Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
title:
TransformingAgriculturalResearchSystemsinTransitionEconomies:TheCaseofRussiaWorldBankDiscussionPapers;396
author: Mudahar,MohinderS.;Jolly,RobertWilliam;Srivastava,Jitendra
publisher: WorldBankisbn10|asin: 0821343130printisbn13: 9780821343135ebookisbn13: 9780585232034
language: English
subjectAgriculture--Research--Russia(Federation),Nationalagriculturalresearchsystems--Russia(Federation)
publicationdate: 1998lcc: S542.R8M8351998ebddc: 630/.72047
subject:Agriculture--Research--Russia(Federation),Nationalagriculturalresearchsystems--Russia(Federation)
Pagei
TransformingAgriculturalResearchSystemsinTransitionEconomies
TheCaseofRussiaWorldBankDiscussionPaperNo.396
MohinderS.MudaharRobertW.Jolly
JitendraP.Srivastava
Pageii
Copyright©1998TheInternationalBankforReconstructionandDevelopment/THEWORLDBANK1818HStreet,N.W.Washington,D.C.20433,U.S.A.
AllrightsreservedManufacturedintheUnitedStatesofAmericaFirstprintingAugust1998
DiscussionPaperspresentresultsofcountryanalysisorresearchthatarecirculatedtoencouragediscussionandcommentwithinthedevelopmentcommunity.Thetypescriptofthispaperthereforehasnotbeenpreparedinaccordancewiththeproceduresappropriatetoformalprintedtexts,andtheWorldBankacceptsnoresponsibilityforerrors.Somesourcescitedinthispapermaybeinformaldocumentsthatarenotreadilyavailable.
Thefindings,interpretations,andconclusionsexpressedinthispaperareentirelythoseoftheauthor(s)andshouldnotbeattributedinanymannertotheWorldBank,toitsaffiliatedorganizations,ortomembersofitsBoardofExecutiveDirectorsorthecountriestheyrepresent.TheWorldBankdoesnotguaranteetheaccuracyofthedataincludedinthispublicationandacceptsnoresponsibilityforanyconsequenceoftheiruse.Theboundaries,colors,denominations,andotherinformationshownonanymapinthisvolumedonotimplyonthepartoftheWorldBankGroupanyjudgmentonthelegalstatusofanyterritoryortheendorsementoracceptanceofsuchboundaries.
Thematerialinthispublicationiscopyrighted.RequestsforpermissiontoreproduceportionsofitshouldbesenttotheOfficeofthePublisherattheaddressshowninthecopyrightnoticeabove.TheWorldBankencouragesdisseminationofitsworkandwillnormallygivepermissionpromptlyand,whenthereproductionisfor
noncommercialpurposes,withoutaskingafee.PermissiontocopyportionsforclassroomuseisgrantedthroughtheCopyrightClearanceCenter,Inc.,Suite910,222RosewoodDrive,Danvers,Massachusetts01923,U.S.A.
CoverphotosprovidedbyCGIAR.
ISSN:0259-210X
MohinderS.MudaharisprincipaleconomistintheRuralDevelopment/EnvironmentSectorUnitoftheWorldBank'sEuropeandCentralAsiaDepartment.RobertW.JollyisprofessorofeconomicsatIowaStateUniversity.JitendraP.SrivastavaisprincipalagriculturalistintheBank'sRuralDevelopment/EnvironmentSectorUnit.
LibraryofCongressCataloging-in-PublicationData
Mudahar,MohinderS.Transformingagriculturalresearchsystemsintransitioneconomies:thecaseofRussia/MohinderS.Mudahar,RobertW.Jolly,JitendraP.Srivastava.p.cm.(WorldBankdiscussionpaper;no.396)Includesbibliographicalreferences(p.).ISBN0-8213-4313-01.AgricultureResearchRussia(Federation)2.NationalagriculturalresearchsystemsRussia(Federation)I.Jolly,RobertWilliam,1944-.II.Srivastava,Jitendra,1940-III.Title.IV.Series:WorldBankdiscussionpapers;396.S542.R8M8351998630'.72047dc2198-27892CIP
Pageiii
Contents
Foreword vii
Abstract iii
Acknowledgments ix
AcronymsandAbbreviations x
Glossary xii
ExecutiveSummary 1
ChapterI.StrategicImportanceofAgriculturalResearch 6
ResearchasaSocietalInvestment 6
ResearchasaStrategytoIncreaseCompetitiveness 8
ResearchasaToolforFoodSecurity 14
AgriculturalResearchasaPriorityInvestment 14
ChapterII.StatusandPerformanceoftheAgriculturalSector
16
RestructuringProductionAgriculture 16
ChangingCropSector 20
ShrinkingLivestockSector 23
FallingAgriculturalInvestment 24
PersistentSectoralInefficiency 25
ImplicationsforAgriculturalResearch 27
ChapterIII.StatusoftheAgriculturalKnowledgeSystem 28
StructureandOrganization 28
MeetingDemandforHigherEducation 31
AgriculturalResearchManagement 32
ChapterIV.ChallengesFacingtheAgriculturalResearchSystem
36
AttributesofaModernAgriculturalResearchSystem 36
HowDoesRussia'sResearchSystemMeasureUp? 38
FundingandStaffingoftheAgriculturalResearchSystem
43
NeededStrategyforTransformingtheResearchSystem 50
Pageiv
ChapterV.TransformingtheAgriculturalResearchSystem 56
ConceptualFrameworkforManagingTransformation 56
FinancingResearchtoFacilitateTransformation 60
IssuesinTransformingtheAgriculturalResearchSystem61
AgendaforCapacityDevelopmentandInstitutionalReform
64
SupportofReformbytheInternationalCommunity 72
References 75
Annexes:
A:AgriculturalInstitutesofHigherEducationinRussia 81
B:MainAgriculturalResearchInstitutesinRussia 83
C:RoleofPublicSectorinFinancingResearch 89
D:RoleofPrivateSectorinFinancingResearch 92
E:RoleofInternationalAgriculturalResearchSystem 95
F:FundingAgriculturalResearchbytheWorldBank 99
ListofTextTables,BoxesandFigures
Tables:
1.1:SummaryofEmpiricalStudieswithEstimatedRatesofReturntoR&D
7
1.2:InternalRatesofReturntoResearch,Extension,andEducationintheUS
7
1.3:RateofReturntoAgriculturalResearchinOECD 9
Countries
1.4:RateofReturntoAgricultureResearchinDevelopingCountries
9
1.5:PerceivedShort-TermBenefitstoDomesticProducersandConsumersfromAgriculturalResearch
13
1.6:BenefitsfromAgriculturalResearch:SomeExamplesApplicabletoRussia
13
2.1:AgricultureLandbyType-ofEnterprise,January1,1996
17
2.2:PerformanceIndicatorsfortheSeedSectorinRussia,mid-1990s
23
2.3:ProductionofLivestockProductsinRussia 23
2.4:LivestockInventoriesinRussia
2.5:LivestockProductivityandFeedConversionIndicatorsinRussia
24
2.6:PublicSectorAgriculturalExpenditureinRussia 25
3.1:RAASResearchInstitutes,Staffing,andBudgetsin1991/92
32
3.2:Full-timeEquivalentAgriculturalResearchPersonnel,1991
33
4.1:MeteorologicalComparisonsinNorthDakota,USAandSaratov,Russia
41
4.2:SpringWheatYieldComparisonsbetweenSaratov,RussiaandNorthDakota,USA
42
4.3:FederalBudgetExpendituresontheRussianAcademyofSciencesandtheRussianAcademyof
45
AgriculturalSciences,1994and1995
4.4:FinancingoftheRussianAcademyofAgriculturalSciences,1994and1995
46
4.5:SelectedIndicatorsforFederalResearchInstitutesSubordinatetotheMinistryofAgricultureandFood,1994
47
Pagev
4.6:R&DExpendituresattheFederalResearchInstitutesSubordinatetotheMinistryofAgricultureandFood,byResearchProgram,1994
43
4.7:QualificationsofResearchersWorkingattheFederalResearchInstitutesSubordinatetotheMinistryofAgricultureandFood,1994
48
4.8:FinancialSupporttotheAgro-industrialComplexinRussia
49
4.9:DirectSubsidiesasaPortionofTotalGrossRevenuesforIndividualCommoditiesinRussia
50
4.10:AnalysisofIssuesforStrengtheningAgriculturalResearch,HigherEducation,andExtensioninRussia
53
Boxes:
1:AgriculturalKnowledgeSystemwithaParticularFocusonAgriculturalResearchinTransitionEconomies:TheCaseofRussia
2
1.1:PublicGoodsandPublicFinance 10
3.1:InstitutionalReformoftheAgriculturalKnowledgeSysteminOmskOblast
34
3.2:ShiftingFundingandShiftingPriorities 35
4.1:ClosingtheSkillGapinEconomics 40
4.2:DoingResearchforRussianConditions 52
5.1:GuidelinesforAgriculturalResearchPrioritySetting
63
5.2:N.I.VavilovInstituteofPlantIndustry 65
5.3:TimiryazevMoscowAgriculturalAcademy 68
5.4:TheAgriculturalKnowledgeSysteminSaratovOblast
68
Figures:
2.1:ChangesinFarmOrganizationsinRussiafrom1990to1996
18
2.2:ChangesinOutputSharesforDifferentFarmOrganizationsinRussiafrom1990to1994
19
2.3:ChangesinCroppingPatterninRussiafrom1990to1995
21
2.4:ChangesinCropYieldsoverTimeinRussia 22
2.5:WheatYieldsfortheFormerSovietUnionandCanada(1960-96)
26
3.1:AgriculturalKnowledgeSysteminRussia 29
3.2:AgriculturalEducationSysteminRussia 30
4.1:SpringWheatYieldsintheSaratovOblast,Russia(1981-95)
44
5.1:ResearchProgramAssessment:StrategicValueandVulnerability
58
5.2:ResearchProgramAssessment:StrategicValueandProgramQuality
58
5.3:OrganizationalStructureofResearchandEducationalInstitutesinSaratovOblast
69
Pagevi
ListofAnnexTables,BoxesandFigures
Tables:
C.1:IntensityofPublicSectorInvestmentinAgriculturalResearchintheEarly1990s
89
C.2:ChangesintheIntensityofPublicSectorInvestmentinAgriculturalResearchOverTime
90
C.3:GlobalTrendsinPublicExpenditureforAgriculturalResearch
90
D.1:EstimatedShareofAgriculturalResearchExpenditurebyAlternativeFundingSourcesinSelectedCountriesinLatinAmerica
93
D.2:TrendsinPrivateSectorSpendingonAgriculturalR&DintheUnitedStates
93
D.3:R&DExpenditureforSelectedPrivateCompanieswithaBroadRangeofAgriculturalActivities,1994
94
E.1:ImpactofCGIARonRice,Wheat,andMaizeYields
96
F.1:WorldBankLendingforAgriculturalResearchandExtension
99
Boxes:
C.1:LikelyReasonsforDeclineinFundingforAgriculturalResearch
91
E.1:CGIARSupportedInternationalAgriculturalResearchCenters(IARCs)
96
F.1:AgriculturalResearchandExtension:LessonsfromChina
102
F.2:ProblemsIdentifiedina1997ReviewofAgriculturalResearchProjects
102
Figures:
F.1:GrowthinFinancialSupportforInternationalAgriculturalResearchSystem
100
Pagevii
ForewordAgricultureisanimportantsectorinRussiaandothertransitioneconomiesofEasternEuropeandtheformerSovietUnion.Awellfunctioningagriculturalresearch,education,training,andtechnologytransferthecomponentsofthenationalagriculturalknowledgesystemarenecessaryincreatingacompetitiveandefficientagriculturalsector.Agriculturalresearchisessentialforreducingproductioncosts,improvingproductquality,creatinguniqueproductcharacteristics,reducingenvironmentaldamage,addingvaluetoprimarycommodities,anddevelopingutilizationtechnologiesthataddvalueorenhancedemandforagriculturalproducts.
Economicanalysisshowshighratesofreturntoinvestmentinagriculturalresearcharoundtheworld.Thus,investmentinagriculturalresearchshouldbeviewedasakeycomponentofaruraldevelopmentstrategydesignedtoaccelerategrowth,alleviatepoverty,andincreasethecompetitivenessofagriculture.However,toachievethesegoals,Russiaandothertransitioneconomiesmusttransformtheiragriculturalknowledgesystemtomakeitfinanciallysustainable,effectiveinproducinghigh-qualityresearchwithapositiveimpactontheagriculturalsector,andappropriateforproducingscientistswiththeskillsneededtoservetheemergingprivateagricultureinamarketeconomy.
Thisreportstemsfromastrongbeliefthatthelong-termproductivity,profitability,andsustainabilityofRussianagriculturewilldependontheabilityandcapacityoftheRussianagriculturalresearchsystemtorespondtoemergingproblemsandopportunities.TheabilitytosustaingainsfromeconomicreformswilldependonRussia'scapacitytosolveagriculturalproblemsinwaysthatareappropriateforprivateagriculture.However,unlesstheagriculturalresearchsystemis
transformed,itsstoresofknowledge,germplasm,data,andknow-howwillcontinuetodeteriorate.
Russia'sagriculturalresearchsystemisimportantnotonlytoRussiabutalsototheworldcommunitybecauseofitsimplicationsforfoodsecurity.ThustheinternationalscientificanddonorcommunityshouldprovidecarefullytargetedassistancetoRussiainordertofacilitatethetransformationofitsagriculturalresearchsystem,stabilizeandprotecttargetedagriculturalresearchassets,anddevelopandrefinemodelsofinstitutionalchangeandhumancapitaldevelopmentthatareappropriateforRussia.Thestrategyproposedhere,alsorelevantforothertransitioneconomies,willmakeapositivecontributionbyimprovingtheefficiency,effectiveness,andsustainabilityofagriculturalresearch.
ThisreportservedasabasisfortheWorldBankworkshoponReformingAgriculturalResearchSystemsinCentralAsiaandtheCaucasus,March5-11,1998.Theworkshopprovidedanopportunityforparticipantsfromseveraltransitioneconomiestodiscusstheconclusionsandrecommendationsofthisreportandtoprovideusefulcomments.IhopethatthiscasestudyonRussiawillcontributetotheformulationofnationalstrategiestotransformtheagriculturalknowledgesystemtoservetheemergingprivateagricultureinRussiaandothertransitioneconomies.
KEVINM.CLEAVERDIRECTORRURALDEVELOPMENTANDENVIRONMENTUNITEUROPEANDCENTRALASIAREGION
Pageviii
AbstractThisreportexaminesthecurrentstateofRussianagricultureandagriculturalresearchsystem.Itdevelopsaconceptualframeworkformanagingthetransformationandrehabilitationofagriculturalresearchsystemsintransitioneconomies,withaparticularfocusonRussia.ThismodelisusedtospecifyanagendaforcapacitydevelopmentandinstitutionalreformthatwouldstabilizeandpreservecriticalagriculturalresearchassetsinRussiaandbeginthedifficultprocessofincreasingtheefficiency,effectiveness,andsustainabilityofitsagriculturalresearchsystem.Thereportisintendedforagriculturalscientists,researchadministrators,publicofficials,andagriculturalleadersinterestedinthetransformationofagriculturalresearchsystemsinthetransitioneconomies.
Pageix
AcknowledgmentsThisreport,althoughitreflectsourownexperienceandjudgment,hasbenefitedfromdiscussionswithourcolleaguesinRussia,theWorldBank,andIowaStateUniversity.WegratefullyacknowledgetheopennessandcandoroffriendsandcolleaguesinRussia'sagriculturalresearchandeducationcommunity,bothinMoscowandintheregions.
Inparticular,theauthorswouldliketothankGaryAlex,JockAnderson,DerekByerlee,DougForno,AlexanderMcCalla,MichaelPetit,andT.V.Sampathforsharingtheirexperience,andforprovidingveryusefulcommentsonanearlierdraft.TheauthorsalsobenefitedfromtheextensiveknowledgeofBobEvenson(YaleUniversity)andWallyHuffman(IowaStateUniversity),whoprovidedhelpfulsuggestionstoimprovethequalityofthisreport.
TheauthorshavebenefitedagreatdealfromdiscussionswithRussiancolleaguesintheMinistryofAgricultureandFood,theRussianAcademyofAgriculturalSciences(RAAS),TimiryazevMoscowAgriculturalAcademy,andseveralregionalagriculturalresearchinstitutes.Theauthorswouldliketoacknowledgethesupport,information,andadviceprovidedbyMessrs.V.Khlystun(formerMinisterofAgriculture),A.Romanenko(PresidentofRAAS),andA.Zhuchenko(VicePresidentofRAAS).
ThemainconclusionsandrecommendationsofthisreportwerepresentedattheWorldBankworkshoponReformingAgriculturalResearchSystemsinCentralAsiaandtheCaucasus,March5-11,1998.Weareindeedgratefulforthevaluableperspectivesandmanyusefulcommentsreceivedfromtheworkshopparticipants.WearealsogratefultoKevinCleaver,LauraTuck,JosephGoldberg,John
Hayward,andCsabaCsakifortheircommentsandadviceandfortheirsupportforthepublicationofthisreport.EvgenyPolyakovprovidedstatisticalassistance,SharifaKalalaandRathnaChiniahprocessedthereport,andMetadeCoquereaumonteditedit.Wegratefullyacknowledgetheircontributions.
Pagex
AcronymsandAbbreviations
AIC: Agro-IndustrialComplex
AKKOR: AssociationofPeasantFarmsandCooperativesofRussia
AKS: AgriculturalKnowledgeSystem
ARSRIIMA:AllRussianScientificandResearchInstituteofInnovationandMarketinginAgriculture
CGIAR: ConsultativeGrouponInternationalAgriculturalResearch
CIAT: CentroInternacionaldeAgriculturaTropical(InternationalCenterforTropicalAgriculture)
CIFOR: CenterforInternationalForestryResearch
CIMMYT: CentroInternacionaldeMejoramientodeMaizyTrigo(InternationalCenterforImprovementofMaizeandWheat)
CIP: CentroInternacionaldelaPapa(InternationalPotatoCenter)
CIS: CommonwealthofIndependentStates
EC: EuropeanCommission
EDI: EconomicDevelopmentInstituteoftheWorldBank
ERS: EconomicResearchServiceofUSDA
EU: EuropeanUnion
FIAS: FarmerInformationandAdvisoryServices
FIST: FederationofInternationalSeedTrade
FSU: FormerSovietUnion
GKI: StateCommitteefortheManagementofStateProperty(Russia)
IC: InstituteofCybernetics(Russia)
ICARDA: InternationalCenterforAgriculturalResearchintheDryAreas
ICLARM: InternationalCenterforLivingAquaticResourcesManagement
ICRAF: InternationalCenterforResearchinAgroforestry
ICRISAT: InternationalCropsResearchInstitutefortheSemi-AridTropics
IFPRI: InternationalFoodPolicyResearchInstitute
IIMI: InternationalIrrigationManagementInstitute
IITA: InternationalInstituteofTropicalAgriculture
ILRI: InternationalLivestockResearchInstitute
IPGRI: InternationalPlantGeneticsResourcesInstitute
IPM IntegratedPestManagement
IRRI: InternationalRiceResearchInstitute
ISNAR: InternationalServiceforNationalAgriculturalResearch
ISTA: InternationalSeedTestingAssociation
MIS: MarketInformationSystem
MOAF: RussianMinistryofAgricultureandFood
MOAFCC: RussianMinistryofAgricultureandFoodComputerCenter
NARS: NationalAgriculturalResearchSystem
NSA: NationalSeedAssociation
NSAC: NationalSeedAdvisoryCommittee
OECD: OrganizationofEconomicCooperationandDevelopment
R&D: ResearchandDevelopment
Pagexi
RAS: RussianAcademyofSciences
RAAS: RussianAcademyofAgriculturalSciences
RSFSR: RussianSovietFederatedSocialistRepublic
SRI: ScientificResearchInstitutes(Russia)
SRIA: SiberianResearchInstituteforAgriculture(Russia)
SRIASE: ScientificResearchInstituteofAgricultureforSoutheastRegion(Russia)
TACIS: TechnicalAssistancetotheCommonwealthofIndependentStates
TMAA: TimiryazevMoscowAgriculturalAcademy(Russia)
UPOV: UnionforProtectionofPlantVarieties
USAID: USAgencyforInternationalDevelopment
USDA: USDepartmentofAgriculture
USSR: UnionofSovietSocialistRepublics
VIR: N.I.VavilovInstituteofPlantIndustry(Russia)
WARDA:WestAfricanRiceDevelopmentAssociation
Pagexii
GlossaryFermerPrivateFarmerSupportProgram
GoskomstatStateStatisticalCommittee
GosseminspektsiaRussianSeedInspectionAgency
GossortkomissiaRussianSeedRegistrationAgency
KolkhozCollectiveFarm
KrayAdministrativeRegion;AconstituentpartoftheRussianFederation
OblastAdministrativeRegion;AconstituentpartoftheRussianFederation
RayonAdministrativeDistrict;Aconstituentpartofakray,oblastorrepublic
SovkhozStateFarm
SPTUAgriculturalVocationalTrainingSchools
VASKhNILAll-UnionAcademyofAgriculturalSciences
VUZAgriculturalHigherEducationalInstitutions
Page1
ExecutiveSummaryReformingRussianagricultureisvitalforthesuccessfultransitiontoamarketeconomy.TheabilitytosustainthegainsfromeconomicreformswillrestonRussia'scapacitytosolveagriculturalproblemsinthefuture,inwaysthatareappropriateforprivateagriculturebasedonmarketprinciples.Furthermore,thelong-termproductivityofRussianagriculturewillbedetermined,toalargeextent,bythecapacityoftheRussianagriculturalresearchsystem,publicandprivate,torespondtoemergingproblemsandopportunities.Despitetheurgencyofproblemsrelatedtopolicyreformandtheneedtodevelopmanagerialandtechnicalcapacitythroughouttheagro-industrialcomplex,ithasproveddifficulttobuildacaseforstrengtheningagriculturalresearchinRussiaanadmittedlylong-termissue.
Russia'sagriculturalresearchsystemisatrisk.Unlessthissystemisquicklytransformedandrehabilitated,itscapacity,alongwithitsstoresofknowledge,germplasm,data,andknow-how,willbelosttofuturegenerations.Russia'sagriculturalresearchsystemisvitallyimportanttoRussiaandtotheworldcommunity.ThusRussiashouldeschewapolicyofbenignneglecttowarditsdeterioratingagriculturalknowledgesysteminfavorofactiveengagementinreorientingandrestructuringitsinstitutionstomeetthenewdemandsofamarketeconomy.Andtheinternationalscientificanddonorcommunity,fortheirpart,shouldtakestepstoprovidetargetedassistancetoRussianscientists,publicofficials,andagriculturalleaderstorestructureandrefocusRussia'sagriculturalresearchsystem.
NumerousproposalstotransformtheagriculturalresearchsystemhavebeendiscussedwithRussianadministratorsandscientistsinthepastfiveyears.Butafterallthestudies,needsassessments,visionstatements,andmemorandaofunderstanding,littleofsignificancehas
occurred.Russia'sagriculturalresearchsystemcontinuestofaceseriousproblems.ThisistheconsequenceofcollectivefailurebytheRussiancentralgovernment,byoblastandmunicipalgovernments,bytheRussianscientificestablishment,andbytheinternationalcommunity.ThereformagendaproposedherebeginswiththeacknowledgmentthattherearenoprovenmodelsofreformintransitioneconomiesandthatcriticalelementsofRussia'sagriculturalresearchsystemareatimmediateriskofbeinglost.Consequently,reformmustfocusonstabilizingandprotectingtargetedagriculturalresearchassetsanddevelopingandrefiningmodelsofinstitutionalchangeandhumancapitaldevelopmentthatareappropriateforRussiancircumstances.ThepriorityactivitiesproposedinthisreportmakeapositivecontributiontowardredefiningrolesandresponsibilitiesforagriculturalresearchinRussia.Andmoreimportant,theywouldhelpensurethatthehuman,biological,andphysicalcapitalinvestedinRussia'sagriculturalresearchsystemisnotlosttofuturegenerations.
AgriculturalKnowledgeSystem
Theagriculturalknowledgesystemconsistsofagriculturalresearch,education,training,andtechnologytransfer.Theagriculturalknowledgesystemneedstobefullyintegratedifitistoberesponsive,efficient,andcosteffective.WhiletheagriculturalknowledgesysteminRussiaisgraduallyadjustingtopolicyreforms,seriousproblemsremain.Theseproblemsneedtobeaddressedwithasenseofurgencybeforethewholesystemcollapses.However,thismustbedoneinthecontextofreformingtheagriculturalsector,promotingefficienteconomicpolicies,andbuildingmuch-neededinstitutionalinfrastructuretosupportprivateagriculturebasedonmarketprinciples.SeeBox1foracomparisonoftheattributesoftheagriculturalknowledgesystempriortoreformandtheneededattributesofthenewagriculturalknowledgesystem,aswellasanoutlineofemergingtrendsandcriticalproblems.
Page2
Box1:AgriculturalKnowledgeSystemwithaParticularFocusonAgriculturalResearchinTransitionEconomies:TheCaseofRussia
AttributesoftheOldSystem·publicsectordominance;·centralizedandquota-drivensystem;·unsustainablesize;·primaryproductionfocus;·isolatedfromglobalnetwork;·excessiveoverlap;·skewedpriorities;·lackoftrainingineconomics;·highqualitybutnarrowlyfocused;·crisismanagementduringtransition.
EmergingTrends·reforminitiativesinhighereducation;·shiftingfocusofresearchpriorities;·clientproblem-orientedresearch;·decentralizationofactivities;·consolidationofinstitutesandprograms;·costconsciousnessandrevenuegeneration;·privatesectorinvolvement.
CriticalProblems·remainshighlycentralized;·departureofhighqualitystaff;·inadequatefinancialsupport;·largeandunsustainablesize;·lackofoveralldirection;·limitedresearchcapabilityineconomics;·seriousinformationandknowledgegaps.
NeededAttributesoftheNewSystem·providesperformanceincentives;·integrated(research,educationandextension);·demanddrivenandresponsivetoclients;·efficientandcosteffective;·decentralized,pluralisticandparticipatory;·globallylinked;·privatesectorinvolvement;·accountabletokeystakeholders;·promotescostrecovery;·sustainable.
Page3
AgriculturalResearch
Issues
ThenationalagriculturalresearchsysteminRussiafacesthefivemajorchallenges:(i)torestructure,rehabilitate,decentralize,andconsolidatethesystemtomakeitsustainableandefficient;(ii)tore-orientthesystemtomakeitserveprivateagriculturebasedonmarketprinciples;(iii)toadoptsocioeconomic,ecological,andbusinesscriteriainplanning,priority-setting,monitoring,andevaluatingagriculturalresearch;(iv)todevelopandstrengthenlinkagesbetweenresearchersandusers,andamongresearch,teaching,andknowledgetransferactivities;and(v)tofacilitateincreasedinvestmentinagriculturalresearchanddevelopment,bothpublicandprivate.
StatusandAchievements
Russiahasanextensivenetworkofmorethan300nationalandregionalagriculturalresearchinstitutesandacademies.Some235oftheseinstitutesaremanagedbytheRussianAcademyofAgriculturalSciences(RAAS),and71bytheMinistryofAgricultureandFood(MOAF).TheRAASbecameapartofMOAFinearly1996.ThenationalagriculturalresearchsysteminRussiawasdesignedtomeetpredeterminedproductiontargetsforindividualcropandlivestockcommodities.However,thissystemisnotsuitablefortheemergingprivateagriculturebasedonmarketprinciples.
Russia'sagriculturalresearchsystemistoolarge,inefficient,andunsustainableundercurrentorprojectedfundinglevels.Inordertoserveprivateagricultureinamarketeconomy,theagriculturalresearchsystemmustbemadesustainable,efficient,demanddriven,decentralized,accountabletokeystakeholders,andintegratedwithhighereducation,knowledgetransfer,andtheworldscientificcommunity.Currentbudgetarysupportissolowthatitisnotadequate
eventofinanceandsustainthemostcriticalresearchprogramsdesignedtoimproveagriculturalproductivity.
Thelong-termnatureofagriculturalresearchshouldnotbeusedasjustificationforinactionorforassigningitalowpriorityinpublicinvestment.Anappropriateanddynamicagriculturalresearchsystemiscriticalforasuccessfultransitiontoamarketeconomy.Most,butnotall,agriculturalresearchcanbeviewedasapublicgoodandthusmeritspublicfunding.Evidencefromaroundtheworldindicatesveryhighratesofreturn(40to80percent)toinvestmentinagriculturalresearch.However,thesehighratesofreturntoinvestmentinagriculturalresearchwillnotberealizedintheabsenceofgoodagriculturalandeconomicpolicies.Russiahasenormouspotentialforexpandingagriculturalproductionandexports.But,thispotentialwillnotberealizedunlessRussianagriculturebecomesefficientandcompetitive.AgriculturaltechnologygenerationanditsapplicationatthefarmlevelareessentialtoimprovetheproductivityofRussianagricultureanditscompetitivenessinworldmarkets.
Withtheintroductionofeconomicreformstoreducethebudgetdeficitandachievemacroeconomicstability,fundingforagriculturalresearchwassubstantiallyreduced.Asaresult,researchhasliterallystoppedsincethebudgetisnotadequatetopayevenstaffsalaries.Scientistsareleavingtofindbetterpayingjobselsewhere.Theresearchfarmsarebeingusedprimarilyforagriculturalproduction,tomeettheneedsofthestaffratherthanforresearchpurposes.Capitalbudgetstoreplaceresearchequipmentandoperatingbudgetstocarryoutresearchhavedeclined.Whilebudgetarypressuresareforcingtheresearchinstitutestomakemuch-neededadjustments,budgetshortagesoveralongerperiodaredoingirreparabledamagetoRussia'scapacitytogenerate,adapt,andtransferappropriateagriculturaltechnologytomeettheneedsofagricultureintransition.Inaddition,thepublicsector'scapacitytoundertakeagriculturalresearchneedstobesupplementedbytheprivatesector,andefforts
mustalsobemadebythepublicsectortorecoverpartofthecost.
Page4
PolicyRecommendations
Russianeedsacompleteoverhaulofitsnationalagriculturalresearchsystem.Thiswillrequirefundamentalchangesindecision-making,priority-setting,incentivesystems,costeffectiveness,revenuegenerationthroughcostrecovery,andaccountabilitytostakeholders.Thesechangesarelongtermandwouldrequirealongtimetoachieve.Asafirststep,however,thereisaneedtodevelopanationalagriculturalresearchstrategytorationalizethestructure,organization,management,andfinancingofthescientificresearchsysteminagricultureatthefederalandregionallevels;tomakeitresponsivetomarketconditionsandtheneedsofnewstakeholders;andtomakeitsustainable.
KnowledgeTransfer
Issues
Thecurrentsystemofagriculturalknowledgetransferisnotadequate,andtheknowledge(particularlyinformationonprices,markets,technology,andreforms)itselfisnotappropriatetotheneedsoftheemergingprivateagricultureandmarketeconomy.Thisistrueatalllevelsofdecision-making,includingproducers,traders,advisors,administrators,andpolicymakers.
StatusandAchievements
Inthepast,informationservicesforagriculturalproducerswerecentralized.Thissystemresultedinthedevelopmentofalargenumberofnarrowlyfocusedspecialistswhoprovidedadvicetothemanagersofstateandcollectivefarms.Thisknowledgewassupplementedbyresearchandfieldapplications.Mostoftheresearchresultswereintroducedthroughdirectives.Therewerefewincentivestopromotenewinnovations.Whilethissystemworkedreasonably
wellwithalimitednumberofclients(about25,000stateandcollectivefarms),itisnotadequatetomeettheneedsofthemorethan280,000privatefarmers,50,000restructuredfarmenterprisesand40millionhouseholdplotholdersthathavealreadybeenestablishedinRussiaandtheirnumbercontinuetoincrease.AWorldBank-financedAgriculturalReformImplementationSupport(ARIS)projectissupportingtheestablishmentofFarmInformationandAdvisoryService(FIAS)centersinthemainagriculturalregionsofthecountry.Thecentersaredesignedtoprovidetimely,reliable,user-friendly,easilyaccessible,andpracticalinformation(agronomic,technical,management,business,legal,andenvironmental)tonewlyemergingprivatefarmers,restructuredfarmenterprises,andagro-businessenterprisestohelpthemmakeinformeddecisionsinamarketenvironment.Thisapproachisbasedonuseoftheinformationalreadyavailableinanextensivenetworkofagriculturalresearchinstitutes,agro-chemicaltestingstations,landdatabanks,academies,anduniversities,anditcapitalizesonRussia'shighlyskilledandliterateworkforce.TheFIAScenters,whichwillbelocatedattherayonandoblastlevels,willbesupportedbyanetworkofregionalandfederaltrainingcentersandtheagriculturalresearchsystem.
Inaddition,theARISprojectisalsosupportingtheestablishmentofanationalnetworkofMarketInformationSystem(MIS)centers.Thesecentersaredesignedtocollect,process,anddisseminaterelevant,timely,andreliablemarketandpriceinformationforthebenefitoffarmers,traders,andpolicymakers.Accesstosuchmarketinformationiscrucialforthesuccessfulfunctioningoftheemergingmarketeconomysinceitincreasesmarkettransparency,transmitsincentivesandopportunitiesforagriculturalproducers,improvesproducersbargainingposition,stimulatescompetitionamongtraders,expandsproducers'andconsumers'choicesinproductselection,andfacilitatesrationaldecision-makingbyproducers,traders,andpolicymakers.
