Economics of  Agricultural Extension

Scopes of study:

1. Financing Agricultural Extension

2. Investment in Agricultural Extension

3. Impact of Extension

Financing Agricultural Extension:

                           In the most countries agricultural extension has long been provided by a government service paid for by tax payers. More recently a variety of ways to finance extension has emerged mainly as a result of the tendency to private Government services and increasing role commercial companies’ play in agricultural research and extension. This is main question which create what are the implication of the ways in which agricultural extension organization are financed regarding the service that is provided to farmer.

 Financial sources which provide for the extension organization:-

1.      A Government service paid for by tax payer

2.      A Government service paid for by a levy on certain agricultural products

3.      A commercial companies selling inputs to farmer and buying their product

4.      Farmer association which is subsided by  the Government

5.      Fees for members by farmers association

6.      Non-Government organization

7.      Private firm which charges a fees from the farmers

8.      Agriculture  publication firm 

What effect of agricultural extension on different finance provider and why?

                                                Because finance provider thinks that it is method to reach their own goals. Since the goals of different sector in an Agricultural Knowledge and Information System (AKIS) are different:-

1.      Government-  Govt. should invest in agricultural extension when,

a)      The general public benefit is more from extension than the individual participant it means if Govt. invests than Govt. benefit is more.

b)      Sufficient benefit of Govt. is not provided by private enterprises.

c)       The condition when Govt. agricultural development programme are combined with extension.

2.      Commercial companies

                            It is a farmer cooperatives try to make a profit through trading system. These invest in extension only if they are convinced that this will promote their trade it is usually in the interest of both the company and their customers that their product are used well. From long time a cooperative or commercial company will only make a profit if it is able to respond to the need of market. This may make it necessary to teach farmer how to produce the product for which there is a market demand. For instance the Tamil Nadu milk producer federation, Indian cooperatives saw that with increasing prosperity a market developed for dairy product with a higher value.

Since it is only possible to produce high value dairy product from clean milk, the Tamil Nadu milk producer federation taught farmers in some villages how to produce clean milk. For which the federation paid a better price this extension campaign has been quite profitable both for the farmers in these village and for the federation.

3.      Farmers association:-

Large and influential farmers associations perform two main roles –

a)      They try to influence collective decision by the Govt. and other in such a way that the interest of their members are taken in to account

b)      They support their members in fields for which they have specialized knowledge.

These association can not play a useful role by employing extension agents but also by putting presume on research and extension organization to work in a more demand–driven and client-oriented way.                

4.      Non-Government organization (NGO)

                                                         NGO have a very wide range of variation in their aims and motivations. It may be a group of entrepreneurs who earn their living by distributing grants from the Govt. or from foreign donors to poor people. Ministry of rural development is mainly support the NGO because it found that it better than Govt. agencies to work with poor peoples from the lower castes. An important goal of the Indian development policy the to decrease poverty and to help low cast people to organize them selves in such a way that they can better influence their own future. For this purpose NGO is most achiever according to ministry.

Investment pattern in agriculture research and education:-

                                   Agricultural research and extension system are mostly funded by govt. in present time the public sector &private sector invest on Research and education .but we can not distinct that how much invest on research & how much on education. In government investment it includes the expenditure by union and all the state, and union territories .these data were compiled from various official accounts of the union & state government and contain all plan and non plan expenditure on revenue as well as on capital account.

How fund is flow from government to ICAR for agricultural research and education?

                  Funds of the government is support the ICAR, the apex body charged with the responsibility of policy planning, execution and coordination of research besides supporting a network ICAR institution a part of fund are transferred to SAUs in the form of research scheme and annual grant. The state government support SAUs which are entrusted with the responsibility of imparting education and conducting state or location specific research some government funds are also used to support research in public organization like agro-economic research center and commodity research station outside the ICAR and SAUs system.

Share (%) of central and state Govt. in the national investment

Period (three year average)                    central          state

1960/61-1962/63                                        20.1               79.9

1970/71-1972/73                                        3.3                 96.7

1980/81-1982/83                                        46.7              53.3

1991/92-1992/93                                        44.6              55.4

                             The changing emphasis on the structure of NARS over time has changed the share of central & state Govt. in the national investment. In the investment indicator is number of scientist which is not readily available. The data complied by the ICAR in 1995/96 indicate that there are about 22,249 scientist engaged in research & teaching in ICAR and SAUs system. With these data annual nominal investment per scientist during the early nineties works out be Rs 0.4 million.

