• TABLE OF CONTENTS
HIDE
 Front Cover
 Title Page
 Executive summary
 Table of Contents
 List of acronyms
 Acknowledgement
 Introduction
 Funding trends for agricultural...
 Strategy trends for AG REE in LAC...
 Status of AG REE in LAC USAID mission...
 AG REE-strengthening in LAC USAID...
 Deman-driven AG-REE systems
 Potential assistance options for...
 Reference
 List of annexes contained in volume...






Title: A cross-cutting analysis of agricultural research, extension, and education (AG REE) in AID-assisted LAC countries
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Permanent Link: http://ufdc.ufl.edu/UF00055262/00001
 Material Information
Title: A cross-cutting analysis of agricultural research, extension, and education (AG REE) in AID-assisted LAC countries
Physical Description: v. : ; 28 cm.
Language: English
Creator: Byrnes, Kerry J., 1945-
United States -- Agency for International Development. -- Bureau for Latin America and the Caribbean. -- Rural Development Division
Agriculture and Rural Development Technical Services Project
Chemonics (Firm)
Publisher: LAC TECH, Agriculture and Rural Development Technical Services Project
Place of Publication: Washington D.C
Publication Date: [1992]
 Subjects
Subject: Agriculture -- Research -- Latin America   ( lcsh )
Agriculture -- Research -- Caribbean Area   ( lcsh )
Agricultural education -- Latin America   ( lcsh )
Agricultural education -- Caribbean Area   ( lcsh )
Agricultural extension work -- Latin America   ( lcsh )
Agricultural extension work -- Caribbean Area   ( lcsh )
Genre: bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Includes bibliographical references.
Statement of Responsibility: by Kerry J. Byrnes.
General Note: "February 1992."
General Note: "Submitted to U.S. Agency for International Development, Bureau for Latin America and the Caribbean, Office of Development Resources, Rural Development Division, LAC/DR/RD."
General Note: On cover: "LAC TECH Agriculture and Rural Development Technical Services Project, AID/LAC/DR/RD, Chemonics International, U.S. Dept. of Agriculture."
Funding: Electronic resources created as part of a prototype UF Institutional Repository and Faculty Papers project by the University of Florida.
 Record Information
Bibliographic ID: UF00055262
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 28474625

Table of Contents
    Front Cover
        Front Cover
    Title Page
        Title Page
    Executive summary
        Page i
        Page i-a
        Page ii
        Page iii
    Table of Contents
        Page iv
        Page v
        Page vi
        Page vii
        Page viii
        Page ix
        Page x
        Page xi
        Page xii
        Page xiii
        Page xiv
    List of acronyms
        Page xv
        Page xvi
        Page xvii
        Page xviii
    Acknowledgement
        Page xix
        Page xx
    Introduction
        Page 1
        Objective of report
            Page 1a
        Organization of report
            Page 1a
        The strategic role of Ag REE-strengthening
            Page 2
            Some measures of poverty in the LAC region
                Page 2
                Page 3
            AID/Washington LAC bureau objectives
                Page 4
            Role of Ag REE-strengthening
                Page 5
                Page 6
                Page 7
            Implications for LAC/DR/RD programming
                Page 8
                Page 9
                Page 10
                Page 11
                Page 12
                Page 13
                Page 14
    Funding trends for agricultural research, extension, and agriculture (AG REE) in the LAC region
        Page 15
        General trends in LAC ARDN funding for Ag REE
            Page 15a
            Page 16
            Page 17
            Page 18
            Page 19
            Page 20
            Page 21
            Page 22
            Funding trends over time
                Page 23
            Funding trends by subregion
                Page 24
                Page 25
                Page 26
                Page 27
            Funding trends by country within subregions
                Page 28
                Page 29
                Page 30
        Other donor funding & activity for LAC Ag REE-strengthening
            Page 31
            Donor support for international agriculture research center (IARCs)
                Page 31
                Page 32
                Page 33
                Page 34
                Page 35
                U.S. government PL-480 local currency generations
                    Page 47
                    Page 48
                    Page 49
                    Page 50
                    Page 51
            Donar support for NARS
                Page 36
                Page 37
                Page 38
                Page 39
                Page 40
                Page 41
                Page 42
                Page 43
            Limits of strengthening NARS through IARCs
                Page 44
                Page 45
                Page 46
    Strategy trends for AG REE in LAC USAID mission portfolios
        Page 52
        Historical overview
            Page 53
            Page 54
            Page 55
            Page 56
            Page 57
            Page 58
            Page 59
            Page 60
            Page 61
            Page 62
            Page 63
            Page 64
            Page 65
            Page 66
        Strengthening TG&T capability of Ag REE institutions
            Page 67
            Andean region
                Page 68
                Page 69
                Page 70
                Page 71
                Page 72
                Page 73
            Caribbean region
                Page 74
                Page 75
                Page 76
                Page 77
                Page 78
            Central American region
                Page 79
                Page 80
                Page 81
                Page 82
                Page 83
                Page 84
                Page 85
                Page 86
                Page 87
                Page 88
        Evolution of AID strategy for Ag REE-strengthening
            Page 89
            Growth vs equity
                Page 90
            Private vs public
                Page 91
            Implementation support vs institutional development
                Page 92
            Regional vs national systems of education
                Page 92
            Market orientation vs commodity orientation in research
                Page 93
            Technology transfer systems vs public sector extension
                Page 94
            Market-researched vs preconceived TG&T models
                Page 94
            Broad focus on natural resource/environmental sustainability vs narrow focus on soil conservation
                Page 94
            Policy environment: Changeable variable vs unchangeable given
                Page 94
            Donor interest vs country need
                Page 95
                Page 96
    Status of AG REE in LAC USAID mission host countries
        Page 96a
        Introduction
            Page 97
        Progress of Ag REE organizations
            Page 97
            Page 98
            Page 99
            Page 100
        Adequacy of public agricultural research and extension
            Page 101
            Public sector agricultural research
                Page 101
                Page 102
                Page 103
            Public sector agricultural extension
                Page 104
                Page 105
                Page 106
                Page 107
        Constraints to stengthening public sector Ag REE
            Page 108
            Constraints internal to public sector
                Page 108
                Page 109
            Constraints internal to USAID mission
                Page 110
                Page 111
        Summary of status of Ag REE systems in the LAC region
            Page 112
            Progress of Ag REE systems
                Page 112
            Adequacy of public Ag REE organizations
                Page 112
            Constraints to public Ag research and extension
                Page 112
                Page 113
                Page 114
                Page 115
                Page 116
                Page 117
                Page 118
                Page 119
                Page 120
    AG REE-strengthening in LAC USAID mission programs
        Page 120a
        Trends in funding for Ag REE-strengthening
            Page 121
            Page 122
            Andean region
                Page 123
            Caribbean region
                Page 124
            Central American region
                Page 125
        Current mission projects having Ag REE components
            Page 126
            Andean region
                Page 126
            Caribbean region
                Page 127
                Page 128
            Central American region
                Page 129
                Page 130
        ARDO program-level performance monitoring system
            Page 131
            Andean region
                Page 131
            Caribbean region
                Page 131
            Central American region
                Page 132
        Mission strategy for Ag REE-strengthening
            Page 133
            Andean region
                Page 133
                Page 134
            Caribbean region
                Page 135
            Central American region
                Page 136
                Page 137
                Page 138
        Management questions facing the mission
            Page 139
            Andean region
                Page 139
            Caribbean region
                Page 140
            Central American region
                Page 140
                Page 141
        Non-project assistance
            Page 142
        Opportunities to be pursued
            Page 143
            Andean region
                Page 143
            Caribbean region
                Page 143
            Central American region
                Page 144
        Summary
            Page 145
            Trends in funding for Ag REE-strengthening
                Page 145
            Current mission projects having Ag REE components
                Page 146
            ARDO program-level performance monitoring system
                Page 147
            Mission strategy for Ag REE-strengthening
                Page 147
                Page 148
            Management questions facing the mission
                Page 149
                Page 150
            Non-project assistance
                Page 151
            Opportunities to be pursued
                Page 152
                Page 153
                Page 154
    Deman-driven AG-REE systems
        Page 155
        Need for demand-driven agricultural TG & T
            Page 155a
            Page 156
            Page 157
        Conditions for a demand-driven Ag REE system
            Page 158
            Page 159
            Page 160
            Page 161
        Functions of a demand-driven Ag REE system
            Page 162
            Research
                Page 162
            Extension
                Page 163
            Education
                Page 164
        Implications for a demand-driven Ag REE system
            Page 164
            Page 165
            Page 166
    Potential assistance options for AG REE-strengthening in the LAC region
        Page 167
        Page 167a
        Potential assistance options
            Page 168
            Ensure that Ag REE-strengthening is adequately prioritized in the LAC agriculture & natural resources (ANR) strategy
                Page 168
                Page 169
                Page 170
            Guidelinds for Ag REE-strengthening
                Page 171
                Page 172
            Balancing support for IARCs, RARCs, and NARS
                Page 173
                Page 174
            Technical support
                Page 175
            Subregional programs
                Page 176
        Overview of assistance options for Ag REE-strengthening
            Page 177
            Page 178
            Page 179
            Page 180
            Page 181
            Page 182
    Reference
        Page 183
        Page 183a
        Page 184
        Page 185
        Page 186
        Page 187
        Page 188
        Page 189
        Page 190
        Page 191
        Page 192
    List of annexes contained in volume two
        Page 193
Full Text
0/. -) 5


LAC


TECH


AGRICULTURE AND RURAL DEVELOPMENT TECHNICAL SERVICES PROJECT
AID/LAC/DR/RD, CHEMONICS INTERNATIONAL, U.S. DEPT. OF AGRICULTURE




A CROSS-CUTTING ANALYSIS OF
AGRICULTURAL RESEARCH, EXTENSION, AND EDUCATION (AG REE)
IN AID-ASSISTED LAC COUNTRIES

VOLUME ONE: TECHNICAL REPORT

by
Kerry J. Byrnes


Submitted to:
U.S. Agency for International Development
Bureau for Latin America and the Caribbean
Office of Development Resources
Rural Development Division
LAC/DR/RD


February 1992


lie.


















A CROSS-CUTTING ANALYSIS OF


AGRICULTURAL RESEARCH,EXTENSION, AND EDUCATION (AG REE)

IN AID-ASSISTED LAC COUNTRIES


VOLUME ONE: TECHNICAL REPORT1


by

Kerry J. Byrnes


Submitted to:

U.S. Agency for International Development
Bureau for Latin America and the Caribbean
Office of Development Resources
Rural Development Division
LACIDRIRD







February 1992


'The ideas expressed herein do not necessarily represent the views or policies of the U.S. Agency for
International Development (USAID) or Chemonics International. Any errors are the sole responsibility of the
author.

'Agricultural Research, Extension, and Education Advisor, Latin American and Caribbean Agriculture and
Rural Development Technical Services (LAC TECH) Project, Chemonics International, Washington, D.C.
LAC TECH is funded by the U.S. Agency for International Development.


































EXECUTIVE SUMMARY











EXECUTIVE SUMMARY


The Agency for International Development (AID) has
helped strengthen agricultural research, extension, and
education (Ag REE) systems in the Latin American and
Caribbean (LAC) region since the early 1950s. Despite
successes in building public Ag REE institutions
between the 1950s and 1970s, the region's technology
generation and transfer (TG&T) capacity deteriorated
significantly during the 1980s, weakening agriculture's
capacity to contribute to food security, trade, and
economic growth in the region. To reverse this trend,
a "demand-driven" (market-led) TG&T process needs to
be created. Potential assistance options for fostering
emergence of "demand-driven" Ag REE systems
include:

* Prioritizing Ag REE in the LAC Bureau's Agricul-
ture and Natural Resources strategy;
Reorienting existing and planned projects to adhere
more closely to guidelines for Ag REE-strengthening;
Ensuring balanced AID support for international,
regional, and national agricultural research systems;
Providing appropriate technical support through
existing or new projects or funding mechanisms; and
Organizing development assistance programming for
Ag REE in terms of sub-regional programs.

CONTINUING FOOD INSECURITY

AID assistance in the LAC region aims at broad-based,
sustainable economic growth that provides for improved
food security. Yet the two basic requirements for food
security are not being met in AID-assisted LAC
countries: (1) total food supply is still not adequate in a
number of countries to provide sufficient calories to all
of the population, even if the total supply were divided
equally: and (2) poor households do not produce or
cannot afford to buy enough food to enable their
members to lead active and healthy lives.

Increases in food availability have lagged in comparison
with growth in national incomes. This chronic food in-
security is the result of low agricultural productivity.
Poor labor and land productivity result in low levels of
food supplies, limited marketing of surplus food, and
cash incomes insufficient to stimulate demand for addi-
tional farm and non-farm goods and services. Further,
most AID-assisted LAC countries during the 1980s
experienced both a decline in per capital food production
(Box 1) and a growth in cereal imports (Box 2).


Box 1. 1987 Per Capita Food Production
A I D -Assisted LAC Countries

LAC SUB-REGION
ANDEAN
Bolivia -
Ecuador |
Peru [
CARIBBEAN
Dominican Republic I
Haiti
Jamaica I
CENTRAL AMERICA
Costa Rica
El Salvador I
Guatemala
Honduras
Nicaragua
Panama |
-30 -20 -10 0 10 20
Percent Below or Above 1979/81 Lvel




Box 2. Growth in Cereal Imports
A I.D -Assisted LAC Countries

LAC SUB-REGION
ANDEAN
Bolivia
Ecuador

CARIBBEAN
Dominican Republic
Haiti
Jamaica
CENTRAL AMERICA
Costa Rica
El Salvador
Guatemala
Honduras
Nicaraguas
Panama
0 0.6 1 1.6 2
Ceral Imports (Million MT)









AGRICULTURAL PRODUCTIVITY DECLINING
Broad-based, sustainable economic growth depends on
creating a macroeconomic and policy environment
conducive to investing in agriculture. It also depends
on: (1) generating productivity-increasing technologies
that are responsive to market opportunities, farmer
production, and marketing constraints, and (2) farmers'
willingness and ability to adopt these technologies.
The paramount function of a country's Ag REE system,
including public and/or private components, is to gen-
erate and transfer the agricultural technology essentn
for increasing agricultural productivity and agriculture's
contribution to economic growth. The Ag REE system
also helps develop the human resources needed in the
agricultural sector.
Despite the potential importance of TG&T to economic
growth in the LAC region, public sector investment in
Ag REE in the region declined significantly during the
1980s. Declines in host-country public funding for ag-
ricultural research were paralleled by declines in AID
funding for Ag REE. In FY84-FY91, LAC Mission
Agricultural. Rural Development, and Nutrition
(ARDN) funding for Ag REE declined both absolutely
and as a percentage of total ARDN funding (Box 3).


Box 3. Ag REE Funding as a Percentage of Total
LAC ARDN Funding.

FY RES EXT EDU

Andean:
88 16.3 15.9 4.0
89 26.6 28.9 6.0
90 12.3 16.9 1.4
91 2.7 4.0 0.3

Caribbean:
88 8.3 17.4 0.0
89 10.4 20.0 5.8
90 23.2 17.9 6.1
91 24.7 21.3 3.9

Central
America:
88 15.6 10.3 5.5
89 3.6 7.7 10.3
90 3.6 4.5 0.9
91 0.5 2.4 0.8


These declines have made it more difficult for public Ag
REE systems to reverse the deterioration in the region'sm
food production capability and agriculture's contribution
to economic growth. Further, unfavorable terms o
trade have provided no incentive for investment in agri-U
culture or for farmers to seek alternative productivity-
increasing technologies. Even in countries where AIDm
has helped to establish a more favorable macroeconomi
and policy environment (e.g., Bolivia), weakened Ag
REE systems cannot respond vigorously to the improved
environment. I

TG&T CAPACITY DETERIORATING
To provide an up-to-date assessment of the status of As
REE systems in AID-assisted LAC countries, AID
conducted a survey of its LAC Missions. Mission sur3
vey responses reflected the limited progress and frel
quent inadequacies of public sector Ag REE systems as
well as numerous constraints impeding greater systenr
productivity. II
Mission ratings of progress in strengthening selected A-
REE system attributes indicated that progress has beef
greatest for private sector TG&T. By comparsion, the
progress ratings for public sector Ag REE system attri-
butes were consistently lower, with public sector agri
cultural research and extension receiving below average?
ratings and agricultural education, on average, rate
lower than the other three categories.
Generally, the Missions rated the adequacy of selected
public sector Ag REE system attributes (personnel marge
agement, program planning, and budgeting) as "poor
to "very poor," although numbers of persons trained for
public research and extension fared somewhat better. I
The following constraints to Ag REE-strengthening wer
identified from the survey responses:

* The primary constraint is client-country factors (e.g,
weak public sector);
* The secondary constraint is AID policy directive
(e.g.. export-led development strategy); and
* The tertiary constraint is Mission inadequacies (e.g
Mission lacks adequate staff to deal with Ag REE).
There was a marked tendency by Missions not to ra
lack of demand for technology as a constraint. TA
suggests that Missions perceive lack of supply of tech-
nology (or its transfer to farmers), not lack of demanm
as the primary constraint. U


I








TRENDS IN AG REE-STRENGTHENING

In the 1980s, AID strategy in the LAC region moved
from support for institution building of public Ag REE
systems, toward institution building of private sector
systems (e.g., agricultural research foundations).

The changing institutional focus of AID assistance was
also accompanied by changing commodity priorities, as
AID turned from traditional food crops to nontraditional
agricultural export (NTAE) crops.
While several Missions are developing projects with Ag
REE components, Mission responses to the survey did
not evidence that Ag REE strengthening is an integral
part of Agency strategy. Also, an appraisal of the Ag
REE-strengthening efforts of other donors and
development assistance agencies (e.g., World Bank and
ISNAR) reflects that Ag REE-strengthening in AID-
assisted LAC countries is not a high priority. Finally,
while several International Agricultural Research
Centers (IARCs) are located in the LAC region, the
IARC mandate does not include strengthening national-
level agricultural research, extension, and education
systems.
Too often AID has relied on a "supply-oriented"
approach aimed at strengthening the ability of Ag REE
organizations to carry out TG&T, without adequate
attention to the basic macroeconomic, policy, and insti-
tutional disincentives to investment in agriculture and
productivity-increasing technology. This. in turn.
constrains the value of developing productive TG&T
capability in public and/or private Ag REE systems.
By the time the LAC region turned its attention to mac-
roeconomic and policy constraints to economic growth
in agriculture, AID assistance for public Ag REE
institution building was being or had been terminated.
In the process, AID overlooked the lesson learned that
strengthening TG&T capability is a long-term process of
human resource development and institution building
that must include collaboration and support of both
public and private sectors.

RECOMMENDATIONS

To reverse the deterioration in the TG&T capacity of
AID-assisted LAC countries, the client countries and the
Agency need to begin to identify ways to facilitate the
emergence of demand-driven (market-led) TG&T in the
region's Ag REE systems. Potential assistance options


for fostering emergence of demand-driven Ag REE
systems include:
* Setting priorities for Ag REE in the LAC Bureau's
Agriculture and Natural Resources strategy

* Including development assistance funding for Ag
REE in terms of sub-regional programs

* Ensuring balanced AID support for international,
regional, and national agricultural research systems

* Providing appropriate technical support through
existing or new projects or funding mechanisms

* Reorienting existing and planned projects to adhere
more closely to guidelines for Ag REE-strengthening
* Placing the issue of Ag REE-strengthening on the
policy dialogue agenda in AID-assisted LAC
countries (e.g., greater autonomy and budget support
for agricultural research)
Further, TG&T organizations must develop program
selection criteria that include, inter alia, the anticipated
market environment and the expected costs and benefits
of program alternatives, the relative importance of
crops, the specific needs and abilities of client groups,
and the specific mix of public and private funding that
is required for sustaining Ag REE systems.
These recommendations, if adopted by AID, can help to
establish the conditions for emergence of demand-driven
Ag REE systems in the LAC region. Once these
conditions have been created, a more favorable environ-
ment will exist for design and implementation of proj-
ects focused on strengthening Ag REE. Absent these
conditions, it is futile for AID to seek to implement a
capacity building approach to Ag REE-strengthening.




The author, Kerry J. Byrnes, is Agricultural Research,
Extension. and Education Advisor for the LAC
Agriculture and Rural Development Technical Services
Project (LAC TECH), Chemonics International. This
report was prepared for the U.S. Agency for International
Development's Bureau for Latin America and the
Caribbean, Office of Development Resources, Rural
Development Division (LAC/DR/RD), February 1992.


































TABLE OF CONTENTS











TABLE OF CONTENTS


Page

EXECUTIVE SUMMARY. i

Table of Contents v

List of Boxes ix
List of Tables ix
List of Figures xiii

List of Acronyms xv
Acknowledgements xix

CHAPTER I INTRODUCTION 1

A. Objective of Report 1
B. Organization of Report 1
C. The Strategic Role of Ag REE-Strengthening 2
1. Some Measures of Poverty in the LAC Region 2
2. AID/Washington LAC Bureau Objectives 4
3. Role of Ag REE-Strengthening 5
4. Implications for LAC/DR/RD Programming 8

CHAPTER II FUNDING TRENDS FOR AGRICULTURAL RESEARCH,
EXTENSION, AND EDUCATION (AG REE)
IN THE LAC REGION 15

A. General Trends in LAC ARDN Funding for Ag REE 15
1. Funding Trends over Time 23
2. Funding Trends by Subregion 24
3. Funding Trends by Country within Subregions 28
4. Major Trends 31

B. Other Donor Funding & Activity for LAC
Ag REE-Strengthening 31
1. Donor Support for International Agricultural
Research Center (IARCs) 31
2. Donor Support for NARS 36
3. Limits of Strengthening NARS
through IARCs 44
4. U.S. Government PL-480 Local Currency
Generations 47











TABLE OF CONTENTS


CHAPTER III STRATEGY TRENDS FOR AG REE IN LAC SAID
MISSION PORTFOLIOS 53

A. Historical Overview 53
B. Strengthening TG&T Capability of Ag REE
Institutions 67
1. Andean Region 68
2. Caribbean Region 74
3. Central American Region 79

C. Evolution of AID Strategy for Ag Ree-Strengthening 89
1. Growth vs Equity 90
2. Private vs Public 91
3. Implementation Support vs Institutional
Development 92
4. Regional vs National systems of Education 92
5. Market Orientation vs Commodity Orientation
in Research 93
6. Technology Transfer systems vs Public
Sector Extension 94
7. Market-researched vs Preconceived TG&T
Models 94
8. Broad Focus on Natural Resource/Environmental
Sustainability vs Narrow Focus on Soil
conservation 94
9. Policy Environment: Changeable Variable vs
Unchangeable Given 94
10. Donor Interest vs Country Need 95

CHAPTER IV STATUS OF AG REE IN LAC SAID MISSION HOST
COUNTRIES 97

A. Introduction 97
B. Progress of Ag Ree Organizations 97
C. Adequacy of Public Agricultural Research and
Extension 101
1. Public Sector Agricultural Research 101
2. Public Sector Agricultural Extension 104











TABLE OF CONTENTS


D. Constraints to Strengthening Public Sector Ag REE 108
1. Constraints Internal to Public Sector 108
2. -Constraints Internal to.USAID. Mission 110

E. Summary of Status of ag REE Systems in the
LAC Region 112
1. Progress of Ag REE Systems 112
2. Adequacy of Public Ag REE Organizations 112
3. Constraints to Public Ag Research and Extension 112

CHAPTER V AG REE-STRENGTHENING IN LAC SAID
MISSION PROGRAMS 121

A. Trends in Funding for Ag REE-Strengthening 121
1. Andean Region 123
2. Caribbean Region 124
3. Central American Region 125

B. Current Mission Projects Having Ag REE Components 126
1. Andean Region 126
2. Caribbean Region 127
3. Central American Region 129

C. ARDO Program-Level Performance Monitoring System 131
1. Andean Region 131
2. Caribbean Region 131
3. Central American Region 132

D. Mission Strategy for Ag REE-Strengthening 133
1. Andean Region 133
2. Caribbean Region 135
3. Central American Region 136

E. Management Questions Facing the Mission 139
1. Andean Region 139
2. Caribbean Region 140
3. Central American Region 140

F. Non-project Assistance 142











TABLE OF CONTENTS


G. Opportunities To Be Pursued
1. Andean Region
2. Caribbean Region
3. Central American Region


H. Summary
1. Trends in Funding for Ag REE-Strengthening
2. Current Mission Projects Having Ag REE Components
3. ARDO Program-level Performance Monitoring System
4. Mission Strategy for Ag REE-Strengthening
5. Management Questions Facing the Mission
6. Non-project Assistance
7. Opportunities To Be Pursued


CHAPTER VI DEMAND-DRIVEN AG REE SYSTEMS


CHAPTER VII


A. Need for Demand-driven Agricultural TG&T
B. Conditions for a Demand-driven Ag REE System
C. Functions of a Demand-driven Ag REE system
1. Research
2. Extension
3. Education

D. Implications for a Demand-driven Ag Ree System

POTENTIAL ASSISTANCE OPTIONS FOR AG
REE-STRENGTHENING IN THE LAC REGION


A. Potential Assistance Options
1. Prioritization of Ag REE-Strengthening
in LAC ANR Strategy
2. Guidelines for Ag REE-Strengthening
3. Balancing Support for IARCs, RARCs, and NARS
4. Technical Support
5. Subregional Programs

B. Overview of Assistance Options for Ag REE-Strengthening

REFERENCES

LIST OF ANNEXES CONTAINED IN VOLUME TWO


168

168
171
173
175
176












TABLE OF CONTENTS


Page


LIST OF BOXES


Summary of the Major Changes in the LAC ARDN
Portfolio during FY88-FY91

Summary of 1989 ISNAR Activities in the LAC
Region

Experience of the U.S. Land Grant Model in
the LAC Region

Consequences of the Privatization of Agricultural
Research in the LAC Region

The Latin American Model of Decentralized Public
Sector Agricultural Research

An Observer's View of R&D Capability in the LAC
Region

The Rise and Fall of a Supply-Driven Concept of
TG&T in the LAC Region

The Small Farmer Cash Income/Purchasing Power
Constraint

Six Strategic Priorities for Achieving Sustainable
Economic Growth in the LAC Region


Performance of Agricultural Sector in AID-
Assisted LAC Countries

Agricultural Research Indicators in the
LAC Region

National Agricultural Research Resources in
the LAC Region--Expressed as 1980-1985 Averages


Box 2.1.