Page5
PolicyRecommendations
Clearly,thereisaneedtoacceleratetheestablishmentofFIASandMIScentersandtomaketheinformationavailabletoproducers,traders,andpolicymakers.Thesecentersneedtobesupplementedbytheestablishmentofanationalcenterformonitoringprogressinagriculturalreformsandconductinganalysisoncriticalagriculturalpolicyissues.Thefederaltrainingcenter(beingestablishedundertheARISproject)shouldalsobeusedtotrainpersonneloffederalministries,regionaldepartments,andotheragenciesinvolvedintheagriculturaladjustmentandineffortstoimproveproductivity,profitability,andsustainabilityoftheagriculturalsector.
InstitutionalReform
Issues
TheagriculturalresearchinstitutionsundertheMinistryofAgricultureandFood,includinginstitutionsunderRAAS,needtoberestructuredtomakethemmoreresponsiveandrelevanttotheneedsofanemergingagriculturedominatedbytheprivatesectoranddrivenbymarketforces.
StatusandAchievements
TheagriculturalinstitutionalstructureinRussiaiscomplex,withmanylayersofdecision-making,policyformulation,andprogramimplementationauthority.ThenewConstitutionhasdecentralizedmuchpowerfromthefederaltotheoblastauthorities.However,thedivisionofresponsibilitiesandrolesisnotyetclearlydefined.AndinadditiontotheMOAFatthefederallevelandagriculturaldepartmentsattheoblastlevel,alargenumberofotheragenciesalsodealwithdifferentaspectsoftheagriculturalsector.Alltheseagenciesaregraduallybeingreorganizedtomeettheneedsofaprivatesector-
dominatedmarketeconomy.However,theslowpaceofthisinstitutionalchangeremainsamajorbarriertoadjustment.
PolicyRecommendations
Thisprocessofinstitutionalchangeneedstobeacceleratedbyabolishingolddepartmentsandagenciesthatweredesignedtomeettheneedsofcentralizedagricultureandcreatingafewwell-equippeddepartmentsandagenciestomeettheneedsofprivateagriculturebasedonmarketprinciples.Afirststepistodevelopanactionplantoreorganizetheinstitutionsthatserveagriculture,withafocusontheagriculturalknowledgesystem.Implementationofsuchanactionplanwouldimprovethepublicsector'scapacitytoprovideappropriatenewservicestoagricultureinatimelyandcost-effectivemanner.
Page6
ChapterIStrategicImportanceofAgriculturalResearchThestrategicroleofagriculturalresearchinRussiaderivesfromthecriticalimportanceofagricultureintheoveralleconomyandRussia'slargenaturalresourcebase.Theagro-industrialcomplexislargeandaccountsforabout20percentofGDPandemploymentinRussia.Agriculturealsohasalargeexportpotentialandconsiderablescopeforimportsubstitution.Atpresent,Russias'agricultureresourcesarenotbeingusedefficiently.Becauseagriculturecontinuestoabsorbalargeshareofbudgetaryresources,anyimprovementinitsperformancecouldhavealargeimpactonbudgetdeficitsandthusonmacroeconomicstability.
Despitethesector'spotentialforhigherefficiencyandgrowth,overallagriculturalproductionremainsinefficient.Productionhasdeclined,yieldsarelow,physicallossesarehigh,pricesremaindistorted,profitabilityislow(particularlyforthelivestocksector),andsubsidiesremainhigh.Unfavorabletermsoftrade,inefficientfarmstructuresandlackofadequateincentives,competitivemarkets,technicalandmarketinformation,andawell-functioningcreditsystemhavecombinedwiththeprevailingmacroeconomicimbalancesoffsettheexpectedbenefitsofreform.Theseproblemsaregraduallybeingaddressedthroughreformanddevelopmentofinstitutionalinfrastructure,butimplementationofreformhasbeenslow.
Russianagriculturehasembarkedonadifficultandprotractedtransition.Theshort-termproblemsinagriculturepolitical,social,andeconomicseemalmostoverwhelming.Why,then,worrynowaboutagriculturalresearchinRussiawhich,toparaphraseT.W.Schultz(1964)isadmittedly''long-termbusiness."Itwouldseemreasonable
toplacetheseactivitiesonthebackburnerandfocusonthecomplexitiesofprivatization,priceliberalization,thedevelopmentofmanagerialskills,oreventheimprovementofmechanismstotransferexistingresearchknowledgeortechnology.ItisdifficulttoarguewiththeneedforRussiatoaggressivelyaddressthiscomplexsetofimmediatetransitionissues.However,theabilitytosustainthegainsachievedfromshort-termreformwillrestonRussia'scapacitytosolveagriculturalproblemsinthefutureinwaysthatareappropriateforprivateagriculturebasedonmarketprinciples.ThusagriculturalresearchisvitalinensuringRussia'ssuccessfultransitiontoamarketeconomy.Itslong-termnatureshouldnotbeusedasajustificationforinactionorlowpriority.Agriculturalresearchcapacityisastrategicresourcethatcanbejustifiedfromanumberofperspectives.
ResearchAsaSocietalInvestment
Nomatterwhichmeasureofreturnisselectedorwhichanalyticalmethodisapplied,anextensiveliteratureinagriculturaleconomicsconvincinglydemonstratesthatinvestmentinagriculturalresearchyieldshighpayoffs.1EvensonandWestphal(1995)recentlysummarized156studiesofestimatedrealratesofreturntoagriculturalresearchanddevelopment(Table1.1).Forpublicsectoragriculturalresearch,averagereturnswere48percentfordevelopedcountriesand80percentfordevelopingcountries.FortheUnitedStates,HuffmanandEvenson(1993)showthatreturnsdiffer
1Returnstoinvestmentinagriculturalresearchcanbemeasuredbyfollowinganeconomicsurplusapproachoranaggregateproductionfunctionapproach.Economicsurplusapproachisrelativelymorepopular.ExamplesforthelatterapproachareGriliches(1964),Binswangeret.al.(1987),Pardey(1989),andMundlak(1996).
Page7
significantlybetweenappliedandmorebasicorpretechnologyresearch,betweenresearchandextension,andbetweenthepublicandprivatesector(Table1.2).
Table1.1:SummaryofEmpiricalStudieswithEstimatedRatesofReturntoR&D
StudieswithRangeofEstimatesforRatesofReturn(%)
Activity/RegionsNumberofStudies 1-24 25-49 50-75 75+ Mean
PublicSectorAgriculturalResearchAfrica 10 2 3 3 1 41LatinAmerica 36 14 22 13 13 46Asia 35 7 20 23 25 56Alldevelopingcountries
85 23 45 40 44 80
Alldevelopedcountries
71 21 54 26 29 48
PrivateSectorIndustrialResearchDevelopingcountries 5 0 3 3 2 58Developedcountries 35 10 20 10 5 44
PublicSectorAgriculturalExtensionDevelopingcountries 17 4 2 4 6 50Developedcountries 6 1 0 3 2 63aIncludesinternationalagriculturalresearchcenters
Source:EvensonandWestphal(1995).
Table1.2:InternalRatesofReturntoResearch,Extension,andEducationintheU.S.
TypeofActivity(SectorSpecific)
InternalRatesofReturn(%)a
Publicresearch 41Pretechnology 74PrivateR&D 46Publicextension 20Farmers'schooling 40
aReferstobothcropandlivestocksectoraggregates,1950-82.
Source:AdaptedfromHuffmanandEvenson(1993).
Page8
Theratesofreturntoinvestmentinagriculturalresearcharegenerallyveryhigh.However,themagnitudeoftherateofreturnvariesfromonecroptoanother,fromonelivestockproducttoanother,fromcropsectortolivestocksectororaggregateagriculturalproduction,fromonecountrytoanother,andfromdevelopedtodevelopingcountries(Table1.3and1.4).Therateofreturntoinvestmentinresearchvariesfrom22to42percentforpotatoesinPeru,to45percentforagriculture(cropsandlivestock)intheUnitedStates,to97percentfordairyinCanadaand191percentformaizeinSouthAmerica.Thenatureofagriculturaltechnology,thelevelofagriculturalproductivityandappropriatenessofagriculturalpoliciesgreatlyinfluencepayoffstoinvestmentinagriculturalresearch.Carefulandinformedresearchmanagementandpublicinvestmentareessentialandmusttakeplacewithinasetofconstraintsdefinedbyacountry'sresourcesandpolicies.
Muchofagriculturalresearchcanbeviewedasapublicgood(Box1.1).Missingmarkets,particularlywhenprivateresearchandneededinstitutionssuchasintellectualpropertyrightsarerelativelyunderdeveloped,canresultinsystematicunderinvestmentinagriculturalresearch.Thefactthattheestimatedsocialpayofftoresearchishighsuggeststhatsystematicunderinvestmentisstilloccurring,evenindevelopedcountrieswithwell-establishedprivatesectorresearch.
Positiveandhighratesofreturnmeanthatthestreamofsocietalbenefitsfromresearchoutweighthecostsoveraplanninghorizonofseveralyears.Thecostsoftheseinvestmentsarerepaidbecausetheeconomygrowsasaconsequenceofthereducedfoodandfibercoststhatbenefitbothconsumersandproducers,thereallocationofphysicalandhumancapitalintohigherandbetteruses,andincreasedeconomicactivity,includingtrade.Butaswithanyinvestment,thereisfrequentlyalagbetweenexpenditureandreturn.Foragriculture,the
lagmaybe10-20years.Evenallowingforthelonglag,however,theexpectedreturnoninvestmentinagriculturalresearchandextensionispositiveandhigh.2
ResearchAsaStrategytoIncreaseCompetitiveness
Publicsupportforagriculturalresearchcanalsobeanimportantpartofanation'sstrategytoincreasethecompetitivenessofitsagriculturalsector,whetherthroughdirectedpublicinvestmentorpublicactiontofosterprivateresearch.Operationally,increasedcompetitivenessmeansthattheagriculturalsectorisbetterabletosellproductsabroadortoproducesubstitutesforproductsbeingimported.Increasedcompetitivenessisdesirablebecauseitresultsinimprovedstandardsoflivingforthegivennationorregion.
Ourunderstandingoftheroleofresearchandtechnologicalchangehasbeeninfluencedbyconceptsofcomparativeadvantagethatunderlietradetheory.Inthisframework,anation'sfactorendowmentstockofland,labor,naturalresources,orcapitalwillinfluenceitsproductionandconsumptiondecisions.Nationswillchoose,forexample,toexportproductsthatmakemoreintensiveuseoffactorsofproductionthatarerelativelyplentiful.Inthiscontext,researchwillbedirectedtowarddevelopingtechnologiescapableofaugmentingscarcefactorsofproductionorreducingcosts.Research
2Thereisvastamountofpublishedliteraturedealingwithdifferentaspectsofagriculturalresearchanddevelopmentor,morebroadly,withthegenerationanddisseminationofagriculturaltechnology.FewselectedexamplesareAlstonandPardey(1996);Alston,NortonandPardey(1995);Anderson(1994);BinswangerandRuttan(1978);ByerleeandAlex(1998);EvensonandPray(1991);HayamiandRuttan(1995);Pardey,RoseboomandAnderson(1991);Pinstrup-Andersen(1982);PurcellandAnderson(1997);Ruttan(1981);RuttanandPray(1987);Tabor(1995),andtheWorldBank(1981,1983,1996b).
Page9
Table1.3:RateofReturntoAgriculturalResearchinOECDCountries
Country Study Commodity PeriodRateofReturn(%)
Australia Duncan(1972) PastureImprovement
1948-69
58-68
Canada Fox,etal.(1989) Dairy 1968-84
97
Canada Widmer,etal.(1988) Beef 1968-84
63
Canada Zachariah,etal.(1988) Broilers 1968-84
48
Finland Sumelius(1987) Aggregate 1950-84
21-62
Germany Burian(1992) Aggregate 1950-87
21-56
Ireland Boyle(1986) Aggregate 1963-83
26
Japan HayamiandAkino(1977)
Rice 1932-61
73-75
NewZealandScobieandEveleens(1987)
Aggregate 1926-84
15-66
UnitedKingdom
ThirtleandBottomley(1988)
Aggregate 1950-81
70
UnitedStatesHuffmanandEvenson(1992)
CropandLivestock
1949-85
45
UnitedStatesLyu,WhiteandLu(1984)
Aggregate 1949-81
66-83
Source:Alston,ChalfantandPardey(1995).
Table1.4:RateofReturntoAgriculturalResearchinDevelopingCountries
Country Study Commodity RateofReturn(%)
Mexico Ruvalcaba(1986) Maize 78-91SouthAmerica Evenson(1989) Maize 191Indonesia Pardey(1993) Rice 60-65India Evenson(1990) Rice 65
Pakistan Nagy(1983) Wheat 58Brazil Ayers(1985) Soybeans 46-69
Philippines Librero(1987) Sugarcane 51-71Peru Norton(1987) Potatoes 22-42
Senegal Schwartz(1989) Cowpeas 60-80Source:Bonte-Friedheim,TaborandRoseboom(1994).
Page10
Box1.1:PublicGoodsandPublicFinanceAgriculturalresearchisoftendescribedasapublicgoodandasaconsequencemeritspublicfunding.Thediscussionofthistopicisfrequentlycarriedoutusingtheratherarcanelanguageofpubliceconomics.Buttheunderlyingissuesarefairlystraightforward.Astheevidenceshows,investmentsinagriculturalresearchyieldhighratesofreturns.Wouldtheseinvestmentsbemadeifthetaskwerelefttoprivatefirms?Furthermore,wouldsufficientfundsbeinvestedtomeetsociety'sneeds?Andwouldthecorrectmixofprojectsbeundertaken?Theanswertoallthreequestionsisprobablynot.
Aprivatefirmaseedcompany,chemicalcompanyorafarmerforthatmatter,willonlyinvestinresearchifthebenefitsfromdoingsoexceedthecosts.Inmanycases,thismeansthatthefirmconductingtheresearchmustbeabletoearnreturnsfromresearchtotheexclusionofcompetitors.Accesstotheearningsfromresearchmightbeobtainedfromapatent,asatradesecretorthroughphysicalcontroloftheinvention.Ifafirmcannotbereasonablyassuredthatitcancaptureasufficientportionoftheincomestreamfromaresearchproject,itwon'tmaketheinvestment.Alternatively,thefirmmightnotcarryoutaresearchprojectinhopesthatacompetitorwouldmaketheinvestment.Wheneitherofthesetwosituationsexist,whenfirmscannotdirectlyandsufficientlybenefitfromresearchinvestments,publicactioncanbejustified.Economistsdescribethisactionasoneofcorrectingamarketfailure.Hereareafewsimpleexamplesofresearchareasthatmightnotbeadequatelyundertakenbytheprivatesector.·Basicresearchisoftenfundedbythepublicsector.Forexample,inordertobreedsoybeanvarietieswithalteredfattyacidcomposition,itmightbenecessarytounderstandthesynthesispathways.Aprivatefirmmightbeunwillingtoinvestinthisbasicresearchbecauseitcannotdirectlycapturethebenefits,orbecausetheexpectedreturncannotcompetewithreturnsfromothershort-terminvestmentalternatives.Inthiscase,itmakesmoresenseforsocietytofundtheresearchandmaketheresultswidelyavailabletosupportcommercialapplication.·Researchthatincreasesknowledgeormanagerialskillsmightnotbeadequatelyfundedbytheprivatesector.Apesticidecompanywithproductstosell,wouldprobablynotinvestindevelopingintegratedpestmanagement(IPM)systemsthatreduceapplicationratesofitsproduct.Buttheselowinputtechnologiesclearly
benefitthesocietyandtheenvironment.Iftheresearchistobecarriedout,thepublicsectormighthavetopayforitorfindwaysforcostrecoveryfromthebeneficiaries.·Someappliedresearchisdifficulttoprotect.Patentscreateapartialmonopolyandprotectafirm'sreturnonresearchinvestmentatleastforaperiodoftime.Thisworksfairlywellforpesticidesormachinery.Cornhybridscanbeprotectedbecauseaccesstotheinbredparentscanbephysicallycontrolledasatradesecret.Self-pollinatedcropssuchaswheatorsoybeansaremoredifficulttocontrolsincefarmerscansavetheirownseed.Consequentlyitcanbedifficultforaprivatefirmtocapturethereturnonitsresearchinvestment.Inthiscase,publicfundingorinterventionmaybeneededifthesebeneficialinvestmentsaretobemade.
Theseexamplesillustrateafewofthereasonswhyprivatefirmsmightnotinvestorunderinvestinresearchthatsocietywouldfinddesirable.Toresolvethisdilemma,publicactionisoftenjustified.However,publicactioncantakemanyforms.Thepubliccanfundandconductresearchdirectly.Thepublicmightfundtheresearchbuthaveitconductedbytheprivatesectorundercontract.Orthepublicmightpasslegislationtocreatecommodityorexporttaxprogramstofundresearchthatfirmswouldfindintheirbestinteresttopursue.Inmanydevelopedcountries,fundingofresearchhasevolvedfromlargelyapublicresponsibilitytoasharedresponsibilitywiththeprivatesector.ForRussia,agriculturalresearchwilllikelyremainapublicfunctionuntiltheprivatesectorandtheneededinstitutionsarewell-developedtopermitasharedrole.Thiswilllikelytakeadecadeormore.
Page11
attemptstoeaseconstraintsthatarelargelytheconsequenceofresourceendowments(ThirtleandRuttan1987).
Oneofthemostimportantinsightsfromthislineofinquiryisthatresearchproductivityandhenceagriculturalproductivitycanbeenhancedby"gettingpricesright"intransitioneconomies.Marketsignalsthatarerelativelyfreeofdistortionscausedbydomestictaxesortradeinterventionwillresultinefficientproductionandtherebydriveresearchintheproperdirection.Thismeansthatresearchmanagerscanmaketheirinvestmentdecisionslargelyonthebasisofwelfaremeasuresthatreflectthenetgaintoproducersandconsumers(Alston,Norton,andPardey1995).Competitivenessandresearchstrategyinthisframeworkaretheconsequencesofwell-functioningcommoditymarketsandeconomicallyliterateresearchmanagers.
Porter(1985,1990)hassynthesizedandextendedanalternativetotheresource-basednotionofcomparativeadvantagethathecallscompetitiveadvantage.Itistheconsequenceofadeliberatestrategybyfirms,industries,ornationstoachievecostleadershiporproductdifferentiation.Costleadership,orconsistentlyachievinglowunitproductioncosts,includestheentiresequenceorvaluechainrequiredtoproducegoodsandservicesfrombasicmanufacturingtotransportation,distribution,marketing,andcustomerservice.Differentiationreferstotheabilitytoproduceandmarketgoodsorserviceswithuniquecharacteristics.Throughdifferentiation,afirmisabletoexactpricepremiumsandearnhigherthannormalprofits.
InPorter'smodel,nationalcompetitiveadvantagefollowsthefirmorindustryandistheresultofconditionsinfactorandproductmarkets,firmstrategyandrivalry,andthecharacteristicsofsupportingindustries.AgriculturewouldseematfirstglancelesssuitedforPorter'smodel,whichhearguesismostappropriateforhightechnologyindustriesratherthanresource-basedindustries.However,
inindustrialcountriesandinmoreadvancedtransitioneconomies,agricultureisanincreasinglyhigh-technologyindustry,wherecompetitivestrategycanoffersomevaluableinsightsonindustrylocation,productivitygrowth,andresearch.ThecutflowerindustryintheNetherlands,thedairyindustryinDenmark,andrecentdevelopmentsintheporkindustryinNorthCarolina(intheUnitedStates),Singapore,orChilearecasesinpoint.ThemajorbuildingblocksinPorter'smodelofnationalcompetitiveadvantageasitappliestotheroleofresearchanddevelopmentarefactorconditions,demandconditions,relatedandsupportingindustries,andfirmstrategy,structure,andrivalry.
Factorconditions.Porter'smodelincludesfactorendowmentsasoneofthekeydeterminantsofnationalcompetitiveadvantage.Factorendowmentsconsistofhuman,physical,natural,knowledge,andcapitalresourcesaswellasinfrastructuretransportation,communication,andhealthcare,forexample.Relativelyfewoftheseendowmentsarereallyfixedorgiven;technologyandresearchcanaltermanyofthemovertime.Competitiveadvantageiscreatedandsustainedwhenfactoraugmentationprovidesbenefitstospecializedindustriesbenefitsthatarenoteasilytransferredtorivals.Researchclearlyisoneofthedrivingforcesbehindthisfactor-augmentingtechnologychange.
Demandconditions.Domesticdemandconditionsarethesecondmajordeterminantofnationalcompetitiveadvantage.Thelargerandmorevisiblethedomesticdemandforaproduct,thegreatertheincentivestoincreaseanindustry'scompetitiveness.Domesticdemandforproductsthatreflectuniquephysicalorculturalcharacteristicsisalsoimportant.IntheUnitedStates.,forexample,theincreasinghouseholdincomesoftwo-careerfamilieshavesignificantlyalteredthedemandforservicesembodiedinretailfoodproducts.Inanotherexample,thescaleoftheU.S.cornindustryhasresultedinalarge
Page12
domesticdemandforhybridseedadaptedtomanyclimaticormaturityzones.Thishas,inturn,fosteredaninternationallycompetitiveseedindustryintheUnitedStates.
Relatedandsupportingindustries.Porteridentifiestheimportanceofindustry"clusters"indeterminingnationalcompetitiveadvantage.Clustersaregroupsofindividualfirmsthatprovidematerials,services,orexpertisetoagivenindustry.Supportingfirmsmayformpartofanintegratedorcoordinatedindustryforexample,linkingfeedprocessing,nutrition,livestockproductionandmeatprocessing.Ortheymaysimplyberelatedorrelevanttoaparticularsituation.Thestrong,ubiquitouscomputersoftwareindustryintheUnitedStateshascertainlyfosteredthedevelopmentofimprovedfarmmachineryinstrumentsandcontroldevices.ThecommonpracticeofoutsourcingmaterialsorservicesbuildscapacityinsupportingindustriesandcanleadtocostreductionsandqualityimprovementthroughscaleeconomiesandjointR&D.Japan'ssuccessinautomobilesandelectronicshas,inpart,beenachievedthroughstrengtheningitssupportingindustrialbase.
Firmstrategy,structureandrivalry.Porter's"diamond"offirmstrategy,structure,andrivalryreferstothecharacteristicsofmanagementandcompetitionwithintherelevantindustry.Itincludessuchdiverseaspectsascorporateculture,societalvaluesandtradition,andthedegreeofrivalryamongfirmswithinanindustry.
Porter'sworkincorporatesmanyoftheearliernotionsofcomparativeadvantageandinducedinnovation.Hisprimarynewinsightisthatnationalcompetitiveadvantageistheconsequenceoffourinter-relatedforceslinkedtofactorsofproduction,demandconditions,theexistenceandperformanceofalliedindustries,andthecharacteristicsofmanagementandfirmbehaviorwithinanindustry.Further,inPorter'smodel,researchanddevelopmentplaysacriticalroleinall
fourareasaspartofdeliberatestrategiestoreducecosts,increaseproductdifferentiationandquality,orreduceadverseenvironmentalconsequences.Agriculturalresearchandtechnologicaldevelopmentcreatecompetitiveadvantagebyimprovingtheabilityoftheagriculturalsectortocreatevaluefordomesticandinternationalcustomers.Theconsequencesoftechnologicalandmanagerialinnovationfosteredbyagriculturalresearcharesustainedhighratesofreturnandincreasingmarketshare.
Evenson(1986)offersanadditionalperspectiveonagriculturalresearchandcompetitiveadvantagewithinaframeworkthatincludesproducersandconsumersasinterestgroups.Evensonintroducesasimpletypologythatdistinguishesbetweenagriculturalproductsthataretradedornontradedandtechnologicalchangethataffectsagriculturalproductionorutilization(processing).Finally,Evensondistinguishesbetweentechnologiesthatcanorcannotbetransferredintocompetingnations(spillovers).ThetypologyissummarizedinTable1.5.
Mostagriculturalcommoditiesaretradedorarepotentiallytradable.Grains,protein,meat,cheese,farmmachinery,bullsemen,andpreparedfoodsarecasesinpoint.However,somecommoditiessuchasfreshmeat,forages,ormilkmorecloselyresemblenontradedgoods.Thekeyissueishowsensitivecommoditypricesaretochangesinoutput.Productionresearchisfocusedonincreasingoutputorimprovinginputqualityorefficiency.Utilizationresearchimprovestheefficiencyofstorage,transportation,andprocessingofagriculturalcommodities,leadingtoimprovedproductionqualityordifferentiation.Transferabilityofresearchcanbeinfluencedbyanumberoffactors.Productiontechnologiesthataresuitableforspecificsoilorclimaticconditionsorrequirespecialmanagementskillsarenotparticularlytransferable.Otherssuchasdairygeneticsorwet-millingtechnologiescanbeeasilytransferredtocompetitors.Institutionalrestrictionssuchaspatentsorhealthregulationslimit
Page13
transferability.Andlocaleconomicconditionsorpricedistortionscanalsobeimportantlimitingfactors.Table1.6listsafewexamplesapplicabletoRussiathatareconsistentwiththistypology.
Table1.5:PerceivedShort-TermBenefitstoDomesticProducersandConsumersfromAgriculturalResearch
CommodityaResearchFocus TradedGoods NontradedGoods
ProductionResearchTransferable C+ P- C++ P-Nontransferable C+ P++ C++ P-
UtilizationResearchTransferable C- P+ C+ P+Nontransferable C+ P+ C+ P+
aThedefinitionofthesesymbolsisasfollows:
C+=consumerbenefitsC-=consumerlosesP+=producerbenefitsP-=producerloses
Source:DerivedfromEvenson(1986).
Table1.6:BenefitsfromAgriculturalResearch:SomeExamplesApplicabletoRussia
CommodityResearchFocus TradedGoods NontradedGoods
ProductionResearch
Transferable Newwheatvarieties Highproteinforagecultivars
NontransferableSustainablewheatproductionsystems
fortheVolgaHills
Improvedbeefgrazingsystems
UtilizationResearch
Transferable Improvedflourmillingtechnologies
Improvedfreshmilkhandlingsystems
NontransferableImprovedflourmillingtechnologies
protectedbypatentortradesecrets
Processingtechnologiesforethnic
foodsorfoodsforlocaltastes
Source:Authors'compilation,basedonEvenson(1986).
ThebenefitsofresearchtodomesticproducersandconsumershighlightedinTables1.5and1.6areconjectural.Butthetypologydoesillustratesomekeypointsaswellassomecontroversies.Consumersappeartobenefitfromalmostalltypesoftechnologicalchangeinagriculture,whileproducersbenefitaswell,butmoreselectively.Farmerswouldlikelysupportnontransferableproduction
Page14
researchintradedcommodities.ForRussia,givenitsrangeandvariabilityofagroclimaticregionsanditshighlyeducatedagriculturallaborforce,site-specifictechnologieswithhighmanagerialrequirementswouldseemtoofferclearadvantages.Iftheseproductiontechnologiescanbedevelopedaroundagroecologicalprinciplestoreduceenvironmentaldegradationandothersocialcosts,Russia'slong-termcompetitiveadvantagecouldbesignificantlyenhanced.Farmersalsobenefitfrom,andwouldprobablysupport,investmentsinutilizationresearch.Butwhetherutilizationresearchshouldbefundedpubliclyorprivatelyiscertainlysubjecttodebate(AlstonandPardey1996).Finally,eveninsituationswherethereseemstobeamixtureofwinnersandlosers,aswithproductionresearchonnontradedgoods,thenetbenefitstosocietyarestilllikelytobepositive.Thegainstoconsumerssimplyoutweighthelossestoproducersandresultinpositiveratesofreturnontheseresearchinvestments.
ResearchAsaToolforFoodSecurity
Thefirsttwoperspectivesonagriculturalresearchareadmittedlyinwardlyfocusedonthegainstoanationorregion.However,thereisaglobalperspectivetoagriculturalresearchthatisparticularlyimportant.Inarecentstudy,McCalla(1994a)juxtaposesplausiblegrowthratesinworldpopulationandincomeagainsthistoricalgrowthratesinagriculturalproductivity.Whatemergesisasimpledisquietingfact:agriculturalproductivitymustcontinuetoincreaseworldwideatorabovehistoricalratesiffuturefooddemandsaretobemetwithoutpotentiallydirehumanconsequences.McCallamakesasecondandequallyominousobservation:inmostcountriesthroughouttheworld,developingandindustrial,nationalprioritiesareshiftingawayfromagricultureandfromagriculturalresearch.Thismyopicperspectivefurtherdiminishestheworld'scollectiveabilityto
achievetheneededincreasesinagriculturalproductivityinamannerthatcanbesustainedintothefuture.
FoodsecurityisrelevanttoRussiaintwoimportantways.First,Russia(andtheothertransitioneconomies)cangoalongwaytowardrealizingitsvastpotentialinagriculturalproductionandinmeetingfuturefoodneedsbyincreasingtheintensityandproductivityofasustainableagriculturalproductionsystem,improvingefficiencyandqualityinagriculturalprocessinganddistribution,andeasingproductionconstraintsindifficultagroclimaticregions.Byactivelycontributingtotheresolutionofglobalfoodproblems,Russiacanalsoimproveearningsfromitsagriculturalsectorandcontributetoruralwell-being.Second,thereisanimportantdomesticdimensiontofoodsecurity.Russiaisnot,byworldstandards,apoorcountry.Nordoesthespecterofhungerthreatenitspopulation.ButnationalfoodsecurityisanimportantissueforRussiainthatiteffectsRussians'standardsofliving.Thetransitiontoademocraticandcivilsocietyissignificantlyinfluencedbythepriceofsausagesandbread.Agriculturalresearchplaysanimportantroleinimprovingproductivity,increasingstandardsoflivingforruralaswellasurbanpeople,andconcomitantlysupportingdemocratization.
AgriculturalResearchAsaPriorityInvestment
Thelogicforsupportingagriculturalresearchasapriorityinvestmentisstraightforwardandcompelling.Agriculturalresearchhasbeenshowntobeasoundsocietalinvestment.Fewpublicgoodscanshowabetterrateofreturn.
·Agriculturalresearchcancreateandsustainnationalcompetitiveadvantageand,thereby,increaseearningsfromagriculturalassetsandtheincomesofruralpeople.
·AgriculturalresearchisneededifRussiaistocontributewithitsvastpotentialtotheresolutionofglobalfoodandenvironmentalproblems.
Page15
·AgriculturalresearchisneededifRussiaistoproperlymeetitsnationalfoodsecurityobjectives,whichsupportdemocraticreform.
Russiafacesthischallengewithanextensiveagriculturalknowledgesystemandalonghistoryofinvestmentinresearchandeducation.ThissituationischaracteristicofmosttransitioneconomiesinEasternEuropeandtheformerSovietUnion.Agriculturalresearch,education,training,andtechnologytransferweregivensomepriorityundercentralplanning.However,theagriculturalknowledgesystemthatemergedwasnotdesignedtomeettheneedsofprivateagricultureinamarketeconomy.FortheWorldBankandotherinternationalfinancialinstitutionsanddonors,thisfactcreatesnewchallenges.Mostoftheirexperienceisindevelopingnationalagriculturalresearchsystemsfromthegroundup.Theproblemsoftransitionoftransforminganextensiveandcomplexknowledgesystemappropriatetoacommandeconomytoonesuitableforamarketeconomyareunprecedented,andthetaskoftransformingtheagriculturalresearchsystemwillnotbeeasy.3
Inmaturemarketeconomies,agriculturalknowledgesystemsarealsointransitioninthedivisionoflaborbetweentheprivateandpublicsectors,inthetrainingandexpertiseofscientistsandeducators,amongotherways.ThusthefutureconfigurationofagriculturalknowledgesystemsinNorthAmerica,Europe,orAustraliamay,ingeneral,beappropriatefortransitioneconomieswhilethecurrentstructurefoundinindustrialmarketeconomiesmaynotbe.ThetransitionofRussia'sagriculturalknowledgesystemmaythusfollowapathtowardwhichindustrialmarketeconomiesarealsomoving.SothevisionforRussia'sagriculturalresearchandeducationsystemmustbeorientedtowardthefuture.
TheproblemsRussia'sagriculturalresearchsystemfacesareespeciallyurgent.Agriculturalresearchisproperlyviewedasalong-
terminvestmentaninvestmentinacountry'sabilitytomeetfuturefoodneeds,exploitcommercialopportunities,orprotectenvironmentsandpeople.Butaswithanyotherhigh-returninvestment,thelossresultingfromadollarnotspenttodayismagnifiedmanytimesinthefuture.Withagriculturalresearchsystems,passiveneglectnotonlyreducesreturnsfromcurrentinvestments,italsoerodescapacity.ForRussia,thelossofresearchcapacityinbothphysicalandhumantermsposesoneofthegreatestthreatstofuturereturns.Whatisneededisactionnowhuman-scale,concrete,doablestepstolimitthelossesincapacity,todevelopworkablestrategiesforreformduringtransition,andtomakeneededinvestmentstosecureRussia'sagriculturalfuture.
