Towards Agricultural Innovation Policy

 

 

Suresh Pal,

 Uree N Choudhary & Rashi Mittal

 

The green revolution in wheat and rice, white revolution in milk, yellow revolution in oilseeds and the blue revolution in fisheries have augmented and diversified the food basket of the country. But there are still many development challenges to be addressed. Continuing focus on household food and nutrition security, decelerating growth in total and partial factor productivity, unsustainable land and water use practices, and economic and ecologically access to food, especially for the poor: are some of the agricultural development challenges. These coupled with the need for promoting competitiveness of Indian agriculture and gearing agricultural systems, including technology systems, to the pressures of international agreements affecting access and application of technologies make the task ahead more challenging.

In order to address these challenges with an emphasis on inclusiveness of the rural poor in the development process, the role of agricultural science and technology assumes greater significance. This is primarily because of the limited scope for cultivation area expansion to produce more and also because we have reached a stage where further exploitation of natural resources would compromise sustainability of agricultural production systems. Therefore, agricultural growth in future should essentially be led or triggered by applications of science and technology in agriculture and associated innovations.  In other words, Indian agriculture will have to shift from resource or input-based growth to knowledge or science-based growth and development.  In this paradigm shift, flow of knowledge and technology has to play a critical role. In this context, efficiency of agricultural science and technology systems should be enhanced to promote technological innovations. These technological innovations and associated knowledge snippets complemented with institutional innovations and support of appropriate policy would contribute to higher productivity and sustainability of agriculture. Participation of the stakeholders in this growth process will go a long way in sustaining the innovative capacity. This paper discusses policy options to promote technological and institutional innovations in Indian agriculture

 

Agricultural Research System

In India, initially agricultural research was essentially a supply driven process and the focus was on creation of new knowledge and its conversion into technologies which can directly be used by farmers. The concept is now moving from supply driven to demand driven kind of interventions and then it becomes a concept of agriculture innovation system, so that the knowledge can be used by the end users, mostly the farmers. This paradigm shift entails a move from a process concept to some kind of output and outcomes (Table 1). The capacity for innovation underscores (a) actors in the innovation system and their respective roles, (b) attitude and practices of main actors, (c) pattern of interaction among the actors, and (d) enabling environment (Hall, 2006). This means that the focus is on the actors in the creation and application of new knowledge because this is important in the innovations. Not only are technological innovations important, creation of new knowledge is equally important. Secondly institutional innovations are also important to put that knowledge really into use. In such a context, the actors, creation and application of new knowledge, institutional innovations and policy issues have become equally important.

 

Table 1:  Expanding view of innovation capacity in agriculture

Scope

Approach

Focus

Actors

Activity based

National Agricultural Research Systems (NARS)

Technology generation and transfer

Research organizations, universities

Output based

Agricultural knowledge and information system (AKIS)

Knowledge and technology dissemination

Research organizations, universities, extension services, non-governmental organizations

Outcome based

National Agricultural Innovation System (NAIS)

Technology and institutional innovation

All economic actors that activity use or generate knowledge

 

Source: Janssen (2006)

 

 

Indian agriculture is shifting towards a greater role for market forces and privatization, including in agricultural research and development (R&D). This is a major shift we have had since economic liberalization in 1991. As part of the globalization process the inter dependence of countries is increasing and the capacity of the different systems to respond to major challenges like climate change, energy crisis, volatility of financial institutions, etc. is dependent on lot of actors and collaborations. So there are multiple actors involved in the development process and the focus is shifting from agricultural products to development of value chain within agriculture sector. Therefore, we have to go much beyond the production systems and look at post-harvest management issues and add value so that we are able to meet consumer demand and also give more money to the producers. Thus, there are some major developments at the demand side also, needing a whole series of innovations to effectively link production with consumption.

Another important development is increasing inter-dependence of agriculture, economic and social development. This inter-dependence has been reinforced in recent times, especially when it was considered that high economic growth could not be sustained without commensurate growth in agriculture and human capital development. This can happen only when there are adequate resources and infrastructure for higher growth and capacity to innovate. When we analyse the capacity for innovation there are few issues needing attention. First issue is the role of various actors in the innovation system. Multiplicity of actors is one of the conditions here, and then their attitude and practices are important for innovation. The second issue is of partnership among the actors in the form of formal and informal networks to realize greater efficiency and economies of scale. The principles of institutional economics provide more systematic ways to analyse how these partnerships help develop innovation systems. Lastly, it is important that technological innovations provide adequate capacity to respond to emerging market opportunities and incentives and thereby promote innovations. We discuss this capacity in some detail.

