A lack of institutional capacity and functioning is a common constraint on agriculture in developing countries, and limits the effectiveness of policies at local level. Institutions for SCPI will have two basic functions: to ensure the necessary quantity and quality of key resources – natural resources, inputs, knowledge and finance – and to ensure that small farmers have access to those resources. In the following, institutions are divided into two main categories: those related to key resources for SCPI, and those that influence the functioning of agricultural product markets, including value chains.

Access to key resources

Land. The shift to SCPI requires improvements in soil fertility, erosion control and water management. Farmers will undertake them only if they are entitled to benefit, for a sufficiently long period, from the increase in the value of natural capital. Often, however, their rights are poorly defined, overlapping or not formalized. Improving the land and water rights of farmers – especially those of women, who are increasingly the ones making production decisions – is a key incentive to adoption of sustainable intensification.

Land tenure programmes in many developing countries have focused on formalizing and privatizing rights to land, with little regard for customary and collective systems of tenure. Governments should give greater recognition to such systems, as growing evidence indicates that, where they provide a degree of security, they can also provide effective incentives for investments³¹. However, customary systems that are built on traditional social hierarchies may be inequitable and fail to provide the access needed for sustainable intensification. While there is no single “best practice” model for recognizing customary land tenure, recent research has outlined a typology for selecting alternative policy responses based on the capacity of the customary tenure system³². 

Plant genetic resources. Crop improvement is fundamental to SCPI. During the Green Revolution, the international system that generated new crop varieties was based on open access to plant genetic resources. Today, national and international policies increasingly support the privatization of PGR and plant breeding through the use of intellectual property rights (IPRs). The number of countries that provide legal protection to plant varieties has grown rapidly in response to the WTO Agreement on Trade Related Aspects of Intellectual Property Rights, which stipulates that members must offer protection through “patents or an effective sui generis system”³³.

Plant variety protection systems typically grant a temporary exclusive right to the breeders of a new variety to prevent others from reproducing and selling seed of that variety. They range from patent systems with rather restrictive rules to the more open system under the International Union for the Protection of New Varieties of Plants, which contains the so-called “breeders’ exemption”, whereby “acts done for the purpose of breeding other varieties are not subject to any restriction”.

IPRs have stimulated rapid growth in private sector funding of agricultural research and development. Only 20 years ago, most R&D was carried out by universities and public laboratories in industrialized countries and generally available in the public domain. Investment is now concentrated in six major companies³⁴. There is evidence of a growing divide between a small group of countries with high levels of R&D investments and a large number with very low levels^{3, 35}. More importantly, technology spillovers from industrialized to developing countries are driven by research agendas that are oriented towards commercial prospects rather than maximum public good.

Increasing concentration in the private plant breeding and seed industry, and the high costs associated with developing and patenting biotechnology innovations, raise further concerns that the introduction of inappropriate IPRs will restrict access to the plant genetic resources needed for new plant breeding initiatives in the public sector^{34, 36}. It has been argued that decentralized ownership of IPRs and high transactions costs can lead to an “anti-commons” phenomenon in which innovations with fragmented IPRs are underused, thus impeding the development of new varieties³⁷.

Mechanisms are needed, therefore, to safeguard access to plant genetic resources for SCPI, at both global and national levels. The emerging global system for the conservation and use of plant genetic resources will provide the necessary international framework. There are several kinds of national IPR regime, with varying degrees of obligations and access³⁸. Countries should adopt IPR systems that ensure access of their national breeding programmes to the plant genetic resources needed for SCPI.

Research. Applied agricultural research must become much more effective in facilitating major transformations in land use and cropping systems for SCPI. Many agricultural research systems are not sufficiently development-oriented, and have often failed to integrate the needs and priorities of the poor in their work. Research systems are often under-resourced, and even some that are well-funded are not sufficiently connected with the broader processes of development³⁹. The following are the most important steps needed for strengthening research for SCPI:

• Increase funding. The decline of public investment in agricultural R&D needs to be reversed. Funding for the CGIAR Centers and national research systems must be substantially enhanced, and linkages between public and private sector research strengthened.
• Strengthen research systems, starting at local levels. To generate solutions that are relevant, acceptable and attractive to local populations, research on SCPI practices must start at the local and national levels, with support from the global level. While important, the research efforts of the CGIAR “can neither substitute, nor replace the complex and routine strategizing, planning, implementing, problem-solving and learning needed on multiple fronts, which only national institutions and actors can and must do”³⁹. There is a huge, underutilized potential to link farmers’ traditional knowledge with science-based innovations, through favourable institutional arrangements. The same holds for the design, implementation and monitoring of improved natural resource management that links community initiatives to external expertise.
• Focus research on SCPI in both high and low potential areas. High-potential areas will continue to be major providers of food in many countries. However, the productive capacity of land and water resources is reaching its limits in some areas, and will not be sufficient to guarantee food security. Therefore, much of future growth in food production will need to take place in so-called low potential or marginal areas, which are home to hundreds of millions of the poorest and most food insecure people. SCPI and related rural employment offer the most realistic prospects for improving those people’s nutrition and livelihoods.
• Give priority to research that benefits smallholders. In low-income, food importing countries, small-scale producers, farm workers and consumers can benefit directly from SCPI research focused on staple food crops, which have a comparative advantage. Priority should also go to agricultural productivity growth and natural resources conservation in heavily populated marginal areas, diversification to higher value products in order to increase and stabilize farmers’ incomes, and improved practices that increase returns to labour of landless and near-landless rural workers⁴⁰.
• Learn from failures and successes. A recent IFPRI study of proven successes in agricultural development¹⁰ highlights the breeding of rust-resistant wheat and improved maize worldwide, improved cassava varieties in Africa, farmer-led “re-greening of the Sahel” in Burkina Faso, and zero-tillage on the Indo-Gangetic Plain. Those successes were the result of a combination of factors, including sustained public investment, private incentives, experimentation, local evaluation, community involvement and dedicated leadership. In all cases, science and technology were a determinant.
• Link research with extension. Solutions to the problems of low productivity and degradation of natural resources are needed at large scale, but replication of SCPI practices is constrained by the vast range and diversity of site-specific conditions. Linking local, national and international research and site-specific extension services is, therefore, particularly important. To be relevant for the advancement of SCPI, research and extension systems must work together with farmers in addressing multiple challenges.

