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Consultative Group on International Agricultural Research

@ CGIARStudy Paper Number 1

Technological Innovation in Agriculture

The Political Economy of Its Rate and Bias

Alain de Janvry

Jean-Jacques Dethier



Consultative G roup on International Agricultural Research

CGIARStudy Paper Number 1

Technological Innovation in Agriculture

The Political Economy of Its Rate and Bias

Alain de Janvry

Jean-Jacques Dethier

The World Bank

Washington, D.C.



Copyright 985

The International Bank for Reconstructionand Development/THE WORLD BANK

1818 H Street, N.W.Washington, D.C. 20433, U.S.A.

First printing September 1985

All rights reservedManufactured in the United States of America

A t its annual meeting in November 1983 the Consultative Group o n InternationalAgricultural Research (CGIAR) commissioned a wide-ranging impact stu dy of theresults of the activities of the international agricultural research oganizations under itssponsorship. An Advisory Com mittee was appointed to oversee the study and topresent the principal findings at the annual meeetings of the CGIAR in October 1985.

The impact stud y director was given responsibility for preparing the main report a ndcommissioning a series of papers on particular research issues and o n the work of th ecenters in selected countries. This paper is one of that series.

Th e judgm ents expressed herein are those of the author(s). They do not necessarilyreflect the views of the W orld Bank, of affiliated organizations, including the CGIAR

Secretariat, of the international agricultural research centers supported by the CGIAR,of the d onors t o the CGIAR, or of any individual acting o n their behalf. Staff of m anynational and international organizations provided valued information, but neither th eynor their ins titutions are responsible for the views expressed in this paper. Neither arethe views necessarily consistent with th ose expressed in the main and summary reports ,and they should not be attributed to the Advisory Committee or the study director.

information with the least possible delay.This paper has been prepared an d published informally in order to share the

Alain de Janvry is chairman of the Dep artme nt of Agricultural and ResourceEconomics at the University of California, Berkeley. Jean-JacquesDeth ier is aconsultant to the D evelopment Research Department of the World Bank.

Library of Congress Cataloging-in-Publication Data

De Janvry, Alain.Technological innovation in agriculture.

(CGIAR study paper / Consultative Group on

Bibliography: p.

1. Agricultural innovations--Economic aspects--Latin

International Agricultural Research ; no. 1)

America. 2. Agriculture--Research--Economic aspects--Latin America. 3. Agriculture--Research--Governmentpolicy--Latin America. 4. Agriculture and state--Latin

America. 5. Agriculture--Economic aspects--Latin

America. I. Dethier, Jean-Jacques, 1952-11. Title. 111. Series: Study paper (ConsultativeGroup on International Agricultural Research) ; no. 1.HD1790.5.D4 1985 338.1'6'098 85-20795

ISBN 0-8213-0592-1



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ABSTRACT

This paper examines the role of market and normarket forces i n a f f i c t ingIt examines t h e processhe rate and bias of technical change i n agricul ture.

of generation of inno vati ons and investment i n agricultural reseamh andexplores, i n the context of political econcxny, the sources of deviat ion fromthe equilibrium rate and bias of technical change.

I t is argued t h a t a theory of the ra te and bias of technological

innovation must go beyond t h e analysis of market forces because t h e y explainonly a fra cti on o f changes i n investment and pro duc tiv ity in agricul ture.Such a theory must also take in to account in st it ut io na l forces which, on t heone hand, d i s t o r t and supplant market mechanisms and, on th e o the r hand, actindependently of prices on the determination of i n v es t m en t and productivity.I n par t icu lar , the act ion of t h e state and i t s modes of intervention must playa central r o l e i n the analysis of investment i n agr i cu l tu ra l research.

It is further argued that the roles played by t h e various actorsinvolved in ag ri cu lt ur al research-=the s t a t e and the National ResearchInstitutes, the Internat ional Agricultural Research Centers, and t h e private

sector--are being redefined a s research moves in to t h e Post-Green Revolutionera. I n par t icu lar , t he private sec tor is being increasingly involved i nresearch, and the work done a t t h e I A R C s modifies the research pr io r i t i es ofthe NRIs. New mechanisms of id en ti fi ca ti on of research pr io ri ti es , ofcoordinatio n of r ese arc h programs, and of part icipat ion of s oci al groupsaffected by rese arch need t o be devised t o increase eff ici enc y and e q u i t y inthe research e f f o r t .

Empirical evidence i n support of these propos i t ions-and, for t h a tmatter, of any propositions concerning investment i n research--is s t i l lfragmentary. Because of the inconsistencies i n t h e ex i s t ing data o r t h eabsence of data i n certain areas (for instance, on inves tment on a canmoditybasis) , t h e argument in t h i s paper is mostly supported by c i rcuns tant ia l

e v ide nc e and case studies.America.

Attention has been mainly f o c u s s e d on Latin

ACKNOWLEDGMENT

The auth ors wish t o thank Grant Scobie and Dorothy M arsc ha f o r t h e i ruseful comments on an e a r l i e r draft .



-V-

CONTENTS

S e c t i o n

1 SUMMARY AND INTRODUCTION: PROPOSITIONS ON

INVESTMENT I N AGRICULTURAL RESEARCH ......................... 1

2 THEORIES OF TECHNOLOGICAL INNOVATION: MARKET

VERSUS INSTITUTIO NAL FORCES ................................. 4

2 .1 . Rate a n d Bias o f T e c h n o l o g i c a l C h an ge ................. 4

2.2. N e o c l a s s i c a l T h e o r y of I n d u c e d I n n o v a t i o n s ............ 5

3

4

5

2.3. A S t r u c t u r a l i s t T he or y of I n du c ed I n n o v a t i o n s ......... 7

SIZE OF THE RESEARCH EFFORT: THE FACTS ..................... 1 6

3.1. H i s t o r i c a l O v e rv ie w ................................... 1 6

3 .2 . L e v e l of E x p e n d i tu r e s i n 1980

......................... 1 9

3.3. G ro w th T re n d i n R e s e a r c h E x p e n d i t u r e s ................. 19

COSTS AND BENEFITS OF AGRICULTURAL RESEARCH PROJE CTS 2 6

UNDERINVESTMENT I N AGRICULTURAL RESEARCH .................... 32

5 .1 . P o l i t i c a l - E c o n o m i c D i m e n s i on of t h eD em and f o r R e s e a r c h ................................... 36

5.2. T he S u p p l y o f R e s e a r c h a n d I t s D e t e r m i n a n t s ........... 3 7

INSTABILITY OF FINANCIAL RESOURCES .......................... 4 5

THE COMMODITY BTAS I N AGRICULTURAL RESEARCH ................. 6b

PATHS OF TECHNOLOGICAL INNOVATION ........................... 71

8.1. S t a t e A c t i n g F ro m A bo ve ............................... 7 1

8.2 . S t a t e A c t i v a t e d F r o m B e l o w ............................ 74

8.3. S t a t e A c t i v a t e d From W i t h i n ........................... 7 6

9 CONCLUSIONS AND IMPLICATIONS FOR THE INTERNATIONAL CENTERS - 0 7 9

FOOTNOTES ........................................................... 8 4

REFERENCES .......................................................... 8 5



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Table

3.1 Comparison of Estimates of Expe nd i tu r e s o n A g r i c u l t u r a l

Research i n Developing Countr ies, 1980 ........................ 20

3.2 Growth Rates of Agr ic u l tu r a l R e se a r c h Expe nd i tu r e s a nd

Sc i en t i f ic S ta f f i n Marke t Economies, 1970-80 ................. 22

3 . 3 Agr ic u l tu r a l R e se ar c h in 67 De ve loping C oun t r i e s , 1980 ........ 25

4.1 Summary S tu di es of Ag r i cu l t ur a l Research Pr od uc t i v i ty ......... 27

5.1 Budge tary Resources Al loca te d t o Ag r i cu l t ur a l Research

i n L a t in America and th e Caribbean, between 1960 and

1980, Selected Years .......................................... 39

5 - 2 Human R e sourc e s ( P r o f e s s i ona l P e r sonne l ) i n Agr ic u l tu r a l

R e se a rc h i n La t in America and the Caribbean from 1960

t o 1 9 80 ( S e l e c t e d Years) ..................................... 41

5 .3 P e r c e n ta ge of To t a l Agr ic u l tu r a l R e se ar c h by th e

P r i va te S e c to r : S e le c te d C on t inen t /C ount r y , 1974 ,

and Income Lev el , 1971 ........................................ 42

6 .1 La t in America and th e Caribbean: Budgetary Resources

for Agr icul tura l Research f rom 1960-1980 ...................... 46

6.2 Latin America a nd the C ar ibbe an : Annua l Va r i a t ion s i n

Budge tary Resources fo r Agr ic ul tu ra l Research , 1970-1980 . 47

6.3 1970-1980 I nd ic a t or s f o r 21 La t in American Coun tr ie s .......... 48

7.1 Estimates of I n te r na t i on a l a nd Na t i ona l R ese a r chInv est ment by Major Commodities, 1971 Con sta nt Do ll ar s ........ 67

7.2 Research a s a Percent of t he Value of Pro duc t ,

by Commodity, Average 1972-79 P er io d, 26 Co un tr ie s ............ 68



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F i g u r e

2 . 1 Ma rk et an d I n s t i t u t i o n a l F o r c e s i n t h e Inducement of

I nnova t ions .................................................2.2 Supply and Demand f o r T echn olo gica l Inno vat ions .............6.1 Argentina : Expendi tures on Agr icu l t ura l Research ,

1970-1980 . . . . . . . . . . . . . . . . . . . . . .a. . . . . . . . . . . . . . . . .o. . . . . . . . . .

6.2 Chi le : Exp endi ture s on Ag ri cu lt ur al Research, 1970-1980 ....6.3 Uruguay: Exp endi ture s on Ag ri cu lt ur al Research, 1970-1980 ..6.4 Peru : Expendi tures on A g r i c u l t u r a l Research, 1970-1980 .....6.5 Bol ivi a : Exp endi ture s on Ag ri cu lt ur al Kesearch, 1970-1980 ..6.6 Ecuador: Exp endi ture s on Ag ri cu lt ur al Research, 1970-1980 ..6.7 Colombia: Exp endi ture s on Ag ri cu lt ur al Research, 1970-1980 .6.8 Bra z i l : Expendi tures on Ag r i cu l t ur a l Research , 1970-1980 ...6.9 Mexico: Ex pen di tu res on Ag ri cu lt ur al Researc h, 1970-1980 ...6.10 Panama: Ex pen di tu res on A gr ic ul tu ra l Resear ch, 1970-1980 ...

6.22 Nicaragua: Expendi tures on Agr icu l tu ra l Research, 1970-1980.

6.13 Barbados: Exp end itu res on Ag ri cu lt ur al Research, 1970-1980

6.14 Jamaica: Ex pen di tur es on Ag ri cu lt ur al Research, 1970-1980 .

8

1 0

49

s o

51

52

53

54

55

56

57

58

59

60

61

62



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SECTI ON 1

SUMMARY AND I NTRODUCTI ON:PROPOSI TI ONS ON INVESTMENT I N AGRI CULTURAL RESEARCH

I n thi s sect i on, we st at e w thout el aborat i on t he maj or proposi t i ons of

t hi s paper .I n

Sect i on 2 , we present a f r amework f or the anal ysi s of t echnol ogi cal i nnova-t i ons whi ch ai ms at taki ng market and nonmarket f orces i nto consi derat i on.Sect i on 3 , we l ook at the exi st i ng dat a on t he present l evel and growt h t rendi n r esearch expendi t ures. I n Sect i on 4 , we r evi ew the methodol ogy used i ncost - benef i t st udi es of agr i cul t ural research proj ects t o examne whet her t heysuppor t the under i nvest ment thesi s. I n Secti on 5, pol i t i cal - economc con-si derat i ons that mght expl ai n under i nvest ment are t hen examned.6, we l ook at the probl em of var i abi l i t y i n f i nanci al resources whi ch i s amaj or f actor of i nstabi l i t y of the research process.t he commodi t y bi as i n research.f erent modes of i nvol vement of the state i n t he research process. Fi nal l y,Sect i on 9 draws concl usi ons f r omt he anal ysi s and i mpl i cat i ons concerni ng the

rol e of I nt ernat i onal Cent ers.

The argument s are then devel oped i n the body of the paper.

I n

I n Sect i on

I n Sect i on 7, we exam neSect i on 8 present s t hree case studi es on di f -

1. Market f orces expl ai n onl y part l y l ong- r un changes i n i nvest ment and pro-duct i vi t y i n agr i cul t ure. These changes, t o a l arge ext ent , are i nf l u-enced by i nst i t ut i onal f orces.operat i on of market f or ces i n the det ermnat i on of pr i ces.i nst i t ut i onal f or ces act on the det ermnat i on of i nvestment and produc-t i vi t y i ndependent of the condi t i on of r el at i ve pr i ces.

These f orces both di st or t and suppl ant t heI n addi t i on,

market forces institutional forces

technologicalpolicyeconomic

policyrelative prices

investment

technology (rate & bias)

productivity

2 . I n spi t e of a rapi d i ncrease i n the l evel of i nvestment i n agr i cul t uralresearch, t here i s no i ndi cat i on that t he gap bet ween opt i mumand act uall evel s of i nvest ment has been reduced. The resul t i s cont i nual underi n-vest ment i n agr i cul t ural research and a subopt i mumrate of t echnol ogi calchange.



-2-

3 .

4 .

Because t here i s a hi gh coml ement ar i t bet ween publ i c ( especi al l y re-search and i nf rast ructure_p___ynd pr i vat e i nvestment i n agr i cul t ure, publ i cunder i nvest ment act s as a bot t l eneck on product i vi t y and out put gr owt h i nagri cul t ure.f ut ure f ood suppl y and w t h t he uni que rol e of t he publ i c sect or i n agr i -cul t ural r esearch, t hi s compl ement ar i t y i s i ncreasi ngl y i mpor t ant ; andunder i nvest ment i n publ i c agr i cul t ural r esearch can be i ncreasi ngl y bi nd-i ng on the growt h i n f ood suppl y.

Wt h the grow ng i mpor t ance of agr i cul t ural r esearch i n

Many expl anat i ons have been advanced of t he t endency f or under i nvest menti n agr i cul t ural r esearch. They i ncl ude:

a.

b.

C.

d.

e.

f.

g*

h.

i .

The exi stence of i nst i t ut i onal and geographi cal ext ernal i t i es.

The t endency f or government s to underest i mate ex ant e the ex postnet benef i t s of agr i cul t ural research.

The di f f i cul t y of t axi ng agr i cul t ure ( l and tax or i ncome tax) t o

f i nance publ i c expendi t ures i n research, w t h the resul t thatt here i s i nsuf f i ci ent publ i c i nvest ment and that ot her f onns oft axat i on- - whi ch are pol i t i cal l y easi er t o enf orce ( l ow agr i cul -t ural pr i ces and i ndi rect t axes>- - cr eat ebot h al l ocat i ve di s-t or t i ons and usual l y regressi ve di st r i but i ve consequences.

The pol i t i cal const i t uency of Schumpet er i an ent repreneurs i ssmal l whi ch reduces t hei r capaci t y f or col l ect i ve acti on.

The pol i t i cal const i t uency of pot ent i al l y benef i t ed consumers( l ower f ood pr i ces) and empl oyers ( l ower nomnal wages) i s l arge,but t he gai ns f or i ndi vi dual consumers and empl oyers are smal lwhi ch i nduces f r ee r i di ng.

There i s i nsuf f i ci ent i nvestment i n human capi t al , especi al l yresearch admni st rat or s and appl i ed sci ent i st s.

There i s a l ack of correspondence bet ween technol ogi cal andpol i t i cal hor i zons when the st at e act s i n response t o a cr i si ssi t uat i on:t rade pol i cy, and l abor pol i ci es- - ar e t hen pref er red overt echnol ogi cal pol i ci es w t h l onger mat urat i on per i ods.

shor t - r un i nst r ument s- - suchas pr i ce i nt ervent i ons,

There i s a l ack of coordi nat i on bet ween technol ogi cal and eco-nomc pol i ci es t hat underval ues t he pot ent i al gai ns of researchefforts.

There i s under represent at i on of speci f i c soci al i nt erest s ( peas-ant s, margi nal r egi ons, etc. ) at t he l evel of the stat e and t hepubl i c sector, w t h a consequent negl ect of i nvest ment i n manyareas of hi gh pot ent i al economc payof f s.



-5 -

j. There i s a general undervaluation of a gri cul tur al products in t hecontext of cheap food pol ic ies and urban bi as es . Unfavorableterns of tra de f o r ag ri cu lt ur e discourage new investments ands t i f l e the demand f o r techn olo gic al innovations or ig in at in g amongproducers.

5. Investment i n ag ri cu lt ur al research i s characterized bv a high level ofva ri a bi li t eve; though research i s a long-term en ter pri se n& only i nd e aturation time of spe cif ic pr oj ec ts but mainly i n terms ofin st it ut io na l building and staffi ng. The-main detenninants- of i ns ta b il i t yappear to be (a ) the high v ari abi l i t y i n foreign aid budgets for research;(b ) domestic economic i n s t a b i l i t y which dest ab il iz es pub lic budgets; and(c) a greater degree of in st ab i l i t y in a gricu l tur al research budgets thani n public budgets due t o a bias aga inst agr icul t ure tha t i s exacerbated i nperiods of economic downswing.

On a commodity basis, export crops receive more r esearch at te nt io n thanfood crops; and some products, such as cassava, that are important sub-sistence crops f or peasants but are not consumed i n urban areas and have

no in dus tr i al use are neglected by research efforts .grown by resource-poor farmers tend t o be neglected because the latter areunable t o voice t h e i r demand f o r new technology a t the leve l of th estate. Neglect i n research i s self-perpetuating. The time lag betweeni n i t i a l investment and research res ul ts i s longer for neglected crops thanf o r more es tab lis hed cr ops, and the state t ends to favor the la t t e r , par-ti cu l ar ly i n peri ods of economic crisis and tight budgets, because ityi el ds short-term payoffs.

6.

breover , c rops

7 . There have been important i n s t i t u t i o n a l changes i n the al loc at io n of re-search resources. In it ia ll y, National Research In st it ut es (NRI) , underthe umbrella of the state, were b u i l t around the model of t ech nol ogi cal

'konverters t o fa c i l i t a t e dissemination and l oca l adoption of technologyavai lable inter natio nall y. But several developments, which are the prod-uc t s of str uct ura l changes tha t have taken pl ace i n th ir d world economies,have modified the context of agr icu ltu ral research.t h e i n i t i a t i v e as a re su lt , among other fa ct or s, of work conducted by theInte rnat iona l Centers. Simultaneously, pri vat ely funded research is in-creasingly taking place i n areas where benefits can be easily appropriatedby pr iv a te groups; and the pri nci ple , who be ne fi ts pays, i s applied toobvia te the f inancia l crisis of the NRIs, thus reinforcing the tendencytoward underinvestment i n area s where publ ic res ea rch i s required.

The NRIs have lost

8. Case studies show that research strategies are successfu l when the s t a t eacts from above and pushes fo r a negotiated solu tion of confl ictin g int er -

ests i n response t o an agrar ian crisis tha t a f f ec t s la rge cons t i tuenciesa t the nati onal leve l. In other cases, the s tate acts from below i n re-sponse t o t he i nt er es ts of sp ec if ic groups and implements po li ci es de-signed t o s olve p ar ti cu la r problems obs truc ting t he development of aproductive sector.s ta te from below, rese arch e f f o r t s may lead t o production increas es.the potential demand for research is not translated into actual demand

when particular social classes l inked t o a gricu l tur al production are tooweak t o mobilize and coord inate government act ion i n th ei r favor.

When the se groups a r e powerful enough t o ac t iv at e t heBut



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SECTION 2

E O R IE S OF TECHNOLOGICAL INNOVATION: MARKET VERSUS INSTITUTIONAL FORCES

2.1. Rate and Bias of Technological Change

A t the l ev el of the firm, technolog ical change can be f ul ly charact eriz edby i t s bias and i t s rate (Diamond, 1965). The b i a s of techn olo gic al change i sgiven by the d i f fe rence i n the rates of change i n the marginal pr od uc ti vi ti esof fa ct or s due t o technology. I t measures which factor of production i s mader el at i ve ly more productiv e by technology and, hence, which factor i s tech-nology aiming a t su bs ti tu ti ng i n production. Technological change can, f o rexample, be land-saving o r laborsav ing according t o whether i t inc rea ses most

the rate of change i n the product ivi ty of l and or tha t of labor. Land-savingtechnology allows the su bs ti tu ti on of technology (ca pi ta l) f o r land i n produc-t i on and, thus, inc rea ses i n the le ve l of yield . Laborsaving technology sub-s t i t u t es technology fo r labor and, thus, allows increased productivity oflabor. To analyze th e bi a s of techno logi cal change a t the le ve l of th e coun-

t r y , the concept of bi as needs t o be extended t o includethe

d i f f e r e n t i a lproductivity-enhancing ef f e c t s of technology not only among fac to rs but a l s oamong a c t i v i t i e s , producti on systems, farms, and regions. In a l l cases, thenot ion of b i a s r e s u l t s i n d i f f e r en t i a l rates of pr oduc tivi ty growth due t otechnology among factors, prodxts, production systems, farms, and regions.

The rate of technological change i s the rate i n the growth of output t h atcannot be explained by the observed change i n the le ve ls of fa ct or use.prin cipal ly conditioned by two sequ enti al processes:resources in the generation of technological innovations and ( 2 ) the t ransferand diffu sion of inn ova tio ns among users . For bot h b i a s and rate, neoclassi-cal theory gives us the concept of an equ ili bri un bia s and an equil ibr iunrat e.

I t is(1) the investment of

According t o the theory of induced innovations, the equi l ibr iun fac torb ia s w i l l be t ha t b ia s which equal izes the marginal productivity r a t i o of fac-t o r s t o t he f a c t o r p ri c e r a t i o .the meta production funct ion which give s the set of a l l exis t ing and poten t ia ltechnologies that can be developed with the exis t ing s ta te of sc i en t i f i cknowledge. By al lowing f o r changes i n production functions, the equilibriumbi as of technological change thus increases the poss ib i l i ty of fac tor subs t i -tu t ion i n response t o changes i n r e l a t ive f ac to r p r i ces r e l a t ive t o ad jus t -ments for a given technique. And by allowing to sub st i tut e fo r the fact orsbecoming relatively scarcer, technology checks the rise i n pr ices of thesefac tors and g ives g rea t er s t a b i l i t y t o f ac to r sha res .si mi la rl y be defin ed among products, production systems, farms, and regions .

Marginal productivities are calculated along

Equilibriun biases can

The concept of an equ il ib ri un r a t e der iv es from both optimun investment i nrese arch and optimum di ff us io n of inno vations. Optimun investment i n re sea rchi s indicated by equaliz ation of the in ter nal rate of return to research to therate of ret urn i n othe r government pro jec ts. Underinvestment i n ag ri cu lt ur al



research wuld thus be indicated by an in terna l rate of ret urn above tha t ofalternative investments.th e inno vation whenever it is profi table fo r entrepreneurs t o do so underequilibriun (shadow) prices and full access to supportive in st i tut ion s(markets, credit, infonnation, etc.).

Optimun di ff us io n corresponds t o a f u l l adoption of

konomic theory thus gives us a well-defined characterization of w h a t

should be the optimum bias and rate of technological change at a par t i cu la rpoint in time. In practice, t h i s f u l l potential of technology for a greaterefficiency i n the all oca tio n of resources i s rarel y fu lf i l le d. There existseri ous dis to rt io ns i n the bi as and ra te of technological change that resul tfrom th e po l i t i c a l economy of th e environment where techno logi cal changeoccurs.the di str ibu tio n of economic and po li ti ca l power i n c i v i l society.

Key i n the determin ation of these biases i s the rol e of the s ta te and

W are principally concerned here with the generation of innovations (asopposed t o dif fus ion ) and w i l l explore, i n the context of po l i t i c a l economy,what are the sources of deviation from the equilibriun bias and rate of tech-nological change.par t icu lar types of technological change depend more than anything on the in-

come and di st ri bu ti on ef fe ct s which technology i s expected t o produce.w i l l be done mainly wi th r eference t o Latin America.

Pressures on the state t o sat isf y cl i en te le demands for

T h i s

2.2. Neoclassical theow of Induced Innovations

In the neoclassical paradigm, explicit or implicit markets are postulatedt o exist with f lexible pr ices.havior, markets determine the allocation of resources and the choice of tech-niques.resources and to the i r e f f i c ient u t i l iza t ion .maximum output can always be achieved by a rea llo cat ion of resources.over, i f there are no increasing returns to scale in the economy, the case f o r

the competitive p ric e system is strongest i n the sense th at any complaintsabout i t s operation can be reduced t o complaints about the distr ibut i on ofincome which can then be rectified by transfers between producers and/or con-sumers.market i n th e absence of accepted lev el s of income in eq ua li ty as K . Arrow(1970, p. 62) has sbwn; but they imply that the problem of allocation of re-sources can be separated from th e problem of th e di st ri b ut io n of co nt ro l overthes e resources. Since a l l resources have an opportunity cost determined bymarket forces, the all oca tio n of own resources i n production i s made i n te rn sof a user cost equal t o market prices with the resul t that the allocation ofresources (and the choice of techniques) i s unaffected by resource ownership.The problems of resource a l lo cat ion and resource ownership are, thus, ful ly

separable . Sta ted another way, what the po st ul at e implies i s that economics(pr ice determination on markets and the allocation and u s e of resources) canbe separated from political economy (social classes which are, i n l a rge pa r t ,defined by unequal control over assets).str iki ng in , f o r instance, neoclassical models of peasant households such a sthose of Lau, Yotopoulos, Chou, and Leu (1981) and of Ahn, Singh, and Squire(1981).labor categor ies, per fec t subs t i tu tab i l i ty i s implied between family and hired

Given profit or net-revenue maximizing be-

The result i s th at market for ces lead t o th e f u l l employment of a l lGiven the stock of resources,

More-

These propositions provide no basis for accepting the result of the

T h i s separation is part icular ly

By post ulat ing the exis tence of per fec t labor markets f or a l l family



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4. I t works better for advanced capitalist democracies wheremarkets are more d e v m n d he state r e l a t ive ly less in-te rvent ionis t than i n most th ir d world co unt rie s i n whichmarkets notably fail; where the state is general ly act ivelyinvolved i n economic a f f a i r s ; and where the d is t r ibu t ion ofwealth and p o l i t i c a l power (and, hence, infl uenc e on thes t a t e ) is highly unequal and more so than i t ever was i n t he

modern hi s tory of advanced economies.

The theory thu s does not adequately explain generat ion of technology i n a con-t e x t where markets tend t o f a i l , where the s ta te is highly intervent ionist ,and where the short run matters t o hunan su rviv al. I t t hu s f a i l s t o d e a l w it hthe main components of the agrarian question i n the third world--inadequateaccess t o food fo r many, poor performance of ag ri cu lt ur e i n as si st in g economicdevelopment, and extensive r ur al poverty. This, of course, does not mean thatpric es do not matter:gene rati on of technology w i l l be profi table fo r the pri vat e secto r and adop-t i on profi table f or pa rt i cul ar groups of producers .necessarily reflect shadow values, net pr ices are generally not the same

across so ci al groups, and the state does not neces saril y respond t o r el at iv epr i ces in a l loca t ing resources t o agr icul tura l research.

they do, pa rt ic ul ar ly i n determining whether the

But market prices do not

Getting the prices right is , thus, necessary but not s uff ici ent f o r anoptimun rate a d bi as of tech nolo gica l change.creat ing production incent ives, nonprice pol icy ef fo rt s t o ra is e yie ld throughpublic investments i n technology and i nf ra st ru ct ur e are essent ia l . The reasonwhy prices are systemica lly found t o be a weak determinant of long-runaggregate supply i n agri cultu re i s precisely due to the f a i l u r e of publicinves tment i n agr ic ul ture i n a si t uat ion where ther e exists a high degree ofcomplementarity between pub li c and p ri va te investment. 1 Public underinvest-ment, i n addi tion , incre ases the var iab i l i ty of agr icu l tu ral output and leadst o subs t i tu t ion of pr iva te fo r publ ic inputs which favors the wealthier farm-

ers who can af fo rd it and t ends t o bia s tech nolo gica l change toward labo r-saving mechanical innovati ons.

