Latin America and the Caribbean
AGRICULTURAL R&D IN CENTRAL AMERICA: POLICY, INVESTMENTS, AND INSTITUTIONAL PROFILE
Gert-Jan Stads, Frank Hartwich, David Rodríguez, and Francisco Enciso
International Food Policy Research Institute (IFPRI); and Inter-American Institute for Cooperation on Agriculture
Drawing from comprehensive datasets derived from primary surveys, this report reviews the major institutional developments and investment and human resource trends in public agricultural research and development (R&D) in the seven countries that constitute Central America: Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama.
A high degree of diversity exists with regard to Central America’s agricultural R&D efforts. The size of the national-level R&D systems varies largely in terms of number of research staff, ranging from just 17 fte research staff in Belize to 283 in Costa Rica. Average degree levels of agricultural research staff also diverged widely from one country to the next. In El Salvador, only 1 out of every 5 agricultural scientists holds postgraduate degrees, while in Belize, Nicaragua, and Costa Rica, more than 50 percent of all agricultural research staff were trained to the MSc or PhD level.
Distribution of spending among countries in the Central American region is very uneven, with Costa Rica and Nicaragua accounting for the lion’s share of the region’s agricultural research expenditures. Total agricultural R&D spending has remained fairly stagnant since the early 1980s.
Growth in spending in Costa Rica and Belize during 1981-2006 was offset by cuts in Guatemala and El Salvador. Funding for agricultural research is still predominantly through government allocations in Panama and El Salvador. Agricultural R&D in Nicaragua, on the other hand, is extremely dependent on foreign donor funding. A number of countries have sought to fund agricultural R&D by a tax on agricultural production or exports while other countries have been successful in commercializing their research results.
Agricultural Research in Latin America and the Caribbean: A Cross-Country Analysis of Institutions, Investment, and Capacities
Gert-Jan Stads, Nienke Beintema, Sandra Perez, Kathleen Flaherty, and Cesar Falconi
International Food Policy Research Institute (IFPRI)
Latin America and the Caribbean (LAC) is well situated to scale up its agricultural production in the face of a growing global population and climate change. The region’s sources of comparative advantage lie, in part, in its abundant water and land resources. To succeed in generating the research outputs needed to accelerate agricultural growth, LAC countries need sufficient, sustainable funding for strategic agricultural research programs in alignment with national and regional priorities, combined with talented, well-trained researchers.
This report assesses trends in the institutional setup, investments, and human resource capacity of agricultural R&D (excluding the private sector) in LAC up to 2013. The analysis draws largely from comprehensive datasets derived from primary surveys targeting close to 700 agencies across the region. It finds that agricultural research spending and capacity in LAC have grown progressively since the turn of the millennium, but that this regionwide growth masks considerable differences across countries. On the one hand, the region is home to Brazil, which outperforms every other country with its highly qualified research staff and world class research infrastructure and outputs. Argentina, Colombia, Costa Rica, Mexico, and Uruguay also have relatively well-developed agricultural research systems, but many other countries—especially the Central American countries, Caribbean island nations, and poorer Andean countries—are increasingly falling behind in terms of infrastructure, investment levels, and capacity.
Other key findings of the report include:
- Many countries, including Ecuador, Guatemala, Honduras, Nicaragua, Panama, and Paraguay, lack the critical mass of PhD-qualified scientists required for agricultural research to have a substantial impact on agricultural growth.
- Across LAC, a large number of highly experienced researchers will be retiring in the short to medium term. Without adequate succession strategies and training, this will create significant knowledge gaps and concerns about the quality of future research outputs.
Taking into account the various challenges related to agricultural R&D funding, human capacity, outputs, and institutional structure, the report as well as the various LAC country factsheets outline a number of policy implications for the region’s national governments.