Technologies and information. Successful adoption of SCPI will depend on the capacity of farmers to make wise technology choices, taking into account both short- and long-term implications. Farmers also need to have a good understanding of the role of agro-ecosystem functions. The wealth of traditional knowledge held by farmers and local communities all over the world has been widely documented, in particular by the report of the International Assessment of Agricultural Knowledge, Science and Technology for Development^8. Institutions are needed to protect this knowledge and to facilitate its exchange and use in SCPI strategies.

Institutions must also ensure farmers’ access to relevant external knowledge and help link it to traditional knowledge. Rural advisory and agricultural extension services were once the main channel for the flow of new knowledge to – and, in some cases, from – farmers. However, public extension systems in many developing countries have long been in decline, and the private sector has failed to meet the needs of low-income producers¹². The standard, public sector and supply-driven model of agricultural extension, based on technology transfer and delivery, has all but disappeared in many countries, particularly in Latin America⁴¹.

Extension has been privatized and decentralized, with activities now involving a wide array of actors, such as agribusiness companies, non-governmental organizations (NGOs), producer organizations and farmer-to-farmer exchanges, and new channels of communication, including mobile phones and the Internet⁴². One key lesson from this experience is that the high transactions costs of individual extension contacts are a major barrier to reaching small and low-income producers. Advisory services to support SCPI will need to build upon farmer organizations and networks, and public-private partnerships¹².

FAO promotes farmer field schools as a participatory approach to farmer education and empowerment. The aim of the FFS is to build farmers’ capacity to analyse their production systems, identify problems, test possible solutions and adopt appropriate practices and technologies. Field schools have been very successful in Asia and sub-Saharan Africa, notably in Kenya and Sierra Leone, where they cover a broad range of farming activities, including marketing, and have proved to be sustainable even without donor funding.

To make wise decisions about what to plant and where and when to sell, farmers need access to reliable information about market prices, including medium-term trends. Government market information services suffer many of the same weaknesses as extension services⁴³. There is now renewed donor and commercial interest in market information, taking advantage of SMS messaging and the Internet.

Financial resources for farmers. Credit will be essential for creating the technical and operational capacities needed for SCPI. In particular, longer term loans are needed for investment in natural capital, such as soil fertility, that will increase efficiency, promote good agricultural practices and boost production. Although many new types of institutions – such as credit unions, savings cooperatives and micro-finance institutions – have spread to the rural areas of developing countries in recent years, the majority of small farmers have limited or no access to them. The inability of local financial institutions to offer longer term loans, coupled with farmers’ lack of collateral, hampers sustainable crop intensification.

Insurance would encourage farmers to adopt production systems that are potentially more productive and more profitable, but involve greater financial risk. In recent years, pilot crop insurance programmes have been introduced as a risk management tool in many rural communities in developing countries. Index insurance products – where indemnities are triggered by a measurable weather event, such as drought or excess rain, rather than by an assessment of losses in the field – have found enthusiastic support among donors and governments. Assessments by IFAD and the World Food Programme of 36 weather-based index insurance pilot programmes have demonstrated their potential as a risk-management tool⁴⁴.

Alternatives to insurance, especially the accumulation of savings and other saleable assets, are often overlooked. Also, preventive, onfarm measures and instruments to reduce exposure to risk should be seriously considered.

Productive social safety nets. Social safety net programmes include cash transfers and distribution of food, seeds and tools⁴⁵. They ensure access to a minimum amount of food and other vital social services. Recent initiatives include Ethiopia’s Productive Safety Net Programme and the Kenya Hunger Safety Net Programme. There is debate about whether such programmes risk creating dependency and weakening local markets. However, recent evidence indicates that trade-offs between protection and development are not pronounced⁴⁶. Instead, safety net programmes can be a form of social investment in human capital (for example, nutrition and education) and productive capital, allowing households to adopt higher risk strategies aimed at achieving higher productivity²⁷.

Policymakers need to understand the determinants of vulnerability at the household level and to design productive safety nets that offset the downward spiral of external shocks and coping strategies. The latter include selling assets, reducing investments in natural resources and taking children out of school, all of which undermine sustainability. Safety nets are also increasingly being linked to rights-based approaches to food security⁴⁷.