Innovations in financing mechanisms for demand-driven agricultural advisory services

Abstract

The Research and Extension Unit (AGDR) of FAO has commissioned a series of case studies on the reform of extension systems in the past decade and the shift towards innovative financing systems for extension. The studies have focused on the relations between the empowerment of farmers and their organizations, their new roles in the advisory systems and the innovative financial mechanisms in extension required to achieve effective pluralistic and demand-led extension and advisory systems, with quality services being relevant for male and female smallholder producers.

Four case studies of different modalities of innovative financing mechanisms were undertaken:

Danish Agricultural Advisory Services, evolution of the Danish model. The study describes the historic development of the Danish Agricultural Advisory Services (DAAS). This is the case of a national advisory system owned and managed by the farmer organizations and financed with public subsidies combined with farmer/user payments, gradually developed to full user payment.

Agricultural Services and Producer Organizations Support programme (PSAOP) from Senegal is the case of reforms towards decentralized demand-led services with structures, procedures and finances for farmers’ demand, negotiation and contracting of advisory services. The farmer organizations were the main drivers of this reform process. Both the supply and demand side are supported with public funding.

Financing advisory services for family farmers in Chile. The study describes the programmes of the Institute for Agricultural Development (INDAP) from Chile (1978-2014). The case shows the development of a pluralistic system for extension and advisory services. The system uses competitive grants provided by Government combined with users’ financial contribution to cover the costs of the services.

Nariño Dairy Products Cooperative (COLACTEOS) in Colombia is a case of producers’ cooperative-based advisory services as embedded services fully financed through their own processing and marketing activities. A team of advisors is hired by the cooperative for regular services; while other services are contracted on a short term basis. Furthermore, a synthesis was established with a conceptual framework for analysis used to develop a synthesis of the experiences from the four case studies. The synthesis also supplements the cases with a literature review on other cases of similar financing mechanisms and drawsconclusions and recommendations.