5.1. Policies Reforms

Most countries in Latin America have reduced public expenditures on research and extension due to fiscal constraints. At the same time, there has been a move towards descaling, decentralizing, and privatizing research facilities and extension services.

In Colombia, research is divided between ICA (a government agency) which focuses on staples and producers' organizations (gremios) which focus each on a particular crop. About 60% of all funding comes from ICA and the rest is private. Public expenditures on research fell by 51% in real terms between 1988 and 1994. In 1992, ICA was divided into two entities, an administrative body funded by the government and a research body that is jointly public and private. Extension has been decentralized from ICA to municipal governments. In Ecuador, the national research institute, INIAP, has had declining budgets over the last 15 years. The funding of agricultural research is being channeled through a foundation that receives both public and private funds. In Peru, public research and extension staff were cut back dramatically. Five research stations were converted to private foundations composed of associations of agricultural producers, exporters, extension agents, and NGO's. The salaries of public research and extension staff hired by these foundations are to be funded by government.

In Mexico, fiscal expenditures on agricultural research have declined from 0.46% to 0.27% of agricultural GDP. Parastatal assets were transferred to producers' organizations, including the Mexican Coffee Institute, the Institute for Sugar Cane Improvement, the National Cocoa Development Council, and the National Fruit Company, as well as to ejidos (Fertimex warehouses). Subsidies to the National Seed Production Company (PRONASE) have been reduced and it has been placed on a competitive basis with private firms. Seed prices are no longer controlled. The 1991 Seed Law gives seed companies access to government research products. Reform of extension services in 1985 included: (i) reorganized and decentralized administrative districts; (ii) increased cost-sharing; and (iii) a shift in focus away from basic grains. Reduced funding and increased non-extension duties for extension agents has led to a de facto privatization. Access to technical assistance for the ejido sector basically vanished under these reforms, seriously compromising the ability of ejidatarios to adapt to the new scheme of price incentives by modernizing and diversifying their crops (de Janvry, Gordillo, and Sadoulet, 1996).