In India, there is an organised agricultural research system which is structured in such a way that it helps in developing the partnerships for research. This is basically a three-tier system. At the centre there is a network of organization under the Indian Council of Agricultural Research (ICAR). At state level there are the state agricultural universities (SAUs), and at the zonal level (covering a couple of districts) there are zonal research stations controlled by SAUs (Fig 1). The ICAR is managing a lot of projects called the coordinated research projects, the technology transfer centres, educational schemes and externally-aided projects like the National Agricultural Innovation Project (NAIP) funded by the World Bank. So there exists a very strong mechanism, establishing linkages between ICAR institutes, SAUs and private sector; for profit as well as non-profit. Under NAIP there is a lot of emphasis on the private sector participation in agricultural R&D and for this funding is also available. Ideally, there should be two-way flow of information between the research system and farmers. But in practice it has been a one-way information flow, i.e. from research system to farmers. The system has been trying to address this weakness through an institutional arrangement and special programmes. More than 500 Krishi Vigyan Kendras (KVKs) or Agricultural Science Centers are established at the district level for assessment, refinement and transfer of frontline technologies and for training of farmers. This mechanism, along with frontline extension programmes of ICAR and SAUs links all the research institutions with farmers and development agencies.

 

 

Fig 1: Organization and linkages of Indian agricultural research system

Source: Pal & Byerlee (2006)

 

Stronger inter-institutional linkage is one of the unique institutional characteristics of the Indian agricultural research system, whereas other large countries like China and Brazil have different kinds of institutional models and their state and central level organizations are working in isolation. Of course there are problems, for example managing such a large system is not easy but there is an institutional mechanism which helps to streamline the relations between the various research institutions like ICAR, SAUs and the private sector, which in turn help coordinate research programmes.

Public funding is one of the major policy instruments for promoting technological innovations and human resource development. There has been a consistent upward trend in public funding for agricultural research and education. However, composition of the public funding from the centre and state governments has changed over the years. This is shown in Figure 2. The percentage share of centre and states in public agricultural R&D funding, clearly reveals that the share of centre has increased, from 20 per cent in 1961 to 49.5 per cent in 2000, reducing the share of all state governments from 80 to 50.5 per cent. It can be said that SAUs and their zonal research stations work for the states and so they are more close to the farming realities. Thus in a way the interface between the users and the research system, is becoming a bit weak. This is a policy question needing attention. It is necessary because the system which is close to the farmers is able to articulate their needs in a much better way and target them through allocation of research resources. Greater support for the state system is also necessary for strengthening this larger system. At the same time, proliferation of SAUs purely based on disciplines or region should be controlled for better use of limited resources.

 

 

Fig 2: Share (%) of the central and state governments in funding for agricultural research & education

 

Agricultural funding and expenditure by centre and states systems are given in Table 2 and it reveals that centre is now funding about 46-47 percent of the research resources, but the central system i.e. ICAR institutes are spending only 36 percent of the resources and the rest are being spent on special programmes having linkages with different institutions in the country. This shows that a significant proportion of the central funding is used for developing some kind of network or linkages among the research institutions who are working for agriculture. The corporate sector, both public and private, is at the margin and contributes about ten percent to the national funding for agricultural research. But this is significant in terms of increasing overall effectiveness of the system through commercialization and transfer of improved technologies and thereby making research demand-driven, which is a necessary condition for improving the capacity for agricultural innovation personnel/bodies

 

Table 2. Centre and states in agricultural funding, 2000

 

Funding Sources (%)

R & E performers (%)

Centre

46.6

36.8

State

42.6

51.9

Corporate

10.8

11.3

 

Source: Ministry of Finance, GoI

 

Committed fund for inter-institutional programmes is one instrument of developing the linkages and partnership within the system. Now when we focus on the knowledge creation, which is one component of the innovation system, what are the implications for agriculture R&D? First comes’ the question of resources. If we compare how much India is investing in agriculture R&D we see that it is 0.5% of agricultural GDP, which is much below that spent by other developing and developed countries (Pal and Byerlee, 2006). So we need to increase it, gradually, to at least one percent of Ag GDP and then rationalize the allocation by regions and commodities. Eastern India still suffers from under-investment; additional resources should be invested there.

 

Capacity for Innovation: Role of Policy and Institutions

Another important issue is the increasing interaction between public policy, institutions and technology/knowledge. This interaction is amply demonstrated by biotechnology which has brought changes in institutions and regulations relating to research or commercialization of biotechnology. There is a need to align policies and institutions to facilitate the flow of knowledge and technology to the end users. There could be institutional innovations within the R&D system. These innovations could be brought about by any change in funding pattern, organization of research programmes and regulations of R&D. For example, it is not necessary that public sector has to bear the responsibility of funding as well as doing the research. In fact the government can outsource to some private sector to do research or private sector can support research work in public sector. So there could be different ways of funding, organization and regulation of research. The system should continue to learn to do these things in a more efficient manner. Governance and management reforms now focus on participatory governance of technology systems so that we are able to bring the system close to the end-users, and research planning orientation has now shifted to outcomes from outlays. Then incentive to change the attitude and practices of the actors (basically scientists) is needed. What are the incentives in place to go out and have contact with the end-users, have partnership with other scientific organizations etc. these are important issues that need resolution. The new IPR policy of ICAR has emphasised on this, through commercialization of technology and incentives are being provided to the scientists. Mechanisms for partnerships like funding and intellectual property management provide incentive to work together and share the credit among the partners.

