Can Private Sector fill the gap in Agricultural Extension? International Food Policy Research Institute 1 Presented by: Suresh Babu Senior Research Fellow International Food Policy Research Institute, Washington D.C. at The SASKI Brown Bag Lunch, World Bank, Washington D.C. 16th December 2015 1 Overview Introduction Conceptual Framework Case Studies on Private Extension Synthesis of Results Conclusions Challenges and way forward 16th December 2015 International Food Policy Research Institute 2 What is private extension? The concept of private extension emphasizes three aspects, which includes: involvement of extension personnel from a private agency or organisation payment of services by the client through a service fee, directly or indirectly playing supplementary or alternative role to public extension services 16th December 2015 International Food Policy Research Institute 3 Why are private extension systems important? Declining budget allocation for the public extension by the Governments and donors Transformation of agriculture from subsistence level to commercialized agribusiness Concerns on efficiency and effectiveness of public extension Beneficiary contribution for ensuring demand driven and accountable extension provision Private extension to supplement and complement the public extension Decentralization of public extension 16th December 2015 International Food Policy Research Institute 4 Research questions Private extension is demand-driven and its uptake is need-based, leading to the following questions: What is the difference between private and public extension systems? (Birner et al., 2009) What regulatory mechanisms and institutional arrangements must be developed to support private extension? What are the latest innovations in extension provision? What are the motivations and incentives for private companies for knowledge sharing? What are the opportunities for private knowledge entrepreneurs (Dewhurst et al., 2013) What role can policymakers play in shaping and supporting inclusive innovation systems? (Foster and Heeks, 2013a,b) 16th December 2015 International Food Policy Research Institute 5 About the book… 16th December 2015 International Food Policy Research Institute 6 To better understand different models of extension delivery and financing by private companies across the agricultural value chain To provide an assessment of what are the factors leading to successes or failures of various approaches To draw lessons and recommendations for future endeavors. Presents 10 cases of private extension across 7 countries. Using various data collection methods, research techniques and field interviews Analyses of trends, commonalities and differences among various extension approaches Rationale for the book Methods used Conceptual Framework 16th December 2015 International Food Policy Research Institute 7 Operational Framework for Assessing, Analyzing, and Acting on Extension Reforms The framework for assessment of private extension requires: Assessment of the current state of extension: Quantitative methods Qualitative methods Analysis of extension provision: Internal Factors External Factors Dialogue and consultations: Key Informant interviews Focused group discussions Action plan for reforms Program implementation, monitoring and evaluation Assessment Analysis Dialogues Action plan Implementation; Monitoring and Evaluation Case Study I: EID Parry, India EID Parry is the oldest private sugar mill in India Motivation for private extension provision: Regular supply of sugarcane for crushing needed The area under sugarcane cultivation is decreasing with urbanization; subsidy for cashew plantation; reducing water table Decrease in sugarcane yield Increase in labor wages 16th December 2015 International Food Policy Research Institute 8 Uniqueness Company has managed to break the smallholder syndrome Effectively pulls the global, regional and national knowledge needed for successful cultivation of sugarcane by the area farmers Case Study II: Kenya Horticulture Exporters (KHE) Kenya Horticulture Exporters (KHE) is a leading exporter of vegetables and fruits in Kenya 16th December 2015 International Food Policy Research Institute 9 Extension Approach of KHE Uniqueness KHE enables smallholders to capture value in export markets It empowers them to understand and work with international standards Create further value for local communities by employing people in processing, packaging and logistics Case Study III: Rio de Una, Brazil 16th December 2015 International Food Policy Research Institute 10 Rio de Una is a food processing company which connects farmers to the buyers of the fresh vegetables Uniqueness It is a win-win situation, where it is in the best interest of the company and the farmers is met