Integrating and Institutionalizing Lessons Learned: Reorganizing Agricultural Research and Extension1

Integrating and Institutionalising Lessons Learned: Reorganising Agricultural Research and Extension Francesco Goletti, Elise Pinners, Timothy Purcell and Dominic Smith Agrifood Consulting International, Senior authorship not assigned Abstract The majority of the population of Vietnam lives in rural areas and depends on agriculture for their livelihood. Consistent growth of the agriculture sector over the past two decades has contributed to a remarkable reduction in the poverty rate and the virtual elimination of hunger in the rural areas of Vietnam. In order to continue the growth rates of the past and contribute to further poverty reduction into the future, Agriculture Science and Technology will need to play a greater part in the development of the agriculture sector. This paper outlines the importance of Agriculture Science and Technology in rural development, discusses the performance of the agriculture research and extension systems and outlines recent developments designed to improve the performance of Agriculture Science and Technology and increase the level of linkages between farmers, policymakers, researchers and the extension system. 1. Importance of Agriculture Science and Technology 1.1 Why Agriculture Science and Technology is important to rural development in Vietnam The performance of Vietnam agriculture over the past 20 years has been impressive, averaging an annual growth rate of around 4 per cent. The agricultural sector has become increasing market-oriented as a result of the policy and institutional reforms initiated by Doi Moi in 1986, including the liberalization of trade and marketing, and the allocation of land use rights to farmers. The policies have released incentives for investment and enabled the success in a number of sectors such as rice, coffee, tea, feed, and fishery. Agricultural exports have boomed while the country has achieved overall food security (even though there are pockets of food insecurity) with an exportable surplus of rice of around 4 million tonnes. Underlying this agricultural growth were market-oriented policies, large public investments in irrigation, rural infrastructure, rural credit, and smallholder development programs. To a lesser extent, agricultural research and extension investments (including input subsidies and demonstration models) have played a role in increasing the productivity of agriculture. Vietnam is undertaking policy reforms to liberalize the economy. This should improve the terms of trade for agriculture and promote greater private investment. However, policy reform alone will not be enough to increase agricultural growth and to make it more equitable. Policy reforms must be accompanied by appropriate investments in public goods, such as agricultural research and extension, in order to maximize the potential for growth and poverty alleviation. However, the current period of policy reform is accompanied by budgetary constraints that motivate careful rationing of public investment funds, making it increasingly important to assess the economic rates of return to agricultural research and other public investments. There is a perception that there are diminishing marginal returns to agricultural research because the “easiest” gains from the Green Revolution have already been reaped through the rapid spread of high yielding varieties (HYV), leading to high levels of HYV adoption and high input use in many regions of Vietnam . However, this perception ignores the vast literature on the contribution of agricultural research to total factor productivity, and the continuing returns to agricultural research in the post-Green Revolution era. The critical importance of effective agricultural research to the development of the agricultural sector has been shown by numerous international studies See as examples.. Internationally, public investments in agriculture are declining, and increasing shares of total public expenditures on agriculture have been allocated to budgetary support to the agricultural sector, input subsidies, and transfers, rather than to productivity-enhancing investments. This has been particularly so in the case of Vietnam until recently; see World Bank . The balance between input subsidies and long-term investments will be a crucial policy question as Vietnam proceeds with economic and agricultural reform. Given the ongoing reform process, the concern over sources of future agricultural productivity growth, and the continuing debate over subsidies and transfers versus investments in agriculture, it is important to highlight the contribution of agricultural research to agricultural productivity growth. Because of the long lags between agricultural research investments and the resulting increases in production, Vietnam’s ability to meet the agricultural challenges of the next two decades will depend critically on the investments that are made today . In addition to the need to invest in agricultural research in order to increase agricultural productivity, Vietnam will have to make a more effective use of science and technology in the future in order to promote agricultural diversification from food crops to high value crops, livestock, and fisheries, and quality improvements comparable with neighboring countries and trade competitors. 