There could be multiple sources of knowledge, viz. public research, private R&D, traditional knowledge, international institutions, etc. Knowledge can be acquired from any of these sources and further addition of incremental value to this could be very useful to the end-users. Information and communication technologies (ICT) can play an important role in access and sharing of knowledge and information among the development agencies and end-users. So here a technology, i.e. ICT is helping in innovations for improved flow of knowledge and information.

Agricultural education is also changing. Traditional focus was on disciplinary training with some exposure to socio-economic issues. But today in addition to these two prime areas of training, there is focus on legal issues which are becoming equally important in agriculture. Similarly, managerial aspects, especially relating to agri-business are getting importance and some universities have started the programmes. As far as the extension system is concerned, we are still experimenting on reforms of the public extension system. The issues flagged are flexible extension approach, accountability to clients and development of capacity (resources and skills). Also there is a need to empower the farmers through provision of information and skills so that they are able to articulate their demand and respond to emerging opportunities through innovations. This can be achieved only when we bring the extension system close to farmers and understand their behaviour in sharing and application of knowledge and technologies. Once this is done, farmers will be able to see where the opportunities are and where they can use their resources, knowledge and skills to tap these opportunities.

The idea is that the innovation system should not be a source of supply driven interventions. There is a need for some analysis of the possibilities for interventions in a participatory mode so that these could be sustained. Here the focus should be on facilitation of intervention in the context of location-specific intervention rather than being some kind of a prescription. Capacity development of end-users and other actors for access and sharing of knowledge, learning and collaboration are extremely important (Janssen, 2006). But such a capacity can’t be developed easily. Therefore there should be systematic efforts by public agencies, governments, and other agencies to develop this capacity among the farmers. There have to be some kind of local knowledge centres or interest groups so that it is possible to integrate the knowledge available, pass it on to the farmers to make them understand and apply it. So this is very important as seen in case of Bt cotton. Initially, adequate information was not available with farmers and there were several problems related to its use and regulation. With the availability of more information farmers made better choices about seed selection and its use.

Lessons from seed industry:      Indian seed industry has witnessed lot of innovations during the last two decades. It began with the policy of the liberalization, and attempts to attract private investment in seed industry. This coupled with strong public plant building programmes allowing transparent access to their material, led to many private seed activities. It really helped in diversifying the seed system. There was a positive attitude and there were facilitating practices for a network approach for breeding, testing and release of plant varieties. This particular policy and system provided boost to private seed sector. This trend was further supported by enabling regulations. First import of vegetable seed and planting material was allowed in the late 1980s, which improved access to improved varieties developed in Europe and other countries. There were fiscal incentives to invest in plant building and in order to capture a large segment of the seed market, private seed companies started investing in plant building. So in that sense diversification took place not only in seed production and distribution but also in plant building. However the key limitation of the system was that there was lack of information flow and limited knowledge of the commercial seed market for the farmer (Pal et al 2007). Barring this limitation, the seed system witnessed tremendous amount of innovations facilitated by favourable policies and regulations. There were technological innovations in the seed industry like greater movement towards hybrids, consequent to the provision of some protection to intellectual property. So this case of seed industry demonstrates the way, the capacity to innovate in agriculture can be developed.

Most studies on innovation system are based on successful cases like seed, flower, poultry and horticulture sector. Other areas like conservation of water and other natural resources are yet to see sustainable innovations. The challenge is how small solutions to location-specific problems could be up-scaled and integrated into a larger innovation system. Increasing focus on commercial sectors should not take away focus from key agricultural development issues like food security, diversification and poverty alleviation. How can we bring small landholder-centred agricultural development into focus when discussing the capacity for innovations? The challenge is: to develop and apply a holistic and need-based concept of agricultural innovation system.

 

 

Conclusion

This paper has examined the concept of agricultural innovation system in the context of current development challenges. So far the examples are from successful commercial sector and little insight is available for addressing other development challenges like inclusive growth and sustainability concerns. Further work should focus on these issues. Although a demand-driven concept is advocated however there would still be several instances when technological innovations would enhance overall innovative capacity of agriculture. This necessitates adequate investment in R&D for accelerating flow of technologies and knowledge to end-users. This should be supported with facilitating policies and enabling institutions. One should understand this policy-institution and technology interface and take appropriate corrective measures to promote the innovations. Finally, efforts should be made to understand the behaviour of farmers in terms of access, application, and sharing of information, so that appropriate steps are taken to develop their capacity (through provision of information and skill development trainings); something which is a prerequisite for enhancing the rate of innovations in Indian agriculture.

 

 

 

References

 

 

 

 

 

 

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