Provides attractive employment opportunities to rural youth Works well as viable alternative to public extension systems for family farms that meet minimum level of agricultural production required Vegetable Value Chain and the Role of Private Extension in Brazil Case Study IV: Syngenta Frijol Nica Program, Nicaragua 16th December 2015 International Food Policy Research Institute 11 Key Objective To provide an integrated package of high-level technological solutions, technical assistance, support in market linkages, and education for bean producers and their families through: Knowledge Transfer Technical Support Financing Uniqueness Program identified opportunities to turn bean cultivation into a highly technical, profitable activity The extension model combines input supply and technical assistance with financing as well as partnerships with commercial groups. The Frijol Nica program was initiated by Syngenta and a strategic partner, Rappaccioli McGregor, S.A. (RAMAC) in 2006 Case Study V: Multi-Trex Integrated Foods, Nigeria 16th December 2015 International Food Policy Research Institute 12 Uniqueness It makes profitability of cocoa production for farmers a key consideration in its operation Focuses on production of high quality cocoa Enabled efficient communication and keeping the extension service demand driven and focused on issues highly relevant for the smallholder cocoa production Multi Trex works in the cocoa value chain and provides extension services designed to target cocoa farmers and assist them to: Increase the quality of cocoa supplied through certification and good agricultural practices Increase their productivity Increase input availability for farmers Ensure regular supply of cocoa Case Study VI: Jain Irrigation Systems Limited, India Jain Irrigation Systems Limited (JISL)is a multinational organization known for its pioneering work in the micro-irrigation industry 16th December 2015 International Food Policy Research Institute 13 Uniqueness The successful vertical integration of JISL extension program in the white onion value chain from input provision to processing Contract farming has increased farmers’ return on investment while creating profit for the company. JISL Extension Program JISL provides agricultural inputs like seed, bio-fertilizer, micro-irrigation system (e.g. drip), seed planters, package materials (‘gani’ bags), and a comprehensive package of extension services After harvest, the produce is bought back by JISL at minimum support prices or market price, whichever is higher On average, farmers have achieved 130% yield increases. Case Study VII: Marico Limited, India Marico Limited is one of India's leading consumer product & services companies operating in the beauty and wellness industry It is currently the largest buyer of safflower in India which is marketed under its healthcare products in the safflower value chain to provide extension to farmers 16th December 2015 International Food Policy Research Institute 14 Uniqueness The program focuses on profitability of safflower production rather than only increasing the levels of safflower production for its own supply Direct linkages between producers (farmers) and processors (industry) of safflower seed tightens the supply chain, leading to more efficient communication and coordination between actors Case Study VIII: PRAN, Bangladesh PRAN is the largest certified agro food exporter in the agro processing sector in Bangladesh 16th December 2015 International Food Policy Research Institute 15 Uniqueness PRAN’s well-defined field-level network, and organized input distribution and crop collection system Guarantee of sale elimination of the middle men through creation of ICT enabled agricultural hubs PRAN’s Vision To enrich the agriculture sector by creating more demand for agro products and enhancing production by providing training and financial support to the participating farmers Case Study IX: Sarveshwar Organic Foods Limited, India Sarveshwar Organic Foods Ltd. was established in 2004 and is involved in the farming, processing, and export and marketing activities of organic produce The company’s extension program focuses on smallholder farmers growing Basmati rice organically in 157 villages of Jammu, Samba and, Kathua districts of Jammu. 