While pr i ces are important i n

2 . 3 . A Structuralist Theory of Indwed Innovations

A non- neoc lass ical theor y of induced inno vati ons i s based on twopremises.r o l e t o play t o that of market forces. This i s clearly a l l the more important

One i s that institutional forces have an important complementary

when markets openly f a i l e it he r because they do not ex is t o r because of- stateinterventions, external i t ies and public goods, excess supply at prevai l ingpri ces with downward in fl ex ib il i t y (e.g. , surplus labor ), o r the existence of

market power through di ff er en t in st it ut io na l mechanisms (re str ict ed competi-t ion , br ibery , e tc . ) . Ins t i tu t io nal forces can thus act i n th e determinationof r e l a t ive p r i ces ( r e su l t i ng in ' p r i c e d i s to r t ions r e l a t ive to their deter-mination by unchecked market forces), of technological innovations, and ofi n s t i t u t i o n a l change i t se lf . In Figure 2 .1 , these are ident i f ied as thest ru ct ur al is t loops by con tra st t o the neoclass ical loop where market force sdetermine rel at i ve pr ice s and technological innovations.



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hange in resource endowments

Change in relative prices

I

Neo-classical

loop: marketforces

innovations

hange in technologyStructuralist

loops:

institutionalforces

Rules of institutional

Change in institutions

Figure 2.1 - Market and Institutional Forces in the Inducement of Innovations



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The second premse of a st ructural i st t heory of i nduced i nnovat i ons i s adi f f erent rul e of survi val f or t echnol ogi cal and i nst i t ut i onal i nnovat i ons.I n t he neocl assi cal paradi gm t echnol ogi es and i nst i t ut i ons survi ve onl y i ft hey are al l ocat i vel y ef f i ci ent i n a gi ven economc envi ronment and theychange when they f ai l t o sat i sf y the cri t er i on of al l ocat i ve ef f i ci ency andare repl aced by new ones w t h a super i or al l ocat i ve ef f i ci ency. Neocl assi caleconomst s have t hus expl ai ned t he permanence of i nst i t ut i ons such as t r adi -

t i onal agr i cul t ure (Schul t z) and sharecroppi ng ( Cheung) on t he basi s of t hei ral l ocat i ve ef f i ci ency i n a gi ven cont ext .sector i nduced t echnol ogi cal i nnovat i ons i n t erms of t he generat i on of t hatt echnol ogi cal al t ernat i ve w t hi n t he conf i nes of moment ary sci ent i f i c capabi l -i t i es whi ch opt i mzes r esource al l ocat i on (Ahmad).

They have al so expl ai ned publ i c

A st ructural i st approach t o t echnol ogi cal and i nst i t ut i onal change i nt ro-duces anot her rul e of survi val f or i nnovat i ons.ency as a meani ngf ul cr i t er i on of sel ect i on because market s are seen t o f ai li n many di f f erent ways. The resul t i s that t here exi st s no gl obal al l ocat i veef f i ci ency and t hat what mat t er s f or t he survi val of i nnovat i ons i s cl assef f i ci ency rather t han al l ocat i ve ef f i ci ency, namel y, t he ef f ect i veness oft echnol ogi es and i nst i t ut i ons i n al l ow ng surpl us appropr i at i on by a speci f i c

soci al group. Par t i cul ar t echnol ogi es and i nst i t ut i ons may thus be cl ass ef -f i ci ent i n al l ow ng surpl us appropr i at i on by a speci f i c soci al group ( l and-l ords or l arge f armers, f or i nstance) whi l e event ual l y creat i ng a great dealof gl obal al l ocat i ve i nef f i ci enci es and a net soci al l oss. Thi s i s how, f ori nst ance, Badhur i (1983) has expl ai ned technol ogi cal st agnat i on i n a cont extwhere i nt er l ocked l and and credi t market s al l ow l andl ords t o extract surpl ust hrough perpet uati on of debt peonage and usur i ous cr edi t terms.

I t rej ects al l ocati ve ef f i ci -

A st ructural i st theory of i nduced i nnovat i ons t hus l ocat es t he det erm n-ant s of t echnol ogi cal i nnovat i ons i n both changes i n rel at i ve pr i ces and i ndi rect i nst i t ut i onal f or ces where pr i ces t hemsel ves ar e i nf l uenced by i nst i t u-t i onal f orces that di stor t themaway f romthe ef f i ci ency pr i ces t hat coul dpresumabl y have resul t ed f r omthe f r ee pl ay of market f orces.

poi nt , i t i s usef ul to cat al ogue t he sources of di st or t i ons that a st ruc-t ural i st approach reveal s r el at i ve t o the neocl assi cal paradi gm f or t he de-t ermnat i on of t he rat e and bi as of t echnol ogi cal change.

As a star t i ng

We reempl oy f or t hi s purpose a f ramework devel oped some year s back t ocharacteri ze the suppl y and demand of t echnol ogi cal i nnovat i ons (de J anvry,1977). We use t hi s f ramework t o l ocat e t he var i ous sources of di st or t i ons;that i s, t he soci al and pol i t i cal el ement s f r omwhi ch depar t ure f romequi l i -br i um rat e and bi as or i gi nat e (see Fi gure 2.2).

(1) t he rol e oft he soci oeconomc st ructure whi ch i nf l uences t he f ormati on of expect ed andactual payof f s; (2) t he unequal di st r i but i on of i nf ormat i on about t echnol ogywhi ch af f ect s the l at ent (potent i al ) demand f or i nnovat i on; ( 3 ) the pol i t i calst ructure and the patt erns of st at e behavi or whi ch af f ect the way i n whi chl atent demand i s t ransf ormed i nto actual demand; ( 4 ) t he degree of ar t i cul a-t i on bet ween i nst i t ut i ons that are demanders and suppl i er s of t echnol ogy.

Four maj or sources of di st or t i ons can be di st i ngui shed:



3SOCIOECONOMIC STRUCTURE

S t a t e o f Science

Land tenure: asse ts d i s t r i b u t i o n

Product and fact or price s:

Figure 2 . 2 - Supply and Demand f or T echno logic al In nova tio ns

Diffusion ,

g lo b al p r i c e d i s t o r t i o n s

group-specif i c p r i c e d i s t o r t i o n s

non-price ba rr ie rs payoffs

Access to inpu t s and ins t i tu t io ns : Actual

d matrix



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A. Soci oeconomc St ruct ur e

The f i r st source of di st or t i on i s the character i st i cs of the soci oeconomcst r uct ure whi ch i nf l uence the f ormat i on of expected and actual payof f s.i ncl ude:

They

a.

b.

C.

d.

e.

f .

Market f ai l ures that l ead to product and factor pr i ce di st or -t i ons such as surpl us l abor (unempl oyment ) whi ch i mpl i es thatwages are not det ermned by suppl y and demand on l abor markets.

Government i nt ervent i ons i n the pr i ce mechani sm such as pr i cef i xi ng, subsi di es, and overval uat i on of the exchange rat e.

Macroeconomc and monetary pol i ci es t hat af f ect real pr i cessuch as Dut ch di sease and i nf l at i onary spi ral s.

Soci al groups' speci f i c product and factor pr i ce di st or t i ons.Di f f erent soci al groups f ace di f f erent pri ces f or the sameproduct or the same f actor .

access t o market s and to compl ex pat t erns of i nt er l ocki ng i nproduct and f actor markets.access to i nst i t ut i onal r ent s ( subsi di zed publ i c credi t , sub-si di zed wat er r i ght s, etc. ) whi ch are di st r i but ed by nonmarketmechani sms. These unequal pr i ces are, i n part , determned byunequal asset di st r i but i on (dual i sm and by unequal mobi l i za-t i on of pol i t i cal power.

Thi s i s due t o t hei r di f f erent i al

I t i s al so due to di f f erent i al

Nonpr i ce barr i ers.barr i er s i n ei t her t hei r di rect use of t echnol ogy or i n der i v-i ng benef i t s f r omt echnol ogi cal change.cl ude access t o i nput s, access t o market s, avai l abi l i t y ofnont raded f actor s, ski l l di f f erent i al s, et c.

Di f f erent soci al groups f ace di f f erent

These bar r i ers i n-

Land t enure pat t erns af f ect the payof f s f romt echnol ogyt hrough economes of scal e (i ndi vi si bi l i t i es i n tubewel l i rr i -gat i on and machi nery), the ext ensi veness of homogenous cr op-pi ng pat t erns, etc.

B. I nf ormat i on St ruct ure

A second source of di st or t i ons i s i n t he f ormat i on of a l atent ( pot ent i al

The st at e, i n par t i cul ardemand f or i nnovat i ons.t he pot ent i al payof f s f romt echnol ogy i s i mperf ect.may have a msconcei ved percept i on of t he pot ent i al gai ns f romt echnol ogi calchange. Thi s w l l be al l the more the case i f t here i s l i t t l e communi cat i on( art i cul ati on) bet ween those who budget r esearch, t hose who generate new t ech-nol ogi es, t hose who are t he pot ent i al users of new t echnol ogi es, and t hose whow l l ul t i mat el y benef i t f romt echnol ogi cal change.pot ent i al benef i t s f romt echnol ogi cal i nnovat i ons i s al so hi ghl y unequal l ydi st r i but ed among pot ent i al benef i ci ar i es ( or l osers) w t h, t ypi cal l y, peas-ant s, l andl ess worker s, and consumers bei ng the l east - i nf ormed groups.

Thi s or i gi nat es i n the f act t hat i nf ormat i on about

I nf ormati on about t he



-1 2 -

C Pol i t i cal St ruct ure

A thi rd source of di st or t i on i s at the l evel of t he pol i t i co- bureaucrat i cstr uct ure.si gnal s by t ransf ormng the l at ent demand f or i nnovat i ons i nto an actual(budgeted) demand f or i nnovat i ons. I n pract i ce, however , t he st at e i s ahi ghl y compl ex i nst i t ut i on t hat i s mot i vated by a whol e spect rumof f or ces

t hat onl y i ndi rect l y ref l ect market f or ces and many t i mes not at al l .i n par t i cul ar , di st i ngui sh two cont rast i ng pat t erns of stat e behavi or .

Accordi ng t o neocl assi cal i deal s, t he stat e shoul d react to market

We can,

a.

The stat e i s an i nst i t ut i on whi ch benef i t s f roma cer t ai n degree of

The St ate Act i ng FromAbove

aut onomy rel at i ve t o ci vi l soci ety. Thi s aut onomy i s cl ear l y const rai ned bybot h economc and pol i t i cal f orces. Economcal l y, t he st at e needs t o generat ei t s r esources f r omw t hi n ci vi l soci et y and, hence, i s commt t ed t o reproduc-i ng the surpl us generat i on capaci t y of ci vi l soci et y, par t of whi ch i t canappropr i at e vi a taxes and l oans.surpl us generat i on and, hence, dependent on surpl us bei ng generat ed i n ci vi l

soci ety. The resul t , i n t er ms of st at e behavi or , i s that i t i s commt t ed t osurpl us generat i on i n ci vi l soci et y and, consequent l y, w l l be drawn i nt omaki ng pol i ci es t hat promot e capi t al accumul at i on and surpl us growt h. Pol i t i -cal l y, t he stat e needs t o l egi t i mze i t sel f whi ch i mpl i es mai nt ai ni ng a cl i en-t el e i n ci vi l soci et y, maki ng t he necessary concessi ons t o organi zed groups,and openi ng channel s of communi cati on w th thembut at t he same t i me act i vel ycont rol l i ng and possi bl y suppressi ng the emergence of ant agoni st i c pressuregroups.

The stat e i s l argel y excl uded f r omdi rect

Thi s r el at i ve aut onomy of t he st at e can f undament al l y be used f or t wo con-One i s t o act as an i deal col l ecti ve capi t al i st i n i nsur -rasted proj ects.

i ng both t he condi t i ons f or capi t al accumul at i on i n ci vi l soci et y and thereproduct i on of t he exi st i ng soci al order .of t he Keynesi an st at e, f or exampl e, whi ch uses f i scal and monet ary pol i ci est o count er cycl i cal downt urns i n capi t al accumul at i on.a stat e whi ch promot es par t i cul ar t echnol ogi cal advances i n agr i cul t ure toovercome i nf l at i onary pressures, def i ci t s i n the bal ance of payment s, o r i n-secur i t y i n f ood suppl i es. The type of st at e i nt ervent i on and t he choi ce ofi nst rument s w l l depend upon whet her the stat e act s i n ant i ci pat i on of eco-nomc cri ses i n what can be cal l ed a pl anni ng mode of act i on or i f i t actsin r eact i on t o an ongoi ng cr i si s i n what can be l abel ed a cr i si s mode. Thet wo modes of response ar e si gni f i cant l y di f f erent , f or i nst ance, i n t erms ofusi ng agr i cul t ural t echnol ogi cal i nnovat i ons as an el ement of cr i si s r e-sponse. Si nce t echnol ogi cal i nnovat i ons requi re a f ai r l y l ong- r un mat urat i onper i od, t echnol ogy can hardl y be used as a pol i cy i nst rument i f t he st ate

basi cal l y act s i n a cr i si s- r esponse mode. I n t hi s case, ot her more i mmedi at epol i cy i nst r ument s w l l be chosen such as pr i ce cont r ol s or t r ade pol i ci es.

Thi s ref orm st proj ect i s typi cal

I t i s al so t ypi cal of

The second proj ect i s f or t he stat e to use i t s r el at i ve aut onomy to pro-mote st ruct ural change on behal f of domnat ed cl asses i n what has been cal l ed

revol ut i ons f romabove (Tri mberger) . Typi cal of t hese st at e proj ects



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.is t he rol e of the ml i t ary and bureaucrat s i n promot i ng moderni zati on i n cer -t ai n phases of t he hi story of J apan, Tur key, Egypt , Per u, and Mexi co. I n t hi scase, the pol i t i cal el i t es are the agent s of change, and the resul t can bedrast i c str uctural changes i n ci vi l soci et y. Thi s i s typi cal of i nt ermedi at eregi mes i n per i ods of t r ansi t i on bet ween economc syst ems where t he ol d dom -nant cl asses are i n economc or pol i t i cal di sarray, and the stat e can emergeas a power f ul f or ce i n st ructur i ng the emergi ng soci al order .

Thus acti ng f r omabove, t he st at e can dramat i cal l y al t er the t r ansf orma-t i on of a l atent demand f or t echnol ogi cal i nnovat i ons i nto an actual demand.Key here are (1) whet her t he st at e act s w t h ref ormst or st ructural changeobj ect i ves, (2) whet her i t acts i n a pl anni ng mode or a cr i si s response mode,and 3) how rest r i ct i ve are the economc and l egi t i macy l i mt s on st at ei ni t i at i ves.

When the st at e act s w t h ref ormst or st ructural change obj ect i ves andwhen t he economc and pol i t i cal l i mt at i ons on stat e i ni t i at i ve do not r e-st r i ct t hese obj ect i ves, the l atent demand f or generat i on of agr i cul t uralt echnol ogy i s l i kel y t o be transl at ed i nt o actual demand and generous budgetal l ocat i ons to agr i cul t ural research. By cont rast t o thi s pl anni ng mode, i ncr i si s per i ods the stat e w l l f ace a hard budget const rai nt and i t s capaci t yt o i nvest i n t he f ut ure w l l be reduced.l i kel y t o be transl ated i nt o actual demand.proj ects, a pl anni ng mode cor responds to a l ow val ue of the di scount r ate, anda cr i si s mode cor responds t o a hi gh val ue of t he di scount rate used t o comput et he present val ue of benef i t s f romagr i cul t ural research.

Theref ore, l atent demand i s l essI n t erms of eval uat i on of publ i c

b. The St ate Act i vat ed FromBel ow

Whi l e t he stat e can act w t h a cer t ai n degree of aut onomy rel at i ve t oci vi l soci ety, i t i s al so appropr i at ed by i nterest groups whi ch use i t as bot h

an obj ect and an i nst rument of compet i t i on- - anobj ect i n that organi zed groupscompete to cont rol the pol i cymaki ng capaci t y of the st at e and an i nst rument i nt hat di f f erent i al appropr i at i on of t he benef i t s of pol i cy (under the f ormofi nst i t ut i onal rents) i s an i mpor t ant el ement of the out come of compet i t i on.The key i ssue here i s t hat t he st at e al l ocat es r esources and rent s by non-market mechani sms and i n response to the soci al pressure syst em the el ectoraland bureaucrati c reward syst ems, and the mechani sms of budget appropr i at i ons.Si nce, here, market s do not work, i nequal i t y i n the di st r i but i on of assets anduneven di st r i but i on of economc and pol i t i cal power are keys i n expl ai ni ngst at e behavi or . The cour se of agr i cul t ural t echnol ogy can thus be power f ul l yi nf l uenced by organi zed l obbi es, bot h on the si de of producers and of con-sumers and empl oyers. The key i n underst andi ng how st at e acti vat i on f rombe-l ow af f ect s the rate and bi as of t echnol ogi cal change are (1) the degree of

organi zat i on and the rel at i ve st rengt h of di f f erent soci al gr oups; (2) theextent of cohesi veness or bal kani zat i on of t he stat e i t sel f , the l at ter



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a llowing g reat e r poss i b i l i t i e s fo r pa r t i cu la r i n t e re s t groups t o cap tu re thestate from below; and ( 3 ) the degree of r e l a t ive autonomy of t he s ta te (and,hence, the stringency of economic and legitimacy co ns tr ai nt s on the s t a t e )which makes i t more o r less i mmune t o i nt er es t group danands.

D . In st it u ti on s Producinrr Innovations

Final ly, a four th source of di st or ti on i n the determination of the rateand bias of technological change i s the way th e innovation-producing i n s t i t u -ti on s transform the act ua l demand f o r innovations in to an ac tu al supply. Themain issue here i s th at of th e degree of art icu lat ion between denand andsupply (Pin eiro and Trigo) i n the choice of research pr io r i t i es within re-search ins t i t ut i ons .2 While the t o t al leve l of research ac t i vi ty in thesei n s t i t u t i o n s i s la rg el y determined by budget a ppr opr iat ion s (a ct ua l danand) ,they generally enjoy a con sid era ble degree of autonomy i n deci ding t he budgetuse among research al te rn at iv es . Research in st it ut io ns , l i ke other agenciesof the state, are als o i nt er na ll y divided along l i n e s which do not neces saril ycor re spond t o d iv is ions in c iv i l soci e ty , r e su l t i ng i n a th i rd pa t te rn ofs ta te behavior (beyond th s ta te acting from above and the s tate activatedfrom below) which can be ca ll ed t he s t a t e activ ate d from within. The re-sponse of research sc ie nt is ts and administrato rs represents a c r i t i c a l l i n k i nthe inducement mechanism. With in the state and pa ras t a t a l i n s t i t u t ion s ca r ry -ing out research, the key issues are those of d ecen trali zatio n of decis ionmaking and of part i cip at i on by in teres ted par t i es i n the de fin i t i on of re-search pr io r i t i es . Decentral izat ion a d par t i c ipa t ion are par t i cu la r lyimportant if research i s going t o address t he problems of small fa rmers whogenerally operate under highly complex and heterogenous circunstances withminimal institutionalized representation.by r u r a l development advocates f o r pa rt ic ip at iv e res ear ch, farming systemsapproaches, and Yarmer f i r s t and last models (Chambers).

T h i s problem has l ed t o proposa ls

Also relevant as par t of t h i s fourth source of d is t or t ion s in rate andb ias are the ro le of i nt er na ti on al t ra ns fe rs of technology, th e complemen-t a r i t y between public and pr iv at e research, and the flow of int ern ati ona l ai dt o ag r i cu l tu ra l r esea rch ins t i t u t ions . International transfers occur unevenlyacro ss crops, regions, and farms and transpose t echnologies with eventu allyoptimum bi ase s f o r th e conte xt where they have been developed but not for thatwhere transferred.t io nal agr ibus iness as a vector of technology tr ans fer t o the th ir d worldcomes about.nological change and a source of exogenously determined d i st or ti o ns which haveof te n had highly s oc ia ll y dis rup tiv e consequences.

This i s where the whole question of the rol e of inter na-

Thes e i n s t i t u t i o n s are simultaneously a dynamic source of tech -

Complenentarity between public and private research i s important because

cer ta i n research areas cannot eas il y be car rie d out by priv at e research.i s the case for fundamental research as w e l l as research with long-term pay-of fs , subs tant ia l ex terna l e f fec ts , and r e s u l t s d i f f i c u l t t o p a te nt . Becauseof complanentarity i n research, underinvestment and in st ab il i t y i n publ ic re-search furding can lead t o bottlenecks on investment i n pri va te researche f f o r t s .

This



-15-

Finally, international aid has been a major source of funding and supportof national research initiatives.tinuity over time, and its priorities are thus also important in determiningthe rate and bias of the actual supply of innovations.

The level of international aid, its con-



-16-

SECTION 3

SIZE OF ?HE RESEARCH EFFORT: E FACTS

3.1. Hi st or ic al Overview

Pri or t o 1950, the developing coun trie s had si gn if ic an t research programsaimed a t the improvement of colonial trade crops such as sugar, tea, coffee ,cocoa, and cotton along with a few small programs on rice and wheat. No s i g -ni fi ca nt research on root crops , oil seed s, pu lse s, sorghum, millets, and feedgra ins was undertaken.

In t he 1950s and ea rl y 1960s, which was a peri od of de colo niza tion andindependence f o r many co unt r ie s of Asia and Africa, high pr ior i ty was g iv en t oin du st ri al growth and t o i mport-subst itution po li ci es while the agr i cu l tu ra lsec tor was re la ti ve ly neglected. Research on food crops was not given pri-o r i t y (Evenson, 1984, p. 357). Of the t o t a l investment i n ag ri cu lt ur al re-search i n 1958, about 90 perc ent was i n developed cou ntr ies and only 10 per-cent i n developing countrie s.necessary €or the provision of cheap food t o t he i ncr eas ing ly urbanized popu-l a t i o n was only a f r ac t ion of that percentage.

During the 1950s and 1960s, a nunber of research in st it ut io ns were b u i l ti n th e developing world on the model of the U . S. federal-state system,usual ly with inte rnat i onal support . Internat ional aid f inanced the t rainin gof ag ri cu lt ur al sc ie nt is ts and i ns ti tu ti on al buildup, but many nationa l gov-ernments fa il ed t o fund and develop research f a c i l i t i e s and other support.3

The pro por tio n of res ear ch on food crop s

In response to that si tu a ti on and following the succ esse s of IRRI andC M T , the internat ional agricul tural research system was developed duringthe 1960s, culminating with the crea t ion of the CGIAR i n 1971. These ce nt er s

d i r ec t e d t h e i r a t t e n t io n t o .a l imited nunber of crops and, given t h e i r in te r-na ti on al mandate, placed emphasis on wide ad ap ta bi li ty of the ge net icmaterial. A t the same time, national research centers were being transformedand developed. They were given an autonomous role and were di st in ct fromth e ir predecessors which usua lly were dependent on t he Ministries of Agricul-tu re (P in ei ro and Trig o, 1983, pp. 126 and 127).

The i n i t i a l success of in te rna t ional a gr icu l tura l research was grea t ,especially if one considers that i n 1971 the IARCs accounted for only 0.1 per-cent of t o t a l expenditures fo r agricu l tura l research.

pp. 171-208) estimates that the technology derived from the work of the insti-tutes added 1 b i l l i o n (U. S . ) i n wheat and rice production i n Asia aloneduring 1972-73.

klrymple (1977,

As the new varieties spread into less-favored lands and as socioeconomiccon str ain ts t o f ur t her advances i n product ivi ty began t o appear, progressslowed.might be declining as rese arch moves i n t o second generati on technology i nwheat and rice.

Evenson (1977, p. 261) suggests tha t the rate of retu rn t o investment



-17-

Moreover, progress has not been uniform. The ret urn on investment i n cornresearch a t the IARCs has been realized more slowly than for wheat and rice,although private research on corn has been rel at iv el y pr of it ab le (Arndt andRutt an, 1977, p. 14) . There i s a great v ar i abi l i t y i n re turn t o research onspe cif ic comnodities as the work of Hertford and associates i n Colombia hassbwn (Hertford e t a l . , 1977, pp. 117-120). Rates of retu rn f o r research onsoybeans and rice were found t o exceed 50 perc ent.

contrast , yielded returns that were estimated t o be negligible . h i s l a t t e rf a c t i s surprising because cott on yi el d increa ses since the early 1950s havebeen spectacular.search ac ti vi ty , involving loc al te st in g of va ri et ie s imported from the UnitedSt a te s , appears t o have been unnecessary because there were only minimal yielddiff eren ces i n those imported varieties and they could j us t as m l l have beenselected at random.example of a state involved i n ag ri cu lt ur al research ac ti va te d from below'' bypowerful interest groups.ird ust ry i n Colombia--until t h e n , accustomed t o importing U. S. cotton--foundi t s e l f compelled t o buy Colombian co tto n.sored the research program which, f o r the most pa r t , involved th e impor tation,lo ca l tes tin g, and dis tr ib ut io n t o farmers of high-yielding varieties.

Research on cotton, by

Hertford's explanation of t h i s puzzle i s that the main re-

The cotton research program of Colombia provides a good

M au se of a change i n exchange ra te , the te x t i l e

T e x t i l e manufacturers then spon-

Boyce and Evenson (1975, pp. 50 and 51) suggest t ha t 40 percent to 50 per-cent of the t o t a l investment i n agr icu ltu ral research i n low-income cou ntrie sderi ved from in te rn at io na l ai d funds during th e 1960s. By 1971, a id was a t alow and probably accounted for less than 20 percent of t h e national systeminvestment. New fonns of funding--more complex than dur ing t h e 1960s and i n -volving a combination of p ubli c funds, in te rn at io na l gr an ts and lo ans, andpa rt ic ip at io n of the pr iv at e sector--were devised (Trigo and Pinei ro, 1984).During t he 1970s and e ar ly 1980s, it seems that foreign aid--although hard t oquantify exactly--accounted fo r a large r share, doubling i n Latin America be-t w e n 1975 and 1980 (Oram, n .d ., p. 7).most Latin American cou nt ri es around 1981 and t he in te rn at io na l rec essi on haveaffected this t rend.

I t i s possible that the cr is i s i n

The ince ptio n i n 1971 of the Consultative Group on Int ern ati ona l Agricul-

Originally established t o help widen the ba si s of fund-t u r a l Research (CGIAR) has introduced a new dimension i n ag ri cu lt ur al research€or the third world.ing for the four exis t ing IARCs, i t was then used t o create new ce nt er s t omeet spec ial needs, support nati onal research ef fo rt s, and coordina te e f f or ton an internat io nal basis. The CGIAR now has about 40 donors, mainly devel-oped countries, multilateral organizations, the Ford Foundation and theRockefeller Foundation, but al so developing cou ntr ies which finance t he 13ins t i t u t ions that make up the CG network.

