4. Institutional reform: a new vision for agricultural and rural extension development

In an effort to respond to the new paradigm, countries worldwide have adopted a variety of institutional reforms. These reforms are either market-oriented or non-market-oriented (Smith 1997). This distinction, illustrated in Figure 3, provides an imperfect but hopefully useful framework for considering these reforms as individual, non-overlapping constructs. Following the discussion of Figure 3, a dynamic view of extension institutional reforms is presented in Figure 4 which suggests possible interconnections among the various constructs. Inferences drawn from the two Figures will shape the discussion in the final section.

The recent adoption by FAO and the World Bank of a fundamental vision and guiding principles for developing agricultural knowledge systems forms the focus of this section. This vision and these principles are reviewed in relation to the plethora of the ongoing agricultural and rural extension reforms.

As a prelude, it is worth noting that the types of extension reforms being enacted are not necessarily new. Decentralization is certainly not new to extension. In some countries extension is historically decentralized, and devolved authority has long existed in Australia, Brazil, Canada, Germany, India and the United States. Partial privatization has existed in France since the 1960s. Participatory extension methods are a traditional aspect of extension in Japan and Taiwan. Pluralistic systems have a long history in Finland. What is new, however, is the extent of globalization and, as Fresco notes (2000), the major economic restructuring in both the developed and the developing countries which has greatly tipped the balance between the public and private sectors.

The reforms underscored in this document are also not new to FAO. SDRE has been working for several years in various countries, francophone, anglophone and lusophone, to promote such reforms as decentralization, participation, and provider pluralism. Examples of these efforts in the francophone countries are FAO’s work in the Congo (FAO 1997), Rwanda, Guinea-Bissau, and the Central African Republic. References to the latter efforts exist only in internal FAO technical documents. Exploratory efforts towards pluralism have been carried out in Mozambique and Zimbabwe. Subsidiarity has become part of the current drive towards reform in Uganda. The Philippines, Indonesia, Iran and Yemen are other examples of efforts at decentralization aided by SDRE. Various aspects of these reforms have, in fact, been integrated in these countries, demonstrating where they overlap and their complementarities. Nevertheless, what is new is the growing commitment of FAO to promoting these reforms as measures that other developing countries should consider. SDRE’s initiative NAESRI is evidence of this phenomenon.

4.1 The contemporary institutional reform of extension

Global developments are shaping extension even more radically than other institutions in the agricultural knowledge systems. Contributing to this drive to reform extension is the new paradigm supporting market-driven income-generation.

A considerable variety of public sector reform strategies have emerged, and can be categorized in different ways. These extension reforms are organized in this paper under two main headings: market reforms and non-market reforms. According to this distinction, market reforms encompass four major reform strategies: revision of public sector extension systems, pluralism, cost recovery, and total privatization. Non-market reforms comprise two main reform strategies: (a) decentralization, transferring central government authority to lower tiers of government, and (b) subsidiarity, transferring or delegating responsibility, sometimes by abolishing authority over extension, to «the lowest level of society as is practical and consistent with the overall public good» (Porter 2001). Figure 3 illustrates these reform strategies.

Figure 3 employs two illustrations, distinguishing market-oriented from non-market- oriented structural reforms. The two illustrations highlight the main strategies adopted worldwide by countries undertaking public sector institutional reform.

Figure 3 - Extension Reform Strategies

The countries mentioned in Figure 3 provide illustrations of where particular strategies have been employed. However, the association of a country with a particular strategy should not be seen as exclusive but rather as indicative of the reform being undertaken in that country. In the final analysis, several different reform directions may be pursued in any one country. This is notably the case in Germany. where three distinct agricultural extension systems exist side by side (Hoffmann, Lamers & Kidd 2000).

Participatory extension systems could exist as part of the above market and non-market reforms, as noted earlier, because they are essentially an extension methodology rather than an institutional arrangement affecting the government structure. However, in cases where government has withdrawn from providing extension services, as in cases within the non-market reform figure on «sub-sidiarity », participatory extension is likely to become the «system» by default or result in a farmer-led system assisted by intervention by international organizations. But the following questions must be asked: What are the implications of these reforms for participation? Who should be involved in participatory initiatives? Who should pay for participatory reforms?

