepre- more than 20,000 entrepreneurs. Operating near neurial experience to the incubator. iPark maintains a strong full capacity, TWBI has almost reached financial self-sufficiency through charges for office rent, management relationship with tenants, pursues a flexible business services, and external training courses. approach to solving problems, and recognizes that the incu- bator will not succeed if its clients do not succeed. Source: Author. As an incubator evolves, it may need to change the com- position of its board.5 Management must determine which skill set will be most useful in enabling board members to many useful guidelines on incubator design, management, support the incubator’s operations. For instance, in many and finance. They are summarized in the sections that fol- developing countries access to finance for SMEs and incu- low; practitioners interested in developing their own incu- batees is a significant issue. Therefore, many incubators bators will also want to make use of the resources listed in select Board members who represent local banks as way to the references for more comprehensive advice. sensitize these banks to the challenges that incubatees face in accessing capital. Choose the right incubator model for the context Ensure access to finance for clients As discussed, in a few markets, particularly in middle- income and larger economies, sector-specific incubators Figure 5.1 shows that enterprises require different amounts are viable, but they will not be viable in many developing and types of financing (for example, more patient capital 392 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 5.19 The Agri-Business Incubator@ICRISAT The Agri-Business Incubator@ICRISAT (ABI), launched tion, with a focus on seed ventures, biofuels, and in 2003, estimates that its various programs have bene- farm systems solutions. fited more than 40,000 farmers. ABI is an initiative of ■ Technology commercialization. ABI is a platform the International Crops Research Institute for the Semi- for commercializing technologies developed by Arid Tropics (ICRISAT) in partnership with the Depart- public institutions through the creation of agribusi- nesses. ABI also facilitates the commercialization of ment of Science and Technology (DST), Government of technologies and services that have been developed India. It promotes technologies developed exclusively by by entrepreneurs and benefit the agricultural sec- ICRISAT, jointly developed with collaborators, or agri- tor. Products and technologies incubated by ABI cultural technologies developed by R&D centers of include sweet sorghum for ethanol production, excellence, universities, and other institutions. ABI insect-resistant transgenic cotton, and pesticide-free develops agricultural enterprises by providing various crops produced through organic farming. services and facilities: ■ Services and facilities. ABI offers technology con- sulting, business development, and training services, ■ Entrepreneurship development. ABI offers entre- as well as office space, laboratories, and agricultural preneurs support from concept to commercializa- land to test new technologies and services. Source: Agri-Business Incubator@ICRISAT. Box 5.20 The Rutgers Food Innovation Center The Rutgers Food Innovation Center, based in New capabilities, enter new markets, train their workforce, Jersey, provides business and technology expertise to and expand and improve their operations. small and midsize food and agribusiness companies in ■ Retail and food service establishments seeking to the Mid-Atlantic and Northeast regions of the United improve their operations and purchase locally States and, through its outreach capacity, to food and grown New Jersey products. agribusinesses throughout the world. The Center cre- An extensive feasibility study in 1999 helped iden- ated over 1,000 new jobs by incubating new businesses tify the prospective client base. The center developed and over US$200 million in revenue growth for clients, a detailed business plan based on significant primary in addition to millions of dollars in local tax revenue. It and secondary market research, a national bench- has assisted more than 1,200 companies and entrepre- marking study on best practices in food business neurs since it began operations in 2000, including: incubation, a comprehensive strategic plan, and a seven-year financial pro forma. Based on this plan, ■ Farmers and agricultural cooperatives desiring to the Food Innovation Center began operations in create new businesses based on value-added agricul- 2000. A very important consideration was that the cen- tural products and/or developing new markets for ter did not begin its program with a dedicated facility their existing commodities. but held back until its program was fully developed. ■ Startup food companies coping with challenges The center operated out of a rented office for eight such as financing, technology, regulations, market years before moving into a full-scale facility. During development, and infrastructure requirements. this period it tested its model, fully developed its pro- ■ Existing small and midsize food companies seeking grams and services, gradually hired staff, and estab- to access new technologies, upgrade quality assurance lished a network of resources to meet the needs of a (Box continues on the following page) MODULE 5: THEMATIC NOTE 3: ACCELERATING THE DEVELOPMENT OF AGRIBUSINESS ENTERPRISES 393 Box 5.20 The Rutgers Food Innovation Center (continued) broad clientele. It ensured that sufficient demand and analytical support from concept to commer- existed for its services before investing in a building cialization. A Shared-Use Processing Area uses an (funded entirely through grants). array of food-processing technologies to produce a The Center’s facility consists of a Client Services broad range of value-added agricultural and food Area, where clients receive marketing, development, products. Source: Rutgers’ Food Incubator, http://www.foodinnovation.rutgers.edu/incubatorlinks.html. Figure 5.1 Financing Gap for Small Enterprises assistance, only office space is required. If the incubator also provides office space and shared equipment (office Problem areas: banks do not US$ lend easily and the money equipment and agricultural processing equipment, for (‘000) required is too small for the venture capitalists to consider example), it needs an appropriate space to house them. If Second 3,000 expansion the incubator plans to offer access to the latest agricultural information and/or to enable virtual mentoring and col- First 1,000 expansion laboration between enterprises, it will need the appropriate IT equipment. For an example, see box 5.21. Development Early stage 500 Lessons from financing arrangements Lessons related to financing incubators differ depending on 50 their source of funding. A model based on revenue from incubatees or from equity may become self-sufficient with Time time, and the only continuing support it may need will be Source: infoDev 2008. the use of buildings, free of charge or at cost. In more chal- lenging markets, as noted, a proportion of ongoing govern- early on)6 at different stages of development. If these ment funding is likely to be required, especially if the social amounts and types of financing are not available in the mar- and economic return on investment is greater than for other ket, enterprises will struggle to scale, and the incubator’s BDS interventions. The financial strain on the public sector impact will suffer. It is important that an assessment of the may make it very difficult for it to afford long-term funding, financing available in the market is made before establishing however. If a model based on long-term support from an an incubator to determine if financing gaps exist and can be external donor is considered, it will be important to conduct addressed effectively. a rigorous cost-benefit analysis to compare incubation to BDS and other business development support mechanisms before committing. Lessons on real estate investment Business incubators that rely upon rent and client fees as The incubator’s client base will determine the array of ser- their main revenue sources cannot, as a general rule, be vices and physical assets required, including real estate. The financially self-sustainable in commercially leased accom- client base must consist of a relatively large number and mix modation or where they pay the capital costs of a building, of small enterprises, because not all small enterprises are unless they have other, substantial forms of support. Gen- growth-oriented. The type and number of enterprises will erally this support consists of ongoing financial subsidies determine the space, equipment, and other resources by a third party, which can be an unreliable and unpre- required, as well as where the incubator needs to be located. dictable source of funding. It is very hard for business incu- If the incubator provides only business planning and strategy bators to achieve adequate margins in commercially rented 394 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 5.21 Real Estate and Management Arrangements Associated with Parquesoft Centers, Colombia Colombia’s network of ParqueSoft Centers comprises largely self-sustaining, though it must seek grants and 14 incubators situated throughout the country and contributions in addition to revenues. Its growth to managed from a headquarters in Cali. The founder is a 14 centers proves it is scalable, and it has required very highly charismatic individual who used his expertise limited public sector support other than real estate. in information and communications technology to The ParqueSoft brand is known internationally and establish ParqueSoft and promote social development is associated with high-quality services. An association through business creation. More than 270 businesses with ParqueSoft allows the startup companies to obtain participate in ParqueSoft. These interlocking business larger contracts that are effectively subcontracted to the entities provide internal as well as external consulting, member companies. The use of cubicles in ParqueSoft marketing, and training support. Member companies buildings permits more intense networking and inter- pay a 20 percent commission on each sale to ParqueSoft, action by the companies. Although this setup builds the which also receives grants, in-kind donations, rents, and ParqueSoft brand and makes each company seem com- service fees. This revenue allows ParqueSoft to pay for petitive with larger, more established companies, it advertising, maintain its building in Cali, and cover should be pointed out that it also diminishes the efforts other overhead expenses. Local universities provide of individual companies to establish their own identi- office space in each location except Cali. ParqueSoft is ties and brand equity. Source: infoDev 2009. accommodation. They run the risk of either failing finan- companies or for locations where exit mechanisms are cially or having to cut costs until they are really nothing unclear. In that case, royalties may be a better approach. more than real estate operations. More commonly, business Business models that rely on sharing clients’ success have incubators attempt to rent buildings at a purely symbolic proven somewhat problematic. Returns from the equity posi- rate (for example, US$1 per year) or to obtain funds to pur- tion, royalties, and brokerage on finance cannot be relied chase or construct their own facilities, both of which are upon for financial sustainability in the short term. It can take more reliable strategies for securing on-going support. ten years to realize returns, and a portfolio of at least 20 com- Taking a small proportion of equity or a royalty on gross panies is required to spread the risk. A high level of manage- sales for a period can be a very good way for an incubator to ment expertise is also required. receive payment for its value-adding services once the com- Aside from a sound financing model, incubators need to pany being assisted has succeeded (not up front, when the “walk the talk� and demonstrate high levels of financial man- company is short of cash). This success-sharing strategy agement capability to incubated enterprises. Financial man- aligns the business incubator’s mission with that of its agement consists of planning, overseeing, and controlling clients. Increasing numbers of technology incubators take a the incubator funds, whether they are brought in through small equity position or negotiate royalty agreements as a services or provided by partners and investors. Mechanisms condition for membership in an incubator. Realistically, tak- need to be developed that allow the incubator manager to ing equity applies only to high-growth and generally intel- know accurately the amounts available, the needs, and the lectual property-driven companies, in situations where clear investment capacity. Additionally, financial management exit mechanisms (such as initial public offerings or trade should focus on bringing in new sources of funds for the sales) exist. This option makes little sense for most service incubator. MODULE 5: THEMATIC NOTE 3: ACCELERATING THE DEVELOPMENT OF AGRIBUSINESS ENTERPRISES 395 T H E M AT I C N O T E 4 Agricultural Clusters Florian Theus, World Bank Institute Douglas Zeng, World Bank SYNOPSIS foster innovation. Clusters are agglomerations or networks of production populated by strongly interdependent firms cluster-based approach helps to identify policy A and institutional impediments to competitiveness and innovation. Through dialogues at the cluster level, new partnerships can be forged between cluster lead- (including specialized suppliers) within a value-adding pro- duction chain as well as service providers and associated institutions in a particular field. In some cases, clusters also encompass strategic alliances with universities, research ers and various public organizations (such as those working institutes, knowledge-intensive business services, bridging on industrial development, infrastructure development, institutions (brokers, consultants), and customers. These research, innovation, and training) to formulate and expe- entities are linked by externalities and complementarities dite policy reforms. Given that developing countries have and are usually located near each other. Agricultural clusters very limited financial resources, selectivity and efficacy are often form geographic and sectoral agglomerations of important guiding principles of competitiveness strategies. enterprises (Schmitz 1992). The most dynamic clusters Focusing on a cluster approach mirrors these principles, spring up spontaneously, without direct intervention by helps in scaling up to the industry level, and fosters regional external actors. innovation systems. A government may choose to pursue cluster initiatives along with simultaneous policy reforms, because the two approaches may create positive externalities Why and when to use a cluster approach and help government develop a compelling case for policy Cluster-based policy aims at removing the imperfections of reform. Based on a broad range of successful cases, the most innovation systems by enabling them to function more effi- important factors in the success of a cluster program or ciently and avoid coordination failures. A cluster-based initiative appear to be demanding markets, positive joint approach is a realistic way to identify the policy and institu- action, and institutions capable of moderating and focusing tional impediments to competitiveness and innovation. power imbalances—complemented by the push factors of When a critical mass of firms moves simultaneously to education and prior technological knowledge. Perhaps most function as an initial cluster, they become an effective vehi- important from a policy perspective is the ability to adopt cle for catalyzing reform. Through dialogues at the cluster flexible and coevolving policies designed to foster cluster level, new partnerships can be forged between cluster lead- emergence, which reflect the development of institutions, ers and various public organizations (such as those working technologies, and firms in a dynamic and self-organizing on industrial development, infrastructure development, process. It is critical to find a balance between carrying research, innovation, and training) to formulate, effectively capacities, the institutional setup, and the individual incen- sequence, and expedite policy reforms.1 A government may tive design. choose to pursue cluster initiatives along with simultaneous policy reforms, because the two approaches may create pos- itive externalities and help government develop a com- CLUSTERS AND THE RATIONALE pelling case for policy reform. FOR INVESTING IN THEM The cluster perspective provides a number of advantages The cluster approach focuses on networks of production over the traditional sectoral approach in both analyzing and and value chains rather than on nationwide initiatives to promoting competitiveness, innovation, and innovation 396 networks. Given that developing countries have very limited ENABLING INVESTMENTS TO SUPPORT financial resources, selectivity and efficacy are important AGRICULTURAL CLUSTERS guiding principles of competitiveness strategies. Focusing The cluster approach involves many actors whose roles are on a cluster approach mirrors these principles, helps in scal- always evolving, which makes the role of the state complex ing up to the industry level, and fosters regional innovation and location specific. Roles of the public and private sectors systems. A value chain may be too narrow a domain when are becoming increasingly blurred. The private sector in the surrounding innovation ecosystem is underdeveloped. many developing countries is providing quasi-public On the other hand, the national innovation system may be goods, such as training smallholders in the use of technol- too broad a domain, and its top-down approach (unlike the ogy, instituting quality control, or providing finance bottom-up approach possible with a cluster strategy, dis- (Larsen, Kim, and Theus 2009). Cooperation and collab- cussed in “Lessons Learned�) would increase the risk of oration schemes have been implemented in virtually all making mistakes on a large scale. spheres that originally might have been the domain of the public sector (see the discussion of PPPs later in this note). Clusters versus value chains Three broad areas of investment are commonly needed While a value chain approach2 can be used in the absence of to support the development of agricultural clusters. They a cluster approach, value chains must be supported for a clus- include investment in infrastructure and the policy envi- ter approach to work. Cluster development and value chain ronment, investment in a regulatory framework, and enhancement must go hand in hand if a cluster aims to pro- investment in formal and informal institutions (and their mote innovation-based competitiveness in developing coordination). countries, where (1) value chains are often very unstruc- tured throughout their segments (transportation, distribu- Importance of improved infrastructure tion, enabling environment), thus requiring intervention by and policy environment numerous stakeholders who cannot resolve these problems alone; (2) trust among stakeholders is weak, and a special Cluster programs and investments are effective only where effort is needed to build social capital; and (3) obstacles minimum conditions of macroeconomic and physical stabil- need to be addressed by multiple stakeholders and value ity, hard and soft infrastructure for doing business, and basic chain segments (USAID 2008). institutions for supply-side functions are met. Government plays an important role in this regard, often supported by donors. Economic reforms such as deregulation of domestic Spontaneous versus orchestrated clusters markets, removal of explicit and implicit trade barriers, The most dynamic clusters spring up spontaneously, with- ending distortions in exchange rates and taxation, as well as out direct intervention by external actors (McCormick and the development of a sound property rights regime are some Mittulah 2005). On the other hand, agricultural clusters in of the measures that need to be taken. For instance, the developing countries may be fostered by local and/or Kenyan cut flower cluster succeeded owing to the enactment national government as well as donor support. of legislation setting up promotional schemes (such as man- In supporting the transformation of clusters into inno- ufacturing under bond, export compensation, and export vation systems, evidence points to the importance of com- promotion zones for horticultural exports), protecting intel- plementary policies, programs, and financial mechanisms lectual property rights, and enforcing quality standards that can foster new linkages and create opportunities for (Zeng 2010). The public good character of infrastructure— sustained growth. Where these links and opportunities are especially the transport, hygiene, and cooling facilities criti- not established, stagnation and decline in the face of crisis cally important for many food products—makes govern- and challenges often followed (Zeng 2010). Regulatory ment and donor involvement imperative. frameworks and extension agencies also play important roles in agricultural cluster development. Regulations, quality assurance, and standards It is obvious that cluster development is a long-term, multifaceted approach that is unsuited to short-term invest- Local governments often try to improve services and regu- ment projects. External support is often provided during lations in ways that help to generate business, enable clusters later phases of cluster development, when clusters have to operate normally, and maintain dynamic growth. In demonstrated their potential. addition, governments enact specific regulations, especially MODULE 5: THEMATIC NOTE 4: AGRICULTURAL CLUSTERS 397 related to types of investments, product quality, and stan- services forestalls process and product upgrading and clus- dards to ensure that products made in clusters have a mar- ter development. The high risks, uncertainty of collateral, ket future. informality of many SMEs, and high transaction costs Persistent capacity constraints can cause standards and limit financial services in rural areas. Where financial ser- quality management regimes to fall short of implementa- vices are available, banks often provide expensive credit tion, however. Targeted assistance to governments has under stringent repayment schedules. Financing innova- proven successful in removing this constraint. In the Ugan- tors and startups becomes extremely difficult under these dan fish cluster, the government provided leadership and conditions. coordination to develop local standards and, through its Developing capacity in financial service providers as well fisheries inspection service, regular monitoring. The devel- as their cluster clients (firms) can be an important step in opment and enforcement of standards helped sustain the reducing information asymmetries and risk. Banks benefit pressure on the clusters to keep up with improved process- from capacity building to improve credit checks. Firms, on related standards (the same could be done for product the other hand, benefit from expertise in developing busi- upgrading) (Kiggundu 2005). ness plans. The list of mobilizing co-investments may include commercial bank financing, equity financing, devel- opment bank financing, an industry tax or levy, venture The crucial role of institutions capital investment, government investment, and voluntary Institutions are crucial in agricultural clusters (figure 5.2). industry investments3 (see the discussion in TN 6 on risk They may be public (state agencies, regional entities on capital). The approach should factor in the consideration competitiveness and innovation, and educational institu- that venture capital, as cases such as Silicon Valley show, tions, among others) or private (banks, business organiza- generally lags behind cluster formation. Venture capital tions, and companies) and formal or informal (networks, firms are attracted to new clusters once they show substan- learning through transactions with local and external tial economic activity with the expectation of future profits agents, and so on). (Braunerhjelm and Feldman 2007). Generating and accessing financial resources. Learning and training. Various industry-specific modes Throughout developing countries, the lack of financial of learning and training—formal and informal—are Figure 5.2 Institutions with Crucial Roles in Agricultural Clusters Public institutions Private institutions Line ministries Business Business associations registrar Lawyers Export promotion Arbitrators Investment Training institutes promotion Business service Standards and providers certification Universities Market research Innovation and agencies IPRs technology foundations R&D Industrial zones Source: World Bank 2009. 398 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK important means of acquiring and disseminating knowl- Institution(s) for coordination and strategy. Nur- edge and technology in clusters, because they influence turing a coordinating body may be important. Forming com- the clusters’ potential for innovation and competitiveness. petitive clusters requires collaboration among multiple levels Modes of learning and training generally include: of government, companies, teaching and research institu- apprenticeship, on-site training at suppliers’ factories, on- tions, service providers, standard-setting bodies, and private the-job training, expert contracting, support mechanisms organizations. A strong coordinating body, usually a public provided by public institutions, learning through trans- agency, is needed for that role. Through unambiguous policy actions with local and external agents, and learning-by- and with the involvement of all relevant actors, a national doing in the areas of production and maintenance competent authority on technological upgrading may pro- (Zeng 2006). vide leadership in organizing background research across On-the-job-training, a major mode of learning for high- carefully selected sectors, developing standards and perfor- tech-intense clusters, is often absent or insufficient in agro- mance targets for technological change, and developing clusters in developing countries. Support programs for reward systems and support and enforcement mechanisms. training institutes, expert contracting, and training of mas- An example is the South African Wine and Brandy Com- ters are means to strengthen training and learning capacity. pany, which was formed to represent the local wine industry For example, in the South African wine cluster, capacity cluster and to implement the vision of innovation-driven was improved through the newly created Elsenburg Train- and market-oriented production and exporting of wine. ing Institute, with vineyards and a cellar. Most established After restructuring, it incorporated divisions focusing on producers exchanged production knowledge through this basic and applied research, international market develop- institute, which performed a function similar to viniculture ment, and social and political transformation (Wood and forums and root stock associations (Wood and Kaplan Kaplan 2006). 2006). (See box 5.22.) Governments can also strengthen major educational POTENTIAL BENEFITS institutions to meet cluster needs. A critical element of cur- riculum design is to foster links with the private sector so Evidence from rural industry clusters in the United States that the skills of graduates meet the agribusiness require- shows that clusters contribute positively to regional ments of the cluster (see examples in module 2). The same economic growth and higher wages for rural workers point applies to research institutes and universities involved (Henry and Drabenstott 1996; Gibbs and Bernat 1997). in R&D: They need to focus on applied research and areas Because of their proximity, cluster constituents enjoy the of prime importance for the respective cluster. Finally, loca- economic benefits of several location-specific externalities tion is key to cluster development. As major sources of tech- and synergies. A well-developed concentration of related nology and knowledge spillovers, as well as technology com- agribusiness spurs three important activities: mercialization, agricultural universities and possibly their incubators are major sites of innovation and thus significant ■ Increased productivity (through specialized inputs, access for cluster development. to information, synergies, and access to public goods). ■ More rapid innovation (through cooperative research Institutions of technology transfer, knowledge and competitive striving). Nothing sparks productive generation, and sharing. Progress in technology, innovation better than competition in proximity— innovation, and product diversity are linked to institu- whether technological innovation, as seen in the IT clus- tions of technology transfer, knowledge generation, and ters of Bangalore or Korea, or creative innovation, as in sharing, mostly supplied or supported by the public sec- the fashion design clusters in New York and Paris. tor or by donors (TN 5). A prime example of best prac- ■ New business formation (filling in niches and expand- tice and long-term development of such institutions is ing the boundaries of the cluster map). In clusters, new Fundación Chile, the key institution enabling technology businesses form as a consequence of competition, transfer to Chile’s renewable natural resource clusters. demand for services, and the attraction of investors; this Fundación Chile started out as a specialized service dynamic in turn spurs innovation. provider and began to incubate companies to nurture a demonstration effect for new technologies (see module 1, The cluster and its location-specific externalities and IAP 3). synergies accrue a range of benefits: MODULE 5: THEMATIC NOTE 4: AGRICULTURAL CLUSTERS 399 ■ Better and more efficient access to infrastructure, spe- productivity, and innovation.4 The South African wine clus- cialized human resources, and inputs, including capi- ter demonstrates those benefits and shows how the develop- tal. Firms readily obtain access to vital inputs such as ment of a cluster can spur innovation and economic growth suppliers, information, technology, financing institu- in an industry (box 5.22). tions, and institutions of higher education. ■ Reduction of costs. Transaction costs are considerably POLICY ISSUES lowered because of proximity in the cluster. Proximity offers vital advantages for the agricultural sector in With regard to agricultural cluster projects, the most promi- developing countries, in particular for SMEs. Often nent policy issues concern power imbalances, social and firms can source products and services from inside the environmental issues, as well as a need to define public ver- cluster and forgo the (greater) cost of having to sus private sector roles. develop or produce the product or service. Costs are Some actors in clusters and innovation systems, such as also being reduced through economies of scale and SMEs and their associations, can encounter enormous dif- scope, as in the case of joint marketing and bulk pur- ficulties in trying to grow (Parrilli 2006). The strongest chasing. Costs related to hiring talented employees are agents use the market to maintain control over resources reduced as well, provided talent is made available in and decision-making and invest in innovative and costly the cluster. activities (such as R&D or promotion campaigns) that ■ Access to information and services. Being in a cluster strengthen their position compared to weaker competi- provides members with preferred access to extensive mar- tors. Leaders are needed for a cluster, but programs and ket, technical, and competitive information that accumu- projects need to guarantee equal opportunity of access and lates in the cluster. For example, through a close relation- competition with a view to sustaining the cluster. The ship with sophisticated buyers within a cluster, suppliers commercial interests of a cluster can infringe upon local are more attuned to their specific needs. Business organi- communities and their way of life, leading to social ten- zations and also business fairs function as information sions and hampering the cluster’s prospects. For example, and service hubs; informal day-to-day contact with simi- social tensions with local residents erupted after cut flower lar companies plays an equally important role. farms privatized the public beaches used for public recre- ■ Attraction of foreign investment. If clusters are leading ation around Lake Naivasha (Bolo 2006). Horticulturists centers for their industries, they will attract all the key and fishers around the lake have come into conflict over players from home and abroad. In fact, foreign-owned diminishing fish numbers (Bolo 2006) (box 5.23). Poten- companies can enhance the leadership of the cluster tial externalities have to be factored into policies and pro- and contribute to its upgrading, as experienced in the grams and should reflect the interests of all potential Ugandan fish cluster where this function was played by stakeholders. European firms. Clusters whose productive processes rely heavily on ■ Better recognition and marketing. For small and devel- natural resources encounter challenges arising from their oping businesses, locating in a cluster near competitors side-effects on the production base, growth, or changing and related industries may help them to grow, gain environmental conditions (such as climate change). At the recognition, and attain status more rapidly within the onset it is difficult to predict the size, concentration, and market. The South African wine cluster is indicative. output a cluster might attain, but the environmental impli- Only when a company was established to market wine cations can be severe (box 5.23). A common analytical tool for a pool of producers did they gain the clout to export is an environmental impact study. Scenario-based forecast- and market on a large scale. One producer alone could ing is an additional tool to hedge against the potential not have done it. problems outlined in an impact study (see module 7, TN 3). A specific challenge to agriculture relates to common- One cluster often seeds or enhances others as it disperses pool resources, in which exclusion of beneficiaries through activities in the value chain to reduce risk, access cheaper physical and institutional means is especially costly and inputs, or better serve particular regional markets. Export- exploitation by one user reduces the availability of the oriented clusters usually generate above-average wages, resource for others (Ostrom et al. 1999). 400 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 5.22 The Wine Cluster in South Africa: Outcomes and Success Factors The South African wine industry has grown signifi- a key coordinating role as the hub of an extensive cantly since the early 1990s in an extremely competitive network of industry actors and scientists and techni- global market. Exports rose from 20 to 177 million liters cians from the universities and ARC. Winetech serves as between 1992 and 2002. Over the same period, table an advisory council to the South African Wine and wine production increased by 33 percent. This phenom- Brandy Company (SAWB), a nonprofit company that enal change came about through a combination of insti- represents wine producers, workers, and wholesalers. It tutional, structural, and market factors. has an explicit commitment to enhance the competi- Two policy initiatives underlay the wine cluster’s tiveness of every aspect of the industry through innova- success. First, the abolition of the quota system precip- tion. SAWB designated the private organization Wines itated a shift toward varieties for which global demand of South Africa (WOSA) to act on behalf of some 320 was increasing. Incentives promoted extensive new South African wine exporters to promote South African planting and replanting. In 2002, 37 percent of vine- wines internationally. The competitive realities of the yards were less than eight years old, and grape quality global market reinforced the roles of SAWB and WOSA, had increased. Second, broad macroeconomic policies because marketing the country’s brands had become aided the growth of the cluster, including the liberaliza- too big of a job for individual firms. tion of agricultural trade, deregulation, land reforms, Greater cooperation and collaboration among pro- reduction of direct subsidies, and the introduction of a ducers and other institutions increased innovation and minimum wage for farmers. helped to overcome market imperfections and inefficien- South Africa’s wine producers can be divided into cies. Innovation altered marketing, wine-making four segments: established producers, new producers, processes, the choice of varieties, and production cooperative producers, and wholesalers (some of which practices. Producers exchange knowledge through viti- produce wine in addition to their primary role of mar- cultural and vinicultural forums, a root-stock association, keting, sales, and distribution). Technical support came two varietal associations, Winetech, and the Elsenburg from the Agricultural Research Council (ARC), which is Training Institute. Extensive use of local and interna- partially funded by the state. The Wine Industry Net- tional consultants and information about international work for Expertise and Technology (Winetech) plays market trends was a key component of success. Source: Wood and Kaplan 2006. Box 5.23 Environmental Challenges for Cluster Development: Examples from Kenya and Tanzania Kenya cut flower industry (a scale challenge). Kenya’s cut munity, heightened competition, and an ineffective regu- flower industry needs water, but the extent to which the latory regime threatened to transform Lake Victoria into cluster around Lake Naivasha would evolve was not fore- an open-access resource, with dire consequences for fish- seen. Horticultural farms in the lake region have ers’ livelihoods, fish populations, and the quality and encroached on riparian ecosystems, leading to pollution quantity of lake water. Through efforts by the govern- and excessive withdrawals of water from Lake Naivasha. ment, international organizations, and civil society, all The lake continues to recede, with a concomitant loss of stakeholders have been involved in managing the fisheries aquatic life, threatening the livelihoods of local fishers resource. Fishers have been involved in planning and and the food supply. The challenge is to guarantee the managing fisheries, which is expected to increase their necessary inputs into production on a sustained basis access to Lake Victoria fisheries and help reconcile the while limiting environmental externalities. potentially conflicting goals of sustainable fishery man- Lake Victoria fisheries (a common-pool resource agement and the livelihoods of communities that catch challenge). A combination of poverty in the fishing com- fish using improper gear and methods. Sources: Bolo 2006; McCormick and Mitullah 2005. MODULE 5: THEMATIC NOTE 4: AGRICULTURAL CLUSTERS 401 LESSONS LEARNED AND RECOMMENDATIONS analyses, which offer more rigorous approaches to the ques- FOR SUPPORTING CLUSTER DEVELOPMENT tion of where to compete (for details on all of these tools, see World Bank 2009). In developing a cluster initiative and identifying supporting It often is vital to the success of a cluster for a donor investments, practitioners need to know which emerging program to help assess the potential of target markets, in clusters have potential and which analytical tools they will particular those in developed countries. Focus first on need to develop a program or project. Successful clusters existing export contacts and identify specific buyers. develop on the basis of specific combinations of capabili- Include detailed monthly pricing information from United ties, incentives, and opportunities. It is hard to predict States and European markets to develop a strategy to enter which of the locations identified in the first phase of this market segments offering the greatest opportunities. Focus process will become the dominant location in the final initially on customer demand and work back to what value phase. Policy makers and development practitioners should chains and clusters produce and how they must change to promote clustering in sectors that already show compara- meet customers’ needs. Agro-industries may have different tive advantage (Rodriguez-Clare 2005) rather than distort- market segments, with different demands and competi- ing prices by promoting the development of sectors with tors; ensure that demand exists not only for the industry in high clustering potential. It is important to include several general but also for the specific product and its value key clusters in the long list of candidates for inclusion in chain. Demanding markets can also be local markets, the initiative. This limits the danger of trying to create clus- which can serve as an essential first step in the cluster’s ters where none exist (World Bank 2009). development.7 Benchmarking of the sector is used to examine gaps between the performance standards of domestic firms and Identifying emerging clusters with potential the standards required by multinationals, new markets, and Before selecting specific clusters for intervention, industry new buyers. Cost benchmarking improves the awareness of specialists should carry out broad cluster mapping at the internal costs and enables comparisons with competitors. It national level. The regional economies in a country are spe- also helps in determining which niches may need less cialized, with each region exhibiting competitiveness in a improvement than others and therefore inform product and different mix of industry clusters. It is very important not to market differentiation.8 ignore interdependencies between regions and between Value chain analysis can contribute to strategic deci- clusters. Cluster mapping will help assemble a detailed pic- sions about which products to target in cluster develop- ture of the location and performance of industries with a ment. The analytical framework is based on three major special focus on the dynamics, linkages, or externalities functions in the value chain: source, make, and deliver. In across industries that give rise to agroclusters.5 addition, the chain’s performance is measured, benchmarks The analysis of emerging clusters begins by identifying established, and performance gaps analyzed, taking into either a driving, export-oriented industry or a fast-growing account government and market failures.9 Finally, institu- “emerging� industry. Export-oriented industries can be iden- tional mapping can identify which public and private insti- tified using the Employment Concentration Factor, an Input- tutions exist in the cluster and determine which institutions Output model, Cluster Dependency Factors, Specialization may be reformed, abolished, or strengthened.10 analysis, and the San Diego cluster analysis.6 All are described in detail in SANDAG (2005) and Goetz et al. (2004). An incremental approach to supporting and designing cluster development: some lessons Analytical tools for developing a cluster The initial phase of cluster development involves sowing the initiative and informing investments seeds of institutional reform, creating new forms of prop- Once potential clusters are selected for inclusion in an ini- erty rights, and setting out strategic programs. It also tiative, several analytical tools can guide cluster initiatives involves establishing trust among key stakeholders and con- and investments. Product and market segmentation will vincing them to collaborate (which will also be a continuous identify the products and markets in which each cluster activity). In subsequent phases, the focus shifts to providing competes. These products and market segments can give incentives to assist startups, attracting entrepreneurs from direction to Porter’s five-forces and competitiveness position the diaspora abroad back to the country, and developing 402 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK regional clusters, in some cases around special economic firms. In projects where lead firms were missing, cluster zones (Braunerhjelm and Feldman 2007; Zeng 2010). Many development and value chain enhancement encountered agricultural clusters might be remote from urban centers, serious obstacles. and linking them to support structures such as banks or In agriculture, most lead firms are major buyers with a universities will be difficult. stake in ensuring quality and price competitiveness and thus Financing is another major issue in subsequent phases of an important stake in the production process. Obtaining cluster development, once startups and investors consider strong commitment from a lead firm is not always possible the basic framework conditions to be in place. As access to at the outset, and the implementation team will need to capital and finance increases for firms, they can increase assess how much can be done to improve the value chain their activity and productivity. Often, new investors such as without cooperation from a lead firm. In successful cases venture capital firms cause new businesses to form, which in that exhibited these characteristics, the cluster identified turn may alter the cluster. segments of the value chain where it could work without A common learning trajectory among firms in develop- active participation from a lead firm, such as promoting ing countries starts off with process upgrading, followed by micro or small and medium enterprises or dealing with product upgrading. For this reason, an incremental environmental issues (USAID 2008). Ultimately, however, approach to investments and programs seems promising. It the support of lead firms is required for cluster promotion may also be worth focusing first on local markets, if their and value chain enhancement to be effective. potential is high enough, as a first step in upgrading. Early accomplishments are essential in fostering trust and need to Guiding principles on targeted public-private part- be incorporated in early action plans. To create such trust, nerships. In agricultural innovation and clustering, PPPs the project and the cluster should focus on a series of (discussed in detail in TN 1 and in module 4, TN 2) can be smaller value chain initiatives that create confidence in clus- seen as arrangements that assemble partners with different ter activities while addressing constraints to innovation and skills to generate, adapt, and/or diffuse innovation, build competitiveness in various segments of the value chain. infrastructure, export and market products, and pool finan- These initiatives may include technical assistance on low- cial resources. Usually PPPs are formalized through contrac- cost production and postharvest handling, observation trips tual agreements specifying the partners’ commitments and to see best practices in other countries, technical assistance sharing of benefits. Potential partners include regional for packaging, and trade missions to major international industry promotion agencies, research institutes, universi- markets to meet potential clients. ties, extension agencies, market promotion agencies in the public sector, producer associations, and businesses and Sequencing, prioritization, and the inclusion of individual producers in the private sector. PPPs must satisfy lead firms. Given limited resources and the ambition to the condition that overall benefits outweigh the overall costs. achieve the biggest impact for the competitiveness of the Without this synergy, there is no justification to partner. agricultural cluster, the major and most urgent areas of Agents that promote PPPs, such as donor agencies, play public investment must be identified. The analytical infor- a crucial role in motivating potential partners, building mation mentioned above should be combined with market trust among partners, and providing credibility for PPPs in trend and segmentation analysis to address major short- general (box 5.24). Matching grants are a successful mech- comings in ways that support the strategic development of anism for making these partnerships work, especially if the the cluster. objective is to foster links between markets and the public A parallel dialogue with major industry agents needs to sector (see TN 2, the discussion in the module overview, be initiated, their feedback factored in, and a common and World Bank 2010). vision built. The outcome should be an informed decision on where to invest and under what time frame, in line with Direct and indirect ways of facilitating and induc- the vision for the cluster. It is pivotal to identify stakeholder ing cooperation. When collaboration and joint action leaders when the project is being designed or first imple- provide obvious benefits to all major stakeholders, as in the mented and to identify lead firms and make them central in South African wine cluster, they may arise spontaneously. efforts to improve the value chain and develop the cluster. In most cases, cooperation among competing firms and Lead firms in successful clusters often spearhead collabora- producers does not occur naturally; it is likely to require tive efforts, interact with government, and attract follower deliberate and sustained action (Wood and Kaplan 2006). MODULE 5: THEMATIC NOTE 4: AGRICULTURAL CLUSTERS 403 Box 5.24 Public-Private Partnership Supports Cluster Development in Uganda’s Fish-Processing Industry After fish exports from Uganda were banned by the provided technical assistance to the government for European Union owing to concerns about bacterial timely and effective communication with the European contamination, the government, donor agencies, fish- Commission. It identified and paid private consulting processor association, and private firms worked firms (based in Europe) to strengthen the audit systems together closely and swiftly to help the industry improve of the government’s Department for Fisheries Resources its processing practices. Standard operating procedures and train fisheries inspectors as well as quality assurance were devised for inspectors, and a voluntary code of managers across all firms that processed and exported conduct on good manufacturing principles for fish- fish. The Lake Victoria Environmental Management processing firms was established through the Uganda Program, supported by the World Bank, provided duty Integrated Program of the United Nations Industrial allowances, transportation, and other logistical support Development Organization (UIP-UNIDO) and the critical to implement the revitalized inspection and law Uganda Fish Processors and Exporters Association. UIP enforcement system. Source: Kiggundu 2005. Both the provision of incentives and direct facilitation Developing capacity in relevant institutions (often funded and implemented by the public sector) seem through technical assistance. As the discussion has to be of value in cluster development. indicated, institutions, public and private, are crucial in Incentives for joint action can take the form of tax agricultural clusters (figure 5.2). Through targeted pro- deductions for dues paid to business associations, access to grams, training (including study tours), and sharing inter- infrastructure, or financial resources for firms agreeing to national best practices, donors play a vital role in strength- work together. In Cambodia, a PPP for food processing sup- ening institutions and promoting cluster development. For ported by GIZ enabled five companies producing mineral example, donor support can improve the capacity of state water, ice, and soy sauce to upgrade their manufacturing agencies in monitoring and enforcing quality standards, as facilities, machinery, and technology. To receive financial seen in the example from Uganda in box 5.24. Donors’ and technical support, the companies agreed to invite inter- involvement may be necessary to help incipient producers ested SMEs to visit to exchange knowledge, skills, and expe- meet complex international standards. Buyers cannot play riences. As a result of this induced knowledge sharing, there this role, because the standards embody specialized knowl- was more demand than available spots to function as lead edge that most buyers do not possess (McCormick and companies, and collaboration in the cluster and industry Mittulah 2005). Adding capacity to an enforcing institution, intensified.11 and making sure the respective officers (and possibly some Creating value along the supply chain and enhancing col- critical buyers) gain the necessary knowledge of sanitary lective efficiency in the cluster requires trust among all stake- and phytosanitary measures, appear to be vital components holders. Direct facilitation by the government and other organ- of cluster development and value chain enhancement in izations, including donors and NGOs, is often needed to developing countries. stimulate and sustain joint action among key cluster agents Donors can also strengthen the intermediary institu- (box 5.25). The “honest broker� role is essential, especially for tions (such as professional and business organizations) that uniting small producers and linking buyers and sellers. On the act as important mechanisms for tapping into foreign other hand, project staff must ensure that stakeholders even- knowledge, coordinating activities in a cluster, and lobby- tually assume this role themselves in the interest of sustain- ing government. Successful efforts to build capacity have ability. Experience indicates that trust can be established more focused on creating a service mentality, training staff, effectively by creating a flow of successful small activities establishing proper financing schemes (such as a fee struc- (training, initial transactions between small and large produc- ture), and providing key business organizations with the ers, and so on) that lead to more significant transactions, such necessary infrastructure (including a website). In extension as joint exporting (USAID 2008). systems, donors add capacity by training officers to use new 404 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 5.25 A Joint Action Project in Paraguay Improves Competitiveness of a Sesame Value Chain through the Cluster Approach Successful joint action for cluster development and alle- together. The project helped them to set clear expecta- viating rural poverty occurred under the United States tions and develop a realistic understanding of the finan- Agency for International Development’s (USAID’s) cial returns to cooperation. It educated participants Vende (“Sell!�) project in Paraguay. In 2003, sesame about the value chain and players involved. Its emphasis processors in north-central Paraguay were receiving on increasing sales constantly reminded people that they orders from Japan and Korea that they could not fill, were working toward a mutually rewarding goal. After because regional suppliers could not provide the right two years, sesame production had doubled in Paraguay. quantity and quality of raw, industrial-grade sesame. Exports for the four processors involved in the program The processors required a type of sesame that could be rose by approximately US$8 million. Thousands of harvested only by hand. Some processors considered farmers in Paraguay’s impoverished north-central zone moving their facilities to other countries. Although and elsewhere increased their incomes by growing a sesame farmers and processors distrusted one another more viable cash crop. Vende technicians are building and had never collaborated closely, Vende brought them local capacity to ensure that these efforts are sustained. Source: USAID 2008. methods to explain and demonstrate appropriate technol- capacity, linkages, and human capital, for example), the ogy for cluster firms. In credit institutions, donors can add activities to support the cluster (these can be private or capacity by improving credit checks; the financial capacity public initiatives or donor programs), and the finance and of firms will improve if they learn how to write business funds available. The evaluation should also be designed to plans. Donors may also assist in developing innovative capture lessons on process. Results of cluster initiatives may financial services and credit schemes for banks. not mature for a long time. To deal with the inherent chal- Technical assistance has strengthened institutions and lenges, it could be useful to devise an M&E assessment promoted cluster development by establishing national similar to the management effectiveness tracking tool used standards based on international food standards such as by the Global Environment Facility.12 The tool categorizes GlobalGAP. A cluster’s competitiveness and capacity to indicators by context, planning, inputs, processing, out- innovate particularly benefits from programs that link firms puts, and outcomes, all of which are relevant to agricul- within value and supply chains in ways that benefit all actors tural cluster projects. Instead of absolute values, a score is involved, including small-scale, geographically scattered used, so results can be plotted to facilitate comparison producers. Subcontracting schemes are a particularly suc- (for example, across agricultural clusters). The tool can be cessful way to link small-scale producers with processors applied as a self-monitoring and external monitoring and buyers. They ensure reliable, better-quality production tool, and it gives immediate feedback and suggestions for for buyers and access to credit, training, and economies of improvement. scale for producers. Apart from tracking process and results through a sound M&E system, a good governance framework is needed to Monitoring and evaluation. Cluster M&E begins by minimize the risks associated with government failure mapping three main areas that require monitoring: the related to misinformation or capture by the industry/ resources of the cluster (natural resources, firm absorptive cluster. MODULE 5: THEMATIC NOTE 4: AGRICULTURAL CLUSTERS 405 T H E M AT I C N O T E 5 Technology Transfer Offices: Facilitating Intellectual Property Protection for Agricultural Innovation Alan B. Bennett, University of California, Davis Riikka Rajalahti, World Bank Andrea Pape-Christiansen, Consultant SYNOPSIS insufficient in strong market economies and for advanced technologies that may require a more formal hand-off to echnology transfer is a critical process in trans- T forming agricultural research innovations into applications for end users. The vast majority of agricultural innovations in developing countries arise from permit commercial development or may require regulatory approval from governmental authorities. Increasingly, more formal mechanisms of technology transfer are required, involving intellectual property (IP) protection and legal publicly sponsored research centers or universities, which agreements to transfer both intangible and tangible property typically are unprepared to engage in formal mechanisms of for further development and distribution. These new tech- technology transfer. These mechanisms may require intel- nology transfer requirements prevail within and between lectual property protection and/or legal agreements for developed and developing countries. transferring intangible and tangible property rights to other Although it is clear that public research organizations public, commercial, or international partners. A sustained play important roles in all countries, more developed coun- investment in capacity building is essential for technology tries have a strong private innovative sector that is virtually transfer programs to have an impact. It is critical to assess absent from developing countries. For this reason, public whether an institution has a broad base of research assets research organizations in developing countries remain a and a culture that will support a technology transfer pro- primary source of local innovation and are likely to play a gram. If so, investment in a technology transfer office role further along the innovation pipeline. They require requires paying attention to: (1) identifying an appropriate internal capacity to deliver innovations to commercial part- business model, (2) establishing an institutional policy ners either for further development or for dissemination framework consistent with national laws to clarify responsi- through market channels. In most cases, public research bilities of the institution and its employees, (3) building the institutions (centers, universities) have focused their pro- capacity to address intellectual property protection and to grammatic development on scientific research capacity and negotiate legal agreements to transfer intangible and tangible not on the development of expertise to engage in the legal property, (4) gaining experience to develop business strate- transactions needed to translate their research into applica- gies to effectively disseminate technology and work with pri- tions. Moreover, many public research institutions have his- vate partners, and (5) communicating both internally and torically managed their technology transfer programs by externally the aspirations (building appropriate culture) and passively waiting for potential licensees to knock on their successes of the institution in technology transfer. door and seek out new technology. International technology transfer can be particularly BACKGROUND AND CONTEXT complex and is highly bi-directional. Advanced genetic tech- Agricultural innovations reach farmers largely through nologies are increasingly transferred from multinational pri- direct transfers of knowledge, agricultural practices, devices, vate companies to public research centers in developing or seed from research centers to farmers. Extension services countries, at the same time that germplasm or other genetic in many countries aim at bridging the gap between public resources move in the other direction. These transfers researchers and farmers. These traditional approaches are require carefully balanced agreements to ensure that the 406 partnership achieves its objectives and that both parties as well as a critical mass of research assets and expertise in receive appropriate recognition for their proprietary contri- technology transfer. butions. Developing this capacity is not easy and typically requires both educational as well as institutional investment. INVESTMENT NEEDED This thematic note explores the steps in developing that capacity in public research institutions by establishing a An effective technology transfer program or department, technology transfer office (TTO) to assist in the legal trans- based on a proper assessment and policy alignment (see fer of technology. Investing in and building institutional “Lessons Learned�), requires major investments. The most capacity for technology transfer within a public organiza- important are staff, infrastructure, capacity, and governance. tion may cover a broad range of activities. These activities may include the protection and licensing of IP but are more Staff and site likely to focus on the support of public/private partnerships, the development of business strategies, or the transfer of A TTO will require a general director or manager (usually a tangible property directly to commercial channels such as scientist with extensive business experience rather than a seed companies or agricultural or veterinary product sup- lawyer) who is at a minimum responsible for business devel- pliers. These activities share a range of skills and experience opment, communication, and negotiation. The office will related to an understanding of intangible and tangible prop- also require administrative personnel. The physical assets erty rights and transfers, of legal contracts and agreements, associated with a TTO can range from office equipment (IT, and of business activities and strategies that are relevant for furniture, and so on), an IP library with access to online the local region. legal databases, to real estate encompassing sufficient space The technology transfer function may be addressed in for the TTO. different manners and must fit local needs and resources. The four main business models for TTOs are summarized Minimum training and core skills in table 5.7. For developing countries, a TTO operated jointly among many institutions (a consortium/network Table 5.8 describes the minimum training requirements TTO) may be the best solution to attain economies of scale for different groups in the institution and IP management Table 5.7 The Four Main Technology Transfer Office (TTO) Business Models Independent TTO department within an institution Network-based TTO Subsidiary company Outsourcing When? When prospects for When individual institutions When research and resource Suitable particularly when technology transfer and lack resources and critical base are sufficient but institution(s) generate commercialization are mass (research base) institutional culture is not technology suitable for high within one institution but institutional culture conducive for entrepreneurial high-value, income and sufficient resources is conducive for activity generating opportunities allow establishment entrepreneurial activity Key benefits – Alignment with institutional Sharing of costs and – May encourage a positive – Minimizes investments and associated objectives expertise perception of technology risks for the institution with the – Revenue to institution transfer and demonstrate – More operational flexibility option seriousness and the ability to structure – More operational flexibility staff remuneration and the ability to structure packages staff remuneration packages Disadvantages Investment requirements per Requirement for shared Lack of alignment with Overhead costs (fees) reduce institution may be high procedures and institutional objectives and revenue to institution agreements on revenue unresponsive to policy Less geared toward sharing often challenging constraints of the institution technology transfer for the such as publication or broader public good conflict of interest Source: Authors, adapted from Campbell 2007. MODULE 5: THEMATIC NOTE 5: TECHNOLOGY TRANSFER OFFICES 407 Table 5.8 Generalized Intellectual Property (IP) Training Needs of Different Groups of Staff in a Technology Transfer Office (TTO) Group Minimum training requirement Researchers – Maintaining good laboratory records – A basic understanding of the types of IP agreements, especially in the context of exchanging research material and information – The importance of confidentiality, especially with respect to publishing and delivering academic presentations – When to disclose IP guidelines and procedures Research managers – The importance of IP management and management functions and institution – IP protection processes and procedures; the investments required to manage IP effectively (including decisions directors required at different stages of IP and research development) – Implementing IP policies, processes, and procedures – An appreciation of the role of technology in addressing socioeconomic needs IP managers – Overview of IP management from the generation of IP property to its exploitation and application – Awareness building – Understanding of science (understanding of certain fields of science an added benefit) Operations – Finance: Understanding IP policy guidelines, namely, systems and processes to handle IP payments and receipts (for example, royalties); the administration of benefits to researchers and the institution – Human resources: IP policy guidelines and interface with other institutional policies such as conditions of service, recruitment, conflicts of interest and commitment, and contracting with clients – Legal services: IP policy guidelines, IP contracts and agreements, understanding what constitutes IP and the different forms of IP protection, and IP negotiation – Grant and contract research: IP contracts and agreements, especially clauses regarding IP ownership, and IP policy guidelines Source: Pefile and Krattiger 2007. office. Technology transfer programs will need the monitoring technology developments and compliance with capacity to develop business strategies around new tech- the terms and conditions of the option or license. nologies. These strategies can serve as a tool to market innovative technologies to existing companies or become Reporting and governance structure the basis for starting new companies to implement the strategy. The secondary role of a TTO is to establish and A TTO requires reporting and governance functions. The maintain connections to national and international TTO management will be accountable to a governing body investment communities as well as to other providers of that may consist of faculty or research center members, services for business development. These connections administrators, and external business leaders. An advisory facilitate the development of startup companies to group from inside and outside the institution is expected commercialize technology. The TTO will also need the to bring new experience to the organization and act as ability to communicate—internally and externally—its internal and external champions. aspirations and successes in technology transfer. Consis- Often a departmental TTO reports to a senior university tent communication within the TTO is critical to develop staff member, whereas a TTO company will be responsible and sustain a culture of entrepreneurship and engagement to a board, which may be chaired by a university senior staff in the technology transfer process. member. Because the TTO represents a linking function The TTO must have the core skills to manage IP protec- between a university or research institute and business, tion and the capacity to negotiate and execute legal agree- governance and advisory arrangements to support both its ments to transfer intangible and tangible property. The internal linkage to the university or research institute and main functions of TTO staff include: (1) evaluating inven- its external linkage to the business community are impor- tion disclosures and deciding whether to file patents or tant. The TTO can also become the “face� of the research other forms of IP protection, (2) managing or monitoring organization to the business community and as such needs patent prosecution, (3) developing, with business develop- to have strong governance and advisory relationships to ment staff, a commercialization strategy, (4) negotiating and ensure that it maintains a high degree of integrity and executing technology transfer agreements ranging from credibility with the outside. The TTO will be expected to options to licenses, and (5) once an agreement is concluded, produce at least annual reports of activity which provide 408 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK financial information to its governance board(s) and also ment of jobs, and increased prosperity through regional provide accounts of nonfinancial public benefits that may and national economic development is legendary. have been realized, such as development of a new medicine In contrast to developed countries, where most research or SME. capacity resides in private companies, the vast majority of the research capacity in developing countries resides in pub- lic research institutions and universities. For this reason, one POTENTIAL BENEFITS might expect an even greater relative impact of technology Investment in technology transfer and IP management transfer from the public sector in developing countries. capacity for public research institutions and universities Within universities (see box 5.26 on China), robust tech- will almost certainly have an impact on the way the institu- nology transfer programs also have many important bene- tion looks at its research outcomes and the extent to which fits that are quite separate from royalty income, such as it can partner with companies to either codevelop or com- (Campbell 2007): mercialize its research results. In developed countries where universities have adopted robust technology transfer ■ Productive interaction with the industrial community. programs, the resulting impact of those universities on the Ideas shuttling back and forth between the academy/ adoption of new technologies, rise in entrepreneurship, research institute and private sector often increase the synthesis of new medicines and other products, develop- quality of research. Box 5.26 Intellectual Property Management at Tsinghua University, China Intellectual property (IP) is a relatively new legal and assigned, to Tsinghua University, unless another agree- social concept in China. Formal legislation was intro- ment takes precedence. Under the university policy, at duced in the 1980s and subsequently strengthened. least 25 percent of revenue generated by a piece of IP is Universities now usually own the IP emanating from shared with the inventor(s) as cash or equity. government-funded research, but technology trans- Tsinghua University spared no effort to educate its fer and commercialization remain low. Most univer- faculty members and students about IP and the univer- sities lack IP policies and independent offices for IP sity’s IP policy. It implemented procedures for examin- management. ing collaborative research agreements and sponsored Tsinghua University is an exception. Its IP Office research agreements between the university and other develops IP policies and manages university IP, which institutions or companies, for which it designed a stan- includes patents, trade secrets, know-how, trademarks, dard contract. A special fund covers patent costs, includ- copyrights, and any related rights. The university’s IP ing application fees, examination fees, agency fees, and policy clearly states what constitutes employee work. maintenance fees for the first three years after a patent is The policy requires an investigator to disclose all results issued. of a finished project to the administrative department, Together, these measures caused Tsinghua Univer- which then decides whether to apply for a patent. If sity to own more patents than any other Chinese uni- results appear to have commercial value but are not versity. From 1985 to 2000, Tsinghua University filed suitable for a patent, they remain a trade secret. An 1,587 patent applications. Since 2001, the average industry-sponsored research agreement must have a annual growth rate of the university’s patent filings has clause on ownership of resulting IP, allocation of patent been 26 percent. In 2004, the university filed 43 foreign costs, and sharing of revenue made from the IP, among applications (including Patent Cooperation Treaty fil- other arrangements, and the IP Office examines the ings). The numbers of patents issued to the university contract before it becomes effective. When a faculty rose from 121 in 1999 to 537 in 2004. Other universities member or other employee goes to another domestic with a similar level of IP management include Peking or foreign university or institute to conduct research, University (University of Beijing) and the Chinese any resulting IP should be assigned, or at least jointly University of Technology. Source: Heher 2007. MODULE 5: THEMATIC NOTE 5: TECHNOLOGY TRANSFER OFFICES 409 ■ Increased industrial support of research at universities financial returns, but only after several years. The immedi- or public research facilities. ate returns are measured in terms of increased PPPs, an ■ More willingness from central and local governments to enhanced capacity to engage international partners, and an support research for economic development. enhanced capacity to deliver research results to commercial ■ Students’ or public researchers’ exposure to the world of channels. Nelson (2007) describes five economic “lessons� industry and the commercial opportunities of research for institutions to consider before deciding to establish a (including training in entrepreneurship), which influ- technology transfer program: ence their career aspirations and the national economy. ■ Financial support from grateful alumni and other entre- ■ Technology transfer will not make your university rich. preneurs who have grown wealthy from companies A successful program will make a small profit but will started from university/institute research. not support the university. It will, however, provide many other benefits to the institution and the community. ■ Building a robust technology transfer program takes sus- POLICY ISSUES tained financial investment. Investments are required A critical and well-understood caveat is that the positive eco- to develop a patent portfolio, attract expert talent, and nomic and public benefits of technology transfer programs train office professionals. take many years or even decades to be fully realized. Sus- ■ It will likely take eight to ten years before your program tained investment in capacity building is essential to achieve stops losing money—and it may never make your insti- the potentially broad impact that technology transfer pro- tution any substantial amount. It takes time to build an grams are very likely to have, and sustained support—fiscal IP portfolio, establish contacts, and develop skills in and otherwise—is needed from senior administration to set technology transfer. Once these conditions are met, the the program’s mission, policies, and priorities. TTO may begin to make money. Technology transfer is a multifaceted process with ■ It may take two decades or more before a university important policy, economic, and managerial ramifications. technology transfer program (including entrepreneurial The public sector’s role is particularly to address issues spinouts) substantially affects the local and regional related to the enabling environment, such as the removal of economy. Expecting substantial returns in a few years technical, legal, and administrative barriers to technology leads to underinvestment and disappointment. transfer, sound economic policy, regulatory frameworks, ■ The ultimate impact may be very large, however—both and transparency, which have implications for transferring economically and culturally—for the university, its grad- private and public technology and the success of a TTO. A uates, and the community. public subsidy to establish a TTO may also be an appropri- ate incentive in developing countries where experience is limited (Fernandez 2007). A robust research base Technology transfer programs require a robust research base, with the capacity to develop new technologies with LESSONS FOR IMPLEMENTATION significant commercial applications. As mentioned, a good The general lessons for implementing TTOs have evolved in practice prior to investing in technology transfer programs many contexts. They involve the need for long-term institu- is to assess the research assets. This assessment should tion building, the prerequisite of a robust research base, the include the research assets and research capacity to supply choice to develop a TTO for a single institution or adopt a a steady stream of innovations to be “transferred.� This network approach, the value of an institutional framework assessment should consider the scientific staff of the insti- for technology transfer, and the skills, cultural environment, tution, its laboratories and facilities, its existing and poten- and incentives to support a TTO. tial base of research funding, and its existing or potential international collaborations. In addition, this assessment should look at the culture of the institutional leadership, Long-term institutional building its scientists, and students (if applicable). If measured only Building capacity for technology transfer requires serious by royalty income, an institution with a smaller research programmatic planning and a long-term institutional com- base will have a more difficult time breaking even. Less mitment to the activity. The early investment may yield research means fewer inventions. An example of successful 410 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK TTO at a large university with a large research base is Uni- and requires several institutions to agree formally on strate- camp Brazil (box 5.27). gies. In many cases it may be the only way to assemble a suf- ficiently large research base to justify the investment. An assessment in Chile concluded that an effectively staffed Individual or network-based technology technology transfer office should receive somewhere transfer office between 20 and 30 innovation disclosures per year (Fernan- If an institution has sufficient research assets to develop a dez 2007). In Chile, this level of activity could be achieved steady stream of innovations and a culture that would sup- only if TTOs served a cluster of universities. port an active technology transfer program, it can move for- ward and establish a TTO. If the research base or institu- An institutional policy framework tional culture is weak, it may be useful to broaden the assessment to encompass a set of regional research institu- Another good practice, following the research base assess- tions. Building a technology transfer program to serve a ment, is to assess and to develop an institutional policy cluster of institutions is the more difficult option, however, framework for technology transfer. The framework must Box 5.27 From University to Industry: Technology Transfer at Unicamp in Brazil Brazil has dramatically increased technology transfer commonly practices sponsored research. In such cases, and innovation through Inova, the technology transfer ownership rights are normally split 50/50. office established by the State University of Campinas Factors in Inova’s success include: (Unicamp) in 2003 and the first technology transfer office established in a Brazilian university. A multidisci- ■ Inova is driven by market demand. Instead of plinary university with more than 31,000 students and selecting Unicamp’s technologies and offering them 20 research units, Unicamp pursues a variety of tech- to the market, Inova examines market demand and nologies in many fields. By 2007, Inova had become the seeks solutions inside the university. most frequent patentor and licensor in Brazil. In only ■ The technology transfer team comes from private two-and-a-half years it signed 128 technology transfer institutions and has business skills. They are not agreements, licensed 45 technologies to private compa- researchers. nies and the government, and applied for 153 new ■ The government provides many incentives to com- patents, 22 trademarks, and 24 software registrations. panies, such as tax benefits to companies that pay Its technology transfer agreements will last for more royalties; tax benefits to companies that invest in than ten years, and they have already generated research and development, within or outside the royalties for the university ranging from 1.5 percent to company; compensation for taxes on royalties paid 10 percent of the net income from the licensed tech- abroad during the execution of technology transfer nology. Unicamp grants inventors 33 percent of royalty contracts; tax exemptions for fees paid to maintain and licensing income. The greatest contributor to the patents, trademarks, and cultivar registrations patent and licensing portfolio is the Chemistry Institute abroad; and sponsorship/subsidy of 60 percent of (48 percent); the corresponding figure for agribusiness the salary of a scientist hired by a company. and food is 16 percent. Inova’s patent database is avail- able online. These coordinated efforts will increase patenting Under Brazilian law, Unicamp owns 100 percent of and technology transfer in Brazil, strengthen the rela- its professors’ and researchers’ results. The law permits public institutions to give up ownership to the inven- tionship between public institutions (where Brazilian tor, but Inova has not taken this route; its inventors research is mainly concentrated) and private compa- lack commercial expertise and find it more attractive nies, and contribute strongly to innovation. Other pub- for Inova to commercialize the technology and give lic universities and research centers have been studying the inventor part of the licensing fee. Unicamp also Inova’s model to emulate it. Source: Di Giorgio 2007. MODULE 5: THEMATIC NOTE 5: TECHNOLOGY TRANSFER OFFICES 411 be consistent with national employment and IP laws and results of its activities to the institutional stakeholders, any exemptions that may exist for public researchers or for including its leadership and sponsors. The profile for staff universities and their faculty. This framework can clarify the in this area includes business training, such as a master’s responsibilities of the institution and its employees prior to degree in business administration, significant work experi- investing in the TTO. ence in business development in private companies, and The first step is to assess the national legal framework, preferably experience in starting a company. Overall, staff including the IP policy, and ensure that the institution’s IP in this area must have the interpersonal skills to interact policy and objectives for its technology transfer program are easily with a range of business professionals and have expe- consistent with the national legal framework as well as its rience in selling new ideas in a wide range of contexts. The own mission and policies. The institution’s IP policy should number of staff needed in this area is small. For most oper- provide the basis for structuring the technology transfer ations, one person is enough, but that person must be program as well as the basis for transferring tangible prop- skilled and experienced. erty developed within the institution.1 Support from senior administration is critical (Nelson 2007). Clear mandates will help technology transfer professionals choose among Culture and incentives for technology transfer and commercialization competing priorities and the ever-present trade-offs between private sector and public sector values. A well- A passionate interest in technology transfer within the insti- understood review and appeal process needs to be put in tution, the TTO management, but particularly the most place early. senior management of the university or institute is a pre- In addition to establishing the broad aspirations and requisite for success. An essential ongoing activity is to iden- objectives, an institutional IP policy must address several key tify and foster relationships with stakeholders, including issues (box 5.28). (See module 6, TN 3). These issues are academics, representatives of the business and user commu- ownership, researchers’ obligations, the institution’s obliga- nity, and regional and governmental offices. The most tions, and administrative responsibilities. important group at the outset is the internal community that must be supported and encouraged to engage in tech- nology transfer and entrepreneurial behaviors (Campbell Importance of core skills to manage IP protection 2007). Faculty reward systems such as professional advance- and capacity to manage legal agreements ment or revenue for engaging in technology transfer, along The required expertise is complex. Technical knowledge is with removing cultural barriers and staffing the TTO, are needed to clearly understand a range of new innovations key factors for success in technology transfer (Campbell and how they might meet standards of patentability; legal 2007). For details, see Siegel et al. (2003). skills must be sufficient to craft complex legal agreements. Many TTOs have found that technical expertise is indispen- Critical steps in establishing a TTO sible and difficult to learn, whereas legal knowledge can be acquired “on the job� and supported by the judicious use of The following minimal activities should be undertaken once external legal counsel. Many staff members are not needed a decision is taken to establish a new TTO (Young 2007): to support this activity, but their skills should reflect the major scientific disciplines of the institution. ■ Assist researchers in identifying results that have com- mercial value and document the discoveries through a disclosure process. The disclosure-of-invention form Importance of business skills and communications should be simple (a complex form deters disclosure). strategy and skills More detailed information can be obtained through sub- The long-term success of the TTO will depend on its abil- sequent interviews with the inventor. ity to expand the impact of the institution’s research by ■ Evaluate the commercial potential of disclosed innova- effectively transferring technologies (either intellectual or tions. A TTO exists to find commercial applications for tangible property) to commercial partners and by support- technology and partners to realize the commercial ing new research partnerships. Its long-term success will potential, not to judge the value of the science. Such eval- also depend on its ability to effectively communicate the uations may be the most difficult of all tasks for a TTO. 412 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 5.28 Key Issues to Be Addressed by an Institution’s Intellectual Property Policy Ownership. An institution’s intellectual property (IP) disclose possible inventions before publication, to assign policy should clearly address who owns IP developed in ownership to the employer/institution, to assist in evalu- the institution (for example, the inventor/researcher ation and patenting, and to report potential conflicts of owns the IP; the research institution owns it; a company interest. providing research funds owns it; the government agen- The institution’s obligations. The policy also needs cies providing research funds own it; or no-one owns it, to clearly describe the institution’s obligations in man- and all IP is committed to the public domain). In most aging IP. When the institution owns the IP, it typically cases, institutions cannot manage IP effectively unless is required to manage IP effectively, to pay patenting they own all IP developed within their walls regardless costs, and to share revenue with inventors. Of particu- of funding source, but this condition may not always be lar interest to researchers is the actual share of revenue possible. Whatever is decided regarding IP ownership, it that will go to the inventors, which can range widely must be very clear to prevent any ambiguity over who from place to place but is typically 25–50 percent of net has the legal ability to transfer technologies. revenue after expenses. Researchers’ obligations. The policy needs to clearly Administering the policy. The policy should identify describe the obligations of research staff. When the insti- who in the institution is responsible for administering tution owns all IP, its researchers typically are required to the policy and procedures for compliance. Source: Authors. There are many approaches to invention evaluation. The professional networking, they may even know their evaluation process lays the foundation for future deci- counterparts in industry (potential licensees) on a per- sions about IP protection and marketing. sonal basis. ■ Determine whether to protect IP in the innovation. If ■ Once one or more industry partners are identified for needed, secure funding for filing patent, trademark, or an innovation, negotiate legal contracts (license agree- copyright applications, and manage the protection ments) with these industry partners to transfer IP rights process. The challenge of securing funding for IP protec- in the innovation in exchange for royalties or other con- tion internationally—especially when seeking protection siderations. The goal is to negotiate a fair arrangement in highly industrialized countries, where the primary that facilitates and assists the commercial partner in suc- markets for the expected products lie—is often over- cessfully developing and marketing the product, rather whelming and perhaps even impossible in many devel- than simply seeking to negotiate the absolute highest fees oping economies because of the tremendous expense. Yet and royalties in the agreement. Developing industry there may be very small or nonexistent commercial mar- partnerships can lead to many unexpected benefits, such kets for the innovation in the country of origin, which as sponsored research, student employment opportuni- can present a serious dilemma. The only solution in ties, consulting opportunities, and even philanthropic many cases is to secure protection in the country of ori- donations to the institution. gin first, thereby “buying time� under the requirements ■ Maintain and manage administrative functions in sup- of the Patent Cooperation Treaty to find a corporate port of the primary functions of IP protection and tech- partner to pay the patent costs internationally as a busi- nology transfer. These functions can include accounting, ness expense in the license agreement. royalty distributions, licensee performance management, ■ Conduct market research to identify potential industry and patent application management. partners, and then market the innovations. Research has ■ If the TTO decides not to pursue IP protection and com- shown that in the United States, the primary source for mercialization of an innovation, implement a process to identification of licensees is the inventor. In industrial- ensure that others have an opportunity to pursue protec- ized countries, inventors typically are familiar with the tion and commercialization if they choose. The “others� marketplace in their area of scientific expertise; through will most often be inventors. MODULE 5: THEMATIC NOTE 5: TECHNOLOGY TRANSFER OFFICES 413 T H E M AT I C N O T E 6 Risk Capital for Agriculture in Developing and Middle-Income Countries Alistair Brett, Consultant SYNOPSIS sector to achieve food security and economic growth. Invest- ment is essential for the agricultural sector to grow; it is esti- isk capital is money explicitly available for invest- R ment into a high-risk business or a security of some type—typically those which are not publicly traded on any national stock exchange. In this note, “risk capital� mated that net investments of US$83 billion per year must be made in the agricultural sector in developing countries if there is to be enough food to feed the world population of 9.1 billion in 2050. Private investors need to be the refers to investment in a company or project at an early or major sources of this capital. Public investment cannot high-risk stage. Because interest in agricultural risk capital meet the needs, but it can be effective in stimulating and investment is relatively new (although investment at other leveraging private investment in the sector. “...[A]gricul- stages is already in place), many of the investment vehicles tural investment growth has not only been spurred by cited in this note are still relatively unproven. This note increased agricultural prices and food security concerns, draws on lessons from using risk capital in other sectors, but also importantly because of innovation and experience especially in innovative technology. It describes current and in risk mitigation of investment. One manifestation of this possible future investment models, their benefits, and phenomenon is the proliferation of funds set up to target potential applications in agricultural investment. Global les- the agricultural sector—agricultural investment funds� sons from developing investment vehicles and investments (FAO 2010, xv).1 in both agriculture and other asset classes are presented Investing in agricultural innovation is an important part with recommendations for policy makers and practitioners. of overall agricultural investments. Increasingly agricul- Because capital for investment does not exist in isolation, an tural innovation is seen as a sector that offers profitable enabling environment must be in place or under develop- investment opportunities for private investment funds as ment. Traditional venture capital is not appropriate for well as alleviating poverty and increasing food security countries lacking essential features for venture funding, (World Bank 2007). Investments are being made in SMEs such as a strong flow of investable opportunities (which can that are developing innovative agricultural technologies to be stimulated by the public and private sectors), access to improve the quality of crops, reduce risk and losses, and domestic or foreign stock markets, a large business sector improve efficiency to increase competitiveness. It is expected for trade sales of companies, and an entrepreneurial culture that the level of innovative technology used in agriculture in where risk and failure are acceptable. It is always critical to developing countries will significantly increase through new ask the question: What problems are to be solved or needs applications of biological and information technologies. The to be met? Only then can it be known whether the provision availability of “risk capital,� money explicitly intended for and use of investment capital could help accomplish the investment into a high-risk business or a security of some expected outcomes. type (typically those which are not publicly traded on any national stock exchange), is warranted. Gaps in the provi- BACKGROUND AND CONTEXT sion of finance for agriculture and agricultural innovation Investment in agriculture is growing because of improved for SMEs and early-stage firms are evident, however, as profitability projections and the interest of development illustrated by data on Africa, which show that the “meso- agencies and governments to increase investment in the finance stage financing is the most difficult to obtain� 414 (table 5.9) (the finance gap for small enterprises is also concept and perhaps a plan for growing the business.3 noted in TN 3). The choice of a risk capital investment Angel investors may group together to form angel invest- model depends on the growth stage of the project or com- ment pools or come from the category referred to as FFFs pany that will receive the funds. (friends, family, and fools—see figure 5.3). Innovation funds, including competitive grants or match- 2. Seed fund investment. A pool of money used to back ing grants as described in TN 2, may be used to make a small companies that are too small to attract venture firms but enterprise in the early stages of development “investment- require too much money for angel investors. For exam- ready� for the types of investment shown in figure 5.3.2 ple, a business may have a prototype product or service Innovation funds may, for example, support moving an idea but few sales. through the feasibility and proof of concept phased to a stage 3. Venture capital fund investment. Venture capital funds that is much more attractive to angel and seed capital. Incu- pool and manage money from institutional investors, such bators (TN 3) may provide similar support. as pension funds and insurance companies, as well as from Typical equity investment levels, which do not have clearly other venture funds and wealthy individuals. They take defined boundaries, are: equity stakes in SMEs with strong growth potential. 1. Angel investment. An angel investor provides backing to This note focuses on the venture capital model of risk very early-stage businesses or business concepts. For capital and pre-venture capital. Because much of the inter- example, a business may have little more than a business est in risk capital investment for agricultural innovation is relatively new, although investment at other stages is already Table 5.9 The Gap in Access to Enterprise Finance in place, many of the investment vehicles discussed here have in Africa a limited track record for investment in agricultural innova- Funding level Funding category Availability tion and are consequently unproven. For this reason, the dis- US$10 million Project financing Yes cussion that follows draws on lessons learned in the use of US$1–10 million Venture capital/private Some risk capital in other more traditional investment sectors, equity especially in innovative technology. US$50,000–1 million Startup/seed capital/growth No capital/meso-finance US$100–50,000 Microfinance Yes RISK CAPITAL INVESTMENT MODELS Source: Adapted from Ashley, Warner, and Romano 2005. The elements needed to provide risk capital for innovation are: (1) an adequate number of opportunities for invest- Figure 5.3 Typical Financing Stages for Company Growth ment (referred to as “deal-flow�); (2) a structured vehicle that provides a source of funds; (3) defined criteria for Startup financing cycle investments made by the investment vehicle; (4) a method- Secondary VCs, acquisitions, mergers, ology for evaluating and selecting projects to be supported Angels, FFFs strategic alliances offerings according these criteria; and (5) a fund management entity Seed capital Later stage and governance to monitor and manage funded projects. Early stage Revenue Mezzanine Public Venture capital in agriculture: 3rd market The venture capital fund model 2nd IPO Break even 1st A suitable investment model is required.4 Although tradi- tional venture capital may not always be appropriate for many developing countries, it is a helpful model to which Valley of death Time alternative financing models such as angel, seed, or meso- level investment can be compared. Venture capital5 is a form of private equity provided for early-stage and more Source: Wikipedia (http://en.wikipedia.org/wiki/Startup_company), mature companies with substantial market potential. accessed September 2011. Note: FFFs = family, friends, fools; VC = venture capital; IPO = initial Returns on venture capital investment are from a trade sale public offering. (sale to, or merger with, another company) or an initial MODULE 5: THEMATIC NOTE 6: RISK CAPITAL FOR AGRICULTURE IN DEVELOPING AND MIDDLE-INCOME COUNTRIES 415 public offering (IPO) in which the company becomes assessments on potential investments (known as “due dili- authorized to sell its stock to the general public on a stock gence�); representation of the fund to the potential invest- exchange. Venture capital funds will not only provide ment’s board of directors or equivalent; defining exit strate- money but will mentor their investee firms. Venture capital gies; monitoring investments and taking corrective action funds are very selective in making investments and may when needed; and communication with all investment par- review many hundreds of business plans before investing in ties. An advisory board composed of independent members one opportunity. By their nature, venture capital invest- and investor representatives should: provide guidance on ments are high risk and investments may fail. On average, the implementation of the fund’s investment strategy; about one in 10 venture capital investments will provide a ensure adherence of the fund to its investment charter; and substantial return on investment. Others may fail or pro- resolve conflicts of interest. An investment committee com- vide insufficient returns to justify the investment. Venture posed of fund representatives and/or other investors should: capital funds usually invest at several stages of a business’s approve all investment decisions of the fund, on the basis of development: startup (funding for businesses at the early reports of evaluations and due diligence performed by the stage of product or service development), first-round fund manager; conduct postinvestment monitoring; and (funding for businesses that have initial sales), second- review progress of the fund’s portfolio and fund manager round (working capital for early-stage companies that are performance. selling product, but not yet turning a profit), third-round (expansion funds for a profitable company; also called Funding criteria mezzanine financing), and fourth-round (financing for exit preparation such as a trade sale or an IPO). Key criteria may include the following: ■ A strong and committed core management team with The venture capital fund management structure a demonstrated performance track record, commit- Venture capital firms are typically structured as limited ment, enthusiasm, and energy, although in some cases a partnerships (“limited� because they limit the liability of reason to invest may be to grow the potential of new investors in the fund, who are referred to as the “limited businesses. partners�). Limited partnerships have “general partners,� ■ Sales of products or services locally or in other markets. which serve as the managers of the venture capital fund and ■ Potential for scaling up the business. investment advisors for the venture capital funds raised. The ■ Potential for sustainable high growth for the business. limited partners have no decision-making authority for the ■ Expectation of sustainable long-term competitive investments being made. These limited partnerships are advantage. legal entities, which hold the funds from the limited part- ■ A viable business model (overall business concept) fol- ners and have a limited lifetime, typically around ten years. lowed by a viable business plan (a detailed plan for grow- This means that the fund must cash in (exit) their invest- ing the business) delivering an attractive return on ments in, say, five to seven years, and this need will be a fac- investment. tor in selecting opportunities in which to invest. ■ A clear strategy for a cashing in their investment within a reasonable time period (known as the investment exit). Venture capital fund management team A selection of agricultural investment funds and the type of Venture capital fund management teams receive a combina- instrument and investment preferences is shown in table 5.10. tion of management fees and a share of the profits. Com- A few of these funds, mostly the new ones, support agricul- pensation in the form of a percentage of the fund’s capital tural innovation, but overall they focus on agribusiness, value means that there is a lower limit on the amount of capital chain development, and food processing. Box 5.29 describes necessary to support qualified management teams. Thus one representative fund in more detail. this venture fund model cannot function if only small amounts of capital are available (for example, seed funds POTENTIAL BENEFITS have to consider other compensation systems). The fund manager is responsible for the overall financial The impact of providing risk capital for investment in inno- and administrative management of investments, including: vative agricultural ventures will depend on the reasons for 416 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 5.10 Representative Agricultural Investment Funds Fund (founding date) Purpose and capital base Countries/target investments Financial instruments Actis Africa Agribusiness Fund (2006) www.act.is Côte d’Ivoire, Kenya, South Sudan, Equity and quasi-equity investments US$92.7 million private equity. This is a specialized fund Tanzania, Zambia Deal size: US$5–15 million. from Actis, a leading private equity investor with Agribusiness across the supply chain. sixty years of experience in emerging markets. African Agricultural Capital (2005) www.aac.co.ke/web/ Kenya, Tanzania, Uganda Equity, quasi-equity, and debt investments Venture Capital Fund (US$8 million), which is fully – Small and medium-sized agricultural – Most likely there are no investments invested in 16 ventures. In response to the absence of an enterprises. below US$100,000. investment facility that focuses on the development of – Provision of risk capital to seed – Objective is to earn a minimum gross private initiatives in agriculture in East Africa, the companies operating in agricultural return of 12%/yr on funds invested. Rockefeller Foundation, the Gatsby Charitable value chains. Foundation, and Volksvermogen NV set up the fund to invest in agriculture-related SMEs in East Africa. African Agribusiness Investment Fund (2008) Botswana, Ghana, Kenya, Nigeria, South Equity and quasi-equity investment. www.agrivie.com/index.html Africa, Tanzania, Uganda US$100 million private equity. Agribusiness sector across sub-Saharan Africa along the value chain. Agribusiness Partners L.P. (United States of America/Russian Georgia, Kazakhstan, Moldova, Russian Private equity, venture capital Federation)/Agribusiness Partners International Fund Federation, Ukraine partnership (1995) www.burlingtoncg.com/api.shtml Agribusiness and food-processing US$100 million. The fund had an initial guaranty companies. from the Overseas Private Investment Corporation. Omnivore Capital (2010) The Godrej Group Canada, India, USA Seed and venture capital US$50 million (target). Investment in scientists and entrepreneurs who are innovating to improve agricultural productivity. Investment in small and medium-sized companies focused on agricultural innovation. Source: FAO (2010, 164 ff). Box 5.29 African Agriculture Fund The African Agriculture Fund was established in 2009 investment financing, equity, and quasi-equity by AfDB, AGRA, BOAD, IFAD, and AFD. The fund has products, Technical Assistance Facility (TAF). an initial target size of US$150 million and expects to raise additional commitments up to an aggregate capi- The fund has two windows of financing for enter- tal amount of US$500 million. Investment objectives of prises. A small–medium company financing window the fund, chosen because they are assessed as future offers investment between US$0.15 million and high-growth sectors, include: US$4 million to help bridge the typical early-stage financing gap. A large company financing window is ■ Food production industries (or provide financial designed for investment up to US$15 million for more services to small agribusiness operators). mature firms. ■ Invest in the value chain to reduce transaction costs of producers/processors and in storage/marketing. Fund terms and exit strategy are: a five-year commit- ■ Grow their markets within the region or develop ment period; seven- to ten-year investment maturity; export opportunities. the exit strategy shall be, as the case may be, to provide ■ Main investment sectors: cereal production, roots for the option for local agricultural producers to acquire and tubers, livestock and dairy products, fruit prod- interests in the targets; and average Internal Rate of ucts, seed production and fertilizers, fats and oils, Return per target shall be around the mid-teens. (Box continues on the following page) MODULE 5: THEMATIC NOTE 6: RISK CAPITAL FOR AGRICULTURE IN DEVELOPING AND MIDDLE-INCOME COUNTRIES 417 Box 5.29 African Agriculture Fund (continued) African Agriculture Fund Structure Institutional investors Category A/B Category C Private sector, commercial investors seeking Technical Assistance Facility (TAF) profits Sponsors Fund Manager – Management Agreement ADVISORY BOARD INVESTMENT COMMITTEE Source: www.phatisa.com. Note: AFD = Groupe Agence Française de Développement; AfDB = African Development Bank; AGRA = Alliance for a Green Revolution in Africa; BOAD = Banque Ouest Africaine de Développement; IFAD = International Fund for Agricultural Development. investing: Is the intention to earn a financial return on the POLICY ISSUES investment, support innovation, create economic develop- Sustained innovation and commercialization need con- ment, or promote social good? For typical venture capital sistent policies for the long term. Obtaining early-stage investments, the Internal Rate of Return (IRR) is used as a financing for SMEs with science- and technology-based measure of the cash return on an investment. The IRR can products or services remains difficult even in developed be thought of as the effective rate of interest earned by the markets. Investment capital is moving to later stages to investment.6 A project may be a good investment if its IRR avoid risk in developed markets and even in some devel- is greater than the rate of return that could be earned by oping markets such as India. SMEs do not have the tangi- alternative investments of equal risk. A venture capital fund ble assets required by banks and other lenders as collateral; in a developed country has traditionally expected an IRR of their assets may be intangible, in the form of patents or at least 20–25 percent (before the 2008/09 crisis). know-how. These firms may also have an unreliable rev- The African Agriculture Fund cited in box 5.29 is an enue stream and inexperienced management. Before example of a mix of public and private funds. The pres- investment capital can be deployed effectively and effi- ence of public support can be attractive to private ciently, it may be necessary to make improvements in a investors. Although agriculture may have a lower IRR than country’s IP regime and improve the support ecosystem. other types of investment, the fund is designed to reduce But it is also necessary to be realistic about what improve- risk where possible by adhering to strict investment crite- ments can be made in the short term. Waiting until there ria. Funds that provide training and technology transfer to is a fully functioning support system in place will mean farmers further reduce investment risk. Another benefit is delaying action indefinitely. the provision by some funds (such as African Agricultural The frequent public policy response is (Hodgson 2009): Capital) of equity investment with possible debt financing in cases where taking an equity position in a business is not ■ The creation of some venture funding entity that pro- inappropriate (for example, when there may be too much vides, often with public sector participation, risk capital dilution of value for the shares held by existing investors). for new, knowledge-based businesses. 418 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK ■ Mentoring and training entrepreneurs in how to pre- government officials or representatives from large enter- pare their ideas to be investment-ready and thus attract prises do not have the skills to carry out the duties of an funding by the right presentation of evidence on the advisory board. opportunity and potential rewards to those looking to Even more important, the investment committee, which make investments. must approve all investment decisions of the fund as rec- ommended by the management, must be fully informed This response may be necessary, but it is not sufficient as and experienced in such decision making, which is not a capacity-building policy. For example, this note empha- always the case in developing countries. There is a need to sizes the importance of creating the ecosystem for innova- provide training for advisory boards and investment com- tion, including the role of government policy in improving mittees working with agricultural innovation projects. existing systems, such as reducing barriers to success, as well as making more radical changes. For agribusiness sup- port this may include physical infrastructure such as trans- Challenges for a developing country or region port systems as well as education. The challenges specific to developing countries or regions Contributions of public and private sectors to both include: finance and knowledge generation should be coordinated to achieve maximum benefits. Public sector support in ■ Setting the right balance between (1) investing in tech- reducing barriers to business, for example, by easing the nology commercialization and (2) investing in technol- process of business registration and creating a more favor- ogy absorption and adaption, together with investment able tax regime and tax inspection systems, can help com- in building the capacity to support technology transla- bine public and private sector investments. A related issue tion and development. is to assure that foreign investors will be able to transfer ■ Understanding that capital for investment does not exist their capital gains out of the country. in isolation. It is critically important to have an ecosystem (enabling environment) that includes but is not limited to such features as: provision of advisory services, a sup- IMPLEMENTING RISK CAPITAL SYSTEMS: portive IP regime, access to markets, an effective gover- LESSONS LEARNED AND RECOMMENDATIONS nance structure, availability of investment exits as a way FOR PRACTITIONERS to realize a return on investment, and the existence of the Although the provision of risk capital equity investment rule of law to provide investor confidence. funds for agricultural innovation is a new trend, lessons ■ Recognizing that traditional venture capital is not have been learned from both agricultural investment and appropriate for many countries lacking the features nec- from investing in nonagricultural sectors. essary for venture funding, such as a strong flow of investable opportunities, stock markets, a large business sector for public listing or trade sales of companies, and Investment fund management an entrepreneurial culture where risk and failure are The fund management (general partners and support staff) acceptable.7 must have the necessary skills to carry out the management ■ Building the ability to provide small amounts of fund- functions described earlier, including in-country experience ing quickly for very early-stage technology development of working under the constraints of a frequently underde- or technology translation funding, and knowing how to veloped ecosystem to support the selection and growth of invest these funds in a “smart� fashion, to attract private the fund’s investments. Experience has shown that nonresi- sector participation and resources needed to scale up dent management teams and lack of experience in the coun- investments. try or in similar environments may lead to failure. ■ Maintaining close contacts with the private sector and Advisory boards, which are responsible for guiding the other investment funds in regions as well as globally. fund’s investment strategy and making sure that the fund ■ Finding partners to provide access to public and private adheres to its investment objectives, all too frequently financing outside the country when only limited financ- in developing countries do not in fact provide effective ing is available within the country. advice, owing to a lack of experience or understanding ■ Having a locally based investment fund manager (that of investment processes. Advisory boards composed of is, one who resides within the country). MODULE 5: THEMATIC NOTE 6: RISK CAPITAL FOR AGRICULTURE IN DEVELOPING AND MIDDLE-INCOME COUNTRIES 419 A cautionary lesson from developing countries is that use of investment capital will help accomplish the expected investment decisions can be distorted by political influence. outcomes. Businesses and governments often believe that Government officials typically lack the experience to evalu- what they need most is investment capital when in fact it ate and manage investment opportunities. In India, for may not be the immediate critical need; a more pressing example, the selection of government-funded projects that need might be finding business partners or gaining access were candidates for further investment was contracted to a to markets. private sector group. ■ Set the right balance between (1) investing in technology commercialization and (2) investing in technology absorption and adaption, together with investment in Practical issues for risk capital use in early-stage building the capacity to support technology translation development and development. Policies should focus on the practical rather than the ideo- ■ Determine the financing objective. Is it to earn a finan- logical. A practical problem for many developing countries cial return on the investment, to foster economic devel- in negotiating financing agreements to either acquire a opment or social welfare, or achieve another purpose? technology or license IP to others is that someone has to The purpose of an investment or investment strategy take the first step and agree to provide initial funding, should be decided and made clear to all involved at the which could be matched later by others. Sometimes this start of the process. funding can be in the form of a grant for early-stage devel- ■ No investment can be made without a sufficient “deal opment, as noted. Should these grants take too long to be flow�—a continuous source of investment possibili- approved (as is often the case), the deal may be lost. ties. The public and private sectors can stimulate deal Note that usually angel and seed funding rely on the avail- flow. ability of later-stage capital to get a return on their investment ■ When developing an investment fund or other invest- by having their shares bought out. Of special interest to devel- ment vehicle, decide how much money will be dedicated oping countries is that some investment models specifically to the fund or other vehicle and under what conditions attempt to address the “investment gap� (also referred to as the or constraints. This decision is critically connected to the “Valley of Death�) which occurs when private and public question of what is the purpose and investment strategy funding are either unavailable in the first place or run out, and of the fund. Some public investment funds have sizeable where the company’s net cash flow does not close the funding amounts of money but have not succeeded because of a gap. Many businesses—frequently those based on research poorly conceived or implemented investment strategy. discoveries—continue to reside in the Valley of Death because Other funds, with limited capital, have not been able to they lack the financial support and skilled management teams support businesses to become self-sustaining. to progress into the “proof of relevancy� phase. ■ Structure public funding to attract private funds, either initially or later (for example, as matching funds or a guarantee for the private investment). Recommendations for practitioners ■ A majority of nongovernment representatives should be A few recommendations should be considered: appointed to management boards of investment pro- grams using government funds. Government representa- ■ Ask the question: What problems are to be solved or needs tives should provide guidance but may want to create to be met? The answer will determine if the provision and maximum good by funding too many projects. 420 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 1 Developing Entrepreneurs through an Agribusiness Incubator at ICRISAT Kiran K. Sharma, International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) S.M. Karuppanchetty, ICRISAT S. Aravazhi, ICRISAT SYNOPSIS Agribusiness incubators can take the form of comprehen- sive occupational schools, offering rural producers and he Agri-Business Incubation (ABI) Program at T ICRISAT, launched in 2003, is an initiative of the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) in partnership with India’s workers sufficient knowledge, experience, infrastructure, and means to become agribusiness entrepreneurs. This endoge- nous movement can have far-reaching effects, promoting the overall modernization of primary production, industrializa- Department of Science and Technology (DST). ABI pro- tion, and marketing and development of rural areas. motes agricultural technologies developed by ICRISAT, More specifically, however, an agribusiness incubator cre- other R&D centers of excellence, universities, and other ates a mechanism to assist in the identification, adaptation, institutions, separately and jointly. Its approach features a and commercialization of products from public and private dual service and outreach strategy. The service strategy agricultural research institutions and universities. From a focuses business development on five strategic areas, build- development perspective, the goal of agribusiness incubation ing on the expertise of ICRISAT and its partners: seed, bio- programs is to develop and commercialize new products, fuels, ventures to develop particular innovations (products technologies, and services to improve productivity in or services), farming (high-value crops), and agricultural farmers’ fields and increase the practical impact of research biotechnology. The outreach strategy involves collaborative conducted in India’s academic and research institutions. business incubation to bring a wider range of expertise and Incubators provide a means of leveraging the significant resources to bear on business development to foster agricul- resources invested in R&D and infrastructure, generating tural development in other regions. employment and income in India’s rural areas, and ulti- mately creating wealth to support the livelihoods of the poor. CONTEXT: INCUBATORS IN INDIA AND AGRIBUSINESS AGRI-BUSINESS INCUBATION PROGRAM OBJECTIVE AND DESCRIPTION Business incubators are gaining a foothold in India. A recent survey found that their numbers had grown from 10 in 2000 The Agri-Business Incubation (ABI) program, launched in to 30 business incubators and science and technology parks 2003, is an initiative of the International Crops Research involved in the commercialization of software and other Institute for the Semi-Arid Tropics (ICRISAT) in partner- engineering technologies in 2009 (NSTEDB and ISBA ship with the Department of Science and Technology 2009). Of the 495 ventures that graduated from the business (DST), Government of India. ABI promotes agricultural incubators in India, 387 remained in business. More than technologies developed by ICRISAT, other R&D centers of 10,000 jobs were created through these ventures. These excellence, universities, and other institutions, separately incubators have stakeholders in government agencies, and jointly. The incubator was set up as part of ICRISAT’s financial institutions, and venture capital operations. Only Agri Science Park (later the Agribusiness and Innovation three were involved in agribusiness in 2008, although vari- Platform). ABI is governed by a board of advisors headed by ous government departments, which recently created entre- the Director General of ICRISAT and by a standing advisory preneurship promotion programs, have expressed an inter- committee that counsels the board on strategy and client est in establishing agribusiness incubators. intake and exit. 421 ABI represents a new resource to promote enterprise ■ Seed ventures. Rural entrepreneurs receive support in development in agriculture and facilitate business among developing a seed business to meet the demand for high- entrepreneurs and technology developers. The pillars for quality seed of open-pollinated crops. Through partner- high-performance incubation are R&D, business planning, ing with public and private entities, entrepreneurs are business development, and access to capital (figure 5.4). The assisted in seed production, processing, and marketing framework encompasses all the services and support sys- (box 5.30). tems offered to an agribusiness venture, such as technology ■ Biofuel ventures. ABI promotes industries involved in transfer, business facilitation, and technical guidance, espe- producing ethanol from sweet sorghum and other agri- cially those in ABI’s focal areas of seed, biofuel, and farm cultural materials. systems. ABI also facilitates the commercialization of ser- ■ Innovative ventures. Innovative agribusiness ventures vices that benefit farmers. are based on proprietary products or novel services with good market potential. ■ Farm ventures. Contract farming, organic farming, and INNOVATIVE ELEMENT precision farming are among the commercial farming ABI is the only incubator with an inclusive, market-oriented ventures promoted through ABI. development plan that seeks to improve farmers’ livelihoods ■ Agribiotech ventures. ABI enables seed companies to through business incubation. Based on the experience engage in the emerging area of agricultural biotechnol- gained in the years since ABI’s inception, the approach has ogy by developing genetic transformation protocols for evolved to benefit the farmers through a vertical strategy commercial crops, molecular markers for traits of inter- (service strategy) and a horizontal strategy (an outreach est for seed producers, and tissue culture methods for strategy based on partnerships in collaborative business producing medicinal, horticultural, and tree crops. incubation). The service strategy focuses development on strategic The outreach strategy of ABI is to collaborate with areas related to the mandates of ICRISAT and its partners: organizations globally in business incubation (cobusiness Figure 5.4 Framework for Business Incubation in ABI Access to R&D networks IP identification and Specialized facilities protection strategies Product development best practices R&D Access to capital State-of-the-art marketing best practices Capitalization High-performance Business planning incubation Access to services Networks and alliances Value proposition Business development development Champions Sales and distribution Strategy channel strategies Development Exchange of ideas Source: ABI Strategic Business Plan 2008–13. 