Agriculturalpolicymakersmustbeawarethatpotentiallyhighratesofreturntoinvestmentinagriculturalresearchwillnotberealizedintheabsenceofreformsintheagriculturalresearchsystemandagriculturalsector.ThisreportassessesthecurrentsituationofRussia'sagriculturalknowledgesystem,withanexplicitemphasisonagriculturalresearch,andoutlinesasimpleconceptualmodeltoaddressthestrategicmanagementofagriculturalresearchduringthetransition.AspecificsetofrecommendationsismadethatcanbeimplementedquicklyandcancontributetoabetterunderstandingofhowRussia'sagriculturalknowledgesystemcanberehabilitatedandtransformedtoimprovetheefficiencyandproductivityoftheagriculturalsector.
3Russiahasmademajorprogressinstabilizingandreformingtheeconomyandtoalesserdegreeinreformingtheagriculturalsector.AnoverviewofthecurrentstatusofagriculturalreformsandperformanceoftheagriculturalsectorisprovidedinBrooks,Krylatykh,Lerman,PetrikovandUzun(1996),Mudahar(1996a,1996b),MudaharandPolyakov(1996),MudaharandSchaeffer(1996),MudaharandSahota(1996),andtheWorldBank(1992a,1994a,1994b).
Page16
ChapterIIStatusandPerformanceoftheAgriculturalSectorDespitearichnaturalresourcebase,Russia'sagriculturalproductionperformancehasbeenfarbelowitspotential.Inmanyways,Russianagricultureisastudyincontrasts:
·Russiaoccupiesnearlyaseventhoftheearth'slandareaover1.7billionhectares.Yetonly220millionhectaresaredevotedtoagriculturalpurposes(about13percent)andofthat,about60percentisconsideredarable.Andmostofthearablelandissubjecttosomesignificantlimitationinadequaterainfall,excessivesalinityormoisture,limitedgrowingseason,ordifficultterrain.Only2millionhectaresofRussia'svastbeltofblacksoilshasadequaterainfallandgrowingconditions.
·Russia'sfarms,there-registeredstateandcollectivefarms,arehugebyNorthAmericanorEuropeanstandards.Yettheyviewithtinyprivatelyownedhouseholdplotsformarketshare.
·MostofRussia'sfoodprocessingsystemisspatiallydispersed,relativelysmallscale,andantiquated.Yetprocessingfirmscontinuetomaintaintheirmonopsonypowerinregionalcommoditymarkets,exactingrentsfromproducers,delayingpayments,andimpedingincentivesforreform.
·RussiahasmadeassignificantacommitmenttoagriculturalresearchandeducationasherEuropeanneighborsorNorthAmerica.YetRussia'sagriculturalproductivityandtechnologylagsignificantlybehindtheWest's.
·Sincetheearly1990s,Russiahasenactedasteadystreamofeconomicreformsintendedtofacilitateprivatesectorparticipation
andtotransformtheeconomyandtheagriculturalsector.Yetagriculturaloutputremainslowandcontinuestofluctuate,particularlylivestockproduction.
TheparadoxesthatcharacterizeRussianagriculturealsoestablishthecontextwithinwhichreformoftheagriculturalknowledgesystemmustoccur.ThefollowingoverviewofthestatusandperformanceofRussianagriculturefocusesonagriculturalorganization,production,productivity,technology,andresearch.
RestructuringProductionAgriculture
Fornearly70years,largestateandcollectivefarmshavebeenemblematicofRussianagriculture.Sincethecollapseofcentralplanning,however,severaldecreesandlawshaveestablishedanewlegalframeworkforprivatizingproductionagriculture.Theimpacthasbeenstrikingatleastonpaper.ByJanuary1996,stateownershiphadfallentoapproximately34percentofallland,andonly8percentofarablelandwascontrolledbystateagriculturalproductionenterprises.Transformedcollectivesoperatingasjointstockcompanies,limitedliabilitypartnerships,orwithrevisedchartershavebecomethedominantformofownershiporcontrol(Table2.1).
Page17
Table2.1:AgricultureLandbyTypeofEnterprise,January1,1996Item TotalLand) AgriculturalLand(millionha)
(millionha) Total ArableMeadows Pastures
Totalland(territory) 1708.2 221.0 129.8 23.9 63.7Landusedbyownersandusersfor 694.6 209.6 127.6 20.1 58.6agriculturalproductionReservelandandforestry 843.4 9.0 1.6 3.3 4.0Landforotheruses 70.7 3.6 0.2 1.8 1.7
Landofagriculturalenterprisesand 544.7 171.2 113.2 13.6 42.8organizationsCollectivefarms 63.1 31.3 21.0 2.1 8.0Jointstocksocieties,agricultural
cooperativesandotherorganizations181.4 93.6 64.4 8.0 20.3
Statefarmenterprises 236.5 20.9 10.6 1.5 8.6Privatefarms 36.2a 10.4 7.5 0.7 2.1Personalhouseholdplots 5.8 5.4 3.4 1.7bCollectiveorchards 1.2 1.2 1.2Collectivevegetablegardens 0.6 0.6 0.6aIncluding17.1millionhaofcariboupasturesandforests.bIncludingpastures.
Sources:GoskomstatofRussia.
Agriculturalproductionenterprisesaregraduallyrestructuring(Figure2.1).In1990,almost99percentofarablelandwasunderstateandcollectivefarms,withtheremainder(about1.3percent)operatedashouseholdplots.By1996stateandcollectivefarmsaccountedforjust29percentofthearableland.Theremainingarablelandisownedandoperatedbycooperativesandjointstockcompanies(59percent),privatefarms(7percent),andhouseholdplots,includingcollectiveorchardsandvegetablegardens(5percent).Thenumberofprivatefarmsincreased
veryrapidlyfromabout4,400inJanuary1991to270,000inJanuary1994,buttheprocesshassloweddownsincethen.However,newlyemergingprivatefarmersarefindingitverydifficulttosurviveduetoeconomichardshipsandlackoffarmmachinery,inputs,credit,markets,andknowledge.
Thesedramaticchangesinlegalstructureandorganizationhavenotbeenaccompaniedbymeaningfulchangesinoperationormanagement.1Outputsharesofagriculturalenterpriseshavebeendecliningrelativetothoseofhouseholdplotsandprivatefarms(Figure2.2).Thissuggeststhat
1AdditionalinformationonrestructuringofstateandcollectivefarmsinRussiaanditsimpactontheiroperations,managementandproductivityisavailableinBrooks,Krylatykh,Lerman,PetrikovandUzun(1996),andBrooksandLerman(1995).Accordingtothem,mostrestructuredfarmsarestillmangedlikecollectivefarmsofthepast,butwithmoreadministrativeautonomyandlessfinancialsecurity.Furthermore,theresultsbasedonfarm-levelsurveyin1994/95indicatethatshareholdersareawareoftheirrightsbutperceivelittletangiblegaintoshareownership.This,ofcourse,islikelytochangeasagricultureproceedswithtransitionandbecomesrelativelymoreprofitableovertime.
Page18
Figure2.1:ChangeinFarmOrganizationsinRussiafrom1990to1996
Page19
Figure2.2:ChangeinOutputSharesforDifferentFarmOrganizationsinRussiafrom1990to1994
Page20
privatizationandreorganizationofthestateandcollectivefarmshavenotcreatedtheincentivesnecessarytoincreaseproductionorimproveefficiency.
Theanalysisshowstwocleartrends.First,about40percentofagriculturalproduction(slightlylessforcropsandslightlymoreforlivestock)originatesprimarilywiththehouseholdplots(38percent)andprivatefarms(2percent),whichaccountforonlyabout12percentofthearableland.Agriculturalproductivityismuchhigheronhouseholdplotsthanontheformerstateandcollectivefarms.However,thehouseholdplotsproduceprimarilyfruits,vegetables,potatoesand,toalesserextent,livestockproducts.Theformerstateandcollectivefarmsaccountformostofgrain,sunflowerseed,sugarbeet,meat,milk,andeggs,themainstaplesinRussiaandthemainsourceofrawmaterialforagro-industry.Second,theformerstateandcollectivefarmsaccountfor78percentofarableland;ofthis,unrestructuredfarmsaccountfor29percentandrestructuredfarms,includingcooperativesandjointstockcompaniesfor59percent.Clearly,thelong-termfutureofagricultureinRussialiesnotasmuchwiththehouseholdplotsbutwithimprovingtheefficiencyandproductivityoflargefarms.Astheadjustmenttakesplaceovertime,theroleofhouseholdplotsinagriculturalproductionislikelytodecline.
ChangingCropSector
ShiftingCroppingPattern.Theareasownundercropshasdeclinedfrom115.5millionhectaresin1991to102.5millionhectaresin1995,an11percentdecline(Figure2.3).Inaddition,thecroppingpatternischanginginfavoroffruits,vegetables,potatoes,andhigh-valueindustrialcrops,suchassunflowerseed.Theareaunderfeedcropshasdeclinedsignificantly,from44millionhectaresin1991to32millionhectaresin1995.Thisdeclineisdueprimarilytotherapiddeclinein
livestockinventories.Aspartoftheeconomictransitiontoamarketeconomy,thedemandforfruitsandvegetablesisincreasingwhiledemandforlivestockproductsisdeclining.
DecliningCropYields.Cropproductionisdeterminedbysownareaandyields.Bothaggregatesownareaandsownareaundermajorcropshavedeclined,ashaveyieldsformostcropsexceptpotatoes,whicharegrownprimarilyonhouseholdplots(Figure2.4).AveragecropyieldsinRussiaaremuchlowerthanaverageyieldsintheUnitedStatesandCanada,whichhavesomesimilaritiesintheagroclimaticconditions.EventhoughpotatoyieldsinRussiaincreasedslightlyinthemid-1990s,theyarestillonlyabout29percentofaverageyieldsintheUnitedStatesand40percentofyieldsinCanada.Clearly,thereisalargepotentialtoimprovecropyields.
FallingInputUse.Oneofthemainreasonsfortherapiddeclineincropyieldshasbeenareductionintheuseofcriticalfarminputs.Mostfarmmachineryisinpoorcondition.Therehasbeenashortageofspareparts.Fuelsupplyhasalsobeenaseriousproblem,interferingwithtimelysowingandharvestingoperations.Fertilizerusehasdroppedfromabout11milliontonsofnutrientsin1990toabout1.4milliontonsin1994.Theuseofpesticides,fungicides,andherbicideshasalsodeclinedsignificantly.Themainreasonsforthisdeclineininputusehavebeenlackofavailabilityfollowingthecollapseoftheoldinputdistributionsystemandlackofcreditandhighpriceswheninputsareavailable.Althoughinputuseintheoldsystemwastoohightobesustained(frombotheconomicefficiencyandenvironmentalprotectionpointsofview)ithasnowdroppedtolevelsthatarenotadequatetomeetminimumcropnutrientneedsandefficientcropproduction.
Page21
Figure2.3:ChangesinCroppingPatterninRussiafrom1990to1995
Page22
GrainCrops
Non-GrainCrops
Figure2.4:ChangesinCropYieldsoverTimeinRussia
Source:Goskomstat.
Page23
InefficientSeedSector.Thefoundationofanefficientcropproductionsystemisthesupplyanduseofhighqualityseed.TheseedsectorinRussiaisnotveryefficient(Table2.2).AverageseedratesaremuchhigherinRussiathanintheUnitedStates,mainlybecauseofpoorseedquality(lowgerminationrates)andpoorcropmanagementpractices.Thebulkoftheseedrequirementsismetbyproducersfromtheirownproduction.Becauseofthehighseedrateandlowcropyields,theamountofseedisamuchhighershareofindividualcropyieldsthan,forexample,intheUnitedStates.Clearly,improvementsinseedquality,aswellascropandlandmanagementpractices,havethepotentialforachievingsubstantialgainsintheformofreducedseedrequirements,highercropyields,lowerproductioncostsandimprovedagriculturalefficiency.
Table2.2:PerformanceIndicatorsfortheSeedSectorinRussia,mid-1990s
Crop SeedRateinRussiaas%ofUSA Seeduseas%ofProductionRussia USA
Wheat(winter) 298 11 4Wheat(spring) 237 21 4Barley(spring) 256 16 3Oats 247 18 8Corn(grain) 111 1 0.2Sunflower 160 1 0.4Potatoes 145 30 6
Source:Mudahar,Sampath,andPray(1997).
ShrinkingLivestockSector
Priortotheintroductionofreformintheearly1990s,thelivestocksectorwastoolargeandwassustainedprimarilybylargesubsidiestoproducersandconsumers.Withtheintroductionofreforms,thelivestocksector
andconsumers.Withtheintroductionofreforms,thelivestocksectorbegantoshrinkaslivestockinventoriesandlivestockproductivitydeclined.Outputoflivestockproductsdeclined41percentformeat,30percentformilkand29percentforeggsfrom1990to1995(Table2.3).
Table2.3:ProductionofLivestockProductsinRussia
(milliontons)LivestockProducts 1990 1991 1992 1993 1994 1995 %Changeover1990Meata 10.11 9.38 8.26 7.51 6.86 5.93 -41Milk 55.72 51.89 47.24 46.90 42.80 39.31 -30Eggs 47.47 46.88 42.90 40.35 37.48 33.71 -29
aCarcassweightforbeef,pork,poultryetc.,includingfat.
Source:GoskomstatofRussia,Mudahar(1996a)andUSDA(1995a).
Page24
Livestockinventoriesdeclined16percentfordairycowsand54percentforsheepandgoatsfrom1990to1996(Table2.4).Livestockproductivityalsodeclinedsignificantlyoverthesameperiod,asindicatedbyyieldsperanimal,weightgain,feedconversionefficiency,andmortalityrate(Table2.5).Mostofthechangesreflectthecombinedimpactofpriceliberalization,subsidyreduction,poormanagement,andinefficienciesininputandoutputproduction.
Table2.4:LivestockInventoriesinRussia
(millionheadonJanuary1)Livestock 1990 1991 1992 1993 1994 1995 1996 %Changeover1990Cattle(includecows) 58.8 57.0 54.8 52.2 48.9 43.3 39.7 -33Cows 20.8 20.6 20.6 20.2 19.8 18.4 17.4 -16Hogs 40.0 38.3 35.8 31.5 28.6 24.9 22.7 -43Sheep&goats 61.3 58.2 55.3 51.4 43.7 34.5 28.3 -54Poultry 654.0660.0652.2568.2565.0507.8439.0-33
Source:GoskomstatofRussia,Mudahar(1996a)andUSDA(1995a).
Table2.5:LivestockProductivityandFeedConversionIndicatorsinRussiaIndicator Unit 1990 1994%Changeover1990Eggsperlayer Number 236 214 -9Milkpercow kg 2731 2195 -20Annualweightgainpercattlea kg 121 98 -19Annualweightgainperswinea kg 118 101 -14FeedusepercenterofweightgainCattlea kg 13500 18.9 40Swinea kg 8300 12.5 51Feeduseper100kgofmilkproduced kg 1400 1.7 21Mortalityrate(%ofherd)Cattlea % 3.0 6.1 103Swinea % 6.9 15.1 119
Swinea % 6.9 15.1 119Sheep/goata % 7.9 13.7 73
aStatesectoronly.
Source:AdaptedfromGoskomstatofRussiaandUSDA(1995a).
FallingAgriculturalInvestment
Aspartofthemacroeconomicstabilizationprogram,budgetallocationstotheagriculturalsectordeclinedsubstantiallyafter1991fallingfrom37.4billionrublesin1991to3.9billionrublesin1994(Table2.6).Thebudgetallocationswereusedprimarilytofinancelargesubsidies,currentexpenditure
Page25
(suchassalaries,benefits,supplies,andotheroperationsandmaintenanceexpenditures),andcapitalinvestments.Whilethepreviouslevelsofbudgetallocationwouldbedifficulttojustify,agriculturalexpendituresince1991hasdeclinedsodrasticallythatitislikelytohurtprospectsforimprovingagriculturalefficiencyandproductivityandthelong-termpotentialforagriculturalproductioningeneral.
Table2.6:PublicSectorAgriculturalExpenditureinRussia(billion1991rubles)TypeofExpenditure 1985 1990 1991 1992 1993 1994
Totalagriculturalexpenditure 28.9 39.5 37.4 13.0 8.1 3.9Livestockbuildings 4.2 3.1 3.0 0.8 0.5 0.3Landamelioration 3.9 2.6 1.5 0.6 0.4 0.2Electrification 0.7 0.9 0.7 0.7 0.5 0.2Plantations 0.3 0.2 0.2 0.07 0.05 0.06Tractors,machinery,andequipment 11.6 15.3 14.3 2.8 2.2 0.9
Source:GoskomstatofRussia.Sel'skoeKhoziaistvoRossii1995.
PersistentSectoralInefficiency
Byanystandardofefficiency,Russianagriculturefallsshort.Themainreasonsforlowproductivityarethefollowing:
·limitedentrepreneurialandeconomicskillsofagriculturalworkersandmanagerssuitabletoamarketeconomy
·collectiveownershipandpoorlydefinedpropertyrightsthatprovideweakincentivestomanagersandworkers
·lackofcompetitionintheinputandprocessingindustries
·outdatedagriculturalproductionandprocessingtechnology
·pricedistortionscausedbygovernmentinterventionparticularlysubsidiesonkeyinputsorincompletepriceliberalization
·inadequateruralinfrastructureforstorageandtransportofcommoditiesfromfarmtomarket
·lackofeconomic,market,andlegalinformation.
2.14.ThecumulativeeffectoftheseandothershortcomingshasbeenpersistentinefficiencyinRussianagriculture.Figure2.5illustratessomeoftheproblemsforwheat,thedominantgraininRussia,usingwheatyieldsfortheformerSovietUnionfor1960-95asaproxy.Russianwheatyieldshaveshownsignificantvariability,withaslowupwardtrendof0.02tonsperhectareperyear.Bycomparison,Canadahasshownapproximatelythesamerateofyieldincrease,butthegapbetweenthem
Page26
Figure2.5:WheatYieldsfortheFormerSovietUnionandCanada(1960-96)
Page27
hasbeenaround0.4metrictonsperhectareformuchoftheperiod,thoughithasbeenwideningsincethebreak-upoftheSovietUnion.Thegappartiallyreflectsdifferencesinclimateandsoils,butmostlyitisduetodifferencesintechnologyandeconomicincentives.
RussianlivestockproductivityalsolagsbehindthatinEuropeandNorthAmerica.Outputlevelsinmilkandswineenterprisesare60percentthoseintheWest.FeedefficiencyincattleandswineproductionisjusthalfthatinEurope.GiventhehistoricalimportanceofmeatintheRussiandietandthedecliningoutputlevelsinfeedgrainsandoilseeds,lowfeedefficienciesinlivestockproductionareparticularlyworrisome.
TheseproductivitygapsinRussianagriculturehavepersistedforalongtime.ButtheproductivepotentialofRussianagricultureshouldnotbeoverlookedsimplybecauseofthesector'spastperformance.Withimprovedtechnologyandstrongereconomicincentives,agriculturaloutputinRussiacanbesignificantlyincreased.However,thiswillrequirenotonlyimprovedagriculturalincentivesandpoliciesbutalsoimprovedaccesstomoreefficientagriculturaltechnology.Thustheneedforthegenerationanddisseminationofappropriateagriculturaltechnologyisgreat.
ImplicationsforAgriculturalResearch
ReformofRussia'sagriculturalknowledgesystemmustbeplannedandimplementedagainstthisbackdropofmassivestructuralchange,decliningoutput,andlaggingproductivity.Theurgencyofthesectoralreformandefficiencyproblemswilllikelyswampattemptstofundorreformagriculturalresearchandeducation.Russianagriculture'sreputationoflowproductivityandinefficiencyisnotlikelytoattractinvestors(localorforeign)inresearchpublicorprivateatthisstage.However,thesearetheconditionsunderwhichthecaseforreform
andimprovedagriculturalresearchmustbemadetoprivateinvestors,internationalfinancialinstitutions,bilateraldonors,andnationalpolicymakers.
Page28
ChapterIIIStatusoftheAgriculturalKnowledgeSystem
StructureandOrganization
Althoughthisreportfocusesprimarilyonagriculturalresearch,itisimportanttoplacethisactivitywithintheoverallstructureofRussia'sagriculturalknowledgesystem.Theagriculturalknowledgesystemisdefinedbroadlytoincludeagriculturaleducation,training,retraining,extension,andtechnologytransferaswellasagriculturalresearch.Bothpublicandprivatesectorinstitutionsplayaroleinstrengtheningtheagriculturalknowledgesystem.
Russia'sagriculturalknowledgesystemwasdesignedspecificallytoserveagricultureunderthesystemofcentralplanning(OECD1994).Itstillretainsmostofitsoriginalcharacteristicsandobjectives:
·generateanadequatesupplyofsemi-skilledandskilledagriculturalworkersforspecificindustriesorenterprises
·generateanadequatesupplyofagriculturaltechniciansandmanagersforagriculturalenterprises
·providetheinstitutionalcapacitytoretrainandimprovetheprofessionalskillsofworkers,technicians,andmanagers
·developandadaptagriculturalproductionandutilizationtechnologiesthroughresearch
·transferthesetechnologiesdirectlytoproductionorprocessingenterprises
·providepolicyanalysisandinformationtocentralplannersandgovernmentofficials
·produceanadequatesupplyofagriculturalscientistsandeducators.
ManagementandoperationalresponsibilityfortheRussianagriculturalknowledgesystemissharedbyatleastthreefederalagenciestheMinistriesofEducation,AgricultureandFood,andScienceandTechnologyPolicy(Figure3.1).TheprimaryinstitutionalbuildingblocksforRussia'sagriculturalknowledgesystemareagriculturalvocationaltrainingschools,technikumsoragriculturalcolleges,agriculturalhighereducationsinstitutions,scientificresearchinstitutes,andretraininginstitutes.However,theconsiderableresearchactivitiesoftheRussianAcademyofAgriculturalSciencesinstitutesfalloutsidethejurisdictionofhighereducation.TheeducationalpathwaysthatcanbefollowedbyqualifiedstudentsaresummarizedinFigure3.2.
Agriculturalvocationaltrainingschools.Studentstypicallyentertheagriculturalvocationaltrainingschoolsingrade8or9andcompletethetrainingprogramwithacertificateasaskilledagriculturalworkerinoneofthe200to300professions.Theschoolsarefinancedattheoblastandrayonlevel.In1992,therewerenearly2200agriculturalvocationalschoolsinRussia.However,enrollment,aswellasthenumberofofferedprofessions,havefallensharplysince1992.
Page29
Figure3.1:AgriculturalKnowledgeSysteminRussia
Source:BasedonOECD(1994).
Page30
Figure3.2.AgriculturalEducationSysteminRussia
Source:OECD(1994).
Page31
Tekhnikumsoragriculturalcolleges.Thereareapproximately300tekhnikumsoragriculturalcollegesprovidingsecondaryvocationaleducation.Graduatesoftheseprogramsmayenteracareerasanagriculturaltechnicianorpursuefurthereducation.Since1992,thetekhnikumshaveintroducednewcurriculathatfocusonretrainingrecentgraduatesinmanagementandeconomics.Curriculumandfundingforthetekhnikumsarecontrolledlargelyatthefederallevel.
Agriculturalhighereducationalinstitutions.TheagriculturalhighereducationinstitutionsresembleagriculturalcollegesoruniversitiesinEuropeandtheUnitedStates.Studentsenteraftercompletinggeneraleducationoraftergraduatingfromatekhnikumoragriculturalcollege.Studentstraditionallyreceivedadvanced,butverynarrowlyfocusedtrainingrelatedtoaspecificoccupation,suchasacropproductionmanagerorfoodprocessingspecialist.Thereareapproximately60agriculturalhighereducationinstitutionsinRussia,consistingof8universities,2nationalacademies,and53institutes.AcompletelistofagriculturalinstitutesofhighereducationinRussiaisprovidedinAnnexA.Althoughtheinstitutionstendtoemphasizeundergraduateeducation,theymayalsoofferpostgraduatedegrees.Manyoftheirfacultymembersconductagriculturalresearchaswell.
Scientificresearchinstitutes.Agriculturalresearchisconductedinover300researchinstitutesacrossthecountry.MostoftheresearchinstitutesfallunderthedirectionoftheRussianAcademyofAgriculturalSciences(RAAS).However,approximately80aresupervisedbytheMinistryofAgricultureandFood.ThisgroupofresearchinstitutestendstobemorenarrowlyfocusedthanthoseunderdirectionoftheRAAS.Inaddition,thereareafewscientificresearchinstitutesundertheRussianAcademyofSciences(RAS)thataddressruraloragriculturalproblems.Severalofthescientificresearchinstitutesalsoconferadvanceddegrees.Mostscientificresearchinstituteshaverudimentarytechnologytransferandadvisory
capabilities.AlistofthemainagriculturalresearchinstitutesinRussiaisprovidedinAnnexB.
Retraininginstitutes.RetrainingorupgradingprofessionalskillshasbeenanimportantelementofRussia'sagriculturalknowledgesystem.In1992severalregionalretraininginstituteswereestablishedbytheMinistryofAgricultureandFoodbymergingthecontinuingeducationprogramsofseveralagriculturalacademies.Theretraininginstitutesoffershortcoursesinupgradingtechnicalagriculturalskillsandknowledge.However,theyhavealsointroducedtrainingprogramsinfarmmanagement,accounting,agriculturallaw,andotheremergingfields.Theretraininginstitutestypicallyhaveonlyasmallresidentstaff.Theyfunction,toalargeextentaseducationalbrokersorganizingshortcourses,recruitingstudents,andhiringinstructorsfromacademies,tekhnikums,ortheprivatesector.
MeetingDemandforHigherEducation
Undercentralplanning,educational,training,andprofessionalimprovementneeds,werefairlypredictableandundercompletecontrolofthestate.Theeducationsystemwasdesignedtotrainpeopletofunctionunderverynarrowjobdescriptions,andemploymentwasguaranteedforlife.ThisorientationdifferedmarkedlyfromthatofEuropeanandNorthAmericaninstitutions,whichareorientedtowardjobmobilityandmultiplecareerpaths.
TheMOAFhasinitiatedaseriesofstudiesundertheauspicesoftheScientificResearchInstituteofSocialProblemsintheAgro-IndustrialComplexondemandforagriculturalmanagersandspecialistswithahighereducation.Thepreliminaryresultsindicatethatdemandwillslowlydeclinefrom37,000specialistsin1995to34,000by2005.Theexpectedsupplyis25,000-30,000graduateseachyear.Thisestimatedsupplyreflectsadropoutrateof25-30percentandthefactthatonly30percentofthestudentsgraduatingwithanagriculturaldegreeactuallyenteranagriculturalprofession.Preliminaryreportsby
Page32
theMinistryindicatethatinearly1996over130,000agriculturalgraduatesunderage30wereunemployed.However,theMinistryconcludedthathighereducationforagriculturewouldstillneedtooperatenearcurrentlevels.
AgriculturalResearchManagement
IntheformerSovietUnion,agriculturalresearchmanagementwastheresponsibilityoftheV.I.LeninAll-UnionAcademyofAgriculturalSciences(VASKhNIL).Thishugescientificcomplex,establishedin1929,playedtheroleofresearchinstitute,fundingagency,professionalsociety,andextensionservice.TheRussianAcademyofAgriculturalSciences(RAAS)originatedfromVASKhNILandwasformallyestablishedin1992.
RAASmanagessome235cropandlivestockresearchinstitutesandexperimentstations.Ofits28,000researchers,700holdtheDoctorofsciencedegreesand8,700candidatesofsciencedegrees.Morethan400state-runexperimentalfarmsandnearly100designoffices,seedplants,andagroprocessingfactoriesareundertheRAASumbrella.Approximately250,000peopleareemployedinlaboratories,fields,farms,andshopsthatRAAScontrols.About1.7millionhectaresofarableland(andtotallandholdingsof7.6millionhectares)arepartofitsexperimentalfarmnetwork.RAASlandholdingsannuallyproducelargequantitiesofseedsforcereals,vegetables,andpotatoes;fruitcuttings;andpedigreeyoungstock.
ThemaintaskoftheRAASresearchersistoprovidescientificsupportforRussia'sagroindustrialcomplex.However,someofitsinstitutesarealsoresponsibleforstafftraininganddoctoralthesispreparation,supportedbyresearchwork.Thisinvolvessome600researcherseachyear.Fiftyspecializedboardsareresponsibleforconferringdoctoralandcandidatedegrees.SomeRAASresearchersareinvolvedasteachersinthehighereducational,training,andqualificationimprovementsystem,andthe
educational,training,andqualificationimprovementsystem,andtheleadingresearchersdeliverlecturesatuniversities,academies,andotherinstitutes.AnestimateofRAASinstitutes,staffingandfundingallocationsfor1991/92ispresentedinTable3.1.
Table3.1:RAASResearchInstitutes,Staffing,andBudgetsin1991/92TypeofResearch
InstitutesNumberofResearch
InstitutesResearchStaffa
BudgetProportions
Livestock 54 10,800 30Crops 181 19,200 70Total 235 30,000c 100
aMostoftheresearchstaffarewelltrainedandholdPh.D.,doctorofscience,candidateofscience,orM.Sc.degrees.bBudgetsmaynothavebeenreceivedinfullbyinstitutions.cEstimatedtohavebeenreducedby40percentin1993.
Sources:OECD(1994),MOAF,andWorldBankestimates.
AcomparisonofagriculturalresearchpersonnelinRussia,UnitedStates,andtheFederalRepublicofGermanyshowsthatin1991,therewere0.46researchersforevery$1millioninagriculturalGDPinRussia(almostthreetimes),0.14researchersintheUnitedStatesand0.16researchersintheFederalRepublicofGermany(Table3.2).Russiahadamuchlowershareofresearchersworkingintheuniversitysystem,however,andtheuniversityfacultydevotedrelativelylesstimetoresearchinstitutes.ResearchintheprivatesectorwasalmostnonexistentinRussiabutitisbeginningtoemerge.
Table3.2:Full-timeEquivalentAgriculturalResearchPersonnel,1991Category Russia
(1991)USA(1991)
FederalRepublicofGermany(1989)
Researchinstitutes 23144 3687 13000Universities ? 7525 2410Privateindustry 0 14188 404Total 23144 25400 4114
Researchers/100,000haofarableland 175 136 57Researchers/millionUS$AgGDP 0.46 0.14 0.16
Source:PrayandAnderson(1997).
ResearchmanagementunderRAAShaschangedrelativelylittlesincethedaysofVASKhNIL.Intheory,researchersidentifypotentialprojectsandsubmitthemtoRAASforapprovalandfunding,alongwithaneconomicjustificationfortheresearchhowtheprojectisexpectedtoimproveRussianagriculture.Inpractice,however,researchmanagementtendstobedrivenfromthecenter,sinceresearchprioritiesandfundingarecontrolledthere.
ResearchmanagementunderRAASischaotic.Theoriginalstructureforresearchmanagementhasremainedinplace,butthefundinghasnot.AtypicalresearchinstituteunderVASKhNILwouldhavereceived80-95percentofitsbudgetdirectlyfromMoscow.Theremainderwouldhavecomefromproduct
budgetdirectlyfromMoscow.Theremainderwouldhavecomefromproductsales,fees,orresearchcontractswithproductionorprocessingindustries.Theseresearchcontractsservedbothasamechanismfortechnologytransferandasasourceofgraduatestudentresearchprojects.Overthepast2-3years,fundingsupportfromRAAShasfallensignificantlyoftento50-70percentoforiginallevels.Thereducedfundinglevelshavenotbeensufficienttocoverevenstaffsalaries.Operatingbudgetstoperformresearcharealmostnonexistent.TheRussianagriculturalresearchcommunityisfightingforitssurvival.
Thefundingcrisishastriggeredawiderangeofresponses.Someresearchershavequitforbetterpayingjobsintheprivatesector,frequentlyoutsidetheirfieldofexpertise,andsomehavetakenonpart-timejobsoutsidetheirowninstitutes.Othershavebeguntoteachpart-timeatagriculturalacademiesorretraininginstitutes.Someresearchinstituteshavemergedwithotherinstitutesorteachingacademies(Box3.1),andsomehaverefocusedtheirresearchprogramsontopicsoflocalinterest,withanaccompanyingshiftinfundingfromfederaltooblastsources(Box3.2).SomeresearchinstitutesareaggressivelyseekingresearchgrantsfromtheMOAForothersources,includingtheprivatesector.
Page34
Researchinstitutesinurbancentersfrequentlyrentbuildingandlaboratoryspacetotheprivatesector,whileresearchinstituteswithexperimentalfarmsareincreasingagriculturalproductionontheseplotsandsellingittohelpsupportresearchandstaffremuneration.