Box 2.2.


Box 3.1.


Box 3.2.


Box 3.3.


Box 3.4.


Box 6.1.


Box 7.1.


Box 7.2.


LIST OF TABLES


Table 1.1.


Table 1.2.


Table 1.3.











TABLE OF CONTENTS


Table 2.1.




Table 2.2.


Table 2.3.


Table 2.4.


Table 2.5.


Table 2.6.



Table 2.7.


Table 2.8.


Table 2.9.



Table. 2.10.


Table 2.11.


Percent Distribution of AID Obligations in the
LAC Region for ARDN Purpose Categories Relating
Directly to Agricultural -Research,. Extension,
and Education

Percent Distribution of AID Obligations in
ARDN Portfolio by Purpose Category (FY84-FY89)

LAC Bureau ARDN Portfolio Summary by Strategic
Funding Categories (FY88-FY91): $'000

LAC Bureau ARDN Portfolio Summary by Strategic
Funding Categories (FY88-FY91): Percentages

LAC Bureau ARDN Portfolio Summary by Strategic Funding
Categories (FY88-FY91): $'000 by Subregion

LAC Bureau ARDN Portfolio Summary by Strategic
Funding Categories (FY88-FY91): Percentages
by Subregion

Trends in LAC ARDN Funding for Agricultural
Re,earch, Extension, and Education: Comparison
Across Subregions

Suoregional Trends in LAC ARDN Funding for Agricultural
Research, Extension, and Education by Subregion:
Comparison Across Categories for Each Subregion

FY89 ARDN Funding for Agricultural Research,
Extension, and Education by Country in Each
LAC Subregion: $'000

Regional Pattern of USAID Mission Investment
in Ag REE as a Percent of FY89 ARDN Resources

U.S. Agency for International Development
(USAID) and Inter-American Development Bank
(IDB) Grant Funding to LAC International
Agricultural Research Centers (IARCs)


Page











TABLE OF CONTENTS


Page


Table 2.12.


Table 2.13.



Table 2.14.


Table 2.15.


Table 2.16.

Table 3.1.


Table 3.2.


Table 4.1.


Table 4.2.



Table 4.3.



Table 4.4.


Table 4.5.


World Bank-Assisted Projects with Agricultural
Research Components in the LAC Region (1981-1987)

ISNAR Activities (Reviews of NARS and Collaboration
in Research Planning and Implementation) in the
LAC Region through 1990

ISNAR Collaboration with National Agricultural
Research Systems (NARS) in System-Building Activities

U.S. Government PL-480 Title I Local Currency
Generations in LAC AID-Assisted Countries (FY86-FY90)

Food Insecure Countries

National Research Institutes Created Since 1957 in
Latin America

AID-Funded Agricultural University Institution
Building Programs in the LAC Region

LAC Subregional Averages of USAID Mission Ratings
of Progress of Ag REE Organizations

USAID Mission Ratings of Progress of AID-Assisted
LAC Countries in Developing Agricultural REE
Organizations

LAC Subregional Averages of USAID Mission Ratings
of Adequacy of Public Sector Organization Having
Primary Responsibility for Agricultural Research

Adequacy of Public Sector Agricultural Research
Organization in AID-Assisted LAC Countries

LAC Subregional Averages of USAID Mission Ratings
of Adequacy of Public Sector Organization Having
Primary Responsibility for Agricultural Extension


106











TABLE OF CONTENTS


Table 4.6.


Table 4.7.



Table 4.8.



Table 4.9.



Table 4.10.


Table 4.11.



Table 4.12.



Table 4.13.




Table 5.1.


Table 6.1.


Adequacy of Public Sector Agricultural Extension
Organizations in AID-Assisted LAC Countries

LAC Subregional Averages of USAID Mission Ratings
of Constraints (to Improving Ag REE) Internal to
Public Sector Organizations

LAC Subregional Averages of USAID Mission Ratings
of Constraints (to Improving Ag REE) Internal to
USAID/Country Mission

Rank Order of Severity of Adequacy of Public
Agricultural Research and Extension Systems in AID-
Assisted LAC Countries

Summation of USAID Mission Ratings of Constraints
to Improving Ag REE in Public Sector Organizations

Relative Importance of Constraints to Improving
Ag REE in Public Sector Organizations in AID-
Assisted LAC Countries

Rank Order of Constraints to Strengthening Public
Agricultural Research and Extension in AID-Assisted
LAC Countries

Comparison of Rank Order of Adequacy of Public
Agricultural Research and Extension (PARE) Systems
and Magnitude of Constraints to Strengthening PARE
Systems in AID-Assisted LAC Countries

USAID Mission Funding Trends for Ag REE in AID-
Assisted LAC Countries during the 1980s

Typology of Producers for Defining a Client-Oriented
TG&T Strategy












TABLE OF CONTENTS


LIST OF FIGURES


Figure 1.1.



Figure 1.2.


Figure 1.3.


Figure 2.1.


Figure 2.2.

Figure 2.3.


Figure 2.4.

Figure 3.1.


Figure 7.1.


Role of the Agricultural Research, Extension, and
Education (REE) System Relative to LAC/DR/RD Goals
and Objectives

Per Capita Food Production in AID-Assisted LAC
Countries

Growth in Cereal Imports to AID-Assisted LAC
Countries

Total ARDN Obligations (FY84-FY89) Toward ARDN Focus
Statement Goals for the LAC Region

LAC ARDN Obligations (FY84-FY89) by Purpose Category

LAC Bureau ARDN Portfolio Summary by Strategic
Funding Categories

World Bank Lending, 1966-1988

Historical Evolution of Agricultural Research and
Extension Organizational Models in the LAC Region

Assistance Options for Ag REE-Strengthening in the
LAC Region











LIST OF ACRONYMS


AD Agribusiness Development Project (El Salvador and Guatemala)
ADF Agricultural Development Foundation (Dominican Republic)
AE Agricultural Education Project (Ecuador and Jamaica)
Ag REE Agricultural Research, Extension, and Education
AID -United States Agency-for.International .Development
ANACAFE National Coffee Association (Guatemala)
AP Agroforestry Program Project (Haiti)
APENN Nicaraguan Non-Traditional Agricultural Growers and Exporters
Association
ARDN Agriculture, Rural Development, and Nutrition
AREE Agricultural Research, Extension, and Education Project (Ecuador)
AST Agricultural Sector Training Project (Dominican Republic)
ATT Agricultural Technology Transfer Project (Peri)
BABCO Belize Agribusiness Company
CAC Commercialization of Alternative Crops Project (Belize)
CARDI Caribbean Agricultural Research and Development Institute (Trinidad)
CARE Caribbean Agricultural Research and Extension Project (RDO/C)
CATIE Tropical Agricultural Research and Training Center (Costa Rica)
CBGA Caribbean Basin Growers Association Project (proposed)
CDRA Agricultural Research and Documentation Center (Haiti)
CENTA Agricultural Technology Center (El Salvador)
CIAT International Center for Tropical Agriculture (Colombia)
CIAT/IBTA Tropical Agricultural Research Center of IBTA (Santa Cruz, Bolivia)
CIMMYT International Maize and Wheat Improvement Center (Mexico)
CINDE Costa Rican Coalition of Development Initiatives
CINDE/DIVAGRI Agricultural Division of CINDE (Costa Rica)
CIP International Potato Center (Peni)
CRDP Chapare Regional Development Project (Bolivia)
DESFIL Development Strategies for Fragile Lands Project (S&T/RD)
DIA General Directorate of Agricultural Research, MAG (Costa Rica)
DIA/SEA Department of Agricultural Research of SEA (Dominican Republic)
DOA/RD Department of Agricultural Research-Research Division (MOA of
Belize)
EAP Pan American Agricultural School (Zamorano) (Honduras)
EARTH Agricultural School for the Rural Humid Tropics (Costa Rica)
ENA National School of Agriculture (El Salvador)
FEPADE Entrepreneurial Foundation for Educational Development (El Salvador)
FHIA Honduran Agricultural Research Foundation
FPX Federation of Agricultural and Agroindustrial Producers and Exporters
of Honduras
FUNDAGRO Foundation for Agricultural Development (Ecuador)
FUNDEAGO Foundation of Agricultural Development (Peni)











FUSADES
FUSADES/
DIVAGRO
GEXPRONT
GREXPAN
HADS
HARF
IARC
IBTA
ICTA
IDB
IDIAP
IICA
INIAA
INIAP
IPM
ISNAR
ISA
JACC
JADF
JARP
JSA
LAC
LAC/DR/RD

LAC TECH

LD
LUPE
MAG
MIDA
MOA
NARS
NRM
NTAE

NPSA
OFWM
PAO
PNIA

PROEXAG
PVO
RAHE
RARC
RDO/C


Salvadoran Foundation for Economic and Social Development

Agricultural Division of FUSADES (El Salvador)
Non-Traditional Products Exporters Association (Guatemala)
Non-Traditional Agricultural Producers and Exporters Association
Highlands Agricultural Development Project (Guatemala)
Honduran Agricultural Research Foundation Project
International Agricultural Research Center
-Bolivian Institute-of Agricultural Technology
Agricultural Science and Technology Institute (Guatemala)
Inter-American Development Bank
Panamanian Institute of Agricultural Research
Inter-American Institute for Cooperation on Agriculture (Costa Rica)
National Institute for Agricultural and Agro-Industrial Research (Peri)
National Institute of Agricultural Research (Ecuador)
Integrated Pest Management Project (ROCAP)
International Service for National Agricultural Research
Superior Institute of Agriculture (Dominican Republic)
Joint Agricultural Coinvestment Council (Dominican Republic)
Jamaican Agricultural Development Foundation
Jamaica Agricultural Research Project
Jamaica School of Agriculture
Latin America and the Caribbean
Division of Rural Development, Office of Development Resources,
Bureau for Latin America and the Caribbean, AID
Agriculture and Rural Development Technical Support (ARDTS)
P-- ':ct
.:ock Development Project (Belize)
Lane Use Productivity Enhancement (Honduras)
Ministry of Agriculture and Livestock (Nicaragua)
Ministry of Agricultural Development (Panama)
Ministry of Agriculture (generic)
National Agricultural Research Systems
National Resources Management
Non-Traditional Agricultural Export (NTAE) Technical Support Project
(Costa Rica)
Non-Project Sector Assistance (generic)
On-Farm Water Management Project (Dominican Republic)
Private Agricultural Producer Organizations Project (Bolivia)
National Program of Agricultural Research (Ministry of Natural
Resources, Honduras)
Non-Traditional Agricultural Export Support Project (Guatemala)
Private Voluntary Organization (generic)
Regional Agricultural Higher Education (ROCAP)
Regional Agricultural Research Center
Regional Development Office for the Caribbean










ROCAP Regional Office for Central America and Panama
RTTS Rural Technology Transfer Systems Project (Ecuador)
SEA Secretary of State for Agriculture (MOA of Dominican Republic)
SERA Agricultural Research Division of the MOA (Haiti)
SRN Ministry of Natural Resources (Honduras)
TG&T Technology Generation and Transfer
TROPRO West Indies Tropical Produce Support Project (RDO/C)
TSP Technical Support Project (generic)
TWM Target-Watershed Management Project (Haiti)
UNA National Agrarian University (Perd)
UWI University of the West Indies (Trinidad)
WM Water Management Project (El Salvador)


xvii











ACKNOWLEDGEMENTS



The author wishes to acknowledge the assistance of a number of people who
contributed in one way or another to this study.

Roberta Van Haeften, LAC TECH-Food Needs Advisor provided data for Chapter
I.C on LAC region food trends (Figures 1.2 and 1.3).

Tom Scarlet, LAC/DR/RD summer intern, and Peter Theil of PPC/PP/RPA provided
the data on which the analysis of ARDN funding trends in Chapter I is based. Tom
provided the initial round of data for the FY88-FY91 period. Peter provided updated data on
the final figures for FY89 obligations. Joanna Bressel, LAC TECH administrative assistant,
prepared the Lotus spreadsheet tables. Tim Lavelie and Ben Hoskins of FVA/FP provided
the data on the PL-480 program in the LAC region (Table 2.13). Data on other donor
funding for agricultural research were provided by Hennie Deboeck of the Secretariat of the
Consultative Group on International Agricultural Research (CGIAR) and by Carlos Enrique
Ampuero of the Inter-American Development Bank. Helpful information also was provided
by John McIntire and Anthony Pritchard of The World Bank.

Dan Seyler, Development Information Division, Center for Development Information
and Evaluation (CDIE) provided the printouts on which Chapter III.B and Annex A are
based. Anne Langhaug of LAC/DPP (assigned from CDIE) assisted in obtaining a set of the
Country Development Strategy Statements (CDSSs) for all LAC USAID Missions from the
late 1970s to the present. Data on trends in USAID Mission strategies vis-a-vis agricultural
research, extension, and education are summarized in Annex A.

Various staff persons of LAC/DR/RD provided suggestions for improving the design
of the questionnaire for the LAC/DR/RD survey of LAC Mission Agricultural Research,
Extension, and Education Projects/Programs (Annex C). Aud6n Trujillo, John Fasullo, Mike
Korin, and Gale Rozell provided suggestions for improving the questionnaire. Joanna
Bressel, LAC TECH Administrative Assistant, reproduced the questionnaire and sent it by
international courier to the 13 LAC USAID Missions.

The staff in the Agriculture and Rural Development Offices of 13 LAC USAID
Missions did a great job in completing the lengthy survey questionnaire. Without their input,
the cross-cutting analyses (Chapters IV and V) and the country case studies (Annex D) would
not have been possible. The key persons in this respect, by Mission, were:

Andean Region
Bolivia: Darell McIntyre and Jonathan A. Sleeper
Ecuador: Richard J. Peters, David L. Alverson, Marco Pefiaherrera, and
Fausto Maldonado
Pern: Rudolfo R. Griego











Caribbean Region
Dominican Republic:
Haiti:
Jamaica:
RDO/C:


Central American
Belize:
Costa Rica:
El Salvador:
Guatemala:
Honduras:
ROCAP


Kenneth Wiegand
David Atteberry
Mark Smith, Barbara Ellington-Banks, and Mark Nolan
Timothy J. Miller


.Elizadia Washington,.FredHunter,.and Al Hankins
Ross Wherry
Kenneth C. Ellis
Roberto Castro
Dwight Steen and D. Craig Anderson
Ronald V. Curtis, Richard L. Hughes, and Jeffrey H. Allen


Albert "Scaff" Brown, LAC TECH agricultural policy advisor, played a key role in
providing insight on the history of AID development assistance for agricultural research,
extension, and education (Chapter III.A) and m stimulating the discussion in Chapter VI of
the concept of a demand-driven Ag REE system. His contributions also are noted in Annex I
regarding the possibility of a ROCAP-funded project to support agricultural research and
agricultural higher education in Central America.

Gary Hansen of PPC/CDIE/PPE provided information on the endowment mechanism
which several AID-assisted LAC countries are seeking to develop as a way to fund agricul-
tural research. Information on the efforts of several USAID Missions to develop
endowments is presented in Annex F.

LAC/DR/RD staff who provided useful feedback on drafts of the report include
Wayne Nilsestuen (Chief) and Mike Korin, Joe Salvo, and John Dorman.

At Chemonics International, Scaff Brown, Jim Chapman, Ivo Kraljevic, and LAC
TECH program manager Candace Conrad provided suggestions for improving the report, and
John Hanson provided editing services.

I also wish to express my appreciation to Francis C. Byrnes who provided various
background documents and read and edited several of the draft chapters.
































CHAPTER I

INTRODUCTION











CHAPTER I
INTRODUCTION



A. Objective of Report

-During the 45 plus years since World War II, the U.S. .Agency for. International
Development (AID or USAID) or predecessor agencies have provided funding for
development assistance programs to strengthen agricultural research, extension, and/or
education (Ag REE) in the Latin America and Caribbean (LAC) region. This report reviews
and assesses this development assistance in regard to Ag REE's current status in the LAC
region, with the objective of identifying the direction, if any, that AID-funded development
assistance should take during the 1990s with respect to the issue of strengthening Ag REE in
the LAC region.

B. Organization of Report

The report consists of Volume 1: Technical Report and the accompanying Volume 2:
Annexes. In the present volume, Chapters I to V provide a reference resource that the
reader may use to review and document the evolution of AID assistance for Ag REE-
strengthening in the LAC region. Chapters VI-VII are forward-looking: Chapter VI focuses
on the direction that Ag REE-strengthening efforts should take and Chapter VII provides a
range of potential assistance options that AID could elect to undertake, moving in the
direction indicated in Chapter VI.

The balance of Chapter I, beginning with section C, provides an overview of the
current development status of the LAC region, with particular emphasis placed on the degree
of poverty characterizing the region, the objectives of AID's Bureau for Latin America and
the Caribbean (LAC), and the role of Ag REE-strengthening in addressing these objectives.

Chapter II reviews funding trends from FY84 to FY91 in the AID LAC Agriculture,
Rural Development and Nutrition (ARDN) portfolio. The chapter provides: (1) an analysis
of trends in AID funding for Ag REE in the LAC region, and (2) an overview of other donor
activities vis-a-vis LAC Ag REE-strengthening.

Chapter III identifies the principal variables that have defined the course of evolution
during the 1980s of AID strategy and project approaches to Ag REE-strengthening in the
LAC region. The discussion is based on analyses of AID documents that provide
information on the Ag REE components of ARDN-funded projects of the LAC USAID
Missions during the 1980s. This documentation includes project summaries, Logical
Frameworks, project evaluations, and Country Development Strategy Statements (CDSSs).
Based on these analyses, the major substantive changes in strategy and project approach that
occurred during the 1980s are identified. Annex A summarizes the relevant material drawn











CHAPTER I
INTRODUCTION



A. Objective of Report

-During the 45 plus years since World War II, the U.S. .Agency for. International
Development (AID or USAID) or predecessor agencies have provided funding for
development assistance programs to strengthen agricultural research, extension, and/or
education (Ag REE) in the Latin America and Caribbean (LAC) region. This report reviews
and assesses this development assistance in regard to Ag REE's current status in the LAC
region, with the objective of identifying the direction, if any, that AID-funded development
assistance should take during the 1990s with respect to the issue of strengthening Ag REE in
the LAC region.

B. Organization of Report

The report consists of Volume 1: Technical Report and the accompanying Volume 2:
Annexes. In the present volume, Chapters I to V provide a reference resource that the
reader may use to review and document the evolution of AID assistance for Ag REE-
strengthening in the LAC region. Chapters VI-VII are forward-looking: Chapter VI focuses
on the direction that Ag REE-strengthening efforts should take and Chapter VII provides a
range of potential assistance options that AID could elect to undertake, moving in the
direction indicated in Chapter VI.

The balance of Chapter I, beginning with section C, provides an overview of the
current development status of the LAC region, with particular emphasis placed on the degree
of poverty characterizing the region, the objectives of AID's Bureau for Latin America and
the Caribbean (LAC), and the role of Ag REE-strengthening in addressing these objectives.

Chapter II reviews funding trends from FY84 to FY91 in the AID LAC Agriculture,
Rural Development and Nutrition (ARDN) portfolio. The chapter provides: (1) an analysis
of trends in AID funding for Ag REE in the LAC region, and (2) an overview of other donor
activities vis-a-vis LAC Ag REE-strengthening.

Chapter III identifies the principal variables that have defined the course of evolution
during the 1980s of AID strategy and project approaches to Ag REE-strengthening in the
LAC region. The discussion is based on analyses of AID documents that provide
information on the Ag REE components of ARDN-funded projects of the LAC USAID
Missions during the 1980s. This documentation includes project summaries, Logical
Frameworks, project evaluations, and Country Development Strategy Statements (CDSSs).
Based on these analyses, the major substantive changes in strategy and project approach that
occurred during the 1980s are identified. Annex A summarizes the relevant material drawn










from USAID CDSSs, while Annex B provides a summary of the Ag REE components of
USAID Mission projects during the 1980s.

Chapter IV provides an analysis of LAC USAID Mission assessments of the status of
Ag REE in the LAC region. The analysis is based on Mission responses to an LAC/DR/RD
Survey of LAC Mission Ag REE projects/programs. The survey was conducted by
LAC/DR/RD's LAC TECH project during the summer of 1990. A copy of the survey
questionnaire is provided in Annex C. The survey provided the basis for preparing both
Mission-specific case sti.iies (see -Annex D)-as-well-as-Chapter IV's analysis of Mission
assessments of the progress of, adequacy of, and constraints on Ag REE systems in AID-
assisted LAC countries. The chapter includes both subregional (Andean, Caribbean, Central
American) and cross-cutting analyses of the status of Ag REE in the LAC region. Finally,
the chapter summarizes the problems that must be addressed in order to increase the effective
impact of development assistance for Ag REE-strengthening in the LAC region.

Chapter V provides a summary of Mission survey responses describing each
Mission's own strategy, program, and plans with respect to Ag REE-strengthening in the
Mission's host country. Specifically, the chapter reviews each Mission's assessment of
trends in Mission funding for Ag REE-strengthening; provides a summary description of
current Mission projects having an Ag REE component; indicates whether the Mission
Agriculture and Rural Development Office has a program-level monitoring and evaluation
system; summarizes the Mission' strategy, if any, for Ag REE-strengthening; identifies key
management questions of concern to the Mission with respect to Ag REE-strengthening;
notes Mission-identified opportunities that should be pursued by the Mission or by other
donors with respect to Ag REE-strengthening; and summarizes the Mission's position, if any,
on non-project assistance vis-a-vis Ag REE-strengthening.