4.2 Market reforms

Market reforms result from the central government’s aim of privatizing the management of agricultural and rural extension systems, whether by contracting the delivery of extension field services, obtaining cost recovery by charging fees for the services, or creating partnerships with farmers’ associations. The least radical way of reforming a public sector extension system is revising it by down-sizing and minimum cost recovery for services. This revisionist strategy has taken various forms. For instance, the United States in the late 1980s shifted away from a discipline-oriented, management-by-objectives approach to an issues-oriented management approach to extension, meanwhile gradually introducing charges for previously free services such as soil sampling and attending workshops. Several other governments maintain agricultural extension units in their ministries of agriculture, e.g. Australia, Canada, Japan, Poland, Portugal, and Spain. These countries continue to provide public sector funding and delivery of extension services, either partially or entirely.

Reforms that advance institutional pluralism are being widely promoted, especially in the developing countries today. This strategy often involves contracting out the delivery of extension field services to non-governmental organizations, such as non-profit NGOs, or to for-profit companies including consultancy firms and farmers’ cooperatives. Contracting-out is considered an opportunity for public sector reform and private sector development in the developing countries, including the transition economies of Europe and Central Asia (Keefer 1998). Kidd et al. (2000) cite a variety of experiences with privatization and the commercialization of agricultural extension delivery that involve public sector partnering with other entities, viz., farmers’ associations in China contracting technical services from public officials (this fee-charging experience will be discussed below and also in Section 5 under ‘cost-recovery schemes’), share-cropping for profit in Ecuador, voucher schemes in Costa Rica, sub-contracting and voucher schemes in Chile, privatized service centres in Ethiopia, contract farming in Kenya, and farmer service centres in Sri Lanka.

Institutional pluralism promoted by central government should not be confused with the fact that in most countries there exists an institutional «complex» of public, private, and semi-public service providers (i.e. the so-called «third sector,» or non-profit NGOs). In the case of institutionalized pluralism, the public sector funds the extension activities while the private sector delivers them. In cooperation with TCI and the World Bank, SDRE has been assisting Mozambique in planning to contract the delivery of extension services in pilot provinces by non-profit NGOs, while continuing with public sector delivery in the rest of the country. In Zimbabwe, where so many public and private service providers are active in extension, SDRE has recently conducted a study that could help in developing a coordination mechanism and define the role of government in a pluralistic situation.

In Western Europe, many agricultural advisory services have redesigned their fiscal arrangements, initiating cost recovery or fee-based services to farmers. Fiscal redesign through direct charging for extension services first became prevalent in the European OECD member countries, largely because of national deficits resulting in changes in government policy and the consequent re-organization of their Agricultural Advisory Services. Over half the OECD member countries currently receive at least 20% of their finances from direct charging, and two countries (Finland and Norway) receive more than 50% of their finances from users. With few exceptions, agricultural extension services tend to be sold to users at a nationally-determined price; however, in some cases highly individualized projects command higher prices, while projects for low-income users are offered at reduced prices (OECD 1992:17). Some countries offer discounts or subsidies or otherwise encourage emerging and low-income farmers to procure group-use services that are less expensive than one-on-one services. In Latin America, Mexico adopted a fee-based strategy in the late 1980s for services to large farmers in the northwest grain-producing states, although Mexico later opted to decentralize national extension services to the state level (OECD 1998).

An interesting experiment in «fee-charging extension» (Fei & Hiroyuki 2000) has been taking place over the past two decades in China. The Chinese central government appealed to local authorities to enhance extension budgets through feecharging extension (FCE) services. The function of FCE is not to recover costs, as it is in such countries as The Netherlands or the United Kingdom, but to act as an incentive. This incentive mechanism seeks to encourage technicians to go out to fields, contact farmers frequently, and ensure that the technologies are adopted. Technology transfer is carried out on a contract basis and is disseminated in response to the farmers’ demands.

Although not feasible in all instances, this system of direct contracting between the extension technician and the farmer distinctly differs from the schemes generally cited. Yet as Fei and Hiroyuki (2000) suggest, the FCE experience in China is an example of useful «best practice» for other developing countries since it has proven viable under small-scale farming conditions and in incomplete market situations.

Farmers and extension technicians are closely associated in this scheme, however - with rights, responsibilities and economic interests linked by contract directly between the farmer and the technician. Such an arrangement necessarily demands high quality technical expertise and training on the part of the extension technician.

