Revealing Trends in Investment in Ag Research & Extension

Cross-posted from the FSP India website written by Jaspreet Aulakh

Photo Credit: Flickr (P. Casier/CGIAR)
Photo Credit: Flickr (P. Casier/CGIAR)

In an article published in European Journal of Development Research, “Public Investment in Agricultural Research and Extension in India,” Pramod Kumar Joshi, Praduman Kumar, and Shinoj Parappurathu examine the spatial and temporal dimensions of agricultural research and extension (R&E) investments with emphasis on returns on investment in major states in India. The article concluded that investments in R&E should increase to meet the future growth challenges in the Indian agriculture sector.

The authors map the temporal and spatial changes in investment in R&E with emphasis on returns to investment in major states of India. They track past patterns of public spending on Research & Development (R&D) in terms of efficiency and explore variation in public spending on R&D across states.  They also estimate the returns to R&D spending and test if the states that spend more achieve higher Total Factor Productivity growth (TFP). TFP growth is estimated using factors such as research and extension stock created over the years, infrastructure and the quality of natural resources, which is later used to calculate Value of Marginal Product (VMP) and the Internal Rate of Return (IRR).

Interesting trends surfaced from the data. R&E increased not only in absolute terms but also as a share of GDP and the Green Revolution has been due to effective R&E investment. The R&E system of India has played a significant role in changing country’s status from food-importing to food-secure in relatively short time. The investment in agricultural research, which was equivalent to 0.30 percent of total GDP in agriculture in 1980/1981, increased to 0.52 percent in 1990/1991 and 0.77 percent in 2010/2011.

The share of research in total R&E investment increased from 65 to 82 percent from the period of 1961-1970 to 2001-2010, but the share of extension declined from 35 percent to 18 percent. This illustrates that research and extension did not follow parallel trends in the spending over time. This can have important policy implications, as lower relative allocations to extension could retard the flow of new knowledge from labs to field and the returns accrued from higher research investment could be underutilized.

Another important inference from the study was that relative shares to priority sub-sectors of agricultural and allied sectors has shifted considerably over time. Investments in R&E in the crop sector and fisheries have increased while investments in R&E for the livestock sector have decreased. The investment in soil and water R&E has remained unpredictable. In addition, different states’ shares of aggregate R&E have been reduced while the central government’s share has increased over the past decade.

The study also reveals that investment in extension has considerably reduced over the years, and the gap between research and extension investment has been widening as well. The intensity of investment in R&E (i.e., total investment per unit cropped area/population) varies considerably across Indian states, with a difference of 1:20 between the lowest-intensity of investment and high intensity of investment.  High disparity in TFP and wide variations in VMP and IRR have been observed across different states and the actual returns on these investments depend on TFP and growth.  For example, while Himachal Pradesh, Haryana and Assam have had high investment intensity, this has not translated to higher productivity.  In conclusion, it is important to identify the agriculture areas which are important for future investments in R&E and this should be strategically directed and balanced among different agricultural sectors so that growth is not compromised in the future.

Agriculture Performance and its Prospects

Wheat Field in Nawad, Bihar. Source: (flickr) Vartika Singh
Wheat Field in Nawad, Bihar. Source: (flickr) Vartika Singh

The recent article in the June issue of Yojana Magazine, by P K Joshi and Anjani Kumar, IFPRI looks into the performance of agriculture and factors responsible for its growth and way forward. Agriculture has shown a promising growth over years with average 3.5 per cent growth as against the targeted 4 per cent per annum and have helped in reducing poverty. Impressive growth of livestock, fisheries and diversification towards high value also helped in increase in income of small farmers. Wide spread adoption of high yielding varieties, irrigation, fertilizers, rural credit and rise in literacy contributed to the growth but still a lot needs to be achieved for ensuring food and nutritional security. The author’s lists the need to bridge the yield gap to enhance agricultural output, such as investment in location specific research for technology development and adoption. Investment in less developed regions needs to be pushed, with policy measures such as land reforms, rural credit, and public investment. Effective coordination in research, education and extension will also help to enhance growth and reduce poverty.

Article in Yojana

Prioritizing Agricultural Research for Development (AR4D) in South Asia- IFPRI and APAARI

Farmer at Naogaon, Bangladesh: Source: Flickr: Divya Pandey/IFPRI

Reducing food and nutrition insecurity in South Asia requires—among many other things— greater long-term investment in agricultural research for development (AR4D). In an effort to strengthen the capacity of research systems in South Asia to invest effectively in this area, IFPRI and the Asia-Pacific Association of Agricultural Research Institutions (APAARI) collaborated with the national research systems of Bangladesh, India, and Nepal to closely example AR4D priorities in the region. The collaboration, carried out through a series of large-scale consultations and both country- and region-level analyses in 2012-13, highlights the urgent need for structural, institutional, and financial reforms throughout the region’s AR4D systems to accelerate inclusive growth and improve food security.

A recent policy brief resulting from this collaboration provides strategic insights that may help shape ongoing and future AR4D investments in the region—priorities that include more stable and longer-term spending on research by governments, reforms to the governance and management of research systems, stronger incentives for private sector participation, and increased cooperation between countries.

The brief also identifies major areas for reform, including a tripling AR4D spending from the present levels in all the countries, building partnerships and consortiums to intensify innovation in the agricultural sector, ensuring functional autonomy of national research systems through stronger policy support and de-bureaucratization, and strengthening human resources development with liberal funding and progressive training policies. The brief further points out the need for greater investment in research areas that are currently underrepresented in national and regional priorities, for example, natural resources management, value chain development, and the provision of farm inputs and services.

With greater, more stable, and longer-term commitments to AR4D, accompanied by significant systemic reforms and renewed priorities, governments, donors, entrepreneurs, and communities can do much to address the persistence food insecurity and poverty across South Asia. Stronger and more effective national research systems have a central role to play in this process.

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