422 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 5.30 Aakruthi Agricultural Associates: An Incubator Graduate Aakruthi Agricultural Associates of India (AAI) was supply by 80 percent. The gap for chickpeas is 30 per- launched in 2004 as a commercial alternative to gov- cent; for pigeonpeas, 70 percent. ernment agricultural extension services in Anantapur When AAI graduated from the incubator in 2006, it Province of Andhra Pradesh. AAI joined forces with became a full business partner with ICRISAT for dis- Agri-Business Incubation (ABI) in 2005 and in 2006 tributing ICRISAT seed in Andhra Pradesh. AAI has became the second venture to graduate from the compressed the time between the release of new seed incubator. and market acceptance in Andhra Pradesh from eight Through the incubator, AAI developed a successful years to less than three years. The advantage of more business model based on partnership with seed rapid market penetration is significant for both providers like ICRISAT, national and state agricultural ICRISAT and farmers. In 2009 the company generated research centers, and farmer franchisees. AAI designed revenues of 27 million rupees. Its net profit margin was replicable seed business ventures and proprietary 2 percent and is expected to reach 20 percent. methods for recruiting farmer entrepreneurs for local, ABI assisted AAI with several critical elements of its low-cost, high-productivity seed multiplication. These development, including the creation of a business plan; ventures create seed delivery systems that offer an alter- provision of technical knowledge and seed science native to government-supported channels and allow backstopping; introductions to multiple stakeholders more rapid introduction of superior varieties. AAI has and potential sources of financing; and introductions built a network of 70 farmer entrepreneurs in Andhra and links to the national research system and other Pradesh. These entrepreneurs pay franchise fees and public providers of technology. Arguably the most sig- receive working capital advances. They engage more nificant assistance that ABI provided to AAI consisted than 300 farmers in seed multiplication and currently of increasing its credibility with government officials. have 4,000 acres under production. Despite these achievements, AAI’s growth is con- The target crops include groundnuts, chickpeas, strained by a lack of external financing. In this area of pigeonpeas, and rice. Oil and legume seeds, in partic- development, ABI has not been able to assist its clients ular, offer limited commercial opportunity for multi- as successfully as it would wish, although it helped to plication and distribution due to their inherent low secure financing for the company’s seed processing multiplication ratios. Through its franchise concept, plant, and 12,000 square feet of warehouse capacity was AAI can sell seed of these crops in markets where provided by the Department of Marketing. ABI has also demand significantly exceeds supply. Demand for assisted AAI in renting numerous local seed storage and groundnut seed in Anantapur, for example, exceeds distribution centers. Source: AAI Annual Report 2009 (unpublished document). incubation). The benefits of cobusiness incubation are that and operations; capacity building in business incubation it provides enhanced support and services to a greater num- operations; business consultancy support services; access ber of entrepreneurs; enables complementary business and by Technology Development Board entrepreneurs to seed technology development in a greater number of regions; capital; development and implementation of incubation fosters cross-border ventures and business development; services in the focal areas (seed, agricultural biotechnol- provides access to a greater range of physical, technical, and ogy, biofuel, other innovation, farms, and potentially other facilities for clients; improves access to a greater range other areas); and making the system successful and self- of markets; offers common branding that can make clients’ sustaining through M&E. To date, key partners for businesses more marketable; and maintains an inclusive, cobusiness incubation have come from the Network of market-oriented development strategy. Indian Agri-Business Incubators (NIABI) and from Cobusiness incubation services with other institutional Mozambique.1 ABI is the coordinating body for NIABI, partners include: planning, development, and implemen- which is implemented by ICAR under the World Bank- tation of a business incubator; facilitating coordination funded NAIP project. MODULE 5: INNOVATIVE ACTIVITY PROFILE 1: DEVELOPING ENTREPRENEURS THROUGH AN AGRIBUSINESS INCUBATOR 423 IMPACT: TECHNOLOGIES COMMERCIALIZED planted in 100,000 acres in Anantapur District by 20,000 farmers. ABI has supported more than 158 ventures in agribusiness since 2003. Among ABI’s clients, 62 percent are seed entre- preneurs, 13 percent are incubatees located on site, 30 per- LESSONS LEARNED cent are cobusiness incubatees, and 4 percent are biofuel ABI has chosen a fairly risky strategy of combining new entrepreneurs. To date, agribusiness products and technolo- entrepreneurs with new technology—a risk that is partly gies incubated through ABI have included sweet sorghum offset by close linkages with world-class scientists. ABI’s for ethanol production; insect-resistant transgenic cotton access to capital and commercial expertise is also somewhat (box 5.31); a biofermentor for biopesticide production; a less developed than that of most other incubators. Some drought-tolerant groundnut variety; better-yielding chick- observations on sustainability and challenges follow. pea varieties; biopesticide formulations; and organic farm- ing methods. Businesses supported by ABI are estimated to have benefited 40,000 farmers. Sustainability In Andhra Pradesh and Maharashtra, 4,000 acres have ABI operates as a business. An initial startup grant of been brought under sweet sorghum cultivation for ethanol US$444,444 as capital for infrastructure and US$111,111 as production. (See other details in module 4, box 4.29 in IAP a recurring grant was provided by the National Science and 2.) The drought-tolerant groundnut variety is used by 1,500 Technology Entrepreneurship Development Board (NST- farmers on more than 5,000 acres; a new chickpea variety is EDB). On average, ABI is generating US$250,000 per year; its annual operating expenses are around US$2 million. Box 5.31 Agri-Biotech Incubation with Bioseed Since its inception in 2003, ABI’s average annual growth rate Research India has been 30 percent. ABI works on two financial models: ■ Under the capital gains model, ABI takes an equity share In 2003, Agri-Business Incubation (ABI) client in companies it incubates. This model is useful for Bioseed Research India licensed Bt gene technol- startup companies with highly proprietary technologies ogy from Monsanto to develop and commercialize and strong entrepreneurship capabilities. It requires less insect-resistant cotton varieties. ABI provided its management support, but the new technology must be client with training in Bt breeding techniques, very strong. biosafety consultancy, and lab and greenhouse ■ The revenue-generation model is a franchisee model in facilities. These services helped the mid-level seed which revenue for ABI is generated through service fees, company to enter the high-end seed business and royalties, rental fees, and one-time fees. It is useful for gain a strong market share through early entry small-scale entrepreneurs who need significant manage- into the market for Bt cotton seed. The incubation ment support but do not require strong technology service benefitted from commercialization of inputs; their business is based on incremental technolo- Bioseed’s Bt technology. About 525,000 packets of gies or pure services. Bt cotton seed were sold during the past two years. The company’s varieties are grown by 200,000 Challenges in business incubation farmers on 500,000 acres. Table 5.11 summarizes challenges that ABI has encountered Source: ABI. since its inception and strategies and solutions used to deal with them. 424 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 5.11 Challenges Faced by Agri-Business Incubator Since Its Inception and Solutions Segment Challenge Strategy/solution Goal and – Balancing technology commercialization and – Focus on incubating enterprises oriented to commercializing objectives agricultural development. technology for agricultural development. – Profit or nonprofit entity. – Nonprofit status ideal under society or section 25 clause of Indian Companies Act, 1956. Target segments Identifying and retaining innovators is difficult. Target niche areas to retain clients. Agricultural – Availability of technology limited to what ICRISAT can Provide incentives to scientist at ICRISAT for technology technology provide. transfer to increase the pool of technology. – Appropriate technology not available at right time. Innovations – Limitations to innovations in R&D institutes because – Organize regular innovation camps and motivational right enabling environment is lacking. programs to scout innovations in the institute. – Individual innovators handicapped by ICRISAT’s – Encourage individual innovators through official innovation intellectual property (IP) policy. camps and recognition in a public forum by employers. Markets – Low pricing of end products limits attractiveness of Work for alternative end products to increase market market for envisaged enterprises. opportunities. – Ag-biotech market segment is not buoyant and is constrained by ICRISAT IP policy. Enterprise – Risk inherent in technology-based businesses deters – Provide entrepreneurs internships on innovation and initiatives entrepreneurs and incubation. incubation with part-time options. – Rural enterprises have less risk-taking ability and need – Provide rural enterprises a high level of management support high amount of management support. and a service package that includes risk coverage. Organization – ICRISAT’s intellectual property right (IPR) policy and – Liberalize IPR and SMTA policies. and policy standard material transfer agreement (SMTA) deter – Offer single-window clearance mechanism for incubation. technology commercialization and incubation. – Stringent entry and exit procedures limit intake of incubatees. Operations – Security systems prevent private clients from working – The security systems need to be flexible for private clients. late at ICRISAT and limit client retention. – The host institute can allocate and list the facilities and – Access to facilities and services for the incubatees services available for enabling effective service to clients. is not always available. Human Limited availability of incubation professionals reduces Certified short-term incubation training program offered by resources opportunities to incubate successful ventures. acclaimed universities. Financial – Capital investment provided by the donor must not be – Donors’ capital investment can be more flexible (confirmed redundant. Allow flexible fund transfers across cost clients can then request the facilities they need). centers to fund utilization as required by industry. – Rental revenues need to sustain the incubator. – Rent must be billed to incubatees on full-cost rather than partial-cost recovery basis. Sustainability – Innovative agricultural entrepreneurs mostly cannot – Revenues from innovators must be packaged in the pay for incubation services. investment, either upfront or based on margin of profits. – Institutional realignments and changes will erode the – Maintain a reserve of 12 months of operating funds. sustainability of ABI. Cobusiness Leadership vacuum and poor follow-up/initiative of – Strategize with non-NARS organizations along with NARSs incubation national agricultural research systems (NARSs), as consortium partners. partnerships primarily in Africa (Mozambique). Source: ABI. MODULE 5: INNOVATIVE ACTIVITY PROFILE 1: DEVELOPING ENTREPRENEURS THROUGH AN AGRIBUSINESS 425 I N N O V AT I V E A C T I V I T Y P R O F I L E 2 The China Technology Transfer Project Josef Ernstberger, Consultant SYNOPSIS OF PROJECT DATA and other high-value commodities, including “green� and organic food, rose rapidly. Country: China: Shaanxi, Anhui, Hunan, Hei- ■ Demand for advanced food processing and marketing. longjiang Provinces Increasing urbanization and differentiation of the food Project: Agricultural Technology Transfer Project consumption structure demanded an advanced process- Financing: About US$207 million, of which US$100 ing, marketing, and catering industry. Enterprises in this million is a World Bank loan sector have mushroomed throughout the country. Most Implementing State Office for Comprehensive of these enterprises were naturally competing with agency: Agricultural Development small-scale farmers on profit margins, or entirely new Dates: Approved April 28, 2005; original closing agricultural markets emerged in which smallholders date (December 31, 2010) extended to often had a relatively weak position. December 31, 2011 ■ New market challenges and opportunities. China’s Includes About 120 subprojects. accession to the World Trade Organization required support for: rapid liberalization of trade practices and further open- ing up of the border. Internal production and food CONTEXT quality standards had to be improved and adjusted to international standards. ince the end of the 1990s, China’s agricultural sec- S tor has entered a phase of urgent and challenging structural transformation dictated by five major developments: A critical bottleneck for the transformation required in the agricultural sector was the slow transfer and adoption of modern science, technology, and knowledge-intensive agriculture. The prevailing farming environment in China ■ Lagging agricultural output and incomes. Farm income was characterized by a highly fragmented production growth had fallen alarmingly behind overall income structure dependent on a multitude of very small farms. growth. Policy priorities have shifted from concerns over This farm structure made it difficult: (1) to expand the use food self-sufficiency and low consumer prices toward of new technologies and/or supply high-value markets that serious concerns about income growth for the farming need a critical mass, farm size, or contain other critical ele- population and the widening disparity in rural and ments to reach economies of scale, (2) to reach farmers by urban incomes. the traditional extension system, because the national ■ Natural resource pressure. As agricultural output extension system model is poorly suited to reach large expanded rapidly in the 1990s, production encroached numbers of farmers and meet their increasingly individual- into more and more fragile ecological environments, and ized demand for knowledge and information, and (3) for farmers adopted unsustainable production practices. farmers to know about and respond effectively to market ■ Changing demand and consumer preferences. Rapid signals. The government-based research and extension sys- growth in the nonagricultural economy and growing tem was not sufficiently responsive to the new challenges urbanization caused changes in food preferences and con- and opportunities presented by agricultural technologies, sumption patterns. Demand for meat, fruit, vegetables, markets, and farmers’ demands. It was supply-oriented, 426 engaged in extending the government’s programs and pro- investment models in which researcher-investor-farmer duction targets, and had no effective means of dealing with partnerships are tested; (2) targeted technology transfer, the constraints small-scale farmers encountered in adopt- which financed technology transfers targeting farmer ing new technologies. groups who did not have adequate access to information, The Technology Transfer Project responded to strategic capital, or decision-making power to adopt technologies concerns in China’s agriculture by providing a learning plat- on their own; and (3) public support programs, which form for developing innovative models for public sector involved financing activities that enabled the private facilitation and support, including fostering better PPPs in sector to realize its role in commercializing innovative agriculture. The primary addressee of the project was the technologies (such as food testing and certification or public sector’s agricultural support and development sys- use of IPRs) and technologies that did not appeal to the tem, in particular the State Office for Comprehensive private sector on commercial grounds but had a clear Agricultural Development (SOCAD), which is China’s public good nature (such as water-saving technology or main funding institution, disbursing about US$2 billion waste treatment). each year for agricultural development in the country. A significant amount of this budget supports agribusi- nesses. Any improvements in targeting these funds and PROJECT INNOVATIONS improving funding modalities would therefore have a The first innovation of this project was that, unlike tradi- tremendous impact. tional public sector support projects, it combined public funding for research, extension, training, and institution building with private investment. The government funded PROJECT OBJECTIVES AND DESCRIPTION the development and dissemination of public goods, but The project’s overall development objective was to develop these activities were implemented by the private sector to and test innovative models for agricultural technology foster the integration of public and private investments transfer and application aimed at generating additional (World Bank 2010). farm income with potential for scaling up. In this way the The second innovation of this project was to focus on project sought to give poor farmers a chance to participate technologies that increase smallholders’ incomes. Often in high-value agricultural markets, domestically and inter- public investments in agricultural research raise smallhold- nationally. This objective was to be achieved by supporting ers’ productivity but not necessarily their incomes (World viable models for restructuring and modernizing agri- Bank 2010). cultural production, processing, and marketing through The third innovation was to develop and fund institutions various forms of vertical and horizontal integration, the such as farmer associations as part of the “technology pack- introduction of innovative technologies, and new institu- age,� provided they would improve the dissemination of new tional arrangements and PPPs. technologies.1 In addition, under all subproject proposals Since mid-2005, the project has been underway in four involving commercial enterprises it was made mandatory provinces (Anhui, Hunan, Heilongjiang, and Shaanxi), that at least 50 percent of the subproject funding would be which includes the Yangling High Technology Agricultural used to directly support farmers in providing the raw mate- Demonstration Zone. The initial closing date of December rial for the enterprises (production base or farm outreach). 2011 was extended by one year to provide more time for The fourth innovation was to design this project specifi- analysis and to learn from experience. The main compo- cally as a learning platform. Recognizing that a single proj- nents of the project are: ect could have only a limited impact in a country as big as China, the project was designed as a stepping-stone to 1. Technology transfer and information markets and ser- improve the effectiveness of public investment and partner- vices, which includes the building of technology transfer ship arrangements by partnering with private players. For markets and exhibition and demonstration facilities. this purpose a framework for M&E was designed to extract 2. Promotion of commercially attractive key technologies and disseminate lessons from this project, particularly in and new institutional arrangements, including two areas: (1) the understanding and rationale for public (1) researcher-investor-farmer technologies, which funding (why and in what areas is it justified to use pub- involved the partial financing of typically tripartite joint lic funds for agricultural development) and (2) the ventures with the objective of designing successful improvement of procedures for the use of public funds (such MODULE 5: INNOVATIVE ACTIVITY PROFILE 2: THE CHINA TECHNOLOGY TRANSFER PROJECT 427 as contracts with private partners, working with farmer companies and farmers or farmer associations. For example, cooperatives and associations, and similar arrangements) organic food production or integrated pest management (World Bank 2005–10). technology were difficult for individual famers to adopt because their small holdings prevented them from exploiting commercial opportunities. However, in groups and in combi- BENEFITS, IMPACT, AND EXPERIENCE nation with a strong processing or marketing partner, small- Many subprojects supported under the project generated holders could be linked with commercial opportunities. remarkable benefits in terms of value added, additional New products and markets, which require the commit- income, or entire new lines of business with new products ment of multiple stakeholders over time to develop and and markets. These achievements were based on: (1) inno- reach, were opened by involving the public sector as a bro- vative institutional and partnership arrangements (for ker. A typical example was the development of camphor example, public sector research with companies or farmer production in one area, where an investor used the support organizations or research-farmer or research-company of the local government and the project to organize farmers arrangements); (2) innovative funding arrangements; and to plant sufficient trees and build a critical mass of produc- (3) innovative technologies fostered by these new part- tion required for a viable processing facility. nerships. However, the project was designed as a learning Many subprojects show that organizing farmers into asso- project. As such its achievements in terms of value-added ciations or under company-farmer arrangements enables or additional income cannot be seen as an end but provide them to enter into higher-value production through brand- only the tool for learning and drawing more generic lessons. ing, product certification (green or organic certification, for The project developed an analysis and lessons learning example), or accessing new markets (especially export mar- framework (World Bank 2005–10), but the evaluation kets). In some instances, farmers were organized because process continues, with a consolidation of results yet to companies were the driving force, but in others farmer asso- come. Even so, some key outcomes have been identified. ciations alone achieved these objectives. National and provincial agricultural support programs Contractual arrangements between the government and have already adopted several design elements tested under the private entities introduced under the project showed that project. A number of policy documents have been prepared, private institutions could successfully deliver public goods which influenced SOCAD’s funding policies, including: and services. Many subprojects involve farmer associations or companies providing animal health services, training ■ The combination of company and farm outreach sup- farmers, or providing other extension services. Most project port under a joint investment. proposals target poor farmers or disadvantaged groups. Sev- ■ Importance of farmer associations as new and valuable eral proposals have involved innovative technologies and partners in PPPs. environmental services, such as the treatment of manure, ■ PPP arrangements to be guided by a clear understanding waste, or crop residues. of public good outcomes to be specified in contractual Although the private sector is assuming many functions arrangements with objectives, indicators, and milestone- traditionally performed by government institutions, the based targets. project has demonstrated that the government remains cen- ■ Monitoring of PPP contracts and performance as a cru- tral to areas such as food safety, protection of property cial success factor. rights, regulations, and policy direction. Project investments in those areas (for example, in food quality standards test- Models have been developed with innovative manage- ing and certification in Yangling, or testing for the presence ment approaches and technologies for women farmers. The of genetically modified ingredients and certification in outmigration of male labor from many rural areas in China Anhui) show the importance of the government in relation increases not only the demand for technologies suitable for to the private sector in agricultural development. women but the need for women to develop their managerial skills as farm operators and entrepreneurs. The project LESSONS LEARNED AND ISSUES developed a model partnership with the All-China Women’s FOR WIDER APPLICATION Federation that successfully addressed these needs. Technology barriers caused by fragmented production The summary of impact and experience gives some indica- and small farm size were overcome by partnerships between tion of the lessons that the project has already provided. 428 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK The sections that follow explain some of these lessons in ■ It controlled the sharing of benefits. Supporting compa- greater detail. They concern the importance of aligning nies and farmers under a joint investment makes it pos- project objectives to the context, supporting multiple stake- sible to monitor and control the distribution of benefits. holders at the same time to attain such goals as a more equi- ■ It facilitated the commercialization of research results. table sharing of benefits, and the importance of assessing Linking public research (individuals as well as institu- and matching potential partners with care. tions) with companies or farmer groups and associations in a joint business undertaking helps to ensure that Importance of objective and context research results are directly relevant to business. Differ- ent arrangements have been tested successfully, such as One of the most critical success factors for this project was contracts between researchers and companies or farmer that it was based on a critical analysis of the sectoral con- associations, or participating researchers and research text and a vision for the sector’s development. For example, institutions as shareholders. the decision to aim for income and value generation versus quantity and productivity increases had far-reaching impli- Another lesson from the project is that the Chinese polit- cations for the design and approval of individual sub- ical and administrative environment made it difficult to projects. Similarly, the decision to emphasize farmer-based select proposals based on competitive procedures. A match- investments for farmer groups or in combination with ing grant system was chosen as the preferable approach to enterprise investments was based on the recognition that select private partners and suitable proposals. The selection farm incomes had high priority given the wide urban–rural and approval of proposals was often combined with a income disparity. “negotiation process,� in which many proposals were modi- fied to sharpen the public good outcomes and develop them Supporting multiple stakeholders under into PPPs (in other words, elements of a solicitation process one investment were incorporated). Traditionally a kind of a “trickle-down� effect was expected when either companies or research institutions were sup- Choice of companies and private partners ported through project funding, with the expectation they would have a positive influence on farm incomes. In many Initially several companies applying for support perceived cases, this effect did not occur. The project has taken a the project as an opportunity to receive public funds to probably unique approach in combining funding for dif- resolve a difficult business situation—startup companies or ferent groups of stakeholders in a single investment, often companies that could not obtain additional commercial under a joint business plan. Different arrangements such as financing. Many of these companies could not afford to wait company-farmer, research-farmer, or research-company- until their proposal had been vetted and funds became farmer were supported. The main advantages of this available, so they dropped out of the process. The key lesson approach were as follows: from this experience is that a project needs to provide suffi- cient design clarity on whether it aims to act as a business ■ It reduced the risk that companies would use public support and development project or a project aimed to sup- funds to crowd out farm production and important port PPPs, in which case: sources of farm household income for high-value prod- ucts (for example, that a meat processor would run its ■ Private partners need to be thoroughly appraised for own pig farm). In line with the overall rural development their financial capacity, management skills, technical objective, the project forced companies to enter agree- know-how, and experience. ments with farmers or farmer organizations to source ■ The PPP should not be the primary determinant of a their raw material from farm households and allocated at partnering company’s financial success. least the same amount of funding to support farmers ■ Companies with a track record of successful businesses (with technical and management training, basic infra- in a field relevant to the PPP objective provide the high- structure, and other resources). est chance for a successful partnership. MODULE 5: INNOVATIVE ACTIVITY PROFILE 2: THE CHINA TECHNOLOGY TRANSFER PROJECT 429 I N N O V AT I V E A C T I V I T Y P R O F I L E 3 Agricultural Cluster Development in Nicaragua Nuria Ackermann, United Nations Industrial Development Organization (UNIDO) SYNOPSIS and trigger synergies between various territorial initiatives, such as infrastructure development, capacity building and his Austrian-funded UNIDO project (total project T budget of approximately €1.5 million) was imple- mented between 2005 and 2008 in Nicaragua to foster the sustainable development of 14 agricultural and skill development, adjustments of the regulatory framework, access to capital, technology transfer, and promotional activ- ities. Technical assistance sought to facilitate partnerships as well as to link existing or planned initiatives so that they agro-industrial clusters. The project’s innovative element would not be implemented in a parallel or uncoordinated was its strategy for delivering technical assistance, in which manner. local institutions were subcontracted to act as cluster bro- In the project’s first phase (2003–05), 11 pilot clusters kers. This approach considerably reduced the risk that clus- received assistance. Best practices identified during this ter activities would falter after project closure because the period helped adapt the cluster development methodology capacity to sustain such activities was lacking. Support insti- to the Nicaraguan context. In the final phase described here tutions can more easily cater to the needs of a well-organized (2005–08, with €1.5 million from Austria), the project cluster than of isolated actors, because the cluster enhances focused on strengthening participatory processes in target the effectiveness and client orientation of their services. In clusters, defining joint strategies, and implementing actions Nicaragua, cluster development turned out to be a strong that contributed to competitive growth and the exploitation catalyst for mobilizing additional resources for private sector of market opportunities. More strategically, it reinforced development, especially for infrastructure and the strength- local stakeholders’ capacity to lead cluster development and ening of local productive capacities and organizations. provide continuity once the project ended. It also helped to increase the application of the knowledge of productive CONTEXT linkages gained through the project by developing a critical Small and medium-sized agricultural and agro-industrial mass of academics and policy makers to apply this learning. production units account for a significant share of employ- ment and income in Nicaragua, but their small size and lim- Indirect assistance to clusters through ited resources trap them in a vicious circle of low produc- brokering institutions tivity, cutthroat competition, and low or even decreasing incomes. UNIDO’s current strategy to overcome these The innovative element in this phase of the project was that problems is to promote clusters, which are geographically UNIDO personnel stepped back from direct intervention as defined business systems where producers specialize in the cluster brokers and selected a local civil society entity to same or related production activities. UNIDO’s entry point assume this role in each cluster. UNIDO provided compre- for fostering systemic competitiveness in a specific cluster hensive classroom and on-the-job training based on its clus- was to facilitate the generation of trust and social capital. ter development methodology to the employees of these brokering institutions. In this way, the brokering institu- tions could obtain the skills required to continue their work PROJECT OBJECTIVES AND DESCRIPTION as facilitators after the project ended. UNIDO’s approach placed particular emphasis on the role of Clusters were selected for development based on field cluster brokers, who could mediate between stakeholders surveys that gathered information about the concentration 430 of enterprises in the cluster, existence of a local identity and number of complementary initiatives in the target clusters shared culture among cluster stakeholders, the degree of (box 5.32). organization within the productive sector, the motivation of entrepreneurs and local institutions, the existence of com- Capacity building for representatives of political plementary projects in the locality, the potential for third- and academic institutions party funding for cluster activities, and market demand and trends for products produced by the cluster, among other UNIDO organized specific seminars for university teachers criteria. The 14 clusters eventually selected belonged to a and political actors at the national level to increase their number of subsectors, including the cocoa, dairy, livestock, awareness of the importance of fostering systemic territorial coffee, and banana subsectors. competitiveness. The aim was to ensure that a critical mass Brokering institutions were selected through competitive of opinion and decision makers would take ownership of bidding. Selection criteria included being active in the cluster the cluster approach and continue promoting activities after but perceived as neutral by stakeholders, having strong ties the project’s closure. Between June 2006 and November with or a good understanding of the productive sector, and 2007, UNIDO organized seven seminars on theoretical having qualified, experienced human resources. After training aspects of cluster promotion for 25 professors of the eco- in the cluster development methodology, the brokering insti- nomics departments of 8 prioritized universities and 20 rep- tutions implemented it in their respective clusters. UNIDO resentatives of the public sector. The training topics were provided backstopping throughout this on-the-job training, established in a participatory manner with the academic which was critical to capacity building and to adapting the counterparts, since the main objective was to build the approach to the local context. Brokering institutions were capacity of university professors to lecture on cluster devel- enabled to take stock of parallel activities to support the SMEs opment and motivate them to establish closer links between in the target clusters and align actors and activities in ways the universities and the productive sector. that would enhance each cluster’s performance. UNIDO mainly financed activities to facilitate collabora- BENEFITS, IMPACT, AND EXPERIENCE tion and synergies in territorial initiatives. In a few cases it cofunded competitiveness-enhancing activities to trigger The benefits, impact, and sustainability of indirect assis- imitation effects. The search for public and private funding tance with brokering and capacity building for academi- was a key responsibility of the brokering institutions. An cians and policy makers are described in the sections that advantage was that UNIDO could draw on or leverage a follow. The discussion is supported by case studies. Box 5.32 Complementary Cluster Development Activities Reinforced the UNIDO Project ■ A conducive policy framework, including a National ■ Other technical or financial assistance projects, Development Plan focused on sector-specific and focusing on upgrading quality, facilitating market territorial enhancement of competitiveness and the access, and strengthening design and technological Presidential Competitiveness Commission, an exec- capacities among producers and local authorities utive body for public-private dialogue. (variously funded by Germany, Finland, the United ■ Infrastructure development, including transport, Kingdom, and European Union). water, and electricity infrastructure developed by ■ Activity by nongovernmental and civil society the National Energy Commission, Inter-American organizations engaged in strengthening local coop- Development Bank, and the Government of Japan. eratives, production processes, and product quality ■ Institutional strengthening, including the estab- (through training and diagnostics) as well as market lishment or development of local cooperatives access (promotional activities), including Oxfam, as well as the strengthening of national producer HORIZONT3000, and the Interchurch Organiza- organizations. tion for Development Cooperation. Source: Author. MODULE 5: INNOVATIVE ACTIVITY PROFILE 3: AGRICULTURAL CLUSTER DEVELOPMENT IN NICARAGUA 431 Indirect assistance to clusters through over time. Examples include the establishment of joint brokering institutions farmer sales networks, vertical networks between primary The brokering institutions performed their new roles well in producers and processors, the organization of local trade the 14 clusters. Although the activities varied by cluster, the fairs, the adaptation of financial services to smallholders’ UNIDO methodology was generally followed. In most clus- needs, and the introduction of environmentally and eco- ters, the brokering institution conducted a participatory nomically sustainable irrigation systems (boxes 5.33 and 5.34 diagnostic study to identify the main bottlenecks of the clus- provide specific examples). ter. By involving all of the main local stakeholders, this exer- After the project ended, public-private collaboration cise helped to create an initial base of trust. The brokering continued or increased in 8 of the 14 clusters. In the other institution usually went on to promote the establishment of clusters, communication between stakeholders remained a cluster commission or territorial governance board that fluid, and levels of trust were preserved, but the cluster com- integrated public and private actors. The brokering institu- missions/governance boards and brokering institutions tion also provided training and backstopping to members of stopped performing their leading roles and the cluster lost the cluster commission and helped them design and imple- momentum. ment a joint action plan to improve cluster performance. Beyond the specific assistance provided under the project, Most brokering institutions started promoting joint cluster initiatives unlocked a number of investment and eco- activities among cluster stakeholders even before the com- nomic opportunities. By engaging in business partnerships and mission had been set up to achieve “quick wins,� to sustain networking, firms could pool assets, increase their advocacy, the actors’ sense of motivation, and to increase social capital and mobilize local, national, and international stakeholders Box 5.33 The Livestock Cluster in Chontales In the Nicaraguan department of Chontales, around associations and the biggest local slaughterhouse. 5,350 producers raise livestock for meat on a small The agreement specified the quality standards and a scale. The brokering institution for this cluster was the premium for cattle meeting those standards. Pro- Center for Entrepreneurial Management (CEGE), ducers raised their incomes; the slaughterhouse which belongs to the National Union of Agriculture gained a consistently good source of supply. and Livestock Farmers (UNAG). UNAG had around ■ Cluster actors collaborated against widespread live- 3,000 members in Chontales alone and was very active stock theft. Three municipalities engaged livestock in supporting farmers both technically and financially. guards (typically volunteers trained by the local In 2006, after a participatory diagnostic study, CEGE police and financed by the collaborating producers). facilitated the creation of a cluster commission, which ■ The largest slaughterhouse (87 percent), UNIDO was composed of representatives of the various cattle (7 percent), and the local university (6 percent) spon- farmers’ associations, local universities, the biggest local sored research by three university students on slaugh- slaughterhouse, various municipalities, the police, and tering and boning capacities. The results motivated other public institutions. Under CEGE’s guidance, these the slaughterhouse to fully finance the expansion of its representatives prepared a joint action plan and imple- slaughtering capacity from 350 to 550 cattle per day. mented concrete activities to overcome the bottlenecks. Project participants achieved the following results: CEGE continues to operate as the local brokering institution. The cluster commission remains active and ■ Small-scale cattle farmers were struggling with the has expanded its scope. Because most cattle farmers in nontransparent grading and pricing system applied Chontales are also milk producers, CEGE and the clus- by local slaughterhouses. CEGE helped to mediate a ter commission are fostering public-private linkages in stable supply agreement between five producers’ both the local livestock and dairy sectors. Source: Author. Note: CEGE = Centro de Gestión Empresarial, Universidad Centroamericana de Nicaragua; UNAG = Unión Nacional de Agricul- tores y Ganaderos. 432 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 5.34 The Banana Cluster in Rivas A significant share of Nicaraguan banana production is in these practices on their farms. APLARI and the concentrated in the department of Rivas, where around Ministry of Agriculture provided training and tech- 4,000 small-scale banana producers operate. The nical assistance to the farmers. These producers Banana Producers Association in Rivas (APLARI) was received higher prices for their bananas and served as the brokering institution for this cluster. APLARI pro- a model for other farmers. vided assistance to its 500 members to improve produc- ■ APLARI supported four small producer coopera- tion and marketing. In this case the cluster commission tives to establish a sales network to increase their included members of banana producer organizations, supply volume and bargaining power. The cooper- local representatives of the Ministries of Agriculture and atives started selling jointly to a Honduran banana Transport, the police, the army, local universities, finan- chip company and a high-end supermarket chain in cial institutions, and international cooperation agencies the capital. The incomes of producers involved in operating in the area. APLARI helped the commission these sales agreements had increased by up to 50 members prepare a joint action plan, in which the value percent by the end of the project. of the planned activities amounted to US$850,000. Of ■ Banana producers on the lake island of Ometepe this, 5 percent was financed by UNIDO and the remain- found it difficult to sell to clients on the mainland. der came from APLARI, the government, the European The only private boat company charged extremely Union, the United Kingdom, Inter-American Develop- high fares for transportation and did not respect ment Bank, and others. Some of the main results the time schedule. Intervention by public authori- included: ties (in particular the National Port Operator) fixed transportation fees and restored adherence to ■ APLARI helped institutions to adapt their support schedules. Port facilities were upgraded and services to producers’ technical requirements. One expanded. The improved boat connection with the result of this realignment was that producers started mainland benefited not only the producers in to use the local university’s soil testing service. Ometepe but facilitated the arrival of tourists to ■ The Ministry of Agriculture had tried to introduce the island. “best agricultural practices� among banana pro- ducers in Rivas but had failed because of a lack of When the project ended, APLARI and the cluster direct communication with the productive sector. commission continued promoting public-private activ- Thanks to APLARI’s intervention and European ities in Rivas to strengthen the performance of the Union support, 18 leading producers agreed to invest banana cluster. Source: Author. Note: APLARI = Asociación de Plataneros de Rivas. whose support would be out of reach to individual stake- implement activities with the productive sector to foster sys- holders. The agglomeration of local private enterprises temic competitiveness. At the national level, however, newly around a clear set of development objectives facilitated public- elected authorities preferred terminology associated with a private dialogue, as it provided the private sector with a clear value chain approach, which may alter perceptions of the agenda and legitimate leaders. Support institutions could cluster approach. more easily cater to a well-organized cluster than to isolated It had been envisaged to target university headquarters actors, so the effectiveness and client orientation of their for seminars on the cluster approach, as they could establish services improved. the curriculums of their regional branches and foster wider dissemination of the approach. In practice, the regional uni- versity branches were much more receptive to the cluster Capacity-building for representatives approach, mainly because as cluster members they felt more of political and academic institutions committed to local economic development. At the cluster level, municipalities and other public actors Several regional branches of universities trained by were actively involved in cluster commissions and began to the project established links with the productive sector MODULE 5: INNOVATIVE ACTIVITY PROFILE 3: AGRICULTURAL CLUSTER DEVELOPMENT IN NICARAGUA 433 in their territory by becoming active members of the ■ Given the limitations of time and funding, cluster cluster commissions. Seven of eight universities partici- development must target a limited number of clusters pating in the seminars included cluster topics in their that become instrumental for showcasing the benefits of curriculums and had introduced 683 undergraduate and the approach and transferring competencies to local 121 graduate students to the cluster approach by the end institutions that can replicate the approach. The selec- of the project. tion of target clusters—based on clearly specified and agreed upon criteria—is critical, because they can have a demonstration effect extending beyond their immediate LESSONS LEARNED AND ISSUES concerns. Careful selection of the brokering institutions FOR WIDER APPLICATION and the specific employees that would act as brokers on the ground also contributed significantly to success. A key lesson was that when the brokering institution was a ■ Social capital can develop in a cluster only if its stake- local producer association, facilitation continued after the holders clearly perceive the advantages of joint action. It project ended. These types of organizations were well is important to focus from the very beginning on identi- embedded in the local context and benefited from a high fying and implementing “quick win� joint actions to level of legitimacy with those they represented. Producer increase motivation and expand cooperation. associations sustained their role as facilitators because they ■ The combination of classroom training, learning by perceived it as beneficial to members and organizational doing, and mentoring proved crucial for learning the objectives. In contrast, brokering NGOs often stopped approach and adapting it to specific local needs. Training working once the subcontract with UNIDO had ended and in fund raising was not sufficient to guarantee sustain- funds to continue their work were not forthcoming. Unlike ability once the project ended, however. the producer associations, the NGOs had a broader scope of ■ The involvement of local university branches helped to objectives, and their missions were less linked to a specific disseminate the cluster development approach and territory and its producers. helped universities form an integral part of the cluster. Other lessons include: A final lesson is that the UNIDO approach (based on the ■ UNIDO’s long-term engagement in Nicaragua, com- generation of trust, establishment of business linkages, and bined with its wide-ranging experience in business net- formation of PPPs) can unleash a cluster’s growth potential work and cluster development in Nicaragua and the but cannot create potential where none exists. Social capital region, were instrumental in developing a tailor-made can help to leverage limited resources, but local develop- training methodology and ensuring an innovative and ment will still be hampered if a territory lacks sufficient sustainable project implementation strategy. funds to mobilize. 434 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 4 Providing Farmers with Direct Access to Innovation Funds Bernard Triomphe, Agricultural Research for Development, France (CIRAD) Mariana Wongtschowski, Royal Tropical Institute (KIT) Anton Krone, SaveAct, Prolinnova South Africa Ann Waters-Bayer, ETC Foundation David Lugg, FAO Laurens van Veldhuizen, ETC Foundation SYNOPSIS CONTEXT: WHY PROVIDE INNOVATION FUNDS DIRECTLY TO FARMERS? pecific grant programs—referred to here as S “Farmer Innovation Funds�—can be designed to provide direct, fairly simple competitive access to small grants or loans for individual farmers or farmer Although efforts have been made to provide public funding to foster innovation among a diverse group of stakeholders through competitive bidding (see, for example, World Bank groups, businesses, or other stakeholders who wish to 2010), such funds still tend to be allocated primarily to adapt, develop, or adopt innovations and business initia- research and extension institutions or other formal actors tives on topics and issues of their own choosing. Access to in the agricultural sector (such as large NGOs), partly as a such funding allows a wide range of innovations to be result of the high administrative and technical require- tackled, and under proper conditions may expand enthu- ments for accessing the funds. Consequently, such institu- siasm and innovation capacity among smallholders, other tions and actors retain an overwhelming influence and rural stakeholders, and those who support them. Different control over the main decisions related to who should ben- funding schemes have been tested and adapted in several efit from such funding, how the innovation process is countries throughout Africa, Asia, and Eastern Europe, organized, what types of activities are implemented, and by with specific objectives, types of farmers, setups, grant whom. Conversely, farmers and other stakeholders sizes, and screening and support mechanisms. The fund- involved rarely have direct access to (and hence have little ing schemes are highly dynamic, evolving in response to to say about) funding to implement their own ideas about changing circumstances and experience gained. Farmer which innovations o explore. In most cases, farmers receive Innovation Funds work better if and when decentralized limited financial support to compensate them for the cost settings are used and when support institutions have the of their participation in specific activities being funded necessary skills and experience to implement them. Fund- (such as working on experiments, linking with other actors, ing mechanisms can be made more sustainable by linking and so on) or to motivate them to try out new technologies them with savings and credit schemes and structures developed by others. (should they exist) and/or by embedding them within existing agricultural R&D institutions and mechanisms for PROJECT OBJECTIVES AND DESCRIPTION fostering innovation. Farmer Innovation Funds are most powerful when they are not implemented in isolation but This profile examines how funding schemes to support as part of systemic, long-term efforts to promote and farmer innovation (“Farmer Innovation Funds,� FIF) can be strengthen sustainable farming, participatory innovation designed and what lessons can be drawn, based on two sets development, and dynamic innovation systems and of experiences: processes, in which the roles and skills of various stake- holders (particularly smallholders) are recognized and ■ Local Innovation Support Funds (LISFs) were initiated supported. under the Prolinnova1 network to test if and how 435 research and innovation funding could be channeled to, capacity of the fund recipients to innovate and to increase governed by, and accessed by small-scale farmers their overall contribution to and participation in the inno- through small grants (typically a few hundred dollars or vation process. less) for developing innovations of their own choosing. Funds are administered by small multistakeholder com- LISFs specifically target poor and vulnerable households mittees or secretariats (usually with 5–10 members but no and focus more (but not exclusively) on local ideas and more than 2 or 3 in the case of the CGPs) in charge of technologies (existing or new), depending on what farm- organizing the calls for proposals and creating sufficient ers actually want to achieve. LISFs have been operating awareness about the fund, clarifying the funding modalities on a pilot basis in several low-income countries in Africa (grant size and cofunding share, interest rate if a loan is and Asia over the past five years. involved, and so on), screening applications in a formalized ■ Competitive Grant Programs (CGPs) focus on commer- and transparent way, and overseeing the effective disburse- cially oriented, small- to medium-size farmer groups and ment of funds (adapted to the financial services and circuits small rural businesses. Although CGPs work with poor available to the applicants). farmers, they prioritize commercially oriented ones. The In most cases, field days or innovation fairs and/or com- CGP focuses on business and market-oriented activities mercial radio or TV programs (in the case of CGPs) are and emphasizes adapting and adopting existing tech- organized to share the results obtained by farmers through nologies (but not exclusively). CGP grants are generally their fund-supported activities. The intention is to increase much larger than LISF grants (typically US$10,000 or awareness about the funds and motivate more farmers to more). Grants include funding for investments to set up apply for the next cycle of funding. the innovative activity, for external technical assistance, Other key activities typically include capacity building and for technology transfer and demonstration to other for those who handle the fund at the local level as well as farmers and stakeholders. A CGP initially operated in representatives of organizations supporting farmers’ inno- Albania, and similar schemes are being implemented in vation. A typical fund program also seeks to establish an Armenia, Azerbaijan, and Kazakhstan. enabling environment for implementing grants, allowing careful M&E, and ensuring effective learning and sharing Both funds have some generic features. They are both with members of the FIF committees and with relevant designed to provide a diverse spectrum of beneficiaries or agricultural R&D institutions and policy makers. These clients (including farmers, land-users, and rural businesses, efforts are aimed at creating awareness and support for the either as individuals or as members of groups) with easy fund program’s longer-term sustainability. access to relatively modest grants or loans allowing them to develop, invest in, and strengthen initiatives and innova- INNOVATIVE ELEMENT tions that they consider worth pursuing and which also have the potential to produce public goods such as eco- Farmer innovation funds present a handful of innovative nomic growth and rural employment, social equity, and elements: ecosystem services. The funds can be used for various purposes and types of ■ They are designed to be easily accessible to small-scale innovations, including technical ones (natural resource farmers and other stakeholders through simple applica- management, for example, or improved production, pro- tion forms and procedures, simple fund disbursement cessing, or transformation of produce), organizational ones modalities, support provided to farmers to fill in appli- (such as better access to input, service, and produce mar- cation forms and meet eligibility criteria, and the possi- kets), and institutional ones (such as creating new institu- bility of applying as individuals or groups. tions and rules or transforming existing ones). To fulfill this ■ They are meant to solve problems and to test innovations purpose, funds may be used for implementing diverse types defined and chosen freely by the applicants themselves. of activities: experimenting on a smallholder’s own farm, ■ Some FIFs (such as LISFs) strive to give farmers a promi- engaging in joint experimentation and other activities by nent role in fund governance, including setting up crite- farmers and other stakeholders (researchers, extension ria for selecting applicants, screening proposals, and agents, and so on), transferring existing technology, or shar- M&E. ing and disseminating successful experiences. In doing so, ■ FIFs have a relatively light administrative structure, so the aim is also to strengthen the individual and collective that over time the corresponding costs are reduced and 436 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK bureaucracy is minimized, allowing timely response to many “new� innovations are emerging as a result of LISFs. applicants and disbursement of grants. Not only the farmer innovators but also other farmers who benefitted from sharing results are reporting higher crop and livestock productivity and increased savings and incomes. In BENEFITS AND IMPACTS both Ethiopia and Ghana, different stakeholders state that The funds have reached several thousand farmers to date. more use is being made of participatory approaches to exten- Table 5.12 summarizes information on numbers and sion work in the zones where the LISFs operate. For examples amounts of grants made in several countries in 2005–10. of innovations explored through FIFs, see box 5.35. Impact assessments of the LISF program are being carried CGPs have proven effective in supporting farmer groups out. Initial evidence in Ghana and Ethiopia indicate that and emerging rural businesses to introduce, test, and Table 5.12 Key Characteristics of Farmer Innovation Fund Grants Made in Several Countries, 2005–10 Period Applications Percent Loan or Country covered received approved grant? Award size (US$) Who are the applicants? LISF scheme Cambodia 2005–09 193 69 Loan 10–100 Individuals filtered by group Ethiopia 2005–09 109 43 Grant <100–300+ Both individuals and groups of 4–5 persons Ghana 2008–09 80 43 Grant 30–300 Mostly individuals Kenya 2008–09 103 22 Grant 50–250 Mixed/unisex groups and individuals Nepal 2004–09 63 38 Grant 50–750 Mostly individuals South Africa 2005–09 65 23 Grant 700–2300+ Mixed/unisex groups and individuals Tanzania 2008–09 25 64 Grant 500–1000 Group applications only Uganda 2005–08 98 68 Mostly loan 25–120 Initially groups, later also individuals CGP scheme Albania 2002–08 656 22 Grant 3,000–15,000 Groups and associations Armenia 2006–09 276 20 Grant Up to 20,000 Groups, associations, small businesses Azerbaijan 2007–10 279 22 Grant 10,000–30,000 Groups, associations, small businesses Source: Authors. Box 5.35 Innovation Themes Explored in the Local Innovation Support Funds and Competitive Grant Programs Crop and animal husbandry. Examples include lean-meat pig production and marketing, improved devising inexpensive animal rations by replacing packaging of aromatic and medicinal herbs, and externally bought feed with locally available feed, improved packaging and marketing of honey. treating animal disease with local plants, selecting Development of niche markets. Examples include germplasm adapted to local conditions, controlling production of honeybee feed, production of saplings bacterial wilt in enset (false banana), devising effec- for forest and ornamental trees, and production of aro- tive water-harvesting methods, improving apple and matic and medicinal plants. peach production technologies, and using plastic Sustainable natural resource management. Exam- mulches in vineyards. ples include increasing biodiversity and combating Processing and storage. Examples include vegetable deforestation through regeneration of an endangered preservation, improved sheep cheese production and native tree species of economic value. brand marketing, and improved onion storage. Social innovation. Examples include organization Improved quality and marketing. Examples include of groups for developing innovations and improving collection and standardization of olive oil, improved savings and credit schemes. Source: Compiled from several LISF and CGP reports. MODULE 5: INNOVATIVE ACTIVITY PROFILE 4: PROVIDING FARMERS WITH DIRECT ACCESS TO INNOVATION FUNDS 437 demonstrate innovative technologies to a broader audience LESSONS LEARNED AND ISSUES FOR of potential rural entrepreneurs and beneficiaries. About 85 WIDER APPLICATION percent of the direct grantees (for example, 700 farmers in A number of lessons from the Prolinnova experience with Albania) experienced an increase in yearly income and were FIFs may be useful in designing similar interventions. They likely to continue their activities after completion. Over are summarized in the sections that follow. 20,000 farmers were directly exposed to new technologies through the technology transfer activities, with an estimated Ensure that funds are used for their intended 3–5 emulators per grant at completion and an additional purpose number likely to adopt and possibly adapt the technologies in subsequent years (boxes 5.36 and 5.37 provide examples Farmer funds are meant to support innovation or promote of a CGP and an LISF case). the adoption of new, relevant technologies (rather than Box 5.36 An Example of a Competitive Grant Program Grant: Improved Onion Storage and Marketing in Albania A local farmer association asked for a competitive grant distributing the produce. Other activities included pur- to build a small onion storage facility to lengthen the chase of a sprayer and irrigation pump for use by mem- marketing period and obtain higher prices during the bers and drying onion seed for planting. During the off-season. During the grant period, the association grant period, dissemination included two workshops, increased from 7 to 32 members, each with about 0.15 five training days, three publications, and a local TV hectares of onions and total production of around 350 broadcast focusing on various aspects of onion pro- tons per year, and signed a contract with a trader in duction and marketing. This grant eventually resulted Tirana to purchase the onions. Around 37 tons could in linking production with markets and contributed be stored at a time, with further investments planned to substantially to the development of a viable farmer increase storage capacity and to purchase a vehicle for association in a remote corner of Albania. Source: World Bank 2011. Box 5.37 An Example of a Local Innovation Support Fund Grant: Propagating Podocarpus in Ethiopia In the highlands near Ambo in Ethiopia, communities the dormancy period by placing seed mixed with soil in rear livestock, produce crops, and plant trees for food a polybag, burying it in a hole, and providing sufficient and income. One tree genus of socioeconomic impor- regular water. The method resulted in a high germina- tance is Podocarpus, a conifer that produces good tim- tion rate (85 percent) and reduced the dormancy ber. These trees are becoming extinct because of high period from over a year to three weeks. Based on these demand and the long dormancy of the seed, which results, Jifara received an award from the government, takes up to a year to germinate. A farmer, Jifara which raised his self-esteem; his income increased from Workineh, applied for and obtained an LISF grant to selling seedlings; and the community’s stocks of test various germination methods with the aim of Podocarpus have increased. In addition, researchers’ shortening the dormancy period and regenerating the and especially extension workers’ attitudes towards tree population in his community. The LISF grant pro- farmers changed, as they now recognized the contribu- vided him with the required material inputs. Jifara tions of local farmers to local solutions using mostly eventually developed a successful method of reducing local resources. Source: Prolinnova–Ethiopia, personal communication. 438 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK purchasing inputs alone). They generally achieve the adequately resourced. It may result in delayed implementa- intended objective if good overall management of the pro- tion of activities and “hijacking� of the process by researchers gram is ensured, local community-based organizations and or extension agents, which may lower the motivation of the farmer organizations are strongly involved, proposals are farmers. But provided things are done properly, that the selected according to clear criteria and procedures, and diverse stakeholders perceive the value of working together, grants are formalized through signed contracts. and that trust develops among the parties, several advan- With respect to LISF schemes, greater clarity about fund tages emerge as the potential synergies between these actors use emerged gradually, after some initial confusion about come into play. Farmers, scientists, extension agents, and pri- whether LISF grants could cover input costs. With respect to vate business owners learn and improvise together—which CGPs, three elements are taken into consideration in the is the full expression of an effective innovation system. Joint grant: investment, technical assistance, and technology innovation also usually implies improved research design, transfer. Operating costs and purchase of inputs are nor- more rigor in implementation, and better documentation of mally part of the beneficiary’s contribution, unless they are results, all of which increase the prospects of wider applica- clearly related to the demonstration function of the grant. tion and dissemination of innovation. Target the funds carefully Costs associated with implementing an effective FIF program The best results are observed when funds are set up to tar- get preexisting community-based organizations, farmer One key objective in establishing a fund program is to keep groups, and institutions that have prior experience with administrative, support, and supervision costs as low as pos- participatory approaches, and when good support institu- sible, compared to the amount invested in experimentation tions or service providers are selected. by grantees. Given the fairly experimental nature of the LISF Support institutions often face significant challenges in and CGP programs profiled here (implying that new mech- terms of their ability to provide sufficient initial mentoring anisms and setups had to be designed), and the fact that to farmers and other grantees and then to step back and some expenses are fixed (such as those for M&E or for estab- allow fuller appropriation of the scheme by local actors. Sup- lishing and operating committees), the relative amounts port institutions also need to develop the capacity to attract devoted to such costs versus the amount of the grants them- and involve major “conventional� agricultural R&D actors, selves may be quite high, especially in the initial stages. a recurrent challenge for NGOs engaged in FIF schemes. In Experience with LISFs over the past five years indicates particular, it is critical to bring local and national extension that, in the start-up phase, about two-thirds of the program and research partners on board to facilitate the scaling-up costs are associated with capacity building for farmers and of the process and the results of such schemes. support institutions, operational costs (making calls, screening proposals, reviewing progress, and so on), creat- ing awareness about the fund, technical external backstop- Value added of farmer innovation compared to ping by service providers and research, sharing and dissem- joint innovation by farmers and agricultural R&D inating process and results, and M&E and impact Localized innovation with minimal support from outside assessment. About one-third of program costs are for the generally yields results that can be readily understood and grants themselves. Over time, the costs associated with run- available to neighbors of farmers benefitting directly from ning an FIF gradually decrease relative to the cost share of FIF grants. It is also a good way of empowering farmers and the grants, to about two-thirds grants and one-third running strengthening their capacity to engage with the formal agri- costs. Overall, the absolute costs for the grant component in cultural R&D environment. the FIFs vary greatly according to size of awards, scale of the For its part, joint (multistakeholder) innovation deriving program, and level of cofunding by grantees. from structured and systematic interactions between farm- ers, researchers, and other actors in agricultural R&D is Effectiveness and dynamics of fund setups geared more toward generating results that can be scaled up with greater certainty. It is more costly and riskier than local The appropriate setup (local versus institutional, decentral- (farmer) innovation, as it invariably takes time to assemble ized versus centralized) for governing and managing the fund the right mix of partners and skills and to ensure it is depends on the specific context, experiences, opportunities, MODULE 5: INNOVATIVE ACTIVITY PROFILE 4: PROVIDING FARMERS WITH DIRECT ACCESS TO INNOVATION FUNDS 439 and the scale at which implementing a FIF program makes and in building their capacity to collaboratively manage the most sense. FIF programs have generally been moving funding schemes at their level through specific training and towards more farmer-led governance mechanisms and mentoring by support organizations. In financial terms, sus- structures. This shift requires support organizations to move tainability and a sense of responsibility can be enhanced by away from managing funds directly and to become more putting payback arrangements into place within commu- involved in building the capacity of farmer groups to man- nity organizations, as done in the case of the LISF Cambo- age funds autonomously. Support institutions also play an dia and Uganda. Not all stakeholders are keen on a loan- increasingly important role in ensuring the quality of pro- type mechanism for funding research and innovation, posals and integrity of fund use. The case from Cambodia however, as this approach is easily confused with a classic (box 5.38) illustrates the evolving nature of the setup. microcredit or loan scheme. Ideally, both local and central approaches could be At a higher level, efforts to institutionalize the FIF con- implemented at the same time. This strategy would speed cept within the country’s agricultural R&D systems are the learning process and the way the entire agricultural incipient. In Tanzania, a local government has agreed to R&D system operates and responds to farmers’ needs and help replenish the LISF in one district. In other countries, desires. some government agencies participate actively in imple- menting LISF pilots. In Cambodia, the government and donors are interested in supporting the recently estab- Sustainability and scaling up of FIF programs: lished central institution running the LISF over the long Advances and challenges term (box 5.38). In Albania, the Ministry of Agriculture, At the community level, considerable progress has been Food and Consumer Protection built on the initial CGP achieved in giving farmers access to innovation resources approach by creating an investment grant model in the Box 5.38 Dynamics of the Local Innovation Support Fund Setup in Cambodia, 2006–10 An initial structure for the Local Innovation Support them to the lead LISF partner in the province. After a Fund (LISF) in Cambodia was designed based on a fea- preliminary review of the proposals, this partner for- sibility study carried out in 2005–06. From the start, it warded them to the LISF National Steering Committee was decided to operate the LISF as a revolving fund. for a final decision. Farmers could apply to the LISF for a loan, on which In 2008, the LISF scheme was expanded to 11 interest was charged. This setup was seen as the best provinces involving a total of 20 NGO members of Pro- way to make farmers feel more responsible for carrying linnova–Cambodia, but it proved too difficult to ensure out LISF activities and to replenish and expand the ini- the necessary capacity building and the quality of the pro- tial fund, linking it to existing community-based sav- posals and ensuing experimentation. It was also challeng- ings and credit schemes. From 2005 to 2008, LISF pilots ing to handle the varying degree of ownership by farmers were established in three provinces, each with a differ- and local support institutions as well as to monitor the ent organization playing the leading role, overseen by an results. Moreover, it was difficult to attract funding from LISF National Steering Committee coordinated by the the national government and from international donors. Cambodian Center for Study and Development in In response, starting in 2011, a new structure was Agriculture (CEDAC), which also coordinates Prolin- designed to implement the LISF through a farmer- nova–Cambodia. Although LISF operations were governed, centralized national fund under an existing highly decentralized in operational terms, the three farmer organization at the national level, Farmer and provinces followed a common procedure. Fund Nature Net (FNN). CEDAC and other Prolinnova– requests by individual farmers were first sent to a Cambodia partners play solely an advisory role to the farmer association, which compiled and forwarded FNN. Sources: Vitou 2008; FAIR workshop reports 2009, 2010. Note: CEDAC = Centre d’Etude et de Développement Agricole Cambodgien. 440 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK official government agricultural support program. In CONCLUSIONS Central Asia, CGP-like schemes have been set up to emu- FIFs are a valuable, vital component of a wider approach to late the success obtained in Albania. strengthening innovation capacities and systems. By making When integrating innovation funds into a wider frame- innovation funds more readily available to farmers and work, is it highly desirable to implement parallel activities other relevant stakeholders, FIFs, as illustrated by the LISF contributing to farmer empowerment and capacity and CGP experiences, are performing an essential role in strengthening. When such integration has been achieved, strengthening innovation and promoting a greater role and the scope and opportunities for an effective and sustainable voice for farmers and other rural stakeholders in governance funding scheme are greatly expanded, at least in contexts of agricultural R&D. where poverty and serious social and economic problems FIFs are most powerful when they are not implemented prevail. in isolation but form part of systemic, long-term efforts to With respect to choosing the appropriate grant size, small promote and strengthen sustainable farming, participa- grants are extremely relevant for very poor, risk-averse tory innovation development, and dynamic innovation farmers working with little outside help and little need for systems and processes, in which the roles and skills of var- investment in equipment or infrastructure, and on innova- ious stakeholders (particularly smallholders) are recog- tions that have a strong location-specific character or an nized and supported. An FIF program should be comple- inherently small niche. They may also be a good way to start mented with investments in a number of related areas that and experiment with the FIF concept and process, before create an enabling environment for agriculture: improving institutionalization takes place. research and extension (to make them more responsive to Larger grants are relevant for better-off farmers, for group demand), nurturing the emergence and consolidation of a applications, when costs of external research and advisory vibrant private sector capable of providing services and services are factored in, and for supporting increased com- inputs and processing the produce, establishing effective mercialization in rural areas. If and when actors from formal coordination mechanisms among these stakeholders, agricultural R&D are ready to integrate FIFs into their activ- designing and funding policies that will favor rather than ities, they will usually be more willing to go with bigger restrain innovation, improving education and training, grants than with small grants. and favoring market linkages, among others. MODULE 5: INNOVATIVE ACTIVITY PROFILE 4: PROVIDING FARMERS WITH DIRECT ACCESS TO INNOVATION FUNDS 441 NOTES 6. Another method would be to look at trade statistics. Module 5 Overview 7. See in particular USAID (2008). 8. World Bank (2009) provides a data-capture template 1. See the infoDev Monitoring, Evaluation, and Impact that helps to implement this diagnostic tool. Assessment study at http://www.idisc.net/en/Page.MEIA 9. For further information on value chain analysis, see .Study.Overview.html. FIAS (2007) and World Bank (2009). 2. For example, through intellectual property rights (IPRs) 10. For further information on institutional mapping, see to promote greater impact of the research and innovations World Bank (2009). emanating from an institution (for example, by licensing technology to partners). 11. This project continues; the preliminary results described here were transmitted in an interview with the author. 3. Financing instruments for agricultural innovation are discussed in module 6. 12. See GEF (n.d.) and Negeli-Ganz (2008). 4. See World Bank (2009b), which suggests this approach for cluster evaluation; with some modification, it is suitable Thematic Note 5 for various business development programs. 1. Many published IP policies can provide guidance for developing these policies; Kowalsky (2007) addresses the Thematic Note 3 role and structure of institutional policies. 1. The Agribusiness Community of Practice recently launched by infoDev (www.infodev.org) raises awareness of Thematic Note 6 the utility and need for agribusiness incubation. For more details on agribusiness incubators, see infoDev (2011). 1. This report, based on research into 31 agricultural investment funds, is a more general overview of investment 2. Examples of incubator models included in this section than this thematic note and is a useful and up-to-date are drawn from infoDev (2009), which assesses the best source of trends. It also contains seven case studies and international practices for ICT incubators and includes models of agricultural investment funds. The report case studies from Argentina, Chile, Colombia, Jordan, and focused primarily on sub-Saharan Africa and transitional South Africa. economies and identified over 80 investment funds working 3. This section is drawn from infoDev’s Incubator Toolkit in agriculture and rural development. (www.idisc.net). 2. Probably the best known example, which has been repli- 4. This section is drawn from infoDev’s Toolkit on Busi- cated by many countries, is the US Small Business Invest- ness Incubation. The forms noted in the section can be ment Research program. See http://www.ncbi.nlm.nih.gov/ accessed via the infoDev site: www.idisc.net. books/NBK9607/. 5. Sally Hayhow, referenced in infoDev’s Incubator Toolkit 3. For examples of angel and seed investing in agriculture, in the section on “The Role of the Incubator Board� see de Kleene (n.d.) and the presentation “Angel Investing in (http://www.idisc.net/en/Article.163.html). Agriculture� (docstoc. www.docstoc.com/docs/10759/Angel- 6. Patient capital is long-term capital invested without Investing-and-Agriculture). expectation of a quickly realized profit. 4. An important model is Yissum Technology Transfer at Hebrew University of Jerusalem, which is responsible for Thematic Note 4 commercializing an array of successful products that gener- ate over US$2 billion in worldwide sales every year. See 1. For details on a cluster policy approach, see World Bank http://www.yissum.co.il/. (2009). 5. There are many descriptions of venture capital; see, for 2. For details on a value chain approach, see FIAS (2007). example, Wyse (2007). 3. For a concise but detailed discussion, see World Bank 6. The technical definition is that the IRR of an investment (2009). is the discount rate that makes the Net Present Value (NPV) 4. For analytical work on this issue see Guiliani, of the investment’s cash flow stream equal to zero. There are Pietrobelli, and Rabelotti (2004, 2005) and World Bank many ways to measure economic development and social (2009). good which are beyond the scope of this note. 5. For a detailed description of advantages and disadvan- 7. There is a persistent myth that a large percentage of tages of the cluster mapping method, see World Bank new businesses in the developed world receive bank loans (2009). and venture capital funding. In the United States, the 442 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Kauffman Foundation’s New Firm Longitudinal Study Aghion, P., and P. Howitt, P. 2005. “Growth with Quality- estimates that 5 percent of new firms obtain business Improving Innovations: An Integrated Framework.� In bank loans. Venture capitalists invested in 440 Handbook of Economic Growth, Vol. 1B, edited by P. Aghion startup/seed-stage companies; angels invested in 20,000 and S.N. Durlauf. San Diego: Elsevier. early stage firms (“Funding for the Rest of Us Entrepre- Altenburg, T., and A. Stamm. 2004. “Towards a More Effec- neurs,� http://www.nyew.org/2010/05/funding-for-the- tive Provision of Business Services.� Discussion Paper rest-of-us-entrepreneurs/, accessed August 2011). That No. 4. Bonn: German Development Institute. leaves approximately 95 percent of all new businesses not Cone. 2010. Shared Responsibility Study Fact Sheet. funded by these entities. Interest in venture capital con- http://www.coneinc.com/stuff/contentmgr/files/0/4b6d5 tinues because venture-backed firms have generated enor- 2e9ecfa4eb96b6ea2a801e48cc6/files/cone_2010_shared_ mous economic impact. responsibility_survey_fact_sheet.pdf, accessed April 2011. David Noe, Chilean Ministry of Finance, December 2007, Innovative Activity Profile 1 www.oecd.org/dataoecd/59/62/40023795.pdf, accessed 1. Institute of International Agriculture, Mozambique March 2011. (IIAM); STEP, Thapar University, Patiala, India; NIABI GIZ (Deutsche Gesellschaft für Internationale Zusamme- members: Tamil Nadu Agricultural University (TNAU), narbeit). 2009. “Public Private Partnerships (PPP): Coimbatore, India; Anand Agricultural University (AAU), Methods and Instruments.� http://www.gtz.de/de/doku Anand, India; Birsa Agricultural University (BAU), mente/gtz2009-en-ppp-advisoryservice.pdf. Ranchi, India; Central Institute of Fisheries Technology Henckes, C., et al. 2004. Shared Responsibility: Promoting (CIFT), Cochin, India; Central Institute for Research on Pro-Poor Growth in Disadvantaged Regions. Draft Cotton Technology (CIRCOT), Mumbai, India; CCS Approach Paper, Eschborn, Bonn, New York, and Haryana Agricultural University (CCS HAU), Hisar, Washington, DC. India; Indian Agricultural Research Institute (IARI), New Delhi, India; Indian Veterinary Research Institute (IVRI), infoDev. n.d. Monitoring, Evaluation, and Impact Assess- Izatnagar, India; Jawaharlal Nehru Krishi Vishwa ment Study. http://www.idisc.net/en/Page.MEIA.Study Vidyalaya (JNKVV), Jabalpur, India; National Institute of .Overview.html, accessed April 2011. Research on Jute and Allied Fibre Technology (NIRJAFT), ———. 2008. “International Good Practice for Establishment Kolkata, India. of Sustainable IT Parks: Review of Experiences in Select Countries.� Washington, DC: World Bank. http://www .infodev.org/en/Publication.557.html, accessed April 2011. Innovative Activity Profile 2 Noe, D. 2007. “R&D Tax Incentive in Chile.� Presentation, December 2007. OECD, www.oecd.org/dataoecd/59/62/ 1. World Bank (2005), in particular Annex 4, describes the 40023795.pdf, accessed March 2011. important role of farmer organizations in this project. Thomas, V., M. Dailami, A. Dhareshwar, R.E. López, D. Kaufmann, A. Kishor, and Y. Wang. 2000. The Quality of Growth. New York: Oxford University Press. Innovative Activity Profile 4 World Bank. 2006. Agriculture Investment Sourcebook. 1. Promoting Local Innovation in ecologically oriented Washington, DC. agriculture and natural resource management (www ———. 2009a. “Agricultural Research and Competitive .prolinnova.net). Grant Schemes: An IEG Performance Assessment of Four Projects in Latin America.� Washington, DC. REFERENCES AND FURTHER READING ———. 2009b. “Clusters for Competitiveness: A Practical Guide and Policy Implications for Developing Cluster Module 5 Overview Initiatives.� Washington, DC. Andersson, T., S.S. Serger, J. Sorvik, and E.W. Hansson. ———. 2010. “Designing and Implementing Agricultural 2004. The Cluster Policies White Book. Malmö: Interna- Innovation Funds: Lessons from Competitive Research tional Organisation for Knowledge Economy and and Matching Grant Projects.� Report No. 54857-GLB. Enterprise Development (IKED). http://www.iberpyme Washington, DC. online.org/Documentos/TheClusterPoliciesWhitebook World Economic Forum. 2011. “Realizing a New Vision for .pdf, accessed April 2011. Agriculture: A Roadmap for Stakeholders.� Geneva. MODULE 5: NOTES, REFERENCES AND FURTHER READING 443 http://www3.weforum.org/docs/IP/AM11/CO/WEF_Ag nium: A Global Workshop for Designers and Practitioners. ricultureNewVision_Roadmap_2011.pdf, accessed April Proceedings of the international workshop held in 2011. Brasilia, 16-18 May 2000. Available at: http://www-wds .worldbank.org/external/default/WDSContentServer/ WDSP/IB/2005/07/21/000012009_20050721110629/ Thematic Note 1 Rendered/INDEX/319020rev0Competitve0grant0wkshp Biggs, T. 1999. “Microeconometric Evaluation of the Mauri- .txt (accessed January 2011). tius Technology Diffusion Scheme (TDS).� RPED Paper van der Meer, K., and M. Noordam. 2004. “The Use of No. 108. Washington, DC: World Bank. Grants to Address Market Failures: A Review of World Dutz, M., C. Harris, I. Dhingra, and C. Shugart. 2006. “Pub- Bank Rural Development Projects.� Agriculture and lic-Private Partnership Units.� Public Policy for the Pri- Rural Development Paper No. 27. Washington, DC: vate Sector Note No. 311. Washington, DC: World Bank. World Bank. Ferroni, M. 2010. “Can Private Sector R&D Reach Small World Bank. 1999a. “Agriculture Technology Notes: Com- Farms?� In World Food Security: Can Private Sector petitive Research Grant Programs, Financing Agriculture R&D Feed the Poor? Proceedings of the 15th Annual Research Within World Bank Loans.� Rural Development International Conference, Parliament House, Canberra. Department. No. 24. Washington, DC. Deakin, ACT: Crawford Fund. Pp. 3–12. http://www ———. 1999b. “Turkey Technology Development Project.� .crawfordfund.org/assets/files/conference/proceedings/ Project Appraisal Document. Washington, DC: World Crawford_Fund_2009_Conference_Proceedings.pdf, Bank. accessed March 2011. ———.. 2006. “Turkey Technology Development Project.� GIZ (Deutsche Gesellschaft für Internationale Zusamme- Implementation Completion Report. Washington, DC: narbeit). 2009. “Public Private Partnerships (PPP): World Bank. Methods and Instruments.� http://www.gtz.de/de/doku- ———. 2009. Agricultural Research and Competitive Grant mente/gtz2009-en-ppp-advisoryservice.pdf, accessed Schemes: An IEG Performance Assessment of Four Proj- April 2011. ects in Latin America.� Washington, DC. Hartwich, F., C. Gonzalez, and L.-F. Vieira. 2005. “Public- ———. 2010. “Designing and Implementing Agricultural Private-Partnerships for Innovation-led Growth in Innovation Funds: Lessons from Competitive Research Agrichains: A Useful Tool for Development in Latin and Matching Grant Projects.� Report No. 54857-GLB. America?� International Service for National Agricul- Washington, DC. tural Research Systems Discussion Paper No. 1. Washing- ton, DC: International Food Policy Research Institute (IFPRI). Thematic Note 3 World Bank. 2005. China Agricultural Technology Transfer Boettiger, S., and S. Alvarez 2010. “Getting Better Tech- Project. Project Appraisal Document, World Bank, nologies to the Poor: A Landscape of Commercializa- Washington, DC. tion Challenges and Opportunities.� Berkeley: Public World Economic Forum. 2011. “Realizing a New Vision for Intellectual Property Resources for Agriculture Agriculture: A Roadmap for Stakeholders.� Geneva. (PIPRA). http://www.pipra.org/documents/PIPRA_ http://www3.weforum.org/docs/IP/AM11/CO/WEF_ CommercializationReport_photos.pdf, accessed August AgricultureNewVision_Roadmap_2011.pdf, accessed 2011. April 2011. IFC (International Finance Corporation). 2010. “Scaling- Up SME Access to Financial Services in the Developing World.� Washington, DC. Thematic Note 2 infoDev 2008. “Financing Technology Entrepreneurs & Collion, M-H. (forthcoming). “Lessons from Latin America SMEs in Developing Countries.� (www.infodev.org/ Productive Partnerships Support Project.� ARD Note. financing), accessed April 2011. Washington, DC: World Bank. ———. 2009. “A Model for Sustainable and Replicable ICT Donovan, G. 2006. “When Markets Do Not Work, Should Incubators in Sub-Saharan Africa.� Washington, DC: Grants be Used?� Agriculture and Rural Development World Bank. infoDev, http://www.infodev.org/en/Publi- Policy Note. Washington, DC: World Bank. cation.734.html, accessed April 2011. EMBRAPA, IDB (Inter-American Development Bank), and ———. 2011. “Agribusiness Incubation: Good Practice World Bank. 2000. Competitive Grants in the New Millen- Assessment and Training Module.� Washington, DC. 444 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Knopp, L. 2007. 2006 State of the Business Incubation Indus- Giuliani, E., C. Pietrobelli, and R. Rabellotti. 2004. “Upgrad- try. Athens, Ohio: National Business Incubation Associa- ing in Clusters in Latin America and the Caribbean: The tion (NBIA). Role of Policies.� Washington, DC: Inter-American Medeiros, J.A., L.A. Medeiros, T. Martins, and S. Perilo. Development Bank. http://siteresources.worldbank.org/ 1992. “Pólos, parques e incubadoras: A busca da mod- INTEXPCOMNET/Resources/Pietrobelli_and_Rabellotti ernizaçao e competitividade.� Brasilia: Conselho _2004.pdf, accessed August 2011. Nacional de Desenvolvimento Científico e Tecnológico Giuliani, E., C. Pietrobelli, and R. Rabellotti. 2005. “Upgrad- (CNPq), Instituto Brasileiro de Informação em Ciência e ing in Global Value Chains: Lessons for Latin American Tecnologia (IBICT), and Serviço Nacional de Aprendiza- Clusters.� World Development 33(4):549–73. gem Industrial (SENAI). Hausman, R., and D. Rodrik. 2003. “Economic Develop- University of Michigan, NBIA (National Business Incuba- ment as Self-Discovery.� Journal of Development Econom- tion Association), Ohio University, and Southern Tech- ics 72(2):603–33. nology Council. 1997. Business Incubation Works. Athens, Henry, M., and M. Drabenstott. 1996. “A New Micro View of Ohio: NBIA. the US Rural Economy.� Economic Review, Federal Reserve Bank of Kansas City, 2nd Quarter 1996. Pp.53–70. Kiggundu, R. 2005. “Learning to Change: Why the Fish Pro- Thematic Note 4 cessing Clusters in Uganda Learned to Upgrade.� In Albaladejo, M. 2001. “The Determinants of Competitiveness Industrial Clusters and Innovation Systems in Africa: Insti- in SME Clusters: Evidence and Policies for Latin Amer- tutions, Markets, and Policy, edited by B. Oyelaran- ica.� In Small-Scale Enterprises in Developing and Transi- Oyeyinka and D. McCormick. New York: United Nations tional Economies, edited by H. Katrack and R. Strange. University Press. Pp. 159–86. London: Macmillan. Kiggundu, R. 2006. “The Lake Victoria Fishing Cluster in Bolo, M.O. 2006. “The Lake Naivasha Cut Flower Cluster in Uganda.� In Africa: Knowledge, Technology, and Cluster- Kenya.� In Africa: Knowledge, Technology, and Cluster-Based Based Growth, edited by D.Z. Zeng. World Bank Institute Growth, edited by D.Z. Zeng. World Bank Institute Devel- Development Study. Washington, DC: World Bank. Pp. opment Study. Washington, DC: World Bank. Pp. 37–52. 87–96. Braunerhjelm, P., and M.P. Feldman (eds.). 2007. Cluster Larsen, K., R. Kim, and F. Theus. 2009. Agribusiness and Inno- Genesis: Technology-based Industrial Development. vation Systems in Africa. Washington, DC: World Bank Oxford: Oxford University Press. McCormick, D., and W. Mittulah. 2005. “Global Markets and Ceglie, G., and M. Dini. 2000. SME Clusters and Network Local Responses: The Changing Institutions in the Lake Development in Developing Countries: The Experience of Victoria Fish Cluster.� In Industrial Clusters and Innova- UNIDO. PSD Technical Working Paper. Vienna: United tion Systems in Africa: Institutions, Markets, and Policy, Nations Industrial Development Organization (UNIDO). edited by B. Oyelaran-Oyeyinka, and D. McCormick. New Dini, M. 2003. Consideraciones sobre politicas para el York: United Nations University Press. Pp. 211–40. desarollo de cluster. Agora 2000 mimeo for Inter-Ameri- Munnich, L.W., G. Schrock, and G. Cook. 2002. “Rural can Development Bank. Knowledge Clusters: The Challenge of Rural Economic FIAS (Foreign Investment Advisory Service). 2007. “Moving Prosperity.� Reviews of Economic Development Litera- Toward Competition: A Value Chain Approach.� Wash- ture and Practice No. 12. Washington, DC: US Economic ington, DC: World Bank. Development Association, United States Department of GEF (Global Environment Facility). n.d. “Management Commerce. Effectiveness Tracking Tool.� World Database on Pro- Mytelka, L. 2005. “From Clusters to Innovation Systems in tected Areas, http://www.wdpa.org/ME/PDF/METT.pdf, Traditional Industries.� In Industrial Clusters and Innova- accessed April 2011. tion Systems in Africa: Institutions, Markets, and Policy, Goetz, S.J., M. Shields and Q. Wang. 2004. “Agricultural and edited by B. Oyelaran-Oyeyinka and D. McCormick. Food Industry Clusters in the Northeast US: Technical New York: United Nations University Press. Pp.39–62. Report.� Regional Rural Development Paper No.26. Uni- Negeli-Ganz, B. 2008. “Monitoring and Evaluation of Clus- versity Park, PA: The Northeast Regional Center for ters.� Paper presented at the 3rd International Clustering Rural Development, Pennsylvania State University. Conference, December 4, Istanbul. Gibbs, R.M., and G.A. Bernat 1997. “Rural Industry Clusters Ostrom, E., J. Burger, C.B. Field, R.B. Norgaard, and D. Poli- Raise Local Earnings.� Rural Development Perspectives cansky. 1999. “Revisiting the Commons: Local Lessons, 12(3):18–25. Global Challenges.� Science 284(5412):278–82. MODULE 5: NOTES, REFERENCES AND FURTHER READING 445 Oyelaran-Oyeyinka, B., and D. McCormick (eds.) 2005. Thematic Note 5 Industrial Clusters and Innovation Systems in Africa: Insti- Campbell, A.F. 2007. “How to Set Up a Technology Transfer tutions, Markets, and Policy. New York: United Nations Office: Experiences from Europe.� In Intellectual Property University Press. Management in Health and Agricultural Innovation: A Parilli, M.D. 2006. “Cluster Trajectories in Developing Handbook of Best Practices, vol. 1, edited by A. Krattiger, Countries: A Stage and Eclectic Approach Applied to R.T. Mahoney, L. Nelsen, J.A. Thomson, A.B. Bennett, K. Survival Clusters in Central America.� In Clusters and Satyanarayana, G.D. Graff, C. Fernandez, and S.P. Kowal- Globalisation: The Development of Urban and Regional ski. Oxford, UK, and Davis, California: Centre for the Economies, edited by C. Pitelis, R. Sugden, and J.R. Wil- Management of Intellectual Property in Health Research son. New York: Edward Elgar. and Development (MIHR) and Public Intellectual Prop- Porter, M. 1998. “Clusters and Competition: New Agendas erty Resource for Agriculture (PIPRA). Pp. 559–66. for Companies, Governments, and Institutions.� In On www.ipHandbook.org, accessed April 2011. Competition, edited by M. Porter. Boston: Harvard Busi- Di Giorgio, R.C. 2007. “From University to Industry: Tech- ness Review. Pp. 197–288. nology Transfer at Unicamp in Brazil.� In Intellectual Rodriguez-Clare, A. 2005. “Coordination Failures, Clusters, Property Management in Health and Agricultural Innova- and Microeconomic Interventions.� Washington, DC: tion: A Handbook of Best Practices, vol. 1, edited by Inter-American Development Bank (IDB). A. Krattiger, R.T. Mahoney, L. Nelsen, J.A. Thomson, SANDAG (San Diego Association of Governments). 2005. A.B. Bennett, K. Satyanarayana, G.D. Graff, C. “Understanding Cluster Analysis.� San Diego Association Fernandez, and S.P. Kowalski. Oxford, UK, and Davis, of Governments, http://www.sandag.org/rta/transfer/ California: Centre for the Management of Intellectual cluster_analysis.pdf, accessed August 2011. Property in Health Research and Development (MIHR) Schmitz, H. 1992. “On the Clustering of Small Firms.� IDS and Public Intellectual Property Resource for Agriculture Bulletin 23(3):64–69. (PIPRA). Pp. 1747–54. www.ipHandbook.org, accessed USAID (United States Agency for International Devel- April 2011. opment). 2003. “An Assessment of Cluster-Based Fernandez, C. 2007. “How to Set Up a Technology Transfer Approaches.� An Evaluation Undertaken by The Mitchel System in a Developing Country.� In Intellectual Property Group. Washington, DC. Management in Health and Agricultural Innovation: A ———. 2008. “Value Chains and the Cluster Approach: Handbook of Best Practices, vol. 1, edited by A. Krattiger, Transforming Relationships to Increase the Competitive- R.T. Mahoney, L. Nelsen, J.A. Thomson, A.B. Bennett, K. ness and Focus on End Markets.� MicroReport No. 148. Satyanarayana, G.D. Graff, C. Fernandez, and S.P. Kowal- Washington, DC. ski. Oxford, UK, and Davis, California: Centre for the Management of Intellectual Property in Health Research Wood, E., and D. Kaplan. 2006. “The Wine Cluster in South and Development (MIHR) and Public Intellectual Prop- Africa.� In Africa: Knowledge, Technology, and Cluster- erty Resource for Agriculture (PIPRA). Pp. 567–74. Based Growth, edited by D.Z. Zeng. World Bank Institute www.ipHandbook.org, accessed April 2011. Development Study. Washington, DC: World Bank. Pp. Guo, H. 2007. “IP Management at Chinese Universities.� In 109–18. Intellectual Property Management in Health and Agricul- World Bank. 2009. “Clusters for Competitiveness.� tural Innovation: A Handbook of Best Practices, vol. 1, edited http://siteresources.worldbank.org/INTEXPCOMNET/ by A. Krattiger, R.T. Mahoney, L. Nelsen, J.A. Thomson, A.B. Resources/cluster_initiative_pub_web_ver.pdf, accessed Bennett, K. Satyanarayana, G.D. Graff, C. Fernandez, and April 2011. S.P. Kowalski. Oxford, UK, and Davis, California: Centre ———. 2010. “Designing and Implementing Agricultural for the Management of Intellectual Property in Health Innovation Funds: Lessons from Competitive Research Research and Development (MIHR) and Public Intellec- and Matching Grant Projects.� Report No. 54857-GLB. tual Property Resource for Agriculture (PIPRA). Pp. Washington, DC. 1673–82. www.ipHandbook.org, accessed April 2011. Zeng, D.Z. (ed.) 2006. Africa: Knowledge, Technology, and Heher, A.D. 2007. “Benchmarking of Technology Transfer Cluster-Based Growth. World Bank Institute Develop- Offices and What It Means for Developing Countries.� In ment Study. Washington, DC: World Bank. Intellectual Property Management in Health and Agricul- ———. 2010. “Building Engines for Growth and Competi- tural Innovation: A Handbook of Best Practices, vol. 1, tiveness in China: Experiences with Special Economic edited by A. Krattiger, R.T. Mahoney, L. Nelsen, J.A. Zones and Industrial Clusters.� Directions in Develop- Thomson, A.B. Bennett, K. Satyanarayana, G.D. Graff, C. ment No. 56447. Washington, DC: World Bank. Fernandez, and S.P. Kowalski. Oxford, UK, and Davis, 446 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK California: Centre for the Management of Intellectual society.org/downloads/VCContemporar yIslamic Property in Health Research and Development (MIHR) Finance.pdf, accessed April 2011. and Public Intellectual Property Resource for Agriculture Ashley, C., M. Warner, and J. Romano. 2005. “Directions (PIPRA). Pp. 207–28. www.ipHandbook.org, accessed for Private Sector Development Instruments in Africa: April 2011. 8 Strategies for the Policy Maker.� London: Overseas Kowalsky, S. 2007. “Making the Most of Intellectual Prop- Development Institute (ODI). www.odi.org.uk/resources/ erty: Developing an Institutional IP Policy.� In Intellec- download/1438.pdf, accessed April 2011. tual Property Management in Health and Agricultural Boettiger, S., and S. Alvarez. n.d. “Getting Better Technolo- Innovation: A Handbook of Best Practices, vol. 1, edited by gies to the Poor: A Landscape of Commercialization A. Krattiger, R.T. Mahoney, L. Nelsen, J.A. Thomson, A.B. Challenges and Opportunities.� PIPRA, http://www Bennett, K. Satyanarayana, G.D. Graff, C. Fernandez, and .pipra.org/documents/PIPRA_Commercialization S.P. Kowalski. Oxford, UK, and Davis, California: Centre Report_photos.pdf, accessed April 2011. for the Management of Intellectual Property in Health Capital for Enterprise Ltd. n.d. “Enterprise Capital Funds.� Research and Development (MIHR) and Public Intellec- www.bis.gov.uk/files/file45483.pdf, accessed April 2011. tual Property Resource for Agriculture (PIPRA). Pp. de Kleene, S. n.d. “Agricultural Growth Corridors.� Presen- 485–94. www.ipHandbook.org, accessed April 2011. tation. Beira Corridor and Southern Agricultural Growth Nelson, L. 2007. “Ten Things Heads of Universities Should Corridor of Tanzania. http://brusselsbriefings.files.word- Know about Setting Up a Technology Transfer Office.� In press.com/2010/08/de-cleene-pp-en1.pptx, accessed Intellectual Property Management in Health and Agricul- April 2011. tural Innovation: A Handbook of Best Practices, vol. 1, edited by A. Krattiger, R.T. Mahoney, L. Nelsen, J.A. Thomson, A.B. Department of Biotechnology, Ministry of Science and Bennett, K. Satyanarayana, G.D. Graff, C. Fernandez, and Technology, Government of India. n.d. “Biotechnology S.P. Kowalski. Oxford, UK, and Davis, California: Centre Industry Partnership Programme (BIPP).� http://dbtindia for the Management of Intellectual Property in Health .nic.in/AboutBIPP.pdf, accessed April 2011. Research and Development (MIHR) and Public Intellec- FAO (Food and Agriculture Organization). 2010. Agricultural tual Property Resource for Agriculture (PIPRA). Pp. Investment Funds for Developing Countries. Rome. www 537–43. www.ipHandbook.org, accessed April 2011. .fao.org/fileadmin/user_upload/ags/.../investment_funds Pefile, S., and A. Krattiger. 2007. “Training Staff in IP Man- .pdf, accessed April 2011. agement.� In Intellectual Property Management in Health Hodgson, B. 2008. “Accessing Finance: Intellectual Capital and Agricultural Innovation: A Handbook of Best Prac- Readiness of Entrepreneurs and MSMEs.� Abstract of a tices, vol. 1, edited by A. Krattiger, R.T. Mahoney, L. paper prepared for the WIPO Italy International Con- Nelsen, J.A. Thomson, A.B. Bennett, K. Satyanarayana, vention on IP and Competitiveness of MSMEs, Rome, G.D. Graff, C. Fernandez, and S.P. Kowalski. Oxford, UK, December 10 and 11. WIPO, www.wipo_smes_rom_09 and Davis, California: Centre for the Management of _c_theme03_3-related1.pdf, accessed April 2011. Intellectual Property in Health Research and Develop- Lerner, J. 2009. Boulevard of Broken Dreams: Why Public ment (MIHR) and Public Intellectual Property Resource Efforts to Boost Entrepreneurship and Venture Capital for Agriculture (PIPRA). Pp. 597–615. Have Failed – and What to Do about It. Princeton: Prince- Young, T.A. 2007. “Establishing a Technology Transfer ton University Press. Office.� In Intellectual Property Management in Health National Committee for International Cooperation and and Agricultural Innovation: A Handbook of Best Prac- Sustainable Development (NCDO). 2008. “Venture Cap- tices, vol. 1, edited by A. Krattiger, R.T. Mahoney, L. ital and Private Equity Funds for Development Index Nelsen, J.A. Thomson, A.B. Bennett, K. Satyanarayana, 2008.� 2008. Amsterdam: NCDO. www.bidnetwork.org/ G.D. Graff, C. Fernandez, and S.P. Kowalski. Oxford, UK, download.php?id=158389, accessed April 2011. and Davis, California: Centre for the Management of Tabor, S.R., W. Janssen, and H. Bruneau (eds.). 1998. Intellectual Property in Health Research and Develop- “Financing Agricultural Research: A Sourcebook.� The ment (MIHR) and Public Intellectual Property Resource Hague: International Service for National Agricultural for Agriculture (PIPRA). Pp. 545–58. Research (ISNAR). ftp://ftp.cgiar.org/isnar/publicat/pdf/ fsb/fsb-f.pdf, accessed April 2011. World Bank. 2007. World Development Report 2008: Agricul- Thematic Note 6 ture for Development. Washington, DC. Al-Rifai, T., and A. Khan. 2000. “The Role of Venture Capi- Wyse, R. 2007. “What the Public Should Know about Ven- tal in Contemporary Islamic Finance.� http://alhaqq ture Capital.� In Intellectual Property Management in MODULE 5: NOTES, REFERENCES AND FURTHER READING 447 Health and Agricultural Innovation: A Handbook of Best glomerados en Nicaragua – Creación de capacidades y Practices, vol. 1, edited by A. Krattiger, R.T. Mahoney, “Cluster-to-Cluster� (UE/NIC/05/003).� http://www L. Nelsen, J.A. Thomson, A.B. Bennett, K. Satyanarayana, .unido.org/index.php?id=o49971, accessed April 2011. G.D. Graff, C. Fernandez, and S.P. Kowalski. Oxford, UK, ———. 2008b. “Proyecto Fortalecimiento y difusión del and Davis, California: Centre for the Management of desarrollo de conglomerados en Nicaragua (UE/NIC/ Intellectual Property in Health Research and Develop- 05/001) 2005–2008: Informe Final Consolidado, Junio ment (MIHR) and Public Intellectual Property Resource 2008.� http://www.unido.org/index.php?id=o4307, for Agriculture (PIPRA). Pp. 1281–88. www.ipHand- accessed April 2011. book.org, accessed April 2011. Innovative Activity Profile 4 Innovative Activity Profile 1 van Veldhuizen, L., A. Krone, M. Wongtschowski, and NSTEDB (National Science and Technology Entrepreneurship A. Waters-Bayer. 2008. “FAIR: Farmer Access to Innova- Development Board and ISBA (Indian STEPs and Business tion Resources.� Rural Development News 2:47–52. incubators Association). “First Status Report on Technol- Wongtschowski, M., B. Triomphe, A. Krone, A. Waters- ogy Business Incubation in India, 2009.� http://www Bayer, and L. van Veldhuizen. 2010. “Towards a Farmer- .nstedb.com/fsr-tbi09/index.html, accessed April 2011. governed Approach to Agricultural Research for Devel- opment: Lessons from International Experiences with Local Innovation Support Funds.� In Symposium Pro- Innovative Activity Profile 2 ceedings, Innovation and Sustainable Development in State Office for Comprehensive Agricultural Development. Agriculture, June 28–30, 2010, Montpellier, edited by 2009-2010. Various monitoring and evaluation reports E. Coudel, H. Devautour, C. Soulard, and B. Hubert. (internal documents). http://hal.archives-ouvertes.fr/ISDA2010, accessed World Bank. 2005–10. Aide-memoires prepared by World August 2011. Bank supervision missions (internal documents). World Bank. 2010. “Designing and Implementing Agricul- ———. 2005. “China Agriculture Technology Transfer Proj- tural Innovation Funds: Lessons from Competitive ect.� Project Appraisal Document. Washington, DC: Research and Matching Grant Projects.� Washington, World Bank. DC. ———. 2010. Designing and Implementing Agricultural ———. 2011. “Albania Agriculture Services Project: Imple- Innovation Funds: Lessons from Competitive Research mentation Completion Report.� Washington, DC. and Matching Grant Projects.� Report No. 54857-GLB. Washington, DC: World Bank. ADDITIONAL RESOURCES Innovative Activity Profile 3 Thematic Note 3 UNIDO (United Nations Industrial Development infoDev’s Business Incubation Toolkit, and links to develop- Organization). 2008a. “Evaluación Independiente ing country regional and national incubator associations: NICARAGUA; Fortalecimiento y Difusión del Desarrollo www.infodev.org/idisc de Conglomerados en Nicaragua (UE/NIC/05/ The United States National Association of Business Incuba- 001); Fortalecimiento y Difusión del Desarrollo de Con- tors: www.nbia.or 448 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK 6 MODULE 1 Creating an Enabling Environment for Agricultural Innovation OV E RV I E W Johannes Roseboom, Consultant EXECUTIVE SUMMARY charge of science and technology, while others establish a he “enabling environment� for agricultural innova- T higher-level entity that brings relevant ministries together tion encompasses factors that influence agricul- to coordinate national innovation policy. In most coun- tural innovation positively but are controlled by tries, the overall objective of the national innovation policy policy domains other than agricultural innovation policy. is to facilitate the transition toward a knowledge economy, An agricultural innovation policy seeks coordination with resulting in increased competitiveness and sustainable eco- these other domains to ensure that together they enable nomic growth. A national innovation policy defines the agricultural innovation. Cross-cutting policy issues affect- roles and functions of actors and stakeholders within the ing agricultural innovation include policies to reduce national innovation system (NIS), provides an overall poverty and sustain the environment, to foster collaboration framework for innovation policies specific to particular between the public and private sectors, and to build social sectors, and sets priorities across sectors and technologies. capital more generally. It creates positive conditions for innovation by investing Three clusters of enabling factors for agricultural inno- in public goods essential for an innovative knowledge vation appear to require attention and investment in most economy. developing countries: (1) innovation policy and correspond- Regulatory frameworks important for agricultural inno- ing governance structures to strengthen the broader frame- vation include those for IP; biosafety; and standards and work for agricultural innovation policies; (2) regulatory technical regulations related to agricultural health and food frameworks that stimulate innovation directly (such as IPRs) safety and quality aspects. Countries will need assistance to or indirectly (standards that stimulate trade) or steer inno- develop legislation, assess the options from which they can vation towards certain preferred outcomes (safer food); and choose, develop their regulatory agencies, and invest in (3) accompanying agricultural investments in rural credit, standards-related infrastructure. infrastructure, and markets. Better coordination of agricultural innovation invest- Innovation policy is a new area, and in most countries ments with accompanying rural investments should lead to the governance structure for innovation is only starting to greater synergy and impact. Investments in rural financing emerge. A particular challenge is where to assign responsi- systems will adopt a more holistic approach to financial ser- bility for innovation policy within the government struc- vices, including credit, savings, money transfers, leasing, and ture. Some countries delegate this task to the ministry in insurance. Investments in roads and market institutions and 449 infrastructure help to improve agricultural productivity, have to interact and seek coordination with these other pol- reduce marketing costs, increase profit margins, and open icy domains to ensure that together they enable agricultural up new opportunities for innovation. innovation in the most positive way. This interaction may These policies, investments, and regulatory reforms will possibly lead to collaboration in the form of joint projects trigger significant changes, such as improving the access of or programs, although not necessarily. agricultural products to foreign markets, increasing private investment in agricultural R&D, and fostering the use of The agricultural innovation policy landscape more sustainable agricultural practices. Policy measures will be needed to ensure that people are not left behind and Figure 6.1 sketches the most relevant policy domains shap- make the transition to more promising economic activities. ing agricultural innovation. At the most aggregate level, political stability is by far the most critical, overarching fac- tor for any innovation system. Without such stability, RATIONALE FOR INVESTMENT investments in innovation activities (particularly those with A key characteristic of the innovation systems approach is long time horizons, such as plant breeding) are too risky to its holistic perspective on innovation as a multifaceted, iter- be attractive. Moreover, war and civil unrest often affect the ative process that is very much shaped by the context within knowledge infrastructure (research stations are destroyed, which it takes place. For that reason, national innovation libraries plundered, and so on) and, by uprooting people, policies are usually formulated as overarching policies try- lead to a loss of knowledge and experience of agricultural ing to coordinate a wide spectrum of policy domains— practices and trade relations. science and technology policy, education policy, economic At the same time, it is important to realize that innova- policy, industrial policy, infrastructure policy, taxation pol- tion in itself can be very destabilizing, because it comes with icy, and justice policy, among others—in such a way that what Schumpeter labeled “creative destruction.� New prod- together they create an environment that enables and stim- ucts and new production methods take over from old ones ulates innovation in the most positive way. Such overarch- and in that process destroy old jobs, vested interests, and ing coordination is only possible with strong, high-level sometimes whole industries. As a result, innovations may political support, often in the person of the prime minister encounter much opposition and catalyze social unrest. or president chairing the council in charge of national inno- Creating new opportunities for those who lose their jobs vation policy. Sector-specific innovation policies (such as the policy Figure 6.1 Policy Spheres Shaping the Environment for for agricultural innovation) more or less replicate the Agricultural Innovation national innovation policy’s overarching and coordinating nature, but they will often have considerably less political Political stability clout to influence policies outside their domains. For exam- Macroeconomic policies ple, a sector-specific innovation policy will have little influ- ence over the adoption of a tax regime for R&D. Such a Agricultural matter is more often dealt with at the national level. policy One problem with the holism of the innovation system approach is that it tends to incorporate its enabling envi- ronment. Because innovation systems (or for that matter Infrastructure Agricultural Education innovation any soft system) do not exist “out there� as objective entities policy policy or realities but rather exist only “in the minds of those who define them� (Daane 2010), there is no natural delineation between what is core to an innovation system and what Science, technology, and should be considered its enabling environment. An artificial innovation policy but potentially practical solution to this problem is to define the “enabling environment� as those factors that influence agricultural innovation positively but that are controlled by policy domains other than the domain of agricultural inno- vation policy per se. An agricultural innovation policy will Source: Author. 450 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK (for example, by offering training to acquire new skills) is commodity boards, and the like). Some of these topics fall one of those measures that should accompany innovation to fully within the agricultural innovation policy orbit— help reduce friction. agricultural research and extension, for example—whereas At the next level, macroeconomic policies dealing with tax- others partially overlap. Coordination between these various ation, exchange rate, market, and trade policies and similar topics is important, because many of them complement matters can have an important impact on the relative com- each other. For example, the lack of rural credit often petitiveness of agriculture in regional and global markets. In restrains the exploitation of market opportunities and new developing countries, many of these policies work against technologies. agriculture. They result in a net taxation of agriculture that A crucial element in agricultural transformation is farm- hampers agricultural growth and innovation. Economic ers’ integration into markets. With farmers’ increasing inte- reform programs for the past twenty-five years have gration into markets, market institutions (commodity chain addressed this macroeconomic imbalance with some suc- organizations are one example) and regulations (such as cess (World Bank 2007b), but it remains a cause for concern product and health standards) become more important and and policy attention, especially considering that developed require attention and investment. While agriculture-based countries heavily subsidize agriculture to the detriment of economies depend on self-sufficiency for food security, developing countries. Consensus is growing (amid concern urban economies depend on markets (including interna- over rising food prices) that agriculture has been relatively tional markets) for food security. neglected in developing countries by both donors and gov- ernments and that agricultural budgets have to be raised. Education policy. Agricultural education and training are The economic reform agenda focused initially only on core components of an AIS (see module 2), but they are also improving the productivity and competitiveness of the agri- part of a broader national education policy that plays an cultural sector. Over the years, however, poverty reduction enabling role. There is a strong positive correlation between and environmental sustainability have become equally primary education enrollment rates and agricultural important objectives. This expanded policy agenda also productivity. The effectiveness of agricultural extension and affects public investment decisions related to agricultural training programs depends strongly on the basic skills that innovation. The big challenge for policy makers is to decide farmers acquire through primary education. At the same how to handle trade-offs between the different objectives. time, basic educational skills are important for those who At the meso level, four policy domains have the most seek employment outside agriculture. direct influence on agricultural innovation: (1) agriculture; In many developing countries, vocational education at the (2) science, technology, and innovation (STI); (3) educa- secondary level is virtually nonexistent (UNESCO educa- tion; and (4) infrastructure. These domains overlap consid- tion statistics),1 and job specialization starts only after sec- erably, and it is not always clear which domain should lead ondary school. Elsewhere a long tradition of vocational when it comes to investments. For example, agricultural education at the secondary level equips the next generation research can be paid out of the agricultural budget or the of farmers with skills and knowledge. Despite the consider- science and technology budget. The scope of these different able debate about the disadvantages of forcing young people policy domains is also usually broader than agricultural to make career choices early in life, the problem with wait- innovation per se. An important task for an agricultural ing too long is that most students never reach the tertiary innovation policy is to influence and coordinate these pol- level. Tertiary education usually targets the more specialized icy domains (including investment decisions in those jobs in agriculture, which may not necessarily be the best domains) so that they create the best environment for agri- preparation for an all-round farmer (module 2). Promoting cultural innovation to prosper. Each policy domain is the introduction or expansion of vocational training in described in detail in the sections that follow. agriculture at the secondary level should advance agricul- tural innovation, but it will require many countries to Agricultural policy. An agricultural policy usually rethink their national education policies. comprises a wide range of topics, including agricultural health, research and extension, input supply, rural credit, Science, technology, and innovation policy. In recent land reform and improvement, rural infrastructure, years, many developing countries—especially middle- market regulation and development, trade promotion, and income countries—have started to recognize the crucial sector organizations (farmer organizations, cooperatives, role of innovation in economic growth and are aiming to MODULE 6: OVERVIEW 451 make the transition toward a knowledge economy. As a PAST EXPERIENCE consequence, STI policy is rapidly gaining importance in Experiences with investments in enabling factors have been these countries. quite mixed. Some types of investment have been around This new emphasis on STI significantly affects the public for decades (if not centuries—witness rural infrastructure), agricultural research and extension services that pre-date whereas others have emerged only very recently (biosafety STI initiatives by several decades. After many decades of rel- regulations). Hence these interventions have quite different ative isolation within ministries of agriculture, these agen- track records, as discussed next. cies must now interact with new STI agencies that have a far wider scope that requires agricultural research and exten- sion to compete with nonagricultural topics for resources. Innovation policy and governance structures Investment in a national innovation policy and correspond- Infrastructure policy. Innovation opportunities often ing governance structures strengthens coordination across depend strongly on infrastructure such as roads, railways, policy domains on innovation issues, addresses issues rele- utilities, and irrigation systems. High transportation costs vant across sectors (such as IPRs or tax deductions for inno- are notorious for cutting heavily into the prices farmers and vation), provides a framework for more sector-specific agribusinesses receive for their products and raising the costs innovation policies (including an agricultural innovation of the agricultural inputs they purchase. When farmers and policy), and, not unimportantly, prioritizes public innova- agribusinesses find it unprofitable to produce for the market, tion investments across sectors. In many instances, national agricultural production often remains below its potential. It innovation policy has generated a substantial influx of new is affordable access to markets that makes it worthwhile and ideas and instruments into the agricultural innovation feasible to adopt new technologies, specialize, and raise domain, including such concepts as business incubators and production. The economic impact of lower transportation risk capital (see module 5). Embedding agricultural innova- costs and improved market access can be quite dramatic (see tion policy in the national innovation policy may provoke box 6.2 later in this overview). As illustrated in IAP 1 for inevitable complications and frictions, but at the end of the Zambia, investments in improved feeder roads can be an day it should result in a stronger AIS. essential component of efforts targeted at enhancing Innovation policies were first implemented in developed agricultural innovation, value addition, and competitiveness. countries in the 1990s and have been emerging in developing countries only in the decade since then. In most countries, innovation policies and their accompanying governance Key enabling factors structures are still very much in flux; in fact, the large major- The agricultural innovation policy landscape depicted in ity of developing countries, particularly the smaller ones, still figure 6.1 comprises a wide range of enabling factors that lack an innovation policy. In this sense, the historical record are critical to agricultural innovation. It is impossible to of innovation policy is still very short, both in developing and cover them all, but the more important ones can be clus- developed countries. tered as follows: Regulatory frameworks ■ Investments in innovation policy and corresponding governance structures that strengthen the broader Except for environmental standards, the other three regula- framework for an agricultural innovation policy. tory frameworks (IPRs, SPS standards, and product stan- ■ Investments in regulatory frameworks affecting agricul- dards) have been around for decades, if not centuries. The tural innovation, such as IPRs, sanitary and phytosani- international standardization and mutual recognition of tary (SPS) measures, and biosafety regulations, aim to these frameworks have been on the political agenda for stimulate private actors to invest in innovation, improve quite some time. The Paris Convention for the Protection of the quality and safety of their products, and/or facilitate Industrial Property, launched in 1883, was one of the first trade. international treaties on IPRs. It has been revised many ■ Accompanying rural investments such as investments in times and gained numerous signatories since then. Global- rural credit, rural infrastructure (irrigation, roads, and ization and intensified trade have put increased pressure on utilities), and agricultural markets. countries to adopt these frameworks; the international 452 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK community supports them strongly, and several interna- (originally 2005, now 2016) set by the TRIPS4 agreement. tional initiatives provide technical assistance and build The debate focuses particularly on two issues. The first issue capacity to implement them.2 is farmers’ rights in relation to breeders’ rights: To what One type of IPR that is quite specific to agriculture is extent can farmers re-use, exchange, or sell PVR-protected plant variety rights (PVRs). In developed countries in par- seed? The second issue is the role of farm communities as ticular, PVRs have been instrumental in developing a private custodians of genetic diversity: Should seed companies seed industry and enabling public plant breeding to be compensate communities for their services? With respect to funded through royalties. Only 68 countries are currently the second issue, UPOV takes the position that farmers’ cus- members of the International Union for the Protection of tomary role as curators of genetic resources is best regulated New Varieties of Plants (UPOV)3, indicating an absence of separately from PVR legislation. On the issue of farmers’ PVR legislation consistent with UPOV standards. Member- rights, UPOV has moved over time toward a more restric- ship is especially weak in Africa and Asia. tive standard favoring plant breeders. The criticism of devel- Considerable debate surrounds the introduction of PVR oping countries is that UPOV is pushing for the adoption of legislation in developing countries, many of which are developed country standards that are not necessarily ade- under pressure to introduce legislation to meet the deadline quate for developing countries (box 6.1). Box 6.1 Plant Variety Rights Legislation in Africa In 1998, the Heads of State of the African Union (AU) Francophone African countries, approved a plant vari- adopted the “African Model Law for the Protection of ety protection (PVP) chapter largely in line with UPOV the Rights of Local Communities, Farmers, and Breed- standards as part of the 1999 Bangui Agreement. This ers, and for the Regulation of Access to Biological decision was taken despite major opposition by inter- Resources.� This watershed document addresses two national nongovernmental organizations. issues—plant variety protection and access to biologi- In more recent years, the discussion in Africa cal resources—based on the premise that both issues regarding PVP has moved from the AU to the subre- are closely linked. The AU model law strongly favors gional economic communities, such as ECOWAS, farmers’ rights over breeders’ rights: PVRs can be with- SADC, and EAC.c Their strategy is to harmonize the held or nullified for reasons such as food security, (emerging) seed regulatory frameworks within their health, biological diversity, and any other requirement communities to facilitate trade and to join forces where of the farming community for propagation material of possible to reduce regulatory costs. For example, a particular variety. The model law also emphasizes the ECOWAS and SADC each recently adopted the idea of protection of Africa’s biological resources and tradi- setting up a common variety release system in their tional knowledge. respective communities. Both communities have initia- The model law was criticized heavily by UPOV and tives to work toward an integrated, regional PVP sys- WIPO.a Discussions between the AU, UPOV, and WIPO tem. SADC, for example, developed a draft protocol for in 2001 did not reconcile their differences. Yet the AU national PVP legislation. In other developing regions, member states did not hold a unified position on the regional economic communities are keen promoters of issues. Some members (Egypt, Kenya, South Africa, and standardizing PVP systems. Most African countries Tunisia) belonged to UPOV many years before the AU seem to be moving toward adopting a PVP system that developed its model law. In 2002 the African intellectual is compatible with the international UPOV standard— property organization OAPI,b comprising some 16 but only after much heated debate. Source: Author. a. UPOV is the International Union for the Protection of New Varieties of Plants and WIPO is the World Intellectual Property Organization. b. OAPI (Organisation Africaine de la Propriété Intellectuelle) was created in the early 1960s to replace the French institute in charge of IPRs prior to independence. It manages a single IPR system across 16 countries. c. Economic Community of West African States, Southern African Development Community, and East African Community. MODULE 6: OVERVIEW 453 Accompanying rural investments Underpinning this approach is the fact that institutions adhering to commercial principles are more likely to achieve Most countries have a long history of addressing enabling outreach and sustainability. The public sector’s role is to factors such as rural credit, rural infrastructure, and agricul- concentrate on ensuring that the environment is conducive tural markets. In many instances, government interventions to the emergence and growth of such institutions (World in these factors in the form of direct investment or facilitat- Bank 2006). ing private or mixed investment have been far from adequate For example, the Innovative Finance Initiative of the and often rather fragmented, lacking attention to coherence Alliance for a Green Revolution in Africa tries to mobilize among interventions. To cite a recent World Bank evaluation commercial banks to provide more credit to the agricultural report on agricultural investments in sub-Saharan Africa): sector through a loan guarantee scheme. By absorbing some ...the lending support provided by the Bank has not reflected the of the risks that commercial banks run when lending to agri- interconnected nature of agriculture activities. Rather, the lend- culture, the initiative has managed to leverage some US$4 ing has been “sprinkled� across an array of activities in rural billion from commercial banks in the form of affordable space, including research, extension, marketing reform, drought loans for farmers and agribusinesses (www.agra-alliance.org). relief, seed development, and transport, but with little recogni- Another practice that has fallen out of favor is to use sub- tion of the relationships among them and the need for all of sidized credit to introduce new technologies. Such schemes these areas to be developed at the same time, or at least in an have often undermined farmers’ repayment discipline optimal sequence, to effectively contribute to agricultural devel- because farmers considered the subsidies to be gifts rather opment. While the Bank’s broader rural focus from the mid- than loans. Jump-starting the introduction of a new tech- 1980s was justified, an unintended result was that it led to less nology is best done through a direct subsidy (starter packets focused attention on the need for various activities that are crit- ical for agricultural development in rural space to come together at reduced costs, for example). at the same time or to take place in some optimal sequence. (World Bank 2007a, xxv) Rural infrastructure. Early research on economic growth illustrated the importance of infrastructure, Rural credit. The lack of working capital and access to provided that: (1) a good balance was maintained with affordable credit often prevents farmers and agribusinesses other investments and (2) infrastructure and related from buying modern inputs and equipment and fully services were run efficiently. More recent econometric benefiting from proven technological opportunities. research suggests that infrastructure investment and Despite many attempts to address this issue, lack of improvement may have received too little attention in the affordable rural credit remains a major bottleneck in many lowest-income countries. There are also signs that rapidly countries. The formal banking sector is still largely absent growing middle-income countries have underinvested in from rural areas, because it perceives the risks and infrastructure, leading in some cases to geographic patterns transaction costs to be too high to make business attractive. of development that hamper economic growth (Willoughby Popular rural credit schemes run by governments from the 2002). Other recent studies of infrastructure investments 1950s to the 1980s did little to attract commercial banks and conclude that: proved unsustainable because of poor management and high default rates. The microfinance movement that ■ Institutional reforms are needed to strengthen the emerged in the late 1990s tried to bridge the rural finance capacity of local and regional governments to formulate gap through self-help groups, which absorb the high costs and implement an infrastructure policy and to inherent in small transactions and use social control to strengthen the capacity of infrastructure organizations to reduce risks (IAP 4). This approach has its limitations, and provide customer-responsive services. the model has not succeeded everywhere. ■ Institutional reforms in the more advanced countries What is needed is a more active involvement of commer- led to greater involvement of the private sector in cial banks in agriculture. Previous approaches tended to iso- investing and managing infrastructure, which requires late financing for agriculture from the development of the improved capacity at the government level to run wider financial system and overemphasized credit as transparent tender procedures and maintain open opposed to savings and other financial services. Within a competition. financial systems approach, however, financing for agricul- ■ Decisions to invest in infrastructure should focus on ture is viewed as part of the wider rural finance market. regions that lag in economic development. 