1.2 What has been the contribution of Agriculture Science and Technology to rural development in Vietnam? The achievements of Vietnam agriculture would not have been possible without the application of science and technology. The increasing value of agricultural production has been achieved through improvement in a number of fields requiring specialist knowledge, science, and technology including: high yielding varieties of rice, maize, and other plants; use of plant nutrient management requiring various dosages of chemical and organic fertilizers; pest management achieved through integrated chemical and biological methods; increased access to water for irrigation and improved water management; improved plant and animal breeds; and better post harvest technologies (to store, handle, preserve, and process food). At the same time, increasing access to market, science, and technology information through media (radio and TV) have created the basis for an increasing use of AST in the future. The Agricultural Science and Technology System (comprising Research, Extension, Education, specialized government agencies, mass organizations, innovative farmers, and enterprises) has contributed in ensuring that improved technologies (particularly seed and fertilizer in the case of rice) could be made rapidly available to the majority of farmers in the most productive areas of the country. Improvements in breeding technologies (for both plants and animals), post harvest systems, and availability of irrigation have been the result of the effort of scientists, agricultural officers, and dedicated workers in different organizations (such as Farmer Union, Women Union, and Youth Union) at the provincial, district, and commune level. In addition to its contribution to overall growth, agricultural growth has resulted in three important outcomes critical to rural development: Increased Food security which has been attained through higher per capita availability of grains, improved access to markets, increased income, and better information about nutrition. Poverty Reduction has been closely linked with agricultural growth as the poor are mostly located in rural areas and derive their livelihood from agriculture. Increased diversification of the rural economy, as a result of diversification in crop production and a growing agro-industrial, trade and marketing sector. A growing agriculture creates the basis for investment in the non-agricultural sector and thus makes the overall rural economy more diversified in so far economic activity becomes increasingly relying on industry and services. As noted above, the application of Agriculture Science and Technology to agriculture has contributed to agricultural growth. In order to study more in depth the nature of this contribution, it is useful to decompose growth of agriculture into two parts. The first part is the one due to the growth of production factors such as land, labor, capital equipment such as pumps and tractors, and variable inputs such as fertilizer. This part can be referred to as the Production Factors Growth. The second part is the growth due to other factors, different from production factors. For example, in the case of Vietnam one key reason for growth over the past 2 decades has been the key policy changes initiated in the second part of the 1980; another important example is the presence of technological change that makes the factors of production more productive. The second part of growth is usually referred to as Total Factor Productivity Growth, namely the growth of output that cannot be explained by the growth of factors of production; see Alston and Pardey . During the first period of the policy reforms initiated in 1986, total factor productivity increased considerably but production factors also had an important contribution to growth. In later periods, total factor productivity did not grow much and explained only a small part of the total agricultural growth: total factor productivity explained about 55 percent of agricultural growth in the earlier period of reforms (1985-89) whereas total factor productivity explained only about 5 percent of growth during the 1990s; see . Table Decomposition of Growth of Agriculture Period 1985-89 (Doi Moi Period) Period 1990-99 (post Doi Moi period) Contribution of Production Factors to Growth 44.7 94.6 Contribution of Total Factor Productivity to Growth 55.3 5.4 Percent of Total Growth Source: The result suggests that during the 1990s, once the effect of the initial reforms was captured by the agricultural system, growth was primarily the outcome of increasing production factors (land, labor, capital, inputs), rather than technological change. During this period, while Agriculture Science and Technology did contribute to increased knowledge, adoption, and use of factors such as improved seeds, fertilizers, mechanic equipment, and irrigation, the contribution of Agriculture Science and Technology to increase overall productivity was relatively small. Research, extension, and the Agriculture Science and Technology systems were successful in ensuring that more inputs could be used in the production system, but the total value of output did not grow much above the total value of inputs. In the Vietnamese context it is generally accepted that agricultural yields are nearing the peak of their respective production functions. This is particularly the case in the Mekong and Red River Deltas, and particularly the case in grains such as rice . If growth has to be sustained in the future in the agricultural sector and the rural economy has to become more diversified and richer, Agriculture Science and Technology needs to have a greater impact on technological change leading to growth of productivity than in the past. 1.3 What has prevented Agriculture Science and Technology from fully contributing to rural development? The major contribution of Agriculture Science and Technology to rural development is through increasing agricultural productivity growth. As we have seen, this contribution has been modest. There are several factors explaining this small contribution including (i) scale and complexity of the farm sector; (ii) weak accountability; (iii) poor incentives; and (iv) supply-driven approach to innovation. Scale and complexity. The farm sector in Vietnam is characterized by a multitude of smallholder farmers in different agro-ecological situations. The task of generating and disseminating technologies and knowledge to increase total factor productivity is