Chapter 1
Agriculture innovation system for inclusive rural development in Asia
An introduction
Lakhwinder Singh and Anita Gill
The global economy is undergoing a fast transformation. The emergence of new technologies is further facilitating the process of this transformation. The consequence of this is the rapid changes that are taking place within and across sectors of the economy. Studies conducted by various scholars help us to understand the process of long-term structural change and the underlined factors that determine the transformation in the industrially advanced countries of the world. The long-run changes that emerged from such studies are a continuous decline in the importance of the agriculture sector in the economy and the emergence of a dynamic industrial sector as an engine of economic growth of the economy. However, the services sector over a long period of time maintained its position at best (Kuznets, 1966). Another feature of this transformation was a somewhat similar decline in the workforce structure of the economy with a time lag. It is important to note that institutional changes facilitated this transition and any obstruction that occurred during the process was mediated by the state for realization of the full potential of epochal innovation.
The newly industrializing countries of East Asia have in recent times followed the classical structural transformation process and very successfully reached (in a relatively short period of time) a level of per capita income equal to that of the industrially advanced countries of the world. However, the sectoral income structure and workforce structure of newly industrializing countries have resembled industrially advanced countries. But the rest of the world (sub-Saharan Africa, South Asia and other developing countries) is predominantly services oriented. The income structure is largely driven by the services sector of their economies but the major proportion of the workforce continues to depend on the agriculture sector. The workforce data of ILO (2018) revealed that 26.5 per cent of the workforce of the global economy was engaged in the agriculture sector, but this workforce was 68.9 per cent in low-income countries in 2017. In Asian and Pacific countries, agriculture accounts for 28.5 per cent of the workforce. In South Asian countries, the agriculture sector was carrying 42 per cent of the total workforce. The dependency of the workforce on agriculture in Africa is as large as 53 per cent. Two Asian giants (China and India) employed a workforce on the order of 17.5 per cent and 42.7 per cent, respectively, in the agriculture sector in 2017. This clearly brings out the fact that the agriculture sector, from the point of view of the workforce engaged in this sector, is still of prime importance.
When we compare the share of gross domestic product generated by the agriculture sector, it is evident that those countries that had observed the classical pattern of structural transformation maintained the right kind of balance between the workforce structure and output structure. However, low-income countries have a very high workforce structure dependent on the agriculture sector but their output structure shows a very low share (30 per cent). This is amply evident when we look at the GDP shares of agriculture sector in the countries of South Asia (18 per cent) and sub-Saharan Africa (30 per cent). In two emerging Asian countries, China and India, the income share of the agriculture sector in their respective economies are 9 per cent and 17 per cent, respectively (World Bank, 2017). The gap between the workforce structure and the income/output structure is quite large, and this has initiated the process of pauperization of the people living in the countryside. When we combine the mismatch of the production and workforce structure with human capital indicators, it is amply clear that exclusion of a variety of natures is rampant and intensifying over time in the rural economies of developing countries in general and South Asia in particular (Dreze and Sen, 2013). Therefore, it is most significant and urgent to bring out the process of exclusion that has been enshrined in the nature of recent economic transformation with a view towards altering this process to make the development process more inclusive. The recent developments in the economic theory of innovation system claims to provide such alternative processes of economic transformation that have the capacity to create an environment of inclusive and harmonious economic development (Lundvall et al., 2009).
The origin of the systems of innovation approach goes back to Friedrich List (1842), who coined the idea of a ânational system of production.â For the first time, Christopher Freeman (1982) developed the concept of a national innovation system based on the premises of Friedrich List to examine how countries build knowledge and knowledge-related institutional arrangements at the national level with the goal of promoting economic development and international competitiveness. The early literature on the national innovation system that emerged in the late 1980s and early 1990s (Freeman, 1987; Lundvall, 1992; Nelson, 1993) developed the idea of network of institutions engaged in generation and diffusion of technological knowledge that make economic actors of production more capable of increasingly supplying new goods and services. These innovative capabilities are developed by interaction among the economic actors of production and are very much rooted within the national borders. In the national innovation system, the state played an important role to develop a basic infrastructure for generation, use and diffusion of technologies, and devising strategies for the overall economic direction of the economy. Several studies challenged this view of the innovation system and postulated an alternative idea of a learning system (Viotti, 2002; Mathews, 1999). It is argued that the innovation system is based in small developed countries, and firms introduce innovations that are new to the world. However, the learning system implies that developing countries use the knowledge developed by the advanced countries and adapt it to local conditions; this unleashes the process of diffusion and learning while making incremental innovations. These studies inspired research work at the regional (Asheim and Gertler, 2004) and sectoral levels (Malerba, 2004). The innovation system approach to understanding the economic development process, strategy and development policy is in its infancy and is largely concerned with firms as economic actors to generate, use and diffuse technological knowledge and interact within the institutional arrangements of a nation state. Thus, the system of innovation approach has neglected the most important sector of the developing economy â agriculture â where the livelihood and welfare of the people living in the countryside are concerned.