Chapter VI focuses on the concept of a demand-driven Ag REE system. The chapter
discusses the need for a demand-driven Ag REE system; essential conditions for establishing
a demand-driven agricultural technology generation and transfer (TG&T) system; and the
research, extension, and education functions essential for carrying out agricultural TG&T
within an Ag REE system, albeit public, private, or a combination of these.

Chapter VII provides a range of potential assistance options that AID could elect to
facilitate the emergence of a demand-driven Ag REE systems in the LAC region. In effect,
the chapter identifies potential ways in which AID become more proactive in helping to
ensure that broad-based economic growth in the LAC region is not precluded by a failure to
address the need for strengthening the TG&T capacity of the region's Ag REE systems.

C. The Strategic Role of Ag REE-Strengthening

1. Some Measures of Poverty in the LAC Region

As stated in The World Bank (1990) Poverty report, the population of the
Latin America and Caribbean (LAC) region, as a percent of total world population, held
constant at 11% between the 1960-65 and 1988-89 periods. Yet the LAC region's










from USAID CDSSs, while Annex B provides a summary of the Ag REE components of
USAID Mission projects during the 1980s.

Chapter IV provides an analysis of LAC USAID Mission assessments of the status of
Ag REE in the LAC region. The analysis is based on Mission responses to an LAC/DR/RD
Survey of LAC Mission Ag REE projects/programs. The survey was conducted by
LAC/DR/RD's LAC TECH project during the summer of 1990. A copy of the survey
questionnaire is provided in Annex C. The survey provided the basis for preparing both
Mission-specific case sti.iies (see -Annex D)-as-well-as-Chapter IV's analysis of Mission
assessments of the progress of, adequacy of, and constraints on Ag REE systems in AID-
assisted LAC countries. The chapter includes both subregional (Andean, Caribbean, Central
American) and cross-cutting analyses of the status of Ag REE in the LAC region. Finally,
the chapter summarizes the problems that must be addressed in order to increase the effective
impact of development assistance for Ag REE-strengthening in the LAC region.

Chapter V provides a summary of Mission survey responses describing each
Mission's own strategy, program, and plans with respect to Ag REE-strengthening in the
Mission's host country. Specifically, the chapter reviews each Mission's assessment of
trends in Mission funding for Ag REE-strengthening; provides a summary description of
current Mission projects having an Ag REE component; indicates whether the Mission
Agriculture and Rural Development Office has a program-level monitoring and evaluation
system; summarizes the Mission' strategy, if any, for Ag REE-strengthening; identifies key
management questions of concern to the Mission with respect to Ag REE-strengthening;
notes Mission-identified opportunities that should be pursued by the Mission or by other
donors with respect to Ag REE-strengthening; and summarizes the Mission's position, if any,
on non-project assistance vis-a-vis Ag REE-strengthening.

Chapter VI focuses on the concept of a demand-driven Ag REE system. The chapter
discusses the need for a demand-driven Ag REE system; essential conditions for establishing
a demand-driven agricultural technology generation and transfer (TG&T) system; and the
research, extension, and education functions essential for carrying out agricultural TG&T
within an Ag REE system, albeit public, private, or a combination of these.

Chapter VII provides a range of potential assistance options that AID could elect to
facilitate the emergence of a demand-driven Ag REE systems in the LAC region. In effect,
the chapter identifies potential ways in which AID become more proactive in helping to
ensure that broad-based economic growth in the LAC region is not precluded by a failure to
address the need for strengthening the TG&T capacity of the region's Ag REE systems.

C. The Strategic Role of Ag REE-Strengthening

1. Some Measures of Poverty in the LAC Region

As stated in The World Bank (1990) Poverty report, the population of the
Latin America and Caribbean (LAC) region, as a percent of total world population, held
constant at 11% between the 1960-65 and 1988-89 periods. Yet the LAC region's










percentage share of income fell during the same period from 33% to 27%, a decline of
nearly 20% (World Bank, 1990:10). In the past 25 years, real per capital GDP growth in the
LAC region fell from 3.7% in 1965-73 to 2.6% in 1973-80 and to -0.6% in 1980-89. Real
per capital growth was almost -1.0% in the 1980-89 period, with all other regions except sub-
Saharan Africa having positive real per capital growth during the same period.

The percentage of the LAC population below the poverty line (set at $370 annual
income) is 12% if only the "extremely poor" (50 million) are counted, and rises to 19% if
the "poor (including extremely poor)" (70.million) are counted. .The-rural. population, as a
percentage of total population, is 59% in Guatemala, 50% in Panama, and 44% in Peri,
while the rural poor as a percentage of total population for these same countries is 66%,
59%, and 52%, respectively (World Bank, 1990:31). As the World Bank notes:

Poverty as measured by low income tends to be at its worst in rural areas, even
allowing for the often substantial differences in cost of living between town and
countryside...malnutrition, lack of education, low life expectancy, and substandard
housing are also, as a rule, more severe in rural areas. This is still true in Latin
America, despite high urbanization rates (World Bank, 1990:29).

The World Bank estimates that an increase of one year in average years of education
may lead to a 3% rise in GDP. In the LAC region, an increase in average years of
education from five to six years is estimated to result in a percentage change in real GDP in
excess of 2%. Looking across regions, the higher the initial level of education, the greater
are the benefits from increasing it, a relationship that underscores the importance of investing
in education. For the LAC region, estimated average social returns to investment in
education are 26% for primary education, 18% for secondary education 18%, and 16% for
higher education. As the World Bank (1990:80) notes:

many of the poor are self-employed in agriculture.... But this does not weaken the
case for investing in education. Educated farmers are more likely to adopt new
technologies, and virtually all studies on agricultural productivity show that better-
educated farmers get a higher return on their land.

Yet, for the LAC region, expenditures on primary education as a percentage of GDP, 1.06%
in 1985, are expected to decline to 0.84% (at current enrollment rates) by the year 2000.

It is estimated that the incidence of poverty (the share of the population below the
poverty line) in the LAC region will decline from 19.1% in 1985 to 11.4% by 2000. Yet
nowhere in the developing world is the contrast between poverty and national wealth more
striking than in the LAC region. While the region's average per capital incomes are five to
six times those in South Asia and sub-Saharan Africa, the LAC region's very high degree of
income inequality results in almost 20% of the population living in poverty.'


'The World Bank estimates that raising all the poor in the continent to just above the poverty line would cost
less than 1% (0.7%) of regional GDP, and that this amount is.about equal to a 2% income tax on the wealthiest
20% of the population.










According to The World Bank, prospects for reducing poverty in the LAC region
depend heavily on policy reforms in several areas. Of first importance, credible
macroeconomic stabilization measures are essential for restoring the confidence of investors,
encouraging flight capital return, and breaking the cycle of economic crises that has been
characteristic of many countries in the region. Equally important are policies to promote
growth and reduce inequality. A first requirement is removal of biases that favor the use of
capital, in order to ensure incentive to invest in more labor-intensive enterprises and
technologies, thereby helping to ensure that productive employment opportunities are
generated for the-poor. Price and financial policy reforms are -needed .to encourage private
investment in efficient labor-intensive, outward-oriented industries.

Further, since 40 to 50% of the poor will still reside in rural areas in the 1990s,
improvements in incentives for agricultural production will need to be complemented by
active support for rural development. A second requirement is the need to maintain, and in
some areas to expand, the provision of social services to the poor. Finally, during the
stabilization process, transfers, such as the emergency employment schemes that have been
used in Bolivia and Peni, may be needed.

The Bank's projected average GDP growth of 4.2% a year for the LAC region in the
1990s assumes that, during that decade's second half, debt burden will no longer be a serious
constraint on regional investment and that, over the next few years, programs to restore
economic stability will be put in place. Also, if income distribution improves with growth,
as occurred, for example, in Colombia during the 1970s and 1980s, significant progress can
be made in reducing regional poverty from 19% to 11% by 2000.

2. AID/Washington LAC Bureau Objectives

Given the state of poverty in the LAC region, the objectives of AID's LAC
Bureau include, among other priorities, achievement of broad-based, sustainable economic
growth which depends, in part, on increasing the contribution of LAC agriculture to the
region's economic growth. As outlined in LAC Program Objectives: Implementation
Workplan (AID, 1991), indicators of performance relative to this objective include:

A limited role for the public sector as provider of goods and services;

Sectoral policies that effectively address impediments to broadly based, sustainable
growth in agriculture;

Broader participation in income-generating activities;

Growth in nontraditional [agricultural] exports;

Priority given in public expenditures to investment in human capital development
and related infrastructure; and

Improved conservation and diminished contamination of soil, water, and air.










3. Role of Ag REE-Strengthening


The role of a country's Ag REE system is discussed in detail in section A.3 of
Chapter VI. Generally, the role of the public and/or private components of a country's Ag
REE system is to carry out technology generation and transfer (TG&T) essential for
increasing agricultural productivity and agriculture's contribution to economic growth. The
Ag REE system also has the role of developing the trained human resources needed in the
agricultural sector, particularly the resources needed to develop more productive, sustainable
technologies; to transfer these technologies to farmers; -and to train the. human resources
required to carry out agricultural research, extension (or technology transfer), and education.
The role of an Ag REE system with respect to institutional sustainability, human resource
development, and development and dissemination of sustainable agricultural technologies is
highlighted in Figure 1.1.

It is important to consider how effectively Ag REE systems in AID-assisted LAC
countries have carried out agricultural TG&T in support of broad-based, sustainable
economic growth, and whether LAC Ag REE systems are prepared to conduct TG&T that
increases the contribution of agriculture to economic growth in these countries. However
promising the decade of the 1990s may appear, the decade of the 1980s was a very difficult
time for many or most LAC countries, particularly if measured in terms of agricultural sector
performance.

During the 1980s, the LAC region placed increasing emphasis on agricultural exports.
For the period, Gacitua and Bello (1991: 391-405) report a significant negative relationship
between agricultural export promotion and food consumption. While the poverty of agri-
cultural workers and small producers increased, food consumption decreased. "Succinctly,
the open market policy implied that, while agricultural output increased, the production of
staple food for domestic markets declined in some cases to levels far below the production
levels of the 1960s, decreasing food consumption and food security" (Gacitua and Bello,
1991:394). At the same time, public sector programs in agricultural research and extension
in most AID-assisted LAC countries did little to improve agricultural productivity, thereby
further contributing to the decline in per capital food production (Figure 1.2) and an increase
in cereal imports (Figure 1.3). Table 1.1 provides data on other agricultural sector trends in
AID-assisted LAC countries.

One factor accounting for the failure to increase agricultural productivity in many
LAC countries during the 1980s was a dramatic decline in public funding for agricultural
research and extension (Table 1.2). Pardey and Roseboom (1990:2-4) report (1) that the real
expenditure per researcher, between 1961-65 and 1981-85, fell by 7.9% in 129 less-
developed countries and by 8.3% in 20 LAC countries, and (2) that:














Figure 1.1. Role of the Agricultural Research, Extension, and Education (REE) System Relative to LAC/DR/RD Goals
and Objectives (Source: LAC/DR/RD).


SUSTAINABLE
BROAD BASED
ECONOMIC GROWTH
I


INCREASED AG
CONTRIBUTION
TO GDP


IMPROVED SECTOR
POLICIES AND
STRATEGIES


PROMOTION -
-- NON-TRADITIONAL ---
AG EXPORTS


PROMOTION OF
AGRIBUSINESS


IMPROVED
LAND ACCESS


KEY: COMPONENT OF
AGRICULTURAL
REE SYSTEM



ZSED IMPROVED
.TURAL CONSERVATION & MANAGEMENT
IVITY OF NATURAL RESOURCES
II


IMPROVED CONSERVATION &
MANAGEMENT OF NATURAL
RESOURCES & ENVIRONMENT


DEVELOPMENT & DISSEMINA-
TION OF SUSTAINABLE AGRI-
CULTURAL TECHNOLOGIES


I-


EVALUATION INSTITUTIONAL HUMAN RUR
& SUSTAIN- RESOURCE FINAN
MONITORING ABILITY DEVELOPMENT MARK


C R O S S C U T T I N G T H E M


AL
CIAL
ETS


E S I


I


!


. -, - =


w 1 11111 1111 1 .. -.... ow















Figure 1.2. Per Capita Food Production in AID-Assisted LAC Countries (Source:
IBRD World Development Report, 1989).




LAC SUB-REGION

ANDEAN
Bolivia
Ecuador
Peru
CARIBBEAN
Dominican Republic
Haiti
Jamaica I
CENTRAL AMERICA
Costa Rica
El Salvador
Guatemala
Honduras
Nicaragua
Panama
-30 -20 -10 0 10 20
Percent Below or Above 1979/81 Leel


Figure 1.3. Growth in Cereal Imports to AID-Assisted LAC Countries (Source: IBRD
World Development Report, 1989).



LAC SUB-REGION

ANDEAN 174
Bolivia 187
Ecuador
Peru
CARIBBEAN
Dominican Republic s
Haiti
Jamaica
CENTRAL AMERICA
Coata Rica
El Salvador
Guatemala
Honduras
Nicaragua
Panama
0 0.5 1 1.5 2
Cereal Imports (Million MT)










A closer study of the period to period averages...reveals a general contraction in
financial support for agricultural research in the less-developed countries during the
latter period of the sample.... Anecdotal evidence suggests this contractionary pattern
of support for public sector agricultural research has continued or even accelerated
over the more recent past for many less-developed countries and may even have
spread to some of the more-developed countries as well.... Average spending per
scientist ratios for the Latin American and Caribbean region as a whole...show a
widespread and substantial decline throughout the region in the early to mid 1980s.
This decline was driven as much by-stagnating expenditure levels as it.was by a
relatively rapid growth in research personnel which, given the current austerity
measures facing many countries in the region, will pose continuing problems for these
NARS [National Agricultural Research Systems].

Current estimates of the level of resources for research in national agricultural
research systems (NARS) are provided in Table 1.3. Yet as a World Bank official noted at a
recent meeting of the Inter-American Council: "If the rural population in [the LAC region]
stays as it is, and the urban population increases as expected, production per farmer will
have to increase enormously to provide enough food. Since there is no more land that can
be used with the current level of technology, and no more water for agriculture, the only
way to increase production is through technological advances" (personal communication from
LAC TECH Agribusiness and trade advisor Ken Weiss).

4. Implications for LAC/DR/RD Programming

How did Ag REE systems in the LAC region reach the point of having such
deteriorated capacity for agricultural TG&T? What, if anything, should AID do about the
situation, and where, if anywhere, should AID look for solutions to the problem? It is
interesting, in this context, that a recent memo of a development assistance agency raised the
question of what is being or could be done to address urban problems in the LAC countries,
and proposed a discussion of this question at an upcoming meeting. The memo noted that:

Discussion is expected to encompass how our location-neutral [emphasis added]
activities in such areas as health, credit, private sector, democratic initiatives,
environment, education, etc., relate to urban problems, as well as whether there are
urban problem interventions that might be appropriate that don't easily fit with these
"traditional" sectors.

In regard to that memo, the following issued can be raised: If "urban problems" are not
addressed in the contc. ,"agriculture or vice versa, is there any hope of developing sustain-
able economic and socia, development in the LAC countries?

It is important to bear in mind that food costs constitute a large percentage of the
LAC urban consumer budget, even though LAC urban food prices often are highly
subsidized. While the urban consumer is a primary beneficiary of food subsidies are a drain
on the public sector budget and in the long run will become economically and politically








Table 1.1. Performance of Agricultural Sector in AID-Assisted LAC Countries.
Average Average Annual Growth Rate (%) Agriculture
Annual GNP GDP Agriculture as % of GDP
Growth Rate ----------- --------------- --------------
COUNTRIES a) 1965-88 65-80 80-88 65-80 80-88 65 88

II It II It II
ANDEAN I It
Bolivia | -0.6 4.5 -1.6 j 3.8 2.1 H 23 24
Ecuador 3.1 8.7 2.0 3.4 4.3 27 15
Perd 0.1 3.9 1.1 1.0 3.6 \ 18 12
II II II If
CARIBBEAN I I I
Dominican Rep. 2.7 7.9 2.2 6.3 0.8 23 23
Haiti 0.4 2.9 -0.2 31
Jamaica -1.5 1.3 0.6 0.5 0.9 1 10 6
i t i it It It
CENTRAL AMERICA I
Costa Rica 1.4 6.2 2.4 4.2 2.5 24 18
El Salvador -0.5 4.3 0.0 3.6 -1.4 29 14
Guatemala 1.0 5.9 -0.2 -
Honduras 0.6 5.0 1.7 2.0 1.1 40 25
Nicaragua -2.5 2.6 -0.3 1 3.3 -0.2 I 25 21 H
Panamb 2.2 5.5 2.6 2.4 2.5 H 18 9 l
Public & Publicly
Education as % Guaranteed
Average Annual of Total Central Long-Term Debt
Population Growth Govt Expenditure (Millions US$)

COUNTRIES al 65-88 80-88 88-2000 72 88 72 88

ANDEAN 1 I4
Bolivia 2.5 2.7 2.7 31.3 18.4 480 4451
Ecuador 3.1 2.7 2.2 27.5 J- t 193 9353 1
Peru 2.8 2.2 2.1 20.0 23.6 I 856 12475

CARIBBEAN Hj <
Dominican Rep. 2.7 2.4 1.8 14.2 212 3216
Haiti I 2.0 1.8 1.9 40 683
Jamaica 1.3 1.5 0.5 160 3512
i i I II II
CENTRAL AMERICA
Costa Rica f 2.7 2.3 2.0 j 28.3 16.2 134 3531
El Salvador j 2.7 1.3 2.1 H 21.4 17.1 88 1630
Guatemala 2.8 2.9 2.8 106 2131
Honduras 1 3.2 3.6 2.9 22.3 90 2739
Nicaragua H 3.1 3.4 3.0 16.6 147 6744
PanamA 2.6 2.2 1.6 20.7 15.6 194 3625












Table 1.1. Continued.


COUNTRIES a)


ANDEAN
Bolivia
Ecuador
Perd

CARIBBEAN
Dominican Rep.
Haiti
Jamaica

CENTRAL AMERICA
Costa Rica
El Salvador
Guatemala
Honduras
Nicaragua
Panama


Food as
% of Mer-
chandise
Imports

65 88


19
10
17


23
25
20


9
15
11
11
12
11


Food Aid
in Cereal
(Metric Tons)
('000)

74/75 87/88


Cereal
Imports
(Metric Tons)
('000)

74 88


'f

290
33
355


278
154
208
I I

235
177
320
146
87


328
563
1857


601
205
418


318
217
166
144
206
93


Fertilizer
Consumption
(Hundreds of Grams
of Plant Nutrient
Per Hectare
of Arable Land)

70/71 87/88


7
133
300


334
4
873


1001
1043
298
156
215
387


19
232
622


556
25
914


1806
1262
656
190
433
657


Avg. Index
of Food
Production
Per Capita
(79-81=100)

86-88


I I I
i ii


95:
95
101


89
87
92
76
71
95


a) Comparable data not reported for Belize and RDO/C (Eastern Caribbean States)


Source: World Bank (1990), Poverty: World Development Report 1990.


Food as
% Share
of Total
House '
Consmpt'n

80 or 85














Indicators in the LAC Region (adapted from ISNAR, 1989).


REGION/COUNTRY

ANDEAN REGION

Bolivia (83) a)
Ecuador (86)
Peru (80)

CARIBBEAN

Dominican Rep. (83)
Haiti (83)
Jamaica (80)


%Change
Sub- Ex- Researchers
Ph.D. M.Sc. B.Sc. total pats Total Since 1980


104
225
273 (85)


OECS:
Antigua (84)
Dominica (83)
Montserrat (84)
St. Kitts-Nevis (84)
St. Lucia (87)
St. Vincent (86)


CENTRAL AMERICA

Belize (82)
Costa Rica (84)
El Salvador (80)
Guatemala (85)
Honduras (82)
Nicaragua (80)
Panama (86)


* *
* *
* *
2 25.
* *
* 10
9 41


*
*
*
101
*
47
90


*
*
*
128
140
*
140


16
114 (81)
106
132
65
57
140


-8.8
+12.5
0.0



+28.3
*
*


+66.7
*
*
+100.0
-20.0
-20.0


*
*
+10.0
-8.4
+118
+118


Research Expenditures


% Change
Since 1980
in Constant LCUs


-50.6
-39.2
+200.2



+37.2
+112.8
* -49.3


-51.1
+8.3
+8.3
*
*


-54.0
*
-11.1
+11.3
*
+11.3


(83)
(86)
(84)


(83)
(83/78) b)
(81/71)


(84/82)

(83)


(84)
(80)
(84)
(80)
(80)
(85)


In Constant
1980 USS PPP


2.224
10.973
24.759



4.766
1.623
2.399


*
.103
*
.061
1.791
*



*
1.984
4.454
6.801
1.554
3.610
5.729


(83)
(86)
(84)



(83)
(83)
(81)



(83)

(81)
(83)


(84)
(80)
(84)
(80)
(80)
(85)


Principal
Research
Organization


IBTA
INIAP
INIAA


DIA/SEA
CDRA
MOA & CARD

CARDI (all):

MOA


MOA, WINBAN


DOA/RD
DIA
CENTA
ICTA
PNIA
MAG/INTA
IDIAP


* = Data not available or inadequate to calculate indicator.
a) Year in parentheses is most recent year for which data are
b) Most recent year relative to present year.


available or was year used in calculating the indicator.


--


Table 1.2. Agricultural Research















Table 1.3. National Agricultural Research Resources in the LAC
Region-Expressed as 1980-1985 Averages.

Agricultural
Agricultural Research Ex- Qualifi-
Person- Research Ex- penditures cation
LAC SUB-REGIONS nel a) penditures b) per Capita c) ARI d) Index e)

ANDEAN REGION

Bolivia 107 3.36 30 0.22 0.3
Ecuador 209 14.06 69 0.54 0.3
Peru 265 18.66 52 0.56 0.12

Sub-Total 581 36.08
Average 50.3

CARIBBEAN

Dom. Rep. 121 3.8 34 0.19 0.18
Haiti 32 1.62 51 0.13 0.94
Jamaica 49 2.4 0.77 0.55
RDO/C 45 2.02 45 f) 0.8 g) 0.47

Sub-Total 247 9.84
Average 43.3

CENTRAL AMERICA

Belize 15 -
Costa Rica 114 3.29 29 0.24
El Salvador 106 4.45 42 0.24 -
Guatemala 150 7.4 49 0.22 0.17
Honduras 68 1.55 29 0.17 0.25

Sub-Total 453 16.69
Average 37.3 0.22 0.21

TOTAL 1281 62.61

a) Personnel & Agricultural Research Expenditures: Pardey and Roseboom
(1988)
b) Ag'l Gross Domestic Product (AgGDP): UN (1988).
Ag'l Research Expenditures: Expressed in millions of 1980 US$.
Expenditures were first deflated to constant 1980 currency units using
an implicit GDP deflator (UN, 1988). They were then converted into 1980
US$ using PPP over GDP indices from Summers and Heston (1988).
c) Ag'l Research Expenditures per Scientist:Ag'l Research Expendi-
tures/Personnel ('000 of 1980 USS).
d) ARI (Ag'l Research Intensity Ratio):Ag'l Research Expenditures/AgGDP (in
percent).
e) Qualification Index: PhD + MS/total scientists (inclusive of expatriate
personnel, who are assumed to hold a higher degree).
f) Average of Dominica, St. Kitts-Nevis, and St. Lucia.
g) Figure is for St. Kitts-Nevis only.

Source: Valverde (1990:28-29)










unsustainable: They will compromise the ability of the market to perform efficiently and
reduce the incentive for farmers to produce.

At the same time, there is upward pressure on urban food prices to the extent that the
internal marketing system is inefficient, with marketing losses and higher per-unit costs
resulting in higher food prices to urban consumers, without any of the benefit of higher
prices being captured by the producer. Marketing losses and inefficiency not only penalize
the urban consumer but also the farmer, as marketing intermediaries must compensate for
anticipated losses by lowering commodity prices-to producers.