454 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 6.2 Economic Impact of Rural Roads in Bangladesh A detailed econometric study of the impact of invest- whereas production increased by about 38 percent in ments in rural roads in Bangladesh found substantial RDP and 30 percent in RRMIMP villages). The road savings in household transport expenses, averaging effects are substantial for adult labor supply in RDP vil- about 36 percent in villages participating in the Rural lages and schooling of both boys and girls. The overall Development Project (RDP) and 38 percent in villages effect of road improvement on per capita consumption participating in the Rural Roads and Market Improve- was estimated at 11 percent in both project areas. ment and Maintenance Project (RRMIMP). Road This study clearly shows that investment in rural improvement also significantly affected men’s agricul- roads unleashes the agricultural production potential tural wages (which rose by 27 percent in RDP villages), of rural areas. The supply response to what looks like fertilizer prices (which fell by about 5 percent in RDP modest input and output price changes is quite dra- and RRMIMP areas), and aggregate crop indices (prices matic in the study areas. Much of this additional pro- increased by about 4 percent in both project samples, duction found its way to the market. Source: Khandker, Bakht, and Koolwal 2006. Despite broad agreement about the importance of rural Market institutions and infrastructure. Investment roads for linking farmers with markets, surprisingly little in market institutions and infrastructure was greatly statistical evidence exists on the size and nature of the ben- affected by the market liberalization ideology that efits of rural roads or their distributional impacts. Isolating dominated the economic policy debate during the 1980s the impact of investments in rural roads on agricultural and 1990s. During the 1960s and 1970s, many governments productivity from other enabling factors is not only chal- played an active, direct role in agricultural markets, and lenging (Walle and Cratty 2004), but many other benefits donors provided significant direct investment in state- must be considered—higher wages, better access to school- owned companies, government-controlled cooperatives, ing and health services, and so forth (see box 6.2). and public marketing agencies. When these government- Another rural infrastructure investment, irrigation, is dominated systems fell into disgrace because of their poor considered an innovation in its own right as well as an performance, donor support for them evaporated. Difficult, important enabler of agricultural innovation more generally. lengthy, and sometimes disruptive processes of privatization A key reason cited for the limited impact of Green Revolu- and market liberalization marked the ensuing transition to tion technology (improved varieties in combination with private market-based systems. It took some time to realize modern inputs) in sub-Saharan Africa is the very limited that well-functioning markets would not inevitably emerge area under irrigation in comparison to other regions, partic- (and foster agricultural innovation); some form of ularly Asia. The underlying problem is that investment costs government assistance is often needed. Attention has per irrigation unit are many times higher in sub-Saharan recently focused on strengthening a new architecture for Africa than in Asia. Irrigation investment projects also tend agricultural market institutions and incentives, promoting to fail more often in sub-Saharan Africa. The World Bank’s private commercial activity, and reorienting state activity to Operations Evaluation Department identified specific weak- providing enabling regulatory and physical infrastructure; nesses in irrigation investment projects, including irrigation as a result, donor investments in market institutions have system design, operation and maintenance, cost recovery, begun to increase again (World Bank 2006). and user groups. For example, cost-recovery schemes did not improve operation and maintenance because revenues went into the general treasury. Despite these weaknesses, World KEY POLICY ISSUES Bank irrigation projects report good returns on average, but Aside from the more thematic policies that shape agricul- these projects require above-average preparation and over- tural innovation, discussed previously, several cross-cutting sight because of their complexity. policy issues affect agricultural innovation. They include MODULE 6: OVERVIEW 455 policies to reduce poverty and sustain the environment, to Social capital foster collaboration between the public and private sectors, When it comes to strengthening the various enabling factors and to build social capital more generally. that stimulate agricultural innovation, social capital (the institutions, relationships, and norms that shape the quality Poverty reduction and environmental sustainability and quantity of a society’s social interactions) often stands out as critical to success. Examples of social capital’s impor- The impact of investments in agricultural innovation has tant role include the management of irrigation schemes, been measured mainly in terms of improvements in agri- self-help groups in microfinance initiatives, communal road cultural productivity (see the numerous rate-of-return maintenance, the establishment of value chains, and similar studies). Over the years, however, environmental sustain- efforts. ability and poverty reduction have assumed equal impor- tance as outcomes of agricultural innovation. This changed perspective affects not only the orientation of investments NEW DIRECTIONS, PRIORITIES, AND in agricultural innovation but investments in enabling fac- REQUIREMENTS FOR INVESTMENT tors. An environmental sustainability assessment is standard The previous section described the policies that shape the procedure for major investment projects in most countries. enabling environment for agricultural innovation, which The poverty alleviation impact of new technologies is often can range from the very generic to the very specific. This difficult to assess ex ante, however. In this sense, innovation section explores concrete investments that will stimulate in itself is a rather crude poverty alleviation instrument, in agricultural innovation by creating a more positive enabling contrast to enabling factors such as investments in rural environment. infrastructure or rural credit, which can be targeted far more specifically to the poor. Investments in innovation policy and governance structures Public-private collaboration A national innovation policy should: With widespread adoption of the market-economy model, many governments are minimizing direct intervention in ■ Provide guidance to actors and stakeholders within the the economy and, where possible, leaving things to the pri- NIS regarding their roles and functions in the system, vate sector. When government intervention is unavoidable, and give a sense of direction (in other words, describe governments are delegating or contracting implementa- what they want to achieve together). tion to the private sector as much as possible. For example, ■ Provide an overall framework within which innovation in closing the rural finance gap, the preferred approach policies specific to particular sectors—agriculture, now is to involve commercial banks (often by subsidizing health, energy, and so on—and particular technologies— them to take on less profitable rural loans) or microfi- ICT, biotechnology, nanotechnology, and so on—should nance schemes rather than to establish government-owned fit. The national policy sets priorities across sectors and rural banks. The construction of rural infrastructure is technologies (and the public resources allocated to contracted out to the private sector, which is increasingly them), whereas the more specific policies set priorities contracted to handle infrastructure operations and main- within a particular sector or technology field. tenance as well. ■ Create the best possible conditions for innovation by A primary objective of many national innovation poli- investing in a range of public goods essential for an cies is to create the right incentives for private investment in innovative knowledge economy. A functional analysis of innovation. Governments can use five important instru- the NIS is a good starting point to identify which func- ments to stimulate private investment in innovation: (1) tions of the system are particularly weak and require IPR legislation; (2) tax deductions and subsidies for R&D; additional attention and investment. Aside from the (3) antitrust legislation (because a competitive environment more traditional investments in the generation and stimulates innovation); (4) subsidized risk capital (either exchange of scientific knowledge, investments are needed directly or through tax deduction facilities) and business to support the application of scientific and industrial incubators; and (5) restraining bureaucratic procedures for knowledge throughout the economy. Although this introducing new products and technologies. responsibility primarily belongs to the private sector, 456 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK government can stimulate innovative behavior in the place, establish oversight structures, and train personnel. business sector by providing incentives for private TN 4 discusses the ins and outs of biosafety regulation. innovation (subsidies, tax breaks, and recognition, for ■ Technical regulations and standards. TN 5 explores the example) and by stimulating the startup of new, knowl- introduction and upgrading of technical regulations and edge-intensive companies using business incubators, standards related to food safety, animal life and health, venture capital, and similar measures (module 5). plant life and health, and quality-related attributes. The past several decades have seen a tremendous expansion of Since innovation policy is such a new area, in most coun- the number of technical regulations and standards emerg- tries the governance structure for innovation has only very ing in these areas. This momentum reflects the intensifica- recently started to emerge. “Governance� concerns the systems tion of regional and global trade and heightened concerns and practices that governments use within their NISs to set over accompanying threats to food safety and animal and priorities and agendas, design and implement policies, and plant health, as well as consumer concerns on the environ- obtain knowledge about their impacts (OECD 2005). mental impacts of agriculture production. It also reflects a A particular challenge is where to assign responsibility for wider set of innovations in science and technology that innovation policy within the government structure. A con- permit very sensitive detection and analytical methods, as siderable number of countries have delegated this task to the well as improved knowledge of the quality and associated ministry in charge of science and technology, while others health hazards of agrifood products. But these emerging have opted to establish a higher-level entity that brings rele- technical regulation and standards are also defining the vant ministries together to coordinate national innovation focus of agricultural innovation. For example, plant policy. TNs 1 and 2 discuss investments in innovation policy breeding can be steered toward developing products that and innovation governance structures in greater detail. attain a preferred quality attribute (size, color, taste, and so on), while the prohibition of certain pesticides (due to stricter regulations) will induce research on alternatives Investments in policy and regulatory frameworks for the control of pests and diseases. that affect agricultural innovation For some time, countries may need assistance to develop The most important regulatory reforms underway at pres- the necessary legislation and assess the options from which ent that affect agricultural innovation include: they can choose. They will also need support to build and strengthen the related regulatory agencies and invest in ■ IPRs. Like PVRs and patents, trademarks, certification standards-related infrastructure. marks, and geographic indications are IPR instruments The regulatory reforms currently being implemented are that, applied correctly, support private investments in expected to trigger all kinds of changes, such as improving the product quality and distinctiveness that go beyond mini- access of agricultural products to foreign markets (because mum standards. The TRIPS agreement places consider- they will meet higher SPS standards), increasing private able pressure on countries to comply. These issues are dis- investment in agricultural R&D (because IP is protected), fos- cussed in TN 3 and IAP 3. tering the adoption of more sustainable agricultural practices ■ Biosafety. Frameworks (including instruments and (because of the introduction and enforcement of environ- activities) that analyze and manage risks in the sectors on mental standards), and increasing the adoption of GM crops food safety, animal life and health, and plant life and (because biosafety legislation and enforcement are in place). health, including associated environmental risks (which came together under the so-called biosecurity frame- Accompanying rural investments work). For example, the establishment of proper legisla- tion and enforcement capacity regarding genetically Systems-thinking increasingly permeates approaches to eco- modified organisms (GMOs) is a prerequisite for regu- nomic development, including agricultural development. lating their adoption (or prohibition). Signatories to the Criticism of earlier agricultural investments has focused on Cartagena Protocol on Biosafety assume the obligation their tendency to operate as relatively isolated interventions to put the necessary legislation and enforcement capacity that fail to develop any synergies. The current trend within in place.5 A large number of countries in Africa and Asia the World Bank is to formulate bigger and more holistic have yet to adopt biosafety legislation and enforcement agricultural development projects with longer time hori- regimes. Investments are needed to put regulations in zons. This module describes examples of the three types of MODULE 6: OVERVIEW 457 rural investment that have strong synergies with agricul- tion and collection points, storage facilities, and market tural innovation investments: and auction facilities), market institutions (such as sup- ply chain organizations and information systems), and ■ Rural financing systems. To eliminate the lack of afford- the capacity to explore and develop new markets. able credit as a constraint on the adoption of agricultural innovations, it is better not to look at credit in isolation, but to take a more holistic approach to financial services, MONITORING AND EVALUATING AN ENABLING including credit, savings, money transfers, leasing, and ENVIRONMENT FOR AGRICULTURAL insurance. Microfinance initiatives can be an important INNOVATION intermediate step toward a more mature rural financial system. IAP 4 provides an innovative example of micro- How can a country’s progress in creating an enabling envi- finance in Andhra Pradesh. ronment for agricultural innovation be monitored and eval- ■ Rural infrastructure. IAP 1 provides an example from Zam- uated? This section identifies indicators corresponding to the bia of how investment in improved feeder roads enhances various enabling factors discussed in this module (table 6.1). agricultural innovation, value added, and competitiveness. The indicators can monitor progress through time and, by ■ Market institutions and infrastructure. There is a strong benchmarking with other countries, give an idea of a coun- synergy between market development and agricultural try’s relative position in establishing an enabling environ- innovation, as both tend to take a value chain approach ment. The list of indicators is just an illustration, but a pretty and emphasize the importance of markets and market good one to make a start. Other factors and indicators can be institutions. Investment opportunities in market devel- added later, and some may not be feasible in all instances opment include market infrastructure (such as distribu- because reliable statistical information may be lacking. Table 6.1 Enabling Environment Factors and Indicators Cluster Enabling factor Indicator(s) Macroeconomic Political and socioeconomic stability • Political instability index (the Economist) or consult www.countryrisk.com for various policies stability indices Favorable macroeconomic policies • Net taxation of agriculture • Difference between the official and the market exchange rate • Impact of trade agreements on the agricultural sector Increased public investment in • Agricultural expenditure as a percentage of total government expenditure agriculture • Share of public goods in agricultural expenditure Education General education • Literacy rate (urban/rural) • Enrollment in primary education (urban/rural) • Enrollment in secondary education (urban/rural) • Enrollment in higher education (urban/rural) • Programme for International Student Assessment (PISA) scores Agricultural education • Enrollment in agricultural schools at secondary level • Enrollment in on-the-job agricultural training schemes (such as farmer schools, extension courses) Agricultural higher education • Number of agricultural graduates Innovation A comprehensive national • Presence of an innovation policy policy and innovation policy in place • Presence and use of innovation policy instruments governance Innovation governance structure in • Existence of a governing body at the governmental (highest political) level for STI place • Involvement of key stakeholders of the STI system in the governing body (composition of the governing body) • Existence of a national strategy (priorities) for STI • Main activities for the implementation of the national strategy • Intensity of interaction in the STI system vertically and horizontally • Participation and commitment of the private sector in policy preparation and implementation General “innovativeness� of a • Composite innovation indices such as the World Bank Knowledge Economy Index, the country UNCTAD Innovation Capability Index, or the UNDP Technology Achievement Indexa (Table continues on the following page) 458 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 6.1 Enabling Environment Factors and Indicators (continued) Cluster Enabling factor Indicator(s) Regulatory IPR legislation and regulatory regime • Status of IPR legislation (patents, PVRs, trademarks, certification marks, geographic reforms in place and operating effectively indications) • Capability of the IPR registration system (e.g., average time to complete a registration) • Capability of the legal system to handle IPR disputes • Patent statistics (number of newly registered patents, broken down by local and foreign) • PVR statistics (number of newly registered varieties, broken down by local and foreign) • Use of certification marks and geographic indications Biosafety legislation and regulatory • Biosafety legislation in place regime in place and operating • Biosafety regulatory system in operation effectively • GMO research trials allowed • Introduction of genetically modified crops Policy and regulatory frameworks • Legislative and regulatory frameworks upgraded and capacity for managing • Institutions operating under clear mandates agricultural health, food safety • Effective mechanisms in place for coordination and collaboration among the entities and associated environmental performing SPS and quality-related functions (including private actors) risks in place and operating • Prioritization of investments and short-, medium-, and long-term plans in place to effectively ensure that identified capacity needs (for example, in terms of skills, physical infrastructure, institutional structures, and procedures) are met • Incentives in place to support private sector compliance • Set of sustainable agricultural practices developed and promoted Accompanying Well-functioning rural financial • Domestic credit provided by banking sector as percentage of GDP rural system • Agricultural credit as a percentage of total domestic credit investments Good rural infrastructure • Road density per square kilometer • Percentage of agricultural land under irrigation Well-functioning agricultural markets • Percentage of agricultural production sold in the market • Share of exports in total agricultural production • Presence and strength of supply chain organizations Source: Author. (a) UNCTAD = United Nations Conference on Trade and Development; UNDP = United Nations Development Programme. MODULE 6: OVERVIEW 459 T H E M AT I C N O T E 1 National Innovation Policy Johannes Roseboom, Consultant SYNOPSIS well as socioeconomic partners such as the business sector, trade unions, and value chain organizations. The mix of ational innovation policies tend to be overarch- N ing, attempting to coordinate a wide range of more specific policies (for science and technol- ogy, education, IPRs, the economy and industry, trade, and policies for innovation depends on the country’s political orientation and objectives, and different forms of innova- tion require different policy instruments and responses (OECD 2010). One developing country with a very articu- taxation) and foster optimal conditions for innovation. A late innovation policy and strategy is Chile (box 6.3). national innovation policy (based on NIS ideas and con- cepts) enables the formulation of an agricultural innovation policy in two ways. First, its economy-wide perspective ACTIONS NEEDED makes it possible to address issues that should be dealt with The role of an innovation policy is to create the best possible at the level of the national economy rather than individual conditions for innovation by developing a range of public sectors. Second, it promotes innovation system thinking at goods that are essential for an innovative knowledge econ- the sector level. This note describes the steps and tools in omy. The best possible conditions will vary significantly from this policy-making process. one country and sector to another, depending on the devel- opment phase, economic structure, and national priorities. Five key functions have been identified and are recommended BACKGROUND AND CONTEXT as the primary targets of a national innovation policy.1 The recent rise of innovation policy around the world has First, organize and implement a national innovation pol- been strongly influenced by the NIS school of thinking. NIS icy. Such a policy should mobilize and engage the various thinking has been picked up by national and international actors and stakeholders within the innovation system, pro- policy makers remarkably quickly throughout the world, vide guidance regarding their roles and functions within the partly because the OECD was an early promoter of the con- system, and give a sense of direction, explaining what they cept but more importantly because countries are looking for want to achieve together. Important steps in this process are ways to respond to increased global competition. How can a described in box 6.4. In most countries, the overall objective country improve its competitive edge? This question is of the national innovation policy is to facilitate the transi- arguably even more important for the world’s poorest coun- tion toward a knowledge economy, resulting in increased tries than for wealthy ones. However, the NIS concept does competitiveness and sustainable economic growth. As noted not provide a simple blueprint for organizing innovation. It is in the module overview, a national innovation policy should foremost an analytical tool for policy making and planning. provide an overall framework within which sector-specific A national innovation policy is not just an extension of and technology-specific innovation policies should fit. This the science and technology policy. It is a higher-level policy approach may require improved coordination and coher- integrating science and technology, economic, industrial, ence of policies and different layers of government. The infrastructure, taxation, trade, labor, and education policies national policy sets out overall priorities across sectors and (to name the most relevant). For this reason, it is not limited technologies (and the public resources allocated to them), to one particular ministry or agency. It requires substantial while the more specific policies set the priorities within a coordination and consensus building among ministries as particular sector or technology field. 460 Box 6.3 Chile’s Innovation Strategy Following a long period of stagnation from the mid- strategic board with public and private representation 1950s to the mid-1980s, Chile’s economy started to take has been created to set cluster-specific priorities. The off, and for the past twenty-five years, it has been one of Strategic Board of the Agro-Food Cluster has identified Latin America’s better-performing economies. The the following subclusters as the most promising for fur- opposition parties elected to government after 1988 ther development and knowledge intensification: fruit, continued the free-market policies introduced by the wine, processed food, pigs and poultry, and red meat. military junta to a substantial extent but with a greater These priorities have been passed to the various STI appreciation of government’s role in economic devel- funding agencies, which are organizing calls for pro- opment, including its role in stimulating innovation. posals for these priorities or giving the selected clusters Chile’s economy has been booming partly because of priority in more generic calls for proposals. Moreover, high revenues from copper exports. To invest those rev- despite their name, competitive funding schemes are enues wisely, the government decided to invest heavily being used to cement stronger links within the innova- in moving away from a predominantly resource-based tion system by promoting cross-institutional collabora- economy (agriculture and mining) toward a knowledge- tion between universities and research institutes and by intensive economy. For this purpose, it created a national promoting public-private partnerships in the form of innovation fund for competitiveness (FIC, Fondo de “technology consortia.� The latter instrument not only Innovación para la Competividad), funded by a new tax cements collaboration between a research agency and on mining, in 2005. A newly created national innovation the private sector but between companies that share a council for competiveness (CNIC, Consejo Nacional de common technology platform. Innovación para la Competividad), in which the various Since FIC’s creation in 2005, public STI investments sectors and interest groups are represented, advises FIC in Chile have more than doubled in real terms (reach- on how to allocate its resources, while an interminister- ing US$530 million in 2009). Public STI investments ial committee on innovation (CMI, Comité de Ministros are projected to continue to grow by 10–15 percent per para la Innovación) is responsible for implementation. year over the coming ten years. As part of this new initiative, CNIC has formulated Parallel to the STI initiative, the Chilean government a national innovation strategy. After extensive study established a major scholarship scheme (Becas Chile) and consultation, CNIC selected five economic clusters in 2008, which will allow some 30,000 Chileans to study on which to focus science, technology, and innovation abroad over the next ten years. The budget for this (STI) investments: agro-food, aquaculture, mining, scheme is some US$6 billion and is also financed out of tourism, and global services. For each selected cluster, a mining royalties. Source: Author. Second, improve the regulatory framework for innova- lifelong learning). Innovation also depends on the educa- tion. Given the many actors within the innovation system tion of science and innovation specialists more specifically, and their often conflicting interests, a set of rules and reg- which may involve among other things motivating students ulations is needed (on dealing with IPRs, fair competi- to specialize in science. tion, technical standards, health, and environment, Fourth, facilitate the creation, exchange, and diffusion of among others) to create a playing field that is transparent knowledge. This is the core business of an innovation system. and fair. Knowledge should not be limited to knowledge generated Third, foster innovation through education. Innovation only by research organizations (and as such codified in depends on the level of education in the general popula- scientific publications and patents) but should include tion, including the knowledge and skills that people will the knowledge (a large part of it tacit) accumulated need in the future and strategies to keep knowledge and within the economy of a country. It is important to make skills up to date (in other words, to develop a capacity for sure that knowledge (both scientific and industrial) is MODULE 6: THEMATIC NOTE 1: NATIONAL INNOVATION POLICY 461 Box 6.4 Developing an Innovation Policy Many of the steps or components of developing an intermediary organizations, and networks advocat- innovation policy do not occur chronologically but ing for policy change, policy makers can be pres- simultaneously or in reverse order. They include: sured from different angles to change policies in a certain direction. ■ Policy analysis. This step requires a thorough ■ Policy making. Policy makers need to get involved understanding of existing policies and their influ- actively in the multistakeholder exchanges and ence on the innovation system (in other words, their activities that occur to facilitate and realize innova- interaction with institutions and actors). A func- tion. When policy makers are immersed in a subject, tional analysis may be a useful input in grasping the evidence-based policy making becomes experiential strengths and weaknesses of the policies in place. policy making. Policy makers learn, through interac- tion and engagement with other system actors, how ■ Formulating policy advice. To a large extent, the policies influence the system and what changes political context determines whether policy makers would be required. are sensitive to evidence and how evidence reaches ■ Policy implementation. Often the job ends for pol- them. Knowledge of the political context and entry icy makers when the policy is written down and points for evidence and dialogue are essential. Influ- made official, yet stating the policy is only the start- encing policy through research requires good data as ing point for change, not the end. An inclusive pol- well as credibility of the institution presenting the icy-making process makes it more likely that the data. For new ideas to be embodied in policies, it is policy will actually be implemented. When different critical to prove that those ideas provide a solution stakeholders understand the need for policy change, to a real problem. In presenting such evidence, com- have invested in it, and stand to benefit, there is munications skills are highly important, and using a pressure on the one hand to enforce the policies and diversity of communications methods increases the on the other hand there is a greater likelihood that chances of success compared to relying on a single stakeholders will abide by the implemented rules method or pathway. Through links with media, and regulations. Source: Author, drawing on KIT 2011. adequately stored and accessible. An important variable in the type of funding instruments to be used (subsidies, tax this context is the quality of a country’s ICT infrastruc- breaks, patents, procurement, and so on); and (4) prioritize ture and the density and quality of its Internet connec- and allocate public resources across the various innovation tions. It is also important to stimulate the exchange of activities. knowledge beyond national borders, which may involve These principal functions of an NIS also remain relevant measures to improve the language capabilities of knowl- at the AIS level, but many of the policies shaping these edge workers, stimulate attendance at international scien- functions at the AIS level are formulated as part of the tific conferences, and create exchange programs and national innovation policy. For example, most investments industry-specific study tours. in education affect all sectors, and the same is true for many Fifth, mobilize and allocate resources for innovation activ- regulatory issues, such as IPR legislation and environmen- ities. Funding of innovation activities can range from fully tal standards. At the same time, the agricultural innovation public to fully private and everything in between, depend- policy may opt for sector-specific policies if the situation ing on the type of industry and activity. The national inno- requires. For instance, it may choose to support plant vation policy should: (1) define which innovation activities breeders’ rights or agricultural advisory services. For this require public support; (2) define the tax base for public reason, it is important to coordinate the development of an funds (general versus specific taxes; see box 6.5); (3) define agricultural innovation policy with the development of a 462 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 6.5 The Creation of Sectoral Science, Technology, and Innovation Funds in Brazil While Brazil has invested substantially in science and STI system: the university-business fund and the technology since the 1970s, the economic impact of fund for science infrastructure. The infrastructure these investments has been modest and uneven. In the fund is financed through a 20 percent levy on all of 1990s, the Brazilian science and technology system was the other sector funds. The sector funds have the criticized for being too science oriented, placing little status of trust funds and are managed jointly by the emphasis on innovation, and lacking stable funding academic community, industry, and government. because of economic problems. The Ministry of Science The strong representation of industry in these funds and Technology (MCT, Ministério da Ciência e Tecnolo- was a particular innovation for the Brazilian STI gia) introduced major restructuring of the funding of system. the science and technology system in 1999. It set up The sector funds serve four major government sector-specific science, technology, and innovation (STI) objectives: (1) stabilize financial resources for medium- funds (in part replacing older funds), which are financed and long-term R&D; (2) improve transparency in through levies to be negotiated within each sector. In this funding decisions, merit reviews, and evaluations; (3) way a substantial amount of new and more stable reduce regional inequalities; and (4) promote inter- “private� resources were mobilized to finance STI of rel- action between universities, research institutes, and evance to each specific sector. For sectors in which a levy companies. The selection of strategic sectors, their was not feasible, the government increased the levy on respective shares of the funds’ resources, the blend of foreign technology transfer payments from 15 percent to basic and applied research, the required overall 25 percent. The increase finances 4 out of 15 funds. budget, and sources of support are all jointly decided Of the 15 funds that have been established, 2 are by the academic community, private sector, and not sector-specific but focus on bottlenecks in the government. Source: IAC 2003; Roseboom 2004. national innovation policy and make sure that they are agricultural innovation and how to improve and modernize consistent. it. At the same time, NIS thinking is influencing AIS think- ing in important ways: POTENTIAL BENEFITS ■ Far greater emphasis is placed on private R&D and inno- The development of a national innovation policy usually vation activities by private firms. Agricultural research reflects the priority that a country assigns to knowledge as and extension were traditionally viewed as government an important (if not the most important) source of future responsibilities. Relatively little attention was given to economic growth, especially as capital accumulation levels involving the private sector. off and the transition toward a capital-intensive economy is ■ Education receives greater emphasis as an important complete. A national innovation policy helps shift the enabling factor in agricultural innovation, both on the emphasis in macroeconomic policy from physical capital to farm and in research and extension agencies. human and social capital. ■ The regulatory framework’s importance in shaping inno- A national innovation policy can also help to create more vation is more widely recognized; for instance, biofuel coherence in a broad range of government policies dealing targets play an important role in shaping the biofuel with issues such as economic development, education, com- innovation agenda. petitiveness, trade, and R&D investment. More coherent ■ Innovation driven by market demand and market policies should help to improve the overall effectiveness of opportunities is given greater emphasis. the NIS. ■ More attention is paid to improving the mobilization, The more prominent role attributed to knowledge in inclusion, and coordination of innovation actors and economic development has sparked renewed interest in stakeholders. MODULE 6: THEMATIC NOTE 1: NATIONAL INNOVATION POLICY 463 POLICY ISSUES setting these priorities because they are highly sensitive from a political standpoint, but a characteristic shared by success- A national innovation policy in a developing country will ful innovators such as Finland and the Republic of Korea is need to address a number of important policy issues. For that they have restructured their economies strategically example, it will need to define the roles of the public and pri- toward more knowledge-intensive industries (see TN 2). vate sector in innovation; ensure that institutions and incen- tives are in place to govern and coordinate innovation; deter- mine the priorities for innovation; come to terms with the Environmental sustainability environmental and social implications of innovation; and acknowledge the informal economy’s role in innovation. Many current production and consumption patterns are not sustainable in the long run. They deplete natural resources and are so polluting that they may cause climate change, with Defining public and private roles in innovation far-reaching repercussions for life on earth. Aside from rais- From a market economy perspective, innovation is first and ing overall productivity, innovation must meet increasingly foremost a task of private entrepreneurs. Government pol- stringent criteria for environmental sustainability and offer icy should focus on creating an enabling environment for green solutions. It is virtually imperative for a national inno- private innovation to take place. Some of these policies, vation policy to address this overwhelming challenge that such as well-functioning markets, sound corporate gover- faces humankind over the next few generations. Some coun- nance, and sound financial institutions, may not be specifi- tries are seeing the environmental crisis as an economic cally aimed at fostering innovation but are nonetheless opportunity and positioning themselves as champions of important. Other policies, such as IPRs, the setting of tech- green technologies (a small country like Denmark, for exam- nological standards, science education, and basic research, ple, is a world leader in windmill technology). In agriculture, may enable private sector innovation more directly. When it reducing greenhouse gas emissions is one of the major envi- comes to innovation, however, a great deal of market or sys- ronmental challenges, along with developing strategies to temic failure requires more direct government intervention cope with the effects of global warming. or support (Edquist 2001). In primary agriculture, for example, the extreme fragmentation of production into Social considerations small family farms has traditionally been a legitimate reason for the government to intervene directly. The flipside of innovation is creative destruction. Jobs dis- appear to low-income countries or are replaced by more efficient production methods requiring less labor. Policy Governance and coordination measures are needed for people to make the transition to A country’s innovation performance depends in part on the more promising economic activities and new jobs. Educa- strength of the institutional arrangements and incentive tion plays a major role in this process, including the concept structures that govern innovation. Innovative activity is not of lifelong learning. Agriculture is a classic example of how governed by government alone. Actors from research and the innovation often results in fewer jobs. The exodus of labor business sector, as well as other stakeholders, play important from agriculture is characteristic of economic development roles. TN 2 provides a detailed discussion of governance in and coincides with the transition from an agricultural to an formulating innovation policy and coordinating innovation. industrial economy and from rural to urban life. This tran- sition has never been easy, but it seems to have become even more difficult as innovation in industry has also reduced the Making strategic choices demand for labor. Industry’s capacity to absorb labor is far Most countries are too small to excel in all sectors and tech- lower than it was one hundred or even fifty years ago. China, nologies. One has to be selective and make strategic choices to for example, still has a very large rural labor surplus despite concentrate innovation investments in specific technology rapid industrialization over the past three decades. fields and sectors. Spreading resources too thinly will be counterproductive. How to make such strategic choices is a Informal economy major policy issue and requires sound analysis of the options. Chile offers a good example of an innovation policy that Many developing countries have a very significant informal makes clear strategic choices (box 6.3). Many countries avoid economy within the overall economy. The informal economy 464 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK is something of a blind spot for government policies, includ- context of developing countries, implementing an innova- ing innovation policy. Even the most comprehensive concept tion policy can be challenging. A long-term strategy to of NISs has yet to fully address innovation that takes place in develop a national innovation policy should be inspired by the informal sector—yet disregarding the role of the informal a philosophy of “radical gradualism,� which suggests a sector can produce misleading, asymmetrical, and ineffective sequence of finely tuned, small, specific reforms and suc- innovation strategies (Kraemer-Mbula and Wamae 2010). cessful outcomes that paves the way for broader institu- tional changes (World Bank 2010). One of the first issues to tackle is the fact that in most developing countries the LESSONS LEARNED AND RECOMMENDATIONS capacity to formulate and implement an innovation policy FOR PRACTITIONERS is usually scarce and must be built over a considerable A dynamic NIS does not emerge overnight. Such a system is period. An example of the radical gradualism approach is built and continuously improved only through a sustained, Argentina’s Unleashing Productive Innovation Project, long-term commitment by government and the private sec- which comprises a wide range of interventions to eliminate tor. A national innovation policy should guide this process. critical bottlenecks within Argentina’s innovation system In most countries, particularly in the difficult institutional (box 6.6). Box 6.6 Unleashing Argentina’s Productive Innovation The Unleashing Productive Innovation Project is a ■ Fostering sector-specific capacity for productive major World Bank effort (its total budget is US$223 innovation (US$85 million). This component will million for five years, of which US$150 million is loan develop critical capacities in three priority areas: money) to assist Argentina to become more innovative, biotechnology, nanotechnology, and ICT. Resources promote diversification into more knowledge-intensive will be allocated through competitive funding economic activities, and stimulate economic growth. schemes designed to foster public-private and The project, which strongly reflects a national innova- private-private collaboration. The private business tion system approach, consists of the five components: community will play a lead role in these funds, both in specifying the research agenda and funding it. ■ Developing human capital for productive innova- ■ Upgrading research infrastructure (US$36 mil- tion (US$28 million). This component fills critical lion). Funds will be allocated on a competitive basis human capital gaps in the national innovation sys- using predefined selection criteria, such as the tem by developing training programs for “technol- extent to which the beneficiary is connected with the ogy brokers� and “technology managers� to profes- productive sector. sionalize and improve innovation processes. It also ■ Strengthening the policy and institutional frame- offers scholarships to pursue studies in information work for innovation (US$20 million). This compo- and communication technology (ICT) and reduces nent will strengthen the policy-making capacity of Argentina’s shortages of qualified personnel. the Ministry of Science and Technology, strengthen ■ Support for new knowledge-based companies (US$ the capacity of the National Agency for the Promo- 54 million). This component promotes the develop- tion of Science and Technology in selected areas, ment of new knowledge-based companies through and support dissemination of project activities. two complementary activities. The first is a pilot of an early-stage venture capital fund. The second is the Although the project does not target the agricultural creation of a proactive, market-driven incubation sector specifically, the sector can benefit from it in var- cycle—from the initial idea to a commercial project, ious ways, especially through the biotechnology fund through early-stage venture capital investment—by included in component 3. Indirect spillins from the establishing “deal flow� promoters that are mainly remunerated on a fee-for-success basis. other components are likely as well. Source: World Bank 2008. (a) See module 5, TNs 3 and 6, for discussions of how incubators and risk capital are used to support agricultural innovation. MODULE 6: THEMATIC NOTE 1: NATIONAL INNOVATION POLICY 465 Pay attention to scale and scope innovation platforms in Europe enable European industries to work together on new technologies. Innovation systems can be considered at different scales, from a national scale to smaller geographic or political units (states, regions, provinces), and with different scopes, from Mobilize a broad spectrum of actors in making economy-wide to sector- or commodity-specific innovation innovation policy systems. From the point of view of policies for improving An important factor in successfully setting and implement- the enabling environment for innovation, the issue of scale ing an innovation policy agenda is the ability to mobilize a and scope is relevant. Policy objectives must be explicit with broad spectrum of innovation actors. Successful mobiliza- respect to the scale and scope of the system they intend to tion of these actors depends on factors such as persuasive influence. At the same time, a balance needs to be struck arguments and incentives, as well as the autonomy of the between centralized and decentralized political decision- actors in the institutional landscape, the nature of existing making in terms of scale and scope. A national innovation linkages (social capital), and the effectiveness of leadership. policy should provide the basic architecture for who is The policy agenda for STI is sometimes dominated by nar- responsible for what. row scientific elites with considerable influence, particularly Another challenging issue is where to situate responsibil- in countries with a less mature innovation system (OECD ity for innovation policy within the government structure. 2010). One way of getting a better overview of the innova- Many countries have delegated this responsibility to the tion landscape is to conduct a functional analysis of the ministry of science and technology, while others have opted actors that make up the landscape (box 6.7). to establish a higher-level entity that brings the various rel- evant ministries together to coordinate innovation policy (see the Chilean example in box 6.3 and TN 2 on innovation Evaluate and measure innovation performance system governance). As noted in the module overview, the Continuous monitoring and evaluation of a country’s inno- latter option seems to be preferred.2 vation performance should be an important component of A criticism of national innovation policies is that they any national innovation policy. Do the various policy tend to ignore opportunities for supra-national collabora- instruments and interventions yield the expected results? tion in the innovation sphere. They are often too inward Benchmarking is a much-used tool at the international level looking and ignore opportunities for regional or interna- to identify best innovation policy practices, while composite tional collaboration. Regional economic communities are innovation indicators help to monitor innovation perfor- becoming more active on innovation policy issues, however. mance across countries and through time (box 6.8). They often press hard for product and technology standard- ization within their communities to create the optimal con- ditions for a single market. The EU is by far the most Foster interaction between the national innovation advanced regional community in terms of having a regional policy and the agricultural innovation policy innovation policy in place (known as the Lisbon Strategy). The introduction of a national innovation policy often In addition, various industry-specific or technology-specific has an important impact on the public agricultural Box 6.7 A Functional Analysis of a National or Sectoral Innovation System A functional analysis is useful to rapidly assess a policy interventions. The standard steps in a functional national or sectoral innovation system.a It can help to analysis of an innovation system are: identify the principal actors within an innovation sys- tem and the linkages and interactions between them. 1. Define the boundaries of the innovation system in Weaknesses identified in such an analysis can form a focus. The level of aggregation in a functional good starting point for formulating specific innovation appraisal can vary substantially. For example, one (Box continues on the following page) 466 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 6.7 A Functional Analysis of a National or Sectoral Innovation System (continued) can deal with the business sector as one entity or dif- 3. Define the primary functions that the innovation ferentiate it by sector, size, innovation profile, or system needs to perform. The “Actions Needed� sec- some other feature. This process will enrich insights tion proposes five key functions that an innovation into how the innovation system functions and hence system needs to perform. These functions are not set help to fine-tune policy interventions. in stone but can be reformulated to match the spe- 2. Identify and engage the principal actors in each of cific context to which they apply. the stakeholder groups within the innovation system, 4. Bring steps two and three together and map in a including (1) the business sector, (2) the government matrix format how the different stakeholder groups sector (including the principal policy-making, coordi- and their specific actors contribute to the different nating, financing, and regulatory agencies for science, key functions. This exercise should help identify technology, and innovation), (3) the research sector possible missing actors or weak links between actors (research organizations, universities, and others), or stakeholder groups. Such mapping is best done (4) technology transfer and other intermediary orga- on the basis of interviews with the various actors nizations, (5) organized civil society (nongovernmen- involved in the innovation system. An alternative tal organizations, consumer groups, trade unions, and is to make the map based on brainstorming sessions the like), and (6) possible foreign innovation partners; with key experts. Source: Author. a. See Paterson, Adam, and Mullen (2003) and Ivanova and Roseboom (2006) for practical examples of applying a functional analysis approach to national innovation systems. Box 6.8 Benchmarking National Innovation Systems and Policies Since the mid-1990s, the Organisation for Economic European Union publishes an annual European Innova- Cooperation and Development (OECD) has conducted tion Scoreboard (EIS) to monitor the innovation per- an array of studies on national innovation systems and formance of individual member nations as well as the policies, covering its member and nonmember coun- performance of the European Union in relation to other tries (including leading developing countries such as economies such as the United States, Japan, China, and Brazil, Chile, China, and South Africa).a The OECD Brazil. The EIS methodology comprises seven innova- methodology, based on the Oslo Manual: Guidelines for tion dimensions, grouped into three blocks: Collecting and Interpreting Innovation Data (issued in 1992 and updated in 1997 and 2005), has been copied ■ Enablers: Captures the main innovation drivers that frequently by other innovation system studies. The lat- are external to the firm and comprises two dimen- est edition of the Oslo Manual includes specific guide- sions: (1) human resources (measures the availabil- lines for the implementation of innovation surveys in ity of highly skilled and educated people) and (2) developing countries, based largely on experience with financial resources (measures the availability of the methodology in Latin America. finance for innovation projects and the support of In 2000, the European Union adopted its “Lisbon governments for innovation activities). Strategy,� which aims to “make Europe the most ■ Firm activities: Captures innovation efforts that competitive and the most dynamic knowledge-based firms undertake and comprises three dimensions: economy in the world.� As part of this strategy, the (1) investment in innovation by firms (multiple (Box continues on the following page) MODULE 6: THEMATIC NOTE 1: NATIONAL INNOVATION POLICY 467 Box 6.8 Benchmarking National Innovation Systems and Policies (continued) variables); (2) linkages and entrepreneurship In addition to EIS, several other international innova- (captures entrepreneurial efforts and collabora- tion indices are produced, including the World Bank tion among innovating firms and also with the Knowledge Economy Index, the UNCTAD Innovation public sector); and (3) throughputs (IPR registra- Capability Index, UNDP Technology Achievement Index, tion and balance of payments regarding technol- the RAND Science and Technology Capacity Index, the ogy royalties). WEF Global Competitiveness Index, the INSEAD Global ■ Outputs: Captures the outputs of firm activities Innovation Index.b The indices use different approaches, and comprises two dimensions: (1) innovators but rankings are reasonably stable across indices. Incom- (measures the number of firms that have intro- duced innovations onto the market or within their plete and poor data cause the rankings of countries at the organizations) and (2) economic effects (captures bottom to be considerably less stable, however. One criti- the economic success of innovation in employ- cism of current measurement frameworks is that they ment, exports, and sales arising from innovation often fail to measure the social impacts of innovation (on activities). well-being and poverty reduction, for example). Source: Pro Inno Europe 2010; World Bank 2010; OECD 2010. (a) The OECD Reviews of Innovation Policy comprehensively assesses innovation systems in individual OECD members and nonmembers, focusing on the role of government. The reviews provide recommendations to improve policies affecting inno- vation performance, including R&D policies. Each review identifies good practices from which other countries can learn (www.oecd.org/sti/innovation/reviews). (b) UNCTAD = United Nations Conference on Trade and Development; UNDP = United Nations Development Programme; WEF = World Economic Forum; and INSEAD = originally Institut Européen d’Administration des Affaires (European Institute of Business Administration). research and extension services established decades ear- tion that are not designed specifically for agribusiness but lier. These agencies are required to interact more vigor- which agribusiness can use. Business incubators, risk cap- ously with STI agencies that have a far wider scope and ital, technology consortia, technology parks, technology compete with nonagricultural agencies for resources from subsidies, and private R&D incentives (subsidies or tax STI funding schemes. National innovation policies also deductions) are examples (many of which are discussed in tend to introduce new instruments to promote innova- module 5). 468 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK T H E M AT I C N O T E 2 Governance of Innovation Systems Christopher Palmberg, ADVANSIS Ltd. Tarmo Lemola, ADVANSIS Ltd. SYNOPSIS ■ Coherence. The different strands of innovation policy and associated policy instruments must fit together. nvestments in developing an NIS should give gover- I nance particular attention, especially the systems and practices for setting priorities and agendas, designing and implementing policies, and obtaining knowledge about ■ ■ Stability. Innovation requires sufficiently stable frame- work conditions, institutions, and policy. Ability to adapt. As the environment for innovation evolves, and innovation evolves along with it, governance their impacts. This note provides examples of the roles that actors need to be able to adapt. innovation policy and its governance have played in the ■ Ability to steer and give direction. A related capability is development of innovation systems in Finland, Republic of the governance system’s ability to provide direction to Korea, and South Africa. Based on these cases, the note iden- actors and steer the innovation system as a whole. The tifies governance activities relevant to innovation systems ability to provide direction requires commitment and for agriculture in developing countries and discusses the leadership from policy makers at the highest level. related policy issues, lessons, and recommendations emerg- ing from the case studies. A key issue arising from the cases Governance of innovative activity is not provided by is that well-functioning innovation systems critically government alone. The research and business sectors as well depend on how well governments can bring together and as other stakeholders such as NGOs play important roles in coordinate the activities of the various actors and stake- many aspects of the governance of an NIS. For example, a holders fundamental for advancing science, technology, and society’s accumulated social capital can make an important innovation in various sectors of the economy. contribution to innovation by increasing trust among the actors, which makes joint innovation efforts as well as com- BACKGROUND AND CONTEXT munication and sharing of knowledge between the actors Governance concerns the mechanisms by which decisions are easy and successful. made in an organization, whether public, private, or non- Innovation system governance at the sectoral level is an profit. Governance has several dimensions, including power, important part of overall innovation system governance. In culture, incentives, leadership, and coordination. In gover- the agricultural sector, the earliest attempts at coordinating nance of an NIS, the systems and practices for setting priori- AIS were centered on strengthening agricultural research ties and agendas, designing and implementing policies, and coordination. A number of developing countries have estab- obtaining knowledge about their impacts receive special atten- lished research governance bodies, but they tend to repre- tion (see OECD 2005). A number of factors impinge on the sent only a narrow range of AIS stakeholders, consisting pri- efficiency of the governance of an NIS—in other words, the marily of ministerial representatives or researchers. They extent to which policy processes have the greatest effect with a have often lacked a consistent, rigorous process for setting given use of resources (OECD 2010). Evidence indicates that priorities. The current movement to improve the represen- efficient governance depends on certain qualities, including: tativeness of these governance bodies and their mode of operation is encouraging, however (for example, seeking to ■ Legitimacy. The policy actors and approaches adopted in represent a wider range of stakeholders and regions, policy processes have to be widely appropriate and improving transparency, and using diverse prioritization accepted for the tasks at hand. tools). The overall trend is toward strengthened research 469 governance and multidisciplinary NIS governance (as dis- agencies involved as well as down through the various cussed in this note), wherein agriculture is one sector decision-making levels. There is a strong element of con- among many. Some countries have made specific efforts in sensus building among the main stakeholders in the design AIS governance, however. Typically these efforts center on and implementation of policies. Companies and the subsectoral governance and coordination—for instance, research community are often involved in policy discussions through commodity boards and subsector networks— as experts or through their branch organizations. Innova- rather than on national agriculture/rural innovation gover- tion policy also explicitly aims to support collaboration and nance structures (like Chile’s FIA and Australia’s Rural networking between industry, universities, and public Research and Development Council). Module 1 discusses research agencies. For example, the R&D programs com- innovation coordination in agriculture in greater detail and missioned by Tekes require collaboration by industry, uni- provides examples of AIS coordination and governance at versities, or public research agencies. the macro, meso, and micro levels. Although this TN discusses NIS governance, benefits, Republic of Korea policy issues, and lessons primarily from developed coun- tries, it can help identify relevant issues and lessons for Korea’s government has taken an active approach to NIS developing countries and their AISs. Finland, Korea, and governance, especially since the mid-2000s. As in Finland, in South Africa have been chosen as examples because, in dif- Korea the NIS involves high-level government officials ferent ways, they represent NISs in which government actors (ministers and other key stakeholders) in designing STI pol- and agencies play an important role. They also represent icy through the Presidential Advisory Council for Educa- NISs at different phases of development to illustrate gover- tion, Science, and Technology (with representatives from nance challenges from different viewpoints. A separate note industry, academia, and research) and the National Science in this module discusses overall innovation policy issues. and Technology Council (formed by government minis- ters). The role of ministries in implementing policy down to the level of individual R&D programs and projects is note- Finland worthy, especially within the Ministry of Education, Finland began to apply the NIS concept before many other Science, and Technology (MEST).1 countries, and its NIS has a relatively streamlined gover- Unlike Finland, in Korea the NIS has a complex gover- nance structure, developed in the mid-1980s and early nance structure. Government science and technology poli- 1990s. The Finnish Funding Agency for Technology and cies have long roots, and the government’s overall role has Innovation (Tekes, teknologian ja innovaatioiden kehit- been pronounced. A key challenge for Korea is to govern its tämiskeskus), was established in 1983, and R&D programs rapidly growing portfolio of policy measures (OECD soon followed. A key characteristic of the Finnish system is 2009b), and Korea is responding with efforts to improve the that high-level government officials (prime minister, coherence of its policies through horizontal coordination finance minister) as well as representatives from universi- (between advisory councils and ministries) and vertical ties, public research organizations, and industry participate coordination (between ministries and the government in the Research and Innovation Council, which develops research institutes). national guidelines for innovation. Operational responsibil- A third characteristic of the Korean system is the duality in ity for policies is delegated to the Ministry of Education and corporate structures. Large conglomerates or multinationals Culture (for basic research), the Ministry of Employment (chaebols, literally “business families�) dominate research, and the Economy (for applied research and the enabling development, and industrial transformation, whereas SMEs environment for innovation), and other ministries. remain relatively underdeveloped. In this sense, Korea is still A second important characteristic of the Finnish NIS is a mixture of an advanced and developing country. This dual- that the main funding agencies (Academy of Finland for ity has crowded out entrepreneurship and may have ham- basic research and Tekes for applied research) enjoy consid- pered technology diffusion and knowledge spillovers erable autonomy in implementing programs, introducing throughout the system. Especially compared to Finland, col- new policy instruments, and managing these programs and laboration and networking in Korea between companies, uni- instruments on a day-to-day basis. A third characteristic is versities, and research institutes is less pronounced, though the strong tradition of collaboration and coordination collaboration within chaebols is extensive. A central challenge throughout the NIS, both across the main ministries and for the Korean NIS is to encourage more collaboration and 470 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK networking, both nationally and internationally (OECD and In 2009, the government established the Technology World Bank Institute 2000; OECD 2009b). Innovation Agency (TIA) to improve coordination of inno- vation funding (Nordling 2009). The new agency is respon- sible for administering a handful of existing innovation South Africa schemes: the Biotechnology Regional Innovation Centers, In the mid-2000s, South Africa became one of the first devel- the Innovation Fund, the National Advanced Manufactur- oping countries to adopt an NIS approach. South Africa is ing Technology Strategy, and the Tshumisano Trust. emerging as a global player in STI in certain fields but faces a range of challenges in developing its NIS amid difficult ACTIVITIES AND CAPABILITIES NEEDED socioeconomic conditions and weak government coordina- tion. Responsibilities for science and technology have been Good governance is manifested in the degree to which fragmented among numerous ministries, departments, and capabilities in the following areas can be developed and agencies. Private R&D has been concentrated in a few large, supported: perception of and responses to challenges, set- diversified companies with established links to government ting policy priorities and coordinating agendas, imple- departments, research organizations, and universities. The menting and managing policies on a day-to-day basis, and innovation system has been virtually disconnected from black obtaining and processing intelligence.2 These capabilities communities (Hausman and Klinger 2006; Lingela 2004). are associated with different levels of governance in an Since 2000, science and technology have been under the innovation system and depend on how interactions and purview of the Department of Science and Technology coordination are governed (vertically and horizontally) (DST). The Parliamentary Portfolio Committee for Science throughout the system (Nelson 2003; OECD 2007b, 2008, and Technology oversees DST; the National Advisory Coun- 2009a, 2009b, 2009c). Figure 6.2 depicts typical decision- cil on Innovation and a large group of stakeholders at the making levels, key public (or semipublic) organizations, National Science and Technology Forum provides advisory and avenues through which an innovation system can be support. Other key STI ministries include the Department governed to develop and sustain these capabilities. The fig- of Education, Department of Trade and Industry, and sec- ure highlights the key governance capabilities within the toral departments such as minerals and energy, agriculture, institutional and organizational framework of an NIS. water, and forestry. These departments steer their activities through sectoral agencies, foundations, and other funding Strengthening policy makers’ capacity to perceive organizations (OECD 2007b). and respond to challenges South Africa has made remarkable progress in a short The ability to perceive and respond to challenges is important period, as evidenced by STI indicators such as a more diver- for an NIS to be agile and proactive. In other words, these sified industrial structure and increasing GDP per capita. capabilities are vital for developing innovation policy guide- Nonetheless, huge social inequalities remain. The limited lines. These capabilities are embedded in the NIS as a whole, at involvement of the “second economy� of black communities all levels of governance, although councils, advisory commit- in entrepreneurship and innovation remains a primary tees (consisting of diverse stakeholders), and similar groups characteristic and challenge for the NIS. One source of this subordinate to the government or parliament often play an problem may be the continued, poor horizontal coordina- important role in responding to these challenges by creating tion across the main ministries, agencies, and funders of a common vision, or consensus, of how to address them. R&D (OECD 2007b). This lack of overall government coor- Finland, Korea, and South Africa illustrate different ways dination is a second characteristic of the South African in which the ability to perceive, and respond to challenges innovation system. plays out in practice. While the Finnish capabilities to per- Limited technology transfer and networking between ceive challenges are embedded in the NIS in a decentralized academia and industry is a third characteristic of the NIS, way (box 6.9), the Korean innovation system has tended to caused in part by the lack of mental models for how an respond to challenges through a more top-down approach innovation system functions beyond the public sector. The (box 6.10). South Africa’s response to the challenge of devel- enabling environment for entrepreneurship is also underde- oping policies to reconfigure the NIS in the years immedi- veloped, as reflected by the limited collaboration between ately following apartheid can be described as a decentralized large and small companies, the poor availability of venture as well as top-down NIS (box 6.11). In this case, there was capital funding, and an outdated IPR regime. considerable concern about the poor socioeconomic context MODULE 6: THEMATIC NOTE 2: GOVERNANCE OF INNOVATION SYSTEMS 471 Figure 6.2 Typical Governance Structure of a National Innovation System Government, parliament • Policy guidelines • Overall policy coordination Government Councils, advisory committees, etc. Ministries • Policy design • Funding and its steering Ministry Ministry Coordinating bodies Vertical governance Agencies • Policy implementation R&D agency Research council • Funding • Intelligence, follow-up Think tanks, etc. Public research • R&D performers Sectoral research institutes • Technology transfer • Intelligence Universities Polytechnics, etc. Incubators, science parks, living labs, etc. Business sector • R&D and innovation performers Companies Entrepreneurs Horizontal governance Source: Adapted from OECD 2005. Box 6.9 Finland Responds to the Challenges of Globalization The ability of Finland’s innovation system to perceive assess how globalization would affect various sectors and respond to challenges is best seen in the way that and their employment prospects in Finland and to innovation policy reacted to globalization. The impact develop corresponding policies to respond to those of globalization was felt most acutely in the business challenges by altering the business environment. The sector, as R&D increasingly moved to foreign locations final report was based on numerous background stud- and price competition became tight, especially in tradi- ies commissioned from national think tanks and tional industries. The emergence of countries such as experts, over 20 sectoral dialogues between employers China and India as increasingly competitive locations and employee unions, and the work of the high-level for manufacturing, research, and development raised steering group appointed by the project. The project concern among labor unions and other national inno- was intended to feed into the ongoing, decentralized vation system stakeholders. Public research organiza- process to formulate a globalization strategy for Fin- tions felt building pressure to compete globally for the land which subsequently influenced various areas of best students and become more engaged internation- policies, such as taxation, R&D programs, and interna- ally. In 2004, the government launched a project to tionalization schemes to support companies. Source: Prime Minister’s Office, http://www.vnk.fi/julkaisukansio/2004/j19-26-osaava-avautuva-uudistuva-suomi/pdf/en.pdf. 472 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 6.10 Korea Responds to the Asian Crisis of the Late 1990s The Korean experience following the Asian financial cri- A coordinated mix of policy measures was put in place: sis highlights the importance of capabilities to perceive regulations to improve the environment for venture and act on challenges to innovation at the national level. startups and their growth; government-backed venture The crisis caused significant downsizing among large funds and tax incentives for investors; and measures to companies, mass layoffs of highly skilled personnel, and support research. Among other things, these measures large reductions in spending on R&D. Aside from fuelled rapid expansion in the number of corporate increasing its expenditures on education, the Korean R&D labs, with SMEs accounting for much of this government responded by increasing its R&D budget, to increase. This success cannot be explained by policy offset the decline in corporate spending. It also used the intervention alone, as it was aided by rapid innovations crisis as an opportunity to develop technology-based in digital and other technologies, but government small and medium enterprises (SMEs), using the action shaped an environment that enabled new busi- Special Law to Promote Venture Firms enacted in 1998. nesses to seize emerging opportunities. Source: OECD 2009b. Box 6.11 A White Paper and Foresight Exercises Facilitate Changes in South Africa’s Innovation Policy In 1996, a White Paper on Science and Technology laid and absorptive capability were singled out as a key down the new, post-apartheid government’s priorities constraint on technological developments and innova- in science, technology, and innovation. Foresight exer- tion. The preparatory work on the White Paper cises followed at the end of the 1990s and acknowl- resulted in a national R&D strategy, endorsed by the edged South Africa’s many socioeconomic challenges. government in 2002. It propelled an innovation system These combined efforts clarified the challenges to gov- approach to the forefront in policy design and high- ernment officials, highlighted weaknesses of the lighted the importance of moving toward an innova- emerging national innovation system, and suggested tion policy with a broad mandate to meet socioeco- actions to address these challenges and weaknesses. nomic needs through science and technology as well as Human resource issues related to poverty, education, innovation. Source: OECD 2007b. (poverty, segregation, one-sided industrial and company in developing countries) and to align policies with existing structure) and the narrow science and technology focus of structures and framework conditions. These capabilities are the apartheid regime. These challenges prompted the South usually embedded in ministries (or department equivalents), African government to adopt a broader and more holistic which typically also design policies and steer funding to sec- innovation system approach to policy that could better toral agencies or directly to public research organizations. direct activities toward common socioeconomic goals. This level of governance is often vertically linked to the gov- ernment through various councils and advisory committees. Ministries also frequently establish dedicated coordina- Establishing and/or strengthening capacity in tion bodies to ensure better coordination between ministe- coordination bodies to set policy priorities and rial and other agendas, especially in broad technology areas coordinate agendas such as nano-, bio-, or environmental technologies. These Capabilities to set policy priorities and coordinate agendas areas require the involvement of many stakeholders and con- are important to economize on scarce resources (especially sultation processes to elicit their views. These coordinating MODULE 6: THEMATIC NOTE 2: GOVERNANCE OF INNOVATION SYSTEMS 473 bodies facilitate more horizontal, “‘whole-of-government� tation of policy (including the allocation of resources) is approaches and policy mixes to respond to an innovation delegated to various ministries, public funding agencies, policy agenda that is widening because of globalization, new and ultimately companies, universities, and public research technologies, and new forms of innovation (open innova- institutes. tion, nontechnical innovation, user-driven innovation, and In all three countries, certain organizations play a critical others) (see discussions in OECD 2005 and EC 2009). role in addressing challenges proactively by setting priorities The fact that a high-level policy council plays a central and coordinating agendas for action. They are described in role in research, development, and innovation policy does box 6.12. not mean that the resulting policy favors centralization. For example, the Finnish Research and Innovation Council, Strengthening the capacity to implement and chaired by the Prime Minister, does not allocate resources manage policies on a day-to-day basis for research, development, and innovation. The Council is very much an advisory body responsible for the strategic Policy design, prioritization, and agenda setting alone will development and coordination of Finnish science and tech- not respond to socioeconomic needs and deliver innovation nology policy as well as the NIS as a whole. The implemen- and growth; policies must be implemented. Implementa- Box 6.12 Organizations Involved in Prioritizing and Coordinating Policy in Finland, Korea, and South Africa Research and Innovation Council, Finland. The strate- well as the formulation of programs and projects. It also gic development and coordination of science, technol- promoted public awareness of science and technology. ogy, and innovation (STI) policies in Finland are the In the 1980s and 1990s, a range of ministries responsibility of the Science and Technology Policy launched R&D programs, sparking demand for better Council, an advisory body to the government. The coordination. The National Science and Technology composition of this council is distinctive in some Council (NSTC), established in 1999 and chaired by the respects and underlines its capacity to perceive chal- president, has since been Korea’s highest decision-mak- lenges, draw overall policy guidelines, and facilitate ing body on STI. As a cross-ministerial body, NSTC has coherence, consensus-building, and coordination a central role in working across ministries to coordinate throughout the system. It involves a wider range of sec- the expanding policy priorities and agendas. Its strong tors than similar councils. The chairmanship is held by links to MEST are underlined by the fact that MEST the Prime Minister, emphasizing its top-level status, provides the NSTC with a secretariat. The NSTC’s hor- and involves key ministers (for employment and the izontal scope at the sectoral level is strengthened economy, education, and finance, for example). The through five subordinate expert committees on key council also includes representatives from academia, industrial technologies, large-scale technologies, state- industry, and labor organizations. It dates to 1963, and led technologies, cutting-edge converging and interdis- its mandate for technology was added in 1986. ciplinary technologies, and infrastructure technologies. Ministry of Science and Technology and National Department of Science and Technology, South Science and Technology Council, Korea. The Ministry Africa. The case of South Africa’s Department of Sci- of Science and Technology (MoST), which became the ence and Technology (DST) is interesting because this Ministry of Education, Science, and Technology department gained responsibility over STI just as (MEST) in 2008, was established in 1967. Its importance South Africa’s policy makers endorsed an innovation grew along with Korea’s increasing emphasis on system approach. The shift toward innovation research, development, and innovation in the 1980s and occurred in response to the enormous socioeconomic 1990s and the broadening of the innovation policy challenges of post-apartheid South Africa. Subse- agenda in the 2000s. It commanded a large budget and quently DST has played an important role in setting had a broad mandate for policy design, coordination, priorities and agendas based on white papers and fore- and evaluation of science and technology in Korea, as cast exercises. Source: Lemola 2002; Dahlman et al. 2006; OECD 2007b, 2009b. 474 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK tion is an essential element of good NIS governance, but it Aside from vertical coordination of innovation policy, has often failed owing to competing rationales between more attention should be paid to horizontal coordina- ministries, lack of political will and funding, changing tion. Horizontal coordination occurs across the bound- external developments (an economic crisis) or other com- aries of distinct policy domains and sectors. The devel- plications (for example, see OECD 2005). opment of a horizontal innovation policy involves Policy implementation and the management of R&D placing a broader strategic approach above departmental funding and other schemes are often delegated to the level of goals by integrating priorities and objectives across vari- agencies, for example to R&D agencies (such as Tekes in ous policy sectors. Horizontal governance of innovation Finland or TIA in South Africa) and research councils (the policy requires the integration of innovation-oriented Academy of Finland or the Research Council for Fundamen- thinking into other policy domains and greater attention tal Science and Technology in Korea). Delegation of these to interfaces with policy sectors that use and apply sci- responsibilities implies a need either to strengthen the capac- ence and technology. ities of these agencies or to establish a new agency. It also The Finnish innovation system offers a good example of highlights the need for ministries to strengthen their steering the role that agencies such as Tekes can play in implement- capacity. Delegation of managerial authority is usually ing policy (box 6.13). In this case, the relatively clear separa- accompanied by stronger requirements to report outputs and tion between responsibilities for designing innovation pol- outcomes and thus increase accountability at lower levels. icy (occurring at the governmental and ministerial level) The day-to-day management capabilities of NISs are and implementing it (occurring at the agency level) has reflected in the routines and procedures that (for example) been important for a flexible and proactive innovation pol- ministries and agencies use to interact with companies, icy and for avoiding political deadlocks that block imple- researchers, and other target groups of R&D programs and mentation. Overall, this division of labor and the strong ver- policy schemes. These agencies also collect intelligence on tical and horizontal connections existing throughout the technological and market trends to support decision mak- Finnish innovation system have been important precondi- ing, as discussed later. Key issues are to avoid unnecessary tions for the relatively short time that elapses between pol- bureaucracy and red tape, strike a good balance between icy design and implementation, which in turn strengthens transparency and secrecy in R&D projects, and ensure pol- Finland’s capacity to respond quickly to emerging chal- icy continuity amid political change and external events. lenges. These preconditions may have been easier to meet in Box 6.13 Tekes as an Implementer of Innovation Policies in Finland Tekes, founded in 1983, is based in the Ministry of are planned with companies, public research organiza- Employment and the Economy. It has relative auton- tions, and other agencies, the funding is competitive, omy to set priorities and agendas in specific technol- and companies must contribute complementary funds ogy areas, following guidelines developed at higher (usually around 50 percent). The idea is to stimulate levels (the Science and Technology Policy Council and collaboration between program partners and maxi- ministries). Tekes’ role eventually expanded to include mize benefits from knowledge spillovers. Each pro- channeling the bulk of public funds for R&D to indus- gram has a coordinator, a steering group, and a man- try and public research agencies, with the exception of ager from Tekes. Funding for programs ranges from basic research agencies. Its major funding instruments €20–150 million, generally over three to five years. include R&D grants and loans for companies and Hundreds of programs have been initiated since 1983; applied research grants for public agencies. Research 29 operated in 2009. These programs have played an grants are typically allocated via technology programs important role in promoting entrepreneurship, planned and implemented with companies and introducing new areas of technology, and renewing research institutes. Although the themes of programs industries. Source: Ylä-Anttila and Palmberg 2007; Tekes (www.tekes.fi). Note: Tekes = Finnish Funding Agency for Technology and Innovation. MODULE 6: THEMATIC NOTE 2: GOVERNANCE OF INNOVATION SYSTEMS 475 Finland than elsewhere because of its small size and the high may have vested interests. Transparency and objectivity level of trust between the main actors in the system. should be the key criteria in impact assessment. Capabilities to obtain and analyze intelligence are also often built in collaboration with transnational think tanks Establish/strengthen capacities to obtain such as the World Bank and OECD. Both organizations and analyze intelligence develop STI indicators and impact assessment methodolo- A well-functioning NIS must have the capabilities and gies and standards; they also undertake assessments and related governance structures to obtain and analyze intelli- evaluations of innovation systems. gence on the impacts of innovation policy as well as future Evaluations of the inputs, activities, outputs, and impacts technological and market trends. These capabilities relate to of research, development, and innovation are essential to technology and innovation studies, development of STI enhance the effectiveness, efficiency, appropriateness, and indicators, evaluations of R&D programs, and other types of accountability of policies to foster innovation and improve policy instruments and interventions, as well as technology social welfare (see module 7). For this reason, they are inte- foresight and assessment. These capabilities are often spread gral to improved innovation intelligence. Aside from out in the NIS; for example, ministries and agencies typically improving accountability, the main strength of evaluation have their own research and analysis units (box 6.14). For the may reside in its capacity to provide insight, learning, and sake of objectivity in impact assessment, however, the most understanding. viable arrangement is for independent expert organizations Evaluation usually includes priority setting, an ex ante (think tanks, consultancies, public research organizations, impact appraisal, monitoring of progress (interim evalua- universities, and so forth) to gather and analyze intelligence. tion), and an ex post evaluation of results and impacts. In the case of public research organizations, the problem These cumulative assessments aim to measure performance, may be that many research groups receive R&D funding and support target or performance-based management and Box 6.14 Strategic Intelligence Capabilities and Activities in Finland, Korea, and South Africa Finland. Tekes monitors results and assesses the impacts technology policies by, for example, forecasting science of projects it funds. For monitoring, Tekes collects proj- and technology development trends; analyzing and ect effectiveness information at the beginning and end evaluating science and technology programs by all of each project and three years after its conclusion. An ministries; conducting research into domestic and impact assessment is done to gain feedback on how the overseas research planning, evaluation, and manage- project attained its objectives, how effective the project ment systems; and disseminating R&D policy infor- was, and what could be learned from the project to mation and data. improve Tekes’ future operations and strategies. Tekes South Africa. South Africa has also been developing also follows international comparisons and reports, its capacity to undertake policy assessments and analy- such as comparisons commissioned by the Organisation sis. These capabilities have been developed within the for Economic Co-operation and Development, Euro- main ministries, agencies, and advisory bodies. Of par- pean Union, and others, and conducts peer reviews of ticular importance is the Centre for Science and Tech- innovation activities in various countries. nology and Innovation Indicators (CeSTII), which is Korea. The Korean Institute of Science and Technol- responsible for national R&D and innovation surveys ogy Evaluation and Planning (KISTEP) is the nation’s based on a memorandum of understanding between main STI planning agency and supports the Ministry the Department of Science and Technology and Statis- of Education, Science, and Technology’s policy plan- tics South Africa in 2004. Several universities also host ning and coordination. Its specific functions are to for- research groups with a focus on technology and inno- mulate, coordinate, and support major science and vation studies. Source: OECD 2007b, 2009b; Tekes, www.tekes.fi. Note: Tekes = Finnish Funding Agency for Technology and Innovation. 476 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK budgeting, enhance accountability and transparency, and and development of different sectors of the economy (as in improve communication of outcomes to policy and deci- Finland and Korea). sion makers and sponsors. Similarly, well-governed innovation systems can bring In Finland, the evaluation of research, development, and previously disconnected actors together and create new nodes innovation comprises meta-evaluation and system reviews and platforms for innovation. Finland and Korea have (Ministry of Employment and the Economy 2010), evalua- implemented explicit coordination schemes and policy pro- tions of scientific and technological fields and programs, grams to achieve this goal, such as the Tekes programs. Pol- and evaluation of universities, research institutes, and other icy in South Africa has focused on integrating the “second R&D institutions. Using information from evaluations to economy� with activities at the traditional core of the inno- inform policy has remained a challenge in Finland, however, vation system. despite the numerous evaluations undertaken in the past The success of an innovation system depends consider- ten to fifteen years. ably on the extent to which it engages private companies in research, development, and innovation. The innovation sys- tem concept can extend the policy mix from supply-sided POTENTIAL BENEFITS schemes (such as R&D funding) toward a large array of more The benefits of an innovation system approach and good demand-oriented schemes (such as standardization, public governance of an NIS should ultimately be visible at the procurement, and regulations). (For examples from the macroeconomic level through increasing innovation and three countries discussed here, see Dahlman, Routti, Ylä- economic growth. As noted, OECD and others have devel- Anttila 2006 and OECD 2007b, 2009b). Nonetheless, an oped a range of innovation input and output indicators, important consideration for governance of the innovation although the relative role of some factors, such as gover- system is that a delicate balance must be struck between nance, is virtually impossible to assess through indicators. relying on market forces and more interventionist policies, The most relevant indicators for measuring the benefits such as regulations. of an innovation system approach capture knowledge flows Finally, although an NIS generally focuses on developing and collaboration or knowledge distribution throughout the national innovation capacity, it does not lose sight of the system (under the assumption that they generate innovation value that the innovation system approach places on knowl- and growth). Some of these indicators are available—for edge flows and collaboration, including internationally gen- example, information on the mobility of researchers and erated knowledge flows and collaboration. Knowledge flows personnel, innovation surveys on R&D collaboration, data and collaboration extend beyond national borders, and an on interfirm collaboration, rates of technology diffusion— innovation system approach can help to identify opportunities but it is beyond the scope of this note to apply them to the and bottlenecks of critical importance (see Edquist 1997 for a case study countries.3 Instead, the experiences of Finland, review of innovation system approaches that emphasize the Korea, and South Africa will be used to highlight some of the international dimension). more subtle and intangible benefits of an innovation system approach in general. As emphasized throughout this note, an innovation sys- LESSONS LEARNED tem approach can focus the policy debate—create consen- The following lessons related to innovation system gover- sus and a common vision—on issues of key importance nance are relevant to developing and sustaining governance for sustaining innovation and growth, especially in in an AIS. response to emerging challenges and in times of crisis. Examples described here include globalization (Finland), economic crises (Finland, Korea), and poverty and segre- A step-by-step process, building on existing structures and contexts gation (South Africa). An innovation system approach to policy thinking and The development of an innovation system approach to analysis can highlight latent potential for knowledge flows and innovation policy may take significant time (decades rather collaboration across the various fields of science, technology, than years) and should be pursued systematically and itera- and industry and achieve “new combinations� as a source of tively so that emerging challenges and feedback from the innovation. To do so, countries will require good capabili- research community and private sector can be addressed in ties in obtaining and processing intelligence on the structure a flexible way. Core governance structures for innovation MODULE 6: THEMATIC NOTE 2: GOVERNANCE OF INNOVATION SYSTEMS 477 systems often are based on existing policy structures such as Mobilizing actors and resources ministries, but they also typically involve the establishment For policy to be more relevant and effective, it must embody of dedicated ministerial departments, councils, agencies, clear visions, strategies, and priorities. Leadership in the think tanks, and other entities. governance of research, development, and innovation are Most developing countries have little room to maneuver in also vital to mobilize actors and resources. Leadership is best research, development, and innovation. Consequently their undertaken by distinguished individuals (a president, prime only strategic choice is to stick to incremental innovations— minister, minister of finance), ministries, or innovative for example, to improve existing products, services, and agencies and enterprises. These leaders have a broader per- processes. All countries will need monitoring and governance spective on policy agendas for research, development, and arrangements that allow sufficient adaptability to reverse innovation and can help to maintain their coherence. unwise decisions quickly. Countries with relatively small research systems, such as small countries or economies in the initial phases of development or recovery, have a particular Coordinating bodies need to concentrate their efforts. Many countries have estab- The role of coordinating bodies in setting priorities and coor- lished various prioritization practices in recent years. Korea, for dinating agendas is increasingly important owing to chal- example, uses a mix of instruments for priority setting, includ- lenges arising from globalization, emerging technologies, ing technology foresight and technology road-mapping. These new forms of innovation, and a range of global issues such processes are distributed across ministries and agencies and as energy and climate change, poverty, health care, and create a diversity of competing priorities and visions (which access to clean water. Coordinating bodies benefit from ideally are reconciled in the national innovation policy). For an links to the highest levels of government (vertical coordina- example from Thailand of a national innovation council, see tion) but must also include decision makers and other the overview in module 1. stakeholders from diverse areas of the economy (horizontal An innovation system approach should acknowledge coordination). The councils in Finland and Korea are two existing industrial structures (ICT and Nokia in Finland), examples of such coordinating bodies. Governance of inno- company distributions (Korea’s chaebols), and the overall vative activity is not provided by government or the public socioeconomic framework (the lack of involvement of South sector alone. It is important that representatives of the private Africa’s “second economy�). Properly applied, the innova- and third sectors actively participate in formulating and tion system approach will facilitate collaboration and implementing policy through various forms of public- knowledge flows across actors and stakeholders whose private partnership. efforts to innovate were previously separate or who were excluded from innovation altogether. A clear role for high-level councils High-level councils can and often do play important roles in Strong, visible commitment at the highest level setting priorities and agendas and as overall policy coordi- A common feature of countries that have successful nation platforms, but it is evident that simply establishing a research, development, and innovation policies is strong and council is not enough (OECD 2009a,b,c). Their needs and visible commitment at the highest political level to long-term tasks must be well-defined in the specific context, with development of financial and human resources for research, attention to the strategic needs of the country’s innovation development, and innovation. Other key factors are the system. The council’s composition, too, needs to be consid- integration of key ministries (finance, education) in plan- ered in view of the strategic tasks. It must be open to newly ning and implementation processes, broad-based consensus emerging actors in innovation in the country. on the basic elements of research, development, and inno- vation policy, and wide agreement that investments in Horizontal coordination research, development, and innovation are needed over the long term. In Finland and Korea, a high-level policy council A broader understanding of innovation and innovation with representatives from ministries, government, R&D policy means that more attention should be paid to hori- agencies, and the private sector turned out to be an efficient zontal coordination, which refers to the crossing of admin- mechanism for overall coordination of research, develop- istrative and cultural boundaries between policy domains ment, and innovation policies. and sectors. 478 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Autonomy to implement RECOMMENDATIONS FOR PRACTITIONERS An innovation system approach can aid both policy design Innovation systems emerge gradually and organically if the and implementation; policies also need to be implemented enabling environment is favorable. Knowledge flows and col- to deliver innovation and growth. In particular, policy laboration cannot be created by policy, but policy can create implementation may best be facilitated at the level of rela- suitable conditions for them to happen. Good governance is tively autonomous agencies rather than ministries and central to the performance of an innovation system, and departments where political and other issues may be inhibit- policies can strongly influence good governance. Practical ing factors (Tekes is one example; TIA in South Africa may recommendations for establishing governance structures be another). include the following general and tentative “steps�: 1. Develop awareness of innovation systems concepts and Transparency identify good practices in similar sectoral, regional, and Innovation policies benefit from transparent schemes and national contexts. Engage in international dialogue. the avoidance of bureaucracy and red tape. Programs for 2. Communicate the viability and challenges of imple- menting an innovation system approach. Probe the pos- R&D can be efficient for focusing activities on predefined sibilities for seeking, and achieving, consensus and a areas (for example, the specific technology areas represented common vision on key issues. by Tekes’ R&D programs). Care should be taken to include 3. Analyze structural and institutional preconditions for elements of competitive tendering. Policy continuity is also governance structures related to innovation systems. important to stabilize the innovation horizon (of private Involve companies, public research agencies, and other companies in particular). relevant stakeholders (main ministries, regulators, NGOs) in policy design, consultations, and strategizing. 4. Consider the suitability of existing institutions to handle Learning and evaluation STI matters. Consider the need for new, STI-dedicated The ability to obtain and analyze intelligence on market and agencies and other institutions. technological developments and trends is of key importance 5. Assess the economic, legal, and political viability of for a well-functioning, proactive innovation system. Fin- introducing STI issues and the innovation system con- land, Korea, and (to an increasing extent) South Africa con- cept at various levels of governance. Ensure that mecha- duct foresight exercises and impact assessments. These nisms for priority setting and coordination can be put in place. capabilities are preferably spread out throughout the inno- 6. Develop existing institutions to support STI or establish vation system and strengthened through international col- new STI institutions if required. Ensure that they have a laboration and related forums. They should be actively clear mandate and specific roles to avoid overlap. Be promoted and maintained. ready to divest obsolete schemes and institutions if nec- Improved means of evaluating the inputs, activities, out- essary to foster the growth of new ones. puts, and impacts of research, development, and innovation 7. Ensure relative institutional autonomy in policy imple- are needed to manage R&D organizations and instru- mentation. Ensure that sufficient capabilities and ments and provide important feedback for policy making. resources are in place for day-to-day management of pol- The development and implementation of monitoring icy schemes and initiatives, now and in the long run (to and evaluation require intervention from the upper lev- ensure policy stability and predictability). els of innovation policy. Many countries are finding that 8. Implement policy schemes (at the agency level or below) evaluations of research organizations, research and tech- and initiatives as considered relevant, based on an assess- nology programs, and other policy instruments are an ment of societal needs. Consider which policy mix is most suitable to the context. Ensure that schemes and effective and indirect way to control and manage research initiatives are transparent, nonexclusive, and predictable, organizations. Although evaluations are increasingly and support both networking and competition. used to improve the design and implementation of the 9. Ensure that institutions and capabilities remain in place instruments of research, development, and innovation (compare with the third step) to analyze and assess techno- policy, they are not always readily available or communi- logical and market trends, as well as to assess the impacts of cated to policy makers at the strategic decision-making policy schemes, initiatives, and the innovation system as a level. whole. Continue to engage in international dialogue. MODULE 6: THEMATIC NOTE 2: GOVERNANCE OF INNOVATION SYSTEMS 479 T H E M AT I C N O T E 3 Managing Intellectual Property to Foster Agricultural Development Sara Boettiger, University of California, Berkeley Robert Potter, Consultant Stanley Kowalski, University of New Hampshire SYNOPSIS which agricultural development often depended on public goods and the unchecked sharing of research results has ver the past decades, consideration of IPRs has O become increasingly important in many areas of agricultural development, including foreign direct investment, technology transfer, trade, investment in innova- come to an end. Countries have entered a new era in which innovation, R&D, and the sharing of knowledge occur at the same time that global IPRs are on the rise. The current IPR climate demands a nuanced and strategic use of IPRs to tion, access to genetic resources, and the protection of tradi- enable innovation and support agricultural development, tional knowledge. The widening role of IPRs in governing the but the shift toward this scenario is proving challenging, and ownership of—and access to—innovation, information, and many donors, governments, institutions, and individuals are knowledge makes them particularly critical in ensuring that struggling to respond. developing countries benefit from the introduction of new There are good reasons for the hesitant progress in technologies that could radically alter the welfare of the poor. understanding the use of IPRs in agricultural develop- Failing to improve IPR policies and practices to support the ment. First, other priorities upstage IPR issues in environ- needs of developing countries will eliminate significant devel- ments where limited resources must be allocated across opment opportunities. The discussion in this note moves formidable needs. Second, expertise in IPR issues often away from policy prescriptions to focus on investments to cuts across many fields, including law, business, science improve how IPRs are used in practice in agricultural devel- and technology, as well as development policy. Even the opment. These investments must be seen as complementary range of IPR instruments in agriculture is diverse. In addi- to other investments in agricultural development. IPRs are tion to patents, other forms of protection, such as trade- woven into the context of innovation and R&D. They can marks and geographical indications, can create value in enable entrepreneurship and allow the leveraging of private agricultural value chains in developing countries; copy- resources for resolving the problems of poverty. Conversely, right laws can limit access to agricultural research jour- IPRs issues can delay important scientific advancements, nals, databases, and software code; PVP certificates, utility deter investment in products for the poor, and impose crip- models, and sometimes even trade secrets are also relevant pling transaction costs on organizations if the wrong tools are to agricultural development (World Bank 2006).1 Third, used or tools are badly applied. The central benefit of pursu- the international landscape for IPRs is changing rapidly. ing the investments outlined in this note is to build into the Policy makers in developing countries now operate within system a more robust capacity for strategic and flexible use of a system of bilateral, regional, and multilateral treaties that IPRs tailored to development goals. govern a wide range of IPR issues (box 6.15); protection of genetic resources and traditional knowledge (box 6.16); BACKGROUND AND CONTEXT FOR and, in debates about food security and developing coun- ACTION AND INVESTMENT tries’ capacity to respond to climate change, the increasing As public funding for agricultural research has fallen relative importance of the role of IPRs in technology transfer. This to private sector investments, for many countries the era in note argues, however, that IPR-related investments are 480 Box 6.15 Beyond TRIPS The Agreement on Trade-Related Intellectual Property often contain obligations relating to domestic intellec- Rights (TRIPS) came into effect in 1995, stipulating tual property policies that exceed the minimum stan- that all signatories to the agreement should introduce dards set forth in TRIPS. Collectively, agreements with a minimum amount of legislation to protect IPRs. intellectual property obligations comprise a landscape This international obligation triggered a widespread referred to as “TRIPS-plus.� A recent report estimated introduction of IPR legislation in developing coun- that close to 400 PTAs were in force by 2010, govern- tries in recent years, as it became a requirement for ing more than half of global trade. Not only is the entry into the World Trade Organization. More number of agreements growing, but IPR provisions recently, in addition to TRIPS, developing countries are also occurring in increasingly diverse types of operate in a landscape increasingly dominated by pref- agreements, from customs standards to anticounter- erential trade agreements (PTAs). These agreements feiting agreements. Source: Heydon and Woolcock 2009; Frankel 2009. Box 6.16 IPR Issues in Genetic Resources Ownership of genetic resources and traditional knowl- Further questions over rights to genetic resources edge is an area where IPRs are increasingly considered are raised by the increased capacity for large-scale a serious issue. R&D in crop improvement, for exam- DNA sequencing. Currently, many projects to sequence ple, depends on the wealth of genetic material held plant genomes promise benefits to agricultural devel- in farmers’ fields and national and international gene opment. The data and associated knowledge hold the banks. Both the conservation of genetic resources and potential to assist in breeding for improved yields, dis- access to them are critical for our future capacity to ease resistance, and countless other traits. There has address global food security issues, including drought been continuing concern, however, in genome tolerance, yield improvements, and resistance to dis- sequencing about the optimal use of IPRs that does eases and pests. not impede innovation based on the new data. Maintaining a balance between the preservation of Some argue that without the ability to patent, the genetic resources and ensuring widespread access investment in further R&D is not warranted; others depends on finding solutions that can work within a argue that allowing proprietary ownership allows complicated cross-section of national, international, and for blocking patents that can slow or halt innova- institutional policies. For example, in 2006 the research tion. While it is becoming increasingly difficult to centers of the Consultative Group on International Agri- patent DNA sequences in the United States, a large cultural Research (CGIAR) that maintained ex situ col- number of patent applications still contain claims lections of plant genetic resources signed agreements to sequences in bulk. For example, CAMBIA’s with the Governing Body of the International Treaty on analysis indicates that approximately 74 percent of Plant Genetic Resources for Food and Agriculture (“the the rice genome is claimed in United States patent Treaty�), which placed the collections they hold under applications. the Treaty, and adopted a “Standard Material Transfer As this brief discussion indicates, future investments Agreement.� Exchanges of genetic resources involving in policies and programs involving genetic resources the CGIAR centers are now governed by this agreement, must include considerations of IPRs to support the which includes IPR obligations. donors’ intended impacts on agricultural development. Source: CAMBIA (“Mapping of Rice Patents and Patent Applications onto the Rice Genome�); Pollack 2010. Note: The Standard Material Transfer Agreement can be accessed at this link: http://www.planttreaty.org/smta_en.htm. MODULE 6: THEMATIC NOTE 3: MANAGING INTELLECTUAL PROPERTY TO FOSTER AGRICULTURAL DEVELOPMENT 481 critical if developing countries are to benefit sufficiently can be a way to jump-start a cycle in which increased pro- from advances in STI over the next decades. tection of IP increases awareness of the value of innovation. Box 6.17 shows an approach to increasing locally focused R&D in Botswana, coupled with measures to raise public MAJOR IPR-RELATED DRIVERS OF awareness of new inventions and designs. DEVELOPMENT Types of IPRs differ in their influence on the innovation Three main interrelated paths characterize mechanisms climate within low-income countries. Patents can be impor- through which IPRs impact global poverty: (1) trade and tant IPR instruments for discrete inventions, as seen in box foreign direct investment; (2) national capacity for innova- 6.18, which shows how a machine to prevent frost damage tion and development of local commerce; and (3) technol- in fruit orchards was exported from Chile to important ogy transfer. These paths are discussed in the sections that overseas markets. Other forms of IPRs offer greater oppor- follow with full recognition of the oversimplification of this tunities to influence the domestic innovation and business framework.2 Nonetheless, it serves as a useful compass for development climate, however. Trademarks, geographical the analysis that follows. indicators, plant breeders’ rights, and seed registration laws may garner comparatively less attention than patents in the international press, but as noted, they often have more prac- Trade and foreign direct investment tical potential to affect agricultural development in low- Box 6.15 showed how trade issues often drive IPR legisla- income countries. Box 6.19 describes how a trademark was tion, with varied impacts. Studies of the relationship initially used to build a brand around Colombian coffee and between IPRs, trade, and foreign direct investment in devel- how geographical indicators have been employed more oping economies have covered a wide range of potential recently to maintain this brand. The success of this paths of interaction in an attempt to determine whether approach led other countries to similarly distinguish their stronger IPR policies in developing countries are likely to local produce in an international market, such as Pinggu produce benefits for the world’s poor. While a significant lit- peaches from China. In this case, the agreement between erature illustrates positive implications of stronger IPR poli- China and the EU on geographical indicators for peaches cies on trade and foreign direct investment, there are from this region of China opened an export market for caveats. Strict enforcement of IPR, for instance, may drive high-quality fruit previously recognized only within China.4 up the costs of imitating or copying inventions, which may reduce growth in very low income countries that rely on Technology transfer these approaches and do not yet have the infrastructure to accept foreign direct investment. Other work has shown The transfer of technology and knowledge remains perhaps that stronger IPR policies can exacerbate income inequali- the most influential of the three drivers listed here in terms ties in developing countries and that the flows from trade of IPR investments contributing to poverty reduction. Most and foreign direct investment do not sufficiently impact the well-capitalized engines of innovation are in developed very poor (Adams 2008). In short, the empirical work on countries, but increasing numbers are found in emerging IPR policies, foreign direct investment, and trade in devel- economies. There is a real need to improve international oping countries leaves unresolved questions about how the capacity for agricultural R&D targeted at poverty reduction poor are affected over time, and debates will continue with as well as the flow of knowledge and technologies to benefit further exploration of the issues.3 developing countries. Whether the “technology� that is transferred refers to a novel plant variety, the tacit knowl- edge of how to improve a food-processing practice, or an National innovation climate innovative business model for giving smallholder farmers IPR legislation is one component of the climate for innova- access to microirrigation, making technology and knowl- tion in a country, but legal instruments are not enough on edge available to improve the lives of the poor has both their own to encourage investment in innovation. Without direct impacts (for example, by improving health, food the active involvement of national researchers, there will be security, or access to water and sanitation) and indirect little appreciation of the role of IPRs, and thus other invest- impacts (such as economic development). IPRs are an ments will do little to encourage innovation. Interventions important factor in public-private partnerships transferring that focus on protecting inventions in public institutions technologies, in the formalization of the knowledge and 482 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 6.17 BOTEC Harnesses Innovation in Botswana Botswana Technology Centre (BOTEC) in Gaborone is National Design for Development Awards in 1999 to rec- a research and technology organization established by ognize inventions and innovations that can offer solu- the Botswana government in 1979. Operating under the tions to some of the problems faced by Botswana. As of Ministry of Communications, Science, and Technology, 2010, three award ceremonies have been hosted. The BOTEC has pursued the government’s policy objective World Intellectual Property Organization and African of technology promotion and innovation as a tool for Intellectual Property Organization supported the award developing the economy and improving the quality of ceremonies by sponsoring special awards for outstand- life in Botswana. To strengthen research and develop- ing innovations in Botswana. BOTEC is contributing to ment capacity, BOTEC has a longstanding involvement efforts to protect Botswana’s traditional knowledge by and active participation with a number of local organi- chairing an Indigenous Knowledge Task Force, which is zations, including the University of Botswana, Botswana drafting the indigenous knowledge section for the Institution of Engineers, Botswana Export Develop- Industrial Property Rights Act. ment and Investment Authority, Botswana Innovation BOTEC’s solar-powered hearing device was devel- Hub, and some nongovernmental organizations. oped through a collaborative scheme with Motse Wa Botswana’s Industrial Property Rights Act (1996) Badiri Camphill, a nongovernmental organization provides a legal framework for the country’s innovators that conducted field tests, raised funds for design to seek intellectual property protection for their intellec- improvements, branded the device with the SolarAid tual property. BOTEC has worked to improve intellec- name, and took it to market. SolarAid generated con- tual property awareness in Botswana to assist inventors siderable interest and was used in many developing to be more creative and benefit from their innovations. countries. BOTEC assisted Motse Wa Badiri Camphill BOTEC’s intellectual property policy seeks to address a to set up a separate organization, the Godisa Tech- number of issues, including Botswana’s increased partic- nologies Trust, to develop the promising pilot project ipation in international treaties related to intellectual into a genuinely successful product. The recharger, property, access to information on inventions related to now successfully marketed under the SolarAid brand, BOTEC activities, and dealing with new technology that requires only 6–8 hours of sunlight to maintain a full has been transferred to companies. BOTEC initiated the charge for a week. Source: Quoted with slight adaptations from WIPO, http://www.wipo.int/ipadvantage/en/details.jsp?id=2623. innovation that lies in the public sector, and in the creation ments, IPR policies should not be driven by individual tech- of specific technology transfer offices (TTOs) in such insti- nologies. Similarly, the desire to encourage public-private tutions (see module 5, TN 5 for examples of TTOs for indi- partnerships should not—by itself—drive IPR policies, vidual institutions or a network of institutions). TTOs are although clearer understanding of IPRs at both the national one example of policies promoting technology transfer, but and institutional level will help these partnerships flourish. they are not the only such policy. Understanding where to make strategic IPR-related Disparity in the capacity to manage IP in public investments, given the diverse pathways of potential impact and private R&D listed above, requires a closer look at the current context of international IPRs and agricultural development. Invest- Despite increasing opportunities to engage the private sec- ments in this space must take into account (1) the interna- tor, the public sector continues to be the primary driver in tional obligations related to IPR and the rapidly expanding agricultural R&D for most developing countries. Globally, use of IPRs in agriculture and (2) the continuing disparity agricultural investment in the public sector is double that in capacity between the public sector and the private sector of the private sector, and one-third of the worldwide agri- in the strategic use of IPRs. Although biotechnology is play- cultural R&D budget is spent in developing countries.5 ing an increasing role in agricultural development and is The lack of capacity for IPR management in public research one area where the private sector has made large invest- organizations, and the disparity in IPR management MODULE 6: THEMATIC NOTE 3: MANAGING INTELLECTUAL PROPERTY TO FOSTER AGRICULTURAL DEVELOPMENT 483 Box 6.18 Patenting a Chilean Invention to Protect Crops from Frost In 1991, severe frost decimated Florencio Lazo Barra’s Industrial Property Department. The invention is also fruit orchards. He lost all of his table grape production protected by patents in Argentina, Australia, China, and and 80 percent of his plums. He also incurred high fuel the European Union. costs for oil burners, which he used in the failed In 1998 the Lazo FCM technology was exported to attempt to protect his orchards from frost. After years the United States by granting a manufacturing license of experimentation, in 1996 a working prototype of the to Agtec Crop Sprayers (now “Superb Horticulture�), Lazo Frost Control Machine (“Lazo FCM�) was tested who sold the product under the name “Lazo Frost successfully. The Lazo FCM is a powerful centrifugal Dragon.� In the first three years, over 500 machines fan with a heater, which is trailed across the field by a were sold in South America and the United States. In tractor. The insertion of a layer of hot air in the cold air 2000, sales and distribution started in Europe through mass surrounding the plants protects fruits and vegeta- Agrofrost N.V., a company based in Belgium selling and bles from frost. distributing the machines throughout Europe under Following successful tests with the prototype, Mr. the “Lazo Frostbuster� name. More recently, the tech- Lazo applied for assistance from Innova Chile, a gov- nology was exported to New Zealand and Australia. ernment agency tasked with promoting innovation. He Without the support of Innova Chile, which obtained funding to convert his business idea into real- enabled the inventor to file for patent protection, little ity and produce more machines. Orders from Chilean of this development would have taken place. Govern- farmers soon followed, and in 1997, with assistance ment agencies charged with supporting innovation are from an intellectual property expert, he began obtain- often criticized for supporting projects that do not ing a patent abroad. The United States was the first come to fruition, so it is important to recognize cases country to grant his invention a patent in 1999. In where they have been successful to balance this Chile, patent No. 41776 was granted in 2002 by the impression. Source: Quoted with slight adaptations from WIPO, http://www.wipo.int/ipadvantage/en/details.jsp?id=2448. capacity between the public and private sectors, are there- species is considered to be of national importance, exemp- fore important considerations for investments in agricul- tions from PVP have been incorporated in some national tural development. legislation. Furthermore, as countries develop, needs for protection may change, particularly as they move from ACTION AND INVESTMENT NEEDED industries that exist by copying products produced else- where to innovating to develop their own products. IPR This section describes a set of investments related to IPR regimes continue to evolve even in developed economies and agricultural development that can improve activity in and must be flexible enough to cope with changes in this sector. Opportunities exist to improve policies at the national requirements. institutional level and to develop institutional capacity, as well as to increase knowledge sharing between the public Promote the establishment of specific IP and private sectors and, through these advances, increase policies in public organizations capacity for technology transfer. It is not possible to provide a template for particular laws Establishing institutional policies on the ownership, protec- or IPR regimes that will benefit all countries; IPR legislation tion, and dissemination of inventions will have a big impact must be tailored to the national context. This issue is dis- on enabling technology transfer among public organiza- cussed extensively in World Bank (2006), which recom- tions. Institutional IPR polices are critical to the impact of mends a dialogue with conscious consideration of needs public research, can open an institution to new partners, and priorities prior to enacting IPR legislation for plant and create incentives for changing the innovation climate. breeding. For example, staple crops may be treated differ- One of the biggest improvements in technology transfer ently from crops grown for export. Where a particular between public and private organizations in the United 484 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 6.19 Colombian Coffee: Trademarks and Geographical Indicators Protect a Valued Brand Coffee from Colombia has retained a significant price all coffee roasters responded to this initiative, however, premium over coffee from Brazil (the world’s largest and another IPR instrument was included in the strat- producer of Arabica coffee) for many decades, largely egy: certification. “Colombian� was registered in relation owing to a branding strategy that emphasizes the high to coffee as a certification mark in North America in the quality of Colombia’s product. The National Federa- 1980s. The formal standards attached to this certification tion of Coffee Growers of Colombia (FNC, Federación mark provide a guarantee that the actors in the market- Nacional de Cafeteros de Colombia) was created in 1927 place are meeting minimum quality standards when by Colombian farmers. Today, it represents over half a selling “Colombian� coffee, thereby protecting its hard- million coffee growers, the majority of whom are earned reputation. Enforcing and protecting this certifi- smallholders. The Juan Valdez® brand strategy is an cation turned out to be expensive but worthwhile, given excellent example of continuing creativity in IPR man- the premium that Colombian coffee now demands in the agement to promote agricultural development. market. The continuing expansion of the Juan Valdez® Television commercials shown in North America in brand also included opening branded coffee shops, the 1960s featured Juan Valdez® in the coffee fields with which have had varying degrees of success, as well as a his faithful mule, painstakingly selecting and hand- partnership with Coca-Cola FoodService to offer a picking the ripest beans. Consumers began to respond branded liquid coffee system. to the message that Colombian beans are grown and “Café de Colombia� was registered as a geographical harvested with great care, with little help from indicator in Colombia in 2004 and the European Union machines, in ideal climatic conditions with plenty of in 2006. Unlike trademarks and certification marks, rain, sun, and fertile volcanic soil. Demand grew. Many geographical indicators are intrinsically linked to coffee roasters began marketing their products as attributes and quality standards related to origin. Colombian coffee. A number launched high-end prod- They need to be recognized by governments, so delays ucts consisting exclusively of Colombian coffee. can arise in establishing such a system, but the value of The Juan Valdez® logo was licensed to coffee roast- these treaties in promoting quality brands is now ers that used only high-quality Colombian coffee. Not recognized. Source: Fridell 2007; March 2007a, 2007b. States was legislation mandating IPR policies for institu- Well-trained IP practitioners are critical for a country to tions that receive federal funds. By clarifying ownership of represent national interests and negotiate IPR provisions in inventions and the responsibility of the institutions to pro- multiple international forums and for a country to develop tect them, IPR policies became an integral part of research national IPR policies that promote development within activities. Without necessarily mandating the use of IPRs complex international obligations. Likewise, managers, through legislative means, in individual organizations the engineers, and scientists in public and private institutions establishment of policies related to ownership and respon- must be able to understand IP and how to use it if countries sibilities for protecting and disseminating inventions will are to play an increasingly competitive role in global agri- have a big impact on enabling technology transfer. cultural development. Create a global corps of trained IPR practitioners Support the creation of TTOs The impact of new IPR legislation in the wake of TRIPS An effective way to achieve institutional understanding of cannot lead to positive cultural shifts in the use of IPRs the value of IPRs may be through the creation of specific without sufficient numbers of trained, in-country practi- TTOs with a mandate to identify and protect innovation use tioners. The success of continuing investments in creating and to use IPRs to promote greater impact of the research patent offices, improving judicial systems, and opening and innovations arising within the institution (for example, TTOs depends on the quality of the professionals engaged. through licensing technology with other partners). Such MODULE 6: THEMATIC NOTE 3: MANAGING INTELLECTUAL PROPERTY TO FOSTER AGRICULTURAL DEVELOPMENT 485 offices provide direct opportunities for the professionals Bank 2006). UPOV remains active in promoting harmo- targeted in training activities to gain experience and also nization as traditional approaches to PVP are challenged by demonstrate to researchers the value of IPRs in enabling advances in plant breeding and genetics (Janis and Smith further development of their innovation (for additional 2007). Trademarks and related brand equity strategies are information, see module 5, TN 5). considered by some scholars to be underutilized as a form of creating value for developing countries’ agricultural prod- ucts. A wide variety of opportunities exist for improving Revisit the importance of nonpatent frameworks nonpatent, IPR-related instruments at both the policy and and opportunities for agricultural development practitioner level; for examples, see boxes 6.19 and 6.20. Trademarks, PVP, seed laws, and geographical indications are a few of many IPR-related nonpatent instruments that Encourage donors to require strategic IPR may have an impact on agricultural development.6 In low- management in development investments income countries where patenting is limited and mecha- nisms for enforcing patents are not well developed, these Private foundations, governments, aid agencies, and other alternative forms of IPRs can be critical instruments in AISs. donors can influence the outcomes of investments across The PVP system, for instance, granting plant breeders exclu- many fields by instituting internal grant-making require- sive rights to market new varieties, is implemented in a ments that demand a higher level of strategic IPR manage- number of industrialized and developing countries (World ment. As one example, requiring grantees to provide a plan Box 6.20 Hagar Soya Co., Cambodia: Multiple Benefits from an Innovative Social Business Model Hagar Soya Co. Limited (HSL) is a small enterprise in “So! Choco� have also been protected by registered Phnom Penh created in 1998 by Hagar, a nongovern- trademarks. mental charity based in Switzerland. In the mid-1990s, The company’s intellectual property strategy focuses Hagar began an income-generation, training, and almost entirely on trademarks and aims at increasing employment project for abused and abandoned the competitiveness of HSL’s products. The company women in postconflict Cambodia. The project led to considers trademarks to be effective for preventing the incorporation of HSL as one of Hagar’s small busi- unauthorized use of HSL’s marks and guarding against nesses. HSL’s first commercially successful product was counterfeiting. The competitive edge also arises from a soya milk drink sold under the brand name “So! registering a trademark to protect and increase its Soya.� The product is nutritious, affordable, and tastes value, then publicizing it through a good marketing good—all important qualities in helping local children and business strategy to enlarge the company’s market increase their protein intake in a country with very share and stimulate the development of new products. high malnutrition. Following the success of the soya The success of HSL’s trademark strategy is reflected in milk drink, the company added more soya-based items the company’s achievements, first, in marketing its to its product line. brand name through brand development of both the Initially, the commercialization of Hagar’s soya company and its products, and second, in ensuring milk was done in a rather informal way; women from lasting brand impact through quality products. Hagar’s programs produced 300 liters of fresh soya The company benefited from Hagar’s initial ability milk per day and sold it on the streets of Phnom Penh to identify the right path to incorporate income-gener- from push carts. By 2003, HSL was ready for larger- ating activities within a development project, taking scale production and the “So! Soya� trademark was into consideration the social needs of Cambodia. HSL registered with the intellectual property Department is an example of an efficient social enterprise model, of the Ministry of Commerce of Cambodia. which, according to the International Finance Corpo- Subsequent HSL products such as “So! Soya kids,� “So! ration, can be replicated by nongovernmental organi- Soya Gold,� “So! Yo,� “So! Yumme,� “So! Milk,� and zations worldwide. Source: Quoted with adaptations from WIPO, http://www.wipo.int/ipadvantage/en/details.jsp?id=2563. 