A competitive grant scheme (CGS) constitutes a tendering process where providers of research resources bid for research contracts within pre-defined programmes or specific calls for proposals.A CGS is simply one mechanism for allocating resources. Competitive grant schemes may be completely open for global competition, have national or regional limits, or require particular combinations of partners in a bidding consortium (e.g. private sector and NGOs and universities and partners from several countries).
The balance of debates about innovation systems ideas in agricultural and rural development seems to have shifted from conceptualisation and historical analysis to planning and practice. National and international development agencies are now grappling with the need to rethink their investments in line with this new perspective. In this month’s LINK LOOK, Andy Hall, Jeroen Dijkman and Rasheed Sulaiman suggest ten priority topics where rethinking is needed and where there seems to be enough experience to provide advice.
The countries of Latin America and Caribbean (LAC) represent a wealth of natural resources; the world’s greatest agrobiodiversity; and immense economic, social, and environmental diversity. As an example, the region is home to Brazil—the world’s fifth-largest country in terms of both area and population—yet it also comprises numerous Caribbean island nations populated by fewer than 100,000 people. Nonetheless, LAC countries exhibit much ommonality, including significant urban populations, high ethnic diversity, and increasing inequality and poverty. Another shared factor is that many LAC countries have reformed or are in the process of reforming their economies through structural adjustment programs. Agriculture faces many challenges in LAC, especially in the context of development. Rising food prices are a growing policy concern for both low- and middle-income countries, and, whereas the region as a whole is a net food exporter, poor consumers suffer the negative impacts of food-price inflation on their incomes and thus on their health and nutrition. In addition, international value chains and supermarkets are transforming domestic food markets, thereby posing serious challenges to smallholders in their ability to remain competitive. As commercial agriculture expands, the agricultural labor market and rural nonfarm economy become vital if resulting productivity gains are to have a beneficial effect on rural poverty.Authors: G.-J. Stads & N. Beintema, IFPRI, 2009
In the first lead article, Roseboom explores how the adoption of a market economy perspective is affecting/ redefining the role of government in agricultural innovation. He focuses on two key questions that policymakers investing in agricultural innovation are struggling with in a market economy, namely: (i) what should be the role of government and how much should be invested in agricultural research, extension and other innovation stimulating measures and; what is the optimal level of public and private investment? According to Roseboom, in an ‘ideal’ market economy, the business enterprise sector takes care of its own innovation activities and the government only plays an enabling and stimulating role by: (i) supporting education and basic research; (ii) creating the right incentives for the private sector to invest in innovation e.g. IPR and anti-trust policies and regulations; and (iii) coordinating the country’s innovation capacity strategically. He suggests that market failure should be eliminated or at least reduced and the responsibility for agricultural innovation handed over to the economic actors in agriculture but notes that this process does not happen overnight.
In the final lead article, Roseboom explores the policy implications of the various options for optimizing public and private sector investments in agricultural innovation. In a market economy, the responsibility for agricultural innovation lies principally with the private sector and the public role is very limited. It is only when markets fail that the government should step in; either by trying to resolve the failure or by assuming responsibility for certain agricultural innovation activities. He opines that it is important to understand the cause and depth of the market failure in terms of horizontal and vertical spill over losses to be able to resolve or moderate it. These losses seriously undermine the expected profitability of private investment in agricultural innovation in general and hence have a negative impact on the economically optimal volume of investments. He recommends differentiated support strategies and developments in public management namely; performance-based budgeting, competitive funding schemes and greater involvement of the ultimate beneficiaries for ensuring that available public resources are invested in the most promising agricultural innovation opportunities.
Roseboom notes that although benchmarking is the most common way of evaluating the level of government investment in agricultural innovation, it is a rather poor tool because it lacks the theoretical underpinning and tends to reinforce the status quo. For example, many economists have argued that there is serious underinvestment in agricultural innovation based on ex post rate of return studies of agricultural research and extension projects. He suggests that using a three step approach based on a standard cost-benefit analysis technique to calculate the expected rate or return (ERR), provides the theoretical answer for establishing the optimal level of investment in agricultural innovation. However, such a rational economic approach is not common practice for investing in agricultural innovation projects either in developing or developed countries. The size of the optimal investment in agricultural innovation and as such the overall productivity depends on the country’s level of economic development, its agricultural innovation capacity and various structural factors such as the level of technological capacity and risk and uncertainty.
Joshua Ariga is an economist with the International Fertilizer Development Center (IFDC), P.O Box 2040, Muscle Shoals, Alabama, 35662. USA. Tel: +1 (256) 381 6600. Email: jariga[at]ifdc.org . Web: www.ifdc.org_____The focus for many developing countries is on increasing both public and private investments for improving the performance of the agricultural sector; an issue that is being pursued at national, regional and international levels. Identifying the right technologies, developing output and input markets, prioritizing agriculture in national development strategies, and private-public partnerships are important aspects for a successful research and development (R&D) and technology adoption framework. Agricultural R&D has the potential to reduce costs and/or raise output and therefore to shift the supply curve to the right. The InterAcademy Council and other public and private agencies have recognized the critical role of S&T in economic and social development and have recommended a doubling of public agricultural R&D funding by 2015.
Sustainable improvement of human well-being depends crucially on knowledge, its production, organisation, distribution, appropriation and wise use. Access to information, the capacity to generate and use scientific and technological knowledge and human innovation give institutions and countries an edge. For ACP countries, past development efforts that ignored local circumstances, technologies and systems of knowledge wasted enormous amounts of time and resources and have failed to achieve the desired result: "sustainable development".
Pouring millions of dollars in a research system does not necessarily guarantee good research and useful outputs and development. First and foremost, we need qualified, competent and motivated researchers, with necessary incentives to ensure focus on the research instead of other things. In Tanzania, for example, the number of PhD holders was lower in 2011 compared with 2008. This decline, gives cause for concern, especially given the importance of the agricultural sector and the value of research in addressing present and future challenges.
A survey of private sector firms in eastern Africa revealed that 65% of them did not allocate any budgets for research. Over 50% of the firms indicated that they responded to calls for collaborative research whenever they were advertised. Of the firms interviewed, 97% indicated that they knew research institutions that could address some of their business challenges. The three priority suggestions by private firms on how to improve uptake and commercialization of improved technologies were: involvement of end users in the research process; establishment of frameworks for regular interactions between researchers and industry players; and awareness creation and training for end users.