                        Beside Govt. private sector also invest in research on seeds, fertilizer, pesticides, machinery, drugs, sugar, food and leather processing. Combining of industrial investment to Govt. investment give aggregate research intensity in the country. Govt. research expenditure was obtained by taking out education expenditure from the total. the share of research is 86.9% in ICAR and 53.5% in SAUs. Aggregate research intensity show that during 1992-94 ,Govt. contributed 80% to national research investment .the contribution of public sector industries was only 5% raising the share public investment to 85% only 15% investment came from the private sector .all together the country spends 0.42% of AgGDP on research ,which is quite low as compared to other countries .it is about 0.5% for developing countries and 2.4% for developed countries.

Investment in Agricultural Extension

                       State Govt. revenue account is main investment source for the extension activity. Primary responsibility of transfer of technology rests with the state Govt. and ICAR  & SAUs are involved only in frontline extension. Thus fact is clearly visible from the source of extension investment, indicating that more than 90% investment is made by the state. Most of the expenditure was go through the expenditure was go through the department of Agriculture of state Government.

Impact Of Agricultural Extension

Future extension concepts must show ways in which, despite meager public means, complex extension content can be transferred as widely as possible. The analysis of extension systems in India, highlight the following key elements for a successful extension system.

Strong, self-financed farming organizations. Strong, self-financed farming organisations. An agricultural extension with a broad impact in developing countries leans on strong, self-financing farming organisations. Wherever they are lacking, the extension service should try to train them to this end based on existing organizational structures.

Self-complementary variety of extension organisations. Self-complementary variety of extension organisations. Extension achieves a broad coverage when the state-dependent and the independent (commercial) extension organisations on one hand and the generally integrated and specialised extension organisations on the other hand complement each other.

Extension with farming groups instead of single consultation. Extension with farming groups instead of single consultation. Work with farming groups (instead of individuals) forms a central feature of a broad impact extension as in this case efficiency increases and exchange between the farmers is encouraged.

Decentralise decision structures and flexibility in order to adapt the extension to local needsDecentralise decision structures and flexibility in order to adapt the extension to local needs. A broad impact requires the adaptation of an initial extension approach to local conditions. Through a decentralized decision structure, an extension service attains the necessary flexibility to undertake such an adaptation.

Personal responsibility of the farmer. Personal responsibility of the farmer. The larger the self-responsibility of the farmer, the more an extension service meets the needs of the farmer and the better chances are that it can develop a broad impact.

Regular Contact. Regular Contact. A significant feature of an agricultural extension, which has a broad impact, is the regular contact between advisers and farming families.

Variety of extension methods. Variety of extension methods. Extension, which has a broad impact, is characterized by a variety of applied methods. The adapted use from mass media to a wide range of methods should be included in the consultation service.

Economically interesting extension content. Economically interesting extension content. Agricultural extension can only develop a broad impact if the extension content is economically interesting for the user.

Regular in-service training and a strong agricultural education system. Regular in-service training and a strong agricultural education system. An extension with a broad impact requires regular in-service training of the advisers as well as a functioning agricultural education system.

Adapted infrastructure and mobility. Adapted infrastructure and mobility. An extension service must ensure sufficient infrastructure for the extension personnel and their mobility in order to have a broad impact.

Functioning supply with production means. Functioning supply with production means. An agricultural extension can only have a broad impact when the producers have access to the necessary production means and services.

Motivated extension personnel. Motivated extension personnel. An extension system can only develop a broad impact when the advisers are motivated.

Close contact between research and extension. Close contact between research and extension. Close contact between research and extension. An extension, which has a broad impact, is distinguished by research and extension working closely together. At the national level their needs to be a co-ordination mechanism. At the regional level the adaptation of research results to the local situation is indispensable Training of farmers and farmer-extensionist by external agents and other farmers in technological developments, communication, extension and training skills.

• Cross-visits among farmers and exposure of farmers to other institutions.
• Facilitation of farmers’ research into, and testing and adaptation of, new technologies and management practices
• Farmer group formation and development, and regular group meetings for planning, learning, sharing experiences and problems, evaluation, etc.

Others include conscientization, leadership training, facilitation of farmers’ research, mass mobilization, forming and managing linkages among farmers, NGOs and government, and developing conflict-resolution skills. Ultimately each farmer-to-farmer extension network has to decide upon the field methods best suited to its own objectives, resources, demography, agro-ecology and social and economic situation.

References: -

                   1.Impact of agricultural extension, policy paper. National Center for Agricultural Economics and Policy.

                 2. Van den ban.       A.W (2000) Different ways of financing agricultural extension. Agricultural Research and extension network paper.

                3.Investement in Agricultural research, extension and education, National Agricultural research and extension system (NARES).