Pergamon world Development Vol. 26, No. 6, pp. 1103-1111, 1998

0 1998 Elsevier Science Ltd All rights reserved. Printed in Great Britain

0305-750x/98 $19.00+0.00 PII: SO305750X(98)00036-9

Agricultural Research Policy Issues in Latin America:

An Overview*

RUBEN G. ECHEVERRiA Interamerican Development Bank, Washington, DC, U S.A.

Summary. - The paper reviews two critical challenges facing research organizations and governments in the region: obsolete institutional structures and lack of stable funding for agricultural and natural resource management research. The paper describes recent trends in research investments, financing alternatives, and the institutional evolution of research organizations in order to meet those challenges. A preliminary conclusion is that the current low level of funding research, together with the dramatic organizational changes taking place in several public research organizations in the region, provide an opportunity to develop truly national agricultural innovation systems. 0 1998 Elsevier Science Ltd. All rights reserved

Key words - Latin America, agricultural research, technology, institutional change, public sector

1. INTRODUCTION

In most Latin American countries, agriculture is a major source of income, employment, and export earnings which contribute to general economic growth, poverty reduction, and the sustainable utilization of natural resources. Despite the discriminatory effects on agriculture of the import substitution policies in the indus- trial sector that have prevailed in the region, the sector outperformed the rest of the economy in the 1980s in almost every country of the region (with annual growth rates above 2%). During the 1990s agriculture has become one of the most dynamic sectors, demonstrating its capacity to provide a strong source of growth in the future.’

institutional models adapted to the new environ- ment, and stable funding for public research organizations. The paper focuses on recent trends in research investments, financing alterna- tives, and on the necessary institutional evolution of research organizations in the region to meet those challenges. The context for the review of these trends is provided by the reforms in economic policy during the past decade, the new demands on the agricultural research agenda, and the current weak research infrastructure.

2. CURRENT STRUCTURE AND RECENT EVOLUTION OF LATIN AMERICAN NARS

Despite these gains, there is a lack of consensus among policy makers of the potential contributions of the food and agricultural sectors to development. In a context of tighter fiscal policies and a reduced (and in many cases not yet well-defined) role of the state, this has trans- lated into declining budgets for agricultural and rural development in general, and for agricul- tural research in particular. In the current policy environment of the region of open economies and deregulation, this reduced support to research is very untimely given the critical role of technology in increasing competitive advantages in regional and global markets.

(a) Structure of research systems

Although agricultural research stations were set up in the region at the beginning of the century, organized science-based research started with the consolidation of those stations into research departments of ministries of agriculture during the 1930s and 194Os, and then into national research institutes (INIAs in their Spanish acronym) starting in the late 1950s. Donors and development banks, especially the United States Agency for International Develop- ment, the Inter-American Development Bank,

The purpose of this paper is to review briefly the two most critical agricultural research policy

*The interpretations and conclusions expressed in this

challenges facing research organizations and paper are entirely those of the author, and should not be attributed to the Interamerican Development Bank.

governments in the region-the development of Final revision accepted: March 12, 1998.

1103

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and the World Bank, supported the rapid growth of these institutes during the 1960s and 1970s and from the 1960s provided funding for the establishment of three international agricultural research centers located in the region (CIAT, CIMMYT, CIP)’ several regional research organizations (such as CATIE and CARDI), and a number of subregional networks of INIAs (PROCIs in their Spanish acronym). Since the late 1950s both Banks have invested over US$5 billion in agricultural research and research- related projects to build this research infrastruc- ture in the region (Nestel and McMahon, 1998).

In recent years, producer associations, research foundations, private sector companies, and agricultural universities have also had an increasing role in technology development in the region.3 Traditionally, for example, the agricul- tural universities (with the exception of Brazil and Chile) have focused only on education, with limited involvement in research activities.

As a result of the focus of past investments, the major components of the research and development (R&D) infrastructure in the region are the national agricultural research institutes (the INIAs). These institutes tend to focus their activities on short- and medium-term production problems, rather than long-term strategic and more basic research activities. They seldom have strong links with the private sector. These INIAs are very heterogeneous in size, scope and effec- tiveness. For example, EMBRAPA’s (Brazil’s INIA) budget in 1997 accounted for approxima- tely two-thirds of the total budget of all public research institutes of the region combined.

In total there are about 100 public and private agricultural R&D organizations in the region, staffed by close to 10,000 professionals with a total annual budget of over US$900 million.’ Approximately 65% of the total number of researchers work for INIAs, while agricultural universities have just 5% of the total, excluding

the private sector (Table 1). According to these estimates, only about half of the total number of researchers had post-graduate training, and of those only 16% had a Ph.D. degree; very low levels in both cases.

