services and integration of E-extension

The benefits of international cooperation for AIS stem from the specialization it allows and from international spillovers. It is particularly important where global challenges (for example, responding to climate change) or transboundary issues (such as water use, pest and disease control, zoonoses) are confronted, and when initial investments are exceptionally high (Group of 20 2012). Crosscountry cooperation also allows countries to better leverage their domestic research resources, which may be particularly important for small countries with limited domestic R&D capacity. Thus, domestic investment in agricultural R&D does not convey the whole picture, given that many countries either have a prominent presence of International Agricultural Research Centers or have strong strategic partnerships with them (table 6.2). The Philippines, for example, hosts the International Rice Research Institute,18 and Indonesia is home to the headquarters of the Center for International Forestry Research and World Agroforestry and leverages significant international R&D. Strengthening scientific and knowledge exchanges with centers of excellence (CoE) in neighboring countries is also an important element of an innovation strategy for a small country with limited resources. However, relying on international R&D capacity may not be sustainable as a long-term strategy. All countries also collaborate with bilateral and multilateral development agencies and international research networks. The collaboration networks have centered largely on topics that receive less domestic attention (for example, livestock, farming systems, the environment) or pose significant cross-country challenges. For more details on international collaboration among the countries, see appendix F.

FDI is one of the most important channels through which technology is transferred across countries. FDI reflects a country’s level of integration into international knowledge networks. Some countries’ AIS have attracted considerable FDI. For instance, in China, FDI and the associated special economic zones have contributed significantly to innovation through transfer of new agricultural technologies, knowledge, and finance (CDB 2015; Chen 2018) (box 6.4). China has also accessed foreign agricultural technology through direct acquisition of foreign firms. This strategy may speed up transfer of technology assets to China and preserve greater sovereign control but is financially costly to the Chinese economy (box F.1 in appendix F) (Fuglie 2016). Foreign research also plays an important role in transferring technology or knowledge to research agencies in Thailand (Suphannachart 2017). In Indonesia, FDI has been modest and volatile, and mostly concentrated in food and plantation crops. Although Cambodia and Myanmar enjoy relatively high FDI, limited R&D is involved (ADB 2019). However, foreign investment in agriculture and agricultural R&D is impeded in the region by inadequate investment conditions. Such conditions include, for example, infrastructure, finance, IPR, seed and biosafety regulations, land rights, and curbs on the use of FDI in agriculture (ADB 2019; Austrade 2019; OECD 2016, 2017b, 2018a).

Investing in extension services has paid off. Traditionally, agricultural extension services have facilitated knowledge flows from research institutes to farmers and entrepreneurs. Often, however, agricultural extension has been forgotten

and underfunded, with poor delivery limiting the potential of agricultural innovations. Although evidence of the impact of some major extension models has been mixed, the median rates of return range between 58 percent and 63 percent for investments in extension services (Alston et al. 2000; Dercon et al. 2008). Extension services have also yielded positive social returns, particularly for women, people with low literacy levels, and farmers with medium landholdings (Davis et al. 2010).

Over the years, agricultural extension services have shifted away from public delivery of technology, inputs, and knowledge. In the past, the public sector dominated extension in most countries. Today, farmers are drawing information from an increasing range of sources and means, especially through innovations in information and communication technology (ICT). This pluralism in services is reflected in the range of approaches used, the array of content, and the interaction with public and private entities. new actors, including nongovernmental organizations, farmer organizations, the private sector, knowledge brokers, and community-based organizations, offer and fund services (World Bank 2012). The roles of these actors vary and are affected by the agricultural commodity, the level of market integration and value added, farmer education, farm size, collective action, and the country’s views on the role of the private sector. As innovation processes have become more complex in increasingly market-oriented and challenging contexts, the need for neutral brokers has become more evident (box F.4 in appendix F).