The net result of this situation is reduced demand for farm produce, lowered incentive
for farmers to produce or raise productivity, and little to no demand for productivity-
increasing agricultural technology or support of research aimed at raising agricultural
productivity. Thus, the problems of urban food prices, productivity stagnation in rural
farming areas, and environmental degradation are highly interrelated, greatly influenced not
only by economic and agricultural policies but also by the efficiency of marketing,
production, research, extension, and educational and training institutions.

Agriculture is as much "location-neutral" as are health, credit, private sector,
democratic initiatives, environment, education, etc. The sector's performance and con-
tribution to economic growth are greatly influenced by a country's urban standard of living.
A higher standard of living-greater income and purchasing power-translates into increased
demand for food and a signal for the agricultural sector to boost productivity and production
to meet the demand for food in urban markets.

USAID strategies, programs, and projects in the LAC region have placed little to no
emphasis on a systematic analysis of and attack on the interrelationship between urban and
rural poverty. AID's emphasis in recent years increasingly has been outward-looking
(nontraditional agricultural export crops) and not inward-looking (traditional food crops).
Agriculture is being abandoned at the same time that development assistance agencies are
asking what to do about urban problems and urban development. LAC urban development
problems cannot be solved by searching for "urban problem interventions that might be
appropriate that don't easily fit with [the aforementioned] 'traditional' sectors [health, credit,
...]," as if there were some "magic bullet," or a sector that somehow has remained hidden.
The agricultural sector is not hidden but is being neglected in a manner counterproductive to
broad-based economic growth. Moreover, continued neglect of and lack of development in
LAC rural areas will only lead to a continuing and growing influx of the rural populace to
LAC urban areas, further aggravating the urban problem and the difficulty of urban
development.

With regard to LAC Bureau objectives, more attention needs to be placed on the LAC
urban problem, but in the context of its interrelationship with agricultural productivity in
countries where agricultural institutions are not yet adequately developed. Clearly, there is a
need for increased attention to the problems of food security and the constraints to increased
agricultural productivity (lack of demand for productivity-increasing technologies). This is










where AID should begin to look for a solution to the problem of LAC Ag REB systems
having such a deteriorated capacity for agricultural TG&T. -

Donors such as AID are now beginning to face up to the serious problems of the
1990s: employment, food production, and protection of the environment. With a growing
population, the LAC countries must create more employment. But employment expansion
will depend on rapid agricultural growth, and agricultural productivity must increase in such
a manner that the environment is not damaged. This will require not only improved
technology that does not exist today, but-also strengthened and sustainable agricultural
technology generation and transfer (TG&T) capacity. Addressing these problems will require
a strong increase in development assistance for agricultural projects and programs.































CHAPTER I

FUNDING TRENDS FOR AGRICULTURAL RESEARCH, EXTENSION,
AND AGRICULTURE (AG REE) IN THE LAC REGION











CHAPTER II
FUNDING TRENDS FOR AGRICULTURAL RESEARCH, EXTENSION,
AND EDUCATION (AG REE) IN THE LAC REGION



This chapter reviews general trends in USAID Latin America and the Caribbean
(LAC) agriculture, rural development, and nutrition (ARDN) funding for Ag REE in the
LAC region and other donor funding and activity for LAC Ag REE-strengthening.

A. General Trends in LAC ARDN Funding for Ag REE

In 1988, AID/W conducted a review of over 1,000 projects active in AID's ARDN
portfolio in FY84-FY89 or proposed for FY90, in order to examine how the projects related
to the ARDN Focus Statement: "The focus of the Agency's [ARDN] program is to increase
the income of the poor majority and expand the availability and consumption of food, while
maintaining and enhancing the natural resource base" (Chemonics International Consulting
Division, 1988). LAC Bureau projects accounted for about 15 percent of the ARDN
portfolio. The study related funding obligations for each project to the ARDN Focus
Statement's food, income, and natural resources goals and to the specific purpose categories
to which the project was directed.' ARDN funding to support agricultural research, ex-
tension, or education was comprised of four purpose categories, as reported in Table 2.1
(LAC region) and Table 2.2 (all regions).

For FY84-FY89, 67% of obligations in LAC's portfolio were directed at the ARDN
Focus Statement goal of income enhancement, while 20.6% were directed to food, 8.0% to
natural resources, and 4.4% to all three goals [Chemonics International Consulting Division,
1988:F-3, Table III-B (1)]. There was a significant recent trend in obligation increases for
natural resources (to 25 % of the portfolio) and corresponding declines in obligations for food
and income (to 15% and 50%, respectively). Figure 2.1 shows that obligations for the
natural resource goal increased as obligations for food and income declined. As Figure 2.2
shows, obligations for technology transfer increased but declined in FY89. While obligations
for technology development increased from FY86 to FY88, they declined between FY88 and
FY89. Growth in obligations for technology transfer, marketing, and resource development
were fueled by declining obligations for credit. LAC funding by Economic Support Funds
(ESF) is not programmed to support agriculture, except as country-owned local currencies
generated from ESF. LAC does not "projectize" ESF. ESF and PL 480 local currency
generations are host country-owned and not accounted for by AID (i.e., not included in the
ARDN data base). Thus, available data may underestimate the true investment in ARDN
activities.


'Purpose categories were: planning and policy analysis (PPA), technology development (TDE), technology
transfer (TTR), marketing (MKT), input delivery capacity strengthening (INP), credit development (CRE),
construction (CON), resource development (RED), land tenure (LTE), human resource development (HRD),
education system development (ESD), and sector support (SEC).












Table 2.1. Percent Distribution of AID Obligations in the LAC Region for ARDN
Purpose Categories Relating Directly to Agricultural Research, Extension,
and Education.
% Purpose Category
7 Technology development (TED): to conduct* or improve* the capacity for conducting
research on improved technologies for production and consumption.
10 Technology transfer (TTR): to extend* or improve* the capacity for
extension/diffusion/transfer of improved technologies for production and consumption.
0 Education system development (ESD): to develop* or strengthen* the capacity to
develop education institution structure/curricula/operations/facilities.

5 Human resource development (HRD): to improve* or strengthen* the capacity to
improve training and human resource development.
22 Total
*or expand, establish, strengthen, study, organize, etc., as appropriate.
Source: Chemonics International Consulting Division, 1988:F-3.

The study noted that investment in technology transfer has tended to expand in each
geographic region, while investment in technology generation has remained static or even
declined. This trend was identified as "worrisome, since productive technology transfer
depends upon a continuous stream of innovative technology." The study speculated that this
"inversion" may reflect increasing attention to:
on-farm research and corresponding attention to research on farmer motives for
adoption or rejection of productive technology. The neglect of this topic in traditional
research pr- -ams has made much commodity-oriented research unproductive. On
the other hand, the decline in technology generation may reflect overdependence on
the output of...international agricultural research...without development of an
indigenous capacity to adapt that output to specific national conditions (Chemonics
International Consulting Division, 1988:33).2

Including all three geographical bureaus (Africa, Asia and the Near East, and LAC),
the study concluded that the Agency's goal for the 1990s and the ARDN focus statement
goals are appropriate and consistent and should not be changed significantly in the
foreseeable future. But the Joint Sector Councils recommended that development and


'During the study period, increasing emphasis was placed in the LAC region on development of nontraditional
agricultural exp'r '*TAE) crops. But there are no international agricultural research centers (IARCs) working on
such crops; and pu. .i sector agricultural research systems in AID-assisted LAC countries traditionally have little
or no experience with NTAE crops. Thus, farmers seeking to grow and export such crops have tended to rely on
private sources for the expertise required to adapt crop-specific technologies to site- specific growing conditions
(Byrnes, 1989).











Percent Distribution of AID Obligations in ARDN Portfolio by Purpose


Category (FY84-FY89).

TOTAL
PURPOSE CATEGORY AID AFR ANE LAC CENTRAL

Research/Extension/Education

Technology Development 11.5 14 6 7 64
Technology Transfer 15.5 15 18 10 2
Educational System Development 2.5 4 3 0 0
Human Resource Development 3.5 5 3 5 1

(Sub-Total) (33.0) (38) (30) (22) (67)

Other Sectors

Construction 17.5 10 24 10 0
Credit 17.0 2 20 33 14
Input 2.0 5 3 0 0
Land Tenure 1.5 0 0 9 1
Marketing 2.5 2 0 11 0
Planning & Policy Analysis 6.0 7 6 5 5
Resource Development 4.5 3 4 4 13
Sector Support 16.0 35 12 4 0

TOTAL 100 100 100 100 100

Source: Chemonics International Consulting Division, 1988:F-3.



implementation of "a strategy for AID support for sustained rural economic growth in the
1990s" would provide opportunity to better focus the ARDN portfolio. The following
needed changes in the portfolio were identified:

The need to concentrate on sustainable agriculture as well as protection of the
natural resource base, concentrating particularly on the generation and transfer of
appropriate technology and the development of a macroeconomic and policy
environment that provides incentives for the adoption of such technology.


Table 2.2.












Figure 2.1. Total ARDN Obligations (FY84-FY89) Toward ARDN Focus Statement
Goals for the LAC Region (Chemonics International Consulting Division,
1988:12).







90 %
so% ~ .:~


FY84 FY85 FY86 FY87 FY88 FY89


E INC


D FooD


M. NAT RES


Key:


INC
FOOD
NAT RES
ALL


= Income
= Food
= Natural Resources
= All










Figure 2.2. LAC ARDN Obligations (FY84-FY89) by Purpose Category (Clienonics International Consulting Division,
1988:16). (See footnote for key to purpose categories).3


'Purpose categories are: planning and policy analysis (PPA), technology development (TDE), technology transfer (TTR), marketing (M KT), input delivery
capacity strengthening (INP), credit development (CRE), construction (CON), resource development (RED), land tenure (LTE), human resource development
(HRD), education system development (ESD), and sector support (SEC).










The need to continue expansion of relative investment directed at improving the
macroeconomic and agricultural policy environment, particularly host-country
planning and policy analysis capacity.

The need to reduce allocations to credit and construction, with the savings
reallocated to other areas that would have a potentially larger impact (such as
natural resources and sustainable agriculture, and improving the macroeconomic
and agricultural policy environment).

Further analysis of the ARDN portfolio was carried out by LAC/DR/RD in 1989.
This analysis reviewed the portfolio in terms of "strategic funding categories" for FY88-
FY91. The analysis provides an indication of current and projected trends in ARDN funding
for agricultural research, extension, and education in the LAC region. For this analysis,
agricultural research, extension, and education were defined as follows:

Agricultural Research: activities carried out at LDC institutions, in the U.S., or at
international agricultural research centers (IARCs) that support agronomic research, including
on-station, basic, on-farm, applied, and farming systems research; includes the development
of improved agricultural practices and extension efforts when undertaken as part of
agricultural research.

Agricultural Extension: activities to transmit knowledge of new agricultural
methods, plant varieties, and products directly to farmers; includes strengthening of
government or private extension and outreach services, improving dissemination techniques,
and providing improved communication and transportation.

Agricultural Education: all activities supporting] agricultural education; includes all
activities supporting faculties of agriculture at the undergraduate and graduate levels.

Tables 2.3 through 2.6 summarize the LAC ARDN portfolio by strategic funding
categories for the FY88-FY91 period; the percentages in Tables 2.4 and 2.6 are derived from
Tables 2.3 and 2.5, respectively. These tables were originally prepared in late 1989. At the
time, the data in the FY88 column were final actual obligations, while the data in the FY89
column were actual obligations, with a possibility that the final obligations could be at
variance with the FY89 operational year budget (FY89 OYB). The data in the FY90 column
were based on the FY90 operational year budget, while the data in the FY91 column derive
from the Annual Budget Submission (ABS) in the FY 91 Congressional Presentation (CP).
The FY89 final actual obligations data were incorporated into the table in November 1990,
thus making the FY88 and FY89 data final actual obligations. Updated FY91 ABS data from
the approved FY91 OYB as well as the new FY92 ABS data were anticipated to become
available in late January 1991. Incorporation of these data into the tables would provide
coverage of a five-year time span.













Table 2.3. LAC Bureau ARDN Portfolio Summary by Strategic


STRATEGIC CATEGORY TOTAL LAC BUREAU
FY88 FY89 FY90 FY91

AGRICULTURE (total) 92627 131919 136761 133021

Agricultural Research = 16130 12076 15416 10994
Agricultural Extension = 15601 19897 16982 14181
Agricultural Education = 4257 14456 3109 2336

Ag/Nutrition Mgmt., Planning & Policy = 2624
Agricultural Land Use and Settlement = 1653 2062 3748 3765
Agricultural Policy = 2073 29526 50784 71548
Agricultural Inputs = 595 3942 1417 208
Agricultural Irrigation = 4883 4729 3957 3837
Pest Management = 918 1834 1518 1135
Agricultural Credit = 17431 15194 10733 8976
Agricultural Marketing = 2906 3828 2492 2411
Agribusiness = 12435 15335 18088 3832
Infrastructure (Rural Roads) = 13745 6416 8067 9798

NATURAL RESOURCES/ENVIRONMENT (total) 18484 28823 32044 29825

Forestry = 6957 10376 11515 10676
Environmental Mgmt., Planning/Policy = 4162 12557 12575 7886
Soils = 165 1388 2241 1640
Agricultural Land Development = 939 1275 1939 1623
Water Resources Management = 781 2718 3331 7450
Energy (Fuelwood) = 5480 509 443 550

NARCOTIC AWARENESS = 0 0 0 125000


GRAND TOTALS = 111111 160742


Funding Categories (FY88-FY91): $'000.


168805 287846















Table 2.4. LAC Bureau ARDN Portfolio Summary by Strategic Funding Categories
(FY88-FY91): Percentages.


STRATEGIC CATEGORY



AGRICULTURE (total)

Agricultural.Research
Agricultural Extension
Agricultural Education

Ag/Nutrition Mgmt., Planning & Policy
Agricultural Land Use & Settlement
Agricultural Policy
Agricultural Inputs
Agricultural Irrigation
Pest Management
Agricultural Credit
Agricultural Marketing
Agribusiness
Infrastructure (Rural Roads)

NATURAL RESOURCES/ENVIRONMENT (total)

Forestry
Environmental Mgmt., Planning/Policy
Soils
Agricultural Land Development
Water Resources Management
Energy (Fuelwood)

NARCOTIC AWARENESS


TOTAL LAC BUREAU


FY88 FY89


FY90 FY91


83.3 82.1 81.0 81.7 a)


17.4
16.8
4.6


1.8
2.2
0.6
5.3
1.0
18.8
3.1
13.4
14.8


9.2
15.1
11.0

2.0
1.6
22.4
3.0
3.6
1.4
11.5
2.9
11.6
4.9


11.3
12.4
2.3


2.7
37.1
1.0
2.9
. 1.1
7.8
1.8
13.2
5.9


8.3
10.7
1.8


2.8
53.8
0.1
2.9
0.9
6.7
1.8
2.9
7.4


16.7 17.9 19.0 18.3 b)


37.6
22.5
0.9
5.1
4.2
29.6


36.0
43.6
4.8
4.4.
9.4
1.8


35.9
39.2
7.0
6.1
10.4
1.4


35.8
26.4
5.5
5.4
25.0
1.8


0 0 0 43.4 c)


100


100


100


100


FY Funding as % of Total ARDN Funding, including
and Environment:


total Natural Resources


STRATEGIC CATEGORY


TOTAL LAC BUREAU
FY88 FY89 FY90 FY91


Agricultural Research
Agricult-ral Extension
Agricult-. al Education


S 14.5
S 14.0
= 3.8


Perce: if funding of 5125,000 for Narcotic Awareness not included;
if fur r Narcotic Awareness is included, percentage is 46.2%.
Percent. funding of 5125,000 for Narcotic Awareness not included;
if fundiz. narcotic Awareness is included, percentage is 10.4%.
Funding or 00 for Narcotic Awareness as a percentage of total ARDN
funding of 5- -6 (see Table 2.3)
FY91 (if not i.. .ie Narcotics Awaren?,J)


7.6
12.4
9.0


FY91 d)


9.4
10.4
1.9


3.7 6.4
4.8 8.2
0.8 1.3










1. Funding Trends Over Time


As a percentage of total funding for Agriculture, funding for agricultural
research, extension, and education (Ag REE) fell significantly during the subject period.
The decline in funding support for these areas is even more dramatic when the absolute
funding is taken as a percentage of total funding for Agriculture and Natural Resources/
Environment. LAC funding for Ag REE, as a percent of total funding for Agriculture, and
as a percent of total funding for Agriculture and Natural Resources/Environment (the
percentages- enclosed in parentheses), -fell- in each of three functions-research, extension,
and education-as follows:

Research Extension Education

FY88 17.4% (14.5%) 16.8% (14.0%) 4.6% (3.8%)
FY89 9.2% (7.6%) 15.1% (12.4%) 11.0% (9.0%)
FY90 11.3% (9.1%) 12.4% (10.1%) 2.3% (1.8%)
FY91 8.3% (3.7%) 10.7% (4.8%) 1.8% (.8%)

Between FY88 and FY91, funding for agricultural research was cut by more than half
(52%) from 17.4% in FY88 to 8.3% in FY91, funding for extension was cut by more than a
third (36%) from 16.8% to 10.7%, and funding for education was cut by over 60% (61%)
from 4.6% to 1.8%. If FY91's allocation of $125,000,000 (43.4% of FY91 ARDN funds of
$297,846,000) for narcotics awareness is included, the percentages fall even lower, from
14.5% to 3.7% for agricultural research, from 14.0% to 4.8% for extension, and from 3.8%
to 0.8% for education.

These trends indicate that the reductions in funding support have been biggest
precisely in the area (education) with greatest potential for developing the human capital on
which the success of future agricultural TG&T efforts will depend. On the other hand,
funding reductions have been smallest precisely in the area (extension) with the least long-
term potential for increasing the farmer's returns to adoption of improved technology.
Without the generation of new productivity-increasing and/or cost-reducing technologies,
investing in extension for transfer of the existing technologies to farmers inevitably leads to a
reduction in the marginal returns to farmer adoption of those technologies. By comparison,
investment in education and research (technology generation) provide the basis for increasing
potential returns to farmers from the adoption of new technologies, because education and
research are the basis for developing technologies that are more productive and less costly or
risky relative to existing technologies.

Looking at agricultural research, extension, and education relative to the remainder of
the LAC ARDN portfolio, if FY91 funding for Narcotic Awareness is not taken into
account, funding for agriculture relative to natural resources/environment fell slightly from
83.3% in FY88 to 81.7% in FY91, while funding for natural resources/ environment
increased from 16.7% in FY88 to 18.3% in FY91. Water resources management accounted
for the largest relative increase in the natural resources/ environment component of the
portfolio, an increase from 4.2% in FY88 to 25% in FY81. The largest relative increment










in funding support in the ARDN portfolio occurred in the agricultural policy area, where
funding increased from 2.2% of the ARDN portfolio's agriculture component in FY88 to
53.8% in FY91. But if the $125,000,000 of funding for Narcotic Awareness, or 43.4% of
total ARDN funding for the Andean Region in FY91, is taken into account, all of the FY91
percentages fall dramatically-agriculture to 46.2% of the ARDN portfolio (down from
81.7% in FY90) and natural resources/environment to 10.4% of the portfolio (down from
43.4% in FY90).

2. Funding Trends by Subregion

Tables 2.5 through 2.8 summarize funding trends for agricultural research,
extension, and education by LAC subregion: Central America (CA), the Caribbean (CN),
and the Andean Region (AN). The percentages in Table 2.6 are based on the dollar figures
in Table 2.5, while Tables 2.7 and 2.8 are taken directly from Table 2.6.

As the reader may see in Table 2.7, funding for agricultural research as a percentage
of total LAC ARDN funding fell by nearly 97% in Central America (15.6% in FY88, 0.5%
in FY91) and by over 84% in the Andean Region (16.3% in FY88, 2.7% in FY91), while
funding for agricultural research in the Caribbean nearly tripled (8.3% in FY88, 24.7% in
FY91).

In agricultural extension, funding as a percentage of total LAC ARDN funding fell by
nearly 77% in Central America (10.3% in FY88, 2.4% in FY91) and by nearly 75% in the
Andean Region (15.9% in FY88, 4% in FY91), while funding for agricultural extension in
the Caribbean increased by nearly 25% (17.4% in FY88, 21.3% in FY91). Thus, the
funding trends in agricultural extension in each subregion were parallel to those in
agricultural research.

In agricultural education, funding as a percentage of total LAC ARDN funding fell by
over 85% in Central America (5.5% in FY88, .8% in FY91) and by nearly 93% in the
Andean Region (4% in FY88, .3% in FY91), while funding for agricultural education in the
Caribbean increased from 0% to an average of 5% for the period (but 3.9% in FY91). The
funding trends in agricultural education in each subregion were parallel to those in agricul-
tural research and extension.













Table 2.5. LAC Bureau ARDN Portfolio Summary by Strategic Funding Categories
Subregion.


STRATEGIC CATEGORY


AGRICULTURE (total)


Research
Extension
Education


Ag'l/Nutrition Mgmt.,
Planning & Policy
Ag'l Land Use &
Settlement
Ag'l Policy
Ag'l Inputs
Ag'l Irrigation
Pest Management
Ag'l Credit
0 Ag'l Marketing
n Agribusiness
Infrastructure
(Rural Roads)

NATURAL RESOURCES/
ENVIRONMENT (total)

Forestry
Environmental Mgmt.,
Planning/Policy
Soils
Ag'l Land Development
Water Resources Mgmt.
Energy (Fuelwood)


NARCOTIC AWARENESS


GRAND TOTALS


FY88 FY89

40062 16871


7737
7505
1910


515
1022
50
0
43
10623
174
8252


ANDEAN


4830
5245
1096


1629

130
598
130
0
0
1209
184
1356


FY90

43426

5668
7824
622


525
1611
250
0
84
5134
320
16515


CARIBBEAN
FY91 FY88 FY89 FY90 FY91

22563 15563 23599 19004 18916


4033
5973
419


935
1957
160
0
72
1537
628
1271


= 2231 464 4873 5578


1779
3733
0


815
86
81
3165
0
3938
84
1282


3261
6243
1800


1175
392
2238
971
0
2226
884
958


6326
4890
1671


1113
1180
30
184
377
603
1079
1151


6436
5571
1025


600
1311
15
127
400
607
1168
1056


(FY88-FY91): $'000 by


CENTRAL AMERICA
FY88 FY89 FY90 FY91

37002 90555 74331 91542


6614
4363
2347


323
965
464
1718
875
2870
2648
2901


3971
8395
11226


557
28490
1574
3758
1779
11759
2760
12934


3422
4268
816


2110
47993
1137
3773
1057
4996
1543
422


525
2637
892


2330
68280
33
3710
663
6832
615
1505


600 2879 400 600 10914 3073 2794 3620


7281 1277 2801 2340 5845 7641 8302 7182 5358 18304 20941 20303


S 856 1023


1370
S55
0
0
5000


= 0

= 47343


0

18148


1421 1144 1950 2565 3366 3801


1122
258
0
0
0


0

46227


1016
180
0
0
0


125000

149903


2109
110
815
381
480

0

21408


3243
44
1235
45
509


2529
283
1881
0
243


1201
360
1520
0
300


0 0 0

31240 27306 26098


4151 6500 6728 5731


683
0
124
400
0


0

42360


8017
1240
40
2507
0


0

108859


8924
1700
58
3331
200

0

95272


5669
1100
103
7450
250


0

111845


Ag'l
Ag' I
Ag'l















Table 2.6. LAC Bureau ARDN Portfolio Summary by Strategic Funding Categories (FY88-FY91): Percentages by
Subregion (* = less than one-tenth of one percent).