Box3.1:InstitutionalReformoftheAgriculturalKnowledgeSysteminOmskOblast
AgriculturewasexpandedinOmskOblastinwesternSiberiaduringthenewlandprogramsofthe1950sand1960s.Agricultureisanimportantindustryandhasalwaysbeengivenemphasisbytheoblastadministration.TheagriculturalknowledgesysteminOmskwastypicalofthatinmanyotheroblastsaresearchinstitute,twoagriculturalacademiesofhighereducationreportingtoMOAF,andaretraininginstitute.InApril1994,threeoftheeducationalinstitutestookanunusualsteptheymerged.OmskStateAgrarianUniversitywasformedbycombiningOmskAgriculturalInstituteofHigherEducation,OmskInstituteofVeterinaryMedicine,andOmskInstituteforRetrainingAgricultureSpecialists.Themergerwasundertaken,inpart,toaddressthefinancialproblemsexperiencedbyallthreeinstitutions.Butitwasnotanewidea.Instituteadministratorsandoblastofficialshadbeendiscussingamergerforthepast10years.Themergerhasledtoincreasedefficienciesinteachingcommonsubjects.Andthemergedinstitutionshavebeenabletointroducenewsubjects,suchasmarketeconomics.Themergerhasnotbeeneffortless,however,andthethreeinstitutionsstilltendtorefertothemselvesasseparateentitiesmuchlikecollegeswithinauniversity.Butthemergerwasfacilitatedbecauseallthreeinstitutionshad,historically,reportedtoMOAF.Thishasbeenastepintherightdirectionsinceithasreducedoverlapoffunctions,ledtobetterutilizationofresources,andimprovedcostconsciousness.TheSiberianResearchInstituteforAgriculture(SRIA)isthemajorresearchinstitutioninOmskOblast.ItreportstoMOAFandhasnotyetformallymergedwiththehighereducationalinstitution.However,over50percentofSRIA'sresearchersnowteachatOmskStateAgrarian
University.SRIAisalsohavingtofacefundamentalchoicesaboutitsresearchprogram.Inthepast,someresearchfocusedondesigningirrigationsystemsforKazakhstan.Thisneednolongerexits.Theinstituteisattemptingtoturnitsattentiontoissuesoflocalinteresthorticulture,forexample.OmskStateAgrarianUniversityappearstobewellonitswaytocombiningtheresearch,teaching,andextensionfunctionsfoundatlandgrantuniversitiesintheUnitedStates.
Thisprocessofaccommodationtoreducedfundinglevelshasnotresultedinstrongresearchprogramsdesignedtomeetfutureagriculturalneeds.Rather,agriculturalresearchandresearchmanagementinRussiaareindisarrayandatrisk.Theoldsystemofprioritysetting,funding,andoversightisnotappropriateforRussia'stransformationtoamarketeconomy.Themoraleoftheagriculturalsciencecommunityisextremelylow.Thecurrentstateofcrisismaychangeindividualattitudestowardagriculturalresearch,butitwillnotnecessarilyleadtoadesirableoutcome,intermsofbothresearchprioritiesandresearchproductivity.
Page35
Box3.2:ShiftingFundingandShiftingPrioritiesTheScientificResearchInstituteofAgriculturefortheSoutheastRegion(SRIASE)istheVolgaregion'spremierwheatbreedinginstitute.Establishedin1909,SRIASEhasaverygoodreputationfordevelopinghigh-qualitycultivarsofdurum,hardspring,andhardwinterwheats.Thesecultivarsareseededonmillionsofhectaresthroughoutthisregion.In1989,81percentofSRIASE'sbudgetcamefromthefederalgovernmentthroughVASKhNIL.Theremaining19percentcamefromitsownfundsearnedthroughthesaleofseedandfarmproduction.In1993,SRIASEbeganreceivingsupportfromtheoblastgovernmentabout16percentofitsbudget.Ayearlater,theoblastwasprovidingnearly40percentofthebudget,almostequaltothefederalcomponent.By1995,theoblastcontributionwasapproximately50percentofthetotalbudget.Asaconsequenceoftheoblast'scommitmenttoresearch,SRIASEhasbeensparedsomeoftheseverefinancialdifficultiesexperiencedbyotheragriculturalresearchinstitutes.Howdidthischangeoccur?ItwastheresultofaneffectiveworkingrelationshipbetweenSRIASE'sadministrationandtheoblastgovernment.However,SRIASEhasalsoredirecteditsresearchprogramtofocusmoreontheneedsofSaratovOblast.Ithasbecomemoreappliedandproblem-oriented.Researchontillagesystemsanderosioncontrolhasincreased.Andlinkageswithextensionandhighereducationinstitutionshavebeensignificantlystrengthened.Inaddition,SRIASEhasdivesteditselfofexperimentalfarmsinneighboringoblasts.ThechangesinitiatedbySRIASEareveryconsistentwithchangesoccurringinnationalagriculturalresearchsystemsthroughouttheworldincreasinglocalfundingandaccountabilityandsolvingrealproblemsfacedbycommercialagriculture.
Page36
ChapterIVChallengesFacingtheAgriculturalResearchSystem
AttributesofaModernAgriculturalResearchSystem
ThefundamentalchallengefacingRussia'sagriculturalresearchsystemistotransformitselffromasystemdesignedtoworkundercentralplanningtoonethatwouldworkundermarketconditionsanextremelydifficultprocess.ButitwouldbeimprudentforRussiatochooseanyotherpath.Russia'sinvestmentinitsentireagriculturalknowledgesystemissignificant.Thereisgreatpotentialforinstitutionalreformifhumanandfinancialobstaclescanbeovercome.However,merelypreservingandstrengtheningtheexistingsystemisnotanoption.
Itwouldalsonotbeprudenttoselect,forexample,anationalagriculturalresearchsysteminNorthAmericaorEuropeandsimplypatternRussia'ssystemafterit.Russia'sagriculturalresearchsystemmustreflectitsuniquehistory,resourcebase,andneeds.Inaddition,thenationalagriculturalresearchsystemsinmostcountriesarethemselvesundergoingscrutinyandreform,makingthemamovingtargetratherthanastaticmodeltobereplicated.ItisextremelyimportantforRussianstounderstandthedirectionsofchangeaswellasthelikelycharacteristicsoftransformedagriculturalresearchsystemsinotherdevelopedcountries.Basedoninternationalexperience,ByerleeandAlex(1998)provideasummaryof''goodpractices"forresearchpolicyandresearchmanagementineffortsforstrengtheningnationalagriculturalresearchsystems.
Someofthemajorchangesoccurringinnationalagriculturalresearchsystemsaroundtheworldincludethefollowing:
·increasedemphasisoncosteffectivenessofagriculturalresearch,oftenrequiringreductionsinstaffandstreamliningofbureaucracies;
·resourcecommitmentsbasedonanticipatedappliedresearchoutcomes;
·increasedinvolvementbyusersofresearchindecision-making,includingresourceallocation,privatesectorparticipation,andreductionofgovernment'srole;
·moreaccesstoresearchresourcesbythoselikelytobenefitfromitsoutcomes,includingfarmers,processingfirms,andseedproducers;
·consolidationofagriculturalresearchactivitiesinselected,well-equippedregionalcenterswithappropriatefinancialsupport,physicalequipment,andhumanresourcestolinkresearcherswithmajorstakeholders,educators,producers,processors,marketers,andconsumers;
·responsibilityandsubstantialautonomyformanagementofresearchinmaincenters,withpolicyandfundingbodiesprovidingonlyoverallguidelinesonprogramsandoutcomes;
Page37
·fundingofspecialresearchinstitutesfornational-interestprojectsandmajornationalindustries,withfundsincreasinglysuppliedfromindustryand,inmanycases,managedcompetitively;
·shiftfrombasictoappliedresearchwhileensuringpublic-goodlinkagebetweenbasicandappliedresearch,withsuchresearchactivitiessupportedbygovernment.
Porter(1990)makessomehelpfulobservationsaboutthecharacteristicsofeffectivescienceandtechnologyandthedevelopmentofnationalcompetitiveadvantage,basedonindustrialcountryexperience:
·Researchisconsistentwiththenation'scompetitiveadvantageitadvancesclustersofindustries.Tosomedegree,researchseekstoretainandexpandhigh-performingindustriesalreadyoperatinginthecountry.
·Researchislocatedprimarilyinresearchuniversitiesratherthangovernmentlaboratoriesorresearchinstitutes.Universityresearch,becauseofinstitutionalopennessandindustrycontact,generallyoutperformsspecializedgovernmentresearchinstitutes.
·Researchemphasisisgiventotechnologiesthathavecommercialrelevance.
·Stronglinksexistbetweenindustryandtheresearchcommunity.Theselinksmaytaketheformofspecializedresearchinstitutionsdevotedtospecificindustriesorclusters,researchcontracts,orformaltechnologytransfermechanisms.
·PrivateR&Disencouragedthroughdirectincentivesorintellectualpropertyinstitutions.
·Sciencepolicyencouragesinnovationratherthanprovidingextensiveprotectionofpropertyrights.Thissuggestsabalance
betweenprotectionandinnovationincentives.
ThesecommondirectionsofchangealsoimplyasetofcommoncharacteristicsforRussia'sagriculturalresearchsystem.Inthefuture,Russia'sagriculturalresearchsystemwilllikelybemore:
·decentralized,withincreasedlocalautonomy;
·accountabletokeystakeholders;
·demanddrivenandresponsivetoclients;
·efficient(rightsized,flexible,entrepreneurial,andcoordinatedwithotherinstitutions);
·linkedwiththeglobalresearchcommunity;
·sustainable,initsabilitytoproducenewscientists,maintainanappropriatefoundationinbasicsciences,generateacceptableratesofreturn,andacquireadequatefundinglevels;
·coordinatedandcomplementarywithprivateresearchentities;and
·integratedwithmultipletechnologytransferandeducationalinterfaces,bothpublicandprivate.
ThisdescriptionhighlightstheexpectedcharacteristicsofRussia'sagriculturalresearchsystem.Nothing,however,hasbeensaidabouthowtheRussianagriculturalresearchsystemachievesthesegoals.Theprocessoftransformationisfraughtwithuncertainty.Themacroeconomicandpoliticalenvironment,whichiswelloutsidethecontrolofRussia'sagriculturalresearchmanagers,will
Page38
significantlyinfluencethesuccessofmanyreforms.Moreimportant,fewmodelsofinstitutionalreformthatarerelevanttoRussia'sconditionsexist.Transformationstrategiesmust,therefore,beundertakeninsuchawaythatinstitutionallearningcanoccur.Thiswilltaketimeandmoneytoachieve.
HowDoesRussia'sResearchSystemMeasureUp?
Inmanycountries,publicagriculturalresearchsystemsarebecomingmoredemand-driven,efficient,andcloselycoordinatedwiththeprivatesector.Ifthesecharacteristicscanserveasabenchmark,itisclearthatRussiahasalongwaytogo.Transformationstrategiesneedtobebasedonaclearanalysisofthecurrentsystem'sstrengthsandweaknessesandtheopportunitiesandthreatsitfacesnowandinthefuture.
StrengthsandOpportunities
ThedifficultchallengesfacedbyRussia'sagriculturalresearchsystemshouldnotobscureitsmanystrengths,assets,andopportunities:
·Russia'sagriculturalresearchsystemisextensiveandhascomparativelyhighlevelofinvestmentinhumanandphysicalcapital.
·Russia'sagriculturalresearchsystemisdistributedthroughoutitsmajoragroclimaticzones.Itwasdesignedtobedecentralizedandclosetostakeholders.
·Thebasictrainingofitstechnicalagriculturalscientistsisgood.Fundamentalskillssuchasmathematics,statistics,chemistry,andphysicsarewelldeveloped.
·Agriculturalresearchersinregionalinstitutionshavealongtraditionofenteringintojointprojectsorconsultancieswithagriculturalenterprises.Thiscanformafoundationformoreeffectiveproblem
recognitionandtechnologytransfer.
·Despitelowsalaries,dwindlingoperatingfunds,andisolationfromtheworldscientificcommunity,manydedicatedRussianagriculturalscientistscontinuetoworktheirtradeasbesttheycan.
·Russia'sstockofagriculturalresearchproductshasnotbeenwidelysharedwiththerestoftheworld.Thepotentialforcollaborationandmutualbenefitinresearchwithotherscientists,publicorprivate,aroundtheworldhasscarcelybeenexplored.Thisstockincludesknowledge,expertise,newtechnologiesaswellasdata.
·Therearemanyreform-mindedinstitutionsandindividualsinRussia'sagriculturalresearchsystem,andmanypositiveexamplesofinstitutionalinnovationandreform.Manyofthereforms,suchasincreasingcontractresearch,aredrivenbyfinancialnecessity.Others,suchasredirectingresearchawayfromminorcropsandirrigationtoworkonimprovedtillagesystemsanderosioncontrolpractices,arebeingdrivenbyscientists'responsetoclientdemands.
·Manyagriculturalresearchersandinstitutionsareseekingcollaborativearrangementswithforeignuniversities,governmentagencies,andprivatefirms.Thesearenewactivitiesfor
Page39
manyRussianscientists.Despitethenoveltyoftheserelationships,however,theentrepreneurialdrivetocreateopportunitiesinresearchisclearlyevident.
·ManyRussianagriculturalresearchinstitutescontrolextensivelandholdings.Theseassetsmayformthebasisforreal"landgrant"institutions.Well-managedfarmscanprovideneededcashflowstosupportresearchactivities.Furthermore,itmaybepossibletosellexcesslandandreinvesttheproceedsinneededresearchfacilitiesorasanendowmentforfinancingresearch.
·Sincetheearly1990s,thefederalgovernmenthasdevolvedmanyfinancialdecisionstoregionalgovernments.Theoblastsnowhaveauthoritytotaxandspend,animportantstepformovingagriculturalresearchclosertostakeholders.
WeaknessesandThreats
ThefundamentalweaknessoftheRussia'sagriculturalresearchsystemisthatitcannotbefinanciallyorpoliticallysupportedandsustainedasitiscurrentlyconfigured.Manyofitsweaknessesarelegaciesofcentralplanningthatweakenthevitalityoftheagriculturalresearchsystem:
·Centralizedmanagementisstillthenorm.ResearchmanagersandscientistsarelargelyaccountableandresponsivetothecentertoMOAFandRAASratherthantoendusers.Onlytotheextentthattopadministratorscorrectlyanticipateenduserneedscanthecurrentsystembeviewedasdemanddriven.
·TheorganizationofRussia'sagriculturalresearchsystemisextremelycomplex.Scientificcouncils,boards,andcommitteesabound.Theeffectivenessofthissysteminestablishingappropriatepriorities,incentives,andoversightisquestionable.
·Thesystemappearstohaveagreatdealofoverlapandduplicationofresponsibilitiesandalackofcoordinationamongresearchinstitutesaswellasinstitutionsofhighereducationwithresearchprograms.Duplicationisdifficulttopinpointinanynationalagriculturalresearchsystem,butthesheersize,isolation,andlackoflocalaccountabilityinRussiawouldsuggestthatduplicatedeffortislikely.
·Researchhasfocusedonincreasingprimaryagriculturalproduction.Researchobjectivestendedtobequota-driven,withlittleregardforeconomicefficiency,productquality,environmentalconsequences,orthesafetyofagriculturalworkers.Thisorientationisstillevidentthroughoutthesystem.
·Little,ifany,researchcapabilityexistsinagriculturaleconomics,agribusinessmanagement,orrelatedsocialsciences.Thisfactremainsdespitethelargenumberofeconomistsworkinginseparateresearchinstitutesinmanyoblasts.Forideologicalreasons,therehadbeenlittlecontactbetweenRussianandwesternagriculturaleconomistsinthepast.Thetwogroupsprobablyshareaknowledgeofconstrainedoptimization.Beyondthat,however,thereappearslittleinthetrainingororientationofRussianeconomiststoallowthemtotackletheproblemsofmarket-basedagricultureorthenecessarytransition(Box4.1).
Page40
Box4.1:ClosingtheSkillGapinEconomicsEconomistsemployedinRussia'sagriculturaleconomicsresearchinstituteshavehadlimitedexposuretomodemmicroeconomictheory,thefoundationofagriculturaleconomics.Withoutmodernmicroeconomictheoryandeconometrics,aswellasahealthydoseofeconomicintuition,RussianeconomistscannotfunctionatthesameleveloftheirWesterncolleaguesbecausetheylackthescientificskillstoexamineproblemsincommoditymarketing,technologyassessment,industryperformanceandcompetition,finance,riskmanagement,trade,andagriculturalpolicy.Russianeconomistsweretrainedinaccounting,labormanagement,mathematicalprogramming,statistics,law,andMarxisteconomictheory,valuablecomponentsofaneconomist'stoolkitbutnotsufficient.
Russianeconomistsalsohavelimitedknowledgeofmacroeconomics,itslinkwiththeagriculturalsector,intersectoraleconomiclinkages,andtheimpactofmacroeconomicstabilityondecision-makingandprofitabilityatthefarmandenterpriselevel.Knowledgeofmoderntheoryofeconomicgrowthandinternationaltradeisessentialfordesigningstrategiesforagriculturaldevelopment,especiallyinthecontextoftransitiontomarketeconomy.Theseskillgapscanonlybeclosedwithin-depthtraining,ampleaccesstoWesterneconomicliterature,andupgradingofcomputersandappropriatesoftware.
·Agriculturalscientistshavehadalmostnoexposuretoconceptsinagriculturaleconomicsorfarmmanagement.Limitedeconomicliteracymakesitdifficultforthemtounderstandincentivesforfarmerstoadoptnewtechnologies.Consequently,thedesignattributesofnewproductiontechnologiesdonotreflecttherealitiesofdecentralized,profit-orientedfarmmanagement.
·Researchcapacityinutilization,foodscience,storage,transportation,logistics,andmarketingisrudimentaryatbest.Itisfoundmainlyinspecializedinstitutes,withlittlecontactwith
agriculturalscientistsorendusers.
·Theintegrationofproductionresearchwithenvironmentaldisciplinesisextremelylimited.Tosomedegree,thisreflectsthelimitedscientificdevelopmentofagroecologyinRussia.However,someenvironmentallyrelevantresearchcapacitydoesexistinsoilconservationandlandreclamation,forexample.Againthevertical,discipline-basedstructureofRussia'sagriculturalresearchsystemlimitsopportunitiesformultidisciplinaryresearch.Thisworkingenvironmentisessentialifintegratedproductionsystemsaretobedevelopedandsuccessfullytransferred.
·LawsgoverningintellectualpropertyrightsarebeingdevelopedinRussia,butevenwithestablishedlawenforcementcapacity,theselawswillbeextremelydifficulttoenforce.Asaconsequence,publiclyfundedintellectualpropertyoftenintheformofcropvarietiesoranimalbioticscanwindupinprivateconcernswithoutpaymentofroyaltiestotheinstitutionsthatdevelopedit.Alongsimilarlines,thelackofstrongenforceableintellectualpropertylawsinhibitsthegrowthofprivatelyfundedresearchandtechnologytransfer.
·CentralplanninghasdeterminedthelocationandstructureofRussianagriculturalenterprises.ThesedecisionshaveinturninfluencedthestructureandorientationofagriculturalresearchinRussia.Priceliberalizationandothereconomicreformswillchangethescope,scale,andlocationofRussianagriculturetosomelargelyunknownextent.The
Page41
currentconfigurationofRussia'sagriculturalresearchsystemdoesnotnecessarilyreflecttheemergingchangesinagriculture.
WhyHastheSystemBeenSoUnproductive?
Theproductivityofapublicagriculturalresearchsystemisdeterminedbyseveralinterrelatedfactors.Amongthemoreimportantare:
·themanagementoftheresearchenterpriseitself,includingprioritysetting,problemfocus,scientisttraining,andmotivation;
·thelevelsofsupportandinvestmentforscientists;
·theefficacyofpubliceducationandtechnologytransfersystems;
·thecapacityofandincentivesfortheprivatesectortocommercializeresearchfindings;and
·theefficiencyandprofitabilityoftheagriculturalsector.
Russia'sagriculturalresearchsystemappearsunproductivebecausemanyoftheseconditionsarenotmet.SomeofthemajorfactorsthatinfluenceRussianresearchproductivityareevidentinacomparisonofyieldsforcontinuousorstubble-croppedhardspringwheatinnorthwesternNorthDakotaintheUnitedStatesandSaratovOblastinRussia.Thetworegionsareroughlycomparableintermsofagroclimaticcharacteristics(Table4.1)butquitedifferentintermsofwheatyields(Table4.2).Thoughitisnotpossibletoapportionyielddifferencesspecificallyamongtechnology,management,andtheregionalenvironment,itispossibletodrawsomeinferencesaftermakingafewassumptions.
Table4.1:MeteorologicalComparisonsinNorthDakota,US,andSaratov,RussiaAgroclimaticIndicator Williston,NorthDakota Saratov,Russia
Latitude(°N) 48.11 51.34Precipitation(mm)
May-August 215 177Total 365 465
MeanTemperatureMay-August 17.7 19.4December-February -11.2 -8.9WholeYear 4.8 6.1
DaysAbove0°C 177.2 206
Sources:Murganov,1992andHighPlainsClimateCenter,UniversityofNebraska.
Page42
Table4.2:SpringWheatYieldComparisonsbetweenSaratov,RussiaandNorthDakota,US
Yields(100kg/ha)Yields Saratova NorthDakota YieldGap
A.Farmers'average 7.5 22.6b 15.1(201%)
B.Experimentalfarms 11.8 - -
C.Experimentalplots 15.0 34.1c 19.1(127%)
YieldGaps(B-A) 4.3 - -
(57%)(C-B) 3.2 - -
(27%)(C-A) 7.5 11.5 -
(100%) (51%)
Note:YieldsinSaratovarereportedatthefarmoroblastlevelforlarge-scaleexperimentalfarmsoperatedbytheRussianwheatbreedinginstituteandatthevarietaltestplotlevel.YieldsinNorthDakotaarereportedatthefarmorregionallevelandfromreplicatedvarietaltrialsinthesameregion.a1981-1993average.b1991-1994average,continuouscrop.c1991-1994average,areasemi-dwarf,varietaltrials.Sources:ScientificResearchInstituteofAgricultureforSoutheastRegion,Saratov,RussiaandL.A.Spilde,DepartmentofPlantSciences,NorthDakotaStateUniversity,Fargo.
ForSaratov,theyieldgapbetweenfarmers'fieldsandtheexperimentalfarmsisduelargelytotechnology.Farmorganization,management,andeconomicincentivesaresimilarontheresearchinstitute'sfarmsandon
large-scalecollectivesfarms.Regionalproductiondifferencesarealsolikelytobesmall.Theyieldgapbetweentheexperimentalfarmsandtheexperimentalplotsreflectsdifferencesinmanagementandenvironmentduetosmallplotsizeandlocation.Iftheplotorenvironmentaleffectsincreaseyieldsby,say,10percent,thenmanagementdifferencesaccountforayieldgapofroughly1.7quintal/ha(=13.5-11.8;onequintal=100kg=onecentner).Thissuggeststhatmostoftheobservedgapofabout6quintal/ha(=13.5-7.5)betweenmaximumfeasibleyieldsandyieldsobtainedonfarmers'fieldsisduetotechnologytransferratherthanineffectivemanagementofexistingtechnologies.
Theyieldgapsbetweenfarmers'fieldsinSaratovandNorthDakotaarequitelarge,muchlargerthantheaggregateyieldestimatespresentedearlierinFigure2.5.Theyieldgapbetweenplotsisalsolargebutsmallerproportionallythanthegapbetweenfarmers'fields.Partoftheplotgapislikelyattributabletoinherentproductivityandweatherdifferencesbetweenthetworegions.Butgiventhesizeofthegap,itseemslikelythatthebestRussiantechnologylagsU.S.technologybyasignificantamount.
Page43
Finally,theyieldgapbetweenfarmers'fieldsandexperimentalplotsislargerinabsolutetermsinNorthDakotathaninSaratov,thoughproportionallyitisonlyhalfthatobservedinSaratov.
TheyieldgapanalysisisbasedonaveragesandthereforemaskstheproductivitytrendsexperiencedinRussia.AtimeseriesplottingofspringwheatyieldsinSaratovatthreelevelsofaggregationshowsaprecipitousdeclineinproductivity(Figure4.1).Thedeclinestemslargelyfromalackofinputs.Inadequatemachinerycapacityduetomechanicalfailureandalackofsparepartshavereducedthetimelinessofplantingandharvesting.Fertilizerandpesticideinputshavebeencutsharply,whiletheuseoflow-qualityseedhasreducedstandssignificantly.Asaconsequence,thehistoricalyieldgapsbetweenfarmers'fields,experimentalfarms,andexperimentalplotsinSaratovhavebeenclosing,butforthewrongreasons.
Thoughincompleteandadmittedlysomewhatconjectural,theforegoinganalysissuggeststhattheRussianresearchestablishmenthasnotbeenabletoeffectivelytransferexistingtechnologiestofarmersortokeeppacewithresearchadvancesinsimilaragroclimaticregionsinNorthAmerica.
Theagriculturaltechnologiesbeingadoptedtodayaretheresultofinvestmentsmadeyearsearlier.Lagsinresearchandtechnologyadoptioncandistributetheimpactoftheseinvestmentsoverasignificantlengthoftimeupto30yearsinsomecases(PardeyandCraig1989).Evenallowingfordifferencesinlevelsofscientificsupport,privateresearch,andscientisttraining,Russiaappearsoverthepast35yearsorsotohaveinvestedinagriculturalresearchatlevelscomparabletothoseinWest.Lackofresearchproductivitydoesnotappeartobesimplyamatterofinadequateresearchinputs.Thiswouldsuggestthatinadequatemotivationandcoordinationofresearchersandextensionpersonnelhavecontributedtolowresearch
productivity.
Finally,theagriculturalresearchestablishmentcannotbeproductiveiftheagriculturalindustryisinefficient.Thereisanextensiveliteraturedocumentingthenegativerelationshipbetweenagriculturalproductivityandpricedistortions(FulginitiandPerrin1993,1996;AlstonandPardey1996).ForRussia,thelessontobelearnedfromthisliteratureisthatagriculturalproductivitywillbedepressedifpricesignalsorstateordersfailtoprovidecorrectincentivestomotivateandcoordinatemanagersandworkers.This,inturn,reducesincentivestoadoptnewtechnologyandmanageitappropriately.Clearly,researchincentivesanddirectionswillbeadverselyaffectedbydistortedeconomicsignalsaswell.ThelackofproductivityofRussia'sagriculturalresearchestablishmentmaybeattributablelargelytotheinefficienciesinherentincentralplanning(WongandRuttan1990).
FundingandStaffingofAgriculturalResearchSystem
ItisdifficulttoaccuratelyestimatetotalexpenditureontheagriculturalresearchsysteminRussia,forseveralreasons.Thesystemislargeandcomplex,withvariedresponsibilitiesthatoftenextendbeyondtheagriculturalresearchfunctionandmanydifferentsourcesoffinancing(thoughtheprimarysourcehasbeenthefederalgovernment).Incompleteestimatesofactualexpenditurerelatedtoagriculturalresearchandproblemsofthetransitiontomarketeconomyfurthercomplicatetheprocess.Thebestandrelativelycompleteestimatesonactualagriculturalresearchexpenditureareavailablefor1994,andthefollowinganalysisisbasedontheseestimates.ThisinformationclearlydemonstratestheprecipitousdeclineinRussianagriculturalresearchfunding.
Page44
Figure4.1:SpringWheatYieldsintheSaratovOblast,Russia(1981-95)
Page45
FundingforAgriculturalResearch
Byinternationalstandards,totalR&Dexpenditureonagriculturalresearchwasverysmallin1994.Ithasdeclinedevenfurthersincethen.In1995,totalbudgetaryfundingforagriculturalresearchwasabout15percent(inrealterms)of1991levels.Clearly,fundingforagriculturalresearchinRussiaiswellbelowglobaltrends.In1994,totalnominalfundingforagriculturalRandDwas94.6billionrublesforinstitutesunderthedirectionoftheRussianAcademyofAgriculturalSciences(RAAS)and31.0billionrublesforthoseundertheMinistryofAgricultureandFood(MOAF),foratotalof126billionrubles,orabout0.25%ofagriculturalGDP.
FundingtheRussianAcademyofAgriculturalSciences.FederalfundingforRAASwas123billionrubles($55.6million)in1994(Table4.3).Plannedallocationsdroppedto$33millionin1995,bringingtheRAASbudgetexpenditureasashareofRussianAcademyofSciences'expenditurefrom26percentin1994to21percent.OfthetotalbudgetaryfinancingforRAAS,$42.8million(about75percent)wasusedforagriculturalR&D(Table4.4).TherequiredpaymentsbytheRAAStothebudget(suchastaxesandsocialsecuritypayments)wereestimatedtobe1.7timesmorethanthefundingforRAASfromthebudgetduring1994.Itisnotclearwhetherthesepaymentswereinfactmade,however.
Table4.3:FederalBudgetExpendituresontheRussianAcademyofSciencesandtheRussianAcademyofAgriculturalSciences,1994and1995
1994 1995(est)FederalFundingfor Billion
rublesMillionUS$
Billionrubles
MillionUS$
RussianAcademyofSciences(RAS)Basicfunding 438.9 198.4 687.0 150.5Additionalfinancinga 28.0 12.7 22.0 4.8
Total 466.9 211.1 709.0 155.3RussianAcademyofAgriculturalSciences(RAAS) 122.9 55.6 150.3 32.9
AshareofRASfunding(%) 26 21
aFundsearmarkedforitsUrals,SiberiaandFarEasterndivisions.
Source:TheRussianAcademyofAgriculturalSciences.
FundingresearchundertheMinistryofAgriculture.SelectedindictorsforagriculturalresearchinstitutesundertheMinistryofAgricultureandFoodarereportedfor1994/95inTable4.5.TotalexpenditureonagriculturalR&Dwas51billionrubles(about$23million).Thebulkofthebudgetaryallocationswasusedtomeetcurrentexpenditures,suchaspayroll,socialsecuritytaxes,supplies,andequipment.
Page46
Table4.4:FinancingoftheRussianAcademyofAgriculturalSciences,1994and1995
(Billionsofrubles;U.S.dollarsinparentheses)
Financing 1994(Actual)
1995(est.)
Totalfinancingfromthebudget 126.2(57.1) n.a.R&Dfinancing 94.6(42.8) 150.3(32.9)Experimentalproduction 29.6(13.4) n.a.Industry 2.0(0.9) n.a.Totalpaymentstothebudgetandsocialsecuritya 341.7(154.5) 255.4(115.7)
a.Itisnotclearwhetherreportedpaymentstothebudgetandsocialsecuritywereinfactmadeinfull.
Source:TheRussianAcademyofAgriculturalSciences.
FundingofResearchPrograms
ThreeprogramsreceivedalloftheagriculturalR&DexpenditureforinstitutionsundertheMinistryofAgricultureandFood:agriculturalsciences(86percent),naturalsciences(10percent),andengineeringsciences(4percent;Table4.6).Fromthetotalresourcesallocatedto''internal"R&D,53percentwasallocatedtoappliedresearch,35percenttodevelopmentalresearch,and12percenttofundamentalorbasicresearch.ThoughsimilarinformationwasnotavailableforresearchprogramssupportedbyRAAS,thebroadallocationsarelikelytobeofsimilarmagnitude.
Althoughagriculturalresearchhasbeenfinancedprimarilybythepublicsector,thereareindicationsoflimitedparticipationbytheprivatesector.Thereisalsosomeevidencethatmostresearchinstitutesarenowinvolvedinsomecommercialactivities(productionandsaleofseedsor
involvedinsomecommercialactivities(productionandsaleofseedsoragriculturaloutput)tomeetsomeofthecostsofresearchactivitiesandstaffsalaries.Clearly,agriculturalresearchisnotreceivingthepriorityitdeservesduringthisperiodoftransitionduetoseriousbudgetproblems.
QualificationsofAgriculturalResearchPersonnel
Overall,thetrainingandqualificationsofR&DstaffinRussiaareofreasonablyhighquality(Table4.7).About60percentofR&DpersonnelworkinginthefederalresearchinstitutesundertheMinistryofAgricultureandFoodhavedoctorofscience,candidateofscience,orcollegedegrees.ThequalityofpersonnelworkingintheRAASinstitutesissimilar.However,researchstaffgenerallylackstraininginsocialsciences,particularlyeconomicsandbusinessmanagement,whichareimportantdisciplinesforguidingappropriateagriculturalresearchandestablishingresearchprioritiesforemergingprivateagriculture.Averagesalariesforagriculturalresearchersarelowerthaninothersectorsoftheeconomy.Forexample,in1995theaveragesalaryinRAASwasone-thirdtheeconomy-wideaverage.Asaresult,researchersareleavingforotherjobs.Asofmid-1995,one-thirdofresearchershadleftRAASduringtheprevious2.5years.
Page47
Table4.5:SelectedIndicatorsforFederalResearchInstitutesSubordinatetotheMinistryofAgricultureandFood,1994
Indicator Level EquivalentUS$
R&DactivityNumberofR&Dpersonnel 8,380Fixedassets(millionrubles) 141,760 64.1
Scientificequipment(millionrubles) 21,593 9.8Workingcapital(millionrubles) 23,903 10.8TotalR&D(millionrubles) 50,868 23.0R&Dconducteddirectlybyinstituteswithout
subcontracting(millionrubles)44,509 20.1
R&Dcoststructure(%)payroll 46materialsandequipment 20
Averagemonthlywage(rubles) 161,200 73Averagemonthlywagesofresearchers(rubles) 193,800 88
ProductionandeconomicactivityaFixedinvestment(millionrubles) 16,989 7.7Profits/losses(millionrubles) 4,987 2.3
Memo:Averageexchangerate(rublesperUS$) 2,212Notes:TheRAASisnotincludedinthistable.aProductionactivitiesrefertoproductionofcrops,livestock,orseed
forsale.
Source:MinistryofAgricultureandFoodofRussia.
Page48
Table4.6:R&DExpendituresforFederalResearchInstitutesSubordinatetotheMinistryofAgricultureandFood,byResearchProgram,1994
ResearchFunding PercentageShare
ResearchProgram: 86.0Agriculturalsciences 10.4Naturalsciences 3.6Engineeringsciences 0.03Medicalsciences 0.0Socialsciences 0.0HumanitiesProgramtotal 100
FundingSources: 78InternalR&DstatebudgetaExtrabudgetaryfund 7Commercialsector 5Ownfinancing 5Othersources 5
Total 100
aOfthis,85percentofspendingwasonagriculturalsciences,8percentonnaturalsciences,and7percentonengineeringsciences.