ICT-based e-extension services have fundamentally changed the functioning of farm advisory services. They have improved timeliness and created new partnerships and forms of investment (chapter 5). Both publicly and privately provided extension services are more and more often delivered over mobile phones, which are increasingly multifunctional wireless devices, delivering timely and customized information at scale, in some areas resulting in yield increases of up to 4 percent (Fabregas, Kremer, and Schilbach 2019). The public sector maintains great interest in ICT as a means of providing better public services that affect agriculture (for example, land registration, forest management, and extension), as well as for connecting with citizens (World Bank 2017a). Private companies that have invested in technology and applications are often interested in working with the public sector to provide their products and services to smallholders. Mobile phone applications, software design, local language customization, and remote transaction services represent only a fraction of the opportunities for continued innovation.19 Commercial enterprises such as processors, input suppliers, and exporters are also motivated to invest in ICT because these investments often lead to increased efficiency and revenue as well as extensions to client bases such as isolated farmers (World Bank 2017a).

Increasingly pluralistic (multiple-provider) extension services need new capacities to serve a varied clientele. Today, the clients—farmers and firms— need a variety of services to function in increasingly complex contexts. Paradigm shifts from the perception that research knowledge can drive innovation must also take place in the programs and among field staff, extension administrators, and policy makers (World Bank 2012). Service providers must be equipped with knowledge and skills in, for example, value chain approaches, market-oriented extension, climate change, risk management, group and organizational development, agribusiness, and mechanisms to share information, including use and provision of e-extension.

The roles of the public and private sectors in extension are also changing in most agri-food system contexts. The private sector (for example, services by

agro-dealers and managers of out-grower schemes, private and third-sector providers) and knowledge brokers play an important role in providing services in contexts of transition and urbanization; however, government has a continuing role to play (Rivera and Alex 2004; Swanson and Rajalahti 2010). Many extension tasks have a public goods nature. Such tasks include regulation, quality control in the produce supply chain, coordination of service provision, and natural resource management, as well as the provision of services to marginal groups, which are unlikely to access or be able to afford private advisory services. The public sector’s role is to fund the provision of extension services (directly or through outsourcing) where demand for services is not being met, to support extension services in addressing issues of long-term social and environmental sustainability, and to manage extension services (including quality control and knowledge management). The public sector can also provide incentives for nonpublic actors to play a greater role in providing services (box 4.5). In pluralistic extension systems, space can be created by the public sector to shift some public investment toward the management of extension systems and the strengthening of private actors’ capacity (Christoplos 2010; Spielman et al. 2011).

The developing East Asian countries have largely public sector–driven extension systems with varying but increasing levels of pluralism, decentralization, and integration of e-extension (table 6.3). Pluralistic extension and rural advisory services prevail in Cambodia, Indonesia, Lao PDR, Thailand, and Vietnam (GFRAS 2016). The central challenge of extension systems is limited coverage and quality (technical, enterprise skills), particularly in Cambodia, Lao PDR, and Myanmar, which also have the poorest penetration of e-extension (with potential to improve quality and coverage). Extension systems are significantly underresourced, and some rely on donor funding in large part (for example, Myanmar). Limited decentralization still hampers smallholders’ access to knowledge and innovations. For instance, Thailand’s public, largely top-down, extension model does not adequately integrate client demand (GFRAS 2016). Some extension systems are hindered by content. For instance, the Philippines’ extension system focuses mostly on a commodity approach (OECD 2017b), constraining climate-smart agriculture programs. Although extension is provided by many private actors, such as agro-dealers, processors (who provide a comprehensive package of inputs, advice, and credit to their contract farmers), and business-oriented cooperatives, technical skills also often limit private sector extension activities. As an example, China’s nationwide extension system is featured in box 6.9.

Several developing East Asian countries have ambitious e-extension plans,20 but integration into national extension systems varies (table 6.3). For instance, the Philippines’ e-extension program aims to provide an alternative to the traditional extension system of the agricultural, fisheries, and natural resources sectors by integrating ICT-based extension delivery. The e-farming component delivers farm and business advisory services, primarily technical assistance, to farmers and agricultural extension agents via text and voice (using a toll-free number), as well as through chat, e-mail, and online forums21. Chapter 5 and appendix E provide details on e-extension in Vietnam and China.

Most developing East Asian countries have rather weak links between farmers, extension, and research (and firms), suggesting that farmer and firm demand is poorly informing R&D programs. In China Indonesia, Malaysia, and Thailand (at the local level), however, cooperatives and industry associations play a brokering role—to a varying extent—in facilitating collaboration, sharing knowledge, and promoting innovation. These organizations serve as platforms