16. Cost recovery is one of the important elements of financing policy which determines governments' ability to meet an increasing demand for services in the longer term. As construed here decisions to charge or not to charge are assumed to be made within the framework of services being wholly provided by government. To that extent such decisions determine the absolute level of domestic funding of livestock services and the acceptable level of the budgetary burden government is willing to bear itself or pass on to the general tax payer. Figure 3 below shows some of the factors determining a policy on cost recovery and potential DVS leverage.
Fig. 3. Cost Recovery (free vs charged services)
|
Determinant Factors |
Potential DVS Leverage |
|
- Nature of the service |
strong |
|
- Government subsidy policy (equity considerations, infant industry argument) |
strong |
|
- Financial feasibility of fee collection |
strong |
|
- Bureaucratic financial discipline |
strong |
|
- Interest group pressure (for or against charged services) |
varied |
17. Potential DVS leverage on the factors influencing policy on cost recovery appears strong. The general orientation of this leverage would be in clarifying the issues involved in order to avoid pitfalls resulting in across-the-board decisions on making beneficiaries pay for services or on getting them free. The intimate knowledge DVS have or should have of the determinant factors and the clientele they serve ought to provide them with the appropriate tools to influence policy.
18. The nature of the service as a determinant factor for government policy decision on whether to charge or not for a publicly provided service is particularly critical. Many people, including government officials, tend to take for granted that governments continue to provide free services.3 In the current financial constraints facing most African governments, the issue has become not that certain services have traditionally been provided by government but whether benefits from a particular service accrue or not exclusively to the one individual recipient at the time it is provided. Services of a "private good" nature (i.e. exclusively benefitting an individual) must be paid for while services of a "public good" nature (non-exclusive) ought to be provided free of charge.
3
I have heard one argument from a director of veterinary services that all services should be considered as public goods because they ultimately contribute to increased food supply which is considered as a major social objective in many African countries. I am afraid this argument is untenable.
19. As in other areas, there are very few purely private or purely public goods, but there are numerous "mixed" goods which may need to be subsidized partially.4 Because of their intimate knowledge of the services they manage, I believe that DVS are in a position to provide a more rational basis on which the ultimate policy-makers must choose to act. I hold the same view in regard to government subsidy policy, particularly regarding equity considerations - because of their knowledge of the clientele DVS have a strong leverage in targetting subsidies to the most disadvantaged section of livestock service recipients.
4
In the animal health context, government declaration that a particular disease control programme is mandatory should not automatically result in the provision of a free service (see Anteneh, 1984 for a detailed consideration).
20. While the financial feasibility of a fee collection scheme does, to a large extent, depend on the level at which a particular fee is set, one must admit it is also a management problem within the reach of DVS. So is the factor of bureaucratic financial discipline where appropriate managerial controls and checks could minimize leakages which threaten the very survival of an established cost recovery scheme.
21. Interest group pressure comes from several directions. Policy-makers' perceptions of political risks associated with imposing or raising service fees is one such factor and an important one. Politicians may be deterred from making decisions on cost recovery schemes even though proposals for user charges may be based on resilient economic justification. Other players are also in the game to varying degrees of involvement - drug manufacturers and distributors, livestock traders, professional associations as well as producers. Particularly as concerns the last group, it is regrettable that managers of agricultural services in general do not try to establish and cultivate a "constituency" whose long-term interests they need to protect, although one realises the overwhelming practical constraints faced under prevailing African conditions. I think potential DVS leverage with producers is strong.