STRATEGIC CATEGORY


ANDEAN CARIBBEAN CENTRAL AMERICA
FY88 FY89 FY90 FY91 FY88 FY89 FY90 FY91 FY88 FY89 FY90 FY91


AGRICULTURE (total)


Ag'l
Ag'l
Ag'l


Research
Extension
Education


Ag'1/Nutrition Mgmt.,
Planning & Policy
Ag'l Land Use & Settlement
Ag'l Policy
Ag'l Inputs
Ag'l Irrigation
Pest Management
Ag'l Credit
Ag'l Marketing
t Agribusiness
0 Infrastructure (Rural Roads)-
NATURAL RESOURCES/
ENVIRONMENT (total)


84.6 93.0 93.9 14.9 72.7 75.5 69.6 72.4 87.4 83.2 78.0


16.3
1C 9
4.0



1.1
2.2
0.1
0
0.1
22.4
0.4
17.4
4.7


26.6
28.9
6.0


9.0
0.7
3.3
0.7
0
0
6.7
1.0
7.5
2.6


12.3
16.'*
1.4



1.1
3.5
0.5
0
0.2
11.1
0.7
35.7
10.5


2.7 a)
4.0 a)
0.3 a)



0.6
1.3
0.1
0
*
1.0
0.4
0.8
3.7


8.3
17.4
0



3.8
0.4
0.4
14.8
0
18.4
0.4
6.0
2.8


10.4
20.0
5.8


1.8
3.8
1.2
7.2
3.1
0
7.1
2.8
3.1
9.2


23.2
17.9
6.1



4.1
4.3
0.1
0.7
1.4
2.2
3.9
4.2
1.5


24.7
21.3
3.9



2.3
5.0
0.1
0.5
1.5
2.3
4.5
4
2.3


15.6
10.3
5.5



0.8
2.3
1.1
4.1
2.1
6.8
6.2
6.8
25.8


3.6
7.7
10.3


0.3
0.6
26.2
1.4
3.4
1.6
10.8
2.5
11.9
2.8


3.6
4.5
0.9



2.2
50.4
1.2
4.0
1.1
5.2
1.6
0.4
2.9


81.7

0.5
2.4
0.8



2.0
61.0
*
3.3
0.6
6.1
0.5
1.3
3.2


15.4 7.0 6.1 1.6 27.3 24.5 30.4 27.6 12.6 16.8 22.0 18.2


Forestry
Environmental Mgmt.,
Planning/Policy
Soils
Ag'1 Land Development
Water Resources Mgmt.
Energy (Fuelwood)

NARCOTIC AWARENESS

GRAND TOTALS


= 1.8 5.6 3.1 0.8


= 2.9
= 0.1
= 0
= 0
- =10.6


= 0O

= 100


0.8
0.6
0
0
0


0

100


2.4
0.6
0
0
0'

0

100


0.7
0.1
0
0
0


83.4

100


9.1 8.2 12.3 14.6


9.9
0.5
3.8
1.8
2.2


0

100


10.4
0.1
3.9
0.1
1.6

0

100


9.3
1.0
6.9
0
0.9


0

100


4.6
1.4
5.8
0
1.2


0

100


9.8 6.0 7.0 5.1


1.6
0
0.3
0.9
0

0

100


7.4
:1.1
*
2.3
0

0

100


9.4
1.8
0.1
3.5
0.2


0

100


5.1
1.0
0.1
6.7
0.2


0

100


a) For South America FY91, percentages (if not include Narcotic Awareness) for research, extension,
and education are 16.2%, 24.0%, and 1.7%, respectively.












Trends in LAC ARDN Funding for Agricultural Research, Extension, and
Education: Comparison Across Subregions.


Research


Extension


Education


AR CA CN
---- % ---


16.3
26.6
12.3
2.7


15.6
3.6
3.6
0.5


8.3
10.4
23.2
24.7


AR CA CN
---- % --


15.9
28.9
16.9
4.0


10.3
7.7
4.5
2.4


AR CA CN
-----%----


17.4
20.0
17.9
21.3


-5.5
10.3
0.9
0.8


Key: AR = Andean Region; CA = Central America; CN = Caribbean Region
Source: Table 2.6.


Table 2.8 provides subregional comparisons of the trends in LAC ARDN funding for
Ag REE. The Andean and Central American regions experienced similar downward trends
in funding for Ag REE. In the Central American region, ARDN funding for education fell
by 85%, research by 97%, and extension by 77%, while ARDN funding in the Andean
region fell 93% for education, 84% for research, and 75% for extension. As a result,
ARDN funding for Ag REE now comprises only 7% of the Andean portfolio and less than
4 % of the Central American portfolio. Only the Caribbean region experienced an increase in
ARDN funding, with funding for education going from 0% to nearly 4% of the ARDN
portfolio in the region, research increasing by nearly threefold (from 8.3% to 24.7%), and
extension increasing by over 20% (from 17.4% to 21.3%).


Table 2.8.


Subregional Trends in LAC ARDN Funding for Agricultural Research,
Extension, and Education by Subregion: Comparison Across Categories
for Each Subregion.


Andean
RES EXT EDU
%--


16.3
26.6
12.3
2.7


15.9
28.9
16.9
4.0


Caribbean
RES EXT EDU
--%-----


8.3
10.4
23.2
24.7


17.4
20.0
17.9
21.3


Central America
RES EXT EDU
---%---


15.6
3.6
3.6
0.5


10.3
7.7
4.5
2.4


5.5
10.3
0.9
0.8


Source: Table 2.6.


Table 2.7.


FY88
FY89
FY90
FY91


FY88
FY89
FY90
FY91










3. Funding Trends by Country within Subregions


Table 2.9 summarizes, by country in each subregion, FY89 ARDN funding
for Ag REE. The reader should note that the data are for a single year (FY89) and that
project obligations generally are lumpy (i.e., the level of funding obligated for any particular
year may be higher or lower than the preceding or following years). A more reliable
indicator would be funding over the life of a project (LOP) or, alternatively, a multi-year
average for Ag REE-related project obligations. Thus, the present data only estimate the
funding trend. With this caution in mind, LACMissions can be.ranked in terms of the
relative emphasis placed on agricultural research, extension, and education, as measured by
ARDN obligations for Ag REE as a percent of total ARDN obligations (last column, Table
2.9).
Research-The Mission ranking is as follows:
% Country % Country
36.3 Peri 13.2 Jamaica
21.2 Bolivia 9.2 Belize
17.0 Ecuador 4.6 ROCAP
16.4 RDO/C 1.4 Guatemala
16.3 Dominican Republic 0.0 Haiti
13.6 Honduras 0.0 El Salvador
0.0 Costa Rica
Comparing USAID Missions across the three subregions, the three Andean Missions
place the highest emphasis on agricultural research, with an average of almost 25% of the
ARDN portfolio invested in -agricultural research; only USAID/Peni invests more than 35 %
of ARDN resources in research. The Caribbean Missions fall in the middle of the range.
Including Haiti (which does not invest any ARDN resources in research), Caribbean
Missions invest an average of about 11% of ARDN resources in research. The Central
American Missions fall at the bottom of the range, investing an average of about 5% of the
ARDN resources in research, although this figure includes two Missions (El Salvador and
Costa Rica) that do not invest any ARDN resources in research.
Extension-The Mission ranking is as follows:
% Country % Country
32.7 Ecuador 16.0 RDO/C
31.9 Haiti 10.2 Honduras
31.6 Peru 9.0 ROCAP
26.7 Belize 6.9 Guatemala
23.5 Bolivia 6.7 El Salvador
20.4 Jamaica 5.8 Dominican Republic
0.0 Costa Rica










Table 2.9. FY89 ARDN Funding for Agricultural Research, Extension, and Education by Country in Each LAC
Subregion: $'000.


LAC SUBREGIONS


TOTAL
ARDN


RESEARCH
($'oo00) (%)


EXTENSION
($'000) Il%


EDUCATION
($'000) (%i


TOTAL REE
($'000) 1A1


ANDEAN REGION


Bolivia
Ecuador
PeruI


CARIBBEAN

Dominican Republic
Haiti
Jamaica
RDO/C


CENTRAL AMERICA


Belize
Costa Rica
El Salvador
Guatemala
Honduras
ROCAP
C. A. Regional


LAC REGIONAL

GRAND TOTALS


6586
3943
7619

18148


6921
9386
10191
4742

31240


2271
7050
20930
38255
15375
23659
1319

108859

2495

160742


1397 21.2
670 17.0
2763 36.3

4830 26.6


1131 16.3
0 0
1350 13.2
780 16.4

3261 10.4


210 9.2
0 0
0 0
550 1.4
2090 13.6
1091 4.6
30 2.3

3971 3.6

14 .6

12076 7.5


1547 23.5
1288 32.7
2410 31.6

5245 28.9


403 5.8
2997 31.9
2085 20.4
758 16.0

6243 20.0


606 26.7
0 0
1412 6.7
2659 6.9
1566 10.2
2122 9.0
30 2.3

8395 7.7

14 .6

19897 12.4


0 0
125 3.2
971 12.7

1096 6.0


1800 26.0
0 0
0 0
0 0

1800 5.8


0 0
0 0
0 0
280 .7
150 .5
10757 45.5
39 3.0

11226 10.3

334 13.4

14456 9.0


2944 44.7
2083 52.8
6144 80.6

11171 61.6


3334 48.2
2997 31.9
3435 33.7
1538 32.4

11304 36.2


816 35.9
0 0
1412 6.7
3489 9.1
3806 24.7
13970 59.0
99 7.5

23592 21.7

362 14.5

46429 28.9


Source: LAC/DR/RD











Comparing across the three subregions, three of the top five ranks are held by the
three Andean Missions, with Ecuador ranked first, Peri third, and Bolivia fifth; together, the
Andean Missions invest an average of 29% of their ARDN resources in extension. The
Caribbean Missions fall in the middle of the range, averaging about 18%; however, overall,
Haiti ranks second at nearly 32% and the Dominican Republic ranks next to last at almost
6%. The Central American Missions fall at the bottom of the range, averaging just under
10%.

S-Education-The Mission -ranking is as follows:
% Country % Country
45.5 ROCAP 0.0 Bolivia
26.0 Dominican Republic 0.0 Haiti
12.7 Peri 0.0 Jamaica
3.2 Ecuador 0.0 RDO/C
0.7 Guatemala 0.0 El Salvador
0.5 Honduras 0.0 Belize
0.0 Costa Rica

Comparing USAID Missions across the three subregions, two of the top five Missions
(Perd at 13% and Ecuador at 3%) are Andean Missions; on the other hand, the
USAID/Bolivia Mission invests 0% of its ARDN resources in education. In the Caribbean
region, USAID/Dominican Republic invests 26% of its ARDN resources in education, while
the other three Caribbean Missions (Haiti, Jamaica, and RDO/C) invest none of their ARDN
resources in education. In the Central American region, ROCAP invests almost half (45.5%)
of its ARDN resources in education, while the five country-level Central American Missions
invest little or none of their ARDN resources in agricultural education.

Overall-In terms of all three Ag REE functions, the country ranking is as follows:
% Country % Country
80.6 Perti 33.7 Jamaica
59.0 ROCAP 32.4 RDO/C
52.8 E:-.ador 31.9 Haiti
48.2 L. :2n Republic 24.7 Honduras
44.7 Boil. 9.1 Guatemala
35.9 Belize 6.7 El Salvador
0.0 Costa Rica

Generally, the Andean region Missions invest almost 60% of their ARDN resources
on Ag REE, USAID/Peri (at 81%) placing first among all LAC countries, Ecuador third
(53%) and Bolivia fifth (45%). By comparison, the Central American Missions invest an
average of about 22%, with ROCAP (at 59%) second among all LAC Missions and
USAID/Costa Rica (at 0%) last. The Caribbean Missions fall in the middle range, averaging
about 37% of ARDN resources invested in Ag REE, although USAID/Dominican Republic
invests nearly half (48%) of its ARDN resources in Ag REE.










The regional patterns for agricultural research, extension, and education are
summarized in Table 2.10.


Table. 2.10. Regional Pattern of USAID Mission Investment in Ag REE as a Percent of
FY89 ARDN Resources.

Central
Andean C-aribbean American

%

Research 24.8 11.5 4.8
Extension 29.3 18.5 9.9
Education 5.3 6.5 7.8
Overall REE 59.4 36.6 22.6



4. Major Trends

Box 2.1 summarizes the major changes in the LAC ARDN portfolio during the
subject period (FY88-FY91). In summary, on a subregional basis, Ag REE funding, as a
percent of total ARDN funding, fell dramatically in two regions (from 36% to 7% in the
Andean region and from 31% to 4% in the Central American region) and increased
dramatically in one region (from 26% to 50% in the Caribbean region). Some of the major
trends in the LAC ARDN portfolio are graphically shown in Figure 2.3. The decline in
ARDN funding for Ag REE and agricultural credit are apparent, while the increase in ARDN
funding for agribusiness, agricultural policy and, more recently, narcotics awareness are
similarly evident.

B. Other Donor Funding & Activity for LAC Ag REE-Strengthening

Beyond AID's ARDN funding for Ag REE, others donors also are doing very little to
strengthen LAC Ag REE systems.

1. Donor Support for International Agricultural Research Center (IARCs)

AID has been one of the principal donors to International Agricultural
Research Centers through the Agency's participation in the Consultative Group on
International Agricultural Research (CGIAR) that coordinates donor funding of the IARC










The regional patterns for agricultural research, extension, and education are
summarized in Table 2.10.


Table. 2.10. Regional Pattern of USAID Mission Investment in Ag REE as a Percent of
FY89 ARDN Resources.

Central
Andean C-aribbean American

%

Research 24.8 11.5 4.8
Extension 29.3 18.5 9.9
Education 5.3 6.5 7.8
Overall REE 59.4 36.6 22.6



4. Major Trends

Box 2.1 summarizes the major changes in the LAC ARDN portfolio during the
subject period (FY88-FY91). In summary, on a subregional basis, Ag REE funding, as a
percent of total ARDN funding, fell dramatically in two regions (from 36% to 7% in the
Andean region and from 31% to 4% in the Central American region) and increased
dramatically in one region (from 26% to 50% in the Caribbean region). Some of the major
trends in the LAC ARDN portfolio are graphically shown in Figure 2.3. The decline in
ARDN funding for Ag REE and agricultural credit are apparent, while the increase in ARDN
funding for agribusiness, agricultural policy and, more recently, narcotics awareness are
similarly evident.

B. Other Donor Funding & Activity for LAC Ag REE-Strengthening

Beyond AID's ARDN funding for Ag REE, others donors also are doing very little to
strengthen LAC Ag REE systems.

1. Donor Support for International Agricultural Research Center (IARCs)

AID has been one of the principal donors to International Agricultural
Research Centers through the Agency's participation in the Consultative Group on
International Agricultural Research (CGIAR) that coordinates donor funding of the IARC











Box 2.1. Summary of the Major Changes in the LAC ARDN Portfolio during
FY88-FY91.

Andean Region

Overall, ARDN funding for agriculture and natural resources/environment fell
dramatically, from 84.6% to 14.9% and 15.4% to 1.6%, respectively. On the
-other hand, narcotics awareness funding, in a single year (FY91).willincrease from
0% (in previous years) to 83.4% of the regional portfolio in FY91.

ARDN funding for Ag REE fell from 36% to 7% of the regional portfolio.

Other areas experiencing major decreases in spending were: agricultural credit
(down from 22.4% to 1%), fuelwood (energy) (down from 10.6% to 0%), and
agribusiness (down from 17.4% to .8%).

Caribbean Region

Overall, ARDN funding for agriculture fell slightly (72.7% to 72.4%), while
funding for natural resources/environment rose slightly (27.3% to 27.6%).

S ARDN funding for Ag REE rose from 25.7% to 50% (49.9%) of the regional
portfolio.

Areas in which there were major decreases in spending were: agricultural irrigation
(down from 14.8% to .5%) and agricultural credit (down from 18.4% to 2.3%).

Central American Region

Overall, ARDN funding for agriculture fell slightly from 87.4% to 81.7%, while
funding for natural resources and the environment rose from 12.6% to 18.2%; thus,
a 5.7% decline in agriculture was balanced by a 5.6% increase in natural resources
and the environment.

ARDN funding for Ag REE fell from 31.4% to 3.7% of the regional portfolio.

Funding for infrastructure fell from 25.8% to 3.2%, while funding for agricultural
policy rose from 2.3% to 61% of the regional portfolio.












Figure 2.3. LAC Bureau ARDN Portfolio Summary by Strategic Funding Categories.


Category:

Agr Land Use 1 FY 61
SFY 8
|E FY 90
Agr R/E/E FY 1


Agr Inputs


Irrigallon/Infraatr.


Pest Management


Agr Credit


Agr Marketing


Agrlbusiness


Agr Policy


Nat. Res./Energy


Narootics
a i I e a I


0 20 40 60 80 100 120 140

$ (000,000)




Source: LAC/DR/RD (note: based on FY89 as of late 1989)










system. There are three IARCs in the LAC region: CIAT, CIMMYT, and CIP. These
IARCs, in turn, work with the national agricultural research systems (NARS). During the
period 1983-89, AID support for the LAC IARCs fell from US$ 13.8 million to less than
US$ 12.66 million, a decline of over 7.5% (Table 2.11).

By comparison, Inter-American Development Bank (IDB) grant funding for the LAC
IARCs has grown from US$ 9.1 million in 1983 to US$ 11.49 million in 1989, an increase
of more than 26%. A recent IDB grant of $11.5 million, the latest in a series of annual
contributions the-IDB has made to the-LAC-IARCs since 1974, marks the start of a new
approach in the Bank's support of the IARCs. In the past, IDB funds financed the core
budgets of the IARCs. Beginning in 1990, $360,000 of the Bank's grant was to fund the
preparation of special programs targeted on the specific needs of the IDB's member
countries, primarily in applied research and training. Over the four-year grant period, about
60% of the Bank's contributions to the IARCs will finance these special programs, the
remaining 40% providing budgetary support. Research activities will involve collaboration
between the IARCs and the NARS. Depending on funding availability, the Bank is expected
to approve about ten special programs during the grant period. The Bank also has provided
that up to 10% of its funding can be used for special programs important to the region but
conducted by IARCs outside the LAC region. Currently IDB is working with CARDI on
development of IDB financing to develop capability (training) in support of agriculture.

As USAID Mission ARDN funding for Ag REE in the LAC region has declined, the
Agency's funding of the LAC IARCs, even though this funding also declined, has become
more and more important, since the NARS rely on the IARCs as a principal source of scien-
tific expertise (e.g., research methodology), technological innovation (e.g. germ plasm), and
training support (e.g., specialized short courses). At the same time, government funding for
public sector Ag REE institutions in AID-assisted LAC countries declined during the 1980s.
But the decline in host country government and AID funding for public sector Ag REE
institutions contributed to a deterioration in the capacity of these institutions to carry out
TG&T.

Indeed, a 1990 survey of LAC USAID Missions found that several key components of
host-country public agricultural research organizations (budget, numbers trained, personnel
management, and program planning) were, on average, rated as poor or very poor (Table
4.3, Chapter 4). The Missions also rated private sector research organizations as having
made the most progress in TG&T during the 1980s. This area's average progress rating was
69%, the progress of public research organizations was rated at 55%, while public extension
and agricultural education were rated at 51% and 45 % respectively.











Table 2.11. U.S. Agency for International Development (USAID) and Inter-American
Development Bank (IDB) Grant Funding to LAC International
Agricultural Research Centers (IARCs).

SAID IDB

Year CIMMYT CIAT CIP Total Total Total

US$ Million US$ Million-

1974 2.0
1975 4.0
1976 10.7
1977 6.2
1978 6.2
1979 6.7
1980 7.4
1981 8.1
1982 9.1
1983 6.00 5.40 2.30 13.7 9.1 22.8
1984 6.00 5.60 2.30 13.9 9.1 23.0
1985 6.00 5.54 2.30 13.84 9.74 23.58
1986 6.10 5.60 2.33 14.03 9.64 23.67
1987 5.25 4.82 2.00 12.07 10.28 22.35
1988 5.25 4.82 2.05 12.12 10.53 22.65
1989 (est.) 5.25 5.36 2.05 12.66 11.49 24.15

Source: CGIAR Secretariat and Inter-American Development Bank


The decline in TG&T capacity of public agricultural research institutions, in turn,
weakened their ability to link effectively not only with the LAC IARCs (CIMMYT, CIAT,
and CIP) but also with the LAC regional agricultural research centers (RARCs): the Tro-
pical Agricultural Research and Training Center (CATIE) in Costa Rica and the Caribbean
Agricultural Research and Development Institute (CARDI) in Trinidad. Faced by the
deteriorating TG&T capacity of national-level Ag REE systems, IARCs and RARCs are
finding it increasingly difficult to implement TG&T programs in collaboration with the
NARS. This became a point of discussion during AID's 1990 International Centers Day. As
the BIFAD Briefs reported, the discussions during Centers Day raised the issue of:

the need for improving host-country institutional capacity and leadership in adaptive
research and extension, in order to [ensure] adoption by farmers of new and improved
technology. The IARCs recognized that they cannot be successful without viable
national research and diffusion systems in the countries they serve.










problem is of such magnitude that its solution goes beyond the resources of any one IARC,
even those of ISNAR.

Obviously, donors such as AID must ensure an appropriate level of investment at all
levels-IARCs (including ISNAR), regional agricultural research centers (RARCs), and
NARS, including the public and private sectors. However, what the TAC does not address
is the issue of whether the donors (e.g., AID) that comprise the CGIAR should establish a
policy of working together to strengthen NARSs, not because the lack of strong national
agricultural research systems is a constraint on the IARCs but rather. because a weakened
national agricultural research system is a constraint on broad-based economic growth. While
the weak TG&T systems in AID-assisted LAC countries can be strengthened on a sustainable
basis only by creating a demand in these countries for strengthened Ag REE systems, the
solution being considered by the TAC is more supply- than demand-driven.

The LAC Bureau is currently emphasizing an improved macroeconomic and policy
environment as the basis for a vigorous private sector response. Such response is a
necessary, but not sufficient, condition for achieving the goal of broad-based economic
growth in the LAC region. As the macroeconomic and policy environment for investment in
agriculture improves, there will be increased demand for productivity-increasing technologies
and, thereby, increased demand for adequate TG&T capacity to supply the productivity-
increasing technologies needed to respond vigorously to improving market opportunities.

These considerations raise the question of whether AID should begin to exercise a
leadership role with respect to making Ag REE-strengthening an integral part of Agency
policy dialogue with host-country governments, requiring that these governments agree to
make a commitment to Ag REE-strengthening (e.g., increased autonomy and adequate budget
support for research) as a condition precedent for AID support in various areas including
research assistance.

The possibility of such a policy dialogue approach, based on a demand-driven model
of agricultural development, should be considered by AID in reaching a decision about the
best means of strengthening the ability of national agricultural research systems to interact
with the IARCs. Policy dialogue can be advanced by non-project sector assistance (NPSA)
programming to encourage host-government policy reforms and improved budget allocations
to Ag REE systems, and/or by more traditional projects and programs providing technical
support to regional TG&T. However, policy dialogue traditionally has been fueled by some
sort of "carrot" such as Economic Support Funds (ESF) and/or PL-480 local currency
generations. The following section reviews the current status of PL-480 local currency
generations as a source of funds for Ag REE- strengthening in AID-assisted LAC countries.

4. U.S. Government PL-480 Local Currency Generations

A potential funding source for Ag REE in AID-assisted LAC countries is local
currency from the sale of PL-480 food commodities. But currently available data on the PL-
480 program are not adequate to determine the extent to which LAC Missions, faced by
declining ARDN funding for Ag REE during the 1980s, sought or began to use PL-480 local










currency generations as an alternative funding source for Ag REE-strengthening. Table 2.15
indicates that local currency generations under the PL-480 Title I program between 1986 and
1988 increased only in Ecuador. While Title I funding held constant in three countries
(Bolivia, Peru, and Jamaica), it fell in Haiti and five Spanish-speaking countries (-3% in El
Salvador, -5% in Guatemala, -20% in Honduras, -33% in the Dominican Republic, and -
45% in Costa Rica). Thus, if PL-480 Title I funds were used to support Ag REE-
strengthening, this only could have occurred in two ways: (1) Missions began to reallocate a
larger share of PL-480 Title I funds to support Ag REE activities; or (2) Missions began to
allocate available PL-480 Title II local currency- generations to Ag REE-strengthening. The
latter possibility would make sense in the context of USAID Missions beginning, over time,
to place increased emphasis on getting the private sector (PVOs) involved in Ag REE
activities.