Productivity and the performance of agriculture in Latin America and the Caribbean
Alejandro Nin-Pratt, Cesar Falconi, Carlos E. Ludena, Pedro Martel
Inter-American Development Bank Environment, Rural Development Disaster Risk Management Division
This study analyzes the performance of Latin America and the Caribbean's agriculture between 1980 and 2012 looking at the contribution of inputs, and total factor productivity (TFP) to growth in output per worker. A growth-accounting approach that goes along the lines of neoclassical growth accounting combined with Data Envelopment Analysis, allows us to measure TFP growth using output and input indices and also to decompose this growth into contributions of technical change and changes in technical efficiency. Our findings show that between 1980 and 2012, regional agricultural output per worker and TFP increased 82 and 45 percent, respectively, reducing the difference between TFP in LAC and in OECD countries. This improved performance of agriculture was the result of fast growth in the use of fertilizer, increases in land productivity, and growth in the use of capital that expanded cultivated area per worker. Higher productivity of the animal stock, fast growth in the use of feed and in the number of animals per worker, have increased the share of livestock in total output and also contributed significantly to the improved performance of agriculture. Observed growth patterns at the country level suggest that countries that increased input per worker have increased TFP at a higher rate than countries with limited access to capital and land. As a result of these growth patterns, the improved performance in the region has amplified differences in labor productivity between countries. Growing differences in labor productivity and the fact that the favorable shock in commodity prices that benefited LAC's agriculture in recent years has apparently ran its course, raise concerns for the future.
ASTI–IICA Regional Report
Stads, Gert-Jan; Hartwich, Frank; Rodríguez, David; Enciso, Francisco
International Food Policy Research Institute (IFPRI); and Inter-American Institute for Cooperation on Agriculture (IICA)
Although the countries in Central America share many cultural and socioeconomic characteristics, important national differences of relevance to agricultural R&D exist among them. In countries like Guatemala and El Salvador, agricultural R&D is largely undertaken by government agencies, whereas most of the research in Honduras, Nicaragua, and Costa Rica is conducted by higher education agencies. In addition, the nongovernmental sector—which includes producer organizations plays a significant role in carrying out agricultural R&D in Honduras and Costa Rica.
In terms of capacity, Belize—the region’s smallest country—employed just 17 fte scientists in agricultural R&D in 2006 compared with 283 fte’s in Costa Rica. Central America as a whole spent $92 million (in 2005 constant prices) on agricultural R&D in 2006, equivalent to 0.31 percent of the region’s agricultural output. Although these totals would be somewhat higher if expenditures by regional agencies like CATIE were included, they are still very low compared with other parts of Latin America, other developing regions, and especially the developed world.
Costa Rica has the region’s most advanced agricultural R&D system and plays an important role in the development of new technologies, particularly for the emergent horticulture and food processing industries. In 2006, Costa Rica accounted for one-third of total Central American agricultural R&D spending, closely followed by Nicaragua. INTA—Nicaragua’s national agricultural research agency, which receives the vast majority of its budget from donors and multilateral development banks—accounted for nearly one-fifth of Central America’s agricultural R&D spending in 2006. Growth in agricultural R&D spending varied greatly across countries. During 1996–2006, Costa Rica experienced a 30 percent growth in its agricultural R&D investments, whereas spending in El Salvador and Guatemala
shrank by more than 40 percent.
Sources of agricultural R&D funding also differ widely across Central American countries. Research in El Salvador and Panama relies almost exclusively on funds provided by their national governments. Public agricultural R&D in Nicaragua, on the other hand, has traditionally been highly donor-dependent. Agencies in Costa Rica and Honduras show an increasing reliance on internally generated resources compared with other countries in the region, which can partly be explained by the
large nongovernmental sectors in these countries.
Linkages among the Central American countries have grown in the past decade, as have linkages with the United States—Central America’s largest trading partner. Although CAFTA, the free trade agreement, may have a negative effect on some of the region’s agricultural industries, it also offers broad economic opportunities to the region. To take advantage of these opportunities, the countries of Central America will have to overcome a range of challenges that affect its competitiveness. An often-voiced concern is that the region’s overall performance in agricultural innovation and capacity has been held back due to the fragmented nature of the region’s agricultural R&D systems and the lack of efficiency, for example, in term of duplication of effort. New innovation system and networking theory suggests that it is
not only the capacity of R&D agents and users that determine the level of innovation in the agricultural sector, but also the level of interaction, collaboration, and exchange of information and knowledge.
Greater economies of scope and scale could be achieved if the countries of Central America continue to integrate their agricultural R&D systems within each country, as a region, and in terms of the broader innovation system. Although some progress has already been made in this regard (for example, SICTA), integration should be extended to include nongovernmental institutions, producer organizations, the higher education sector, and the private for-profit sector. In addition to enhanced integration, a boost in agricultural R&D investments is called for—particularly in Guatemala and El Salvador—if Central America is to enhance smallholder production, cut (rural) poverty and to compete with top-quality agricultural products in a global market.