More than half of the total number of researchers and more than 70% of researchers with a Ph.D. degree were concentrated in the Southern Cone countries of Latin America (Table 2). The presence of two large public research institutes in the Southern Cone region (EMBRAPA of Brazil and INTA of Argentina) and two medium-size institutes in the Andean region (CORPOICA of Colombia and FONAIAP of Venezuela) explains the differ- ences of average number of researchers per organization among subregions in Latin America and the Caribbean. Four countries (Brazil, Mexico, Argentina and Colombia) account for about 80% of the public agricultural research expenditures and employ near 70% of the researchers in the region.

These figures highlight the large subregional contrasts and an overall small number of research personnel with academic training. This is despite the generally improving trend in educational levels of research staff since the 1970s when close to 80% of the researchers employed by INIAs held only a bachelor’s degree.

(b) Trends in research funding

Estimates of total investments in agricultural research in the region vary from $600 million to $1 billion per year, including the national research institutes (about 75% of the total), and research activities of the private sector, producer associations, research foundations and universi- ties (about 25% of the total). Private sector investment in agricultural research in the region

Table 1. Number of agricultural researchers in the public sector in Latin America, by employer and academic level, 1993

Academic level

INIAs Natural Resources Research Inst. Other public organizations Universities International/regional centers TOTAL Percent of total

Source: Lindarte (1995).

B.Sc. MS Ph.D. Total

2,491 2,122 877 5,496 177 22 7 206 584 825 212 1,621 222 138 71 431 414 174 180 768

3,894 3,281 1,347 0 45.1 38.5 15.8 100.0

(% )

64.5 2.4

19.0 5.1 Y.0

100.0

AGRICULTURAL RESEARCH POLICY ISSUES 1105

Table 2. Number of agricultural researchers in Latin America by subregion and academic level, 1993

Caribbean CAmerica Andean Scone Total

Total staff (research+other) Total research personnel Research staff in total (%) Research staff by subregion (%)

Research Personnel With B.Sc degree With MS. degree With Ph.D. degree Average per organization

820 118

14 1

43 54 12

8

Source: Lindarte (1995).

10,579 9,111 23,344 43,854 1,538 3,386 5,692 10,734

15 37 24 24 14 32 53 100

861 1,228 1,762 3,894 306 600 2,321 3,281 141 239 955 1,347 44 159 252 111

has increased but still accounts for only about 10% of total resources invested (Table 3). Added to this is the investment by international centers targeted to the region (about $45 million per year), and regional entities (CATIE, CARDI, PROCIs and others) of about $25 million.

Growth in public funding for agricultural research after a period of rapid growth during the 1960s and 1970s slowed and became unstable during the 1980s. In the past decade, growth in agricultural research investment in the region has stagnated (with the exception of Brazil and Uruguay) and in a number of countries, such as Mexico, investment has declined sharply (Table 4).

During the period of rapid expansion of INIAs that ended by the 198Os, the number of scientists grew faster than total research expenditures. Staff numbers continued to increase up to the mid-1990s during a period in which total research budgets were declining. From 1981-85 to 1992, it is estimated that total expenditures in the INIAs fell 15% while the number of researchers increased by 22%. But, the number of researchers employed by the public sector has also started to decline during recent years.

These trends have resulted in declining expen- diture per researcher, reduced operating budgets, and lower real salaries for scientists, with negative implications on performance. By

Table 3. Evolution of investments in national agricultural research institutes in Latin America, 1981-92

Country Institute Number of researchers Expenditures in million Expenditures per 1985 PPP $ researcher (1985 PPP

$ x 1000)

1981 1986 1991 1992 1981 1986 1991 1992 1981 1986 1991 1992

Argentina INTA 1045 1028 955 1015 76 60 78 85 73 Bolivia IBTA 89 82 115 115 4 8 10 3 42 Brazil EMBRAPA 1576 1724 2105 2097 333 304 437 464 211 Chile INIA 169 196 207 189 20 28 30 32 118 Colombia ICA 385 473 438 422 37 75 48 50 97 Ecuador INIA 176 208 200 238 22 13 9 11 124 Guatemala ICTA 139 121 119 164 10 9 5 9 74 Mexico INIFAP 1722 2160 1716 1500 265 156 118 98 154 Panama IDIAP 69 133 123 124 6 8 7 8 83 Paraguay DIEAF 64 112 115 112 7 9 5 4 111 Peru INIA 265 256 170 153 27 28 22 25 102 Venezuela FONAIAP 386 423 491 504 58 28 42 44 151

Total (average) 6085 6916 6754 6633 865 729 811 832 (142) Total (average) 4509 5192 4649 4536 532 425 374 19 (118)

less Brazil

Source: ISNAR Indicator Series database (except estimate for Mexico).