The broad obj ect ive s of th e sys tem were defined by the Technical Advisory

Committee (TAC) as follows:of food supplies i n LDCs and meeting total food needs; ( 2 ) meeting thenutrit ional requirements of the less advantaged groups i n the LDCs (TechnicalAdvisory Comnittee Secretariat, 1979) .

(1) increasing the amount, quality, and stability



-18-

In the early 1970s, the CGIAR system had expanded cons ide rab ly with agrowth ra te i n fina nci al support of nearly 20 percent per year.1970s and 1980s, the re was a sharp leve lli ng off of expenditures and the s y s -t an has hardly expanded during the 1980s with a growth ra t e of only 1 percentpe r yea r i n real terns since 1980.t o 18.5 percen t of donor funding of a l l agr i cu l tu ra l r e search i n the th i rdworld (Oram, p. 9).

In the l a t e

The 1980 level of funding was equivalent

More than 50 percent of the resources of the system go in to plant breedingand related act iv it ie s. The other major research area i s the development ofbetter systems of land and water management such as water cons erva tion methodsf o r the semiarid t rup ics , s o i l conservation proj ects , and farming systans.

In the aftermath of the Green Revolution, a g loba l agr ic ul tu ra l researchsystem i s me rgi ng (Ruttan, 1984). Strong link ages between th e vari ous cm-ponents of the system have been establi shed , pa rt ic ul ar ly between the in te rna-t iona l ne twr k of IARCs and the nati onal research systems. Pri vat e researchand priv ate funding of public p roj ect s i s increasing .4 The pri vat e sect ori s becoming incre asingly involved i n ag ri cu lt ur al research i n Latin America,more so according t o Oram (p. 14) than i n any other developing region.

Agricultural research, by i t s very nature, i s a long-term enterprise thatrequires not only adequate levels of investment but also a sustained invest-ment program and q ual if ie d personnel over a period of year s. Although th er ehas been an increase i n research expenditures measured i n constant do ll ar sover the past 20 years or so as well as an increase i n the q ua li ty and quan-t i t y of the s ta f f of research ins t i tu t io ns , there i s evidence of lar ge yea r-to-year var ia t ions i n the level of funding of research.also reveal that resources are highly unevenly allocated among crops andregions, with ce rt ai n crops receiving a di sp ro po rt io na te amount of funds, andcountries- -and regions with in a country--being re la ti ve ly more favored thanothers.

The ava ila ble dat a

The ge nera tion and di ff us io n t o farmers of a flo w of th e new technologyare considered by a l l spec iali zed agencies t o be an es se nt ia l component of thepackage of measures required for the eli mi nat ion of t he food gap proj ecte d

unti l the end of the century (Food and Agri cul tu re Organiz ation, 1981, p. 77;World Bank, 1983, pp. 67-77; and Oram, Zapata, and Ray, 1979, p. 128). Mostof the increase i n agr ic ul tur a l productiv i ty w i l l cane through larger and moreef fi ci en t investments i n applied research and ext ension services i n developingcountr ies . The po ss ib i l i t y tha t i t w i l l come from sane dramatic advance i nbasic research such as t h e one that gave rise t o the Green Revolution cannotbe excluded but i s unli kely i n the next two decades.

Global resea rch exp enditures f o r 1984 are of the order of $10 b i l l i o n

(U. S.) and involve about 200,000 sc ie nt i st s. About hal f th at amount andtwice that personnel are invested i n extension.only 2 percent of a l l ag ri cu lt ur al research (and 15 percent of research expen-di tu re s i n less-developed coun tr ies ( L D C S ) .

of f or ei gn as si st an ce , t he World Bank over th e pa st decade has loaned $1.5b i l l i o n (U. S . ) for research support and $2 b i l l i o n (U. S.) for extension.

The CGIAR system represents

To fix ideas about the magnitude



- 19-

The cost of research per s ci en t i s t per year i s $100,000 i n indu str ial ize dcount r ies and 60,000 i n LDC which explains pa rt of t he diffe renc e ( fo r exten-sio n services, the difference is even more strik ing- -$33 ,000 and $3,000).

3.2. Level of Eben ditur es i n 1980

The prin cipal sources of data on research expe ditur es-- t he 1981IFPRI/ISNAR study of Oram and Bind li sh (OB), t h e 1983 da ta of Judd, Boyce, andEvenson (JBE) completing up t o 1980 th e Boyce-Evenson d a ta (Buyce and Evenson,1975), and th e Trigo-Pine iro (1984) in form atio n f o r 1980 i n La tin Americancountries--arrive a t very differe nt estimates. The JBE estimates, the resultof a survey based on questionnaires, are based on a broad d efi ni t ion ofresearch expenditures.sector research a d agricul tural ly related '' sc ie nt if ic research. One wouldtherefore expect the OB estimates (which do not incl ude pr iv at e resear ch anddef ine nar rowly agr ic ul tur a l research ac t iv i t ie s ) t o be lower.

They includ e public res earch and pri va te in du st ri al

In f ac t , as should be clear from Table 3.1, this is f a r from being t hecase.

Brazil, Mexico, Indonesia, the Phil ippines, etc., the OB f igures are consider-ably la rger than the JBE dat a. With the development of an in te rn at io na l net -work of research and t he e xist ence of such organizati ons as C G I A R , one wouldhave expected more accuracy i n th e da ta ( f o r which times series covering a tleast t w o decades ex is t) as the data collection improves. The important dis-crepancies re f le c t the d i f f ic u l t i es i n measurement due t o the f ac t tha t agr i -cu l tu ra l r e sea rch ac t iv i t i e s are not easy t o define with precis ion.international component--bilateral and mu lt il at er al aid--o f the funding cannotbe evaluated with accuracy because (1) the disbursements gre often made for aperi od of seve ral ye ar s and ( 2 ) many development projects have research com-ponents which are hard t o separ ate from the other components of the pro j -ects. Private research (which the OB data presunably an i t s) i s a l s o hard t oqu an ti fy because of the va ri et y of funding mechanisms ranging from contribu-

t io ns t o spec i f ic publ ic pro jec ts t o independent inst i tutes set up by pro-dmers ' associations.

What i s puzzling is t h a t , i n many important cases such as Argentina,

The

3 . 3 . Growth Trend i n Research Expendi tures

Real spending on re sea rch incre ased nearl y fou rfo ld (3.68) between 1959and 1980 but only by a fac tor of 1 . 4 between 1970 and 1980 according t o th eB E data.Boyce, and Evenson, 1983, p. 6) and do not include the IARCs expenditures.

These data apply t o na tio nal (pu bli c) res earc h systems (Judd,

According t o the data of Oram, the overall annual rate of growth f o r the

past decade wis 12.9 percent (Table 3.2).clear that most of the rese arch ef fo r t i s s t i l l concentrated in developedco un tr ie s. But important changes have take n place since 1959. Asia, La tinAmerica, and Europe are increasing in importance. The share of Asia almostdoubled between 1959 and 1980, mainly because of the expenditures of Japan andChina--the l a t te r having increased i t s research eff or t almost tenfold i n the

pas t 20 years.doubled.

Examining the data by region, i t i s

Europe's share increased sl ig ht ly and Latin America's share



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TABLE 3. 1

Compari son of Est i mates of Expendi t ures on Agr i cul t ural Researchi n Devel opi ng Count r i es, 1980

Country JBE data OB data PT dat a1 2 3

t housands of dol l ars ( U . S .

Lat i n Amer i ca

Argent i naChi l eParaguayUruguayBo1i vi aBraz 1

Col ombi aEcuadorGuyanaPer uVenez uel aBarbadosCosta Ri caE l Sal vadorGuat emal aHai t iHondurasJ amai caMexi co

Ni caraguaPanamaTr i ni dad / TobagoDomni can Republ i c

M ddl e East

MoroccoSudanEmt

Tuni si aLi byaCyprusI ranI sraelJ ordanTurkeySyr i a

59, 75011, 3195, 3573, 821

11, 374174, 012

32, 2316, 1002, 6788, 163

34, 88565 2

2, 1682, 3915, 332

4521, 047

93570, 929

2, 2112, 482

7092, 514

8, 02613, 60023, 7176, 7642, 7932, 410

45, 16330, 209

84926, 4634, 963

166, 34010, 3533, 1004, 1742, 808

245, 000

38, 5726, 4362, 4288, 912

39, 172767

2, 0824, 9744, 700

a978772

172, 402

1, 9993, 200

2, 515

19, 98114, 63423, 7176, 7642, 7932, 411

85034, 426

5, 293

152, 41012, 8666, 547

84 73, 292

142, 317

2, 6106, 857419

4, 35539, 171

9012, 0832, 8755, 785

290979770

66, 155

1, 8152, 255

7712, 336

( Cont i nued on next page. )



- 21

TABLE 3. 1- - Cont i nued.

Country J BE dat a OB dat a PT dat a1 2 3

t housands of dol l ar s (U. S. 1

Af ri ca

Camer oonChadBeni nGambi aGabonGhanaI vory CoastLi beri aMal iMaur i t ani aNi ger i aSenegal

Si erra LeoneUpper Vol t aZai reBur undiEt hi opi aKenyaMadagascarMal awMaur i t i usRwandaTanzani aUgandaZambi aBotswanaLe sot hoZi mbabweSout h Af r i caSwaz and

Asi a

Bangl adeshSri LankaNepalI ndi aPaki st an

I ndonesi aMa1 ys aPh 1 ppi nesThai l andChi na

3, 7881, 6022, 403

66334

12, 65512, 771

3946, 141

284121, 840

9, 726

6981, 1055, 0953, 6083, 400

22, 7124, 8785, 6607, 879

9457, 2147, 4525, 202

46510, 56064, 5191, 306

4, 977

27, 6135, 0572, 634

120, 16729, 89933,20030, 3919, 533

21, 600643, 555

3, 7881, 022, 403

10, 09524, 370

3947, 354

284134, 964

9, 797

6981, 1055, 983, 6103 , 00

24, 0524, 8014, 562

9457, 2197, 4525, 205

46510, 560

26, 6164, 3422, 797

154, 78125, 277

44, 48546, 33416, 25423, 276

aBl anks i ndi cat e dat a not avai l abl e.

Sources: Col. 1- - J udd, Boyce, and Evenson, 1983; Col . 2- - 0r amand Bi ndl i sh,1981; Col . 3- - Pi nei r o and Tr i go, I S M, 1984.



-22-

TABLE 3.2

Growth Rates of Agr ic u l tu r a l Expe nd i tu r e s and S c ien t i f i c S t a f f

i n Market Economies, 1970-80 (p er ce nt compound p er annum).

Ag. Research Expe ndi ture s Ag. Research S c i e n t i s t s

1970-75 1975-80 1970-80 1970-75 1975-80 1970-80Asia ( e xc e p t

Middle East and

China) ( 1 2 )

Middle East

and North Africa

( 9 )

Sub-Saharan

A f r i c a ( e x c e p t

South Africa) ( 2 5 )

L a t i n America ( 2 1 )

T o t a l d e v e l o p i n g

c oun t r i e s ( 6 7 1

C G I A R I n s t i t u t e s

Western Europe ( 1 7 )

Canada , Aust ra l ia ,

N.Zealand, Japan ( 4 )

U n i t e d S t a t e s

Notes:F i g u r e s i n p a r e n t h es i s

5.4 6.3 5.9

7.6 2.1 4.9

11.8 8.9 10.4

12.9 13.0 12.9

9.6 9.4 9.5

19.9 12.9 16.4

3.6 5.8 4.7

6.0 1.8 3.9

1.6 2.4 2.0

5.2

1.1

9.7

4.5

4.7

NA

3.5

4.0

0.0

9.3 7.2

8.7 4.8

10.8 10.2

7.5 6.0

8.9 6.8

NA NA

4.8 4.2

1.2 2.5

1 .o 0.5

i n t h e f i r s t column i nd ic a t e t h e number of

countr ies inc luded (The 67 de ve lop ing countr ies a r e l i s t e d i n t a b l e 3.3).Source:The t a b l e i s t a k e n from P. O r a m , I S N A R , n.d.

R e f e r e nc e s:

Developing countr ies : Oram, P. & B i n d l i s h , V . , TFPRI/ISNAR, 1981, and

more recent i n f o r m a t i o n c o l l e c t e d by P. OramC G I A R : Second Review of t h e C G I A R , November 1981.

WesternEurope : unpubl ished da ta

fromR. Evenson (da ta

a r e for1968-74

and 1974-80) .United Sta te s : Assessment of t h e U.S. Food and Ag ri cu lt ur al Research System,

Congress of t h e Un it ed S t a t e s , Office of Technology Assessment, 1981.



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Fixpenditure Shares , 1959 and 1980(percent of total1

Continent Country&ropeU&Rad Eastern EuropeNorth America and Oceania

Latin AmericaAfricaAsia( C h i n a )

198095913 3 20.2

27.5 20.236.9 23.3

3.9 6.35.8 5.7

1 2 . 7 24.3

(2.6) (8.7)

Source: Judd, Boyce, and Evenson (1983).

T h i s changing pa tt er n and the di ff er en t rates of growth by region re f l e c t ,of cour se , d i ff e ren t i n i t i a l co d i t io ns , the unequal financial effort ofnat ional systens, and the fa ct tha t the research tha t was previously carr iedout i n developed co unt rie s now tends t o be local ized i n the countr ies wheremost productivity gain s and i ncrease i n arabl e land can take place.

When research and extension expenditures are presented as a percentag e ofthe agricultural product, one observes that the relationship between more andless-developed countries has not changed much.

The more a ff lu en t cou nt ri es t end t o spend more on r esear ch and compara-t ive ly less on extension services than low-income countries.v e l q i n g coun tri es group, however, clear dif fer enc es appear. The ef fo rt ofmiddle-inzome c ou nt ri es and sen i -i nd us tr ia li zed economies5 has increasedskrply s ince 1959 while low-income countries have increased research and e x -tens ion expenditures at a slower pace, measured i n percentage of ag ri cu lt ur alGDP. This could be a t t ri b u te d t o a l e s se r r esea rch e f fo r t o r t o a lower eco

nanic performance.

Within the de-

Research Expenditures(a s percent of value of agr icu l tu ral product)

bw-income countries19590.15

19700.27

19800.50

Middle -income co un tr ies 0.29 0.57 0.81Seni - i d u s t r i a l i zed economies 0.29 0.54 0.73Ind ust ria liz ed economies 0.68 1 .37 1.50Planned economies (including China) 0.33 0.73 0.66Planned economies (excep t China) 0.45 0.75 0.73

Extens ion wendi tures

(a s percent of value of a gr ic ul tu ra l product)

1959 1970 1980bw-income countries 0 30 0 43 0.44Middle-income countries 0.60 1.01 0.92Se ni -i nd us tr ia li ze d economies 0.29 0.51 0.59In du st ri al iz ed economies 0.38 0.57 0.62Planned economies (in clu din g China) aPlanned economies (excep t China) 0.29 0.33 0.36

aBlanks ind ica te data not available.Source: Judd, Boyce, and Evenson (1983).



- 24

As Tabl e 3 . 3 for 67 devel opi ng count r i es ( f romOr am ISNAR) shows, nocl ear pat t ern i s recogni zabl e.of t he count ry and G N P per capi t a (Oramn. d. , and Rut t an, 1984).t i onshi p bet ween research expendi t ures and ot her economc var i abl es i s, i ngeneral , not si gni f i cant .t r i es spent approxi mat el y 0 . 3 percent of t hei r agr i cul t ural product i n 1975, adecade ago. Thi s i s consi derabl y bel ow t he est i mates of Boyce and Evenson f or

1974 whi ch are i n most cases doubl e or t r i pl e.i s t hat Oramuses t he agr i cul t ural G D P eval uat ed at cur rent 1975 pr i ces whi l eBoyce and Evenson val ue agr i cul t ural G D P at 1971 pr i ces.i ncrease i n agr i cul t ural pr i ces bet ween 1971 and 1974, t he di f f erence can besi zabl e (Pi nst rup- Andersen, 1982, p . 75).

Two expl anat ory f act or s have been ci t ed:

Oram ( 1978, 1979) est i mated that devel opi ng coun-

One r eason for t he di spar i t y

si zeThe r el a-

Due to the sharp



T A E L E 3.3

Agriruitural Research i n 57 Developing Countries, 1980.

(ranked by percentage of the ir agri cultu ral CDP)

Corrntry CNP per Ag. Res. Ag. Res. Growth r ate Number of Costs percapita Exoend. as of of ag. CDP Scient i s t s Scient i s t

I per year) i n 1980 (US $)US 3 ) (000 US$) ag.GDP1970-80

EXPENDITURES O V E R 1 PERCENT OF AC. CDP

PanamaZlmbabweGuyanaArgentinaHexicoBar~adosVenezuelaMaiiSenegalKenyaBrazilC y p r l r s

1730630570

239320101620353019045042020501520

3203105532428

165340172402

7b7391727354979724052

2450002411

5.332.421.851.641.361.351.321.241.211.191.151.12

1.9-0.5

1 .o

2.6

2.30.0

3.84.4

3.75.44.91 1

Tot a1 Mean 633483

EXPENDITURES 6ETWEZN 0.5 A N D 1 PERCENT OF AC. CDP

F i j i 1150Malaysia 1620Chiie 2150Elrrund i 230Zanbia 563Ivory Coast 1150

Togo 410Malawi 230Nigeria 1010Colonbia 1 1 80

:Iorocco 900Lesotho 420Papua N.C. 780

Benin 310Uruguay 2810Sudan 410Chad 120Tunisia 1310E l Saivador 660

TotaiIMean

2349463341035336 105205

24370

18924562

134964

335721978146550522403417414636160267644974

332262

0.88 NA

0.82 5.10.31 2.30.81 1.80.30 1.8

0.78 3.4

0.76 0.80.75 4.10.74 0.80.54 4.90.62 0.80.60 2.90.59 NA

0.59 NA

0.59 0.20.57 2.60.56 -0.30.55 4.90.50 2.8

6420

351064

19502336068

105400

295755

7282

22

8222841109212

49271034

3336861411019

22216442

285116

4887

50,00052,53769,371156,33588,41133,348108,811108,147

93 30460,13082,854

43,836

93,860

106,77356,36736,84308,04947,752176,594

38,61216,529124,505115,83229,12733,21445,927126,47418,80289,244

38,14323,73342,879

67,990

EXPENDITURES BETWEEN 0.25 A N D 0.49 PERCENT OF AC. CDP

Bangladesh

JordanLibyaPakistanSr i LankaGuatemalaMadagascar

TanzaniaEclradorBoliviaIndiaPeruTurkeyBurkina F.

ParaguayNicaraguaThailandIndonesia

Egypt13058014208640

3002701080

350

2801270570240

93014702741300740670430

2661623717

8502794

25277434247004801

721964362808

1547818912

34426110531001999

2327644485

0.48 2.20.45 2.70.44 NA

0.44 11 1

0.41 2.30.41 2.80.39 4.60.39 0.1

0.35 4.90.35 2.40.34 3.10.33 1.90.33 NA

0.23 3.40.28 1.20.28 5.90.27 3.10.26 4.70.26 3.8

TotalIHean 381743

EXPENDITURES UNDER 0.25 P E R C E N T OF AC. C D P

Costa Rica 1730Syria 1340Korea Rep. 1520

Jamaica 1040Mauritania 440Sie rra Leone 280

Nepal 140Cameroon 670Domln. Rep. 1160

Philippines 690Zaire 220Rwanda 200Ethiopia 140Ghana 420Honduras 560

Liberia 530Uganda 300

2082529329031

772284698

279737882515

162545098945

340310095978394

7452

Total/Hean 91876

Source: P. Oram. ISNAR, n.d.

0.240.240.230.230.220.210.200.200.20

0.200.200.180.180.17

0.160.110.08

2.58.23.20.71 1

2.20.53.83.1

4.91.2NA

0.7-1.2

1.54.7

-0.9

16422724

35123

42215868

256276114

71032699371236363

15251473

20208

2834

75172960408

3522610699

105097241553526020175

3654

16,2108,707

24,28622,7078,91910,28929,74771,779

23,19923,31924,63221,79133,31036,74120,46340,256

31,73015,26330,200

18,890

27,76030,77830,241

19,30035.50319.94312,37635,73525,404

15.49052,55739 137521,93528,67916,30019,70042,583

25,144

Notes: 1 CNP per capita and ag. CDP derived from World Bank data(World Development Report, 1982) and nationai data.

2. Ag. resea rch expenditures and sc ien tis ts: see re ferencesfo r t ab le 3.2.

3. Costs per scie nti sts include a l l research costs, notonly sala r ies .



- 26-

SECTION 4

COSTS ND BENEFITS OF AGRICULTURAL RESEARCH PROJECTS

Froman economc per spect i ve, t he rate of t echni cal change i n agr i cul t uredepends on t he l evel of i nvest ment i n research. The i nt ernal r ate of r et urn

IRR) of a research proj ect i s t he di scount r at e that equal i zes benef i t s andcost s of t he proj ect over i t s durat i on.t hat , as l ong as t he I RR i s great er than t he oppor t uni t y cost of capi t al(OCC), i t i s prof i t abl e to i ncrease t he st ock of know edge by i nvest i ng i nresearch.

The rul e for opt i mal i nvest ment i s

Some aut hor s, notabl y Rut t an, have argued on the basi s of numerous st udi esest i mat i ng the rat e of ret urn to i nvest ment i n agr i cul t ural research thatt here i s under i nvest ment i n agr i cul t ural research.l ows. Al l st udi es measur i ng the producti vi t y of r esearch star t i ng w t h thcpat h- breaki ng study of Gr i l i ches (1958) on hybr i d cor n come up w th averagerates of r eturn to i nvest ment rangi ng bet ween 30 percent and 60 percent peryear (Tabl e 4.1).ect , commodi t y, r egi on, and met hodol ogy used f or t he eval uat i on.that average ret urns consi st ent l y exceed t he OCC by a w de margi n i ndi cat est hat , as l ong as we are at a poi nt on the margi nal ef f i ci ency cur ve where t heI RR exceeds t he OCC, i t i s prof i t abl e to i nvest more i n research.def i nes t he oppor t uni t y cost - - whether t i s t he rat e of r et urn t o ot her t ypesof agr i cul t ural i nvest ment ; t o convent i onal devel opment proj ects such as roadbui l di ng, educat i on, et c. ( f or whi ch a 15 percent IRR i s consi dered t o begood); or si mpl y t he rat e of i nt erest i n devel opi ng countr i es- t here seems tobe evi dence that not enough resources are i nvest ed i n research. 6

The argument runs as f ol -

The est i mates vary great l y dependi ng on t he type of proj -But t he f act

However one

The opponents of t he under i nvest ment t hesi s have concent rated t hei rcr i t i ci sms on the methodol ogy used t o measure t he I RR.

st ance, have poi nted out that gross benef i t s were compared onl y to di r ectcost s i n most st udi es and t hat , i f ot her cost s of i mpl ement at i on were ac-count ed f or , est i mat ed returns woul d be more comparabl e to those of i nf r a-st ructure proj ects.usual l y i s under repor t i ng of t he benef i t s of t he proj ect as i mpor t ant i ndi r ectbenef i t s, such as spi l l over ef f ect s beyond t he count r y, ar e usual l y not t akeni nt o account .

Some aut hor s, f or i n-

As a count erargument , others have stated that t here

The est i mati on procedure of t he rat e of ret urn to r esearch7 i nvol vest hree st eps ( Scobi e, 1979):est i mat e t he out put - i ncreasi ng ef f ect of t echnol ogi cal change, and ( gi ven t heshi f t ) comput e the gross annual r esearch benef i t (GARB); ( 2 ) comput e the cost sof t he pr oj ect ; and ( 3 ) est i mat e t he soci al prof i t abi l i t y of t he i nvestment by

a di scount ed cash f l ow anal ysi s of t he cost s and benef i t s over t i me ( t ypi -cal l y, t he i nt ernal r at e of r et urn i s used as a measure of soci al return).

(1) measure t he shi f t i n t he suppl y curve to

To measure the i mpact of t he research- i nduced t echni cal change on out put ,t wo methods are used:t i on approach.

ei t her an i ndex number approach or a product i on f unc-The nat ure of t he i nnovat i on i nvol ved det ermnes i n



TABLE 4.1Summary Studies o f Agricultural Research Prod uctiv i ty TABLE 4 1 -Con f /nued

Annual Internal

T ime Rate of Return

Studv Countrv Commodi v Period ( I

Index Number :

Gril iches, 195 8

Gri l iches, 195 8

Peterson, 1967

Evenson, 1969

Barletta, 1970

Barletta, 1970

Ayer, 1970Schmitz and Se ckltr,

1970

Ayer and Schuh, 1972

Hines, 1972

USA Hyb r id corn 1940-1955

USA Hyb r id sorghum 1940-1957

USA Poul t ry 1915-19 6 0

South Af r ica Surgarcane 1945-19 6 2

Mexico

Mexico

Brazi l

USA

Brazi l

Peru

Hayami and Akino, 1 977 Japan

Hayami and Akino, 1 977 Japan

Hertford, Ardi la, Colom bia

Rocha, and Tru j i l lo,

1977

Pee, 197 7 Malaysia

Peterson and USAFitzharris, 1977

Wennergren and Bolivia

Whitaker, 1977

Pray, 1978 Punjab

(Brit ish

India)

Punjab

(Pakistan)

Scobie and Posada, 197 8 BoliviaPray, 198 0 Bangladesh

Regression Analysis:

Gril iches, 1964 USATang, 196 3 Japan

Wheat 1943-19 6 3

Maize 1943-19 6 3

Cot ton 1924-1967Tomato harvester, 1958-1 69

w i t h no

compensat ion to

displaced workers

Tomato harvester,

with compensation

of displaced workers

for 50% of earnings

loss

Cot ton 1924-19 6 7

Maize 1954-19 6 7

Rice

Rice

Rice

Soy beans

Wheat

Cot t on

Rubber

Aggregate

Sheep

Wheat

Agricultural

research and

extension

Agricultural

research and

extension

Rice

1915-19 5 0

1930-1961

1957-1972

1960-1971

1953-1973

1953-1972

1932-1973

1937-19421947-1952

1957-19 6 2

1957-19 7 2

1966-1975

966-1975

906-19 5 6

948-19 6 3

957-1964

Wheat and rice 1961 -1977

Aggregate 1880-19 3 8

Aggregate 1949-19 5 9

35-40

20

21-25

40

9 0

35

77+

37-46

16-2877-1 10

35-40a

50-5Sb

25-27

73-75

60-82

79-96

11-12

none

24

5051

49

34

4 4

-48

34-44

23-37

79-96

30-35

35

35-40

Latimer, 1964 USA Aggregate 1949 -1959 no t signif icant

source: Ruttan,pp. 242

and243.