a daunting one. With a total number of extension staff and workers of more than 6,000 and roughly 12 million farming households, each extension staff is on average responsible to extend technological messages to 2,000 farming households. Moreover, limited access to electronic communication in rural areas, and difficulty of access particularly in isolated upland areas make it difficult to try to introduce complex technological messages. Often the best one could do is to provide simple technological messages that often result in just an increase in inputs such as seeds, fertilizers, mechanical equipment, and new breeds. Weak Accountability. Often in the past, ‘success’ of Agriculture Science and Technology institutions such as research and extension organizations was evaluated largely in terms of higher production. If provincial or national targets, particularly for rice production, were exceeded the achievement was marked as successful. The insistence on production and growth obviously made more difficult the task of measuring productivity (particularly total factor productivity and labor productivity) World Bank notes that the agricultural value added per worker in Vietnam in 1999-2001 was 28% that in Thailand and 0.5% of this value in France and the Netherlands. and evaluating the contribution of Agriculture Science and Technology to productivity. Insufficient incentives. As a consequence, there was little incentive for staff in the Agriculture Science and Technology public organizations to research the drivers of agricultural productivity in the larger context of farm performance To a large extent farm performance is related to managerial ability; the ability of farmers to manage the increasing complexity of not just production but also (pre)processing, marketing, and environmental impacts of their farming practices.. Since the main incentive was to increase production, the major effort was in ensuring that the inputs to production were widely disseminated, a function that could largely be accomplished by the private sector or state owned enterprises. Moreover, the limited budget of the research and extension system 14.3 billion VND (1993) to 90 billion VND (2004) excluding salaries, with modest results: only 0.06% of agricultural area reached, and less than 0.5% of farmers receive training . did not permit either improving the technical, managerial, and communication skills of the staff or carrying out activities (experiments, demonstration, travel, training, capacity building) that could lead to improvement of productivity of the beneficiaries (farmers and enterprises). Supply-driven approach. Given that in most cases the technologies were provided to farmers at zero cost, there was not an effort to assess farmers’ demand for specific technologies and farmers’ willingness and capacity of paying for science and technology services. In the absence of strong linkages between consumers’ demand, farmers’ supply, and science and technology providers, most of the science and technology efforts were on crops and on rice in particular, even though livestock and fisheries, fruits and vegetables, and a variety of cash crops could lead to higher value of production and therefore higher productivity. The emphasis on production also implied that the post harvest system of storage, handling, processing, transportation, and packaging was often neglected in the efforts of science and technology providers. 2. Refocusing and Restructuring of the Agriculture Research System 2.1 Structure of the Agricultural Research System, 1977-2004 The development of a well-functioning agricultural research system in Vietnam has had a long and somewhat tortuous history. Very early after the reunification of the country in 1975 the government saw a need for the rationalization of the research system still reeling from the effects of decades of armed conflict. The Vietnam Agricultural Science Institute (VASI), established in 1952 as the Crop Science Institute and renamed VASI in 1972, was mandated under Decree 410 TCCB/QD (29 December 1977) as an umbrella organization for agricultural science and technology activities. Despite these organizational changes at the institutional level, the fundamental structure of research did not change, with a myriad of sub-institutes setting their own research mandates and priorities and often conducting overlapping research Prior to the implementation of Decision 930/QD-TTg to restructure the agricultural research institutes and centers under MARD, the agricultural research system in Vietnam was an extremely complex one, including 34 research institutes and 12 universities/colleges, and involving five ministries: (i) Ministry of Agriculture and Rural Development (MARD), (ii) Ministry of Education and Training (MOET), (iii) Ministry of Industry (MOI), (iv) Ministry of Fisheries (MOFI), and (v) Ministry of Science and Technology (MOST). The agency primarily responsible for the implementation of agricultural research is MARD which was responsible for 28 of the research institutes, with 113 Sub-Institutes/Centers, and 6 of the 12 agricultural universities/colleges; see and ACI . Table Main Research Centers and Institutes under MARD 1996-2004 Name Acronym Name Acronym Agricultural Genetics Institute AGI National Institute for Animal Husbandry NIAH Bee Research and Development Center BRDC National Institute for Agricultural Planning and Projection NIAPP Centre for Agricultural Machinery Testing CAMT National Institute for Plant Protection NIPP Cuu Long Delta Rice Research Institute CLDRRI National Institute for Soils and Fertilizer NISF Ba Vi Coffee Research Center CRC National Institute for Veterinary Research NIVR Central Sericulture Research Center CSRC National Maize Research Institute NMRI Food Crops Research Institute FCRI Post-Harvest Technology Institute PHTI Forest Inventory and Planning Institute FIPI Research Institute for Fruits and Vegetables RIFV Forest Science