59 82 84 98 84 28

177 208 221 120 145 170 159 109 119 64 45 46 84 44 52 72 69 65 64 56 61 83 46 40

111 131 163 70 85 88

(105) (120) (126) (82) (80) (81)

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Table 4. Estimated shares of agticultural research expenditure by public institutes, universities, farmers, and the private sector in selected countries, 1995 (percentage of total expenditure)

Country INIAs Universities Farmers groups Private companies

Argentina 89 Brazil” 63 Chile 75 Colombiah 61 Ecuador 52 Mexico SO Peru 65 Venezuela 80

5 n/a 6 29 nia 8 20 I 4

2 29 8 5 7 36

17 5 28 20 10 5 10 I 9

Source: Echeverria et al. (1096). IN 1991. ” 1993.

1993, approximately 65% of the public sector budgets was devoted to salaries, 21% to operating costs and 13% to capital. In the INIAs, more than 80% of that budget was devoted to salaries (Lindarte, 1995)-considerably above the norm for research organizations of 65-70%. At the same time, documented returns to invest- ment in agricultural research (Echeverria, 1990) are very high (above 40%) and considerably higher than the cost of borrowing, leading to the conclusion that Latin American governments have generally invested too little in agricultural research. There are several potential reasons for the decline in funding (Byerlee and Alex, 1998); government budget cuts as a result of fiscal austerity, lack of understanding of the crucial role of agriculture in overall development policies, lack of recognition of the public-good nature of much agricultural research, inefficiency and lack of accountability of research organiza- tions, lack of relevant research outputs, poor communication of the impact of research to policy makers, and a long-term decline in agricultural commodity prices.

In sum, chronic underfunding threatens the survival of several public research organizations in the region. Solving this financial challenge is the major current concern of these organizations and must be central to the agenda of policy makers, and multilateral and bilateral agencies.

3. POLICY ISSUES

Despite past investments in building agricul- tural research systems, many public organizations are characterized by uncertain funding, lack of articulation with the private sector, lack of trans- parent priority-setting mechanisms, ill-defined strategies, and a declining quality of staff. All

these factors have translated into few relevant outputs to solve wider demands on the systems, which implies that in some countries the public structure for agricultural R&D is at risk of becoming obsolete.

There is a widely perceived need for more demand-driven, flexible, effective and efficient public R&D organizations to cope with the effects of policy reforms. The long-term nature of research and in some cases bureaucratic inertia have delayed adjustments in many national research organizations to these new realities, and to the evolving role of the state in the region.

There are two high-priority policy issues facing national research systems of the region-the appropriate institutional models to satisfy new technological demands and priorities, and the need to seek sustainable funding mechanisms for carry out this research. The first one relates to building truly national agricultural innovation systems, the second one to broadening the funding alternatives to provide a more sustain- able resource base. Related to these issues is the need to develop and strengthen new partnerships between national, regional and international research organizations, since agriculture in Latin America relies increasingly on research conducted outside national and/or regional borders. The remainder of the paper discusses these policy issues within the context of the evolving research agenda.

(a) New demands on the research agenda

Structural adjustment, market liberalization, a growing private sector, and broader concerns with conserving the environment and alleviating poverty, have placed new demands on R&D

AGRICULTURAL RESEARCH POLICY ISSUES 1107

organizations of the region. With increasing emphasis on free trade, and with the limited expansion possibilities of the land frontier, improved technology is the key to countries staking out their competitive advantages. In addition, the product mix in the agricultural sector is subject to rapid changes through trade, so that research organizations must be positioned to react to these changes. Finally, with growing urbanization, the share of the retail price of agricultural commodities captured by the farm sector is declining, requiring more research focus on post-harvest processing and marketing.

These changes have altered the economic context for agricultural development and created new challenges to the agricultural research estab- lishment. National research organizations are being called upon to broaden their agendas and to give greater attention to concerns of poverty alleviation, environmental degradation, and resource management. In addition, agricultural technologies are becoming more management intensive, both through the substitution of improved information for environmentally harmful chemicals (e.g. integrated pest manage- ment), and through demands on all sectors of society to reduce costs in order to increase competitiveness in regional and international markets.