Source:MinistryofAgricultureandFoodofRussia.
Table4.7:QualificationsofResearchersWorkingatFederalResearchInstitutesSubordinatetotheMinistryofAgricultureandFood,1994
LevelofEducation Number PercentageShare
Collegedegrees 3,517 42Doctorofscience 160 2
Candidateofscience 1,256 15Specializedsecondaryeducation 1,076 13Othera 2,371 28Total 8380 100
aCalculatedasaresidual.
Source:MinistryofAgricultureandFoodofRussia.
Page49
FinancialSupporttotheAgro-industrialComplex
Financialsupporttotheagro-industrialcomplex,whiledecliningovertime,remainslarge(Table4.8).In1994,totaldirectfinancialsupport(federalandlocal)wasabout$4.6billion,oralmost20percentoftheagriculturalGDP.Ofthis,69percentwasforsubsidies(Table4.9),14percentforcapitalinvestment,and17percentforotherexpenditure.Onlyafractionofdirectfinancialsupport(1.2percent)wenttofinanceR&Dforagriculture.Thereisnoeconomicjustificationforlargesubsidiestoloss-makingagro-industrialenterprises.Thesubsidiesnotonlydelayneededadjustmentstoimprovetheefficiencyofagriculturalenterprisesbuttheyarealsotooexpensivetofinance.
Table4.8:FinancialSupporttotheAgro-industrialComplexinRussiaActual Estimated
TypeofSupport 1992 1993 1994 1995 1996(Billionrubles)
Totaldirectsupport 703 3,966 10,158 13,000 13,170Capitalinvestment 178 935 1,375 2,893 4,918Otherexpenditures 112 526 1,811 2,477 3,104Subsidies 413 2,505 6,971 7,630 5,148
Totalindirectsupport n.a. n.a. n.a. 55,692 73,356Taxdiscounts n.a. n.a. n.a. 20,000 20,000Commoditycredits n.a. n.a. n.a. 13,000 18,900Forgivenandrescheduledloans n.a. n.a. n.a. 17,500 26,100Electricitydiscounts n.a. n.a. n.a. 5,192 8,356
Totaldirectandindirectsupport n.a. n.a. n.a. 68,692 86,526(Percent)
Totaldirectandindirectsupportasshareof:Consolidatedbudgetexpenditure n.a. n.a. n.a. 14.1 n.a.
Federalbudgetexpenditure n.a. n.a. n.a. 24.9 19.9GDP n.a. n.a. n.a. 4.1 3.8
Memo:Ruble-dollarexchangerate 223 934 2,203 4,562 4,799n.a.isnotavailable.Note:For1992-94,thetotalsincludebothfederalandlocalsupport;for1995and1996,totalsincludeonlyfederal
support.Thedataareinnominalterms.
Source:InstitutefortheEconomyinTransition,GoskomstatofRussia;USDA(1995a).
Page50
Table4.9:DirectSubsidiesasaPortionofTotalGrossRevenuesforIndividualCommoditiesinRussia
(Percent)Commodity 1993 1994 1995
Grain 0.3 0.6 5.4Sunflowerseed 0.0 0.3 0.4Sugarbeets 0.0 1.6 3.2Potatoes 0.0 0.6 5.6Vegetables 0.0 4.3 1.9Flax 59.2 73.0 n.a.Milk 25.5 22.8 11.2Cattle 19.8 27.4 8.6Hogs 18.8 22.9 10.9Sheep 24.9 44.5 19.0Poultry 17.7 20.5 10.9Wool 31.4 55.5 40.0Eggs 14.6 13.1 6.9
n.a.isnotavailable.Note:Dataarebasedonasampleofeightformerstateorcollectivefarms.Source:RussianMinistryofAgricultureandFood;USDA(1995a).
NeededStrategyforTransformingtheResearchSystem
SohowdoesRussia'sagriculturalresearchsystemmeasureup?Usingthecharacteristicsandorientationofemergingnationalagriculturalresearchsystemsinotherindustrialcountriesasabenchmark,severalbroadareasofchangeareevident.Overthenext4-5yearsRussiamust:
·Fundamentallyreorientitsresearchdecision-making,prioritysetting,andincentivesystemtowardtheneedsofend-usersratherthandemandsfromthetop.
·Significantlyincreasetheefficiencyandeffectivenessoftheagriculturalresearchsystem,byreducingcosts,increasingrevenues,andimprovingthequantityandqualityofresearchoutput.
·Rapidlyincreaseexpertiseincriticalresearchareasnotadequatelyrepresentedtoday,especiallyinagriculturaleconomics,farmandagribusinessmanagement,financialmanagement,agro-ecology,modernbiology(biotechnology),foodtechnology,logistics,andextension.
·AlterthelegalstatusandrelationshipsofresearchinstitutionstofederalagenciessuchasMOAFandRAAS.
·Improveandmodernizetechnicalknowledgeandeconomicliteracythroughouttheagriculturalresearchcommunity.
Page51
·Modernnationalagriculturalresearchsystemsshouldemploymultipleoutletsfortechnologytransfer,bothpublicandprivate.Theagriculturalresearchsystemdoesnotneedtocontrolthetechnologytransfersystem,butitdoesneedtoknowhowtouseit.Russia'sagriculturalresearchsystemmustdevelopthecapacitytotransferitsproductstoend-usersthroughthemostappropriateandcost-effectivemeans.
·Redefinefederalandoblastpartnershipsandrolesinfinancing,coordinating,andprovidingoversighttoagriculturalresearch,education,andextension.Thegoalofmovingresearchclosertothecustomersuggeststhatfundingandaccountablybemovedtotheoblastlevel.Ontheotherhand,researchspilloversresearchresultsfinancedinoneregionthatbenefitanothersuggestacontinuingroleforthefederalgovernment.Opportunitiesto"freeride"canalsocausesystematicunderinvestmentinagriculturalresearchwhenlocalfundingsourcesareemployed.
·Reduceprofessionalisolationthroughincreaseduseoflow-costcommunicationtechnologies.ManyRussianresearchinstitutescannotaccesstheInternetbecausetheylackmodems.Asimple,low-costsystemtoallowRussianscientiststosearchdatabases(suchasAGRICOLAorCABAbstracts)andcommunicatewithcolleaguesshouldbeadoptedassoonaspossible.
·Significantlyupgradescientificequipmentandfacilitiestomeetworld-classstandards.Giventhehighcostofthisinvestment,itmustfollowapriority-basedstrategythatisconsistentwithreformobjectivesfortheentiresystem.
·Developappropriatetechnologyandeffectivetransfermethodsforsmallholders.Privatefarmsandhouseholdplotswillplayacriticalroleintransformingproductionagricultureandmeetingfuturefoodneeds,andRussianagriculturalresearchmustensurethattheneedsof
smallholderproducersarebeingmet.
·Importandadaptappropriateagriculturaltechnology,wherepossible.Researchknowledgeandtechnologytransferabilityarequitehighinsomeareasbasicanimalnutritionandfoodtechnology,forexample.Russianeedstoseekoutcost-effectivetechnologiesthatcanbeusedtorapidlyincreaseproductivityinkeyareas(Box4.2).
·DeveloplinkswiththeConsultativeGrouponInternationalAgriculturalResearch(CGIAR)andotherinternationalresearchinstitutions,particularlythoseservingsimilaragroclimaticregions.
·Continuetoreformtheagriculturalsectortoreducepricedistortionsandredirectfundsfromsubsidiestoactivitieswithpotentiallyhigherpayoffs,suchasresearchandextension.
Anumberoflonger-termissuesofRussia'sagriculturalknowledgesystemthatmustbeaddressedtoincreasetheeffectiveness,efficiency,andsustainabilityaresummarizedinTable4.10.
Page52
Box4.2:DoingResearchforRussianConditionsOnestatementfrequentlymadebyRussianagriculturalscientistsisthatcertainresearchprojectsareneededtodeveloptechnologiesthatwork"underourconditions."Forsomeproductionenterprisesthismakessense.Croppingorgrazingsystemscertainlyneedtobetailoredtothecharacteristicsofsoils,climate,orlandscape.Often,however,"ourconditions"simplymeansdevelopingtechnologiestoaccommodatedistortedpricesignals,inadequatemanagerialskills,orinputshortages.Changingtheconditionsisclearlythebetterwaytogo.Thisillustratesanotherpoint,however.TheRussianagriculturalestablishmentneedstocarefullyassesswhenresearchisneededandwhenknowledgeandtechnologycanbeimportedandadaptedtolocalconditions.Foodprocessing,transportation,andlogisticsisnotoriouslyinefficientinRussia.However,asizablestockofresearchfindingsandtechnologiesisavailablefromothercountries.Thesameholdstrueinanimalnutritionandgenetics.Itmakeslittlesensetoinvestinbasicgeneticornutritionresearchatthisstageofscarceresourceswhensuchinformationcaneasilybeobtainedfromsimilarresearchdoneelsewhere.Inareaswhereresearchortechnologiescanbeimported,Russianscientistsneedtobecomeskilledintechnologyevaluation,adaptation,marketing,andtransferandinintellectualpropertyissues.Undertakingresearchfor"Russianconditions"iscertainlynecessarybutonlyinspecificsituations.Acquiring,evaluating,andadaptingexistingtechnologiesparticularlygermplasmandmanagementpracticesusedinsimilaragroclimaticregionsinothercountrieshavethepotentialtorapidlyadvanceRussianagriculturalscienceandtechnology.
Table4.10:AnalysisofIssuesforStrengtheningAgriculturalResearch,HigherEducation,andExtensioninRussia
Issue ApproachtoSolution CommentPOLICY1.Analyticalcapabilityforpolicyanalysislimitedbydatainadequaciesandscarcityofhumanresources.
Bolstereconomicandsocialscienceresearchcapabilitiesanddevotemoreresourcestothecollectionofsocio-economicdataonthesector.
Existinginstitutionshaveverylimitedlinkstomainstreamagriculturalresearchinstitutesandagriculturaluniversities.
2.Littleornointegrationofresearch,highereducation,andtechnologytransfer.Thepotentiallydiverseclientbaseofproduction,processing,andmarketingisomittedfromsectoralplanning.
Focusononeintegratedagriculturalknowledgecenterperregion,providingservicesofhighereducation,research,andtechnologytransferforsmall,medium,andlargeproducers,processors,andmarketersinbothpublicandprivatesectors.
Anyincrementalfundingtothesubsectormustbewellfocused.
3.Benefitsofresearchandextensionnotreapedunlesstheprofitabilityofinnovationisclear.
Implementpricingpolicyreforms,stateprocurementreforms,realistictaxationregimesforagriculture,andlandtenuresecurity.
Otherinterventionsaddressthesewiderissues.Theirimpactisassumedwithinanappropriatetimeframetobenefitagriculturalresearch,highereducation,andextension.
INSTITUTIONS4.Inadequatelinkagesbetweenresearchandhighereducation.
Focusdiminishedresourcesonasinglecenterofagriculturalknowledgeforeachregion,togaincostefficiencies.
Returningtothepastsituationwillnotprovidemaximumbenefit.Focusingonintegratedsystemswillfosterlinkages.
5.Lossofirreplaceablehumancapital.
Preserveessentialelementsoftheexistingsystemtoavoidtheneedformassivefutureinvestment.Increasestaffsalaries,researchresources,andgraduatestudentstipendsandfellowships.
Thisisunlikelytooccurwithoutexternalassistance.
6.Inadequateresearchfundingleadsinstitutestodivertlimitedresourcesforproductionpurposesortoseekexternalresearchcontractswhichdonotreflectthecost/valueofresearchorfurthertheirobjectives.Integrationwithhighereducationisreducedbythistrend.
Introducecontractresearchforagreednationaland,inparticular,regionalappliedresearchthatencouragesjointinvolvementofeligibleuniversitiesandresearchinstitutes.Separateincomegeneratingactivitiesfromresearch.
Currentresearchgrantsmaynotmeettherequiredcriteriaofobjectivityinselection,orientationtousers,andinvolvementofexternalandindependentpersons.
(Tablecontinuedonthenextpage)
(Tablecontinuedfrompreviouspage)
Issue ApproachtoSolution Comment7.Difficultyinintegratingresearchinstitutesanduniversitiesandinincludingextensionactivitiesbecauseofthegeographicandinstitutionalseparationofresearchinstitutesanduniversities.
Focusonresearchinstitutesthatareclosetouniversitiesandencourageinstitutionalintegrationthroughjointprofessionalpositions,students'research,andotherteaching.Introducetheextensionconcepttoresearchersasauserorientationandtouniversitiesasanewsubjectarea.
Existinginstitutionalarrangementsrenderdecisionsonthefundingofdistantresearchinstitutesdifficult.Earlyinvestmentmaybeneededinordertostrengthensuchdecision-making.
8.Financialinefficienciesatthecentrallevelthatreducefundsreceivedatregionallevel;central-levelinstitutionalresponsibilityunclear.
Asfaraspossible,allocateprojectfundstotargetedinstitutionswhilerecognizingtheobjectiveofstrengtheningRussiancapabilitytoadministerfundsundernewcircumstances.
Regionalinstitutionshavelimitedadministrativeexperience.
9.Absenceofagriculturaleconomics,marketing,agribusiness,andextensioninuniversitycurricula.
Introducenewcoursesanddepartmentsatappropriateuniversitiesandreorientmanagementtoaccommodatetheseareastogreatestbenefit.
Managementstylesatuniversitiesappeartobetop-down,whichhasadampeningeffectonthebenefitsofdiverseprofessionalinput.
10.Inefficientproliferationofresearchandhighereducationinstitutesinsomeregions.
Combineinstitutestoformanagriculturaluniversityinregionsthatlackone.
Efficienciescanbegainedthroughclosemanagementofsuchmergers.
11.Toomanyresearchinstitutesandinsufficientlinkagesbetweenthem;toomuchstaffandineffectiveinstitutionalsystems.
Conductamanagementreviewofresearchinstitutes.Allocatebudgetstoparticipatingresearchinstitutes(closetoagriculturaluniversities)thatmeetselectioncriteria.
Implicationsofcombininginstitutesarestaffreductionsandreorientationofinstituteobjectivesandstrategies.
12.Conceptofextensionispoorlyunderstood.Someelementsof
Introduceextensionattheuniversitylevel,initiallytotrainextensioneducatorsandtodevelopanextension
Theroleoffarmertrainingcentersinhigheragriculturaleducation
Someelementsofextensioninfarmertrainingcenters,butwithoutfullaccesstoagriculturalknowledgeresources.
educatorsandtodevelopanextensionservicelinkedtotheresearch-highereducationcomplex.Focusextensionattheregionallevel.
agriculturaleducationrequiresclarification.
13.Inadequateequipmentandfacilitiesforresearchandhighereducation;insufficientbudgetstoaddresstheseneeds.
Investsubstantiallyinresearchandhighereducationequipmentandrenovationofexistingfacilities.Providematerials,equipment,andfacilitiesforextension.
Qualityandmaintenanceofexistingbuildingsishighlyvariable.
(Tablecontinuedonthenextpage)
(Tablecontinuedfrompreviouspage)
Issue ApproachtoSolution Comment14.Managementsystems,styles,capabilities,andtoolsnotorientedtochangedcircumstances.Professionalmotivationandsatisfactiongivenalowpriority.
Providemanagementtrainingandassistance.Improvestaffsalariesandconditions,includingaroleindecision-making.
Goodwillexistsamongstaffandshouldberetainedthroughsensitivehandlingofmanagementtraining.
15.Inadequatefinancialsupportforagriculturalresearch,increasingriskthatirreplaceableelementswilldisappear.
Providefinancialsupporttooperationstopreservekeyelements.
Entrenchedattitudesthatincrementalfundsshouldpreservethestatusquoconflictwiththerealityofstructuralchange.
TECHNOLOGY16.Lackofinformationtechnologyandequipmentforteaching.
Provideappropriateequipment.
Specificneedsarestilltobedetermined.
17.Outdatedtextbooksandtechnologyatuniversitylevel;notconnectedtointernationalsystem.
Provideandtranslatetextbooks,supportstaffexchangeswithforeignuniversities,andprovidelibrarysupport.
Languageisaconstrainttogainingaccesstointernationalknowledge.
18.Inadequateresearchequipment.
Provideadequateequipment.Specificneedsarestilltobedetermined.
19.Lackofinternationalexposurebyresearchersandunnecessaryduplicationofexperiments.
Supportexchangesofresearchers,jointprograms,librarysupport,andadvisers.
Languagetrainingmaybenecessary.
20.Technologypromotedtofarmersandotherusersnotsuitabletotheiractualneeds.
Introducethetwo-waycommunicationconceptofextension,initiallythroughhighereducationandlaterthroughpilotadvisoryservices.
ImplementationshouldbeslowtoallowagradualunderstandingoftheprocessanditsadaptationtoRussianrequirements.
21.Objectiveconsiderationsoffinancial,economic,and
Supplementresearchfundsthroughanobjective
Theimplicationthatsomeresearchareasmaynot
financial,economic,andadoptionfactorsnotincludedinresearchproposals.
throughanobjectivecompetitivegrantsystem.Provideassistanceforappliedresearchproposalpreparation.
researchareasmaynotreceivefundingshouldbemadeclear.
22.Depletionandpollutionofnaturalresourcebaseforagriculture.
Includesustainabilityandresourceprotectioncriteriainresearchplanningcriteriaanduniversitycurricula.
Thesewillrequireinternationalcollaboration.
Source:AdaptedfromWorldBank(1994c).
Page56
ChapterVTransformingtheAgriculturalResearchSystemReformofRussia'sagriculturalresearchsystemwillbeanuphillbattleunderthebestofconditions.Hereareafewofthemajorobstacles.
·Itwillbedifficulttodevelopaviableconstituency,particularlyintheMinistryofFinance,thatsupportsagricultureandiscommittedtotheneedforagriculturalresearch.
·Fundstosupporttheneededrestructuringandreinvestmentwillbeinshortsupply.Competitorsforpublicfundsabound.Privatefundswillbedifficulttoattractuntiltheneededreformshavebeenmade.
·Notestedmodelexistsforrestructuringacomplexnationalagriculturalresearchsystemdevelopedundercentralplanningtooneappropriateforamarketeconomy.
AnumberofreviewsofRussia'sagriculturalknowledgesystemhavebeenconductedoverthepastfewyears(OECD1994;WorldBank1994c).Whattypicallyhasemergedfromthesereviewsisamind-numbinglistofproblemsandanequallydiscouraginglistofbroadrecommendations.Atapracticallevel,itisdifficulttotranslatesuchrecommendationsintomanageableprograms.Tosomedegree,thisdifficultyarisesbecausetheneededstepscombineshort-termcrisismanagementwithlong-terminstitutionalreformforRussia'snationalagriculturalresearchsystem.Whatisneededisaframeworkthatbreaksdownanenormouslydifficulttaskintosmaller,coordinatedsteps.
ConceptualFrameworkforManagingTransformation
ConceptualFramework.SupposethatitwerepossibletoexamineeachscientificresearchinstituteinRussia,orevenbetter,eachresearchprogramandrankthemonthebasisofthefollowingthreeattributes:strategicvalue,vulnerability,andprogramquality.DoingsowouldshedlightonthestrategyneededfortransformingtheagriculturalresearchsysteminRussia.Thesethreeattributesmightbedefinedasfollows:
·StrategicvaluereflectsthepresentvalueoffuturebenefitsgeneratedbyaninstituteorprogramtoRussiansocietyortheworldscientificcommunity.Thisvaluemightariseinanumberofways:Throughasignificantincreaseinproductivityorreductioninlossesinmajoragriculturalenterprisesthatdirectlyaffecttheeconomicwell-beingofproducersandconsumers;throughagriculturalresearchassetssuchasgermplasmorscientificknow-howthatareuniqueandhavevaluetobothRussiaandtheworldcommunity;throughongoingresearchprogramsthatmaintainagriculturalproductivity(forexample,breedingcropsfordiseaseandpestresistance);andthroughresearchprogramsthataddresscriticalnationalandregionalneeds,suchasagriculturalsustainability,ruraldevelopment,policyevaluation,foodtechnology,transportationandlogistics,andfarmmanagement.Strategicvalueisnotindependentofitstimecontext.Forexample,apubliclysupportedmaintenanceresearchprogramforwheatrustresistancemightbestrategicallyveryimportantintheshortrun,but
Page57
itsstrategicvaluemaydeclinewiththedevelopmentofprivatewheatbreedingcompaniesormayberedirectedtowardmorebasicaspectsoftheproblem.
·Vulnerabilityisashort-termconceptreflectingthelikelihoodorriskofsignificantlossofresearchassetsbiological,physical,andhumanwithin,say,thenext1-3years.
·Qualityisalonger-termconceptandisbothaninputandanoutputmeasure.Howgoodisthesciencebeingproducedrelativetoworkconductedelsewhereintheworld?Howskilledandwell-trainedarethescientists?Howgoodaretheresearchfacilities,fieldplots,equipment,ordatabases?
StrategicValueandVulnerability.ThehypotheticalresultsforanagriculturalresearchsystemconsistingoffiveresearchinstitutesorindividualprogramsthathavebeenrankedonthebasisofstrategicvalueandvulnerabilityarepresentedinFigure5.1.Withinthisshort-termcontext,theresearchmanagermustdevelopastrategyforstabilizingtheresearchsystem,givenafixedordecliningfundingbase.Herearesomepossibleapproachesforthefiveinstitutions.
InstitutesAandBarerankedlowinstrategicvaluebutdifferintheircurrentvulnerability.Mostresearchmanagers,ifconfidentintheirassessmentofstrategicvalue,wouldterminatebothprograms.
InstitutesDandEareassessedtohavehighstrategicvalue,butdifferinvulnerability.ForinstituteD,fundingatcurrentlevelsseemsreasonable.Certainly,low-costoptionstoenhanceinstitutionaleffectivenessshouldbeexploredcostcontrol,programreview,staffexchanges,orstepstoovercomeprofessionalisolationsuchasconnectionwiththeInternet.InstituteEisobviouslyatriskandmeritsaggressiveintervention.Grantstoprotecthigh-valueresearchassetswouldseemtobejustified.Additionalfinancialsupportforprogram
orsalariesmightberequired.AssistancetolowercostofthesortprovidedtoinstituteDwouldbeappropriate
InstituteCisclearlystuckinthemiddlenotveryimportant,notterriblyvulnerable.Benignneglectisoneattractiveoption.Institutescientistscouldbeconsideredforsomelow-costassistancebutnotmuchmoreshouldbeoffered.Measuresofstrategicvaluemightbedifficulttomake,andtheirrevocablestepofterminatingtheresearchprogramwouldnotbeundertakenimmediately.
StrategicValueandProgramQuality.Thesamehypotheticalresearchinstitutionsarenextassessedfromtheperspectiveofprogramqualityandstrategicvalue(Figure5.2).Programqualityisalonger-termcharacteristic.Inthissituation,theresearchmanagermustdevelopastrategythatfocusesoninstitutionalreformanddevelopment.
Inthisexample,instituteCremainsstuckinthemiddle.Benignneglectstillseemslikeareasonableapproach.InstituteAshouldbeclosed.Thefactthatitcansurviveintheshortrundoesnotcompensateforitslackofstrategicvalueorprogramquality.Continuingtooperatethisinstitutionconsumesresourcesthatareneededtosupporthigher-priorityprograms.
InstituteBhasahigh-qualityprogram,butisstrategicallynotveryimportantandisquitevulnerable.ThissituationmightberepresentativeofamorebasicorpretechnologyresearchinstituteandisfairlycommoninRussia,wheremissiondrifthasresultedinhigh-qualityprogramsthatdonotsupporthigh-priorityobjectives.Oneoptionmightbetoseekaforeignpartner,publicorprivate,thathasneedofthisinstitute'sscientificexpertiseandprivatizeit.Alternatively,itmightbepossibletohelp
Page58
Figure5.1:ResearchProgramAssessment:StrategicValueandVulnerability
Source:Author'sData
Figure5.2:ResearchProgramAssessment:StrategicValueandProgramQuality
Source:Author'sData
Page59
scientistsfromtheinstitutefindworkopportunitiesabroadorinotherprogramsandthenclosetheinstitute.
WhataboutinstitutesDandE?Onthebasisofshort-termsurvivability,instituteDrequiredmodestassistance.However,wenowseethatthisinstitute'sprogramsareofhighqualityandstrategicallyimportant.Inthiscase,long-terminvestmentandprogramdevelopmentareprobablywarranted.InstituteEisatoughcallhighstrategicvaluebutwithaveryvulnerable,low-qualityprogram.Anexampleofthissituationmightbefoundwithaneconomicsresearchinstitute.EconomicsisclearlyofhighvaluetoRussia.However,mostRussianeconomistsaresimplynotcompetitivewiththeirWesterncounterparts.Startingovermaybewarrantediftheexistinghumanorphysicalcapitalcannotbeupgradedcost-effectively.Alternatively,iftheinstituteistobemaintained,acombinedstrategyofstabilization,reform,andreinvestmentmustbedeveloped.
5.12.ActionPlan.Theforegoingdiscussionillustratessomeofthekeyconsiderationsthatresearchmanagers,governmentofficials,andscientistsmusttakeintoaccountindevisingappropriatestrategiesfortransformingRussia'sagriculturalresearchsystem.Theexerciseisadmittedlyeasiersaidthandone.Butitdoesclarifythefollowingfouractionstepsthatshouldformthebasisofanystrategyforreformingtheagriculturalresearchsystem:
·Evaluateandscreenresearchinstitutesonthebasisofstrategicvalue,vulnerability,andprogramquality.
·Stabilizehighlyvulnerableprogramsthatmeetspecificstrategicvalueandqualitystandards.
·Reformandredirecttargetedinstitutesandprogramsthatmeetminimalstandardsforstrategicvalueandquality.Terminateprograms
thatdonot.
·Reinvestinphysicalandhumancapitaltobringtheresearchestablishmentuptoneededstandards.
·Theoverallmanagementobjectivesforthisactionplanarestraightforward.
·Buytime.Identifyandstabilizehigh-value,vulnerableprogramsandinstitutions.ThisprotectsRussia'sagriculturalresearchsysteminacost-effectivewayandprovidesneededbreathingroomtotransformthesystem.Furthermore,itprovidesameanstoseparateshort-termcrisismanagementfromthetime-consumingactivitiesrequiredtoreformandrefocuskeyagriculturalresearchinstitutions.
·Facilitateorganizationallearning.Reforminganationalagriculturalresearchsystemestablishedundercentralplanningisunchartedterritory.Russianeedstodevelopandpilotmodelsofinstitutionalreform.Organizationallearningcannotproceedifacrisismentalityexistsorifoverallprioritiesandstrategyarepoorlyarticulated.
·Developneededhumancapital.SeveralareasofsciencethatarecriticaltoamodernagriculturalresearchsystemarenotsufficientlydevelopedinRussia.Economicsandagroecologyarethemostobviousomissions.Furthermore,generalupgradingoftraditionalagriculturalfieldsissorelyneeded.Finally,itisimperativethatRussia'sagriculturalscientificcommunitybere-integratedwiththerestoftheworld.
Page60
·Implementappropriatelong-termchanges.Resourcereallocationandreinvestmentmustbemadeslowlyoveranumberofyears.Closingfacilities,mergingstaff,andrebuildingresearchcapacityallrequirecarefulplanning,politicalaction,andstaffsupport.Thesechangescannotbemadeovernight.
FinancingResearchtoFacilitateTransformation
ConventionalwisdomandthemostinternationalreviewsholdsthatRussia'sagriculturalresearchsystemisovergrownandtoocomplexandmustlearntooperateonaleanerbudget.Tightbudgetscancreateincentivestoreform.Whileitwouldseemreasonabletoexpectreformtooccurwithinexistingbudgetconstraints,stubbornadherencetoexistingbudgetsoftenstymiesinstitutionalchange.Thefollowingargumentsjustifysupportingmodestandcarefullytargetedincreasesinfunds.
·Stabilizingthesystem.Anumberofhigh-valueagriculturalresearchassetsandprogramsareatrisk.Theymustbeidentifiedandstabilizedquickly.Thisprocesscannotproceedrapidlyenoughiftherequiredfundshavetobecarvedoutofexistingprograms.InterventiontostabilizetargetedelementsofRussia'sagriculturalresearchsystemrequiresnewfunding.
·Overcominginstitutionalinertia.Largeorganizationsrarelyactdecisively.Intimesoffinancialadversity,thetypicalresponseofadministratorsistopreservealltheelementsofanorganizationandreducefundingproportionately.Sharingthepainseemstobepoliticallymoreexpedientthanmakingclearallocativedecisionsbasedonpriorities.Thisacross-the-boardmentalitypreventsmeaningfulinstitutionalchangeandensuresfuturemediocrity.Yet,itisextremelydifficult,particularlywhenahighdegreeofuncertaintyexists,tomakedecisionstoterminatesomeactivitiesandshift
resourcestoothers.Manyresearchprogramshaveacertain''optionvalue"thatwilljustifycontinuationuntilthelong-termvaluebecomesmoreapparent.Intheshortrun,itisfrequentlymuchmoreeffectivetostrengthenhigh-priorityprogramsandthentobeginthemoredifficult,long-termprocessofredirectingfundsandscientistsorsheddinglabor.Clearlythisstrategyrequiresadditionalfunds.
·Creatingincentives.Russia'sagriculturalresearchsystemmustbecomemoredemand-driven,coordinated,andefficient.Thisrequiresafundamentalchangeinresearchers'behaviorandcorporateculture.Thesechangescanbegreatlyfacilitatedbycreatingtheproperincentives.Oneoptionistointroduceacompetitivegrantsprogramthatsupportsthedesiredresearchortechnologytransferactivities.Well-craftedandadministeredgrantsprogramscanchangeresearchinstitutionsmuchmoreeffectivelythandirectivesandjawboningevercould.Inaddition,smallsalarybonuses,travelfunds,andnewscientificequipmentcanalsodowonderstochangecorporateculture.Thistoorequiresadditionalfunds.
·Rewardinghighlyqualifiedresearchadministrators.Institutionalreformcannotbeaccomplishedthrougharelianceoncompetitivegrants.Atbest,agrantsprogramwillresultinahigh-qualitypatchworkofscientificprojects.Skilledresearchmanagementisessentialifprogramsaretofittogetherinwaysthatactuallysolveproblems.Integrationandcoordinationofthevariousresearchprogramscanonlybeaccomplishedthroughadministration.Consequently,salariesforeffectiveresearchmanagersmustbesufficientlyhightoattractandretaintheminthesepositions.
Page61
·Improvingresearchfacilitiesandequipment.Russia'sresearchcapitalstockdoesnotmeetmodernstandards.Asignificantcapitalexpenditureisrequiredtomodernizefacilitiesandequipment.Themajorstumblingblockisdecidingwhichfacilitiesshouldbeimprovedandwhoshouldpayforit.Thesedifficultdecisions,however,shouldnotobscureasimplefact:newinvestmentinagriculturalresearchfacilitiesandequipmentisneededifRussia'sagriculturalresearchsystemistobeviable.Furthermore,thislong-terminvestmentwilllikelyrequiredebtfinancing.Fewagriculturalresearchsystemsinindustrialcountriescanhandlemajorcapitalinvestmentsoutofoperatingbudgets.Capitalexpendituresmustbeamortizedoveratimehorizonthatiscompatiblewithoperatingbudgetsanddebtservicecapacities.
·Seekingalternativefinancingsources.Inadditiontobudgetaryallocationsbyfederalandoblastgovernments,theagriculturalresearchinstitutesmustexplorealternativefundingsourcestofinancespecificresearchprograms.Possiblealternativefundingsourcesincludemultinationalcompanies(forinputs,seeds,chemicals,biotechnology,foodtechnology);domesticprivatecompanies;andendowmentssetupfromthesaleofsurplusland(mostagriculturalresearchinstituteshaveexcessland)andcommercialenterprises.However,useofthesealternativefinancingsourceswouldrequireinstitutionalandprogramreforms.
Thislistofjustifications,whilenotcomplete,doesdemonstratewaysinwhichnewfundscanincreasetheeffectivenessandefficiencyofRussia'sagriculturalresearchsystem.Societalgainsfromimprovedresearchoutputandcostsavingsfromimprovedresearchmanagementcanbeexpectedtomorethanoff-settheincrementalfundingincreasesrequiredtofacilitateinstitutionalchangeandrecapitalizethereformedagriculturalresearchsystem.Theextensiveevidenceonreturnstoagriculturalresearchassuresusofthisfact.Buttheadditionalfunds
obtainedthroughloans,credits,orgrantsmustgotoreformRussia'sagriculturalresearchsystem,notsimplymaintainthestatusquo.
IssuesinTransformingtheAgriculturalResearchSystem
BeyondtheimmediateneedstostabilizeandtransformRussian'sagriculturalresearchsystemlieseverallonger-termissuesthatmustbeconfronted.Twoofthemostpressingaredevelopingobjectiveguidelinesandmechanismsforsettingresearchprioritiesandestablishingtheappropriatelevelandmixofresearchinvestment.TogainsomeinsightintotheseissuesforRussiaandothertransitioneconomies,weturnonceagaintotheexperienceoftheinternationalagriculturalresearchcommunity.
