BECAUSE of the poor performance of the farm services and their lack of ability to combat emerging challenges in agriculture, privatisation of extension services is often proposed to improve their efficiency and effectiveness. But empirical evidence doesn’t support this view.

In any case, complete privatisation is not a practical solution. However, to cut down expenditure and enhance delivery, outsourcing or contracting out to specialised extension service providers might be useful.

Extension and advisory services play an essential role in the growth and development of agriculture. These services are mostly provided under the aegis of the ministry of agriculture, especially in developing countries.

However, public extension services is being severely criticised. It is stated that the system is centralised in its management and functioning, and there is a lot of red-tape involved in it; it lacks ability and competency to deliver; it is inefficient and not cost-effective as it formulates and implements extension programmes poorly; it has insufficient operational funds, ill-motivated staff and does not offer any incentives; and lastly, it lacks accountability.

Complete privatisation of farm services is not a practical solution. But to cut down expenditure and improve delivery, outsourcing or contracting out to specialised extension service providers might be useful

Moreover, due to the changing needs and focus on farming, it is unrealistic to furnish extension services for free. Besides, there are the emerging challenges of uncertain climate as well as shifting export markets, declining water availability and increasing soil degradation.

To respond effectively and to adjust to these present-day challenges, more pluralistic approaches are needed for extension services to broaden their focus and enhance their capacities.

Privatisation of existing system was recently put forward as a remedy to reform and improve extension services. It was argued that privatisation would give farmers more control and influence over the quality of extension services, and that the services would be more relevant, demand-driven and market-oriented. It would ensure timely supply of such services to farmers.

Across the globe, various countries have adopted different privatisation modalities and institutional arrangements. Australia and New Zealand almost completely privatised the extension services, while the UK adopted a partial cost-recovery mechanism. In the US and some European countries, farmer-based organisations (FBOs) and extension cooperatives play a significant role in providing the extension services.

Vouchers (in some cases subsidised) distributed by the government to hire private consultants are being used in Chile, Costa Rica and Columbia; these vouchers are reimbursed by the government.

In most of the developing world, Input Supply Firms (ISFs) are actively involved in extension services. These companies, under contract with farmers, provide production inputs as well as extension services, and these are termed embedded services.

However, so far, the results of privatisation in this sector have not been very promising. While it has shown some favourable results in some countries (especially developed ones), the overall outcome is not quite convincing.

Empirical evidence suggests that private sector is biased towards large-scale and commercial farmers; resource-poor, small-scale and subsistence farmers are deliberately neglected as they are illiterate and don’t have enough holdings at their disposal to buy advisory services in the open market. The commercial orientation of the system places small farms at a disadvantage, leaving them uncompetitive in the long run.

Secondly, where FBOs are involved in contracting out extension services, they may not be much interested in dealing with the problems of poor and marginalised growers. The leadership of FBOs is shared, in most cases, by influential and affluent people in the farming community.

Thirdly, in developing countries like Pakistan and India, most of the private extension services are provided by Input Supply Firms. These companies provide services mostly related to their products or the crops they buy, just to increase their sales and maximise profits without addressing broader concerns like poverty alleviation and environmental sustainability.

Their services are also limited in scope. And evidence suggests that these services are also biased. A typical example is India, where ISFs have established agri-clinics and agri-business centres to provide comprehensive extension services. However, most of these service units are located in already prosperous rural areas, where medium and large-scale farmers dwell.

The potential private service providers may also be professionally less competent, especially in developing countries, where extension providers at present are mostly trained in generic technology issues. And private companies would not be tempted to allocate resources to build the professional capacity and skills of their staff. And where vouchers are distributed, corruption may arise (as it did in Chile).

In Pakistan, where bulk of the growers are small-scale and mostly uneducated, privatisation is not a feasible and realistic solution. The government should maintain the existing network of agricultural branches to furnish extension services for free. However, there is a dire need to expand the focus and enhance the institutional capacity of extension service to make it more effective and relevant.

Muhammad Imran Azeem is a Research Associate and Muhammad Salih Al-Shenaifi a Professor at King Saud University

Published in Dawn, Economic & Business, June 2nd, 2014