Annua

Time Rate o

Study Country Commodi ty Per iod

Peterson, 1967

Evenson, 1968

Evenson, 1969

Bar let ta, 1970

Duncan, 1972

Evenson and J ha, 1973

Cline, 1975

(revised by Knutsonand Tweeten, 197 9)

Bredahl an d Peterson,

1 9 7 6

Kahlon, Bal, Saxena,

Evenson and Flores,

and Jha, 1977

1978

Flores, Evenson, and

Hayami, 197 8

Nagy and Fur tan, 197 8

Davis. 1979

Evenson, 1979

USA Poul t ry

USA Aggregate

South Africa Sugarcane

Mexico Crops

Austral ia Pasture

India Aggregate

USA Aggregate

Improvement

Research and

extension

USA Cash grains

Poul t ry

Dai ry

Livestock

India Aggregate

Asia- Rice

nat ional

Asia-

International Rice

Tropics Rice

Phil ippines Rice

Canada Rapeseed

USA Aggregate

USA

USA

USA

USA

Sou hern

USA

Nor thern

USA

Western

USA

USA

Aggregate

Technology

or iented

Science

or iented

Science

or iented

Technology

or iented

Technology

or iented

Technology

or iented

Farm management

research and

agricultural

extension

1915-1 960

1949-1959

1945-1 58

1943-1963

1948-1 69

1953-1971

1939-1948

1949-1 58

1959-1968

1969-1972

1969

1969

1969

1 9 6 9

1960-1961

1950-196s

1966-1975

1966-197s

1966-1975

1966-1975

1960-1975

1949-1 59

1964-1974

1868-1926

1927-1950

1927-1950

1948.1971

1948-1971

1948-1971

1948-1971

1948-1 7 1

45

58

41

39

32

28

32-

73-

74-

46-

95-

66-



- 28-

general t he appropr i ate method.mat e of average benef i t f r omt he whol e proj ect , i s used when t he source oft echni cal change can be easi l y i dent i f i ed; i t est i mates t he amount of r e -sources saved by adopt i ng modern var i et i es. Thi s r equi res an assumpt i on aboutyi el ds that woul d have prevai l ed i f t he technol ogy had not been adopt ed(usual l y usi ng ti me ser i es of yi el ds of t radi t i onal var i et i es and si mul at i ngthei r t i me pat hs) and, as Scobi e poi nt s out , depends heavi l y on t he qual i t y of

t he nat i onal data.returns t o i ncreased i nvest ment , measures by economet r i c methods t he cont r i bu-t i on of i nputs and of t echni cal change to i ncreased out put .probl ems of errors i n measurement and speci f i cat i on bi as can l ead t o bi asedest i mat es of t he t echnol ogi cal cont r i but i on, but t here i s no cl ear presump-t i on concerni ng t he di r ect i on of t he bi as ( Scobi e, 1979, p. 3.

The f i rst approach, whi ch produces an est i -

The second approach, produci ng an est i mate of margi nal

The cl assi cal

Her t f ord and Schmt z poi nt out t hat , r egardl ess of t he met hodol ogy empl oyed, accurat e est i mat i on of t he change i n product i on at t r i but abl e to r e-search i s the most cr i t i cal st ep i n any ef f or t to measur e product i vi t y ofresearch. The st andard approach measures t he soci al surpl us resul t i ng f romashi f t i n t he suppl y curve due t o t he t echni cal change. J ar ret t and Li ndnernot e t hat accurate surpl us measures depend on t he shape and l evel o f suppl yand demand f unct i ons and that paramet er s val ued at equi l i br i um are not neces-sar i l y represent at i ve.

Boni g (1974) and Hert f ord and Schmt z ( 1977) not e the necessi t y t o usecompensated demand curves t o r educe t he bi as of sur pl us measur es because un-compensated demand el ast i ci t i es w l l tend to overest i mat e t he benef i t s t o con-sumers.Schuh ( 1972, 1974) t here seems t o be agreement t hat a uni t ary el ast i ci t y ofdemand curve i s t he rel evant r ef erence poi nt t o measure GARB ( see Scobi e,

Fol l ow ng the eval uat i on of research on cot t on i n Brazi l by Ayer and

p. 5) .

The l evel and shape of t he suppl y curve const i t ut e anot her area of di s -

agreement . Gr i l i ches (1958) and Schmt z and Seckl er (1970) i n thei r work ont he Cal i f orni a t omat o harvest er assume per f ect l y el ast i c suppl y curves. Ayerand Schuh (1972), by usi ng exper i ment al cot t on yi el d gai ns rat her t han actualgai ns observed among f armers, actual l y overest i mat e the shi f t i n suppl y r e-sul t i ng f rom i nnovat i ons. Two t ypes of shi f t s have been most l y consi dered i nt he l i t erat ure: a I pi vot al l ' shi f t and a paral l el shi f t .J arrett (1978) and Rose ( 1980, p. 834) have anal yzed the ef f ect on t he t ype ofcurve chosen and of t he i nt ercept est i mate on the measurement of GARB.show t hat t he est i mates of GARB can vary si xfol d dependi ng on t he nature ofthe shi f t .

Li ndner and

They

As Scobi e (1979) not es, economet r i c est i mat i on i s general l y rendered di f -f i cul t by t he absence of observat i ons f or t he est i mat i on of t he i nt ercept . (Do

f armers produce posi t i ve amount s i f t he pr i ce i s zero?)of t he curve i s concerned, one possi bl e assumpt i on woul d be t o post ul at e di f -f erent curves dependi ng on the type of techni cal change and how i t affectsdi f f erent groups of producer s, f or exampl e, producers of upl and s. i r r i gat edr i ce (e. g. , Scobi e and Posada, 1978).

As f ar as the shape

Several i mport ant methodol ogi cal probl ems concerni ng t he measurement ofbenef i t s have been noted, par t i cul ar l y by Li ndner and J ar ret t ( 19781, Scobi e



- 29-

(19791, and Rose (1980).t he new t echnol ogy t o be removed i s cal cul ated. But , as Scobi e (p. 8 ) poi nt sout , ot her scenar i os t hat mght have prevai l ed i n i t s absence are i gnored.These omssi ons that are not t aken i nto account i n t he measurement mght verywel l dampen t he bi as and resul t i n a net underest i mat i on rather t han over-est i mati on of t he benef i t s. For exampl e, woul d t he government have permt tedi mpor t s at t he hi gher pr i ce i mpl i ed by t he absence of t echnol ogi cal change,

and woul d i t have i nt roduced ret ai l pr i ce f i xi ng or rat i oni ng i n an at t empt t oevade the consequences of hi gher pr i ces? (Scobi e).

I n est i mat i ng GARB, t ypi cal l y t he soci al loss wer e

I nt roduci ng t rade and pr i ce pol i ci es and government i nt ervent i on i ngeneral i nt o t he model t o be est i mat ed mght al t er t he resul t s consi derabl y.The st rengt h of the or i gi nal Gr i l i ches model was i t s si mpl i ci t y.a cl osed economy, he i gnored the pot ent i al f orei gn exchange t hat mght beearned t hrough techni cal i nnovat i ons.t i ci t y of demand of - 1 and thereby abst ract s f romgeneral - equi l i br i umandresource - adj ust ment probl ems.

By assumng

Hi s model al so assumes a pr i ce el as-

Many of t he st udi es l i st ed i n Tabl e 4 1 have taken i nto account the pos-si bl e di st or t i ons i nt roduced by government pol i ci es and t r ade pol i ci es as wel l

as the general - equi l i br i umef f ects ar i si ng f romchanges i n r esource produc-t i vi t y i n one sector , t hereby f reei ng resources that can be empl oyed i not her sectors.t he di st r i but i on bet ween producer s of t he benef i t s f r omr esearch.

They have i n general done so i n t he cont ext of an anal ysi s of

For export commodi t i es, demand el ast i ci t i es w l l tend to be qui t e hi gh.Thi s means t hat , even for l arge changes i n t he quant i t y suppl i ed, t here w l lbe f ai r l y smal l changes i n pr i ce; most benef i t s w l l go t o producers unl esst he government j udges i t necessary to i ntervene.t hough, coul d benef i t i ndi r ect l y because the addi t i onal f orei gn exchangegenerat ed by i ncreased expor t s can hel p f i nance a hi gher r ate of growth. Thi ssequence was poi nted out by Cast ro and %huh i n thei r st udy of Brazi l . Of t hecommodi t i es i ncl uded i n t he st udy, t wo ( sugarcane and cot t on) were tradi t i onalexport s; anot her t wo were st apl e f oods ( beans and mani oc).

Some consumer groups,

k i no and Hayam ( 19751, i n t hei r study of t he r i ce- breedi ng program ofJ apan, concl uded that i n t he absence of t rade producers woul d have been netl osers f romagr i cul t ural research.a net i mpor ter of ri ce. ) Evenson, Fl ores, and Hayam ( 19771, anal yzi ng t her i ce program i n the Phi l i ppi nes, have shown how i mport s have been used t omai nt ai n a st abl e pr i ce f or consumers w th suf f i ci ent r i ce i mpor t s to mai nt ai na target domest i c pr i ce.

(Dur i ng t he per i od under st udy, J apan was

I n hi s f amous paper on t he returns to poul t ry research i n the Uni tedSt at es, Pet er son (1967) t akes general - equi l i br i umef f ects i nto consi derat i on.

The reduct i on i n out put i f t he new t echnol ogy i s w t hdrawn causes a reduct i oni n net $ci a1 benef i t s.movi ng out of that sector , a f act t hat shoul d be subt racted f romt he est i mat eof net soci al benef i t s measured i n t he par t i al - equi l i br i umf ramework.and Seckl er (1970) proceed i n a si ml ar way i n t hei r anal ysi s of t he mechani -cal t omat o harvest er . They subt ract f romt he benef i t s of t he research on t heharvest er t he returns f oregone by f armworkers who woul d have been empl oyed

But t here i s al so a net gai n because resources are

Schmtz



-30-

were i t not f or t echni cal change.noted, t hi s procedure amount s t o t aki ng i nto account t he adj ust ment cost sassoci at ed w t h the technol ogi cal change.

As Schuh and Tol l i ni ( 1978, p. 3 3 ) have

As t hese exampl es f romt he l i t erat ure demonst rat e, t he theory i s wel l de-

On t he cost si de, t hree probl ems

F i r s t , i t has been argued that

vel oped on t he benef i t si de; the accuracy of t he est i mates depends onl y on t heavai l abi l i t y of dat a i n each rel evant case.

s m t o be of maj or concern f or most aut hors.spi l l over ef f ects or i gi nat i ng i n t he publ i c good character of t he product oft he research have not been i nternal i zed. For exampl e, shoul d par t of t he costof t he I RRI programbe charged agai nst t he benef i t s of hi gh- yi el di ng var i et i esi n Col ombi a or i n t he Phi l i ppi nes; does t he f act t hat the I RRI i s l ocat ed i nt he Phi l i ppi nes expl ai n why t hat count ry spent l ess than 0. 25 percent of i t sagr i cul t ural product on research ( Tabl e 3 . 3 . ) ? A second i ssue, rai sed byDal r ympl e among ot her s, i s t hat of adopt i on and associ at ed cost s.benef i t account i ng, not onl y shoul d the di rect cost s of t he research programbe entered agai nst t he benef i t s but , al so, t he cost s of di f f usi on and assi m -l at i on by f armers of t he new t echnol ogy shoul d be entered. Some authors havef ai l ed to do t hi s and, t heref ore, have underest i mat ed t he cost s of t he pr o-gram

f or l ack of preci se dat a, some cost s mght i nevi t abl y escape even a caref ulaccount i ng. The thi rd i ssue, al r eady rai sed i n t he cont ext of t he eval uat i onof benef i t s, i s t hat of pri ce di stor t i ons. Do t he cost s of t he i nput s usedref l ect t hei r t r ue soci al scar ci t y val ue? For exampl e, dur i ng t he past de-cade, t he pr i ce of chemcal i nput s (f er t i l i zers, etc. ) i n devel opi ng count r i eswas di st ort ed by exchange r at e pol i ci es and other measures ai med toward pro-t ecti ng the agr i cul t ural sector f r omthe consequences of oi l pr i ce i ncreases.

I n cost-

I n gener al , ei t her because of the di ver se nat ure of i ndi r ect cost s or

Fi nal l y, i n t he cont ext of our br i ef r evi ew of t he met hodol ogy of eval ua-t i on of t he proj ect, i t i s i mport ant to ment i on t he measurement bi as thatmght exi st because of an underest i mat i on of t he i nvest ment and adopt i onper i od. Fi r st , as Gr i l i ches (1957) had noted, not onl y shoul d the l ag i navai l abi l i t y of t echnol ogy be account ed f or i n t he economet r i c est i mat i on butt he adopt i on l ag shoul d al so be t aken i nt o account .correct measurement of depreci at i on cost s dur i ng t he i nvest ment per i od. AsScobi e has poi nt ed out (p. 91, because t he l ags are general l y l ong i n agri cul -t ural r esearch, i t can be argued that errors i n GARB ar e damped rather t hanampl i f i ed by t he f act t hat w t h hi gh rat es of r et urns ( such as those repor t edi n most st udi es) er ror s i n f ut ure benef i t st r eams ar e heavi l y di scount ed andmore t han of f set t he under report ed cost s.

A second probl em i s t he

I n concl usi on, none of t he i ssues of methodol ogy ment i oned here seems t odi sprove t he under i nvest ment hypot hesi s. Cl ear l y, as we have seen, severemeasurement probl ems exi st at every step of t he eval uati on procedure. Al -t hough t he accuracy of t he est i mat es mght be l egi t i mat el y i n doubt f or t he

ear l i er st udi es, w t h t he degree of sophi st i cat i on di spl ayed i n the more r e-cent st udi es i ncorporat i ng ear l i er cri t i ci sms i t i s l i kel y that the resul t sactual l y underest i mat e rat her overest i mat e ret urns t o agr i cul t ural research.As we have seen f r oma methodol ogi cal poi nt of vi ew, nothi ng presumes t hedi recti on that t he est i mat i on bi as w l l t ake- - nei t her opt i msmnor pessi msm



-31-

i s j ust i f i ed.cat ed enough t o t ake i nto account al l of t he rel evant ef f ects. To a greatext ent , t he qual i t y of t he dat a w l l det ermne t he resul t s.t hat t he average returns observed i n many st udi es are too hi gh.exi st s a research product i on f unct i on w th di mni shi ng ret urns to margi nali ncrement s of i nvest ment , one wonders i f IRRs rangi ng bet ween 30 percent and60 percent conceal margi nal r at es of r et urns so l ow t hat t hey woul d not

j ust i f y more i nvest ment i n agr i cul t ural research.

Al l t hat one can hope for i s that t he model w l l be sophi st i -

I t i s possi bl eBut i f t here

Pasour and J ohnson (1982) have quest i oned t he val i di t y of ex post eval ua-t i ons t o measure pot ent i al ret urns.that a par t i cul ar i nvest ment per f ormed wel l r el at i ve to t he market average (ahi gh ex post ret urn) does not i mpl y that i t w l l be a good i nvest ment i n t hef ut ure (a hi gh ex ant e return).agr i cul t ural research because t he ( envi ronment al , soci al , and i nst i tut i onal )condi t i ons i n whi ch the i nnovat i on process t akes pl ace ar e cruci al t o the suc-cess of t he proj ect.adapt ed t o di f f erent r egi ons or count r i es yi el d very di f f erent adopt i onrates. To concl ude that t here i s under i nvest ment requi res proof that the rateof i nvest ment i n t he cur rent per i od i s t oo sl ow and to use the term under i nvest ment - - i mpl yi ng that t he rate of i nvest ment i s too sl ow- - r equi r esa normati ve j udgment . ' The economst cannot det ermne underi nvest ment or i n-ef f i ci ency by deci si on- makers i n ei t her the publ i c or pr i vate sect or- - he canonl y provi de i nf ormat i on about past economc condi t i ons (Pasour and J ohnson,1982). Such a st atement does not l ' provel l hat the present l evel of i nvest menti s opt i mal or t hat i nvest ment oppor t uni t i es i n agr i cul t ural research have beenexhaust ed; i t merel y shi f t s the debat e f romthe posi t i ve to t he normat i ve t er -rai n. Cl ear l y, pol i cy choi ces have t o be made; but t hi s does not di sprove t hepoi nt made by Rut t an and ot her s t hat there i s an economc rati onal e i n maki ngt he choi ce of i nvest i ng i n r esearch as l ong as t here i s evi dence of hi ghret urns.

Thei r argument runs as f ol l ows.

Thi s i s par t i cul ar l y tr ue i n t he case of

The f act

Thi s expl ai ns why, f or exampl e, t he same var i et i es



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SECTI ON 5

UNDER1NVES T I N AGRI UJ LTURAL RESEARCH

Pl ot t i ng rates of r et urn agai nst i nvest ment - i n- r esear chdat a resul t s i n anuni nt el l i gi bl e scat t er of poi nt s.

search i n agr i cul t ure make a case f or the under i nvest ment t hesi s, but t hey donot expl ai n why i nvestment i n research acti vi t i es is so l owl i t t l e about t he pol i cy choi ces i nvol ved i n r esearch- resource al l ocat i on, whyt here i s i nvest ment i n cert ai n t ypes of crops and/ or t ypes of i nnovat i ons andwhy other s are negl ect ed, and why some research proj ect s are successes andot her s f ai l ures.

St udi es examni ng t he product i vi t y of r e-

They say very

The studi es show t hat i nvest ment i n agr i cul t ural r esearch yi el ds very hi ghrat es of return.10 percent t o a 100 percent annual i nt ernal rat e of ret urn.tend to anal yze proj ects i nvol vi ng speci f i c i nnovat i ons i n speci f i c areas orcrops. Fai l ures are sel domdocument ed. Behi nd t hese dat a are pr i ce/ quant i t yrel at i onshi ps and i nst i t ut i onal processes i nvol vi ng suppl y and demand curvesand t hei r i nt eract i ons whi ch generat e those poi nt s.ret urns observed i n t he st udi es can onl y be expl ai ned by i dent i f yi ng t he var i -abl es determni ng demand and suppl y f unct i ons of research.

They exhi bi t a great var i ance i n r et urns rangi ng f r omaFi nal l y, t hey

The great var i ance i n

I n t hi s sect i on we exam ne some of t hese var i abl es and put f orward somepol i t i cal - economc argument s t hat expl ai n the l ow rat e of i nvest ment i n r e -search.bet ween pr i vat e- and publ i c- sector r esearch i n agr i cul t ur e whi ch has been acont i nui ng area of concern and cont roversy.sector i n agr i cul t ural r esearch i n both devel oped and devel opi ng countr i es hasbeen j ust i f i ed on t hree grounds:sumers shoul d recei ve al l t he benef i t s f r omresearch, and spi l l over benef i t s

f r om research creat e ext ernal i t i es that requi re government f i nance t o i nt er -nal i ze.f or conveni ence.

Before examni ng t hese argument s, we w l l comment on t he boundary

Par t i ci pat i on of t he publ i c

research resul t s are a publ i c good, con-

Al t hough they ar e rel at ed, we w l l examne these i ssues separat el y

Neocl assi cal t heory takes i nt o account t he possi bi l i t y of market f ai l ure.The f ai l ure of market s t o exi st ar i ses, f or i nst ance, because of t he i mpossi -bi l i t y of excl udi ng nonbuyer s f r omt he use of t he product .pr i ci ng mght be i mpossi bl e or may r equi re t he use of consi derabl e resources.I n general , market f ai l ure occur s because t r ansact i on cost s ( i ncl udi ng excl u-si on cost s, i nf ormat i on cost s, etc. ) whi ch are at t ached t o any market and i n-deed t o any mode of r esource al l ocat i on are so hi gh t hat t he exi st ence of t hemarket i s no l onger wor t hwhi l e. The di f f erence between t r ansact i on cost s andproduct i on cost s i s t hat t he f ormer can be var i ed by a change i n t he mode of

r esource al l ocat i on whi l e t he l at t er depends onl y on t echnol ogy and t ast es andwoul d be the same i n a l l economc syst ems [ Ar row (1970), p. 6811.

Market s are the predomnant f ormof soci al ar rangement t o al l ocat e r e-

I n t hi s case,

sources i n a capi t al i st soci et y, but they are not t he onl y mode of r esource



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al l ocat i on. One of the advant ages of the pr i ce syst emover pol i t i cal bargai n-i ng or over pl anned al l ocat i on i s usual l y st at ed t o be the economy i n cost s oft r ansact i on; but i n some cases such as usage of i r r i gat i on, the cost s oft r ansmt t i ng and recei vi ng a l arge number of pr i ce si gnal s are very hi gh, andt here i s a tendency not t o di f f erent i at e pr i ces as much as woul d be desi r abl ef roman ef f i ci ency poi nt of vi ew I n a pr i ce syst em tr ansact i on cost s dr i vea wedge between buyer ' s and sel l er ' s pr i ces and thereby gi ve ri se t o wel f are

l osses. Removal of t hese l osses can be achi eved by sw t chi ng t o anot her modeof resource al l ocat i on such as al l ocat i on by t he stat e on the basi s ofbenef i t - cost cri t eri a. O f cour se, t he advant ages of such a mode of al l ocat i oncompared to the market syst emmust be wei ghed agai nst a possi bl e i ncrease i nt ransact i on cost s whi ch coul d resul t , f or exampl e, i n the case of agr i cul t uralresearch i n t he need f or st udi es t o det erm ne demand f unct i ons w t hout t hebenef i t of observi ng a market .

Market f ai l ures are one of the reasons why t he st at e has a speci al rol e topl ay i n r esource al l ocat i on. Gi ven hi gh t ransact i on cost s or gi ven the exi st -ence of Paret o i nef f i ci ency i n a f r ee- mar ket equi l i br i um t here i s pressure toover come i t by some f ormof depar t ure f romt he the f ree market , i . e. , somef ormof col l ect i ve act i on; but , ot her reasons have al so mot i vated t he stat e t oi nt ervene i n the economy. Because of i t s r el at i ve aut onomy, i t was abl e i nspeci f i c i nstances to ef f ectuat e i mportant st ructural changes i n agr i cul t ur e- -t hrough l and ref ormand i nvest ment progr ams- - agai nst t he w l l of the domnantcl asses i n soci et y basi ng i t s act i on on ef f i ci ency or equi ty consi derat i ons.The st at e, hi stor i cal l y, has pl ayed a pr i vi l eged rol e i n repl aci ng the marketf or al l ocat i ng resources because i t has t he coerci ve power ( and, i n somecases, the l egi t i macy) requi red to economze on t ransact i on cost s.

t i on f or t he f ai l ure of the market . I nst i t ut i ons, such as producers' associ a-t i ons and ot her t ypes of coal i t i ons, can organi ze themsel ves i n order t oi nt ernal i ze the external i t i es created by t he process of product i on of r e-

search. I n Sect i on 3 we have seen, f or exampl e, t hat the associ ati on oft exti l e producers of Col ombi a has f i nanced research on cot t on i n that countr y,t hus, appropr i at i ng most of the benef i t s of t he operat i on.

The st at e i s not the onl y soci al i nst i t ut i on whi ch can serve as compensa-

The spi l l over argument addresses the i ssue of ext ernal i t i es t hat are pre-sent i n most research proj ects.congruence between cost s and benef i t s of agr i cul t ural research.cer t ai n domai ns, such as i mproved var i et i es, can be expect ed t o have an i mpacton product i vi t y growt h i n agr i cul t ure for ot hers t han t hose who have borne thecosts. Theref ore, some mechani sm i s requi red t o i nt ernal i ze the ext ernal i t i esand, t hus, i mprove ef f i ci ency.

Spi l l over ef f ect s r esul t f r omt he l ack ofResearch i n

Anot her di mensi on of spi l l over ef f ects i s the t ransf er of gai ns f rompro-

ducers to consumers ( Rutt an, 1982, p. 2 5 7 ) . The way i n whi ch the gai ns f romt echni cal change are part i t i oned between producers and consumers of a par t i cu-l ar commodi t y depends on the sl opes of the demand and suppl y curves f or theproduct and on t he rate of t echni cal change and of demand change, i . e. , thatrat e at whi ch the t wo cur ves shi f t t o the r i ght over t i me. I f the product i scharacteri zed by hi ghl y el ast i c demand and/ or by r api d growt h i n demand, such



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as f or most expor t cr ops, producer s are abl e to retai n l arge gai ns f romt ech-ni cal change.growt h i n demand i s sl ow, as i s the case f or many f ood crops consumed by t hepoor i n devel opi ng count r i es, most of the gai ns f rom t echni cal change arepassed on t o consumers i n t he f ormof l ower pr i ces i f no i nt ervent i on, such aspr i ce suppor t programs f or f armers, t akes pl ace. The t r eadml l mechani sml i mt s t he economc mot i vat i on of f armers f or suppor t of agr i cul t ural r esearcht o a smal l popul at i on of ear l y adopt er s of t he new t echnol ogy. The ear l yadopt ers al so t end t o be t he most i nf l uent i al and pol i t i cal l y ar t i cul at e. AsRut t an ( 1982, i bi d. ) poi nt s out , i t may expl ai n why agr i cul t ural r esearch hasnot been abl e to achi eve as broad a base among the f armpopul at i on as supportf or commodi t y pr i ce programs.

By cont r ast , i f demand i s i nel ast i c and/ or i f t he rat e of

Some aut hors have obj ect ed to publ i c agr i cul t ural r esearch on t he groundsthat cent ral i zat i on of deci si on maki ng at t he l evel of t he stat e creat es i n-ef f i ci enci es.respond w t h a nonmarkef - f ai l ure argument ( see Pasour and J ohnson, 1982); butt he cent ral i zat i on argument i s hi stor i cal l y i ncor rect i n t he case of agr i cul -t ural research.

Lat i n Amer i can research i nst i t ut i ons and shown t hat , as a r esponse t o theprobl ems associ at ed w t h cent ral i zed research under the aegi s of t he m ni s-t r i es of agr i cul t ure, decent ral i zed and aut onomous i nst i t ut i ons emerged dur i ngt he 1960s i n most Lat i n Ameri can count r i es.

To t he st ructural i st mar ket - f ai l ur e ar gument , t hese aut hor s

Pi nei r o and Tr i go (1983) have document ed the evol uti on of

Ot her aut hors have expressed doubt about t he publ i c- good nature of r e-search. They argue that a l arge propor t i on of new t echnol ogy has been i n t hef ormof i mproved seeds, machi nery, chemcal s, et c. , rat her t han i nf ormat i on( such as f armng pract i ces) whi ch has a publ i c- good el ement .t i on, say, about pl ant i ng densi t y, whi ch may appear t o have a publ i c- goodchar act er , i n f act , must be modi f i ed and adapt ed to i ndi vi dual mcroecol ogi calci r cumst ances on each farm (Grant Scobi e, per sonal communi cat i on) .agr i cul t ural t echnol ogy i s actual l y a publ i c good i s hi ghl y rel evant f or a

pol i cy debat e i f one consi der s that t he st at e shoul d i nt ervene i n t he f i nanc-i ng and conduct of t he research process onl y i n cases where pr i vat e i ni t i at i vefai l s.

Even i nf orma-

Whet her

There are t wo di st i nct aspect s t o the quest i on of what i s the appropr i at eboundary between publ i c and pri vat e research.search benef i t s are not appropr i abl e by t he pr i vat e sect or and where marketmechani sms or pr i vat e coal i t i ons f ai l t o produce research (market f ai l ure) ,publ i c i nt ervent i on i s requi red.i nst ances where benef i t s are not appropr i abl e because pr i vat e t r ansacti oncost s are too hi gh. I n such uncont roversi al i nst ances, most aut hor s agreethat publ i c f i nanci ng i s i n order and t hat t he st at e shoul d have a r ol e i ndet ermni ng research pr i or i t i es. Thi s woul d be, f or i nst ance, t he case of

basi c sci ent i f i c r esearch; but i n t hose si t uat i ons where pr i vat e mechani sms ofappropr i at i on can be devi sed, t he quest i on becomes: Shoul d t he pr i vat e sect orappropr i at e al l t he benef i t s f rom research?cause one consi der s, fo r exampl e, t hat t he st at e shoul d use t he surpl us t of i nance devel opment proj ects) , how shoul d t he surpl us be di st r i but ed?

I n some i nst ances where r e-

The pr i vat e sector w l l negl ect r esearch i n

I f t he answer i s negat i ve ( be-

I n



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pract i ce, t he answer gi ven to t hi s quest i on depends l argel y on t he natur e oft he st at e and of i t s rel at i onshi p w t h var i ous gr oups i n ci vi l soci et y.