486 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK demonstrating that IPR has been considered in all aspects of POLICY ISSUES the proposed activities will drive demand for building The World Intellectual Property Organization (WIPO) rec- capacity in IPR management, highlight the impact of spe- ognizes a number of policy issues related to IPRs for devel- cific IPR-related policy needs, set important standards, and oping countries and has adopted 45 related recommenda- ultimately benefit donors by reducing the risks of their tions under the WIPO Development Agenda.7 The investments. Furthermore, requiring a consideration of recommendations are grouped in the following clusters and product development beyond the research stage has the cover a number of issues relevant to this discussion, includ- advantage of identifying other technologies that may need ing: Technical Assistance and Capacity Building; Norm- to be licensed and other partners who will need to be setting, Flexibilities, Public Policy, and Public Domain; involved to deliver the products to the target population. Technology Transfer, Information and Communications IPR-related investments must be made, however, with Technologies (ICTs), and Access to Knowledge; Assessment, the recognition that IPR is only one of many factors that can Evaluation, and Impact Studies; Institutional Matters, foster or impede technology transfer. While there are key including Mandate and Governance. opportunities to address IPR issues in technology transfer, practitioners often find that risks unrelated to IPR are more challenging. These risks concern stewardship, products Coordination of IPR policies with other flowing back into commercial markets, and liability issues. innovation policies It should also be noted that, particularly for technology Policies seeking to encourage innovation for development directed toward rural populations, some form of extension are inherently dependent on many other areas of policy and services will be critical for disseminating the technology to law. Sound policies on education, trade, agricultural input the target population (World Bank 2006). subsidies, farmers’ extension services, functioning court sys- tems, and many other elements are integral to the impact of POTENTIAL BENEFITS IPR policy on agricultural development (World Bank 2006). Given the interconnectedness of IPR policies with other Investments in IPRs play a facilitating role, influencing the national policies, and given the wide variety of IPRs affect- potential impacts of many other investments in agricultural ing agriculture, it is difficult to provide specific policy rec- development. The impacts of improved handling of IPR ommendations. Countries have considerable flexibility issues, therefore, are unlikely to be directly measurable. Ben- (even within TRIPS) to adopt IPR policies that support efits to R&D activities in the public and private sectors their own specific needs, and resources exist for them to should include improved transfer of technology from pub- engage advice on policy changes. lic organizations, improved linkages between industry and While the appropriate policies will be as diverse as the academic or public research institutions, and improved range of developing countries adopting them, there are access to private sector technologies. For example, Unicamp common goals for IPR policy supporting agricultural created productive linkages between the university’s own development. These goals support benefits for the poor in R&D and industry once it established a specific TTO (mod- access to technology as well as economic development, and ule 5, TN 5). they include creating incentives for local innovation, In individual cases, benefits can often be attributed encouraging foreign direct investment, increasing connec- directly to the particular steps taken to protect the IP within tions between industry and universities or research insti- a particular project, such as the patenting of the frost con- tutes, facilitating better public-private partnerships, and trol machine (box 6.18), which allowed the inventor to enter improving the impact of public agricultural research for licensing agreements with overseas developers. This connec- the poor. tion can also be seen in commercial enterprises, where suc- cess is determined by the creation of a particular brand associated with a certain quality of product. Box 6.20 A functional legal system and extension service described how a small NGO in Cambodia became a suc- The major precondition for any development of IPRs is a cessful enterprise by trademarking its products. Although functional legal system under which IPRs and other legally the success of this enterprise depended on a wide range of binding agreements, especially contracts, can be enforced. factors, trademark protection was an enabling part of the IPRs are a property right, and developing respect for prop- business strategy. erty rights further contributes to social justice and the rule MODULE 6: THEMATIC NOTE 3: MANAGING INTELLECTUAL PROPERTY TO FOSTER AGRICULTURAL DEVELOPMENT 487 of law in a country (Cavicchi and Kowalski 2007). As noted, Legislation has to be passed and enforced but is extension services are another precondition; introducing not sufficient on its own technology and innovation into research is pointless if the For low-income countries, the impact of IPR policies is outcomes are not transferred to farmers and have no often dwarfed by other factors that have a far more direct impact on poverty (World Bank 2006). Access to improved effect on innovation, including lagging investment in edu- products is a major equity issue that must be addressed cation, institutional and infrastructural challenges, limited within individual projects, but for products that have a access to financing, and the effects of a range of other busi- direct commercial value and will be marketed through the ness development policies. In response to TRIPS, most private sector, high royalties may have detrimental effects countries have passed IPR legislation, but few have gone on on access. In this case, IPR legislation can include compul- to create a culture of innovation. To take this next step, the sory licensing mechanisms to increase access and/or reduce value of protecting and using innovation must be under- the market price. stood within a society. Government support for innovation (box 6.18) that leads to the development of specific prod- Environmental issues ucts is one way to demonstrate the value of IPRs to a wide cross-section of society. Given the wide-ranging impact of IPRs on rural develop- Investments related to IPRs are focusing on legal systems ment, it is difficult to provide specific policy recommenda- of developing countries, based on the understanding that the tions with respect to environmental issues. In most cases, ultimate impact of any IPR depends on how it is enforced. access to improved technologies is expected to improve IPR legislation must be supported by well-functioning insti- rural productivity. Productivity improvements may have tutions (courts, patent offices, and the like) if IPRs are to both positive and negative environmental implications, but provide any incentive for innovation, but these critical the major factor in environmental damage is often the lack investments in institutional capacity will have more impact of better alternatives. If farmers have better alternatives to if they are designed to support the interactions of institutions current practices, they may be able to take better care of and staff with a rapidly changing IPR environment. Examples their land, use other resources more efficiently, and con- include investments in improved capacity to negotiate inter- tribute to greater environmental sustainability. national treaties, increased support for connections to inter- national networks of professionals, and improved access to Roles of public and private sectors research and expertise specifically targeted at IPR issues in developing countries. Since the major rationale for a society to develop IPRs is to provide an incentive for individuals and organizations to invest in innovation by increasing the likelihood of a Managing property rights in public institutions return, IPRs will directly affect the private sector’s involve- is critical ment in agricultural development. IPRs help connect coun- In agricultural development, public institutions are central tries to the global innovation marketplace, which includes to the development and adoption of innovations that will both private and public actors. At the same time, giving benefit the world’s poor. The role of the public sector in agri- public institutions responsibility to protect their inventions cultural development has shifted considerably over recent (as well as license them) increases technology transfer. For decades: grants are for shorter terms and focus more tightly this reason, there is a major role for the public as well as the on projects; engagement with the private sector is increas- private sector in developing an IPR system that is relevant ingly a necessity; and organizations operate in a complex to national needs. web of IP and regulatory law frameworks. The public sector has lagged considerably in understanding how IPR policies and practices affect its role in development goals. LESSONS LEARNED In public organizations, capacity for IPR management is As discussed, a wide range of actions and investments can often a low priority due to resource constraints, limitations support the management of IPRs to promote agricultural on available expertise, and a lack of receptivity among development. The following sections summarize lessons some managers to embrace IPRs as an important compo- learned over the years as new strategies in IPR management nent of their development work. This lack of capacity can were used to achieve specific socioeconomic goals. lead to mistakes and missed opportunities in licensing, 488 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK partnership agreements, and strategic management of to promote a local industry. Often these are temporary innovations. From the donors’ perspective, lack of IPR measures used to assist in strategic development, because management can lead to delays, potentially reduced they may be considered to be in breach of trade rules, but impact, or sometimes the halting of a project altogether. where a case can be made for a special need, exemptions are Conversely, good capacity for IPR management reduces the an important option to consider. risk for donors’ R&D investments. RECOMMENDATIONS FOR PRACTITIONERS Humanitarian licensing models need more work The recommendations that follow are intended for policy Licensing language that supports “humanitarian uses� of makers as well as practitioners (researchers, managers, and proprietary technologies permits them to be used for appli- experts who encounter IP issues at the institutional or proj- cations important to international development while pre- ect level). The recommendations complement the earlier serving the technology owner’s commercial market, yet such section on “Actions Needed,� which identifies key areas for language is not widely used. Much work remains to be done investment, and should be kept in mind by practitioners as to move from “model language� to language integrated into aspects of IPR arise in projects. working licenses. In addition to IPR provisions, humanitar- ian use licensing has not yet adequately addressed key issues Create diverse opportunities for IPR training that repeatedly arise in public-private partnerships, such as liability. Policy makers as well as those at the institutional level can Emerging markets represent a further licensing chal- articulate the need to raise awareness of IPR issues across lenge. So far, many models of humanitarian licenses depend many fields of science and technology. Scientists, engi- on territorial distinctions. This strategy can leave countries neers, IP managers, government officials, administrators, like Brazil, India, and China out of a geographically defined and many others can benefit from improved understand- region for humanitarian use, despite the large populations ing of the role of IPRs in agricultural development. The of very poor people in these countries. Legal strategies must roles that IPRs play, however, and the levels at which they be improved to allow the poor in these countries to benefit may be encountered are highly diverse, which suggests from technologies that are accessed under humanitarian use that a broad range of training options should be consid- licenses. ered. For example, box 6.21 details the development of a small enterprise from an NGO-led project to generate income. In this case, IPR awareness training was incorpo- Flexibility is crucial for future success rated into the business planning for the project so that One-size-fits-all solutions to IPR management work in lim- participants would understand the options for protecting ited situations to reduce transaction costs, but over the any IP. Where a producer organization is involved, such as years it has become clear that most IPR management at the the Colombia Coffee Federation (box 6.19), the organiza- institutional level requires project-specific consideration of tion’s needs may best be served by identifying specific the partners, technologies, countries, and many other individuals to receive more specialized training in legal details. Patent pools, patent commons, clearinghouses,8 aspects of managing IPRs. and model licenses do have great value, but the standard- In addition, practitioners can work to ensure that train- ized approach must be complemented with (1) the flexibil- ing for particular professionals continues—for example, ity to modify the IPR strategy and (2) access to resources to through engagement with an international community. support good strategic management. At the policy level, Training within a South–South context can be particularly similarly, the complex differences among countries necessi- valuable for professionals to compare the challenges and tate careful assessment of tailored IPR policy solutions. As solutions related to IPRs in developing countries. Where the noted, the level of development of a particular industry establishment of technology transfer offices is being consid- may warrant some kind of special exemption, particularly ered, exchange programs with existing offices can be highly if the industry is considered of strategic importance. Such beneficial and help to forge long-term links between insti- exemptions have most often been seen in the pharmaceuti- tutions. Box 6.21 includes examples of investments in train- cal industry, where exemptions from patent protection for ing IP professionals with funding from national agencies certain drugs or even whole classes of drugs have been used and donors. MODULE 6: THEMATIC NOTE 3: MANAGING INTELLECTUAL PROPERTY TO FOSTER AGRICULTURAL DEVELOPMENT 489 Box 6.21 Country and Donor Investments in Intellectual Property Training for Professionals In-depth training. Since its founding in 1998, the at locally based organizations. The Intellectual Property World Intellectual Property Organization (WIPO) Office of Singapore (IPOS, www.ipos.gov.sg) funds the Academy (http://www.wipo.int/academy/en/) has costs of the program jointly with local organizations. offered a wide range of courses on intellectual property India’s National Institute of Intellectual Property Man- and intellectual property management. In addition to agement (NIIPM, www.ipindia.nic.in), in the Ministry short workshops, the academy provides key support for of Commerce and Industry, provides training to R&D degree and certificate programs in many developing managers, scientists, legal professionals, patent agents, countries. For example, in 2010 Zimbabwe’s African researchers, doctors, engineers, and others. University (in collaboration with WIPO and the Practical knowledge. As part of its bilateral develop- African Intellectual Property Organization) graduated ment assistance, the Swedish International Develop- the first class of students with a master’s degree in intel- ment Cooperation Agency (SIDA, www.sida.se) offers lectual property. around 100 Advanced International Training Pro- South–South training. The International Intellectual grammes every year targeted at practitioners in the Property Training Institute (IIPTI, http://iipti.org/), field. These programs frequently cover various IPR part of the Korean Intellectual Property Office, trains issues, including topics such as genetic resources and professionals from Malaysia, Vietnam, and other devel- IPRs, industrial property in the global economy, and oping countries within the region. India, South Africa, intellectual property for least developed countries. The and Brazil play key roles as regional leaders with the Public Intellectual Property Resource for Agriculture capacity to share IPR knowledge specific to the chal- (PIPRA, www.pipra.org) provides training and educa- lenges faced by developing countries. tional materials (see the ipHandbook, www.iphand- Targeting diverse professionals. Singapore’s Men- book.org) to developing-country scientists, intellectual torship Funding Scheme brings in qualified patent property managers, and policy makers, with a focus on agents from overseas to mentor and train professionals providing tools for practicing intellectual property. Source: Authors. When developing training programs, it is essential to clarity around confidentiality issues, and the flexibility for consider that the trained professionals will need some form management to implement a strategic IPR management plan. of employment in a setting where they can use the skills they EMBRAPA9 in Brazil has created such policies, which enabled have learned. Significant resources have been wasted by it to make licensing deals with a number of multinational training people who have no opportunities to apply their companies as well as local seed producers and assume a signif- knowledge; these misdirected efforts further erode the icant role in soybean variety development (Fuck and Banacelli impression that IPRs should be taken into account. TTOs 2009). Policy makers should continue to explore IP policy provide a focus for training individuals and can also employ options through the lens of creating incentives for public and them in a role that enables them to maintain their involve- private collaboration in agricultural development. ment in this field. Balance in-house capacity with prudent use of Promote collaboration among public external services and private partners The IPR management capacity needed to meet the challenges Practitioners working at the institutional level should seek to of coming decades does not exist in sufficient depth, even in ensure that institutional IP policies support partnerships industrialized countries. In the private sector, due diligence,10 between public and private organizations. Such policies might the negotiation and drafting of agreements, and strategic IPR include, for example, a clear set of principles to govern legal management are all regular practices (see IAP 2). Universities, relationships with partners, processes to assess risk in partner- nonprofits, governments, international aid agencies, and ships, transparency mechanisms to enable good governance, philanthropic foundations have excellent expertise in IPRs. 490 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Yet the capacity for both strategic management of IPRs and IP as well as for licensing. In module 5, TN 5 addresses the the day-to-day work of IPR practitioners is not as common as role of TTOs in agricultural development, where the cre- it needs to be. In such cases, external sources are commonly ation of a TTO represents an opportunity to foster an employed for a number of specialized tasks, such as legal enabling environment for innovation and provide opportu- opinions on freedom to operate and drafting of patent sub- nities for training (including raising awareness of IPR missions. Practitioners should consider this option when among scientists and administrators). For some institu- dealing with specific investments that may have detailed tions, the costs of creating and managing a technology requirements for IPRs. The use of external services may be a transfer office, investing in a portfolio of IPRs, and (impor- much more cost-effective option for certain tasks. tantly) having the resources to enforce those IPRs, may not One investment discussed earlier was the creation of a be feasible, and they will need to explore other options for TTO in an institution to serve as a focal point for protecting developing capacity in IPR management and training. MODULE 6: THEMATIC NOTE 3: MANAGING INTELLECTUAL PROPERTY TO FOSTER AGRICULTURAL DEVELOPMENT 491 T H E M AT I C N O T E 4 Biosafety Regulatory Systems in the Context of Agricultural Innovation Morven McLean, ILSI Research Foundation SYNOPSIS 2008) but also because of inadequate capacity to enforce regulatory compliance (Pray et al. 2006). Biosafety regulation is a multidisciplinary, multifunctional The converse may be argued as well, however. A well- endeavor that should take into account the broader context defined biosafety regulatory system that is consistent in its of agricultural production and innovation. Investments application (that is, the assessment, decision-making, and needed to operationalize a biosafety regulatory system enforcement processes are not arbitrary) can be a power- should promote interministerial cooperation, sound and ful stimulus for investments in this area. For example, pragmatic policy development, scientifically defensible risk Brazil has seen public and private investments increase in assessment and risk management, rational inspection and agricultural biotechnology since it passed the Biosafety enforcement activities, and meaningful stakeholder consul- Law in 2005 (BrBiotec 2010). The new law clarified the tation and public participation. Efficiencies can be gained regulatory remits of various ministries and clearly defined through the cross-utilization of national or regional exper- the roles and responsibilities of the two regulatory author- tise, regional harmonization, and ensuring that the design ities, the National Biosafety Council (CNBS, Conselho of a biosafety regulatory system takes into account pro- Nacional de Biossegurança) and the National Biosafety grammatic and operational costs, including opportunity Technical Commission (CTNBio; Comissão Técnica costs that may arise from overregulation. Nacional de Biossegurança). The law ended a five-year moratorium on approvals of GE crops that arose from differences in governmental and BACKGROUND AND CONTEXT judicial interpretation of pre-2005 legislation (Cardoso To date 22 countries have approved genetically engineered et al. 2005). The moratorium, in turn, contributed to wide- (GE) plants for cultivation or consumption (CERA scale cultivation of illegal (unapproved) GE soybeans. Since 2010a). In 2010, 148 million hectares (366 million acres) 2005, Brazil has approved 20 GE cotton, soybean, and maize were planted to GE crops, largely soybeans, cotton, maize, lines for commercial cultivation; prior to 2005 it had and canola (James 2010). Common to all countries where approved only 1 (CERA 2010a). GE crops are cultivated is a system to regulate these prod- A functional biosafety regulatory system is a prerequisite ucts and especially to ensure that they are evaluated with for realizing the benefits that agricultural biotechnology can respect to human health and environmental safety (com- (and does) provide to poor producers and poor consumers in monly referred to as biosafety) prior to their commercial developing countries (World Bank 2007). Ultimately, envi- release. ronmental and human health protection is the overarching The regulation of products of agricultural biotechnol- priority of any biosafety regulatory system, and confidence in ogy, particularly GE crops, has been identified as a con- the decisions that governments make on behalf of the public straint to innovation in this sector, largely because of the is a precondition for public acceptance and adoption of agri- costs of meeting information and data requirements pre- cultural biotechnology products. Strategic investments in scribed by regulatory authorities for assessing the safety of programs that foster adaptability, transparency, clarity, and GE plants (Cohen and Paarlberg 2004; Kalaitzandonakes, workability in the development and implementation of Alston, and Bradford 2007; Matten, Head, and Quemada regulatory systems also foster agricultural innovation. 492 INVESTMENT NEEDED ■ Conduct an assessment and gap analysis of national development priorities, agricultural policies, existing Investments in support of biosafety regulation may be regulatory regimes, and national and regional scientific needed for any or all stages in the typical progression of and technical means necessary for a biosafety regulatory events that lead to the development and implementation of system to function. a regulatory system. Key issues and policy options for these ■ Build a strong base of scientific knowledge in support of stages were described in a conceptual framework for the regulatory system and the development of core com- biosafety regulation (McLean et al. 2002); World Bank petencies in biotechnology product evaluation (box 6.22). (2003) presented examples for individual countries. In sum- ■ Develop biosafety regulations to effect specific public mary, the key stages are: policy goals (as articulated in a national biosafety or even biotechnology strategy). ■ Elaborate a national policy consistent with other objec- ■ Implement regulations through the operationalization tives related to economic, social, and rural development, of the biosafety regulatory system. natural resource management, and environmental pro- ■ Address cross-cutting issues that are common to each tection and sustainability. stage in the development and implementation of a Box 6.22 Building Human Resource Capacity for Biosafety Risk Assessment The type of human resource capacity needed to imple- implementation of the National Biosafety Policy for ment a biosafety regulatory system generally, and its GMOs and derived products, and for establishing tech- risk assessment function specifically, is particular to nical safety standards and technical opinions regarding each country. No standardized lists of human resource the authorization of activities that involve research and requirements specific to individual disciplines exist. It commercial use of GMOs and derived products.� can be instructive, however, to examine how other CTNBio is comprised of 27 members: countries have approached this issue. In India, the Risk Assessment Unit of the proposed ■ Twelve specialists (PhDs recommended by scientific Biotechnology Regulatory Authority of India will be organizations). permanently staffed by a multidisciplinary team of sci- ■ Nine government officials appointed by the follow- entists responsible for undertaking science-based risk ing agencies: Ministry of Science and Technology; assessments of specific products. The Risk Assessment Ministry of Agriculture, Livestock, and Food Sup- Unit will comprise thematic cells. The expertise for the ply; Ministry of Health; Ministry of the Environ- two cells pertinent to the regulation of genetically engi- ment; Ministry of Development, Industry, and neered crops is: Foreign Trade; Ministry of External Relations; Min- istry of Agrarian Development; Ministry of Defense; ■ Core characterization: Molecular biologist, toxicol- and Special Office of the President for Aquaculture ogist, microbiologist, biochemist, bioinformatics and Fisheries. specialist, biostatistician. ■ Six members appointed as follows: one specialist in ■ Plant biotechnology: Plant physiologist, plant consumer rights by the Ministry of Justice; one spe- pathologist, entomologist, agronomist, and plant cialist in human health by the Ministry of Health; breeder. one specialist in environment by the Ministry of the Environment; one specialist in biotechnology by the In Brazil, the National Biosafety Technical Commis- Ministry of Agriculture, Livestock, and Food Sup- sion (CTNBio, Comissão Técnica Nacional de Biosse- ply; one specialist in family agriculture by the Min- gurança) provides technical support and advice to the istry of Agrarian Development; one specialist in federal government “in the formulation, updating, and worker’s health by the Ministry of Labor. Source: DBT 2008; Government of Brazil 2005. MODULE 6: THEMATIC NOTE 4: BIOSAFETY REGULATORY SYSTEMS IN THE CONTEXT OF AGRICULTURAL INNOVATION 493 national biosafety system, especially the human, financial, unanticipated events, such as trade disruptions that can and infrastructure resources to: develop and implement a occur as a result of accidental (or sometimes deliberate but national biosafety system; support the infrastructure illegal) transboundary movement of GE commodities into a required (such as buildings, equipment, and computers); jurisdiction where there is no approval for that GE crop or facilitate communication and public participation; train derived food. For example, continued delays in the deploy- scientific and regulatory personnel; and foster the research ment of pro-vitamin A rice (“Golden Rice�) have been required to assure that risk assessments are sound. attributed exclusively to biosafety regulation by the product developer (Potrykus 2010). POTENTIAL BENEFITS POLICY ISSUES Investments in support of developing biosafety regulatory Key policy considerations include: capacity have the potential to provide many positive spillovers into related areas. These areas include public agri- ■ Coordination of biosafety laws and regulations with cultural research, extension services, and plant health and existing legislation related to environmental protection, quarantine programs. human health, agricultural production, IP protection, Private developers of GE crops, particularly multinational and trade. companies, are generally disinterested in entering markets, ■ Interministerial coordination to ensure that concerns even where there is farmer demand for these crops, unless an and remits are carefully considered during the establish- operational (and predictable) biosafety regulatory system is ment of a biosafety regulatory system. Responsibilities in place. More critically, publicly funded and donor-funded and mandates of all involved ministries should be clearly initiatives that focus on improving the productivity of staple communicated. crops using biotechnology will be unsuccessful unless there ■ Multilateral environmental agreements, particularly the is a clear path forward that ensures improved crop varieties Cartagena Protocol on Biosafety, must be considered will actually move from laboratory to field trials to farmers. during the development or revision of biosafety legisla- (Although when the technology does reach farmers, the tion (box 6.24). impact can be significant; see box 6.23.) ■ Trade: Biosafety legislation should not promote practices Highly precautionary regulations may be the most sig- that may be considered or may result in impediments to nificant barrier to innovation in agricultural biotechnology, trade. as they price the technology out of the hands of the public ■ Resources—financial, human, and institutional—need sector and SMEs. These costs include the direct costs of reg- to be considered before developing the regulatory system ulatory compliance as well as indirect costs associated with because they can, and should, influence its construction. Box 6.23 Who Benefits from Agricultural Biotechnology? It is difficult to quantify the benefits of regulating prod- genetically engineered technology). According to this ucts of agricultural biotechnology, but the economic study, farmers in developing countries paid 14 percent impact from commercializing many genetically engi- of technology gains, whereas farmers in developed neered crops has been studied. Brookes and Barfoot countries paid 34 percent of their gains. The higher reported that in 2007, the total cost farmers paid for share of total technology gains accounted for by farm genetically engineered soybean, maize, cotton, and income gains in developing countries relative to the oilseed rape was equal to 24 percent of the technology farm income share in developed countries reflected fac- gains (inclusive of farm income gains plus the cost of tors such as IPRs in developing countries and the the technology payable to the seed supply chain, com- higher average level of farm income gain on a per- prised of sellers of seed to farmers, seed multipliers, hectare basis derived by developing country farmers plant breeders, distributors, and the providers of relative to developed country farmers. Source: Brookes and Barfoot 2009. 494 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK ■ Regional coordination and harmonization of elements ■ Biosafety regulation can be rationalized through the pro- of the regulatory system should be considered and/or motion and acceptance of international risk assessment pursued, as harmonization has the potential to: reduce standards. regulatory disparities between countries; reduce the regu- latory burden on national governments and the regulated The next sections address each of these points in detail. community; and facilitate trade within region (see IAP 3). Building capacity to develop and implement LESSONS LEARNED AND RECOMMENDATIONS biosafety regulatory systems requires a FOR PRACTITIONERS multiyear commitment The previous sections have described the often complex Workshops, symposia, and conferences can be valuable in interface between agricultural innovation and biosafety reg- raising awareness or catalyzing discussions that may ulations. Lessons related to developing and implementing inform the development of strategic programs, but they biosafety regulations can be summarized briefly: cannot replace continued and meaningful engagement with those who are tasked with the responsibility of actu- ■ Building capacity to develop and implement biosafety ally developing and implementing the regulatory frame- regulatory systems requires a multiyear commitment. work (a task requiring considerable time, coordination, ■ Interministerial coordination is a prerequisite for suc- and expertise; see box 6.24 for an example from India). cessful development of a biosafety regulatory system. Identifying in-country partners and investing in longer- ■ Investments in biosafety regulatory capacity can be strate- term capacity building for key individuals, including pol- gically applied to benefit other regulatory programs. icy makers and opinion leaders, contributes to systemic ■ Biosafety regulatory systems should incorporate provi- versus transient gains. Experience has shown that the will- sions for change. ingness of these individuals to understand the impact of, ■ Investments to develop biosafety regulatory systems and provide an enabling environment for, (cost)effective should accompany investments in agricultural biotech- biosafety regulation is critical (see box 6.25 for an example nology research. from Uganda). Box 6.24 The Development of Genetically Engineered Food Safety Assessment Guidelines in India The South Asia Biosafety Program (SABP) has assisted engineered plants. The conference offered an opportu- the Governments of Bangladesh and India to further nity for stakeholders and technical experts from a num- strengthen their institutional governance of biotechnol- ber of sectors to exchange experiences and views. ogy since 2004. In India, the program started with stake- ICMR then hosted a multisectoral stakeholder con- holder consultations and a gap analysis of the current sultation that achieved consensus on making the safety biosafety regulatory system. The analysis identified the assessment of genetically engineered foods in India need for comprehensive safety assessment guidelines for consistent with the internationally accepted Guideline foods derived from genetically engineered plants and for the Conduct of Food Safety Assessment of Foods for technical training in conducting food safety assess- Derived from Recombinant-DNA Plants adopted by ments according to international standards. the Codex Alimentarius in 2003. ICMR formed a The Indian Council of Medical Research (ICMR), drafting committee with representation from several the technical arm of the Ministry of Health and Family ministries and departments and formulated draft Welfare, in partnership with SABP, undertook a series of “Guidelines for the Safety Assessment of Foods Derived activities over the next several years aimed at meeting from Genetically Engineered Plants.� this need. It began with an international conference on The draft guidelines were circulated to technical safety assessments for foods derived from genetically experts for input and reviewed by India’s Review (Box continues on the following page) MODULE 6: THEMATIC NOTE 4: BIOSAFETY REGULATORY SYSTEMS IN THE CONTEXT OF AGRICULTURAL INNOVATION 495 Box 6.24 The Development of Genetically Engineered Food Safety Assessment Guidelines in India (continued) Committee on Genetic Manipulation and Genetic concepts and principles of genetically engineered food Engineering Approval Committee before being safety assessment and the methodology outlined in the posted for public comment. Stakeholders’ comments new guidelines. were addressed, and the guidelines were reviewed From inception to completion, the process of devel- once again by both committees before their final oping new food safety guidelines and ensuring their adoption in 2008. The end result is a guidance docu- implementation under existing authority in India took ment that is consistent with internationally accepted four years. The long-term collaborative relationship practices for assessing the safety of genetically engi- between ICMR and SABP contributed to the success of neered food. this endeavor. SABP, particularly through strong in- ICMR also collaborated with SABP to conduct tech- country partnerships, supported ICMR’s commitment nical workshops providing in-depth, hands-on training to developing new guidelines by providing not just about key requirements for the safety assessment of technical expertise on food safety assessment, but also foods derived from genetically engineered plants. The institutional support to ICMR and Indian regulatory training ensured that scientists and regulators, as poten- committees as they took the guidelines through review, tial risk assessors and science advisors, understood the adoption, and implementation. Source: McLean 2010; CERA 2010b. Box 6.25 Advancing Agricultural Biotechnology in Uganda: It Takes More Than Good Science Uganda has spent almost fifteen years working to develop product commercialization will not advance in Uganda a functional biosafety regulatory system that will promote until the national Biosafety Bill is promulgated. The an enabling environment for research, development, and process of preparing the Biosafety Bill began in 2003. deployment of genetically engineered crops. The country The Bill was finalized in 2007, approved by the Cabinet was an early recipient of Global Environment Facility in 2008, and currently awaits submission to Parliament. support to develop a National Biosafety Framework. The An analysis of the reasons for this protracted process process started in 1998, three years before Uganda ratified found that a combination of market, policy-political, the Cartagena Protocol on Biosafety and five years before and sociocultural factors are hindering progress, such as: the Protocol came into force. Since then, the Ugandan regulatory and science com- ■ Lack of sustained and coordinated political champi- munities have benefitted from significant national and ons to move the bill forward. international investments that have supported both ■ Lack of clarity among ministries regarding regula- human and institutional resource development, such as tory roles and responsibilities. enhanced technical capacity for product development, ■ Influence of antibiotechnology organizations. management of confined field trials, and premarket risk ■ Complex and diverse institutional players. assessment. The incremental gains achieved through ■ Poor product development strategies, leading to these interventions have been confounded by continued delays in driving the operationalization of the delays in operationalizing the regulatory system, partic- biosafety regulatory system. ularly the passage of national biosafety legislation. Uganda provides an all too common example of a The last bullet may now be a significant catalyst country where innovation in agricultural biotechnology for movement on the Biosafety Bill. Using existing is not necessarily limited by science but by political, legislation, Uganda has approved confined field social, and market barriers. It is generally accepted that trials of genetically engineered cotton, banana, and (Box continues on the following page) 496 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 6.25 Advancing Agricultural Biotechnology in Uganda: It Takes More Than Good Science (continued) cassava. These and other pipeline products such engineered crops approaching commercialization as drought-tolerant maize are all considered impor- may be the incentive needed to achieve multistake- tant for Uganda’s agricultural productivity and sus- holder, and consequently political, support for the tainability. Having farmer-supported, genetically Biosafety Bill. Source: Horna et al. 2012, forthcoming; AATF 2010. A shortcoming of many capacity-building projects is that Interministerial coordination is a prerequisite for they support the drafting of biosafety frameworks, legisla- successful development of a biosafety regulatory tion, or related documents but do not provide the follow-on system support to finalize, adopt, and then implement the sys- International support for the establishment of biosafety reg- tem(s) prescribed in these documents (Chapotin, McLean, ulatory systems has favored the creation of new regulatory and Quemada 2009). For example, 123 countries partici- entities under ministries other than agriculture. Particularly pated in the Project on Development of National Biosafety influential in this regard is the Cartagena Protocol. Because Frameworks sponsored by the United Nations Environment of its relationship to the Convention on Biological Diversity, Programme and Global Environment Facility (UNEP-GEF). the Protocol has largely been implemented through ministries Designed to help countries comply with the Cartagena Pro- of environment. Agricultural biotechnology regulation tocol, the project was active from 2001 to 2009. Of the 38 intersects the mandates and interests of multiple ministries, African countries that completed their national biosafety especially agriculture but also ministries of science and frameworks under this project, only three have regulatory technology, environment, health, and trade. systems that can be considered operational: Tanzania and Investments in the development of biosafety regulatory Nigeria have authorized confined field trials (although Tan- systems should explicitly require meaningful interministerial zania’s approvals pre-dated their National Biosafety Frame- consultation and a clear delineation of roles and responsibil- works project) and Burkina Faso has assessed and approved ities between competent authorities. Otherwise, different a GE plant for commercial release (insect-resistant cotton in ministries develop parallel and often redundant or conflict- 2008). The transition of countries from the framework ing regulatory requirements that ultimately increase the reg- development projects to the follow-on UNEP-GEF Project ulatory burden on product developers. Rational regulation is on Implementation of National Biosafety Frameworks was achievable if the overarching purpose of biosafety regulation limited to 19 countries. (that is, human and environmental safety) drives the devel- Interventions should be tailored to country needs, but opment of the regulatory system and is not tied to political many large capacity-building programs, such as the or financial gain by specific ministries. National Biosafety Frameworks project, implement a com- Interministerial coordination, while necessary, is difficult mon project model. Investments should first support a to obtain in practice. As indicated during the 2003 Sub- comprehensive needs assessment and gap analysis to iden- Regional Workshop for Latin American Countries on the tify and prioritize interventions that will further the opera- Development of a Regulatory Regime and Administrative tionalization of a functional regulatory system. In addition Systems, the primary conflict identified for the implementa- to evaluating the national situation, it is important also to tion of national biosafety frameworks was coordination of critically consider capacity building or related initiatives the administrative tasks and competencies of the institu- that may be happening regionally or internationally and tions involved in them (UNEP 2003a). This issue was also whether these may assist or constrain follow-on activities. stressed in a similar workshop for Asian countries, where it The needs assessment should also take into account the was noted that “much of the administrative system seemed broader context of agricultural production and innovation, to be in place in many countries, and that coordination was because biosafety regulation is but one part of that larger the major challenge where different agencies were working system. separately� (UNEP 2003b) (box 6.26 presents an example MODULE 6: THEMATIC NOTE 4: BIOSAFETY REGULATORY SYSTEMS IN THE CONTEXT OF AGRICULTURAL INNOVATION 497 Box 6.26 Interministerial Coordination in the Biosafety Regulatory System of Bangladesh In Bangladesh, the biosafety regulatory system is still in inputs from key ministries. Because of this action, no a developmental stage, although institutional proce- further government debate is considered necessary for dures cover R&D and the review and approval of foods approval. derived from transgenic plants. The system is based on Guidelines for confined (experimental) field trials a National Biosafety Framework document, developed of genetically engineered plants have also been pre- with UNEP-GEF funds in 2004–06, which draws on a pared through the cooperative efforts of the Depart- set of Biosafety Guidelines initially published by the ment of Environment (DoE in MoEF) and the Ministry of Science and Technology in 1999. With the Bangladesh Agricultural Research Council, Ministry of ratification of the Cartagena Protocol by Bangladesh in Agriculture (MoA). The guidelines include procedures 2004, responsibility shifted to the Ministry of Environ- for applications, standard operating procedures, and a ment and Forests (MoEF), and the Biosafety Guidelines guide for inspections of confined field trials by officials were redrafted to incorporate certain obligations of the appointed by MoEF. These guidelines have been Cartagena Protocol. The revised guidelines were pub- approved by the NCB and published as an annex to the lished in 2007. Biosafety Guidelines. In 2009 guidelines for genetically Under the Biosafety Guidelines, the competent engineered food safety assessment were prepared that authority is the interministerial National Committee are consistent with Codex (2003). NCB approved them on Biosafety (NCB). The subordinate Biosafety Core in 2010, and they will be published as an appendix to Committee operates as a scientific review body and so the Biosafety Guidelines. far has been asked by the NCB to provide input into all Bangladesh’s biosafety regulatory system, while still its decisions. To lend enforcement power to MoEF, a young, has made significant progress. Confined field Biosafety Rule has been drafted that incorporates the trials are now being approved and applications for Biosafety Guidelines and brings them under the formal commercial release are considered imminent. Intermin- jurisdiction of the Environment Conservation Act. This isterial cooperation, particularly between DoE of MoEF Biosafety Rule was prepared by a drafting committee and the Bangladesh Agricultural Research Council of convened by MoEF that sought to proactively include MoA, has been integral to the success achieved to date. Source: Author. from Bangladesh). For the majority of countries, both single Plant and Biotechnology Risk Assessment Unit. This developed and developing, internal coordination between action was taken to align biosafety and phytosanitary risk competent authorities remains a significant issue that has assessments, leverage complementarities in the scientific yet to be resolved. expertise required for both, and improve procedural consis- tencies (P. Macdonald, personal communication). Investments in biosafety regulatory capacity Investments should strengthen the scientific and knowl- can be strategically applied to benefit other edge base in ways that will provide benefits that extend regulatory programs beyond biosafety risk assessment and decision making. Many The shared nature of many of the regulatory functions of developing countries have only a transient need for biosafety plant health and quarantine programs and biosafety pro- risk assessment per se, because regulatory authorities may grams (such as risk assessment, monitoring, and inspection) receive an application for a field trial or premarket approval means that there is an opportunity to apply investments for only once a year or once every few years. Investments in edu- biosafety regulatory capacity building to strengthen plant cation and research in the scientific disciplines that support health and quarantine systems (and vice versa) so that the biosafety risk assessment and regulation, especially in the objectives of both can be achieved without building redun- agricultural sciences, will have wide-reaching payoffs, how- dant administrative and operational services. For example, ever. Efficiencies can be gained through the cross-utilization the Government of Canada recently combined the risk of expertise within a country or even through pooling human assessment functions for GE plants and plant health into a resources with neighboring countries. 498 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Biosafety regulatory systems should incorporate regulatory pump,� such as applications for R&D activities in provisions for change laboratories, field trials of experimental GE products (trans- The regulation of products of modern biotechnology is a genic plants, insects, or fish, for example) or applications for relatively new arena for governmental oversight. Advances environmental, food, and/or livestock feed safety assess- in biotechnology processes and products, experience gained ments prior to marketing a product. Of the 38 African in regulatory operations over time (both nationally and countries mentioned previously, few have substantive pub- internationally), the globalization of agricultural trade, and lic research programs in agricultural biotechnology, and the influence of multilateral agreements and international many are not considered priorities for private biotechnol- standard-setting bodies require biosafety regulatory systems ogy investment. to accommodate change (box 6.27). For example, embed- The lack of substantive private or public R&D, even more ding detailed technical provisions about risk assessment than resource constraints, may explain why so few countries into laws versus guidance impedes regulators’ ability to have implemented national biosafety frameworks. In effect, accommodate new knowledge or advances in risk assess- there is an absence of demand to drive regulatory develop- ment approaches, as revising legislation is considerably ment (or reform) forward, and policy makers’ attention is more burdensome than amending guidance. redirected to existing priorities (with notable exceptions, as in Burkina Faso; see box 6.28). Another definite require- ment is the political will to move the regulatory system for- Investments to develop biosafety regulatory systems should accompany investments in ward so that decisions, particularly about product-specific agricultural biotechnology research approvals, are actually taken. Implementation cannot be meaningfully initiated unless applications related to GE products are ready to “prime the Biosafety regulation can be rationalized through the promotion and acceptance of international risk assessment standards Box 6.27 Adaptability in Biosafety Regulation: The Gene Technology Act in Australia The building of sufficient risk assessment capacity is a par- ticular problem in countries that do not have a base of sci- entific expertise in biosafety. The development of a In 2001, the Gene Technology Act, 2000 intro- regional or subregional approach to risk assessment may duced a national scheme for the regulation of be the most practical and cost-effective option in such genetically engineered organisms in Australia. It cases. This approach can be facilitated by the active partic- included a statutory requirement (Section 194) for ipation of competent authority representatives in interna- an independent review of the operation of the act, tional forums such as the Codex ad hoc Intergovernmen- including the structure of the Office of the Gene tal Task Force on Foods Derived from Biotechnology and Technology Regulator (the OGTR), by the fifth the OECD Working Group on Harmonization of Regula- anniversary of the act coming into force. The tory Oversight of Biotechnology, where criteria for risk review was based on issues raised during extensive assessment harmonization are discussed and guidance or national public and stakeholder consultations, standards established. Vietnam developed its own practical submissions made in response to the terms of ref- erence for the review, site visits to laboratories and approach (in this case to assess risks of GE food), based on field trials, experience gained by OGTR personnel a review of risk assessments conducted in other countries during the first four years of the act’s implementa- (box 6.29). tion, international developments in biotechnology, Rationalization can also be achieved during the design of and related reports and literature. The review a biosafety regulatory system. Policy options should be eval- found that the act’s flexibility to deal with chang- uated to take into account not just the government’s over- ing circumstances and emerging technologies was arching human health and environmental protection goals sufficient but that the act should be reviewed again but also the costs of sustaining a system that can realistically in five years to ensure that it continues to accom- achieve those goals. These costs include the opportunity modate emerging trends. costs associated with overregulation. Identifying the fund- Source: GTRS 2006. ing mechanisms required to sustain a regulatory system can be an effective tool in rationalizing its complexity. MODULE 6: THEMATIC NOTE 4: BIOSAFETY REGULATORY SYSTEMS IN THE CONTEXT OF AGRICULTURAL INNOVATION 499 Box 6.28 The Approval of Bt Cotton in Burkina Faso Burkina Faso is sub-Saharan Africa’s largest cotton pro- cotton varieties were approved by Burkina Faso’s ducer. Cotton accounts for 30–50 percent of the coun- National Biosafety Agency (ANB, Agence Nationale de try’s export earnings and is the main source of foreign Biosécurité) for commercial release. Comparisons in exchange. In many rural areas where poverty is high, 2008 and 2009 showed that Bt cotton yielded 30 per- the sale of cottonseed is the main or only source of cash cent higher than conventional varieties, and only two revenue for Burkinabe farmers. Insect control is a key insecticide applications were necessary. factor in cotton yield; insect infestations can damage Burkina Faso’s biosafety regulatory system has up to 90 percent of the crop. Farmers typically apply developed relatively quickly and smoothly compared to 6–8 applications of insecticide per growing season, but those of other African countries such as Kenya, yield losses of 30–40 percent persist. Uganda, and Nigeria. In 2005 Burkina Faso completed An alternative insect management approach is to its National Biosafety Framework with resources from plant insect-resistant, transgenic cotton varieties (Bt the United Nations Environment Programme and cotton). Transgenic varieties from the United States Global Environment Facility. In 2006 the ANB was were evaluated in confined field trials in Burkina Faso established under Law No. 005-2006 “Pertaining to the from 2003 to 2005. These Bt varieties had significantly security system in regard to biotechnology in Burkina reduced larval populations of cotton bollworm and Faso.�a However, it was the joint commitment of the cotton leafroller, with a commensurate improvement in Ministers of Environment and Agriculture, who pub- seed cotton yields and lint quality. After the insect resis- licly championed the economic benefits of Bt cotton to tance trait was bred into local varieties, further field tri- the Bukinabe economy, that effectively catalyzed the als were planted in 2006–07. Precommercial seed pro- rapid operationalization of the ANB, which was duction began in 2008, the same year two transgenic achieved in only two years. Source: Héma et al. 2009; D.J. MacKenzie (personal communication). (a) Loi N° 005-2006/AN, Portant régime de sécurité en matière de biotechnologie. Box 6.29 Practical Regulation of Genetically Engineered Foods in Vietnam In June 2010, the Government of Vietnam issued modified organisms have no uncontrollable risks to Decree No. 69/2010/ND-CP on Biosafety for Geneti- human health. 2. They have been permitted by at least cally Modified Organisms, Genetic Specimens, and five (5) developed countries for use as food and no risk Products of Genetically Modified Organisms. With has been seen in these countries.� respect to the use of genetically engineered organisms This approach to regulatory approvals is both practi- as food or animal feed, the Decree permits a written cal and scientifically defensible. It recognizes that the certification of eligibility for use as food if the subject Vietnamese Ministry of Health considers the biosafety of the application satisfies “either of the following regulatory systems of certain other countries to be con- conditions: 1. The dossier of application for a written sistent with that of Vietnam and that the risk assessment certification of their eligibility for use as food has been and approvals undertaken by those countries may be appraised by the Genetically Modified Food Safety considered equivalent to and therefore sufficient to Council, which concludes that such genetically obtain a certificate of eligibility by the Ministry of Health. Source: Government of Vietnam 2010. 500 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK T H E M AT I C N O T E 5 Technical Regulations and Standards Luz Diaz Rios, Consultant Johannes Roseboom, Consultant SYNOPSIS administrative provisions, with which compliance is mandatory. Technical regulations include import bans he current landscape of technical regulations and T standards related to agriculture and agrifood is complex and rapidly evolving. Standards represent major challenges for the targeted sectors and industries, yet (total or partial), technical specifications (process and product standards), packaging standards, information requirements, and requirements for labeling and claims. Standards and technical regulations for agriculture and they also present opportunities to catalyze innovations food have become increasingly important in recent decades, while achieving public health, trade, environmental, and but they date to ancient times. Assyrian tablets, for example, social objectives. Standards can help to reduce information describe the method to be used in determining correct asymmetries and externalities and promote fair competi- weights and measures for food (FAO and WHO 2005). tion. Some agricultural export industries in developing From the late 1800s to early 1900s, countries started to enact countries have used compliance with standards to gain an national agrifood standards. The ensuing proliferation of important competitive advantage; compliance required not requirements complicated the landscape for international only innovation in production and processing but in collec- trade to such an extent that the first international standards tive and organizational behavior. In an evolving landscape began to be adopted in the early 1900s. Over the course of of standards, however, individual, one-time innovations the century, but especially in the latter half, broader efforts offer limited opportunities to leverage long-term benefits. to enact agriculture and food standards at the international What is required instead is a process of strategic planning, level prompted important innovations in the international supported by continuous innovation and improvement, to institutional framework for setting standards (see box 6.30). take on new challenges and opportunities as they emerge. The number of agriculture and food-related issues sub- Approaches to harmonizing standards across countries or ject to standardization has grown tremendously in the past industries can reduce transaction costs by reducing duplica- several decades.1 This momentum reflects the intensification tive functions of conformity assessment, including testing of regional and global trade and heightened concerns over and certification. National policy makers need to strike a accompanying threats to food safety and animal and plant balance between domestic and international trade interests health. It also reflects a wider set of innovations in science and, as much as possible, maintain close involvement in and technology that permit very sensitive detection and ana- regional and international standard-setting efforts. lytical methods, as well as improved knowledge of the qual- ity and associated health hazards of agrifood products. Many standards and regulations relate to naturally occurring haz- BACKGROUND AND CONTEXT ards, such as foodborne pathogens and toxins, while others A “standard� is a document approved by a recognized body have been introduced by innovations in agricultural tech- that provides, for common and repeated use, rules, guide- nologies to increase productivity (such as the use of pesti- lines, or characteristics for products or related processes cides, veterinary drugs, and other chemical compounds). and production methods. Compliance with standards is Changes in consumers’ concerns and perceptions, as well not mandatory. “Technical regulations,� on the other hand, as pressure from civil society and the enactment of interna- specify product characteristics or their related processes tional agreements,2 have been critical in expanding the and production methods, including the applicable range of desirable attributes associated with the quality of 501 Box 6.30 International Framework for Setting Quality and Sanitary/Phytosanitary Standards Sanitary and phytosanitary (SPS) measures are taken to The Agreement on Technical Barriers to Trade protect: (1) human or animal health from risk arising (TBT) deals with product standards. It aims to prevent from additives, contaminants, toxins, or disease organ- national or regional technical requirements or stan- isms in food, drink, and feedstuffs; (2) human life from dards in general from being used as unjustified barriers risks associated with diseases carried by plants or animals; to trade. The agreement covers standards relating to all (3) animal or plant life from pests, diseases, and disease- types of products, including industrial and agricultural causing organisms; and (4) a country from other damage products. Food standards related to SPS measures are caused by the entry, establishment, or spread of pests. not covered. Codex decisions recognized by the TBT The need to fight animal diseases (zoonoses) at the Agreement include those on food labeling, decisions on global level led to the creation of the Office Interna- quality, nutritional requirements, and analytical and tional des Epizooties (OIE) through an international sample methods. agreement in 1924. An international agreement on The International Organization of Standardiza- plant health was reached in 1952 through the Interna- tion (ISO) also enacts international standards; those tional Plant Protection Convention (IPPC). The applicable to agricultural industries and enterprises Codex Alimentarius Commission (CAC), focusing on include standards for quality, safety, and environmen- food standards in relation to safety risks, was created in tal management (series ISO 9000, ISO 22000, and ISO the early 1960s. These international organizations have 14000, respectively). The agricultural sector also bene- become even more relevant since the mid-1990s, when fits from standards dealing with conformity assess- they were recognized as the international reference for ment that apply across sectors (ISO 17000 series). settling disputes and for international trade under the Other international organizations setting global stan- World Trade Organization (WTO) Agreement for San- dards relevant to agriculture include the International itary and Phytosanitary Measures.a Seed Testing Association (ISTA) and the Interna- Under the agreement, countries are encouraged to tional Federation of Organic Agriculture Movements present their concerns to the WTO regarding measures (IFOAM). adopted by trade partner countries that do not follow A plethora of private initiatives also seek to have a the stated principles. According to WTO, of 312 SPS- global reach. GLOBALG.A.P. enacts standards on related trade concerns raised by countries to the SPS good agriculture practice, and the Global Food Safety committee over 1995–2010, 28 percent related to food Initiative (GFSI) focuses on Hazard Analysis and safety, 25 percent to plant health, and 41 percent related Critical Control Point (HACCP)-based standards to animal health and zoonoses. Animal health concerns with application in agrifood industries. Still other mainly included foot-and-mouth disease (24 percent of private initiatives apply to particular agricultural concerns), transmissible spongiform encephalopathy subsectors, for example export crops such as coffee, (35 percent of concerns), and avian influenza. cocoa and tea. Source: Authors; WTO 2011. (a) For zoonoses, the International Health Regulations enacted in 2005 are an international legal instrument with the purpose and scope to prevent, protect against, control, and provide a public health response to the international spread of disease in ways that are commensurate with and restricted to public health risks, and which avoid unnecessary interference with international traffic and trade. Another international agreement related to biological risks is the Convention on Biodiversity Cartagena Protocol, discussed in TN 4. agrifood products. Demands go beyond a product’s charac- has induced innovation at many levels in the agricultural teristics (product standards) to include specifications on the sector (box 6.31). conditions under which products are produced and pack- aged (process standards, which now often include sustain- ACTIONS AND INVESTMENTS NEEDED ability considerations). Table 6.2 lists examples of the broad range of standards and technical regulations applied to food The capacity of standards and technical regulations to achieve and agricultural products. The demand for such standards their intended outcomes and also catalyze agricultural 502 MODULE 6: CREATING AN ENABLING ENVIRONMENT FOR AGRICULTURAL INNOVATION Table 6.2 Examples of Standards and Technical Regulations Applied to Agriculture and Agrifood Products Quality or technical Food safety Animal/plant health attributes Environment Social • Pesticide residue • Plant material • Quality grades • Pesticide use • Monitoring of limits quarantine • General labeling restrictions child labor • Microbiological • Pest risk analysis requirements • Regulations on • Occupational standards needs • Packing standards water/soil health • Traceability • Fumigation • GMO labeling contamination standards requirements requirements & • Restrictions on codes for organic • Animal welfare • Hygiene restrictions animal feed • practices & monitoring requirements • Bans/restrictions on ingredients certification • Right to • Vet. Drug antibiotic use in • Nutritional labeling • Protection of association residues aquaculture specific species • Minimum • Chemical & • Disease-free areas • Fish catch wage other • Disease surveillance restrictions contaminants • Restrictions on • Regulations on (e.g., mycotoxins) veterinary drugs animal waste • Code of good • Traceability of animals effluent agricultural • Plant material • Water efficient practices quarantine regulations • Phytosanitary • Chemical use certificates restrictions • GMO varietal • Biosafety approval regulations (for GMOs) • Codes to limit biodiversity loss Source: Adapted from Jaffee et al. 2005. Box 6.31 Standards Induce Innovation throughout the Agriculture Sector Innovation along agricultural supply chains. The seri- ozone-depleting substance under the Montreal Proto- ous effects of mycotoxins on human and animal health col. Since 2010 the European Union has banned its use following consumption of specific contaminated prod- for most purposes, including quarantine and preship- ucts (such as groundnuts and maize) have led many ment fumigations, boosting the search for alternative countries to enact technical regulations establishing control mechanisms. maximum permitted levels of mycotoxins. In sub- Innovation in supply chains. Record-keeping and Saharan Africa, where the problem is especially serious, traceability requirements have been incorporated into numerous collaborative research initiatives have been public and private standards, leading to innovations in undertaken to identify cost-effective management supply chains that include simple tracking methods options to reduce the threat to trade and human health. (pen and paper) as well as more sophisticated systems Research has emphasized on-farm technologies such as based on barcodes, radio-frequency identification, biological control, resistant/tolerant varieties, agro- wireless sensor networks, and mobile devices and nomic practices, cost-effective diagnostic tools, and applications. practices and technologies for drying, storing, and pro- Innovation in standards themselves. The past two cessing food and feed. decades have seen the emergence of tremendous inno- Innovation in alternative control methods. Bans on vations in the way standards are developed and imple- hazardous pesticides and other chemicals for treating mented. For example, the move toward system pests and diseases are a major incentive for innova- approaches to food safety regulation has been influ- tions. Methyl bromide, used especially in quarantine enced by two major developments: (1) the introduction operations for controlling pests affecting plants and of scientific risk analysis as the basis of establishing plant-derived materials, has been recognized as an food standards and regulatory measures and (2) the (Box continues on the following page) MODULE 6: THEMATIC NOTE 5: TECHNICAL REGULATIONS AND STANDARDS 503 Box 6.31 Standards Induce Innovation throughout the Agriculture Sector (continued) adoption of food safety management systems, such as emphasizes the private sector’s specific obligations in the Hazard Analysis and Critical Control Point supplying agrifood products to consumers. (HACCP) system, and the subsequent move from test- Innovation by private actors. Private “codes of prac- ing end-products to preventive approaches. At the pri- tice� and standards related to sustainability (food safety, mary production level, HACCP-based approaches are environmental and social criteria) are also proliferating, being implemented, complementing a set of preventive especially in horticultural and export crops (coffee, tea, measures packaged under good agriculture practices cocoa, bananas), forestry, aquaculture, and livestock. (GAP) programs. Tremendous innovations have been put in place by the Innovation in certification. The preponderance of private sector and NGOs, not only for the development of system approaches and process standards has fostered voluntary standards—with a set of prescribed criteria for the emergence of systems for assessing conformity ensuring compliance—but also in terms of compliance- based on third-party certification. This development related infrastructure (such as the innovative auditing opens opportunities for coregulatory approaches by the and certification systems described earlier). Innovation private and public sector (a combination of legislation has extended to methods for ensuring that certification and self-regulation by private operators). The move- schemes include farmers of differing capacities. In this ment toward self-regulation in the private sector regard, the emergence of group certification has been a has been pushed by the incorporation of concepts tremendous innovation, allowing engagement with such as “due diligence� in regulations; due diligence organized groups of small-scale producers. Source: Authors. Note: In the United States, for example, the 2011 Food Safety Modernization Act (FSMA) expands the powers of the Food and Drug Administration; among other provisions, it empowers the FDA to create a system for recognizing bodies that accredit third-party auditors to certify eligible foreign facilities. innovation is influenced by policy and regulatory frame- SPS and quality issues at the policy level appears to be works and by the mechanisms enabling stakeholders to inter- increasing; for example, many governments have enacted act and collaborate to prioritize needs and investments, share specific food safety or organic production policies. costs, and perform specific functions related to SPS and qual- The alignment and harmonization of policy and legisla- ity. Action and investments are especially important for (1) tive frameworks is often the first stage in creating an effi- aligning policy and regulatory frameworks to enable stan- cient system for SPS and quality standards. Harmonization dards to contribute to specific policy goals (such as institu- addresses the complex, inefficient regulatory frameworks tional reform) and (2) enhancing capacities to perform the emerging from overlapping institutional roles, identifies wide range of roles and functions related to standards. outdated regulations and standards, and promotes inter- agency coordination and communication, among other institutional reforms. The alignment of policy and regulatory frameworks For example, several countries have merged multiple Policy frameworks vary in accordance with specific national laws related to SPS in new food laws and have updated reg- or subnational needs and circumstances. To understand how ulations to reflect new institutional arrangements and com- technical regulations and standards can contribute to policy petencies. Another trend is to promote integrated policy goals, it is essential to clearly define the overarching goals of and regulatory frameworks for managing certain risks SPS and quality regulations. The legislative and regulatory together. FAO has developed an integrated “biosecurity process is one of an array of tools that government can use approach� for managing biological risks to animal, plant, to achieve policy goals, but often it is only in the course of and human health and life (including associated environ- analyzing and discussing concrete legislative actions that mental risk), because they all involve systems and procedures outstanding policy questions are identified and resolved. In for risk assessment and management, food contamination recent years, government awareness of the importance of notification, and exchanging information.3 504 MODULE 6: CREATING AN ENABLING ENVIRONMENT FOR AGRICULTURAL INNOVATION Strengthening institutional arrangements Enhancing capacities to perform the assigned roles and functions Once the specific rights and obligations of stakeholders involved in the SPS and quality-related system are defined Along with putting effective policy and regulatory frame- through the legislative process, the challenge is to create works into place and defining the roles and mechanisms for mechanisms enabling the relevant parts of government to actors to work together, a third critical area for action and investment is the development and enhancement of the collaborate. Major barriers to adopting more effective sys- wide range of skills, physical infrastructure, institutional tems for SPS and quality standards are erected by bureau- structures, and procedures that ensure that the organiza- cratic divisions of responsibility. These barriers can arise tions and individuals can perform SPS and quality-related from budgetary constraints, unequal institutional capabili- functions effectively, efficiently, and sustainably. Table 6.3 ties, differing cultures, limited communication of informa- provides examples of those functions. tion, the absence of a shared vision, and/or disincentives to Most functions listed in table 6.3 require broader over- working horizontally. Actions and investments to overcome sight and/or some level of collective action. The foundations such barriers and achieve greater efficiencies are illustrated of an effective system for SPS and quality standards lie in the in box 6.32. broad awareness among stakeholders that standards are Box 6.32 Institutional Arrangements for Improving Systems for SPS and Quality Standards Develop mechanisms for interagency and stakeholder Safety Agency—which defines food safety policy and coordination. Examples include memorandums of coordinates the work of institutions with food safety roles. understanding among public agencies to clarify roles Merge SPS functions into a single independent and responsibilities in specifies areas (such as inspec- agency. An example of this type of arrangement in tions), the establishment of task forces/working groups developing countries is the Belize Agricultural Health to respond to disease outbreaks or emergencies, and Authority (BAHA), established in the early 2000s. identifying liaison staff in each agency to facilitate com- BAHA integrates food safety, quarantine, and plant and munication and exchange of information. In many animal health functions into a single entity. developing countries, task forces have emerged under Consider costs and capacity. Implementation of any the leadership of public or private entities, bringing of these approaches will involve considerations of cost public and private actors together to discuss actions to and capacity. In establishing a new agency, consider the deal with challenges emerging from SPS and quality- leadership, facilitation, time, and resources required. related standards. All options need to be assessed in the context of exist- Coordinate functions under a lead agency. An exam- ing capacities in the public and private sectors, the ple of this approach is ACHIPIA—the Chilean Food investments required, and the expected benefits. Source: Authors. Note: ACHIPIA = Agencia Chilena para la Calidad e Inocuidad Alimentaria. Table 6.3 Organizational Functions Related to Sanitary and Phytosanitary (SPS) and Quality Standards Functions related to SPS and quality standards Registering and controlling feed, agrochemicals, veterinary drugs Developing/maintaining pest- or disease-free areas Conducting basic research, diagnosis, and analysis Testing products for residues and contaminants Accrediting laboratories, veterinarians, and other third-party Establishing/maintaining product traceability entities Developing/applying quarantine procedures Reporting possible hazards to trading partners Conducting epidemiological surveillance Providing metrology services Inspecting/licensing food establishments Notifying the World Trade Organization and trading partners of new SPS measures Inspecting and approving consignments for export Participating in international standard-setting Source: Adapted from World Bank 2005. MODULE 6: THEMATIC NOTE 5: TECHNICAL REGULATIONS AND STANDARDS 505 integral to the competitiveness of their country, sector, or national quality awards, national productivity awards, and firm and that they have particular roles to play in the system matching grant programs (to cite some examples). (World Bank 2005). For example, educated consumers, Given the significant capacities needed to perform SPS entrepreneurs, and others can contribute significantly to and quality-related functions, the investments required to setting standards at the national level and push for improve- strengthen and develop those capacities can be consider- ments and efficiencies in the public sector. able, particularly in developing countries (box 6.33). The It is also through the specific actions of individual pro- first step in developing this capacity is to identify specific ducers and processors that compliance with SPS and quality- needs. Tools have been developed to support countries in related standards is achieved. The private sector often assessing their capacity needs related to standards. For invests heavily in compliance with SPS and quality stan- example, FAO has developed guidelines for assessing needs dards (such as the use of HACCP or testing and certification in food safety and biosecurity capacity (FAO 2007a, 2007b). at the farm level). Creating awareness and enabling the pri- OIE developed the Performance, Vision, and Strategy (PVS) vate sector to innovate through standards is an important tool as the basis for evaluating performance against interna- dimension of capacity development. Along with the enact- tional standards published in the Terrestrial Animal Health ment of standards and regulations, the provision of incen- Code. The World Bank assists countries to perform needs tives for private investment can be complementary and assessments and develop action plans, some of which now serve as a much-needed tool to support innovation. These include estimates of the costs associated with improving incentives can take the form of quality promotion policies, operational capacities (World Bank 2010). Box 6.33 Actions and Investments for Uganda’s Fish Export Industry to Comply with Standards and Technical Regulations Hazards of a poorly performing regulatory system. fishery policy; (3) improving monitoring and inspec- Uganda’s fish export industry burgeoned in the 1990s, tion systems (drafting inspection manuals and standard largely because private investments in fish-processing operating procedures and training inspectors); (4) initi- facilities led to strong export performance in European ating regional efforts to harmonize handling procedures markets. Public investments in food safety policy and in the countries bordering Lake Victoria; (5) upgrading regulatory frameworks and enforcement capabilities a (small) number of landing sites and plans for upgrad- did not keep pace with private investments in the ing a substantial number of others; (6) upgrading pro- industry, however. At the end of the 1990s, the weak cessing plants’ procedures and layouts; (7) opening up regulatory system exposed Uganda to three safety- the U.S. market, which requires HACCP compliance; related bans on its fish exports to Europe. Scientific (8) installing two local laboratories and improving the proof that the fish were unsafe never materialized, yet quality of laboratory services provided to the industry; the poor performance of Uganda’s public regulatory (9) increasing the number of processing plants and and monitoring system was used to justify the ban. improving export performance; and (10) forming an Investing and innovating to reposition the industry. Association of Quality Assurance Managers to address Public and private actors made a series of innovations problems and concerns among industry players. and investments to lift the ban and regain the markets. The fixed investment in upgrading factories, manage- Innovation and investment were favored by high ment systems, and other infrastructure between 1997 and demand in Europe, technical and financial assistance 2001 was equivalent to about 6 to percent of the FOB value from development partners, the government’s open and of exports over that period. The innovations were beyond decisive leadership; and access to finance for private those required to achieve compliance, such as the adop- companies. Specific actions included: (1) streamlining tion of ISO 9000 and even ISO 14000 quality systems. In regulations and strengthening the government author- general, the process enhanced cooperation and relations ity that would implement them; (2) developing a new between the regulatory agency and the industry. (Box continues on the following page) 506 MODULE 6: CREATING AN ENABLING ENVIRONMENT FOR AGRICULTURAL INNOVATION Box 6.33 Actions and Investments for Uganda’s Fish Export Industry to Comply with Standards and Technical Regulations (continued) Continuously innovating to meet new challenges have been adopted to manage market risks. The vol- and opportunities. Despite some lingering food ume of fish exports to the European Union has not safety issues, the larger challenge for the industry is to returned to previous levels, partly because of the deal with the depleted waters and fisheries of Lake depletion of fish stocks and competition from other Victoria and more general environmental degrada- types of white fish from other countries. For the tion, which have spurred negative campaigns against Ugandan fish industry, the capacity to learn from its the industry in Europe. Regulatory controls, comple- experience, innovate in response to evolving market mented by self-regulation and voluntary efforts to demands, and sustain its resource base will be critical gain environmental and sustainable certification, to future viability. Sources: Ponte 2005; Ponte, Kadigi, and Mitullah 2010; Jaffee et al. 2006. The use of economic analysis to drive policy decisions information concerning products and processes. They related to SPS is often emphasized, but the complexity of provide incentives to local firms to improve the quality and current methods is driving efforts to find more flexible and reliability of their products. They can also be used as a risk practical methodologies. An innovative framework based management instrument, as a product differentiation tool, on multi-criteria decision analysis is being validated by the or as a cobranding strategy. Standards Trade and Development Facility.4 Several agricultural export industries in developing countries have used compliance with standards to gain an important competitive advantage. Examples include horti- POTENTIAL BENEFITS cultural industries in Peru (Diaz and O’Brian 2003; Diaz In the agriculture and agrifood sectors, standards fulfill a Rios 2007) and Kenya (Jaffee 2003); the groundnut industry broad range of objectives. A general objective of standardiza- in Argentina and Nicaragua (Diaz Rios and Jaffee 2008); tion is to facilitate flows of information between consumers and the Brazil nut industry in Bolivia (Coslovsky 2006). In and producers (particularly information on unobservable all cases, success required the incorporation of innovations characteristics, such as the use of GM ingredients) to facilitate in production and processing but, perhaps most important, trade and spur economic activity. For government, standards in collective and organizational behavior. Examples of col- allow authorities to achieve several objectives, such as the pro- lective and organizational innovation include the formation tection of animal, plant, and human life and health; the pro- of the Fondation Origine Sénégal—Fruits et Legumes; the tection of the environment; and the incorporation of social collective self-regulation of Bolivia’s Brazil nut industry; the and sustainability considerations into agricultural produc- collaborative arrangements and interactions between Peru’s tion. Through standards, information imbalances and exter- Commission for Export Promotion (PROMPEX, Comisión nalities can be addressed and fair competition promoted. Para la Promoción de Exportaciones) and several subsec- Compliance with standards is crucial for countries to toral associations. participate in international trade, because it ensures the Clearly the impacts and distributional effects of non- compatibility of components and traceability of products compliance with SPS standards can be devastating for a and raw materials from different places. Approaches to har- company or an entire industry.5 The World Bank (2005) monizing standards between countries and/or industries presents several examples of associated distributional effects can reduce transaction costs by reducing duplicative func- across agricultural export industries resulting from the tions of conformity assessment, including testing and certi- imposition of bans or export restrictions following non- fication (Jaffee 2005). compliance with these critical standards. Compliance with From the perspective of the private sector, standards are standards and the prevention of foodborne illnesses and a means of transferring technology and diffusing technical animal/plant diseases also reinforce a country’s reputation MODULE 6: THEMATIC NOTE 5: TECHNICAL REGULATIONS AND STANDARDS 507 as a reliable supplier. Outbreaks can lead to huge costs for systems tends to overshadow (at least in the policy discus- governments and the public resulting from diagnosis and sions) the other benefits of improved standards, such as treatment of illness, production losses, outbreak investiga- reduced production losses and improved public health tions, and product tracebacks and recalls.6 impacts on domestic populations. The challenge for policy makers is to find the right balance between these different interests and options when formulating policies and invest- POLICY ISSUES ment plans. Standards and technical regulations are used by governments Another area of concern from a policy perspective is the as a tool to achieve broader policy objectives. The sections emergence of private SPS standards. Concerns about their that follow discuss the need for a balanced approach to policy proliferation, prescriptive nature, legitimacy, transparency, and decision making that takes domestic and international potential to undermine public action, as well as their poten- trade interests into account. Related issues involve the chaotic tial economic development impacts, have coalesced around proliferation of private standards and their implications for an intense debate within the SPS committee of WTO. Con- national policy, the strategic uses of standards, and the ques- cerns related to the proliferation of private social, environ- tion of who should provide services related to standards. mental and sustainability standards are emerging as well. Discussions in several forums are intensifying over the scope of harmonization and collaboration and the need for a bet- Balancing divergent policy goals and dealing with ter understanding of intended impacts at the ground level. the proliferation of private standards Policy makers often have to choose between conflicting pol- Compliance with standards as a strategic issue icy goals with respect to standards and technical regulations. For example, a desire to protect human health may conflict Some view the imposition of stricter SPS and quality with the desire to facilitate agricultural trade or to develop requirements as a barrier to trade, especially if they entail an industry or sector. The goal of expanding export markets costly, highly technical requirements or complex adminis- may also conflict with the desire to conserve water or reduce trative procedures. Such requirements erode the competi- pesticide use (Vapnek and Spreij 2005). tiveness of industry players and further marginalize small Policy making at the national or local level can be highly countries, traders, and farmers. influenced by the international environment. Government Others view the same standards and requirements playing policies should be consistent with obligations under inter- a catalytic role in innovation and modernization. Demands national agreements as well as with national food security for compliance with increasingly stringent standards can and development goals. It is generally recommended that expose the fragile competitiveness of an industry (or individ- countries adopt international standards, although their ual players) and the lack of institutional arrangements for effectiveness depends on their suitability to specific national collective action and clarify the need for action, as in Uganda’s contexts. The harmonization of regional standards for raw fish industry (box 6.33). This experience illustrates that inno- milk in Eastern Africa is one example. Debate revolves vation in response to agricultural standards and regulations is around a desire to harmonize with Codex standards, not a one-time event but part of a continual process of antic- although they do not reflect handling and consumption ipating and responding to emerging challenges. practices in the region (Jensen, Strychacz, and Keyser 2010). In several cases, industry players and governments have Trade has become a driving force behind increased public responded effectively to prevailing standards and have con- and private investment in SPS and quality systems, but at the solidated or improved their market position. In some coun- same time, many stakeholders are concerned that increas- tries, the response has involved a proactive, forward-looking ingly stringent trade standards are having adverse effects on strategy that seeks to reinforce their competitive advantage, as the costs to and competitiveness of developing-country sup- in the groundnut industry in Argentina and the horticultural pliers, particularly from LDCs. Consequently, in many coun- industries of Peru (Diaz Rios 2007) and Kenya (Jaffee 2003). tries, compartmentalization of production and adoption of a In other cases, the response has been essentially reactive, seek- system of “dual standards�—one focusing on compliance with ing to adjust in the face of adverse trade events. (see box 6.34). export market demands and one for local consumption—has The World Bank has advocated for compliance with been seen as a solution. Another concern is that the heavy standards to be viewed as a strategic issue, highlighting the emphasis on the trade benefits regarding SPS and quality multiple strategic options available to countries (table 6.4). 508 MODULE 6: CREATING AN ENABLING ENVIRONMENT FOR AGRICULTURAL INNOVATION Box 6.34 Innovating to Quickly Respond to Adverse Trade Events India’s fish and fishery products: An export market Peruvian asparagus exports: Success through stan- lost and regained. In 1997, the European Union dards. In 1997, when Spanish health authorities banned all fish and fishery products from India due to asserted that consumption of canned Peruvian aspara- noncompliance with hygienic standards. The Indian gus caused two cases of botulism poisoning, the result- government improved hygiene by requiring measures ing public scare in European markets created large such as integrating preprocessing operations with pro- market losses for Peruvian asparagus exporters. Seeing cessing facilities and imposing strict limits on approved that even one careless exporter could disrupt the mar- output according to plants’ capacities for water, ice kets, the government and industry decided to take making, and effluent treatment. The government action to bring Peruvian agricultural standards in line implemented programs to support improved hygienic with international norms. In 1998, the Peruvian Com- controls in fish processing, including subsidy programs mission for Export Promotion convinced the asparagus for upgrading processing facilities and training man- industry to implement the Codex code of practice on agers and workers throughout the supply chain. Fish food hygiene. Government specialists worked with the exporters acted collectively to establish infrastructure companies to ensure proper implementation. In 2001, that would link preprocessing units to common water, national fresh asparagus norms were published. They ice, and effluent facilities. The new facilities include provided a quality and performance baseline for the modern laboratories that perform all microbial and industry that allowed many firms and farms to gener- chemical tests required by importers. These measures ate the necessary skills and experience to gain certifica- led the European Union to lift the ban on imports. tion under the stringent international standards. Source: World Bank 2005. Table 6.4 Strategic Choices and Responses with Respect to SPS and Quality Standards Strategy Nature of the response Exit Voice Compliance Reactive Wait for standards and Complain when standards Wait for standards and give up are applied then comply Proactive Anticipate standards and Participate in standard Participate in standard leave particular markets creation or negotiate creation or negotiate before standards are before standards are applied applied Viability Exit Voice Compliance Size of firm or industry ++ + Share of target market – ++ + Reputation – ++ + Suitability of legal/regulatory framework ++ + Leadership/coordination within value chain + ++ Private sector management/technical capacity + + ++ Public sector administrative/technical capacities + ++ ++ Clarity of institutional responsibilities + + Geographical/agro-climatic conditions –/+ –/+ Prevailing challenges ++ – –/+ Nature of the measure –/+ –/+ Source: World Bank 2005. MODULE 6: THEMATIC NOTE 5: TECHNICAL REGULATIONS AND STANDARDS 509 Those options will vary for each country, depending on its to determine the immediate and long-term scope for economic, political, and social systems and norms, institu- enhancing that capacity. Prioritization can begin with iden- tional structure, size and location, and so on. tifying the most immediate and/or significant risks as well as opportunities for competitive or welfare gains. Policy makers need to weigh the different objectives and their Who provides services related to standards? potential distributional impacts, but all too often priorities Perhaps the most important decision to be made with respect are driven by the benefits associated with competitive repo- to building capacities related to standards is whether capacity sitioning of industries/sectors or access to remunerative building should be done by the public or private sector. There export markets. As challenging as it may be, it is fundamen- is certainly an increasing recognition of the critical role that tal to consider holistic approaches that merge domestic and the private sector can play in providing services traditionally trade perspectives, perhaps through strategic prioritization viewed as the responsibility of the public sector. In countries at the national, sectoral, or industry level with stakeholders. where demand for certain standard-related services is high, the private sector may have an opportunity to provide them. Before building, equipping, and maintaining laboratories and Effective regulatory and voluntary interventions require public and private other standard compliance-related services, public actors need involvement to consider alternatives. In some instances public authorities have delegated compliance services to private organizations, The development and enforcement of policies related to particularly accreditation, testing, and certification services standards are enhanced by leveraging support from the pri- (for example, public authorities certify compliance on the vate sector and/or creating an enabling environment basis of testing services provided by private laboratories). (incentives) for private investments in capacity related to SPS and quality standards. The conditions for effective coregulatory approaches should be analyzed and explored, LESSONS LEARNED as they represent a potential opportunity for public and Standards represent major challenges for developing coun- private collaboration. tries, yet isolated improvements and innovations offer lim- ited opportunities to leverage long-term benefits. A key les- Assess the gaps between local and international son is that countries must be strategic and proactive. What is standards to determine the investments needed required is a process of strategic planning, supported by to bridge them continual innovation and improvement, to successfully overcome challenges and take advantage of new opportuni- From a market perspective, the structure and maturity of an ties. A proactive stance rests upon public and private aware- industry should drive the design of public and private inter- ness of the issues and strong governance. ventions related to standards. The first step is to assess the Quite often, developing countries have a long list of needs gaps that need to be bridged. The product and the type of for capacity development. Efforts to develop capacity related market provide a good indicator of the standard-related to standards should aim at maximizing the strategic options challenges. Public and private actors will need to make dis- available, consider costs/benefits, speed of implementation, tinct adjustments and investments to meet stricter food sustainability, complementarities between the public and safety, quality, and other requirements. Time, significant private sectors, and the possibilities for regional collabora- investments, and incremental upgrades are all needed for an tion. Certainly one of the “nonregrettable� investments in industry to become an effective and competitive supplier in this domain would be to invest in creating broader public more demanding markets. and private awareness of SPS and quality management issues. The sections that follow expand on these points. Consider the needs of vulnerable groups New or more stringent standards are likely to pose compli- Priority setting is essential for effectively managing ance problems for firms and farms operating under less standard-related challenges and opportunities favorable conditions. An awareness of the distributional Pragmatism is needed when examining the state of a coun- effects of standards and their influence on poverty is critical try’s SPS and quality-related capacity, and realism is needed for understanding the strategic choices available to different 510 MODULE 6: CREATING AN ENABLING ENVIRONMENT FOR AGRICULTURAL INNOVATION actors and identifying the most appropriate tools to support harmonize standards addressing common (and cross- them in implementing those choices. border) SPS issues should receive strong consideration from policy makers. Involvement in communities of practice, net- works, and forums that promote common learning and Learn from others, cooperate nationally and information sharing is essential. Examples include the activ- regionally, and search for funds to develop capacity ities undertaken by the Standards Trade and Development Given the complexity of standards, it is fundamental for pol- Facility, other development partners, and international icy makers from developing countries to engage in activities standard-setting organizations. For voluntary standards in where they can influence the setting of public and private agriculture and agrifood, new spaces for knowledge standards. Leadership and proactive involvement in initia- exchange and learning are emerging, such as the Trade Stan- tives at the regional level are critical. Regional initiatives to dards Practitioners Network. MODULE 6: THEMATIC NOTE 5: TECHNICAL REGULATIONS AND STANDARDS 511 I N N O V AT I V E A C T I V I T Y P R O F I L E 1 Developing an Enabling Environment to Improve Zambian Smallholders’ Agribusiness Skills and Commercial Orientation Indira Ekanayake, World Bank SYNOPSIS OF PROJECT DATA In 2006, the government initiated the World Bank- funded Agricultural Development Support Project (ADSP). Country: Zambia Through support to Zambia’s Ministry of Agriculture and Project: Agricultural Development Support Co-operatives (MACO), the ADSP fosters the commercial- Project (ADSP) ization of smallholder agriculture by developing a network Cost: US$37.2 million (total project cost of competitive value chains in selected high-quality, high- US$39.6 million) value commodities (such as cotton, horticultural crops, Component cost: Support to Farmers and Agribusiness honey, and dairy). Interventions provide better technology Enterprises (US$33.2 million); Institu- (improved seed, microirrigation), strengthen institutions tional Development (US$3.9 million); (public-private partnerships, outgrower schemes), and Project Management and Coordination develop well-maintained rural roads in high-potential agri- (US$2.6 million) cultural areas. The objective is to ensure that the selected Dates: FY 2006–14 value chains operate efficiently to increase value addition, Contact: Indira Ekanayake, World Bank, Zambia improve smallholders’ access to markets, and improve the competitiveness of their agricultural commodities. CONTEXT Agriculture has become a major driver of growth and a sig- PROJECT OBJECTIVES AND DESCRIPTION nificant source of export earnings and diversification in Zambia as a result of rising mineral prices. Notwithstand- As noted, the ADSP was designed to increase the commer- ing Zambia’s abundant and fertile land and water and eco- cialization of smallholder agriculture by improving the pro- nomic growth (exceeding 5 percent for the past seven to ductivity, quality, and efficiency of value chains in which eight years), small-scale farmers have seen little change in smallholders participate. The project funds three invest- their quality of life. Smallholders’ productivity is very low ment areas: (1) matching grants to promote innovative compared with that of Zambia’s commercial farmers and agribusiness activities that build synergies to develop value farmers in other parts of the world. Productivity is partly chains, (2) rural feeder roads, and (3) public institutional constrained by the lack of title to land, limited financial support for market development. resources, and insufficient infrastructure, but much of the The Market and Innovation Facility (MIIF) provides problem arises from the unfavorable policy environment matching grants to fund innovative activities in which for small-scale farmers. agribusinesses interact with smallholders or business- Starting in the 1990s, consecutive investments by the oriented farmer groups and cooperatives. The activities International Development Association (IDA) have sought match the business development needs of each subsector, to raise productivity in Zambian agriculture in line with emphasize technical assistance, and fall into three cate- government strategy to support the commercialization of gories: (1) technology, training, capacity-building, and agri- smallholder agriculture. This strategy aims to reduce cultural services in production, processing, and marketing poverty by expanding contract farming and outgrower in value chain development; (2) information, research, and schemes that link smallholders with commercial farmers or studies associated with value chain development; and agroenterprises. (3) services and capacity-building in business management 512 and development, product promotion, and acquisition of mented by the Road Development Authority (RDA) and the technical and market information. National Road Fund Agency (NRFA). The institutional The Rural Roads Improvement Facility (RRIF) provides development component is managed by the respective resources to rehabilitate and maintain rural and district roads MACO departments. to link selected high-potential agricultural areas to markets as a means of improving incomes and livelihoods. Target roads INNOVATIVE ELEMENT are in five districts (Choma, Chongwe, Katete, Chipata, and Lundazi) in two provinces (Southern and Eastern). RRIF The innovative feature of ADSP’s design is a demand- investment is expected to provide the essential rural road net- driven, value chain approach that facilitates smallholders’ work for improved market access and associated product participation in key value chains. Innovative features of delivery efficiencies and benefits. The road facility supports ADSP’s implementation include the demand-led innova- the ADSP’s general aims, because value chain development is tion fund, matching investments by agribusiness to finance superimposed within the rural road grid. To date, 642 kilo- a sustainable rural road network (crucial for innovation by meters of critical feeder roads have been rehabilitated (57 per- agribusiness), and the piloting of an improved market cent achievement of the target of 1,129 kilometers). information system. Rural road improvements are procured The Supply Chain Credit Facility (SCCF) was originally through Output and Performance-based Road Contracting designed to provide credit, on a demand-driven basis, for (OPRC). A spatial approach is used to ensure that techno- investments to improve the supply chains of existing and logical interventions in the selected value chains are com- emerging outgrower schemes and enable agroenterprises, patible with the improved rural road grid. traders, or nucleus and commercial farmers working with Under MIIF, matching grants support innovative interven- smallholders to finance capital investments, seasonal inputs, tions by agribusiness that add value to agricultural products, and export activities. Following implementation delays, improve agricultural productivity, and improve smallholders’ SCCF was modified to improve the productivity of outgrower links to markets. The MIIF Innovation Categories in agricul- schemes, scale them up, establish new contract farming enter- tural value chains include new products, new technologies or prises, and upgrade processing and marketing capacity. processes, new markets, new strategic partners or organiza- Under the project’s institutional development component, tional arrangements, and new geographical locations. ADSP builds capacity in selected departments of MACO to The innovative element expected of SCCF is that it provide the core public services for enhancing smallholders’ would enable entrepreneurs to make the capital investments productivity, quality of produce, and access to markets. For that are vital to stronger and more competitive value chains example, the project has enabled the Cotton Development with or without scaling up while reducing risk absorption. Trust (a public-private trust) to provide seed and technical assistance to smallholders and increase its production of BENEFITS, IMPACT, AND EXPERIENCE foundation seed for cotton through improved irrigation facilities. The project has also helped to build and equip a Value chains strengthened through the project include biotechnology laboratory at the Seed Control and Certifica- dairy, cotton, horticultural crops, paprika, honey, biodiesel, tion Institute (SCCI) and improve the SPS services of the and tobacco, among others. Some of the key benefits and Zambia Agricultural Research Institute. outcomes associated with the project are described next. The Project has multi-institutional and innovative insti- tutional arrangements for implementation. For example, An innovative matching grant scheme is under way the National Coordination Office is based in MACO. MIIF is administered by Africare, an international NGO, and In its three-plus years of implementation, MIIF has coordinated and managed by an independent, outsourced funded 17 subprojects (for which the total budget exceeds secretariat. Independent technical reviewers assess the tech- US$2.6 million) involving more than 28,800 smallholder nical and financial feasibility of proposed subprojects. A beneficiaries. Six additional subprojects are under review, multistakeholder subcommittee of the National Project and 20 or more proposals are under development. MIIF Steering Committee (with representatives of the Bankers subprojects have generated 22 technologies and innova- Association of Zambia, the agribusiness sector, MACO, and tions for a range of value chains, including dairy, ground- a member of the secretariat) is responsible for final funding nuts, honey, biofuels, and fisheries. The grant scheme has decisions. The project’s rural road component is imple- leveraged an additional 85.6 percent cofinancing, MODULE 6: INNOVATIVE ACTIVITY PROFILE 1: IMPROVING ZAMBIAN SMALLHOLDERS’ AGRIBUSINESS SKILLS 513 illustrating the considerable buy-in and commitment by project had rehabilitated 583 rural district and feeder roads agribusinesses. It is too early to project the outcome of the in the national road network. It is actively encouraging the subproject grants, but initial assessments by beneficiaries use of MIIF grants in contracting for road rehabilitation have been very positive. and maintenance to create synergies between improved To date, the grant scheme has funded high-quality pro- crop production and marketing in the value chains. The posals that are demand led and innovative. One lesson from socioeconomic targets of the OPRCs in selected catchment the experience with MIIF, however, is that it is vital to main- areas (3,136 households were surveyed as a baseline) are tain the number of high-quality subprojects that enter the mainly related to process impacts (income-generating funding pipeline. Awareness of the facility is spread through opportunities from road rehabilitation), access impacts continuous publicity; a variety of field days, symposia, and (associated with providing the road infrastructure), and workshops; and word of mouth in the business community. mobility impacts (on transport services or growth in traffic Another lesson is that a favorable external business environ- volumes), but they are still too early to quantify. ment (especially exchange rates for commodity exports and inputs for production and value addition) is essential for strong participation in an innovation grant scheme such as An agricultural market information system piloted MIIF that attempts to increase competitiveness. in an integrated project activity zone MIIF’s implementation has faced several challenges. Ini- As noted, the project used a spatial approach to target the tially agribusinesses were reluctant to participate because of technology interventions for the selected value chains their limited awareness of and low interest in the need to inno- within the improved rural road grid in Southern Province, vate for greater competitiveness. The high transaction costs where a market information system has also been success- (time, resources) and lack of experience in developing concept fully piloted in three districts. Given the popularity of radio notes, proposals, follow-up documentation, and cofinancing broadcasts of commodity market prices, this program is commitments also presented a challenge for some partici- being scaled up to include all districts in Southern Province pants. The private sector was wary of engaging with what it and will also be introduced to Eastern Province, where the perceived to be NGO- and government-“driven� activities. OPRC rural road work is taking place. Similar issues of limited trust and experience in working with the private sector impeded collaborative arrangements Short-, medium-, and long-term loans to support between private and nonprivate actors. Another challenge that investment must not be underestimated is that the effort involved in working with smallholders in outgrower schemes can limit the Loans provided through the SCCF are an important com- private sector’s interest in submitting proposals. plement to the matching grants provided through MIIF, and Although it is too early to point to specific benefits aris- access to short-, medium-, and long-term agricultural ing from the project’s various kinds of support to specific finance remains critical to the project’s success. This aspect of value chains, the adoption of more productive and favor- the project has been implemented more slowly than able technologies has increased. A baseline study in two expected, however. Responsibility for implementation has provinces where rural road work is taking place was com- been transferred to the Development Bank of Zambia, where pleted, and an impact study is being undertaken in the institutional capacity strengthening has been initiated. same areas. Serving the public goods agenda Performance-based contracts for rural roads The outcomes of ADSP far exceed the cost of the public successfully implemented investments. Aside from reinforcing the private sector’s As noted, the project uses a new method of road contract- capacity to increase the competitiveness of Zambian agri- ing called OPRC, in which the contractor rehabilitates the culture and improve smallholders’ participation in lucrative roads under the contract and maintains them for five years. value chains, the project strengthens the public goods deliv- This agreement ensures that project participants in rural ery agenda through targeted institutional development, areas that are far from markets have consistent access to with long-term benefits for the agricultural sector. Exam- those markets. Spillover benefits include improved access to ples of these public goods include wider availability of good health facilities and primary schools. By its third year, the quality seed for multiplication by private and public 514 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK agencies, more skilled human resources in public institu- These platforms help to develop a shared understanding of tions, and development of the rural road network. challenges, opportunities, and intervention that may guide the support services and matching grant program. They can also foster collaboration, including partnership between Projects similar to ADSP under way in public and private agencies. other parts of the world Productive partnership projects funded by the World Bank in Colombia and Vietnam also use matching grants to facil- Establish a high-caliber secretariat with private sector experience itate partnerships and build capacity in value chains. These projects and ADSP are demonstrating the challenges of The secretariat or fund administrator has a key responsibil- engaging and retaining the interest of a diverse group of pri- ity in implementing a grant scheme. Selection of the grant vate actors, such as traders, processors, exporters, whole- administrator requires significant effort, and often special salers, and retailers. Such projects often require greater capacity building is warranted. Deficiencies in management attention to entrepreneurial skills than to farming practices. capacity and leadership could cause delays or even the fail- ure of the scheme. As noted, under ADSP this function was outsourced to an NGO. This option is useful when a project LESSONS LEARNED AND ISSUES requires autonomy, experience in working with participants FOR WIDER APPLICATION at the grassroots level and in decentralized projects, as well To date, the ADSP approach has yielded three key lessons. as experience with donor requirements (reporting, procure- First, the development of market institutions is not in syn- ment, and fiduciary issues). NGOs also come with chal- chrony with development of other parts of the value chains. lenges, however, including the potential for greater overhead There is need to consistently identify areas, themes, and costs, problems with long-term institutional sustainability, issues that can contribute to activities that strengthen value and a greater risk that they will lack business understanding. chains. Second, alliances and partnerships for agribusinesses The essential features for a secretariat to succeed are the do not “just happen� in projects of this nature. They must be available capacity, institutional sustainability, overhead actively facilitated and nurtured and benefit from early tech- costs, separation of the funding and implementation of the nical and financial support. A conducive political economy is grant fund, potential for political interference, and the essential for success. Third, owing to its demand-driven interests of the key stakeholders. design, MIIF responded to greater and more varied demand from more diverse businesses than originally anticipated. Strengthen aspects of the matching grant scheme The focus of the grant scheme became fragmented as a result and increased the administrative burden. Other lessons are The matching grant scheme could be strengthened in a num- discussed in greater detail in the sections that follow. ber of ways. The activities and value chains supported by the facility could be adjusted to focus more on high-priority value chains and on moving away from activities involving Engage private sector grantees/actors for dialogue technology, extension, and studies toward a wider set of and innovative enterprise development business-promoting activities. Stronger, direct communica- A project such as ADSP, which seeks to promote innovation tion with actors in the agricultural sector is vital to increase in value chains and involve smallholders in commercial agri- awareness of the facility. The grant application and review culture, must engage the private sector when it is first devel- process should be streamlined. The MIIF administrator oped and designed. ADSP carefully engaged the private sec- requires greater capacity to interact with private sector stake- tor as the project was prepared, but a more consistent effort holders, train clients, and manage the overall program. was warranted later, during the project’s implementation. One final lesson from the experience with MIIF is that Matching grants under ADSP did not automatically the grants have been quite useful for building institutional strengthen value chains and develop agribusiness. Midway capacity in public organizations at the provincial and dis- through the project, it was realized that consultative trict level. In other words, participation in grant schemes processes (multistakeholder platforms, forums for value that strengthen agribusinesses can benefit not only chains, sector associations, and field days) were useful instru- national goals but provincial and district institutions and ments to support development of the agricultural sector. economies. MODULE 6: INNOVATIVE ACTIVITY PROFILE 1: IMPROVING ZAMBIAN SMALLHOLDERS’ AGRIBUSINESS SKILLS 515 I N N O V AT I V E A C T I V I T Y P R O F I L E 2 Intellectual Property Management in Livestock Veterinary Medicines for Developing Countries Josef Geoola, GALVmed Sara Boettiger, University of California, Berkeley SYNOPSIS livestock diseases (East Coast fever, Rift Valley fever, Porcine he Global Alliance for Livestock Veterinary Medi- T cysticercosis, and Newcastle disease) cause estimated annual cines (GALVmed) is a nonprofit organization that economic losses upwards of US$350 million. Losses on this makes livestock vaccines, diagnostics, and medi- scale affect the livelihoods of hundreds of millions of poor cines accessible and affordable to the very poor. GALVmed households in the developing world. coordinates research, development, and deployment GALVmed currently works on nine disease-control tech- (RD&D) among multiple partners, from identifying candi- nologies for those four livestock diseases. Many diseases date technologies to manufacturing sustainable supplies of afflicting livestock in developing countries are preventable market-ready products. GALVmed uses a wide range of and well understood from a research perspective. Until resources to ensure that IP supports innovation for the recently, however, the developing world has lacked the poor, such as due diligence for accessing upstream tech- resources for moving the science out of the lab and into the nologies, the implementation of IP strategies that work field to prevent and contain livestock diseases. One reason toward development goals, the use of IPRs as incentives to for this impasse is that disease-preventing and disease- engage partners, and the negotiation of contracts that sup- controlling technologies often emerge from R&D in port the translation of research into products accessible to advanced laboratories and are subject to one or more forms the poor. GALVmed’s IP management system benefits its of IP protection. pro-poor mission by addressing broader issues that prevent For GALVmed to achieve its mission, the organization innovations from becoming sustainable, market-ready must constantly exercise (and review) its IP policies and IP products. Experience with public-private partnerships has management strategies. Through effective IP policies and taught GALVmed to leverage its interests while providing its management strategies, GALVmed can identify and circum- partners with the opportunity to achieve their own internal vent IP risks early in the commercialization pathway, there- mission. fore avoiding potentially serious and costly downstream impediments to GALVmed projects. GALVmed is unusual in that it operates across the entire CONTEXT commercialization pathway to make technological solutions The Global Alliance for Livestock Veterinary Medicines accessible to the poor. GALVmed does not have in-house (GALVmed, www.galvmed.org) is a nonprofit organization capacity for the research, development, and deployment with a mission to make livestock vaccines, diagnostics, and (RD&D) of products. Instead, its role is to facilitate the medicines accessible and affordable to the millions for entire RD&D process, from identifying candidate technolo- whom livestock is a lifeline. The Bill and Melinda Gates gies to manufacturing sustainable supplies of market-ready Foundation, the United Kingdom Department for Interna- products. Managing RD&D activities among multiple part- tional Development, and the European Commission are ners and under pro-poor obligations requires the organiza- major sponsors of GALVmed’s work. tion to consider the use of IP strategically to ensure that The impact of livestock in addressing poverty continues to upstream technologies do ultimately result in downstream be underappreciated, particularly livestock’s role as living products accessible to those who need them most. assets for the very poor. Data on the impact of livestock dis- By addressing a wide range of IP strategy issues, eases are limited, but four of the many major and unaddressed GALVmed has gained experience that has value for many 516 Box 6.35 Tailoring Intellectual Property Strategies for Public and Private Partners in Technology Deployment The vaccine that GALVmed is currently deploying for to determine: (1) whether in-licensing was required East Coast fever has a commercial market, primarily and which partners might need to be engaged in the among the Masai in East Africa, and potential for sus- process due to IP ownership and (2) what incentives tainable private sector production and distribution. could be derived, either with IP or other levers, to Protection against East Coast fever adds significant ensure that partners also had incentives to comply with value to Masai calves, and the Masai are willing to pay GALVmed’s pro-poor obligations. for the vaccine within a certain price range. With the While commercialization of the East Coast fever help of the Public Intellectual Property Resource for vaccine involved private companies as partners in man- Agriculture (PIPRA, www.pipra.org), GALVmed first ufacturing and distribution, another vaccine in approached the IP strategy for the vaccine by character- GALVmed’s portfolio, the Porcine cysticercosis vaccine, izing the opportunities and risks. The vaccine was involves virtually all public partners. In this case, nearly ready for the market and would not require sub- GALVmed recognized that the lack of a private market stantial further development. PIPRA reviewed the IP in for the Porcine cysticercosis vaccine (government pro- the technology. It determined that the technology and curement was anticipated) meant that incentives to related know-how, although enormous in value, were in engage manufacturers and distributors would need to the public domain and had no associated IP rights. be different. PIPRA conducted due diligence over rele- The lack of formal IP meant that manufacturers vant technologies and ascertained that, while formal would have less of an incentive to invest in producing IPRs existed in some countries, it was tangible property the vaccine. GALVmed needed to explore other types rights that would provide GALVmed with both chal- of leverage, such as forward market commitments or lenges and opportunities in its development of a pro- other assurances of supply channels. Eventually poor commercialization strategy. GALVmed was then GALVmed learned that deregulation of the vaccine in able to employ licensing language to create incentives each country in East Africa was linked to an exclusive for partners, whereby a selected partner would gain marketing authorization that offered some leverage. To geographical exclusivity in developing, manufacturing, create a commercialization strategy for sustainable and distributing the vaccine. As was the case with the delivery of the vaccine to East Africa, information on East Coast fever vaccine, developing an IP management marketing authorizations needed to be integrated with strategy involved critical due diligence to determine information on the profit incentives of manufacturers GALVmed’s risks and opportunities, and then careful and distributors as well as consideration of the transfer consideration of how to use the available leverage to of know-how. In summary, even though IP did not ensure that partners had incentives that aligned with play a role in the eventual commercialization strategy, GALVmed’s obligations to deliver products to the very formulation of an IP management strategy was critical poor. Source: Authors. organizations that develop technology for the poor. GALVmed has employed to address IP issues, such as due GALVmed has made crucial IP decisions, observed their diligence, strategy implementation, and conscious leverag- implications, and employed IP strategies suitable for both ing of IP, as well as some of the challenges involved (for public and private partnerships (see box 6.35). example, negotiating contracts). Through broad involvement with the RD&D process, GALVmed addresses IP and contractual challenges, includ- GALVMED’S INNOVATIVE APPROACH ing accessing and transferring proprietarily owned tech- nologies, resolving the distribution of rights, and strategi- As it has grown, GALVmed has developed a systematic cally using IP to promote deployment. The remainder of approach that anticipates IP hurdles and mitigates IP risks this profile focuses on the processes and resources that arise during RD&D (box 6.36). These IP management MODULE 6: INNOVATIVE ACTIVITY PROFILE 2: INTELLECTUAL PROPERTY MANAGEMENT IN LIVESTOCK VETERINARY MEDICINES 517 Box 6.36 Internal Capacity Building for Strategic Intellectual Property Management As GALVmed has expanded, its needs for managing IP that could be missed internally, and provides insight have evolved. During its startup phase, to ensure that on regional laws and regulations. The execution of IP issues were addressed from the onset of projects contracts requires expertise in local law, and non- with utmost diligence, GALVmed outsourced IP man- profits often require legal opinions from local attor- agement issues to a group such as PIPRA, with a neys on risks such as exposure to liability. Most proven track record and the expertise for managing IP important, a local attorney is essentially local within agriculture. Five years after its founding, enough to meet individuals in the organization and GALVmed now manages an ever-growing number of understand the nuances of issues that would other- technologies in the RD&D pipeline. The related com- wise be missed through a phone call. plex IP challenges demand timely attention and there- ■ Improving utilization of external IP expertise to fore in-house expertise. GALVmed’s growing internal address the resource gaps that almost always exist capacity for IP management has been achieved internally. External expertise, in the form of con- through three changes: tracted services from organizations or individual consultants, can provide experience-based, impar- ■ Creating a new management role within the orga- tial advice that would be difficult to gain otherwise. nization to deal with IP and agreements. This role External expertise (in GALVmed’s case, from provides for focused, consistent management of PIPRA) has access to the knowledge and expensive the drafting of time-sensitive agreements and deli- toolsets that small nonprofits may struggle to pur- cate negotiations as well as critical accountability for chase. These experts have access to a global network IP management. Moreover, internal expertise allows of attorneys that can provide regional legal advice for IP management strategies that fit the organiza- that can be valuable, for example, when questions tion’s risk tolerance, encompass organizational cul- of law arise in countries where GALVmed’s part- ture, and can more easily be adapted to changing ners practice. Lastly, external experts have the latest information of the technical and socioeconomic specialized insight on IP. They are capable of break- realities of the RD&D pathway. ing down technologies, conducting highly detailed ■ Contracting the services of a local attorney from a assessments, acquiring legal insight, and converting top-tier law firm to provide weekly and as-needed a mass of information into one thorough, mean- support in drafting and negotiating complex legal ingful report that GALVmed’s internal expert can agreements. A local attorney a provides the organiza- then integrate into a larger commercialization tion with an external opinion, identifies legal issues strategy. Source: Authors. a. Andy Harris, associate at Maclay Murray & Spens LLP, Edinburgh. measures are critical to GALVmed’s ability to efficiently Stage 1: Technology landscaping transform upstream disease-preventing technologies into GALVmed’s initial step of conducting a technology land- safe, effective, and accessible downstream products. scape requires using IP and other sources of information to The sections that follow provide more detail on scout for preexisting and emerging technologies. Technical GALVmed’s four-stage, systematic approach to managing and scientific value of individual technologies are assessed IP. The approach was designed to balance the organization’s as well as potential IP risks. In one instance, scientists at nonprofit, pro-poor mission with the need to integrate and GALVmed learned of a number of technically promising, address a variety of challenges arising throughout the com- but proprietarily owned, vaccine stabilization technologies. mercialization pathway of the products GALVmed seeks to Upon IP review, GALVmed learned of related ongoing deliver to the poor. 518 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK patent disputes. The uncertainty and risk associated with make this type of due diligence a part of their grant-making these disputes, and the potential impact these risks may process. The due diligence task for technology development have on downstream partners for technology development, is undoubtedly complex and requires substantial resources, were considered in conjunction with technical issues, and but there is great value in high-quality IP analysis. Integrat- the risk was deemed unacceptable. The review of IP issues ing IP analysis with technical information permits decisions allowed GALVmed to avoid pursuing a technology that to be made based on the evidence and reduces risk. could have potentially led to delays or the expense of late- stage shifts in research strategy. Early identification of tech- Stage 3: Technology-specific IP management strategy nologies that exhibit scientific merit and withstand IP review paves the path to a more resource-efficient commer- The insight gained and information generated through IP cialization process. due diligence is used for creating a Disease Intellectual Property Plan (DIPP). The DIPP is used to advise GALVmed staff and to address questions from external par- Stage 2: IP due diligence ties, such as stakeholders, regarding GALVmed’s intended IP As candidate technologies are identified from Stage 1, an IP management strategy for a specific disease-control technol- due diligence process is used. This due diligence (or IP ogy. Aside from presenting the results of the IP due diligence auditing) is a resource-intensive process involving in- process, DIPPs map the flow of technology from providers depth research into the patent landscape surrounding to development partners, manufacturers, and so on. This each selected technology (for example, individual investi- map allows GALVmed to identify the contractual arrange- gations of vectors, genes, promoters, markers, and signal ments needed for effectively governing IP transactions sequences of a vaccine). When a patent is particularly between the actors involved in a way that supports pro-poor important to GALVmed’s commercialization strategy or sustainable delivery of technology. Moreover, by building when use of a technology is suspected to infringe existing upon the results of the due diligence process, GALVmed can patents, freedom-to-operate (FTO) assessments may be make informed decisions on critical issues such as owner- carried out with the help of attorneys. The information ship and rights allocations as they relate to background and gained from IP due diligence allows GALVmed to identify foreground IP. potential partners, understand in-licensing obligations, and Issues of ownership and rights allocation are often not review potential opportunities for the use of IPRs in further straightforward where nonprofit organizations are engaged development of the technology. in technology development. There is, first, the question of While some large companies employ internal IP legal whether the coordinating organization should own IP itself. expertise, it is usually more efficient for small companies Some would say there is an inherent discord between own- and nonprofits to outsource this level of patent landscaping ing IP and being an “honest broker� that coordinates incen- and analysis. For these analyses, GALVmed collaborates tives among partners. However, the ownership of IP allows with PIPRA. In this stage, GALVmed also incorporates a a facilitator organization to have more leverage in pushing review of issues of tangible property rights1 (examining, for for pro-poor outcomes. GALVmed does not seek to own IP, instance, material transfer agreements as well as IP licenses); but it does not rule out the possibility of a future instance in existing claims to both tangible property and IP are mapped which claiming ownership to IP rights could be critical to to understand the full implications for commercialization. achieving the development and deployment of products for Rights to ownership and the terms of use for technology the poor. providers, partners, and GALVmed must be clearly docu- mented for any background (existing) and foreground Stage 4: Contracting (future) IP used or generated throughout RD&D. Finally, a review of rights and obligations of relevant existing legal The strategy articulated in a DIPP is ultimately imple- agreements is also conducted at this stage. mented through a set of contracts among partner organiza- The importance of due diligence for RD&D is often tions. Contract drafting and negotiations are among the underestimated in agricultural development; as a conse- most challenging and resource-consuming activities that quence, organizations operate in an environment of uncer- GALVmed undertakes. Some contracts govern straightfor- tainty and risk. Sponsors who invest in organizations like ward IP transactions. Under other circumstances, contracts GALVmed are incurring unnecessary risk if they fail to need to capture more sophisticated strategies that deal with, MODULE 6: INNOVATIVE ACTIVITY PROFILE 2: INTELLECTUAL PROPERTY MANAGEMENT IN LIVESTOCK VETERINARY MEDICINES 519 for example, issues of pro-poor performance obligations, purely humanitarian, private partners, who are crucial in geographical exclusivities, and activities for which a high ensuring that a technology becomes a successful product, degree of uncertainty exists. GALVmed’s position as a facil- are likely to have different ambitions, which must also be itator in the RD&D process further complicates what might considered. otherwise be a simple contract. As a facilitator, GALVmed The need to foster stronger public-private partnerships engages multiple parties, often playing the role of an inter- has taught GALVmed to leverage the organization’s interests mediary or broker (see module 3, TN 4, for a discussion of while providing its partners with the opportunity to achieve innovation brokers). GALVmed must structure contracts to their own internal mission. This understanding has served ensure that there is a potential for leveraging to meet pro- GALVmed enormously well while dealing with contentious poor goals, certain obligations from technology providers IP issues and creating conditions for relationships and are integrated, and an effective recourse process is in place products conducive to success. (should obligations be broken) with minimal impact on Another benefit GALVmed has enjoyed from its goals and milestones. In addition, GALVmed must ensure approach to managing IP is the ability to rapidly produce, that the expectations of the technology provider and subli- negotiate, and secure agreements with different partners. censee are in compliance with one another. It is in The development of core IP principles and more attractive GALVmed’s interest to release market-ready products as conditions for engaging partners have allowed the organiza- soon as possible. Therefore it becomes GALVmed’s respon- tion to significantly increase the rate at which it can negoti- sibility to manage challenging negotiations with all involved ate contracts. parties in a timely and efficient way. LESSONS LEARNED AND ISSUES FOR BENEFITS, IMPACT, AND EXPERIENCE WIDER APPLICATION As this profile has illustrated, IP management processes in the GALVmed’s experience in IP management (including its private sector are highly relevant to nonprofits working to interaction with public and private partners) provides many develop technology for the poor. IP management in the pri- lessons. A key lesson is that superficial surveys of IP are vate sector minimizes risks and contributes key components insufficient. All organizations working in the knowledge to a commercialization strategy that supports the organiza- economy, in the public sector or otherwise, need to proac- tion’s goals. GALVmed, through its systematic approach to tively address IP matters. Systematic IP management will IP management, is better able to circumvent and/or mini- improve efficient progress, reduce risk, and support the mize IP risks that could adversely affect downstream devel- organizational mission, ultimately creating greater impact opment and deployment operations (see the sections on IP on livelihoods of the very poor. landscaping and IP due diligence) and can use IP manage- The resources needed to implement IP management require ment to support its organizational goals. In the wider organizational decisions to develop certain capacities in-house scheme of things, GALVmed’s IP management system has and determine which elements should be outsourced. Some benefited the organization pro-poor mission by addressing have suggested that basic understanding of IP and access to some broader issues that often delayed milestone deliver- patent information (such as information in public patent ables, namely, the growth of innovation to sustainable, databases) is sufficient for most public sector operations. As market-ready products. demonstrated here, however, IP issues require significant One main point highlighted through GALVmed’s experi- expertise in analysis and the ability to develop solutions tai- ence in strategic IP management is that organizational mis- lored to each project’s goals. Public patent data require sions and related policies, including IP policies, must be interpretation, informed analysis, and then translation into aligned with the ambitions of partners engaged in the a sound IP strategy that serves the organization and its RD&D process. Ultimately, the availability of GALVmed’s development goals. products should not depend on the existence of GALVmed GALVmed has found that a hybrid approach to IP capac- itself. For innovations to become meaningful products with ity building, in which IP expertise is available both in-house wide adoption, partners, preferably private, must be incen- and externally, serves the organization best. Internal sources tivized to support the existence and availability of a product, are in closer contact with staff overseeing the RD&D process throughout and beyond the existence of GALVmed. While and can better capture and communicate the organization’s GALVmed’s facilitation in the development of a vaccine is needs and wants. External expertise, on the other hand, is 520 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK impartial, can provide in-depth analysis, and can highlight Consequently, GALVmed has recognized that the second issues the organization may fail to see internally. External half of the equation for success in commercializing technologies expertise has given GALVmed high-quality analysis and for the poor is to build capacity in its downstream partners. access to top-tier attorneys. GALVmed now hires business consultants to work alongside One of the most challenging issues GALVmed has experi- partners to create business plans and strategies that take enced is that of contracting. GALVmed’s facilitation role advantage of the IP knowledge GALVmed holds. In some entails the development of multiple contracts and often instances, GALVmed assists its partners by taking the lead in lengthy negotiations. GALVmed is working toward a new drafting and negotiating complex agreements between part- approach that employs significantly simplified contracts fit ners. This intervention provides the partners with practical for multiple purposes. The intention is to decrease the time experience for dealing with IP issues, while providing between drafting and signing contracts, while still effectively GALVmed with the opportunity to impart its knowledge integrating the necessary rights and obligations. In addition and experience in IP management for pro-poor purposes. to benefits for GALVmed, simplified legal contracts benefit Capacity building on a project-specific basis has made related developing country partners without good access to legal processes, such as contracting, simpler. GALVmed can now expertise. engage with partners who have a clearer understanding of GALVmed has learned that building in-house capacity to the needs, steps, risks, costs, and inputs required for a sus- manage IP is only half of the equation. IP management plays tainable venture. an integral role in achieving a desired result; many related In conclusion, GALVmed provides an example of how factors, such as business development strategies, go hand- nonprofits engaged in research, development, and deploy- in-hand with IP management practices. Regardless of the ment of technologies for the poor can benefit from system- diligence GALVmed puts into managing IP, a sustainable atic IP management. IP management plays a key role in endeavor ultimately relies on a partner’s ability to interpret reducing risks and improving the organization’s capacity to GALVmed’s knowledge of IP issues and integrate that deliver on its mission. Most nonprofits do not have suffi- knowledge into a sound business model for downstream cient in-house capacity, and this profile illustrates how the application. balance of outsourced services and internal capacity can In GALVmed’s case, this challenge can prove difficult to change as an organization grows. Lastly, GALVmed’s experi- meet. The majority of the organization’s partners for down- ence indicates the importance of integrating capacity build- stream deployment are from the developing world, and ing in IP management; even where a nonprofit is challenged many suffer capacity constraints (either in financial or other itself in IP management capacity, there are opportunities to resources) or lack experience with IP, complex contracting, share knowledge and continue to foster improvements in a the creation of business plans, and other key business tools. partner’s IP management skills. MODULE 6: INNOVATIVE ACTIVITY PROFILE 2: INTELLECTUAL PROPERTY MANAGEMENT IN LIVESTOCK VETERINARY MEDICINES 521 I N N O V AT I V E A C T I V I T Y P R O F I L E 3 Developing a Subregional Approach to Regulating Agricultural Biotechnology in West Africa Morven McLean, ILSI Research Foundation SYNOPSIS OF PROJECT DATA Common Regulations for Conventional and Transgenic Seeds in the CILSS Area.