Data are not available to track how the importing countries allocated funding available
under the Title I and II programs, nor are data available on the extent to which the Ag REE
components of Mission projects have been or are being funded by PL-480 local currency
generations. However, the general provisions of the PL-480 Food for Development Program
include "activities of the Government of the importing country designed to develop and
extend the technical base for small farmer agriculture...to increase the number of trained
farmers and technicians" (U.S. Department of State, 1990: Annex A Food for Development
Program). These provisions authorize the use of PL-480 local currency generations to be
used in support of TG&T activities carried out by the Ag REE institutions of the importing
country.

In Bolivia's case, the FY90 PL-480 program budget provided for up to US$ 20
million for financing lines to provide funds, both through credit and grant mechanisms, for
various projects, with several having Ag REE components. One project receiving funding
has been the Chapare Regional Development Proiect (US$ 2 million budgeted for counterpart
funds in the project's Associated High Valleys Component). Similarly, the FY90 program
budget provides US$ 3 million for the National Wheat Program that includes support for
research and extension activities carried out by public and private sector entities (U.S. Dept.
of State, 1990: Annex B Program Description). Indeed, a recent USAID/Bolivia reporting
cable notes that PL-480 funds:
were granted to private sector agricultural research and extension stations, performing
research in such areas as varietal improvement of potatoes, corn and wheat. They
also provide technical assistance and training to farmers. Their services have been
quite reliable and are preferred by the vast majority of farmers to the government
stations.

The PL-480 program was revised under the "Agricultural Development and Trade Act
of 1990." These revisions have implications in terms of accessibility of AID-assisted LAC
countries to local currency generations that potentially could be used for Ag REE-
strengthening. The revised program has provisions for Title I and Title III, as follows:
Title I, a loan-financed concessional sales program to be administered by USDA,
allows local currency payments to be used, among other objectives, for establishment










and expansion of institutions for basic and applied agricultural research and the use of
such research through development of extension services; and for research in agri-
culture, forestry, and aquaculture, including collaborative research which is mutually
beneficial to the U.S. and the recipient country. Further, the Secretary of Agriculture
is authorized to establish a program of grant assistance to U.S. and foreign non-
governmental organizations for the purposes of buying discounted external debt of
foreign governments to obtain local currencies needed to finance projects "involving
the research, study, prevention, or control of animal and plant pests and diseases."
Title III, a bilateral grant program to be administered by USAID, allows local
currency proceeds of sales to be used, among other objectives, for research on
malnutrition and its causes and for support for research (including collaborative
research which is mutually beneficial to the U.S. and the recipient country), educa-
tion, and extension activities in agricultural sciences.

Section 413 provides that:
To the extent practicable, assistance for a foreign country under this Act shall be
coordinated and integrated with United States development assistance objectives and
programs for that country, and with the overall development strategy of that country.
Special emphasis should be placed on, and funds devoted to, activities that will
increase the nutritional impact of programs of assistance under this Act, and child-
survival programs and projects, in least developed countries, by improving the design
and implementation of such programs and projects" (as cited in 1/14/91 memorandum
from Don Ferguson, USDA/OICD/DRD, on "Authorized Uses of United States
Owned Foreign Currencies: Sections 104 and 305 and Related Provisions").

To be eligible for the Title III program, an LAC country must be a "least developed
country," i.e., a country must meet the criteria for its inclusion in the World Bank's Civil
Works Preference list, or the country must be a "food deficit" country. To be a "food
deficit" country, AID's administrator must determine that the daily per capital caloric
consumption in the country is less than 2300 calories, that the country cannot meet its food
needs through domestic production or imports due to a shortage of foreign exchange
earnings, and that the child mortality rate under age 5 is greater than 100 per 1,000 births.

The Conference Committee Report states that "because calorie and child mortality
data may be inaccurate, out of date, or unavailable, the administrator may be required to use
his judgement and the judgement of experts in determining that a country meets the criteria."
Also, Title III provides that priority shall be given to countries that have demonstrated the
greatest need for food, the capacity to use food assistance effectively, and a commitment to
policies that promote food security, and that have a long-term plan for development. On the
basis of these criteria and available data (Table 2.16), only four AID-assisted LAC countries
(Haiti, Bolivia, Honduras, and Perd) are eligible to participate in Title III (bilateral grant).













Table 2.15. U.S. Government PL-480 Title I Local Currency Generations in LAC
AID-Assiste:x Countries (FY86-FY90).


LAC SUBREGICON:


Thru
July
FY86 FY87 FY88 FY89

U.S.$'000


Thru Percent
Sept Increase
FY90 86 to 88


ANDEAN REGION

Bolivia
Ecuador a)
Peru


CARIBBEAN REGION

Dominican Republic
Haiti b)
Jamaica
RDO/C (E. Caribbean)


CENTRAL AMERICA

Belize
Costa Rica
El Salvador
Guatemala
Honduras


a) Beginning in 1987, funding for
b) Beginning.in 1990, funding for
to Government.


Ecuador is Sec.


416 funding.


Haiti is Title II Government


Source: Food for Peace Summary, Latin America & Caribbean Year
End Totals Title I, II, III, 416 (1986-1990). Office
of Food for Peace, Bureau for Food for. Peace and
Voluntary Assistance, United States Agency for
International Development.


20000
5000
20000


30000
15000
35000
0


20000
44000
19000
15000


20000
1591
20000


30000
10000
37800
0


0
16000
30400
21500
12000


20000
11612
20000


20000
0
35000
0


0
11000
42600
18000
12000


22000
3300
21000


20000
0
40000
0


0
15000
40000
18000
18000


20000
5610
20000


14600
4000
40000
0


15000
40200
18000
12000


0
132
0


-33.3

0
0


0
-45.0
-3.2
-5.3
-20.0












Table 2.16. Food Insecure Countries (Source: USAID/FVA).


= Countries receiving IBRD Civil Works Preferences
= Countries with average daily calorie supply less than 2,300
= Countries with child (under five) mortality rate greater than


100 per 1,000.


FAO UNICEF
AID- GNP/Capita Avg. Daily Under 5
Assisted 1989 Calorie Mortality
LAC Supply Rate
*** ** Country 1988 1988
*** ** Haiti 400 1911 171

** Bolivia 600 2086 172
** Honduras 900 2164 107
** Peru 1090 2269 123

Nicaragua 2361 95
Dom. Rep. 790 2357 81

Guatemala 920 2352 99
Ecuador 1040 2388 87
El Salvador 1040 2415 84
Jamaica 1260 2572 22
Panama 1780 2468 34
Costa Rica 1790 2782 22


KEY:
***
*










The stagnant or declining public institutional capacity for research and extension in
developing countries, especially in Africa and Latin America, also was noted, and the
national capacity to sustain support of their public institutions without foreign aid was
questioned. AID and the IARC participants wrestled with defining their
organizations' appropriate roles and those of other donors and the host countries in
reversing this trend....

Unless public research and extension institutions are supported,...rural economies will
stagnate and the-natural resource- base-for.sustainable-agriculture will deteriorate
further, resulting in decreased food yields (BIFAD, 1991:6).

Deterioration of public TG&T capacity has also sparked an increased interest among
the IARCs in establishing collaborative links with private sector research groups, i.e., with
non-governmental organizations (NGOs) and-private voluntary organizations (PVOs).
However, such private agricultural research organizations generally focus on different crops
(i.e., nontraditional agricultural export crops) than those (i.e., basic food crops) falling
within the research mandates of an IARC or a NARS. This raises the question of whether
increased reliance of LAC IARCs on collaborative links with private research organizations,
and decreased reliance on public agricultural research organizations, would further weaken
both public and private research organizations. That is, would such a trend further accelerate
the decline of public sector research on basic food crops, while distracting private research
organizations from their mandate to focus on NTAE crops?

2. Donor Support for NARS

a. World Bank

Lending by the World Bank in the LAC region during 1981-87 for
free-standing agricultural research projects and agricultural and regional development (ARD)
projects with research components included six projects in four AID-assisted countries:
Barbados, Haiti, Jamaica, and Peri (Table 2.12). The cost of the agricultural research com-
ponents in these Bank projects, as a percentage of total project cost, averaged 15% for the
region, while project research costs in the four AID-assisted countries as a percentage of
total project cost was only 5.2%. Although Bank lending (loan/credit) amounted to 40.4%
of total project cost, the cost of a project's research component as a percentage of total
project cost was 0.49%. Further, the Bank provides an extremely small portion of its
lending to LAC countries receiving AID assistance, most lending being targeted on non-AID-
assisted countries such as Brazil and Mexico; only a small percentage of lending is actually
allocated to research.

These figures reflect a downward trend since the 1960s in Bank funding for
agricultural research. During the years (1968 to 1981) that Robert McNamara directed the
World Bank, it dedicated a significant proportion of its budgets for loans to finance ARD
projects, with a fifth of the loans going to LAC countries. These loans were important
because they partially corrected the tendency of many LAC countries to underinvest in their
own agricultural and rural sectors.












Table 2.12. World Bank-Assisted Projects with Agricultural Research Components in
the LAC Region (1981-1987) (source: Pritchard, 1990).

Key: Countries in bold are AID-assisted countries.

A = Barbados F = Jamaica
B = Brazil G = Mexico
C = Colombia H = Paraguay
D = Guyana I = Peru
E = Haiti

Year Total LAC % Countries (# of Projects)

1981 32 4 12.5 B (3), G (1)
1982 27 8 29.6 B (4), G (1), H (2), I (1) a/
1983 36 4 11.1 B (1), G (1), C (1), I (1) b/
1984 32 5 15.6 B (1), C (1), E (1), F (1), (1) _/
1985 39 4 10.3 B (2), G (1), D (1)
1986 28 3 10.7 B (2), G (1)
1987 36 8 22.2 B (6), G (1), A (1) d/

Notes:

a/ 1982: Peri (Agricultural Research & Extension, cost of project's research component:
$21.7 million, 26% of project's total cost).

b/ 1983: Peri (Alto Ways Rural Development, cost of project's research component:
$3.7 million, 4.4% of total project cost).

c/ 1984: Haiti (Rural Development II, cost of project's research component: $2.7
million, 9.3% of total project cost); Jamaica (Export Crops I, cost of project's
research component: $0.6 million, 1.5% of total project cost); and Perd (Rural Dev
III, cost of project's research component: $1.5 million, 2.2% of total project cost).

d/ 1987: Barbados (Ag Development Rehabilitation-A, cost of project's research
component: $0.2 million, 3.4% of total project cost).











However, when McNamara left the Bank in 1981, it began to cut the actual value of
the loans for ARD projects. McNamara's successor, A.W. Clausen, emphasized structural
readjustment and the LAC debt crisis; policy reform, market reform, and privatization
became the road to development. Since 1980, the portion of the Bank's loans directed to
ARD projects has decreased almost by half, with the real value of ARD loans falling to
almost 20 percent (see Figure 2.4). The Bank believed that it had discovered a better means
to help the agricultural sector: structural adjustment loans (SALs). It was expected that
these loans would benefit farmers because the loans were tied to policy changes such as
currency devaluation, reduction in governmental subsidies and protection, and the
introduction of price reforms and market-determined exchange rates.


Figure 2.4.


o5
"o
0


oc
a~


World Bank Lending, 1966-1988.


25,000


20.000


1 .UUU 0-
Lu
10.000


5.000


0 i


Total Bank Lending







ARD Project Lending


66 68 70 72 74 76 78 80 82 84 86 88


Fiscal Year


Source: World Bank, l, -d 1989 (as reported in Paarlberg and Lipton, 1991).

During the 1980s, the Bank did not emphasize ARD projects that disburse money
slowly, but rather the SALs that disburse money more quickly, with conditions for the
implementation of specified policy reforms. Thus, a reduced amount of money has been
available for ARD projects. At the same time, the structural adjustment program may have
hurt more than helped farmers. Under pressure to reduce national budgets, many developing
country governments chose to cut public investments for agriculture rather than touch urban
and industrial subsidies. Many governments found it easier to cut subsidies (that is, raise the
price of rural credit and inputs such as fertilizer, and cut the budgets for agricultural research
and extension) than to raise commodity prices.


m w I v w I- .










With the passage of time, the LAC countries were under pressure to repay the interest
on their loans and pay import bills during a long and deep recession. This pressure led the
Bank to put even greater emphasis on the sectoral adjustment loans (SECALs), thereby
cutting even further the amount of money available for ARD projects. In the process, the
Bank began to depend more and more on generalists and trade economists, and less and less
on agricultural technicians and agricultural economists. Toward the mid-1980s, when the
principal donors put pressure on the Bank to reduce operational costs, the Bank responded by
reducing its technical personnel in agriculture.

With the beginning of the 1990s, the Bank is recognizing that a rural investment crisis
has been imposed on the previous structural adjustment crisis, especially in Africa and Latin
America. The Bank has begun to look for ways to increase public sector investment in
agriculture in the Bank's borrowing countries. For example, the Bank now offers what are
called "hybrid" loans, which combine structural adjustment support that disburses rapidly and
project support that disburses slowly. The Bank also is pushing other means to increase
public expenditures on the agricultural sector. For example, the Bank has made an SAL loan
to Mexico that was conditioned on the Mexican government increasing its level of public
sector funding support for agriculture.

Paarlberg and Lipton (1991) clarify that the change in the Bank's pattern of lending
had as a consequence that the Bank not only disburses money but also, by way of example,
defines the development agenda. That is, any change in the Bank's policies reverberates
outward to the multilateral institutions, international assistance agencies, and national
development ministries. Thus, they conclude that:
If the World Bank fails to revive its project lending for agricultural and rural
development in the 1990s, no other competent lending institution will be ready and
able to take its place.... The Inter-American Development Bank...followed the lead
of the World Bank in the 1980s and permitted lending for agriculture to fall
(Paarlberg and Lipton, 1991:495).

They also emphasize that it is not clear that bilateral assistance is ready to fill the vacuum
created if the Bank does not provide financing for projects aimed at strengthening agricultural
technology systems in the LAC region. On the other hand, private investments in LAC
agriculture have favored a few highly profitable commercial subsectors (e.g., horticulture and
agroprocessing) and this tendency is not likely to change.

Some would maintain that without a rebirth of leadership on the part of the Bank,
developing country governments may have the will but not the capacity to invest in
agricultural and rural development. With respect to this, Paarlberg and Lipton (1991:496)
write that as World Bank ARD lending
declined in the 1980s, so did Third World governmental outlays-by about $45 billion
per year, according to estimates by the U.N. Food and Agriculture Organization. In
Latin America, agriculture's already small share of central government expenditures
fell by 35% in the early 1980s. By allowing its own lending for agricultural and rural
development to falter over the past decade, the Bank may have legitimized an










unfortunate tendency in the same direction among Third World governments as well
as multilateral and bilateral funding sources.

The reduction in public expenditures for agriculture had a negative impact on the capacity of
Ag REE systems to generate and transfer agricultural technology. As earlier noted, the real
expenditures per agricultural researcher fell by 8.3 percent in 20 LAC countries between
1961-65 and 1981-85 (Pardey and Roseboom, 1990:2-4).

b. International Service for National Agricultural Research (ISNAR)

Donors also provide funding for the International Service for National
Agricultural Research (ISNAR). But ISNAR has provided only limited technical support for
Ag REE-strengthening of National Agricultural Research Systems (NARS) in AID-assisted
LAC countries. Table 2.13 summarizes ISNAR's LAC collaboration, including the explora-
tory (initial) Mission to country, system review, system planning, and implementation of
system improvements. The boundaries between the planning and implementation phases are
not always clear; most of the time ISNAR works on various critical factors simultaneously,
with the phases overlapping. While work on some factors is in the planning stage, others are
in the implementation stage.

ISNAR has done NARS reviews in five AID-assisted LAC countries (Bolivia, Ecua-
dor, Peri, Dominican Republic, Panama) and exploratory reviews in Costa Rica and Haiti.
ISNAR has collaborated in planning and implementation of NARS improvements in four
countries (Bolivia, Ecuador, Dominican Republic, and Costa Rica). Table 2.14 summarizes
specific ISNAR activities in individual LAC countries to date, while Box 2.2 identifies
ISNAR activities in AID-assisted LAC countries during 1989.

In 1989, ISNAR sponsored several regional training and international workshop
events, and two regional training programs were conducted. At CATIE (Costa Rica), IICA,
CATIE, and ISNAR sponsored a workshop on Agricultural Research Management, attended
by 20 high- and mid-level managers from 10 LAC countries, of which nine were AID-
assisted: Bolivia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala,
Honduras, Nicaragua, and Panami. In Chile, FAO, IICA, ISNAR and INIA (Chile)
sponsored a :raining program on research management. Three ISNAR staff contributed
topics on research management: innovation, private-sector linkages, and monitoring and
evaluation, plus a paper on basics of biotechnology. Participants attended from Chile and
three AID-assisted LAC countries: Bolivia, Ecuador, and Peni.

ISNAR sponsored three international workshops at ISNAR's headquarters in The
Hague, Netherlands. The International Agricultural Research Management Workshop
(IARM) was conducted for senior NARS managers (7 from the LAC region). This work-
shop focused on three management areas: planning and priority setting, structure and
organization, and program budgeting and management information. The Agricultural
Researcher Information System (ARIS) workshop, which included participation of two AID-
assisted LAC countries (Costa Rica and Ecuador), focused on helping research managers to
learn how to use a human resource questionnaire and database program to quickly process











Sunimary of 1989 ISNAR Activities in the LAC Region.


ANDEAN
Bolivia-Diagnostic review of IBTA; attendance of Bolivians at two regional workshops:
Agricultural Research Management (ARM), CATIE, Costa Rica; and Regional Research
Management, Chile), and at two international workshops: International Agricultural
Research Management (IARM) and Making the Link, The Hague.
Ecuador-Assisted in gathering and analyzing data on human resources for INIAP;
INIAP's director of human resources spent a month at ISNAR planning a system for human
resource management and development. Ecuadorian staff took part in two regional
workshops (CAT[E and Chile) and three international workshops (IARM, ARIS, and
Making the Link).
Peri-ISNAR staff member took part in Perd's annual conference on agricultural research;
Peruvians took part in the Regional Research Management workshop in Chile.
CARIBBEAN
Dominican Republic-Hosted a case study in the research-technology transfer linkage
study. Dominicans attended the CATIE ARM and Making the Link workshops.
CENTRAL AMERICA
Costa Rica-ISNAR staff provided technical assistance to the National Commission for
Research and Transfer of Agricultural Technology. Participated in a workshop for
planning the 1990 research program, making presentations on systems for planning,
monitoring, and evaluating integrated research and transfer components of national
programs, and centers and data banks of scientific-technical information in the agricultural
sector). Advised Costa Rica's new National Commission for Research and Transfer of
Agricultural Technology on evaluating performance of national research programs. A case
study was done on the research-technology transfer linkage. Costa Ricans participated in
the CATIE ARM workshop and in two international workshops: Agricultural Researcher
Information System (ARIS) and Making the Link.
Guatemala-Guatemalans participated in the Making the Link workshop and in the CATIE
ARM workshop.
Honduras-Honduras participated in the CATIE ARM workshop and will participate in a
case study of small country NARS.


Box 2.2.













Table 2.13.


ISNAR Activities (Reviews of NARS and Collaboration in Research
Planning and Implementation) in the LAC Region through 1990)


(Source: Carlos Valverde, ISNAR).


AID-ASSISTED Country Initial System Research Implemen-
LAC COUNTRIES Request Mission Review Planning station
ANDEAN REGION
Bolivia (83) (89) (89) (90) (91)
Ecuador (84) (87) (88) (89) (91)
Peru (85) (85)
CARIBBEAN REGION

Dominican Republic (82) (83) (83) (84) (86)
Haiti (83) (83) (83)!/
Jamaica (90)
CARDI (E.Caribbean) (84) (85) (85) (90) (91)
CENTRAL AMERICA

Belize
Costa Rica (81) (81) *(81/87) (89) (
El Salvador
Guatemala (86)
Honduras (83)
Nicaragua
Panama (83) (85) (85) (86)
OTHER LAC COUNTRIES

Argentina (84)* (85) (88)3/
Brazil
Chile (80) (86)* (87) (88) 4/

Colombia (84) (85) (85) 3/

Guyana (81) (82) (82)
Mexico (87)
Paraguay
Suriname (86)
Uruguay (85) (86) (86)2/ (86) (91)
Venezuela (91)


1, 2 = Only
3 = Only
4 = Only


exploratory review
system component
training


KEY:









Table 2.14. ISNAR Collaboration with National Agricultural Research Systems (NARS) in System-Building Activities
(Source: Carlos Valverde, ISNAR).


System-Building Bolivia Ecuador Perd Dominican Costa Colombia Uruguay
Activities ______Republic Rica
Structure & *
Organization
National Research 0* *
Priorities
Program Formulation *
& Budgeting
Monitoring *
& Evaluation
Link NARS *
& Policymakers
Link NARS & Tech- *
nology Transfer
Link NARS
& Knowledge Sources
Human Resources *
Physical Resources *
Financial Resources *
MIS____










human resource information. A workshop called Making the Link Between Agricultural
Research and Technology Transfer identified and discussed lessons learned from two ISNAR
studies [On-Farm Client-Oriented Research (OFCOR) and Research-Technology Transfer
Linkages (RTTL)]. AID-assisted LAC countries participating were Bolivia, Ecuador,
Dominican Republic, Costa Rica, and Guatemala.

3. Limits of Strengthening NARS through IARCs

Despite ISNARs progress in. strengthening NARS in.AID-assisted LAC
countries, the CGIAR is concerned about the weakened capability of the NARS to collaborate
with the IARCs, and has directed its Technical Advisory Committee (TAC) to develop a
background paper on "Relationships Between CGIAR Centres and National Research
Systems: Issues and Options" (CGIAR, 1991). In this paper, the TAC notes that IARC
activities cannot be effective:

unless there is a certain minimum capacity within the national system to do research,
as well as to establish effective linkages both with the Centres and with local
producers through the extension services. Where this minimum capacity is lacking,
the Centres have sometimes collaborated with bilateral donors in the provision of
research assistance [defined as including financial assistance, technical assistance,
etc.], rather than face the frustration of not being able to transfer the benefits of their
work (CGIAR, 1991:6).

But the TAC states that:
Only the Group [CGIAR], itself, can determine the role it wishes to play in this
whole area of activity [i.e., "issue of strengthening national research systems"]. In
particular, it must enunciate its preferences for the extent to which the Centres it
funds should become involved in direct support for national systems, and the ways in
which they might do so (CGIAR, 1991:6).

The TAC further states that while "there is general recognition of the need for re-
search assistance to national institutions to reinforce Centre activities, a recurring issue in the
CGIAR has been the extent to which the Centres themselves should become involved in pro-
viding and administering it" (CGIAR, 1991: 9). The TAC notes that the IARCs have created
research networks that have played a role in providing national programs access to
development assistance. But the TAC also notes that:
As a consequence, the increasing calls on the time of national scientists are not
necessarily determined by their own national priorities. The driving force may be
supply, rather than demand. Furthermore, active promotion of cooperative and
contract research by the Centres might serve only to aggravate the problem.... As far
as cooperative networks are concerned, if they are to be successful and sustainable,
there is no viable alternative to a demand-driven system in which the countries them-
selves define the problems and determine the priorities. It is the orchestration of
CGIAR involvement in all these activities to which further thought must be given and
appropriate action taken (CGIAR, 1991:13).










Finally, the TAC notes that IARCs, including ISNAR, play or could play a role in
providing research assistance (technical and/or financial assistance) aimed at strengthening
national (public and/or private) agricultural research systems. But the TAC clearly states:
"If there is a desire to link Centre activities more closely to research assistance, an
alternative approach would be to give more explicit recognition to this need, and to modify
the structure of some or all of the Centres accordingly" (CGIAR, 1991:6).

