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The
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Report
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No. 66: Agricultural Extension -
a decade of change
The full reportThis is a summary of RIRDC ’s full research report Agricultural Extension in Australia:The Changing Roles of Public and Private Sector Providers by Sally Marsh and David Pannell, of the Agricultural and Resource Economics Department at the University of WA (phone 08 9380 3427, fax 08 9380 1098, email spmarsh@cyllene.uwa.edu.au). The full report is in press and not yet available on our website
• Education,training and professional development – of public sector consultants.
• Efficiency and sustainability of institutional arrangements – minimise transaction costs.
• Institutional structures to ensure effective public sector and private sector links – cooperation and coordination in a commercial environment.
• Facilitating access to extension information in a privatised environment.
•Rethinking public investment into some private good extension.
The policy changes are not confined to Australia, or to agriculture,and are a reflection of a trend towards privatisation of services world-wide. Australia has an excellent record in the efficient and effective provision of agricultural information to farmers,particularly technical, production-related information.A uniquely Australian situation exists in the Research and Development Corporations,whereby Australian farmers contribute through industry-levied funding to agricultural research,development and extension and so have expectations of a degree of control.
Australia has also achieved a unique and enviable involvement of farmers in the development and implementation of sustainable farming practices through specific programs like the National Landcare Program.
The challenge now is to understand the consequences of policy change and elicit appropriate responses from all sectors of agriculture.
A review of the current situation by University of Western Australia researchers Sally Marsh and David Pannell has concluded that as long as key problems are addressed,the changes will lead to a system which serves Australia well. Although success would require care,knowledge of potential problems,and probably a lengthy and somewhat difficult period of adjustment. Marsh and Pannell have drawn on international and Australian literature,extensive consultation with public and private sector personnel, outcomes of a key workshop held in September 1997,and personal experience to complete the research.
Governments have defended the need for change with calls for greater efficiency and effectiveness of services provided by the public sector.
However,the trend towards privatisation also appears related to factors such as the declining relative importance of agriculture in the economy and budget pressures on governments, as well as the increasing influence of economists ’ theories and prescriptions within government.
Policies have included:
• regionalisation;
• implementation of the ‘Funder-Purchaser- Provider ’model within state government agencies;
•industry partnerships;
• cost-recovery;
• cost-sharing;
• out-sourcing;and
• a re-direction of extension activities.
The result of these initiatives has been increased private sector participation in the delivery of agricultural extension services.
Despite the cutback in services provided by public agencies,they are all still providers of extension services,although the services provided have changed and in some cases they are moving rapidly towards becoming co-ordinators of extension service providers. Most state agencies are still generators of information through their research and have responsibilities for the dissemination of that information.
Conflicts now exist between the demands to “get information out ” and to recover costs of information seen to have “private-good characteristics.”
1.Research capability and information flows
Availability of information is being restricted primarily by the push for intellectual property rights and the increasingly competitive nature of research funding.Dissemination of information is affected by the number of competing research and information providers,which contributes to a perception of information overload among clients.
For Research and Development Corporations and those state government agencies who see their role as information wholesalers,the amount of information which needs to be collated and efficiently delivered to a variety of extension providers presents a challenge,but one which they are currently actively addressing. Information availability to private-sector information providers could become a problem as funds from taxpayers or farmer levies are increasingly used to resource private-sector researchers who are likely to be less willing to share the information.
There is also concern about the weakening of research/extension links.Loss of feedback from farmers to researchers could become a problem as state public-sector agencies cut back on production-oriented extension.
The problem is worsened by the lack of processes to obtain private-sector feedback to public-sector researchers.As the private sector takes more responsibility for production- oriented extension delivery,it will be more important to obtain their input into research priorities.
Barriers to obtaining this input,such as the costs to the private sector of engaging with the public sector,will need to be addressed.Marsh and Pannell rated this issue as vital,as even the best extension cannot compensate for irrelevant or ineffective research.
If agricultural extension is to become dependent on commercial priorities then the directions pursued may not be economically efficient from the point of view of society as a whole,or may be contrary to other goals related to social welfare or the environment.
Other concerns are that extension may be biased towards individuals and industries better able to pay,the corporatisation of Landcare, and industry-funded research products being marketed by particular companies.
2.Sustainability and efficiency of the new arrangements
It is apparent that there has been a rapid escalation of transaction costs in the new institutional arrangements.This is most obvious in the internal operation of Funder-Purchaser- Provider systems,with substantially greater effort and energy needing to be devoted to administrative tasks to keep the new system operative.
It also arises in the relationships between public and private sectors.If researchers are now more reliant on the private sector for practical feedback about their research,this clearly involves greater costs than were previously the case.Indeed the costs borne by the private sector in providing this feedback may mean that they are unwilling to do so without a clear perception that they (or at least their clients)will benefit.