� The preambles to the conven- Country: CILSS and ECOWAS member tions recognized both the benefits and potential risks of economies in West Africa modern biotechnology. It stated that a subregional Project: Rural Agricultural Income and Sustain- approach to biosafety regulation should be undertaken as able Environment Plus (RAISE Plus) “each country is neither able to individually take advan- Program: Short-Term Technical Assis- tage of the known and potential benefits of genetically tance in Biotechnology (STTAB) modified organisms (GMOs), nor cope with their known Implementing Michigan State University (MSU), and potential risks.� organizations: Agriculture and Biotechnology Strategies In 2005, the Economic Community of West African States (AGBIOS), and the Donald Danforth (ECOWAS) published an action plan with three operational Plant Science Center (DDPSC) objectives for the development of biotechnology and Budget: US$2 million biosafety in the subregion, one of which was to develop a Date: USAID FY 2006–09 subregional approach to biosafety regulation (ECOWAS Contact: Dr. Saharah Moon Chapotin, USAID 2005). The plan was critical of the slow progress in achieving a subregional biosafety framework in West Africa, which it attributed to “an absence of political support in the field of CONTEXT biotechnology and biosafety; lack of communication In 2004, the Sahel Institute (INSAH, Institut du Sahel) between stakeholders, even within the same country; lack of completed a stock-taking exercise in the member coun- coordination between the concerned ministries in the mem- tries of the Interstate Committee for Drought Control in ber countries; and poor subregional cooperation on the sub- the Sahel (CILSS, Comité Inter-états de lutte contre la ject.� The subregional approach to biosafety advocated by sècheresse au Sahel) plus Ghana to gain a better under- ECOWAS was to develop and implement a common regula- standing of the structure of the seed sector in each. Dur- tory framework that would be binding on all ECOWAS ing the country consultations, stakeholders provided the member countries. following justifications for establishing a subregional reg- ulatory body for conventional and transgenic seed in the PROJECT OBJECTIVES AND DESCRIPTION Sahel: (1) extending national seed markets that are con- sidered limited; (2) formalizing an ancient transborder The primary objective of the Short-Term Technical Assis- seed route; (3) ensuring the quality of the varieties tance in Biotechnology (STTAB) project was to work released; and (4) monitoring the release of GE products in cooperatively with regulatory officials to develop practi- particular. cal, needs-driven policies, directives, guidance, and review This insight led to the development of the “Framework procedures to address the regulation of confined field tri- Convention Introducing a Common Biosafety Regulation als and eventual commercialization of GE crops in West for the Prevention of Biotechnological Risks in the CILSS Africa. The project’s components are described in the sec- Countries� and the “Framework Convention Instituting tions that follow. 522 Technical assistance to INSAH for the review Establishing a Procedure for the Review and Authorisation and adoption of technical annexes to the CILSS of Products of Modern Biotechnology within the biosafety convention ECOWAS.� The project worked in partnership with INSAH (the tech- nical arm of CILSS) and the West and Central African Technical assistance to enhance the environmental Council for Agricultural Research and Development risk assessment capacity of the national biosecurity (WECARD, referred to more commonly by its French agency, Burkina Faso acronym, CORAF)1 as well as representatives from national The STTAB project also endeavored to work with national environment and agriculture ministries to improve the agencies and authorities to build institutional and human Framework Convention Instituting Common Regulations resource capacity in risk assessment, risk management, and for Conventional and Transgenic Seeds in the CILSS Area. decision making at the national level. When the project During a series of four subregional meetings and with began, Burkina Faso was the only country in West Africa to additional bilateral inputs from CILSS country representa- have approved confined field trials of a GE crop, insect- tives, the CILSS Convention was substantively rewritten in resistant (Bt) cotton. To approve these trials, Burkina Faso an effort to address the activities of the subregional process had promulgated biosafety regulations and established consistently and without duplication. The contained, con- ANB, its national biosafety agency reporting to the environ- fined, and unconfined uses of GE organisms were clearly ment ministry (Ministère de l’Environnement et du Cadre differentiated. The regulatory responsibilities for each of de Vie). While the ANB, which has a legal mandate for the these activities were defined. The technical annexes, which coordination and monitoring of all activities pertaining to describe the technical information required for applica- the implementation of biosafety in Burkina Faso, was tions to the regional scientific review panel, were more already active in the field, budgetary and technical capacity clearly aligned with the types of applications that will be constraints limited its effectiveness. Preserving and building received in the subregion and with international stan- on the advances in Burkina Faso required building signifi- dards and guidance related to the regulation of GE organ- cant and sustainable capacity within the ANB. isms established by Codex Alimentarius, OECD, and the Cartagena Protocol. INNOVATIVE ELEMENTS Technical assistance to INSAH to develop and implement an ECOWAS regulation on biosafety The innovative elements of STTAB were its regional approach to what was initially perceived as a national prior- In August 2008, the Experts Group Meeting on ECOWAS ity. The approach proved flexible enough to be developed Biosafety Regulation, attended by environment and agricul- into a novel model for subregional harmonization of ture representatives from 14 ECOWAS countries, concluded biosafety regulations. with a request to INSAH-CILSS to extend the CILSS Frame- work Convention to all of the ECOWAS member countries. Building on the STTAB project’s support to INSAH for the Identifying and responding to a national priority with positive regional spillovers development of a regional biosafety framework within West Africa, this initiative aimed to extend the CILSS Biosafety Initially, the STTAB project focused most of its technical Convention under the ECOWAS mandate. capacity-building in Burkina Faso. This strategic decision Specifically, the objective was to develop an ECOWAS was based on the fact that: (1) Burkina Faso’s government Regulation governing the importation, development, man- had clearly indicated its support for the commercialization ufacture, and use of GE organisms and products derived of Bt cotton and, to that end, had made significant steps thereof within ECOWAS Member States and to facilitate a toward establishing a biosafety regulatory system (see box consultative process leading to the adoption of the Regula- 6.28 in TN 4 in this module) and (2) farmers expressed sig- tion. The ECOWAS Biosafety Regulation was to be consis- nificant interest in cultivating Bt cotton, generated by prom- tent with the spirit of the CILSS Biosafety Convention, ising results from field trials conducted from 2003 to 2006. incorporating the best elements of that framework, includ- Environmental risk assessment training was provided to ing its technical guidance on risk assessment procedures. ANB personnel and other scientists so that a premarket The resulting document was “Regulation C/Reg.1/12/08 environmental risk assessment of Bt cotton could be MODULE 6: INNOVATIVE ACTIVITY PROFILE 3: A SUBREGIONAL APPROACH TO REGULATING AGRICULTURAL BIOTECHNOLOGY 523 undertaken. The assessment was a prerequisite for the deci- training, and serves as a potential model for other countries sion to approve Bt cotton. in the subregion (or elsewhere in sub-Saharan Africa). The commercial cultivation of Bt cotton in Burkina Faso contributed to an increase of about 16 percent of overall A novel but feasible model for subregional production in 2009/10. It is anticipated that 95 percent of harmonization harvested area (442,900 hectares) in 2010 will be planted to Given the ease of transboundary movement of seed between Bt cotton compared to the 2009/10 season (106,000 countries in West Africa, the impending commercial hectares). This expansion is expected to contribute signifi- authorization of Bt cotton in Burkina Faso was an impor- cantly to national cotton production. tant catalyst for countries to work toward implementing a The ECOWAS regulation has not been submitted for subregional approach to biosafety regulation. From prior approval, so it remains to be seen how implementation will stock-taking exercises and subregional consultations, it was proceed. The West Africa Regional Biosafety Project, apparent that the project should direct regional harmoniza- launched in June 2009 by the West African Economic and tion to the development of a mechanism whereby the Monetary Union (WAEMU) with funding from UNEP-GEF science-based risk assessment would be undertaken by a and the World Bank, has a component to strengthen insti- subregional body but all decision-making would remain at tutional capacity for preparing regional laws and regula- the national level. A subregional body responsible for tions on biosafety and creating an institutional framework undertaking risk assessments for specific types of applica- to accompany the dissemination and implementation of the tions (such as confined field trials, food safety assessments regional biosafety framework in WAEMU countries. A joint for GE food, environmental risk assessment of GE plants) CILSS-ECOWAS-WAEMU committee is currently review- and providing scientific opinions to the member countries ing the ECOWAS Regulation to determine how it may be was considered the most achievable form of harmonization. best incorporated into the WAEMU project. The end result This model differed from the only other examples of subre- may be that the ECOWAS Regulation will become a joint gional harmonization that have been implemented interna- ECOWAS-WAEMU Regulation. tionally. In the EU, national decisions about cultivating GE crops are delegated to a subregional body, but this model has been ineffective. In Canada and the United States, har- LESSONS LEARNED AND ISSUES FOR monization of technical requirements for risk assessment WIDER APPLICATION has not resulted in appreciable gains in the efficiency or The lessons from this experience are summarized in the effectiveness of their representative regulatory systems. sections that follow. They focus on the factors that The revised CILSS Convention and follow-on ECOWAS contribute to successful collaboration, including a clear Regulation provide a practical and achievable approach to appreciation of the stakeholders involved, the potential biosafety regulation in a subregion where national govern- incentives for collaboration, and the capacity-building ments have limited scientific resources (human, financial, requirements that must be fulfilled if collaboration is to and institutional) to draw upon. An essential element of this yield useful results. project was to build capacity among the country represen- tatives involved in drafting these documents so that the Understand who the key players are and engage implications of specific policy choices and regulatory them early in the process approaches could be considered. The INSAH-CILSS process that led to the development of the first draft of the Framework Convention was criticized BENEFITS, IMPACT, AND EXPERIENCE because the Convention was developed by Ministries of This STTAB project has resulted in both direct and indirect Agriculture without representation or input from national benefits in the subregion. Building the capacity of Burkin- biosafety focal points or Ministries of Environment. The abe risk assessors and regulators to undertake the environ- process to revise the Convention under the STTAB project mental risk assessment of GE cotton was one of the factors deliberately included representation from a broader range contributing to its eventual approval. This effort has of ministries. This more inclusive approach was an impor- strengthened the ANB nationally, promoted its visibility tant step in correcting the apparent absence of prior inter- within West Africa as a regional resource for risk assessment ministerial engagement. 524 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Collaboration with like projects should begin early ECOWAS Regulation would be more efficient and cost- and continue through the life of the project effective than if each country performed its own assessment. Deficiencies in cooperation and coordination between the It might also help mitigate potential trade disruptions that CILSS-ECOWAS initiative to develop a subregional can occur when trading partners have asynchronous prod- approach to biosafety risk assessment and the West Africa uct approvals. Regional Biosafety Project under WAEMU led to early con- cerns that two competing approaches to regional biosafety Building national biosafety capacity is necessary for regulation would develop. This concern may have been subregional harmonization resolved with the CILSS-ECOWAS-WAEMU committee mentioned previously. Other capacity-building initiatives It is difficult for policy makers to support efforts to develop have also been launched in West Africa since the STTAB subregional approaches to biosafety regulation, let alone project began, notably the African Network of Biosafety determine the appropriate model to advance, unless some Expertise, established by the African Union/New Partner- national capacity in this area has been achieved. A national ship for Africa’s Development (NEPAD) Office of Science government does not need to have established and opera- and Technology, with a specific mandate to improve techni- tionalized a biosafety regulatory system before engaging in cal capacity in biosafety regulation and risk assessment. such discussions, but it requires at least some expertise in Collaboration between all of these projects will be essential biosafety (or related) regulation and/or risk assessment to if subregional harmonization is to be achieved. ensure that national interests can be met. Subregional harmonization is unlikely unless there Identify how project outcomes can be sustained is an imperative for countries to engage Neither the CILSS Convention nor the ECOWAS Regulation meaningfully in the process identifies provisions for funding the subregional activities In the case of West Africa, the commercial release of Bt cot- described in each (such as convening the subregional scien- ton in Burkina Faso was a pivotal event. While there had tific panel). Funding for biosafety capacity building in West been efforts to promote a subregional approach to Africa, including support for the development of national biosafety regulation prior to the impending approval of Bt and subregional biosafety regulatory approaches, has come cotton, the expectation that Bt cotton seed would move to from the EU, United States, and Japanese donor agencies, as other countries within the subregion provided a real-world well as foundations and international financial institutions example of why a subregional approach to risk assessment such as the Bill and Melinda Gates Foundation, the was desirable and even necessary. Given that most West McKnight Foundation, the Rockefeller Foundation, and the African countries have very limited capacity in biosafety World Bank. Mechanisms for sustainable funding of a sub- risk assessment and risk management, a subregional risk regional biosafety regulatory system by West African gov- assessment of Bt cotton under the process described in the ernments have not been established. MODULE 6: INNOVATIVE ACTIVITY PROFILE 3: A SUBREGIONAL APPROACH TO REGULATING AGRICULTURAL BIOTECHNOLOGY 525 I N N O V AT I V E A C T I V I T Y P R O F I L E 4 The Supply Response to New Sources of Demand for Financial and Other Services in Rural Andhra Pradesh Gunnar Larson, World Bank Melissa Williams, World Bank SYNOPSIS projected to require about US$40 billion–US$50 billion in credit.2 elf-help groups and their federations at the village, S subdistrict, and district levels represent a new, self- aware client base for providers of financial and other services. By forming groups that effectively demand Self-help groups (SHGs) are the primary source of credit for the rural poor, including small and marginal farmers. In 2007–08, an estimated US$1.7 billion in credit was disbursed to 1.3 million SHGs, but at this rate of flow, a major credit services, these clients acquire fundamental financial liter- gap is expected. Per capita credit access is equivalent to acy and other competencies (thrift, savings, inter-lending, US$111, which is less than 40 percent of the average expen- bookkeeping, and management skills) that strengthen and diture by small and marginal farmers who cultivate their sustain their capacity to innovate. Government agencies, land (US$286).3 As a result, countless poor people are left NGOs, and private companies have designed products and with no recourse other than informal moneylenders, who interventions to answer their demand and fulfill their charge usurious interest rates, sometimes as high as 600 per- needs in a number of sectors, including agriculture, cent annually. finance, nonfarm employment, health, and education. Per- Module 1, IAP 4 described social mobilization among haps the most significant practical lesson from this experi- SHGs in Andhra Pradesh to develop a new source of effec- ence is that stronger institutions for the rural poor enable tive demand in that state’s rural economy. For rural entre- several positive factors to converge. Public agencies gain a preneurs and other service providers, the size of this new new partner capable of collectively asserting its needs, clientele is sufficient in scale to command substantial atten- business gains a promising new market for services, and tion. As of November 2010, nearly 11 million women had the wider economy gains a foundation for more pro-poor organized themselves into SHGs through Indira Kranthi growth and innovation. Patham, creating a new, self-aware client base.4 The poten- tial returns from serving so vast a population of customers are self-evident. CONTEXT As noted in the overview of this module, accompanying India is one of the world’s fastest-growing economies, yet investments in rural finance show strong synergies with translating rapid economic growth into reduced poverty investments in agricultural innovation. SHGs have proven remains a persistent challenge, particularly in rural areas. highly effective in bringing rural financial services into areas Throughout India, only 23 percent of 200 million rural poor that are traditionally poorly served. They do so by helping are organized into various forms of groups. Individuals who commercial lenders to manage risk through joint liability, are not in groups can find it challenging to obtain the credit, which brings tremendous pressure to bear on the respective other services, and market access that offer the means to group members to repay loans on time. The SHG strategy increase their incomes. The Government of India estimates lowers transaction costs and addresses lenders’ concerns that it will need to invest about US$20 billion over the next over the potentially high risks of default in poor, remote eight to nine years to tackle poverty but plans to invest just rural areas (World Bank 2011). The organization of SHGs over US$10 billion.1 Over the same period, the poor are into larger aggregates at the village, subdistrict, and district 526 levels was designed intentionally to meet sellers and service INNOVATIVE ELEMENTS providers halfway. As the rural poor have organized, saved, accessed credit, and built skills and assets, they have more effectively voiced OBJECTIVES AND DESCRIPTION their demand for goods and services. In response, govern- Aside from eliminating some of the barriers that prevented ment agencies, NGOs, and private companies have commercial banks from offering services in rural areas, a designed products and interventions to answer their major goal of linking organized rural groups to formal demand and fulfill their needs in a number of sectors, credit and other services is to accommodate the constraints including agriculture, finance, nonfarm employment, typical of SHG members, including time constraints. A health, and education. premium is placed on convenience and on enabling the In many instances, these service providers use a copro- individual customer to conduct multiple transactions in a duction model in which the institutions of the poor become single visit. A closely related goal is to provide them with a agents or franchises of an agency or business to extend its relatively complete menu of financial services, including outreach and deliver services more cost-effectively. This credit, insurance, and instruments for poor households to practice not only provides services but generates employ- swap burdensome informal debt obligations for new obli- ment within rural areas. In some instances, the Village Orga- gations in the formal sector with more stable and reason- nization operates a commodity procurement center where able interest rates (a high priority among the poor in the agricultural inputs are sold. The approach builds capacity in state). The insurance instruments are designed to protect the institutions, provides employment, and helps poor vulnerable clients from the financial effects of events that clients become more integrated with the value chain (for often leave people in poverty, including pensions that pro- example, the procurement center will buy their produce and vide security in old age. Figure 6.3 shows how SHGs and sell them inputs to improve yields in the next cycle). their federations create an enabling environment for inno- In other instances, the poor have innovated by develop- vation by empowering the rural poor to acquire the capac- ing their own enterprises in response to program-supported ities, services, market access, and social safety nets that pave activities. Some community members sell biopesticides and the way for innovation. biofertilizers to farmers in response to the community- Figure 6.3 Self-Help Groups Constitute a Rural Institutional Platform That Enables the Rural Poor to Acquire the Capacities, Services, Market Access, and Social Safety Nets That Pave the Way for Innovation Investing in enterprises Access to markets Public-private people and jobs partnerships Investing in value chains Savings Access to financial Rural institutional Credit services platform: Insurance • Self-help groups • Village organizations Bookkeeping • Subdistrict federations • District federations Developed Planning capacities Job skills Food security Safety nets, risk, Death and disability and vulnerability insurance management Pensions Source: Authors. MODULE 6: INNOVATIVE ACTIVITY PROFILE 4: FINANCIAL AND OTHER SERVICES IN RURAL ANDHRA PRADESH 527 managed sustainable agriculture initiative (see module 1, health, marriage, and home repair. The banks offered prod- IAP 4). Others provide public services that have not reached ucts and services in all these areas, including support for their location, such as preschools or nutrition centers for long-term investment in land. Because escaping from debt pregnant women and young children. These services are has been a major priority for many rural households in especially important in the tribal areas. Andhra Pradesh, banks also arranged debt swaps and pro- The foundation of this entrepreneurial innovation is vided credit with which to retire costly informal loans. Even access to financial services. These services enable the poor to better, the new services enabled poor people to avoid the sit- accumulate assets and create a less risky environment in uations that had made them easy prey for informal money- which they can capitalize on livelihood opportunities. lenders. Lending is based on household investment plans that are vetted by the SHGs and Village Organizations. Community-based recovery mechanisms ensure repayment BENEFITS AND IMPACTS rates of 95 percent or higher to the banks. The benefits and impacts of providing formal financial ser- vices to clients previously regarded as too risky to serve have Insurance services to reduce vulnerability ranged from the tangible benefits that people obtain from the services themselves to less tangible effects such as financial Illness and death can plunge or further entrench a family in discipline or the sense of security derived from savings and poverty. Private companies had often viewed the transaction insurance plans. Commercial banks have benefited from costs of providing health, disability, and life insurance as innovative business models that make it possible to tap into a prohibitive in rural areas, but community-managed struc- vast and underserved rural market. The successes of the pro- tures dramatically reduce those costs by taking on tasks such gram in Andhra Pradesh and other states, and the benefits of as enrolling members and verifying, documenting, and the products, services, and new models developed expressly processing claims. In Andhra Pradesh, community resource for a large base of very poor clients, inspired the Government persons (bima mithras) are trained to fulfill these responsi- of India to establish a National Rural Livelihoods Mission. bilities on behalf of the Life Insurance Corporation of India The Rural Livelihoods Mission will apply the strategies devel- (more information on community resource persons appears oped through this program at the national level. below). District federations have established call centers and developed a web portal to process transactions. The resource persons and call center make insurance services far more Building a bridge to formal credit economical to provide and far more accessible to the rural The savings, thrift, and inter-lending activities around poor, reducing the time to deliver insurance benefits by half. which SHGs are organized provide members with experi- Throughout Andhra Pradesh, more than 1.5 million SHGs ence in financial discipline, money management, and in were organized during the first ten years of the Indira Kran- conducting transactions and repaying loans. Over time, thi Patham program. During that period, SHG members these competencies enable people to establish a history of accessed more than US$6 billion in credit from commercial repayment, obtain a credit rating, and then engage with banks. More than 11 million members and their families paid banks or microfinance institutions. As a result, bank lending for death and disability and health insurance coverage, and has increased from Rs 1.97 billion (US$48 million) in over US$100 million worth of claims have been settled. Over 2001–02 to Rs 65 billion (US$1.6 billion) in 2009–10. By 1 million SHG members have a separate health savings early 2010, banks had extended loans of Rs 251 billion account, and as many as 3,000 villages have dedicated health (US$6 billion) to SHGs without any collateral. risk funds to mitigate the shocks of health emergencies. More than 3,000 villages have nutrition centers for pregnant and lactating mothers and children under five. Total financial inclusion As banks began to see the rural poor as customers, they The use of procurement center altered their business model to accommodate this new source of demand. Rural households generally require Procurement centers operated through Indira Kranthi Patham working capital to support their current activities, capital to are an important convening venue for small-scale producers invest in new income-generating activities, and cash to meet and prospective investors. Small-scale producers, whose sales basic consumption needs and social obligations, such as were previously dispersed widely among informal buyers, 528 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK command better prices for their produce and buy inputs at relate to institutional development. When institutions of lower prices. Procurement centers offer a forum for learning the rural poor become strong, they establish the basis for about new crops and growing methods, some of which have a convergence of factors. Public agencies gain a new part- been developed locally. Producers are also better positioned to ner that articulates the aspirations and concerns of its learn about developments in consumer and other markets, membership. Private businesses gain clients capable of because they interact directly with buyers in the value chain. collectively asserting demand as a market. The wider These venues also reduce the costs of outreach to interested economy gains a foundation for more inclusive, pro-poor investors by assembling a critical mass of potential clients growth and innovation based on improved capacities and whose purchasing power offsets any discounts they may nego- access to services. In the case of community-managed sus- tiate. Linking producers to corporate and cooperative partners tainable agriculture, stronger institutions for the rural such as ITC Ltd., APMARKFED, and Olam International poor create a foundation for dialogue on alternative agri- became one of the great legacies of Indira Kranthi Patham, culture in India’s semiarid tropics. and the quest for additional partners continues. The cost advantages of using coproduction models to deliver insurance services and agricultural inputs offset many of the disincentives of investing in rural areas. The Co-contributory pension scheme organization of a new client base provides businesses with The government of Andhra Pradesh devised a co-contribu- local partners capable of assuming many functions that tory pension scheme targeting SHG members over 18, all of were once centrally performed. The reduced costs greatly them women. The members contribute Re 1 per day, which extend the reach of government services and private com- is matched by the government. The Life Insurance Corpora- panies. The transaction costs for poor rural clients also tion of India invests the contributions in the market to get fall dramatically through the use of one-stop shops where higher returns. When the member turns 60 she receives a they can conveniently conduct multiple transactions. pension of Rs 500 a month and health insurance coverage. Located close to home, these service points provide com- Thus far, about 4.5 million SHG members have individual plete “end-to-end� financial services including credit, co-contributory pension accounts, and more than 400,000 insurance, procurement of inputs, and marketing of are receiving pensions. produce. Like most problem-solving efforts, the experience Other benefits described here has cautionary as well as positive lessons. In seven districts of Andhra Pradesh, the easy availability In addition to these specific instruments, Village Organiza- of credit from commercial banks and microfinance insti- tions bundle entitlements from public distribution systems, tutions encouraged borrowing well in excess of house- grain banks, and bulk purchases from the open market in a holds’ ability to repay, and about 20 percent of participat- food security system that benefits as many as three million ing households began accumulating serious debt. The households. Village Organizations also operate “bridge resulting microfinance crisis points to the ongoing need schools� that offer incentives to ensure high levels of enroll- for building financial literacy among the poor and for dis- ment among girls. Among the more than 600,000 farmers who cipline in lending. The abusive collection processes adopted community-managed sustainable agriculture in its employed by some of these institutions emphasizes the first four years, the use of nonpesticide management caused a need for discretion in selecting which institutions may dramatic resurgence in local biodiversity in addition to reduc- participate in rural livelihoods programs and to the need ing input costs and enabling farmers to escape from debt. for well-defined channels for recourse when borrowers default. LESSONS LEARNED AND ISSUES FOR WIDER APPLICATION Some of the most significant practical lessons to emerge from the rural livelihoods program in Andhra Pradesh MODULE 6: INNOVATIVE ACTIVITY PROFILE 4: FINANCIAL AND OTHER SERVICES IN RURAL ANDHRA PRADESH 529 NOTES 3. See Benoit (2007) for a good overview of indicators rel- evant to assessing innovation systems. Module 6 Overview 1. Of 145 countries for which data were reported for the years 1999/2000 and 2000/01, about one-third reported that Thematic Note 3 more than 95 percent of secondary school students were 1. World Bank (2006) discusses this issue for many highly enrolled in general programs and less than 5 percent in relevant country-level investments related to plant vocational or technical programs. Most European countries breeding. reported 20-40 percent enrollment in vocational/technical 2. For example, it does not adequately emphasize the programs at the secondary level. importance of IPRs in access and benefit sharing, in which 2. IPRs: World Trade Organization (WTO) and World “access� refers to accessing traditional knowledge and Intellectual Property Organization (WIPO); PVRs: Interna- genetic resources, and “sharing� refers to sharing the ben- tional Union for the Protection of New Varieties of Plants efits (commercial and otherwise) arising from the use of (UPOV); Biosafety: Global Environmental Facility (GEF); traditional knowledge and genetic resource. and SPS standards: Standards and Trade Development 3. For a thorough exploration of these issues, see Maskus Facility (STDF), World Animal Health Organization (OIE), (2000). and International Plant Protection Convention (IPPC). 4. See http://www.wipo.int/ipadvantage/en/details.jsp?id 3. Union internationale pour la protection des obtentions =2595. végétales, established in 1961. 5. Commission on Intellectual Property Rights (2003). 4. TRIPS is the Agreement on Trade Related Aspects of Intel- lectual Property Rights, signed in 1994 as part of the Uruguay 6. “IPR-related� here refers to a broader definition of IP as round of the General Agreement on Tariffs and Trade creations of the mind or value added by innovative think- (GATT). The TRIPS agreement obliges all members of the ing. Even a hybrid plant variety, then, can be considered in World Trade Organization (WTO) to have some form of IPR some sense a form of IPR in agriculture, because control legislation in place. Low-income countries are given additional over the parents prevents others from profiting from the time to fulfil this obligation but eventually must comply. fruits of the breeder’s investment. 5. The Cartagena Protocol, which is part of the Conven- 7. See http://www.wipo.int/export/sites/www/ip-develop tion on Biological Diversity, was signed in 2000. ment/en/agenda/recommendations.pdf. 8. Patent pools, patent commons, and clearinghouses are essentially joint marketing systems in which a number of Thematic Note 1 agencies agree to market their IP as a common entity, making 1. See, for example, Johnson (2002), Paterson, Adam, and it simpler for a licensee to obtain access to a number of dif- Mullen (2003), Ivanova and Roseboom (2006), Hekkert et ferent pieces of IP in a single transaction. Patent commons al. (2006), and World Bank (2010). are typically free to access, although this is not always the case. 2. Innovation policy calls for a “whole-of-government� 9. Empresa Brasileira de Pesquisa Agropecuária, Brazil’s approach. It depends on the establishment of efficient gov- national agricultural research organization. ernment machinery able to ensure the needed coordination. 10. For example, assessing whether the researchers’ rights to Although its mechanisms must be adapted to existing insti- use technologies, materials, and data are aligned with the tutional frameworks and to cultural backgrounds, models project’s activities and evaluating potential related risks. that place a powerful coordinating body at the center of government allow innovation policy to have a pervasive influence (World Bank 2010). Thematic Note 5 1. The CAC initially formulated international commodity Thematic Note 2 and product standards, but this role has expanded to include commodity-related guidelines and codes of prac- 1. Formerly MoST, the Ministry of Science and Technology. tice; general standards and guidelines on food labeling; gen- 2. This taxonomy of key governance capabilities is based eral codes and guidelines on food hygiene; guidelines on on numerous studies undertaken by Advansis. Compare food safety risk assessment; standards, codes, and guidelines also with findings of the OECD Monitoring and Imple- on contaminants in foods; standards, guidelines, and other menting National Innovation Policies (MONIT) project recommendations on sampling, analysis, inspection, and (OECD 2005). certification procedures; maximum limits for pesticide 530 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK residue; food additives provisions; and maximum limits for 3. The US$286 figure is based on NSSO (2003). veterinary drugs in foods (FAO and WHO 2005). 4. Andhra Pradesh has 10,978,982 women in 975,362 2. For example, the 1992 Rio Declaration set a foundation SHGs, organized into 38,334 village organizations, 1,099 not only for government action but for all stakeholders to subdistrict organizations, and 22 district organizations, integrate sustainable development considerations within representing all 22 rural districts. their consumption and production decisions (Rio Declara- tion, Principle 8). Other agreements include the Kyoto Pro- tocol (1997) and World Summit on Sustainable Develop- REFERENCES AND FURTHER READING ment (2002). Module 6 Overview 3. For animal diseases, there has been a call for an inte- grated and global approach under the concept “One World, Daane, J. 2010. “Enhancing Performance of Agricultural One Health.� Innovation Systems.� Rural Development News 1/2010: pp. 76-82. 4. STDF is a global program established by FAO, OIE, WHO, WTO, and the World Bank (www.standardsfacility.org), Khandker, S.R., Z. Bakht, and G.B. Koolwal. 2006. “The which also offers grants to support specific investment in SPS Poverty Impact of Rural Roads: Evidence from capacity. The proposed multi-criteria framework aims to Bangladesh.� World Bank Policy Research Working Paper enhance the economic efficiency of SPS capacity-building 3875. Washington, DC: World Bank. decisions to meet a country’s economic development, poverty OECD (Organisation for Economic Co-operation and alleviation, public health, and other objectives (Henson and Development). 2005. Governance of Innovation Systems. Masakure 2011). Vol. 1: Synthesis Report. Paris. 5. See Calvin (2003) and Calvin et al. (2003) for examples Walle, D. van de, and D. Cratty. 2002. Impact Evaluation of a related to raspberries from Guatemala (contaminated with Rural Road Rehabilitation Project. Washington, DC: an intestinal parasite) and green onions from Mexico World Bank. (hepatitis A). Willoughby, C. 2002. Infrastructure and pro-poor growth: 6. In the United States alone, recent data estimate the eco- Implications of recent research. Unpublished. nomic impact of foodborne illness nationwide in US$152 World Bank. 2006. Agricultural Investment Sourcebook. billion annually (Scharff 2010). Washington, DC. ———. 2007a. World Bank Assistance to Agriculture in Sub- Innovative Activity Profile 2 Saharan Africa: An IEG Review. Washington, DC. ———. 2007b. World Development Report 2008: Agriculture 1. Tangible property rights are the set of rights defined by for Development. Washington, DC: World Bank. law that relate to a physical object, for example plasmids or vectors. Thematic Note 1 Innovative Activity Profile 3 Edquist, C. 2001. “The Systems of Innovation Approach and Innovation Policy: An Account of the State of the Art.� 1. Conseil Ouest et Centre Africain pour la Recherche et le Paper presented at the DRUID Conference, June 12–15, Développement Agricoles. Aalborg, Denmark. Hall, A., L. Mytelka, and B. Oyeyinka. 2006. “Concepts and Innovative Activity Profile 4 Guidelines for Diagnostic Assessments of Agricultural 1. Including SGSY and NREGS. The Swarnjayanti Gram Innovation Capacity.� Working Paper No. 17. Maastricht: Swarozgar Yojana (SGSY) is an integrated program for self- UNU–MERIT (United Nations University and Maas- employment of the rural poor that seeks to bring poor fam- tricht Economic and Social Research Institute on Inno- ilies above the poverty line by organizing them into SHGs. vation and Technology). The National Rural Employment Guarantee Scheme Hekkert, M.P., R.A.A. Suurs, S.O. Negro, S. Kuhlmann, and (NREGS) guarantees 100 days of wage employment in every R.E.H.M. Smits. 2006. “Functions of Innovation Systems: financial year to every household, whose adult members A New Approach for Analysing Technological Change.� volunteer to do unskilled manual work. Technological Forecasting and Social Change 2. Based on SGSY estimates, swarojgaris (self-employed 74(4):413–32. persons) were able to leverage US$2.1 from commercial InterAcademy Council (IAC). 2003. Inventing a Better banks for every US$1 of government investment. Future: A Strategy for Building Worldwide Capacities in MODULE 6: NOTES, REFERENCES AND FURTHER READING 531 Science and Technology. Amsterdam: InterAcademy Dahlman, C.J. Routti, and P. Ylä-Anttila (eds.). 2006. Fin- Council. land as a Knowledge Economy: Elements of Success and Ivanova, N., and J. Roseboom. February 2006. A Functional Lessons Learned. Washington, DC: World Bank Insti- Analysis of the Russian Innovation System: Roles and tute. Responsibilities of Key Stakeholders. Moscow: Science and EC (European Commission). 2009. Policy Mixes for R&D in Technology Commercialization Project (EuropeAid/ Europe. Maastricht: UNU-MERIT (United Nations Uni- 115381/C/SV/RU). versity and Maastricht Economic and Social Research Johnson, A. 2002. Functions in Innovation System Institute on Innovation and Technology). Approaches. Göteborg: Department of Industrial Edquist, C. (ed.). 1997. Systems of Innovation: Technologies, Dynamics, Chalmers University of Technology. Institutions and Organizations. Oxon: Francis Pinter KIT (Royal Tropical Institute). 2011. Dossier: Rural innova- Publishers. tion policies, in KIT Information Portal: Rural Innova- Hausmann, R., and B. Klinger. 2006. “South Africa’s tion Systems. http://portals.kit.nl/Rural_Innovation Export Predicament.� CID Working Paper No. 129. _Systems and http://www.kit.nl/smartsite.shtml?ch= Cambridge, MA: Centre for International Develop- FAB&id=26844, accessed March 2011. ment (CID), Harvard University. Kraemer-Mbula, E., and W. Wamae (eds.). 2010. Innovation Lemola, T. 2002. “Convergence of National Science and and the Development Agenda. Paris: Organisation for Technology Policies: The Case of Finland.� Research Economic Co-operation and Development (OECD) and Policy 31(8–9):1481–90. International Development Research Centre (IDRC). Lingela, V. 2004. “The Co-evolutionary Framework to OECD (Organisation for Economic Co-operation and Improve Competitiveness in the South African System of Development). 2005. Oslo Manual: Guidelines for Collect- Innovation.� Paper presented at the Globelics Academy, ing and Interpreting Innovation Data. 3rd edition. Paris. Lisbon. ———. 2010. The OECD Innovation Strategy: Getting a Ministry of Employment and the Economy. 2010. Evalua- Head Start on Tomorrow. Paris. tion of the Finnish National Innovation System. Helsinki: Paterson, A., R. Adam, and J. Mullen. 2003. The Relevance of Taloustieto Oy. the National System of Innovation Approach to Main- Nelson, R. 2003. National Innovation Systems: A Compara- streaming Science and Technology for Development in tive Analysis. Oxford: Oxford University Press. NEPAD and the AU. Pretoria: New Partnership for Nordling, L. 2009. “South African Innovation Agency Takes Africa’s Development (NEPAD). Shape.� SciDevNet, July 21, 2009, http://www.scidev Pro Inno Europe. 2010. European Innovation Scoreboard .net/en/news/south-african-innovation-agency- (EIS) 2009: Comparative Analysis of Innovation Perfor- takes-shape.html, accessed March 2011. mance. Brussels: European Union (EU). OECD (Organisation for Economic Cooperation and Roseboom, J. 2004. Case Study on the Financing of Agricul- Development). 2005. Governance of Innovation Systems. tural Research in Brazil. Washington, DC: World Bank. Volume 1: Synthesis Report. Paris. World Bank. 2008. “Project Appraisal Document on a Pro- ———. 2007a. Chile. OECD Review of Innovation Policy. posed Loan in the Amount of US$ 150 million to the Paris. Argentine Republic for an Unleashing Productive Inno- ———. 2007b. OECD Reviews of Innovation Policy: South vation Project.� Washington, DC. Africa 2007. Paris: OECD Publishing. http://dx.doi ———. 2010. Innovation Policy: A Guide for Developing .org/10.1787/9789264038240-en. Countries. Washington, DC. ———. 2008. China. OECD Review of Innovation Policy. Paris. ———. 2009a. “Chile’s National Innovation Council for Thematic Note 2 Competitiveness: Interim Assessment and Outlook.� Benoit, G. 2007. “National Innovation System: The System Paris. Approach in Historical Perspective.� Working Paper No. ———. 2009b. OECD Reviews of Innovation Policy: Korea 36. Montreal: Project on the History and Sociology of 2009. Paris: OECD Publishing. http://dx.doi.org/10 STI Statistics. Canadian Science and Innovation Indica- .1787/9789264067233-en. tors Consortium, http://www.csiic.ca/PDF/Godin_36 ———. 2009c. Mexico. OECD Review of Innovation Policy. .pdf, accessed March 2011. Paris. 532 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK ———. 2010. The OECD Innovation Strategy: Getting a AJB/PDF/pdf2010/1Nov/Kargbo%20et%20al.pdf, Head Start on Tomorrow. Paris. accessed March 2011. OECD and World Bank Institute. 2000. Korea and the March, E. 2007a. “. . .And a Tea.� WIPO Magazine 5/2007. Knowledge-Based Economy: Making the Transition. ———. 2007b. “Making the Origin Count: Two Coffees.� Paris. WIPO Magazine 5/2007. Ylä-Anttila, P., and C. Palmberg. 2007. “Economic and Maskus, K.E. 2000. Intellectual Property Rights in the Global Industrial Transformations in Finland.� Journal of Economy. Washington, DC: Institute for International Industry, Competition, and Trade 7(3–4):169–87. Economics. Pollack, A. 2010. “Rival Candy Projects Both Parse Cocoa’s Thematic Note 3 DNA.� The New York Times, September 15, 2010. Sell, S.K. 201. “Cat and Mouse: Forum-Shifting in the Battle Adams, S. 2008. “Globalization and Income Inequality: over Intellectual Property Enforcement.� Unpublished Implications for Intellectual Property Rights.� Journal of paper. George Washington University, www.gwu Policy Modeling 30(5):725–35. .edu/~igis/Sell%20Paper.doc, accessed March 2011. CAMBIA. n.d. “Mapping of Rice Patents and Patent Appli- World Bank. 2006. Intellectual Property Rights: Designing cations onto the Rice Genome.� Patentlens, http://www Regimes to Support Plant Breeding in Developing Coun- .patentlens.net/daisy/RiceGenome/3909.html, accessed tries. Report No. 33517 GLB. Washington, DC. September 2010. Cavicchi, J.R., and S.K. Kowalski. 2007. “Use the Kitchen Door.� Op/ed contribution. National Law Journal Thematic Note 4 30(15):23. AATF (African Agricultural Technology Foundation). 2010. Commission on Intellectual Property Rights (UK). 2003. Rationale for a Biosafety Law for Uganda. Policy Brief. “Agriculture and Genetic Resources.� Chapter 3 in http://www.aatf-africa.org/userfiles/WEMA-UG-policy- Integrating Intellectual Property Rights and Development brief2.pdf, accessed March 2011. Policy, 3rd ed. London. IPR Commission, http:// BrBiotec. 2010. “Country Profile: Brazil.� Brasil Biotec, www.iprcommission.org/papers/pdfs/final_report/CIPR http://apps.convention.bio.org/applications/CPA/ fullfinal.pdf, accessed March 2011. ProfileDetailsView.aspx?ccd=bra, accessed March 2011. Frankel, S. 2009. “Challenging TRIPS-plus Agreements: The Brookes, G., and P. Barfoot. 2009. “Global Impact of Biotech Potential Utility of Non-Violation Disputes.� Journal of Crops: Income and Production Effects, 1996–2007.� International Economic Law 12(4):1023–65. AgBioForum 12(2):184–208. Fridell, G. 2007. Fair Trade Coffee: The Prospects and Pitfalls Cardoso, T.A.O., M.B.M. Albuquerque Navarro, B.E.C. of Market-Driven Social Justice. Studies in Comparative Soares, F.H. Lima e Silva, S.S. Rocha, and L.M. Oda. 2005. Political Economy and Public Policy. Toronto: University “Memories of Biosafety in Brazil: Lessons to Be Learned.� of Toronto Press. Applied Biosafety 10(3):160–68. Fuck, M.P., and M.B.M. Bonacelli. 2009. “Institutions and CERA (Center for Environmental Risk Assessment). 2010a. Technological Learning: Public-Private Linkages in GM Crop Database. Center for Environmental Risk Brazil and Argentina.� Journal of Technology Management Assessment (CERA), ILSI Research Foundation, and Innovation 4(2):33–43. http://cera-gmc.org/index.php?action=gm_crop_data- Heydon, K., and W. Woolcock (eds.). 2009. The Rise of Bilat- base, accessed March 2011. eralism: Comparing American, European and Asian ———. 2010b. The South Asia Biosafety Program. Center Approaches to Preferential Trade Agreements. New York: for Environmental Risk Assessment (CERA), ILSI United Nations University Press. Research Foundation, http://cera-gmc.org/index.php? Janis, M.D., and S. Smith. 2007. “Technological Change and action=s._asia_biosafety_program, accessed March the Design of Plant Variety Protection Regimes.� 2011. Chicago-Kent Law Review 82: 1557–615. Chapotin, S.M., M. McLean, and H. Quemada. 2009. Kargbo, A., J. Mao, and C. Wang. 2010. “The Progress and “Biosafety Capacity Building: Lessons Learned from Issues in the Dutch, Chinese, and Kenyan Floriculture USAID’s Global Partnerships.� Paper presented at the Industries. African Journal of Biotechnology 9(44):7401–08. 13th ICABR Conference on the Emerging Bio-Economy, Academic Journals, http:// www.academicjournals.org/ June 18–20, Ravello. International Consortium on MODULE 6: NOTES, REFERENCES AND FURTHER READING 533 Agricultural Biotechnology Research, http://www.econo- McLean, M.A., R.J. Frederick, P. Traynor, J.I. Cohen, and mia.uniroma2.it/icabr/paper_view.php?id=484&p=5, J. Komen. (2002). “A Conceptual Framework for Imple- accessed March 2011. menting Biosafety: Linking Policy, Capacity and Regula- Cohen, J.I., and R. Paarlberg. 2004. “Unlocking Crop tion. ISNAR Briefing Paper No. 47. IFPRI, Washington, DC. Biotechnology in Developing Countries: A Report from Potrykus, I. 2010. “Lessons from the ‘Humanitarian the Field.� World Development 32 (9):1563–77. Golden Rice’ Project: Regulation Prevents Development DBT (Department of Biotechnology). 2008. Establishment of Public Good Genetically Engineered Crop Products.� Plan for the National Biotechnology Regulatory Authority. New Biotechnology 27(5):466–72. New Delhi: DBT, Ministry of Science and Technology. Pray, C., B. Ramaswami, J. Huang, R. Hu, P. Bengali, and EAC (East African Community). 2009. Biosafety Act, 2009. H. Zhang. 2006. “Costs and Enforcement of Biosafety Arusha. Regulations in India and China.� International Journal of Technology and Globalisation 2(1–2):137–57. Government of Brazil. 2005. Decreto No. 5.591, de 22 de UNEP (United Nations Environment Programme). 2003a. novembro de 2005. Brasilia. http://www.planalto.gov Sub-Regional Workshop for Latin American Countries on: .br/ccivil_03/_Ato2004-2006/2005/Decreto/D5591.htm, Development of a Regulatory Regime and Administrative accessed March 2011. Systems. UNEP, http://www.unep.ch/biosafety/old_site/ Government of Vietnam. 2010. Decree No. 69/2010/ND-CP development/devdocuments/3ChileWebReportEN.pdf, on Biosafety for Genetically Modified Organisms, accessed March 2011. Genetic Specimens, and Products of Genetically Modi- ———. 2003b. Report of the Subregional Workshop for Asian fied Organisms. http://www.thuvienphapluat.vn/ Countries on: the Development of a Regulatory Regime and archive/Nghi-dinh/Decree-No-69-2010-ND-CP-on- Administrative Services. UNEP, http://www.unep.ch/bio biosafet y-for-genetically-modified-organisms- safety/old_site/development/devdocuments/shirazre vb110514t11.aspx, accessed March 2011. portfinal.pdf, accessed March 2011. GTRS (Gene Technology Review Secretariat). 2006. “Statu- World Bank. 2003. “Biosafety Regulation: A Review of Inter- tory Review of the Gene Technology Act 2000 and The national Approaches.� Report No. 26028. Washington, DC. Gene Technology Agreement.� Canberra: GTRS, Depart- ment of Health and Ageing. ———. 2007. World Development Report 2008: Agriculture for Development. Washington, DC. Héma, O., H.N. Somé, O. Traoré, J. Greenplate, and M. Abdennadher. 2009. “Efficacy of Transgenic Cotton Plant Containing the Cry1Ac and Cry2Ab Genes of Bacillus Thematic Note 5 thuringiensis against Helicoverpa armigera and Syllepte derogata in Cotton Cultivation in Burkina Faso.� Crop Calvin, L. 2003. “Produce, Food Safety, and International Protection 28(3):205–14. Trade: Response to U.S. Foodborne Illness Outbreaks Associated with Imported Produce.� In International Horna, D., P. Zambrano, J. Falck-Zepeda, T. Sengooba, G. Trade and Food Safety: Economic Theory and Case Stud- Gruère, J. Komen, and M. Kyotalimye. 2012 (forthcom- ies, edited by J. Buzby. AER-828. Washington, DC: Eco- ing). “Designing an Ex-ante Assessment of GM Tech- nomic Research Service, United States Department of nologies to Support Biosafety Regulations and Decision Agriculture (USDA). Making: The Case of Cotton in Uganda.� Calvin, L., B. Avendaño, and R. Schwentesius, R. 2003. “The James, C. 2010. “Global Status of Commercialized Economics of Food Safety: The Case of Green Onions Biotech/GM Crops: 2010.� ISAAA Brief No. 42. Ithaca, and Hepatitis A Outbreaks.� VGS-305-01. Washington, NY: International Service for the Acquisition of Agri- DC: Economic Research Service, United States Depart- biotech Applications (ISAAA). ment of Agriculture (USDA). Kalaitzandonakes, N., J.M. Alston, and K.J. Bradford. 2007. Coslovsky, S.V. 2006. “How Bolivia’s Brazil-Nut Industry “Compliance Costs for Regulatory Approval of New Became Competitive in World Markets While Brazil’s Fell Biotech Crops.� Nature Biotechnology 25(5):509–11. Behind: Lessons from a Matched Comparison.� Depart- Matten, S.R., G.P. Head, and H.D. Quemada. 2008. “How ment of Urban Studies and Planning Working Paper. Government Regulation Can Help or Hinder the Inte- Cambridge: Massachusetts Institute of Technology. gration of Bt Crops within IPM Programs.� Progress in Díaz, A., and T. O’Brian. 2004. “Improving Competitiveness Biological Control 5:27–39. and Market Access for Agricultural Exports through the McLean, M.A. 2010. “India’s Biosafety System: At Par with Development and Application of Food Safety and Qual- the World?� BiotechNews 5(2):88–91. ity Standards: The Example of Peruvian Asparagus.� 534 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Lima: Inter-American Institute for Cooperation on Jensen, F.M., N. Strychacz, and J. Keyser. 2010. “Non-Tariff Agriculture (IICA). Barriers and Regional Standards in the EAC Dairy Sec- Diaz Rios, L. 2007. “Agro-industries Characterization and tor.� Africa Trade Policy Notes. Washington, DC: World Appraisal: Asparagus in Peru.� Agricultural Manage- Bank. ment, Marketing, and Finance Working Document No. Ponte, S. 2005. “Bans, Tests, and Alchemy: Food Safety Stan- 23. Rome: Rural Infrastructure and Agro-Industries dards and the Ugandan Fish Export Industry.� Working Division, Food and Agriculture Organization (FAO). Paper No. 2005/19. Copenhagen: Danish Institute for Diaz Rios, L., and S. Jaffee. 2008. “Barrier, Catalyst, or Dis- International Studies (DIIS). traction? Standards, Competitiveness, and Africa’s Ponte, S., R. Kadigi, and M. Mitullah. 2010. When the Mar- Groundnut Exports to Europe.� Agriculture and Rural ket Helps: Standards, Ecolabels and Resource Manage- Development Discussion Paper No. 39. Washington, DC: ment Systems in East Africa. Presentation at the SAFE World Bank. Final Conference, Zanzibar, 31 May-1 June 2010. FAO (Food and Agriculture Organization). 2007a. “FAO Scharff, R.L. 2010. “Health-Related Costs from Foodborne Biosecurity Toolkit: Guide to Assess Biosecurity Capac- Illness in the United States.� Report prepared under the ity.� Part 2. Rome. ftp://ftp.fao.org/docrep/fao/010/ Produce Safety Project at Georgetown University. Pro- a1140e/a1140e.pdf, accessed August 2011. duce Safety Project, http://www.producesafetyproject ———. 2007b. Strengthening National Food Control Sys- .org/admin/assets/files/Health-Related-Foodborne-Ill- tems. A Quick Guide to Assess Capacity Building Needs.� ness-Costs-Report.pdf-1.pdf, accessed September 2011. Rome. ftp://ftp.fao.org/docrep/fao/010/a1142e/a1142e00 Vapnek, J., and M. Spreij. 2005. “Perspectives and Guide- .pdf, accessed August 2011. lines on Food Legislation, with a New Model Food Law.� FAO (Food and Agriculture Organization) and WHO FAO Legislative Study. Rome: Food and Agriculture (World Health Organization). 2005. “Understanding the Organization (FAO). Codex Alimentarius.� Revised and updated. Rome. World Bank. 2005. “Food Safety and Agricultural Health Henson, S., M. Jensen, S. Jaffee, and L. Diaz Rios. 2010. Standards: Challenges and Opportunities for Developing “Assessing the Demand for Trade-Related Food Safety Country Exports.� Washington, DC. and Quality Interventions in Agri-Food Chains.� Wash- ———. 2010. “Operational Costs of Trade-Related Sanitary ington, DC: World Bank. and Phytosanitary Activities.� Washington, DC: World Henson, S., and O. Masakure. 2011. “Establishing Priorities Bank. for SPS Capacity-Building: A Guide to Multi-Criteria WTO (World Trade Organization). 2011. “Specific Trade Decision-Making. Standards and Trade Development Concerns.� Committee on Sanitary and Phytosanitary Facility.� http://www.standardsfacility.org/Files/Eco- Measures. Report G/SPS/GEN/204/Rev.11. Geneva. nAnalysis/MCDA_FrameworkGuideDraft_20-Jun- 11.pdf, accessed August 2011. Jaffee, S. 2003. “From Challenge to Opportunity: Trans- Innovative Activity Profile 1 forming Kenya’s Fresh Vegetable Trade in the Context of Cristancho, E., I.J. Ekanayake, and W. Janssen. 2007. Emerging Food Safety and Other Standards in Europe.� “Colombia: Lessons from the Competitive Allocation of Washington, DC: World Bank. Research Funding in the Agricultural Sector.� En Breve Jaffee, S., H. Spencer, M. Sewadeh, P. Pentney, and F. 113. [In English and Spanish.] World Bank, http:// Musonda. 2005. Tanzania’s Agro-Food Trade and Emerg- irispublic.worldbank.org/85257559006C22E9/DOC_VI ing Sanitary and Phytosanitary (SPS) Standards: Toward EWER?ReadForm&I4_KEY=CEE1F9183BCF301C85257 a Strategic Approach and Action Plan. Document pre- 3B80053A7BB96B7435FBCD5FB548525769A005C5167 pared as a contribution to the Tanzania Diagnostic Trade &I4_DOCID=E70EFADC494EBB71852576A8001A6925 Integration Study, March. &, accessed March 2011. Jaffee, S., T. Deeb, T. O’Brien, Y. Strachan, and R. Kiggundu. World Bank. n.d. Implementation Manual: Market 2006. Uganda, Standards and Trade: Experience, Capaci- Improvement and Innovation Facility, 2009/2010, Zam- ties, and Priorities. Draft background report for the bia Agricultural Development and Support Program. Uganda Diagnostic Trade Integrated Study, January. Ministry of Agriculture and Cooperatives, Lusaka. Jaffee, S., S. Henson, and L. Diaz Rios. 2011. “Making the World Bank. 2010. “Designing and Implementing Agri- Grade: Smallholder Farmers, Emerging Standards, and cultural Innovation Funds: Lessons from Competitive Development Assistance Programs in Africa.� Report No. Research and Matching Grant Projects.� Washington, 62324-AFR. Washington, DC: World Bank. DC. MODULE 6: NOTES, REFERENCES AND FURTHER READING 535 Innovative Activity Profile 2 NSSO (National Sample Survey Organization). 2003. “Income, Expenditure, and Productive Assets of Farmer Boettiger, S., and S. Alvarez 2010. “Getting Better Technolo- Households.� Report No. 497. New Delhi. gies to the Poor: A Landscape of Commercialization Challenges and Opportunities.� Berkeley: Public Intellec- Rao, K.P., V. Kalavakonda, S.S. Banerjee, and P. Shah. 2008. tual Property Resources for Agriculture (PIPRA). “Community-managed Procurement Centers for Small http://www.pipra.org/documents/PIPRA_Commercial- and Marginal Farmers in Andhra Pradesh, India.� Liveli- izationReport_photos.pdf, accessed August 2011. hoods Learning Note 1(2). Washington, DC: World Bank. http://www-wds.worldbank.org/ Brown, S. 2009. “Playing Catch-Up with Lifeline Vaccines.� external/default/WDSContentServer/WDSP/IB/2008/02 Rural 21, http://www.rural21.com/uploads/media/ /27/000310607_20080227103401/Rendered/PDF/42721 rural_eng_41-42_01.pdf, accessed August 2011. optmzd0WP0South0Asia021AP1MKTG.pdf, accessed March 2011. Innovative Activity Profile 3 Shenoy, M., S. Lakhey, and P. Shah. 2010. “Creating Jobs for Rural Youth in Andhra Pradesh, India: Livelihoods Learn- CILSS (Comité Inter-états de Lutte contre la Sècheresse au ing Note 2(4). Washington, DC: World Bank. http:// Sahel). 2006. Framework Convention Instituting Com- siteresources.worldbank.org/INTRURLIV/Resources/ mon Regulations for Conventional and Transgenic Seeds LLN-2-4_AP-skills.pdf, accessed March 2011. in the CILSS Area. Bamako. Vijay Kumar, T., D.V. Raidu, J. Killi, M. Pillai, P. Shah, V. ECOWAS (Economic Community of West African States). Kalavadonda, and S. Lakhe. 2009. “Ecologically Sound, 2005. Action Plan for the Development of Biotechnology Economically Viable: Community Managed Sustainable and Bio-safety in the ECOWAS Sub-region. Abuja. Agriculture.� Washington, DC: World Bank. ———. 2008. Regulation C/Reg.1/12/08 Establishing a Pro- World Bank. 2011. “Managing Credit Risks in Financing cedure for the Review and Authorisation of Products of Agriculture: Lessons from Experiences in Asia and Modern Biotechnology within the ECOWAS. Abuja. Africa.� Washington, DC. Innovative Activity Profile 4 USEFUL WEBLINKS Hayward, N., and A. Brizzi. 2007. “Supporting the ‘People Sec- tor’: The South Asia Experience in Rural Livelihoods Thematic Note 4 Development—A Summary. Livelihoods Learning Note 1 www.tradestandards.org: Trade Standards Practi- (1). Washington, DC: World Bank. http://www-wds.world- tioners Network bank.org/external/default/WDSContentServer/WDSP/IB/ 2007/12/12/000310607_20071212165109/Rendered/PDF/ www.oie.int: World Animal Health 41692optmzd0Le1le1s0sector01PUBLIC1.pdf, accessed Organization (OIE) March 2011. www.standardsmap.org/en/: ITC Standard’s Mapping Hanumantha Rao, S.V. 2007. “Total Financial Inclusion: A Initiative Success Story.� CAB Calling 31(2):13–15. College of Thematic Note 5 Agricultural Banking, http://www.cab.org.in/CAB% www.ictsd.org: International Centre for 20Calling%20Content/Financial%20Inclusion%20 Trade and Sustainable %20A%20Study%20of%20Business%20Correspondents Development (ICTSD) %20in%20Orissa/Total%20Financial%20Inclusion% www.ifahsec.org: International Federation of 20-%20A%20Success%20Story.pdf, accessed March 2011. Animal Health (IFAH) Mohan, V., M. Takada, V. Kalavakonda, S.S. Banerjee, and P. www.ippc.int: International Plant Protec- Shah. 2008. “Community-managed Food Security Enter- tion Convention (IPPC) prises in Andhra Pradesh.� Livelihoods Learning Note 1(4). Washington, DC: World Bank. http://www- www.ipfsaph.org: International Portal on wds.worldbank.org/external/default/WDSCon- Food Safety, Animal and tentServer/WDSP/IB/2008/02/27/000310607_20080227 Plant Health 114806/Rendered/PDF/427290optmzd0NWP0South0As www.seedtesting.org: International Seed Testing ia041AP1RCL.pdf, accessed March 2011. Association (ISTA) 536 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK www.agrifoodstandards.net: Small Scale Producers and Innovative Activity Profile 5 Standards in Agrifood Society for the Elimination of Rural Poverty (SERP) Supply Chains http://serp.ap.gov.in/SHG/index.jsp. www.standardsfacility.org: Standards and Trade Development Facility (STDF) MODULE 6: USEFUL WEBLINKS 537 7 MODULE 1 Assessing, Prioritizing, Monitoring, Coordination and Collective Action for and Evaluating Agricultural Innovation Agricultural Innovation Systems OV E RV I E W Helen Hambly Odame, University of Guelph Andy Hall, LINK Ltd. Kumuda Dorai, LINK Ltd. EXECUTIVE SUMMARY involving innovation surveys and network mapping. At the level of specific programs or interventions, assessment tools he rationale for investing in assessment, priority T setting, monitoring, and evaluation within an innovation system is that practitioners require information for short- and long-term decision making and for strengthening the involvement of end-users or farmers in value chains include gender analysis and support for self- organizing networks, among others. Still other methods are relevant at all levels of the innovation system for effective for managing limited resources effectively within complex, performance management, accompanied by reporting nonlinear processes of technical and institutional change arrangements that ensure accountability. that seek to achieve social, economic, and environmental goals. Change is rarely managed by following a set plan. RATIONALE Instead, information on technical adaptations (what gets done) as well as institutional adaptations (policy and orga- In innovation systems, managing depends on information- nizational changes) involving how things get done must be rich tasks such as assessment, monitoring, and evaluation, continuously sourced, shared, analyzed and used to inform which are vital to maintaining learning, performance, and decision making at multiple levels of the system. accountability (box 7.1). Decision makers, including This module examines processes to inform decision mak- investors, public service managers, entrepreneurs, scien- ing and manage innovation at four generally defined levels of tists, and primary producers, easily understand the need the innovation system for agriculture: policy, investment, to identify technical information that can be used to cre- organization, and intervention. The module identifies meth- ate new products and services. Equally essential—but far ods relevant at each level for assessing, prioritizing, monitor- more difficult to obtain, analyze, and make accessible—is ing, and evaluating innovation processes. For example, at the information about institutional adaptations (organiza- policy level, international and cross-sectoral comparative tional and policy changes) that are being made or need to analyses may be used (such as benchmarking) and combined be made within the innovation system before technical with multistakeholder policy dialogues and foresighting innovations can be realized. For this reason, individuals studies to inform on future development issues or subsec- and organizations who are concerned with performance tors. At the organizational level, methods include multi- management, learning, and accountability within the AIS institutional and organizational performance assessments will need to learn how to obtain and use information. 539 Box 7.1 Main Terms Used in This Module Accountability. A transparent management system that example, with indicators using quantitative or qualita- ensures participation and open communication and tive data) in relation to mandate, strategy, objectives, reporting on results obtained and inputs used to and client needs. achieve the results. Theory of change or intervention logic. The under- Assessment. Making decisions about innovation to lying assumptions in an intervention that link inter- know why investment is necessary to transform modes of vention inputs with expected outcomes. production and consumption. Assessment is also done Monitoring. Tracking progress in stimulating to speed the search function within innovation systems changes in the policy and institutional environment; (for example, to identify new, more sustainable, and internal to an intervention and learning-based. more equitable routes to value creation in agriculture). Evaluation. Performed on behalf of the investor to Decision making. Decision making is not centralized gauge the effectiveness of the design and execution of the but occurs throughout the system. Rather than limiting intervention supported by the investor and the observed the focus to any single line of inquiry or information impacts associated with it. Evaluation is also done to source, interactive learning feeds decision making and inform the intervention logic of new investments. requires individuals and groups to be open to different Information gathering. The collection, communi- and imaginative ways of thinking as well as to be recep- cation, analysis, and reporting of quantitative and qual- tive to new ideas and directions that match the context. itative data by various stakeholders, which makes it Priorities. The areas to which internal and external possible to assess: priorities, capacities, and perfor- resources will be allocated to address problems or take mance; components within the system, such as institu- advantage of opportunities. tions, partnerships, and interventions; or the system’s Performance. Results in the form of productivity resources (human, financial, physical, and other (outputs), outcomes, and impact, measured (for resources). Source: Authors. Tasks such as assessing, prioritizing, monitoring, and eval- Today, the responsibilities of decision making and manag- uation will be widely used across the system and by a range ing innovations are spread across a range of actors at differ- of stakeholders. For instance, donors and community lead- ent levels of the innovation system. It is important to recog- ers may be concerned with tasks such as evaluating social nize that each of these levels requires different investments, and economic outcomes from past agricultural innovation. and while coordination may still occur, it is rare for a single, Scientists and public planners compile data and analyses of centralized agency to be responsible for assessment, priority future trends and priorities and monitor indicators of setting, monitoring, and evaluation within the AIS. These lev- change within the system. Entrepreneurs may track returns els, which are useful for organizing the discussion in the rest to current project investments and farmers may assess of this overview, include the following: value chains of specific interest to them as producers. ■ Policy level. At this level, the actors are responsible for Efforts are also made to connect all types of decision creating the enabling environment for innovation (see makers within the system to meet their shared need for module 6). At this level, decision making and manage- information and intelligence about their current context. ment emphasize coherence across sectors, scenario devel- No single organization or type of organization can provide opment, and benchmarking innovation capacities. the knowledge needed to inform policy, set priorities, or ■ Investment level. At this level, the actors are responsible propose interventions. Monitoring can facilitate mid- for designing and prioritizing interventions that support stream adjustments, while evaluation at the final stages of innovation. Decision making and management empha- an intervention enables outcomes and impacts to be thor- size evaluating the performance of investments and test- oughly investigated to inform future investment decisions ing the underlying assumptions that shed light on the and negotiation among stakeholders. “why� question for new investments. 540 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK ■ Organizational level. At this level, the actors are respon- as public policies—that directed investment into priority sible for ensuring relevance to the wider innovation areas (often commodity research programs). In the era that system. Decision making and management emphasize preceded AIS thinking, policy and planning tools assessing organizational performance and understanding commonly resulted in R&D programs and projects that the shifting landscape of other organizations and net- operated with defined resources and specific time scales works in the innovation systems. (table 7.1). Centralized public R&D planning was chal- ■ Intervention level. At this level, the actors are responsi- lenged, however, to respond to constant changes in ble for managing and implementing innovation demand-driven value chains, where decision making and processes and resources to achieve desired social and eco- management were decentralized. Entrepreneurs and nomic goals. Decision making and management empha- primary producers became key to processes of assessing size efforts such as monitoring the effectiveness of existing policy and managing performance within the sys- actions in achieving intervention goals, understanding tem. This evolution suggests that innovation systems for the dynamic context in which interventions take place agriculture are increasingly more difficult to design, plan, and planning around it, and understanding unexpected and implement without mechanisms to ensure that rapid outcomes. adjustments can be made in “game-changing� situations, such as the emergence of new fundamental information, The “how to� approach for identifying innovation prior- dramatic shifts in resource availability, or demands from ities and assessing performance described in this module includes tasks that are familiar to policy makers and man- new or different stakeholders. agers of science, technology, and innovation, including While the basic elements of policy making and planning strategic planning and foresighting, organizational perfor- have not disappeared altogether in an AIS, the need to adapt mance assessment, monitoring, evaluation, and impact to uncertainty and appreciate complexity have given rise to assessment. These familiar management processes and tools greater skepticism about causality and control in policy and are being adapted to the new demands of a multistakeholder planning cycles (Edquist 1997). In an AIS, decision makers innovation system, however, and being supplemented with are required to be strategic and not just fund and opera- interactive learning to gather information on the institu- tionalize strategic plans, then monitor and evaluate them. tional dimensions of innovation processes and capacities. Rather than determining a final set of priorities, planning Examples of these adapted and new tools are discussed becomes an iterative process that continuously identifies and throughout this module. (re)prioritizes actions in response to the rapidly changing environment. In an AIS context, the conventional notion of PAST EXPERIENCE a fixed-purpose or time-bound plan of action must antici- Past agricultural R&D systems traditionally placed great pate new information and learning generated through stake- emphasis on gathering information about inputs into or holder interactions, monitoring, and eventually evaluation outputs from the agricultural research process, prioritizing of results. The move beyond past agricultural policy making where those input investments should be made, listing out- and planning methods is most evident when it comes to puts produced, and gathering information about the out- monitoring and evaluation, which are now understood comes of research that typically combined different outputs within the AIS to be distinct tasks with different responsi- and led, for example, to changes in an important agricul- bilities, tools, and time frames (TNs 4 and 5). tural commodity’s yield and wider social and economic impact. Investments to gather information on inputs and KEY POLICY ISSUES outputs made it possible to validate technology adoption, investigate the economic surplus generated by research and For policy making, priority setting, and performance man- compute rates of return, and inform economic studies of agement in the AIS, key policy issues involve allocating the contribution of research to impact (Pardey, Alston, and sufficient resources to information gathering and assess- Ruttan 2010). ments. These activities will help identify opportunities Historically innovation was oriented toward a linear that impinge on the AIS (including those that are nonagri- “technology push� model that focused heavily on R&D, and cultural) and strategies for ensuring that learning from decision making and management largely were orchestrated very localized as well as large-scale interventions can by centralized bodies. In agricultural development, national become more useful to individual stakeholders as well as governments predominantly made decisions—constituted to the AIS as a whole. MODULE 7: OVERVIEW 541 Table 7.1 Conventional Agricultural Policy Making and Planning Tools Tool Description and time frame Advantages Disadvantages and challenges Strategic planning Defines direction of change and Creates sense of direction that aligns Operational demands may detract from operational objectives (4–8 years); the organization to its environment. strategic planning. emphasis on efficiency and relevance. Master planning Define long-term investments and Determines major system and Limited with respect to redefining the activities (10 years). organizational activities in relation organization in relation to changes in its to financial investment. environment. Program planning Prioritized actions to address Systematically analyzes constraints and Investors may impose new priorities on constraints (3–5 years). identifies priorities before resource gaps existing programming, making it difficult analyzed and projects developed, which to fulfill original program objectives. is relevant to request funding and negotiate with investors. Project planning Define efficient and sufficient set of Identifies and prepares an integrated Lack of necessary resources challenges activities to overcome a “problem� plan to resolve a “problem.� This project planning, monitoring, and (1–3 years). integration translates a project idea into evaluation. Proposals may have a proposal and also ensures that immutable deadlines. planning integrates monitoring and evaluation operations. Experiment Develop best option to obtain insight Identifies the most efficient and effective Research ideas often arise and become planning into a scientific question (1 year or option, in the form of research proposals to respond to investor calls less). proposals, for achieving research results. or changing stakeholder demands without sufficient attention to fair and equal treatment within the organization. Financial planning Match financial availability to needs Develops annual budgets and strategies Needs to ensure a link to project (variable). to identify and develop alternative monitoring and evaluation to respond sources for an organization’s core and to low-performing activities and operational funding. rebalance resources with programs. Human resource Efficiently manage and develop human Analyzes capacity-building needs and Needs to ensure a link to project and training resources (variable). prepares to develop knowledge, monitoring and evaluation to respond plans attitudes, and skills of individuals in an to low-performing individuals, redirect organization. training efforts, and rebalance human resources with programs. Priority setting Final stage of planning that defines an Rationalizes investment in relation to Implementation can deviate from agreed investment portfolio that is consistent limited resources, external demands for priorities. Priorities set without explicit with national policy and development transparency, and focus on client needs. support of key stakeholders and goals, organizational mission, and program staff can lead to conflict in the program objectives. organization. Source: Authors; Gijsbers et al. 2000; Alston et al. 1995. A supportive fiscal environment that values access to information that could otherwise be scanty or assessing, prioritizing, monitoring, and evaluating overwhelming and difficult to sort out. Information accessi- AIS and ensures information access ble to one stakeholder group may not necessarily benefit Within public institutions, management tasks associated another, so resources are also needed to assess users’ infor- with information, knowledge, and learning are often mation needs. squeezed into already tight budgets for financing R&D and It is also appropriate for the public sector to play a key innovation (Hall and Learner 2010). Allocating sufficient role in mobilizing information for policy, priorities, and funding for information management should also ensure performance management in AIS and making this informa- access to more and better information. For example, pro- tion as widely accessible as possible. Public agencies, such as duction data in developing countries are notoriously unre- universities, research institutes, and government depart- liable, and food stock data around the world are highly ments, can collect, analyze, and communicate information secretive. Releasing research results or making information about the AIS, making it available not just to their own net- such as price and market data widely accessible using a works but to wider professional or producer associations, range of communication strategies and media can facilitate media agencies, private sector groups, and others. An exam- 542 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK ple of such an initiative is the use of foresighting and sce- about end users, including farmers, is essential to identify nario planning exercises (TN 3). Furthermore, governments indicators of future performance and impact. Participatory can encourage participation by the private sector, recogniz- methods of problem analysis such as Most Significant ing that proprietary rights may be associated with informa- Change (TN 4) or mapping exercises (IAP 2) supplement tion sharing among enterprises. Efforts to make as much baseline data and provide end users’ critiques of their own information publicly available as possible have led to situations and past interventions. Such information collec- important contributions to technical and institutional tion and exchange ensures that all stakeholders are better innovations (module 5 discusses incentives and resources informed as decision makers by developing intelligence on for innovative partnerships and business development; key information and trends. module 6 covers intellectual property management; and Even so, analysis generated about technical and institu- module 1 focuses on coordination and collective action tional innovations at the end user or local level is often diffi- among AIS stakeholders.) cult to combine and compare across different temporal, spa- tial, and need-specific contexts. This requires generic tools for assessing, prioritizing, monitoring, and evaluating inno- Information on agricultural and nonagricultural vation processes to be carefully selected and adapted to fit as opportunities closely as possible with prevailing social, cultural, political, Although policy making, priority setting, and performance economic and environmental contexts (see the cases of India management in an AIS depend on information about inter- in IAP 4 and Chile in IAP 5). For the same reasons, within a ventions with the expected links to agriculture (such as country, planning efforts and results from monitoring and interventions that will raise agricultural productivity), evaluating local innovations are not necessarily easily scaled information about the productivity of crucial nonagricul- up to constitute national priorities or policy. Policy making tural sectors and linkages to new product markets is also rel- and setting priorities will have limited success unless the evant to information-gathering efforts in the AIS. Innova- complex of local circumstances and decision making among tion policy (see TN 1 in module 6) generally needs to stakeholders is taken into account. Rather than trying to include a link between agricultural and nonagricultural eco- gather and compare information about all local interven- nomic strategies for resource-poor households—for exam- tions, strategies for assessment that compare selected cases of ple, by supporting sustainable agricultural intensification local adaptation and innovation, preferably involving while developing manufacturing and services that will regional or international benchmarking, can be used (see TN expand nonagricultural employment. 1). The key point is for the end user or local innovation Balancing potentially competing priorities within the processes not to be overly generalized, and for all stakehold- wider innovation system requires dedication to informa- ers to be active collaborators within AIS assessment, priority tion-intensive tasks such as benchmarking. The identifica- setting, monitoring and evaluation to ensure learning, per- tion of multipurpose infrastructure or multitasking capaci- formance management, and accountability. ties that are useful to agriculture and transferable to nonagricultural sectors will provide a wider set of options in NEW DIRECTIONS, PRIORITIES, the innovation system. One example of multipurpose infra- AND REQUIREMENTS structure is rural infrastructure for information and com- munication technologies, which can improve flows of agri- Innovation systems are developing new management cultural information within and among organizations in processes which question underlying assumptions and the- addition to performing a multitude of other functions (for ories of action to reconsider the sustainability of systems an overview, see World Bank 2011). that were perhaps no longer effective and relevant in the changed context. Managers within innovation systems now must be equipped to deal with change and not simply End-user participation and scaling up information administer under changing circumstances. As a result, new from the local level emphasis is placed on, for example, defining alternate sce- Within an AIS, an end-user perspective in processes such as narios and strategies that could influence or create opportu- assessment and priority-setting is developed by bringing nities for technical and institutional innovation. Such meth- innovation users’ collaboration, behavior, and perceptions ods seek to redefine organizational mandates while ensuring of change to bear on the analysis of the system. Baseline data participation and open communication about results MODULE 7: OVERVIEW 543 obtained from past inputs used to achieve the results. Over ■ Policy level: Benchmarking innovation capacity. the long run, high-performing innovation systems establish Managers and investors increasingly need to benchmark internal management processes that can define objectives the performance of sectors and subsectors in terms of the and indicators of success and can achieve and communicate capacity developed for innovation through innovation results while being attentive to resource constraints. In con- system interventions. International investors may also trast to the past, especially in agricultural R&D, when prior- use benchmarking to make international comparisons to ity-setting exercises and planning instruments (and their track macro-level progress and help target subsectors, requirements for M&E) were largely mandatory and often sectors, and countries for investment in capacity static exercises, management tasks within the innovation strengthening or for other investments that are condi- system are ineffective and irrelevant unless they are estab- tional on certain levels of capacity. Methodological chal- lished as dynamic processes. lenges need to be addressed, however, in measuring and The thematic notes and innovative activity profiles in comparing context-specific and systemic capacities of this module provide more depth on the processes and meth- this sort. (See TNs 1 and 4 in this module and TN 1 in ods undertaken at these four levels. The overlap among the module 6.) levels is substantial, but it is useful to highlight the purpose ■ Investment program level: Foresighting. Investment and roles of each level, what is being assessed, and what implies committing support to a program of activity to tools are used for setting innovation priorities and assessing gain a desired return. Projections of future investments performance (table 7.2). needed within an innovation system will benefit from col- Examples of key directions for future assessment, laborative diagnostic tools such as foresighting. Stake- priority setting, monitoring, and evaluation at different holder engagement and learning that can lead to techni- levels of the AIS include the following: cal and institutional changes are facilitated through Table 7.2 Decision Making and Management Processes and Tools at Different Levels of an Agricultural Innovation System Stakeholders Level involved Key management processes Tools (related TN/IAP) Policy National policy – Track progress of the national system and its functions – Benchmarking (TN 1) makers, sector – Coordinate agriculture with other sectors (modules 1 and 6) – Innovation surveys (TN 2) committees – Inform global or regional public policy networks – Foresighting and scenario planning – Design an enabling environment (intellectual property, (TN 3, IAP 1) banking, pricing, and tax regimes) (module 6) Investment Finance ministry, – Prioritize and allocate resources – Diagnostic studies with a commodity or program donors, private – Identify new investment opportunities or bottlenecks subsector focus (TN 3, IAP 5) sector, technical – Review effectiveness of past investments – Benchmarking (TNs 1 and 4) team leaders – Improve underlying theories of change (intervention logic) – Evaluation and impact assessment (TN 5) of new investments Organization Executive – Assess organizational performance (TN 2) – Performance indicators (TN 2) officers, board of – Set organizational policy and program priorities – Innovation surveys (TN 2) directors, – Enable organizational and institutional learning and change – Self-organizing networks (IAP 4) research (module 4, TN 5) – Evaluation and impact assessment (TN 5) organizations, – Respond to changing innovation landscape – Institutional histories (TN 4) extension – Network mapping (IAP 2) organizations – Reflexive monitoring in action (TN 4) – Causal process tracing (TN 4) Intervention Nongovernmental – Accountability to investors – Participatory impact pathway analysis organizations, – Managing effectiveness of program/project implementation – Outcome mapping (TN 4) private sector, – Managing innovation processes, including effectiveness of – Gender analysis of value chains (IAP 3) research and networks, interactions, and ways of working – Rapid appraisal of agricultural knowledge extension – Testing and reframing theories of change (intervention logic) systems (TN 4) program leaders, – Responding to unexpected outcomes – Stakeholder analysis (IAP2) project managers – Responding to changing innovation environments – Most significant change analysis Source: Authors. 544 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK foresighting processes. Foresighting involves systemati- reporting and negotiation for future decision making. cally looking at the long-term horizon of science, tech- These two crucial innovation management processes can nology, and institutions within dynamic economic, polit- inform one to the other, but they are distinct processes ical, and social contexts to identify strategies that will with respect to learning, performance management, and yield the greatest benefits. (See TN 3 and IAPs 4 and 5.) accountability. (See TNs 4 and 5 and IAPs 6 and 7.) ■ Organizational level: Institutional assessment. Invest- ment in an AIS anticipates technical innovation as well as MONITORING AND EVALUATION institutional changes involving policy, program, and project implementation (how and when) and resources The development of an AIS requires continuous decision employed (who, what, and where) to obtain the highest making and management to obtain critical information to possible potential for impact. Institutional assessments answer critical questions. For example, how have policy use multiple methods to capture existing and potential and investment in innovation processes achieved or sur- changes within and among organizations and their passed their objectives? How do stakeholders know that strategic activities. (See TN 2.) resources for innovation are being allocated and managed ■ Intervention level: Interactive visualization methods for effectively? What lessons about institutional adaptations learning, action-oriented planning, monitoring, and are informing new technical changes? And finally, how can evaluation. Actors and organizations in innovation sys- assessments strategically inform future decision making tems are drawing on information from a wide range of and interventions? sources, often using multiple methods. Tools that involve In effect, the act of assessing, prioritizing, monitoring, interaction, such as outcome mapping or Net-Map, are and evaluating within the AIS is a reflexive practice that used to gather and synthesize information and generate catalyzes the experience-based learning that underlies all new knowledge. These methods generate qualitative data technical and institutional innovation. Aside from the and are used together with more traditional quantitative more detailed discussion of M&E in this module, the analysis and diagnostic case studies to enable learning notion of revitalizing the way in which monitoring and that will improve the prospects for interventions to pro- evaluation are distinctly needed to inform learning, perfor- vide the best possible return on investment. Monitoring mance management, and accountability is a common allows for mid-stream adjustments that can optimize per- thread in all of the themes covered by the modules in this formance while evaluation leads to better accountability sourcebook. MODULE 7: OVERVIEW 545 T H E M AT I C N O T E 1 Assessing Innovation for Prioritizing Investments Helen Hambly Odame, University of Guelph SYNOPSIS of the 21st century,1 even as most nations face urgent, rom an AIS perspective, approaches to assessment emergent, and often competing needs for investment in F and priority setting must consider both the complex- ity and unique context of agricultural innovation. The design of agricultural policies and investment programs education, health, energy, and telecommunications and transportation infrastructure. Assessment guides decision makers in the allocation of scarce resources (financial, human, and physical) to areas showing the greatest poten- requires more than analysis of the agricultural sector and its subsectors; it requires information on links with other sec- tial for benefit, a process referred to as priority setting. tors to which agriculture may contribute or from which agri- Prior to the application of the innovation systems concept culture may benefit. Priorities are determined through to agriculture, priority setting largely entailed defining a deeper and wider sets of data, often involving ongoing portfolio of public R&D programs and projects that was synthesis through interaction and learning with many stake- consistent with national development goals, national agri- holders. Three analytical methods are recommended for cultural policy, and the objectives of public research insti- assessing innovation system investments and thereby helping tutes and technology transfer services (Contant 2001). to allocate resources for investments: (1) theory of change From an AIS perspective, approaches to assessment and and flexible planning; (2) measuring the functions of priority setting must consider the complexity and unique innovation systems; and (3) making comparisons across context of agricultural innovation. The design of agricul- innovation systems (benchmarking). To develop an effective tural policies and investment programs requires more than assessment and priority-setting process for agricultural the analysis of the agricultural sector and its subsectors; it innovation, public policy makers and donors must insist requires information on links with other sectors to which on the allocation of sufficient resources, perhaps through a agriculture may contribute (for example, biofuels for the unit or platform that would be closely involved with data energy sector) or from which agriculture may benefit (for access, data linkages, and the adoption of interdiscipli- example, innovations within human health sciences that nary approaches to assessment, monitoring, and evaluation. benefit animal health). Priorities are determined through Stronger individual and organizational capacity is needed to deeper and wider sets of data, often involving ongoing syn- assess change within and across individuals, organizations, thesis through interaction and learning with many stake- and networks or systems. Much work needs to be done to holders. As described below, new and modified assessment ensure that data collected with stakeholders at the local level methods are being used to supplement traditional priority- feeds into both ex ante and ex post assessment and priority setting principles and practices in agricultural R&D.2 setting. Input from the local level is tremendously impor- Monitoring and evaluation are crucial for feeding infor- tant, and participation requires time and commitment to be mation and intelligence back into assessment and priority done well. setting by, for instance, identifying bottlenecks in the inno- vation system or recommending new investment opportu- nities. Instead of relying on linear input-output-impact models, this kind of M&E relies on integrating policy and BACKGROUND AND CONTEXT investment priorities much more closely than before. It uses Investing in innovation systems for agriculture has become more flexible forms of planning to feed lessons learned from one of the most important global and national policy efforts monitoring—and subsequently from evaluation and impact 546 assessment—back into decision-making processes for AIS must participate, and that projections of the potential investments in innovation. impact of policies and investments are fundamental ele- Regardless of whether the AIS is mature and operating ments of assessment. within the context of an established national innovation Three analytical methods are recommended for assessing policy, assessment and priority setting for policy and invest- and prioritizing investments in agricultural innovation: (1) ment program levels are relevant to any system.3 Module 6 understanding the theory of change; (2) measuring the describes national innovation policy and discusses how the functions of innovation systems; and (3) making compar- development of innovation priorities across sectors and isons across innovation systems. Each is discussed in the technologies (and the public resources allocated to them) is sections that follow. coordinated with specific policies and priorities for innova- tion within a particular sector or technology domain. IAP 4 Theory of change (India) and IAP 5 (Chile) in this module describe foresight- ing processes that contribute to overall innovation policy The process of assessment is one of judging and making processes, the assessment of policies for innovation, and pri- decisions. As a lens through which innovation is under- oritizing areas for investment. This note focuses on specific stood, a theory of change is the set of hypotheses, as devel- methods for exploring the underlying theory of change, oped by stakeholders, of how policy and investment prior- measuring the functions of the AIS to identify capacity and ities, and the resulting programming and projects, plan to resource gaps, and using policy and investment-level bench- achieve their intended goals and objectives, including marks and indicators to make comparisons across countries social, economic, political, and environmental change and sectors. objectives. This kind of assessment is sometimes referred to as the causal model. The assessment team works with actors and networks having a stake in the innovation ASSESSMENT METHODS process to identify the underlying assumptions, values, In general, assessment has two major dimensions: ex and definitions of individuals and organizations. Box 7.2 ante (prior to implementing an investment interven- lists the kinds of questions raised in a theory of change dis- tion) and ex post (after implementing an investment cussion to inform an analytical process that will lead to intervention) (table 7.3). Each type of assessment seeks complementary methods, such as organizational assess- to increase the efficiency and effectiveness of past invest- ment (TN 2), foresighting, building scenarios, and vision ments while ensuring transparency and accountability statements (TN 3 and IAPs 4 and 5). for new investments. Like the other processes discussed in this module—orga- nizational assessment (TN 2), foresighting (TN 3), moni- Box 7.2 Questions for Assessing the Theory of Change in Innovation Systems toring (TN 4), and evaluation (TN 5)—in the context of an AIS, the assessment of innovation systems and associated investments recognizes that the dynamics of the innovation ■ What is the definition of innovation in the system change constantly, that stakeholders throughout the given context? ■ How do innovations emerge and develop in the given context? Table 7.3 Roles of Ex Ante and Ex Post ■ Who are the innovation actors (organizations) Assessments in the given context? Ex ante assessment Ex post assessment ■ What policies and investments exist to support – Analyzes the likely impact of – Assesses impact. innovation in the given context? a proposed intervention. – Supports accountability ■ What policies and investments do not exist to – Identifies the optimal portfolio reporting to investors. support innovation in the given context? of investments according to – Justifies allocation of resources. specific programs or projects. – Generates lessons. ■ How are innovation trends, processes, and – Establishes a baseline or – Identifies recommendations products measured in the given context? framework to collect and for future interventions. ■ What are the key sources of data on innovation compare information for ex in the given context? post evaluation. Source: Author. Source: Author. MODULE 7: THEMATIC NOTE 1: ASSESSING INNOVATION FOR PRIORITIZING INVESTMENTS 547 An example of assessing the theory of change is DFID’s differ from policy makers’ and investors’ conceptions. The Research Into Use (RIU) program (see IAP 7), which intro- process also benefits from participants testing their duced the method to assess developmental impacts and assumptions against the available data and identifying inform future priorities for investment by DFID and its part- where data to address those assumptions are missing. The ners. The RIU assessment explored assumptions of the pro- conclusions from these discussions inform decisions on gram and their causal relation to activities, outcomes, out- which methods will be used in the next stages of policy and puts, and impact. Information is fed back into policy and investment planning or evaluation. In Sierra Leone, for investment decision making. Specific attention was given to example (IAP 1), discussions on the theory of change led to determining whether the intervention’s theory of change was greater clarity in self-organizing networks and their invest- altered during implementation, why this change was impor- ment processes, including the use of social media for con- tant in relation to impact, and why the investors (DFID and tinued discussions and information gathering. its partners) needed to be made aware of the change. Exploring the theory of change is a relevant activity Measuring the functions of an innovation system throughout the management cycle. The theory of change Decision-making processes such as ex ante and ex post can be developed at the outset of assessing innovation and assessment, the identification of investment priorities, and prioritizing investments; it can later be revisited during organizational performance assessment rely on identifying monitoring, evaluation, and impact assessment. Analyzing the key functions of innovation systems. Table 7.4 identifies the theory of change contributes information to accounta- these functions and sources from which data are collected bility reporting and is also a useful tool for proposing rec- and analyzed. ommendations for future investment. Analyzing the theory of change for innovation processes helps to identify expected outputs, outcomes, and impacts Case studies for a plan of action. Commissioned surveys or reviews of Case studies (including ex ante innovation histories) are espe- relevant literature as well as case studies can compile data cially useful for profiling specific functions of the innovation on conditions of path dependency for technical and insti- system or for examining specific sectors or technology tutional innovations. This information may also help to domains. Case studies are a powerful assessment tool because identify stakeholders’ participation in identifying comple- innovation systems are highly contextual, and specific tech- mentary and conflicting areas of innovation and document nical and institutional innovations are path dependent: their ideas regarding the theory of change and how it may Beyond the level of its basic functions, an innovation system Table 7.4 Ten Functions of Innovation Systems and Related Data Sources Key functions Main sources for data or cases 1. Providing R&D and creating new knowledge. International or government sources, R&D dialogues, end-user surveys. 2. Building competence in the labor force (includes education, International or government sources; student performance measures; training, creation of human capital, production and reproduction employer surveys on education, vocational training, and other variables. of skills, and individual learning). 3. Forming new product markets. International, government, and industry sources, including new market surveys. 4. Forming new quality requirements arising from the demand for International, government, and industry sources, including product new products. surveys or consumer studies. 5. Creating and changing organizations for the development of new International, government, and industry sources; policy dialogues; fields of innovation. actor-network analysis; innovation surveys. 6. Networking through markets and other mechanisms, including Government and industry sources, policy dialogues, actor-network analysis, interactive learning among different organizations. innovation surveys. 7. Creating, changing, and abolishing institutions that influence International, government, and industry sources; policy dialogues; innovation innovating organizations by providing incentives or removing surveys. obstacles to innovation. 8. Incubating activities for new innovating efforts. Industry, government sources, R&D dialogues, innovation surveys. 9. Financing innovation processes and other activities that can International, government, and industry sources; policy dialogues; facilitate the commercialization of knowledge and its adoption. investment surveys; and impact assessment. 10. Providing consultancy services relevant to innovation processes. Government and industry sources, professional association surveys. Source: Author, based on Edquist 1997. 548 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK is difficult to describe in generalities. The socioeconomic, cul- Benchmarking: making comparisons across tural, and geographic contexts tend to define the specific innovation systems organizations and institutions within an innovation system Benchmarking uses input indicators (investments in the and the interactions among its actors. Case studies can cap- functions of an innovation system) as well as output/ ture some of this detail, and meta-analysis of case studies can outcome indicators (products and processes and trends inform comparisons across commodities, institutions or emerging from an innovation system) to identify discon- countries (Larsen, Kim, and Theus 2009; Wenninck and nects within the system—among institutions and in relation Heemskerk 2006; World Bank 2006). to government policies—that hinder innovation. If indica- Often case studies begin with a general profile of an inno- tors are difficult to establish, it may be that the theory of vation system that describes its two basic and related ele- change was not sufficiently developed. ments: organizations and institutions. Organizations (TN 2) At the policy and investment program level, innovation are the group structures that have staff, facilities, equipment, benchmarks and indicators are used to compare current and and funding to conduct activities related to innovation. historical measures and trends within the same country or to Examples include public research institutes or advisory ser- compare the innovative capacity of actors in the system vices. Institutions are the established formal and informal (firms, for example), particularly their relative ability to iden- practices, values, norms, rules, or laws that regulate the rela- tify and absorb technologies to enhance innovative perfor- tions and interactions between and within organizations. mance and overall competitiveness. The Organisation for Examples of institutions in an innovation system are tax laws Economic Co-operation and Development (OECD) has been and R&D incentives that encourage innovating organiza- especially influential in providing guidelines for the system- tions. Using tools such as innovation surveys and focus atic collection of innovation data. Table 7.5 summarizes best groups, case studies will often elaborate on the range of pos- practices for benchmark data collection (OECD 1997; Bloch sible functions performed by a range of possible actors. The 2007; Kraemer-Mbula and Wamae 2010). identification of key networks or alliances (see IAPs 1 and 4 Spielman and Birner (2008) identify AIS-oriented bench- in module 4) among actors as well as the knowledge base for marks and indicators. They recognize that agricultural innovation are also discussed in innovation case studies. Table 7.5 Guidelines for Benchmarks and Indicators for Innovation Systems Key measurement – Interactions among enterprises (e.g., joint research activities; technical collaboration). considerations – Interactions among enterprises, universities, and public research institutes (e.g., joint research, joint patenting, joint publications, network analysis of informal linkages). – Diffusion of information, knowledge, and technology to enterprises (e.g., industry adoption rates for new technologies; consumer data; strengthened competencies; skills training). – Human resource flows (e.g., movement of highly qualified personnel within and between the public and private sectors). Key techniques for – Institutional assessments for analyzing human resource flows; institutional linkages; industrial clusters and innovative firm assessment behavior (TN 2). – Innovation surveys question enterprises on their sources of knowledge most relevant to innovation and allow a comparative ranking of sectors/industries and national systems, including regional and global comparisons; surveys used by OECD are typically based on OECD’s Oslo Manual (first developed in 1990 and currently in its third edition; see OECD 2005). – Cluster analysis (see also TN 4 in module 5) focuses on the interactions between particular networks of enterprises across and within specialized sectors and even internationally; tools may include social network analysis and deliberative mapping, among others. – Evidence-based management focuses on obtaining the best facts. Even less-than-favorable evidence is accepted during the assessment to “learn by doing.� This technique cautions against complacency in achieving benchmarks set by comparing one country to another, perhaps within the same region, and by avoiding dialogue about mistakes, risks, and uncertainties. Key investment and – Upgrading competencies in individual organizations; incentives and recognition for innovative work in individual enterprises financing and clusters. considerations – Investing in higher education; R&D in public institutions; access to public research. – Private-public research initiatives; improved intellectual property and knowledge management; investing in information and communication technology. – Competitive or matching grants or low-interest loans; science/trade fairs; new business incubators. – Facilitate the national system to engage in international knowledge flows, including knowledge acquired abroad as capital or intermediate goods; foreign direct investment; purchases of foreign patents/licenses; establish learning alliances; trade in services such as technical consultancies; aid-for-trade; internationally coauthored publications and R&D. Source: Author; OECD 1997, 2005. MODULE 7: THEMATIC NOTE 1: ASSESSING INNOVATION FOR PRIORITIZING INVESTMENTS 549 benchmarks and indicators have to be attentive not only to countries, sectors, institutions, and commodities. measures of sectoral performance but to processes that Together, these methods support the ongoing design, underlie sectoral performance and the contribution of inno- monitoring, and evaluation that enable technical and vation to performance. Table 7.6 presents examples of the institutional innovations. wider scope of benchmarks and indicators for assessing an AIS at the level of policy and program investments. POLICY ISSUES POTENTIAL BENEFITS Assessing and setting priorities for innovation involves information and learning-intensive processes. These Assessment and associated priority setting direct scarce processes constitute an organized way of thinking about resources towards the best possible return on innovation how and why innovation takes place and how the key func- activities. Assessment compiles a vast range of data on key tions of an innovation system can be identified, understood, functions in the system. These data include both quantita- and assessed. Approaches to assessing innovation and prior- tive and qualitative information supporting the analysis of itizing investments are still evolving, given the relatively policy effectiveness, enabling adjustments in the resource recent application of the innovation systems concept to allocation as needed, and ultimately enabling the nonlinear agricultural development. It is clear, however, that two feedback loops expected of planning, monitoring, and eval- important policy issues for assessing innovation and priori- uation in complex adaptive systems (Pant 2010). tizing innovation investments include appropriate financ- Opening up discussions with a wide range of stake- ing and organization of priority setting within the public holders on the underlying theory of change catalyzes a sector and the need for inclusiveness in assessment and process of planning strategically and transparently, versus priority-setting processes. mechanistically setting out a strategic plan (TN 3). It improves the chances that stakeholders will reach consen- sus on the action plan. With this method, questions about Supporting public sector innovation assessment and priority setting the objectives of the innovation system, the resources available, and alternatives for allocating those resources To develop an effective assessment and priority-setting are addressed. Specific strategies to bridge the gaps within process for agricultural innovation, public policy makers and among the functions of innovation systems can be and donors must insist on the allocation of sufficient time, developed, such as strategies for empowering people to human resources, and funding. Such a process would gain innovate, unleashing innovation in firms, creating and greater visibility if a unit or platform responsible for this applying knowledge, applying innovation to address key analysis were established within the national system (see development challenges, or improving policies influencing TNs 1 and 2 in module 6). This platform or unit, and assess- the governance of innovation systems. Benchmarks and ment teams linked to it, would be closely involved with indicators provide a means for comparative assessments of sourcing data, ensuring access to the data, and adopting Table 7.6 Examples of Classic Indicators for Policy and Program Investments Compared with Indicators for AIS Policy and Program Investments Classical indicators AIS indicators Agricultural GDP and GDP growth rate Share of farmers who have tried/adopted some new agricultural production practice (e.g., new crop variety or livestock breed)a Total agricultural factor productivity Share of farmers who have tried/adopted some new agricultural marketing practice (e.g., pre-production contracts, collective marketing)a Yields per hectare of major food staple and high-value crops/livestock Share of farmers who have tried/adopted some new natural resource management technique (e.g., conservation tillage, soil erosion controls, water harvesting)a Share of cultivable land under modern varieties Share of agricultural firms that have tried/introduced some new product or process innovation Source: Spielman and Birner 2008. a. Includes use of sex-disaggregated data and disaggregated by income group (poverty). 550 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK interdisciplinary approaches to assessment, monitoring, LESSONS LEARNED AND RECOMMENDATIONS and evaluation. International bodies such as OECD and FOR PRACTITIONERS the World Bank can enable national systems to share The approaches described here continue to develop. The fol- methodologies and knowledge. Regional forums are pro- lowing lessons and recommendations have emerged so far: viding a similar opportunity (CPR, CRISP, and LINK 2011; SWAC 2005). ■ Recognize supportive norms for assessment and prior- ity setting. Assessment that involves interactions Policies to support inclusive priority setting among multiple stakeholders (such as learning alliances or communities of interest or practice) requires spend- To ensure that priority setting for innovation actually ing time and material resources on creating environ- happens and that it yields the widest possible range of ments in which values and attitudes that complement benefits, policy makers must promote mechanisms to the innovation process can thrive. Incentives and recog- help farmers and other actors articulate demands, build nition activities as well as communication strategies are public/private sector dialogue, and increase accountabil- often useful to convey innovation values and attitudes. ity to the local level (Sulaiman 2009; Spielman and Lynam Creating an environment for presenting, discussing, 2010). For instance, AIS benchmarks and indicators can and reviewing priorities is integral to the process of integrate the analysis of poverty and gender issues innovation itself. (Spielman and Birner 2008). Decentralized methods for ■ When selecting tools for assessing innovation and priori- assessing innovation and investment priority setting are tizing investment in AISs, determine which tools are being explored by OECD, among others (box 7.3) (see already being used and why. Introduce new methods such also module 1). as theory of change, analysis of innovation functions, and benchmarking on an experimental basis. Gaps in data will become apparent; they should be addressed through an Box 7.3 The Local Economic and action plan to collect the missing data or by focusing on Employment Development Project the data that are available (a larger assessment suffering from a lack of data would be ineffective). When selecting tools, use experience developed by stakeholders within the National systems of innovation are sometimes system and seek recommendations from communities of challenged by consultation at the local level practice. when assessing institutional capacities, negotiat- ■ Develop competencies for assessment and priority ing targets, and establishing multistakeholder setting. Capacity for assessing innovation and priori- processes such as boards and panels, which allow tizing investments is considered essential for the future a wider group of actors to have input into of global agriculture (G20 2011b). Priority assessment national programs. Such efforts are vital, how- ever, for ensuring incremental responsibility and of commodity innovations has received methodologi- decentralized decision making that strengthen cal attention, but technical skills for econometric local economies. analysis and participatory research can be lacking The Local Economic and Employment (Raitzer and Norton 2009). Human capacities are best Development (LEED) Project (supported by the built through effective curriculums and learning in Organisation for Economic Co-operation and action. The teaching of assessment and priority-setting Development) has tracked experiences in methods cannot follow a blueprint, because valuable national systems of innovation with multistake- learning comes from working within different contexts holder processes at the local level. LEED has to identify relevant concepts, definitions, and methods. found that flexible funding schemes and special Collaborative projects for sharing tools and using funds for local innovation help to build stake- assessment and priority-setting methods in AISs are holder involvement and that multistakeholder encouraged. In this respect, competencies such as will- action learning enables the innovation process to continue after external funding ends. ingness to communicate, learn, and interact with mul- tiple stakeholders will be essential. In the end, such Source: Potter 2008. efforts are more likely to create engaged individuals, organizations, and networks. MODULE 7: THEMATIC NOTE 1: ASSESSING INNOVATION FOR PRIORITIZING INVESTMENTS 551 ■ Continue to strengthen the integration of the end-user/ development, and the facilitating role of public research farmer perspective in assessment and priority-setting and extension organizations. In low-income countries, processes. The Agricultural Science and Technology end-users may not be literate or may be marginalized in Innovation systems work by CTA, KIT, CABI, and the other ways. For contextual reasons, they may be difficult Free University of Amsterdam is a case in point. It inte- to engage in participatory processes. Much work needs to grates different perspectives into a more comprehensive be done to ensure that data collected with stakeholders at framework that encompasses end-user/farmer-led inno- the local level feeds into both ex ante and ex post assess- vation processes, the private sector’s role in value chain ment and priority-setting activities. 