Such di f f i cul t quest i ons can onl y be answered on a case- by- case basi sbased on an ex ant e eval uat i on. Some general pr i nci pl es, t hough, can be de-r i ved f r omal ready exi st i ng studi es.t he ef f ect of di spl aci ng l abor and do not prof i t soci et y at l arge.f i nanci ng of such cost - savi ng but not ouput - i ncreasi ng i nnovat i ons shoul d bel ef t t o t he pr i vat e sector . Bi nswanger , f or i nst ance, i n hi s st udy of t r ac-t or i zat i on i n Sout h Asi a ( 1980, p. 73) concl uded t hat the t ractor surveysf ai l to provi de evi dence that t r actors are responsi bl e f or substant i al i n-creases i n i nt ensi t y, yi el ds, t i mel i ness, and gross ret urns on f arms i n I ndi a,Paki st an, and Nepal . Such benef i t s may exi st but are so smal l t hat t hey can-not be detected and st at i st i cal l y suppor t ed even w t h massi ve survey researchef f or t s. Thi s i s i n sharp cont rast t o new var i et i es or i r r i gat i on where any-body woul d be surpr i sed i f he fai l ed to f i nd st at i st i cal l y si gni f i cant yi el def f ects, even i n f ai r l y moderat e survey ef f or ts. Bi ol ogi cal i nnovat i ons arebenef i ci al t o l arger groups i n soci et y than mechani cal i nnovat i ons, and t heprobl emt hen becomes t o devi se mechani sms to make benef i ci ari es pay f or t he

research accordi ng to t hei r share of benef i t s vi a t axat i on or ot her publ i cal l ocat i on schemes.

I nnovat i ons i n mechani zat i on have most l yTheref ore,

The grow ng i mpor t ance of t he pr i vat e sector i n the process of t echni cali nnovat on, i ncl udi ng the rol e of t ransnat i onal corporat i ons and nat i onalf armer associ at i ons, and t he decent ral i zat i on of nat i onal r esearch systems arethe most i mpor t ant f eat ures of t he gl obal r esearch systemthat has emerged i nrecent years.search backed by i nternat i onal suppor t . The moment umwas provi ded by t heear l y successes of IRRI and C M Y T . But as technol ogy moved i nto t he secondgenerat i on' ' phase, l at ent probl ems began to appear ; t here were si gns that t hei nst i t ut i ons bui l t dur i ng the 1960s were f aci ng a cr i si s because they were notadapt i ng t o new devel opment s t aki ng pl ace i n the economes of Lati n Amer i ca.

Dur i ng the 1960s, t here was st rong expansi on i n nat i onal r e-

Before the Second Wor l d War, i nst i t ut i onal change i n agr i cul t ural r esearchwas i nduced i n response to speci f i c cr i ses such as a cot t on cr i si s i n Canet e,Per u, an out break of sugarcane mosai c di sease i n Pal mra, Col ombi a, andchanges i n export markets ( cacao and rubber ) as a resul t of t he war i n Ecuador( Tr i go, Pi nei r o, and Sabato).

Dur i ng the 195Os, as a resul t of the process of i mpor t - subst i t ut i ng i n-dustr i al i zat i on (ISI) whi ch i nduced changes i n t he st ruct ure of demand f orf ood because of popul ati on growt h and urbani zat i on, t here was i ncreasi ngawareness of the i mpor t ance of agr i cul t ural t echnol ogy and of i nst i t ut i onalchanges to moderni ze agr i cul t ure and count eract t he t rend of st agnat i on of t heagr i cul t ural sector that was generat i ng bal ance- of - payment s probl ems and

domest i c excess demand.

The agr i cul t ural sector s of Lat i n Amer i ca were t ransf ormed by a set ofi nt er rel at ed ref orms:agrar i an ref orms; ( 2 ) i ncreasi ng use of agroi ndust r i al i nput s, whi ch i mpl i ed achange i n ori ent ati on i n the devel opment of agr i cul t ure and, as such, was

(1) changes i n the product i on st ructure t hrough



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resi sted at f i r st by several soci al groups but i n t i me l ed t o the appearanceof new agrar i an i nterest gr oups; and 3) i nst i t ut i onal changes i n research andt echnol ogy. Dur i ng t hi s per i od, Lat i n Ameri can st ates act i ng f rom aboveassumed responsi bi l i t y f or t echnol ogi cal change. Aut onomous sempubl i c i nst i -t ut i ons were set up i n many count r i es ( I NTA i n Argent i na i n 1957, I NI AP i nEcuador i n 1959, FONAI AP i n Venezuel a i n 1959, I NI A i n Mexi co i n 1960, SI PA i nPer u, ICA i n Col ombi a, I NI A i n Chi l e, et'c.). The basi c model around whi cht hese i nst i t ut es were const ructed was that of a technol ogi cal conver t er tof aci l i t at e t he adopt i on and di ssemnat i on of the technol ogi es avai l abl e at t hei nt ernat i onal l evel ( see Tr i go, Pi nei r o, and Sabat o, p. 132).i nst i t ut es were based on t he concept of broad adapt abi l i t y (encompassi ng aw de range of regi ons and types of f arms) f or maj or crops.

The nat i onal

5. 1. Pol i t i cal - Economc Di mensi on of the Demand f or Research

At t he begi nni ng of t he 1970s i t became cl ear that t he avai l abl e t echnol o-gi es on whi ch the moderni zat i on st rat egy was based were qui t e successf ul i nsome cases but were not neutral i n t hei r ef f ects on product i on and i n t hei r

soci al i mpact.Publ i c research pol i cy when t he st at e i s i n the pl anni ng mode can be

vi ewed as a process of expl i ci t l y creat i ng t he demand for r esearch of cert ai nt ypes rather t han si mpl y respondi ng to exi st i ng demand t hrough est i mat es ofmarket f orces and t hei r ef f ect s ( Mel l or , p. 479). The case st udi es anal yzedby Tri go and Pi nei r o show t he successes of st rat egi es i n whi ch the government ,i n response t o st agnati on i n product i on or f orei gn exchange shor t ages, pushesf or a negot i at ed sol ut i on and medi at es the i nt erest s of i ndust r i al urban cl as-ses w t h more speci f i c i nt erest s of f armers' groups ( r i ce i n Col ombi a or mai zei n Argenti na) .ar t i cul at e t he demand f or new t echnol ogy or i gi nat i ng f romvar i ous gr oups,whi ch appears i n an ex ant e eval uat i on to be i n t he i nt erest s of t he soci et y

at l arge, and t o produce a package of pol i ci es combi ni ng adapt at i on of i mproved var i et i es avai l abl e i nt ernat i onal l y t o l ocal condi t i ons w t h economcpol i ci es prot ecti ng speci f i c groups f r omt he ef f ects of t echni cal change( pr i ce st abi l i zat i on, subsi di es, and protect i oni sm. These processes ofart i cul at i on presuppose that the st ate must be st rong enough, once t he need

f or t he soci et y as a whol e t o i ncrease product i on i s r ecogni zed, to i mpl ementpubl i c pol i ci es consi st ent w t h progress and t echni cal change.

I n t hese cases, t he state, acti ng f r omabove, i s abl e to

I n ot her t ypes of successf ul t echnol ogi cal processes, t he soci al ar t i cul a-t i on was generat ed f r omw t hi n t he agr i cul t ural sector . The exampl es of sugari n Col ombi a and ml k product i on i n t he Ecuador i an hi ghl ands show t hat , when i tt akes t he i ni t i at i ve, the agrar i an sector acqui res consi derabl e i nf l uence andpar t i ci pat i on i n t he i nst i t ut i onal mechani sms. I n t hese cases, speci f i c

soci al cl asses were abl e to negoti ate w t h the government on a ser i es of pol i -ci es ( pri ce pol i ci es, credi t , etc. ) that served thei r speci f i c i nt erest s andacti vat ed t he st at e f rom bel ow The economc pol i ci es i mpl ement ed were i nal l cases desi gned to sol ve par t i cul ar probl ems obst ruct i ng the devel opment oft he product i ve sector .change cont rol l ed the sector and were abl e t o appropr i at e a good part of t hebenef i t s of t echni cal change. Moreover , t hey creat ed organi zat i onal mecha-ni sms that gave thema cert ai n amount of cont rol over t he suppl y of t echnol ogy.

The soci al groups that t ook the i ni t i at i ve i n the



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Accordi ng t o t he f i ndi ngs of t he PROTAAL st udi es, such processes of t ech-ni cal change, al t hough successf ul , had moderat e ef f ects on yi el ds and resul t edi n consi derabl e expansi on of area. They resul t ed i n i mpor t ant changes i n workorgani zat i on toward more concent rat i on and ver t i cal i nt egrat i on of pr oduc-ti on. By cont rast , when t he stat e medi ated t he i nt erest s of conf l i ct i nggroups f romabove, t he resul t s were si gni f i cant i ncreases i n product i on andyi el ds and mnor modi f i cat i ons of t he work organi zat i on ( see Pi nei r o and

Tr i go, 1983).

Ther e ar e al so exampl es of rel at i ve fai l ures resul t i ng ei t her i n st agna-t i on of t he sector af f ected or i n i nsi gni f i cant i ncreases i n yi el d but i n ac-cel erat ed soci al di f f erent i at i on (e.g. , pot at o producti on i n t he Mant aroVal l ey i n Peru).process of t echni cal i nnovat i on were not adequatel y desi gned or no exi st i ngsoci al cl ass l i nked to product i on was capabl e of mobi l i zi ng and coordi nat i nggovernment act i on i n i t s f avor .that are produced by t he campesi no sector ( pot atoes, beans, etc.speci f i c regi ons.l ess- f er t i l e r egi ons or r egi ons w t h reduced access t o wat er ; regi onal di f f er -ences ar e of t en cor rel at ed w th cl ass di f f erences (see Scobi e and Posada,p. 386 . The di f f i cul t i es of t he poorest producers t o mobi l i ze research ef -f or t s i n t hei r f avor may expl ai n, f or exampl e, why upl and, noni r r i gat ed ri cehas recei ved l ess at t ent i on t han has i r r i gated ri ce. Concent rat i ng researchon t he f ormer woul d presumabl y have entai l ed f oregone benef i t s t o the numer -ous urban poor w t hout guarant eei ng that smal l upl and producers woul d havebenef i t t ed i n the l ong run (Scobi e and Posada).

I n t hese exampl es, ei ther publ i c pol i ci es backi ng up t he

Thi s remark appl i es par t i cul ar l y t o the cropsor by

I n Lat i n Amer i ca the rural poor tend to be concent rat ed i n

These comment s show that potent i al demand for research w l l be t ransl atedi nt o actual demand ei t her when some product s are i mportant f or the st ate,whi ch sees i n the process of t echni cal change a means of f i ndi ng a sol ut i on t oa speci f i c agrar i an probl em (e.g. , r i ce i n Col ombi a), or when products arei mportant f or some speci f i c groups and producers' associ at i ons capabl e of

mobi l i zi ng the stat e whi ch w l l t hen engi neer t he change i n act i ve col l abora-t i on w th those groups.

5. 2 The Suppl y of Research and I t s Determnant s

The rat e of t echni cal change i s af f ected by t he condi t i ons under whi chi nst i t ut i ons suppl yi ng research i n agr i cul t ure operate. As expl ai ned above,f roman i nst i t ut i onal poi nt of vi ew, research ef f or t s are mai nl y cent eredaround the nat i onal research i nst i t ut es organi zed i n t he 1960s, but one of t hemost si gni f i cant r ecent t rends i s t he grow ng par t i ci pat i on of t he pr i vat esector i n some areas of r esearch.

The set t i ng of pr i or i t i es and al l ocat i on of resources of t he nat i onal r e-search i nst i t ut es have been af f ected dur i ng the 1970s by changes i n thenat i onal and i nt ernat i onal cont ext i n whi ch they operat e.model adapt ed f r omt he U. S . f ederal - st at e Agr i cul t ural Exper i ment St at i onsystem (i n whi ch st at es compet e agai nst one anot her i n the provi si on of r e-search) has become i ncreasi ngl y i nadequate t o deal w t h t hose changes. Thedecent ral i zed i nst i t ut i ons of Lat i n Amer i ca, organi zed al ong the l i nes of t heU S . system were set up w t h t he f unct i on of servi ng as publ i c conver t ers of

The i nst i t ut i onal



- 3 8 -

t echnol ogy avai l abl e i nt ernat i onal l y i nto t echnol ogy adapt ed t o l ocal condi -t i ons. Al t hough there was a marked i ncrease i n budgetary and human resourcescoi nci di ng w t h i ni t i al successes i n some ar eas, avai l abl e dat a show t hat ,si nce the ear l y 1970s , the overal l t rend i n Lat i n Amer i ca i s toward a loss ofi nst i t ut i onal st rengt h. The signs of cri si s i dent i f i ed i n some i nst i t ut i onsand the regi onal di f f erences noti ceabl e among di f f erent syst ems ( Sout hernZone, Andean regi on, Cent ral Ameri ca, and the Car i bbean) ref l ect mai nl y t he

di f f erent charact er i st i cs of the economc devel opment and of the process ofsoci al change generat ed by t echni cal change speci f i c t o each count ry( Tabl e 5 . 1 ) .

Asi de f r omregi on or count ry-speci f i c devel opment s, whi ch we w l l examnef ur t her i n t he cont ext of t he i nstabi l i t y of f i nanci al resources, cer t ai ndevel opment s common t o al l count r i es may expl ai n the f ai l ure of the presentsyst em t o adapt t o the new si t uat i on.

The converter model was sui t ed t o a si t uat i on character i st i c of t heear l y st ages of i nst i t ut i onal i zed research.Revol ut i on was avai l abl e f rom i nt ernat i onal cent ers, on the one hand; and, on

t he ot her hand, i t had al l t he character i st i cs of a publ i c good. I t was wel lsui t ed for i nvol vement of t he publ i c sector as t he t echnol ogy i n most casesdi d not i nduce benef i t s t hat coul d be easi l y appropr i at ed by pr i vat e gr oupsand, t herefore, t he st ate coul d medi ate among var i ous urban and r ural groupst o adopt successf ul l y new t echnol ogi es w t hi n the f ramework of t he devel opmentpl an. Al t hough the ori gi nal model was based on t he i dea of compl ement ari t ybet ween i nt ernat i onal and nat i onal cent ers , i n pract i ce, t he i nt ernal dynamcsof t he I ARCs l ed them to become a pract i cal al t ernat i ve and a compet i t or ( i nt erns of human resources, f or exampl e) f or t he nat i onal i nst i tut es. As t heexampl e of r i ce i n Col ombi a shows, I CA has l ost much of i t s i ni t i at i ve as aresul t of work conducted at t he cent ers.

The technol ogy of t he Green

Paral l el devel opment at the nat i onal l evel al so resul t ed i n a l oss of i n-

f l uence of t he nat i onal systems.generat i on of t echnol ogy by pr i vat e associ at i ons ( such as CEN CA& andFEDEARROZ i n Col ombi a) corresponds t o an i ncreasi ng i nvol vement of t he pri vat esector i n r esearch. The i ncreasi ng rol e i n t he devel opment of agr i cul t ure off i nns produci ng i nput s i n the devel opment of agr i cul t ure has cr eat ed new op-por t uni t i es f or t he pr i vat e sector, and t he i dent i f i cat i on of benef i t s sui t -abl e f or pr i vat e appropr i at i on has encouraged pr i vat e f i nns t o par t i ci pat e i nt he generat i on and di ssemnat i on of t echnol ogy.that research i s i ncreasi ngl y becomng a pr i vat e good and that i nst i t ut i onsare vi ewed not as i nst rument s f or broad agrar i an change ref l ect i ng a nat i onalconsensus but , r at her , as organi zat i ons servi ng par t i cul ar i nt erest s i n t heagr i cul t ural sector ( see Pi nei r o and Tr i go, pp. 3 3 2 - 3 3 3 ) .

Di rect par t i ci pat i on i n t he process of

These t endenci es i ndi cat e

W t hi n the cont ext out l i ned above, nat i onal i nst i t ut es must devel op pr o-Al t hough the dat a i ndi cat e anr ams under severe shor t ages of ski l l suppl y.

i ncreasi ng t rend i n t erms of prof essi onal per sonnel f r om 1970 t o 1 9 8 0 (as aresul t of a consci ous st rategy ai med toward devel opi ng human resources f oragr i cul t ural research) , t he sector i s pl agued by out mgrat i on of hi ghl y qual i -f i ed per sonnel , a hi gh rat e of t urnover of t rai ned personnel whi ch i s detr i -ment al t o the devel opment of l ong- t ermresearch programs, and a weakeni ng oft he tr ai ni ng programs of t he i nst i t ut es ( see Tr i go, Pi nei r o, and Ardi l a).



TABLE 5 . 1

Budgetary Resources Allocated to Agricul tural Research in Lat in America and the Caribbean, between 1960 and 1980,Selected Years (Constant Value of 1975; Off ic ia l Money Exchange Ra te : Na t iona l Cur rency /US do l l a rs , fo r Year Se lec ted )*