GuidelinesforEstablishingResearchPriorities
AsdiscussedintheUSTaskForceonResearchInnovationsforProductivityandSustainability(1995),FalconiandElliot(1995),PurcellandAnderson(1997),andtheWorldBank(1996b),researchadministratorstypicallydistinguishbetweenthefollowingfourtypesofresearch:
·Basicresearch,whichcreatesnewscientificknowledgetoachievenewunderstandingbutwithnoimmediatecommercialapplication.
·Strategicresearch,whichprovidesknowledgeandtechniquestosolvespecificproblemsthathaveawiderapplicability.
Page62
·Appliedresearch,whichdevelopsnewtechnologiesandtangibleinventionsbyadaptingbasicandstrategicresearchtosolvespecificfieldproblems.
·Adaptiveresearch,whichinvolvesselectingandevaluatingtechnologicalinnovationstoassesstheirperformanceinaparticularagriculturalsystemandadjustingtechnologiestofitspecificenvironmentalconditions.
Thereisaneedforanappropriatebalanceamongthesefourtypesofresearchinordertodeveloptechnologiestosolvespecificagriculturalproblems.Basicresearchgenerallyrequiresfinancingbythepublicsector,whereasappliedandadaptiveresearchcouldgenerallybefundedbyboththepublicandprivatesectors(Umali1992;ThirtleandEcheverria1994).Finally,thegenerationoftechnology(agriculturalresearch)mustbecloselyintegratedwithasystemtotransfertechnology(agriculturalextension)sothatitisresponsivetotheproblemsfacedbyclients(farmers).
Giventhelimitedfinancialresourcesallocatedbythepublicsectorforagriculturalresearchandeverincreasingdemandsontheselimitedresources,thereisaneedforclearguidelinesforestablishingresearchpriorities(seeBottomleyandContant1988;McCalla1994b;McCallaandRyan1992;Collin1989;CollinandKissi1995;andAlston,Norton,andPardey1995).Basedoninternationalexperience,guidelinesforsettingagriculturalresearchprioritiesaresummarizedinBox5.1.TheseguidelinesareespeciallyimportantfortransitioneconomiessuchasRussia,wheretheagriculturalsectorispassingthroughamajorstructuraltransformationandthefinancialresourcesforagriculturalresearchareverylimited.Followingtheseguidelineswillnotonlyresultinacost-effectiveandtransparentapproachtoreformagriculturalresearchsystembutwillultimatelyleadtohigherreturnstoinvestmentinagriculturalresearch.AccordingtoPurcell
andAnderson(1997),thekeyelementsofaviableagriculturalresearchsystemare:
·humanresourcedevelopment;
·provisionofresearchfacilitiesandequipment;
·organization,management,planning,andlinkagesamongresearchentities;
·linkageswithclientandrelevanttechnology;
·fundingofnationalagriculturalresearchsystems;and
·incentivesforresearchperformance.
FinancingAgriculturalResearchInvestment
Inadditiontotheprioritiesassignedtoagriculturalresearch,howtheinvestmentisfinanced,atwhatlevel,andbywhomallcontributetotheefficiencyoftheresearchenterprise.Therearefourbasicaspectstothesechoices:
·Nationalorregional?Ingeneral,fundingofagriculturalresearchbythebeneficiariesmakessense.Thisisoneofthemajorforcesdrivingdecentralizationofagriculturalresearchworldwide.Localfundingtranslatesintolocalaccountability.Butbecausethebenefitsofagriculturalresearchdonotrespectpoliticalboundaries(Khanna,Huffman,andSandler,1994;Alston,Norton,andPardey1995)somelevelofnationalfundingisjustifiabletoaccountforthetransferabilityofresearchbenefitsintoandoutofaregion.Thegreaterthespillover,thegreaterthecasefornationalsupport.However,increasednationalfundingcanattenuatelocalaccountabilityandtheextenttowhichresearchisdemanddriven.Therearenosimplerulestoresolvethisdilemma.
Page63
Box5.1:GuidelinesforAgriculturalResearchPrioritySettingMarketfailurePrioritiesforpublicresearchfundingshouldbeinareasinwhichtherearehighsocialreturnsandlowprivatereturns.Wheremarketfailureexistsbutreturnsaccruemainlytotheprivatesector,formsofgovernmentinterventionotherthandirectfundingbecomeappropriate(Lloyd,Harris,andTribe1990).Efficiency
Domesticnetpresentbenefitsfromresearcharehigher:·thelargerthetotalpre-researchvalueofproductionofthecommodity;·thefastertheexpectedgrowthoftheindustry;·thegreatertheproportionalreductioninunitcostsinducedbyresearch;·thehighertheprobabilityofresearchsuccess;·thehighertheceilingrateofadoptiondomestically;·thefastertheadoptionoftheresearchresultsdomestically;·thelowertheadoptionofresearchresultsinothercountries;·thesoonerthereductioninunitcostisrealized;·thelowertherateofresearchdepreciation;·thelowertheresearchcost;·thelowertheinterestrate;·thelowertheopportunitycostofgovernmentfunds;·thesmallerthedomesticproductionasashareofglobalproductionofthecommodity;·thegreatertheeffectofresearchonreducingdistortingeffectsofpricepolicies;and·thegreatertheeffectofresearchonreducingdistortingeffectsofexternalities.Netdomesticresearchbenefitsarenotaffectedbymanyprice-distortingpolicies,althoughthedistributionofbenefitstendstobeshiftedtowardthosebeingassistedbythepricepolicy.Distribution
Researchisarelativelyblunttoolformeetingdistributionalobjectives,suchasforincomeornutrition,comparedwithpolicyinstrumentssuchastaxesandsubsidies.Researchtendstobebothanineffective,andaverycostlymethodforpursuing
socialpolicyobjectives.Domestic"producer"benefitsareincreasedasashareoftotalbenefits:
·thehigherthedomesticpriceelasticityofdemandforthecommodity;·thelowerthepriceelasticityofsupplyofthecommodity;·thesmallerthedomesticproductionasashareofglobalproductionofthecommodity;·whenthetechnologyappliesfartherdownthemarketingchaintowardsfarm-levelproduction;·thelowertheadoptionofresearchresultsinothercountries;and·thefastertheadoptionofresearchresultsdomesticallyrelativetoothercountries.
Source:PurcellandAnderson(1997);originallyfromAlston,NortonandPardey(1995).
Page64
·Privateorpublic?Publicfundingofresearchisjustifiableonlywhentheprivatesectorisunableorunwillingtomakeinvestmentsatlevelsdesiredbysociety.Again,nosimpleallocationruleexists.Andtheallocationbetweenpublicandprivateresearchisclearlyevolutionary.Itchangesasfirmsbecomemoreablethroughexperienceorinstitutionalinnovationtoextractrentsfromtheirresearchinvestment.TheprivatesectorinRussiaisnotyetdevelopedenoughtomakesignificantcontributionstoagriculturalresearch.(seeAnnexCfortheroleofpublicsectorinfinancingresearch,andAnnexDfortheroleofprivatesectorinfinancingresearch.)
·Russiaortheinternationalcommunity?Ideally,Russiashouldhavethebestagriculturalresearchsystemitcanaffordtosupport.However,thereareclearlyrolesfortheinternationalcommunityinsupportingthereformandtransformationofRussia'sagriculturalresearchsystem.Mostoftheserolesareshort-terminnature,primarilytosupportstabilizationandrestructuringinitiatives.However,thesamespilloverargumentthatjustifiesamixofregionalandnationalsupportwithinRussiacanalsobemadebetweenRussiaandtheinternationalcommunity.ItmakessenseforRussianscientiststoreceivepartialfundingfrominternationalagenciesforagriculturalresearchthatbenefitsotherregionsorcountries.(SeeAnnexEfortheroleofinternationalagriculturalresearchsystemandAnnexFforfundingofagriculturalresearchbytheWorldBank.)
·Budgetarysupportorloans?Thefinalfindingdilemmaembodiesmostoftheforegoingchoicesanddependsonthemixofregional,national,andinternationalsupportaswellasontherelativerolesofthepublicandprivatesectors.Budgetaryallocationsfromregionalornationalgovernmentsfinanceongoingprogramsthroughoperatingbudgets.Budgetaryallocationscanalsobeused,inalimitedway,forcapitalinvestmentordebtservice.Thetwousescompetewitheachother,andresearchadministrationmustattempttomaintainan
appropriatebalance.
AgendaforCapacityDevelopmentandInstitutionalReform
Aship'srudderworksonlywhentheshipismoving.Sotoowithinstitutionalreform.Gettingafewthingsstartedismoreimportantthanwaitinginhopesthatsomeoptimalplancanbedevelopedandadopted.Inthissectionweproposeandbrieflydescribesixpriorityareasthatbuildoninternationalexperiencebutareintentionallylimitedinscope.Bylimitingprojectscope,webelievethattherequiredcourseofactioncanbedeterminedandimplemented.AndalthoughtheprojectsfocusdirectlyonneededactioninRussia,theyareappropriateforagriculturalresearchreforminothertransitioneconomies.
Theoverarchingobjectivesfortheproposedprojectsaretostabilizecriticalelementsoftheagriculturalresearchsystemandtodevelopworkablemodelsofinstitutionalreform.Inadditiontotheselonger-termobjectives,itisimportantthattheworldscientificcommunitystayengagedwiththeirRussiancounterpartsdespitethepoliticalandeconomicuncertaintiesthatwillprevailinRussiaforthenextseveralyears.Inbrief,theobjectivesofsixpriorityareasareasfollows:
·Todevelopandimplementaplantostabilizespecificagriculturalresearchprogramsthatareconsideredtobeofhighstrategicvalueandareextremelyvulnerabletoloss(seeBox5.2).
·TodevelopwithinRAAS,MOAF,andtheRussianagriculturalscientificcommunitythecapabilitytoestablishandimplementappropriatesciencepolicyandadvocacy.
Page65
·ToreconnecttheRussianagriculturalscientificcommunitywiththerestoftheworld.Inparticular,toseekoutandimplementcost-effectivewaystoreducetheimpactonRussianagriculturalscientistsofyearsofprofessionalisolation.
·TodevelopandpilotmodelsofprofessionaldevelopmentthatcanrapidlyintroducecriticalskillsintoRussia'sagriculturalresearchsystem.Theseskillsincludeagriculturaleconomics,agribusinessmanagement,agroecology,extensionmethods,andadultlearningbehaviorandresearchmanagement.
·Todevelopandpilotmodelsofinstitutionalreformattheoblastlevelthatsignificantlyincreasetheeffectivenessandefficiencyofresearchdirectedtowardacriticalneedwithintheoblastthathasnationalimportanceandconsequences.
·Todevelopandpilotmodelsforresearchinstitutemergers,closures,downsizing,orprogramtermination.
Box5.2:N.I.VavilovInstituteofPlantIndustryTheN.I.VavilovInstituteofPlantIndustry(VIR)inSt.Petersburg,foundedin1894,holdsoneoftheworld'slargestandmostimportantgermplasmcollectionsover340,000accessionsofmorethan2,500species.VIRprovidesresearchsupporttoallofRussia'splantbreedingcenters.FundingforVIRcomesdirectlyfromthefederalbudget.Severefundingshortageshaveput,VIR'sresearchprogramanditsgermplasmcollectionatrisk.VIR'svulnerabilityhasbeenrecognizedbytheWorldBankandotherinternationalagencies,whichhaveaccordinglyprovidedsupport.
Thesestepsarenecessaryantecedentstoanylarge-scaletransformationofRussia'sagriculturalresearchsystem.Thereislittledoubtthatlong-termsocialreturnsfromagriculturalresearchwillsignificantlyexceeddebtservicerequirementsfromanyinvestment
financedbyborrowedfunds.However,prudentallocationofloanfundsrequirestimeandmanagementexperiencebothlackingintheRussianagriculturalresearchestablishment.Incertainsituations,therefore,pilotprojectssupportedbydonorgrantfinancingmightbejustified.
StabilizingAgriculturalResearchSystem
TheRussianagriculturalresearchsystemneedstoidentifypriorityagriculturalresearchinstitutions,assets,andprogramswithhighstrategicvaluethatarevulnerabletosignificantorirreplaceablelossoverthenexttwotofiveyears.Eachpriorityprogramneedsanappropriatestabilizationplan.Along-termplanisalsoneededtoensurethefutureviabilityoftheresearchprogram.
MajorparticipantsinthisprojectwouldbeasmallmanagementteamrepresentingMOAF,RAAS,financingentities,andinternationalconsultantsonsciencepolicyorspecificareas-ofscience.ThesuccessofthisprojectdependsentirelyonthecommitmentoftheMOAFandRAAStoreformtheagriculturalresearchsystem.Researchmanagersmustbewillingtoobjectivelyevaluateeachinstitute'sprogramusingcleareconomiccriteria.Furthermore,theymustbewillingtoconsiderstrategiesinwhichtheydeliberatelysharepowerwithotherentitiesanddecentralizedecision-making.Itisnotpossibleto
Page66
evaluatethestrategicvalue,vulnerability,andqualityofaresearchprogramwithoutconfrontingdecisionstocloseordownsizeinstitutions,shiftpriorities,orredirectscientificactivities.
Expertconsultationandadvicecanplayacriticalroletoensureobjectiveevaluationandprovideneededscientificexpertise.ConsultantsshouldbedrawnfromtheranksofscientistsandadministratorsinleadingagriculturalresearchuniversitiesandselectedresearchinstitutesfromtheCGIAR.
Fundingthisactivityistrickybusiness.Incentivestomisrepresentinstitutionalvulnerabilityandvalueareobviouslyhigh.Fundingmightbebasedonsomeofthefollowingcriteria:
·RequirecostsharingbetweenMOAFandRAAS,theinternationalfundingagency,theoblastgovernment,ifappropriate,andthespecificinstitutionreceivingassistance.
·Captotal,one-timefundsavailablefromthefundingagencyatarelativelylowlevel.
·Providefinancialassistanceprimarilyintheformofloans.Loanswouldseempreferabletograntssincetheintentistopreserveresearchassetsthathavehighfuturevalue.Loansalsocreatearepaymentobligation,whichshouldreducetheincentivetomisrepresentprogramvulnerability,value,orquality.However,debtservicerequirementsandoperatingbudgetrequirementsmustbecarefullyreviewed.Totheextentthatstrategicvalueaccruestotheworldscientificcommunity,limitedgrantfundingwouldalsobeappropriate.
StrengtheningtheCapacityforAgriculturalSciencePolicy
DuringtheSovietera,agriculturalsciencepolicyandadvocacywerethedomainofVASKhNIL.WiththecollapseoftheUSSR,the
establishmentofRAASand,morerecently,itsmergerwithMOAF,thelinesofauthorityforsciencepolicyandadvocacyhavebecomeblurredandinsomecasesobliterated.Russianagriculturalscienceneedsabodythatcandevelopandclearlyarticulatesciencepolicyandstrategy.Russianagriculturalsciencealsoneedsabodythatcanclearlypresenttolegislativebodiesandotherstakeholdersthecaseforagriculturalresearchandthebenefitsityields.Itislikelythatthetwobodiesneedtobedistinctandindependent.Russianagriculturalsciencealsoneedstoreestablishfield-basedprofessionalsocietiesthatarewellconnectedtothemajorinternationalprofessionalassociations.Finally,RussianscienceadministratorsinRAASandMOAFneedatechnicalassistanceprogram,possiblysupportedbydonorgrants.Technicalassistancewouldbeprovidedbyresearchadministratorsandstafffromleadingagriculturalresearchinstitutions.Keyareasofassistancewouldinclude:
·studytoursofleadingagriculturalresearchinstitutions,universities,andagriculturalresearchadvocacygroups
·trainingprogramsonagriculturalresearchadministrationandevaluation.Thiswouldincludechoicesinfundingmechanisms,publicandprivatesectorresearch,establishmentofpriorities,andmonitoringandevaluation
·trainingprogramsonagriculturalresearchadvocacyandlegislativestrategy
·preparationofapolicydocumentgoverningagriculturalscienceinRussia.
Page67
AstransformationofRussia'sagriculturalresearchsystemproceeds,supportandaccountabilitywillbecomecloselytiedtooblastgovernments.However,nationalrepresentationandcoordinationofresearchwillstillbeneeded.AndRussia'sscientificcommunityneedstodevelopleaderswithastrategicperspectiveonagriculturalresearchwhocanseekopportunitiesandreacttopotentialthreats.Strengtheningagriculturalsciencepolicy,ultimately,seekstodevelopthisstrategiccapability.
ProvidingInternetAccesstotheAgriculturalResearchCommunity
Politicalideology,distance,poorcommunicationsystems,anddecliningbudgetshaveisolatedRussianagriculturalscientistsfromcolleagueselsewhere.AtatimewheninstantaneousglobalcommunicationovertheInternetisalmostcommonplace,Russianscientistsarenearlycutofffromtheworld'sscientificcommunity.
AlthoughanetworkofmajorRussianuniversitiesdoesexist,fewagriculturalinstitutionshaveaccesstoitusuallybecausetheylackdedicatedphonelineoramodemorthefundstocoverthecostofaccesstothetelephonenetwork.ThesearesmallobstaclescomparedwiththebenefitsthatwouldaccruewereRussianagriculturalscientiststogainfullaccesstotheInternet.Internetaccessiscertainlynotaperfectsubstituteforjournalsubscriptions,attendanceatprofessionalmeetings,scientificexchanges,orjointresearch.Butitiscosteffective.Andonadailybasis,InternetaccesscanplayamajorroleinreunitingRussianagriculturalscientistswiththeircolleaguesbothinsideandoutsidethecountry.
DevelopingCriticalScientificSkills
Therearetwobasicapproachestodevelopingcriticalscientificskills.Thefirstwouldrelyonacentralinstitutionthatwouldreceiveneededtrainingandthentraintrainersatspecificagriculturalacademiesor
researchinstitutes.Thesecondapproachwouldbemoredecentralizedandoffertrainingincriticalneedsdirectlytofacultyandresearchersatspecificinstitutions.
Thefirstapproachwouldlikelybemorecosteffectiveintheuseofdonorfunds.However,itwouldalsotendtocentralizeexpertiseandinformationathrow-backtoSovieterapolicies.Thiswouldclearlybeanunfortunateconsequence,sinceavibrantresearchandeducationalcommunityrequiresprofessionalindependence,institutionalfreedom,andcompetition.Butwithpropersafeguards,thepitfallsofcentralizationcanbeavoided.
TheTimiryazevMoscowAgriculturalAcademy(TMAA)hasawell-establishedtraditionofprovidingsupportandeducationalmaterialsthroughoutRussia'sagriculturalknowledgesystem,anditsadministrationandstaffhaveclearlystatedtheirwillingnesstoengageinsuchactivity(Box5.3).Mentoringisanessentialcomponentofthiseffort.TMAAcouldbelinkedwithacounterpartoneNorthAmericanandaEuropeanuniversitythatcouldprovidetrainingtoselectedTMAAfacultymembers.CentersofexcellencecouldbeestablishedinTMAAinareasthatarenotadequatelyrepresentedinRussianagriculturalresearch.SelectedresearchinstitutionsinRussiacouldthenpilottrainingprogramsdevelopedbyTMAAanditscounterparts.
Page68
Box5.3:TimiryazevMoscowAgriculturalAcademyTimiryazev,MoscowAgriculturalAcademyisoneoftheoldestagriculturaleducationalinstitutionsinRussia.Establishedin1865,ithasbeenhometosomeofRussia'smostdistinguishedagriculturalscientistsoverthepast130years:K.A.Timiryazev,D.N.Pryanishnieav,N.I.Vavilov,V.R.Williams,N.D.Kondratiev,andV.S.Nemchinov,amongothers.TimiryazevAgriculturalAcademyhasawell-establishedtraditionintrainingRussianagriculturalscientistsandeducators.Approximately70percentofalltextbooks,laboratory,andotherteachingmaterialsinuseinRussiawerepreparedbytheacademy'sfaculty.Recently,theacademy'sadministrationhasattemptedtoestablishinternationalcontactstoupgradeprogramsineconomics,agribusinessmanagement,agroecology,extensioneducation,andresearchmanagement.Becauseofitshistoricalposition,TimiryazevisuniquelysuitedtoserveasRussia'straininginstituteforthesecriticalareas.
Foreachcriticalarea,thecounterpartinstitutionandTMAAwilldevelopandconductatrainingprogramtoupgradescientificskillstoanacceptablebasiclevel.Withsupportfromthecounterpartinstitution,TMAAwoulddevelopappropriatetrainingmaterialsandprograms,andTMAAstaffmemberswouldpilotbasicscientifictrainingprogramsatselectedresearchinstitutes.TMAAfacultytrainedincriticalskillareaswouldalsoparticipateinselectedresearchprogramsthroughpilotconsultancyprograms.Forexample,TMAAfacultymightcollaborateonprojectsontechnologyevaluation,commoditymarketing,orenvironmentalmanagement.
RestructuringAgriculturalResearchattheOblastLevel
InmostoblastsorkraysinRussia,theagriculturalknowledgesystemresemblesaminiatureversionofthenationalsystem.Researchinstitutes,agriculturalinstitutesofhighereducation,tekhnikums,agriculturalvocationaltrainingschools,retraininginstitutes,andanumberofgovernmentagenciesareallrepresented,eachreportingthroughverticalchannelstoMoscowanditsrespectiveministry(Box5.4andFigure5.3).Thisisthesettingwithinwhichmodelsofinstitutionalreformforagriculturalresearchmustbedevelopedandtested.
Box5.4:TheAgriculturalKnowledgeSysteminSaratovOblastTheagriculturalknowledgesystemisSaratovOblastistypicalofthatinmanyoblasts.ItsmajorcomponentsarefourresearchinstitutesreportingtoRAAS,tworesearchinstitutesreportingtotheRussianAcademyofSciences,andtworesearchinstitutesandthreeeducationalacademiesreportingtoMOAF.Addtothislisttworetraininginstitutes,ateachingacademyforgeneraleconomics,andSaratovStateUniversity,amajoreducationalinstitutionwithover20,000students,andthedifficultywithinstitutionalreformisclearastheorganizationchartinFigure5.3showsaswell.
Althoughthereisclearlyaroleforthefederalgovernmentinidentifyingnationalprioritiesandaccountingforexternalities,responsibilityforfinancingandmanagingadecentralizedagricultural
Page69
Figure5.3.OrganizationalStructureofResearchandEducationalInstitutesinSaratovOblast
Source:BasedonUngenfucht(1996).
Page70
researchprogrammustultimatelydevolvetotheoblasts.Therefore,experimentswithinstitutionalreform,whetherattheproject,enterprise,orregionallevels,mustfocusontheoblast.Institutionalreformhastodowithcreatingnewwaysofdoingbusinessnewproducts,customers,collaborators,incentivesandmethodsofplanning,implementation,andcontrol.Institutionalchangecanbebestfosteredbycreatingincentivesthatencourageoblastagriculturalresearchinstitutionsandscientiststorefocustheiractivitiesinordertodevelopacomprehensiveagriculturalresearchprogramthatis:
·consumer-oriented
·demand-driven
·client-focusedandparticipatory
·multidisciplinary
·costeffective
·linkedtoendusersthroughappropriatechannels,bothpublicandprivate.
Inshort,theincentivesystemshouldmovetheoblastresearchcommunityinthedirectiontowardwhichagriculturalresearchisheadedelsewhereintheworld.
5.37.Indesigningapilotprojectforinstitutionalreformattheoblastlevel,severalissuesneedtobeconsidered:
·Participatingoblastsshouldbecarefullyscreenedtoensurethattheoblastgovernmentiscommittedtothereformsandthatagricultureisanimportantsectorwithintheoblast.
·Theprojectshouldbeorganizedaroundanagriculturalproblemofsignificancetotheoblastandthatcanquicklydemonstratesignificantsocietalbenefits.Forexample,researchtoimprovetheoverall
profitabilityandenvironmentalperformanceofbreadwheatproductionsystemsinSaratovandneighboringoblasts.Aprojectwiththisscopewouldrequireintegrationofplantandsoilscienceswithmarketing,farmmanagement,conservationplanning,farmpolicy,andagriculturallaw.Furthermore,itrequiresdirectattentionontospill-overandspill-inproblemsandassociatedgovernmentresponsibilities.Thistypeofprojectwouldbeappliedinnatureandwouldrequiresynthesisandadaptationofexistingresearchresults.
·Theprojectshouldworkwithexistinginstitutionsintheoblast.Aprojectthatproposeseliminatingormergingspecificorganizationsislikelytobemetwithhostilityandtoinvolveapainful,protractedprocess.Toomuchenergywouldbeexpendedandlittlewouldbelearnedaboutnewwaysofworkingtogether.
·Theprojectshouldestablishaconsortiumofresearchinstitutionsandindividualsthatclearlyhavesomethingtooffer.Thiswouldrequireawell-supportedprojectmanagementstructurewiththeauthoritytosetclearlimitsandexpectations.
·Longer-termrelationshipsbetweentheoblastconsortiumandoneortwocarefullychosenWesternagriculturalresearchinstitutionsshouldbeestablished,toprovidetheoblastconsortiumwithamodelofeffectiveorganizationalbehavior,opportunitiesforprofessionaldevelopment,scientificexpertise,mentoring,andotherformsofsupport.SelectedCGIAR
Page71
institutionsmightalsobeinvolvedparticularlyfortechnicalsupportintargetedresearchareas.
·Fundingneedstobeprovidedjointlybyparticipantsandtheinternationalcommunity.Allpartiesneedtobecommittedtotheproject'ssuccess.Sharedfinancinghelpsestablishthatcommitment.
Aprogramofbroadinstitutionalreformrequiresbroadparticipation.Thisinclusiveapproachcertainlyaddsmanagerialcomplexitytotheproject,butitshouldalsoresultinincreasedcommitment.Keyparticipantsmightinclude:
·Administratorsandscientistsofselectedoblastorregionalresearchinstitutesorinstitutesofhighereducationwithresearchprograms.
·AdministratorsandscientistsfromMOAFandRAAS,whoseinvolvementisparticularlyimportantifthepilotprojectistoresultinnationalreformstrategies.
·Representativesofoblastadministration.Itisexpectedthattheoblastwillincreasefundingforresearch.Inturn,itmustplayagreaterroleinresearchplanningandoversight.
·Representativesofend-users,includingparticipatingfarms,processingplants,andinputsuppliers.End-userscouldparticipatethroughadvisoryorreviewbodies.Theymightalsoexploredirectparticipationinresearchandfundtargetedresearchgrants.
·Representativesofstakeholderswithintheoblast,includingconsumersandenvironmentalists.Thiswouldlikelytaketheformofanadvisoryorreviewboardfortheproject.
·RepresentativesfromWesterncounterpartresearchinstitutions.Effectiveandcommittedcounterpartsareessentialtothesuccessofthisproject.
Giventhelevelofuncertaintythatsurroundspilotprojects,grantfundingalongwithin-kindcontributionsbyparticipantsmightbeconsidered.Withbettermodelsofinstitutionalreformandprovenresults,debtfinancingmightbeattractivetooblastandfederalgovernments.Fundingmustbeaccompaniedbyaclearcommitmentbyallpartiestorealreformoftheagriculturalresearchsystemwithintheoblast.Preservingtheexistingsystemisnotanoption.
ConsolidatingResearchInstitutesandPrograms
Elimination,downsizing,andmergingofresearchinstitutesandfacilitiesmustoccurifRussiaistoachieveareasonablebalancebetweenbudgetandprogram.Becauseofthepoliticalandpersonnelproblemsassociatedwiththeseactions,neededinstitutionaladjustmentsareoftenavoided.Thishesitationcostsmoneyandoftenexacerbatespersonnelproblems.Theobjectiveofthisactivityisto:
·developandtestmodelsofresearchinstituteorprogramclosure,downsizing,ormerger
·developandtestmodelstousesurplusland,buildingsandotherassetstogenerateincometosupportresearch
Page72
·developandtestproceduresforretrainingorrelocatingdischargedstaff
·developandtestproceduresforreallocatingorliquidatingassetsfromterminatedprograms.
Theprojectwouldinvolverepresentativesfromtheprivatesector,MOAF,andRAASaswellasfromoneortwonationalagriculturalresearchsystemsinothercountrieswithexperienceindownsizingandprogramtermination.Forexample,researchadministratorsfromNewZealandorAustraliamightbeinvolved,aswellasstaffmembersfromselectedCGIARcenters.ItisessentialthatMOAFandRAASadministratorsplayanactiveroleinidentifyinginstitutionsforclosureordownsizingandtakeresponsibilityfortheseactions.
SupportofReformbytheInternationalCommunity
ThequestionofhowtofinancereformofRussia'sagriculturalresearchsystemhasarisenrepeatedlyinthisreport.Atissueis''howtobestfinance"theprocessofreform,restructuring,andrehabilitationoftheRussianpublicagriculturalresearchsystem.Itisexpectedthattherestructuredsystemwouldbesustainablewithfundingfromfederalandoblastbudgetsandotherresearchsponsors,bothpublicandprivate.Ultimately,operatingandcapitalbudgetswillbebroughtintolinetosupportthebestagriculturalresearchsystemRussiacanafford.
Restructuringandreformoftheagriculturalresearchsystemcanbefinancedby:
·costreduction,recovery,andreallocationofexistingbudgets
·increasedappropriationfromfederaloroblastsources
·agriculturalresearchfoundations
·grantsfrominternationaldonorsortheprivatesector
·loansfrominternationalfinancialinstitutionssuchastheWorldBank.
Intheshortterm,financingreformthroughreallocationwilltaketimeandagreatdealofpoliticalcapital.Increasedappropriationsseemratherunlikelyifthereformprocessistobeexpedited.Researchfoundationsdonotyetexist.Whatremainsaregrantsandloans.
Grantfundingisnormallyjustifiedonthebasisofpublicgoodsarguments.InthecaseofagriculturalresearchinRussia,thereareseveralpublicgoodselementsembeddedinthereformprocess:
·FoodsecurityinRussiasupportsdemocratizationandthedevelopmentofcivilsociety.
·GlobalfoodsecuritywillbeenhancedifRussia'sagriculturalsectorbecomesmoreefficientandsustainable.
·ThevalueofRussia'sagriculturalresearchassets,suchasgermplasm,know-how,orresearchproducts,maybelosttotheworldcommunitywithoutdirectintervention.
Thatsaid,however,itisquestionablewhetherthevalueofinternationalpublicgoodsissufficienttosupporttheuseofgrantfundsforagriculturalresearchreforms.Andevenifitwere,itcanbeverydifficulttocreateincentivesoradequatelymonitorgrant-fundedprojectsthatwouldensurethatthedesiredreformsoccur.
Page73
Whataboutloans?Fundstofinancereformandtherestructuringoftheagriculturalresearchsystemcanbeborrowedatmarketratesofinterestfarbelowtheratesofreturnthatinvestmentsinagriculturalresearcharecapableofgenerating.Borrowingtheneededcapitalisclearlyprofitable.Furthermore,borrowingmoneywouldalignincentivestoinvestinresearchreformsandprojectsthatgeneratethemostsocietallybeneficialincomestreams.YetRussiaauthoritieshaverepeatedlydemonstratedareluctancetofinanceagriculturalresearchwithdebt.Thereareseveralpossiblereasonsforthisreluctance:
·ThecaseforcompetitiveratesofreturnfrominvestinginagriculturalresearchprojectshasnotbeenadequatelymadetotherelevantRussianauthorities,particularlyintheMinistryofFinance,MOAF,RAAS,andtheoblastgovernments.
·PersistentinefficiencyinRussia'sagriculturalsectorisperceivedtoreduceactualratesofreturnwellbelowratesestimatedforothercountries.
·Uncertaintiesassociatedwiththebenefitsfromreform,ortheabsenceofprovenmodesofreform,aresogreatthatRussianauthoritieswillnotacceptloanobligations.
·AgencyproblemsunderminetheprocesstheMinistryofFinanceisreluctanttotakeondebtbecauseitsagents,MOAForRAASorotherresearchbodies,maynotbeabletoimplementtheneededreformsormaychoosetopreservetheexistingsystem.
·Thetermsoftheloandonotmatchtheexpectedincomestreamfromtheinvestmentinagriculturalresearch,therebyresultinginseriousliquidityproblems.
Undertheseconditions,acasecanbemadeforusingsmall,targetedgrant-fundedpilotprojectstodevelopandtestreformprojectsandtodeveloptheneededskillsforRussianstodesignandmanagethe
projects.However,thegrantfundscanserveonlyasacatalysttojumpstartthereformprocess.Ultimately,responsibilityforfinancingthetransitionandongoingoperationsofthereformedRussianagriculturalresearchsystemrestswiththeRussians.
Agriculturalresearchinterestsarewellrepresentedintheinternationalcommunity,intheWorldBank,OECD,bilateraldonors,theEuropeanCommunity,andNorthAmericanandEuropeanagriculturaluniversities,amongothers.TheveryrealprospectofRussia'svastagriculturalknowledgesystemcollapsingjustwhentheworldcommunitywillneeditmostshouldbesufficienttoprovokearesponse.YettheresponsefromtheinternationalcommunitytoRussia'sagriculturalresearchcrisishasbeenlimitedandfragmented.Little,ifany,efforthasbeenmadetoassistRussiawiththetransformationofitsagriculturalresearchorhighereducationsystems.Long-termcapacitycannotbeallowedtofallvictimtoshort-termexpediency.