552 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK T H E M AT I C N O T E 2 Methods for Organizational Assessments in Agricultural Innovation Systems Regina Birner, University of Hohenheim SYNOPSIS ■ Monitoring. During the execution of development inter- ventions, assessments are needed to monitor changes his note presents methods that can be used to T assess individual organizations within the innova- tion system, such as agricultural research and extension organizations. These assessments are not only ■ over time. In particular, assessments can help to reveal whether organizational reforms are proceeding as intended. Evaluation and impact assessment. After completing an useful diagnostic tools for planning AIS interventions but intervention, such as a reform of a country’s research important components of monitoring, evaluating, and organization, assessments are required to evaluate the assessing the impact of AIS interventions. If time and effectiveness of the investment, to quantify its impact, resources are limited, assessments can be based on second- and to derive lessons for future interventions. ary data and expert interviews. More detailed assessments may involve surveys among staff of organizations in the AIS, Since the AIS approach is comparatively new, project farm household surveys, and participatory methods. From managers face a lack of clarity about the methods that can an implementation and policy perspective, it is important to be used for these purposes. Existing methods for organiza- create demand for assessment data to achieve sustainability. tional assessments can be adjusted, however, to take the role of organizations within the innovation system into account. BACKGROUND AND CONTEXT This note describes a set of assessment methods and gives FOR INVESTMENT specific advice on how they can be used in assessing invest- ment projects that reflect an AIS approach. Investments to improve the overall performance of an AIS often include components to improve the functioning of indi- vidual organizations, often in conjunction with components THE ASSESSMENT FRAMEWORK, OBJECTIVES, to improve the coordination between organizations and to AND REFERENCE SITUATION create an enabling environment for them to innovate. For Since an AIS is a theoretical construct, it is important to use planning, managing, and evaluating investment projects to an assessment framework that defines the elements and rela- support agricultural innovation, it is essential to have diagnos- tions of the AIS in which a given organization is to be tic tools for assessing the organizations within the system. This assessed. Several assessment frameworks are available (see note describes such tools and methods (methods for assessing TN 1). This note uses the framework developed for the an AIS in its entirety are discussed in TN 1). World Bank by Spielman and Birner (2008) for illustration, Assessments can support AIS investment projects in the because it identifies the types of organizations involved in following ways: an AIS and their relations (figure 7.1). Although this note ■ Diagnostic assessments (ex ante). In the planning phase focuses on one framework, the methods discussed can be of development interventions, assessments can be used applied to other assessment frameworks. to identify the strengths and weaknesses of the organiza- In the context of investment projects, assessments may tions involved in an AIS, to identify entry points for be carried out (1) at the level of the AIS as a whole, (2) at the reforms, and to assess the feasibility and expected costs level of the innovation system for specific commodities or and benefits of planned investments. value chains, or (3) at the level of different organizations 553 Figure 7.1 Conceptual Diagram of a National Agricultural Innovation System Informal institutions, practices, and attitudes Examples: Learning orientation; trust; communications; practices; routines Agricultural research Bridging Agricultural value chain and education systems institutions actors and organizations Agricultural Political channels Consumers education system Stakeholder * Primary/secondary platforms Trade, processing, * Postsecondary * Vocational training wholesale, retail Agricultural extension system * Public sector Agricultural producers Agricultural research system * Private sector * Different categories * Third sector * Public sector * Private sector Integration in * Third sector value chains Input suppliers Agricultural innovation policies and General agricultural policies and investments investments Linkages to other Linkages to general Linkages to Linkages to economic sectors science and technology international actors political system Source: Spielman and Birner 2008. within the innovation system (organizational assessments). within the innovation system can be assessed. The following In conducting an assessment at the organizational level, a pri- options may be considered: mary task is to clarify the objectives of the assessment. Box 7.4 presents a number of questions related to the performance of ■ Benchmarking. One approach is to compare the organi- an organization within an AIS. The questions illustrate the zations within the system in a particular country with range of objectives that an organizational assessment may those of other countries, typically countries in the same need to consider to gain a comprehensive understanding of region or countries that are otherwise comparable. If that performance. quantitative indicators are used, this approach is known In addition to clarifying the objectives of an assessment, as “benchmarking.� it is also important to identify who will use the results. ■ Changes over time. Another approach (which can be Assessments may be carried out by organizations that fund, combined with benchmarking) is to compare the perfor- or intend to fund, organizations within the innovation sys- mance of the organization at different points in time and tem. However, assessment results need to be fed back to the determine whether it improved or deteriorated. management of the organizations involved to stimulate ■ Policy goals, organizational objectives, or standards. institutional learning and change. Moreover, as discussed A third approach is to compare organizations against below, assessments benefit from the involvement of staff goals that have been set by policy makers, by managers of members as well as users of innovation-related services. the respective organization, or by another entity, such as Another primary task is to select the standard or reference a donor organization or certification or accreditation situation against which an organization’s performance agency. 554 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK quantities of inputs distributed, numbers of trainees or stu- Box 7.4 Questions That Illustrate the Range of Objectives in an dents receiving instruction, and so on. The assessment will Organizational Assessment need to generate much of its own information, however, and much of it will be qualitative. Examples include information on the organization’s patterns and strength of collaboration A number of questions illustrate the varied objec- with other organizations in the AIS, the relevance of the tives of an assessment to understand how well a organization’s roles, and the existence of learning-based certain organization—for example, the public performance management arrangements. research institute responsible for a certain com- modity—performs within an AIS: Criteria for selecting assessment methods ■ What internal management factors influence Before describing assessment methods in detail, it is useful the organization’s performance? to consider the criteria that influence the choice of an ■ Which factors in the organization’s environ- appropriate method: ment influence its performance? ■ What are the most promising types of interven- tions to improve the organization’s perfor- ■ The scope of the assessment. Even though the assessment mance and its contribution to the innovation is looking at the performance of an individual organiza- system? tion, from an innovation systems perspective it is impor- ■ Is the evolving nature of the agricultural sector tant to take into account specific linkages and coordina- placing new demands on the organization? tion mechanisms. ■ What is the role of the organization within the ■ The existing data and knowledge. The data and knowl- innovation system? Is this role still relevant? edge about an organization that are available (and acces- How may it need to change? sible) have a large influence on the choice of the assess- ■ Are the organization’s patterns of partnership ment method and the amount of primary data that must and collaboration sufficient to maintain its rel- be collected. Organizations in the innovation system for evance in the evolving agricultural sector? What agriculture, such as extension organizations, typically new linkages might be required? ■ What learning-based mechanisms for enhanc- have their own reporting systems. It is helpful to examine ing organizational performance are in place? whether the data generated from such reporting systems ■ How can the organization’s contribution to the will be useful for the assessment. overall innovation system be improved? ■ The time and resources available. The choice of an assess- ment method is also determined by the time and the Source: Author. resources available for the assessment. Ideally, there should be a match between the purpose of the assessment—for example, to determine the level of the planned invest- SELECTING ASSESSMENT METHODS ment—and the time and resources available for ex ante, AND OBTAINING DATA ongoing, and ex post assessments. Planners, analysts, researchers, and evaluators can use a variety of methods to assess organizations within an inno- The role of preliminary AIS assessments vation system. Assessments may be based on quantitative or qualitative methods and may be derived from different dis- Before embarking on an organizational assessment, it is also ciplinary backgrounds, such as economics and its branches useful to develop an understanding of the AIS in which the (public economics and New Institutional Economics, for organization operates. It is important to keep these prelimi- example), organizational sociology, public administration, nary assessments of the AIS (mapping the AIS and reviewing and political science. The assessment can call upon existing expert opinion about the AIS) in proportion to the main task data and statistics to develop a picture of the national con- that lies ahead, which is the organizational assessment. These text and the main contours of the innovation system in system assessments provide context, “locate� an organization which the organization is situated. Data may also be avail- within the wider innovation system, and highlight its rela- able on the organization’s performance in relation to spe- tionships throughout the system. A further function of these cific indicators, such as the number of staff publications, system assessments is that they engage system stakeholders MODULE 7: THEMATIC NOTE 2: METHODS FOR ORGANIZATIONAL ASSESSMENTS IN AGRICULTURAL INNOVATION SYSTEMS 555 in a dialogue about the role and performance of a specific previously) and by using the “snowball system�—that is, by organization with the innovation system. asking respondents to identify other persons who should be interviewed. Mapping the AIS. Even if an assessment ultimately focuses Information can be collected from experts in different on only one organization within an AIS, an organizational ways. One alternative is to conduct semistructured inter- mapping of the AIS as a whole is useful to gain a clear views, using an interview guideline. It is also possible to use understanding of the environment in which the focus a questionnaire for an expert survey and ask respondents to organization operates (for example, it can help to answer score the various actors in the innovation system on a scale some of the questions raised in box 7.4). The outcome of (of one to four, for example) regarding their effectiveness, organizational mapping is a diagram that displays the responsiveness, accountability, organizational performance, essential organizations in the innovation system and their and other criteria. Even though the scoring results will reflect relations to each other. The mapping process may take a subjective assessment of the actors involved, this approach different forms, but it needs to be based on an assessment yields useful information. Similarly, governance indicators framework. If time and resources are limited, the major are often based on expert assessments, and if a standardized organization within the AIS usually can be identified by approach is applied, such data can be used as indicators to compiling information from the documents and literature monitor changes over time or make comparisons across available and interviewing experts based on a semistructured countries. For an example of how an expert survey was used questionnaire. in Ethiopia, see Spielman and Kelemework (2009). For example, if the goal is to map the national innovation system for dairy production and the assessment framework METHODS FOR ASSESSING ORGANIZATIONS displayed in figure 7.1 is used, the analyst will have to com- WITHIN AN INNOVATION SYSTEM pile information on the following questions: This section introduces methods that can be used to assess ■ Which research organizations deal with dairy production? a specific organization within an AIS, such as an agricul- ■ Which education organizations provide training for tural research institute, agricultural training center, or agri- dairy production at different levels (diploma, graduate, cultural extension organization. The methods include staff postgraduate)? and farm household surveys as well as methods derived ■ Which extension organizations provide advice on dairy from business administration to assess organizational production? performance. ■ Who are the major players in the value chain (dairy pro- cessing companies, for example)? Organizational performance assessment ■ Which organizations of dairy farmers, such as dairy cooperatives, exist? The business administration literature describes a wide range of methods that organizations can use to assess and The analyst can construct a diagram based on the infor- manage their performance. One approach that is particu- mation collected and use it to collect further information on larly relevant for innovation systems is the Organizational innovation system actors and organizations, especially their Performance Assessment (OPAS), developed for agricul- roles and interactions. Some mapping techniques make it tural research institutes by the former International Service possible to visualize the innovation system during the inter- for National Agricultural Research (ISNAR) (Peterson, view process; for an example, see the description of Net- Gijsbers, and Wilks 2003). Map in IAP 2. OPAS was first tested in 1996–97 at the research insti- tutes of the Council for Scientific and Industrial Research Conducting expert surveys. The collection of (CSIR) in Ghana and later adapted and used by national information from experts is useful for gathering valuable research organizations in Benin (Institut National des information about an innovation system in a comparatively Recherches Agricoles du Bénin) and Uganda (National short period. It allows the analyst to draw on the Agricultural Research Organisation) (Peterson, Gijsbers, comprehensive knowledge gained by professionals who have and Wilks 2003, 8). long experience in the AIS. The list of experts to interview In OPAS, organizational performance is defined as “the can be derived during a mapping exercise (discussed ability of an organization to use its resources efficiently and 556 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK to produce outputs that are consistent with its objectives and a management assessment. Each component follows a number relevant for its users� (Peterson, Gijsbers, and Wilks 2003, 1). of clearly defined steps. Scores (which may be weighted Box 7.5 displays the elements of OPAS and explains the rela- according to organizational priorities) are applied, making it tions between them. possible to monitor progress over time. An assessment of the OPAS has been designed for assessments conducted by output trends of research organizations shows that the organi- managers and staff of the respective research organization zation considerably increased its public services such as dis- with the assistance of one or two external facilitators. The semination and training events but that its technology output assessment has two major elements: an output assessment and fell (Peterson, Gijsbers, and Wilks 2003, 18). Box 7.5 Elements of the Organizational Performance Assessment Agricultural research organizations use resources and feedback mechanisms are required at different levels to inputs (funds, personnel, equipment, and facilities) to ensure that research organizations plan their resources undertake their research operations in order to pro- efficiently and produce relevant and useful outputs. . . . duce outputs (agricultural technologies and services) An underlying assumption in organizational perfor- for the benefit of farmers, agro-industries, and other mance is driven by a number of critical management users. The outcomes (or consequences) of adopting or factors, as indicated in the lower part of the diagram. applying these outputs are measured by their effects, Through a periodic assessment of these factors, man- positive or negative, on such factors as production agers can determine if appropriate mechanisms and costs, yields, and use of natural resources. In this procedures are in place and functioning, and can take sequence of events, which is illustrated in the upper steps to correct management deficiencies that con- part of the diagram, performance assessment and tribute to poor (or lower) organizational performance. Figure B7.5 Diagram of Organizational Performance Assessment Resources Research operations Outputs Users Outcomes – personnel – research – improved technologies – farmers – adoption – funds – testing/adaptation – improved mgt practices – industry – increased production – infrastructure – reporting – training events – NGOs – cost reduction – equipment – dissemination – dissemination events – academia – profits – publications – employment Policy objectives – public services – improved NRM Mandate – achievement policy objs – organizational learning Operations monitoring & feedback PLANNING Periodic output assessment Outcome assessment and feedback Periodic management assessment 1. Assessing context and organizational responsiveness 6. Ensuring quality and quantity of staff 2. Planning strategy and goals for the organization 7. Protecting organizational assets 3. Selecting program objectives and priorities 8. Coordinating and integrating internal functions 4. Planning research projects 9. Managing dissemination and partnerships 5. Managing projects, and maintaining research quality 10. Ensuring effective monitoring, evaluation and reporting CRITICAL MANAGEMENT AREAS Source: Reproduced directly from Peterson, Gijsbers, and Wilks 2003, 6. MODULE 7: THEMATIC NOTE 2: METHODS FOR ORGANIZATIONAL ASSESSMENTS IN AGRICULTURAL INNOVATION SYSTEMS 557 Box 7.6 displays sample questions for human resource of the system and the competencies, roles, and ways of management (management area 6 in figure B7.5 in box working that the wider system demands. Organizations use 7.5). As in the output assessment, scores can be applied to a suite of methods, referred to as “institutional and organi- each question, which makes it possible to monitor changes zational learning� (see also module 1 and TN 4 in module over time. 4) to enable this continuous adaptation and updating to From an innovation systems perspective, it is useful to take place (box 7.7). expand the OPAS approach and include indicators that cap- ture the relation of the organization to be evaluated with Surveys among the staff of organizations other organizations in the AIS, both at the level of the out- put assessment and the level of the management assessment. Another organizational assessment method, which can be For example, at the output level, research organizations may combined with OPAS, is a survey of an organization’s staff include scores for collaboration with agricultural extension members. These surveys are particularly useful in organiza- and education organizations, and vice versa. At the manage- tions that have large numbers of field staff, such as public ment level, critical management area 9 already refers to agricultural extension systems. They can provide in-depth “managing dissemination and partnerships� (critical man- information about the organization’s capacity and staff agement areas are listed in figure B7.5, box 7.5). Indicators incentives, but they need to be carefully planned, as they in this area may be expanded to include all types of partners require genuine support from management. As in other in the innovation system, as indicated in figure 7.1. Such surveys, the anonymity of the respondents has to be data could then also be used as measurable indicators of the ensured, and interviewers have to be careful to create an performance of different AIS members. These indicators atmosphere in which respondents are willing to talk freely could also be considered in external evaluations, which may about their assessments, especially when sensitive issues are increase the incentives for organizations not only to raised, such as issues of political interference. Moreover, it improve their individual performance but to improve their is important to pre-test the survey instrument with a group performance as a member of a wider innovation system. of respondents who reflect the diversity of the AIS. This To reflect more of an innovation systems perspective, the step is important not only to test the suitability of the OPAS can also be modified in the area of learning-based instrument but also to build confidence among staff. In performance management. Successful organizations contin- designing the questionnaire, the trade-off between simplic- uously update and reframe their relationships with the rest ity and capturing all relevant details must be considered. Box 7.6 Sample Question Set for Assessing Human Resource Management Performance ■ To what extent does the organization maintain and ■ How effective are mechanisms to promote a good update staff information (e.g., biodata, publications, working environment and high staff morale? projects)? ■ How effective is the performance-evaluation process ■ To what extent does the organization plan and for research staff? update its staffing, recruitment, and training ■ How effective is the performance-evaluation process requirements? for nonresearch (management, administrative, and ■ How effectively are staffing, recruitment, and train- support) staff? ing plans linked to program and project needs? ■ How effective are reward and sanction processes, in ■ How effective are selection procedures (for manage- terms of motivating staff? ment, scientific, and support posts) in terms of ■ How effectively does the organization compete with objectivity and transparency? the private sector in providing salaries and benefits ■ To what extent is training based on merit and on that attract and retain quality staff? organization and program objectives? Source: Reproduced directly from Peterson, Gijsbers, and Wilks 2003, 22. 558 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 7.7 Organizational Learning and Institutional Change Institutional or organizational learning is the deliber- tion activities. Shambu Prasad, Laxmi, and Wani dis- ate and ongoing process in which information from cuss an “unusual coalition� between an international research and evaluation activities and outcomes feeds research center (the International Crops Research into a reflective analysis of what has worked and not Institute for the Semi-Arid Tropics) and a private worked in an institution. In turn, the lessons from such Indian donor (Tata), in which the research center reflective analysis inform decisions about future direc- established new institutional mechanisms, both tions for the organization. Leadership, incentives, internal and external. The internal mechanisms resources, and flexibility within the organization’s rou- involved new ways of organizing work among site tines are required for this process to work. coordinators and activity coordinators who have to The Institutional Learning and Change initiative seek input from each other. External mechanisms defines a learning organization as an organization included a new steering committee as well as state with a culture that supports this kind of analysis and and district committees with multiple stakeholders change. The term “institution� is used instead of who were engaged in the use of new tools such as “organization� when referring to the learning process actor-linkage mapping. Module 3 examines addi- that takes place across organizations and among a tional cases of organizational learning and institu- diverse set of people involved in research and evalua- tional change. Source: Author; Watts et al. 2003; Shambu Prasad, Laxmi, and Wani 2006. In designing staff surveys, it is also useful to take gender If a survey that includes agricultural households is into account. For example, a survey may include specific planned for another purpose, it may be possible to include questions on career opportunities and constraints for questions on the performance of the organization to be eval- female staff. Moreover, the data for male and female uated and on other aspects of agricultural innovation. If a respondents can be analyzed separately. Box 7.8 describes survey is planned specifically to collect information on the the constraints to agricultural innovation that were identi- assessment of an organization in the AIS, it will be useful to fied in a survey of agricultural extension agents in six dis- include questions on outcome indicators, such as the adop- tricts of Ghana. (See IAP 3 for an example from Peru.) tion of innovations, as well as questions on household access to the services provided by the organization (such as exten- sion services) as well as household satisfaction with those ser- Farm household surveys vices. It may also be useful to include information on other For organizations that deal directly with farmers, such as aspects of the innovation system, such as access to agricul- agricultural extension organizations, surveys among tural inputs and complementary services as well as marketing farmers—the clients of the organization—are essential opportunities. It will often be useful to collect such data sep- for an ultimate assessment of organizational perfor- arately from male-headed households, female-headed house- mance. At the same time, farm household surveys can holds, and female spouses in male-headed households. provide important information about the performance of When farm household surveys are not possible and sec- the AIS as a whole, which means that they can also form ondary data are limited, Participatory or Rapid Rural an important component of a system-level assessment. Appraisal methods will be useful, since assessments of Farm household surveys are the most expensive and time- organizations in the AIS, or of the system as a whole, should consuming approach to collecting data about agricultural take the farmers’ perspective into account. innovation, but they provide particularly relevant infor- mation, especially if secondary data on farm households POTENTIAL BENEFITS that capture aspects of agricultural innovation are not available. Box 7.8 describes how this assessment method The key challenge facing agricultural research institutes, was used in Ghana. development organizations, and enterprises is to maintain MODULE 7: THEMATIC NOTE 2: METHODS FOR ORGANIZATIONAL ASSESSMENTS IN AGRICULTURAL INNOVATION SYSTEMS 559 Box 7.8 Using Staff Surveys in Assessing Agricultural Extension Services in Six Districts of Ghana To assess the performance of the organizations provid- The survey also showed that less than 12 percent of ing agricultural extension services in Ghana, a team household heads and less than 6 percent of spouses from the University of Ghana–Legon and the Interna- had adopted a new technology in the previous tional Food Policy Research Institute carried out an two years. The implication is that considerable con- assessment that involved surveys among agricultural straints prevent male and female farmers from extension providers (70 interviewees) as well as agricul- innovating. tural household heads (1,168) and their spouses (613). The survey among agricultural extension agents The assessment showed that the public extension revealed that female extension agents were more effec- service remained the main provider of extension infor- tive in reaching female farmers than male extension mation (an important finding, given the crucial role of agents, but only 14 percent of extension agents were advisory services in agricultural innovation). Only one women. Extension agents as a group identified the lack respondent had received a visit from a nongovernment of transport and access to credit as major constraints organization providing extension services, and non- on farmers (see the figure). An inadequate number of governmental organizations organized only 4 percent extension staff was seen as the least important of group meetings on extension. constraint. The assessment also showed that female household The assessment revealed management problems as heads as well as female spouses in male-headed house- well. Extension agents had limited incentives to per- holds had very low access to agricultural extension ser- form, priorities and targets were not set, and training vices even though women play an important role in opportunities were limited. The assessment identified Ghana’s smallholder-based agriculture, and even entry points for interventions to improve the perfor- though Ghana has a special program for Women in mance of this key organization in Ghana’s agricultural Agricultural Development. innovation system. Source: World Bank and IFPRI 2010. their relevance and performance in the rapidly evolving ■ Commit resources to organizational assessment. The agricultural sector. Organizational assessments provide a benefits of organizational assessments are realized only if way of investigating the capacities and outcomes of an orga- they are conducted on a regular basis to maintain an nization and identifying ways of strengthening different organization’s relevance in the AIS and to monitor aspects of capacity to improve relevance and performance. progress over time. Conducting assessments regularly These actions improve the effectiveness of both public and can be a considerable challenge, especially if organiza- private investments in the development of organizations tions rely on external donors to fund this activity. within an AIS. If similar assessment tools are used in differ- ■ Build local ownership for assessment. The sustainability ent countries, additional benefits can be realized from cross- of an assessment regime can be improved by generating country comparisons and benchmarking. buy-in from local organizations, such as the ministries in charge of agriculture, science, and technology. ■ Build local capacity for assessment. The sustainability POLICY ISSUES of an assessment regime can also be improved by build- Policy issues related to organizational assessments range ing and institutionalizing local capacity for conducting from ensuring that assessments are properly resourced, that organizational assessments. It may also be useful to local capacity to conduct assessments is developed and sus- involve regional networks of agricultural research tained, that assessments reflect environmental and social organizations, such as the Forum for Agricultural considerations, and that wide support develops for using Research in Africa (FARA), or regional economic com- the results to improve performance. Policy responses to munities, such as the Economic Community of West these concerns include the following: African States (ECOWAS), in the use of assessment 560 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK tools, especially if benchmarking approaches are used ■ Resource implications. As with all assessments, in orga- (see the final point). nizational assessments carefully consider the resources ■ Emphasize social and environmental considerations in and capacity required to undertake the assessment. designing assessment methods. For example, assessment Assessments involving household surveys are particu- methods can be designed to capture the extent to which larly resource-intensive. Depending on the country and individual organizations in the system are biased towards region, the costs may range from US$25 to US$120 per large-scale farmers. As shown in box 7.8, assessment household. Yet certain types of data about an organiza- methods are also useful to assess the gender dimensions tion’s performance in the innovation system can be col- of the innovation system. lected only through surveys, such as data on male and ■ Create regional guidelines. International and regional female farmers’ access to extension services. organizations may take on the role of developing guide- ■ Inclusiveness. To create “buy-in,� it is important to gen- lines for harmonizing assessments and publishing erate “demand� for assessment data at the organizational, results, especially if benchmarking approaches are used. national, and regional level. It may be useful, for exam- ple, to work with parliamentary committees in charge of agriculture or science and technology. In democratic sys- tems, such committees may have considerable latitude to IMPLEMENTATION ISSUES use assessment tools to hold the government accountable To some extent, implementation issues for organizational for the performance of an innovation system and its assessments reflect the policy issues just mentioned: organizations. Likewise, it may be useful to involve farmer organizations, which can also play an important ■ Timeliness. It is important to conduct organizational role in creating accountability. assessments regularly and in a timely fashion, as they are ■ Choosing local partners for assessments. As indicated, a key mechanism for organizations to maintain their rel- it is essential to build local capacity for assessments. evance within an innovation system. It is preferable to use Potential partners may include analytical units within frequent organizational assessments to encourage contin- the ministries in charge of agriculture or science and uous incremental change rather than to rely on infre- technology, university departments that work in this quent major organizational reforms (see, for example, the field, as well as think tanks and local consulting CGIAR as an example of major reform; www.cgiar.org). companies. MODULE 7: THEMATIC NOTE 2: METHODS FOR ORGANIZATIONAL ASSESSMENTS IN AGRICULTURAL INNOVATION SYSTEMS 561 T H E M AT I C N O T E 3 Foresighting Investments in Agricultural Innovation Anthony Clayton, University of the West Indies SYNOPSIS Individuals, firms, and governments therefore have a common interest in gaining a more accurate sense of the ndividuals, firms, and governments have a common I interest in gaining a more accurate sense of the future to identify potential achievements, successes, and failures; discern new opportunities; or reduce risk. New, future-ori- future, either to improve their chances of making a success- ful investment or to reduce the risk of loss. The problem is that the future for any given sector, nation, or individual will be determined by a complex combination of interacting ented evaluation methods are needed to complement cur- variables that cannot be anticipated with precision. The rent methods, which are largely ex post—in other words, response is to identify better ways to think about and pre- they account for past outputs, outcomes, and impact. Given pare for the future (Postrel 1998). Foresighting is a means of the impossibility of seeing into the future, the only solution gathering and using information to think strategically about is to gather and analyze information to think about and pre- the future, including the future of agriculture (de Lattre- pare for the future. Tools such as foresighting can make an Gasquet 2006). Foresighting assumes that the future is not important contribution to this process by clarifying a coun- predetermined or even predictable but that it will be influ- try’s position with regard to strengths, weaknesses, threats, enced by choices made today. challenges, and opportunities, focusing attention on longer- term issues (including difficult institutional and political issues), and securing a sufficient level of commitment from FORESIGHTING TOOLS AND APPLICATIONS stakeholders to enable the necessary processes of reform, Foresighting is a strategy for change, rather than a strategic restructuring, transformation, and change. plan, although it often feeds into a strategic planning process. Foresighting is both a process and a set of tools for managing and communicating knowledge, setting priorities, coordinat- BACKGROUND AND CONTEXT ing goals, and encouraging innovation in science and tech- Most decisions are based on implicit assumptions about the nology. It involves an iterative and interactive process of future. People depositing funds with a bank assume that they systematically exploring possible future economic and social will be able to withdraw their capital when it is required. dynamics, including factors such as science, technology, insti- Investors fund a new business venture because they antici- tutions, environment, and development options. The aim is pate profits. When farmers expect good demand for their to identify strategic areas of investment that will yield the crop, they may plant an extra field. Assumptions such as greatest economic and/or social benefits (Rutten 2001). From these are both rational and functional; few decisions can be an innovation systems perspective, organizations pursue made without assuming that a significant degree of stability foresighting exercises to (Popper et al. 2007): encourage and continuity will prevail. Because it is also true that these strategic and future-oriented thinking; support innovation assumptions sometimes prove incorrect, it is important to strategies and priority setting; identify research/investment assess the balance between risk and reward involved in each opportunities; generate visions and images of the future; cope decision and to gauge the reliability of the individuals and with “grand challenges� facing the economy, society, and the strength and trustworthiness of the institutions on which environment; and promote public debate and trigger neces- the plan depends. sary actions. 562 Box 7.9 Foresighting to Transform Ireland’s Agrifood Sector (Teagasc 2030) Teagasc, established in 1988, is the national body pro- 3. Energy Squeeze Fuels Agriculture. With oil produc- viding integrated research, advisory, and training ser- tion declining steadily, agriculture is vital to global vices to Ireland’s agriculture, food industry, and rural food and energy security. communities. The Teagasc 2030 foresight exercise 4. A European Agriculture. This scenario addresses (launched in 2006, ending in 2008 with an interna- the socioeconomic aspects of the rural economy and tional foresight conference) sought to establish a the consequences of a European economy partly iso- broadly shared vision for the Irish agrifood industry lated from the rest of the world by tariffs and and rural economy in 2030. That vision would enable restricted trade. Teagasc to meet science and technology needs in the 5. Sustainable and Rural. Sustainability, climate short, medium, and long term. change, and environmental security have prece- The foresighting process. Teagasc 2030 was overseen dence: The 2030 bioeconomy delivers competitive by a steering committee of national and international agri-environmental products and services. representatives from government, industry, and univer- sities. The committee was assisted by a foresight panel Lessons and response. Based on the scenarios, of experts from Teagasc, other government depart- strategic and operational responses emerged: ments, state bodies, universities, farming and rural organizations, and food industries. A foresight working ■ For the sector: Promote knowledge generation and group from Teagasc’s research, advisory, and training dissemination, learning, and problem solving. Policy directorates completed background papers on drivers drivers at the European Union and national level of change and possible future scenarios and handled create new markets and opportunities. day-to-day running of the project. The knowledge base ■ For farms, firms, and policy makers: Adapt quickly was developed in workshops, other events, and consul- to changing circumstances, generate added value, tations with stakeholders and international experts. and support innovation. The scenarios. Involving elements of imagination ■ For Teagasc: Address the new challenges and but drawing on likely developments in the agrifood needs facing the Irish agrifood knowledge system. sector, rural economy, and world over the next 20 years, Excellence in supporting science-based innova- Teagasc 2030 developed five scenarios and described tion will depend on building organizational capa- their effects on the organization: bilities in leadership, partnership, and accounta- bility. Teagasc will establish a new technology 1. Ireland—The Food Island. The value-added food transfer service for food companies, strengthen sector in 2030 has many new elements such as con- investment in biosciences, enhance the depth of vergence of the food and pharmaceutical industries. its scientific effort, and continue upgrading its 2. Globally Competitive Farming. In 2030, a diversi- educational programs to the highest international fied agrifood sector competitively produces milk, standards. beef/sheep, and tillage crops. Source: Teagasc, www.teagasc.ie. The next sections of this note describe elements of the Foresighting process foresighting process, how to select an appropriate foresight- Foresighting is often spearheaded by individual organiza- ing tool, the use of complementary tools, and the develop- tions or collaborating groups who have a stake within the ment of alternative scenarios. They conclude with examples innovation system (for example, by strategic partnerships of how these processes unfolded in agricultural foresighting or innovation councils, among others). The organization in Ireland (box 7.9) and Jamaica (box 7.10). MODULE 7: THEMATIC NOTE 3: FORESIGHTING INVESTMENTS IN AGRICULTURAL INNOVATION 563 Box 7.10 Foresighting for Jamaica’s Sugar Industry Objective and process. Jamaica’s sugar industry was the would depend on how the change process was largest employer of agricultural labor and used the most managed. (and much of the best) arable land, but it depended on a 3. Multi-objective optimization demonstrated a European Union trade regime that was being phased possible solution that could achieve a range of out. Jamaican sugar was not competitive and would have developmental goals. Extensive, low-value agricul- to undergo profound restructuring to survive. A research ture would shift to intensive, high-value agricul- program at the University of the West Indies attempted ture, increasing revenue, profits, and skill transfer to address these issues through linked foresight exercises while reducing environmental impact. involving government, academics, and industry from 2003 to 2010. Following a 2003 Delphi study that identi- Outcomes and lessons. Following the withdrawal of fied drivers of change and a 2004 foresight workshop to Brazil’s plan to invest in Jamaica’s ethanol industry and identify land-use scenarios, by 2009 public and private an even more acute budgetary crisis in 2010–11, the Gov- partners had developed an integrated assessment that ernment of Jamaica chose to sell the sugar industry to a generated more accurate predictions than official fore- foreign company. This outcome illustrates how pressing casts. An integrated policy development project in short-term needs, in conjunction with international 2010–11 identified options for improved policies, using uncertainties and domestic politics, often entail the loss geographic information system mapping as the basis for of strategic direction and potential future prosperity. a national spatial plan. The cost of the seven years of The foresighting exercises resulted in three significant foresighting was an estimated US$150,000. advances. First, the identification of future scenarios The scenarios. In early 2008, a diversification plan helped to establish that better future outcomes were pos- involving privatization and the manufacture of ethanol sible. Second, the process helped to identify the weak- presented three scenarios: nesses and vulnerabilities in current policies. Third, the dialogue between officials, academics, and industry rep- 1. Diversification would succeed. The area used to resentatives was genuinely useful. Yet the exercises could produce cane for ethanol would increase signifi- not resolve deep core weaknesses in governance. Most cantly. The contribution to mitigating climate decisions are still taken on a sectoral basis without con- change would offset probable negative consequences sidering cross-sectoral effects. Ministry officials partici- for river and coastal water quality. pated in the debates, but not ministers. No sufficiently 2. Diversification would fail. Much land would powerful group exists to address the large disparities in become available for other purposes (housing, wealth, influence, and power in Jamaica and arrive at an tourism, forestry) or revert to scrub. Some options optimal outcome. Vested interests continue to dominate would be environmentally positive, but much the informal networks where key decisions are made. Source: Author. initiating the foresighting exercise does not necessarily facil- Rutten (2000) explains that there are no blueprints for itate the process. A common procedure is to establish a organizing a foresighting exercise. The process itself has steering committee for the exercise and a foresight working four key stages, however: group to manage implementation. This approach was used for a foresighting exercise for agriculture in Ireland (box 1. Bring together a wide range of information resources 7.9). For the Jamaican sugar industry, a team of foresight and key stakeholders to discuss and define the core experts was contracted to help users define the steps and objective(s) of the foresighting exercise. tools in a foresighting exercise to meet the needs of different 2. Identify and engage a wider group of stakeholders (typi- users (in general, users might include firms, industry asso- cally involving both public and private sector organiza- ciations, multinationals, or governments). tions) in the process. 564 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK 3. Establish a foresighting task force (or a steering commit- interactions, clarify “known unknowns,� assess vulnera- tee with an implementing working group) with key bility to events, identify possible outcomes, backcast to stakeholders represented, ideally with the support of a the present day, and build a strategy for managing foresight expert. change. 4. Design and develop the foresighting exercise. Select the tools for the strategic analyses, and set the timelines for Examples of online toolkits for foresighting are listed in completion. the “resources� section of this note, following the references. This process is not a linear series of steps. At each of these four stages, new information may be injected, additional Complementary tools in the foresighting process stakeholders may become involved (they can sometimes Aside from the three major foresighting tools, complemen- include criminal or vested interests), and organizational tary methods of information gathering can be used in the changes may affect the level of human and financial process, depending on timelines and tasks assigned within resources allocated to the exercise. The exercise will need to the task force or to the foresight expert: remain sufficiently flexible to respond to these challenges and changes while remaining productive. The outputs of the ■ A horizon scan examines the external environment for process should include the following: potential threats and opportunities or early signs of dis- ruptive technological change. ■ Determining the economic, social, environmental, and ■ A decision tree is developed by constructing a logical institutional factors that might encourage or inhibit sequence of pertinent questions, such as “If this plan innovation (either in a particular country, or among fails, what are our other options?� firms, or in government). ■ User requirements capture. When a particular group ■ Clarifying the position of a country (or firms or govern- (such as consultants or a local elite) has all of the rele- ment) with regard to its strengths, weaknesses, threats, vant information, they may be able to control the challenges, and opportunities, usually by focusing atten- agenda and determine the answers. A user requirements tion on the longer-term issues. capture process helps to forestall elite capture and ■ Securing a sufficient level of commitment from stake- information asymmetries. The information base for all holders to enable the necessary processes of strategic users is developed, displayed, discussed, and modified reform, restructuring, transformation, and change. in an iterative process, often using graphic-rich soft- ware that allows data to be overlaid in layers (a GIS is Selecting the appropriate foresighting tool one example). As summarized in table 7.7, three key strategic planning tools are used to develop future-oriented analyses in the Foresighting and defining alternative scenarios foresighting process: Scenarios (different possible visions of the future) can be ■ Technology roadmapping identifies key trends in the used to formulate long-term policy, institutional strategy, market and clarifies those trends and their relation to and research programs (Johnson and Paez 2000). In a fore- organizational goals; then technological and manage- sight exercise, a process of defining and describing scenarios rial decision-making occur to achieve the preferred is used to explore the way that choices made today will lead future. to alternative futures. Scenarios are usually encapsulated in ■ Delphi studies review significant trends in relevant areas brief, illustrative descriptions of possible future states of a (such as emerging scientific and technological opportu- system. A common technique is to develop a small set of nities, needs for education and training, and so forth) alternative scenarios, which is helpful for imagining, struc- and identify the most plausible outcomes, plus any turing, and analyzing different possible futures. Scenarios associated threats and opportunities. can range from the probable (most likely) future to possible ■ Foresighting and backcasting exercises identify organi- best-case and worst-case futures. The storylines are discussed zational and institutional drivers of change plus their widely and critiqued.1 Ideally, like the overall foresighting MODULE 7: THEMATIC NOTE 3: FORESIGHTING INVESTMENTS IN AGRICULTURAL INNOVATION 565 566 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 7.7 Foresight Tools Foresight tool Characteristic Roadmapping Delphi Foresight/backcasting Purpose Identify key trends in market, clarify Review significant trends in relevant areas and identify Identify drivers of change plus interactions, identify organizational goals, make technological and most likely outcome, plus any associated threats and “known unknowns,� assess vulnerability to events, managerial choices to achieve preferred opportunities; can be more accurate than individual identify possible outcomes, backcast to present day, future consultation and more reliable than statistical groups build strategy for managing change made up of noninteracting individuals whose judgments are aggregated Typical user Individual firms Industry associations Large multinational corporations, governments Typical time 1–10 5–20 10–50 horizon examined (years) People involved Experts and decision makers; 10–20 Experts (different disciplines); 30–100 Experts and stakeholders; 20–50 and numbers Type of process 1 day introduction, 1 day run-time, monitoring Coordinated, iterative discussion of expert judgments Facilitated discussion, present “what-if� challenges and and implementation on defined issues; responses are kept anonymous but counterfactuals, 3 months’ preparation, 2 days’ run- fed back to group, clarified, ranked and reevaluated in time; a large national exercise will require 1 year’s a minimum of 3 rounds, 3 months’ preparation, preparation, 2 years’ run-time 3 months’ run-time Role of foresight Introduce concept Coordinate, derive scenarios Facilitate, challenge, manage process expert Key challenges Getting experts and decision makers to engage, Identifying and recruiting the panels, managing the Identifying and recruiting key stakeholders, facilitating overcoming organizational inertia process the process, maintaining momentum Key questions to – What are our core technologies? – What is the issue to be addressed? – What are the key assumptions underlying this plan? guide information – Could we use them more effectively? – What is important about the issue? – What is the “worst case� situation? gathering / – Could an innovation make our technology – What are possible future scenarios for this issue? – What if this plan doesn’t work? analysis obsolete? How quickly could we adapt? – What views create tensions on the issue? – What is the contingency plan? – What are the trends in our sector? Could a new competitor or a new market emerge? – What is our competitive advantage? – What are the priorities for maintaining, upgrading, or replacing our core technologies? – What resources will be required to update our technologies and upgrade our skills? Examples Institute of Grocery Distribution (UK) used Rikkonen, Kaivo-oja, and Aakkula (2006) described the De Lattre-Gasquet (2006) examined three case studies roadmapping to identify food production use of Delphi expert panels in the scenario-based on the use of foresighting in agricultural research issues that could affect the food chain and to strategic planning of agriculture in Finland; Stewman and development priorities: one at the commodity facilitate a more considered introduction of and Lincoln (1981) conducted a Delphi study on the level (cocoa), one at the level of a national system new technologies in the future on behalf of likely timeframe for expected breakthroughs in the (Dutch agriculture), and one at the level of an its members, who were major retailers and biological sciences from recombinant DNA (RDNA) organization (the International Food Policy Research food and agricultural research institutes (IGD research, with emphasis on basic knowledge and three Institute’s 2020 Vision) 2003) applied areas: agriculture, industry, and medicine Source: Author. exercise, scenarios are updated with further assessments of institutional, and political barriers; providing sufficient the environment, drivers of change, and likely interactions resources to implement the results of foresighting exercises; between system variables in the progression from current and ensuring that policy change can be sustained. conditions to a future state. Boxes 7.9 and 7.10 provide examples of scenarios developed within wider foresighting Reduce the risk of costly policy failures in Ireland and Jamaica; IAPs 4 and 5 provide examples from India and Chile. For poor and developing countries, the primary policy issue in foresighting and strategic planning is that these exercises can reduce the risk of policy failures with high human and POTENTIAL BENEFITS developmental costs. One of the most important differences Attempts to prepare for the future can generate a range of between rich and poor countries is that the cost of a policy benefits. The general advantages of a strategic planning failure in a rich country is usually in terms of its opportu- process are that it can help any organization assess its threats nity cost—the loss of the wealth that might have otherwise and opportunities, clarify the issues, determine its priorities, been generated. Although poor and developing countries and integrate all of the important variables into a single have a greater need to prepare for the future, most have just coherent plan. This is true irrespective of the quality of the a small fraction of the capacity (the skills, knowledge base, plan that results. A strategic planning process also helps to access to information networks, and so on) that rich coun- identify any weaknesses (such as insufficient capital, inade- tries deploy on such exercises. For this reason, it is excep- quate technical capacity, inappropriate management, or tionally important for poor countries to use policy tools gaps in the supply chain) that will have to be addressed and that are effective, robust, and cost-effective. thereby clarifies the priorities for borrowing and invest- ment, hiring and firing, and R&D. Address barriers to progress and provide The advantage of future-oriented strategic planning is sufficient resources for foresighting that it facilitates more objective consideration of today’s real problems. The foresight exercises may depoliticize and Strategies for change, including the use of foresighting, usu- decontextualize the problems, which then allow the prob- ally have to address issues such as institutional culture and lems to be addressed more realistically. Thinking about local politics. As the example of the Jamaican sugar industry forces that will shape the future, such as demographic suggests, it is often important to address the political, cul- trends, can indicate the future pattern of market demand tural, or economic factors and institutional policies that (for example, for food, energy, water, and housing) and the seriously impede progress, because development trajecto- need for investments in new technologies to meet that ries can become locked in by the real or perceived cost of demand (see, for example, Clayton and Staple-Ebanks developing alternatives, the reluctance to write off sunk 2002). A foresight approach, using techniques such as sce- expenditures, or a lack of relevant skills. nario planning and integrated assessment to incorporate Managing in the present while preparing for the future social, economic, and environmental factors, can ultimately often involves gathering new sources of information, estab- identify and present the best available, optimal, or even win- lishing where and when change is needed, building a con- win outcomes, which different organizations and interest sensus, and mobilizing people and institutions around the groups may find acceptable. Finally, many planning exer- new strategy. Commitment, time, and financial resources cises are flawed because of information asymmetries. A pos- are essential to support foresighting, especially the imple- sible solution to this problem is a user requirements capture mentation phase. process, which can be built into a strategic planning exer- cise. This process involves two or three iterations in which users are shown possible outcomes, give their feedback, and Link foresighting with institutional change to ensure sustainability refine the model. A policy issue especially relevant to innovation systems is that innovation cannot usually be imposed. A solution that POLICY ISSUES is not widely understood, or which cannot be easily assimi- The chief policy issues related to foresighting are related to lated or at least accommodated by local cultural and politi- reducing the risk of failed policies; addressing cultural, cal systems, generally will not gain wide support and will fail MODULE 7: THEMATIC NOTE 3: FORESIGHTING INVESTMENTS IN AGRICULTURAL INNOVATION 567 once external funding and/or pressure are withdrawn. Fore- and wider economic restructuring, provide the economic sighting exercises can inform innovation at the policy and impetus to support a widening skill base, attract and retain investment levels, but to ensure sustainability, they must be human and financial capital, and make a decisive move linked to assessment and change processes within the along the value chain, thereby escaping from low-growth, organizations involved in the innovation system (see TN 2). low-margin markets. Ultimately, the dynamics of innovation and change cannot Key recommendations for practitioners include the be understood without a broad concept of knowledge, following: including competencies and capabilities, practices and rou- tines, and meanings, beliefs, and perceptions (Williams and ■ Many policy advisors, planners, and donor agencies Markusson 2002). A foresight exercise takes all of these fac- find it difficult to talk openly about political problems tors into account to map out a development plan which may that can undermine innovation processes, such as vested be visionary but is also practical and realistic, so that it interests and corruption. They often prefer to talk about ensures immediate and long-term benefits for the economy technical issues as if they could be addressed in isolation. and society. Transparency is sacrificed and the exercise loses credibil- ity with stakeholders. In fact, the real impediments to progress are often the political, cultural, or economic fac- LESSONS LEARNED AND RECOMMENDATIONS tors that determine which solutions are adopted and Foresighting cannot, by itself, solve all problems. Other factors supported and how and when this occurs. It is useless to must be addressed, as seen in the example from Jamaica and present an analysis of technological choices as if the final discussed throughout this sourcebook. These factors include decision is value-free. The only way to map out a poten- the role of multistakeholder collaboration for good gover- tially viable solution is to engage with and understand nance (modules 1 and 6); sensible macroeconomic and regu- the political and cultural issues. latory policies (module 6); investments in education, advisory ■ For these reasons, it is extremely important that partic- services, and research capacity (modules 2, 3, and 4); and an ipants in foresighting exercises understand that a sys- innovative, entrepreneurial private sector (module 5). All have tematic examination of the possibility of failure and an an important role to play in encouraging technological honest discussion of the pattern of previous failures are dynamism, investment, and associated processes of economic the only ways to improve the chances of success. Well- diversification and growth, as well as a move into higher-value organized feedback to the client and participants enables products and services that meet market demands. the process to tolerate the dissent, complexity, and uncer- Experience with foresighting exercises suggests that fore- tainty that is typical of strategic analyses. sighting is a best practice for formulating a long-term ■ Foresighting is a process, not a one-time activity. The strategic plan that enables reform and encourages innova- time required may have to be extended in light of new tion. The foresighting process and associated tools provide a information or significant changes in the external envi- structure for assessing factors that are internal (internal ronment (such as a recession). A national process can strengths and weaknesses of the science, technology, pro- take several years and cycle over a longer period. Regular duction, and institutional base) and external (changing interaction with participants at all stages of the process is global markets and other critical factors in the external envi- needed to ensure that the exercise does not suffer from ronment). A foresighting exercise also lays the groundwork stagnation or “groupthink� as well as to ensure that new for a review process to anticipate key market opportunities stakeholders are identified, recruited, and fully involved. by updating findings with information on new and emerg- ■ Ideally a foresighting exercise should be commissioned ing technologies in conjunction with an analysis of the cur- formally so that it is clearly accountable to client rent restructuring of key sectors of the global economy in demand. It is recommended that a foresighting expert be relation to science, technology, and production. The identi- contracted as a facilitator, but the expert does not replace fication of such market opportunities could, with good the need for a steering committee and working group to management, create demand for a process of institutional implement the exercise. 568 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK T H E M AT I C N O T E 4 Monitoring Agricultural Innovation System Interventions Andy Hall, LINK Ltd. Kumuda Dorai, LINK Ltd. Trish Kammili, National Institute for Agricultural Research, France (INRA) SYNOPSIS systems—are rarely this simple, and the underlying assump- tions often prove to be unrealistic. Monitoring practice has his note deals with strategies for monitoring AIS T interventions. Innovation system interventions make explicit assumptions about the nonlinearity of change and innovation in their design, and in doing so, for some time recognized this nonlinearity of agricultural and other development interventions, accepting that out- comes and impacts are achieved following constant itera- tions of an approach based on experience emerging from the they place specific demands on monitoring arrangements. intervention itself. This awareness is evident in the range of These assumptions hinge on the recognition that innova- learning-based interventions that have emerged in recent tion usually involves simultaneous technical adaptation and years, such as adaptive collaborative management techniques changes in the way things are done—in other words, insti- in natural resource management (Colfer 2005; Guijt 2007) tutional (and policy) adaptation—and that the final or techniques such as project Outcome Mapping (described impacts will occur only when institutional adaptation has in box 7.12 later in this note). been achieved. Process-oriented monitoring methods that Innovation system interventions make explicit assump- can cope with learning-based interventions have been tions about the nonlinearity of change and innovation in around for some time; innovation system interventions their design and, in doing so, place specific demands on should rediscover and adapt these methods rather than monitoring arrangements. These assumptions hinge on the reinvent them. These types of monitoring methods include recognition that innovation usually involves simultaneous Outcome Mapping, Rapid Appraisal of Agricultural Knowl- technical adaptation and changes in the way things are edge Systems (RAAKS), the Most Significant Change (MSC) done—institutional (and policy) adaptation. A related approach, and Participatory Impact Pathway Analysis. assumption is that final impacts such as changes in yield, incomes, food availability, or environmental sustainability BACKGROUND AND CONTEXT will occur only when institutional adaptation has been In common with all interventions, good practice in agricul- achieved. The intervention logic of innovation system inter- tural innovation interventions requires effective perfor- ventions is that while technological adaptations have the mance management accompanied by reporting arrange- potential for immediate impacts, institutional and policy ments that ensure accountability. This thematic note deals adaptations strengthen capacities for innovation that with monitoring—the effective management of perfor- remain and continue to develop beyond the life of an inter- mance by implementers so that they can achieve desired out- vention. These capacities lay the foundation for future tech- comes and report their progress to investors. A separate the- nical adaptations and lead to social and economic impacts. matic note (TN 5) deals with evaluation—the assessment of This focus on institutional adaptation highlights the impacts and the generation of lessons for future interven- need for those implementing an intervention to monitor tions by investors and planners. Traditionally, monitoring how effectively their actions stimulate new ways of doing systems in interventions have focused on tracking perfor- things. Often this kind of change involves stimulating the mance against a set of milestones agreed with the investor at adaptation of informal institutions—for example, by devel- the intervention’s inception. In reality, agricultural develop- oping links between research, enterprise, development, and ment interventions—particularly those related to innovation (sometimes) policy players and then finding ways in which 569 these networks can work effectively. Sometimes it involves are best deployed to meet the demands of this type of inter- stimulating changes in formal institutions, such as land vention. Process-oriented monitoring methods have been tenure arrangements, regulatory regimes, pricing policies, around for some time, and innovation system interventions or the roles of certain organizations. This process, in turn, might need to rediscover and adapt those methods rather requires interventions to facilitate negotiations about than reinvent them. Boxes 7.11 and 7.12 illustrate two such change between different stakeholders. Both types of insti- methods: Rapid Appraisal of Agricultural Knowledge Sys- tutional change need to be tracked. tems (RAAKS) and Outcome Mapping. Because the environments in which institutional changes must take place have highly specific features, the process of Principles for selecting monitoring methods stimulating change can rarely follow a set plan. Instead an experimental approach is needed. This means that interven- Several principles from good practice stand out and make a tions must be learning based and reflexive, which is why useful guide for selecting monitoring methods from among monitoring is so critical: It assumes the role of helping to the many that are being adapted to the learning orientation determine whether the intervention’s chosen approach is of innovation system interventions. These principles are resulting in desirable outcomes and whether the interven- particularly useful at a time when experience of monitoring tion needs to respond to other (often unexpected) changes innovation system interventions remains limited. They in its environment. include the following: Since the nature of institutional bottlenecks may become apparent only during the course of an intervention, indica- ■ Balance accountability and learning. Aside from col- tors of performance will need to be developed on a case-by- lecting the data required for reporting to the investor, case basis and constantly revised. Recording unexpected implementers will need to collect monitoring data that institutional changes is an additional way of alerting an will help them manage the performance of their inter- intervention’s investor that progress is being made. vention. All of the methods summarized in table 7.8 sup- Interventions also will need to monitor progress toward port learning-based monitoring for interventions. final social, economic, and environmental impacts. Such mon- ■ Make assumptions explicit, and revisit theories of itoring implies a set of assumptions about the relationship change. The greater learning orientation of monitoring between these institutional outcomes and final impacts. Inter- implies a need to make assumptions about change ventions need to test these assumptions by monitoring out- processes explicit in planning interventions and a need comes farther down the results chain toward final impact to to revisit and test those assumptions. Previously practi- verify whether the institutional changes that have been tioners tended to regard such assumptions as a given. enacted are likely to lay the foundation for those final impacts. By exploring and responding to the validity of the This monitoring provides information that can feed into assumptions on which an intervention is based, how- adjustments in the intervention; it also acts as a means of ever, implementers can improve the intervention’s reporting on progress and remaining accountable to investors. effectiveness. All of the learning-based approaches in The monitoring of innovation system interventions also table 7.8 involve testing underlying assumptions. If an emphasizes the need to make information accessible to all intervention’s theory of change must be altered, it is stakeholders involved. Information collection approaches important that the investor be made aware of the will need to be inclusive and transparent, and information change in accountability reporting. management systems must provide open access to all, not ■ Incorporate different stakeholders’ perspectives. The just those involved in designing monitoring arrangements. shift to address the question of how things happened and to track unexpected outcomes requires a much stronger emphasis on widening the scope of participation in INVESTMENT NEEDED monitoring. Wider participation helps to capture the Practitioners have become better equipped to manage the perspectives of the poor (and other stakeholders) on the performance of learning-based, institutional adaptation actual effects of an intervention (social, economic, and processes and the complex impact chains that are likely to institutional). It also makes it possible to develop a fuller be encountered in innovation system interventions. The understanding of the process through which those effects challenge of monitoring innovation system interventions is came about. Different stakeholders may have different therefore to learn how current good practice and principles interpretations of cause and effect. It is now good 570 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 7.11 Rapid Appraisal of Agricultural Knowledge Systems A Rapid Appraisal of Agricultural Knowledge Systems Strengths (RAAKS) focuses primarily on knowledge and informa- ■ Provides insights into the social organization of tion systems. The appraisal is a structured inquiry into innovation and people’s values, motivations, and the social organization of innovation, based on reactions. the inputs of those involved: the way the actors ■ Improves the generation, exchange, and use of behave, how they interact and form networks, how they knowledge and information for innovation. go about cooperating and communicating, what stimu- ■ Builds capacity among the actors involved by lates them to learn, and what blocks them from learn- making them conscious of their performance as ing. Actors gain a shared understanding of their perfor- innovators. mance as innovators—their perceptions, judgments, understanding, and capacity to take decisions and act— and learn to contribute more effectively to innovation. Weaknesses The main elements of RAAKS are as follows: ■ A complex methodology with a series of steps, exer- cises, and tools to be implemented. ■ Strategic diagnosis. Joint definition of useful strate- ■ A strong focus on rural activities; does not consider gies through an appraisal of opportunities and the wider setting of the innovation system (actors obstacles. other than those involved in activities in the rural ■ Creative tension. Compare and contrast the multi- domain). ple findings that represent the various analytical perspectives. ■ Design of solutions. Participants are encouraged to Best use or application analyze, interpret, and, based on these steps, design ■ Together, actors develop a common understanding potentially useful solutions. of their performance as innovators. Source: Kammili 2011; Salomon and Engel 1997. practice in monitoring to recognize these divergent per- changes in yields or quantities of fertilizer sold), although ceptions. This principle extends to the need to draw on these indicators contain their own assumptions about the perspectives from a wider range of stakeholders in devel- causal chain to impact. Data collection techniques for oping the theory of change that will guide an interven- tracking outcomes include small sample surveys, participa- tion’s implementation and learning. Box 7.13 illustrates tory appraisal techniques, and longitudinal household case one approach for widening participation in monitoring; studies. It is important to keep these activities in propor- others are included in table 7.8. tion to the task of managing the intervention, however. ■ Mixed methods. Expanding views of monitoring require Costly and time-consuming baseline surveys do not lend quantitative methods (to measure outcomes) to be com- themselves to learning-based interventions for the simple bined with qualitative methods (to understand and learn reason that they do not generate information quickly from institutional and process changes). To understand enough to inform how an intervention is managed (see institutional and process changes, and to establish their the examples from IAPs 6 and 7). causal links to outcomes and impact, monitoring will need to place much greater emphasis on qualitative meth- ods such as Innovation and Institutional Histories (box Available monitoring methods 7.14) or Causal Process Tracing (table 7.8). Rather than measuring levels of income and social variables, it may be Table 7.8 presents the strengths and weaknesses of a range more appropriate to use proxy indicators of changes that of monitoring methods that have relevance to innovation will lead to these impacts in the future (for example, system interventions. These methods have a number of MODULE 7: THEMATIC NOTE 4: MONITORING AGRICULTURAL INNOVATION SYSTEM INTERVENTIONS 571 Box 7.12 Outcome Mapping Outcome Mapping reflects the idea that development is Strengths done by and for people. The central concept of Out- ■ A robust methodology that can be adapted to a come Mapping is that development is achieved through wide range of contexts. Outcome Mapping’s very changes in the behavior, actions, relationships, and flexible approach allows it to be used as a plan- activities of people, groups, and organizations with ning or replanning tool and at the beginning or which an intervention works directly (the “boundary midway through an intervention. Outcome Map- partners�). The originality of this approach stems from ping can also be used as a monitoring approach the fact that there is a clear shift from measuring the throughout an intervention or as a framework for outputs of an intervention (poverty alleviation, evaluation. reduced conflict, and so forth) toward trying to assess ■ It complements standard approaches and thus changes in behaviors, relationships, and actions of the can be used in combination with other method- people and the organizations directly involved. By ologies. emphasizing behavioral change, Outcome Mapping ■ It unites process and outcome evaluation. aims to assess “contributions� to impacts rather than ■ Monitoring provides the space for critical self- claim “attribution� for impacts. reflection and learning. The boundary partners are identified, as are strategies for equipping them with tools and Weaknesses resources so that they can contribute to the develop- ■ Most assessment data are generated by the interven- ment process. An intervention thus facilitates tion, raising the question of whether the data are changes but does not cause or control them directly. objective (for example, failures may be white- Outcome Mapping maps how an intervention influ- washed). ences the roles partners play in development through ■ Uncertainties about combining Outcome Mapping a set of graduated indicators of changed behavior. It data with more quantitative data. monitors and evaluates three elements of the inter- ■ Lack of clarity about how to deal with and integrate vention: behavioral changes, the strategies used by new boundary partners. the intervention to stimulate change among the partners, and how the intervention functions as an Best use or application organizational unit. Through these three elements, Outcome Mapping unites process and outcome mon- ■ Satisfies the need for accountability as well as learn- itoring and evaluation. ing about the change process. Source: Kammili 2011; Earl, Carden, and Smutylo 2001. characteristics, discussed below, that make them different innovation system interventions, in which experimenta- from conventional milestone-based monitoring techniques. tion and action learning are the main routes to success. The discussion provides a flavor of the new approaches to 2. Inquisitive. Recognition of the importance of unexpected monitoring that will be seen in the coming years in innova- outcomes and the need to record and learn from them. tion system interventions. This perspective is particularly useful in innovation system The value added by the new monitoring techniques interventions, because their process-driven nature can reviewed in table 7.8, compared to conventional milestone- lead to unanticipated outcomes that have significance. based techniques, may be summarized as follows: 3. Communicative and accessible. Monitoring approaches as ways of sharing results and lessons and building a joint 1. Explanatory. A focus on reconstructing events in an understanding of events that have taken place. Making attempt to understand why a particular course of action information accessible to all stakeholders is important in led to the outcomes observed or failed to achieve innovation systems, because it is a way that organizations expected outcomes. This understanding is important for learn and improve their performance. 572 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 7.8 Overview of Methods for Monitoring AIS Interventions Method Purpose/use Strengths Weaknesses Major references Innovation and – Understand past innovation – Fosters discussion among stakeholders and leads to – Written accounts are based on recollections and Douthwaite and Institutional processes and identify reflection and learning. could be biased. Ashby (2005); Histories institutional factors that foster – Helps build a shared vision of the future. – Need skilled facilitators to help collect and analyze Shambu Prasad, or hinder innovation. the information. Hall, and – Forge a shared vision of the – Usually takes a very long time for significant lessons Thummuru future among stakeholders. to emerge. (2006) Participatory – Guide project management, – Involves staff and key stakeholders of an intervention – A relatively new approach that needs to be further Douthwaite et al. MODULE 7: THEMATIC NOTE 4: MONITORING AGRICULTURAL INNOVATION SYSTEM INTERVENTIONS Impact Pathway especially in complex in constructing impact pathways. implemented to gauge its weaknesses. (2003) Analysis situations where innovation is – Includes both (1) causal chain of activities, outputs, seen as emerging from a and outcomes that shed light on how an network. intervention achieves its goals and (2) network maps that show evolving relationships between participants. – Underlines the fact that innovations emerge from a network and not a linear “pipeline.� – Promotes reflection, self-evaluation, and learning. – Provides a framework for carrying out action- research. Causal Process – Well suited for complex and – Places data and theory in close proximity. One – Regarded as not very strong for wider generalization George and Tracing long-term interventions with quickly sees what works and what does not in an but more suited to narrow specification of the reach Bennett (2005); systems learning goals. intervention’s lifetime. of causal propositions. CoS-SIS (2009); – Takes a great deal of time. Walters and – Not conducive to parsimonious theory and leads to Vayda (2009) partial, middle-range theory. It is easy to miss causal complexity. – Easy to lose sight of the broader context. Reflexive – Best suited for long-term – Mechanisms built into the intervention permit all – Works in theory for long-term interventions van Mierlo et al. Monitoring in interventions with systems participants to contribute to learning by reflecting oriented to systems learning, but most development (2010) Action learning built into their on the relationships between key aspects and interventions do not have the luxury of long-term mandates. ambitions of the intervention as well as the practices learning as the sole goal and need to demonstrate and institutions in which they are embedded. (developmental) impacts throughout the life of the – Monitoring is integral to the intervention, so insights intervention. gained are built into and experimented with in new – A coherent set of tools and principles, but in activities. essence the approach is still being developed and – Encourages investigators to look for creative not in widespread use, so experiences from the field solutions. are few. – Reflexive monitoring in an intervention ensures that those involved develop new ways of working to keep up with changes in the intervention’s institutional context. (Table continues on the following page) 573 574 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 7.8 Overview of Methods for Monitoring AIS Interventions (continued) Method Purpose/use Strengths Weaknesses Major references Appreciative – Identify positive changes and – Fosters learning from past and contemporary – Like Innovation and Institutional Histories, this Biggs (2006); Acosta Inquiry look for unexpected situations. method can suffer from bias or incorrect reporting. and Douthwaite outcomes. – Opens up the possibility of looking at different (2005); Hall, things in new places/ways. Sulaiman, – Interviews allow for deep connections, unexpected Bezkorowajnyj learning, and a sense of empowerment. (2007) Outcome – Satisfy the need for – A robust methodology that can be adapted to a – Does not replace but complements logical Smutylo (2005); Mapping accountability as well as wide range of contexts. Its flexible approach allows framework analysis. Earl, Carden, and learning about the process of it to be used as a planning or replanning tool, at the – Most data is self-assessment data generated by the Smutylo (2001); change. beginning or midway through an intervention. It can intervention, which raises the question of objectivity. IDRC n.d. – Especially useful for assessing also be used as a monitoring approach throughout – Unclear how to combine resulting information with what causes change in an intervention or as a framework for evaluation. more quantitative data and how to deal with and behavior, relationships, – It can complement standard approaches and can be integrate new boundary partners. activities, or actions of the used in combination with other methodologies. people, groups, and – Unites process and outcome evaluation. organizations with whom an – Monitoring provides the required space for critical intervention works directly. self-reflection and learning. – Well suited for complex and long-term aspects of interventions with outcomes that are intertwined and difficult to segregate. Most Significant – Make sense of an – Enhances capacities of stakeholders (at the – A subjective expression of the values and concerns ECDPM (2006); Change intervention’s impact and organizational and individual levels) and fosters of the stakeholders designated to select the stories. IFAD (2002); Davies foster learning. learning. (1996); Davies – With the help of all primary – Helps identify unexpected changes or outcomes. and Dart (2005) stakeholders, identify the most – Large amounts of information are processed, from significant changes that have which negative and positive changes are deduced. occurred as a result of an – More accessible than traditional M&E techniques; no intervention. specific skills required to participate. Rapid Appraisal – Help actors as a group to – Provides insights into the social organization of – Complex methodology with a series of steps, Salomon and Engel of Agricultural understand their performance innovation and people’s values, motivations, and exercises, and tools to implement. (1997); ECDPM Knowledge as innovators. reactions. – Strong focus on rural activities does not consider (2006) Systems – Improves the generation, exchange, and utilization of the wider setting of the innovation system (actors knowledge and information for innovation. other than those involved in activities in the rural – Enhances capacity building of the actors involved by domain). making them conscious of their performance as innovators. Stories and – Shed light on the changes that – Exchanging stories builds trust between participants; – Biased; depends on the perspective of the person Asif (2005) Narratives have occurred at the in some cases may lead to an environment telling the story. individual, organizational, or conducive to learning and stimulate change. institutional level. – An effective way to deal with passions and emotions MODULE 7: THEMATIC NOTE 4: MONITORING AGRICULTURAL INNOVATION SYSTEM INTERVENTIONS – Uncover intangible factors of individuals involved. (qualities, values, culture, and – Has the potential to stimulate change if told so forth) that determine the correctly. organization’s character. – Individual focus can translate into organizational development. – Not hierarchical. Performance – Used to assess innovations for – Effective means to measure progress towards fixed – Definition of indicators guarantees success. When World Bank (2004) Indicators which cause and effect are objectives. indicators are defined poorly, they are not good known and can be linked – Facilitates benchmarking comparisons over time. measures of effectiveness. through predetermined – Predetermined indicators do not allow for performance indicators. measuring unexpected changes. – A risk that the intervention will need too many indicators; data for some indicators may be inaccessible or costly and impractical to measure. Source: Authors. 575 Box 7.13 Most Significant Change: A Form of Participatory Monitoring and Evaluation Most Significant Change (MSC) is a form of participa- teams of people to focus their attention on the inter- tory monitoring and evaluation that involves many vention’s impact. participants in an intervention to decide what kinds of changes need to be recorded and to analyze the infor- Strengths mation collected, which can be used to assess the inter- ■ Enhances capacities of the stakeholders (at orga- vention’s performance and impact. The approach nizational and individual levels) and fosters focuses on collecting significant change stories that learning. emerge from the field. Significant changes can include ■ Helps identify unexpected changes or outcomes. changes in people’s lives and participation levels as well ■ Processes large amounts of information, from which as changes in the sustainability of people’s institutions negative and positive changes are deduced. and their activities. ■ More accessible than traditional techniques for Together, stakeholders decide what is going to be monitoring and evaluation, and requires no specific monitored. MSC process managers identify broad skills to participate (everyone can tell a story). domains of change that they assume to be important and that should be evaluated. These domains of change Weaknesses are deliberately wide and inclusive. Stakeholders iden- ■ The approach is a subjective expression of the values tify significant changes in a particular domain of and concerns of the stakeholders designated to change and justify why they think these changes are the select the stories. most significant. The stories are analyzed by stakehold- ers at every level (field, organization, investor, and so Best use or application on). This approach is a fairly simple way to make sense ■ To make sense of an intervention’s impact and foster of a large amount of information. The central aspect of learning. the technique is not the stories themselves but the ■ To identify the most significant changes that have deliberations and dialogues surrounding their selec- occurred as a result of an intervention, with the help tion. If implemented successfully, MSC causes whole of all primary stakeholders. Source: Kammili 2011; Davies 1996; Davies and Dart 2005. 4. Inclusive. A focus on the inclusiveness of the monitoring performance and achieving results is the responsibility process. Inclusiveness can help diffuse tensions around of all those involved. the change process associated with innovation system 7. Tailor-made. A number of methods involve the use of interventions. It is also a way of helping to build the link- institutional change indicators. The emphasis is on devel- ages that these types of interventions need. oping these indicators based on the nature of the inter- 5. Rapid. These methods generate information quickly. vention being monitored. Approaches accommodate the This consideration is important for innovation system fact that indicators of performance are a moving target interventions, which must be nimble in responding to and need to be revised constantly. Tailoring indicators in unfolding events. this way is particularly suitable to the learning-based 6. Nonexpert/open access. Methods are designed to be characteristic of innovation system interventions, in used by all those involved in interventions—that is, for which the specific nature of the institutional change being self-assessment—rather than by monitoring experts. sought rarely can be predicted, aside from generic terms These methods are also designed to promote access to such as the degree of participation, the strengthening the information generated. Open access is important in of links between stakeholders, or the inclusiveness of innovation system interventions, because managing decision-making processes. 576 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 7.14 Innovation and Institutional Histories The Institutional History method helps people involved change. These experiences can then be scaled out by in the innovation process construct a shared under- disseminating the findings of the innovation standing of how innovation has occurred. Institutional process. histories are narratives written jointly by people who have been involved in an innovation. The history records Strengths changes in institutional arrangements (new ways of ■ Fosters discussion among stakeholders and leads to working) that evolve over time and facilitate the achieve- reflection and learning. ment of goals. ■ Helps build a shared vision of the future. This approach highlights the importance of insti- tutional innovations. The main idea behind these his- Weaknesses tories is to introduce institutional factors into the legitimate narrative of success and failure in research ■ Written accounts are based on recollections and organizations. Histories can be written by using could be biased. interviews to construct a timeline, gain a clear under- ■ Skilled facilitators are needed to help assemble and standing of roles and relationships, inquire into what analyze the information. triggers or hinders successful innovations, and reflect ■ It usually takes a long time for significant lessons to on failures. Lessons drawn from the analysis can be emerge. used to improve performance. The dialogue that is promoted between the actors Best use or application during the preparation of institutional histories can ■ To understand past innovation processes and identify promote learning and capacity building. The conclu- institutional factors that foster or hinder innovation. sions drawn can be used in subsequent planning and ■ To forge a shared vision of the future among help to formulate a shared vision that can catalyze stakeholders. Source: Kammili 2011. POTENTIAL BENEFITS OF MONITORING evaluation and about who is responsible for each task causes APPROACHES monitoring systems to underperform and results in badly executed evaluations (see IAPs 6 and 7). These wasted In common with all interventions, well-executed monitor- resources lead to ineffective interventions and prevent ing arrangements are central to the performance of innova- investors from learning vital lessons for designing future tion system interventions. Investments in developing such interventions. This issue is addressed easily by simply clari- arrangements will strengthen the effectiveness of investments fying roles, responsibilities, and time frames for the separate in achieving developmental goals and, in doing so, improve tasks of monitoring and evaluation. value for money. Strengthen the capacity to implement learning-based per- formance management approaches. Within the agricultural research and innovation profession such expertise is POLICY ISSUES RELATED TO MONITORING limited. Although these skills are better developed in the A number of policy issues are important for ensuring that general development and rural development communities, monitoring delivers some of the benefits that have just been particularly in the nongovernmental sector, training in these described. methods is needed urgently, because monitoring is the A primary concern is to improve the demarcation of lynchpin of effective innovation system interventions. responsibilities for monitoring and evaluation. A lack of clar- As a central performance management tool, monitoring ity on the part of investors as well as intervention imple- must be integrated and mainstreamed in innovation system menters about the different purposes of monitoring and interventions rather than exist outside of them. Isolating MODULE 7: THEMATIC NOTE 4: MONITORING AGRICULTURAL INNOVATION SYSTEM INTERVENTIONS 577 monitoring as a specialist domain simply to satisfy the to adapt them to best match the performance management investor, without all the intervention’s personnel taking per- demands of innovation system interventions. Practical les- formance management seriously, defeats the objective of an sons for doing so include: innovation system intervention. Investors will need to modify their expectation of account- ■ Negotiate accountability reporting with the investor. ability reporting, accepting the process nature of interven- Learning-based monitoring generates mainly qualitative tions and becoming more comfortable with institutional information on processes and institutional arrange- change outcomes. This changed perspective places addi- ments, including unexpected outcomes. Investors may be tional responsibility on the investor to ensure that impact unfamiliar with this kind of information in accountabil- evaluation is undertaken in a timely fashion and in a way ity reporting, so it is important to discuss reporting that recognizes the nature of these interventions. expectations beforehand. ■ Ensure that the indicators of institutional change are specific to the particular intervention and revised LESSONS AND RECOMMENDATIONS FOR as needed. Generic institutional change indicators, such PRACTITIONERS as the degree of participation or the strengthening of Innovation system interventions demand an expanded suite links between stakeholders, can act as guidelines for cat- of monitoring arrangements that respond to the learning- egories of institutional change that are likely to occur. In based nature of these interventions and their primary focus managing the performance of an individual interven- on using institutional adaptation as the foundation for tion, however, more case-specific indicators are needed. future impacts. A wide range of tools and approaches is Since the nature of institutional bottlenecks may become available; the challenge is to know which to select and how apparent only as the intervention unfolds, performance Box 7.15 Developing Institutional Change Indicators Institutional change encompasses a very wide range of ■ Changes in the poverty relevance of actions and changes, from new ways of doing things to formal policy interventions. changes. Developing indicators can be difficult, because ■ Market-related institutional change. decisions need to be made about what types of institu- ■ New types of organizations playing new types of tional change are important to help understand the roles. progress of a particular innovation system intervention. ■ Old types of organizations playing new roles. At the same time, it is important to capture the range of ■ New forms of rural credit. changes that an intervention is helping to stimulate, ■ Changes in agricultural research practice. some of which may not be expected. This last objective is ■ Changes in the policy-making process. important when reporting outcomes to investors. The ■ New network configurations. DFID-funded Research Into Use program (see www ■ Formal policy changes. .researchintouse.com) faced this challenge. The program ■ Changes in donor practice. recognized that institutional change would be the main route through which it would achieve long-term This practice helped identify categories of institu- impacts, but it had no systematic mechanism for captur- tional change where limited progress was being ing evidence of those changes, nor did it have an accessi- made—changes in donor practice and changes in the ble way of reporting institutional changes to its investor policy-making process. It also helped to improve com- other than through lengthy case studies. For this reason, munication of the program’s progress in stimulating the program’s Central Research Team developed an institutional change, which had previously been diffi- inventory of all institutional changes observed (IAP 7) cult for an external audience to see. and categorized them as follows: Source: Authors and Adwera et al., forthcoming 2012. 578 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK indicators will need to be revised constantly (box 7.15 performance of the intervention and ensure that it is on illustrates institutional change indicators developed in an track to achieve its agreed outcomes. Implementers should innovation system intervention). guard against collecting impact evaluation data. This time- ■ Collect data on outcomes in a timely way to contribute to consuming activity will not necessarily provide data at the the intervention’s learning cycles, with due attention to appropriate time to manage an intervention successfully. the approach and scale of data collection. Quantitative ■ Revisit milestones and expected outcomes. Learning- methods are likely to play a role in collecting outcome or based interventions may evolve. Their evolution will lead proxy outcome information to understand the effective- to unexpected outcomes and modified theories of ness of process changes brought about by an intervention. change. It is important to make the investor aware of The approach and scale of this data collection need to these changes and negotiate how new milestones and be in proportion to implementers’ need to manage the outcomes will be reported. MODULE 7: THEMATIC NOTE 4: MONITORING AGRICULTURAL INNOVATION SYSTEM INTERVENTIONS 579 T H E M AT I C N O T E 5 Evaluating Agricultural Innovation System Interventions Andy Hall, LINK Ltd. Kumuda Dorai, LINK Ltd. Trish Kammili, National Institute for Agricultural Research, France (INRA) SYNOPSIS Monitoring—the effective management of performance by implementers to achieve desired outcomes and report he evaluation of innovation system interventions is T linked to the monitoring of interventions but is a separate function. Evaluation is usually performed on behalf of the investor by independent evaluators and not by progress—is covered in TN 4. Three critical features of AIS interventions influence how they are evaluated. First, they focus on strengthening capacity; second, they use a learning-based process; and those responsible for implementing the intervention. A well- third, they require a distinction to be made between designed evaluation is particularly important for innovation impact, shared impacts, unexpected impacts, and unrelated system interventions, as their process-driven nature means impacts. Each of these issues is discussed next. that the result chains are complex, dynamic, and not amenable to simple linear and anecdotal evaluation. Great care is needed in making judgments about the relationship between the A focus on strengthening capacity effectiveness of the design and execution of the intervention An innovation system intervention is an investment to and the observed impacts associated with it. Evaluation good improve how change and innovation take place. Although practice is better equipped than ever to deal with this com- such an investment is made ultimately to achieve certain plexity. This note outlines key good practice principles rele- social, economic, or environmental impacts, the immedi- vant to evaluating innovation system interventions: a stronger ate outcome is improved ways of doing things—usually learning orientation in evaluation, the use of counterfactuals, referred to as institutional change. For example, the the use of mixed (quantitative and qualitative) methods, and National Agricultural Innovation Project in India estab- incorporating the perspectives of different stakeholders. The lished research, development, and private sector consortia example of Theory-Based Impact Evaluation (TBIE) illus- around selected themes to introduce a new way of work- trates how these principles work together. Experience with ing that would achieve wide-scale impact in the future applying evaluation approaches and principles to agricultural (see module 4, IAP 2). An innovation systems research innovation system interventions is currently in its infancy. A project addressing fodder scarcity in West Africa and policy priority is to develop the capacity for this type of eval- India (the Fodder Innovation Project, described in IAP 6) uation, which will help to improve the long-term effectiveness experimented with ways to induce institutional change of innovation system interventions. that would enable innovation leading to social and eco- nomic impacts. BACKGROUND AND CONTEXT A learning-based intervention process The effectiveness of innovation system interventions lies in their outcomes and impacts being investigated thor- Improvements in how change and innovation take place will oughly and the resulting lessons applied to future invest- depend on the specific circumstances of each intervention. ments. This process contributes to accountability as well For this reason, ways of achieving those improvements are as future investment performance. This note focuses hard to design in advance. Innovation system interventions on the evaluation of innovation system interventions. address this issue by adopting a learning-based approach, 580 in which the intervention continuously tests the assump- approaches relied on (1) technology adoption studies, (2) tions on which it is based (its intervention logic). Over the investigation of economic surplus generated by research and course of the intervention, investors’ expectations of what computation of rates of return, and (3) economic studies of the intervention is going to achieve, and how it will do so, the contribution of research to impact. While these often need to evolve significantly. For example, an interven- approaches are powerful (see Evenson, Waggoner, and Rut- tion in Sierra Leone (IAP 1) designed to help put agricultural tan 1979; Pardey and Beintema 2001; Alston et al. 1995), a research results into use began by trying to establish innova- persistent critique is that they have weak diagnostic value. tion platforms around commodity chains. It soon found that Their inability to elucidate underlying causal processes and the main bottlenecks to research use and innovation were account for institutional change are particular weaknesses policy issues in the enabling environment for innovation. (Hall et al. 2003; Horton and Mackay 2003; Watts et al. 2003). In contrast, the wider development evaluation tradition is well equipped to deal with the investigation of causal links Distinguishing impact, shared impacts, unexpected between dynamic theories of change and impacts of the sort impacts, and unrelated impacts likely to be encountered in innovation system interventions By definition, innovation system interventions operate (see, for example, the guidance on impact evaluations in within an often complex web of activity. Much of this wider NONIE, Leeuw, and Vaessen 2009). The challenge is mainly set of events is beyond the control and influence of the to understand how current good practice in the wider devel- intervention, but the performance of the intervention itself opment evaluation community can be more widely is often greatly influenced by this context. While the imme- deployed in the evaluation of innovation system interven- diate outcomes of an intervention—for example, the estab- tions. Of particular relevance is the recent focus on evalua- lishment of innovation platforms (see module 4, particu- tions that link the assessment of outcomes and impacts larly TN 1)—can be evaluated easily, it is more difficult to (what were the end results) with learning (what processes attribute impacts to those platforms. The causal chain from and practices brought about those results) (Savedoff, intervention to impact is often complex, may take time to Levine, and Birdsall 2006; White 2009a). mature, and might be geographically removed from the point of intervention. As a result, tracing and attributing Principles for evaluation impact are difficult. In India, for example, the Fodder Innovation Project (see Emerging from this trend is a set of principles that practi- IAP 6) introduced an institutional change, in which an tioners can draw upon in evaluating innovation system NGO helped the National Department of Animal Hus- interventions. These are now general principles for all types bandry use its resources to hold livestock health camps in of evaluations. villages. Can the resulting impact be attributed solely to the intervention that supported the NGO to explore institu- ■ Situational responsiveness influences the design of the tional change? In Nigeria, the Fodder Innovation Project led evaluation. Referred to as “situational responsiveness,� to an unexpected outcome: An NGO and the local livestock the key principle involves matching the design to the research institute collaborated on animal disease surveil- needs, constraints, and opportunities of the particular sit- lance, an activity that was outside the scope of the project’s uation rather than one particular method. The applica- mandate to focus on fodder but was likely to lead to impor- tion of this principle rests on understanding the charac- tant future impacts. Finally, since complex impact chains teristics of an intervention or parts of it and determining can often mask underlying causal processes, there is the where the underlying change processes are simple, com- danger that impacts may be attributed to an intervention plicated, or complex. when in fact they arose from unrelated events. ■ Seek a stronger learning orientation in impact evalua- tion. A number of new initiatives—notably the Interna- tional Initiative for Impact Evaluation (3IE) but also INVESTMENT NEEDED others—have stressed the need to combine accountabil- Viewed from the perspective of traditional approaches to ity and learning objectives. Learning is important for assessing the impacts of agricultural research investments identifying what worked or did not work and why, and (see box 7.16), designing approaches for evaluating innova- this information is valuable for designing future invest- tion system interventions seems daunting. Traditional ments. While this perspective emphasizes the need for MODULE 7: THEMATIC NOTE 5: EVALUATING AGRICULTURAL INNOVATION SYSTEM INTERVENTIONS 581 Box 7.16 Limitations of Traditional Methods for Evaluating Innovation System Interventions in Agriculture Ex post impact assessment Cost-benefit analysis ■ Although it addresses the accountability imperative ■ Calls upon significant financial and human for funders of interventions, it does not help in resources. drawing the institutional lessons required to under- ■ Benefits are estimated in advance based on assump- stand the innovation process. Does not cover tions that may not always be correct. noneconomic dimensions. ■ Not all costs and benefits can be quantified (social ■ Difficult to develop credible counterfactuals and and environmental costs/benefits, for example); establish definitive causalities. results obtained do not reflect all benefits. ■ Focuses on intended positive results and frequently ■ Items included in the analysis reflect the bias of ignores unexpected and negative results. whoever performs the analysis; coverage and quality ■ Not appropriate in more complex areas such as nat- thus vary greatly. ural resource management, policy and biodiversity ■ Given its complexity, involves only economists and research, and training and capacity building. project designers and does not engage other primary stakeholders. Randomized control trials ■ Weak in external validity (or generalizability) and in Economic surplus approach and rate of return identifying the mechanisms responsible for differ- studies ences observed in the experimental and control sit- ■ Requires substantial resources for collecting, pro- uations. cessing, and interpreting technical and economic ■ Rarely appropriate in complex situations where out- data. comes arise as result of interactions of multiple fac- ■ Simplistic assumptions about lags, costs, and supply tors that cannot be “controlled.� shifts have biased rates of return (usually upwards). ■ Limited in their ability to deal with emerging and ■ Not suitable for ranking noncommodity research unanticipated outcomes. such as socioeconomic and interdisciplinary research. Source: Kammili 2011. rigor in measuring impact, it also explicitly acknowl- ticular intervention—the counterfactual. The best way to edges the need to test interventions’ assumptions and achieve this goal is still a point of debate (see box 7.17 for theories of change (White 2009a). For details, see the details on the challenges involved). Box 7.18 provides an example of Theory-Based Impact Evaluation in box 7.19. example of Propensity Score Matching, one approach to ■ Make assumptions explicit and revisit theories of developing a counterfactual case. change. Adopting a greater learning orientation in eval- ■ Mixed methods. Quantitative methods (to measure uation means making assumptions about change impacts) clearly are central to investigating impacts, processes explicit when planning interventions and but they must be complemented by a range of qualita- revisiting and testing those assumptions at the time of tive methods (to understand and learn from institu- evaluation. By exploring the validity of the assumptions, tional and process changes) that can help to understand evaluators can learn critical lessons for designing future the context in which the intervention took place and interventions (box 7.19). the process to which the intervention contributed that ■ Use counterfactuals in impact evaluation. A stronger brought about those impacts. Practitioners can draw learning orientation has also been accompanied by upon a very wide array of qualitative methods, and the demands for greater rigor in the quantitative methods combination of methods selected depends consider- used to measure impacts, as well as for methods that bet- ably on the nature of the intervention and the precise ter establish what would have happened without a par- demands of evaluation functions. (For a discussion of 582 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 7.17 Challenges of Developing Counterfactuals The origins of counterfactuals can be traced to scien- out� comparisons appear more promising for captur- tific experiments conducted with a control, the classic ing the counterfactual case, particularly when used in example being the randomized control trials used in conjunction with statistical techniques that account drug testing. This approach poses ethical and opera- for differences between the starting conditions in tional problems that make it impractical for develop- comparator sites. ment interventions. The establishment of counterfactuals remains an Another approach, “before� and “after� compar- evolving science for the evaluation community. Despite isons, struggles to account for changes that would the challenges, mechanisms for establishing what have happened despite the intervention. Variants of would have happened in the absence of an intervention this approach have been developed, however, which should be built into the overall design of interventions compare the effects of an intervention that starts in and the monitoring and evaluation arrangements that different places at different times. “With� and “with- are put into place for them. Source: Authors. stakeholders in investigating the intervention’s theory Box 7.18 Propensity Score Matching of change. Propensity Score Matching is a tool for identifying Evaluation approaches a suitable group with which the recipients of an intervention (the treatment group) can be com- Table 7.9 presents a comparative overview of evaluation pared. Evaluators find a comparison group com- approaches appropriate to the demands of innovation sys- prising individuals who did not, in fact, receive the tem interventions. In different ways and with different intervention but who, given their observable char- emphases, these methods use the principles discussed in this acteristics, had the same probability of receiving it note. They should be viewed as a menu of approaches which as individuals in the treatment group. The inter- practitioners can draw upon to ensure that evaluations vention’s impact is the difference in outcomes achieve the correct balance between learning and accounta- between the treatment and comparison group. bility. There are a number of points that need to be high- Source: World Bank 2004. lighted about these methods. Only the first method men- tioned, Theory-Based Impact Evaluation, explicitly makes provisions for measuring outcomes and investigating underlying process. In reality, Theory-Based Impact Evalu- mixed methods in Theory-Based Impact Evaluation, ation is an evaluation framework rather than a specific see box 7.19.) method, and it relies on a suite of qualitative tools. ■ Incorporate different stakeholders’ perspectives. Greater The other methods outlined in table 7.9 are specific tools participation is needed to capture the perspectives of for qualitative investigation of what happened and what the poor (and other stakeholders) on what were the processes lead to the outcomes observed. While these meth- actual results of the intervention (social, economic, ods for learning lessons are powerful, practitioners must and institutional). Similarly, wider participation is recognize that there is an appetite among investors—public needed to more fully understand the process through and private—for the quantification of outcomes and which these results came about. Different stakeholders impacts. The nascent approaches to evaluating innovation may have different interpretations of cause and effect. system interventions will need to satisfy this demand. It is now good practice in evaluation to recognize these The least developed of the methods presented in table 7.9 divergent perceptions. This principle extends to the is benchmarking of innovation capacity. An important area need to draw on perspectives from a wider range of of methodological development is to find measures of MODULE 7: THEMATIC NOTE 5: EVALUATING AGRICULTURAL INNOVATION SYSTEM INTERVENTIONS 583 Box 7.19 Theory-Based Impact Evaluation Theory-based Impact Evaluation (TBIE) is advocated consider in the design are the possibility of spillover for understanding why an intervention has or has not effects (the control is affected by the intervention) had an impact. The approach calls for examining and and contagion or contamination (the control is mapping the causal chain of an intervention—from affected by other interventions). inputs to outcomes and impact—to test the underlying 5. Conduct a rigorous factual analysis. The counter- assumptions and shed light on the “why� question. factual analysis of impact needs to be supplemented TBIE involves six steps: by rigorous factual analysis of various kinds, given that many links in the causal chain are based on fac- 1. Map the causal chain. The causal chain links inputs tual analysis. Targeting analysis is the most common to outcomes and impacts. It is the intervention’s the- form of factual analysis: Who benefits from the inter- ory of change, which explains how the intervention is vention? To the extent that there is a defined target expected to have its intended impact. Testing assump- group, then what is the extent of the targeting errors? tions is central to a theory-based approach. One crit- Such errors can be quantified and their source iden- icism of the causal chain approach is that it is static tified. Factual analysis often highlights a crucial and does not account for an intervention’s ability to break in the causal chain and explains low impact. adapt and evolve—an important consideration for 6. Use mixed methods. A major step toward mixed innovation system interventions. This criticism is methods is to increase the use of rigorous quantita- addressed in TBIE by suggesting that the intervention tive methods in qualitative studies (quantitative theory should reflect the new design, and the evalua- analysis informed by qualitative insight) or the use tion should document the learning process that of qualitative data in quantitative studies. Without resulted in the new design. In this way, the interven- qualitative methods, the danger is that researchers tion theory remains dynamic. Another criticism is will conduct impact studies with no exposure at all that it misses unintended consequences, which is to the intervention. addressed by identifying those consequences through Strengths a careful application of intervention theory, fed by thorough preliminary fieldwork, and using the result- ■ The combination of counterfactual impact esti- ing information to develop new theories of change. mates with detailed exploration of causal links and 2. Understand the context. Clearly, understanding the theories of change has the potential to provide com- context is crucial to understanding its impact and in pelling lessons and evidence. designing the evaluation, as context influences how ■ Lessons gleaned from TBIE are valuable in trying to the causal chain plays out. understand what works in development. 3. Anticipate heterogeneity. Understanding the con- ■ Far more valuable lessons for policy are obtained text also makes it possible to design the evaluation through the insights on what doesn’t work in inter- to anticipate possible variation in impacts (arising ventions. from how the intervention is designed, the charac- Weaknesses teristics of the beneficiaries, varied socioeconomic ■ Not yet in widespread use, so experiences are settings, and so on). limited. 4. Conduct a rigorous evaluation of impact using a ■ Construction of a robust counterfactual can be credible counterfactual. The appropriate counter- challenging. factual is most usually defined with reference to a ■ Data-intensive. control group, which has to be identified in a way ■ Expensive, although good value for money if well that avoids selection bias, meaning the use of either executed. experimental or quasi-experimental approaches. Panel data help to strengthen the design, so baselines Best use or application are encouraged. Where they are not available, they ■ An evaluation tool best suited to investigating might be recreated using existing data sets or recall. impacts and undertaking policy learning in large- In addition to selection bias, important issues to scale interventions. Source: White 2009b and authors. 584 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK innovation system performance at the macro level that rely put sufficient money aside for evaluation when planning on indicators of system behavior and functions rather than new innovation system interventions. on input indicators such as research spending. Finally, over and above the evaluation of individual interventions, investors will increasingly need to benchmark innovation capacity developed in sectors and subsectors POTENTIAL BENEFITS through innovation system interventions. International Effective evaluation is central to improving the perfor- investors may also wish to use benchmarking to make inter- mance of investments in current and future innovation sys- national comparisons. These comparisons are needed to tem interventions. Well-designed evaluations of innovation track macro-level progress and to help target subsectors, system interventions are particularly important because sectors, and countries for investments to strengthen innova- their process-driven nature means that the result chains are tion capacity or for other investments that require certain complex, dynamic, and not amenable to simple, linear, levels of innovation capacity as a precondition. A number of anecdotal evaluation. Great care is needed in making judg- methodological challenges in measuring and comparing ments about the relationship between the effectiveness of context-specific and systemic capacities of this sort remain an intervention’s design and execution and the observed to be addressed, however. impacts associated with the intervention. Consequently the evaluation of innovation system interventions is likely to be LESSONS AND RECOMMENDATIONS expensive but will be an important investment in strength- FOR PRACTITIONERS ening the long-term performance of these interventions. The main lessons and recommendations for practitioners mirror the principles of good practice outlined earlier. A POLICY ISSUES description of Theory-Based Impact Evaluation (box 7.19) Policy issues related to the evaluation of innovation system illustrates how these good practice principles and the meth- interventions are partly but not entirely similar to those ods associated with them work together to ensure that the for monitoring (see TN 4). evaluation of innovation system interventions contains One similarity is the need to build capacity in evaluating accountability and learning dimensions. innovation system interventions. Experience with these The evaluation of innovation system interventions sorts of evaluations remains limited, because innovation should give particular attention to the following: system interventions are relatively recent. Nor are many investors familiar with the evaluation principles and ■ Timing of evaluations. While many innovation system approaches applicable to those interventions. Professional interventions will have quick wins, most impacts will evaluators from the wider development community do emerge only much later as institutional change kicks in, have experience in applying these principles, but there is a creating new capacities for innovation. While process need to develop a new cadre of evaluators with experience and institutional change evaluation can take place in applying them to AIS interventions. shortly after the completion of an intervention, impact A second policy priority is to clearly demarcate responsi- evaluation can take place only after sufficient time has bilities for monitoring and evaluation. Investors need to make passed, often 3–5 years later. a very clear distinction between evaluation and monitoring ■ Looking widely for impact. The evolving nature of inter- and not be tempted to include the collection of impact eval- ventions means that outcomes and impacts can be uation data within the intervention. This point is particu- unpredictable, both in the types of impact observed and larly important for innovation system interventions, because their geographical and social location. Evaluation needs the ultimate impacts may not emerge until some time after to be sensitive to this unpredictability. the intervention ends. ■ Investigating unexpected outcomes. Since innovation Third, sufficient resources must be available to use a com- system interventions operate in dynamic environ- bination of evaluation methods. The evaluation of innova- ments, changes and unexpected outcomes can occur tion system interventions requires greater rigor in measur- that have significance for impacts or can provide ing impacts, investigating result chains, and testing the opportunities for new investments. These unexpected validity of theories of change. Inevitably, evaluations will outcomes need to be recorded and investigated for any take longer and cost more. Investors need to plan ahead and lessons they provide. MODULE 7: THEMATIC NOTE 5: EVALUATING AGRICULTURAL INNOVATION SYSTEM INTERVENTIONS 585 586 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 7.9 Evaluation Approaches Relevant to Innovation System Interventions Method Purpose/use Strengths Weaknesses Major references Theory-based – Helps in understanding why a – A combination of counterfactual-based impact estimates – Not yet in widespread use, so White (2009b) Impact Evaluation program has or has not had with a detailed exploration of causal links and theories of experience limited. impact. change has the potential to provide compelling lessons and – Construction of a robust – Best suited to investigating evidence. counterfactual can be challenging. impacts and undertaking policy – Lessons gleaned from such an exercise are valuable in – Data-intensive. learning in large-scale trying to understand what works in development. – Expensive, though good value for investments. – Offers far more valuable lessons for policy through its money if well executed. insights on what doesn’t work in development. Innovation and – Understand past innovation – Fosters discussion among stakeholders and leads to – Written accounts are based on Douthwaite and Institutional processes and identify reflection and learning. recollections and could be biased. Ashby (2005); Histories institutional factors that foster – Helps build a shared vision of the future. – Need skilled facilitators to help Shambu Prasad, or hinder innovation. collect and analyze the information. Hall, and – Forge a shared vision of the – Usually takes a very long time for Thummuru future among stakeholders. significant lessons to emerge. (2006) Participatory – Guide project management, – Involves intervention staff and key stakeholders in – A relatively new approach that needs Douthwaite et al. Impact Pathway especially in complex situations constructing impact pathways. to be further implemented to gauge (2003) Analysis where innovation is seen as – Includes both (1) a causal chain of activities, outputs, and its weaknesses. emerging from a network. outcomes that sheds light on how an intervention achieves its goals and (2) network maps that show evolving relationships between participants. – Underlines the fact that innovations emerge from a network and not a linear “pipeline.� – Promotes reflection, self-evaluation, and learning. – Provides a framework for carrying out action-research. Causal Process – Well suited for complex, long- – Places data and theory in close proximity. One quickly – Regarded as not very strong for George and Tracing term interventions with sees what works and what does not in an intervention’s wider generalization but more suited Bennett (2005); systems learning goals. lifetime. to narrow specification of the reach CoS-SIS (2009); of causal propositions. Walters and – Takes a great deal of time. Vayda (2009) – Not conducive to parsimonious theory and leads to partial, middle- range theory. It is easy to miss causal complexity. – Easy to lose sight of the broader context. Most Significant – Make sense of an intervention’s – Enhances capacities of stakeholders (at the organizational – A subjective expression of the values ECDPM (2006); Change impact and foster learning. and individual levels) and fosters learning. and concerns of the stakeholders IFAD (2002); – With the help of all primary – Helps identify unexpected changes or outcomes. designated to select the stories. Davies and stakeholders, identify the most – Large amounts of information are processed, from which Dart (2005) significant changes that have negative and positive changes are deduced. occurred as a result of an – More accessible than traditional M&E techniques; no intervention. specific skills required to participate. Stories and – Shed light on the changes that – Exchanging stories builds trust between participants; in – Biased; depends on the perspective Asif (2005) Narratives have occurred at the individual, some cases may lead to an environment conducive to of the person telling the story. organizational, or institutional learning and stimulate change. level. – An effective way to deal with passions and emotions of – Uncover intangible factors individuals involved. (qualities, values, culture, and – Has the potential to stimulate change if told correctly. MODULE 7: THEMATIC NOTE 5: EVALUATING AGRICULTURAL INNOVATION SYSTEM INTERVENTIONS so forth) that determine the – Individual focus can translate into organizational organization’s character. development. – Not hierarchical. Benchmarking – More than just evaluating – Can be useful in tracking macro-level progress and to help – Methodologies still being developed. CPR, CRISP, and Innovation individual interventions. Can target subsectors, sectors, and countries for investment in LINK (2008); Capacity help investors benchmark the capacity strengthening or for investments that require Kraemer-Mbula performance of sectors and certain levels of capacity as a precondition. (2012 subsectors in terms of capacity forthcoming); built for innovation. Spielman and Birner (2008) Source: Authors. 587 ■ Acting on evaluation lessons. Investors must be willing The principles outlined in this module and the evalua- to act upon the lessons that emerge from evaluations of tion approaches summarized in table 7.9 are well known to their innovation system interventions. This can be easier professional evaluators in the wider development evalua- said than done when lessons point investors away from tion community. What is important is that investors com- traditional approaches and the interests of stakeholders mission evaluations that embody these principles and select associated with them. One approach that investors evaluators with experience in applying them. In the short increasingly use to bolster their confidence in emerging term, they probably must look beyond the pool of evalua- lessons is to use systematic reviews of similar projects to tors who have undertaken traditional assessments of the test key assumptions about suggested ways forward. impact of agricultural research investments. 588 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK N O T E AT I I N N O VX . X V E A C T I V I T Y P R O F I L E 1 Self-Organizing Networks in Policy and Planning: Experience from Sierra Leone’s Partnership for Agricultural Innovation and Development Steen Joffe, Innodev Ltd. David Suale, Research Into Use (RIU) Adolphus Johnson, Research Into Use (RIU) SYNOPSIS OF PROJECT DATA Many research agencies in sub-Saharan Africa have evolved little over recent decades, are institutionally hide- Project name: Sierra Leone Partnership for Agricultural bound, and have little accountability to other elements of Innovation and Development (SL-PAID) the innovation system. Priority-setting mechanisms that Established: July 2008 by Memorandum of Associa- shape investments in the AIS still tend to be formal, gener- tion, in a process facilitated by the DFID- ally top-down exercises. They lack the sort of broad-based, financed Research Into Use Programme “many-to-many� problem-solving exchanges that are essen- Incorporated: August 2008 in Sierra Leone as Company tial drivers of innovation. Limited by Guarantee Launched: January 2009 PROJECT OBJECTIVES AND DESCRIPTION BACKGROUND AND CONTEXT Within the Research Into Use Programme (IAP 7), a For Sierra Leone, the period of rapid change following the country strategy team worked with local stakeholders in disastrous 1991–2002 war has provided opportunities to Sierra Leone to develop an innovative strategy for an rebuild and reinvent institutional frameworks supporting autonomous, self-organizing group to develop as a plat- agriculture. The country’s new vision for agriculture form for improving policy and practice related to agricul- requires the sector to shift toward a pluralistic and compet- tural innovation (Joffe et al. 2008). This open, inclusive itive rural service economy, with agribusiness acting as an network would be a medium for creating new productive engine of socioeconomic growth and development. For that alliances and creating value. vision to become a reality, a stream of new policy, process, As a first step, the team worked through a local secretariat and technological innovations must be created. Although to bring key actors together in a series of workshops, ensur- inside or outside of Sierra Leone there is no shortage of ing participation across the innovation system. Participants knowledge relevant to Sierra Leone’s current needs, this included farmers, farmer-based organizations, and repre- knowledge is not yet used on any scale for innovation, sentatives of rural communities; agribusiness and market because the conditions to use it are lacking. actors (processors, wholesalers, retailers, input companies, In a well-functioning AIS, knowledge flows between all equipment suppliers, and financial service providers); the principle domains, underpinning myriad investment knowledge intermediaries, including technical advisory and decisions and behavior changes that collectively drive pro- business development services; communications services ductivity and growth. In Sierra Leone, as in many low- and the media; knowledge generators (research, education, income development contexts, these flows and interactions and other widely used sources); and policy makers, decision around problems and opportunities are weak and have his- makers, and regulators with influence over “framework torically taken place within a limited institutional context. conditions.