In addition, advances in molecular biology and information technology have opened new avenues for agricultural research which can reduce the costs of developing improved technol-

ogies. These technologies, however, call for substantial initial investments in human and physical capacity. Given the global trend to privatize knowledge, more public investment is required in basic sciences as a prerequisite for the generation of future streams of technology.

Because government activities in the agricul- tural sector in most countries of the region have shrunk and because the private sector is not “filling the gap” (Pray and Umali-Deininger, 1998), the move toward a more poverty-oriented and environmentally sound research agenda has been very slow. Institutional structures to break down the separation of research by commodity and discipline, and incentive systems to develop accountability in terms of impacts at the farm level are needed to handle these new demands on research systems.

(b) Alternative funding mechanisms

The decline in R&D funding in the region must be addressed by finding mechanisms for sustain- able funding support for research, and by increasing the efficiency with which resources are currently utilized. Increasingly, funding and execution of research in the region are being conceptually separated and viewed within a matrix structure, as shown in Table 5. Research execution possibilities (shown as columns in Table 5) include public sector research institutes, research corporations, non-profit organizations,

Table 5. Alternative means of financing and executing agrkultural research at the national level

Source of funds Example Execution of research”

Public University Foundation, Private research NGO, other company institute non-profit

Government Public funds for agriculture *** ** * *

Public funds for science and technology * ** *

Public funds for environment * ** **

Foundation Endowment for research ** ** * **

International donors Grant or loan from a donor or *** ** ***

development bank/private firm Joint ventures Market development for a product of the ** * ** :x * *

publicsector Charges for research Royalties for inbreds * ** ***

products Charges for services Pre-release, seed and pesticide screening, ** * *

soil tests Farmer financing Levy or check-off on commodity sales ** ** ***

Private sector Private company R&D budget * * ** +**

Source: modified from Echeverria et al. (1996). ’ The number of asterisks indicates the potential importance.

1108 WORLD DEVELOPMENT

universities, producers groups, and private companies that engage in agricultural research. There are several funding mechanisms (shown as rows in Table 5): public sector block grants, competitive funds, research foundations, producer associations/cooperatives, royalties on research products, levies on farm output, and funding by private companies. Public funding of research has been traditionally viewed as the responsibility of the ministry of agriculture, and execution of research as the role of the INIAs while private sector companies fund their own “in-house” research through the sale of proprie- tary products. The new conceptual view of research systems, recognizes a diverse array of potential participants in research funding and execution and a large number of alternative points of intersection between funding sources and research executing organizations-the body of Table 5. For instance, development of a public-good type technology needs to be financed by the public sector, but in some cases the research might be more efficiently executed by subcontracting to a private firm. On the other hand, private companies may find it cost- effective to fund research in public research institutes. Clearly, although some sources of funding are more relevant to some types of research executing agencies, public research organizations will be increasingly required to tap several sources of funds.

This new complexity of research funding is increasingly evident in the region. Most INIAs now have mechanisms to commercialize research results through various types of alliances with the private sector, especially joint ventures. Commercialization is only relevant, however, for technologies for which the benefits can be appro- priated and this source of funds will necessarily only account for a small share of the total budget of institutions that specialize in the production of public goods. A more promising source of funding that is increasing rapidly in the region is farmer-managed levies on agricultural produc- tion. These funds can be raised by commodity associations to conduct their own research or to fund research in public and/or private research organizations. The leverage of these funds can be even greater if there is a legislated commitment by governments to match the funds provided by farmers.

Research-oriented foundations have also become an alternative means for funding and, in some cases, for executing research. But the record of foundations in Latin America to date is mixed. Those foundations that enjoy national and local funding support and those that have an

endowment will probably continue to be important players in the R&D system (Echeverria et al., 1996). Others, especially those that are heavily dependent on outside sources of funds (especially donors) are likely to decrease in importance.

Research organizations will have to acquire a greater share of their funding through competi- tive bidding schemes. National competitive funds for the development of agricultural technology are now operating in many countries in the region. To date, they have proven to be efficient mechanisms for funding research by providing greater accountability to the funding source. The advantage of these funds is that they can be a good instrument to increase research capacity in several components of a national research system such as agricultural universities, as well as providing opportunities to strengthen links among national and international research organizations. On the other hand, in order to compete, research institutions must have a minimum core budget and a critical mass of staff-that is, all institutions need a portion of the budget that is “core funded” to cover costs of maintenance and upgrading of physical and human resource infrastructure, since competitive grants usually only fund operating costs. As the use of competitive funding increases in the region, there is a need to analyze the transaction costs involved and how the quality of research has been affected.