Ashasbeenarguedfromseveralperspectives,theRussianagriculturalresearchsystemmeritsassistanceeveninthemidstofadifficulteconomicandpoliticaltransition.Thisassistanceneedstobeginwithtwobasicstepstostabilizeandprotecttargetedagriculturalresearchassetsandtodevelopandpilotmodelsofinstitutionalchangeandhumancapitaldevelopment.Newfinancingisrequiredtoimplementboththesesteps.However,thefinancingmustbeprovidedinawaythatensuresdeliberatetransformationandreform.Usingfundstopreservethepastisunacceptable.Itisalsoessentialthatfundsextendedtosupportstabilizationandinstitutionallearningreflecttheuncertaintyoftheprocessand
Page74
outcomeinbothareas.Forthisreason,bothgrantsandloansshouldbeconsideredaspossiblefundingmechanismsinthenearterm
ProjectstosupportagriculturalresearchprogramshavebeendiscussedwithRussianadministratorsandscientistsforthepastfiveyears.Yetafterallthestudies,needsassessments,visionstatements,andmemorandaofunderstanding,littleofsignificancehasoccurredtorelievetheseriousproblemsfacingRussia'sagriculturalresearchsystem.ThisisaconsequenceofcollectivefailurebytheRussiangovernment,byoblastandmunicipalgovernments,bytheRussianscientificestablishment,andbytheinternationalcommunity.ThepriorityactivitiesproposedheremakeapositivecontributiontowardredefiningrolesandresponsibilitiesforagriculturalresearchinRussia.Andmostimportant,theywouldhelpensurethatthehuman,biological,andphysicalcapitalinvestedinRussia'sagriculturalknowledgesystemisnotonlyusedeffectivelyduringtransitionbutalsoisnotlosttofuturegenerations.
Page75
ReferencesAlston,J.M.,J.A.ChalfantandP.G.Pardey.1995."TechnicalProgressandStructuralChangeinOECDAgriculture"InS.R.Tabor,ed.,AgriculturalResearchinanEraofAdjustment:Policies,Institutions,andProgress.EDISeminarSeries,Washington,DC:WorldBank.
Alston,J.M.,G.W.NortonandP.G.Pardey.1995.ScienceUnderScarcity:PrinciplesandPracticeforAgriculturalResearchEvaluationandPrioritySetting.Ithaca,NewYork:CornellUniversityPress.
Alston,J.M.andP.G.Pardey.1996.MakingSciencePay:TheEconomicsofAgriculturalR&DPolicy.Washington,DC:TheAEIPress.
Alston,J.M.,P.G.PardeyandJ.Roseboom.1997."FinancingAgriculturalResearch:InternationalInvestmentPatternsandPolicyPerspectives"PaperpresentedattheAnnualConferenceoftheAmericanAgriculturalEconomicsAssociation,August10-16,Sacramento,California.
Anderson,J.R.(ed).1994.AgriculturalTechnology:PolicyIssuesfortheInternationalCommunity.Cambridge,MA:C.A.B.International.
Anderson,J.R.,P.G.PardeyandJ.Roseboom.1994."SustainingGrowthinAgriculture:AQuantitativeReviewofNationalandInternationalAgriculturalResearchInvestments,"AgriculturalEconomics.10(2):107-23.
Binswanger,H.P.andV.W.Ruttan,eds.1978.InducedInnovation,Technology,InstitutionandDevelopment.Baltimore,Maryland:JohnsHopkinsUniversityPress.
Binswanger,H.P.,M.-C.Yang,A.BowersandY.Mundlak.1987."OntheDeterminantsofCross-CountryAggregateAgriculturalSupply,"JournalofEconometrics36(1):111-131.
Bonte-Friedheim,C.,S.TaborandJ.Roseboom.1994.FinancingNationalAgriculturalResearch:TheChallengeAhead.BriefingPaperNo.11.TheHague:ISNAR.
Bottomley,A.andR.Contant.1988.MethodsforSettingPrioritiesAmongDifferentLinesofResearch.TheHague:ISNAR.
Brooks,K.,E.Krylatykh,Z.Lerman,A.PetrikovandV.Uzun.1996.AgriculturalReforminRussia:AviewfromtheFarmLevel.DiscussionPaper327.Washington,DC:WorldBank.
Brooks,K.,andZ.Lerman.1995."RestructuringofSocializedFarmsandNewLandRelationsinRussia"D.Umali-DeiningerandC.Maguire,eds.AgricultureinLiberalizingEconomics:ChangingRolesforGovernments.Washington,DC:WorldBank.
Byerlee,D.andGaryE.Alex.1998.StrengtheningNationalAgriculturalResearchSystems:PolicyIssuesandGoodPractices.ESSD(RuralDevelopment).DiscussionPaper,Washington,DC:WorldBank.
Page76
CGIAR.1996a.25YearsofFoodandAgriculturalImprovementinDevelopingCountries.CGIARSecretariat,Washington,DC:WorldBank.
CGIAR.1996b.ReportoftheTaskforceonCentral/EasternEuropeandtheFormerSovietUnion.DocumentNo.ICW/96/06,CGIARSecretariat,Washington,DC:WorldBank.
CGIAR.1997.1996AnnualReport.CGIARSecretariat,Washington,DC:WorldBank.
Collion,M.H.1989.StrategicPlanningforNationalAgriculturalResearchSystems:AnOverview.WorkingPaperNo.26.TheHague:ISNAR.
Collion,M.H.andA.Kissi.1995.GuidetoProgramPlanningandProgramSetting.ResearchManagementGuidelinesNumber2E,TheHague:ISNAR.
Csaba,C.1998."AgriculturalResearchinCentralandEasternEuropeandtheformerSovietUnion"ECSREWorkingPaperNo.2,Washington,DC:WorldBank.
Echeverria,R.G.,E.J.TrigoandD.Byerlee.1996.InstitutionalChangeandEffectiveFinancingofAgriculturalResearchinLatinAmerica.TechnicalPaperNo.330,Washington,DC:WorldBank.
Evenson,R.E.1986.TheImportanceofAgriculturalResearchDuringaPeriodofFarmSurpluses,InCriticalConcernsofUS.Agriculture.Philadelphia,PA.:ThePhiladelphiaSocietyforPromotingAgriculture.
Evenson,R.E.1994.AnalyzingtheTransferofAgriculturalTechnology,InAgriculturalTechnology:PolicyIssuesfortheInternationalCommunity.J.R.Anderson,ed.,Cambridge,MA:C.A.B.International.
Evenson,R.E.andC.R.Pray(eds).1991.ResearchandProductivityinAsianAgriculture.Ithaca,NY:CornellUniversityPress.
Evenson,R.E.andL.E.Westphal.1995.TechnologicalChangeandTechnologyStrategy.CenterPaperNo.503,EconomicGrowthCenter,NewHaven,CN:YaleUniversity.
Evenson,R.E."IARC,NARCandExtensionInvestment,andFieldCropProductivity:AnInternationalAssessment."inR.E.EvensonandC.R.Pray,eds.ResearchandProductivityinAsianAgriculture.Ithaca,NY:CornellUniversityPress.
Falconi,C.andH.Elliot.1995.PublicandPrivateRandDinLatinAmericaandtheCarribbean"inG.H.PetersandD.D.Hedley(eds)AgriculturalCompetitiveness:MarketForcesandPolicyChoice.Dartmouth,UK:InternationalAssociationofAgriculturalEconomists.
Fan,S.andP.G.Pardey.1992.AgriculturalResearchinChina:ItsInstitutionalDevelopmentandImpact.TheHague:ISNAR.
Fulginiti,L.E.andR.K.Perrin,1993."PricesandProductivityinAgriculture"ReviewofEconomicsandStatistics.75:471-482.
Page77
Fulginiti,L.E.andR.K.Perrin.1996."LDCAgriculture:NonparametricMalmquistProductivityIndexes,"JournalofDevelopmentEconomics(forthcoming).
Griliches,Z.1964."ResearchExpenditures,EducationandtheAggregateProductionFunction,"AmericanEconomicReview.54(6):961-74.
Hayami,Y.andV.Ruttan.1995.AgriculturalDevelopment:AnInternationalPerspective.Baltimore,MD:JohnsHopkinsUniversityPress.
Hobbelink,H.1991.BiotechnologyandtheFutureofWorldAgriculture.London:ZedBookLtd.
Horton,D.,etal.1993.MonitoringandEvaluatingAgriculturalResearch:ASourcebook.Cambridge,MA:C.A.B.International.
Huffman,W.E.andR.E.Evenson.1993.ScienceforAgriculture.ALong-termPerspective.Ames,IA:IowaStateUniversityPress.
Huffman,W.E.andR.E.Just.1994."Funding,StructureandManagementofPublicAgriculturalResearchintheUnitedStates"Amer.J.Agr.Econ.76(November1994):744-759.
James,C.1996.AgriculturalResearchandDevelopment:TheNeedforPublic-PrivateSectorPartnerships.IssuesinAgricultureNo.9,CGIARSecretariat,Washington,DC:WorldBank.
Judd,M.,J.BoyceandR.Evenson.1991."InvestmentinAgriculturalResearchandExtensionPrograms:AQuantitativeAssessment",InR.E.EvensonandC.R.Pray,eds.,ResearchandProductivityinAsianAgriculture.Ithaca,NY:CornellUniversityPress.
Khanna,V.,W.E.HuffmanandT.Sandler.1994.AgriculturalResearchExpendituresintheUnitedStates:APublicGoods
Perspective.ReviewofEconomicsandStatistics.74(2):267-77.
Lloyd,A.G.,M.HarrisandD.E.Tribe.1990.AustralianAgriculturalResearch:SomePolicyIssues.Melbourne:CrawfordFundforInternationalAgriculturalResearch.
McCalla,A.F.1994a.AgricultureandFoodNeedsto2025:WhyWeShouldBeConcerned,CGIARSecretariat,Washington,DC:WorldBank.
McCalla,A.F.1994b."EcoregionalBasisforInternationalResearchInvestment."InJ.R.Anderson,ed.,AgriculturalTechnology:PolicyIssuesfortheInternationalCommunity,Cambridge,MA:C.A.B.International.
McCalla,A.F.andJ.Ryan.1992."SettingAgriculturalResearchPriorities:LessonsfromtheCGIARStudy."Amer.J.Agr.Econ.74:1095-1100.
Mudahar,M.S.1996a.Russia'sAgriculturalPerformanceandPolicyDuringTransition.WorldBank,Agriculture,IndustryandFinanceDivision,CountryDepartmentIII,EuropeandCentralAsia,Washington,DC
Page78
Mudahar,M.S.1996b.EvolutionofAgriculturalPricesinRussia:ImplicationsforIncentives,ProfitabilityandPricePolicy.WorldBank,Agriculture,IndustryandFinanceDivision,CountryDepartmentIII,EuropeandCentralAsia,Washington,DC.
Mudahar,M.S.andE.Polyakov.1996.AgriculturalTradePolicyinRussia.WorldBank,Agriculture,IndustryandFinanceDivision,CountryDepartmentIII,EuropeandCentralAsia,Washington,DC.
Mudahar,M.S.andG.B.Schaeffer.1996.MeasuringtheEffectsofAgriculturalPrice,SubsidyandTradePoliciesinRussia:EconomicIncentivesinaTransitionEconomy.WorldBank,Agriculture,IndustryandFinanceDivision,CountryDepartmentIII,EuropeandCentralAsia,Washington,DC.
Mudahar,M.S.andG.S.Sahota.1996.QuantitativeAnalysisofResourceTransferstoAgriculturalSectorinRussia.WorldBank,Agriculture,IndustryandFinanceDivision,CountryDepartmentIII,EuropeandCentralAsia,Washington,DC
Mudahar,M.S.,T.V.SampathandC.Pray1997.TransformingSeedIndustryinTransitionEconomies:TheCaseofRussia.WorldBank,Agriculture,IndustryandFinanceDivision,CountryDepartmentIII,EuropeandCentralAsiaRegion,Washington,DC.
Mundlak,Y.1996."OntheAggregateAgriculturalSupply",InJ.M.AntleandD.A.Sumner,eds.TheEconomicsofAgriculture.Vol.2,PapersinHonorofD.GaleJohnson,Chicago:UniversityofChicagoPress.
NationalResearchCouncil.1994.InvestingintheNationalResearchInitiative:AnUpdateoftheCompetitiveGrantsProgramintheUSDepartmentofAgriculture.Washington,DC:NationalAcademyPress.
OECD.1994.ReviewoftheAgriculturalEducationandTrainingSysteminRussia.Paris:OECD.
Pardey,P.G.1989."TheAgriculturalKnowledgeProductionFunction:AnEmpiricalLook,"ReviewofEconomicsandStatistics.71(3),453-61.
Pardey,P.G.andB.Craig.1989.CausalRelationshipsBetweenPublicSectorAgriculturalResearchExpendituresandOutput,AmericanJournalofAgriculturalEconomics.71:9-19.
Pardey,P.G.andJ.M.Alston.1995.RevampingAgriculturalR&D.Brief24,2020VisionofIFPRI,Washington,DC:InternationalFoodPolicyReseachInstitute.
Pardey,P.G.,J.RoseboomandJ.R.Anderson(eds).1991.AgriculturalResearchPolicy:InternationalQuantitativePerspectives.Cambridge:CambridgeUniversityPress.
Persley,G.J.1990a.BeyondMandel'sGarden:BiotechnologyintheServiceofWorldAgriculture.Cambridge,UK:C.A.B.International.
Persley,G.J.(ed).1990b.AgriculturalBiotechnology:OpportunitiesforInternationalDevelopment.Cambridge,UK:C.A.B.International,Wallingford.
Pinstrup-Andersen,P.1982.AgriculturalResearchandTechnologyinEconomicDevelopment.NewYork:Longman.
Page79
Porter,M.E.1985.CompetitiveAdvantage:CreatingandSustainingSuperiorPerformance.NewYork:TheFreePress.
Porter,M.E.1990.TheCompetitiveAdvantageofNations.NewYork:TheFreePress.
Pray,C.E.andJ.R.Anderson.1997."TheAgriculturalResearchSystemoftheFormerSovietUnion:PastandFuture."JournalofInternationalDevelopment.9(4):517-527.
Prosterman,R.L.,R.G.MitchellandB.J.Rorem.1997.ProspectsforPeasantFarminginRussia.RDI(RuralDevelopmentInstitute)ReportsonForeignAidandDevelopmentNo.92,Seattle,WA:RDI.
Purcell,D.L.andJ.R.Anderson.1997.AgriculturalExtensionandResearch:AchievementsandProblemsinNationalSystems.Washington,DC:WorldBank.
Ruttan,V.W.1981.AgriculturalResearchPolicy.Minneapolis,MN:UniversityofMinnesotaPress.
Ruttan,V.W.(ed).1994.Agriculture,Environment,andHealth:SustainableDevelopmentintothe21stCentury.Minneapolis,MN:UniversityofMinnesotaPress.
Ruttan,V.W.andC.R.Pray(eds).1987.PolicyforResearch.Bolder,CO:WestviewPress.
Schultz,T.W.1964.TransformingTraditionalAgriculture.NewHaven,CT:YaleUniversityPress.
Srivastava,J.P.andC.Reinhard.1996.AgriculturalKnowledgeSystemsintheTransitioningEconomies:ASurveyofWorldBankExperience.CGIARSecretariat,Washington,DC:WorldBank.
Tabor,S.R.(ed).1995.AgriculturalResearchinanEraofAdjustment:Policies,InstitutionsandProgress.EDISeminarSeries
(incollaborationwithISNAR),Washington,DC:WorldBank.
TaskForceonResearchInnovationsforProductivityandSustainability.(Co-chairs:UmaLeleandRonnieCoffman).1995.GlobalResearchontheEnvironmentalandAgriculturalNexusforthe21stCentury(GREAN).AProposalforCollaborativeResearchAmongUSUniversities,CGIARCenters,andDevelopingCountryInstitutions,OfficeofInternationalStudiesandProgramsattheUniversityofFlorida,Gainesville,FL.
Thirtle,C.andR.G.Echeverria.1994."PrivatizationandRolesofPublicandPrivateInstitutionsinAgriculturalResearchinsub-SaharanAfrica,"FoodPolicy.Vol19(1):31-44.
Thirtle,C.G.andV.W.Ruttan.1987.TheRoleofDemandandSupplyintheGenerationandDiffusionofTechnicalChange.HarwoodAcademicPublishers.
Umali,D.L.1992.PublicandPrivatgeSectorRolesinAgriculturalResearch:TheoryandExperience.DiscussionPaperNo.176,Washington,DC:WorldBank.
Umali,D.L.andL.Schwartz.1994.PublicandPrivateAgriculturalExtension:BeyondTraditionalFrontiers.DiscussionPaperNo.236,Washington,DC,WorldBank.
Ungenfucht,Vladimir.1996.PersonalCommunication.SRAISE,Saratov,Russia.
Page80
USDA.1995a.FormerUSSRUpdate:AgricultureandTradeReport.WPS-95-S2,EconomicResearchService,Washington,DC:USDA.
USDA.1995b.PublicandPrivateResearchandDevelopmentinAgriculturethrough1992.EconomicResearchService,Washington,DC:USDA.
Wong,L.andV.W.Ruttan.1990."AComparativeAnalysisofAgriculturalProductivityTrendsinCentrallyPlannedEconomies"InSovietAgriculture:ComparativePerspectives.Ames,IA:IowaStateUniversityPress.
WorldBank.1981.AgriculturalResearch:SectorPolicyPaper.ReportNo.2966,Washington,DC:WorldBank.
WorldBank.1983.StrengtheningAgriculturalResearchandExtension:TheWorldBankExperience.OED,ReportNo.4684,Washington,DC:WorldBank.
WorldBank.1992a.FoodandAgriculturalPolicyReformsintheFormerUSSR:AnAgendafortheTransition.StudiesofEconomiesinTransformation,No.1,CountryDepartmentIII,EuropeandCentralAsiaRegion,Washington,DC:WorldBank.
WorldBank.1992b.WorldBankAssistancetoAgriculturalHigherEducation,1964-1990.OED,ReportNo.10751,Washington,DC:WorldBank.
WorldBank.1994a.RussianFederation:AgriculturalReformImplementationSupport(ARIS)Project.StaffAppraisalReportNo.12710-RU,Washington,DC:WorldBank.
WorldBank.1994b.RussianFederation:LandReformImplementationSupport(LARIS)Project.StaffAppraisalReportNo.12711-RU,Washington,DC:WorldBank.
WorldBank.1994c.RussianFederation:AgriculturalResearch,HigherEducationandExtensionSub-SectoralAnalysisandProjectIdentification.Agriculture,IndustryandFinanceDivisionCountryDepartmentIII,EuropeandCentralAsia,Washington,DC:WorldBank.
WorldBank.1996a.AgriculturalResearchandExtension:LessonsfromChina.OEDPrecis,Number108,TheWorldBank,Washington,DC:WorldBank.
WorldBank.1996b.AchievementsandProblemsinDevelopmentofNationalAgriculturalResearchSystems.OperationsEvaluationDepartment.ReportNo.15828,Washington,DC:WorldBank.
WorldBank.1997.Russia:ForestPolicyduringTransition.AWorldBankCountryStudy,Washington,DC:WorldBank.
Zijp,W.1994.ImprovingtheTransferandUseofAgriculturalInformation:AGuidetoInformationTechnology.DiscussionPaperNo.247,Washington,DC:WorldBank.
Page81
AnnexAAgriculturalInstitutesofHigherEducationinRussiaNumber AgriculturalAcademiesand
InstitutionsLocation
1 All-RussiaAgriculturalInstituteofExtra-MuralTraining
Balashikha
2 TimiryazevAgriculturalAcademy Moscow
AgriculturalUniversities1 GorskyStateAgriculturalUniversity Vladikavkaz2 KrasnoyarskStateAgricultural
UniversityKrasnoyarsk
3 KubanStateAgriculturalUniversity Krasnodar4 NovosibirskAgriculturalUniversity Novosibirsk5 St.PetersburgStateAgricultural
UniversityPushkin
6 VoronezhStateAgriculturalUniversity
Voronezh
7 AltaiStateAgriculturalUniversity Barnaul8 BashkirAgriculturalUnivesity Ufa
AgriculturalInstitutes1 BelgorodAgriculturalInstitute Maiski2 BlagovestchenskAgricultural
InstituteBlagovestchensk
3 BryanskAgriculturalInstitute Kokino4 BuryatAgriculturalInstitute Ulan-Ude5 ChuvashAgriculturalInstitute Cheboksari6 DaghestanAgriculturalInstitute Makhachkala7 DonAgriculturalInstitute Persianovka8 IrkutskAgriculturalInstitute Molodezhny9 IvanovoAgriculturalInstitute Ivanovo
10 IzhevskAgriculturalInstitute Izhevsk11 Kabardino-BalkarAgricultural
InstituteNalchik
12 KazanAgriculturalInstitute Kazan13 KirovAgriculturalInstitute Kirov14 KostromaAgriculturalInstitute Kostroma15 KurganAgriculturalInstitute Lesnikovo16 KurskAgriculturalInstitute Kursk17 NizhegorodskyAgriculturalInstitute Novgorod18 NovgorodAgriculturalInstitute Novgorod19 OmskAgriculturalInstitute Omsk20 OrenburgAgriculturalInstitute Orenburg21 OryolAgriculturalInstitute Oryol22 PenzaAgriculturalInstitute Penza23 PermAgriculturalInstitute Perm24 PrimorskyAgriculturalInstitute Primorsky
(AnnexAcontinuesonthenextpage)
Page82
(AnnexAcontinuedfrompreviouspage)
Number AgriculturalAcademiesandInstitutions Location
25 RyazanAgriculturalInstitute Ryazan26 SamaraAgriculturalInstitute Kinel27 SaratovAgriculturalInstitute Saratov28 SmolenskAgriculturalInstitute Smolensk29 StavropolAgriculturalInstitute Stavropol30 TumenAgriculturalInstitute Tumen31 TverAgriculturalInstitute Tver32 UlyanovskAgriculturalInstitute Ulyanovsk33 UralAgriculturalInstitute Ekaterinburg34 VelikolukskiAgriculturalInstitute VelikieLuki35 VolgogradAgriculturalInstitute Volgograd36 YakutskAgriculturalInstitute Yakutsk37 YaroslavlAgriculturalInstitute Yaroslavl
AgriculturalEngineeringInstitutesandUniversities
38 Azovo-ChemomorskyInstituteofAgriculturalMechanization
Rostov
39 ChelyabinskAgriculturalEngineeringStateUniversity
Chelyabinsk
40 MoscowInstituteofAgriculturalEngineers
Moscow
41 SaratovInstituteofAgriculturalMechanization
Saratov
42 TabmovInstituteofChemicalMachineBuilding
Tabmov
DairyInstitutes43 VologdaDairyInstitute Molochnaya
FruitandVegetableGrowingInstitutes44 MichurinFruitandVegetableGrowing Michurinsk
Institute
LandImprovementInstitutes45 MoscowInstituteofLandImprovement Moscow46 NovocherkasskEngineeringandLand
ImprovementInstituteNovocherkassk
LandUseUniversities47 MoscowStateUniversityofLandUse Moscow
VeterinaryAcademiesandInstitutes48 KazanStateVeterinaryInstitute Kazan49 OmskStateVeterinaryInstitute Omsk50 MoscowVeterinaryAcademy Moscow51 SaratovStateZooveterinaryInstitute Saratov52 St.PetersburgVeterinaryInstitute St.Petersburg53 TroitskyVeterinaryInstitute Troitsky
AnnexBMainAgriculturalResearchInstitutesinRussiaNo. AgriculturalResearchInstitute Location
1 All-RussiaResearchInstituteofEconomics,Labor,andManagementinAgriculture.
Moscow
2 ResearchInstituteofEconomicsandOrganizationoftheAICoftheCentralBlack-EarthZone.
Voronezh
3 VolgaResearchInstituteofEconomicsandOrganizationoftheAIC
Saratov
4 All-RussiaResearchInstituteofAgriculturalEconomics Moscow5 All-RussiaResearchInstituteofCyberneticsofAIC Moscow6 All-RussiaResearchInstituteofEconomicsandNorms Rostov-on-the-Don7 AgrarianInstitute Kursk8 KurskResearchInstituteofAgro-IndustrialProduction. Moscow9 PotapenkoAll-RussiaResearchInstituteofWine-Growingand
Wine-Brewing.Novocherkassk,RostovOblast
10 All-RussiaResearchInstituteofCorn Piatigorsk,StavropolKrai
11 ResearchInstituteofAgricultureofSouthEast Saratov12 All-RussiaResearchInstituteofVegetableGrowing Mytischi,Moscow
Oblast13 All-RussiaResearchInstituteofPotatoGrowing Korenevo,Moscow
Oblast14 KrasnodarResearchInstituteofVegetableandPotatoGrowing Krasnodar15 All-RussiaResearchInstituteofSelectionofHorticulture Oryol16 LukianenkoKrasnodarResearchInstituteofAgriculture Krasnodar17 DonZoneResearchInstituteofAgriculture Rassvet,Rostov
Oblast18 SamaraResearchInstituteofAgriculture Bezenchuk,Samara
Oblast19 OrenburgResearchInstituteofAgriculture Orenburg20 NorthCaucasusZoneResearchInstituteofHorticultureand Krasnodar
Wine-Growing21 TambovResearchInstituteofAgriculture Chakino,Tambov
Oblast22 StavropolResearchInstituteofAgriculture Shpakovskoe,
StavropolKrai23 SouthUralsResearchInstituteofFruit,Vegetable,andPotato
GrowingCheliabinsk
24 ResearchInstituteofAgricultureofCentralRegionofNon-BlackEarthZone
Nemchinovka,MoscowOblast
25 TulaResearchInstituteofAgriculture MolochnyeDvory,TulaOblast
26 All-RussiaSelectionandTechnologicalInstituteofHorticultureandPlant
Moscow
27 Nursery.VavilovAll-RussiaResearchInstituteofCropGrowing
St.Petersburg
28 All-RussiaResearchInstituteofAgriculturalBiotechnology Moscow29 PustovoitResearchInstituteOfOilCrops Krasnodar30 All-RussiaResearchInstituteofBeansandGroatsCrops Oryol31 All-RussiaResearchInstituteofIrrigationVegetableGrowing
andMelonsKamyziak,AstrakhanOblast
32 MichurinAll-RussiaResearchInstituteofHorticulture Michurinsk,TambovOblast
33 All-RussiaResearchInstituteofFlowGrowingandSubtropicalCrops
Sochi,KrasnodarKrai
34 All-RussiaResearchInstituteofSelectionandSeedGrowingofVegetableCrops.
LesnoiGorodok,MoscowOblast
(AnnexBcontinuesonthenextpage)
(AnnexBcontinuedfrompreviouspage)
No. AgriculturalResearchInstitute Location
35 MichurinAll-RussiaResearchInstituteofGeneticsandSelectionofFruitPlants
Michurinsk,TambovOblast
36 All-RussiaResearchInstituteofMedicineandAromaticPlants
Moscow
37 BashkirResearchInstituteofCropGrowingandSelectionofFieldCrops
Ufa
38 PovolzhieKonstantinovResearchInstituteofSelectionandSeedGrowing
Kinel,SamaraOblast
39 Karachaevo-CherkessResearchInstituteofAgriculture Kavkazskiy,Karachaevo-CherkessRepublic
40 ViliamsAll-RussiaResearchInstituteofFodder Lugovaia,MoscowOblast41 All-RussiaResearchandTechnologicalInstituteof
LucerneandRapeGikalo,ChechenRepublic
42 All-RussiaResearch,Design,andTechnologyInstituteofRape
Lipetsk
43 All-RussiaResearchInstituteofLupine. Briansk44 PenzaResearchInstituteofAgriculture Penza45 BashkirResearch,Design,andTechnologyInstituteof
AnimalHusbandryandFodderProductionUfa
46 TatarResearchInstituteofAgriculture Kazan47 All-RussiaResearchInstituteofBiosynthesisofProteins. Moscow48 All-RussiaResearch,Design,andTechnologyInstituteof
ChemicalisationofAgricultureNemchinovka
49 NorthCaucasusInstituteofMountainAgriculture Mikhailovskoe,RepublicNorthOssetia
50 UlianovskResearchInstituteofAgriculture Timiriazevskoe,UlianovskOblast
51 LowVolgaResearchInstituteofAgriculture NovozhiznenskiyVolgogradOblast
52 DagastanResearchInstituteofAgriculture Makhachkala53 CheliabinskResearchInstituteofAgriculture Timiriazevskiy,
CheliabinskOblast54 NorthCaucasusResearchandTechnologyInstituteof Krasnodar
54 NorthCaucasusResearchandTechnologyInstituteofAgro-ChemistryandSoils
Krasnodar
55 CaspianResearchInstituteofAridAgriculture Astrakhan56 AdygeyResearchInstituteofAgriculture Maikop57 All-RussiaResearchInstituteofAgricultureand
ProtectionofSoilsfromErosionKursk
58 Agro-PhysicsResearchInstitute St.Petersburg59 PrianishnikovAll-RussiaResearchInstituteofFertilizer
andAgroSoilScienceMoscow
60 DokuchaevSoilInstitute Moscow61 All-RussiaResearchInstituteofAgricultural
MicrobiologySt.Petersburg
62 All-RussiaResearchInstituteofAgriculturalRadiologyandAgro-Ecology
Obninsk,KalugaOblast
63 All-RussiaResearch,Design,andTechnologyInstituteofChemicalAmeliorationofSoils
St.Petersburg
64 All-RussiaResearch,Design,andTechnologyInstituteofMineralFertilizers
Viatkino,VladimirOblast
65 DokuchaevResearchInstituteofAgricultureoftheCentralBlackEarthZone
VoronezhOblast
66 All-RussiaResearchInstituteofPlantProtection St.Petersburg67 All-RussiaResearchInstituteofPhyto-Pathology B.Viazemy,Moscow
Oblast
(AnnexBcontinuesonthenextpage)
(AnnexBcontinuedfrompreviouspage)
No. AgriculturalResearchInstitute Location
68 All-RussiaResearchInstituteofBiologicalProtectionofPlants Krasnodar69 All-RussiaResearchInstituteofIrrigationAgriculture Vologograd70 All-RussiaResearchInstituteofAgriculturalUseofAmeliorated
LandsTver
71 All-RussiaResearchInstituteofHydro-TechnologyandAmeliorationMoscow72 All-RussiaResearchInstituteofAgroForestAmelioration Volgograd73 All-RussiaResearch,Design,andTechnologyInstituteof
MechanizationandElectrificationofAgricultureZernograd,RostovOblast
74 All-RussiaResearch,Design,andTechnologyInstituteofAnimalHusbandryMechanization
ZnamiaOktiabria,MoscowOblast
75 All-RussiaResearch,Design,andTechnologyInstituteofMaintenanceandExploitationoftheMachineandTractorPark
Moscow
76 All-RussiaResearch,Design,andTechnologyInstituteofElectrificationofAgriculture
Moscow
77 All-RussiaResearch,Design,andTechnologyInstituteofTechnologyandEconomicsofStorage,transportation,andMechanizationofFertilizerApplication
Riazan
78 Research,Design,andTechnologyInstituteofLiquidFertilizers Klin,MoscowOblast
79 All-RussiaResearch,Design,andTechnologyInstituteofUseofMachinesandPetroleumProductsinAgriculture.
Tambov
80 All-RussiaresearchInstituteofTechnologyofStrengthening,Rehabilitation,andproductionofParts
Moscow
81 All-RussiaResearchInstituteofOrganization,Economics,andTechnologyofMaterialProcurementinAIC.
Riazan
82 All-RussiaResearchInstituteofAnimalHusbandry Dubrovitsy,MoscowOblast
83 All-RussiaResearchInstituteofHorseBreeding InstituteKonevodstva,RiazanOblast
84 All-RussiaResearchInstituteofPhysiology,Biochemistry,andNutritionofAgriculturalAnimals
Borovsk,KalugaOblast
NutritionofAgriculturalAnimals KalugaOblast85 All-RussiaResearchInstituteofSheepandGoatBreeding Stavropol86 All-RussiaResearchandSelectionInstituteofAnimalHusbandry Bykovo,
MoscowOblast87 All-RussiaResearchInstituteofMeatHusbandry Orenburg88 All-RussiaResearchInstituteofGeneticsandBreedingof
AgriculturalAnimalsSt.Petersburg
89 All-RussiaResearch,Design,andTechnologyInstituteofPoultryBreeding
SergievPosad,MoscowOblast
90 NorthCaucasusResearchInstituteofAnimalHusbandry Znamenskiy,KrasnodarKrai
92 StavropolResearchInstituteofAnimalHusbandryandFodderProduction.
Stavropol
93 VolgaResearchInstituteofAnimalHusbandryandBiotechnology Saratov94 KalmykResearchInstituteofAgriculture Elista95 All-RussiaResearch,Design,andTechnologyInstituteofPig
BreedingTogliatti,SamaraOblast
96 AfanasievResearchInstituteofAnimalandRabbitBreeding Rodniki,MoscowOblast
97 All-RussiaResearchInstituteofIrrigationFishery Vorovskogo,MoscowOblast
98 All-RussiaResearchInstituteofPoultryProcessingIndustry Rzhavki,MoscowOblast
99 ZhitkovAll-RussiaResearchInstituteofGameandAnimalBreeding Kirov100KovalenkoAll-RussiaResearchInstituteofExperimentalVeterinary Moscow101SkriabinAll-RussiaResearchInstituteofHelminthology Moscow102All-RussiaResearchInstituteofVeterinaryVirusologyand
MicrobiologyPokrov,VladimirOblast
(AnnexBcontinuesonthenextpage)
(AnnexBcontinuedfrompreviouspage)
No. AgriculturalResearchInstitute Location
103All-RussiaResearchVeterinaryInstituteofPathology,PharmacyandTherapy
Voronezh
104All-RussiaResearchInstituteofVeterinarySanitation,HygieneandEcology
Moscow
105All-RussiaResearchVeterinaryInstituteofPoultryBreeding St.Petersburg106NorthCaucasusZoneResearchVeterinaryInstitute Novocherkassk,
RostovOblast107CaspianZoneResearchVeterinaryInstitute Makhachkala108All-RussiaResearchInstituteofMeatIndustry Moscow109All-RussiaResearchInstituteofMilkIndustry Moscow110All-RussiaInstituteofButterandCheeseIndustry Uglich,Yaroslavl
Oblast111All-RussiaResearchInstituteofPreserveandDryVegetable
Industry.Vidnoe,MoscowOblast
112ResearchInstituteofBabyNutrition Istra,MoscowOblast
113All-RussiaResearchInstituteofRefrigerationIndustry Moscow114ResearchInstituteofFoodConcentrateIndustryandSpecialFood
TechnologyMoscow
115All-RussiaResearchInstituteofStarchProducts Konevo,MoscowOblast
116All-RussiaResearchInstituteofSugarIndustry Kursk117All-RussiaResearchInstituteofTobacco,MakhorkaandTobacco
ProductsKrasnodar
118All-RussiaResearchInstituteofFats St.Petersburg119All-RussiaResearchInstituteofBeerBrewing,SoftDrink,and
Wine-MakingIndustryMoscow
120ResearchInstituteofConfectioneryIndustry Moscow121All-RussiaResearchInstituteofFoodBiotechnology Moscow122All-RussiaResearchInstituteofFoodAromatizers,Acidsand
ColorsSt.Petersburg
123ResearchInstituteofInformationandTechnologicalandEconomicResearchinFoodIndustry.