~

S U B R E G I O N ’

~~~ ~~ ~

1960 1965 1970 1974

Southern zone (excluding Brazi l)BrazilAndean ZonePanama and Central America (excluding Mexico)

MexicoCaribbean (excluding Dominican R epublic)Dominican RepublicLatin America and the Caribbean ( to tal)

‘3 1,446’8 ,2806

15,63 1 ‘ O

4 ,412”4,66619I ,53OZ2

44 1 2 7

66,406

3 1,298

20 ,003‘4,967165 ,2181 ,53OZ3

4 9 6 2 7

15,5337

79,045

32 ,594324,178’43,056 2

4 ,904”9 ,7233,28OZ4

490”1 18,225

44,702432,87995 7 39313

5,9611814,637”2,940”2 ,27828

160.790

42,559’1 16,7976 0 3 4 l4

10,21548,35 7”

1,642282,239

2 , 1 2 8 2 6

*Preliminary figures, currently being adjusted (Trigo and Piiieiro, 198 1 : Append ix 1 ).

I Southern Z one includes Argentina, Uruguay, P araguay, and Chile .Andean Z one includes Bolivia , Peru, Ecuador, Colombia and Venezuela .Central America includes Costa Rica, Nicaragua, Hondu ras, El Salvador,and Guatemala. Caribbean includes Guyana, Suriname, Jamaica, Hait i ,Barbados, Grenada, Trinidad and Tobag o.

Information f or Chile is f rom 196 1.

Information fo r Paraguay is f rom 1971.Information for Chile and Uruguay is f rom 1973; fo r Pa raguay f rom

Information is f rom 1962.

Authors’ est im ate , based o n f igures supplied by Boyce and Evenson.’ nformation is f rom 1972.Information is f rom 1973.

l o Information for Bolivia , Venezuela and Peru is f rom 1962; fo r Ecua-dor f rom 1965.

l 2 Information for Bolivia and Venezuela is f rom 1972 a n d 1969 re-spec ively .l 3 Information for Bolivia and E cuador is f rom 1973; fo r Venezue la andPeru f rom 1976.l 4 Informa ion for Colombia is f rom 1979.I s Information for Nicaragua and Guatemala is f rom 1962; f o r H o n d u -ras from 1963.

Source: Pinei ro and T r ig o ( 1 9 8 3 ) .

1972.’ nformation fo r Argentina is f rom 1979.

Information for Bolivia is f rom 1962.

l 6 In fo rma t ion fo r El Salvador is f r o m 1966; fo r Gua temala f rom 1962and Panama f rom 196 1.

In fo rma t ion fo r Honduras and Nica ragua is f rom 1965; fo r Gua temalaf rom 1973; fo r Panama i t was e s t ima ted a s US$600,000.

In fo rma t ion fo r E l Sa lvador is f rom 1973; Honduras f rom 1976 andPanama f rom 1975; fo r N ica ragua i t was e s t ima ted a s US$1,000,000.l In fo rma t ion i s fo r 1962.2o In fo rma t ion i s fo r 1972.2 1 In fo rma t ion i s fo r 1979.22 In fo rma t ion fo r Barbados , Jama ica , Sur iname , Grenada , T r in idad andT o b a g o is f r o m 1965; fo r Guyana i t was e s tima ted a s US$250,000.23 S a m e i n f o r m a t io n a s 1960.24 In fo rma t ion fo r Barbados , Jama ica , Sur iname , Grenada , T r in idad andTobago i s f rom 1972; f o r G u y a n a f r o m 1973 and for Hait i f rom 19762 5 In fo rma t ion fo r Barbados and Ha i t i i s f rom 1976; for Ja maica Trini-d a d a n d T o b a g o f r o m 1972.26 In fo rma t ion fo r Ha i t i is f r o m 1978; fo r Sur iname and Grenada f rom1974, a n d f o r G u y a n a f r o m 1978.271nfo rmat ion was e s t ima ted on the basis of 10 per cen t o f the to ta l sfo r Panama and Cen t ra l Amer ica .

In fo rma t ion i s fo r 1977.



-40-

In terms of human resources (Table 5.21, i t seems that progress can be

expected a t the leve l of the Master's degree i n the t r ainin g of personnel i ndeveloping countries but that i t w i l l be very slow a t t he l eve l of the doctor-

ate degree (Evenson and Evenson, p. 227).ing fellowshi ps from gra ntin g agencies w i l l not increase subst ant i al ly. A fewcountr ies are using l oans from th e World Bank t o support grad uate s tu di es i nth e United S ta te s by t h e i r stu den ts (Evenson and Evenson).

The avai labi l i ty of fore ign t ra in-

The phenomenon of migration and the highly fragmented market for scien-t i s t s (with low wages for lower ranking personnel and higher wages for person-nel trained abroad) i s even more preoccupying.rel at i ve t o those paid by int ernat iona l agencies tha t are will ing t o pay ahigh wage for short-term consulting services. Such developments i n which t hequan tity of personnel is increasing but the quality remains inadequate repre-sent a preoccupying trend for the development of a s table research ef for t

National salaries are low

The market mechanism performs poorly in the allocation of research fundsto research.na t ional ins t i tu tes (such as basic knowledge) is a public good with i t sch ar ac te ri st ic s of nonrivaln ess and nonexcludability (f re e use fo r anyone oncei t becomes av ai la bl e except in some spe cif ic- -pa ten tab le- -in sta nce s), and i tinduces free riding (people w i l l wait for somebody else to incur the cost ofresearch before doing i t themselves).used t o a ll oc at e resour ces and a dmi nis tra tiv e mechanisms have t o be used.

This i s mainly because a large part of research produced by

Therefor e, market s ig na ls cannot be

Some forms of technolog ies th at do not have the c ha ra ct er is ti cs of apublic good are more ea si ly appropriated by the pr iv at e sec tor .ins tances can the pr iva te sec tor be expected t o par t ic ipa te in agr ic ul tur a lre search? Improved machinery and ot he r forms of technology (mechanical andchemical) th at can' be prot ecte d by pat ent s permit s el ec ti ve access t o researchfi nd in gs t o those who fina nce ( or buy) t he product.high o r because t he co st s cannot be covered by th e be ne fi ts asso ciat ed w i t h

the new technology the farmer i s able t o capture, the pri vat e se cto r has beenunwil ling i n the pas t t o f inance research in a reas such as biological in-novations. Crop va ri et ie s w i t h high-yield capacity, disease and pest resist-ance, etc. fo r developing cou ntr ies were gen eral ly developed by in te rn at io na lresearch in st it ut es and adapted t o local condit ions by national resea rchi n s t i t u t e s . But int ro duc tio n of t h i s new technology had a considerable impacton the demand fo r f e r t i l i z e r s and other ag ri cu lt ur al inputs, and firms supply-ing such inp uts acquire d la rg e economic gai ns deriv ed from investment i n ag ri -cultural research through i t s effect on the demand for their product(pes t i c ides and f e r t i l i ze r s ) .

In what other

Because the r i s k i s too

The greater importance of the priva te s ector i n agr icu l tu ral research indeveloped coun tries r es ul ts i n pa rt from the g rea ter use of purchased i nputs

by the agr icul t ural sector--al though th is is not the only explanatory factor.The use of f e r t i l i ze r and other chemical inputs i s higher i n some developingcoun trie s than i n the United Sta te s for export crops such as cotton.

by t he pr iv at e sec to r and th e natio nal income of th e country (Table 5.3).developed cou nt ri es , ac cording t o 1974 da ta (Boyce and Evenson), th e pr iv at e

A clear corre la t ion exists between the proportion of agr icu ltu ral researchIn



TABJ,E 5.2Human Resources (Professional Personnel) in Agricultural Research in Latin America and the Caribbean,

from 196 t o 198 (Selected Y ears)

S U B R E G I O N ' 196 1965 197 1974 198

Southern Zone (excluding Brazi l)

BrazilAndean Zone

Panama and Central America (excluding Mexico)

Mexico

Caribbean (excluding the Dominican Republic)

Dominican Republic

Latin America and th e Caribbean ( total)

3 6 S 2

2 0 0 5

3877

144'

19013

6415

3 9

1 ,353

816 I , 0 4 5

50O6 7 6 4

643 1 ,294

305 o 283

27914 55 I

96 1S7I6

1 220

2 , 6 4 4 4,106

1 ,1964

2 , 0 0 01 , 6 9 4

33312

22817

3 5 2 1

1,000

6,486

1 ,364

2 ,9351,843 '

3 8 3

1 ,079

19818

9 9

7 ,901

Preliminary inform ation, s t i l l being analyzed (Trigo and PiAeiro, 1981: Appendix 2) .

I Southern Zone includes Argentina, Uruguay, Paraguay, and Chile .

Andean Z one includes Bolivia, Peru, Ecu ador, Colombia and Venezuela .

Central America inclu des Costa R ica, Nicaragua, Hondu ras, El Salvador

and Gua temala . Car ibbean inc ludes Guyana , Sur iname , Jamaica , Ha i t i ,

Barbados, Grenad a, Trinidad and Toba go.

Information for Arg entina, Chile and Paraguay is f r o m 1 9 5 9 .

Information f or Paraguay is f rom 1971.

Information f or Chile is f rom 1973 ; fo r Paraguay i t was e s tima ted a t 37 .

In fo rma t ion is fo r 195 9 .

Information is for 1967.

Information fo r Bolivia, Ecu ador and Peru is f rom 1959 .

In fo rma t ion fo r Co lombia i s f rom 1979 .

In fo rma t ion fo r Honduras and Nica ragua i s f rom 1959 ; fo r Gua temala

i t was estimated at 20 .

l o In fo rma t ion fo r El Salvador and Guatemala is f rom 1966.

I ' In fo rma t ion fo r Honduras , N ica ragua and P anama i s from 1971 ; o

G u a t e m a l a , f r o m 1 9 7 2 .

l 2 In fo rma t ion fo r E l Sa lvador is f rom 1973 ; fo r Cos ta R ica and Gua te

mala i t was est imated at 6 4 and 5 8 respect ively.

l 3 Information is for 1959 .

l 4 In fo rma t ion is fo r 1966.

I s In fo rma t ion i s fo r 1959 .

l 6 In fo rma t ion is f o r 1 9 7

l 7 In fo rma t ion fo r T r in idad and Tobago i s f rom 197 1.

In fo rma t ion fo r T r in idad and Tobago i s f rom 1978 .

l 9 In fo rma t ion i s fo r 19 59 .

*O Information is for 1 9 7

Es t ima ted .

Source: Pineiro and Trigo ( 1 9 8 3 ) .



-42-

TABLE 5.3

Percentage of Total Agricultural ResearchSelected Continent/

Country, 1974, and Income Level, 1971by the Private Sector:

Percentageof t o t a l

ag r i cu l tu ra lresearch

Cont inen t /count ry

North America and Oceania

Western Europe

Eastern Europe and USSR

Latin America

Africa

Asia

Income GNP per capi ta )

Less than $150

1 5 0 -$ 400

$ 400-$1,000

$1,000-$1,750

$1,750 and more

25.4

1 0 . 8

8 . 3

5.1

2.9

2 . 2

5.2

2.8

7 . 4

7.0

24.0

Source: Boyce and Evenson.



- 43 -

sector accounts for about 25 percent of total research while in resource-poorcountries of Africa i t accounts for less than 3 percent.purchased in du st ri al inp uts used by farmers i s much lower than i n th e UnitedStates or Japan and makes benefits from research much less a t t r ac t ive .

The proportion of

When agr i cu l tu ral production i s oriented toward rural consumption ortoward th e domestic market, th e pri vat e sec tor may be unwilling t o invest i n

research t ha t would i ncre ase prod uc tiv ity and induce a f a l l i n food p r i ces .Resource su bst it u ti on may be induced by new tec hno logie s, such as laborsavingmechanization, and lead t o a reduction i n costs . For the priva te sector to bewilling t o pay for t he research, the resource s ubs tit uti on eff ect must be suf-f ic ie nt t o cause a decrease i n to ta l c ost s th at would exceed research cost sand th e induced f a l l i n farm income.pr iv at e se ct or can be expected only when th e e l a s t i c i t y of demand f o r t he goodi s high ( export crop s, fo r example) o r when the s ta te i s wil ling t o take meas-ures such as pri ce subsidies.

This i s why the pa rt ic ip at io n of th e

Part icipa tion of th e pri vat e sect or can al so be expected i n cases wherethe crop i s grown by a limited number of producers who can easily appropriateth e ben ef it s from research . Research programs succ essf ul from th e poin t ofview of the private sector have been carried out by producer groups such asthe Colombian Federation of Cotton Growers (see Hertford, e t a l l .producers are not able t o ident ify the pot ent ia l b enefi ts t o research or maynot be able to capture the benefi ts ; th ei r part ici pat i on i n research invest-ment in developing countries i s l imited.

In general,

The changes that have occurred a t the int ernat ional leve l during the pastseveral years have considerably alte red the parameters of agr icu ltu ralresea rch . Along wi th t h e cre ati on of an int ern ati ona l network of public orsemipublic institutions under the umbrella of C G I A R , there i s evidence of aprivate internationalization of the technological process whereby transna-tio nal corporations operating i n developing countries t ran sfe r technologies

developed by t h e i r resea rch and development departments. The int er na ti on altrade of technological inputs defines the type of technology t o be supplied a tthe nat ional level .

These international transfers of technology, rat her than responding t o ademand originating from within a country, respond t o the investment programsof these firms. To quote Pin eir o and Trigo, The par ti ci pa ti on of priv at eindustry in th e generation of a gri cul tur al technologies i s increasing fasterthan the conditions in each country would seem t o merit. This i s the productof changes in the world market and of the faster growth of commercial agricul-ture and agroindustr ial ac t i vi t i es than peasant agricul ture. I t suggests thatthe s tate has not been able t o control t he technological process eff ect ive ly.Evenson and Evenson, i n t h e i r s tudy of the leg al incentive systems i n Latin

America, suggest t ha t developing cou ntri es have tended t o develop le galsystems of pate nts and other forms of protection of in te ll ec tu al property tha tdo not f ost er creat iveness i n the private sector but create, instead, exces-siv e re lia nce on the technology developed i n ri ch er countri es.Mexico, and a few ot her cou ntr ies , by adopting codes of conduct f or transn a-

ti on al corp orat ions and pet ty pa te nt s systems more adapted t o inventio ns ofth ei r co untr ies, could fo st er more autonomous pr iv at e research i n Latin

Brazil,



-44 -

America. Evenson and Evenson (p. 211) suggest that combinations of publicsector research, public sector contracts with private firms, and imaginativepatent systems are optimal.



-45-

SECTI ON 6

I NSTABI LI TY OF FI NANCI AL RESOURCES

One of t he most preoccupyi ng t rends i n agr i cul t ural research i s t he hi ghl yThe annual var i at i onsar i abl e nature of f undi ng observed i n t he past decade.

i n budget ary resources f or agr i cul t ural research i n Lat i n Amer i ca, expressedi n const ant (1975) l ocal cur rency, are shown i n Tabl es 6. 1- 6. 3 and Fi gures6. 1- 6. 14.

The dat a pl ot ted i n Fi gures 6. 1 through 6. 14 are t aken f romTabl e 6. 1 pub-

However , t here i s r eason to have doubts aboutl i shed by I S M.Ameri can research expendi t ures.the qual i t y of the dat a. Eduardo Venezi an di d a caref ul st udy of Chi l e f ort he I mpact Study i n whi ch he repor t s that total research expendi t ures i n realt erms have doubl ed f rom1970 to 1975 whi l e t he I SNAR data i ndi cate an oppo-si t e t rend mS c o b i e , personal communi cat i on) .

I t i s t he most compl et e source of i nf ormat i on on Lat i n

I ndex of Real Research Expendi t ures, Chi l e, 1960- 1980

Fromtabl e FromYear 6. 1 E. Venezi an

19601965197019751980

10099

300191242

100181283529721

Var i abi l i t y of expendi t ures i s not l i mt ed to Lat i n Amer i can count r i es.

cat e that t he probl em i s shared by al most al l count ri es wi t hf f i c i en t s ofvar i at i on8 rangi ng f rom 10 percent t o 90 percent over t he 1970- 1980 per i odbut most l y between 20 percent and 50 percent .growt h rat e i n research expendi t ures (12 percent or hi gher ) al so tend to ex-hi bi t a hi gh coef f i ci ent of var i at i on ( 45 percent or hi gher) . On a regi onalbasi s, Asi an and Af r i can count r i es have 67 percent and 50 percent , r espec-t i vel y, of thei r count r i es exceedi ng 25 percent of var i at i on; and Sout hAmeri ca and the M ddl e East have 80 percent and 100 percent , respecti vel y.These aggregat e dat a i ndi cat e the ser i ous nat ure of t he probl em gi ven thel ong- r un nat ure of agr i cul t ural research programs. Si nce, on the average,70 percent of al l i nst i t ut i onal cost s are absorbed by personnel cost s (whi chi n the shor t termcan be consi dered as f i xed costs) , a decl i ne of 10 percenti n t he resources avai l abl e to research i nst i t ut es i mpl i es a cut of 40 percentt o 50 percent i n operat i ng capaci t y and, i n pract i ce, j eopardi zes f ut ure r e-search programs.

The I FPRI / I SNAR dat a f or 41 devel opi ng count r i es ( Oramet al . , 1979) i ndi -

Count r i es t hat exhi bi t a rapi d

The f undi ng of agr i cul t ural r esearch act i vi t i es comes f r omt hree maj orsources:



TABLE 6.1

Latin America an d the Caribbean: Budgetary resource s for agricultural research from1960-1980. alues expressed in constant 1975 urrency (in thousands).

1960 1965 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980~~ ~ ~ ~~

North Zone:Costa Rica (Colones) 3,565.1 5,210.6 4,637.5 13,521.9 14,387.5 9,235.3 7,081.0 8,972.8 9,937.9 10,839.5 10,329.1 12,525.9 12,143.7

El Salvador (Colones) 1,177.5 1,072.5 1,280.3 1,552.2 1,812.5 2,295.1 2,570.0 2,500.0 4,530.4 4,095.8 5,077.2 4,409.2 3,906.3

Mexico (Pesos) 58,325.0 65,237.0 30,900.0 41,912.5 65,812.5 109,337.5 116,812.5 173,437.5 199,912.5 166,612.5 450,600.0 510,750.0 579,487.5

Nicaragua (Cordoba s) - 5,545.8 7,209.5 7,469.3 7,729.0 6,430.3 6,830.5 7,855.4 8,494.2 9,343.6 7,848.4 8,508.2 9,168.1

Cuatamala (Quetzales) 1,840.0 - 1,911.0 1,578.9 2,330.7 2,380.0 2,293.7 2,668.8 2,841.2 3,426.7 3,484.9

I'anama (Balboas) 417.0 - 1,176.0 1,437.0 1,698.0 1,649.0 1,600.0 1,218.0 850.0 989.9 1,014.2 1,709.8 1,622.3

Caribbean Zone:Barbados B B Dollars) 480.0 1,179.7 1,258.5 1,100.9 943.3 843.4 747.4 735.3 735.3 850.4 1,149.4 1,012.0

Jamaica(JDollars) - 137.5 138.0 769.0 814.0 1,257.3 1,360.7 1,301.3 1,340.9 1,178.1 841.5 504.9 554.4Guyana CDollars) - - - - 1,218.7 1,131.8 1,543.4 1,094.9 583.5 - - -

Andean Zone:Bolivia (Pesos) 10,820.0 - 30,980.0 31,360.0 25,080.0 25,620.0 26,140.0 24,820.0 23,520.0 41,240.0 46,020.0 42,080.0 36,680.0

Colombia (Pesos) 213,751.2 234,312.0 667,944.0 764,755.0 750,562.0 760,766.0 701,984.0 711,454.0 747,173.0 641,682.0 807,461.0 739,899.0 697,114.0

Ccuador (Sucres) - 42,850.0 72,628.0 96,552.0 125,806.0 137,143.0 126,025.0 128,825.0 131,600.0 132,880.0 109,321.0 124,156.0 99,666.0

Venezuela (Bolivares) 19,850.6 31,757.6 - - - - - 85,207.7 96,647.0 99,330.8 84,387.4 97,699.8

i'eru (Soles) 76,948.8 114,933.6 351,818.0 271,279.2 289,353.6 308,937.6 297,962.4 415,711.2 376,852.0 211,028.0 188,975.0 174,644.0 161,188.0~ _ _ _ _ _ ~ _ _ _ _ _ ~ ~~ ~

Southern Zone:Argentina (Pesos) 936,000.0 1,028,000.0 1,283,000.0 ,534,000.0 1,222,000.0 ,145,000.0 ,165,000.0 ,218,000.0 ,209,000.0 1,301,000.0

Brazil (Cruzeiros) 67,316.4 - - - 196,569.0 237,608.0 - - 700,307.0 713,405.0 758,027.0 945,240.0 949,561.0

Chile (Pesos) 13,701.7 13,554.4 41,173.8 45,711.6 46,787.1 26,745.3 28,690.1 26,151.1 33,252.4 32,957.7 31,283.1 32,373.3 33,208.2

Paraguay (Guaranies) - - - 68164.0 75,982.0 - - 208,232.0 205,767.0 213,733.0 441,1350

Uruguay (Pesos) 215.0 484.5 372.3 399.0 425.7 525.6 584.1 730.2 573.6 663.3 585.3 773.4 817.8

1,099,976.4 ,066,998.8 ,113,000.0

Source:Notes:

Oram and Bindlish, 1981; ihero and Trigo 1983.

A Hyphen (-) signifies that the data was not availableI Corresponds to 1962

Corresponds to 1964' Corresponds tb 1966



TABLE 6.2

Latin America and the Caribbean: Annual variations in budgetary resources for agricultural research. 1970- 1980

1971/1970 1972/1971 197311972 1974/1973 1975/1974 1976/1975 1977/1976 1978/1977 1979/1978 1980/1979

Northern ZoneCosta Rica 2.91 1.06 0.64 0.76 1.27 1.11 1.10 0.95 1.21 0.97

El Salvador 1.21 1.17 1.26 1.12 0.97 1.80 0.90 1.24 0.62 0.88

Mexico 1.36 1.57 1.66 1.07 1.48 1.15 0.83 2.70 1.13 1.13

Nicaragua 1.04 1.03 0.83 1.06 1.15 1.08 1.10 0.84 1 08 1.07

Guatemala - - 0.82 1.47 1.02 0.96 1.16 1.06 1.20 1.02

Panama 1.22 1.18 0.97 0.97 0.76 0.70 1.16 1.02 1.69 0.95

Caribbean ZoneBarbadosJamaicaGuyana

1.07 0.87 0.86 0.89 0.88 0.98 1.00 1.16 1.35 0.88

5.57 1.06 1.54 1.08 0.96 1.03 0.88 0.71 0.60 1.09- - -- - 0.93 1.36 0.71 0.35

Andean ZoneBoliviaColombiaEcuadorVenezuelaPeru

1.01 0.80 1.02 1.02 0.95 0.09 I .75 1.12 0.91 0.87

1.14 0.98 1.01 0.92 1.01 1.05 0.86 1.26 0.92 0.94

1.33 1.30 1.09 0.92 1.02 1.02 1.01 0.82 1.13 0.80

- - - - - - 1.13 1.03 0.85 1.16

0.77 1.06 1.07 0.96 1.39 0.91 0.56 0.89 0.92 0.92

Southern ZoneArgentinaBrazilChile

ParaguayUruguay

0.84 1.10 1.25 1.20 0.79 0.94 1.02 1.05 0.99 1.08- - 1.21 - - - 1.02 1.06 1.25 1.00

1.11 1.02 0.57 1.07 0.91 1.27 0.99 0.10 1.03 1.03

- 1.11 - - - - 0.99 1.04 2.06

1.07 1.07 1.23 1.11 1.25 0.78 1.16 0.88 1.32 1.06

Source: Table 6.1

Note: A hyphen (-) means that the data was not available.

h t a r ef er to absolute variat ions from previous year.



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TABLE 6.3

1970-1980 I nd ic a to r s f o r 2 1 Latin American Countries

(Countr ies i n order of ag. GDP growth ra te)

Paraguay 6.9 11.7 63.3 0.28 1.0 1300 0.61 25.6 1.6 7.4 -3.5

Braz i l 4.9 20.2 53.5 1.15 2.0 20 50 0.51 5.7 4.0 1.4 7.0

Colombia 4.9 3.3 14.5 0.64 1.5 1180 0.2 2 17.0 6.8 1.1 16.2

Guatemala 4.6 9.1 29.7 0.39 0.6 108 0 0.25 11.6 2.6 1.7 16.2

Venezuela 3.8 12.1 45.0 1.32 2.5 36 30 0.25 10.4 10.4 0.7 18.7

Nicaragua 3.1 2.5 11.6 0.27 0.7 74 0 0.55 24.1 1.3 0.6 9.8

B ol iv ia 3.1 4.2 25.1 0.34 0.5 57 0 0.61 29.6 0.8 4.2 3.2

Dom. Rep. 3.1 NA NA 0.20 0.4 116 0 0.21 65.4 2.0 0.8 15.2

Salvador 2.8 25.3 70.9 0.50 1.0 660 0.15 6.3 6.9 1.4 1 2.0

Argentina 2.6 7.9 47.4 1.64 6.2 2390 1.30 33 .1 4.8 0.5 1.2

Costa Rica 2.5 0.5 17.2 0.24 0.9 1730 0.22 6.5 4.2 0 .0 7 - 3

Ecuador 2.4 6.7 25.8 0 .35 0.8 1270 0.33 9.5 2.5 0.2 7.7

Mexico 2.3 33.5 88.4 1.36 2.5 2 090 0.33 12.0 7.4 0.1 9.5

Panama 1.9 11.4 29.1 5.33 1.7 17 30 0.30 9.0 5.6 0.6 11.0

Honduras 1.5 -6.8 32.5 0.16 0.3 56 0 0.4 8 7.8 0.6 1-11 6.7

Guyana 1.0 NA NA 1.85 2.7 57 0 0.43 10.9 6.4 0.2 -1.0

Jamaica 0.7 -4.5 33.8 0.23 0.4 1040 0.12 7.8 2.9 0.6 -5.5

Uruguay 0.2 7.5 25.6 0.59 1.4 281 0 0.65 8.6 2.2 0 .3 4.4

Barbados 0.0 -2.3 20.0 1.35 2.9 162 0 0.14 1.4 23.2 0.0 -6.5

Peru NA 4.5 32.5 0.33 0.5 93 0 0.19 12.6 2.6 2 .0 5.9

Explanation of columns:

( 1 growth ra t e of ag. G D P 1970-80 (percent )( 2 ) growth r a t e of ag. re searc h expenditures 1970-80 (percent )( 3 ) c o e f f i c i e n t of var i a t i on i n ag . research expendi tures (percent )

( 4 ) r a t i o o f a g. res. exp. t o ag. GDP 1980 (percent )( 5 ) ag. research expenditu res per c a p i t a 1980 (US 1( 6 ) GNP per capi ta 1980 (US 1(7) manl land r a t io (a ra ble a rea per capi t a , i n ha)( 8 ) arable a rea per s c i en t i s t (ha)( 9 ) ag. res earch expenditures per ha ( U S 1( 1 0 ) growth r a t e of a r a b le a r e a 1970-80 (percent )( 1 1 ) growth r a t e o f f e r t i l i z e r u se 1968-78 ( p e r c e n t )

Source: P. Oram, ISNAR.



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E X P E N D I T U R E S O N A G R I C U L T U R A L R E S E A R C H

1600 ......................................................................

1500 ...

1400 ..

a1300 ..r

gent

11200 ..an

.1100 ... .. .

e .. .. .1000 . . .

*

.

... .. .. ..

. .

*. . * . ... . . . . .....

..*.. . . .

.

... ....

900 .....................................................................1970 1972 1974 1976 1978 19

Argentina 1970-1980 (in mill. constant pesos)

FIGURE 6 . 1



-50-

Expenditures on Agricultural Research

50000 .....................................................................

. . .*...45000 ...

.. .. ...*.

40000 ..

35000 ..

.30000 ..

i. . .

. . . .... . . ...*

.*. ....

.....* ....

.

i......

. .25000 .....................................................................

1 9 7 0 1 9 7 2 1 9 7 4 1 9 7 6 1 9 7 8 1 9 8

C h i l e 1 9 7 0 - 8 0 - - in constant 000 pesos

FIGURE 6 . 2



-51-

E x p e n d i t u r e s on A g r i c u l t u r a l R e s e a r c h

900 .....................................................................

.

.800 ..

700 ..

..600 .. .

..

..... .. .+

... .. . .

. .. ..* ..

.....

+

500 ..

....

...

400 .. w . . . . . .

9 . ......

.

U r u g u a y 1970 80

FIGURE 6 . 3



5 2-


450000 .......................................................................

4 0 0 0 0 0 ..

.

t

. .. ..

t

.350000 .

.. . .... .

. .

. .. .300000 . . ..

...t...

...0

t ........ *. .

.. .2 5 0 0 0 0 ...

..

.

.200000 ..

t

.....* ..... . ..

t....150000 .....................................................................

1970 1972 1974 1976 1 9 7 8 1980

Peru 1970 80

FIGURE 6 - 4



-5 3-

E x p e n d i t u r e s o n A g r i c u l t u r a l R e s e a r c h

50000 .....................................................................

.45000 .. ...

.40000 ..

.

4

.

I

... .

35000 ...

........30000 .. .

..

.

25000 ...

............... .....a . .......

20000

.....................................................................1970 1972 1974 1976 1978 1980

B o l i v i a 1970-80

FIGURE 6 . 5



-54-

140000

130000

120000

110000

100000

9 0 0 0 0

80000

70000


.......................................................................

.

.....

..

.

..

..

....

...

. .

. ...

..+..

.

.

.

.

. .. .. . ............

...... .. ..... . .... ..

. .

. . .+.

.....................................................................1970 1972 1974 1976 1978 1

Ecuador 1970 80 a t c o ns ta n t p r i c e s

FIGURE 6.6



-55-

E x p e n d i t u r e s ofi A g r i c u l t u r a l R e s e a r c h

8 5 0 .....................................................................

800 ..

* .. . . ..

7 5 0 .. .. * * . . . . .

. .. .

. .

. .

. .7 0 0 ...

*.

....... .

. .. ...

..* .

6 5 0 ..

* .. .. .. .

*

. .it

. .. .. .....*

503

.....................................................................1 9 7 0 1 9 7 2 1 9 7 4 1 9 7 6 1 9 7 8 1 9 8 0

C o l o m b i a 1 9 7 0 - 8 0 i n c o n s t a n t m i l l . p e s o s

FIGURE 6 - 7



-56-


1000

8 0 0

6 0 0

200

0

....................................................................... **.....

....... .... .*. .

*........

.

....

.

...

.

.

.....................................................................

400

1970

...*...

1972 1 9 7 4 1 9 7 5 1 9 7 8

Brazil 1970 80 i n constant cruzeiros

19

FIGURE 6 . 8



-5 7-

E x p e n d i t u r e s on A g r i c u l t u r a l R e s e a r c h

600000 .......................................................................

.500000 .. .*.

. .....

..400000 ..

. .

.300000 ..

.

.200000 ..

.

.*.

..... ...........

100000 .. .... .*.

..*. .

............ *

0 .....................................................................1 9 7 0 1 9 7 2 1 9 7 4 1 9 7 6 1 9 7 8 1 9 8 0

M e x i c o 1 9 7 0 - 8 0

FIGURE 6 . 9



-58-


1800 .....................................................................

.

1600 .

4 .

. . .... . . . .

4... ... .. . ...

1400 ..

.

. .

. .

. .

. .. .

..1200 .

...

..

.. .

. ..

.

.1000 .. .

. . ..

. .

.* .

.......

... ...

fi...

.

. ..

8 0 0 .....................................................................1970 1972 1974 1976 1978 1980

P a n a m a 1970 80

FIGURE 6 - 1 0



-59-

E x p e n d i t u r e s o n A g r i c u l t u r a l Research

..+ .

.. +.

6000 ........................................................................

..5000 .. ... . .... .. +.

. .. . . .. .... +4000

........

3000 .. .. ..

. m . . . . . .

...*. .. ... ..

2000 ... +....

*. .....

+...

1000 .....................................................................1970 1972 1974 1976 1978 1980

El Salvador 1970 80

FIGURE 6 . 1 1



9 5 0 0

9 0 0 0

8 5 0 0

8 0 0 0

7 5 0 0

7 0 0 0

6500

6 0 0 0

-60-


o . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0

.

...

..

..

...

.

..

..

.

ff

.

.ff

t

.......

ff

..

..

...

. ..

. .. .

.a .

. ..

. .. .. .ff

*............

.....................................................................1970 1972

. .. .. ..a .

1974 1976

N i c a r a g u a 1970 80

1978 198



-6 1-


.1200 . . .*.. ....

1100 .. .*

.. .

.0

1000 ...

.900 ...

800 ...

.

.

.

.

*.

...

..

..

....

* .. .. .. ..

.

*

...... ......

. .700 .....................................................................

1970 1972 1974 1976 1978 1980

Barbados 1970-80 at c o n s t a n t p r i c e s

FIGURE 6 - 1 3



-62-

E x p e n d i t u r e s on A g r i c u l t u r a l Research

1 4 0 0 ...................................................................... ?

?

. . . . . . . . * . . . . . .. .... .

.?

1200 .. .... .. . .

1000 .. .. .

8 0 0 .. ..N...

. ..600 ..

.. .e *

. .4 0 0 .... .. .....

..2 0 0 ...

1

...

.?

..

.?

.......

. .0 .....................................................................1970 1972 1974 1976 1978 198

Jamaica 1970 80

FIGURE 6 . 1 4



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1.2.3.

Annual allocations from the national budget.

International grants and loans from bilateral and multilateral sources.Channeling a fr ac ti on of t he proceeds from agric ult ura l exportstowards agricultural research which provides an a l t e rna tive t o thetr ad i ti on al mechanism of budget a ppro pria tion .

The INTA of Argentina, u n t i l re cently, .recei ved budgetary resources from a

tax on agric ul tur al exports ; and i n B r a z i l (CEPLAC, f o r re search on cac ao) andColombia (FEDERACAFE, f o r co ffee) res ea rch on sp ec i f ic commodities is sup-ported by levying a tax on such exports.financing through a formula based both on sugar exports and on the d i f fer -ential between domestic and foreign sugar prices (Trigo and Pineiro, 1984,

In Colanbia, CENICANA receives

p. 7 7 ) .

The above trend seems t o indicate a sh if t away from in st i t ut io na l al l oca -As Trigo andions from the publ ic se ctor supported by int ern ati ona l grants.