Agriculture innovation and development has undergone substantial changes over time. The origin of agriculture experimentation research stations and research laboratories happened around the middle of the 19th century, when the German government established 74 experimentation stations. The US model of national agriculture research and the extension system was based on the German model of agriculture innovations. Agriculture research stations were established in the early 1920s in the United States, and from the mid-1920s through the mid-1960s, the US agriculture research and extension system remained almost essentially unchanged (Ruttan, 2001). It was geared towards generating knowledge and diffusing technologies that enhance production. The major criticism of this system came from resource depletion and environmental sustainability. It was argued that the public agriculture research system of the United States has ignored the interests of farmers and consumers but has served business interests well. However, the US system of agriculture research and extension has remained a source of new knowledge and new technology for agriculture development. CGIAR was established for the diffusion of agriculture new knowledge and new technologies to developing countries for solving the problem of deficiency and food insecurity in the postâWorld War II period. The technology transfer was difficult due to topographical variations and diversity of soil conditions across regions; thus the emphasis shifted from mere transfer of technology to establishment of a science, technology and innovation system in developing countries. The agriculture research and extension system mainly emulated the US system and this science, technology and innovation system was directed to increase production and productivity for solving food insecurity in developing countries. However, due to conducive conditions generated by the institutional arrangements and suitable climatic and soil conditions, the Green Revolution flourished in Asia. The critics have argued that the linear model of agriculture research, technology and the innovation extension system developed technologies inappropriate to social, physical and economic settings of the circumstances of the stakeholders (Hall, 2007a; Raina et al., 2014).
The literature on agriculture innovation development has recorded three sets of distinct streams: a classical national agriculture research system (NARS), an agriculture knowledge and information system (AKIS) and an agriculture innovation system (AIS). These three streams describe different modes of innovation capacity building but acknowledge the additive nature of these ideas. However, the latter two approaches emphasize interactive learning. In fact, the agriculture innovation system approach combines NARS and AKIS, and in addition to that it strengthens linkages and interaction and institutional developments to support interactions, learning and innovation and enabling a policy environment. It has been emphasized that to ensure learning and interaction among actors, the role of public sector is crucial and the market alone will not serve the purpose (Hall, 2007b). The agriculture innovation system in Asia has evolved over time but suffers from a linear approach which resulted in several problems. Apart from environmental sustainability, the exclusionary tendencies are enshrined in the process of the production system. Therefore, it has entered into a severe crisis, with small and marginal farmers finding it difficult to survive, and many have resorted to committing suicide (Singh et al., 2016). It also suffers from inadequate investment resources in R&D, lacks capabilities to promote required interaction and has limited reach and access to new knowledge and information technologies. The lack of institutional support and interaction results in non-viability of small and marginal farmers, and thus they are facing exclusion. Therefore, it is of utmost importance to bring these issues to the fore. The chapters that follow systematically examine the processes and suggest measures, including public policy, that have the capacity to mitigate such tendencies. The holistic approach is adopted by the studies to develop some alternative thinking to agriculture innovation, development and public policy.
Leonardo A. Lanzona, in âKnowledge Economy for Inclusive and Sustainable Agricultureâ (Chapter 2), presents a holistic analysis of the use of the knowledge economy to achieve inclusive and sustainable agriculture development among developing countries. He has argued that there is a tendency towards shrinking the size of holdings and a majority of farming households are engaged in small-scale farming. The poor and small-sized farm households are engaged in subsistence farming, and their individual capacity to enter into global value chains is limited. The author has developed a theoretical model for using the knowledge economy for the benefit of the small farm sector in the developing countries. He has developed the perspective of a national innovation system that allows the development of knowledge both by the science and technology-based system of innovation and interaction of users in an institutional framework. However, he has argued that developing countries spend very little on developing agriculture knowledge, and institutional arrangements are rather weak. The weak system of innovation and technical knowledge for agriculture development in the developing countries is identified by the author; he contemplates that to harness advantages in the era of knowledge economy and globalization, the developing countries should emphasize development of human capital. One pillar of human capital is education and technical skills. The author has emphasized quality of education and skill formation of the poor and small farmers of developing countries to achieve inclusive and sustainable development. Furthermore, the empirical evidence from Southeast Asia and Central Asia are compared with other advanced countries to point out how developing countries can overcome the weaknesses of the knowledge system for attaining inclusive and sustainable development. It is argued by the author that participation of the poor and small agriculture holders in global value chains is difficult in the current scenario, but he provides alternative thinking and viable options as to how small agriculture holders can participate in global value chains. He has suggested that the quality of education and social capital can allow small agriculture holders to form collectives and take advantage of the knowledge economy to develop their products, processes and social innovation for inventing their own value chains. For achieving this, he has suggested massive investment in the system of innovation by the nation.