Institute of Vietnam FSIV Rubber Research Institute of Vietnam RRIV Hanoi City Research Center for Fruits and Vegetables HNRCFV Southern Institute for Water Resources Research SIWRR Institute of Agricultural Economics IAE Southern Fruit Research Institute SOFRI Institute of Agricultural Science IAS Bao Loc Sugar Research Center SRC Information Center for Agriculture and Rural development ICARD Tea Research Institute of Vietnam TRIV Institute for Sugar Cane Research ISCR Vietnam Agricultural Science Institute VASI Institute for Water Resources Planning IWRP Vietnam Institute of Agricultural Engineering VIAE National Center for Inspection of Drugs and Bio-Products NCIDB Vietnam Institute for Water Resources Research VIWRR National Center for Variety Evaluation and Seed Certification NCVESC Western Highlands Agro-Forestry Scientific and Technical Institute WASI Nha Ho Cotton Research Center NHCRC Source: The national agricultural research system was further supported by university-based research and the work of the National Centre for Technology Progress (NACENTECH) under MOST. The universities of forestry and water resources are managed by MARD. The MOFI is responsible for two fisheries and aquaculture research institutes (Institute of Fisheries Research and Institute of Fisheries Planning and Projection) and the University of Fisheries. The MOI has three institutes (Oil Plants Institute (OPI), Cotton and Fiber Research Institute (CFRI), and Foodstuffs Industry Research Institute (FIRI) respectively). MOET controls four agricultural universities, two agricultural faculties and three agricultural colleges. In addition, private universities and colleges are also involved in agricultural research. This system was hampered by the fact that the regional distribution of public research institutes and their stations is uneven, with about 80 percent of them in the Red River and Mekong deltas, making it difficult for the institutes to address poverty reduction and environmental issues in remote and upland regions where research institutes and their stations do not exist; see . Of the 28 institutes under MARD, 17 were created in the last 20 years and four as recently as 1997-1998. The geographic distribution of the research facilities under MARD was highly centralized, with 21 institutes having their headquarters in Hanoi and 3 in HCMC. The other institutes and related sub-institutes were located in smaller towns, but often rather close to Hanoi or HCMC; 47 percent of all locations were in Hanoi and another 15 percent in HCMC . As a further compounding factor, institute mandates were often not clearly defined and differed depending on their relationship to their parent organization, the initial establishment, and the evolution of their roles. This ambiguity of functions lead to duplication of research efforts across organizations . Table MARD Research Organizations Region Research Institutes Planning Institutes Research, Information or Testing Centers Regulatory, Inspection or Control Centers Sub-entities of Research Institutes (Centers, Sub-Institutes, Stations) Total % of Total Red River Delta 14 3 5 2 55 79 54.5% North East Region 1 7 8 5.5% North West Region 1 1 0.7% North Central Coast 4 4 2.8% South Central Coast 3 3 2.1% Central Highlands 1 12 13 9.0% North East South Region 4 28 32 22.1% Mekong River Delta 2 3 5 3.4% Total 22 3 5 2 113 145 100.0% Source: 2.2 Reorganization of Research Institutes under MARD The current system of agricultural research in Vietnam is a result of restructuring and reorganization over a long period of time. A major re-organization of the agricultural research system was proposed in 1996 under Decision 782-TTg according to three basic principles: (i) keeping or merging some institutions and a continuation of their full state funding (both salary and research funds); (ii) moving some institutions or centers under control of State Owned Enterprises (SOEs) and gradually reducing direct state funding to these centers; and (iii) identifying some institutes to become independent self-financing organizations within 5 years (if unable to become independent, these would be dissolved). The rationale for this proposed restructuring was largely budgetary, rather than a desire to achieve greater levels of efficiency within the research system. The proposed restructuring under Decision 782-TTg did not take place. As an alternative plan, The Master Plan for Agricultural Research in Vietnam summarized four alternative proposals for restructuring of the agricultural research system. Discussions on these alternative proposals continued for several years without any consensus being reached. Under the ADB funded Agriculture Sector Development Project Loan one of the tranche conditions was for a reorganization of research institutes and centers. Specifically the conditions called for: (i) the number of research institutes and centers to reduced to about 25, including the creation of 2 new regional centers—for the central coast and northern highland agro-ecological regions; (ii) the functions and responsibilities of each institute were to be clarified and duplications eliminated; (iii) standards and performance-based evaluation of agricultural research institute staff were to be established; and (iv) a prioritization of agricultural research toward more adaptive and participatory on-farm research. While the ADB tranche conditions specifically mentioned that the resultant reorganization plan should also propose how to deal with the surplus staff that would result from the reorganization, this staffing issue remained the biggest sticking point and MARD was unable to resolve this issue over the subsequent years of discussion with research institutes. The final design for restructuring of the agriculture research system is outlined in Decision No. 930/QD-TTg and Decision No. 220/2005/QD-TTg . The key features of the restructuring as approved are the creation of an umbrella Academy, the