The TAC proposes the possibility of establishing "a research assistance agency as a
separate unit"-at-some or all of the IARCs.- Such an agency would be controlled by the
IARC's board but would have a separate budget and be "entirely self-funding, by charging
appropriate overhead costs" on all research assistance it administered. Research assistance
would be managed by "full-time specialists" rather than by international scientists on a part-
time basis, as often happens at present.
The research assistance unit could draw on Centre programme staff on a paid
consultancy basis, thus maintaining the integrity of the core funding. Some
restructuring of existing Centres along these lines would not be difficult. In some
instances, it would amount to little more than reorganizing the units that already exist
at some Centres, which currently operate under such titles as "international
cooperation programmes (CGIAR, 1991:11-12).

Some would argue that asking IARCs to assume a major leadership role for
strengthening NARS distorts the whole purpose of the IARCS: to provide leadership in
identifying and attacking major problems restricting efficient production of specific com-
modities. In this view, IARCs should stick to doing what they can do best, namely, helping
NARS through: (a) literature; (b) germ plasm; (c) training; (d) role models; and (e)
influencing national policy makers.

Perhaps an expansion in ISNAR operations could most effectively address the issue,
with ISNAR drawing consultants from IARCs, other research institutes, universities, and
private sector firms, to meet the spectrum of policy, managerial, administrative, and
technical problems of NARS. ISNAR also could refer specific projects to the World Bank,
regional development banks, USAID, and other national development assistance programs.

Beyond these points, several questions can be posed regarding the ideas outlined by
the TAC Secretariat:

Re the reference to NARS lacking "minimum capacity," why do the NARS lack
capacity despite all the money, technical assistance, training, etc. expended?
What, if anything, can the IARCs do about these factors-national policies, lack of
funds, civil service systems, etc.?

Re the referenced "research assistance agency," was not the CGIAR's principal
objective in establishing ISNAR that of "strengthening" NARS? Would not such
an agency be successful only by working in behalf of all the IARCs? Would each
IARC's "research assistance agency" operate independently of other IARC research
assistance agencies, or would each IARC's research assistance agency be affiliated










with an overreaching agency (e.g., ISNAR)? How would the agency address
problems of NARS with commodities not represented by any IARC?

Re the referenced "self-funding," where would the funding originate for direct, in-
direct, and overhead expenditures? To what extent is ISNAR's budget self-funded?
How would a donor decide where a dollar invested would have greatest impact-in
IARCs, RARCs, or NARS? In this regard, is AID overinvesting in the IARCs and
private sector research organizations and underinvesting in the NARS? If declining
-ARDN funding for public-agricultural research reflects declining. AID ..interest in
basic food crops and increasing interest in NTAE crops, should AID seek that the
IARCs begin to allocate a larger shared of their AID funding for research on
NTAE crops (e.g., fruits and vegetables)?

What pattern of investment of AID funding in public and private research will have
the greatest impact with respect to achieving broad-based economic growth?
Would the impact on economic growth of AID's grant funding support for LAC
IARCs be increased if the funds were made available to individual Missions to use
in supporting host country collaboration with the LAC IARCs or IARCs outside
the LAC region? Would such a change, by moving AID's funding support for the
IARCs further downstream to support country-specific collaboration between
NARS and IARCs, serve to increase the demand for and utilization of IARC
technologies and accelerate and increase TG&T's contribution to economic growth?

Re the referenced "full-time specialist," what would the specialist do and how
would he do it? What would be the best qualifications for the specialist? How
would the specialist relate to the IARC scientists? What would be the "status" of a
specialist in research technical assistance in relation to IARC scientists? Would
such a specialist operate more like an extension subject matter specialist who
serves area-specific extension agents?

Clearly, the TAC paper focuses on the key problem identified in the present Ag REE
Inventory-weakened technology generation and transfer (TG&T) capability of national Ag
REE systems in the LAC region. This problem acts as a brake on the speed at which IARCs
can generate productivity-increasing technologies and transfer them to farmers.

However, the TAC raises the issue of whether the CGIAR should establish a policy
on IARCs playing a strengthening role vis-a-vis national agricultural research systems (e.g.,
establishing a "research assistance unit" in each IARC). But this solution only makes sense:
(a) if IARCs have comparative advantage to take on such an expanded role, and (b) if the
magnitude of the problem does not go beyond the resources of the IARCs. Each LAC
country already faces uncertainty about which is the best source of technical assistance (e.g.
CIMMYT, CIAT, or CIP) in various areas (e.g., farming systems research); no individual
center would have a comparative advantage in terms of being the source of technical
assistance vis-a-vis Ag REE system strengthening. Continuing need for Ag REE
strengthening in many LAC (as well as African and Asian) countries suggests that the































CHAPTER III

STRATEGY TRENDS FOR AG REE
IN LAC SAID MISSION PROTFOLIOS











CHAPTER mIII
STRATEGY TRENDS FOR AG REE IN LAC SAID MISSION PORTFOLIOS



This chapter identifies key trends in AID support for Ag REE-strengthening in the
LAC region. It first presents an historical overview of AID-funded Ag REE-strengthening
efforts since the 1950s, and then reviews programs during the 1980s, identifying the extent to
which Agency-funded projects have assisted in developing the technology generation and
transfer (TG&T) capability of Ag REE systems. Finally, the chapter identifies key trends in
the evolution of AID strategy and project approaches to Ag REE-strengthening.

A. Historical Overview

AID' has funded Ag REE projects or projects with Ag REE components in the LAC
region for over 40 years.2 Jim Chapman (personal communication) identifies three major
phases:

1950-70 Assistance to Ministries of Agriculture in the areas of agricultural
extension and/or research
1970-85 Creation of semiautonomous agricultural research and/or extension
institutes (ICTA, CENTA, IDIAP, INIAP, INIPA, IBTA, etc.)
1985- Creation and development of autonomous private sector foundations
which conduct or contract out research and extension (FHIA,
FUNDAGRO, etc.)

The pattern of creating semiautonomous research institutions was evident even earlier than
the 1970s. As Valverde (1990:25) notes: "The reorganization of research and the adoption
of decentralized institutes as structural models was the generalized patterns in the 1960s."
Table 3.1 lists the national agricultural research institutes that have been created since 1957
in the LAC region. A visual outline of the evolution of agricultural research and extension
models, from "ministry model" to "semiautonomous model" to "fully autonomous model," is
given in Figure 3.1.







'AID is also understood here in the generic sense of including the Agency's predecessor agencies.

'As Valverde (1990) notes, during the decades of the 1960s and 1970s, technical and financial assistance to national
agricultural research systems (NARS) also was provided by the Ford and Rockefeller Foundations, United Nations special
funds, resources from the Inter-American Development Bank, agencies for cooperation (FAO, CEPAL, ECLA, IICA),
and bilateral aid from Canada, Great Britain, Sweden, Switzerland, and Germany.












Table 3.1. National Research Institutes Created Since 1957 in Latin America.
(AA = Administrative Autonomy: A = Autonomous; S = Semiautonomous)

REGION/
Country Acronym Name and Year AA


ANDEAN
Bolivia
Ecuador
Perd


CARIBBEAN


Dom. Rep.
Jamaica


IBTA
INIAP
INIPA
INIAA


IDIAA'
NARIJ'


Institute Boliviano de Tecnologfa Agropecuaria (1975)
Institute Nacional de Investigaci6n Agropecuaria (1959)
Institute Nacional de Investigaci6n y Promoci6n Agraria (1981)
Institute Nacional de Investigaci6n Agropecuaria y Agroindustrial (1987)


Institute Dominicano de Investigaci6n Agropecuaria
National Agricultural Research Institute of Jamaica


CENTRAL
AMERICA


Guatemala
Nicaragua
Panama


ICTA
INTA5
IDIAP


Institute de Ciencia y Tecnologfa Agricolas
Institute Nacional de Tecnologfa Agropecuaria
Institute Nacional de Investigaci6n Agropecuaria de Panama (1975)


'Not implemented.

'In the process of being implemented.


SResearch activities were initiated in 1979 by the administrative systems of the Ministry of Agriculture.











Table 3.1 (continued)

REGION/
Country Acronym Name and Year AA

OTHER'


INTA
INIA
CIAAB
ICA
INIA
EMBRAPA
FONAIAP
INIA
INIFAP
INIA7
NARIG


Institute Nacional de Tecnologfa Agropecuaria (1957)
Institute Nacional de Investigaci6n Agropecuaria (1961)
Centro de Investigaciones Agrfcolas "Alberto Boerger" (1961)
Institute Colombiano Agropecuario (1962)
Institute Nacional de Investigaci6n Agropecuaria (1964)
Empresa Brasileira de Pesquisa Agropecuaria (1973)
Fondo Nacional de Asistencia y Investigaci6n Agropecuaria (1973)
Institute Nacional de Investigaci6n Agraria (1978)
Institute Nacional de Investigaciones Forestales y Agropecuaria (1986)
Institute Nacional de Investigaci6n Agropecuaria (1989)
National Agricultural Research Institute of Guyana


'LAC countries that do not currently have USAID Missions.

7The law creating INIA is under discussion in the Uruguayan Congress.

Source: Valverde (1990:26).


Argentina
Mexico
Uruguay
Colombia
Chile
Brazil
o Venezuela
Venezuela
Mexico
Uruguay
Guyana












Figure 3.1. Historical Evolution of Agricultural Research and Extension,
Organizational Models in the LAC Region (Source: Valverde, 1990:27).




1830 IBM 10 19" 19m 1979 Is"
as ss ees ets to


Coeta FRca
E SLvador





Pan-m-
Na







POm
Catmbrl







BrEad
Pens


ruguay



W UktbY y ma" l Uo4e 0aIr di t Nbcs IIA




Looking back across these developments over the past 40 years, Chapman asks:

Is there no common denominator among them which would appropriately characterize
the evolution of REE systems in [the] LAC [region]?... It would be interesting to
know why these changes or shifts...took place, what were [the] strengths and
weaknesses of each type of institutional form, what are the lessons to be extracted
from all of this and what are the implications for future efforts in REE?












The very existence of the "changes or shifts" identified by Chapman suggests that
AID assistance for Ag REE-strengthening in the LAC region also has undergone a dramatic
shift during the past four decades. From the mid-1950s to the mid-1970s, the focus of AID
project assistance was on institution building in agricultural universities or ministries of
agriculture, with the objective of transferring the U.S. Land Grant model of university
research, extension, and education (see Box 3.1). This was a major thrust of AID's program
during the mid-1950s in Colombia, where Michigan State University assisted Colombia's
National University in developing agronomy departments at Palmira, Medellfn, and Bogota.
Table 3.2 lists other AID-funded. agricultural university institution-building.programs in the
LAC region.



Box 3.1. Experience of the U.S. Land Grant Model in the LAC Region
(Vessuri, 1990:1547-1548, 1551).

"...a peculiar organizational R&D pattern, based on the land grant
colleges and the experimental station system of the United States, was
implanted throughout Latin America in the mid-1950s and early 1960s.
Examples of this included the National Institute of Farming Technology
(INTA) in Argentina (1957), the National Institute of Agricultural Research
(INIAP) in Ecuador (1959), the National Agricultural and Livestock Research
Fund (FONAIAP) in Venezuela (1959), the National Institute of Agricultural
Research (INIA) in Mexico (1960), the Agricultural Research and Promotion
Service (SIPA) in Peru (1960), the Colombian Agricultural and Livestock
Institute (ICA) (1963), and the National Institute of Agricultural Research
(INIA) in Chile (1964). Their mission involved improving the diffusion of
technology already available in the industrialized countries. Consequently,
the industrialized countries' priorities for technological development were
also adopted, within limits imposed by resource availability. In general,
the resulting technology has been capital-intensive and has centered on
products of temperate climates, forms of production appropriate to the nat-
ural resources of the developed countries, and crops with good prospects in
the export markets, such as corn..., sugar..., milk, beef..., and rice....
These institutes have tended to disregard the development of capabilities
to make fuller use of native productive potential....

[But] "the institutes lost efficiency, among other things, because of
their broad range of activities resulting from the tremendous heterogeneity
of agricultural production in Latin America. The North American 'federal'
scheme they copied was a response to high regional heterogeneity of the U.S.
agricultural sector, in the context of a relatively homogeneous production
structure that facilitated the linkage to the different farming interest
groups. On the contrary, the single-agency model adopted in Latin America
tended to hinder such a relationship and the ability to respond to the needs
of many different groups, frequently with conflicting interests."










Table 3.2. AID-Funded
Year Country
51-57 Panama'
54-57 Chile
54-57 Ecuador
54-56 Mexico
54-68 Peru
82-88
57-63 Guatemala
60-63 Paraguay
64-67
62-68 Uruguay
64-73 Brazil
64-73 Brazil
64-73 Brazil
64-73 Brazil
65-70 Costa Rica
65-73 Dominican Rep.
86-88 Costa Rica


Agricultural University Institution Building Programs in the LAC Region (IIansen, 1989).
Assisted University Assisting University
National Institute of Agriculture University of Arkansas
University of Concepci6n University of California
University of Quito and Guayaquil University of Idaho
Superior Institute of Agriculture Texas A&M University
National Agrarian University North Carolina St. University


University of San Carlos
National University of Asunci6n

Universidad de la Repiiblica
University of CearA
University of Sao Paulo
University of Rio Grande do Sul
University of Vicosa
University of Costa Rica
Superior Institute of Agriculture
EARTH (Agricultural School for
the Rural Humid Tropics)


University of Kentucky
Montana State University
Washington State University
Iowa State University
University of Arizona
Ohio State University
University of Wisconsin
Purdue University
University of Florida
Texas A&M University.
California Poly. State University,
Rutgers University,
University of Nebraska,
Virginia Polytechnic University


'Rutgers University provided TA to IDIAP in Panama during the mid-1980s.










But transferring the Land Grant university model to LAC countries proved very
difficult, if not impossible, given that the functions of research, extension, and education
were most always housed in separate organizations, with most countries lacking any
mechanism to integrate and coordinate these functions. The result of the lack of any single
institution for carrying out the functions of agricultural research, extension, and education in
an integrated manner was a tendency to address these functions individually through separate
projects. Again, drawing on Colombia as an example, AID started two extension projects in
the mid-1950s:9

In 1955, in the Department of BoyacA, a pilot extension program [Servicio T6cnico
Agricola Colombiano Americano (STACA)], modeled on the classical U.S.
extension program, was started; and

*In 1957, following establishment of the Cauca Valley Corporation (CVC), modeled
on the U.S. Tennessee Valley Authority (TVA), an extension program, modeled on
the Boyaca STACA program, was started.

Initiation of these extension projects by USAID/Colombia was influenced by two
factors. First, a functioning agricultural research program [Departamento de Investigaci6n
Agricola (DIA)] had already been started in the Ministry of Agriculture by the Rockefeller
Foundation.10 But DIA had neither the mandate nor the resources to carry out technology
transfer; hence the need to create an extension capability. Second, while the university's
agronomy departments potentially could do extension, the university was an autonomous
institution that had neither mandate nor incentive to carry out agricultural research or
extension. Thus, the situation dictated that a structure to carry out extension could only be
established outside the existing research (DIA) and educational (National University)
institutions.

In 1957 the Government of Colombia established the Colombian Agricultural Institute
(ICA), with a mandate to carry out agricultural research and extension. While the
Rockefeller Foundation continued to provide technical assistance support to ICA through
much of the 1960s, by 1968 the foundation began to reallocate its Colombian program field
staff to the newly created International Center for Tropical Agriculture (CIAT) in Palmira,
Colombia. But this did not create a severe technical assistance vacuum because by 1966
USAID/Colombia, with technical assistance from the University of Nebraska, had undertaken
a major project to develop ICA's agricultural research and extension capability.

Thus, within a matter of only a decade or so (from the mid-1950s to the mid-1960s),
USAID/Colombia supported a series of agricultural institution building projects-first in
education, then in extension, and finally in research. The pattern that has been illustrated
here for Colombia, of addressing the separate functions of research, extension, and education


9Much of the following history relating to USAID experience in Colombia is drawn from conversations with Albert
(Scaff) Brown and Francis C. Byrnes.

'This program was modeled on the success of the Rockefeller Foundation agricultural research program in Mexico.


59











through a series of separate projects, has been repeated over time in other AID-assisted
countries in the LAC region, although not necessarily in the same sequence.

But there was a recognition in each case that increasing agricultural productivity
depends on improving agricultural technology, while improving technology depends on
research to generate technology, extension to transfer the technology to farmers, and
education to develop the human resources to carry out research and extension. Thus, AID's
agricultural institution building-projects during this period sought to provide the missing
ingredient,. whether it. be research, .extension,education, .or a combination of these. Indeed,
where technical assistance staff of a U.S. Land Grant university were involved, they
invariably sought to duplicate the Land Grant model of research, extension, and education
within the specific institution being assisted.

Following the creation of the International Agricultural Research Centers (IARCs) in
the early 1960s (e.g., the International Rice Research Institute), the early success of some
IARCs in developing productivity-increasing agricultural technology (e.g., "miracle" IR-8
rice), and growing perceptions that agricultural extension in the LAC region had nothing to
offer, or that what it had to offer was not what farmers needed, there was increasing
recognition of the need to direct greater attention to agricultural research. But there also was
growing frustration that public sector agricultural research organizations, plagued by political
interference and low salary levels, could not provide the kind of environment essential for a
productive agricultural technology generation system. These factors led many AID-assisted
LAC countries between the late 1960s and early 1980s to create semiautonomous agricultural
research and/or extension institutes (e.g., ICTA in Guatemala).

Thus, the perception that extension would be severely limited without being able to
offer farmers productivity-increasing agricultural technologies led AID-funded project
assistance over time to increased emphasis on agricultural research. The emphasis on
research tended to focus on how to increase or boost commodity productivity. Research
capacity building during this period focused on establishing research experiment stations,
with the emphasis being on strengthening the capacity of agricultural research system to
carry out production research. However, over time there was increasing realization that
farmers would not adopt new agricultural technologies unless the technologies were adapted
to the more site-specific circumstances characterizing farmers' fields.

A new orientation emerged between the mid-1970s to the mid-1980s, as agricultural
researchers began to move off the experiment stations and into farmers' fields. The success
of Mexico's Puebla Project in boosting corn yields through on-farm adaptive research was an
important step in the development of the farming systems approach to agricultural research.
During this period, several LAC AID Missions initiated farming systems research and
extension (FSR/E) projects or projects having FSR/E components." Yet FSR/E projects


"Byrnes (1990a) reviews three AID-funded FSR/E projects implemented in the LAC region between 1975 and 1987:
Guatemala Food Productivity and Nutritional Improvement (520-0232) (Byrnes, 1989b); Honduras Agricultural Research
(520-0139) (Byrnes 1989c); and ROCAP Small Farm Production Systems (596-0083) (Byrnes, 1989d). Other FSR/E
projects implemented in the LAC region are identified in Byrnes (1989a).










often did not live up to expectations because they could not overcome long-standing con-
straints to linking the Ag REE functions (Byrnes, 1990a).

During this period AID increasingly became frustrated with the lackluster
performance of public agricultural research and extension organizations. In case after case,
host country governments failed to provide adequate counterpart support to meet the
recurrent costs of whatever technology generation and transfer (TG&T) model AID technical
assistance projects sought to implement. For example, in 1986, despite an evaluation team's
recommendations-and totally frustrated by-a lack. of.Ministry, of-Agriculture.support, USAID/
Panama sought to cancel the Agricultural Technology Development and Agricultural
Technology Transfer projects (Byrnes, et al., 1987).

The increasing frustration felt by AID with trying to implement agricultural TG&T
through public sector research and extension organizations had two main results:

AID bilateral support for national-level, public sector agricultural research began to
decline; indeed, there have been no new bilateral USAID programs for direct
strengthening of public sector agricultural research in the LAC region in over five
years.

AID support for public agricultural research in the LAC region increasingly is
being limited to funding the region's International Agricultural Research Centers
(IARCs) and two regional centers (RARCs)-the Centro Agron6mico Tropical de
Investigaci6n y Ensefianza (CATIE) in Costa Rica, which provides assistance to
Central America; and the Caribbean Agricultural Research and Development
Institute (CARDI), in Trinidad, which primarily serves the countries comprising
the Organization of Eastern Caribbean States (OECS). The three LAC IARCs are:
International Center for Tropical Agriculture (CIAT), Colombia; International
Maize and Wheat Improvement Center (CIMMYT), Mdxico; and the International
Potato Center (CIP), Peni.

Further, by 1985, AID was under pressure to find ways to cut development assistance
budgets and to increase the private sector's role in development. Increasingly, from one
country to the next, USAID Missions, frustrated with a perceived lack of progress in
supporting public sector agricultural research and extension organizations, began to search
for ways to "privatize" agricultural TG&T, especially for nontraditional agricultural export
(NTAE) crops that could provide these countries with an improved ability to earn foreign
exchange desperately needed to repay bank loans.

Indeed, in a period of less than five years, between 1984 and 1989, USAID Missions
created and funded private agricultural research organizations in five countries, including
Honduras, Jamaica, the Dominican Republic, Pern, and Ecuador, with similar organizations
also being considered for Guatemala and El Salvador (Sarles, 1990). Underlying AID's push










for privatization of agricultural research in the LAC region has been the assumption (yet to
be proven) that privatization (somehow) can overcome a series of constraints that have
impeded institutionalization of effective agricultural research capacity in public sector organi-
zations. These constraints, all conditioned by factors external to the research organization,
are (Sarles, 1987:6-7; 1989):

Stability and Level of Funding: Lack of control of the research budget, with the
available funding consistently low and its availability in terms of timing controlled
not by the Ministry of Agriculture but by the-Ministry of Finance;

Constituency Support/Relevance of Research: A political, rather than scientific
or economic orientation towards setting the research agenda, filling important
positions, and coordinating with extension, with the average Research Institute
Director's tenure being short;

Professionalism: With personnel systems often tied to the government's civil
service system regulations, low salaries and a lack of incentives result in a failure
to attract and retain qualified research managers and researchers, with the result
that priorities often are not established or are not enforced; and

Coordination with Other Key Institutions: Lack of integration between public
and private sector research, and among research, education, and extension.

The first of these, stability and level of funding, while clearly interrelated to the other
constraints, has proven to be the most problematic constraint. Indeed, the LAC Missions
currently supporting private agricultural research organizations are now searching for
strategies and mechanisms to ensure financial sustainability of these research organizations.
One strategy being explored by several Missions is that of establishing an endowment
sufficiently large to generate a dividend stream to meet the expenses of a private research
organization (Hansen, 1990). Typically, the AID-funded private research organizations are
mandated to carry out agricultural research on the nontraditional agricultural export (NTAE)
crops.

Yet the need for improved TG&T capacity for traditional food crops has not, over the
past few decades, become any less urgent, as government research and extension programs in
most AID-assisted LAC countries did little to stem growth in cereal imports (Figure 1.2) or
decline in per capital food production (Figure 1.3). Indeed, as host-country government
funding for Ag REE fell dramatically during the past decade in many of these countries
(Table 1.2), AID funding for Ag REE during this same period also fell (see Chapter II).
Further, as scarce resources were being redirected to support the development of private
sector research on the NTAE crops, there was a failure to realize the negative consequences
for TG&T for the basic food crops (see Box 3.2).












Box 3.2. Consequences of Privatization of Agricultural Research in the LAC Region (from Vessuri,
1990:1548).

"The new private organizations focus their attention on technologies, that, by their very nature, allow for the
private appropriation of profits. Their activities cannot thus be expected to cover the development of technological
potential in the broadest sense, that is, including education, training, etc.; without these functions, however, the
ability of the rest of the system to develop new technologies would quickly be exhausted. Likewise, private
organizations will not assume specific activities of a generic nature or with a low probability of bringing about
immediate results. Finally, the new private organizations are not interested in developing certain agronomic
techniques (cropping practices, pasture management, etc.) because of the difficulty of privately appropriating their
benefits. This means that a broad range of users neglected by the new institutional formats can be served only
by public organizations...."