Moscow
ResearchinFoodIndustry.124ResearchInstituteofWoolProcurementandPrimaryProcessing
KraiNevinnomyssk,Stavropol,
125.NorthCaucasusResearchInstituteofSugarBeetandSugar Krasnodar126KrasnodarResearchInstituteofStorageandProcessingof
AgriculturalOutputsKrasnodar
127VolgogradResearch,DesignandTechnologyInstituteofMeatandMilkHusbandryandProcessingofLivestockProducts
Volgograd
128AltaiResearchInstituteofAgricultureandCropSelection Barnaul129AltaiResearch,DesignandTechnologyInstituteofAnimal
HusbandryBarnaul
130BuriatResearchInstituteofAgriculture Ulan-Ude131InstituteofExperimentalVeterinaryofSiberiaandFarEast Krasnoobsk,
NovosibirkOblast
132KemerovoResearchInstituteofAgriculture Kemerovo133KrasnoiarskResearchInstituteofAgriculture Krasnoiarsk134KurganResearchInstituteofGrainEconomy Sadovoe,Kurgan
Oblast135ResearchInstituteofHorticultureinSiberia Barnaul136ResearchInstituteofFarNorth Norilsk137ResearchInstituteofAgricultureofNorthernTrans-Urals Tiumen138ResearchInstituteofVeterinaryofEastSiberia Chita139SiberianResearchInstituteofAgricultureandChemicalisation Krasnoobsk,
NovosibirskOblast
(AnnexBcontinuesonthenextpage)
(AnnexBcontinuedfrompreviouspage)
No. AgriculturalResearchInstitute Location
140SiberianResearchInstituteofFodder Krasnoobsk,NovosibirskOblast
141SiberianResearchInstituteofMechanizationandElectrificationofAgriculture
Krasnoobsk,NovoribirskOblast
142SiberianResearch,DesignandTechnologyInstituteofAnimalHusbandry
Krasnoobsk,NovoribirskOblast
143SiberianResearch,DesignandTechnologyInstituteofCropGrowingandSelection
Krasnoobsk,NovorisbsirskOblast
144SiberianResearchInstituteofAgriculture Omsk145SiberianResearchInstituteofAgriculturalEconomics Krasnoobsk,
NovosibirskOblast
146YakutResearchInstituteofAgriculture Yakutsk147IrkutskResearchInstituteofAgriculture Pivovarikha,
IrkutskOblast148SiberianResearch,DesignandTechnologyInstituteofPhysicsand
TechnologicalProblems.Krasnoobsk,NovosibirksOblast
149SiberianResearch,DesignandTechnologyInstituteofProcessingofAgriculturalOutput
Krasnoobsk,NovoribirskOblast
150KrasnoiarskResearch,DesignandTechnologyInstituteofAnimalHusbandry
Krasnoiarsk
151Trans-BaikalResearchInstituteofAgriculture Chita152ResearchInstituteofAgriculturalProblemsinKhakassia Zelionoe,
Khakassia153ResearchInstituteofAmeliorationandRationalNatureUse Tiumen154.SiberianResearchInstituteofPeat Tomsk155All-RussiaResearchInstituteofVeterinaryEntomology Tiumen
155All-RussiaResearchInstituteofVeterinaryEntomology Tiumen156All-RussiaResearchInstituteofTuberculosisofAnimals Omsk157MountainAltaiResearchInstituteofAgricultureMountainAltai
ResearchInstituteofAgricultureMaima,AltaiRepublic
158NorthWestResearchInstituteofAgriculture Belogorka,LeningradOblast
159RudnitskiyResearchInstituteofAgricultureofNorthEast Kirov160UralsResearchInstituteofAgriculture. Yekaterinburg161OryolResearchInstituteofAgriculture Znamenka,
OryolOblast162PskovResearchInstituteofAgriculture Radian,Pskov
Oblast163NovgorodResearch,DesignandTechnologyInstituteofAgriculture Borki,
NovgorodOblast
164PermResearchInstituteofAgriculture Lobanovo,PermOblast
165MariResearchInstituteofAgriculture. Ruem,Mari-EL166RiazanResearch,DesignandTechnologyInstituteofAIC Podviazy,
RiazanOblast167NizhegorodResearch,DesignandTechnologyInstituteofAIC Roika,
NizhegorodOblast
168NorthWestResearchInstituteofMilkandPastureEconomy Vologda169YaroslavlResearchInstituteofAnimalHusbandryandFodder
ProductionMikhailovskoe,YaroslavlOblast
170ResearchVeterinarianInstituteofNon-BlackEarthZoneofRussianFederation
NizhnyNovgorod
171Research,DesignandTechnologyInstituteofMechanizationandElectrificationofAgricultureofNon-BlackEarthZoneofRussianFederation
St.Petersburg
172ResearchInstituteofEconomicsandOrganizatinofAgriculturalProductioninNon-BlackEarthZoneofRussianFederation
St.Petersburg
173Research,DesignandTechnologyInstituteofAICofKomiRepublic Syktyvkar
(AnnexBcontinuesonthenextpage)
(AnnexBcontinuedfrompreviouspage)
No.AgriculturalResearchInstitute Location
174KalugaResearch,DesignandTechnologyInstituteofAIC
Kaluga
175ArchangelResearchInstituteofAgriculture Archangel176KaliningradResearchInstituteofAgriculture Slavinskoe,Kaliningrad
Oblast177VladimirResearchInstituteofAgriculture Seltso,VladimirOblast178ChuvashResearchInstituteofAgriculture Ivanovo,Chuvashia179IvanovoResearchInstituteofAgriculture Bogorodskoe,Ivanovo
Oblast180SmolenskResearchInstituteofAgriculture Smolensk181KostromaResearchInstituteofAgriculture Minskoe,KostromaOblast182All-RussiaResearchInstituteofSoy Blagoveshchensk183FarEastResearchInstituteofAgriculture Khabarovsk184FarEastZoneResearchInstituteofVeterinary Blagoveshchensk185SakhalinResearchInstituteofAgriculture NovoaleksandrovskSakhalin
Oblast186MagadanResearchInstituteofAgriculture Magadan187PrimorskiyResearchInstituteofAgriculture Timiriazevskiy,Primorskiy
Krai188FarEastResearchInstituteofMechanizationand
ElectrificationofAgricultureBlagoveshchensk
189FarEastResearchInstituteofPlantProtection Kamen-Rybolov,PrimorskiyKrai
190FarEastResearchInstituteofEconomicsandOrganizationofAIC
Khabarovsk
191KamchatkaResearchInstituteofAgriculture Sonosnovka,KamchatkaOblast
192Kabardino-BalkariaResearchInstituteofAgriculture Nalchik193All-RussiaResearchInstituteofGrainandProcessed
ProductsfromGrainMoscow
194StateResearchInstituteofBakeryIndustry Moscow195MainComputingCenter Tver196ScientificandTechnologicalCenterofFoodIndustry Moscow
196ScientificandTechnologicalCenterofFoodIndustry Moscow197ArchangelExperimentalAmeliorationStation Archangel
Page89
AnnexCRoleofPublicSectorinFinancingResearchThelevelofpublicsectorinvestmentinagriculturalresearchanddevelopmentvariesagreatdealfromonecountrytoanotherandfromregiontoanother.Thestatusandemergingtrendsinthelevelofinvestmentinagriculturalresearcharethefollowing:1
·Publicinvestmentinagriculturalresearch(measuredaspercentofagriculturalGDP)inthedevelopingcountriesaswellasthetransitioneconomiesismuchlowerthaninthedevelopedcountries(forgloballevelsandtrendsseeTablesC.1andC.2).Theinvestmentlevelsindevelopingcountriesarealmost20percentofthecorrespondinglevelsindevelopedcountries.
·Generally,therehasbeenanincreaseinthelevelsofinvestmentinagriculturalresearchinbothdevelopinganddevelopedcountriestillmid-1980s.Sincethentherehasbeenadeclinebuttheactualchangevariesfromonecountrytoanotherandfromoneregiontoanother(seeTableC.3).
TableC.1:IntensityofPublicSectorInvestmentinAgriculturalResearchintheEarly1990s
Countries/regions Nominalinvestmentinagriculturalresearchas%ofthenominalagriculturalGDP
Developingcountries
0.50
Developedcountries
2.50
Russia 0.25China 0.42
UnitedStates 2.22UnitedKingdom 3.80Australia 5.00Canada 5.30
Sources:Alston,PardeyandRoseboom(1997);Alston,ChalfantandPardey(1995);andAuthors'calculations.
1Thereisacontinuingdebateonthebestmechanismsforfundingagriculturalresearch(NationalResearchCouncil,1994).Competitivegrantsarebeingconsideredasoneofthebestwaystoallocatescarceresourcestofinanceagriculturalresearch.However,accordingtoHuffmanandJust(1994),theempiricalevidencefromtheUnitedStatesindicatesthatthecurrenttrendtowardcompetitivegrantsandearmarkedfunding,asopposedtoformulafundingfromfederalsources,apparentlyreducedproductivityofresearchexpenditure.
Page90
TableC.2:ChangesintheIntensityofPublicSectorInvestmentinAgriculturalResearchOverTime
(PercentageofAgriculturalGDP)Region 1971-75 1976-80 1981-85 1986-90 1991
DevelopingCountries 0.38 0.47 0.50 0.49 0.51Sub-SaharanAfrica 0.78 0.84 0.86 0.74 0.70China 0.40 0.48 0.41 0.38 0.36AsiaandPacific(excl.China) 0.26 0.36 0.44 0.50 0.55LatinAmericaandtheCaribbean 0.43 0.51 0.59 0.49 0.54WestAsiaandNorthAfrica 0.50 0.49 0.52 0.52 0.52
IndustrialCountries 1.38 1.60 1.98 2.18 2.39Totala 0.67 0.76 0.81 0.79 0.81
aExcludingCubaandtheformerSovietUnion.
Source:Alston,PardeyandRoseboom(1997).
TableC.3:GlobalTrendsinPublicExpenditureforAgriculturalResearch
RegionExpenditures
(millionin1985dollars)AnnualGrowthRates(percentperyear)
1971 1981 1991 1971-81 1981-91
DevelopingCountries 2985 5535 8017 6.4 3.8Sub-SaharanAfrica 699 927 968 2.5 0.8China 457 934 1494 7.7 4.7AsiaandPacific(excl.China) 862 1922 3502 8.7 6.2LatinAmericaandtheCaribbean 508 1008 951 7.2 -1.1WestAsiaandNorthAfrica 459 738 1102 4.3 4.0
IndustrialCountries 4298 5713 6941 2.7 1.7
Totala 7283 11248 14958 4.4 2.8
aExcludingCubaandtheformerSovietUnion.
Source:Alston,PardeyandRoseboom(1997).
Page91
AccordingtoWorldBank(1981),averagepublicexpenditureasaproportionofagriculturalGDPindevelopingcountriesasagroupshouldrisefromlessthan0.5%to2%.Agricultureismuchmoreefficientandproductiveincountrieswithhigherlevelsofinvestmentinagriculturlresearchanddevelopment.Onelessonforthedevelopingandtransitioneconomies,includingRussia,isthatthepolicymakersmustconsiderincreasingthelevelsofinvestmentinagriculturalresearch.However,thisinvestmentmaynothaveeconomicpayoffscomparabletothoseindevelopedcountriesunlesstheagriculturalresearchsystemisreformedandmademoreresponsivetoclientneeds.
However,forvariousreasonstheinvestmentinagriculturalresearchinallcountries,butparticularlyinthetransitioneconomies,isdeclining.AssummarizedinBoxC.1,therearemanyreasonsforthisdecline.Thereisaneedtoconvincethenationalleadersofpotentialpayoffstoinvestmentinagriculturalresearchorthelostoutputfornotmakingsuchinvestments.However,itmustberecognizedthatmerelyincreasingbudgetallocationsisnotlikelytogeneratethedesiredresults.Clearlythereisaneedforimprovingefficiency,consolidatingresearchfacilities,establishingresearchprioritiesthatrespondtolocalandnationalneedsandincreasingaccountability.
BoxC.1:LikelyReasonsforDeclineinFundingforAgriculturalResearchBasedontheinternationalexperience,thelikelyreasonsfordeclineinfundingforagriculturalresearcharethefollowing:·budgetcutsasaresultoffiscalausterity;·lackofunderstandingbynationalleadersofthecrucialroleofagricultureinoveralldevelopmentpolicies;·lackofrecognitionofthepublic-goodnatureofmuchagriculturalresearch;·withdrawalofsupportbydonors;·inefficiencyofresearchsystemandlackofaccountability;
·lackofrelevantresearchoutputsfrommanyresearchprograms;·along-termdeclineinagriculturalcommodityprices,whichactsasadisincentivetoinvestmentintheagriculturalsectorSource:ByerleeandAlex(1998)
Page92
AnnexDRoleofPrivateSectorinFinancingResearchTheroleofprivatesectorinfundingagriculturalresearchisgraduallyincreasing.Thisisparticularlytrueformodernagricultureindevelopedcountries.Thepublicsector,however,remainsthedominantsourceoffundingagriculturalresearchindevelopingcountriesandintransitioneconomies.Forexample,thealternativesourcesforfundingagriculturalresearchinLatinAmericaarenationalagriculturalresearchinstitutes,universities,farmergroupsandtheprivatecompanies(TableD.1).Theavailableinformationindicatesthatalmost25percent(inChile)to50percent(inMexico)oftotalagriculturalresearchexpenditurewasaccountedforbyacombinationofuniversities,farmergroupsandprivatecompanies.1
AsreportedinTableD.2,themainagriculturalresearchareasinwhichtheprivatesector(multinationalprivatecompanies)isactiveare:
·agro-chemicals
·agriculturalmachinery
·veterinarypharmaceuticals
·plantbreeding(e.g.hybridseeds)
·postharvestfoodprocessing.
Inotherwords,theprivatesectorinvestmentistargetedtothoseareasinagriculturalresearchwheretheprivatecompaniesareabletocaptureallormostofthereturnsfromtheirinvestment.IntheUnitedStates,theprivatesectorexpenditureonagriculturalresearchwas27percenthigherthanthecorrespondingamountspentbythepublic
sectorin1992.Beginningin1975,privateexpenditureonagriculturalresearchhasbeenlargerthanthepublicexpenditureonagriculturalresearchintheUS(HuffmanandEvenson,1993).TheprivatesectorhasbecomeamajorpartnerandafundingsourceforresearchonbiotechnologyintheUSlandgrantuniversities.Goodoverviewsofthestatus,progress,opportunities,constraintsandpotentialpayoffsforinvestmentinbiotechnologytosolvespecificagriculturalproblemsareavailableinPersley(1990a,1990b)andHobbelink(1991).ThemajormultinationalcompanieswithabroadrangeofagriculturalactivitiesarereportedinTableD.3.ThetotalamountspentonagriculturalR&Dbythesemultinationalcompaniesissubstantial,rangingfrom2-14percentoftheirannualrevenue.AtthisstagethereislimitedscopeforagriculturalresearchbytheprivatesectorinRussiaandinothertransitioneconomies.However,theroleoftheprivatesectorinresearchisexpectedtoincreaseovertimewiththeintroductionoftheenablingpolicyenvironmentandgenerationofdemandforresearchintheprivatesector.
1Echeverri,Trigo,andByerlee(1996)addresstheissueoffinancingagriculturalresearchinLatinAmerica.Theyidentifysuccessfulelementsofastrategytofundresearchthroughjointventures,saleofresearchproducts(commercializethem),competitivefunds(throughbiddingschemes),researchfoundations,farmers'contributions(e.g.,levyonagriculturalproduction)andprivatesectoragribusinessresearch.Theyalsoadvocateneedforflexiblesystems,bettermanagementandincreasedbudgetaryallocationsforagriculturalresearch.
Page93
TableD.1:EstimatedShareofAgriculturalResearchExpenditurebyAlternativeFundingSourcesinSelectedCountriesinLatinAmerica
PercentageofTotalExpenditureCountry NationalResearchInstitutes Universities
GroupsFarmer
CompaniesPrivate Total
Argentina 89 5 0 6 100Brazila 63 29 0 8 100Chile 75 20 1 4 100Colombiab 61 2 29 8 100Ecuador 52 5 7 36 100Mexico 50 17 5 28 100Peru 65 20 10 5 100Venezuela 80 10 1 9 100
a1991b1993
Source:AdaptedfromEcheverria,Trigo,andByerlee(1996).
TableD.2:TrendsinPrivateSectorSpendingonAgriculturalR&DintheUnitedStates
(millionsofcurrentdollars)Input-Oriented
YearChemicals
AgriculturalMachinery
Veterinary/Pharmaceuticals
PlantBreeding
PostharvestFoodProcessing Total
1960 10 76 6 6 80 1771970 126 89 45 26 206 4931980 1390 287 111 97 456 13411992 1123 394 306 400 1088 3311
aPrivatesectoragriculturalresearchexpenditureofUS$3.3billionin1992
aPrivatesectoragriculturalresearchexpenditureofUS$3.3billionin1992was27%morethanthecorrespondingamountspentbytheUSpublicsector.
Source:James(1996);originallyfromUSDA(1995b).
Page94
TableD3:R&DExpenditureforSelectedPrivateCompanieswithaBroadRangeofAgriculturalActivities,1994
Company AnnualRevenuea($million)
R&DExpenditurea($million)
Expenditureas%ofRevenue
AmericanCyanamid
4276 595 13.9
DeKalbGenetics
320 44 13.7
SandozAG 15870 1635 10.4ZenecaAG 2420 242 10.0Ciba-Geigy 19341 1931 9.8Pioneer 1478 114 7.7Monsanto 8272 609 7.4HoechstCelanese
7794 313 7.3
SumitomoChemical
9798 554 5.7
Dupont 39333 1404 3.6Unilever 45419 831 1.8
aAnnualrevenueandR&Dexpenditureareavailableonlyforthepubliclytradedcompanies.
Source:James(1996).
Page95
AnnexERoleofInternationalAgriculturalResearchSystemTheinternationalagriculturalresearchsystemconsistsoftheConsultativeGrouponInternationalAgriculturalResearch(CGIAR),theTechnicalAdvisoryCommittee(TAC)toCGIARandanetworkofInternationalAgriculturalResearchCenters(IARCs).Atpresent,therearesixteenCGIARsupportedInternationalAgriculturalResearchCentersandthesearelocatedindifferentpartsoftheworld(BoxE.1).Themainfocusofresearchinthesecentersisimprovementinproductivityforcrops,livestock,inputs(irrigation),farmingsystems,agro-forestry,researchmanagementandfoodpolicy.CGIAR'sresearchexpenditureduring1993($235million)wasallocatedasfollows,expressedinpercentterms:
Institutionalbuilding 25.3Productionsystems 23.7Germplasmenhancement 21.9Naturalresources 19.0Agriculturalpolicy 10.3Total 100.0
AccordingtoCGIAR(1997),themajoragriculturalresearchprioritiesoverthenext20yearsare:
·reducingpoverty
·improvingproductivity;
·protectingtheenvironment;
·savingbiodiversity;
·improvingpolicies;and
·strengtheningnationalprograms.
TheCGIARsystemwasestablishedinearly1960s.Newinternationalagriculturalresearchcenterswereaddedovertime.Theeconomicimpactofagriculturalresearchinthesecentershasbeenenormous,intheformofimprovedyieldsandhigheragriculturaloutputandfoodproduction.TheimpactofCGIARonrice,wheatandmaize(threeimportantgraincrops)yieldsindevelopingcountriesfrom1970to1990isreportedinTableE.1.Thefollowingarethethreemainconclusions:
·First,between50percent(rice)to100percent(wheat)increaseincropyieldsover20years'periodfrom1970to1990isattributedtovarietiesdevelopedattheCGIARcenters.
·Second,anincreaseinyieldsforrice,wheatandmaizeduetoCGIARgermplasmhasavoidedpotentialencroachmentofabout200,000haofarableland.Thisisveryimportantinthelightofincreasingdemandforfoodandthelimitstogoodqualitylandundercultivation.
·Third,theestimatedannualvalueofincrementalproductioninrice,wheatandmaizethatisattributabletoCGIARisabout$4.6billion.
Page96
ThesearesignificantcontributionsoftheCGIARsystem.Anincreaseinfoodproductionaloneindevelopingcountrieshadamajorimpactonavoidinghungerandmalnutritionandcontributingtomuchneededfoodsecurity.
TableE.1:ImpactofCGIARonRice,Wheat,andMaizeYieldsIndicator Rice Wheat Maize
AreainDevelopingcountries(000ha) 143569 105794 83623Areaundermodernvarieties(%) 74 70 57CGIARGermplasminmodernvarieties(%) 20 49 45Yields(ton/ha):1970 2.3 1.2 1.51990 3.5 2.4 2.6Yieldincrease(%) 52 100 73PotentialLandEncroachmentAvoidedby 60,000 90,000 50,000YieldIncrease(000ha)AnnualvalueofProductionincreaseattributabletoCGIAR($billion)
1.5 1.6 1.5
Source:CGIAR(1996a).
BoxE.1:CGIARSupportedInternationalAgriculturalResearchCenters(IARCs)
CIATCentroIntenacionaldeAgriculturaTropical.Cali,Colombia.Founded1967.FocusoncropimprovementandecoregionalapproachestodevelopingagricultureinthelowlandtropicsofLatinAmerica.Researchcoversrice,beans,cassava,foragesandpasture.CIFORCenterforInternationalForestryResearch.Bogor,Indonesia.Founded1992.Focusonresearchonforestconservationandsustainabledevelopment.CIMMYTCentroInternacionaldeMejoramientodeMaizyTrigo.MexicoD.F.Mexico.Founded1966.Focusoncropimprovement.Researchcoversmaize,wheat,barleyandtriticale.
oncropimprovement.Researchcoversmaize,wheat,barleyandtriticale.CIPCentroInternacionaldelaPapa,Lima,Peru.Founded1971.Focusonpotatoandsweetpotatoimprovement;specialattentionpaidtoecoregionalaspectsofmountainareaagriculture.IPGRIInternationalPlantGeneticResourcesInstitute.Rome,Italy.Founded1974.Focusonconservinggenepoolsofcurrentandpotentialcropsandforages.ICARDAInternationalCenterforAgriculturalResearchintheDryAreas.Aleppo,Syria.Founded1977.FocusonimprovingfarmingsystemsforNorthAfricaandWestAsia.Researchcoverswheat,barley,chickpea,lentils,pasturelegumesandsmallruminants.
(Boxcontinuesonthenextpage)
Page97
(Boxcontinuesfrompreviouspage)
ICLARMInternationalCenterforLivingAquaticResourcesManagement.Makati,MetroManila,ThePhilippines.Foundedin1977.Focusonresearchonallaspectsoffisheriestoimproveefficiencyandproductivityofcultureandcapturefisheries.ICRAFInternationalCenterforResearchinAgroforestry,Nairobi,Kenya.Founded1977.Focusoninitiatingandsupportingresearchonintegratingtreesinland-usesystemsindevelopingcountries.ICRISATInternationalCropsResearchInstitutefortheSemi-AridTropics.Patancheru,AndhraPradesh503324,India.Founded1972.Focusoncropimprovement;croppingsystems.Researchcoverssorghum,millet,chickpea,pigeonpeaandgroundnut.IFPRIInternationalFoodPolicyResearchInstitute,WashingtonD.C.,20036-3092,USA.Foundedin1975.Focusonfoodpolicyandsocio-economicresearchrelatedtoagriculturaldevelopment.Providespolicyresearchandinstitutionbuildingassistancetodevelopingcountries.IIMIInternationalIrrigationManagementInstitute.Colombo,SriLanka.Foundedin1984.Focusonperformanceofirrigationindevelopingcountries.Researchcoversinstitutionalconditionsformanagingirrigationsystemsandfacilities;managementofwaterresources,irrigationsupporttofarmers.IITAInternationalInstituteofTropicalAgriculture.Ibadan,Nigeria.Founded1967.Focusoncropimprovementandlandmanagementinhumidandsub-humidtropics;farmingsystems.Researchcoversmaize,cassava,cowpea,plantain,soybean,riceandyam.ILRIInternationalLivestockResearchInstitute.Nairobi,Kenya,andAddisAbaba,Ethiopia.Foundedin1994.Focusonresearchtoimprovelivestockproductivityandanimalhealth.Is
responsiblefortheSystem-WideLivestockResearchProgram.IRRIInternationalRiceResearchInstitute.Manila,Philippines.Founded1960.Focusonglobalriceimprovement.ISNARInternationalServiceforNationalAgriculturalResearch.TheHague,Netherlands.Founded1979.Focusonstrengtheninganddevelopingnationalagriculturalresearchsystems.WARDAWestAfricaRiceDevelopmentAssociation.Bouake01,Coted'Ivoire.Founded1970.FocusonriceimprovementinWestAfrica.Researchcoversriceinmangroveswamps,inlandswamps,uplandconditions,irrigatedconditions.Source:CGIAR(1996a,1996b,1997).
ThemainsourcesoffundingforCGIAR-supportedinternationalagriculturalresearcharebilateraldonors,privatefoundationsandtheWorldBank.TheannualfinancialsupportfortheCGIARsystemhasincreasedfrom$21millionin1972to$304millionin1996.TheWorldBank'sshareintotalfundingfortheCGIARsystemhasincreasedfromabout10percentinthe1970s,toalmost15-20percentinthe1990s.Clearly,theCGIARsystemhasplayedaverysignificantroleininternationalagriculturalresearchnotonlyintheformofdevelopingnewplantvarietiesandprovidingsupporttothenationalagriculturalresearchsystems(NARSs)butalsoinfacilitatingincreasedparticipationinagriculturalresearchbytheprivatesector.TheWorldbank,ontheotherhand,hasplayedanimportantroleinfinancinginternationalandnationalagriculturalresearch.
Page98
During1996,CGIARestablishedaTaskForceonCentral/EasternEuropeandtheformerSovietUnion(CGIAR,1996b).TheTaskForcehasrecommendedthatCGIARextenditsmandatetoincludetheseregions,withaparticularfocusonthefollowingfiveactivities:
·Accesstoinformation
·Accesstogeneticresources
·TransformationofNARSs
·Intensificationofexistingactivities
·CGIARstrategyfortheregions
AsfarasRussiaisconcerned,therearealreadyagreementsoncollaborativeresearchwithseveralCGIARcenters.Theseagreementsinclude:
·CIMMYTandVASKhNIL(nowreplacedbythenewRussianAcademyofAgriculturalSciences),September1990;
·ICARDAand(i)theVavilovAll-RussianScientificResearchInstitute,May1993;(ii)KrasnodarResearchInstitute,May1993;and(iii)theSouth-EasternRegionalAgriculturalResearchInstitute,1994.
·ICRISATandVASKhNIL(nowreplacedbythenewRussianAcademyofAgriculturalSciences),April1990;
·IRRIandAll-RussianRiceResearchInstitute,June1995.
Itisexpectedthataspartofthenewmandate,theseexistingarrangementswillbestrengthenedandnewagreementsoncollaborativeagriculturalresearchwillbedeveloped.
Page99
AnnexFFundingAgriculturalResearchbytheWorldBankInadditiontofinancinginternationalagriculturalresearchthroughtheCGIARsystem(ashasbeenreportedinFigureF.1),theWorldBankhasbeenamajorsourceoffinancingnationalagriculturalresearchinthedevelopingcountriesthroughcredits(IDAcredits)andloans(IBRDloans).AsshowninTableF.1,thetotalWorldBanklendingforagriculturehasdeclinedfrom31percentin1977-80to14percentin1993-96.However,theshareofagriculturalresearchandextensionintotallendingforagriculturehasincreasedfrom7.5percentin1977-80($0.9billion)to14percentin1993-96($1.9billion).Inthe1970s,agriculturalresearchaccountedforonly25percentoftheBanklendingforagriculturalresearchandextension;thisshareincreasedto50percentinthe1990s.
TableF.1:WorldBankLendingforAgriculturalResearchandExtensiona(US$billion)
ForAgriculture ForResearchandExtensionPeriod Total Amount %of
TotalTotalAmount
%ofAgriculture
%forResearch
%forExtension
1977-80 37.04 11.56 31.2 0.87 7.5 26 741981-84 56.21 14.03 25.0 1.29 9.2 48 521985-88 70.73 16.09 22.7 1.43 8.9 36 641989-92 87.82 14.75 16.8 1.75 11.9 46 541993-96b
95.79 13.80 14.4 1.94 14.1 50 50
Total 347.59 70.22 20.2 7.27 10.4 43 57
aIntermsofcommitmentswhichrefertothenominalBankloanandcreditfundsapproved.
bEstimate.Source:PurcellandAnderson(1997);withadditionalcalculationsbytheauthors.
AssummarizedinByerleeandAlex(1998),theWorldBankfundingforagriculturalresearchoverthepast25yearsfrom1981to1996isasfollows:
Overall:
·Totalprojectswithresearchcomponets 458
·Fullresearchprojects 145
·Totalfundingforresearch(US$million) 3868
Page100
FigureF.1:GrowthinFinancialSupportforInternationalAgriculturalResearchSystem
Page101EuropeandCentralAsia(ECA):
·Totalprojectswithresearchcomponents 30
·Fullresearchprojects 11
·Totalfundingforresearch(US$million) 198
·ShareofECAisoverallfundingforresearch(%)
5
TheOperationsEvaluationDepartment(OED)oftheWorldBankhasreviewedBank-financedagriculturalresearchportfolioin32developingcountries(WorldBank1996b;PurcellandAnderson1997).Theexaminationofagriculturalresearchprojectsfinancedinthe1980sand1990sindicatesthattheBankfinancedagriculturalresearchprojectshavemadeasignificanteconomicimpact.However,deficienciesintheNARSspersistwithrespectto:(i)developmentofsoundresearchplanning,prioritysettingandevaluationhasbeenslow;and(ii)thesustainabilityoftheNARSshasoftenbeenweak.Thefollowingfourrecommendations,thataremadetoimprovequalityofBankassistancetotheNARS,areveryrelevantforRussia:
·Theremustbeaclearcommitmenttoappropriatepolicies,adequatebudgetallocationandscientificrigor.
·ThereisaneedforstrategicalliancestoenhanceeffectivenessofresourceuseintheNARSs.
·ThereisaneedforgreateruseofeconomicanalysistoassistinprioritysettingamongvariousprogramsinNARSs.
·Thereisaneedtosupportmonitoringandevaluationsystemstofacilitateresearchplanningandex-postevaluation.
Otherimportantlessonsforagriculturalresearchandextension,that
arebasedonBankfinancingofthreeagriculturalresearchandextensionprojectsinChina,arereportedinBoxF.1.AsummaryofthestatusofexistingWorldBankinvolvementintheagriculturalknowledgesysteminthetransitioneconomiesofCentral/EasternEuropeandtheformerSovietUnionisprovidedinSrivastavaandReinhard(1996).Finally,theproblemsidentifiedina1997reviewofWorldBank-supportedagriculturalresearchprojectsaresummarizedinBoxF.2;furthersupportingtheproblemsidentifiedbyOEDexamination.
Thefinalfundingdilemmaembodiesmostoftheforegoingchoicesanddependsonthemixofregional,nationalandinternationalsupportaswellastherelativerolesofthepublicandprivatesectors.Budgetaryallocationsfromregionalornationalgovernmentssupportongoingprogramsthroughoperatingbudgets.Budgetaryallocationscanalsobeused,inalimitedway,forcapitalinvestmentordebtservice.Thetwousescompetewitheachotherandresearchadministrationmustattempttomaintainanappropriatebalance.