At the regional level, a Regional Fund for Agricultural Technology has been set up and will initiate funding on a competitive basis in 1998 for research projects of regional and subregional interests (FONTAGRO, 1997). One of the Fund’s distinct characteristics is that it is being constituted as an endowment with direct contributions from the expected beneficiaries themselves (the countries of the region) who will also manage the fund. These two important attri- butes (sustainability of funding and demand- driven agenda) should accelerate its consolidation and growth in a relatively short period of time. The Fund is also proving to be a valuable forum for discussion of regional agricul- tural research priorities and technology policy issues.

The growing diversity of funding mechanisms for public sector research institutions is being complemented by increased participation of private companies in the funding and execution of research, stimulated by the liberalization of markets and trade throughout the region and the strengthening of intellectual property rights. Multinational firms with access to global markets

AGRICULTURAL RESEARCH POLICY ISSUES 1109

are able to exploit economies of size and scope in R&D and operate somewhat independently of public sector research institutions. National companies, with a few exceptions, will require greater interaction with, and access to, public sector research in order to develop their own applied R&D capacity and compete effectively with the multinationals.

Finally, public research organizations will have to work harder to mobilize political support for government funded research. The need for public funding for agricultural research may be justified on the grounds that a significant number of the products of research have the character- istics of semi-public or public goods with little or no incentive for private participation (i.e. benefits cannot be “appropriated” by individuals as real or intellectual property to the exclusion of others). Even with an expanding role for the private sector, much research is public good in nature, including basic and strategic research. The public sector will also have to provide a lead role in applied research for small farmers even for private-type goods, because it is risky, the beneficiaries have little capacity to pay, and it is difficult to protect intellectual property rights in a cost-effective manner. As research and techno- logical development priorities move beyond the search for productivity increases to pursue environmental objectives, there is an emerging demand for a new set of public goods in natural resources management.

It is therefore critical that trends in public sector appropriations in most countries of the region be reversed in order to fill this gap, together with funding arrangements that reflect the geographic focus and the commodity orienta- tion of the research.’ Research organizations also require a more accountable system for the use of current funds. A levy on agricultural production plus matching funds from government revenues seems to be an effective funding approach to strengthen public research institutes in small- and medium-size cases, as shown by the INIA- Uruguay model which enjoys stable funding and benefits from the strong voice of farmers in its governance.

(c) Building national innovation systems

Part of the solution to the funding problem lies in reforms to the traditional INIA model of agricultural research to make it attractive for governments, farmers and the private sector to invest in agricultural research. One of the reasons for the reduction in funding has been the

perceived lack of effectiveness and efficiency of use of past funding. Looking back, several INIAs failed to use their resources to modernize their structures in areas such as policy formulation, priority setting, human resource planning, as well as broadening the base for financial support (McMahon, 1992; Nestel and McMahon, 1998).

As a response to these challenges, most INIAs of the region are in the process of restructuring (e.g. Colombia, Ecuador, Bolivia, Paraguay). These changes are characterized by a number of reforms aimed to overcome weaknesses in the INIA model. First, agricultural research in the region is no longer conceived as a public sector monopoly. Greater efforts are being made to involve a wider range of institutions in the research system and to exploit complementarities between them. These complementarities arise because different types of research organizations produce different types of technology. For instance, universities in the region are usually involved in more basic research linked to teaching, INIAs with applied and adaptive research to produce biological and managerial (agronomic) technologies, while private companies are usually active in producing chemical, mechanical and biological technologies where benefits are appropriable. In addition, non-government organizations (NGOs) and producer organizations are more involved with technology transfer, adaptive research and natural resources management.

Second, there is a move toward linking public research organizations that carry out applied and adaptive research more closely to their clientele. National research institutes are seeking to decen- tralize their responsibilities for applied and adaptive research to the state and local level, leaving a much smaller national institute to focus on basic and strategic research with broad appli- cation, and on developing international collaborative links. Meanwhile, state and zonal research institutes are being reorganized to involve farmers more directly in their govern- ance, funding, and even execution of adaptive research.

This more complex research system will also demand new linkages between national and state research organizations, between INIAs and universities, as well as between the public and private sectors. Competitive funds can be used to foster those linkages by providing grants to stimulate consortia to address agreed-on high- priority research areas. These elements at the national level are being complemented by building new subregional cooperative research networks, as in Central America (SICTA) and

1110 WORLD DEVELOPMENT

the Caribbean (PROCICARIBE) to foster research collaboration across countries.’

