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,