Some of the increase in transaction costs is attributable to increased monitoring and evaluation to meet increased requirements for accountability.Some is due to the need for more complex systems of participation in order to achieve wide support from stakeholders.Some is due to administrative systems being poorly designed and/or implemented.
3.Market failure and the public-good nature of agricultural information
The perception of agricultural information as a public good,and subject to market failure, has provided the prime argument in policy debates since the 1960s for the continued provision of government extension services.The increasing industrialisation of agriculture,with a consequent increased emphasis on the potential for commercial provision of these services,has resulted in a questioning of the public-good nature of much agricultural information.
The report argues that much agricultural information still has public good characteristics and that market failure can occur even with services clearly deemed to be private goods.
This is supported by overseas experience,which indicates that areas of market failure are a reality as extension services are privatised.It raises the concern that some state governments may go too far down the road of privatisation of extension, neglecting important issues which would not be picked up by the private sector.
Government agencies are still very involved in extension,but the focus of their extension has changed.There has been a withdrawal from areas perceived to be adequately supplied,or having the potential to be adequately supplied by the private sector,partly because of funding restrictions but also because of policy directives to address areas of public rather than private good.
The growth of extension activities directed towards Landcare and human resource development reflects the amount of funding for these activities that has become available through the National Landcare Program,and also a change in philosophy about the types of public-sector extension services that should be provided to Australian farmers.
4.Extension methodology and technology transfer
There has been a change in extension ideology away from the “linear model ” of technology transfer.
This has resulted in a move away from linear ‘top down ’approaches from scientists to farmers, towards extension methodologies that emphasise information flows,adult learning principles and participation by stakeholders.
Under the new paradigm,it is seen as appropriate that farmers should have more control over the information that they need or want and over the way it is delivered.It is held that extension should be “demand-pull ” rather than “science-push ”.
Increased use of farmer groups for agricultural extension has been one major change associated with this new paradigm.Extension officers now often act as facilitators rather than as experts in science or technology.
The number of groups that farmers can participate in is growing rapidly and are becoming the major vehicle used by Research and Development Corporations to disseminate the results of research that is being conducted with their funds.All state departments of agriculture now focus on farmer groups rather than one-to-one extension,and an increasing amount of publicly-funded extension is being undertaken in areas which emphasise the development of human resources.
Group-based extension done well appears to have many advantages because of its emphasis on adult learning principles and encouragement of producer “ownership ” of both problems and solutions.It has also facilitated the entry of rural people other than producers into agricultural issues,particularly in the Landcare program.
Marsh and Pannell found concerns that the current emphasis on groups
may be excessive, resulting in problems relating to (a) its effectiveness
in all situations, (b) its sustainability and (c)its ability to involve
all who need to be involved.
• issues related to the privatisation of extension;
•issues of co-operation and co-ordination between research organisations,government agencies and consulting organisations;
• the escalation of ‘transaction costs ’in the new institutional environment;
• over-reliance on group-based extension methods;and
• potential problems associated with restricting government extension activities to areas of public good.
There is a need to assess these potential problems and possible responses to them. Specifically, thereport makes the following key recommendations.
Education, training and rofessional development
The private sector should actively address the issue of training new,inexperienced consultants, in recognition of the reduced availability of suitably trained staff from the public sector in most states.
Efficiency and sustainability of nstitutional arrangements
Agencies need to make efforts to reduce transaction costs arising from measures designed to increase accountability,consultation and participation,and should not seek to maximise accountability or stakeholder support without regard to the costs and benefits of doing so.
Institutional structures to ensure effective research/ extension links
Structures and processes that encourage co-operation and co-ordination in a commercialised environment are needed. Agriculture agencies should actively pursue the establishment of formal links between research programs and private sector consultants and agronomists.
Facilitating access to extension information Rural Research and Development Corporations should investigate the feasibility and potential value of national or state-level systems of data-base development and information dissemination for technology transfer.
Rural Research and Development Corporations and other agencies should ensure that information generated in research they fund in the private sector is not subject to restricted access.
Conflicting demands faced by government agencies in a privatised environment to "get the information out"to farmers and at the same time to recover costs of information should be recognised and addressed.The potential costs associated with making agricultural information less accessible should be assessed against the benefits of cost recovery policies.
Funding and delivery of extension
Agriculture agencies should not seek to completely confine their extension services to areas with public good characteristics.It is difficult to clearly identify public goods,since most goods and services have a mixture of public and private good characteristics.Potential problems from restricting services to public good areas include:
• loss of control of extension direction and reduced capacity to promote key government objectives;
•increased need to regulate private sector activities;
•reduced effectiveness of public-good extension due to loss of high-quality staff and reduced farmer interest;and
• market failure for some private good information.