INIAs are also increasing their alliances with advanced research organizations in the industrialized countries, in order to gain access to advances in scientific knowledge and develop their capacity to apply this knowledge locally.

Finally, public research organizations will have to adopt new management approaches that promote efficiency and responsiveness to client needs. More transparent and rigorous priority- setting procedures to focus limited resources on fewer and more relevant activities will be needed. Some research organizations, such as INIA, Uruguay, are adopting private sector-style management approaches, in order to have suffi- cient authority to make personnel and financial decisions to respond quickly to new opportunities.

4. CONCLUSION

After 40years of useful application of a “one size fits all” model, the standard model for public agricultural research in the region-the INIA model-is becoming obsolete, due to changes in the process of innovation, and changes in the macroeconomic environment. As the agricultural sectors of the region continue to grow and become more competitive, private sector funding (from farmers and input companies) will continue to increase; as well as the share of public funds allocated to competitive funding mechanisms. In fact, “the INIAs” are very heterogeneous organizations and most of them have started the process of adjusting to this new setting.

While it is tempting to search for a new universal model for funding and executing research to meet today’s challenges, each system will have to evolve its own model based on its existing research infrastructure, market size and historical factors. These models will require suffi- cient flexibility to determine new arrangements and alliances to fit changing market conditions.

Much of the challenge to public research organizations in the region arises from a re-examination of the role of the state in general. This has led to efforts to strengthen non-public

alternatives to the funding and execution of research. This has created considerable confu- sion, however, since it is not yet apparent to policy makers that many products of agricultural research are public goods. Gradually, a new realism is developing of the crucial role of both the public and private sectors.

Likewise on the funding side, there is a strong move to seek sustained and diversified options for financing research in public research organi- zations. As block grants to INIAs decrease other sources are beginning to fill the gap, such as competitive grants, commodity programs funded by farmers, and increased private sector partici- pation stimulated by stronger intellectual property rights.

Many of these funding mechanisms (such as farmers’ own financing of specific crop and/or livestock research) have been in use in Latin America for more than two decades but have expanded recently to other commodities and countries. One difficulty, however, is that the majority of the new funding mechanisms have arisen in response to an acute shortage of operating budgets of public research institutes and often leave a gap in funding for the mainten- ance and upgrading of the research infrastruc- ture, including new skills in emerging areas of agricultural science, such as biotechnology and natural resource management research. They will not be a substitute for mobilizing political support for public funding of agricultural research through greater efforts to build alliances with those who control the purse strings. In addition, public research organizations are having to implement reforms in priority setting, management, and links to technology transfer in order to attract new funds.

Agricultural research organizations are also having to build new partnerships. On the one side, linkages to broader science are needed to tap the new advances, especially in biotech- nology. On the other side, research organizations can no longer be content to produce new research products but will have to link to a variety of technology transfer mechanisms to ensure that they produce results on the ground. In particular, new public-private partnerships are needed to ensure both research and develop- ment of technology.

NOTES

1. During the past 30years the sector’s contribution 54%’ to 10% and 25% respectively. Although to GNP and to employment decreased from 21% and agriculture accounts for 40% of total value of exports,

the region has been a net food importer for the last 15 years.

2. There is a tendency to group some or all of these organizations into a National Agricultural Research System (NARS). Among other factors, the concept of a system involves a clear division of labor and strong links among its elements, a “systems perspective,” and an integrated strategy towards the future. Although this is a relevant goal to pursue, to refer to the several heterogeneous organizations currently involved in agricultural R&D in most Latin American countries as a NARS is more a myth than a reality.

3. See Pideiro and Trigo (1996) and Echeverria et al. (1996) for a more complete description of the activities of these organizations.

4. More than half of that budget however represents the annual budget of one institute (EMBRAPA in Brazil).

5. See Alston and Pardey (1996) for a conceptual review of economic principles of agricultural R&D policy and Fuglie et al. (1996) for an analysis of public and private investments in agricultural research in the United States under alternative markets and institu- tional arrangements.

6. In addition to the national and regional entities, the multilateral and bilateral development agencies that play an important role in strengthening national science and technology systems should also continue to develop new approaches and strategies to increase their effectiveness (Echeverria and Tollini, 1992; Purcell and Anderson, 1997; Mayorga, 1997).

AGRICULTURAL RESEARCH POLICY ISSUES 1111

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