In an empirical study, âFarmersâ Awareness, Perceptions and Knowledge Gaps: Looking for Innovations in Agriculture Extension,â Kamal Vatta and Garima Taneja (Chapter 3) have examined the awareness and perception of farmers about the agriculture extension system. The major attempt of the authors is to identify the knowledge gaps between the producers and users of the agriculture innovation and extension system. Scientific agriculture innovations and the extension system have concentrated on producing an increasing quantity of foodgrains while using natural resources intensively, without taking into consideration the long-term sustainability. The study is based on primary data collected from Asiaâs most successful Green Revolution belt â the Indian state of Punjab. It covers 2,083 farmers spread over 11 districts and all categories of farmers such as small and marginal, semi-medium, medium and large farmers in the year 2013. The authors examined the level of awareness and major challenges being faced by Punjab farmers in accessing scientific knowledge related to the production of major crops. The chapter further explores their perceptions on ill effects of intensive farming and threats of climate change. The results indicate that despite high awareness of the ill effects of intensive agriculture and their causes, the farmers lack awareness of potential solutions for addressing these problems. The major finding that emerged from the data analysis is that access to a more scientific and better recommended set of production practices of major crops was very low and that had adversely affected the effectiveness of farm operations. The authors are of the view that the agricultural innovation extension system can be strengthened if the use of ICT in agriculture can play an important role. In this respect, the authors proposed the role of various options including web portals, mobile applications and bulk messaging services that can enhance the effectiveness of the traditional approaches of extension education. Furthermore, the study highlights the set of information which can be routed more effectively through the innovative extension tools that can add value to the farmersâ decisions. The implication of all the suggestions made by the authors brings out the fact that public investment in agriculture innovation and extension system assumes great importance.
The key role played by innovations in the development of agriculture has been well augmented in the literature. However, their role in plantation agriculture in particular has been highlighted by Namrata Thapa and K. J. Joseph in Chapter 4, titled âInteractive Learning, Innovation and Performance: A Comparative Analysis of Natural Rubber and Tea.â Their logic is that institutional arrangements in plantation agriculture are different from those of general agriculture. This, combined with changing production conditions and trading environment, necessitates a separate analysis of research and extension system in plantation crops. Equally, or rather more important, is the issue of the drivers of innovation â the research institutes and growers â and the relative role played by them in driving the interactive learning process for fostering innovation. Thapa and Joseph have focused on this issue by examining two plantation crops: tea and natural rubber. For tea, the discussion centres on the research activities undertaken by the Tocklai Tea Research Institute (TTRI) for the North Indian tea plantation. For natural rubber, it is the Rubber Research Institute of India (RRII), the only organization that is undertaking R&D activities in natural rubber. The two plantation crops have contracting institutional arrangements: while large growers were involved in the R&D committees in the case of TTRI, suggesting strong interaction between scientists and growers, there was a dominance of small growers in the case of rubber, suggestive of their rather negligible role in the R&D activities of the central governmentârun RRII. The authors examine the interactive learning process, viewed as a prerequisite for innovation, in the context of interaction of TTRI and RRII with planters and growers. In case of TTRI, although it was undertaking collaborative research work with foreign universities, there was a near absence of collaboration with research institutes. Interaction with planters, in the form of Area Scientific Committee meetings, training-cum-demonstrations and advisory visits, has more or less revealed a downward trend. Moreover, inadequate funding and the resulting cuts in manpower are manifested in the systemâs inability to interact with small growers and address their specific needs.
Interaction of RRII with research institutes and universities indicated close interaction with the knowledge generating institutes. Interaction with growers in the form of contact and training programmes showed a downward trend since 2009â10. Interaction in the form of Rubber Producer Societies, however, seemed to be on the path of revival in recent years. The authors have also examined the research effort in terms of financial resources and human resources engaged in research and extension for tea and rubber, In the case of tea, the institute displayed lacklustre performance in terms of raising own resources but was able to conduct long-term research activities mainly due to externally funded projects. For rubber, major funding came in the form of budgetary support from the Government of India. However, the share of rubber research in the total plan fluctuated sharply and registered a fall over the period 2001â02 to 2013â14.
There was also a drastic fall in total manpower employed in TTRI, although the number of scientists employed grew. However, in the case of rubber, the proportion of manpower engaged in research to total manpower at the Rubber Board remained almost the same. Further, R&D expenditure per worker employed in TTRI was around twice that in RRII.
Results on research outcomes revealed that in the case of tea, meaningful research on a sustained basis has been undermined by lack of assured funding for research and a fall in manpower availability, with the result that despite evolving different clones overtime, the one evolved as far back as 1949 still dominated. Insignificant increase in productivity and limited research on tea processing were the other banes of the tea industry. In contrast, the grower-centric approach of RRII led to a successful integration of technological and organizational innovations. The growers were not only provided advisory services but also other income-generating activities. The research and extension system for rubber delivered better results compared to tea despite lower R&D intensity. However, for both TTRI and RRII, the authors highlight the need for scaling R&D and extension activities and also adequate financial support for the same.
The global agriculture innovation system is in transition. For a long period of time, the investment in the agriculture research and extension system was mainly incurred by the state across the board and relatively private investment has shown its presence in recent times. The dynamics and evolution of private agriculture research in innovation and extension system is the prime concern of scholars. Daniel K. N. Johnson has examined âGlobal Trends in Private Agriculture Researchâ (Chapter 5), the impact of private agricultural research on less developed countriesâ agriculture innovation and extension systems. The author has traced the origin of private agriculture research back to the 1980s and 1990s and especially its role in GM ...