16th December 2015 International Food Policy Research Institute 16 Awareness Generation Internal Inspection External Inspection Uniqueness purchases rice from the farmers on the premium rates on buy back basis efficient systems of procurement, storage, monitoring and delivery of produce The requirements and obligations of organic production and contract with the company are explained to the farmers upfront. Awareness Generation Internal Inspection External Inspection Publicity of Material Prepare and maintain Field Diaries Extension Activities Traceability of produce Case Study X: An Giang Plant Protection Joint Stock Company, Vietnam An Giang Plant Protection Joint Stock Company (AGPPS) is a provider of seedlings, fertilizers, and pesticides and a conduit for the transfer of agricultural technologies and cultivation techniques in the rice industry To address major agricultural pests and diseases threatening Vietnamese rice producers, AGPPS selected well-informed farmers to act as ‘farmers’ friends' (FFs) to aid small holder farmers 16th December 2015 International Food Policy Research Institute 17 Uniqueness AGPPS has an extensive distribution network and flexible sales policies Offers high quality products, provides advanced technical assistance to farmers, and has strong marketing campaigns, providing end to end solutions to farmers Synthesis of Results I: Overview Involves complete set of actors Quality of the produce drives private extension Competitiveness in global markets Cost of extension is captured by the private sector Shared value addition – ensures sustainability Net profit Natural Resource Management 16th December 2015 International Food Policy Research Institute 18 Synthesis of Results II: Impact of Private extension Benefits of Private Extension India/ Sugarcane   Kenya/ Vegetables Brazil/ Vegetables Nicaragua /Beans Nigeria/ Cocoa India/ Onions Yield increases +++ ++++ ++++ +++++ ++++ ++++ Cost reductions ++++ +++ ++ ++ ++ ++++ Quality and consistency of outputs +++ ++++ ++++ +++ ++++ ++++ Increase in net profit +++ ++++ +++ +++ ++++ ++++ Natural Resources Benefits ++++ +++ ++++ +++ ++ ++++ 16th December 2015 International Food Policy Research Institute 19 Impact of the private extension system Note: This is given in the format of “before and after” keeping before at the “++” level Synthesis of Results III: Feedback on the private extension services The case studies also provide feedback from the contract farmers themselves, the extension workers, the communities in which the companies operate, and the company management. 16th December 2015 International Food Policy Research Institute 20 Crop/Nature of advice India/ Sugarcane Kenya/ Vegetables Brazil/ Vegetables Nicaragua /Beans Nigeria/ Cocoa India/ Onions Pre-planting advice +++ +++ ++++ +++ ++ ++++ Input supply – seedlings/ seeds ++++ +++ ++++ +++ ++ ++++ Input supply – fertilizers and chemicals ++++       ++ ++ ++++ ++++ ++       Help with crop loans ++++ ++ +++ +++ +++ ++++ Irrigation systems ++++   ++ ++ ++ ++ ++++ Intermediate cultivation / weeding +++ +++ ++ +++ ++ +++ Harvesting Help / advice ++ +++ ++++ ++ ++++ +++ Post-harvest advice ++ ++++ ++++ ++ +++ ++ Marketing advice /Help ++ ++++ +++ +++ ++++ ++++ Ranking: +++++ excellent ++++ very good +++ good ++ fair + poor Conclusions I Provision of integrated services Better research-extension linkages Market connections – assured market access Reduction in price uncertainty Inclusive innovation 16th December 2015 International Food Policy Research Institute 21 Conclusions II Enhanced use of quality inputs Product differentiation Solidarity building Cost recovery Demand driven Capacity development 16th December 2015 International Food Policy Research Institute 22 Final Remarks Access to knowledge is a key determinant of agricultural growth Private extension plays an important role in the pluralistic extension system Private extension programs for value chains are effective, but their coverage is limited Perfect substitute for public extension systems? Public-private partnerships to increase the efficiency and effectiveness of the public extension system Need better understanding of costs and benefits of innovations in extension approaches 16th December 2015 International Food Policy Research Institute 23 Challenges and way forward… Need to monitor private companies to avoid undue exploitation of farmers Dispute resolution is another major challenge What price do farmers pay for extension services? The scale (and scope) of private companies’ operations may remain limited 16th December 2015 International Food Policy Research Institute 24 16th December 2015 International Food Policy Research Institute 25 Thank you! image1.png image2.jpg image3.gif image4.jpg image5.emf KHEFinance /InputFarmers Loan repaymentCredit / Inputs image6.png image7.emf Vegetable farmers – Organic and Traditional Extension Services Extension / Technical Associates Credit Organic certification Equipment rental Own seedlings Research linkage EMATER Micro-irrigation Rio de Una-Vegetable processing and packaging Bob’s McDonalds Other retailers Walmart Retail stores Wholesale market Consumer Vegetable purchase by Rio de Una image8.jpg image9.jpg image10.JPG image11.jpeg image12.jpg image13.jpg image14.jpg