We are now at the outset of a fifth decade (the 1990s) of AID development assistance,
during which AID's traditional "war on hunger" portfolio of projects already is under
pressure, at least for the Andean countries, to become a portfolio of "war on drugs" projects.
AID's attention and resources increasingly are being diverted from a traditional role of
raising crop productivity (the "corn booster" role) toward a new role, namely, that of Cocaa
buster." As part of this new role, AID projects in Perd and Bolivia are encouraging Andean
peasants to grow crops other than coca and discouraging drug consumption in the population
at large.'2 Indeed, about 43% ($125,000,000) of AID's LAC ARDN for FY91 portfolio is
targeted for "Narcotic Awareness."

USAID/Bolivia is now designing the "Alternative Development Project" to follow the
"Chapare Regional Development Project." Yet, while the Mission is required by the U.S.
Congress to spend millions of dollars to discourage Bolivian peasants from migrating to the
Chapare to grow coca, there are indications that the Mission is beginning to realize that
developing alternative technologies, be these for NTAE crops or traditional food crops, can-
not proceed if the required markets for alternative crops, as well as the required TG&T
capability in Ag REE institutions, public or private, is weak or absent (Byrnes, 1990b,
1991).

The limited TG&T capability available to support a "Chapare Regional Development
Project" provides a dramatic example of a more general problem facing the LAC region,
namely, that of the continuing constraint on agricultural TG&T caused by a failure of
national governments to allocate the autonomy and resources that are required to develop and
sustain Ag REE systems that can carry out TG&T efficiently. Indeed, the autonomous or
semiautonomous structure of most national agricultural research systems (NARS) in the LAC
region is called into question in a recent analysis of "the Latin American Model" of



"A World Bank official reported at a recent meeting of the Inter-American Council that the price of coca leaves is
such a small portion of the price of coca that processors can increase what they pay farmers enough to keep coca more
profitable than any other crop. Others maintain that Bolivian farmers do not like a market that is unstable, which prevails
when there is effective interdiction against coca trading, and would prefer to grow and sell crops that have long-run
market sustainability.













decentralized public institutions (Valverde, 1990:25-31). Box 3.3 abstracts key points from
Valverde's analysis.


Box 3.3. The Latin American Model of Decentralized Public Sector
Agricultural Research (from Valverde, 1990:27, 29-30).

"Beginning with the premise that total autonomy is nonexistent within
a public or semipublic system, it could be said that, functionally, a decen-
tralized public institution is autonomous insofar as it has the authority
to organize, plan, budget, and-execute the research activities delegated to
it. ...it is autonomous in terms of its direction, administration, manage-
ment, and operation, always taking into account that these activities are
in keeping with the socioeconomic development policies of the country and
agricultural sector.

"In the...LAC region, the degree and type of decentralization of
central government research activities ranges from decentralized autonomous
bodies (EMBRAPA-Brazil and INIA-Chile), to decentralized bodies strongly
tied to the central and bureaucratic semiautonomous systems of the state
(INIAP, IBTA...). Between these two extremes lie different degrees of
dependence on the central government. Regrettably, no clear and convincing
indicators have been developed to distinguish an autonomous decentralized
institution from a semiautonomous one. Thus, a decentralized institution
is not necessarily autonomous in terms of its administration, management,
and operation.

"...most decentralized bodies in LAC are in one way or another compul-
sorily subordinate to or linked to the ministry (agrarian sector) in all
that refers to the strategies, policies, and priorities established by the
minister of the sector and to the coordination of the programming, budget-
ing, execution, and evaluation of the results.

"In practice, however, coordination in extreme cases has been converted
by the ministry into an excess of control measures, resulting in the disap-
pearance of the operative and administrative flexibility of the decentral-
ized institute. Consequently, the administrative status of the decentral-
ized body does not differ in any way from that of any other department act-
ing within the norms governing the ministry or public departments of the
central government.

"To.be more precise, anything in the [LAC] NARs concerning the struc-
ture, organization, and management of financial and human resources general-
ly operates entirely within the norms of the ministries of agriculture and
finance as well as the national regulations on personnel management. ...
These norms and regulations are suited to routine office work, but they are
not flexible enough to accommodate exceptional situations such as those
involved in agricultural research activities.

"Research by nature deals with biological entities and complex eco-
logical systems. It needs constant personal attention and a flow of phy-
sical resources, specific and not always predictable research materials, and
a time schedule not always subject to rigid fiscal calendars. For example,
laboratory and field experiments need constant attention which does not fit
into the strict routine established for professionals and technicians
working within the central bureaucratic system. (continued...)













Box 3.3. The Latin American Model of Decentralized Public Sector Agricul-
tural Research (continued from Valverde, 1990:27, 29-30).

"Without going into budgetary details, it may be said that, under the
central government system of budgetary allocation and payment of most LAC
countries, the activities related to research involving biological entities
and dynamic ecological systems are [not] compatible with budgetary execu-
tion. The common problem encountered is that neither the allocation of
resources nor the calendar of payments conforms to the needs of the research
calendar.
"In other words, the element of administrative flexibility is absent
or limited with regard to the operation and allocation of the physical,
financial, and human resources necessary to execute the research activities.
It would seem that a feasible alternative would be to grant real
autonomy to the decentralized institutes in terms of a series of exceptions
to the laws, which, without surpassing any legal framework, would permit
them to implement measures to increase their level of flexibility,
efficiency, and effectiveness in the management of available resources. It
would also allow them to attract and manage additional resources.
"Autonomy, therefore, appears to be a precondition to taking the meas-
ures needed to allow the implantation of salary structures-escalafones-and
fiscal systems according to the research activity. These are the basic
elements needed to end the decline and continuous drain of talent that is
becoming more and more acute within the research system."0



Valverde goes on to identify the functional and/or activity areas where administrative
flexibility and autonomy are needed in a NARS. These areas are as follows:

Generation and management of income
Establishment and maintenance of a researcher wage scale
Decisions about international technical cooperation
Flexibility for travel abroad
Hiring consultants
Flexible budgetary execution
Management of donor resources
Flexibility in making contracts and procuring goods

The end result of a lack of administrative flexibility and autonomy in LAC public Ag
REE systems (or NARS), combined with the decline in host country public (see Chapter
I.C.3) and AID (see Chapter II) funding for Ag REE has been decline in the TG&T capacity
of Ag REE systems in AID-assisted LAC countries (see Box 3.4).















Box 3.4. An Observer's View of R&D Capability in the LAC Region (Vessuri,
1990:1543, 1550).

"Observers of the [LAC] region expect that in the coming years science and
technology capability will undergo a process of accelerated obsolescence,
and will, therefore, become increasingly out of step with the social and
material needs of the population....
"...Latin American R&D systems have not kept pace with international devel-
opments and continue to be deficient. There is research capability, but it
excels only in more or less isolated enclaves. Conditions are such that in
more than a few cases, the very weight of the often low-quality, obsolete,
and bureaucratized institutional research infrastructure acts as a powerful
obstacle to change. Latin American universities are mostly politicized and
controlled by self-serving interest groups. National research systems are
handicapped in their ability to create the scientific and technical profiles
required by the production systems undergoing deep transformation during the
current technological revolution in the industrialized countries. Probably
no single country in the region is able to face by itself the technological
challenge of the coming decades.
"Most recent studies point to a serious deterioration of working conditions
in the research field and the growing alienation of researchers, who lack
stimuli and often the minimal conditions to pursue their work."


While the "low-quality, obsolete and bureaucratized institutional research infra-
structure" often may act as "a powerful obstacle to change," it does not follow that this
should be an excuse for the development assistance community to allow national governments
to continue to fail to allocate the autonomy and resources that are required to develop and
sustain Ag REE systems that can carry out TG&T efficiently. Yet in AID there is no
evident consensus on whether the apparent AID strategy (neglect of the public Ag REE
system in favor of developing private Ag REE systems) should continue. In the absence of
any consensus to address these problems, the present strategy has been based on "rolling
redesign" that responds not to the basic problems faced by LAC Ag REE systems but rather
to whatever may be the latest development panacea." Yet an unanswered question remains
in terms of what role, if any, AID should play in assisting LAC countries with strengthening
their Ag REE systems, whether public or private, and whether designed to support TG&T
for traditional food crops, NTAE crops, or a mix of commodities including traditional export
crops, livestock, fisheries and aquaculture, and forestry.

As AID has increased its support for agricultural research on NTAE crops by private
sector organizations and reduced its support for public sector research on traditional food
crops for domestic consumption, the Agency has skirted three issues:

1. Is there is a continuing need for public involvement in agricultural research in
AID-assisted LAC countries?


"Over the past decade, the focus has shifted from one area to another, including institution building, FSR/E, coca
substitution, policy dialogue, privatization, structural adjustment, sustainability, and so on.










2. If there is a continuing need for public involvement in agricultural research in
AID-assisted LAC countries, is there an optimal role or scale of public involvement in
agricultural research that varies, from one country to the next, as a function of each
country's resource endowments (e.g., size of country)?

3. If each AID-assisted LAC country has a continuing need for public involvement
in agricultural research, and if the optimal scale of this involvement varies as a function of
each country's resource endowments, what criteria can be used to decide what kind of public
sector agricultural research capacity building is most appropriate in each country situation?

Clearly, in retrospect, small and/or resource-poor countries (e.g., Haiti) cannot afford
the same full-scale NARS of the type that can be afforded by larger countries with more
resources (e.g, EMBRAPA in Brazil, ICA in Colombia, or INIA in Mexico). But small
and/or resource-poor countries do need to have some minimum capacity to reach out to ex-
ternal technology sources (e.g., IARCs) and bring productivity-increasing technologies to
their countries for "downstream" or adaptive research. On the other hand, the larger and/or
resource-richer countries (e.g., Ecuador) have the potential to develop "upstream" research
capacity to carry out more applied or basic research geared to these countries' agricultural
potential.

While the overall strategy of donors (e.g., Rockefeller and Ford Foundations) was to
reduce funding to national programs and to create and increase funding for International
Agricultural Research Centers (IARCs), AID's defacto "strategy" in the LAC region has
been to reduce funding for public agricultural research programs and to create and increase
funding for private agricultural research organizations. While the strategy of other donors
was reinforced by the creation of the Consultative Group for International Agricultural
Research (CGIAR) to marshal and coordinate donor funding for research on basic food
crops, no comparable group was created to marshal and coordinate funding for the various
private agricultural research organizations created by AID in the LAC region. Yet, while the
donor community has continued to focus primarily on basic food crops, AID redirected its
attention from a primary focus on research on traditional food crops for domestic consump-
tion to research on foreign exchange-earning NTAE crops. In the long run, there is
uncertainty about whether this approach will contribute to or be counterproductive to AID's
stated development goal, namely, "to increase the income of the poor majority and expand
the availability and consumption of food, while maintaining and enhancing the natural
resource base."

B. Strengthening TG&T Capability of Ag REE Institutions

With this overview in mind, the discussion turns to a review of AID support for Ag
REE-strengthening in the LAC region during the 1980s. Ag REE's current status in the
region (reviewed in Chapter IV), is not a simple function of AID's activities in the region
during the 1980s. The current situation grew out of nearly 40 years of development
assistance implemented in a complex of environmental constraints (political, economic,
social, cultural, biophysical, and agro-climatic). Keeping this in mind, this section analyzes
the most recent decade of AID support for Ag REE-strengthening in the LAC region. When










the decade of the 1980s is seen in the light of this overview, one can identify the variables
that have defined the course of evolution of AID -strategy and project approaches to
strengthening the TG&T capability of Ag REE sys:tms in the LAC region. These variables
are defined following this section's country-specific analysis which is based on a much more
detailed analysis in Annexes A and B.

1. Andean Region

a. Bolivia

USAID/Bolivia placed little emphasis during the 1980s on Ag REE-
strengthening. The Mission's portfolio was driven by two objectives: (1) to find alternative
crops and technologies to substitute for coca; and (2) to reactivate the private agricultural
sector by strengthening and expanding the capacity of private agricultural producer organiza-
tions (PAOs) to provide their members private-sector services (e.g., seed, credit, technical
assistance, machinery, storage, transport, and marketing).

Yet a recent training needs assessment of USAID/Bolivia's Chapare Regional
Development project identified the need to strengthen public and private sector capability to
carry out adaptive on-farm research as essential if the project is to be successful in
developing crop alternatives to producing coca (Byrnes, 1990b). In both of the project's
target regions (Chapare and Associated High Valleys), the Mission's strategy depends heavily
on agricultural TG&T as a key to achieving the project's mandate to provide crops and
technologies that -.- he remunerative alternatives to coca production. Yet none of the
Mission's projects -- e 1980s, except Chapare, focused on strengthening the capability
of public or private oiL.-: -. ons to carry out agricultural TG&T.

The Mission's Private Agricultural Producer Organizations (PAO) project has had
some success in strengthening PAO capability to provide member services. But the project's
emphasis on private-sector services neglects that farmer demand for services depends to a
significant extent on farmer demand for and the available supply of agricultural technology.
While the 4/90 evaluation of the project found one PAO that was providing, via a check-off
system, funding for agricultural research, this PAO was reaching only a relatively elite group
of farmers in the Santa Cruz region; otherwise, none of the PAO project's inputs is directed
at strengthening private or public capacity to generate technologies that farmers will demand.

While USAID/Bolivia's portfolio in recent years has lacked a long-term program or
series of projects to strengthen public or private agricultural TG&T capability, the success of
the Mission's current coca substitution initiative ultimately will depend, to a large extent, on
Bolivia's agricultural TG&T capability. In this regard, a study conducted by the
International Se--ice for National Agricultural Research (ISNAR, 1989a) identified the need
to rebuild Boli,.. s agricultural TG&T system. The study found that IBTA's resources have
deteriorated because of a loss of qualified staff, degradation of priority-setting and program-
ming systems, and incapability of extension to attend efficiently to the needs of the rural
population.










The study proposed restructuring IBTA by creating "regional services for research
and transfer of agricultural technology." While the regional services initially would be
funded by the GOB and departments, there would be a strategy to develop the system
gradually, whereby the regional services would receive increasing local support from
development corporations, regional agricultural chambers, etc. Once local support provided
a majority of the funding for the regional services, they would become autonomous entities,
adopting a status similar to that actually held in the Department of Santa Cruz by the
Research Center for Tropical Agriculture (CIAT/Bolivia). The study recommended a phased
action plan to-implement the system,- and-identified a global project-that donors -could support
to provide the components needed for institutional strengthening. Such a global project or
program could include the following projects or subprojects:

Strengthening the central unit of a national agricultural research and technology
transfer system;

Strengthening and consolidating national agricultural research and technology
transfer programs;

Establishing or consolidating technological linkage units; and

Supporting the regional services of the agricultural research and technology
transfer system.

While the study's proposed action plan for implementing the agricultural research and
technology transfer system recognizes the need to train the personnel required to operate the
system, neither the study nor the action plan identified the problems or needs of Bolivia's
agricultural education system. A subsequent study by the World Bank recommended that,
rather than attempting to restructure IBTA nationwide, the Bank should assist Bolivia in
implementing a more limited restructuring, with an emphasis on providing support for
revitalizing IBTA in defined target regions offering the greatest potential for agricultural
growth.

b. Ecuador

USAID/Ecuador sought in the early 1980s to strengthen public Ag REE
systems. The Integrated Rural Development (IRD) project sought to strengthen the ability of
the Secretariat for Integrated Rural Development (SEDRI) to coordinate extension by various
implementing agencies. A second project, Rural Technology Transfer System (RTTS),
sought to strengthen the capability of public agencies-first SEDRI and then the National
Science and Technology Council (CONACYT) and Ministry of Agriculture (MOA)-to assist
implementing agencies in improving technology transfer and linkage of REE institutions. But
USAID/Ecuador's efforts to develop public sector ability to coordinate agricultural TG&T
repeatedly were frustrated during the early 1980s. A mid-1984 evaluation recommended a
major redesign that marked a shift away from these projects' initial extension focus and
toward an emphasis on education through provision of opportunities for in-country and U.S.
short-term and degree training. Training also was reinforced by Mission support of an










Agricultural Education project that funded scholarships for Ecuadoreans to study at the Pan
American Agricultural School (EAP) in Honduras.

The 10/85 amendment of the RTTS project revised the project's strategy to place
greater emphasis on working with private sector producer associations. While a public
agency (MOA) continued to be RTTS' lead institution, the project assisted producer associa-
tions to carry out commodity-specific TG&T activities [later called Research Extension
Linkage Units (RELUs)], assisted by the University of Florida and Utah State University.
The RELU activities proved successful ,ver the-next few years and led to-a 5/88 project
amendment to establish a self-sustaining private sector technology validation and transfer
system. The RELU concept became a key component of a private sector agricultural
research foundation (FUNDAGRO) created under the Agricultural Research. Extension. and
Education project (see below).

But even as USAID/Ecuador sought to strengthen public sector TG&T capability for
food commodities, the Mission, under the Non-Traditional Agricultural Export (NTAE)
project, began to focus on NTAE crops. A strategy of technical assistance to private groups
(e.g., Federation of Ecuadorean Exporters) reflected a growing emphasis on providing
development assistance through private organizations. Yet the mid-1988 NTAE evaluation
concluded that more time and resources would be needed to develop private sector ability to
achieve NTAE project objectives. Indeed, the evaluation stated that the Mission's strategy of
turning to the private sector had not provided any "magic bullet" for solving the institutional
problems that other projects (IRD and RTTS) already had encountered in trying to work
through public agencies.

The launching of the Agricultural Research. Extension, and Education (AREE) project
in 1988 further evidenced the Mission's growing private sector orientation. AREE, which
seeks to improve a public-private TG&T system for certain commodities, is being
implemented by the private Foundation for Agricultural Development (FUNDAGRO) that
grew out of the Mission's frustration with Ecuador's public agricultural research institute
(INIAP). While the Mission partially funds FUNDAGRO, a recently completed Agricultural
Sector Assessment (Whitaker, et al., 1990) pointed to a need for increased public support for
agricultural research and science. The assessment identified Ecuador's inadequate science
base and discriminatory macroeconomic policies as the two major constraints to agricultural
progress. Based on this assessment and a series of Mission-sponsored policy dialogue
seminars, the Minister of Agriculture requested technical assistance to implement a plan for
an autonomous National Research Service to replace INIAP. Also, the Mission has begun to
explore the potential of non-project sector assistance (NPSA) to stimulate development of Ag
REE in Ecuador (Brown, 1990b, 1990c).

c. Perd

USAID/Peri provided support, during much of the 1980s, to strengthen
public sector Ag REE organizations. From 1980 to 1989, the Agricultural Research.
Extension, and Education (AREE) project assisted the National Agrarian Research and
Promotion Institute (INIPA) in developing public agricultural TG&T capability. Mission










support for public agricultural research and extension was to continue under the follow-on
Agricultural Technology Transfer (ATT) project that had been designed by mid-1987. But,
in late 1987, agricultural extension was pulled from INIPA and placed in the MOA, and
INIPA was renamed the National Institute for Agricultural and Agro-Industrial Research
(INIAA). Further, about the same time, Pern failed to meet U.S. Government drug
certification requirements, and also fell in arrears on loan repayments; as a result, the
Foreign Assistance Act's Brooke-Alexander amendment required AID to cut off funding for
USAID/ Pern's bilateral projects with the Government of Perd.

This led the Mission to redesign the ATT project, whereby the implementing agency
was changed from INIAA to the Foundation of Agricultural Development (FUNDEAGRO),
the creation of which had been earlier assisted by the Mission.14 The redesigned ATT
project contract, signed with FUNDAGRO in late 1988, was to assist in improving TG&T
links between FUNDEAGRO, INIAA, and the private National Agrarian Organization
(ONA), with the primary emphasis being on channeling AID funding to support private
TG&T through private groups-Ingeniero Agr6nomo associations, producer associations, and
irrigation users districts, with some funding going to INIAA to support participation of
agricultural researchers from that organization.

It should be noted that the AREE and ATT projects also provide funding to strengthen
agricultural education institutions such as the National Agrarian University (UNA). Further,
these projects and Agricultural Planning & Institutional Development have funded advanced
degree training either in-country or in the U.S. Thus, in retrospect, both the AREE and the
ATT projects provided assistance to strengthen all three REE functions. However, while the
AREE and ATT projects focused on strengthening Pern's TG&T capacity, this capacity also
was strengthened through area-specific projects such as Upper Huallaga Agricultural Devel-
opment and Central Selva Resource Management. The former project, as in
USAID/Bolivia's Chapare Regional Development, sought income alternatives to coca
production, while the latter, as in the Associated High Valleys component of the Chapare
project, sought to address poverty problems in a related region (i.e., Pern's high jungle
region). More recently, there is increased recognition of the need to address natural resource
problems.

The Mission's Semiannual Project Report (USAID/Peni, 1989) stated that AREE had
been "successfully completed" and that the end-of-project evaluation had "served to document
the extent of success and provide guidance to the current ATT Project." ATT was reported
to have developed "productive, collaborative relationships with all participating institutions."
Further, it was stated that the project was expected during the next reporting period "to begin
impacting at the goal and purpose level." At the same time, the documented assessed
progress with respect to the fifth objective of the ATT project's technology generation
component, namely, that INIAA's national programs develop a sufficient degree of maturity
to ensure continued political and financial support, adequate to sustain the level of effort



"FUNDEAGRO grew out of an earlier foundation (FUNSIPA) created as a way of moving private funds to support
research within INIPA.










existent at the project's conclusion. On this count, the report stated that a forum of former
INIAA chiefs had discussed:future needs and goals and that all had mentioned:

that INIAA still has the same problems as it did five years ago and, before anything
can be accomplished, these problems need to be resolved. Their concerns included
the lack of resources, too many of the same experiments tested at different experiment
stations, lack of publications, and lack of awareness of farmers' needs (USAID/Peni,
1989:21).

While the Semiannual Project Report identifies progress areas, there appears to be some
uncertainty about whether the government will be willing and able, by the PACD of August
31, 1993, to make a commitment to sustain the publicly-funded Ag REE system.

By comparison with the case of Colombia, reviewed in section I.A, USAID/Peri's
program during the 1980s did not go through a sequential evolution of initially focusing on
one function (e.g., extension) and later on others (education or research). However, while
support initially was aimed at strengthening public sector agricultural TG&T (INIPA renamed
INIAA), Mission support for strengthening Perd's agricultural TG&T capacity was redirected
in the late 1980s toward supporting private agricultural TG&T implemented through
FUNDEAGRO.

Comparison of the Peruvian and Ecuadorean cases reveals that USAID/Perd sought to
develop TG&T capability primarily in public sector agencies. FUNDEAGRO provided a
mechanism to ensure a more efficient channeling of donor funding to public sector research
by INIAA. USAID/Ecuador initially sought to strengthen REE capability by working
through public organizations, subsequently through public sector organizations coordinating a
mix of public and private agencies, and finally through a private sector foundation
(FUNDAGRO) that has a mandate to work through both public and private institutions. Yet
the GOE now is interested in creating an autonomous National Research Service to replace
the existing public research organization (INIAP).

Projects in Ecuador (AREE) and Pern (ATT) have sought to increase private sector
involvement in TG&T activities, although this appears to have been more aggressively
pursued in the AREE project than in the ATT project which initially was designed to support
the development of public sector agricultural TG&T. Subsequently, however, a series of
events-the removal of the extension function from INIPA and its placement under the
MOA. the renaming of INIPA to INIAA, and the failure of Perd to comply with drug
certification and loan repayment requirements-led the Mission to shift its support for
developing TG&T capacity to the private sector FUNDEAGRO.

d. Andean Region Summary

Efforts are underway in all three Andean countries to develop improved
agricultural TG&T systems. There is increasing emphasis by the USAID Andean Missions
on developing the capability of private organizations (i.e., foundations and PVOs) to carry
out TG&T activities. In both Bolivia and Ecuador there are proposals to renew efforts to




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