Vietnam Academy of Agricultural Sciences (VAAS) and the moving of formerly SOE based research institutes to being under the direct control of VAAS. The establishment of the Vietnam Academy of Agricultural Sciences (VAAS) It should be noted that, although the English name of the new organization is “Academy”, in fact the new organization does not incorporate any Universities, and does not have a major teaching function. The Vietnamese name of the organization also does not include the words Hoc Vien (Academy). was intended to (i) minimize overlap in duties between existing institutes and also strengthen collaboration between research and technology transfer activities; (ii) overcome fragmented efforts for better mobilization of resources, especially human resources, for science and technology development; (iii) encourage the autonomy of member institutes See also Decree 115/2005/ND-CP .; and (iv) contribute to downsizing staff in research institutes. The reorganized structure is presented in . Table Reorganized MARD Institutes Institute Name Component Institutes National Research Institutes 1 Vietnam Academy of Agricultural Science This is a new institute responsible for the management of the following research centers and institutes: Vietnam Agricultural Science Institute (VASI), National Institute for Plant Protection (NIPP), National Institute for Soils and Fertilizers (NISF), Research Institute for Fruits and Vegetables (RIFAV), Agricultural Genetics Institute (AGI), Food Crops Research Institute (FCRI), Bee Research and Development Centre (BRDC), National Maize Research Institute (NMRI), the Tea Research Institute (Currently under VINATEA), and Ba Vi Coffee Research Center (currently under VINACAFE). 2 Forestry Science Institute Based on FSIV; location Hanoi 3 Water Resource Science Institute Based on VIWRR; location Hanoi 4 Institute of Animal Husbandry and Health Based on integration and reorganization of NIAH & NIVR; location Hanoi 5 Institute of Agricultural Engineering and Post Harvest Technology Based on VIAEP; location Hanoi 6 Institute of Policies and Strategy for Agricultural and Rural Development Based on integration and reorganization of IAE, the strategic information unit under the MARD Informatics Centre, and other related units; location Hanoi. Regional Research Institutes 1 Northern Agro-Forestry Science and Technology Institute Based on reorganization of Food & Foodstuff Institute; location Hai Duong, the centre of Northern Delta. 2 Viet Bac Agro-Forestry Science and Technology Institute Based on reorganization of TRIV, Phu Tho Fruit Research Centre, and other related research units under MARD in region; location Phu Tho. 3 North East Agro-Forestry Science and Technology Institute Based on reorganization of North East Research Centre under FSIV, and other related research units under MARD in region; location Son La. 4 North Coast Agro-Forestry Science and Technology Institute Based on reorganization of Research Centre under VASI in Nghe An, and other related research units under MARD in region; location Nghe An 5 South Coast Agro-Forestry Science and Technology Institute Based on reorganization of Research Centre under VASI in Binh Dinh, and other related research units under MARD in region; location Binh Dinh. 6 Central Highlands Agro-Forestry Science and Technology Institute On the existing basis as detailed in Decision 930/QD-TTg (30 November 1997) by Prime Minister. 7 South East Agriculture Science and Technology Institute Based on reorganization of IAS in HCMC (as Decision No. 782/QD-TTg and renamed), Ben Cat Sugarcane Research Institute in Binh Duong and other related research units under MARD in region; location HCMC 8 South West Agriculture Science and Technology Institute Based on reorganization of CLRRI and SOFRI and other related research units under MARD in region; location Can Tho 9 Southern Water Resources Science Institute Based on Decision No. 782/QD-TTg; location HCMC As can be seen in , this reorganization left the basic management structures of the existing research institutes intact (resolving the staffing issues which had plagued previous reorganization plans), while adding an extra layer of management on top and thereby meeting the ADB tranche conditions for a reduction in research institute numbers. The overall strategy for science and technology in general for the period to the year 2010 is outlined in Decision 272/2003/QD-TTg .The main features of this strategy, particularly as it applies to agriculture science and technology, are as follows: (i) continue to perfect and implement the renewal of science and technology management structure; (ii) push the development of science and technology markets and the commercialization of science and technology products: (iii) speed up the execution of the strategy and policy for high-technology development; (iv) complete the building of 3-5 universities and 3-5 research institutes achieving average and advanced standards in the region; (v) complete the building and bringing into effective use of key national laboratories; and (vi) step up the implementation of the international strategy in science and technology. 