A note on training. Although this document is concerned with institutional reform, it must be remembered that other issues relating to pre-service education and in-service training are highly relevant to the success of any agricultural and rural extension system. Administrative and technical training is crucial for the success of institutional reform. To become extension technicians, agents must acquire high quality technical expertise and training. To meet the challenge of reform measures, managerial staff must develop high quality administrative expertise relevant to arranging and monitoring contracts, as well as supervisory skills in human resource management and programme monitoring and evaluation. Extension workers need to become agronomic, livestock or fisheries technicians or, depending on the programme goals, to develop special skills in farm management, farmer organization, or other programmatic and organizational skills. Extensionists must be prepared to respond purposively to the requirements of institutional reform (Qamar 2001), and new knowledge and skills must be promoted as well as new attitudes towards change. Specifically, the premiss underlying the strategy for fee-charging is that farmers will have access to practical information provided by knowledgeable technicians.

One of the most radical recent extension reform strategies is total privatization, including commercialization. In the case of total privatization, both the funding and the delivery of extension services are shifted entirely, or largely, to the private sector, as in The Netherlands. The Netherlands decided to privatize its public extension agents, at first by transferring them with initial financial support to work with farmer associations, and more recently assigning responsibility for these services to a private company, DLV. Privatization relieves the government of a fiscal burden, often improving the delivery of services once the private sector has taken over the function, although this strategy may leave poor farmers and rural workers without any support. In the case of commercialization, authority is given to a government-commercialized public agency, as in New Zealand. New Zealand’s Ministry of Agriculture and Fisheries was challenged to «go commercial» in 1986, and to operate under user-pay commercial criteria. This former public sector service now operates as a company, under the name ‘Agriculture New Zealand’. A similar step was taken in England and Wales. The Agricultural Development Advisory Service (ADAS), formerly a Ministry of Agriculture, Fisheries and Food executive agency responsible for providing extension services, was privatized in 1997. This body, now known as ADAS Consulting Ltd, is one of many private agricultural consultancies that offers a range of advisory services to primary producers in agriculture and horticulture (OECD 1999).

Figure 3 is limited by the fact that in several cases, countries employ a «mix» of extension structures, as already mentioned. For instance, the Agricultural Advisory Service (AAS) in Norway can be divided into three categories, depending on the amount of government support. Some services are financed entirely by government, some are partially financed by government, and others receive no government funding at all. Germany, a federally constituted country with strong states (Länder) rights, is an example of a «mix» of multiple extension decentralization structures in its three different regions: north-western, eastern, and southern (Hoffmann, Lamers & Kidd 2000). A similar case prevails in Australia where each state maintains its own authority, and extension services differ, although the trend appears to be towards reducing official services (Cary 1998).

In short, the reforms cited here are not static but are themselves in a state of flux. Several countries, such as Chile, have revisited their extension system arrangements on several occasions and have modified them each time. Chile has moved away from a voucher system to direct subsidization under contracts with farmers to hire private extension service providers (Berdegué & Marchant 2001). In most cases, extension reform would best be described as «work in progress».

4.3 Non-market reforms

While central government market reforms aim at privatizing - wholly or partially, directly or indirectly - the management of agricultural and rural extension systems, non-market reforms aim at relieving central government of the responsibility of funding and managing extension. The most common non-market reform strategies are decentralization to lower tiers of government, and transferring or delegating the responsibility for extension to non-governmental organizations, or removing government responsibility for extension entirely.

Decentralization is often narrowly defined to signify shifting authority for extension to lower tiers of government. Some (Rondinelli 1991) use the term, «devolution » for this type of political decision. Whatever the terminology, decentralization is a policy determination that differs from market reforms.

Decentralization reforms are observable in Colombia where extension is being transferred to the municipal level (Garfield, Guadagni & Moreau 1997), or in Mexico where authority for the service has been shifted to the states, as well as in other Latin American countries (Llambi & Lindemann 2001). Some countries are in the transition stage of moving towards a regionally decentralized extension system, as in Malawi. In collaboration with the TCI and the World Bank, SDRE has been assisting Uganda to plan shifting administrative and fiscal authority for extension to local government and farmers’ groups (Uganda 1998b). Similarly, Yemen has been given assistance to implement its plans to give farmers wider extension responsibilities, as have Indonesia, Iran and the Philippines to help them establish and/or strengthen their devolved extension services.