Pi ne iro (1984, p. 80) remark, ev en ts poin t t o growing acceptance of thepr in ci pl e, %whoever be ne fi ts pays, in di ca ti ng th e diminishing ro le of thes tate and of i t s a b i l i ty t o set pr io r i t i es and the growing infl uenc e of p r i -va te in teres ts .sugarcane are financed by COPERSUCAR (t he suga r prod ucer s' co oper at iv e) and byANDA ( the assoc iat ion fo r the use of f er t i l iz e r ) fo r cot ton, beans, corn, soy-beans, and wheat. Si mi la rl y, i n ECuador, the re searc h program on pa st ur e un-derway a t IMAP i s financed by th e Highlands Livestock Associa tion. The tre ndtoward increasing pr im ti za ti o n and par tic ula riz ati on of research should be ofserious concern because:

In B r a z i l , fo r instance, a nunber of res ear ch programs fo r

1. Nothing indicates that there i s any inherent m e c h a n i s m capable ofse t t i ng na t ional p r i or i t ie s and a l loca t i ng funds t o neglected areas ofresearch; i t leaves th e market with i t s dis tor ted s ignals as the so lemechanism of allocation so t ha t there i s a lack of congruence betweenth e r esear ch budget and the economic importance of sp eci fi c prod ucts .

2 . I t might place excessive value on re se arch programs producing quickre su lt s and lead t o an exaggerated reli ance on trans fer s of technolo-gies that sane producer groups are ab le t o ob ta in .

Nevertheless, i t po in ts toward new approaches i n the attempt t o coordi nateresearch a t the nati onal l eve l. Recent developments i n sane L at in h e r i c a nc o un t ri e s s h u l d be viewed i n t h i s l ig ht. In Chile, fo r instance, the IMAcombines two forms of financing: cor e funds ori gin ati ng i n the natio nalbudget and international aid which meets the basic operat ing cost s whilespe cif ic project fundings are covered by co nt ra ct s and agreements with t heint ere ste d pa rt ie s. In Colombia the coord ina tio n of res ear ch programs i s car-ri ed o ut i n th e framework of a National Agricultural Research Plan which i s

the to ol used t o govern the use of a vai lab le fi na nc ia l reso urce s (DepartamentoNational de Planeacion, 1981). Agr icu ltu ral Research Councils i n which a l lparties interested in research would be represented (consumers and producersby farm size, region, et c. ) have a l s o been proposed i n Colanbia a s mechanismsof coordinatio n. In s p i t e of th e incre asin g ro le of supplementary sources offunding, the causes of f i nanci al in st ab i l i t y i n agricul t ural research are t o



-64-

be found mainly i n the f ac to rs th at aff ect national budgets and inte rnat ionaldisbursement s .

External funding t o national research systems i s sub ject t o po l i t i ca lvagaries and t o the f ina ncial d if f i cu l t ie s experienced by the funding ag ex ie sthemselves.cies such as the World Bank and i t s a f f i l i a t e s (IDA i n pa r t i cu la r ) had t o re-duce t h e i r lending program due t o the unwillingness of the United S tat es t ocontr ibute t o an increase i n resources. Prior t o 1980, external mul t i l a te ralassistance, mainly from IDB and from the World Bank, was increasing rapidly.Until the mid-l970s, mu lt il at er al funding was relatively insignificant (Oram,n.d.).funding, i t increased three times as f a s t . T h i s shows tha t m ul t i l a te ra l andb i l a t e r a l a id of te n supplement each othe r. From 1971 t o 1980, the IDB granted13 loans t o e ight count ries i n Latin America f o r a t o ta l of $138 bi l l io nU. S.). I t also provided nonreimbursable grant aid for technical cooperation

t o 20 projects i n 13 countr ies .totaling $96 million (U. S.) in Lat in America (Trigo and Pinei ro, 1984,p. 80).

Colombia, Peru, Bo livia, Ecuador, and Mexico); but Jamaica, Honduras, andCosta Rica among the smaller nations received significant suns. With the in-creasingly blurred distinction between long-term and short-term developmentprograms i n the context of the shared res pon sib ili t ie s of the I MF and theWorld Bank ami the increasingly active rol e played by those in st it ut io ns i nthe economic management of La tin American co un tr ies , one ca n expect t h a tcon dit ion ali ty programs w i l l affect research programs in the future.Nicaragua, f o r inst ance , although i t has signi f ican t ly increased i t s expendi-tures on research (Figure 6.12) has not received loans from the World Banksince 1981.European cou ntr ies , has been generally smaller than multilateral funds andmore evenly distributed among countries (Oram, n.d.1.af fe ct the granting of fundings more di re ct ly than in the case of mu lt i la teral

aid.

There are no av ai la bl e da ta a f t e r 1980 when major lending agen-

After 1975, when i t was estimated t o be roughly equal to b i l at er al

The World Bank granted two research loans

Wltilateral money has gone mainly t o large r countr ies ( Brazi l ,

Bilateral aid, mainly from the United States, Canada, and Western

P o l i t i c a l motivations

Budgetary appropriations f or agr icu ltu ral research can be expected t oflu ctu ate according t o t he economic si tua tio n i n t he country.

funds are paid out of gen era l revenues and that they have t o compete withother p r io r i t i es i n the budget, the vari ation s i n th e research budget can beexpected t o follow the flu ctu ati ons observed i n the highly unstab le economiesof Latin America and t o be more aff ecte d than othe r budgetary i tan s.the double bias exist ing against agr icu ltu ral research (an urban bia sagainst agriculture and a tendency t o underinvest i n agr icu ltu ral research),expenditures on research are probably more affected by the current recessiont ha n other budgetary itans. Government revenues f lu c tua te mainly because ofvariat ions in ta r i ff s and other internat ional t rade taxes (which typical lymake up from 25 percent t o 50 percent of t o t a l revenues i n LDC) and i ndomestic tax es on goods and ser vic es. The cur ren t rece ssio n a f f e c t s both.

Given that such

Given

In his an al ys is of the determinants of government expenditures i n t heagr icul tura l sec tor , V. Elias (1981, p. 27) f o d that the sources of



-65-

var i at i ons i n t he share of government expendi t ures on agr i cul t ure i n t he GDPdepend more on the vari at i ons of t he share of expendi t ures on agr i cul t ure i nagr i cul t ural val ue added than i n changes i n t he share of t he agri cul t ural sec-t or i n t he tot al GDP. I n ot her words, t he maj or det ermnant of change i n theshare of government expendi t ures on agr i cul t ure i n nat i onal i ncome i s t hef l uct uat i ons i n t he share of expendi t ures on agr i cul t ure by t he government i nt he total budget . Thi s i mpl i es that pol i t i cal deci si ons concerni ng t he al l o-

cat i on of f unds between agr i cul t ure and ot her budgetary i t ems and not economcand st ructural f actor s ar e t he most i mport ant f actors expl ai ni ng var i at i ons i nt he research budget . I n t he case of many i mport ant count r i es ( Mexi co, Brazi l ,Argent i na, and Peru), t he repayment of t he f orei gn debt has cl ear l y become, i nrecent years, the most i mpor tant pr i or i t y f or t he shor t termcount r i es have the ol dest research i nf rast ructure and ar e most af f ected bybudget ary i nstabi l i t y i n r esearch.

Some of t hese



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SECTION 7

'lHE (DhMODITY BIAS IN ACXICULTURAL RESEARCH

I n t h i s s e c ti o n we t ur n t o the issue of b ia s of te ch ni ca l change and ex-amine why many c m o d i t i e s of major economic inpo rtance are receiving vir tu-

al ly no research at ten t ion.

The evidence on the subject i s scant . The relat ionship between researchexpe ndit ures and th e value of comnodities i s a key q uestion i n determiningwhether resources are al located correct ly and i n w h a t di rec t ion the b ias oftechnical change has occurred.are limited because of the di ff ic ul ty i n disaggregating data on research ex -penditures and st af f on a comnodity basis.

Unfortunately, d at a on investment by c m o d i t y

Estimates published by the U. S. National Research Council indicate thatcotton, l ivestock and dairy products, wheat, rice, sugarcane, and maize ( i ndecreasin g ord er of im po rt ax e) rank among the best-furded a gr ic ul tu ra l com-modities i n te rn s of expenditures i n 1976 (Table 7.1).of the commodity value, though, cot to n i s ahead with 3.5 percent while a l loth er comnodities represe nt less than 1 perc ent of t he value of th e product.Some important s tap le foods of low-income popu la tion groups , such as cassava,receive hardly any attention, w h i l e export crops, such as coffee, have beenthe obj ect of research programs i n many t ro pi ca l coun tri es since the beginningof th e century and continue t o be aburdantly financed.crops ard export crops expressed as a percentage of the value of the commodityi s i n many in st an ce s more important than i t is f o r food crops.

In te rn s of percentage

Research i n t ro pic al

Judd, Ebyce, ard Evenson have presented data on research expenditures bycomnodity f o r 1972 through 1979 which al so use th e frequency of pub li ca ti on son each commodity as an in di ca to r (Table 7.2). Although this indicator has

been criticized, mainly on the grourds that i t does not account for the geo-graphical or igi n of the research (many researchers publ ish i n forei gn jour-nals) and that basic research (r ath er than applied research) f ind s i t s wayin to journa ls and other sc ie nt if ic publications, it provides a rough measureof th e emphasis plac ed on sp ec i f i c comnodity programs.

The trend favoring export crops and underfuniing staple crops does notseem t o vary gr eatly , except fo r cott on, comparing the d at a i n Table 7 . 1 andi n Table 7 .2 .f i b e r s ) and th e f a c t t ha t tec hnological innovatio ns may have reached an upperl i m i t may be facto rs accounting fo r the slowing down of expenditures incot ton -re lat ed research. By co nt ra st , new export crops, such as soybeansa d vegetables, receive a good deal of research atte nt io n.

The declining world demand for cotton (competing with synthetic

Research i n food crop s must be judged on th e basis of t h e i r importance i nnational consumption.the da ta put to gether by Oram, e t a l . relat ing expenditures and sc ie nt if icman-years by geoclimatic region t o the share of the t o ta l population and t oth e main st a pl e comnodities. From these data , i t i s concluded, very

Some tentative conclusions can be drawn on the basis of



-67-

TABLE 7 . 1ESTIMATES OF INTERNATIONAL AND NATIONAL RESEARCH INVESTMENT BY

MAJOR COMMODITIES, 197 CONSTANT DOLLARS

Estimated Research InvestmentValue o

Commodiry National

in Al l International National Investment asCommodity. in Developing Centers Centers Proportion o

Order o Value Nations I 976)a ( 1 9 7 ~ 5 ) ~ Product Valueo Production ($ billions) ($ millions) ($ millions) percentage)

~~ ~

I . Rice2. Wheat3. Sugar cane4. Cassava5 . Cattle6. Maize

7. Coconuts8. Sweet potatoes9. Coffee

10. Grapes11 . Sorghum12. Barley13. Groundnuts14. Cotton15. Dry beans16. Chick peas17. Chilies and

spices

18. Olives19. Grain legumes20. Potatoes (white)

Over 135-65-65-65-63-4

3-43-4

22

I - I R1-1

1-195

I - 1

I - ] %I - 1

I - 1

I - I

I

I

1.93.80

I .97.94. I

00.6=

00

I .20.50.5

0

I .5I .2

0

01.62.w

34.735.930.24.0

54.829.6

2.03.48.56.9

12.29.44.0

60.14.03.0

4.0

5 o(25.3)

8.2

0.26d0.650.500.07

0.880.750.060.090.400.350.710.620.133.500.250.18

0.25

0.33

(2.00)0.68

SOURCE: Reproduced from Supporting Papers , World Food and Nutrition Study, V ol. 5 (1977), 5 I ,

by permission of the National Academy Press, Washington, D.C.OCenters and programs sponsored by the Consultative Group on International Agricultural

Research.bRough estimate derived by allocating total research expenditures by country according to the

proportion of standardiz. .;publications. Standardized publications are converted into constant scien-tist-years.

=Additional funds also were spent on these crops at the Asian Vegetable and Research Develop-ment Center.

dThe proportion varied sharply by type of rice: shallow water, 0.40; upland rainfed, 0.16; inter-mediate, 0.16; and deep water, 0 05 The international center investment was principally in the f i rs t

two types.



68

TABLE 7. 2Research as a Percent of t he Val ue of Pr oduct , by Commodi t y,Average 1972- 79 Per i od, 26 Count r i es

COM MOD TY

Wheat

Ri ce

Mai ze

Cott on

Sugar

Soybeans

Cassava

Fi el d BeansCi t rus

Cocoa

Pot atoes

Sweet Pot atoes

Vegetabl es

Bananas

Cof f ee

Gr oundnutCcconut

Beef

Por k

Poul t r y

Ot her Li vest ock

Af ri ca

1. 30

1. 05

. 44

. 23

1.06

23. 59

. 09

1. 65. 88

2. 75

. 21

.06

1. 56

. 27

3. 12

. 57

. 07

1. 82

2. 56

1.99

1. 81

R E G I O N

Asi a

. 32

. 21

. 21

. 17

. 13

2. 33

. 06

.08

. 51

14. 17

. 19

. 08

41

. 20

1. 25

. 12

.03

. 65

. 3 9

. 32

. 89

Lat i n

Amer i ca

1.04

. 41

. 18

. 23

. 48

. 68

.19

. 60

. 57

1. 57

. 43

. 19

1. 13

64

. 9 2

. 60

. 10

. 67

. 60

1. 12

. 42

Al l

Count r i es

. 51

. 25

. 23

. 21

. 27

1. 06

. l l

. 32

. 52

1.69

. 29

. 07

. 73

. 2 7

1. 18

. 25

.04

1. 36

1. 25

1. 64

. 71

I nt er nat i ona

Cent er s

. 02

. 02

. 03

-

-

. 02

. 04--

.08

-

-

.005

-

. 02

0 02

-

Sour ces: M Ann J udd, J ames K. Boyce, and Rober t E. Evenson, I nvest i ng i nAgr i cul t ur al Suppl y ( Di scussi on Paper No. 442, Yal e Uni ver si t y, Econom c Gr owt hCent er , 1983); and USDA, I ndi ces of Agri cul t ural Pr oduct i on, var i ous i ssues.



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t en ta t ive ly , t ha t wheat and perhaps barley, millet , sorghum, and groundnuts

receive a f a i r share of research resources i n re la t ion t o their importance asst ap le food and tha t rice, star chy crops, and puls es probably do not.maize, the shares i n South America are relatively high and those for CentralAmerica and Africa re la ti ve ly low. Runinant liv est ock research i n th e Middle

East, semiarid tropics, a d south America may be adequately funded (Oram,et a l . , 1979, pp. 129-130 and Table 44) .

For

There i s also some evidence indicating a pos i t ive cor re la t ion on a com-modity basis between the expenditures of IARCs and the national expendituresf o r wheat, maize, white potatoes, sweet potatoes, rice, and sorghum. Bothtypes of expenditures a r e less s t rongly cor re la ted i n the case of grourdnuts,beans, millet, ard cassava (see CGIAR Impact StLdy Newsletter).a n t s of investment of sp ec if ic crops have never been cl ea rl y elucidated.f a l l i nt o tw categories:variables affecting the supply of research.

The determin-

Theyvar iab les af fec tin g t he demand f o r resea rch and

The mechanisms through which demand for technical innovations is a r t i c u -la te d tend t o exclude peas ants and other groups unable t o voice t h e i r demand

at the lev el of the state. T h i s may explain why m i n i m a l research a t ten t i onre la ti ve t o the importance of th e crops as a source of nu tr ie nt s i s p ai d t os o m e crops. This crop t radi t ional ly has been asmall fann sec tor ac t i v i t y i n Lat in America. Beans represent an importantsour ce of p ro tei n fo r many L at in Americans, and t he re i s a grea t po ten t i a l fo rin cr ea si ng y i e lds of beans through improved seeds and farming pra cti ces , butthe so ci al context i n which they are grown limits the pos s ib i l i t i e s of de-velopment of n e w technology. Beans are almost exclusively a crop of the smallfann sector grown mainly f o r l oca l market consumption.sidered a high -ris k crop, they oft en receive less cul t iv at i on and care than doot he r, su re r market crop s such as maize and coffee.t en d t o be resource poor and do not have access t o c r e d it f o r f e r t i l i z e r andchemical co nt ro l agen ts. In every country except Venezuela, the majority of

fanners i s not using improved seed and replants traditional seeds from oneharvest t o the next.

Beans are a case i n poin t .

Because they are con-

Farmers planting beans

The beans program of CIAT i s re l at ive ly new, and many co un tr ie s have noty et released v ar ie ti es develuped with mat eri al developed by th at or gani zati onbecause of the general d i f f icu l ty of matching a particular type of beans withthe required resistance characteristics f o r a particular environment.Climatic conditions vary considerably, and the conditions and types ofdis eas es found a t CIAT are not found i n many cou nt ri es .

Most coun tr ie s of Lat in America are cur ren tly importing beans t o m e e t

th ei r needs.suff i cient i n beans, there i s increasing p ress ure t o abandon the small farm

sector and focus at t ent ion on large farms where beans could be produced as asingle crop (intercropping of beans i s a widespread pr act ic e i n most coun-tr ie s) with f u l l mechanizat ion. T h i s policy i s i n e f f ec t i n Costa Rica; andthere i s incre as ing i n t e re s t i n mechanization i n Honduras, Guatemala, Panama,Venezuela, Paraguay, Argentina, and B r a z i l (Iowa S t a t e Universi ty, p. 240) .

Because many countries have set a goal of becoming self-



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Being unable t o a r t i cu la te t he i r atomistic danand through public channels,growers of beans who are marginal producers are losing control over this cropwhich would req uir e con sid era ble investment i n on-farm rese arch , farmingpractices, and development of d iSeaSe -resi st ant va riet ies.

The supply of technological innovations for sane comodi t i e s has of tenbeen limited by the f a c t that research has a relat ively low product ivi ty inear ly years .lect and classify germ plasm and t o create physiological and pathologicals tudies t o develap the bas is fo r a prod ucti ve b reed ing program.

As Evenson (1978) poi n ts ou t, i t may take several year s t o col -

The time la g between investment and a c tua l payoff f o r neglected commodi-t i e s w i l l be longer than fo r those crops, such as rice, on which research hasbeen i n progr ess f o r many ye ars. It i s not necessari ly t rue that the i n t e rna lrate of return t o investment i n research on neglected crops i n the ear ly years

i s lower than it is on the more established crops (Evenson, p . 231).longer ges tat ion period does provide an explanation f o r the observed tendencyt o i nv es t r e l a t ive ly l i t t l e i n the neglected crops such as root crops. This,combined with the fact that the state and th e pri vate sector tend t o value

short-term gains most highly (i .e ., that their discount rate i s high), ex-p l a i n s w h y there are few incen tives t o in ves t heavily i n programs th at haveuncertain payoffs.

The

Another element of explanation i s provided by the nature of the comodi-t i e s neglected by research. Many such cro ps, such as cassava, tend t o begrown f o r home consumption of small farmers, are not consumed widely i n urbanareas, and have no known industrial u s e (except a t an experimental l eve l).Some countries, such a s Thailand, where cassava ranks f i f t h in terms ofinvestment i n research, export t h a t crop (Suthad Setboonsarng, persona lcommunication), but these a re i so l a t ed cases.



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SECTI ON 8

PATHS OF TECHNOLOGI CAL I NNOVATI ON

I t i s usef ul to look at di f f erent pat hs through whi ch t echnol ogi cal i nno-vat i ons have occur red i n order t o i dent i f y t he condi t i ons that have been as-

soci at ed w t h success and t o l earn f romthem There are basi cal l y t wo broadpat hs that can be cont rast ed. The f i rst i s when t he pr i vat e sector i s thegenerat or of t echnol ogy. Thi s i ncl udes producer associ at i ons organi zi ng pr i -vat e research i nst i t ut es w t h a speci al i zed commodi t y f ocus.Sugarcane Growers Associ ati on and t he Ri ce Growers Associ ati on i n Col ombi awhi ch have organi zed pr i vat e research i nst i t ut es t o sol ve par t i cul ar probl emst hrough research and manage i nt ernat i onal t ransf ers of technol ogy. St rongproducer organi zati ons of t hi s t ype tend to emerge when product i on of a par -t i cul ar commodi t y occur s i n speci al i zed regi ons w th a hi gh degree of homo-genei t y of product i on condi t i ons and f armt ypes, most l i kel y medi um si zed,owner - operated commerci al f arms.

Exampl es ar e t he

A second pr i vat e i ni t i at i ve i s when t he agr i busi ness sect or- - i n par t i cu-l ar , seed, chemcal , and machi nery compani es- - engages n research and i nter-nat i onal t ransf ers. Thi s has been t he domnant path i n f armmachi nery wheremost i nnovat i ons have or i gi nat ed i n smal l i ndependent f i rms and where i nt erna-t i onal t ransf er s requi re mni mal , i f any, adapt at i on. Thi s path has al so beeni mportant i n t he product i on of new seed var i et i es, and t he recent devel opment si n t he pat ent abi l i t y of bi ogenet i c i nvent i ons shoul d f ur ther st i mul at e pr i vat eresearch act i vi t y i n t hi s fi el d. The resul t w l l be enhanced compet i t i on be-t ween publ i c and pr i vat e sect ors, a desi rabl e f eat ure t o sti mul at e t he ar t i cu-l at i on of t he publ i c sect or w t h i ts f armsect or cl i ent el e.because pr i vat e sel f - i nt erest f i rms tend to have a bet t er percept i on of marketdemands and more i nst i t ut i onal f l exi bi l i t y i n organi zi ng research, i ncl udi ngorgani zi ng cooperat i ve vent ures w th publ i c research i nst i tut i ons. They, how-

ever , tend t o conf i ne thei r acti vi t i es t o l ow- r i sk, shor t - r un, hi gh payof ft echnol ogi cal advances.

Thi s occur s

We concent rate here on the pat hs of t echnol ogi cal i nnovat i ons whi ch occurFol l ow ng the di scussi on i n Sect i on 2, we di st i n-hrough t he publ i c sect or .

gui sh three cases.

8.1. State Act i ng FromAbove

A good exampl e of a successf ul t echnol ogi cal pat h that or i gi nat ed i n thest at e act i ng f romabove i s t he devel opment of new r i ce var i et i es i n Col ombi a.I t al so shows how a stat e i ni t i at i ve was coordi nat ed w th research by i nt erna-

t i onal cent ers (CI AT) and commodi t y organi zati ons (FEDEARROZ)

Dur i ng t he 1950s, t he product i on of f ood grai ns i n Col ombi a was rapi dl yf al l i ng behi nd domest i c demand.i mpor t subst i t ut i on i ndust r i al i zat i on that i nduced rapi d urbani zat i on andl arge i ncome ef f ect s i n consumpt i on.pri ces upward and addi ng t o i nf l at i onary pressures.t he government t o di ver t par t of f orei gn exchange earni ngs away f romessent i al

Thi s occur red as a r esul t of a programof

Excess demand for f ood was pushi ngIn addi t i on, i t f orced



-73-

the state of t he price-cos t rel ati on allowed prices t o f a l l by only 28 perce'ntbetween 1965-1969 and 1970-1974, while c os ts f e l l by 30 percent.t i on i l lu st ra te s the importance for the s ta te of coordinat ing technologicaland economic policies for successful technological sequences to result.

This rela-

The rice rese arch program contained two ot he r sources of bi as . One was aThe new technolo-actor bias toward a deepening of the capital-labor ratio.

gies implied a sharp increase i n the use of fe r t i l izers , herb ic ides , fungi -cides, and pesticides. A t the same time, labor requirements per ton of riceproduced f e l l by 50 percent.labo r use from 15.2 mil li on person/days i n 1965 t o 13.2 mi lli on person/days i n1978 i n sp i te of large increases i n area planted and output levels (Pineiroand Trigo, p. 141).

The aggregate result for Colanbia was a f a l l i n

Another bias i s among product ion systems. Since techn olo gical change wasmotivated by a production crisis (and not , f o r example, an income cr isis amongsmall farmers) , the research str at eg y nat ura lly focused on building on thebest, i .e . , concentrating on the production conditions where the greatestyield increases could be obtained per unit of re search cost.focus on i r r igat ed rice production--a production system f o r which si gn if ic an t

technological advances were available in Asia. As the new varieties diffusedi n the medium/large ir ri ga te d farms, output i ncre ases forced rice prices down-ward. The re sul t was detr imental to small dryland rice producers f o r whom nonew cost-reducing technological options were available. Their share i nnati onal output th us f e l l from 50 percent i n 1966 t o 1 0 percent in 1974.

This led to

Information ' i s very incomplete, but i t seems that dryland producersshif ted t o the next best a l te rna t ive as rice pri ces declined.of perfect substitution between upland rice and irrigated rice used i n theoriginal study by Scobie e t a l . may have been too strong.ers on the north coas t p r g i f ferent qual i t ies of rice for own or localmarket consumption. There is a certa in degree of sub st i tut abi l i t y with the

high-quality rice from ir r ig a te d regions over 1500 km away i n th e TolimaValley but not perfect subst i tutabi l i ty G . Scobie, personal communication).

The assumption

Small upland farm-

Whatever the case may be, the Colombian rice program i s an excellent ex-ample of a technological path induced by the s tate act ing from above t o dea lthrough the instrument of technology with a problem of national significance.I t shows the importance of coordinatin g int er na ti on al , public, and pr iv at eorganizati ons i n managing the process of tra nsf er, research, adaptation ,t r i a l , and diffusion.cal with economic policies.been minimized had the participation of rice growers t o de cis ion making notbeen confined t o t he medium/large producers represen ted by FEDEARROZ.easy technological option was available for upland rice farmers, compensation

could a t least have been paid under the form of research programs for the nextbest alternative available to them.

I t al so shows the key ro le of coordinat ing technolo gi-Equity issues i n agr ic ul tu re could, however, have

If no



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8.2. St ate Act i vat ed FromBel ow

Agr i cul t ural t echnol ogy i s, to a l arge ext ent , an i mper f ect publ i c good- -that i s, a good t he benef i t s f r omwhi ch no i ndi vi dual can be excl uded butwhere the benef i t s vary sharpl y across i ndi vi dual s by r egi on, crops, f armt ypes, sources of i ncome, i ncome l evel s, and consumpt i on pat t erns.i s t hat di f f erent groups i n ci vi l soci et y have markedl y di f f erent demands f or

t echnol ogi cal i nnovat i ons and t hat di f f erent groups have a di f f erent i alabi l i t y t o i nduce a publ i c sect or r esponse t o t hei r demands. The organi zat i onof t he publ i c sector al so has an i mpact on i t s r esponse to i nt erest group de-mands f or t echnol ogy, i n par t i cul ar t he degree of decent ral i zat i on of r esearchi nst i t ut i ons, t hei r degree of aut onomy i n the management of r esearch budgets,and t he exi st ence or not of f ormal mechani sms of consul t at i on w t h i nt erestgroups.

The r esul t

The pat t ern of t echnol ogi cal change i n the product i on of sugar cane i nCol ombi a i s a good exampl e of t he st ate bei ng act i vat ed f r ombel ow i n r esponseto a st r ong commodi t y associ at i on (Pi nei ro et a .).Col ombi a i s r egi onal l y concent rat ed i n the Cauca Val l ey.

l arge sugar m l l s have domnat ed t he i ndust ry.t hese m l l s expanded out put by hor i zont al expansi on and managed i ndependentl yan ef f or t to i mprove t he t echnol ogy of sugarcane product i on.of t he domest i c market was an ef f ect i ve bott l eneck to out put gr owt h, and t hem l l s were competi ng f or market shares w t h technol ogy as one i nst rument ofcompet i t i on.

Sugarcane product i on i nOver t i me, a f ew

Duri ng t he 1940s and 1950s,The l i mt ed si ze

Sugar i s t he si ngl e most i mpor t ant f ormof cal or i es i n the Col ombi an di et ,especi al l y f or l ow- i ncome consumers; but sugar product i on f or i ndust r i al useand, especi al l y, f or expor t was l i mt ed bef ore 1960.

Sugar Di sappear ance, Col ombi a, 1960- 1977 ( Thousands of Tons)

Di rect I ndustr i alYear consumpti on use Export s

196019611962196319641965196619671968

196919701971197219731974197519761977

180. 6205.8245.2212. 9227.1250.2259. 0252.7292. 2

312. 3339. 3357. 2387. 1414. 5437. 3457. 6489. 7509. 0

107.3115. 0124. 1127. 8140. 4139. 3150. 7140.7149. 9

171. 7164.5180.8193. 1213. 1223. 7229. 5246 O

254.0

0.148. 765. 540. 825. 794. 6

113. 9200. 3238.7

171.3129. 4165. 2202.8142. 5128.6197. 8100. 259. 1

Sour ce: Pi nei r o et al . , p . 92.



-75-