� 589 The participants used innovation system mapping tech- members and mandated to manage the affairs of the part- niques to visualize the main elements and actors in the AIS nership), and a secretariat (responsible for day-to-day oper- and the strength of the linkages and knowledge flows ations, coordination, and administration). In summary, the between them. More specifically, they assessed and mapped association’s defining features are that it is self-governing, knowledge flows between elements of the system and the membership-based and has a broad, representative mem- factors influencing these flows in relation to rural and non- bership; it is financed through subscriptions; it receives rural livelihoods and routes out of poverty. They also iden- broad support from the Government of Sierra Leone and tified key drivers of change in the context for agricultural principal agencies; and it is embedded in key policy forums. policies and programs and determined where investments and other economic activities were likely to create new chal- BENEFITS, IMPACT, AND EXPERIENCE TO DATE lenges and demands for knowledge. This process required participants to develop an initial map of the key institu- PAID is a young organization but already operates success- tional elements and organizations relating to the AIS, which fully in a number of key respects. PAID members have for- was transposed into a more formalized innovation system mulated and voted on appropriate governance structures, domain structure. Next, the participants worked in groups rules, norms, and the interaction mechanisms required for to map linkages between those domains. The subsequent PAID to operate effectively as a vehicle for delivering inno- analysis and discussion highlighted a number of findings: vations in the agricultural sector. Under rules established by the membership, “formal� interaction in PAID is collective ■ Weak or ineffective knowledge flows from markets into and consensual. Strategic decisions are made or endorsed by the small-farm sector resulted in asymmetries that led to the general membership at the annual general meeting. exploitive behavior. Operational decisions are taken at the district level and at ■ Very unidirectional and supply-driven knowledge flows events held at the platform level. from intermediaries and from policy processes into the The organization has also launched two fast-track, com- small-farm sector led to coordination problems and high modity-based innovation platforms. These initial platforms transaction costs (see the next point). were selected based on information from field assessments ■ Formal policy processes were poorly linked with other by or with the participation of PAID member organizations: key innovation system elements. Weaknesses at the cen- ter and coordination problems limited the public sector’s ■ Solar drying in fruit and other horticultural value effectiveness. chains. Twenty solar drying units operate in communi- ■ Weak links between financial institutions and other ele- ties in four districts in the Northern Province; early ments of the AIS meant that formal lenders lacked infor- reports indicate that they are used successfully. mation to support credit flows to rural entrepreneurs. ■ Poultry feed production and marketing. Maize is being ■ The research system had poor links with all other actors grown on 110 acres (46 hectares) across locations in Bo, in the AIS. It did not deliver knowledge oriented towards Kenema, and Kailahun Districts for a seed multiplication value addition in the market chain, and a lack of trust drive and eventual use for feed in intensive poultry pro- persisted between researchers and actors in the produc- duction systems. tion and agribusiness “side� of the sector. The platforms have spun off active partnerships with As a result of the workshops and related meetings, a core other actors who want to adopt platform technology, group of actors decided to organize and form a partnership. including CARE International, MADAM-Sierra Leone, the Through flexible alliances, members would engage in inno- Sierra Leone Centre for Agribusiness Development, and the vative activities and build a better business environment to Nehemiah Project. To guide future priorities for developing foster and scale out those activities. The Partnership for platforms, PAID has documented a more structured Agricultural Innovation and Development (PAID), estab- approach consisting of open calls for proposals, concept lished in Freetown in 2008, now operates autonomously as screening, investment events, and small grants for opportu- a “partnership of service-providers,� open to all who sub- nity development. scribe to its vision and mission. Membership in PAID makes it easier for people and orga- Under a Memorandum of Association, PAID has a nizations to obtain information to guide choices, gain support general assembly of all members, a board (elected by the for their decisions, and build alliances. Typically, information 590 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK flows informally among the wide range of stakeholders pres- collective intelligence around investment decisions. ent at key events and meetings, including stakeholders from Within the social business paradigm, boundaries between the Ministry of Agriculture, Fisheries, and Forestry, other cen- public, private, and third sector roles begin to break down tral and district government agencies, FAO, DFID, the Sierra for practical purposes. Similarly, boundaries between pol- Leone Agricultural Research Institute, banks, farmer organiza- icy and practice and between planning and delivery are no tions, civil society and nongovernmental organizations, pro- longer necessarily institutionally or organizationally dis- ducers, processors, traders, and transporters. tinct; these activities are undertaken instead by individuals PAID also has a place on the Agriculture Advisory Group and groups applying creative and flexible solutions to and Technical Committee, a formal, policy-making standing common problems across organizational boundaries, rep- committee that was involved in developing Sierra Leone’s resenting particular interests and competencies in pursuit Comprehensive Africa Agriculture Development Pro- of value-creating opportunities. These approaches are gramme compact and National Sustainable Agricultural already driving transformational change in more advanced Development Plan, linked to the national poverty reduction economies and may be equally transformational in devel- strategy. PAID has also brought together actors in extension oping country contexts. to form the Sierra Leone Forum for Agricultural Advisory Services. Stakeholders in this process identified gaps in LESSONS AND ISSUES FOR WIDER extension services; as a result, a policy on extension in Sierra APPLICATION Leone is being developed. Finally, PAID members in Bo Dis- trict raised concern over the activity of a fraudulent actor in Within the PAID network, a number of early decisions were their region. This concern was channeled to the secretariat highly influential in building social capital and reducing and brought to the notice of ministry officials. The situation transaction costs. was corrected. Network membership and the role of facilitation INNOVATIVE ELEMENT: SOCIAL BUSINESS Members decided that the partnership would be NETWORKS FOR INNOVATION SYSTEMS autonomous and establish its own secretariat, member- From a public policy perspective, the means to foster inno- ship would be open to those who subscribed to the part- vation often focus on improving linkages and flows of nership’s vision, and organizations would be represented information between actors and interests. For this reason, by senior representatives with decision-making power. governments offer incentives for innovative businesses to Membership also would be open to service providers of locate in clusters (see TN 4 in module 5), where their close various kinds, in agriculture and agribusiness. An elected association can generate a variety of spillover benefits and executive would represent the partnership between gen- externalities. Governments also subsidize interactions by eral meetings, a general code of conduct would be organizing events and meetings around key policy areas in drafted and agreed, and the network would be financially which the state wishes to drive innovation that the market independent and sustainable. In addition to charging alone may not deliver. registration and annual subscription fees, the network These strategies are valid but require complementary would raise financing independently and develop rev- approaches to enable the “conversation� that will support enues from innovative activities. Revenue would not only policy and practice. The new frontier for agencies wishing to sustain the partnership but serve as an incentive for support the AIS—rather than supporting priority-setting membership. processes alone—is to foster self-organizing social business The network was able to come to these decisions because networks (see TN 2 in module 1). Such networks respond to of the initial investment by key actors in facilitating a core the interests of a diverse group of stakeholders and can understanding and common vision of the network’s role. operate flexibly and dynamically in light of demands and Members’ early involvement in decisions on structure and opportunities identified by their membership. governance increased confidence and promoted engage- This general model is well established as a way to orga- ment. Higher levels of trust and reduced transaction costs nize innovation in industry, where social business design have enabled PAID to rely more on signals through the approaches, increasingly underpinned by new social media internal “knowledge market� and less on formal priority- tools and engagement strategies, are used to harness setting mechanisms. MODULE 7: INNOVATIVE ACTIVITY PROFILE 1: SELF-ORGANIZING NETWORKS IN POLICY AND PLANNING IN SIERRA LEONE 591 Existing sector frameworks are still needed provided only in the context of a strategy and path towards financial independence. As noted, PAID’s member organiza- Networks for innovation are not a replacement for or an alter- tions pay a registration fee and annual subscription native to existing sector-wide and/or vertical subsector frame- (approximately US$30 and US$150, respectively) to support works. Such frameworks are still needed to provide the for- core network costs. mal process and democratic accountability around policy and practice. Networks like PAID bridge such frameworks, providing an opportunity for more flexible and less formal Improving linkages and working relationships interaction within a different institutional paradigm. between research and the business sector For networks like PAID, engagement with government is Many networks dissolve because members perceive little important but should be balanced to avoid prejudicing the net- real value in participating. A key lesson from Sierra Leone work’s independence and openness in decision making. Attain- and elsewhere is to provide pathways to see initiatives ing such a balance can be tricky. For example, Rwanda’s through and gain the rewards of participation, both profes- National Innovation Coalition is restricted to a few public sional and financial. In practical terms, this means that the sector bodies. Plans to establish another separate and more network should offer a framework for adaptive research, open agricultural innovation network attracted no high- enterprise development, and scaling out innovations. level support and were never implemented. In Bolivia, the “Pull� mechanisms such as innovation-financing events Natural Resources Information and Knowledge Network and competitions and related processes will help to seed (SICTAF, Sistema de Información y Conocimiento Tec- ideas and new enterprises out of the network. For one of its nológico Agropecuario y Forestal) explored establishing members, the Sierra Leone Agricultural Research Institute, itself as a self-governing, socially inclusive knowledge net- PAID acts as a new framework for improving linkages and work. The responsible ministry was unable to engage working relationships between research and the business sec- productively with such a network other than as its apex tor. The network also serves as a channel to bring technolo- institution, however; it never accepted that the network gies already developed by the institute into use and for the could operate within a self-defined governance framework. institute to “plug in� to the new priorities emerging from This lack of formal support was a key reason why the initia- innovation platforms. tive foundered. PAID’s continuing heavy reliance on transmitting infor- One lesson from this diverse experience is that the open, mation directly through meetings and field operations “flat,� nonhierarchical structure that favors innovation is not raises costs and is one area where improvement is needed. always consistent with established ways of doing government The value of face-to-face interaction will never be replaced, business. Indeed, where coalitions are facilitated to promote but social networks for AIS can and should develop strategies AIS they can end up reinforcing existing networks rather to apply mobile and web-based social media. These technolo- than bringing in new voices and influences on policy. gies permit information and knowledge to be exchanged at a low cost, both “internally� and with other stakeholders Financial sustainability and influencers locally and globally. PAID is exploring these As always, financial sustainability remains a major consider- avenues through the African Forum for Agricultural Advi- ation. The facilitation, coordination, and “market research� sory Services, which is piloting the Innodev platform underpinning the creation of PAID in Sierra Leone were (www.innodev.org) in Sierra Leone and Uganda to support financed by DFID, along with the core administration and problem solving through networks, enable groups to form personnel costs. This initial subsidy is very likely to be a around opportunities, and attract support for entrepreneurs generic requirement for such networks, but it should be through mentors and investment partners. 592 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N E AT I N O TO VX . X V E A C T I V I T Y P R O F I L E 2 Using Net-Map to Assess and Improve Agricultural Innovation Systems Eva Schiffer, Consultant SYNOPSIS ■ How do these actors interact (including formal and informal links, material flows such as funding or seed, ractitioners require methods that capture the com- P plexity of an AIS and structure it in a way that allows actors to use the detailed information rapidly. Net-Map is a participatory influence network map- ■ nonmaterial flows such as ideas, policy pressure)? What are their goals with regard to a specific innovation or the general innovativeness of the system (are they sup- portive, unsupportive, or neutral)? ping method based on social network analysis and power ■ How strongly do they influence the innovation system’s mapping. This pen-and-paper method helps those involved ability to innovate? in or observing agricultural innovation to determine and ■ What are the crucial strength and weaknesses of the discuss who the actors are, how they are linked, how influ- innovation network? Where are bottlenecks and coali- ential they are, what their goals are, and what the crucial tions? What links are missing? What strategies are suc- bottlenecks and opportunities are. Net-Map is useful for cessful? understanding complex, dynamic situations in which mul- ■ How does the innovation system change over time? tiple actors influence each other and the outcome. It can be used for an initial assessment of an innovation system and With regard to the logistics of the method needed, it is can also help to monitor the innovation system’s develop- crucial for it to be straightforward and easy for people to ment over time. apply in the field; provide results quickly; allow for explor- ing and understanding systems with many unknowns; BACKGROUND AND CONTEXT: REQUIREMENTS structure the complexity but leave room for in-depth expla- FOR AN AIS ASSESSMENT TOOL nations; support users in developing strategies for improv- The AIS approach, instead of focusing on specific actors, ing the AIS; and collect data that are comparable between appreciates that an innovation involves multiple partners sectors, countries, and over time. who have formal and informal ties, have different goals, and use their influence in various ways to further or block the INNOVATIVE ELEMENT innovation. Practitioners increasingly require methods that capture this complexity and structure it in a way that allows Net-Map, a participatory social network mapping approach actors to use the detailed information rapidly. (Schiffer and Hauck 2010), is based on social network AIS assessment tools ideally need to capture a specific analysis (Hanneman and Riddle 2005), power mapping range of complex data and to do so under particular logis- (Schiffer 2007), stakeholder analysis (Grimble and Wellard tic conditions. The following data are needed to understand 1997), and participatory action-research (Kindon, Pain, and an AIS: Kesby 2007). This method helps those involved in or observing agricultural innovation to determine and discuss ■ Who are all the actors involved (impacting on and who the actors are, how they are linked, how influential they being impacted by the innovation, formally and infor- are, what their goals are, and what the crucial bottlenecks mally involved, supportive and unsupportive of the and opportunities are (Schiffer and Hauck 2010; http:// innovation)? netmap.wordpress.com). 593 HOW NET-MAP WORKS a broad set of perspectives could be gained by including people from: the private sector, NGOs, donor agencies, gov- Net-Map can be used in planning, implementing, monitor- ernment, and civil society (farmers, consumers); the ing, and evaluating interventions. The following step-by- national, regional, district, and local level; different ethnic step description briefly explains how it works. groups, nationals and foreigners, different ages and genders; and agriculture, trade, finance, and industry. The ideal 1: Getting started group is between 6 and 12 people. Larger groups should be Net-Map is a pen-and-paper method that involves drawing split into (equally diverse) subgroups. networks together with participants (individuals or groups) The participants are asked to name all actors (individu- to capture their complex knowledge of a system and make als, groups, organizations) involved. Actors include not only implicit or tacit knowledge explicit. Net-Map can be used as those who are involved in formal decision making but a tool by external actors, such as donors or researchers, to everyone who can influence or is influenced by the issue. acquire a better understanding of the situation and monitor its development. It may also be used internally (for example, 3: How are they linked? by an implementing NGO or ministry) to help decision A link is something that flows from one actor to another makers and implementers improve stakeholders’ involve- (like money) or connects two actors (like friendship). Typi- ment, strategic planning, monitoring, and evaluation. Net- cal links in an innovation system are flows of money, ideas, Map sessions are typically facilitated by a trained Net-Map innovative products, political pressure, and formal lines of practitioner. command. Before starting the activity, it is important to deter- mine its framework and goal: Net-Map can be used as a 4: How strong is their influence? one-off activity for planning or as a startup tool to get an activity on track. For monitoring and evaluation, a base- This question focuses on how strongly the different actors line Net-Map at the beginning of the intervention and can influence the specific issue at hand (not in the country one or more follow-up Net-Maps are recommended (for at large)—for example, “How strongly can this actor influ- example, after one, three, or five years). It is possible to do ence whether farmers use this new rice variety?� Actors’ a string of individual interviews or one (or more) group influence is defined as their ability to achieve their goals in meetings. a social setting, despite resistance (Weber 1922). The first step is to develop the overall question. It nor- The level of influence is represented by an “influence mally has the format: “Who influences XY?� XY can be spe- tower� (using some small, stackable objects). The greater cific (“Who influences farmers’ adoption of this new rice the influence, the higher the tower. The influence tower is variety in this area within the next five years?�) or more gen- used to assess an actor’s actual influence on a given issue; eral (“Who influences the innovativeness of the agricultural the actor’s influence can be based on a number of attrib- sector in this country?�). utes, such as money, formal position, persuasiveness, Often the more specific questions provide more specific informal ties, and so on. The influence tower does not and therefore useful answers. For example, one might measure the actor’s formal position or how influential the learn that network structures that encourage the adoption actor should be. of a new rice variety might be similar to those for other crops. 5: What are their goals? The next step focuses on understanding the actors’ goals. In 2: Who is involved? some cases it makes sense to ask who actively supports the innovation or innovativeness, who is passive, and who The people attending the session normally consist of the actively hinders it. In other cases, actors might follow two host (the person/organization who is looking for answers), competing philosophies or goals. the facilitator (expert in the Net-Map method, neutral in the content question), participants from different areas of 6: Discussion (what does this mean)? the innovation system, and a note-taker. Choosing the right participants is crucial, because the knowledge of the people In this step, the map is drawn, and any issues that came up interviewed is the core source of information. For example, with the mapping are discussed. The discussion can include 594 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK looking at bottlenecks, conflicts, coalitions, future strategies, ■ Engaging stakeholders in Nigeria, Ethiopia, and Uganda missing actors, or links that should be developed in the in developing bisosafety legislation under the Interna- future. It is not important to reach agreement on every point tional Food Policy Research Institute’s (IFPRI’s) Program but to explore and understand different points of view, why for Biosafety Systems; see http://programs.ifpri.org/pbs/). people hold them, and how these different views can affect ■ Understanding and improving regional water governance the innovation system. For example, if a representative from in northern Ghana; see Schiffer and Hauck (2010). the agriculture ministry and one from the environmental ■ Understanding fisheries management in small reservoirs protection agency disagree on a crucial issue, that informa- in northern Ghana; see Hauck and Youkhana (2008). The tion, in and of itself, can be important for shaping a future Net-Map exercise revealed that overlapping governance strategy of engagement with these two agencies. systems (traditional and modern, top-down and bottom- up) were one reason for unsustainable management 7: Results practices and poor enforcement of rules. ■ Increasing the impact of agricultural research on policy The Net-Map session yields the map and discussion notes. making in Malawi and Nigeria; see Aberman et al. The network map can be entered into social network analysis (2010). By looking at concrete case studies (such as stud- software (such as VisualyzerTM or UCINETTM), which pro- ies of fertilizer policy), this project aims to understand duces a computerized network picture and also allows for when and how research can enter policy-making some quantitative analysis, such as identifying bottlenecks or processes. Follow-up Net-Map sessions in Malawi will boundary spanners. While the network structure provides the track changes over time. bones, the discussion adds the meat, giving concrete infor- mation about how and why the network performs or fails. Typically, the goals of a Net-Map intervention are Less tangible (but sometimes even more relevant) out- twofold—to understand and to improve a situation. Two comes of a Net-Map session are the learning and energy case studies provide more detail on how Net-Map was used shared by the people attending. Participants regularly report in analyzing an innovation system in Ethiopia (box 7.20) that they have gained enthusiasm for a common cause, have and developing strategies to prevent the spread of avian resolved misunderstandings, and have a clearer vision and influenza in Ghana (box 7.21). General lessons from the use shared strategy after attending Net-Map sessions. The intan- of Net-Map are provided in the concluding section. gible effects are especially powerful if participants discover blind spots together (see box 7.21 in the next section) or if a diverse group develops a common understanding. To make LESSONS LEARNED AND ISSUES the most of these process results, it is crucial that the host FOR WIDER APPLICATION is seriously committed to using them and continuing to Net-Map is a useful tool for understanding complex, collaborate with the participants. dynamic situations in which multiple actors influence each other and the outcome. It can be used for an initial assess- ment of an innovation system in a country or sector and can BENEFITS, IMPACT, AND TWO CASE STUDIES also help to monitor the innovation system’s development Since its development in 2007, Net-Map has been used in a over time. variety of ways, within and beyond agriculture, in Africa, Asia, A Net-Map facilitator needs to be good at working with Europe, and the United States (for detailed case studies and groups and individuals, giving them room to express methodological development, see http://netmap.wordpress themselves but also guiding them when the discussion .com). The uses have been as diverse as the following: goes off on a tangent. It helps if the facilitator is able to think in structures and discover patterns in complex maps. ■ Developing benchmarks and indicators for chicken and Prior knowledge of social network analysis is a plus but maize innovation systems in Ethiopia (box 7.20); see also not necessary. Spielman and Birner (2008); Spielman and Kelemework The Net-Map steps are normally taught in a learning- (2009). by-doing approach. After a brief (one-hour) session, new ■ Assessing communication channels concerning avian Net-Map facilitators are able to draw their first Net-Map on influenza in Ghana (box 7.21), Ethiopia, and Nigeria; see an issue of their choice. In five to eight days, with the help also Schiffer, Narrod, and von Grebmer (2008). of an experienced Net-Map practitioner, a new Net-Map MODULE 7: INNOVATIVE ACTIVITY PROFILE 2: USING NET-MAP TO ASSESS AND IMPROVE AGRICULTURAL INNOVATION SYSTEMS 595 Box 7.20 Net-Mapping a Poultry Innovation System in Ethiopia The Debre Zeit-Mojo corridor in the Addis Ababa mar- analysis showed that this innovation cluster was inex- ket shed is an exceptionally innovative area for poultry, tricably bound to the specific location (the Addis where new breeds and methods are embraced much market shed, with a market for white-fleshed chicken) more rapidly and widely than in other areas of the and the collaboration between large-scale poultry country. Could Net-Map discover the network condi- producers and an agricultural research center. This tions that encouraged agricultural innovation? What context-specificity meant that the Debre Zeit-Mojo lessons could be learned for other geographical areas innovation cluster did not deliver a blueprint for and other agricultural products? poultry innovation systems in more remote areas of Net-Maps were drawn with researchers, extension the country. Further research, for example through agents, and poultry farmers. The links that were mapped Net-Maps of poultry systems in less-privileged areas, included: production inputs and equipment (embodied would be needed to understand how innovation could knowledge); knowledge and information (disembodied be fostered under different conditions. knowledge); credit and financial services; regulatory This experience shows how Net-Map can tease out oversight; and coordination and cooperation. which innovation conditions are specific to a given Through this process, participants discovered an context and which can be transferred as general lessons innovation cluster of strongly interlinked private and for other areas. The method also helped colleagues who public sector actors who had facilitated the develop- had worked in the country for a long time to see aspects ment of a small commercial poultry farm sector. The of the innovation system of which they were unaware. Source: Author; Spielman and Kelemework 2009. Box 7.21 Net-Mapping to Reduce the Risk of Avian Influenza in Ghana Net-Map was used in kick-off workshops for a proj- the community actors and district administrators: the ect on pro-poor strategies to reduce the risk of avian animal health technician. The relatively low number of influenza (http://www.hpai-research.net). Stakehold- animal health technicians in the system increased the ers from different areas of poultry production, mar- risk that reports of suspicious bird deaths would be keting, and government oversight mapped all of the delayed. actors involved, focusing on two links: (1) flows of An even more crucial insight was related to the ne- information about suspicious bird deaths and glect of market actors in avian flu compensation (2) flows of intervention if avian influenza was con- schemes. Farmers were compensated for every bird firmed. culled by the government in an outbreak, but no such Group mapping allowed participants to exchange compensation was available to live bird traders. Partic- knowledge about this network and highlight specific ipants diagnosed a potential corruption hot spot at the bottlenecks. In Ghana, mapping revealed critical issues national border: Suspicious bird deaths in a trader’s that had not been clear to the participants or flock would give the trader strong incentives to bribe researchers beforehand. The Net-Mapping session border veterinarians, cross to the neighboring country, indicated that if there was an outbreak on a small farm, sell the birds, and leave as soon as possible. This kind of considerable information would be exchanged at the activity sets the scene for a regional pandemic. The net- village level (including among teachers, opinion lead- work figure shown here represents flows of informa- ers, and other actors unrelated to the poultry subsec- tion about suspicious bird deaths in Ghana, indicating tor). Only one actor, however, bridged the gap between the corruption hotspot at the border. Source: Author. Note: More information including illustrative Net-Map examples can be found at http://netmap.wordpress.com. 596 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK intervention can be developed with a team of facilitators event, such as an inception workshop or annual planning with no prior training in the method. The basic process is meeting. taught; the proposed question and links are pretested with In some cases, however, individual interviews are more a number of interview partners; the questions are adjusted; convenient. Actors may be geographically spread out or and the new facilitators learn how to enter the data. A par- otherwise difficult to reach; interview partners may speak ticular challenge in every Net-Map intervention is to ask more truthfully about sensitive issues, especially if there is the right general question. a great power difference between stakeholders or a history Following this preparation, the group of facilitators will of conflict. either invite participants to a group mapping session or As noted, it is beneficial to have a time series; for exam- conduct a series of individual interviews. Group mapping ple, Net-Mapping could be done at the beginning of a sessions are especially powerful for getting consensus and project, halfway through, and at the end. During each ses- buy-in, developing strategic plans, and getting answers sion, discuss what is useful, identify any underutilized rapidly, without much additional analysis. If possible, plan opportunities, and identify bottlenecks. Develop strategies one full day for a group session to allow for discussion and accordingly and use the next mapping session to see how avoid rushing participants. It is possible to do a group Net- the network changed, which strategies were successful, and Map in half a day, however, and make it part of a bigger what still needs to happen. MODULE 7: INNOVATIVE ACTIVITY PROFILE 2: USING NET-MAP TO ASSESS AND IMPROVE AGRICULTURAL INNOVATION SYSTEMS 597 N OV X . X I N O T E AT I V E A C T I V I T Y P R O F I L E 3 Gender Analysis for the Assessment of Innovation Processes: The Case of Papa Andina in Peru Silvia Sarapura, University of Guelph SYNOPSIS OF PROJECT DATA Box 7.22 New Market Niches and Value Project name: Papa Andina Addition for Small-Scale Growers Country/region: Papa Andina works through a of Native Potatoes in the Andes range of strategic local partners in each country: the PROINPA Papa Andina led to the creation of T’ikapapa, the Foundation (Bolivia); the first commercial brand that supports the sale of National Potato Program, INIAP native potatoes under strict quality standards. (Ecuador); and the INCOPA T’ikapapa connects small-scale potato farmers in Project (Peru)1 the Andes with high-value niche markets in urban Starting date: Papa Andina (1998); Peru centers, exports its products to other countries PMCA (2001) within the region such as Venezuela, explores Closing date: Ongoing potential European markets for high-end potato Project financing: Initially Swiss Agency for Devel- products, and partners with an increasing num- opment and Cooperation; also bers of nongovernmental organizations and pri- New Zealand Aid Programme, vate operations to further promote native crops. McKnight Foundation Source: Author. Implementing agency: Partnership Program hosted by the International Potato Center (CIP) Website: http://www.papandina.org/ ■ The PMCA is based on the participatory approach to stakeholder collaboration in agricultural R&D known CONTEXT as Rapid Appraisal of Agricultural Knowledge Systems Across the Andean region, small-scale farmers face the chal- (RAAKS; see also box 7.11) (Engel and Salomon lenge of gaining access to dynamic new markets for high- 2003). The PMCA fosters commercial, technological, value produce while remaining resilient amid the forces of and institutional innovation through a three-step climate change and globalization. The Papa Andina regional process that builds interest, trust, and collaboration initiative, anchored in the International Potato Center among participants, improves farmers’ links to mar- (CIP), promotes innovation that leads to the development kets, and stimulates pro-poor innovation. of market niches and value addition, particularly for the ■ Stakeholder platforms (see also TN 2 in module 1) are native potatoes grown by poor smallholders in Bolivia, spaces and events where public and private stakeholders Ecuador, and Peru (box 7.22). The assessment of gender interact, share reciprocal interests, build trust, and join in issues plays a critical role in Papa Andina’s two principal common initiatives. Often such platforms are developed approaches to engage market chain actors: the Participatory as a result of PMCA and continue after the approach has Market Chain Approach (PMCA) and stakeholder plat- been implemented; in other cases, the PMCA works forms (see also TN 1 and IAP 1 in module 4): through platforms that already exist. 598 Both the PMCA and stakeholder platforms facilitate the Through the PMCA, women’s involvement and the involve- articulation of demand and supply for innovation-linked ment of different groups of women are systematized in the services and reduce transaction costs in marketing the pro- following ways: duce of many small farmers (Bernet et al. 2008). In the Andes, PMCA has been validated in two complete cycles, ■ Representation. Smallholders, female and male, repre- both in Peru and Bolivia (2003–04). The method has been senting their communities at events return to their com- shared with other organizations in these countries, which munities and share their findings and innovative ideas. has led to further testing. In Peru, the Intermediate Tech- ■ Replication. Initial farmers, now acting as representa- nology Development Group, an international NGO, subse- tive farmers, work with R&D partners to replicate quently used the method in the cheese, coffee, and cacao knowledge-sharing events and activities with more subsectors. Starting in 2005, PMCA was introduced and farmers in their area who grow native potatoes. For tested in potato, sweet potato, and vegetable commodity example, a woman farmer in Puno shared information chains in Uganda. with representatives of 12 communities in the Lake Tit- icaca basin. In this way, innovative ideas for making coffee from dried potato and adding value to freeze- OBJECTIVES AND DESCRIPTION dried potato products spread to at least 10,000 farmers A key feature of Papa Andina is that it brings together many in those areas. participants in the AIS, including smallholders, market ■ Communication and recognition. Native potato product agents, and agricultural service providers, many of whom ideas and technologies were also shared between women did not know one another or who actively distrusted one farmers in Peru and women’s groups and R&D institu- another, and helps to identify new opportunities for all of tions in Uganda, Bolivia, and Ecuador (Horton 2008; these stakeholders to collaborate and innovate. Papa Andina Kaganzi et al. 2009). recognizes that gender analysis and female farmers’ active involvement in assessing innovation processes and systems The third innovative element is that Papa Andina pur- are central to developing sustainable, profitable agricultural posefully demonstrated the value of women’s involvement market chains that are well integrated into the wider inno- in the AIS. The initiative showed that it is possible to involve vation system. In turn, this system-level integration is resource-poor women farmers as key stakeholders in the important for gender equality and the empowerment of potato value chain; the participating R&D institutions resource-poor women and their families. demonstrated the value added by gender analysis and Each phase of the PMCA incorporates specific gender- investing in women’s innovation; and the donor agencies related assessments and activities (table 7.10). Flexibility in played an important role in establishing the need for gender the duration of each phase and in the use of specific tools assessment and the integrated involvement of women farm- (quantitative surveys, focus groups, and so forth) is necessary ers in R&D as key stakeholders. (Bernet et al. 2008). BENEFITS, IMPACT, AND EXPERIENCE INNOVATIVE ELEMENT A number of gender-related benefits, impacts, and experi- From a gender perspective, Papa Andina has three innova- ences are linked to each of the three phases of the PCMA tive elements. The first innovative element is that the PMCA and to the stakeholder platforms. In phases 1 and 2, experi- and stakeholder platforms enable women to share their ences with gender assessment and gender-related activities findings and customs with other members of the AIS in organizing the PMCA and stakeholder platforms have through events and activities that highlight women’s knowl- shown how to foster the organization of female and male edge of genetic diversity. When women participate in events farmer groups based on common interests and resources. such as family competitions, their roles in the farming Organizing enables farmer groups to consider the eco- household, the wider community, the market chain, and the nomic feasibility of production and marketing issues AIS are recognized and reinforced (box 7.23). beyond the household level. The groups can build their The second innovative element is that the empowerment human and social capital to access platforms where support of women farmers has resulted in systemic changes. is available from R&D and government institutions as well MODULE 7: INNOVATIVE ACTIVITY PROFILE 3: THE CASE OF PAPA ANDINA IN PERU 599 600 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 7.10 Phases of the Participatory Market Chain Approach and Gender Assessment and Related Activities in Each Phase Phase Overall activitya Gender-related assessment and activity Stakeholders identified – Get to know the market chain actors and other – Integrate gender sensitivity training into R&D organizations as they begin their stakeholders—their activities, interests, ideas, stakeholder identification activities. Phase 1: 2–4 months problems, and so forth: – Include women farmers as a stakeholder group in the rapid assessment of the market Step 1: Conduct a 3- to 6-week rapid assessment chain. R&D partners, including investors, reinforce the need to address women’s of the market chain and identify key specific needs in PMCA. stakeholders. – Initiate family and community competitions for innovation to recognize women’s Step 2: Hold a one-day workshop to define impact contribution to the value chain (box 7.23). groups using the impact filter. – Among the stakeholders, identify women’s groups and male and female leaders who Step 3: Hold a final event for phase 1 to share support gender equity and empowerment; encourage them to highlight or discuss information and secure stakeholders’ issues and benefits for women farmers in workshop events. continued involvement. Stakeholder platforms engaged – In a participatory manner, analyze potential – Platforms bring together female and male small-scale farmers from different business opportunities; work in thematic groups of communities in the region, market agents, and agricultural service providers to share Phase 2: 3–5 months 10–20 persons; establish new stakeholder findings and customs, with support from R&D institutions. Many of these stakeholders platforms or strengthen existing stakeholder will be unfamiliar with each other. platforms; R&D organization involved provides – Identify and involve NGOs engaged in related gender analysis and women’s facilitator to assist groups. empowerment programs. Their involvement may be the key to the success of these – Using the following tools, each thematic group platforms. analyzes potential business opportunities: rapid – Gender equity (participation of women representing different ages, classes, and ethnic market appraisal; quantitative market survey; focus groups) is included in the platforms and in the selection criteria for the thematic groups. groups. Implementation of joint – Implement joint market innovations: work in – Analyze continued knowledge sharing by women farmers and gender roles and market innovations thematic groups of 10–20 persons; R&D relations within the stakeholder platforms for further technical and institutional organization involved provides facilitator to assist innovation at the national and international levels. Phase 3: 4–6 months groups. – Women and men continue to participate in fairs and events outside their communities – Each thematic group uses marketing concept (regional and national) to demonstrate their knowledge and stimulate participation in development and business plan to test or stakeholder platforms. implement, monitor, and evaluate their innovations. – R&D partners monitor/evaluate how individual women farmers have gained If necessary, phase 2 activities can be revised (for confidence to join new and extended networks and to exchange varieties cultivated in instance, by adding focus groups to clarify other areas of the Andes. consumer preferences). – R&D partners monitor/evaluate how male and female farmers have gained individual and collective capacities and skills for communication, negotiation, facilitation, and teamwork. – Encourage ongoing discussion within the project of how market chains empower disadvantaged farmers who otherwise have little opportunity to participate and make decisions. – Encourage ongoing discussion within the project of how women have the chance to interact with other market chain actors and professionals from R&D organizations, thereby increasing their access to knowledge, innovation, contacts, and self- development. Source: Author. a. The activities in each phase of the PMCA (described in detail in the “User Guide�; see Bernet, Thiele, and Zschocke 2006) occur consecutively over 9–15 months. Box 7.23 Innovation Fairs to Assess and bring their large store of knowledge to bear on the innova- Recognize Women’s Contributions to tion process for native potato. Market Chains and the Agricultural In recent years, women farmers in some regions of Peru Innovation System have established profitable businesses supplying native potatoes to national and/or international markets. Messages about women’s advancement in marketing chains and inno- Every family and community in the high Andes has developed its own varieties of native potato. vations have been highlighted in public-private R&D part- Seed of native potato varieties is usually obtained nerships and corporate social responsibility commitments by inheritance, barter, or as a gift. The PMCA part- involving such companies as Pepsi-Co and its subsidiary, ners support local, provincial, regional, and even Frito Lay.2 New products marketed by some companies have national fairs—public events where farmers (men used the image of an award-winning female farmer. These and women) have a chance to demonstrate the examples have been reported to the author as motivating varieties they prefer to select, store, cultivate, har- female producers to participate in the native potato market vest, process, consume, and market. These fairs are chain. opportunities for communities and farmers to highlight the enormous diversity of potatoes they use and explain how they have managed this native LESSONS AND ISSUES FOR WIDER APPLICATION potato biodiversity over time. The participants Several gender-related lessons have emerged from Papa may exchange seed or buy tubers from one another at these fairs. Andina. Donor priorities were an important contextual Fairs represent an excellent opportunity for consideration for incorporating gender assessment in the farmers to obtain information from one another native potato innovation system. Donor agencies’ initial as well as from R&D partners. In most cases, wives proposal development and planning criteria for gender, accompany their husbands to the fairs, because empowerment, and working with NGOs stimulated the women are the farm household members with the requirements for gender assessment and the integrated best knowledge of the morphological and qualita- involvement of women farmers in R&D as key stakeholders. tive characteristics of each potato variety. Family As a result, “researchers and NGOs that have worked with collections can be extensive: A small-scale farming Papa Andina are more aware of gender issues and the need family at one fair presented more than 600 vari- to achieve impact at farmer level� (Devaux et al. 2010). eties. Women farmers report that the fairs enable In some cases, the benefits of traditional and newly them to feel rewarded and recognized for their developed innovations generated by the stakeholder plat- efforts in preserving and maintaining the extraor- dinary biodiversity of native potatoes. forms remain highly localized. For example, with support from USAID, one farming community sold a local variety Source: Author. of potato known as “Capiro� to Frito Lay to produce potato chips for the domestic market (the company had previously imported potatoes from Colombia). Farmers earned more than US$1.6 million in sales, but this success cannot be replicated easily because the domestic market as NGOs. This support can also entail technology transfer for snack foods is limited. Farmers are also cautioned not to farmers and opportunities to fine-tune technologies to to regard this success story as an inducement to grow just specific conditions. one variety of potato. The maintenance of potato diver- In phases 2 and 3, thematic groups use communication sity remains central to the innovation system and its and collaboration to address and break down traditional stakeholder platforms. Although female farmers, espe- gender roles, divisions of labor, and power relations. Recog- cially indigenous women farmers, have brought a wealth nizing women’s role in the selective breeding of native of experience to market chains and agricultural innova- potato varieties in different ecosystems and their detailed tion, women farmers often struggle to ensure that their knowledge of different potato phenotypes helps to counter- knowledge benefits themselves, their families, and their act gender bias. Communication activities, including the communities. Investment strategies that establish net- innovation fairs, focus on how Andean women have culti- works of information and knowledge sharing can increase vated native potatoes. These activities enable women to the impact of locally developed and innovative practices MODULE 7: INNOVATIVE ACTIVITY PROFILE 3: THE CASE OF PAPA ANDINA IN PERU 601 and strengthen the abilities of women and their commu- of the innovation system and the continuing activities of nities to meet their agricultural and economic needs in a the stakeholder platforms. culturally appropriate and environmentally sensitive ■ Through networking provided by the stakeholder plat- manner. forms, identify suitable technological and institutional Despite women’s critical role in the potato market chain, innovations. In particular, review the suitability of tech- subsistence production, in which women are usually nologies or institutional arrangements available in other involved, receives less institutional support than cash crop market chains that have become successful and sustain- production. The number of female extension officers in able for women farmers. public extension systems is very limited (although the only ■ Identify and respond to socioeconomic factors that may NGO working in the high Andes, Fovida, provides a few affect the adoption of proposed technological or institu- female agents). As a result, resource-poor women farmers tional innovations (for example, security of resources; ten- are less likely than their male counterparts to receive agri- urial arrangements for land or water; access to inputs such cultural extension services. Forming links to NGOs within as credit, seed, and fertilizer; and membership in producer phases 2 and 3 of the PMCA is important to strengthening groups). Identify activities that are particularly time- the innovation system in this regard. and/or energy-consuming for women and address them Aside from these relatively specific lessons, Papa Andina with targeted investments and supporting interventions. offers a number of more general considerations about the ■ Increase and sustain the supply of information, tech- successful integration of women into any AIS: nologies, and facilities that women may fail to access because of social exclusion (examples include market ■ Assess the entire system and individual agrifood value information, transport, appropriate tools and equip- chains using a mainstreaming approach that includes ment, and so forth). the use of gender analysis to recognize women’s role and gender relations in production and decision making. Papa Andina illustrates the centrality of gender issues in Indispensable tools for gender analysis in innovation sustainable and inclusive agricultural development and the assessment are gender-disaggregated data; analysis of effectiveness of the AIS as a whole. Gender assessment and women’s and men’s access to resources such as labor, strategies to ensure the participation of women in value land, capital, and knowledge; and the engagement of chains are important tools to identify the strengths and women in capacity-building activities. diversity of actors in innovation systems. R&D institutions ■ Ensure that the full range of women’s and men’s activi- play an especially important role in ensuring that innova- ties, resources, and benefits is reflected in the assessment tion benefits small-scale male and female farmers. 602 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N E T EXX X NOX N O TN O V.AT I. V E A C T I V I T Y P R O F I L E 4 Scenario Planning to Guide Long-Term Investments in Agricultural Science and Technology in India Riikka Rajalahti, World Bank SYNOPSIS How would the technology system embrace the growing importance of the private sector? Would Indian agriculture n Indian Council for Agricultural Research (ICAR) A and World Bank team engaged in scenario plan- ning from September 2004 to June 2006 to assess critical policy and institutional challenges for agriculture and remain competitive in the global marketplace? What would be the fate of the small-scale farmer? corresponding reforms that would enable the research sys- Scenario planning may help address such questions tem to meet them. ICAR management evaluated the likely Scenario planning is a structured process of thinking about benefits and impact of alternative reform scenarios and and anticipating the future that helps to break the mindset determined which specific reforms to support through the that the future will be a continuation of the past (van der National Agricultural Innovation Project (NAIP). This Heijden 1996). It entails the development and collective process increased the government’s ownership of the analysis of a set of scenarios, which are narratives of alter- reforms and its commitment to implement them. This pro- native environments that show how different interpreta- file summarizes key elements of the process and its findings. tions of driving forces can lead to different plausible futures The cost of the scenario planning in India involved several (Ogilvy and Schwartz 1998; van der Heijden 1996). components: external facilitators (US$100,000); preparatory studies (US$30,000); workshops (US$60,000); peer review- ing (US$5,000); and dissemination (US$20,000). Funding PROJECT OBJECTIVES AND DESCRIPTION came from the budget for preparing NAIP (US$155,000) and a US$60,000 grant from the World Bank’s Agricultural and Scenario planning was used to explore the uncertainties sur- Rural Development Department (ARD) to support knowl- rounding Indian agriculture and identify the key decisions edge generation. The investment of staff time was also sub- that would need to be taken to ensure that India’s agricul- stantial for ICAR and the World Bank, on the order of 30 tural technology system was prepared for the future. The weeks for each institution. assessment included a wide range of stakeholders and enabled participants to develop a shared perspective on a future that was not necessarily a continuation of the past. BACKGROUND AND CONTEXT The scenario development and analysis were conducted in To address the challenges facing agriculture in India and parallel with the design of NAIP. consolidate the gains under the completed National Agri- For these parallel efforts to succeed, they required the cultural Technology Project, the Government of India and participation of high-level officials, farm leaders, senior the World Bank agreed to undertake a new National Agri- leaders from the public and the private sectors, NGO lead- cultural Innovation Project (NAIP) (see IAP 2 in module 4). ers, donor representatives, experts on agricultural develop- In preparing the project, it became clear that many uncer- ment, and some “remarkable people� (a term used in the tainties faced agriculture and agricultural science and tech- scenario planning literature to describe lateral thinkers). nology in India. For example, how would global warming The process was managed jointly by the regionally and affect the production characteristics of Indian agriculture? centrally based staff of the World Bank’s ARD. An Indian 603 co-leader was invited, and experienced scenario planning fields may require further assessment to understand experts facilitated the process, which was organized around how the impact of change on these variables can be seven information-gathering and knowledge-sharing steps: managed. 1. Identify driving forces for future change, taking into As hoped, the scenario project co-evolved with the NAIP consideration political conditions, economic develop- project (table 7.11), enabling NAIP to benefit from the ments, social developments, environmental trends, and understanding emerging through the scenario work. In this technological changes. way, the NAIP model was tested in various “environmental� 2. Identify predetermined factors. Which future develop- conditions specified by the scenarios—a process sometimes ments will take place in any scenario? referred to as “wind tunneling.� 3. Identify critical uncertainties—in other words, critical The main steps included the following: areas in which the future is uncertain. 4. Develop scenario plots. A scenario is defined by a combi- 1. An initial workshop at World Bank headquarters in nation of two critical uncertainties, drawn out and shown Washington, DC, to introduce the scenario planning as axes on which the scenarios are plotted. Then a com- concept and process and to receive wider buy-in among prehensive description of how the future will look under staff for the process that would unfold (figure 7.3). this scenario is developed. These futures must be plausible. 2. Interviews with “remarkable people� to explore the 5. Consult with those having relevant expertise. The sce- issues and concerns for future agricultural development narios are presented to a large number of people who in India (van der Heijden 1996; box 7.24). have relevant expertise; their comments are collected and 3. A workshop in India to launch the process and obtain incorporated in the scenarios. Consultation helps to input from participants. identify knowledge gaps and guides decisions on whether 4. A scenario analysis and design workshop to identify and what additional knowledge must be gathered. the key scenarios that would be developed (following 6. Assess the implications of different scenarios. The best the steps described earlier to identify the critical ele- possible responses of the client organizations to each of ments of each scenario: driving forces, predetermined the plausible future scenarios are assessed. factors, and main uncertainties). The scenario plots 7. Compare possible responses to the scenarios. Two ele- (figure 7.3) had two main dimensions. The first was ments in the comparison require special attention. First, economic management, which could be strongly market there are those actions that can be found in all responses based and liberalized but also more government con- and tend to be low risk. Second, there are the responses trolled and centrally led. The second was the social fab- that differ strongly among scenarios. Responses in these ric of the countryside and the country in general, which Table 7.11 Timing for Preparing the National Agricultural Innovation Project (NAIP) in Relation to Scenario Development Timing NAIP Scenario project September 2004 Internal planning workshop in the World Bank April 2005 Start of project preparation Scenario agenda workshop at Indian Council for Agricultural Research July 2005 Draft Project Appraisal Document (PAD) Scenario building workshop; development of first-generation scenarios August 2005 Polished PAD Research on the validity of first-generation scenarios October 2005 Quality enhancement review December 2005 Project appraisal February 2005 Negotiations Second-generation scenarios concluded and circulated for comments April and June 2006 Board approval Workshops in India and at the World Bank on the implications of the scenarios July 2006 Project becomes effective and implementation begins Source: Rajalahti et al. 2006. 604 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Figure 7.3 Final Scenario Plots Developed during the Scenario Design and Consultation Processes The Four Scenarios 1. In the valley Concern for 4. Through the hills India goes it alone inclusive Focus on investment climate Social progress but economic stagnation growth public-private partnership Only limited agricultural reform Enabling of agricultural reform Social Interventionist Economic management Liberalized texture 3. Over the mountains 2. Along the edge Centrally planned economy Reliance on Market forces given free rein Freedom reined in personal Rich/poor divide Agricultural reform by compulsion incentives Agricultural reform by economic necessity Source: Rajalahti et al. 2006. could be strong, with rural people well organized in vil- BENEFITS TO NAIP AND IMPLICATIONS FOR lages that are able to take care of their problems, or SCIENCE, TECHNOLOGY, AND INNOVATION weak, in which case the poor would be more marginal- Scenario analysis contributed to the design of NAIP in many ized. Using these two dimensions as the axes of a 2 x 2 ways. The process truly engaged people in thinking outside matrix, 4 combinations emerged that can serve as per- their everyday domains and resulted in four very different spectives on the future of Indian development. One of but plausible scenarios. The process led ICAR to think about the combinations introduced a third dimension of the issues beyond its own technical competence and to rapid global warming. strengthen the realization that the world it serves requires 5. Finalization and presentation of the scenario storylines, new approaches, including social organization and institu- including the development of full scenario stories (see tional innovation. Rajalahti et al. 2006) and their validation. The scenarios were considered very useful for envision- 6. Scenario analysis results workshops were organized to ing long-term science and technology needs. Scenario devel- define the way forward in relation to NAIP and ICAR. opment clearly revealed two major needs: to work on insti- The specific goal was to identify how the scenarios could tutional arrangements for R&D (farmer organizations, help to identify which critical decisions needed to be sector boards, cooperatives) and fully explore the potential made to maximize the future role and impact of India’s of nonfarm rural employment. technology system. The scenario process also helped the project design team to define the scope of NAIP’s components, particularly the institutional development needed for the AIS to evolve. It INNOVATIVE ELEMENT highlighted the importance of enhancing the capacity for Scenario planning was done to build consensus and elicit dialogue and interacting with other stakeholders in the outside-the-box thinking among diverse stakeholders innovation system. Flexibility, rather than the pursuit of one that traditionally did not engage with each other in reform strategy, was considered a key trait for a successful science and policy discussions. The results were used for organization in a rapidly changing world. designing a long-term investment project in science and The client organizations used the national scenarios to technology. strengthen their visioning capacity and strategy development MODULE 7: INNOVATIVE ACTIVITY PROFILE 4: SCENARIO PLANNING TO GUIDE LONG-TERM INVESTMENTS 605 LESSONS LEARNED AND ISSUES Box 7.24 Key Issues Raised by “Remarkable FOR WIDER APPLICATION People�—Including Opinion Leaders and Policy Makers—in the Scenario Scenarios provided a neutral space for building consensus Development Process, India about critical decisions surrounding the future role and impact of India’s technology system. The following recom- The key question posed to the interviewees was, mendations, suggested adjustments, and limitations should “When thinking of the future of Indian agricul- be kept in mind by those engaged in a similar exercise: ture, what keeps you awake at night?� Four main themes emerged from these interviews: ■ Adapt scenario analysis to specific planning tasks, ■ Will there be enough water for future genera- such as the development of a country assistance strat- tions? How can water be managed sustainably? egy, sector strategy, project, or regional plans. Apply- ■ What will drive Indian agriculture in the future: ing the analysis to larger, global issues is far more chal- government or the market? What is the right lenging. balance? ■ Implement the scenario process ahead of project prepa- ■ How will rural communities change? How fast ration because scenario analysis requires a significant will rural–urban migration proceed, and what time commitment, particularly for consultation and is the future of small-scale farming? validation. ■ How can rural stakeholders voice their ■ Allocate sufficient time and resources for clients to views––women, farmers, the private sector? understand and come to own the process. Source: Rajalahti et al. 2006. ■ Form a multidisciplinary scenario team, led by an expe- rienced scenario leader(s). ■ Draw participants from many disciplines and repre- senting a range of views (India’s scenario-building at the level of specific regions and products, such as rice, dairy process, for example, included people from outside the products, and medicinal plants. For this purpose, groups of agricultural sector). It is also essential to include partici- stakeholders were asked to develop the national scenarios for pants representing the groups that the process aims to the product or region of their interest. influence. The national competitive fund for research consortiums, ■ Pay close attention to the following: the need for a full- managed by ICAR, subsequently was aligned with the issues time manager to oversee the process; the availability of identified by the scenarios. These consortiums have been research capacity with adequate resources; the need to the main means of reforming India’s agricultural research manage and guide research performed by third-party system and enabling it to move toward a more demand- institutes; the coordination required to operate a vir- driven, multistakeholder approach in addressing innovation tual team over long distances; and managing political needs. See module 4, IAP 2. sensitivities. 606 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK I N N O V AT I V E A C T I V I T Y P R O F I L E 5 A Vision for Agriculture in Chile in 2030 and the Implications for Its Innovation System Willem Janssen, World Bank Ariani Wartenberg, World Bank SYNOPSIS to information and technology, logistics, and trade agree- ments, to mention just a few. It may be preferable for a n 2009, Chile’s Ministry of Agriculture commissioned the I World Bank to identify the long-term changes required for its AIS to be more effective. The World Bank collabo- rated with Chile’s Foundation for Agricultural Innovation country to overestimate such threats and be overly prepared than to underestimate them and be marginalized. Invest- ments in innovation that respond to those challenges are a key ingredient in ensuring the future global competitiveness (FIA) to design a participatory process combining an analysis of Chilean agriculture and in meeting the increasingly of major trends with input from opinion leaders, sector rep- sophisticated domestic demand for agricultural products. resentatives, and others. The two major outcomes were (1) a This profile describes collaboration between Chile’s Fun- vision statement that expresses Chile’s agricultural potential dación para la Innovación Agraria (FIA, Foundation for and aspirations and (2) an action plan outlining changes for Agricultural Innovation) and the World Bank to develop a the innovation system to achieve that vision. The Ministry of vision for Chilean agriculture in 2030 and a corresponding Agriculture financed the study through a fee-based service action plan for the innovation system to realize that vision. agreement with the World Bank. The service cost US$250,000 For additional information on Chile’s agricultural technol- (US$150,000 to develop the vision and US$100,000 to pre- ogy consortiums, see module 4, IAP 3; for a discussion of pare the implications for the innovation system). FIA invested FIA and its activities, see module 1, IAP 3. US$175,000 in the study and made a staff member available full time for the two years that the study required. PROJECT OBJECTIVES AND DESCRIPTION CONTEXT The project had two interlinked objectives. The first objec- Chile is a leading player in regional and global agricultural tive was to identify the main opportunities and challenges markets and regards itself as a food and forest powerhouse. that Chile needs to address if it wishes to reinvigorate agri- Despite substantial development in the agricultural sector, cultural growth and propose a vision for Chilean agriculture agricultural growth has leveled off in Chile over the past toward 2030. The second was to identify the adjustments decade, signaling that Chile’s innovation system was more required for AIS to contribute effectively to realizing this effective in the past and that changes are needed to forestall vision. These objectives would be achieved through a future negative growth. process combining analysis, multidisciplinary consultation Changes in the innovation system should anticipate the at different phases of the analysis, and synthesis of the challenges of the future in addition to those that are appar- results. The process is detailed in the sections that follow. ent at present, because innovation is usually a slow process. Many years are likely to intervene between an initial idea or Developing scenarios and building the vision finding and its widespread application. Potential challenges can be related to any number of variables: domestic and Four driver studies were commissioned to identify key trends international market factors, climatic and production con- and driving forces of change that could be to be used for ditions, competition with other sectors, social unrest, access defining and building the scenarios. The studies focused on 607 markets and trade, rural policies and rural development, nat- rizes the main thematic recommendations. In the final step, ural resource management and climate change, and science consultation and dissemination, the action plan was widely and technology. The team produced short summaries of the shared in the country through presentations, press releases, studies and shared them at the first workshop. Information and web publishing. Feedback from these events concluded on seven subsectors (clusters) (fresh fruit, processed food, the process and initiated the preparation of budget proposals. wine, native forestry, dairy, red meats, and cereals) con- tributed to building scenarios and discussing their implica- INNOVATIVE ELEMENT tions. Further input came from interviews with 11 opinion leaders and “remarkable people� (lateral thinkers who could The Chile exercise recognized the uncertainties of the bring alternative perspectives to the dialogue) representing a future, used this insight to understand the basic long-term wide range of views from the public and private sector, as well competitive advantages of its agricultural sector, and drew as academia and civil society. These views helped in drawing the implications for change. Rather than diagnosing the implications and identifying important elements of the vision present situation and proposing remedies, the study formu- for 2030 (box 7.25). lated future ambitions and specified the action required to A subsequent scenario building workshop, facilitated by FIA get there. The proposed changes to the innovation system and World Bank staff and external consultants in December were (rightly) perceived as the next step forward and not as 2010, convened 24 experts from the public and private sectors, a recognition of past failure. academia, and civil society. Four scenarios were outlined in a series of plenary sessions and smaller working groups. The BENEFITS TO CHILE’S AIS core team then consolidated the scenarios, developing compre- hensive descriptions that were submitted for validation to the The benefits of the approach described here derive from its original workshop participants, the scenario team, other constructive, creative, and collaborative features and from experts in Chile (more than 70 people), and five external peer the comparative strengths of FIA (local and national exper- reviewers. The team incorporated the feedback, emphasizing tise) and the World Bank (international experience). The scenario 2 (“Terra Calida�) and consolidating scenarios 1 and involvement of former presidents, cabinet ministers, journal- 3 in a “Business as Usual� scenario (figure 7.4). ists, scientists, businesspeople, individual farmers, farmer organizations, and many other individuals was highly produc- tive. The discussion was conducted in simple, frank language. Action planning and dissemination of results Participants shared and developed considerable knowledge The core team combined the analysis and proposals from and linked it to a specific plan for action. The plan recognized the position papers into an action plan. Box 7.26 summa- that Chile has sophisticated ambitions in high-value markets and is not satisfied with imitating wealthier countries. Box 7.25 The Vision for Chilean Agriculture Somewhat by chance, the approach proved politically in 2030 robust: The work was started by a left-leaning government and finished by right-leaning government. Nor did the second biggest earthquake in the history of the world derail the study. In 2030 Chile is a quality producer of a range of food The forward-looking nature of the study motivated and fiber products. Its international image is marked strong participation and interest in its results. By looking far by the diversity that its geography allows it to pro- into the future, participants ensure that several issues that duce. The sector has an emphasis on environmental had been forgotten or considered out of bounds (technology sustainability and wholesomeness, valued by both transfer, the role of the ministry, the importance of qualified domestic and international consumers. Through the application of ICT, investments in agricultural tech- human resources) regained relevance and received attention. nology and the training of its labor force, Chile has been able to develop profitable value chains, well LESSONS LEARNED AND ISSUES integrated from production to final markets, and FOR WIDER APPLICATION able to remunerate its participants at comparable levels to the rest of the Chilean economy. Briefly, lessons from this process include the following: Source: World Bank 2011b. ■ The local partnership was key to success. Vision building is a very labor- and communication-intensive process. 608 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Figure 7.4 Scenarios for Chile’s Agricultural Innovation System High intervention of (a) Temperature increase and (a) Few climate variations public policies (b) High increase in demand of lower precipitation rate meats and fruits (b) Limited increase in demand (c) No change in tariffs because of higher prices (d) Regulations over use of (c) Tariffs on carbon footprint natural resources (d) More regulations over use of natural resources 1 2 BAU Terra Calida Low impact of High impact of climate change climate change Liberal BAU 3 4 Common Impacts: (a) Few climate variations (a) Price increase of oil and (b) High increase in demand of fertilizers meats and fruits (b) Increase in quality (c) No change in tariffs requirements (d) Few regulations over use of Low intervention of (c) Biotechnology development, natural resources public policies ICTs Source: Authors. Note: BAU = Business as Usual; ICTs = information and communication technologies; “Terra Calida� is a reference to the effects of global warming. The many consultation and dissemination sessions could Box 7.26 Summary of Action Plan have been organized only by the national partner. Identi- Recommendations in Six Thematic Areas fying resource people (for background studies and work days) requires in-depth understanding of the national setting. The phone must be answered if someone (a jour- ■ Genetic improvement. Multidisciplinary teams; nalist, entrepreneur, student) has questions. biotechnology tools; intellectual property and ■ The development of a vision that expresses an ambition patents. made the study interesting to the political players in the ■ Farm management. Management of natural resources and water; information and commu- sector. Politicians cannot easily sell the need for more nication technologies; ecological inputs. institutional integration or long-term research, but they ■ Harvest and postharvest. Proposals from com- can piggyback those measures on the ambition for higher petitive funds; shared funding between govern- farm incomes or less pollution. ment and private sector. ■ The step from analysis to vision was smaller than ■ Standards and quality. Private sector-led expan- expected. The 10 workdays brought out similar ideas across sion of Chile GAP (good agricultural practice subsectors and remarkable agreement on how to pursue standards); benchmarking of standards with them. The main difference is that vision cannot be based importers. on evidence alone; it requires some “structured dreaming.� ■ Qualified human resources. Collaboration ■ The use of simple language allowed everybody to con- with Becas Chile (a national scholarship pro- tribute and to understand the goals that were being gram); international exchange networks. pursued. This frank approach creates much wider ■ Labor resources. Basic and vocational educa- tion in rural areas; monitoring system. acceptance and better feedback. ■ Development of the vision created the room for change Source: World Bank 2011a. needed to implement the action plan. If this willingness to consider change is sustained during the implementa- tion of the action plan, it will constitute a further achieve- ment of the process described here. MODULE 7: INNOVATIVE ACTIVITY PROFILE 5: A VISION FOR AGRICULTURE IN CHILE IN 2030 AND THE IMPLICATIONS 609 N O T E AT I I N N O VX . X V E A C T I V I T Y P R O F I L E 6 Monitoring and Evaluation in the Fodder Innovation Project Andy Hall, LINK Ltd.1 SYNOPSIS environments. The KPOs were all NGOs, with one excep- tion: the animal husbandry department of an agricultural The rationale of the Fodder Innovation Project (FIP), university (see module 4, IAP 1). implemented in India and Nigeria in 2007–10, was that per- sistent fodder shortages arose from a scarcity of fodder innovation capacity, not of technology. A diagnosis of the PROJECT OBJECTIVES AND DESCRIPTION limitations of networks and institutional arrangements associated with specific fodder-related themes was done to The project’s rationale was that the persistent fodder shortage design activities to address those limitations. The project’s suffered by many poor livestock keepers did not arise from a monitoring system was designed to include a baseline sur- scarcity of technology itself but from a scarcity of fodder vey of households, a map of current innovation capacity, innovation capacity (Hall, Sulaiman, and Bezkorowajnyj and an actor linkage matrix and scoreboard to track institu- 2008). Fodder innovation capacity was defined as the net- tional change. The difficulties encountered with all of these works of organizations that mobilized ideas and resources methods provide some cautionary lessons. First, an essential and the institutional settings that framed the relationships foundation for M&E within any innovation system project involved in innovation. The project used an approach is to determine whether the expected outcomes are develop- inspired by action-research to explore how these networks mental or institutional, because this orientation directly and institutional settings could be strengthened, with the influences the kind of M&E approach required. Second, expectation that they would drive fodder innovation. data requirements and tools for monitoring must be The project’s implementation strategy was for the project adapted to the realities of short projects. Third, collabora- management team to help the KPOs select fodder-related tive development of tools for monitoring institutional themes (challenges but also opportunities, such as new mar- change helps to ensure that they are appropriate and owned kets for milk), diagnose the limitations of current networks by the partners who need to use them. Finally, the evalua- and institutional arrangements associated with these tion of innovation system projects such as FIP, in which themes, and design activities to address those limitations. socioeconomic impacts may become apparent some time The project management team then helped the KPOs mon- after the project ends, should include and adequately fund itor the effectiveness of their efforts in stimulating institu- strategies for learning how the project led to impacts. tional changes and, where needed, helped them alter their plans in light of information revealed by monitoring. The project hired two research fellows to conduct diagnostic CONTEXT studies, investigate which activities and processes were The innovation system perspective in the Fodder Innova- enabling the development of fodder innovation capacity, tion Project (FIP)2 built on lessons from an earlier project and identify any resulting developmental outcomes. (2004–07) that indicated the limitations of a technology- After three years (of which the first year was spent iden- transfer approach in addressing fodder scarcity. The project tifying suitable KPOs and introducing them to the project’s was implemented in India and Nigeria in collaboration with rationale), some immediate outcomes became evident in five key partner organizations (KPOs), which formed the the project sites. They included more efficient veterinary nucleus for stimulating change in their local innovation and input service delivery systems; changing collaborative 610 practices of actors; changing institutional arrangements to one was debated considerably. Finding comparator “with- make additional fodder produced available to women, the out� sites was problematic, so the designers adopted a landless, and poor livestock-keeping households; evidence “before-and-after� approach. Seventeen locations were of demand being generated for fodder varieties and other selected from the five project sites in India and Nigeria and livestock-related knowledge and technologies; and the 2,047 households interviewed. Data collection began six KPOs institutionalizing and mainstreaming their approach months into the project, took over a year to complete, and in their other activities or across different organizations. the initial analysis of the baseline data was incomplete at the end of the project. The survey was not repeated at the end of the project to develop the “after� scenario, as time and INNOVATIVE ELEMENTS OF MONITORING resources were not available. AND EVALUATING THE FODDER INNOVATION PROJECT Monitoring institutional change Because FIP was inspired by an action-research approach, the iteration and recasting of activities based on their To monitor changes in the institutional environment, the relative effectiveness in strengthening networks and institu- project team planned to develop an institutional baseline. tional arrangements were regarded as central to exploring The baseline would have two functions. A diagnostic how to develop innovation capacity. A monitoring system function—identifying institutional issues that needed was a critical element of this iterative process, but the issue attention—would form the basis for the initial set of project of how to design a monitoring system for FIP was contested interventions. A monitoring function would track progress within the project’s management team. in facilitating institutional change. Some felt that the project was a development project and To collect this baseline information, FIP investigated fod- that monitoring should therefore focus on what they viewed der innovation capacity using a methodology developed by as the project’s major deliverable: household-level outcomes. the World Bank (Hall, Mytelka, and Oyelaran-Oyeyinka This view was reinforced by the donor’s desire to see tangible 2006; World Bank 2006). The methodology involved explor- results in areas planted to new fodder species and related live- ing four main elements of innovation capacity: (1) actors stock feeding practices adopted by poor households. Others and their roles; (2) patterns of interaction among the actors; regarded the project as a research project. Their view was that (3) the institutions (rules that govern interactions); and (4) any developmental outcome would be on a relatively small the enabling policy environment. Using this framework, scale and at best a byproduct of an experiment attempting to project staff struggled to develop sufficiently detailed understand how to facilitate institutional change associated accounts of the institutional dimension of fodder innova- with the development of innovation capacity. tion capacity to inform implementation design. They Given the strongly held and often opposing views tended to develop more macro-level or generic accounts of about the types of outcomes against which the project the weaknesses in innovation capacity—the missing links should monitor its performance, the team decided to pro- between research and development actors—with a view to ceed on two tracks. The first was an impact assessment publishing them as academic papers. It should be stressed exercise; the second was to monitor changes in the insti- that the weakness was not in the method but in the guidance tutional environment. given to those who were expected to use it. Acknowledging that the diagnostic and institutional baselines were not helping to develop action plans, project Impact assessment staff held workshops with the implementing partners to The impact assessment involved designing and conducting diagnose critical issues and develop plans to proceed. These a household survey to collect baseline information about workshops relied on implementers’ knowledge of their own animal feeding practices, cropping patterns, and household operating environments; the role of the project was to facil- incomes. Statistical expertise was brought into the project to itate them to identify key bottlenecks that needed to be help design the survey instrument and develop an appro- addressed in this environment. The question of how to priate sampling approach. The design anticipated repeating monitor institutional change remained open. The project the survey at the end of the project to judge impacts. recognized that monitoring was the key to iterative learning The designers of the impact assessment recognized the and thus a critical part of the experiment to investigate how need for a counterfactual, although the means of developing to facilitate fodder innovation capacity. MODULE 7: INNOVATIVE ACTIVITY PROFILE 6: MONITORING AND EVALUATION IN THE FODDER INNOVATION PROJECT 611 The project also recognized that the primary institu- into place led to institutional changes, which led in turn to tional dimension of capacity that needed to be addressed changes in livestock feeding practices. The project team across all project initiatives was the pattern and quality of searched for examples of institutional change and devel- linkages between players associated with fodder innovation. oped accounts of how they took place and their outcomes. The project selected two tools to discern these patterns. The They learned that many of the institutional changes taking first was an actor linkage matrix (Biggs and Matseart 1999). place related only indirectly to fodder use. Instead, they con- This tool draws up a list of organizations on the axes of a cerned innovations in output markets for milk, disease sur- matrix. In a workshop setting, the matrix can be used to veillance, veterinary services, and conflicts over access to map patterns, linkages, and collaboration and identify land and grazing areas. Project partners had felt that these which missing links and relationships could be formed for issues needed to be addressed as a precondition for fodder the change process to work more effectively. The second tool innovation. was a scoreboard developed by the project to help partners Evaluation in FIP was external, independent, and com- assess qualitative changes in the nature of relationships. For missioned by the donor. The approach was an output-to- each relationship identified in the actor linkage matrix, the purpose review based on FIP’s logical framework. While this KPOs used the scoreboard parameters to specify the quality exercise was adequate for accountability, it was not clear that of these relationships. The project team, partners, and other it generated project-level lessons that could be used in stakeholders would conduct this scoring exercise periodi- future interventions. cally. The parameters were (1) embracing the project approach; (2) openness and flexibility; (3) level of joint LESSONS LEARNED AND ISSUES actions; (4) the perceived value of interaction; (5) punctual- FOR WIDER APPLICATION ity and commitment; and (6) use of own resources for proj- ect activities. Table 7.12 depicts a partial scoreboard. The experience with M&E in FIP yielded cautionary lessons about mixed messages on expected outcomes and the risks of using data-intensive monitoring methods in short proj- EXPERIENCE TO DATE WITH MONITORING ects. Greater collaboration in designing monitoring tools INSTITUTIONAL CHANGE and a greater emphasis on using evaluations as learning The project management team felt that these tools were well opportunities would also have been valuable. conceived, yet the KPOs found them cumbersome, particu- larly the scoreboard. KPOs felt that the scoreboard could ■ Clarify the nature of the interventions and expected not be used in a participatory way with their partners and outcomes. An action-research project of this type—and stakeholders, because it raised sensitive issues that could most innovation system interventions are going have an undermine the relationship-building process (table 7.12 action-learning orientation—runs the risk of sending compares externally and internally generated scores). A mixed messages to the donor and project partners about more worrying trend quickly became apparent: The KPOs the nature of the outcomes it is expected to deliver. These were using the actor linkage matrix and scoreboard mainly mixed messages directly affect the monitoring strategies to report back to project management rather than for their adopted and set up internal conflicts about whether own learning. developmental impacts or institutional changes are to be In fact, the KPOs were all well embedded in the prevail- monitored. Getting agreement on these issues right from ing institutional context. They had their own informal ways the start is an essential foundation for the M&E system of analyzing that context and identifying which partners within any innovation system project. and stakeholders they needed to draw in to support their ■ Tailor data requirements and tools for monitoring intervention. They were well aware of the sorts of incentives impact to the realities of short projects. Resources spent that different partners and stakeholders would require to on an elaborate baseline for a short project of this type participate in particular project activities. When they were were probably misspent. The project did have a responsi- given project resources to focus on this networking, they bility to track its contribution to developmental out- were able to use their pragmatic knowledge of the context comes, but the team should have selected an approach and make good progress. that was more appropriate for generating data that the The single remaining monitoring issue was that the proj- implementers could use in designing, redesigning, and ect still had to collect evidence that the interventions it put managing the intervention. Such an approach would 612 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Table 7.12 Partial Results of an Externally and Internally Generated Scoreboard for Monitoring and Learning in the Fodder Innovation Project 1a 1b 2a 2b 3a 3b JDPC/ILRI JDPC/ILRI Farmer Group Farmer Group OSADEP OSADEP EGSB IGSB EGSB IGSB EGSB IGSB EGSB IGSB EGSB IGSB EGSB IGSB Parameter AS AS AN AN AS AS AN AN AS AS AN AN Embracing the project approach, openness, and flexibility (institutional) 3 3 6 6 0 1 5 4 0 0 5 3 Level of joint actions and sharing resources 4 6 8 8 2 4 5 6 2 4 6 6 Interaction (5 marks) Value of interaction (5 marks) 4 6 8 8 2 4 4 8 2 2 6 4 Sense of belonging as an actor (individual) 2 3 7 7 2 2 6 6 2 1 4 4 Forum as platform for mutual benefits 2 4 7 6 2 3 4 6 2 1 5 4 Punctuality and commitment of actors 3 5 7 7 2 2 6 7 2 1 6 4 Use of own resources (institutional) 3 4 8 6 5 2 8 7 0 1 2 3 Misunderstanding among actors (drawn internally for internal use) * 0 * 0 * 0 * 1 * 0 * 0 Source: Author. Note: Scores are 0 = lowest mark, 10 = highest mark; * = not determined; – = does not yet exist; AS = at start (January 2008); AN = at now (July 2009); EGSB= externally generated scoreboard; IGSB = internally generated scoreboard; JDPC = Justice, Development, and Peace Commission; ILRI = International Livestock Research Institute; OSADEP = Osun State Agricultural Development Programme. almost certainly have involved rapid, qualitative ■ Link impact measurement to learning. The evaluation of appraisal methods. Another valuable approach would FIP could have paid much more attention to learning how have been to use Causal Process Tracing to help unravel a project like this could lead to impacts. The baseline sur- the underlying institutional (and other) causes of out- vey conducted for FIP could be valuable for this purpose: comes observed. This approach would have been partic- Repeating the survey some years after the project’s end ularly important in FIP, as many of the outcomes would provide valuable lessons about impact as well as recorded were either unexpected or tangential to the underlying processes of change. Donors could consider original ambition to reduce fodder scarcity. providing projects with resources to commission base- ■ Collaboratively develop tools for monitoring institu- line surveys, and donors could commission impact tional change. The institutional monitoring tools for assessment and evaluations to be done after the project’s FIP were well conceived but failed largely because they end. This approach would be particularly useful for were “expert�-driven and not appropriate to or owned innovation system projects in which large-scale socio- by the partners who needed to use them. A more useful economic impacts are evident only some time after the approach would have been to develop monitoring tools project is implemented. Caution would be necessary, collaboratively with each partner, adapting existing however, to (1) ensure that an adequate counterfactual institutional-learning tools and principles to each part- analysis could be done; (2) capture unintended outcomes ner’s specific management needs. In hindsight, the that may take place away from the original project site; scoreboard parameters appear ambiguous and poorly and (3) fully interrogate theories of change and investi- framed. gate causal links to impacts observed. MODULE 7: INNOVATIVE ACTIVITY PROFILE 6: MONITORING AND EVALUATION IN THE FODDER INNOVATION PROJECT 613 N O T E AT I I N N O VX . X V E A C T I V I T Y P R O F I L E 7 Monitoring and Evaluation in the Research Into Use Program Andy Hall, LINK Ltd. Kumuda Dorai, LINK Ltd. SYNOPSIS research findings but that the findings produced more limited social and economic impacts than expected. In July 2006, he Research Into Use (RIU) program, designed with T an innovation systems perspective, emphasized strengthening networks and partnerships and also gave prominence to private sector and enterprise perspec- DFID established a five-year flagship program, Research Into Use (RIU). As its name implies, the program’s fundamental purpose was to make better use of agricultural research. tives to drive research into use. The program pursued explicit learning objectives, including drawing key policy lessons OBJECTIVES AND DESCRIPTION about better strategies for putting agricultural research into Implemented in South Asia and Africa with a budget of use. In RIU, the challenge for M&E lay in the need to track US$50 million, RIU drew inspiration from the innovation developmental as well as institutional outcomes and the lim- systems perspective. It emphasized driving research into use ited experience, confidence, and consensus in the use of by strengthening networks and partnerships and giving pri- methods that could address those two outcomes together. A vate sector and enterprise perspectives more prominence. It key lesson from RIU’s experience with M&E is that it is crit- also pursued explicit learning objectives for internal purposes ical to maintain the distinction between monitoring and and external policy audiences (for details, see www.research- evaluation and to separate the timing and responsibilities for intouse.org and Hall, Dijkman, and Sulaiman 2010). these two functions. Monitoring progress toward institu- RIU had three main elements: tional and developmental targets is challenging; programs should have specific M&E expertise to help design integrated ■ The Asia Challenge Fund (ACF) supported 15 consor- monitoring strategies for each of their interventions (not to tiums of research and development partners to scale out collect data for M&E experts to analyze). Donors should be previously developed technologies. Projects were located realistic about the type and scale of outcomes likely to be evi- in India, Bangladesh, and Nepal. The logic was that the dent in the action-to-impact results chain during the life of main task in putting research into use was the promotion an intervention. The final impact needs to be explored after of technologies and other research products. The tech- the program has come to an end, especially for a program nologies dealt with in this way included new crop vari- such as RIU, with its emphasis on achieving impact by stim- eties developed through client-oriented breeding, fish ulating institutional and policy change. Sensitive manage- fingerling production techniques, crab and seaweed pro- ment of the interaction between evaluators and programs is duction, and new management and analytical tech- needed to deal with the tensions between accountability and niques, including participatory floodplain management learning. This point is particularly important for innovation and participatory market chain analysis. Over time, system interventions, because theories of change are multi- many of the consortiums recognized that their main task dimensional, evolve, and are often difficult to articulate. was not to promote technology per se but to marshal the different players around existing value chains or to CONTEXT develop new ones. Often this work involved bringing A series of reviews funded by DFID indicated that invest- additional partners with entrepreneurial expertise into ments in agricultural research often delivered excellent the consortiums. While the Asia Challenge Fund projects 614 certainly yielded direct developmental outcomes, they RIU incorporated two further elements: a communica- were most noteworthy for the extensive institutional tions and a research function. The research team, distrib- changes they stimulated. uted across Asia and Africa, was mandated to draw key ■ The Africa Country Programmes (ACPs) were established policy lessons to inform national and particularly interna- in Malawi, Nigeria, Rwanda, Sierra Leone, Tanzania, and tional development investors about better strategies for put- Zambia with the explicit agenda of brokering new clus- ting agricultural research into use. ters of organizations around selected R&D themes. This agenda was based on the recognition that developmental INNOVATIVE ELEMENT: MONITORING AND and market-based opportunities often arise and can use EVALUATING DEVELOPMENTAL AND research expertise and findings, but institutional inertia INSTITUTIONAL CHANGE often prevents an appropriate mix of organizations, knowledge, and resources from assembling to innovate RIU set targets for development (outcomes measured in in response to such opportunities. The ACPs used inno- terms of benefits to poor people) and institutional and pol- vation platforms and other dialogue mechanisms as icy change (outcomes measured in terms of changes in key starting points to identify opportunities and help orga- stakeholders’ behavior in the innovation process and nizations link with each other. Some of the initiatives changes in policies that shape the national and international brokered in this way included a smallholder indigenous innovation environment). The emphasis given to these out- poultry value chain in Tanzania, an improved fish finger- comes shifted in the latter part of the project, when a 70 per- ling supply chain in Malawi, and an integrated livestock cent impact weighting was assigned to institutional and pol- fodder and vet service arrangement in Nigeria. With the icy outcomes. ACPs’ broad, opportunity-driven agenda, many unex- The challenge for RIU was to monitor institutional and pected adaptations took place as organizations in the policy changes and direct developmental outcomes, even consortiums found new ways of working with each though it was recognized that developmental outcomes other, such as new financing mechanisms, new roles for would not arise on a significant scale until after the project research partners, and new ways of influencing policy. ended. The task was even more challenging because the Existing research products (and research expertise) were interventions evolved a great deal to reflect the emerging put into use in these initiatives, and their developmental understanding of how to put research into use and to take outcomes were recorded, but the main outcomes from advantage of emerging opportunities to do so. the ACPs were institutional. Part of the challenge lay in the tension over whether ■ The Best Bets. RIU envisaged that it would identify Best RIU was a developmental or institutional change initia- Bet technologies for scaling up, but quickly it shifted to tive. Management and staff changes brought differing identifying best bet business models and unique consor- views on this point, which had implications for how M&E tiums that successfully combined enterprise principles was addressed. A consensus eventually emerged that RIU (specifically, a focus on the poor as a market for products needed to track developmental as well as institutional and services) with science-Based innovation. The outcomes. Because RIU was implemented before there approach proved useful for tapping the ability of entre- was much experience, confidence, or consensus in the use preneurs with social credentials to marshal research and of methods that could address those two outcomes other knowledge, resources, and partners to create busi- together, the M&E task was largely exploring new ground. ness innovations that addressed issues as diverse as sleep- The next sections describe the resulting experience and ing sickness control, farm input supplies, and biological learning. control of an aggressive parasitic weed (Striga). Support for these businesses created capacity for continuous EXPERIENCE innovation around the themes covered. Having focused on supporting existing enterprise-like organizations and Following advice from the donor, RIU initially set aside one- consortiums, the Best Bets were better placed than other third of its budget for the combined task of monitoring RIU interventions to achieve direct developmental out- impact and learning (MIL). A specialist group was brought comes. Institutional change was also anticipated, however, in to design and implement an M&E plan, which had two as many of the organizations involved were encouraged notable elements. The first was a baseline survey for the ACF to assume new roles in the innovation process. projects and ACPs to conduct (the Best Bet projects had not MODULE 7: INNOVATIVE ACTIVITY PROFILE 7: MONITORING AND EVALUATION IN THE RESEARCH INTO USE PROGRAM 615 yet started). The second element was that projects were asked to find a suitable evaluator. An evaluator was finally identi- to record the events unfolding around their interventions. fied and appointed early in 2010, when RIU had about 15 The data were sent to the UK-based MIL group for analysis. months left to run. The impact assessment team (as RIU described it) would assemble evidence about outcomes to substantiate lessons A new management team and M&E strategy that the research team was developing as well as to report to A midterm and subsequent technical review of RIU were the donor for accountability. Responding to the donor’s critical of the MIL approach, noting that the baseline exer- demands, however, the impact team assumed a more cise was particularly burdensome and provided no clear broadly conceived evaluative role, exploring the effective- feedback to the ACF or ACPs. Following these reviews, a ness of project cycle management and reporting its findings new management team was brought into RIU at the begin- to the donor. ning of year four of RIU’s five-year program. The MIL The impact team also developed a learning approach, group disbanded, a new M&E strategy was put into place, drawing on the Theory-Based Impact Evaluation meth- and ACF projects and ACPs became responsible for moni- ods developed by Howard White and the 3IE group to toring their progress as they saw fit. assess developmental impacts, explore RIU’s theory of Some projects continued baseline and follow-up studies change, and revisit its assumptions (for a brief descrip- and tracking. For example, a project promoting varieties tion of the methods, see box 7.19 in TN 5; see also White developed through client-oriented breeding found those 2009a, 2009b). Information was collected through house- studies useful for targeting, because they identified agrocli- hold surveys in selected countries and extensive inter- matic zones where adoption patterns indicated that the new views were conducted with RIU staff and stakeholders in varieties performed well and were acceptable to farmers. RIU focus countries. Box 7.27 summarizes key elements Others found the approach less useful or did not see it as a of the evaluation framework. priority and stopped. Problems encountered Impact assessment The impact team’s dual responsibilities for accountability The new M&E strategy specified that RIU would appoint an (judging the effectiveness of RIU’s implementation) and independent team to assess impact. Initially RIU struggled learning (helping RIU to understand its impact over time) Box 7.27 Key Elements of the Framework Used to Evaluate Research Into Use The impact assessment team developed a series of ■ Efficiency. To what extent was the RIU’s informa- questions to examine the theory of change embedded tion management system (including the M&E sys- in the interventions of Research Into Use (RIU). The tem) fit-for-purpose? How did RIU assess the following are the main categories of questions posed: progress of innovations and their contribution (both positive and negative) to building knowledge ■ Overarching question. Has the underlying theory of and addressing market failures? change—that “new forms of partnership will lead to ■ Effectiveness. What partnership arrangements were innovation (which in turn will contribute to poverty most effective in understanding and addressing the reduction and economic growth)�—been shown to barriers to innovation, both nationally and locally, be appropriate? and why? What partnership arrangements are effec- ■ Relevance. Given its theory of change, was RIU’s tively ensuring that the innovation process focuses design appropriate to explore how to put research on the issues of gender and social exclusion? Was the into use? Was the program’s design appropriate to its research monitoring system effective? ambition to impact on poor people? ■ Impact. To what extent has RIU impacted poor people? Source: Adapted from RIU project document. 616 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Box 7.28 Framework for Tracking Institutional Change Research Into Use (RIU) recognized that it needed to tory were sorted into groups to arrive at broad cate- track institutional change, but what sort of institu- gories of institutional change. Illustrative indicators of tional change should be tracked? Given that innovation each type of change were developed, and this frame- is embedded in a very wide range of relationships in work was used for deeper investigation and documen- economic systems, the range of institutions that are tation of institutional changes through case studies and important in the innovation process is likely to be writeshops. equally large and varied. Some areas of expected insti- tutional change are very obvious—for example, ■ New ways of financing rural innovation. changes in research practice or changes in patterns of ■ New, poverty-relevant ways of working or organiz- partnership—but because RIU operated in complex ing things. development arenas, some institutional changes would ■ Market-related institutional changes. be difficult to predict from theory alone. ■ Existing types of organizations playing new roles. The broad categories of change listed below were ■ New types of organizations playing new roles. identified through a rapid inventory of institutional ■ Changes in research practice. changes observed in association with RIU’s activities. ■ Changes in the policy formulation space/process. Institutional changes were defined as things that were ■ Effects on donor/government investment behavior. being done differently as well as changes in formal poli- ■ New network configurations. cies and rules. The institutional changes in the inven- ■ Formal policy changes. Source: Adwera et al. 2011. were managed insensitively. The accountability function RIU responded to these findings in a number of ways. It was perceived as a policing exercise and tended to impede changed its quarterly reporting formats to include institu- the learning function, preventing the sharing of informa- tional change issues. It developed a framework to categorize tion and perspectives. Frequent changes in the impact team, and track an expanding range of different types of institu- including its leader, exacerbated this problem. tional change (box 7.28; Adwera et al. 2011). Institutional The evaluators and RIU disagreed about the RIU’s the- histories of the ACPs were commissioned to develop a ory of change. Evaluators articulated it as “partnerships lead deeper understanding of how they promoted innovation to innovation,� whereas RIU articulated it as “institutional (box 7.29). Finally, writeshops helped staff implementing and policy change will enable innovation.� The evaluators interventions to record institutional changes and unexpected found that it was too early to collect the impact data needed outcomes and use the writeups to engage other stakeholders. to satisfy the Theory-Based Impact Evaluation approach that inspired the design of the evaluation. In other words, an LESSONS LEARNED: WHAT COULD impact evaluation was premature. HAVE BEEN DONE DIFFERENTLY? By the end of RIU’s initial five-year lifecycle in June 2011, the A mechanism for systematically impact team had not yet reported its findings (as of this writ- capturing change ing, RIU has been extended to June 2012, partly to complete A more positive result of this experience was that the impact the impact evaluations). Even so, from the work completed team identified evidence that institutional change was so far, a number of lessons related to M&E stand out: occurring as a result of RIU’s efforts. The team also called attention to the fact that RIU lacked a mechanism for sys- ■ Separate responsibilities for M&E. It is critical to main- tematically capturing this information and using it in dia- tain the distinction between monitoring and evaluation logue with policy makers and others to leverage wider pol- and to separate the timing and responsibilities for these icy and institutional change. two functions. RIU started off collecting its own impact MODULE 7: INNOVATIVE ACTIVITY PROFILE 7: MONITORING AND EVALUATION IN THE RESEARCH INTO USE PROGRAM 617 Box 7.29 Rationale and Approach for Innovation Studies Based on Institutional Histories of Africa Country Programmes The Africa Country Programmes (ACPs) of Research prominence of core concepts and the way this evo- Into Use (RIU) used innovation platforms as one means lution played out in RIU’s strategy, with particular of enabling innovation. RIU commissioned institutional emphasis on the ACPs. histories of the ACPs to understand the specific details of ■ A detailed institutional history of the ACPs, empha- how the various innovation platforms were designed and sizing how they organized their work, learned along functioned in each setting and to learn how each ACP the way, and evolved in response to the evolution of functioned as a broking or intermediary organization RIU and the local development, political, and insti- within the wider innovation and development land- tutional environment. scape. The decision to use institutional histories reflected ■ A detailed account (in accessible language) of the the fact that the arrangements and approaches used in nature, role, and function of the intermediary/ each program evolved significantly. All programs took brokering task, including the innovation platforms, advantage of a range of opportunities; some approaches to explain what brokering involves. were less effective than others, but all were instructive. ■ Based on those accounts, develop guiding principles The resulting institutional histories contributed to inno- for designing a program enabling intermediary vation studies with the following elements: agencies/brokers to catalyze innovation and put research into use. ■ A short institutional history of the evolution of RIU, with a strong focus on understanding the changing Source: RIU project document. data (an evaluation function) and, in the process, fully. In this sense, the baseline studies may yet prove impeded progress on the action part of its interventions. valuable for post-program evaluation, although a more The expectations of the donor were also important: appropriate approach would have been for RIU to com- Donors should be realistic about the type and scale of mission the design and execution of the baselines inde- outcomes likely to be evident in the action-to-impact pendently of the interventions. Then the evaluators results chain during the life of an intervention. This could have repeated the surveys after the program ended. statement does not mean that interventions should not ■ Develop a systematic monitoring plan. Monitoring track their performance; it means that tracking and man- progress toward institutional and developmental targets aging performance will require data different from the is challenging and requires technical backstopping so data needed for assessing an intervention’s final impact. that projects can perform this function as an integral A suite of well-executed qualitative methods and rapid part of their management. Those who need to act on the quantitative surveys would have been much more useful information generated should have ownership of the to the ACF projects and ACPs as a way of monitoring and monitoring role: Responsibility should lie with the indi- generating feedback on the effectiveness of their actions. vidual projects rather than the central program. Pro- ■ Time the evaluation carefully. The impact team initiated grams should have specific M&E expertise to help its activities prematurely. It could be argued that the design integrated monitoring strategies for others to use effectiveness of program cycle management could be rather than to collect data for the M&E expert to ana- investigated only when the program was still on the lyze. A very large suite of techniques is available for ground, but the final impact needs to be explored after exploring institutional change and understanding rela- the program has come to an end. The nature of RIU, with tionships between process and outcome (TN 4). The key its emphasis on achieving impact by stimulating institu- is to have expertise that is sufficiently familiar with this tional and policy change, suggests that this time lag is suite of methods to adapt principles and tools to the particularly important. Since this route to impact is com- specific monitoring needs of each project in the larger plex, chains of causation will need to be explored care- program. 618 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK ■ Manage tensions between accountability and learn- mensional and evolving and appear difficult for programs ing. Sensitive management of the interaction between such as RIU to articulate. One approach—viewed as a evaluators and programs is needed to deal with the good practice in the evaluation community—is to tensions between accountability and learning. This employ conversational rather than interrogative infor- point is particularly important for innovation system mation collection techniques with program staff and interventions, because theories of change are multidi- stakeholders. MODULE 7: INNOVATIVE ACTIVITY PROFILE 7: MONITORING AND EVALUATION IN THE RESEARCH INTO USE PROGRAM 619 NOTES collaboration with United Nations University-Maastricht Economics and Social Research Institute on Innovation Thematic Note 1 and Technology (UNU-MERIT), the International Center 1. See, for example, the G20 press release on its September for Crop Research in the Semi-Arid Tropics (ICRISAT), 2011 Ministerial Meeting on Development (G20 2011a) and and the International Institute of Tropical Agriculture progress on the Global Conferences on Agricultural (IITA). Research for Development process (http://gcardblog.word- press.com/; FAO 2011). Innovative Activity Profile 7 2. For further information on conventional methods of priority setting and investment in agricultural R&D see 1. The author was head of RIU’s Central Research Team. Tabor, Janssen, and Bruneau (1998), Contant (2001), and Alston, Norton, and Pardey (1995). 3. World Bank (2007) identifies three main contexts for REFERENCES AND FURTHER READING innovation: (1) agriculture-based countries (mainly in sub-Saharan Africa) where farmers lack access to well- Module 7 Overview functioning agricultural markets; (2) transforming coun- Alston, J. M., G. W. Norton, and P. G. Pardey. 1995. Science tries (mainly in South Asia, East Asia and the Pacific, the Under Scarcity: Principles and Practice for Agricultural Middle East, and North Africa) where agricultural markets Research Evaluation and Priority Setting. Ithaca: Cornell. are developing and some farmers gain from good connec- Edquist, C. 1997. Systems of Innovation, Institutions, and tions to markets; and (3) mature innovation countries Organizations. London: Pinter Publishers. (most countries in Latin America and the Caribbean and many in Europe and Central Asia) where agricultural mar- Gijsbers, G., W. Janssen, H. Hambly Odame, and G. Mei- kets function relatively efficiently and farmers are effective jerink. 2000. Planning Agricultural Research: A Source- market players. book. The Hague: International Service for National Agricultural Research (ISNAR). Hall, B. H., and J. Learner. 2010. “The Financing of R&D and Thematic Note 3 Innovation.� In Handbook of the Economics of Innovation, 1. For example, see the discussion of scenarios developed edited by B. H. Hall and N. Rosenberg. Amsterdam: Else- under India’s National Agricultural Innovation Project on vier. Pp. 610–38. the future of agriculture in India (http://www.naip.icar.org Hall, B. H., and N. Rosenberg. 2010. “Introduction to the .in/workshops2.htm). Handbook.� In Handbook of the Economics of Innovation, edited by B. H. Hall and N. Rosenberg. Amsterdam: Else- vier. Pp. 3–9. Innovative Activity Profile 3 OECD (Organisation for Economic Co-operation and 1. Fundación PROINPA (Promoción e Investigación de Pro- Development). 1986. “Glossary of Terms Used in Evalua- ductos Andinos) (www.proinpa.org/); Programa Nacional de tion.� In Methods and Procedures in Aid Evaluation. Paris. Raíces y Tubérculos rubro Papa (PNRT-Papa), Instituto ———. 1991. Principles for Evaluation of Development Nacional Autónomo de Investigaciones Agropecuarias Assistance. Paris. (INIAP) (www.iniap-ecuador.gov.ec/); and Innovación tec- ———. 2000. Glossary of Evaluation and Results-Based nológica y competitividad de la papa en Per (INCOPA) Management (RBM) Terms. Paris. (www.cipotato.org/papandina/incopa/incopa.htm). Pardey, P. G., J. M. Alston, and V. Ruttan. 2010. “The Econom- 2. See “A Quest for the Perfect Potato� (Newsweek 2008), ics of Innovation and Technical Change in Agriculture.� In Mapstone (2010), and the August 2010 speech by Pepsi-Co Handbook of the Economics of Innovation, Vol. 2, edited Chairperson and CEO Ms. Indra Nooys (http://www.pepsico by B. H. Hall and N. Rosenberg. Amsterdam: Elsevier. .com/assets/speeches/IndraNooyiPeruReception-2010.pdf). Pp. 939–84. World Bank. 2011. Information and Communication Tech- Innovative Activity Profile 6 nologies for Agriculture e-Sourcebook. Washington, DC. 1. The author led the research in the Fodder Innovation Project. Thematic Note 1 2. Funded by DFID between 2007 and 2010, RIU was led Alston, J. M., G. W. Norton, and P. G. Pardey. 1995. Science by the International Livestock Research Institute (ILRI) in under Scarcity: Principles and Practice for Agricultural 620 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Research Evaluation and Priority Setting. Ithaca: Pant, L. P. 2010. “Assessing Innovations in International Cornell. Research and Development Practice.� UNU-MERIT Bloch, C. 2007. “Assessing Recent Developments in Innova- Working Paper No. 2010-043. Maastricht: United tion Measurement�: The Third Edition of the Oslo Man- Nations University–Maastricht Economics and Social ual Science and Public Policy 34 (1): 23–34. Research Institute on Innovation and Technology Contant, R. 2001. “Priority Setting.� In Planning Agricultural (UNU-MERIT). Research: A Sourcebook, edited by G. Gijsbers, W. Janssen, OECD (Organisation for Economic Co-operation and H. Hambly Odame, and G. Meijerink. The Hague: Inter- Development). 1997. National Innovation Systems. national Service for National Agricultural Research Paris. (ISNAR). ———. 2005. Oslo Manual: Guidelines for Collecting and CPR, CRISP, and LINK (Centre for Policy Research, Centre Interpreting Innovation Data. 3rd edition. Paris. for Research on Innovation and Science Policy, and the ———. 2010. Measuring Innovation: A New Perspective. Paris. Learning, INnovation, Knowledge initiative). 2011. South Potter, J. (ed.) 2008. Making Local Strategies Work: Building Asia Rural Innovation Capacity Benchmarking Workshop, the Evidence Base. Paris: Organisation for Economic Co- August 19–20, 2011. New Delhi: CPR. operation and Development (OECD). Edquist, C. 1997. Systems of Innovation, Institutions, and Raitzer, D. A., and G. W. Norton. 2009. Prioritizing Research Organizations. London: Pinter Publishers. for Development: Experiences and Lessons. Wallingford, FAO (Food and Agriculture Organization). 2011. “The UK: CAB International. GCARD Road Map: Transforming Agricultural Spielman, D. J., and R. Birner. 2008. “How Innovative Is Research for Development Systems for Global Impact.� Your Agriculture? Using Innovation Indicators and Rome. http://www.fao.org/docs/eims/upload//294891/ Benchmarks to Strengthen National Agricultural Inno- GCARD%20Road%20Map.pdf, accessed September vation Systems.� ARD Discussion Paper No. 41. Washing- 2011. ton, DC: World Bank. G20. 2011a. Ministerial Meeting on Development: Commu- Spielman, D. J., and J. Lynam. 2010. “Design Elements for niqué. 23 September 2011, Washington, DC. http://www Agricultural Research within an Agricultural Innovation .g20.org/Documents2011/09/Ministerial%20 Systems Framework: Evidence from and for Africa.� In Declaration-final.pdf, accessed September 2011. Proceedings of the Second Science with Africa Conference ———. 2011b. “Concept Paper Prepared by Brazil, 2010. United Nations Economic Commission for Africa, Canada, France, Japan, CGIAR, FAO, GFAR and the http://www.uneca.org/sciencewithafrica/Resources.html, WB.� Conference on Agricultural Research for Develop- accessed October 2011. ment: Promoting Scientific Partnerships for Food Secu- Sulaiman, R. 2009. “Farmer First or Still Last? Uneven Insti- rity, Montpellier, September 12–13. http://www.egfar tutional Development in the Indian Agricultural Innova- .org/egfar/digitalAssets/4797_Concept_Paper_G20_con tion System.� Paper presented to Farmer First Revisited: ference_on_ARD.pdf, accessed October 2011. Farmer Participatory Research and Development Twenty Gijsbers, G., W. Janssen, H. Hambly Odame, and G. Mei- Years On, Institute of Development Studies, University of jerink. 2001. Planning Agricultural Research: A Source- Sussex, December 12–14, 2007. book. The Hague: International Service for National SWAC (Sahel and West Africa Club). 2005. “The Family Agricultural Research (ISNAR). Economy and Agricultural Innovation in West Africa: Hall, A., L. K. Mytelka, and B. Oyelaran-Oyeyinka. 2006. Towards New Partnerships.� Report No. SAH/D(2005)550. “Concepts and Guidelines for Diagnostic Assessments of Paris: Organisation for Economic Co-operation and Agricultural Innovation Capacity.� UNU-MERIT Working Development (OECD). Paper No. 2006-017. Maastricht: United Nations Univer- Tabor, S., W. Janssen, and H. Bruneau. 1998. Financing Agri- sity–Maastricht Economics and Social Research Institute cultural Research: A Sourcebook. The Hague: International on Innovation and Technology (UNU-MERIT). Service for National Agricultural Research (ISNAR). Kraemer-Mbula, E., and W. Wamae, (eds.) 2010. Innovation Wennink, B., and W. Heemskerk (eds.) 2006. “Farmers and the Development Agenda. Paris: Organisation for Organizations and Agricultural Innovation: Case Studies Economic Co-Operation and Development (OECD) and from Benin, Rwanda, and Tanzania.� Bulletin No. 374. International Development Research Centre (IDRC). Amsterdam: Royal Tropical Institute (KIT). Larsen, K., R. Kim, and F. Theus. 2009. “Agribusiness and World Bank. 2006. “Enhancing Agricultural Innovation: Innovation Systems in Africa.� Washington, DC: World How to Go Beyond the Strengthening of Research Sys- Bank. tems.� Washington, DC. MODULE 7: NOTES, REFERENCES AND FURTHER READING 621 ———. 2007. World Development Report 2008: Agriculture Clayton, A., and C. Staple-Ebanks. 2002. “Nutraceuticals for Development. Washington, DC. and Functional Foods: A New Development Opportu- nity for Jamaica: Market-Scoping Study.� Technical report for the National Commission on Science and Thematic Note 2 Technology. Kingston: Environmental Foundation of Akramov, K. T. 2009. “Decentralization, Agricultural Ser- Jamaica (EFJ). vices, and Determinants of Input Use in Nigeria.� IFPRI de Lattre-Gasquet, M. 2006. “The Use of Foresight in Agri- Discussion Paper No. 941. Washington, DC: Interna- cultural Research.� In Science and Technology Policy for tional Food Policy Research Institute (IFPRI). Development: Dialogues at the Interface, edited by L. Box Peterson, W., G. Gijsbers, and M. Wilks. 2003. “An Organi- and R. Engelhard. London: Anthem. zational Performance Assessment System for Agricul- Georghiou, L. 1996. “The UK Technology Foresight Pro- tural Research Organizations: Concepts, Methods, and gramme.� Futures 28 (4): 359–77. Procedures.� ISNAR Research Management Guidelines IGD (Institute of Grocery Distribution). 2003. “Future No. 7. The Hague: International Service for National Foods for Well-Being: An Expert Panel’s View of the Next Agricultural Research (ISNAR). 25 Years.� Watford, UK: IGD. Shambu Prasad, C., T. Laxmi, and S. P. Wani. 2006. “Institu- Johnson, B., and M. L. d’Apice Paez. 2000. “Alternative Sce- tional Learning and Change (ILAC) at ICRISAT: A Case narios for Agricultural Research.� In Planning Agricul- Study of the Tata-ICRISAT Project.� Global Theme on tural Research: A Sourcebook, edited by G. Gijsbers, W. Agroecosystems Report No. 19. Patancheru: Interna- Janssen, H. Hambly Odame, and G. Meijerink. The tional Crops Research Institute for the Semi-Arid Tropics Hague: International Service for National Agricultural (ICRISAT). Research (ISNAR). Spielman, D., and R. Birner. 2008. “How Innovative Is Your Miles, I. 1997. “Technology Foresight: Implications for Agriculture? Using Innovation Indicators and Bench- Social Science.� Centre for Research on Innovation and marks to Strengthen National Agricultural Innovation Competition Working Paper No. 3. Manchester: Univer- Systems.� Agriculture and Rural Development Discus- sity of Manchester. sion Paper No. 41. Washington, DC: World Bank. Popper, A., M. Keenan, I. Miles, M. Butter, and G. Sainz de Spielman, D., and D. Kelemework. 2009. “Measuring la Fuenta. 2007. Global Foresight Outlook 2007. European and Benchmarking Agricultural Innovation System Foresight Monitoring Network/European Foresight Net- Properties and Performance: Illustrations from work, http://www.foresight-network.eu/files/reports/ Ethiopia and Vietnam.� IFPRI Discussion Paper No. efmn_mapping_2007.pdf, accessed October 2011. 851. Washington, DC: International Food Policy Research Institute (IFPRI). Postrel, V. 1998. The Future and Its Enemies. New York: Simon and Schuster. Watts, J., R. Mackay, D. Horton, A. Hall, B. Douthwaite, R. Chambers, and A. Acosta. 2003. “Institutional Learn- Rajalahti, R., K. van der Heijden, W. Janssen, and E. Pehu. ing and Change: An Introduction.� ISNAR Discussion 2006. “Scenario Planning to Guide Long-Term Invest- Paper No. 03–10. The Hague: International Service for ments in Agricultural Science and Technology: Theory National Agricultural Research (ISNAR). and Practice from a Case Study on India.� Agriculture and Rural Development Discussion Paper No. 29. Wash- World Bank and IFPRI (International Food Policy ington, DC: World Bank. Research Institute). 2010. “Gender and Governance in Rural Services: Insights from India, Ghana, and Rikkonen, P., J. Kaivo-oja, and J. Aakkula. 2006. “Delphi Ethiopia.� Washington, DC. Expert Panels in the Scenario-based Strategic Planning of Agriculture.� Foresight 8 (1): 66–81. Rutten, H. W. 2001. “Science and Technology Foresight.� In Thematic Note 3 Planning Agricultural Research: A Sourcebook, edited by Clayton, A., K. K’nIfe, and A. Spencer. 2009. “Integrated G. Gijsbers, W. Janssen, H. Hambly Odame, and G. Mei- Assessment of Trade-Related Policies on Biological Diver- jerink. The Hague: International Service for National sity in the Agricultural Sector in Jamaica: Transition Agricultural Research (ISNAR). Strategies for the Sugar Industry in Jamaica.� Nairobi: Shepherd R. 2010. “Societal Attitudes to Different Food Pro- United Nations Environment Programme (UNEP) and duction Models: Biotechnology, GM, Organic, and National Environmental and Planning Agency of Jamaica. Extensification.� Science Review No. 12, Foresight Project http://www.unep.ch/etb/initiatives/pdf/Final%20Study% on Global Food and Farming Futures. London: Govern- 20Jamaica%2012%202009.pdf, accessed September 2011. ment Office for Science. 622 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Stewman, S., and D. Lincoln. 1981. “Recombinant DNA Douthwaite, B., and J. Ashby. 2005. “Innovation Histories: A Breakthroughs in Agriculture, Industry, and Medicine: A Method from Learning from Experience.� ILAC Brief No. Delphi Study.� Futures 13 (2): 128–40. 5. Rome: Institutional Learning and Change (ILAC) Ini- Wehrmeyer, W., A. Clayton, and K. Lum (eds.). 2002. “Fore- tiative. sighting for Development.� Greener Management Inter- Douthwaite, B., T. Kuby, E. van de Fliert, and S. Schulz. 2003. national 37. “Impact Pathway Evaluation: An Approach for Achieving Williams, R., and N. Markusson. 2002. “Knowledge and and Attributing Impact in Complex Systems.� Agricul- Environmental Innovations.� Paper presented at the 1st tural Systems 78: 243–65. BLUEPRINT workshop, January 23–24. Earl, S., F. Carden, and T. Smutylo. 2001. “Outcome Map- ping: Building Learning and Reflection into Develop- Thematic Note 4 ment Programs,� Ottawa: International Development Research Centre (IDRC). www.idrc.ca/en/ev-9330-201- Acosta, A., and B. Douthwaite. 2005. “Appreciative Inquiry: 1-DO_TOPIC.html, accessed September 2011. An Approach for Learning and Change Based on Our ECDPM (European Center for Development Policy Man- Own Best Practices.� ILAC Brief No. 6. Rome: Institu- agement). 2006. “Draft Study on Capacity Change and tional Learning and Change (ILAC) Initiative. Performance: Mapping of Approaches towards M&E of Adwera, A., J. Dijkman, K. Dorai, A. Hall, C. Kilelu, A. Capacity and Capacity Development.� Brussels. Kingiri, E. Madzudzo, H. Ojha, T. S. V. Reddy, R. George, A., and A. Bennett. 2005. Case Studies and Theory Sulaiman V, and U. Ugbe. 2011 (forthcoming). “Institu- Development in the Social Sciences. Oxford: Oxford Uni- tional Change and Innovation: A Framework and Pre- versity Press. liminary Analysis of RIU.� RIU Discussion Paper. UK: Guijt, I. (ed.) 2007. “Negotiated Learning: Collaborative Research Into Use (RIU). Monitoring for Forest Resource Management.� Washing- Asif, M. 2005. “Listening to the People in Poverty Project: A ton, DC: Resources for the Future. Manual for Life History Collection.� Unpublished. Hall, A., R. Sulaiman V, and P. Bezkorowajnyj. 2007. Biggs, S. D. 2006. “Learning from the Positive to Reduce “Reframing Technical Change: Livestock Fodder Rural Poverty: Institutional Innovations in Agricultural Scarcity Revisited as Innovation Capacity Scarcity.� and Natural Resources Research and Development.� Nairobi: International Livestock Research Institute Paper prepared for the Impact Assessment Workshop (ILRI), International Crops Research Institute for the organized by the CGIAR System-Wide Program on Par- Semi-Arid Tropics (ICISAT), Consultative Group on ticipatory Research and Gender Analysis for Technol- International Agricultural Research (CGIAR) Sys- ogy Development and Institutional Innovation and the temwide Livestock Programme, International Institute International Maize and Wheat Improvement Center of Tropical Agriculture (IITA), and United Nations Uni- (CIMMYT), October 19–21, 2005, Texcoco, Mexico. versity–Maastricht Economics and Social Research Colfer, C. J. P. (ed.) 2005. The Complex Forest: Communities, Institute on Innovation and Technology (UNU- Uncertainty, and Adaptive Collaborative Management. MERIT). Washington, DC: Resources for the Future. IDRC (International Development Research Centre). “Eval- CoS-SIS (Convergence of Science–Strengthening Agricultural uation for Development.� http://www.idrc.ca/en/ Innovation Systems). CoS-SIS. 2009. “Revised Proposal for ev-26586-201-1-DO_TOPIC.html, accessed March 2009. CoS-SIS Research Design, March 2, 2009.� Draft Working IFAD (International Fund for Agricultural Development). Paper No. 3. CoS-SIS, http://cos-sis.org/pdf/CoS-SIS% 2002. “Managing for Impact in Rural Development: A 20VERSION%20Res%20Design%20(March%202009) Guide for Project M&E.