Economists tend to concentrate on the intergovernmental transfer of powers and responsibilities. They argue that the decentralization of powers to local government is unlikely to be a panacea to the shortcomings of a weak central government (Smith 1997; Dauphin 2000). Crowder (1996) raises the question of the effect of decentralization on research-extension linkages: does it result in de-coupling research-extension linkages, or does it actually improve these linkages? On the other hand, in Indonesia, where both research and extension services have been decentralized, the creation of provincial Technology Assessment Institutes presents a new and promising paradigm of operational linkages among reserach, extension and farmers (Qamar 1998). Although important, these are considerations that fall outside the immediate purposes of this paper.

Governments also «decentralize» to other organizations and levels. At least three decentralization directions currently dominate the development of agricultural and rural extension. One is to decentralize the burden of extension costs by redesigning the fiscal system. Another is to decentralize central government responsibility for extension through structural reform. The third is to decentralize programme management through farmer participatory involvement in decision-making and, ultimately, helping farmers take responsibility for extension programmes. Governments may shift authority to farmers’ associations, such as cooperatives or chambres d’agriculture, as is being done in Denmark, Finland and France, in Europe, and Ecuador in Latin America. In some cases, governments may shift authority to NGOs or farmers’ groups upon terminating government responsibility for public sector extension services. In Latin America where non-market reforms involve delegating authority to private NGOs, as in Bolivia, Ecuador and Peru, this type of reform has been referred to as «tertiarization» (Bastos 1997). In the present paper, this last form of «decentralization» is referred to as «subsidiarity».

Subsidiarity is a comparatively recent term which, according to the AKIS/RD Vision and principles, means that authority should go to the lowest level at which economies of scale and scope are not compromised and all costs and benefits are internalized. Giving local communities responsibility for programmes is an attractive option because it integrates local government and rural people into programme design and implementation. Some governments have shifted the institutional and technical responsibility for exchanging and transferring information to the farmers, who manage the agricultural extension programmes themselves. Such participatory involvement is thought to make services more responsive to local conditions, more accountable, more effective and more sustainable. This form of «subsidiarity» exists in Bolivia and Peru. As a rule, subsidiarity highlights government delegation of authority to nongovernmental entities, and in some cases the total disengagement of government from agricultural and rural development interests, giving NGOs or farmers and farmers’ organizations that responsibility. In several European countries, such as Denmark and Finland and partially also France and Germany, the farmers’ associations carry out extension with partial government sponsorship.

This review of the institutional reforms of extension is not intended to cover all the reform strategies that exist, much less all the structural forms of extension. Some countries have undertaken reform through the ‘deconcentration’ of authority to lower branches of central government. This effort may be a stepping-stone to later decentralization. At the moment, central authority structures may be deconcentrated to field levels in a number of ways: through financial grants, local coordination, district administration, provincial development planning, and regional coordination, as occurs in Belgium, England and Wales, Indonesia, and Ireland.

Another form of extension development is when dual authority structures are established, with power shared either (i) between the government and farmers’ associations, as in Norway and Sweden, or (ii) between the government and a subnational governmental entity (e.g. a state or prefecture), as in Japan, South Korea, and Taiwan. In Figure 3, these dual forms of structured authority fall under the heading of pluralism (or power sharing), since they are a form of partnership.

Agricultural development including extension-related responsibilities has sometimes involved delegation to an external (foreign) private company, e.g. the French-run Textile Development Company (CFDT) operating in Africa, South Asia, and Eastern Europe.

In short, countries worldwide have adopted and continue to experiment with a variety of reform measures, to respond positively to the current paradigm shift towards market-oriented economies and democratic society. An examination of the various reform strategies undertaken worldwide provides a valuable «menu of options» for governments in a transitional reform stage or in the process of reconsidering the role of different sectors in agriculture.

4.4 A dynamic view of extension institutional reforms

Although Figure 3 helps to clarify the different types of agricultural and rural extension institutional reforms, it has several limitations. It is limited in its emphasis on market and non-market reforms, by failing to indicate the possibility of complementarity, such as possible linkages that might exist between a pluralistic reform established under a contractual scheme and the promotion of subsidiarity within that scheme. Another limitation is that a particular country may have a multiplicity of reform trends, as already indicated. To attempt to resolve this limitation, Figure 4 sets out the reforms as though they were simultaneously circular in their dynamism, and hence changeable, and part of a larger puzzle within which considerations such as cost-benefits, political reality, and social needs remain central.