Wth t he Cuban Revol ut i on i n 1959 and the consequent possi bi l i t y of ex-por t i ng a f i xed quot a to the Uni ted St at es under hi ghl y f avorabl e pr i ce condi -t i ons, t he Col ombi an sugar i ndust ry ent ered i nt o a boomper i od. Thi s i nducedt he sugar m l l s t o cooperat e i n t he organi zat i on of a car t el that woul d r egu-l at e t he di st r i but i on of expor t quot as i n t he hi ghl y conLent rat ed i ndust ry andbl ock ent ry of new compet i t ors. Thus was created ASCOCANA, t he Associ at i on ofCol ombi an Sugarcane Producers.

sugarcane product i on and the possi bi l i t y of i ncorporat i ng addi t i onal l and i nproduct i on throughout the 1960s, t he mai n f ocus of t he Associ at i on was nott echnol ogi cal i mprovement but t he promot i on and regul at i on of export s, thenegot i at i on of i nt ernal pr i ces f i xed by t he st at e, and wage bargai ni ng w t ht he l ocal l abor uni ons.t ernat i onal compet i t i ve pressures, t he Associ at i on thus concent rat ed i t s poweron the pr i ce, market , and i ncome condi t i ons of product i on and not on themoderni zat i on of producti on i t sel f .

Wt h excel l ent ecol ogi cal condi t i ons for

As can be expected of a nat i onal car t el w th no i n-

By 1970, t he condi t i ons of product i on changed suf f i ci ent l y to f orce theassoci at i on to deal more squarel y w th t echnol ogi cal i ssues.pansi on became severel y l i m t ed, l abor short ages began t o occur among canecut t ers, and rei nf orcement of t he uni on movement l ed to si gni f i cant i ncreasesi n l abor cost s. The publ i c research agency (ICA i n Pal mra) had no par t i cul ari nt erest i n devel opi ng t echnol ogi cal programs t o i ncrease expor t s. At t hesame t i me, Col ombi a was promoti ng a new i nst i t ut i onal model f or t he generati onand di f f usi on of t echnol ogi cal change based on a shared responsi bi l i t y betweent he publ i c and pr i vat e sect or f or t he commerci al sector s of agr i cul t ure, whi l et he publ i c sect or onl y retai ned f ul l responsi bi l i t y f or rural devel opmentact i vi t i es di rected at t he t r adi t i onal and margi nal sectors.t hi s l ed i n 1977 t o t he organi zat i on of a Nat i onal Sugar Commssi on i ntegratedby represent at i ves of key publ i c sector i nst i t ut i ons (M ni stry of Agr i cul t uLe,pr i ce- f i xi ng agency, agr i cul t ural bank, etc. 1 and representat i ves of ASCOCANA.The Commssi on was charged w t h t he responsi bi l i t y of recommendi ng to thenat i onal government pol i ci es f or the product i on, market i ng, expor t , cr edi t ,

and devel opment of t he sugar sect or. The Commssi on was endowed by l aww th anati onal f und for sugarcane based on a tax l evi ed on sugar pri ces.was used t o creat e a speci al i zed regi onal r esearch i nst i t ut e, CENI CANA( Col ombi an Research Cent er f or Ssarcane) , managed j oi nt l y by publ i c sector( I CA) and pr i vat e sector (ASCOCANA) represent at i ves.vate sector i nt erest s thus mobi l i zed the st at e i nto organi zi ng a speci al i zedagency w th very broad pol i cy and technol ogi cal mandat es over whi ch t hey had asubst ant i al degree of cont rol and whi ch was f i nanced by publ i c r evenues.

Hor i zont al ex-

For sugarcane,

J i s fund

St rongl y organi zed pr i -

The i nst i t ut i onal model that character i zes r esearch on sugarcane i nCol ombi a i s t hus one t hat evol ved f roma cent ral rol e of t he stat e act i ng w t hrel at i ve aut onomy ICA) to one where t he state was i ncreasi ngl y capt ured f rombel ow by power f ul l y organi zed i nterest groups.

of both an i ncreasi ng weakeni ng of t he st at e due to f i scal cr i ses and neo-l i beral phi l osophi es and a st rengt heni ng of the agr i busi ness sect or , a processwhi ch characteri zed most of Lat i n Amer i ca i n t he 1970s and whi ch i s rei nf orcedby the cr i si s of debt and aust er i t y pol i ci es i n t he 1980s. I f st at e programsf or t he under represent ed sector s of ci vi l soci et y ar e i nsuf f i ci ent to compen-sat e f or t hei r excl usi on f romagr i busi ness i nt erest s, t he bi as i n research i nf avor of t he commerci al sector w l l l i kel y be i ncreased.

Thi s occur red i n t he cont ext



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C E N I d acti vel y engaged i n a broad programof t echnol ogi cal research.I t assi st ed i n the def i ni t i on and di f f usi on of a number of i nnovat i ons such asseed cont r ol , i nt r oducti on of new var i et i es, bi ol ogi cal cont r ol , and cul t uralpracti ces. Thi s resul t ed i n a 35 percent i ncrease i n yi el ds between 1970 and1978. ' Technol ogi cal change al so al l owed hor i zont al expansi on by maki ng pro-duct i ve l ands of i nf er i or qual i t y. The t echnol ogi es i nt roduced were capi t ali nt ensi ve and l ed to an i ncrease i n the capi t al / l abor r at i o great er t han

j ust i f i ed by rel at i ve f actor pr i ce changes.al l owed the sugar m l l s t o i ncrease thei r share of the total product at t heexpense of both l abor and i ndependent producers of sugarcane.l owed t hemto consol i dat e t he sugarcane car t el and creat e bar r i er s t o theent ry of pot ent i al compet i t or s.

These t echnol ogi cal i mprovement s

They al so al -

We see, i n concl usi on, t hat t echnol ogi cal change i n sugarcane product i oni n Col ombi a occur red as a resul t of st rong i ni t i at i ves of producer or gani za-t i ons.research program over whi ch they ret ai ned st rong cont rol .nol ogi cal change i s, o f cour se, most ef f ect i ve f or commodi t i es w th power f ull obbi es and rel at i vel y l i t t l e i mpor t ance f or t he macroeconomy.

quent l y, t ends to be bi ased i n f avor of agroi ndust r i al and agroexpor t cropsand to negl ect t he probl ems of t he more di sorgani zed sect or s i n agr i cul t ure,t ypi cal l y smal l f armers and f armworkers.

They were abl e to act i vat e t he st at e f r ombel ow i nto creat i ng a mxedThi s pat h of t ech-

I t , conse-

8 . 3 . St at e Act i vat ed FromWt hi n

The st at e i s i nt ernal l y di vi ded, and agent s of t he st at e bel ongi ng topar t i cul ar groups of bureaucrat s or pol i t i ci ans or act i ng i ndi vi dual l y i nf l u-ence t he cour se of st at e act i ons i n di r ect i ons that do not necessar i l y cor r es-pond ei t her t o t he l ogi c of t he st at e act i ng f romabove or to t he l ogi c of t hestat e acti vat ed f rombel ow by pressure groups i n ci vi l soci et y. Thi s i s par -t i cul ar l y evi dent i n t he case of research on agr i cul t ural t echnol ogy where

percept i on of t he pot ent i al gai ns f r omt echnol ogi cal i nnovat i ons ( the expectedpayof f s mat r i x) i s of t en di f f i cul t t o achi eve f or bot h the st at e at l arge andci vi l soci et y, whi l e sci ent i st s and research admni st rat or s can more easi l y dothi s. The resul t i s t hat nar r ow cont rol by out si de i nt erest s over t he cour seof r esearch i s di f f i cul t t o achi eve and t hat sci ent i st s and research adm ni s-t rat ors general l y have a consi derabl e degree of i ni t i at i ve i n est abl i shi ngresearch pr i or i t i es. I n t hei r study of t he U . S . Agr i cul t ural Exper i ment St a-t i on syst em Kal dor and Paul sen t hus concl ude that the i nt ernal deci si on-makers ( stat i on di r ectors, depar t ment chai rper sons, and sci ent i st s) deci de theprogram and t he external deci si on- makers ( the U. S . Congress and stat e l egi s-l atures) apprai se the programand deci de how much suppor t t o gi ve i tp. 10).

Ramsdal e and Paul sen f i nd t hat , because sci ent i st s ar e t he i ni t i at ors of pr o-

posal s, t hey have t he great est shor t - r un i nf l uence on t he choi ce of t opi cs.I t was f ound that t he st rongest source of si gnal s f or t hemwere depart ment alcol l eagues, j ournal s, and convent i ons- - not i nt erest gr oups- - and onl y second-ar i l y sources of f undi ng.

Si m l ar l y, i n a study of how research proj ects ar e sel ected,



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I n t he st udy of t he per f ormance of publ i c a r i cul t ural r esearch i nArgent i na (I NTA), Col ombi a ICA), and Peru (UNA , Pi nei r o and Tr i go found thatt he mai n source of r esearch i nef f i ci ency was pervasi ve soci al di sar t i cul a-t i on, i .e. , t he l ack of connect i on between t he demand f or new t echnol ogy andt he research ef f or t . What t hey f ound i s t hat sci ent i st s tend t o be mot i vat edby peer r ecogni t i on, especi al l y i n i nt ernat i onal sci ent i f i c ci r cl es, and byt he chal l enge of t he research ef f or t more t han by a demand or i gi nat i ng i n t he

sector or at the l evel of t he stat e. The cases of r i ce and sugar are, by con-t rast , cases where soci al ar t i cul at i on was ef f ect i ve i n demand gui di ng t heresearch ef f or t .

A n exampl e where research sci ent i st s had an i mpor t ant r ol e i n i ni t i at i ng aresearch program i s t he case of t he mechani zat i on of t omat o harvest i ng i nCal i f orni a. Mechani zati on came about as a response to the end of the BraceroProgrami n 1964 ( through whi ch Mexi can farmworkers had been i mpor ted season-al l y i nt o t he Uni ted St at es) and successf ul uni oni zat i on of f armworkers t hatpushed wages upward dramat i cal l y. The rol e of t he Uni ver si t y of Cal i f orni a, apubl i c Uni versi t y, was essent i al due to t he di f f i cul t y of mechani zi ng the har -vest of t omat oes t hat requi red si mul t aneousl y bi ol ogi cal and mechani cal r e-search.pr i vat e sector s t hroughout the process of t echnol ogi cal devel opment .

Also essent i al was t he cont i nued i nt eract i on w t hi n publ i c and

The i ni t i al moment um was provi ded by speci f i c sci ent i st s of t he Uni versi t yof Cal i f orni a who percei ved dur i ng Wor l d War I 1 t he recur rence of f ut ure l aborshor t ages.f or machi ne harvest i ng as wel l as the desi gn of a mechani cal harvest er . Thef i r st t omat o var i et i es adapt ed to mechani cal harvest i ng were rel eased i n thel ate 1940s, and i t i s onl y i n 1956 that t he Cal i f orni a Tomat o Growers Associ a-t i on star t ed to f und research at t he Uni versi t y of Cal i f orni a. The f i r st har -vest ers were bui l t i n 1958 by M chi gan St at e Uni ver si t y, t he Uni versi t y ofFl or i da, and Purdue Uni versi t y.pat ent ed a harvest er and l i censed a pr i vat e agr i cul t ural machi nery company to

star t l arge- scal e producti on.

They i ni t i at ed t he search f or t omat oes w th proper t i es sui t abl e

I n 1959, t he Uni versi t y of Cal i f orni a

Wt h some of i t s sci ent i st s havi ng t aken the l ead, t he Uni versi t y ofCal i f orni a' s r ol e as an i nt egral part of t he process of t echnol ogi cal i nnova-t i on was cruci al . The Uni versi t y provi ded practi cal l y a l l the sci enti f i c re-search capabi l i t y i ncl udi ng t he new t omat oes t hat were t he necessaryprerequi si t es t o success of t he overal l st rat egy.through whi ch al l segment s of the i ndust ry coul d i nt eract - - host i ng semnarsand demonst rat i ons. Fi nal l y, t he Uni versi t y was i nvol ved i n al l phases of t hedevel opment and di f f usi on of t he harvest er syst emand t he necessary associ at edcul t ural pract i ces.

I t was a f ocal poi nt

A l l segment s of the Cal i f orni a canni ng tomat o i ndust ry were al so i n-

vol ved. For exampl e, some l arge and progressi ve growers were i mport ant i nt est i ng t he new machi nes and new cul t ural pract i ces and i n speaki ng i n favorof t hemat growers' meet i ngs. The Tomat o Growers Associ ati on, . a group of can-ner s, and the Bl ackwel der Manuf actur i ng Company al l donat ed f unds t o the Uni -versi t y i n suppor t of i t s work. Canners woul d run peel abi l i t y and l l sol i dsl lt est s f or seed compani es on new st rai ns, and some seed compani es worked w tht he Uni versi t y t o sel ect new t omat o st rai ns and were among t he f i r st to adoptt he harvest er . Uni ver si t y engi neer s, Bl ackwel der Manuf act ur i ng Company, and



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some la rg e growers a l l worked together on the machine.t o accept machine-harvested tomatoes was a l so e s sen t i a l.pl i ed conversion of tomato-receiving f ac i l i t ie s t o handle bulk containers ,expanded washing and so rt in g operations, gre ate r expenses fo r qu ali ty c ont rol ,di ff er en t hours of operation, and many othe r co st ly adaptations. Since almosta l l tomatoes were grown under contract and since every contract specified thetype of seed t o be used and qu al it y limi tat ion s, adoption could not have oc-

curred without the consent of processing firms. Once the processors decidedt o switch t o machine-harvested tomatoes, adoption of the harvester was accom-plished quickly.

The canners' decisionT h i s decision im-

The perc ent of th e crop harves ted by machine incr ease d from 3.5 perc en t i n1964 t o 80 percent three y ear s later and reached 100 per cen t i n 1970.s h i f t from hand- t o machine-harvested methods implied dr a s t i c changes i n thesystem of production- -with se eds, cu lt iv at io n, machinery, labo r requirements,chemical inp uts , handling, proc essi ng, p roduct mix, and marketing a l l deeplyaffected.

The

The co st savi ngs t o growers who adopted th e technology were s igni f icant(Schmitz and Seckler). These savings aro se lar ge ly because the harves ter wasa once-through-the-f ie ld operation , whereas hand harvesting required t hr ee t os i x pass es through the f i e l d and because th e female machine so rt er s, who re-placed the male f ie ld p ickers , were paid 15 t o 25 percent less per hour.

The innovation was, of course, ser iou sly biased toward la rg e fanns andagainst labor.rap idl y eliminate d and production became concentrat ed i n the la rge fanns. I n1964, there were 1,072 farmers with tomatoes with an average area of 132 acres;by 1975, there were 845 growers left with an average area of 354 acres. Whilemale hand-picking crews were di sp laced by the machines, new jobs were createdi n s or ti ng (u nsk ill ed women) and f o r dr iv er s and mechanics as well as i n manu-facturing and processing (skilled labor).

process of d eski l l ing and s ki l l in g of the labor force involved, increasing thepola r iza t ion of wages among farm workers.

Due t o economies of scale i n machinery, smaller growers were

There was thus a simultaneous

T h i s pa th of tech nolo gica l development where pa rt ic u la r menbers of th es ta te play an ac ti ve promotional r ol e shows the importance of ef fe ct iv el yl inking these in s t i t u t ion s with the po ten t i a l c l i en te l e f o r t echnolog ical i n -novations.the process of technological innovations.soci ety of perceiving the expected payoffs from research which places thesc i ent i s t i n the pos i t ion of having t o create th e demand f o r his fu t ur e work.This requi res the ex iste nce of in st it ut io na l mechanisms that a llow sc i en t i s t sand pot ent ia l benef ic ia r ies t o mainta in a constant dialogue on the po ten t ia lga in s of techno log ica l inno vati ons. The second i s the tendency for sc ie nt i s t s

t o s e e k peer recognition through sc ie nt if ic achievements inst ead of seekingmaximum impact on c i v i l s oc ie ty through tec hno log ica l advances.requires car efu l ly designing the r ules of t he game i n research inst i t ut io ns t oovercome the re su lt in g tendency of di sa rt ic ul at io n between research e ff or t andlatent demand.the groups i n c i v i l soc ie ty wi th the greatest f inancing capaci ty, typi cal lyth e more agg ressive producer a ssoc iatio ns.

weaker sections, typically small farmers and farm labor.

The object ive of th i s l inkage is t o overcome th ree tendencies i nOne i s t he d i f f i c u l t y f o r c i v i l

This also

And th e t h i r d i s t he t endency fo r s c i en t i s t s t o l i nk up with

The result i s biases against the



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coordi nat i on among research i ni t i at i ves as wel l as bet ween generat ors, user s,and benef i ci ari es of research. We have seen how some of t he more successf ult echnol ogi cal pat hs have i nvol ved the combi ned ef f or t s of i nt ernat i onal ,nat i onal , and pri vat e i nsti t ut i ons w t h a cl earl y def i ned and f l exi bl e di vi -si on of l abor bet ween t hem Also, we have seen how sci ent i st s have a uni querol e to pl ay i n i dent i f yi ng t he pot ent i al payof f s f romresearch. St rongercont acts consequent l y need to be i nst i t ut i onal i zed bet ween researchers and

research user s. And we have seen how both underi nvest ment i n speci f i c r e-search areas and bi ases i n t echnol ogi cal i nnovat i ons resul t f r omt he l ack ofrepresent at i on of speci f i c soci al sectors ( especi al l y r esour ce- poor f armersand l andl ess workers) i n t he process of def i ni t i on and budget i ng of researchpr i or i t i es. A s of t oday, coordi nati on among research ef f ort s and communi ca-t i on among gener at or s, sel l er s, users, and benef i ci ar i es of research remai nwoef ul l y i nadequat e.counci l s be promot ed t hat al l ow a broad par t i ci pat i on of i nt ernat i onal , pub-l i c, and pr i vat e i nt erest s i n t he def i ni t i on and fundi ng of r esearch pr i or i -t i es. These i nst i t ut i ons shoul d gi ve a voi ce to t he soci al l y margi nal sectorsas wel l , i . e. , provi de represent at i on not onl y i n t erms of t he rel at i ve eco-nomc i mpor t ance of commodi t i es and t he rel at i ve economc i mpor t ance of pro-ducer s but al so i n t erms of numbers of i ndi vi dual s af f ect ed by t he cour se oft echnol ogy.

I t i s consequent l y essent i al t hat nat i onal r esearch

2. Taxi ng t he Benef i ci ar i es. One of t he mai n reasons for whi ch there hasbeen under i nvestment i n publ i c agr i cul t ural r esearch i s the di f f i cul t y of t ax-i ng par t of t he benef i t s of r esearch away f r om i t s benef i ci ar i es.are not abl y di f f i cul t t o i mpose on agr i cul t ure due to t he pol i t i cal power ofl andl ords; and t axes on consumers are equal l y l i f f i cul t t o i mpose due to thei rdi sper si on, di sorgani zat i on, and t he smal l si ze of t he benef i t s they each de-r i ve f r omt echnol ogi cal progress.

exampl es of t he successf ul f i nanci ng of research and di f f usi on programs byt axi ng benef i ci ar i es.

f i cat i on of t he ex ant e payof f s f romr esearch and a br ad mobi l i zat i on off ut ure benef i ci ar i es i n accept i ng t o share t he costs. Thi s r equi res bothgreat er decent ral i zat i on of r esear ch and great er par t i ci pat i on of f ut ure bene-f i ci ar i es to t he def i ni t i on and budget i ng of t he research ef f or t s.r equi res t he avai l abi l i t y of r esearch l oans i n order t o f i nance the researchef f or t s unt i l l at ent payof f s become taxabl e actual payof f s.can, however , be f i nanced by t axi ng the benef i ci ar i es, and research that bene-f i t s t he weaker segment s of t he popul at i on shoul d remai n t he f i nanci al r e-sponsi bi l i t y of t he publ i c sector.

Land taxes

Yet , t he systemof expor t tax to f i nance,/ I NTA i n Argent i na and of tax on ml l i ng to f i nance FEDEARROZ i n Col ombi a ar e

What i s requi red f or t hi s i s a much more cl ear i dent i -

I t al so

Not al l r esearch

3 . Coordi nat i on Bet ween Technol ogi cal and Economc Pol i ci es. The ex-ampl es of successf ul t echnol ogi cal pat hs demonst rat e t he i mpor t ance of coor di -nat i ng t echnol ogi cal and economc pol i ci es. I n par t i cul ar , t he downward pr es-

sure on pr i ces exerci sed by out put - i ncreasi ng t echnol ogi es must be caref ul l ymoni t ored to al l ow f or t echnol ogi cal t readni l l ef f ects t hat w l l ext ract f r omagr i cul t ure some of t he benef i t s of t echnol ogi cal i nnovat i ons w t hout st i f l i ngt he prof i t abi l i t y and, hence, t he i nducement to i nvest i n agr i cul t ure. I ft echnol ogi cal i nnovat i ons are cost savi ng but not out put i ncreasi ng, t he bene-f i t s of t echnol ogi cal change need to be ext racted f r omagr i cul t ure t hrough



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land taxes.change in agriculture must be understood in terms of macroeconomic forces in-cluding the valuation of th e exchange ra te, trad e po li ci es , c re di t terns,etc. Here, again, a broad consultative m e c h a n i s m i s needed that can reconcilethe co nfl ict ive pressures which underl ie the def ini t io n of technological K O -

nomic policies.

The economic policies that affect the success of technological

4 . Ex Ante Analysis and P ar ti ci pa to ry Research.l i t t l e in fo na t i on and analysis g o e s in t o the def in i t ion of research pr ior i -

I t is evident that very

t ies . i he result i s t h a t the so c ia l ly more vocal and powerful se ct or s undulydominate th e cours e of tech nolo gica l change.tendency i s a great er col labor ation between n atu ral and soc ial sc ie nt is ts anda greater part i cipat ion of research beneficiar ies (and affected sectors) i n

the def i n i t io n of research pr ior i t i es .nological progress must be Pare to optimum but t h a t compensatory programs o rresearch l in es should be considered simultaneously with the de fi ni ti on of pro-grams with clear negative payo ffs f o r weak segments of th e populati on. S i m ethese payoffs are extremely di ff ic ul t t o ant icipa te , a broadly part ici pato ryprocess with continued e valu atio n of t h e impact of rese arch advances seans t o

be the best guarantee that the biases of technological change can be promptlycorrected by complanentary technological and institutional innovations.

Needed t o co unte ract this

T h i s is not t o say that a l l tech-

5.

Recognizing the ro le of in st it ut io na l force s in influencing the rate and

Implications fo r the Internationa l Centers

bia s of technical change i n agricul ture has seve ral implications fo r the C G I A Rsystem.

To a ce rt ai n extent, the anal ysis of th e s tate activated from below/above/within can apply, by analogy, t o the behavior of t he In tern ation alCenters. There a re , however, fundamental d if fer enc es between Nat iona l

Inst i tute and IARCs. Being supranational institutions, the IAFCs have agr ea te r degree of autonomy from loc al in te re st groups than nati ona l i n-s t i tu t ion s in te rns of the def in i t ion of th e i r research pr io r i t i es andprograms; but, they als o face seri ous lim ita tio ns i n their action.

Firs t of a l l , they depend on the cou ntr ies with which they cooperatet o obtain s ignals , i . e . , information on the latent demand for innovations.The dist or t ion s that ar e present a t the nat ional l evel are , therefore, t rans-lated a t the in terna t ional leve l .

a.

b. To the extent th at they are able to formulate independently a researchprogram fi l t e r i n g the i nf on at io n received from the ir various cont acts withNKIs, they can claim t o represent the in te re st s of so ci al groups that are un-

derrepresented a t the nat ional level .

For inst ance , donors have st re ss ed repeatedly that the work of the IAFKsshould focus on incr easi ng the pros peri ty of resource-poor farmers. These

demands la ve a l so been expressed by the TAC.th e development of tech nolo gies th a t will require low amounts of purchased

Several programs have focused on



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i nputs f or m l l et , sorghum and cassava whi ch ar e common cr ops among poorf armers. There are al so several programs on l egumes, such as beans, toi mprove t he qual i t y of nut r i t i on among the poor.obst acl es that such programs have to f ace i s t he congruence between t hepr i or i t i es est abl i shed by CGI AR and t hose of t he nat i onal st r at egi es wher epr i or i t i es ar e of t en gi ven to qui ck payof f s i n more product i ve areas and t ocash crops f or f orei gn exchange.

However , one of t he

c. A maj or obst acl e t o i ncreasi ng agr i cul t ural product i vi t y occur s at t hel evel of t r ansl at i on of t he l at ent demand f or i nnovat i ons i nt o a budget ed de-mand.rel at i on t o nat i onal systems ar e al so present at t he l evel of CGI AR.growt h of expendi t ures dur i ng t he 1980s has sharpl y dropped (1 percent si nce1980 as compared t o 20 percent i n t he f i rst f i ve years of CGI AR accordi ng t oOram.cent ers.bei ng cut back.l ess operat i onal j ust when i t s pot ent i al mul t i pl i er ef f ect i s nearest t oreal i zat i on.

The sympt oms of under f undi ng and i nst abi l i t y t hat we have not ed i nReal

Personnel cost s f orman i ncreasi ng propor t i on of t he budget of t he

Thus, as not ed by Oram paradoxi cal l y, t he syst embecomesMai nt enance, equi pment r epl acement , and ot her operati ng cost s ar e

An addi t i onal di mensi on of t he f i nanci al cri si s of t he system i s t hat t heCGI AR must compet e for f unds w t h the nat i onal i nst i t ut es that i t i s supposedt o suppor t resul t i ng i n compet i ng rat her t han col l aborat i ve behavi or .percent age of donor f undi ng to agr i cul t ural r esearch bei ng channel ed t o theCGI AR has dropped f rom26 percent i n 1971- 72 to about 18. 5 percent i n 1980.

The

d. I n t erms of suppl y of r esear ch, the suppor t provi ded by t he CGI AR t onat i onal systems poses a probl em f or a wor l dw de systemthat i ncl udes coun-t r i es and regi ons w t h hi ghl y var i abl e r esources and l evel s of devel opment .As a r esul t , measurabl e progress has been qui t e unevenl y di st r i but ed.

basi c, appl i ed, and adapt i ve research and of t rai ni ng staf f up t o the Ph. Dl evel .spects.t ural research syst emwhere they need the assi st ance and expert i se of t heI ARCs at al l stages of t hei r t rai ni ng and research ef f or t s.

Some countr i es have st rong research syst ems and are capabl e of under t aki ng

Ot her count r i es ar e st i l l at a l evel of devel opment of thei r agr i cul -They are abl e to compl ement and cooperate w t h t he I ARCs i n most r e-

Car ryi ng out r esearch w t h count r i es w t h di f f erent needs and di f f er entdegr ees of compl exi t y i n t hei r research systemposes ser i ous probl ems of pr i -or i t y set t i ng and coordi nat i on i n a per i od where t he growt h rate i n fundi ng i sdecl i ni ng.

e. By mandate, t he I ARCs ar e requi red to di r ect t hei r research towardt hose food crops t hat w l l meet t he nut r i t i onal r equi rement s of t he l ess ad-

vantaged groups i n the LDCs ( TAC Secret ar i at , Revi ew of pr i or i t i es, 1979);but , research on cr ops such as sorghum m l l et , t ropi cal r oot s, and tuber si ni t i at ed l ess t han 10 year s ago does not yet produce resul t s t hat i t i spossi bl e t o adapt t o di f f erent mcroecol ogi cal si t uat i ons. I ncreased l ong- r un



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commitment on the part of the donors is required in order to ensure that suchprograms aimed at reaching resource-poor farmers that are underrepresented atthe national level be allowed to continue without being affected by financialrestrictions at the international level.



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Footnotes

l Reca est i mat es a l ong- r un suppl y el ast i ci t y f or Argent i na agr i cul t urebet ween 0.42 and 0. 52; Chi bber, f or I ndi an agr i cul t ure bet ween 0. 29 and 0 .46 ;and Esf ahani , f or Egypt i an agr i cul t ure of 0.09 ( see Mohan Rao).

2V. Rut t an (1982, pp. 249- 251) def i nes ar t i cul at i on as the syst emat i c i n-t er rel at i on of par t s to f orman i nt egrat ed whol e r ef er r i ng to publ i c agr i cul -t ural r esearch i n t he Uni t ed St at es. He not es t hat ar t i cul at i on can be seeni n the mul t i di sci pl i nary or i ent at i on of exper i ment st at i ons; i n t he associ a-t i on bet ween exper i ment st at i ons and ext ensi on ser vi ces; and i n the connec-t i ons and communi cati ons that are to be f ound among theoreti cal r esear ch,practi cal r esearch, and f armproducti on. He al so not es, qui t e i nt erest i ngl y,t hat decent ral i zat i on (of t he agr i cul t ural r esearch system st rengt hened t hear t i cul at i on bet ween sci ence and f armng.

30x1 t he devel opment of nat i onal research systems, see Rut t an, 1982 (Uni t edSt at es, J apan, I ndi a, Brazi l , Mal aysi a); Tr i go, Pi nei r o, and Ar di l a, 1982

( Col ombi a, Ar gent i na, Peru) ; and Pray, FRI St udi es, XI X- 1, 1982( Paki st an/ Punj ab) .

(1982).4See Rutt an ( 1982) ; Tr i go and Pi nei r o, I S M (1984) ; and Pi nst r up- Andersen

5Thi s cl assi f i cat i on of count r i es r ef er s to t he Wor l d Bank' s Wor l d De-

61n t hei r st udy of r esearch benef i t s i n Brazi l , Cast ro and Schuh assume

7For a survey of model s used f or t he eval uat i on of cost s and benef i t s of

8The coef f i ci ent of var i at i on i s t he st andard devi at i on di vi ded by t he

vel opment Report , 1982.

that t he OCC i s 10 percent .

r esear ch, see Schuh and Tol l i ni (1978).

mean.



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