3. The Shifting Focus of Agriculture Extension in Vietnam 3.1 The Structure of Agriculture Extension in Vietnam Before summarizing and discussing the agriculture extension system here, we briefly describe the clients for agriculture extension. There are three groups: Poor farmers with sometimes sub-economic farm sizes, and/or with extremely weak links to the market. This is the largest group, and there is a relatively high number of ethnic minorities in this group. Most of these farmers essentially produce for subsistence, with a tendency to minimize risk. When in need of cash, they also sell rice but that is often when the price is low; the terms of trade for these farmers are not good. These farmers have little capacity to invest in agriculture, and use little external (expensive) inputs. If any, they use chemical fertilizer (can be obtained with credit). Producing mainly rice, these farmers seldom buy rice seed. If they do need better seed, they obtain seed through exchange with other (mostly better off) farmers. The main strategy to escape poverty lies outside the farm: doing off-farm labor. This group of farmers exists in all rural areas, both in mountainous areas as in the deltas; especially the Red River delta is characterized by a high density of poor smallholders. A group of better off farmers, producing for household consumption and for the market. They have some capacity for investment; their have food security but are still vulnerable, depending essentially on farming. A relatively small number of well off farmers, often called ‘industrial farmers’, who own larger sizes of land and have a good capacity to invest. They produce for the market. Keeping this simplified description in mind, it is easier to understand the dichotomy in the agriculture extension system and approach. This system can be described as having five approaches: (i) Technology promotion, (ii) Socio-economic development, (iii) Risk mitigation (crop & animal health); (iv) Commercial services (input supply), and (v) Agricultural commodity promotion. The government extension system is focused on the first approach, targeting farmers that are capable of carrying out demonstration models, and potentially interested in technology (this technology is mostly referred to as ‘high-tech’ or modern farming, and mostly comes as seed and chemicals). The programme is quite uniform, designed to introduce new varieties to large homogenous land areas. The main criteria for this approach are crop yield and adoption by farmers. For the second approach there are several government programs Such as the Hunger Eradication and Poverty Reduction Programme (HEPR) and Programme 135, a national poverty alleviation programme targeting the 1,700 poorest communes. In these programs extension is providing 100% subsidized inputs for demonstration models . that focus on poor areas, poor households. This approach is also about demonstration of ‘proven successful experience’, often in combination with subsidized supply of inputs (seed, fertilizer). The third approach is of concern for all farmers, but in most cases Apart from a few better practices with low-input methods such as the Integrated Pest Management (IPM) and System of Rice Intensification (SRI) approaches. See http://ciifad.cornell.edu/sri/ it is about promotion of (appropriate use of) pesticides. This approach is the responsibility of the Plant Protection stations that rely to an important extent on development project funding (such as from IPM projects). The fourth approach considers farmers as customers; the agriculture extension staff is to ‘link in the promotion process. In practice, it means that agriculture extension staff has permission to act as sales agent for the main actors in this approach; the commercial companies. This is a main activity for many extension staff as it adds to their income. The incentive policies for commune extension workers differ from province to province: from 6 USD/month in Lao Cai (90,000 VND) up to 20-27 USD/month in Ha Giang, and Tuyen Quang . In the fifth approach the government agriculture extension system is usually not directly involved. Under Decision 80/2002/ QD-TTg, MARD implements a system of promotion of production of key commodities through contract farming, including preferential measures such as subsidized credit and preferential access to land . 3.2 New Decree on Extension Prior to mid 2005 agriculture and forestry extension services in Vietnam were governed under Decree 13-CP . In 2003 the former Department of Agriculture and Forestry Extension (DAFE) was reformed into a number of bodies, including the National Agricultural Extension Center (NAEC). In mid 2005 this institutional change and a new orientation and framework for the extension system was formalized under Decree 56/2005/ND-CP . The new Decree and its associated circular outlines the five main activity areas of the extension system: (i) Information & Awareness (ii) Education, training and upgrading knowledge, (iii) Establishment of demonstration models and technology transfer, (iv) Advisory Services and (v) International Cooperation. The Decree formalizes the decentralized structure of the extension system that had existed in fact for many years, and also recognizes and encourages multiple economic sectors to participate in the extension system. Some of the main differences between the new and old extension decrees are: (i) a greater emphasis on poverty reduction and sustainability as goals of the extension system, (ii) a greater recognition of the potential of non-state sectors to contribute to extension, and (iii) the promotion of more comprehensive approaches to training. However, in the new decree, stakeholders (clients and target groups) of agriculture extension services are not clearly described and classified, in terms of: (i) their role in agriculture (subsistence farming and/or market-related production) and (ii) livelihoods (their assets related to farming: farm size, capacity for investment, and the importance of farming or other activities to ensure their livelihood). Current discussions about the agriculture extension system revolve mostly on the following issues: To what extent should government agriculture extension focus on the largest group of poorer farmers, rather than on the smaller group of ‘adopters’ that are better off? The outcome of this discussion depends on how one weighs the importance of developing different approaches and services for different farmer target groups: one size fits all or do different groups of farmers indeed require different services? Do poorer farmers need more knowledge-based extension rather than input-based? Can better off farmers pay for services, and if so: in how far can and should