PRIVATIZATION OF AGRICULTURAL

EXTENSION SERVICES

GUNGADI SHARANAPPA
PG 09 AGR 1017
Dept. of Agril. Extension Education

CONTENTS
INTRODUCTION
CONCEPT
REVIEW OF LITERATURE
CHALLENGES
ASSUMPTIONS
APPROACHES
CASE STUDIES
CONCLUSION

 I.C.A.R. Extension System: KVK,

Extension system of the MoA /SDRD,
Extension system of the MRD/SDRD,
Extension work by NGOs, corporate and cooperative institutions etc,
Extension efforts of Agricultural Universities .

Limitations of the Present Extension

System
Expensive.
Very time consuming process.
Leads to information loss.
Poor communication capacity.
Lack of adequate number of extension workers.
Lack of adequate allocation of funds.
Barala, 2006

Contd.

Inadequate involvement of all stake holders.

Weak Research-Extension-Farmer-Marketing
linkage.
Poor infrastructural facilities.
Inadequate operating resources and financial
sustainability.
Uneven spread of Extension services.

Over

the years public extension has

become a dead weight on public funds and
less than 10 percent of the budgets are
currently
available
for
operational
expenses, the rest being used for
maintenance of the staff structure.

M. L. Manrai, 2001

Present Problems of Agriculture

Sector
Shrinking agriculture productive land,
Small and scattered land holdings,
Low production & small market surplus,
Lack of organized markets,

Contd

Lack of credit facilities,

Lack of promotion to non-farm
entrepreneurship among farmers and
Lack of timely information

Concept of private Extension / Privatization

The process of funding and delivering the
extension services by private individual or
organization.

Privatization is the act of reducing the role of

government or increasing the role of private
sector in an activity or in the ownership of
assets
Bloome, 1993

 Financial Burden on Government ,

Poor performance of Public Extension Service,
Commercialization of Agriculture,
Inability of the Public Extension to reach all the
farmers,
Inability of the Public Extension to cover all the
services.
Chandra shekara, 2000

The word Privatization broadly refers to

a process by which the government reduces
it role in an activity and encourages private
sector to take up these roles. It means the
change from providing free public services
financed by government to a commercial
institution self financed by users on the basis
of cost recovery.

Merits of Private Extension

Transformation of agriculture from more subsistence level to

commercialized agri-business

New patent regime has drawn the attention of private sector

Efficient delivery service

High quality of service

Reduction of input supply risk ensuring the volume, quantity

and timing of supply to their consumer

Purpose specific , target specific

Enhanced efficiency of staff

Van Den Ban & Hawkins, 1996

Contd

Providing free-of charge extension service

Promote sales of production inputs (or) services
Assure continuous supply and quality agricultural products
Promote project returns on investment in farms
More effective because farmer can
the best able to help

select an adviser , who is

Resources, innovative ideas motive for profit and thus keen to

offer effective and better service to customer
Healthy competition among service provider

Stake holders in private Extension System

Agricultural Consultants,

News papers,

Agricultural Consultancy Firms,

Agricultural Magazines/Journals

organization/co-

Private Television Channels,

Farmers
operatives,

Private Sector Banks,

Internet.

Agri-business Companies,
Input Dealers,
Chandra Shekara, 2004

Operationalisation of PAES
Private Agricultural
Extension
Service is operationally defined as services
related to provision of agricultural inputs,
provision
of
marketing
services,
and
consultancy/advisory services. (production
and marketing) rendered to farmers by
private companies/firms on the basis of
payment or free of charge.

SOME IMPORTANT OPINIONS ON

PRIVATIZATION OF EXTENSION SERVICES

The public extension system is facing constraints of funds, in efficient

field staff, political pressures, centralized bureaucratic authority, large
areas, diverge cropping systems and large population.

Due to these reason the private extension service is encouraged

nowadays.

The private extension service is expected to provide demand driven,

cost effective and quality service.
Supe, 2003

A thinking is on at the National level to private extension efforts of

the country. In this direction we need to identify the area, types of
farmers, geographic location etc. to whom private extension 'can
suit.

In our country the privatization has already taken place in the

disciplines of veterinary extension, plantation crops, seed production
and floriculture.

The efforts of multinational and other private sectors such as Pepsi,

Brooke Bond etc. are the examples of such.

However, we should take this step with a caution that in our country
there is a lot of heterogeneity in farming systems. Therefore, it is
suggested that we may take this step in a phased manner.
Hansra, 1996

Review of Literature
1.

Theoretical orientation of privatization in

agricultural extension service.

2.

Experiences of privatization of agricultural

extension service.

3.

Approaches implemented by private sectors.

4.

Focus of private sectors and

5.

