THE ROLE OF THE PRIVATE SECTOR IN AGRICULTURAL EXTENSION: ECONOMIC ANALYSIS AND CASE STUDIES

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ABSTRACT
After tracing the origins of the concept of “extension”, this paper reviews the main
relevant economic concepts (public and private goods; rival/non-rival products;
excludability; free riding; externalities; moral hazard) and their implications for
the opportunities and constraints faced by private extension, whether profitoriented or non-profit. Appendix 1 presents detailed case studies from countries
in which major change in extension practice has recently occurred (Ecuador,
Guatemala, Thailand, Jamaica and the Netherlands). Drawing on these, its main
conclusions are:
 that extension by commercial companies has commonly been associated with
input supply and with their ability to capture part of the benefits of extension
through input or output markets. Whilst there are notable examples in which
private companies (usually processors/marketers of single commodities) have
worked extensively with smallholders, economic factors clearly orient them
towards medium/large-scale farmers in areas of good infrastructure.
 that, whilst farmers’ associations (FAs) have been widely promoted in the
North, their strengths in developing countries are usually associated with
marketed commodities, though in some cases they service a range of crops on
an area basis. Cases are noted in which FAs have acted as a “watch dog” on
relations between commercial companies and farmers. Key issues are how
FAs and government relate to each other; how far associations of large-scale
farmers can also cater for smallholders, and how the emergence of FAs can
be promoted.
 “mixed” extension systems are becoming increasingly common, in which
government and NGOs take on extension functions for client groups and
geographical areas which have been disregarded by private commercial
organisations. Given these differing circumstances, direct comparisons of
efficiency between public and private extension are hazardous.
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 in many countries, the adoption of more open policies towards input supply,
processing and marketing would facilitate a stronger role by the private
commercial sector in extension related to these areas.
The paper concludes by sketching out a framework of questions that need to be
asked in order to obtain a rapid assessment of the current status of extension and
of relevant institutions and institutional linkages in any given country. It also sets
out an agenda for future research, in which questions of cost sharing, cost
recovery and decentralisation of government services feature strongly.

THE ROLE OF THE PRIVATE SECTOR IN AGRICULTURAL EXTENSION: ECONOMIC ANALYSIS AND CASE STUDIES