their need for agriculture extension be taken care of by a pro-profit sector? If the pro-profit sector would take care of this, what would still be the role of public agricultural extension? For example, the current success of the System of Rice Intensification in Vietnam and elsewhere shows there is scope for public extension where modern farming methods can not be promoted through inputs. To what extent the current agriculture extension system (with poor salaries, poorly educated extension staff, insufficient staff on lower levels, and staff composition not reflecting the farmer society - in terms of minorities and gender) is capable and motivated to provide knowledge-based extension? Until recently Thai Nguyen University was the first institute to be given permission to provide training on Agricultural Extension: this permission was given approximately at the end of 2004 (pers. comm. Nguyen Viet Khoa, 2004). most agriculture extension staff were trained only on technical matters, not on adult education, communication/ facilitation, farmer organization and marketing. To what extent does the current financing system of extension encourage innovation, demand based and knowledge-based extension? Given that a lot of the finance is going into subsidized input supply, this question links to the following issues: (i) targeting (most subsidies do not reach poor), (ii) trade related issues (WTO restrictions, distorting market mechanisms), (iii) effectiveness (adoption not sustained when subsidies stop; farming practice unchanged), and (iv) efficiency (acting as sales agents, agriculture extension staff spend little time on agriculture extension itself). Hoang Xuan Thanh et al. (2006). 4. Developing Linkages between Agriculture Research and Extension Systems in Vietnam 4.1 Current status of linkages between policymakers, research, extension and clients There is currently a relatively low level of linkages between actors in the Agriculture Science and Technology system. Information on needs and priorities does not flow easily from the farmer to the extension service, from the extension service to the research system and from the research system to planners. In addition, much of the local knowledge and practices of farmers are not considered for inclusion in research or extension activities. The outcome is that results of research are not easily transferred to the extension system and farmers. Even when these transfers occur, the technology often does not match the actual requirements of producers. Hence, although a lot of high quality research is undertaken in the Agriculture Science and Technology system, the diffusion and adoption of the results is at a relatively low level . Extending the outputs of research activities to large scale production faces several difficulties: institutes often do not have enough human resources and finance to undertake this activity, and the extension networks at the grassroots level (particularly from district level downward) are still in the phase of development. The systems of research and extension have difficulties in linking together, for many reasons including different channels of funding and reporting responsibility. Some institutes with specific outputs like crop seeds, animal breeds or machine prototypes have conducted technology transfer of their results to several localities through contracting with extension organizations or farmer households . These activities are useful for research orientation and assessment. However, such activities are confined only in certain favorable areas rather than widespread to the more remote areas. Over the past decade Vietnam has registered some important achievements as regards the transfer of technologies to the client farming community. Notably through its extension programmes and projects to change cropping patterns to avoid or reduce the impact of natural calamities, promote beef cattle and pigs with higher percentages of lean meat, and to diffuse new production technologies in industrial crops, fruits and vegetables, etc. These achievements have been made in spite of the fact that generally the technology transfer system in Vietnam is facing many difficulties and challenges. These challenges are as follows: (i) Low public investment in technology transfer and poor infrastructure of the technology-transfer institutions; (ii) Lack of co-ordination and co-operation among the many technology-transfer institutions, and between these institutions and the credit institutions; (iii) High levels of poverty in many farm households, meaning that they do not have enough money to adopt the new technology – questioning either the suitability of these technologies to their livelihood systems or also the productivity of the new technology itself; (iv) Low levels of education of recipient farmer trainees, and difficulties in communication between extension agent/trainers and trainees due to language differences, especially in mountainous and remote areas; (v) Low numbers and insufficiently qualified grass-roots extension agents, negatively affecting the efficiency and effectiveness of technology transfer; and (vi) The lack in Vietnam of a proper curriculum and facilities for educating and training technology transfer staff at any level, including the university level. 