Figure 4: A dynamic view of extension institutional reforms

Figure 4 provides a more dynamic view of institutional extension reforms, and further illustrates that an extensive menu of options exists for governments to consider in any agricultural and rural extension reform. It also suggests that there is no single solution to the question of reform. Indeed, several areas of reform might be combined to formulate a country’s policy, depending upon that country’s situation and the way the government views its needs.

4.5 Vision and guiding principles for extension development

Over the last generation, varying perspectives of agricultural and rural extension have emerged.

During the 1980s, the most widely used schema for illustrating extension’s relationships was a triangle with research at the pinnacle and extension and farmers at the bottom corners of the triangle (Merrill-Sands & Kaimowitz 1989). This technology triangle stressed the importance of research, and the linkages between research and extension and with farmers. Feedback arrows pointed from and to each of the three points of the triangle.

Agricultural extension, as illustrated earlier in Figure 2, is currently viewed as part of a larger knowledge triangle consisting of agricultural education, research and extension. Moreover, the term Agricultural Knowledge Information System (AKIS) is now taken to refer to rural communities as well as farmers, which means that in Figure 3 the central focus should read rural communities, and not farmers alone. This focus places a new emphasis on rural people as a whole, and not only on those engaged in agricultural production. However, the AKIS/RD strategic vision is not always consistent in its broader focus, and still refers to the groups to be reached as «farmers».

The AKIS/RD vision is underpinned by nine guiding principles. These include: economic efficiency; a careful match between the comparative advantages of organizations and the functions they perform; subsidiarity; clear spread of costs; careful assessment and optimal mixing of funding and delivery mechanisms; pluralistic and participatory approaches; effective linkages among farmers, educators, researchers, extensionists, and other AKIS/RD stakeholders; building human and social resources; and sound monitoring and evaluation.

The principles are ambitious, and differ in at least two respects. Several of them pertain to institutional arrangements that involve policy reform strategies. That is the case with pluralism, subsidiarity and cost recovery, which the AKIS document refers to as the «optimal mix of funding and delivery mechanisms». In short, these principles relate to issues of extension funding and delivery; they pertain to policy reform options.

The other principles are more closely associated with programme management and development. Such issues as the participation of stakeholders in decisionmaking, cost efficiency, human development and training, social resource enhancement, monitoring and evaluation: these are primarily programme management issues, and are more closely related to the programme dimensions enumerated by Axinn in his guide on approaches.

Participation, like other approaches to extension, has its advantages and disadvantages. It constitutes both a development philosophy and an instrument (Nagel 1992). As a philosophy, it describes the action by which all the participants are involved in attaining a common goal. As an instrument, it focuses on the involvement of stakeholders in decision-making processes, such as situational analysis, planning, implementation and evaluation. The process has the advantage of using local expertise, capacity-building, cost-effectiveness, and greater familiarity with the local context (Zijp 1994).

Participation, then, is a process that may be introduced into an extension system. Or, as with the Farmer Field School (FFS) approach, it may define the very purpose of the extension activities. FFS seeks specifically to initiate rural people into taking personal responsibility for addressing the problems, interests and concerns that surround them. In this sense, FFS is related to an earlier teaching/learning process developed by the Brazilian educator, Paolo Freire.

As the AKIS/RD document notes, the next step in promoting extension reform is to apply the guiding principles. In addition to case studies under preparation in several countries for this exercise, the present paper is intended to serve as part of that next step, namely, to aid FAO staff to operationalize the AKIS/RD vision and to draw up guidelines relating to that vision and its principles. In due course, an assemblage of procedures and tools for implementing the proposed initiatives will need to be collected and analysed.

The next step, however, is not so simple as choosing between reform options. An understanding of each country’s situation and needs is needed, and through analysis and dialogue to arrive at perhaps distinct initiatives that draw on, but do not necessarily copy or imitate, the reforms undertaken elsewhere.

The initiatives assembled and reviewed in the next section draw on the agricultural and rural extension institutional reforms that have been, and at the beginning of the 21st century are being, adopted in countries worldwide.