Advantages and disadvantages of private

extension service

Theoretical orientation of privatization in

agricultural extension service
The private extension provider is an individual or
organization other than government who is providing
single or integrated services to the farmers.
Chandra Sekhara , 2002

Experiences of privatization in agricultural

extension service
Harter and Hass (1992) reported that
most
of
the
commercial
agencies
concentrate their activities on areas having
favorable physical environments such as
fertile soil and satisfactory infrastructure.

(Commercialization of British extension system:

Promise or primrose)

Approaches implemented by private sector

Chandra Shekara (2001) said that agri-business
firm provides all agricultural inputs and technologies
to farmers. They also supervise on production
processes. The mutual benefit here is that the
farmer gets input, technology and market support,
where as the firm gets quality product at reasonable
price.

(Private extension in India; myths, realities, apprehensions

and approaches.)

Focus of private sectors

Pray and Echeverria (1990)
private consulting firms in
concentrate on plantation
growing number are staffed
managers and technicians.

reported that
Asia tend to
crops and a
by plantation

(Private sector agricultural research and

technology transfer links in developing
countries)

Advantages and disadvantages of

privatization of agricultural extension
service
Baxter (1987) said that private extension
agencies do not usually apply their resource
to the food crops that are fundamental to
farmers, but on those who produce the cash
crops.

(Agricultural Extension Worldwide: Issues,

Practices and Emerging Priorities)

CHALLENGES IN PRIVATISING AGRICULTURAL

EXTENSION SERVICES IN INDIA

1. Larger Area under Subsistence Farming

2. Need for Location Specific Technologies

3. Women Dominated Rural Work Force Agriculture in India is a

family occupation

4. Competition among Private Extension Systems leading to

contradictory messages

Assumptions behind Private Extension

Extension generates new income, extension become economic
input.
Provides Demand-Driven Service
Increases the voice of farmers in the extension service
Extension service become more cost effective with efficient and
quality service
Privatization complement or supplement the efforts of public
extension
Extension personnel become more client accountable
Private extension increases staff professionalism

Contd

Clients (farmers) are more committed to the service

Private extension not suitable to small and marginal farmers

Private extension concentrates big and progressive farmers

and areas having favorable environment

Private extension is less education oriented and more

commercial in nature

Private extension dont concentrate on food grain production

Private extension restricts flow of information

Less contact between extension worker and farmer

PRIVATIZATION APPROACHES
1. Share cropping system
2. Extension contract system
3. Village extension contract system
4. Contract farming
5. Public extension through private delivery
6. Service for vouchers

STRATEGIES FOR PRIVATIZING

EXTENSION

Commercialization of extension services Complex, demand driven

technologies in the public extension system should be provided for particular
cost.

Introducing Contract Extension System Public extension system can make

contract with registered private agricultural consultancy agencies to transfer
the agricultural technology.

Introducing Share Cropping System

Giving partnership rights and more responsibility to private sector and

NGOs.

Creating and strengthening farmers groups and co-operatives

Experiences of extension privatization in

different countries

Private Extension reduces the economic burden of the

governments and increases the efficiency of extension
services provided Netherland

Government has perfect control over Private Extension

Chile
Personal economic interest of the extension agent mixed
with his increase of professional involvement in
extension activity share cropping in Ecuador

Rivera, 1996

 Privatization increases the accountability of extension agent

Extension contract system - China
It is possible to prevent the farmers being exploited by private
extension agents by proper legislation Denmark
Private Extension is cost effective compared to public extension
due to low overhead charges United Kingdom
Certification and grading of technical consultants is possible for
regulation Germany
Government can focus on sustainable areas, leaving regular
extension to private extension Tunisia

Favorable factors for privatization

Technological advancement in the areas of Communication &
Information Technology
Opening out of public research and educational institutes to
part with the technologies
Changing-cropping trend and emergence of contract farming
Need to earn more from smaller holdings
Loss of credibility in the existing extension system
Inability of the public extension system to reach the large
target client system

Negative impacts of
privatization
Focused mainly on commercial farmers
Profit maximization role by generating location
specific , demand driven technology
Neglected the production of food crops
Concentrated on area having favorable physical
environment
Exploitation of farmers
Neglected education role
Regional imbalance

CASE STUDIES

AGROCEL - Agro Service Centers

The pioneering leader with 55 years of strong foundation in the chemical
world.
In 1988, they launched their dream project AGROCEL - Agro Service
Centers in Kutch with a shared capital from the Gujarat Agro Industries
Corporation, the Government of Gujarat.
Now the service centers in Kutch, one in Vadodara, Gujarat, two in
Maharashtra, one in Haryana, and one in Jammu & Kashmir.
AGROCELs Mission:
To make all agri-inputs available to farmers at the right time and at
reasonable cost with all necessary technical guidance.
AGROCELs Activities:
Crop Improvement, Land & Water management, Nutrient Management,
Pest and disease management.
Pawar, C.S. and Patel, H.G.