4.2 Promoting Linkages between Farmers, Research, Extension and Policymakers Investments in developing agriculture research can lead to improved quality and performance of agricultural production and processing, but if investments are not made in the extension system, then the results of research cannot be transferred effectively to production systems. If investments are not made in the agriculture education system, then the technically skilled workforce required to effectively implement improved technologies derived from research will not be available. Investments in developing agriculture extension can lead to improved methods of participatory, client oriented extension, with the requirements of the farmers being taken into account by a grassroots based system. However, if these improvements are not accompanied by improved research, then the extension services will not be able to provide farmers with appropriate technologies. Similarly, if investments are not made in agriculture education, the skill base required for effective grassroots extension systems will not develop and rural based agro-industry (which is also a driver for improved extension services) will develop at a slower pace. The lack of effective linkages between production, research and extension - and the importance of developing such linkages - has been recognized in a number of key guiding legal documents for Agriculture Science and Technology, including Decision 272/2003/QD-TTg and Decision 171/2004/QD-TTg . These guiding legal documents outline an orientation of Agriculture Science and Technology towards undertaking research in response to demands and ensuring that the results of research are transferred into production, through the activities of a pluralistic extension service. This is conceptualized as the development of a “Science and Technology market”, where demand for technology from clients (in this case, farmers and agroenterprise) is matched with supply of research results from research institutes, transferred through the extension system . In addition to the guiding legal documents, a number of initiatives within MARD have been introduced in order to try and develop stronger linkages between agricultural science and technology and farmers. These include Decision 80/2002/QD/TTg to encourage the linkage of “4 houses The “4 houses” are scientists, entrepreneurs, the state and farmers.” to promote contract farming and agricultural commercialization and the gradual introduction of a competitive funding mechanism for agricultural research which has “responsiveness to farmer demands” as one of the criteria for judging research proposals . The Government of Vietnam will also undertake an investment project to support Agriculture Science and Technology, with the support of the Asian Development Bank . The project will commence in 2007 and will be implemented over a period of 5 years. The project will support a fund for the development of capacity within regional research institutes and for developing and implementing strong links between the regional research institutes, extension services and farmers. The fund would be designed to support applied and adaptive research that has a focus on development of appropriate technologies for the regions serviced by the regional research institutes. This would include technologies appropriate for poor households and ethnic minority households. Allocation of funding will be through a mechanism based on selection criteria for research proposals. The criteria include a number of eligibility conditions, including that the proposal should originate from a regional institute, that the proposal should include at least one Provincial Extension Center or advisory council as a co-applicant. The proposals for research funding must contain evidence that the proposed research will be undertaken in response to a identified need from grassroots stakeholders . 5. Conclusion Swanson notes that if extension is going to shift its focus to increasing incomes and employment, then it must shift from being a “supply-driven” extension system to one that is more “demand” or “market driven.” This shift requires at least three major institutional changes. If these institutional changes can be achieved, then a national agricultural science and technology system can have positive short- and long-term impacts on the rural poor. Firstly, agricultural science and technology needs to focus on high-value and labor-intensive agriculture which is specifically designed to increase incomes and employment among the rural poor. Secondly, small-scale producers must get organized into groups to achieve economies of scale and become linked with the supply chains accessing higher-valued markets. Thirdly, to target specific markets and the agroecological zones and farmers supplying them, agricultural science and technology decision making and priority setting needs to be decentralized . The importance of Agriculture Science and Technology has become increasingly recognized within Vietnam. Public investment in Agriculture Science and Technology, including research and extension has increased significantly since 2000, and this trend is likely to continue into the future. Agriculture Science and Technology is also strongly supported by a number of international donors and INGOs, including the World Bank, Asian Development Bank, AusAID, the Australian Center for International Agricultural Research (ACIAR), and the Netherlands Development Organization (SNV). However, increased investment alone will not be sufficient to ensure the increased contribution of Agriculture Science and Technology to agriculture sector growth and poverty reduction. To increase the level of contribution of Agriculture Science and Technology to sector growth, the efficiency of research and extension must be improved, and links and information flow between farmers, extension, research and policy makers must be improved. In the last 2 years, significant steps have been taken to increase the efficiency of research and extension, with the introduction of a rationalization of the extension system under Decree 56/2005/ND-CP and a major restructuring of the agricultural research system under Decision 930/QD-TTg . Increasing the levels and extent of linkages between actors in the Agriculture Science and Technology system is also the subject of a number of initiatives under MARD and is the centerpiece of an upcoming Agriculture Science and Technology project by the Government of Vietnam, supported by the ADB. 6. References http://www.agrifoodconsulting.com/Explain%20Sources%20of%20Growth.pdf PAGE 1