� Rome. .pdf, accessed September 2011. Kammili, T. 2011. “A Briefing Paper on Monitoring and Davies, R. J. 1996. “An Evolutionary Approach to Evaluation Practice for Rural/Agricultural Innovation: Facilitating Organizational Learning: An Experiment by How Do You Measure the Impact of Innovation Ini- the Christian Commission for Development in tiatives?� LINK Policy Resources on Rural Innovation. Bangladesh.� Monitoring and Development News, Hyderabad: Learning, Innovation, and Knowledge http://www.mande.co.uk/docs/ccdb.htm, accessed Sep- (LINK). tember 2011. Patton, M. Q. 2008. “State of the Art in Measuring Develop- Davies, R., and J. Dart. 2005. “The ‘Most Significant Change’ ment Assistance.� Presentation at the World Bank Inde- (MSC) Technique: A Guide to Its Use.� Monitoring and pendent Evaluation Group Conference, Measuring Development News, www.mande.co.uk/docs/MSCGuide Development Effectiveness: Progress and Constraints, .pdf, accessed September 2011. April 10, Washington, DC. MODULE 7: NOTES, REFERENCES AND FURTHER READING 623 Salomon, M., and P. Engel. 1997. “Facilitating Innovation Douthwaite, B., and J. Ashby. 2005. “Innovation Histories: for Development: A RAAKS Resource Box.� Amsterdam: A Method from Learning from Experience.� ILAC Brief Royal Tropical Institute (KIT). No. 5. Rome: Institutional Learning and Change (ILAC) Shambu Prasad, C., A. Hall, and L. Thummuru. 2006. Initiative. “Engaging Scientists through Institutional Histories.� Douthwaite, B., T. Kuby, E. van de Fliert, and S. Schulz. 2003. ILAC Brief No. 14. Rome: Institutional Learning and “Impact Pathway Evaluation: An Approach for Achieving Change (ILAC) Initiative. and Attributing Impact in Complex Systems.� Agricul- Smutylo, T. 2005. “Outcome Mapping: A Method for Track- tural Systems 78: 243–65. ing Behavioural Changes in Development Programs.� ECDPM (European Center for Development Policy Man- ILAC Brief No. 7. Rome: Institutional Learning and agement). 2006. “Draft Study on Capacity Change and Change (ILAC) Initiative. Performance: Mapping of Approaches towards M&E of van Mierlo, B., B. Regeer, M. van Amstel, M. Arkesteijn, Capacity and Capacity Development.� Brussels. V. Beekman, J. Bunders, T. de Cock Buning, B. Elzen, Evenson, R. E., P. Waggoner, and V. W. Ruttan. 1979. Economic A. Hoes, and C. Leeuwis. 2010. “Reflexive Monitoring in Benefits from Research: An Example from Agriculture. New Action: A Guide for Monitoring Systems Innovation Proj- Haven: Economic Growth Center, Yale University. ects. Wageningen: Communication and Innovation Stud- George, A., and A. Bennett. 2005. Case Studies and Theory ies, Wageningen University and Research Centre (WUR), Development in the Social Sciences. Oxford: Oxford Athena Institute, and VU University Amsterdam. University Press. Walters, B. B., and A. P. Vayda. 2009. “Event Ecology, Causal Hall, A., R. Sulaiman, N. Clark, and B. Yoganand. 2003. Historical Analysis, and Human-Environment Research.� “From Measuring Impact to Learning Institutional Les- Annals of the Association of American Geographers 99 (3): sons: An Innovation Systems Perspective on Improving 534–53. the Management of International Agricultural Research.� Winter, R. 1989. Learning from Experience: Principles and Agricultural Systems 78 (2): 213–41. Practice in Action Research. Philadelphia: Falmer Press. Horton, D., and R. Mackay. 2003. “Using Evaluation to World Bank. 2004. Monitoring and Evaluation: Some Tools, Enhance Institutional Learning and Change: Recent Methods and Approaches. Washington, DC. Experiences with Agricultural Research and Develop- ment.� Agricultural Systems 78 (2): 127–42. Thematic Note 5 Horton, D., P. Ballantyne, W. Peterson, B. Uribe, D. Gapasin, and K. Sheridan (eds.) 1993. Monitoring and Evaluating Alston, J. M., G. W. Norton. and P. G. Pardey. 1995. Science Agricultural Research, A Sourcebook. Wallingford: CAB under Scarcity: Principles and Practice for Agricultural International and International Service for National Research Evaluation and Priority Setting. Ithaca: Cornell Agricultural Research (ISNAR). University Press. IFAD (International Fund for Agricultural Development). Asif, M. 2005. “Listening to the People in Poverty: A Manual 2002. “Managing for Impact in Rural Development: A for Life History Collection.� Unpublished, http://www Guide for Project M&E.� Rome. .dgroups.org/groups/pelican/docs/LPP_2005.doc?ois=no. ISNAR (International Service for National Agricultural CoS-SIS (Convergence of Science–Strengthening Agricul- Research). 2003. “Monitoring, Evaluation, and Impact tural Innovation Systems). 2009. “Revised Proposal for Assessment of R&D Investments in Agriculture.� The Cos-SIS Research Design, March 2, 2009.� Draft Working Hague. Paper No. 3. CoS-SIS, http://cos-sis.org/pdf/CoS- SIS%20VERSION%20Res%20Design%20(March%2020 Kammili, T. 2011. “A Briefing Paper on Monitoring and Eval- 09).pdf, accessed September 2011. uation Practice for Rural/Agricultural Innovation: How CPR, CRISP, and LINK (Centre for Policy Research, Centre Do You Measure the Impact of Innovation Initiatives?� for Research on Innovation and Science Policy, and LINK Policy Resources on Rural Innovation. Hyderabad: Learning, Innovation, and Knowledge). 2008. “Report on Learning, Innovation, and Knowledge (LINK). CPR-CRISP-LINK Workshop on Benchmarking Rural Kelly, T., J. Ryan, and H. Gregersen. 2008. “Enhancing Ex Innovation Capacity, August 2008.� Ottawa: Interna- Post Impact Assessment of Agricultural Research: The tional Development Research Centre (IDRC). CGIAR Experience.� Research Evaluation 17 (3): 201–12. Davies, R., and J. Dart. 2005. “The ‘Most Significant Change’ Kraemer-Mbula, E. 2011 (forthcoming). “Rethinking the (MSC) Technique: A Guide to Its Use.� Monitoring and Benchmarking of Agricultural and Rural Innovation.� Development News, www.mande.co.uk/docs/MSCGuide LINK Policy Resources on Rural Innovation. Hyderabad: .pdf, accessed September 2011. Learning, Innovation, and Knowledge (LINK). 624 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Maredia, M., D. Byerlee, and J. Anderson. 2000. “Ex Post White, H. 2009a. “Some Reflections on Current Debates in Evaluations of Economic Impacts of Agricultural Impact Evaluation.� 3ie Working Paper No. 1. New Delhi: Research Programs: A Tour of Good Practice.� Paper pre- International Initiative for Impact Evaluation. sented at the workshop on The Future of Impact Assess- White, H. 2009b. “Theory-based Impact Evaluation: Princi- ment in the CGIAR: Needs, Constraints, and Options, ples and Practice.� 3ie Working Paper No. 3. New Delhi: May 3–5, Rome. International Initiative for Impact Evaluation. NONIE (Network of Networks on Impact Evaluation), F. World Bank. 2004. Monitoring and Evaluation: Some Tools, Leeuw, and J. Vaessen. 2009. “Impact Evaluations and Methods, and Approaches. Washington, DC. Development: NONIE Guidance on Impact Evaluation.� Washington, DC: NONIE. http://siteresources.world- bank.org/EXTOED/Resources/nonie_guidance.pdf, Innovative Activity Profile 1 accessed September 2011. Arnold, E., and M. Bell. 2001. “Some New Ideas about Pardey, P. G., and N. M. Beintema. 2001. “Slow Magic: Agri- Research for Development.� In Danida, Partnerships at cultural R&D a Century after Mendel.� IFPRI Food Pol- the Leading Edge: A Danish View for Knowledge, Research, icy Report. Washington, DC: International Food Policy and Development. Copenhagen: The Commission on Research Institute (IFPRI). Development-related Research Funded by Danida, Min- Patton, M. Q. 2008. “State of the Art in Measuring Develop- istry of Foreign Affairs. ment Assistance.� Presentation at the World Bank Inde- pendent Evaluation Group Conference, Measuring Hinchcliffe, D. 2010. “The Social Enterprise: A Case for Dis- Development Effectiveness: Progress and Constraints, ruptive Transformation.� Dachis Group, http://www April 10, Washington, DC. .dachisgroup.com/2010/04/a-case-for-disruptive- transformation/, accessed September 2011. Savedoff, W., R. Levine, and N. Birdsall. 2006. “When Will We Ever Learn? Improving Lives through Impact Evaluation.� Joffe, S., D. Suale, H. Jalloh, F. M’Cormack, and F. Johnston. Report of the Evaluation Gap Working Group. Washing- 2008. “RIU Strategy for Sierra Leone.� Edinburgh: ton, DC: Center for Global Development (CGD). Research Into Use (RIU). http://www.dfid.gov.uk/r4d/ PDF/Outputs/ResearchIntoUse/riu08sl-countrystrategy Shambu Prasad, C., A. Hall, and L. Thummuru. 2006. .pdf, accessed September 2011. “Engaging Scientists through Institutional Histories.� ILAC Brief No. 14. Rome: Institutional Learning and Kanyarukiga, S., A. Barnett, V. Rusharza, C. Zaninka, D. Change (ILAC) Initiative. Cownie, S. Joffe, V. Mwesigwa, J. Espasa, and M-A. Spielman, D., and R. Birner. 2008. “How Innovative Is Your Kamikazi. 2007. “RIU Country Strategy in Rwanda.� Agriculture? Using Innovation Indicators and Bench- Edinburgh: Research Into Use (RIU). http://www marks to Strengthen National Agricultural Innovation .researchintouse.com/resources/riu07rw-countrystrategy Systems.� Agriculture and Rural Development Discus- .pdf, accessed September 2011. sion Paper No. 41. Washington, DC: World Bank. Maconachie, R. 2008. “New Agricultural Frontiers in Post- Walters, B. B., and A. P. Vayda. 2009. “Event Ecology, Causal conflict Sierra Leone? Exploring Institutional Chal- Historical Analysis, and Human-Environment Research.� lenges for Wetland Management in the Eastern Annals of the Association of American Geographers 99 (3): Province.� Working paper. Manchester: University of 534–53. Manchester. Watson, J. D. (ed.) 2003. “International Conference on “National Innovation Coalition,� Research Into Use, Impacts of Agricultural Research and Development: Why http://www.researchintouse.com/prog r ammes/ Has Impact Assessment Research Not Made More of a riu-sierra-leone/riu-sl31natcoalition.html, accessed Difference?� Mexico DF: International Maize and Wheat September 2011. Information on PAID in Sierra Leone. Improvement Center (CIMMYT). “RIU Sierra Leone.� Research Into Use, http://www Watts, J., D. Horton, B. Douthwaite, R. La Rovere. G. Thiele, S. .researchintouse.com/programmes/riu-sierra-leone/ Prasad, and C. Staver. 2007. “Transforming Impact Assess- index.html, accessed September 2011. Background on ment: Beginning the Quiet Revolution of Institutional RIU program in Sierra Leone. Learning and Change.� Experimental Agriculture 44: 21–35. “The Birth of the John Lewis State: Public Sector Workers Watts J., R. Mackay, D. Horton A. Hall, B. Douthwaite, R. Urged to Set Up Co-operatives,� The Daily Mail, Novem- Chambers, and A. Acosta. 2003. “Institutional Learning ber 18, 2010. http://www.dailymail.co.uk/news/ and Change: An Introduction.� ISNAR Discussion Paper article-1330742/John-Lewis-state-Public-sector-workers- No. 03–10. The Hague: International Service for National urged-set-operatives.html?ito=feeds-newsxml, accessed Agricultural Research (ISNAR). September 2011. MODULE 7: NOTES, REFERENCES AND FURTHER READING 625 Innovative Activity Profile 2 Innovative Activity Profile 3 Aberman, N., E. Schiffer, M. Johnson, and V. Oboh. 2010. “A Quest for the Perfect Potato.� 2008. Newsweek, July 25. “Mapping the Policy Process in Nigeria: Examining Daily Beast, http://www.thedailybeast.com/newsweek/ Linkages between Research and Policy.� IFPRI Discussion 2008/07/25/a-quest-for-the-perfect-potato.html, Paper No. 1000. Washington, DC: International Food accessed September 2011. Policy Research Institute (IFPRI). Alderman, H., J. Hoddinott, L. Haddad, and C. Udry. 2003. Grimble, R., and K. Wellard. 1997. “Stakeholder Method- “Gender Differentials in Farm Productivity.� FCND ologies in Natural Resource Management: A Review of Discussion Paper No. 6. Washington, DC: International Principles, Contexts, Experiences, and Opportunities.� Food Policy Research Institute (IFPRI). Agricultural Systems 55 (2): 173–93. Bebbington, A., and E. Rotondo. 2010. “Informe de la Hanneman, R. A., and M. Riddle. 2005. Introduction to evaluación externa de la fase 3 de Papa Andina.� Lima: Social Network Methods. Riverside: University of Califor- International Potato Center (CIP) and Papa Andina. nia, Riverside. http://faculty.ucr.edu/~hanneman/, Bernet, T., A. Devaux, G. Thiele, G. López, C. Velasco, K. accessed September 2011. Manrique, and M. Ordinola. 2008. “The Participatory Hauck, J., and E. Youkhana. 2008. “Claims and Realities of Market Chain Approach: Stimulating Pro-poor Market- Community-based Water Resource Management: A Case Chain Innovation.� Rome: Institutional Learning and Study of Rural Fisheries in Ghana.� In Natural Resources Change (ILAC). in Ghana, edited by D. M. Nanang and T. K. Nunifu. Bernet, T., G. Thiele, and T. Zschocke. 2006. “Participa- Hauppauge, NY: Nova Science. tory Market Chain Approach: User Guide.� Lima: Inter- Kindon, S., R. Pain, and M. Kesby (eds.). 2007. Participa- national Potato Center (CIP) and Papa Andina. tory and Action Research Approaches and Methods: Con- http://www.cipotato.org/publications/pdf/003296.pdf, necting People, Participation, and Place. New York: accessed September 2011. Routledge. Devaux, A., J. Andrade-Piedra, D. Horton, M. Ordinola, G. Schiffer, E. 2007. “The Power Mapping Tool: A Method for Thiele, A. Thomann, and C. Velasco. 2010. “Brokering the Empirical Research of Power Relations.� IFPRI Innovation for Sustainable Development: The Papa And- Discussion Paper No. 703. Washington, DC: Interna- ina Case.� ILAC Working Paper No. 12. Rome: Institu- tional Food Policy Research Institute (IFPRI). tional Learning and Change (ILAC). Schiffer, E., and J. Hauck. 2010. “Net-Map: Collecting Social Devaux, A., D. Horton, C. Velasco, G. Thiele, G. López, T. Network Data and Facilitating Network Learning Bernet, I. Reinoso, and M. Ordinola. 2009. “Collective through Participatory Influence Network Mapping.� Action for Market Chain Innovation in the Andes.� Food Field Methods 22 (3): 231–49. Policy 34: 31–38. Schiffer, E., C. Narrod, and K. von Grebmer. 2008. “The Role Devaux, A., C. Velasco, G. López,, T. Bernet, M. Ordinola, H. of Information Networks in Communicating and Pico, G. Thiele, and D. Horton. 2007. “Collective Action Responding to HPAI Outbreaks.� HPAI Research Brief for Innovation and Small Farmer Market Access: The No. 5. Pro-Poor HPAI Risk Reduction, http://www.hpai- Papa Andina Experience.� CAPRi Working Paper No. 68. research.net/docs/Research_briefs/IFPRI- Washington, DC: International Food Policy Research ILRI/IFPRI_ILRI_rbr05.pdf, accessed September 2011. Institute (IFPRI). Spielman, D., and R. Birner. 2008. “How Innovative Is Your Engel, P., and M. Salomon. 2003. “Facilitating Innovation Agriculture? Using Innovation Indicators and Bench- for Development: A RAAKS Resource Box.� Amsterdam: marks to Strengthen National Agricultural Innovation Royal Topical Institute (KIT). Systems.� Agriculture and Rural Development Discus- Horton, D. 2008. “Facilitating Pro-poor Market Chain sion Paper No. 41. Washington, DC: World Bank. Innovation: An Assessment of the Participatory Spielman, D., and D. Kelemework. 2009. “Measuring and Market Chain Approach in Uganda.� Social Sciences Benchmarking Agricultural Innovation System Proper- Working Paper No.2008-1. Lima: International Potato ties and Performance: Illustrations from Ethiopia and Center (CIP). Vietnam.� IFPRI Discussion Paper No. 851. Washington, Horton, D., B. Akello, L. Aliguma, T. Bernet, T. Devaux, B. DC: International Food Policy Research Institute Lemaga, D. Magala, S. Mayanja, I. Sekitto, G. Thiele, and (IFPRI). C. Velasco. 2010. “Developing Capacity for Agricultural Weber, M. 1922. Economy and Society: An Outline of Market Chain Innovation: Experience with the ‘PMCA’ Interpretive Sociology. 1978 ed. Berkley: University of in Uganda.� Journal of International Development 22 (3): California Press. 367–89. 626 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Kaganzi, B., S. Ferris, J. Barham, A. Abenayko, P. Sanginga, Innovative Activity Profile 5 and J. Njuki. 2009. “Sustaining Linkages to High-Value World Bank. 2011a. “Chile’s Agricultural Innovation Sys- Markets through Collective Action in Uganda.� Food tem: An Action Plan towards 2030.� Unpublished inter- Policy 34: 23–30. nal report, Washington, DC. Mapstone, N. 2010. “Old Roots Tap New Customers.� Finan- ———. 2011b. “Towards a Vision for Agricultural Innova- cial Times, September 27. http://www.ft.com/intl/cms/s/ tion in Chile in 2030.� Unpublished internal report, 0/fd19a3fa-ca7b-11df-a860-00144feab49a.html#axzz1 Washington, DC. YoAqM4QP, accessed September 2011. Practical Action. 2010. Lessons and insights in Participatory Market Chain Analysis (PMCA): An action-research of Innovative Activity Profile 6 PMCA applications in Bangladesh, Sri Lanka, Sudan, Peru, and Zimbabwe. Unpublished. http://practicalac- Biggs, S. D., and H. Matseart. 1999. “An Actor-Oriented tion.org/docs/ia2/DFID-PCMA_report_rev6.pdf, Approach for Strengthening Research and Development accessed September 2011. Capabilities in Natural Resource Systems.� Public Admin- Research Into Use. 2010. “New Market Chain Approach istration and Development 19: 231–62. Yields Fast Results: Participatory Market Chain Hall, A., L. K. Mytelka, and B. Oyelaran-Oyeyinka. 2006. Approach.� RIU, http://www.researchintouse.com/nrk/ “Concepts and Guidelines for Diagnostic Assessments of RIUinfo/PF/CPH01.htm#L5, accessed March 2011. Agricultural Innovation Capacity.� UNU-MERIT World Bank. 2008. Gender in Agriculture Sourcebook. Wash- Working Paper No. 2006-017. Maastricht: United ington, DC: Food and Agriculture Organization (FAO), Nations University–Maastricht Economics and Social World Bank, and International Fund for Agricultural Research Institute on Innovation and Technology Development (IFAD). (UNU-MERIT). Hall, A., R. Sulaiman V., and P. Bezkorowajnyj. 2008. “Reframing Technical Change: Livestock Fodder Innovative Activity Profile 4 Scarcity Revisited as Innovation Capacity Scarcity. Part Ogilvy, J., and P. Schwartz. 1998. “Plotting Your Scenarios: 2: A Framework for Analysis.� UNU-MERIT Working Global Business Network.� In Learning from the Future, Paper No. 2008-003. Maastricht: United Nations Uni- edited by L. Fahey and R. Randall. Chichester, UK: John versity–Maastricht Economics and Social Research Wiley. Institute on Innovation and Technology (UNU- MERIT). Rajalahti, R., W. Janssen, and E. Pehu. 2007. “Scenario Plan- ning to Guide Long-term Investments in Agricultural World Bank. 2006. “Enhancing Agricultural Innovation: Science and Technology: Theory and Practice from a How to Go Beyond the Strengthening of Research Sys- Case Study on India.� Agriculture and Rural Develop- tems.� Washington, DC. ment Note No. 28. Washington, DC: World Bank. Rajalahti, R., K. van der Heijden, W. Janssen, and E. Pehu. 2006. “Scenario Planning to Guide Long-term Invest- Innovative Activity Profile 7 ments in Agricultural Science and Technology: Theory Adwera, A., J. Dijkman, K. Dorai, A. Hall, C. Kilelu, A. and Practice from a Case Study on India.� Agriculture Kingiri, E. Madzudzo, H. Ojha, T. S. V. Reddy, R. and Rural Development Discussion Paper No. 29. Wash- Sulaiman V, and U. Ugbe. 2012 (forthcoming). “Institu- ington, DC: World Bank. tional Change and Innovation: A Framework and Pre- Rajalahti, R., J. Woelcke, and E. Pehu. 2005. “Development of liminary Analysis of RIU.� RIU Discussion Paper. UK: Research Systems to Support the Changing Agricultural Research Into Use (RIU). Sector.� Proceedings. Agriculture and Rural Development Hall, A., J. Dijkman, and R. Sulaiman V. 2010. “Research Into Discussion Paper No. 14. Washington, DC: World Bank. Use: Investigating the Relationship between Agricultural van der Heijden, K. 1996. Scenarios: The Art of Strategic Con- Research and Innovation.� RIU Discussion Paper No. versation. Chichester, UK: John Wiley. 2010-01. Edinburgh: Research Into Use (RIU). ———. 2005. Scenarios: The Art of Strategic Conversation. http://www.researchintouse.com/learning/learning40dis 2nd edition. Chichester, UK: John Wiley. cussionpaper01.html, accessed September 2011. World Bank. 2006. “Enhancing Agricultural Innovation: White, H. 2009a. “Some Reflections on Current Debates in How to Go Beyond Strengthening Research Systems.� Impact Evaluation.� 3ie Working Paper No. 1. New Delhi: Washington, DC. International Initiative for Impact Evaluation. MODULE 7: NOTES, REFERENCES AND FURTHER READING 627 White, H. 2009b. “Theory-based Impact Evaluation: Princi- DG Research, is part of a series of initiatives to provide a ples and Practice.� 3ie Working Paper No. 3. New Delhi: knowledge sharing platform for policy makers in the EU. International Initiative for Impact Evaluation. The Foresight for Development initiative (http://www .foresightfordevelopment.org/) is piloted in Africa by the South Africa Node of the Millennium Project, with sup- RESOURCES port from the Rockefeller Foundation. Module 7 Overview The Global Food and Farming Futures 2011 Foresight Project from the UK Departments for Environment, The CGIAR’s Institutional Learning and Change Program Food and Rural Affairs (Defra) and International Devel- (http://www.cgiar-ilac.org) brings together a group of opment (DFID) involved around 400 leading experts and national and international partners who are committed to stakeholders from about 35 countries across the world. strengthening the contributions of collaborative applied More than 100 peer-reviewed evidence papers commis- R&D programs to pro-poor agricultural innovation. sioned by the project are available at http://www Knowledge Management for Development (http://www .bis.gov.uk/foresight/our-work/projects/published- .km4dev.org/) is an internet portal and discussion group projects/global-food-and-farming-futures. on knowledge sharing and knowledge issues, including iKnow (http://wiwe.iknowfutures.eu/) is one of six Blue Sky reflective management, action-learning, and network foresight research projects funded by the European development. Commission’s Seventh Framework Programme for At the United Nations University–Maastricht Economic and Research and Technology Development (FP7) under the Social Research and Training Centre, LINK (Learning, Socio-economic Sciences and Humanities (SSH) theme. INnovation, Knowledge) (http://www.innovationstud- The project aims to interconnect knowledge on issues ies.org/) provides policy-relevant resources on innova- and developments potentially shaking or shaping the tion for a new rural economy through concepts, lessons, future of STI in Europe and the world. and guidelines. Millennia2015 Foresighting Women’s Life in the The Pelican Initiative (http://dgroups.org/Community Knowledge Society (http://www.millennia2015.org/) .aspx?c=3c4b8b5b-d151-4c38-9e7b-7a8a1a456f20) is an examines issues that will strongly influence women’s online community of practice for monitoring and evalu- life in the knowledge society in every country in the ation (M&E) and participatory inquiry. future. It also examines responsibilities with regard ODI’s Research and Policy in Development (RAPID) pro- to how these issues evolve at a global level. The fore- gram (http://www.odi.org.uk/Rapid/Index.html) aims to sighting exercise has developed a methodology and is improve the uses of research and evidence in development analyzing 37 variables to build an action plan to policy and practice through research, advice, and debate. empower women. Science and Technology Foresighting (http://www.tech- foresight.ca/tools.html) is an online community of Thematic Note 3 practice offering tools, templates, and links to various The European Foresight Platform (http://www.foresight- foresighting and scenario planning initiatives around platform.eu/), financed by the European Commission the world. 628 AGRICULTURAL INNOVATION SYSTEMS: AN INVESTMENT SOURCEBOOK Glossary Action-research. An iterative process of diagnosis, planning, leges of agriculture within comprehensive universities) in action, evaluation, and reflection. addition to the polytechnics, institutes, or colleges that pre- Adaptive management. “A structured, iterative process of pare technicians at the diploma level (postsecondary, sub- optimal decision making in the face of uncertainty, with degree level). This second category of education, often an aim to reducing uncertainty over time via system termed agricultural technical–vocational education and monitoring� (http://en.wikipedia.org/wiki/Adaptive_ training (ATVET), technical–vocational education and management). Adaptive management functions as a tool training (TVET), or vocational education and training for learning as well as change within a system: As new (VET), prepares technicians in a variety of specializations information emerges, the system uses it (actively or pas- in agriculture subsectors. Some secondary schools offer sively) to change its operations and improve outcomes over agriculture as an elective. Agricultural training, frequently the long term. The management process includes present in training centers or training institutes, is offered to pub- and future stakeholders, bases iterative decision making on lic employees as in-service training and/or to farmers as the results of monitoring (learning), and regards uncer- farmer training. Although the various elements in the AET tainty as a means of improving understanding. delivery chain are often referred to collectively as a “sys- Advisory services. Agricultural advisory services can be tem,� they do not necessarily form a robust system in which defined as the entire set of organizations that support communication and feedback flow between institutions and facilitate people engaged in agricultural production and allow for continuous improvements. Many countries to solve problems and to obtain information, skills, and divide responsibility for AET between the ministries of technologies to improve their livelihoods and well-being. agriculture and education. See also agricultural extension. Agricultural extension. The entire set of organizations that Agricultural education and learning (AEL). A variation on support and facilitate people engaged in agricultural agricultural education and training that reflects a more production to solve problems and to obtain information, student-centered approach to formal programs. skills, and technologies to improve their livelihoods and Agricultural education and training (AET). Organized pro- well-being. grams and activities that serve the need for information, Agricultural knowledge and information system (AKIS). A sys- knowledge, and skills among those who work in various tem that links people and institutions to promote mutual parts of the agriculture sector and the broader rural space. learning and generate, share, and utilize agriculture- An AET system typically consists of tertiary educational related technology, knowledge, and information. The sys- institutions (agricultural universities or faculties and col- tem integrates farmers, agricultural educators, researchers, 629 and extensionists to harness knowledge and information clients in setting priorities and financing, executing, and from various sources for improved livelihoods. Farmers evaluating research. See matching grants. are at the heart of this knowledge triangle. Contracting. When one organization contracts with another Agricultural innovation system (AIS). A network of organi- to perform a function or service. Contracting in occurs zations, enterprises, and individuals focused on bringing when research, extension, and other government agricul- new products, new processes, and new forms of organi- tural services provide services for an external group, such zation into economic use, together with the institutions as a nongovernmental organization or a private organi- and policies that affect their behavior and performance. zation. Contracting out is when government hires an Agricultural technical–vocational education and training external organization to perform services. (ATVET). See agricultural education and training. Cooperative extension. An extension model developed in the Business development services (BDS). A range of nonfinan- U.S. university system, in which universities, linked to the cial services provided by public and private suppliers to extension system, produce research results that are dis- entrepreneurs, who use them to operate more efficiently seminated to farmers. and expand their businesses. BDSs can include training, Cost sharing. When users of services pay at least a partial consultancy, and advisory services, marketing assistance, amount of the cost. information, technology development and transfer, and Decentralization. Moving responsibility and/or funding of business linkage promotion. public governmental services to local administrative lev- Business incubators. Programs designed to accelerate the suc- els such as districts. Decentralization can take many cessful development of entrepreneurial activities through forms, such as deconcentration (accountability remains an array of business support resources and services, within the Department of Agriculture), devolution to developed and orchestrated by incubator management local governments (accountability is transferred from and offered both in the incubator and through its net- central to locally elected governments), or delegation to work of contacts. Incubators vary in the way they deliver semiautonomous services. their services, in their organizational structure, and in the Demand articulation. Identifying the needs of different user types of clients they serve. groups for the knowledge and information produced by Central nodes. In the terminology of social network analysis, agricultural research organizations or the services well-connected partners who pull promising new entrants (credit, advice) provided by other types of organizations. into networks and collaborate with a wide assortment of Downstream research. Usually refers to research that adapts partners, exposing them to more experiences, different a technology (agronomic practice, new variety) to a par- competencies, and added opportunities. By linking clus- ticular country’s or locality’s needs. Sometimes called ters of network actors, the central nodes facilitate flows applied or adaptive research. of information and resources. Innovation brokers are par- Economies of scale. In agricultural research, economies of ticularly prepared to become central nodes. scale occur when the cost per unit of research output falls Change agent. See innovation broker. with the number of units of output produced, usually Commercialization or commercial services. A focus in the through better use of major fixed investment or special- agricultural research and extension system on commer- ized skills. cial crops or the provision of services for specific cash Economies of scope. In agricultural research, economies of crops such as tobacco or cotton. scope occur when the cost of a desired output falls with Commodity extension. An extension system focused on one an increase in the number of different research outputs cash crop, for which advice and inputs are provided by being produced. These gains occur when there is cross- one institution. commodity or cross-disciplinary learning as an external Competitive research grants (CRGs). Grants that fund economy. research based on national competition and scientific Embedded services. Companies provide information with peer review. Transparent procedures are used to select the inputs they sell or other products they market. the proposals that will receive funding, based on rigorous Enabling environment. The environment (political, regula- criteria. Well-designed grants can bring greater contesta- tory, institutional, economic, and social) that supports, bility to the innovation process; the funding may not promotes, and sustains a given outcome. For agricultural necessarily flow to the traditional recipients. Grants can innovation, an enabling environment comprises those promote research partnerships, leverage research factors that influence agricultural innovation positively resources, and help to develop a more efficient, demand- but are controlled by policy domains other than agricul- driven, and pluralistic research system by involving tural innovation policy itself. 630 GLOSSARY Farm business schools. Schools that facilitate learning on that will allow it to remain in business for an indefinite production, management, business finance, and market- period. ing skills. Farm business schools and cooperatives have Governance. The systems and practices that governments an important learning role in promoting entrepreneur- use to set priorities and agendas, design and implement ship among farmers, but initially they require external policies, and obtain knowledge about their impacts. facilitation. Also refers to any systems and practices performing Farmer organization or producer organization. An organiza- the same function at the subnational level (provincial tion constituted by farmers who seek solutions to produc- research institutes, input subsidy programs) and in tion or commercial problems. Some agricultural services smaller institutions (farmer organizations, irrigation focus on providing extension, conducting research, or schemes). offering other services through these organizations. Green revolution. The enormous increases in cereal produc- Farmer field school. A participatory method of learning, tion resulting from the adoption of high-yielding wheat, technology development, and dissemination based on maize, and rice varieties, grown under irrigation with adult-learning principles such as experiential learning. fertilizer and other inputs, across large areas of Asia and Typically groups of 20–25 farmers meet weekly in an Latin America from the 1960s to 1980s. informal setting on their farms with a facilitator. The Group-based approach. Extension programs that work with defining characteristics of farmer field schools include farmer groups or other common interest groups. discovery learning, farmer experimentation, and group Industry clusters. Agglomerations of strongly interdependent action. This interactive, practical training method firms (including specialized suppliers) linked to each other empowers farmers to be their own technical experts on in a value-adding production chain, service providers, and major aspects of their farming systems. Farmers are facil- associated institutions in a particular field. Some clusters itated to conduct their own research, diagnose and test encompass strategic alliances with universities, research problems, devise solutions, and disseminate their learn- institutes, knowledge-intensive business services, bridging ing to others. institutions (brokers, consultants), and customers. Clus- Farmer field school networks. Networks of informal or for- ter-based approaches for business development and mal groupings with a common interest that draw their innovation have increased agricultural productivity, membership from all the farmer field schools within a innovation, and business formation. given geographic or administrative boundary. Information and communications technology (ICT). The wide Farming systems research and extension (FSRE). System of and growing array of modern communications technol- research and extension that is focused on understanding ogy such as the Internet, e-mail, electronic databases, the farming systems of small-scale farmers through mobile phones and telephones, computers, personal digi- applied, multidisciplinary, on-farm, farmer-centered tal devices, radio-frequency infrared devices, and the research. related infrastructure to support it (wireless networks, Fee for service. The provision of services for a cost by gov- fiber-optic cable, and so on). ernment, nongovernmental, or private organizations. Innovation. An invention that is used for the first time in a Genetically engineered. A genetically engineered or modified product that reaches the market or produces a change in organism in which the genetic material has been trans- a social process. An innovation that is well known else- formed using the techniques of genetic engineering. where may still be regarded as an innovation if it is new These techniques combine DNA molecules from different locally. sources into one molecule to create a new set of genes. Innovation brokers. Teams of specialists that combine a This recombined DNA is then transferred into an organ- strong background in science with knowledge of busi- ism, giving it modified or novel genes. Transgenic organ- ness and commercialization and/or the creation of inno- isms, a subset of genetically modified organisms, carry vation networks. Innovation brokers are also known as DNA that originated in a different species. Examples change agents or technology brokers. include cotton that has been genetically transformed to Innovation capabilities. The skills to build and integrate resist a particular herbicide. Many countries strictly con- internal and external resources to address problems or trol the production, use, export, and import of genetically take advantage of opportunities. Innovation capabilities modified plants and animals. (Based on http://en.wiki depend not only on innovative individuals but also on pedia.org/wiki/Genetically_modified_organism.) internal features of an organization, especially incentives, Going concern. An enterprise that is expected to generate cultures, organizational spaces for experimentation, sufficient revenues and manage its resources in a manner coordinating structures, and collective action. GLOSSARY 631 Innovation-led growth. Growth based on innovative tech- information services, technology, and business linkage nologies, processes, products, markets, or organizational information. Also referred to as value-chain oriented arrangements rather than on large additional uses of nat- services, market-oriented agricultural advisory services, ural resources. and marketing extension. Innovation network. A diverse group of actors that voluntar- Marketing chain. Modern marketing chains for agricultural ily contribute knowledge and other resources (such as crops have many features of buyer-driven value chains: money, equipment, and land) to develop jointly or an actor close to consumers (usually a supermarket or improve a social or economic process or product. Inno- broker) dominates, organizing many producers and vation networks are a special form of organization with intermediaries, deciding who participates in the chain, a nonhierarchical structure, a collaboration-based cul- overseeing all the links from the farm to the shelf, ture, consensus-based coordination (because members defining the nature of the interactions and commercial are free to leave the network at any time), usually no legal conditions, and setting quality and safety standards. personality (especially in their early stages), and often Other important features of modern marketing chains relatively fuzzy objectives (such as improving the man- are that they focus on marketing specific products (such agement of natural resources). They evolve with market as vegetables, fruits, meat), access to the chain is highly opportunities and the technologies they develop. Inno- restricted, verbal contracts based on trust are common vation networks differ from farmer organizations in that but informal transactions rare, and technologies are farmer organizations have a homogeneous membership generated mostly in developed countries and imposed and more formal, stable relations. Innovation networks by the leading agent. Only farmers with strong capa- differ from value chains in that the latter are more stable, bilities for innovation (especially entrepreneurship, are focused on delivering a product or service, and are physical and financial resources, and social capital) can coordinated by a central actor. Innovation networks are survive in the highly competitive environment of mod- also known as innovation platforms. ern marketing chains. Innovation platform. See innovation network. Matching grants. The matching of funds from the granting Intellectual property rights (IPRs). Intellectual property law organization (usually a public agency) with funds from grants owners of intellectual property (creations of the the beneficiary. Matching grants increasingly promote mind) certain exclusive rights to a variety of intangible near-market technology generation, technology transfer assets, such as musical, literary, and artistic works; discov- and adoption, private economic activity, and overall eries and inventions; and words, phrases, symbols, and innovation, often by including multiple stakeholders. By designs. Common types of intellectual property include focusing greater attention on demand and use from the copyrights, trademarks, patents, industrial design rights, very beginning, basically by attracting users of technolo- and trade secrets. See tangible property rights. (Based on gies and knowledge in partnerships (and requiring a http://en.wikipedia.org/wiki/Intellectual_property.) matching commitment), matching grants may be more Intervention logic. The underlying assumptions in an interven- effective than competitive research grants at enhancing the tion that link intervention inputs with expected outcomes. use of technology and knowledge by farmers and other entrepreneurs. Invention. The creation of knowledge. An invention becomes an innovation only when it is first used in a National agricultural research system (NARS). The entities product that reaches the market or produces a change in responsible within a given country for organizing, coor- a social process. dinating, or executing research that contributes explicitly Learning alliance. A process-driven approach that facilitates to the development of the country’s agriculture and the development of shared knowledge among different maintenance of its natural resource base. actors. Learning alliances contribute to improved develop- National innovation policy. Overarching policies coordinat- ment outcomes because lessons are more quickly identi- ing a wide spectrum of policy domains—science and fied and learned and because stronger links among technology policy, education policy, economic policy, research organizations and other actors in the AIS industrial policy, infrastructure policy, taxation policy, improve the focus on research and development practices. and justice policy, among others—in such a way that Local agribusiness development services. Services that together they create an environment that enables and improve the performance of a small-scale enterprise stimulates innovation. Sector-specific innovation poli- oriented to agricultural production, be it individual or cies (such as a policy for agricultural innovation) repli- cooperative, in accessing markets, financial services, and cate the national innovation policy’s overarching and enhanced agribusiness environments. Examples of these coordinating nature but have considerably less political services include training and advisory services, market clout to influence policies outside their domains. 632 GLOSSARY Niche markets. A small, specific, and well-defined subset they are hierarchical or allow individual exploration of of the market on which a particular product focuses. opportunities and horizontal communication); learning Examples include markets for fair trade, organic, or other routines (the heuristics and methods used for collectively products certified to have particular qualities; small-scale accepting new ideas and procedures); the propensity to growers of particular kinds of produce purchased directly interact and cooperate with other actors in the AIS; and by consumers in a nearby city; a new market for a tradi- the availability of resources for the development of inno- tional product (quinoa, amaranth, and acai are three of vations (capital and specialized assets). many kinds), or a new product derived from a traditional Organizational interface. Modalities that help to transform crop. Some niches have more demanding quality and knowledge and information produced by research commercial requirements than others, and farmers’ par- organizations into socially and economically relevant ticipation in these markets depends on whether they can goods and services. Examples include innovation plat- meet those requirements. Although niche markets have forms, value-chain approaches, and public-private partner- had important impacts on local communities, they can- ships. not expand beyond a certain size without becoming com- Outgrower. A farmer operating under a formal or informal moditized. For this reason, they can make only a limited agreement (often a contract) to grow produce for a com- contribution to alleviating poverty. Niche markets can be mercial agricultural enterprise (for example, a sugarcane considered a form of innovation network. processor) or a large-scale farmer. Outgrowers may Nongovernmental organization (NGO) extension. Extension receive credit and advice from the processor. systems run by NGOs, often in a project mode and Participatory or demand-driven approaches. Method of focused on participatory methods. research and/or extension focused on bottom-up No-till agriculture. An agronomic practice in which crops approaches and empowerment of clientele. These are planted in previously unprepared soil by opening a approaches include methods such as farmer field schools narrow slot or trench of the smallest width and depth and farmer research groups. needed to obtain proper coverage of the seed. Conven- Pluralistic extension. Extension system based on multiple tional tillage practices involve multiple tractor passes to service providers, including public, private, and civil accomplish plowing, harrowing, planking, and seeding society organizations, in which the focus is often on operations; no-till requires only one or two passes for demand-driven, participatory approaches. spraying herbicide and seeding. In addition to reducing Privatization. Full transfer of ownership (usually by sale) the number of operations, no-till requires less-powerful from government to a private entity. tractors and reduces equipment depreciation. While no-till principles are the same everywhere—entailing Privatized research or extension services. Services run for minimal soil disturbance, keeping soil covered, and profit, not necessarily for cash crops only. using crop rotations—the actual packages differ greatly Producer organizations. See farmer organization. by location. Public-private partnerships. At least one public and one pri- Organization. A group of actors that collaborate over a sus- vate organization share resources, knowledge, and risks tained period. An organization can be either formal or to achieve a match of interests and jointly deliver prod- informal. Collaboration may take different forms, ucts and services. In agricultural research, PPPs bring including frequent exchanges of information, joint pri- together partners with different skills and knowledge to ority setting for policies and programs, and joint imple- contribute jointly to the generation, adaptation, and/or mentation of innovation projects. diffusion of an innovation. Usually the partnership Organizational capabilities for innovation. The abilities of the agreement is in the form of a contract that establishes organization’s members and the organization’s key charac- each partner’s commitments and the distribution of ben- teristics. Organizational abilities for innovation include efits. PPPs in agricultural research can be set up not only maintaining specialized knowledge, creativity, and com- to generate knowledge via research but also to foster the mitment to the organization; developing a long-term diffusion and application of knowledge among private vision for the organization; absorbing information gen- actors (agribusiness, farmers) and public actors (univer- erated by other agents (also called the absorptive capac- sities, research institutes, and extension agencies). ity); creating new knowledge; and using this knowledge Qualitative growth. Growth associated with a range of addi- to develop innovations that address commercial, social, tional public goods that especially reduce extreme organizational, or technological needs or opportunities. poverty, provide food security, narrow structural An organization’s key characteristics include its culture, inequalities, protect the environment, or sustain the governance, and communications routines (whether growth process itself. GLOSSARY 633 Risk capital. Money explicitly available for investment into a Strategic alliances. Partnerships that usually involve long- high-risk business or a security of some type—typically term cooperation (10 or more years), multinational those that are not publicly traded on any national stock companies, or groups of companies. Examples include exchange. In this sourcebook, risk capital refers to invest- the development and introduction of minimum social ment in a company or project at an early or high-risk and environmental standards for agricultural or forestry stage. Private investors are the major sources of risk cap- products, fair trade arrangements, and similar ambitious ital; public investment cannot meet the needs, although programs. it can stimulate and leverage private investment in the Tangible property rights. The set of rights defined by law that sector. See venture capital. relate to a physical object, for example plasmids or vec- Rural productive alliance. An economic agreement between tors. See intellectual property rights. formally organized producers and at least one buyer, which Technical regulations. Regulations that specify product specifies product characteristics (such as size and varieties characteristics or their related processes and production to be produced); quantity to be produced or bought; pro- methods, including the applicable administrative provi- duction modalities (such as how a product will be deliv- sions, with which compliance is mandatory. Technical ered, by whom, and when, as well as grading and packing regulations include import bans (total or partial), tech- requirements); payment modalities and price determina- nical specifications (process and product standards), tion criteria; and the buyer’s contribution (such as techni- packaging standards, information requirements, and cal assistance, specific inputs, and arrangements for input requirements for labeling and claims. See standards. reimbursement—for example, at the time of sale). Technology broker. See innovation broker. Sanitary and phytosanitary (SPS) protection. Measures, Theory of change. The underlying assumptions in an interven- including regulations and agreements, to protect: tion that link intervention inputs with expected outcomes. (1) human or animal health from risk arising from Traditional extension system (general extension). Extension additives, contaminants, toxins, or disease organisms in focused on increasing agricultural productivity, run by food, drink, and feedstuffs; (2) human life from risks asso- central government, using a top-down approach and ciated with diseases carried by plants or animals; (3) animal often emphasizing the transfer of technology. or plant life from pests, diseases, and disease-causing organisms; and (4) a country from other damage caused by Training and visit (T&V). A system of extension manage- the entry, establishment, or spread of pests. Such measures ment with a focus on improving technical knowledge of include national control of contaminants, pests, and dis- extension agents and regular visits to farms. eases (vaccination programs, limits on pesticide residues Transfer of technology (TOT). Programs focused on dissemi- in food) as well as international controls to prevent their nating information and new technologies. Such programs inadvertent spread (for example, the rejection of insect- often include an integrated approach in which technology infested food shipments that pose a risk to domestic food is pushed as a package deal with the requisite institutional production). See standards and technical regulations. support, such as credit and fertilizer facilities. Social capital. The institutions, relationships, and norms that Value chain. The set of linked activities pursued by the dif- shape the quality and quantity of a society’s social interac- ferent actors that a firm organizes to produce and market tions. Increasing evidence shows that social cohesion is a product. See also marketing chain. critical for societies to prosper economically and for devel- Value-chain approach. Attention to improving efficiency opment to be sustainable. A narrow view of social capital along the value chain for a particular agricultural com- regards it as a set of horizontal associations between peo- modity, often through applied agricultural research ple, consisting of social networks and associated norms integrated with institutional innovations in farmer that have an effect on community productivity and well- organization and marketing. being. Social networks can increase productivity by reduc- Venture capital. Venture capital is a form of private equity ing the costs of doing business. Social capital facilitates provided for early-stage and more mature companies coordination and cooperation. This quality is strong with substantial market potential. Returns on venture within mature groups with strong internal institutions, capital investment are from a trade sale (sale to, or intragroup trust, altruistic behavior, membership in other merger with, another company) or an initial public offer- groups, and ties to external service providers. ing in which the company becomes authorized to sell its Standard. A document approved by a recognized body that stock to the general public on a stock exchange. Venture provides, for common and repeated use, rules, guide- capital funds will not only provide money but will men- lines, or characteristics for products or related processes tor their investee firms. See risk capital. and production methods, with which compliance is not Vocational education and training (VET). See agricultural mandatory. See technical regulations. education and training. 634 GLOSSARY A U T H O R S A N D T H E I R A F F I L I AT I O N S Nuria Ackermann, United Nations Industrial Development Organization (UNIDO) John Allgood, International Fertilizer Development Center (IFDC) S. Aravazhi, International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) Seth Ayers, World Bank Institute, and formerly with infoDev Peter Ballantyne, International Livestock Research Institute (ILRI) Alan B. Bennett, University of California, Davis Rupert Best, Catholic Relief Services (CRS) Regina Birner, University of Hohenheim Sara Boettiger, Public Intellectual Property Resource for Agriculture (PIPRA), University of California, Berkeley Arnoud R. Braun, Farmer Field School Foundation, Wageningen University Alistair Brett, Consultant Judy Chambers, Program for Biosafety Systems, International Food Policy Research Institute (IFPRI) Anthony Clayton, University of the West Indies, Jamaica Marie-Hélène Collion, Latin America and Caribbean Region, Agriculture and Rural Development, World Bank Kristin Davis, International Food Policy Research Institute (IFPRI) and Global Forum for Rural Advisory Services (GFRAS) Luz Diaz Rios, Consultant Kumuda Dorai, Programme Officer, LINK Ltd. (Link Ltd. started as a UNU-MERIT/FAO initiative in 2005) Deborah Duveskog, Consultant Javier Ekboir, Institutional Learning and Change Initiative (ILAC, www.cgiar-ilac.org) Howard Elliott, Consultant Wyn Ellis, Consultant Josef Ernstberger, Consultant 635 Michelle Friedman, World Bank Josef Geoola, GALVmed Peter Gildemacher, Royal Tropical Institute (KIT) María Verónica Gottret, Tropical Agriculture Research and Education Center (CATIE) Andy Hall, LINK Ltd. (Link Ltd. started as a UNU-MERIT/FAO initiative in 2005) Helen Hambly Odame, Assistant Professor, University of Guelph Frank Hartwich, United Nations Industrial Development Organization (UNIDO) Willem Heemskerk, Royal Tropical Institute (KIT) Douglas Horton, Consultant Indira Ekanayake, Africa Agriculture and Development, World Bank Steen Joffee, Director, Innodev U.K. Adolphus J. Johnson, Ministry of Agriculture, Forestry and Food Security, Sierra Leone Trish Kammili, French National Institute for Agricultural Research (INRA) S.M. Karuppanchetty, International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) Godrick Khisa, Farmer Field School Foundation Promotion Services, Wageningen University Laurens Klerkx, Communications and Innovation Studies, Wageningen University Stanley Kowalski, University of New Hampshire School of Law, Concord Patti Kristjanson, World Agroforestry Centre (CIFOR) Anton Krone, SaveAct, Prolinnova South Africa Gunnar Larson, Agriculture and Rural Development Department, World Bank Ninatubu Lema, NARS Tanzania Tarmo Lemola, ADVANSIS Ltd. David Lugg, Food and Agriculture Organization of the United Nations (FAO) Mark Lundy, Decision and Policy Analysis Program, CIAT John Lynam, Consultant Charles J. Maguire, Consultant Vijay Mahajan, BASIX Group, India Morven McLean, ILSI Research Foundation Mohinder S. Mudahar, Consultant Bernardo Ospina Patiño, Latin American and Caribbean Consortium to Support Cassava Research and Development (CLAYUCA) Christopher Palmberg, ADVANSIS Ltd. Andrea Pape-Christiansen, Consultant Robert Potter, Robert Potter Consulting John Preissing, Food and Agriculture Organization of the United Nations (FAO) Ranjitha Puskur, International Livestock Research institute (ILRI) 636 AUTHORS AND THEIR AFFILIATIONS Catherine Ragasa, International Food Policy Research Institute (IFPRI) Riikka Rajalahti, Agriculture and Rural Development Department, World Bank Johannes Roseboom, Innovation Policy Consultancy Silvia Sarapura, University of Guelph Eva Schiffer, Consultant Kiran K. Sharma, International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) David J. Spielman, International Food Policy Research Institute (IFPRI) David S. Suale, Ministry of Agriculture, Forestry and Food Security, Sierra Leone Rasheed Sulaiman V, Centre for Research on Innovation and Science Policy (CRISP), India Florian Theus, World Bank Institute Bernard Triomphe, Agricultural Research for Development, France (CIRAD) Klaus Urban, Food and Agriculture Organization of the United Nations (FAO) K. Vasumathi, BASIX Group, India Rodrigo Vega Alarcón, Consultant, formerly with FIA Laurens van Veldhuizen, Prolinnova International Secretariat, ETC Foundation Ann Waters-Bayer, Prolinnova International Secretariat, ETC Foundation Melissa Williams, South Asia Agriculture and Rural Development, World Bank Mariana Wongtschowski, Royal Tropical Institute (KIT) Douglas Zhihua Zeng, Africa Finance and Private Sector Development, World Bank AUTHORS AND THEIR AFFILIATIONS 637 INDEX Boxes, figures, and tables are indicated by b, f, and t following the page number. A agenda setting AACREA (Argentine Association of Regional Consortiums for coordination and collective action, 32, 76 Agricultural Experimentation), 49b, 63b education and training, 114–17, 114t Aakruthi Agricultural Associates of India, 423b agrarian economies, 265, 278b ABI (Agri-Business Incubator@ICRISAT), 393b, 423b Agri-Business Incubator@ICRISAT (ABI) (India), 393b, 423b, accountability. See also governance See also business incubator coordination and collective action, 21, 36 Agrícola Cafetelera Buena Vista (Bolivia), 96 defined, 540b Agricultural Biorefinery Innovation Network for Green Energy, extension and advisory services, 188, 217, 219 Fuels, and Chemicals (Canada), 46 innovation networks, 51 agricultural business development, 388–441 partnerships, 367b business incubators and, 388–95 research organizations, 317–19, 319b cluster-based approach, 396–405, 430–34, 431–33b accreditation, 123 enabling environment for, 512–15 ACF (Asia Challenge Fund), 614–15 innovative activity profiles, 421–41 Ackermann, Nuria, 430 partnerships and, 362 Adaptable Program Loan (World Bank), 240b, 241 risk capital for, 414–20 adaptive management, 19b technology transfer and, 406–13, 426–29 additionality, 372b, 377 agricultural credit services, 246–50, 247t, 248–49b advisory committees for curriculum reform, 153 Agricultural Economics Institute, 163 advisory services, 10. See also extension and advisory services agricultural education and training (AET). See education aerial photography, 8b and training AERI (Agricultural Exports and Rural Income) Project, 151 Agricultural Exports and Rural Income (AERI) Project, 151 AET (agricultural education and training). See education and agricultural innovation councils, 23 training agricultural innovation systems AFAAS (African Forum for Agricultural Advisory Services), 188, 189b defined, 4b affirmative action, 29, 65 education and training. See education and training Africa. See also specific countries and regions evolution of, 1 biosafety regulatory systems in, 522–25 examples, 3b education and training in, 125 functional assessments, 548–49, 548t regional research coordination in, 299b, 301b funding. See innovation funds regulatory frameworks in, 453b initiatives to strengthen key components, 4–7 Africa Country Programmes (ACP), 615 innovation brokers. See innovation brokers African Agriculture Fund, 417–18b, 418 need for, 4b African Forum for Agricultural Advisory Services (AFAAS), 188, 189b networks. See innovation networks African Women in Agricultural Research and Development overview, 3–4, 4f (AWARD), 109b research in, 264–69. See also research 639 Agricultural Research Council (ARC, South Africa), 401b Armenia, competitive grant funding in, 436 agricultural research linkages, 277–88 ARMT (Agricultural Risk Management Team), 347 commercialization approaches, 284–86 ASARECA, 306b financing for, 286 Asia Challenge Fund (ACF), 614–15 in AIS, 277–88 Asociación Argentina de Consorcios Regionales de innovative activity profile, 344–49, 345b, 346t, 348b Experimentación Agricola (AACREA), 49b, 63b investment context, 277–78, 278b ASOSID (Mexico), 312b investment needs, 278–86, 279–80t assessment, 546–52 lessons learned, 287–88 benchmarking and, 549–50, 549t policy issues, 286–87 of biosafety risk, 492–500, 501–11, 522–25 potential benefits, 286 defined, 540b technology transfer and, 284–86, 285b of environmental risk, 522–25 Agricultural Risk Management Team (ARMT), 347 foresighting investments, 562–68, 563–64b, 566t Agricultural Sector Development Program (Tanzania), 200 gender issues and, 598–602 Agricultural Services and Producer Organizations Project of innovation systems, 541–602 (PASAOP, Senegal), 281–82b of innovation system functions, 548–49, 548t agricultural technical-vocational education and training innovative activity profiles, 589–609, 598–602 (ATVET), 109, 136–40 investment context, 541, 546–47 Agricultural Technology Consortium model (Chile), 338–43, investment needs, 543–45, 544t 339b, 342–43b lessons learned, 551–52 Agriculture and Rural Development Council (Australia), 23 methods, 547–50, 547b, 593–97, 603–6 Agriculture Education Council (India), 146 organizational, 553–61. See also organizational assessment Agriculture Investment Sourcebook (World Bank), 190 policy issues, 541–43, 542t, 550–51 Agriculture Technology Fund (Peru), 241, 242–43b potential benefits, 550 Agriculture Technology Management Agency (ATMA) (India), 85 public sector role, 550–51 Agri Science Park (India), 421 recommendations, 551–52 agrodealer development, 192, 231–35, 232b theory of change, 547–48, 547b knowledge transfer and, 232, 233b, 235b Association of Public and Land-Grant Universities (U.S.), 127–28 lessons learned, 234–35 Association of Small and Medium Agro-producers of Panama support systems, 233–34, 234b (APEMEP), 92b Ahmadu Bello University (Nigeria), 156 ATMA (Agriculture Technology Management Agency), 85 aid-for-trade, 188 ATVET (agricultural technical-vocational education and training), Albania, innovation funds in, 438b, 440 109, 136–40 Alemaya University of Agriculture (Ethiopia), 156 Australia All-China Women’s Federation, 428 agricultural innovation council in, 23 Allgood, John, 231 biosafety regulatory systems in, 499b Alliance for a Green Revolution in Africa, 299b coordination organizations in, 36, 37b Andhra Pradesh Dairy Development Cooperative Federation, 248b national agricultural innovation system in, 284b Andhra Pradesh, India no-till agriculture in, 70, 73t agricultural credit services in, 248b research and development in, 284 community organizations in, 84–89 research councils in, 21 coordination organizations in, 84–89, 85b, 86–87f, 87–88b technical human resources development in, 137b financial services in, 526–29 AWARD (African Women in Agricultural Research and innovative activity profiles, 84–89, 526–29 Development), 109b Self help groups (SHGs) in, 84–89 Ayers, Seth, 388 angel investment, 415 Azerbaijan, competitive grant funding in, 436 APEMEP (Association of Small and Medium Agro-producers of Panama), 92b B Aravazhi, S., 421 BACET (Building Agribusiness Capacity in East Timor) ARC (Agricultural Research Council, South Africa), 401b project, 165–68 Argentina backward integration, 56b farmer organizations in, 63b BAIF Development and Research Foundation, 216b innovation networks in, 49b Ballantyne, Peter, 326 national innovation policy in, 465b Banana Producers Association in Riva (Nicaragua), 433b no-till agriculture in, 70, 72t, 73t Bangladesh public-private research partnerships in, 274b, 292b, 294 agricultural innovation systems in, 3b Argentine Association of Regional Consortiums for Agricultural agrodealer development in, 234, 234b Experimentation (AACREA), 49b, 63b biosafety regulatory systems in, 498b 640 INDEX extension and advisory services in, 214, 233b, 235b no-till agriculture in, 70, 72t, 73t no-till agriculture in, 47b, 70, 72 public-private research partnerships in, 292b, 385b public-private partnerships in, 375b research councils in, 21 rural road networks in, 455b technology transfers in, 411b technical knowledge transfer in, 233b, 235b Brazilian Agricultural Research Corporation, 70, 112b Bangladesh Fertilizer Association (BFA), 234b Brett, Alistair, 414 BASIX Group, 192, 246–50, 247t, 248–49b British American Tobacco, 181b Bayero University (Nigeria), 156 broad cluster mapping, 402 BecA-Hub, 299b brokers. See innovation brokers benchmarking Building Agribusiness Capacity in East Timor (BACET) assessment and, 549–50, 549t project, 165–68 cluster-based development and, 402 Bukalasa Agricultural College (Uganda), 163 national innovation systems and policies, 466, 467–68b Bunda College of Agriculture (Malawi), 156 organizational assessment and, 554 Burkina Faso, biosafety regulatory systems in, 500b Bennett, Alan B., 406 business development. See agricultural business development; Best, Rupert, 344 local business development services (LBDSs) Best Bet technologies, 615 business incubators, 366, 388–95. See also agri-business BFA (Bangladesh Fertilizer Association), 234b incubators Bhabha Atomic Research Centre (India), 38b financing, 394–95 Bill and Melinda Gates Foundation, 109b, 133b in Mali, 209b Bioconnect (Netherlands), 40–41, 43b in India, 393b, 423b biosafety regulatory systems, 492–500 innovation networks and, 46 capacity building for, 493b innovative activity profiles, 421–25 innovative activity profiles, 522–25 investment context, 388–89, 389b interministerial coordination for, 497–98, 498b investment needs, 389–91 investment context, 492 lessons learned, 391–95, 424 investment needs, 493–94 local business development and, 209b lessons learned, 495–99 policy issues, 391 policy issues, 494–95 potential benefits, 391 potential benefits, 494, 494b recommendations, 391–95 recommendations, 495–99 revenue models for, 390b Bioseed Research India, 424b services of, 388b BIOTEC program (Thailand), 266 sustainability, 424 Birner, Regina, 553 typology, 389t block grants, 381–82, 382t business linkage development, 233, 234b Boettiger, Sara, 480, 516 Business Minds Africa: Professionals for Agricultural Bogor Agricultural University (Indonesia), 127b, 133 Entrepreneurship in East-Africa, 207 Bolivia education and training in, 117b C farmer organizations in, 67 CAADP (Comprehensive African Agriculture Development innovation networks in, 45b Programme), 182 no-till agriculture in, 70, 73t CAFÉ PERÚ, 242b public-private research partnerships in, 385b Cambodia research and development in, 283 innovation funds in, 440, 440b rural productive alliances in, 96, 97 intellectual property rights in, 486b Botswana public-private partnerships in, 404 business development services in, 207 Cambodian Center for Study and Development in Agriculture intellectual property management in, 483b (CEDAC), 440b Botswana Technology Centre (BOTEC), 483b Canada BRAC, 214, 215–16b International Development Agency, 299b Braun, Arnoud R., 236 no-till agriculture in, 70, 73t Brazil capacity building, 9–10 coordination and collective action in, 34 for biosafety regulatory systems, 493b education and training in, 112b, 129 cluster-based business development and, 431, 433–34 farmer organizations in, 67 coordination and collective action and, 9, 26–28, 27b, 31–32, Brazilian Agricultural Research Coooperation (EMBRAPA), 59–69 112b, 292b education and training and, 9–10 national innovation policy in, 463b evaluation and, 580 INDEX 641 capacity building (continued) public-private research partnerships in, 90 extension and advisory services, 10 tertiary education reform in, 124–25b farmer organizations and, 61, 64 value chains in, 54b for governance, 473–76 Chinese University of Technology, 409b higher education students and, 133b CIAT (International Center for Tropical Agriculture), 17b, 91–93, innovation brokers and, 226 347, 348b innovation systems and, 9–10 CLAYUCA, 90–94 for intellectual property (IP) management, 518b Learning Alliances, 344–49 local business development services and, 211–12 CIMMYT (International Maize and Wheat Improvement for national coordination, 35, 36b Center), 47b, 50 organizational change and, 316–17, 318b CIP (International Potato Center), 45b, 222b for pluralistic extension systems, 198–200 civil society. See also nongovernmental organizations (NGOs); for public-private partnerships, 379 specific organizations Casas Agrárias (Mozambique), 208b cluster-based business development and, 431b Cassava research networks, 90–94, 92b. See also CLAYUCA coordination and collective action role, 28, 31 catalytic agents, 46, 50. See also business incubators; innovation education and, 138 brokers innovation networks and, 48, 51 Catholic Relief Services (CRS), 347, 348b marketing chains, 57 CATIE, 344–49. See also Learning Alliances research and, 273, 371b CBR (community-based research), 157–59, 159b Clayton, Anthony, 562 CCARDESA (Center for Coordination of Agricultural Research CLAYUCA (Latin American and Caribbean Consortium to and Development in Southern Africa), 307b Support Cassava Research and Development), 90–94, 92b CEDAC (Cambodian Center for Study and Development in Client-Oriented Research and Development Management Agriculture), 440b Approach (CORDEMA), 318b, 322 CEGE (Center for Entrepreneurial Management) climate change, 12b, 188. See also environmental issues (Nicaragua), 432b cluster-based business development, 368, 396–405 CENICAÑA (Colombian Sugarcane Research Center), 66 capacity building and, 431, 433–34 Center for Community-Based Research (Thailand), 158 infrastructure and, 397 Center for Coordination of Agricultural Research and innovative activity profile, 430–34, 431–33b Development in Southern Africa (CCARDESA), 307b institutional framework and, 398–99, 398f Center for Entrepreneurial Management (CEGE) investment needs, 397–99 (Nicaragua), 432b investment rationale, 396–97 Central Africa, regional research coordination in, 299b. lessons learned, 402–5, 434 See also specific countries policy issues, 400 Central American Learning Alliance, 283, 344, 347 potential benefits, 399–400, 431–34 CFC (Common Fund for Commodities, Kenya), 222b public-private partnerships and, 404b CGIAR. See Consultative Group on International Agricultural recommendations, 402–5 Research regulatory environment and, 397–98 Cheetah Network (Mali), 209b value chains vs., 397 Chiang Mai University (Thailand), 126, 133, 157–59, 159b CMSA (community-managed sustainable agriculture), 85, 86–89, Chile 87–88b agricultural innovation council in, 23 codesigned innovations, 308–15 Agricultural Technology Consortium model in, 338–43, 339b, investment context, 308–9, 309t 342–43b investment needs, 309–13, 310b, 310t, 312b assessment in, 607–9, 608–9b, 609f lessons learned, 314–15 coordination organizations in, 36, 80–83 partnerships for, 282–83, 295 intellectual property management in, 484b policy issues, 314 national innovation policy in, 461b potential benefits, 314 no-till agriculture in, 72 COFUPRO (Coordinadora Nacional de las Fundaciones Produce, olive oil industry in, 82b Mexico), 75–77, 78b research and development tax incentives in, 365b collective action. See coordination and collective action China colleges and universities. See tertiary education and training business incubators in, 392b Collion, Marie-Hélène, 95 education and training in, 129, 138 Colombia higher education reform in, 157–59, 159b agricultural innovation systems in, 3b intellectual property management in, 409b, 426–29 business incubators in, 395b no-till agriculture in, 70, 72, 73t farmer organizations in, 67 public-private partnerships in, 362, 375b, 377b, 380b intellectual property rights in, 485b 642 INDEX matching grant schemes in, 385b policy issues, 28–29 no-till agriculture in, 72 poverty reduction and, 17–18 public-private research partnerships in, 90, 93, 274b, 385b public and private sector role, 28 rural productive alliances in, 96, 97 public goods production and, 17 Colombian Coffee Growers’ Federation, 23, 24, 53, 60 research and educational organizations role, 28–29, 270, Colombian Sugarcane Research Center (CENICAÑA), 66 277–88, 278b, 297–307 Colombia Productive Partnerships Project, 385b sustainability issues, 29 commodity boards, 23–24 value chains and, 31, 52–58 Common Fund for Commodities (CFC, Kenya), 222b Copperbelt College of Education (Zambia), 117b community-based research (CBR), 157–59, 159b Coprokazan (Mali), 62b community-managed sustainable agriculture (CMSA), 85, 86–89, CORAF/WECARD, 307b 87–88b CORDEMA (Client-Oriented Research and Development competency-led partnerships, 295 Management Approach), 318b, 322 competitive position analysis, 402 core (block) funding, 381–82, 382t competitive research grants (CRGs), 6b, 41b, 286, 368, 381–82, Corporation to Promote Production (CORFO, Chile), 81 382t, 386b, 437–38b. See also matching grants, and Costa Rica innovation funds cassava market in, 94b defined, 632 education and training in, 128, 133 Comprehensive African Agriculture Development Programme higher education reform in, 160–62 (CAADP), 182 public-private research partnerships in, 90 CONDESAN, 298b cost-sharing, 189–90, 233 Consorcio Papa Chile SA, 342b Council of Scientific and Industrial Research (India), 38b consortium approaches, 283–84 Council of Social Science Research (India), 38b Consultative Group on International Agricultural Research Council on Agricultural Research (India), 47b (CGIAR) counterfactuals, 582, 583b extension and advisory services, 180, 183b, 222 CRCs (Cooperative Research Centres), 284b, 338 Gender and Diversity Program, 109b credit markets, 246–50, 247t, 248–49b. See also financial services research centers, 262, 274b, 306b CRGs. See competitive research grants role of, 7 Crops Research Institute (Ghana), 71b contracting curriculum reform, 131–35 intellectual property (IP) management and, 519 investment context, 131–32 for partnerships, 378–79 investment needs, 132 performance-based, 514 lessons learned, 134–35 for public-private partnerships, 378–79 policy issues, 134 Cooperative Research Centres (CRCs), 284b, 338 potential benefits, 132–33, 133b Coordinadora Nacional de las Fundaciones Produce recommendations, 135 (COFUPRO, Mexico), 75–77, 78b cyber-extension, 183b coordination and collective action, 9, 15–106 agenda setting, 32 D in biosafety regulatory systems, 497–98, 498b DAE (Department of Agricultural Extension, Bangladesh), capacity building for, 26–28, 27b, 31–32, 59–69 233b, 235b economic growth and, 16–17 Dairy Cooperative Societies (India), 25b, 60 environmental outcomes and, 18 DAPEP (Dryland Agriculture Productivity Enhancement equity issues, 29 Program), 246 of extension and advisory services, 189b Davis, Kristin, 179, 180, 194, 236 factors essential to, 18, 19b decentralization Farmer Field Schools (FFSs), 236–39 coordination and collective action, 77 gender issues, 29 education and training, 124–25b governance and, 30, 478 extension and advisory services, 6b, 184, 197–98, 202 innovation brokers and, 30–31 research, 6b, 262–63, 270 innovation networks and, 30, 44–51 DEEPA Industries Ltd., 222b innovative activity profiles, 70–99 democratization, 270 instruments and incentives for, 20 Department for International Development (UK), 327b investment rationale, 16–18 Department of Agricultural Extension (DAE, Bangladesh), monitoring and evaluation, 32–33 233b, 235b on national level, 21, 34–43 Department of Education, Employment, and Workplace organizations for, 20–26, 22t, 23–25b, 27b Relations (Australia), 137b overview, 15–33 Department of Primary Industries (DPI, Australia), 137b INDEX 643 Department of Science and Technology (DST, India), 421 Ekanayake, Indira, 512 Dharampur Uththan Vahini (DHRUVA, India), 216b Ekboir, Javier, 15, 44, 52, 59, 70, 75 Diaz Rios, Luz, 501 Elliott, Howard, 297 diffusion of technology, 39b, 47, 70–71 El Salvador, learning alliances in, 17b Dijkman, J., 273 Elsenburg Training Institute, 401b District Services for Economic Activities (Mozambique), 206b Empresa Brasileira de Pesquisa Agropecuária (EMBRAPA), 34, Doing Business (World Bank), 391 70, 112b, 292b Dorai, Kumuda, 539, 569, 580 enabling environment for innovation, 10–11, 449–537. downward accountability, 188 See also standards, biosafety DPI (Department of Primary Industries, Australia), 137b environmental issues, 456 Dryland Agriculture Productivity Enhancement Program financial services, 526–29 (DAPEP), 246 governance and, 452, 456–57, 469–79 DST (Department of Science and Technology, India), 421 infrastructure 512–14 due diligence, 519 innovative activity profiles, 512–29 Duveskog, Deborah, 236 intellectual property management, 480–91, 516–21 investment context, 452–55 E investment needs, 456–58 EARTH University (Costa Rica), 133, 160–62 investment rationale, 450–52, 450f East Africa monitoring and evaluation for, 458–59t Farmer Field Schools in, 236, 238 national innovation policy, 460–68 regional research coordination in, 299b policy issues, 450–52, 450f, 455–56, 457 East Africa Agricultural Productivity Project, 264 poverty reduction and, 456 East Africa Dairy Development Project, 327b public-private partnerships, 93, 456 Eastern and Southern Africa Seed Alliance, 285b regulatory frameworks and, 452–53, 457, 492–511, 522–25 Economic Development Programme (BRAC), 215–16b rural areas, 454–55, 455b, 457–58 Ecuador environmental issues innovation networks in, 45b enabling environment for innovation and, 449, 456 public-private research partnerships in, 90, 291b intellectual property (IP) management and, 488 research and development in, 283 local business development services and, 210, 210b education and training, 9–10, 107–77, 117b national innovation policy and, 464 curriculum reform, 125–26, 126b, 131–35, 151–53 pluralistic extension systems and, 201 financing trends, 5b Envirotrade project, 210b formal, 110–11 Equity Bank of Kenya, 327b gender and, 109b equity issues. See also gender issues ICT and, 8b, 117b coordination and collective action, 29 informal, 111 extension and advisory services, 188–91, 244 initiatives to strengthen, 5–7, 6b, 7 organizational change, 324 innovative activity profiles, 145–71 partnerships, 370 in-service training and development, 111, 141–44, 154–56 pluralistic extension systems, 201 for intellectual property (IP) management, 407–8, 408t, regional research, 302 489–90, 490b research, 270 investment context, 108, 111–12 ERAP (External Resource Person Advisory Program), 246–47 investment needs, 114–17 Ernstberger, Josef, 361, 381, 426 monitoring and evaluation of investments in, 119–20, 120–21t Estamos (NGO), 208b overview, 107–21 Ethiopia policy issues, 112–13 business development services in, 201, 205 reform priorities and directions, 113–19, 114t education and training in, 126, 138 structure of systems, 108–11 extension and advisory services in, 181b, 184, 187b technician development, 136–40, 163–64, 169–71, 170b gender-inclusive education in, 109b for Technology Transfer Offices (TTOs), 407–8 innovation funds in, 437, 438b tertiary level, 122–30, 145–53, 157–62. See also tertiary net-mapping in, 596b education and training research and development in, 327b e-extension, 183b technical skill development in, 163–64 Egypt Eurasia Group, 234b education and training in, 132 European Foundation for Quality Management, 164 higher education reform in, 151–53 evaluation, 580–88. See also monitoring and evaluation (M&E) technical skills development in, 169–71, 170b capacity building and, 580 vocational training in, 169–71, 170b counterfactuals and, 582, 583b 644 INDEX defined, 540b FARM-Africa (NGO), 185b investment context, 580–81 Farm Business Schools, 207, 211 investment needs, 581–85 Farmer and Nature Net (FNN), 440b lessons learned, 585–88 Farmer Field Schools (FFSs) methods, 583–84b, 583–85, 586–87t coordination networks for, 236–39 policy issues, 585 defined, 26 potential benefits, 585 extension and advisory services, 180, 181b, 192, 206b principles, 581–83, 582b gender issues, 237b recommendations, 585–88 lessons learned, 239 exit strategies for public-private partnerships, 369b, 379 participatory group learning in, 185b extension and advisory services, 179–93, 194–250 potential benefits, 237 agricultural credit and, 246–50, 247t, 248–49b sustainability, 238 agrodealer development, 231–35, 232b farmer interest groups (FIGs), 184b coordination of, 189b farmer-managed foundations, 23 defined, 179–80, 180b farmer organizations, 24–26. See also producer organizations development principles, 183–87, 185–86t defined, 16b equity issues, 188, 190–91, 244 extension and advisory services, 202 evolution of, 180–83, 181b financing of, 63b, 67 “extension-plus� approach, 191, 213–20 information technology use by, 62b Farmer Field Schools, 185b, 236–39 innovation networks and, 46 gender issues, 190–91 marketing chains and, 52 ICT and, 183b, 185b poverty reduction and, 17 initiatives to strengthen, 6b, 7 farmer-to-farmer (F2F) extension, 182 innovation brokers and, 191, 221–30 farmer training centers (FTCs), 187b innovation networks and, 46 Farm Radio International, 62b in-service training, 154–56 FDSE (Fondo para el Desarrollo de Servicios Estratégicos, Peru), investment levels in, 181–82, 181b 242–43 local business development services, 191, 204–12 fee-for-service extension, 188b monitoring and evaluation of, 192–93, 192b fertilizer deep placement technology, 235b pluralistic extension systems, 191, 194–203 FFA (Future Farmers of America), 109, 110b, 111 policy issues, 187–91 FFSs. See Farmer Field Schools public and private sector roles, 180, 187, 189, 190t FIA (Fundación para la Innovación Agraria, Chile), 23, 30, 36, roles and impacts of, 180 80–83, 81b sustainability, 189–90 finance partnerships, 295 “extension-plus� approach, 191, 213–20 financial services human resource issues, 218 agricultural credit, 246–50, 247t, 248–49b institutional framework and, 216–18 cluster-based development and, 402 investment context, 213–14, 214t enabling environment for innovation and, 526–29 investment needs, 214–16, 215–16b, 215t extension services and, 246–50, 247t, 248–49b lessons learned, 218–20 instruments, 369b, 417t monitoring and evaluation of, 216–18, 217t savings and credit cooperatives, 183 policy issues, 216–18 financing. See also matching grants and research grants potential benefits, 216 of agricultural research linkages, 286 public and private sector roles, 218 of business incubators, 394–95 recommendations, 219–20, 220t extension and advisory services, 189–90 sustainability, 218 of farmer organizations, 63b, 67 External Resource Person Advisory Program (ERAP), 246–47 investments for innovation, 414–420 partnerships, 368–69 F of research, 5b, 270, 271b facilitation, 3b, 15–33, 283, 288, 305t, 306, 308–15, 316–25, sustainability of, 19b 344–49, 520–21. See also broker, and innovation broker technology transfer, 5b business, 422 Finland direct, 404 response to challenges of globalization, 472b facilitating cooperation, 403 governance of innovation systems in, 469–479, 472b, 475b network membership and, 591 policy coordination organizations in, 474b public sector, 427 research and innovation council, 474b Fair Trade movement, 53 strategic intelligence capabilities in, 476b FAO (Food and Agriculture Organization), 111 Finnish Funding Agency for Technology and Innovation (Tekes), 473b INDEX 645 first-round funding, 416 Ghana FLAR (Latin American Fund for Irrigated Rice), 298b agricultural innovation systems in, 3b FNN (Farmer and Nature Net), 440b agricultural research linkages in, 280b Fodder Innovation Project, 327b, 329b, 610–13, 613t education and training in, 155 Fondo de Tecnología Agraria (FTA, Peru), 241, 242–43b gender-inclusive education in, 109b Fondo para el Desarrollo de Servicios Estratégicos (FDSE, Peru), innovation funds in, 437 242–43 in-service training for extension staff, 155–56 Food and Agriculture Organization (FAO), 111, 181b, 211 net-mapping in, 596b Ford Foundation, 301b no-till agriculture in, 70, 71b, 72 foreign direct investment, 482 organizational assessment in, 560b foresighting investment, 562–68 public-private research partnerships in, 90 lessons learned, 568 research councils in, 21 policy issues, 567–68 Ghana Cocoa Board, 24 potential benefits, 567 Gildemacher, Peter, 221 process, 563–65 Global Alliance for Livestock Veterinary Medicines (GALVmed), recommendations, 568 327b, 516–21, 517–18b sustainability and, 567–68 Global Development Alliance, 234b tools and applications, 562–67, 566t Global Forum for Rural Advisory Services (GFRAS), 182, formal organizations, 21 189b, 192b Foundation for Agricultural Innovation (Chile), 23, 30, 36, GlobalGAP, 405 80–83, 81b Golden Rice, 50 fourth-round funding, 416 Gottret, María Verónica, 344 Framework for African Agricultural Productivity, 182 governance, 469–79, 472f France, no-till agriculture in, 72 capacity building for, 473–76 Fresh Produce Exporters Association of Kenya (FPEAK), 23, 24b competitive research funding and, 41b Friedman, Michelle, 95 coordination and collective action, 30, 36b, 478 FTA (Fondo de Tecnología Agraria, Peru), 241, 242–43b enabling environment for innovation and, 452, 456–57, 469–79 FTCs (farmer training centers), 187b farmer organizations, 61 Fundación Chile, 399 innovation funds and, 383, 384t Fundación para la Innovación Agraria (FIA, Chile), 23, 30, 36, innovation networks, 51 80–83, 81b of innovation systems, 469–79 Future Farmers of America (FFA), 109, 110b, 111 of innovation systems in Finland, Republic of Korea, South Africa, 469–79 G intellectual property (IP) management and, 408–9 GALVmed (Global Alliance for Livestock Veterinary Medicines), investment context, 469–71 327b, 516–21, 517–18b investment needs, 471–77 Gender in Agriculture Sourcebook (World Bank), 324 lessons learned, 477–79 gender analysis, 539, 544t, 598–602 local business development services and, 209 gender issues national innovation policy and, 21, 464 in assessments, 598–602, 600t organizational change, 317–19, 319b in coordination and collective action, 29 potential benefits, 477 as cross-cutting theme, 12b project-based funding and, 40, 41b, 42t education and training, 113 public-private partnerships, 375 in education and training, 109b recommendations, 479 in extension and advisory services, 190–91 Technology Transfer Offices and, 408–9 in Farmer Field Schools, 237b transparency and, 479 organizational change, 324 Granovetter, M., 221 partnerships, 370 Guatemala pluralistic extension systems, 201 farmer organizations in, 67 Gene Technology Act (Australia), 499b learning alliances in, 17b genetically engineered foods, 495–96b, 500b. See also biosafety public-private research partnerships in, 385b regulatory systems rural productive alliances in, 97 genetic resources Guyana, public-private research partnerships in, 90 intellectual property management and, 481b public-private partnerships, 274b H Geoola, Josef, 516 Hagar Soya Co. (Cambodia), 486b GFRAS (Global Forum for Rural Advisory Services), 182, 189b, Haiti, public-private research partnerships in, 90 192b Hall, Andy, 273, 539, 569, 580, 610 646 INDEX Hambly Odame, Helen, 539, 546 technology development and transfer in, 331–37, 333t, Hartwich, Frank, 294 334–36b Hawassa University (Ethiopia), 156 Indian Council of Agricultural Research (ICAR), 38, 38b, 145, Heemskerk, Willem, 179, 194 323b, 331–37 higher education. See tertiary education and training Indonesia Honduras education and training in, 129 education and training in, 128 public-private research partnerships in, 274b learning alliances in, 17b tertiary education reform in, 125, 127b public-private research partnerships in, 385b Industry Skills Training Councils (Australia), 137b honest broker role, 404 infoDev, xv, 364, 390b, 392b HoneyBee Network, 224b infomediaries, 224b HORIZONT3000, 431b informal organizations, 21 Horton, Douglas, 316 Information and Communication Technologies for Agriculture household surveys, 559 e-Sourcebook (World Bank), 183b humanitarian licensing models, 489 information and communication technology (ICT) human resource development (HRD), 141–44, 146 education and, 8b, 115, 117b extension and advisory services and, 7, 183b, 185b I farmer organizations and, 62b IBEX (Inter Borrower Exchange Program), 246 innovation brokers and, 224b ICAR. See Indian Council of Agricultural Research knowledge exchange role of, 8b ICICI Bank, 248b research and, 272–73, 272b ICRISAT. See International Crops Research Institute for training and, 8b, 117b Semi-Arid Tropics information gathering ICT. See information and communication technology defined, 540b IDE (International Development Enterprises), 224b market intelligence, 58, 272–73, 413 IDESI (Institute for Development of the Informal for organizational assessment, 555–56 Sector–Arequipa), 242 research and, 272–73 IDRC (International Development Research Centre), 17b, 344 infrastructure IFDC (International Fertilizer Development Center), 232–33, 233b for cluster-based business development, 397, 431b IIRR (International Institute of Rural Reconstruction), 207 for education and training, 168 ILAC (Institutional Learning and Change Initiative), 559b, 628 INIA (Instituto Nacional de Investigación Agropecuaria, ILO (International Labour Organization), 111, 375b Uruguay), 39b, 320–21b ILRI. See International Livestock Research Institute INIAP (Ecuador), 45b Imperial Chemical Industries (ICI), 70 INIAP (Instituto Nacional Autónomo de Investigaciones INCAGRO. See Innovation and Competitiveness Program for Agropecuarias, Ecuador), 291b Peruvian Agriculture Innova-Chile, 81 INCOPA Project (Peru), 45b Innovation Acquisition Service (Thailand), 23b incubator. See business incubator Innovation and Competitiveness Program for Peruvian India. See also Andhra Pradesh Agriculture (INCAGRO), 240–45, 240b, 242–43b, 244t, Agricultural business incubator at ICRISAT, 393b, 421–25 320–21b, 322 agricultural innovation systems in, 3b innovation brokers agrodealer development in, 231 brokering role, 179–259 BASIX, 246–50 capacity building and, 27b biosafety regulatory systems in, 495–96b coordination role of, 30–31 business incubators in, 392b, 421–25, 422f, 423–24b, 425t defined, 16b coordination organizations in, 25b, 38b, 84–89, 85b, 86–87f, extension and advisory services role of, 191, 221–30 87–88b innovation networks and, 46 education and training in, 129, 138 innovative activity profiles, 231–50 extension and advisory services in, 184b, 224b investment context, 221–22 farmer organizations in, 62b, 63b investment needs, 222–23b, 225–26 higher education reform in, 145–48 lessons learned, 227–28 innovation brokers in, 222, 224b monitoring and evaluation of, 228 National Agricultural Innovation Project (NAIP), 38, 266, 269, policy issues, 226 331–37, 333t, 334–36b potential benefits, 224–25 no-till agriculture in, 47b, 70, 72, 72t recommendations, 228–30 research organizations in, 21, 323b typology of, 222–24, 225t scenario planning in, 603–6, 604t, 605f, 606b innovation funds, 381–87 governance and, 383, 384t INDEX 647 innovation funds (continued) lessons learned, 144 innovative activity profile, 435–41, 437–38b, 437t, 440b potential benefits, 143–44 investment context, 381–82 Institute for Development of the Informal Sector–Arequipa investment needs, 383 (IDESI, Peru), 242 lessons learned, 386–87, 387b Institute of Peruvian Amazon Research, 243b policy issues, 384–85 institutional framework potential benefits, 383–84 cluster-based business development and, 398–99, 398f, 431b sustainability, 440–41 “extension-plus� approach and, 216–18 InnovationNetwork (Netherlands), 46 intellectual property (IP) management and, 410 innovation networks, 30, 44–51 pluralistic extension systems and, 201 capacity building and, 27b research and, 5 coordination and collective action role of, 30, 44–51 Technology Transfer Offices and, 410, 485–86 incentives for, 51 tertiary education and, 147 investment context, 44–45 Institutional History monitoring method, 577b, 610–13, 613t investment needs, 45–46 institutional learning, 559b lessons learned, 49–51 Institutional Linkage Project, 151 policy issues, 47–49 Instituto Nacional Autónomo de Investigaciones Agropecuarias potential benefits, 46–47, 47b (INIAP, Ecuador), 291b public and private sector roles, 48–49, 49b Instituto Nacional de Investigación Agropecuaria (INIA), recommendations, 51 39b, 320–21b research role, 48 Instituto Nacional Tecnología Agropecuaria (INTA, Argentina), 292b social capital issues, 48 Institut Pertanian Bogor (IPB, Indonesia), 127b, 133 sustainability and, 47–48 INTA (Instituto Nacional Tecnología Agropecuaria, innovation platforms, 268–69, 283 Argentina), 292b innovative activity profiles intellectual property (IP) management, 480–91 advisory services models, 231–50 capacity building for, 518b agricultural business development, 421–41 contracting and, 519 agricultural research linkages, 344–49, 345b, 346t, 348b due diligence, 519 assessment, 589–609 enabling environment for innovation, 480–91, 516–21 biosafety regulatory systems, 522–25 environmental issues, 488 business incubators, 421–25 foreign direct investment and, 482 cluster-based business development, 430–34, 431–33b genetic resources and, 481b coordination and collective action, 70–99 governance and, 408–9 education and training, 145–71 humanitarian licensing models, 489 enabling environment for innovation, 512–29 innovative activity profile, 516–21, 517–18b innovation brokers, 231–50 institutional framework and, 410 innovation funds, 435–41, 437–38b, 437t, 440b investment context, 406–7, 407t, 480–82 innovation partnerships and business development, 421–41 investment needs, 407–9, 484–87 in-service training/learning, 154–56 legal framework and, 487–88 intellectual property (IP) management, 516–21, 517–18b lessons learned, 410–13, 488–89 Mexico produce foundation, 75–79 national innovation policy and, 482 monitoring and evaluation (M&E), 610–19 policy issues, 410, 411–12, 487–88 no-till networks, 70–74 potential benefits, 409–10, 487 organizational change, 326–30, 327b, 329b public and private sector roles, 483–84, 488, 517b prioritization, 593 public-private partnerships and, 293, 295 public-private research partnerships, 90–94 recommendations, 412–13, 413b, 489–91 rural productive alliances, 95–99 research councils and, 38 regulatory frameworks, 522–25 Technology Licensing Office (Thailand), 23b research, 326–49 technology transfer and, 482–83 technician development, 163–64, 169–71, 170b trade and, 482 tertiary education and training, 145–53, 157–62 training for, 407–8, 408t, 489–90, 490b Inova, 411b Inter Borrower Exchange Program (IBEX), 246 in-service training/learning, 141–44 Interchurch Organization for Development Corporation, 431b implementation issues, 144 interest groups, 40, 184b innovative activity profile, 146, 154–56 internal rate of return (IRR), 418 investment context, 141 International Center for Tropical Agriculture (CIAT), 17b, 91–93, investment needs, 142–43 347, 348b 648 INDEX International Crops Research Institute for Semi-Arid Tropics cluster-based business development in, 401b (ICRISAT), 285b, 393b, 421–25, 422f, 423–24b, 425t coordination organizations in, 24b, 64b International Development Agency (Canada), 299b extension and advisory services in, 222b, 238b International Development Enterprises (IDE), 224b Farmer Field Schools in, 236, 238, 238b International Development Research Centre (IDRC), 17b, 344 farmer organizations in, 62b International Fertilizer Development Center (IFDC), 232–33, 233b gender-inclusive education in, 109b International Food Policy Research Institute, 181b innovation brokers in, 222, 222b, 225 International Institute of Rural Reconstruction (IIRR), 207 research and development in, 271b, 327b International Institute of Tropical Agriculture–FOODNET, 348b value chains in, 54b International Labour Organization (ILO), 111, 375b Kenya Agricultural Productivity Project (KAPP), 238b, 269 International Livestock Research Institute (ILRI), 44, 223b, 299b, Kenya Agricultural Research Institute (KARI), 222b, 269 326–30, 327b Kenya Dairy Goat and Capacity Building Project International Maize and Wheat Improvement Center (KDGCBP), 185b (CIMMYT), 47b, 50 Kenya Flower Council, 24b International Potato Center (CIP), 45b, 222b Kenya Good Agricultural Practices (Kenya-GAP), 24b International Service for National Agricultural Research Kenya Horticulture Council, 24b (ISNAR), 78b Kenya Tea Board, 24, 64b internship programs, 153, 161 Kenya Tea Development Agency (KTDA), 53, 60, 64b, 66–67 intervention logic, defined, 540b Kerala Horticultural Development Programme (KHDP, India), IP. See intellectual property management 215b, 217b, 219b iPark (business incubator), 392 Khisa, Godrick, 236 IPB (Institut Pertanian Bogor, Indonesia), 127b, 133 Klerkx, Laurens, 221 Ireland Kline, S. J., 268 education and training in, 126 knowledge transfer, 232, 233b, 235b. See also education and foresighting investments in, 563b training; technology transfer scenarios, 563b Korea, Republic of Teagasc, 536b governance of innovation systems in, 470–71, 473b IRR (internal rate of return), 418 policy coordination organizations in, 474b ISNAR (International Service for National Agricultural strategic intelligence capabilities in, 476b Research), 78b Kowalski, Stanley, 480 Kristjanson, Patti, 326 J Krone, Anton, 435 Jamaica KTDA. See Kenya Tea Development Agency foresighting investments in, 564b Kwadaso Agricultural College (Ghana), 156 public-private research partnerships in, 385b Janssen, Willem, 607 L Jimma University College of Agriculture and Veterinary Labor standards, 375b Medicine (Ethiopia), 163 Lake Victoria Environmental Management Program, 404b Joffe, Steen, 589 Lambayeque Institute for Agricultural Development (Peru), 242 Johnson, Adolphus, 589 Land Care movement (Philippines), 270 joint experimentation, 311 Land O’Lakes, 165, 166, 167 joint venture, 79b, 81b, 141–42, 195, 286, 341 Larson, Gunnar, 84, 526 Latin America and the Caribbean. See also specific countries K competitive research grants in, 386b Kammili, Trish, 569, 580 farmer organizations in, 65–66 KAPP (Kenya Agricultural Productivity Project), 238b, 269 public-private research partnerships in, 90–94, 294 KARI (Kenya Agricultural Research Institute), 222b, 269 regional research coordination in, 297–98, 298b Karuppanchetty, S. M., 421 research and development in, 263 Kazakhstan, competitive grant funding in, 436 science and technology funds in, 40 KDGCBP (Kenya Dairy Goat and Capacity Building Project), Latin American and Caribbean Consortium to Support Cassava 185b Research and Development (CLAYUCA), 90–94, 92b Kelemework, D., 275 Latin American Fund for Irrigated Rice (FLAR), 298b Kellogg Commission on the Future of State and Land-Grant LBDSs. See local business development services Universities, 127–28 learning alliances, 17b, 273, 344–49, 345b, 346t, 348b Kenya learning organizations, 559b agrodealer development in, 234b LEED (Local Economic and Employment Development) business development services in, 201, 207 Project, 551b INDEX 649 legal framework for intellectual property, 487–88. See also innovation networks and, 48 regulatory frameworks value chains and, 56–57 Lemola, Tarmo, 469 marketing chains, 52–58. See also value chains limited partnership investments, 416 coordination and collective action, 23–24 LISFs (Local Innovation Support Funds), 435–41, 438b, 440b extension and advisory services, 217b Livelihoods Diversification and Enterprise Development farmer organizations and, 60 Fund, 238b investment context, 52–53 livestock, 516–21, 517–18b investment needs, 53–55 biosciences, 299b lessons learned, 57 Fodder innovations project, 610–13 niche markets and, 55 Global Alliance for Livestock Veterinary Medicines policy issues, 56–57 (GALVmed), 516–21 potential benefits, 55–56 intellectual property management, 516–21 public and private sector roles, 57 ILRI, 44, 223b, 299b, 326–30, 327b recommendations, 57–58 research within AIS, 326–30 social capital issues, 56–57 role of ICT for, 8 sustainability and, 56–57 Livestock, Livelihoods, and Markets Project (LiLi), 327b market intelligence, 58, 272–73, 413 local business development services (LBDSs), 191, 204–12 matching grants (MGs), 67, 98, 211, 242, 286, 368, 381–82, 382t, capacity building and, 211–12 384b, 549t. See also competitive research grants, and environmental issues, 210, 210b innovation funds governance and, 209 defined, 632 implementation of, 212 McLean, Morven, 492, 522 investment context, 204–5 MERCOSUR, 298b investment needs, 205–8, 206b Mexico lessons learned, 210–12 codesigned innovation in, 312b policy issues, 208–10 coordination organizations in, 75–79 potential benefits, 208 farmer-managed foundations in, 23 public and private sector roles, 205–7, 205f, 209–10 farmer organizations in, 63b, 67 social targeting of, 209 innovation networks in, 49b sustainability, 210 no-till agriculture in, 72 Local Economic and Employment Development (LEED) public-private research partnerships in, 90 Project, 551b research councils in, 21 Local Economic Development Projects (Mozambique), 206b value chains in, 54b, 56b Local Innovation Support Funds (LISFs), 435–41, 438b, 440b microcredit, 246 locavore movement, 53 Middle East and North Africa. See also specific countries Los Lagos University (Chile), 342b education and training in, 108 Lugg, David, 435 regional research coordination in, 297–98 Lundy, Mark, 344 Midwest Universities Consortium for International Activities Lynam, John, 261 (MUCIA), 152–53, 169–71, 170b Milk Producers’ Cooperative Unions (India), 25b M Ministry of Agriculture (China), 124b Maguire, Charles J., 107, 122, 131, 136, 141, 145, 149, 151, 154, Ministry of Agriculture (Ethiopia), 138 163 Ministry of Agriculture (India), 38b Mahajan, Vijay, 246 Ministry of Agriculture (Netherlands), 149 Makerere University (Uganda), 156 Ministry of Agriculture (Peru), 243b, 244 Malawi Ministry of Agriculture and Fisheries (Timor Leste), 165–68 business development services in, 207 Ministry of Agriculture and Food Security (Tanzania), 318b gender-inclusive education in, 109b Ministry of Education (China), 124b Mali Ministry of Education (Egypt), 169–70 business development services in, 208 Ministry of Education (Ethiopia), 138 extension and advisory services in, 187, 200, 209b Ministry of Education (Netherlands), 149 farmer organizations in, 62b Ministry of Food and Agriculture (Ghana), 155, 280b Mali Agribusiness Incubator Network, 209b Ministry of Science and Technology (Thailand), 23b, 266 M&E. See monitoring and evaluation mixed-portfolio investment model, 389 Manpower Advisory Councils (India), 146 mobile phones. See information and communication Mansingh Institute of Technology (India), 25b technology (ICT) marginalized populations. See also equity issues; gender issues monitoring and evaluation (M&E), 11, 569–79. See also farmer organizations and, 65 assessment 650 INDEX capacity building and, 580 National Cooperative Dairy Federation (India), 63b competitive research funding and, 41b national coordination, 21, 34–43 of coordination and collective action, 32–33 capacity building for, 35, 36b counterfactuals and, 582, 583b investment context, 34–35 defined, 540b investment needs, 35–36 of education and training, 119–20, 120–21t, 126b lessons learned, 37–43 for enabling environment for innovation, 458–59t operational practices, 35–36 of extension and advisory services, 192–93, 192b policy issues, 37 of “extension-plus� approach, 216–18, 217t potential benefits, 36–37 farmer organizations and, 69 project-based funding, 40, 41b, 42t of innovation brokers, 228 recommendations, 37–43 innovative activity profiles, 610–19 research councils, 38–40, 38b investment context, 541, 569–70, 580–81 thematic or subsectoral coordination, 40–41 investment needs, 543–45, 544t, 570–76, 581–85 National Council on Innovation for Competitiveness (Chile), 338 investment rationale, 539–41 National Dairy Development Board (NDDB, India), 24, 25b, 63b lessons learned, 578–79, 585–88 National Fund for Agricultural Research (Senegal), 281b methods, 570–76, 571–72b, 573–75t, 576–77b, 583–84b, National Innovation Agency (NIA, Thailand), 23b, 266 583–85, 586–87t National Innovation Foundation (India), 224b of national innovation policy, 466–68b national innovation policy, 449–59, 460–68 of organizational change, 319–20, 330 benchmarking for, 466, 467–68b participatory, 576b coordination and collective action, 21, 34–43 of partnerships, 367b, 372–73, 373t development of, 462b policy issues, 541–43, 542t, 577–78, 585 enabling environment for innovation, 449–59, 460–68 potential benefits, 577, 585 environmental issues, 464 principles, 581–83, 582b governance and, 464 of public-private partnerships, 294–95, 294b, 379–80, 380b intellectual property management and, 482 recommendations, 578–79, 585–88 investment context, 460 of regional research, 303–7, 304–5t investment needs, 460–63 of research, 275, 276t lessons learned, 465–68 terminology, 540b monitoring and evaluation of, 466–68b Most Significant Change (MSC), 576b policy issues, 464–65 Mountains of the Moon University (Uganda), 163 potential benefits, 463 Mozambique recommendations, 465–68 business development services in, 201, 205, 208 social capital and, 464 extension and advisory services in, 184, 187, 197b, 200, 206b, National Rural Employment Guarantee Scheme (India), 85 208b, 210b National System of Innovation for Competitiveness (Chile), 80 gender-inclusive education in, 109b National Union of Agriculture and Livestock Farmers innovation brokers in, 226 (Nicaragua), 432b Mudahar, Mohinder S., 331 NBIA (National Business Incubator Association), 391 NDDB (National Dairy Development Board, India), 24, 25b, 63b N NEPAD (New Partnership for Africa’s Development), 299b, 301b Namibia National Farmers Union, 327b Nepal, no-till agriculture in, 47b, 70, 72 NAIP (India), 38, 266, 269, 331–37, 333t, 334–36b Nestlé, 181b NARIs (national agricultural research institutes), 262–63 Netherlands National Agency for Agricultural and Rural Advisory Services Bioconnect, 22t, 43b (Senegal), 281b coordination organizations in, 43b National Agricultural Advisory Services (NAADS, Uganda), higher education reform in, 149–50 181b, 186–87b, 200, 206b, 226 innovation brokers in, 222, 227 National Agricultural Extension Program (Mozambique), 184 Netherlands Foundation for International Cooperation, 163 National Agricultural Innovation Project (NAIP) (India), research and development in, 284 38, 266, 269, 331–37, 333t, 334–36b Wageningen university and research center, 149–50 National Agricultural Research Institute (Ecuador), 291b Net-Map, 593–97, 596b National agricultural research institutes (NARIs), 262–63 Network of Indian Agri-Business Incubators (NIAB), 423 National Bank for Agriculture and Rural Development New Partnership for Africa’s Development (NEPAD), 299b, 301b (India), 216b New Zealand National Business Incubator Association (NBIA), 391 extension and advisory services in, 188t National Commission for Scientific and Technological Research no-till agriculture in, 72 (Chile), 80 New Zealand Dairy Board, 24 INDEX 651 NGOs. See nongovernmental organizations potential benefits, 322–23 NIA (National Innovation Agency, Thailand), 23b, 266 recommendations, 324–25 NIAB (Network of Indian Agri-Business Incubators), 423 for research, 270, 277–88, 278b, 316–25, 344–49, 345b, 346t, Nicaragua 348b cluster-based business development in, 430–34, 431–33b, Ospina Patiño, Bernardo, 90 432–33b outcome mapping, 572b learning alliances in, 17b outsourcing partnerships, 294 public-private research partnerships in, 90 Oxfam, 431b niche markets, 53, 55, 56, 58 Nigeria P agrodealer development in, 234b PAID (Partnership for Agricultural Innovation and business development services in, 207 Development, Sierra Leone), 589–92 gender-inclusive education in, 109b Pakistan public-private research partnerships in, 90 agrodealer development in, 231 Nippon Foundation, 154 no-till agriculture in, 47b, 70, 72 Njaa Marufuku project (Kenya), 238b Palmberg, Christopher, 469 nongovernmental organizations (NGOs). See also specific Panama organizations cassava research in, 92b cluster-based business development and, 431b farmer organizations in, 67 coordination and collective action role of, 17b public-private research partnerships in, 90, 385b extension and advisory services, 189, 195, 196t rural productive alliances in, 97 innovation networks and, 46 Papa Andina marketing chains, 52, 57 codesigned innovation and, 313b public-private partnerships and, 387b creation and consolidation of, 45b research and, 267 gender and assessment of, 598–602, 600t no-till networks, 70–74, 72–73t innovation brokers and, 225 Pape-Christiansen, Andrea, 406 O Paraguay OIKOS (NGO), 208b cluster-based business development in, 405b one-stop agribusiness centers, 207–8, 208b no-till agriculture in, 70, 72t, 73t Operation Flood (India), 25b ParqueSoft Centers (Colombia), 390b, 395b organizational assessment, 553–61 participatory group learning, 185b benchmarking and, 554 participatory market chain approach (PMCA), 313b framework for, 553–55, 554f, 555b participatory monitoring and evaluation, 311, 576b household surveys, 559 Participatory Radio Campaigns, 62b information gathering, 555–56 participatory research, 262–63, 291b investment context, 553 Partnership for Agricultural Innovation and Development learning organizations and, 559b (PAID, Sierra Leone), 589–92 lessons learned, 561 partnerships, 10, 361–448. See also agricultural business methods, 555–59 development; public-private partnerships performance assessment, 556–58, 557–58b agricultural business development and, 362 policy issues, 560–61 contracts for, 378–79 potential benefits, 559–60 equity issues, 370 staff surveys, 558–59, 560b extension and advisory services, 198 organizational frameworks, 316–25 financing, 368–69 capacity building and, 316–17, 318b gender issues, 370 for coordination and collective action, 20–26, 22t, 23–25b, 27b incentives, 365b defined, 16b innovation funds, 381–87, 435–41 equity issues, 324 investment context, 363–69, 364–65t gender issues, 324 investment needs, 371–72 governance issues, 317–19, 319b investment rationale, 362–63 incentives for change, 320 limited, 416 innovative activity profiles, 326–30, 327b, 329b monitoring and evaluation of, 372–73, 373t investment context, 316 policy issues, 369–71 investment needs, 316–22, 317t principles for, 377 lessons learned, 324 for research, 90–94 monitoring and evaluation of, 319–20, 330 PASAOP (Agricultural Services and Producer Organizations policy issues, 323–24 Project, Senegal), 281–82b 652 INDEX Peking University (China), 409b organizational change, 323–24 PepsiCo, 249b partnerships, 369–71 performance, defined, 540b. See also monitoring and pluralistic extension systems, 200–201 evaluation (M&E) public-private partnerships, 293–94, 376 performance-based contracts, 514 regional research, 300–302 Peru research, 269–70 agricultural innovation systems in, 3b risk capital investments, 418–19 extension and advisory services in, 240–45 technician development, 138–39 gender and program assessment in, 598–602, 600t Technology Transfer Offices, 410, 411–12 innovation networks in, 45b tertiary education and training, 128 public-private research partnerships in, 90, 385b value chains, 56–57 research and development in, 283 Polytechnic University of Bobo-Dioulasso (Burkina Faso), 156 research funding in, 320–21b Potter, Robert, 480 Philippines poverty reduction public-private research partnerships in, 274b coordination and collective action role in, 17–18 research and development in, 270 enabling environment for innovation and, 456 Pingali, P., 300 Preissing, John, 240 plant variety rights (PVRs), 453b priorities, defined, 540b. See also agenda setting pluralistic extension systems, 191, 194–203, 196t private sector. See also public-private partnerships capacity building for, 198–200 coordination and collective action, 28 environmental issues, 201 extension and advisory services, 181b, 187, 189, 190t, 195, equity issues, 201 196t, 202 gender issues, 201 “extension-plus� approach, 218 institutional framework and, 201 innovation networks and, 48–49, 49b, 51 investment context, 195–97 in-service training capacity, 142 investment needs, 197–200, 199t intellectual property (IP) management, 483–84, 488, 517b lessons learned, 202 local business development services (LBDSs), 205–7, 205f, policy issues, 200–201 209–10 potential benefits, 200 marketing chains, 52, 57 public and private sector roles, 201 pluralistic extension systems, 201 recommendations, 203 research financing, 5b, 267, 271–72 sustainability, 200 role of, 12b PMCA (participatory market chain approach), 313b value chains, 57, 93 policy issues PROCISOR, 298b agricultural research linkages, 286–87 Produce Foundations (Mexico), 23, 31, 60, 75–79 assessment, 541–43, 542t, 550–51 Producer organization, 5b, 6b, 24, 31, 62b, 95–99, 220t, 222b, 241, biosafety regulatory systems, 494–95 244, 281b, 342b, 385b, 431b, 433b, 489. See also farmer business incubators, 391 organization cluster-based business development, 400, 431b defined, 631 codesigned innovations, 314 Productive Partnerships Project (Colombia), 385b coordination and collective action, 28–29, 37 product marketing companies, 23 curriculum reform, 134 PROfarm courses, 137b education and training, 112–13 Programa Nacional de Extensão Agrária (PRONEA, enabling environment for innovation, 450–52, 450f, Mozambique), 184, 200 455–56, 457 PROINPA Foundation (Bolivia), 45b evaluation, 585 project-based funding, 40, 41b, 42t extension and advisory services, 187–91 project management, 142–43 “extension-plus� approach, 216–18 Prolinnova network, 60 foresighting investments, 567–68 Propensity Score Matching, 583b innovation brokers, 226 public-private partnerships, 290b, 290t, 374–80 innovation funds, 384–85 business development services, 208, 212 innovation networks, 47–49 capacity building for, 27b, 379 intellectual property (IP) management, 410, 411–12, 487–88 cluster-based business development and, 404b local business development services (LBDSs), 208–10 contracts for, 378–79 marketing chains, 56–57 for coordination and collective action, 90–94, 92b monitoring and evaluation (M&E), 541–43, 542t, 577–78, 585 education and training, 143 national innovation policy, 464–65 enabling environment for innovation and, 93, 456 organizational assessment, 560–61 exit strategies, 369b, 379 INDEX 653 public-private partnerships (continued) recommendations, 495–99 extension and advisory services, 190, 206b cluster-based business development and, 397–98 farmer organizations and, 63b coordination and collective action and, 21 investment context, 374–75 enabling environment for innovation and, 452–53, 457, investment needs, 375–76 492–511, 522–25 investment rationale, 289–90, 362–63, 369b innovative activity profiles, 522–25 lessons learned, 294–95, 376–80 technical regulations and standards, 501–11, 502b monitoring and evaluation of, 294–95, 294b, 379–80, 380b institutional frameworks and, 505, 505b, 505t policy issues, 293–94, 376 investment context, 501–2 potential benefits, 293, 376 investment needs, 502–7, 503–4b, 503t principles for, 377 lessons learned, 510–11 recommendations, 295–96 policy issues, 504, 508–10, 509b, 509t research and, 90–94, 92b, 271, 274b, 289–96, 291–92b, 327b potential benefits, 507–8 sustainability, 379 public and private sector roles, 510 value chains and, 93 Reinventing Agricultural Education for the Year 2020 (U.S.), 128 public sector. See also public-private partnerships RELCs (Research-Extension-Linkage Committees, Ghana), 280b assessment and, 550–51 representational partnerships, 294 coordination and collective action, 28 research, 261–360 extension and advisory services, 180, 189, 190t, 195, 196t in agricultural innovation system, 264–69 “extension-plus� approach, 218 codesigned innovations, 308–15 innovation networks, 48–49, 49b community-based, 157–59, 159b intellectual property (IP) management, 483–84, 488, 517b decentralization of, 262–63, 270 local business development services (LBDSs), 205–7, equity issues, 270 205f, 209–10 financing for, 5b, 270, 271b marketing chains, 57 ICTs and, 272–73, 272b pluralistic extension systems, 201 initiatives to strengthen, 5–7, 6b research financing, 5b innovation networks and, 48 role of, 12b innovative activity profiles, 326–49 value chains, 57, 93 investment context, 262–64 Puskur, Ranjitha, 326 investment needs, 270–75 PVRs (plant variety rights), 453b investment rationale, 261–62 monitoring and evaluation of, 275, 276t R organizational framework for, 270, 277–88, 278b, 316–25, Ragasa, Catherine, 275, 277 344–49, 345b, 346t, 348b Rajalahti, Riikka, 1, 15, 34, 277, 381, 603 participatory, 262–63, 291b Rapid Appraisal of Agricultural Knowledge Systems (RAAKS), policy issues, 269–70 45b, 571b public-private partnerships and, 90–94, 92b, 274b, 289–96, regional research, 297–307 291–92b equity issues, 302 reforms, 10 investment context, 297–99, 298b regional, 297–307 investment needs, 299–300 technology transfer and, 284–86, 285b, 331–37, 334–36b lessons learned, 302–7 research councils, 21, 38–40, 38b monitoring and evaluation of, 303–7, 304–5t Research-Extension-Linkage Committees (RELCs, Ghana), 280b policy issues, 300–302 Research Into Use (RIU) program, 614–19, 616–18b potential benefits, 300 RIR (Rural Infrastructure Revival), 247 sustainability, 302 risk capital, 414–20 Regional Unit for Technical Assistance (RUTA), 347 investment context, 414–15, 415f, 415t Regional Universities Forum in Africa (RUFORUM), 133, 133b, investment models, 415–16 207, 301b lessons learned, 419–20 regulatory frameworks, 452–53, 457, 492–511 policy issues, 418–19 biosafety regulatory systems, 492–500 potential benefits, 416–18, 417–18b capacity building for, 493b recommendations, 420 interministerial coordination for, 497–98, 498b venture capital funds, 415–16 investment context, 492 Rockefeller Foundation, 109b, 133b, 301b investment needs, 493–94 Roseboom, Johannes, 449, 460, 501 lessons learned, 495–99 Rosenberg, N., 268 policy issues, 494–95 roundtables, 39b, 58 potential benefits, 494, 494b Royal Tropical Institute, 207 654 INDEX rural areas Shining Path, 241 business development and, 369 Sierra Leone coordination organizations in, 84–89, 85b, 86–87f, 87–88b, Farmer Field Schools in, 238 95–106 policy and planning assessment in, 589–92 enabling environment for innovation and, 454–55, 455b, Sistema Nacional de Innovación para la Competitivad 457–58 (SNIC, Chile), 80 higher education reform and, 157–59 skill gap analysis, 126b, 152 learning alliances in, 17b SOCAD (State Office for Comprehensive Agricultural marketing chains and, 55 Development, China), 427 productive alliances in, 95–106 social capital. See also equity issues; gender issues value chains and, 99 enabling environment for innovation and, 456 Rural Capacity Building Project (Ethiopia), 126 extension and advisory services and, 7 Rural Infrastructure Revival (RIR), 247 “extension-plus� approach and, 218 Rural Polytechnic Institute of Training and Applied Research innovation networks and, 48 (Mali), 156 marketing chains and, 56–57 rural productive alliances, 25–26, 99 national innovation policy and, 464 Rural Research and Development Council (Australia), 37b value chains and, 56–57 Rutgers Food Innovation Center (USA), 392, 393–94b social network analysis, 79b Rwanda social targeting of local business development services, 209 agrodealer development in, 234b Society for Elimination of Rural Poverty (SERP, Andhra Pradesh), gender-inclusive education in, 109b 31, 84–89 Sokoine University of Agriculture (Tanzania), 156 S South Africa SACCAR (Southern African Center for Cooperation in cluster-based business development in, 401b Agricultural Research and Training), 307b cluster-based development in, 399 SACCOs (savings and credit cooperatives), 183 education and training in, 129 SAE (Supervised Agricultural Experience), 110b governance of innovation systems in, 471, 473b Safaricom, 185b no-till agriculture in, 72 Safe Food, Fair Food Project, 327b policy coordination organizations in, 474b SAFE (Sasakawa Africa Fund Education) Program, 133, 154–56 public-private research partnerships in, 90 Samako Agricultural Institute (Mali), 156 regional research and, 307b sanitary/phytosanitary standards, 502b strategic intelligence capabilities in, 476b Sarapura, Silvia, 598 South Asia. See also specific countries Sasakawa Africa Association, 154 education and training in, 108 Sasakawa Africa Fund Education (SAFE) Program, 133, 154–56 Southern African Center for Cooperation in Agricultural Sasakawa–Global 2000, 71b Research and Training (SACCAR), 307b satellite imagery, 8b Spielman, David J., 275, 277, 294 SAUs (state agricultural universities, India), 145–48 staff surveys, 558–59, 560b savings and credit cooperatives (SACCOs), 183 startup funding, 416 scenario planning, 400, 603–6, 604t, 605f, 606b state agricultural universities (SAUs, India), 145–48 Schiffer, Eva, 593 State Office for Comprehensive Agricultural Development science and technology councils, 21 (SOCAD, China), 427 science parks, 271–72 State University of Campinas (Unicamp, Brazil), 411b SDC (Swiss Agency for Development and Cooperation), 45b, 211 strategic alliances, 374 Secondary Vocational Agricultural Education Program (U.S.), 128 Strategic Services Development Fund (Peru), 242–43, 320b second-round funding, 416 Suale, David, 589 sector-specific incubators, 389–90 Sub-Saharan Africa seed fund investment, 415, 422 education and training in, 108 Self Help Group Quality Improvement Program (SHGQIP), 247 extension and advisory services in, 190 self-help groups (SHGs), 84, 247, 526 farmer organizations in, 66 Senegal, agricultural research linkages in, 281–82b regional research coordination in, 297–98, 306–7b SEP (Supervised Enterprise Project), 154, 155 research and development in, 264, 273 SERP (Society for Elimination of Rural Poverty, Andhra subsectoral coordination, 40–41 Pradesh), 31, 84–89 subsidies, 50 shared responsibility system, 361, 369, 370–71 Sulaiman, Rasheed, 213, 273 Sharma, Kiran K., 421 supermarkets, 53, 56b SHGQIP (Self Help Group Quality Improvement Program), 247 Supervised Agricultural Experience (SAE), 110b SHGs (self-help groups), 84, 247 Supervised Enterprise Project (SEP), 154, 155 INDEX 655 Supervised Student Internship Programs, 171 lessons learned, 410–13 sustainability policy issues, 410, 411–12 business incubators, 424 potential benefits, 409–10 coordination and collective action, 29 recommendations, 412–13, 413b extension and advisory services, 189–90 training for, 407–8, 408t “extension-plus� approach, 218 Tekes (Finnish Funding Agency for Technology and Farmer Field Schools, 238 Innovation), 475b innovation funds, 440–41 territorial innovation programs, 81b innovation networks, 47–48 tertiary education and training, 122–62 local business development services, 210 comprehensive reform, 123–25, 124–25b marketing chains and, 56–57 curriculum reform, 125–26, 126b, 131–35, 151–53 pluralistic extension systems, 200 innovative activity profiles, 145–53, 157–62 public-private partnerships, 379, 385 in-service training, 141–44 regional research, 302 institutional development and, 147 technician development, 139 investment context, 122–23 tertiary education and training, 147 investment needs, 123–28 value chains, 56–57 lessons learned, 128–29, 147–48 Swiss Agency for Development and Cooperation (SDC), 45b, 211 policy issues, 128 Swiss-Re, 327b potential benefits of investment, 128 systemic intermediaries, 221 program design, 128 recommendations, 129–30, 130b T sustainability and, 147 Tanzania for technician development, 136–40 cluster-based business development in, 401b Thailand extension and advisory services in, 187, 200, 207b coordination organizations in, 23b Farmer Field Schools in, 238 education and training in, 125 gender-inclusive education in, 109b public-private partnerships in, 375b innovation funds in, 440 public-private research partnerships in, 274b research capacity building in, 318b Thailand Research Fund (TRF), 157, 158–59 tax incentives, 20, 364 thematic coordination, 40–41 TBIE (theory-based impact evaluation), 584b Thematic Notes Technical Assistance and Support Services (TASS), 246 agricultural education and training to support AIS, 122–44 technician development, 136–40 agricultural research as part of AIS, 277–325 innovative activity profile, 163–64, 169–71, 170b coordination and collective action for AIS, 34–69 investment context, 136–37 enabling environment for AIS, 460–511 investment needs, 137–38, 137b extension and advisory services as part of AIS, 194–230 lessons learned, 139 innovation partnerships and business development, 374–420 policy issues, 138–39 assessing, prioritizing, monitoring and evaluating AIS, 546–88 potential benefits, 138 theory-based impact evaluation (TBIE), 584b recommendations, 139–40 theory of change, 540b, 547–48, 547b sustainability, 139 Theus, Florian, 396 technology consortiums, 81b, 338–43 third-round funding, 416 Technology Development Foundation of Turkey (TTGV), 384b Tianjin Women’s Business Incubator (TWBI, China), 392b Technology Licensing Office (Thailand), 23b Timor-Leste, education and training in, 126, 165–68 technology parks, 367–68 Tocal College (Australia), 137b technology transfer. See also Technology Transfer Offices (TTOs) ToT (Training of Teachers) program, 163–64 agricultural business development and, 406–13, 426–29 trade agricultural research linkages and, 284–86, 285b extension and advisory services, 188 agrodealer development and, 232, 233b, 235b intellectual property (IP) management and, 482 financing, 5b Trade-Related Intellectual Property Rights Agreement innovation brokers and, 226 (TRIPS), 481b intellectual property (IP) management and, 482–83 training. See also education and training research and, 284–86, 285b, 331–37, 334–36b farmer organizations and, 68 Technology Transfer Offices (TTOs), 368 for intellectual property (IP) management, 407–8, 408t, governance and, 408–9 489–90, 490b institutional framework and, 410, 485–86 training and visit (T&V) extension model, 182 investment context, 406–7, 407t Training of Teachers (ToT) program, 163–64 investment needs, 407–9 transforming economies, 265, 278b 656 INDEX transparency coordination organizations in, 39b competitive research funding and, 41b INIA, 39 coordination and collective action, 35 no-till agriculture in, 73t extension and advisory services, 191 public-private research partnerships in, 274b farmer organizations, 61 research and development in, 271b governance and, 479 public-private partnerships, 377 V TRF (Thailand Research Fund), 157, 158–59 value chains, 31, 52–58 Trinidad and Tobago, public-private research partnerships in, 90 cluster-based business development vs., 397 Triomphe, Bernard, 308, 435 cluster-based development and, 402 TRIPS (Trade-Related Intellectual Property Rights coordination and collective action, 31, 52–58 Agreement), 481b defined, 16b Tropical Agriculture Research and Education Center, 344 investment context, 52–53 Tsinghua University (China), 409b investment needs, 53–55 TTGV (Technology Development Foundation of Turkey), 384b lessons learned, 57 TTOs. See Technology Transfer Offices niche markets and, 55 Turkey, matching grant schemes in, 383, 384b policy issues, 56–57 Turkey Technology Development Project, 384b potential benefits, 55–56 TWBI (Tianjin Women’s Business Incubator, China), 392b public and private sector roles, 57, 93 200 Markets Upgrading Program (China), 58 recommendations, 57–58 research financing and, 272 U rural productive alliances and, 99 UAP Insurance, 327b social capital issues, 56–57 Udayana University (Indonesia), 168 sustainability and, 56–57 Uganda Van Hall Larenstein University of Applied Sciences, 207 biosafety regulatory systems in, 496–97b Vasumathi, K., 246 business development services in, 201, 205, 205b Vega Alarcón, Rodrigo, 80, 338 cluster-based business development in, 404b Vegetable and Fruit Promotion Council, Kerala (VFPCK, India), extension and advisory services in, 181b, 184, 186–87b, 200, 215b, 217b, 219b 205b, 206b Veldhuizen, Laurens van, 435 Farmer Field Schools in, 238 Vende Project (Paraguay), 405b gender-inclusive education in, 109b Venezuela innovation brokers in, 226 no-till agriculture in, 72 technical regulations and standards in, 506–7b public-private research partnerships in, 90 technical skill development in, 163–64 venture capital funds, 46, 63b, 361, 368–69, 415–16 Uganda Fish Processors and Exporters Association, 404b vertical coordination, 20 Unicamp (Brazil), 411b veterinary medicines, 516–21, 517–18b Union Training Centers (India), 25b Vietnam, biosafety regulatory systems in, 500b United Nations, 2b Villagro Network, 224b United Nations Educational, Scientific, and Cultural vocational education and training (VET), 109, 136–40 Organization (UNESCO), 111 United Nations Industrial Development Organization W (UNIDO), 430–34, 431–33b Wadi Programme of Dharampur Uththan Vahini (India), 216b United States Wageningen University and Research Center, 125, 149–50, 163 business incubators in, 391 Wartenberg, Ariani, 607 cluster-based development in, 399 Waters-Bayer, Ann, 435 education and training in, 127–28, 152–53 West Africa. See also specific countries no-till agriculture in, 70, 73t Agricultural Productivity Project, 264 public-private research partnerships in, 90 biosafety regulatory systems in, 522–25 vocational education in, 109 Center for Crop Improvement, 299b United States Agency for International Development (USAID), Network of Peasant and Agricultural Producers’ Organizations, 60 109b, 111, 112b, 160, 234b, 262, 405b Seed Alliance, 285b University of Abomey-Calavi (Benin), 156 Whirlpool Company, 27b University of Beijing (China), 409b Williams, Melissa, 84, 526 University of Cape Coast (Ghana), 155–56 Wine Industry Network for Expertise and Technology upward accountability, 217 (Winetech), 401b urbanized economies, 265 Wines of South Africa (WOSA), 401b Uruguay Winrock International Institute for Agricultural Development, 154 INDEX 657 W.K. Kellogg Foundation, 128, 160 X women. See gender issues Xavier Labour Research Institute, 217b Women’s Development and Leadership Develpoment Programs (India), 25b Y Wongtschowski, Mariana, 435 Yangling High Technology Agricultural Demonstration World Bank Zone, 427 on education and training, 108 education financing, 111, 112, 138 Z extension and advisory services, 181b, 240b, 241, 243 Zambia farmer organizations and, 67 agricultural business development in, 512–15 learning alliances and, 347 business development services in, 207 public-private partnerships and, 384b, 385b, 404b education and training in, 117b research and development investments by, 5b, 6, 263, 323b gender-inclusive education in, 109b research centers, 262 Zamorano University (Honduras), 133 rural productive alliances and, 96 Zeng, Douglas, 396 World Development Report 2008 (World Bank), 265 Zonal Agricultural Research and Development Funds WOSA (Wines of South Africa), 401b (ZARDEFs), 318ba 658 INDEX ECO-AUDIT Environmental Benefits Statement The World Bank is committed to preserving Saved: endangered forests and natural resources. The • 53 trees Office of the Publisher has chosen to print • 22 million BTU Agricultural Innovation Systems: An Invest- of total energy ment Sourcebook on recycled paper with • 5,369 pounds of net 50 percent post-consumer waste, in accor- greenhouse gases dance with the recommended standards for (CO2 equivalent) paper usage set by the Green Press Initiative, • 24,213 gallons of a nonprofit program supporting publishers in waste water using fiber that is not sourced from endan- • 1,534 pounds gered forests. For more information, visit of solid waste www.greenpressinitiative.org. R esearch, education, and extension investments, while usually necessary, are often insuf�cient alone to bring knowledge, technologies, and services that enable farmers and entrepreneurs to innovate. Efforts to strengthen research systems and increase the availability of knowledge have not increased innovation or the use of knowledge in agriculture at the pace or the scale required by the intensifying and proliferating challenges confronting agriculture. Agricultural Innovation Systems: An Investment Sourcebook contributes to the identi�cation, design, and implementation of the investments, approaches, and complementary interventions most likely to strengthen agricultural innovation systems (AIS) and to promote innovation and equitable growth. The Sourcebook provides a menu of tools and operational guidance, as well as good practice lessons, to illustrate approaches to designing, investing in, and improving these systems. Managing the ability of agriculture to meet rising global demand and to respond to the changes and opportunities will require good policy, sustained investments, and innovation—not business as usual. Experience indicates that aside from a strong capacity in R&D, the ability to innovate is often related to collective action and coordination, exchange of knowledge among diverse actors, incentives and resources available to form partnerships and develop business, and an enabling environment. While consensus is developing about what is meant by “innovation� and “innovation system,� no detailed blueprint exists for making agricultural innovation happen at a given time, in a given place, for a given result. That said, the AIS approach, which looks at these multiple conditions and relationships that promote innovation in agriculture in speci�c contexts, has moved from a concept to a subdiscipline with principles of analysis and action. Drawing on approaches that have been tested at different scales in different settings, this Sourcebook emphasizes the lessons learned, bene�ts and impacts, implementation issues, and prospects for replicating or expanding successful practices. The Sourcebook reflects the experiences and evolving understanding of numerous individuals and organizations concerned with agricultural innovation, including the World Bank. It targets the key operational staff who design and implement lending projects in international and regional development agencies and national governments, as well as the practitioners who design thematic programs and technical assistance packages. The Sourcebook can also be an important resource for the research community and nongovernmental organizations. ISBN 978-0-8213-8684-2 90000 9 780821 386842 SKU 18684