AGROCELs Financial outlay

Farmers Co-operatives - AMUL

The Kaira district co-operative milk producers union selected the

brand name AMUL for its product.
it has a turn over of 500 crores, covering 9,70,000 farmers of one
district serving with just 150 extension workers.
On an average 333 people visits AMUL daily.
Village Society: - The village co-operative society consists of primary
milk producers. To become a member, a milk producer pays an
entrance fee of Re.1 and buys at least one share of Rs.10.
District Union: - The Union is managed by a Board of Directors of
which twelve are elected from among the Chairmen of village
societies.
Education: - The Union maintains a constant link with rural
producers specially women.
Welfare Activities: - Two scholarships are given every year to
outstanding children of members
Anonymous., 2000

Members:

13 district cooperative milk

producers Union

No. of Producer Members: 2.79 million

No. of Village Societies:

13,328

Total Milk handling

capacity:

11.22 million litres per day

Milk collection (Total 2008-09):

3.05 billion litres

Milk collection (Daily

Average 2008-09):

8.4 million litres

Milk Drying Capacity:

626 Mts. per day

Cattle feed manufacturing

Capacity:

3500 Mts per day

Sales Turnover

Rs (million)

US $ (in million)

1994-95

11140

355

1995-96

13790

400

1196-97

15540

450

1997-98

18840

455

1998-99

22192

493

1999-00

22185

493

2000-01

22588

500

2001-02

23365

500

2002-03

27457

575

2003-04

28941

616

2004-05

29225

672

2005-06

37736

850

2006-07

42778

1050

2007-08

52554

1325

2008-09

67113

1504

Agriclinics and Agribusiness Centers

A nationwide project initiated in 2002 to train and deploy

private extension personnel throughout the country.

The course is offered through approximately 60 different

training institutions in India.

The farmers who use the services of the agriclinics are

expected to pay a fee established by the agripreneur.

Programme objectives: The programme is designed to

help develop opportunities for private extension, in order
to lower the burden on public funding.

Number of personnel trained till 2009- 7211

MANAGE, 2002

State

Karnataka

Name

Sadashiva Achari

Identification No

KAR3014

Qualification

B.Sc Ag

Address

S/o Narayan Achari, Mudala house, Peraje

VillageBudoli post, Bantwala tq South Kannada
Karnataka - 574253 Phone: 08255-313206
Email: [email protected]

Training Institute

KAR-UAS-BLR

Date of Completion

5/14/2009

Nature of Services Provided

training the rural women about vermicompost

preparations, value addition

Total Investment

(a) Fixed: 4

Source of Investment

Barrowed

If borrowed, Name of the Bank & Place

vijaya bank, main br,bawtwala

Average income per month

Rs. 50000

No. of farmers covered

1000

No. of villages covered

10

(b) Operational: 1

 Partnership Defined The term public private partnership in the

present context is necessarily a collaborative effort between the
public and private sectors contributing for one or more functions like
planning, resources and activities as required to accomplish a
shared goal set out by the partners.

The public and private partnership may occur at any one or more
stages in the process of extension, production, procurement,
processing, marketing etc. depending upon the stated objectives of
partnership.

MANAGE, 2004

The case of Public Private

Partnership

Excel Parle Farmers A case of Partnership Excel Crop

Care Limited (ECCL) initiated one such experiment called
Excel and Me where me represent the farmers.

Objective: The main objective of the ECCL is to minimize

the cost of cultivation of crops, improve production and
productivity by providing advisory services and package of
practices, thus increasing the income of farmers.

Excel And Me: Excel, over the years, had initiated this
systems approach wherein Integrated Pest Management (IPM)
and Integrated Crop Management (ICM) were consistently
promoted.

Excel retail outlet:

The Excel & Me not only offers advice to the farmers for crop
cultivation but also provides quality inputs at a wholesale price to
grow the crops for better yields.
The farmers who come for the Gyan Kendra not only receive proper
advice but also they can get farm machinery on hire.

Role of public institutions

Presently there is no formal arrangements between Excel and other

public institutions like KVK and Department of Agriculture.
however, the informal collaborative efforts are made to provide
proper advice to the farmers.
The KVK scientists are invited by the Excel in the farmers meet to
share the latest research and practices.

Parle-Excel-farmer programme has resulted in

Increase in the yield by using improved varieties of sugarcane and
package of practices.

Creating awareness about soil health and increase in the organic

carbon content in soil.

Creating awareness of using bio-compost

Creating awareness about the application of right inputs in right

proportion thus reducing the cost of cultivation.