Recent Developments in the Conduct of Latin American Agricultural Research
Beintema, Nienke; Pardey, Philip G.
(International Food Policy Research Institute(IFPRI); and International Service for National Agricultural Research (ISNAR)
It is hard to distill a concise picture of Latin American agricultural R&D based on these new data and doubly difficult to discern what these trends portend for the future of agricultural R&D in the region. After the generally dismal decade of the 1980s, public investments in agricultural R&D rebound in some countries during the first half of the 1990s. But the recovery seems fragile and not shared widely throughout the region. Public research in countries like Brazil and Colombia that did better in the early 1990s suffered cutbacks in the later part of the decade, and many of the poorer (and smaller) countries have failed to experience any sustained growth in funding for the past several decades.
Neither has private research stepped in to fill the gap. Reliable estimates on private research spending are hard to come by, but the best (and most recent) evidence we have assembled suggests that in 1996 less than $100 million of the almost $1.6 billion of agricultural R&D spending in our 9-country sample was done by private firms. Evidently most of the private technologies used throughout the region are based on research done elsewhere.
The future of technical change in Latin American agriculture is heavily dependent on accessing technologies best suited to local markets and production constraints, cognizant of the everchanging trade prospects facing the region. This means generating technologies locally or tapping and, where necessary, adapting technologies developed in other parts of the world. Absent adequate investment in research to generate, screen, and test technologies Latin American agriculture will slip behind its competitors. Perhaps the most worrying indications in our data is an apparent bifurcation of research throughout the region. The richer countries may be making sufficient investments to stay in the race (although even here the trends are not entirely convincing, with investment slowdowns in many of these countries in recent years), but poorer countries seem to be slipping behind, both in terms of their ability to generate new technologies now and to continue doing so in the future.
Public Agricultural Research in Latin America and The Caribbean: Investment and Capacity Trends
Stads, Gert-Jan; Beintema, Nienke
Agricultural Science & Technology Indicators (ASTI); International Food Policy Research Institute (IFPRI); and Inter-American Development Bank (IDB)
In 2006, LAC as a whole employed more than 19,000 FTE researchers in agriculture and invested $3.0 billion in agricultural R&D (in 2005 constant prices), which corresponds to 1.14 percent of the region’s total agricultural output. Nevertheless, 70 percent of this total was spent by just three countries: Argentina, Brazil, and Mexico. Were these “big three” countries excluded, the region’s agricultural R&D investments as a percentage of AgGDP would be substantially lower (0.72 percent). Regionwide investments grew by 1.1 percent per year during 1981–2006, but this average masks significant differences over time and among countries. During 1996–2006, agricultural research spending in countries like Argentina, Costa Rica, and Uruguay rose markedly, whereas expenditures in countries like Chile, El Salvador, Guatemala, Honduras, and Paraguay contracted. Brazil, the region’s largest country, also experienced a modest decline in its agricultural R&D investments since the mid-1990s largely due to reduced spending by the country’s state government agencies in recent years.
LAC’s human resource capacity in agricultural R&D shows similar diversity across countries. Argentina, Brazil, and Mexico each have large and comparatively complex systems employing thousands of scientists, whereas capacity in the countries of the Caribbean and Central American is understandably much smaller. Overall, entities conducting agricultural R&D in the LAC region have become increasingly diversified in recent decades, with the INIAs occupying a progressively lower share of total research staff numbers. Large national differences in the average qualifications of agricultural scientists are also present; nonetheless, qualification improved overall in most countries in the past decade. A worrying trend, however, is that the pool of scientists is aging and some countries have failed to address this with initiatives to hire and train younger scientists.
Most agricultural R&D in LAC is funded by national governments, but sources differ widely across countries. Commodity taxes on the sale of production or exports have become popular in many countries, especially Colombia and Costa Rica, and competitive funding mechanisms are also gaining popularity in a large number of countries. Donor dependency for the LAC region as a whole is much lower than in Sub-Saharan Africa, although it remains very high in countries like Nicaragua and Honduras. Internally generated resources and private funding play an important role in financing agricultural research in the region as well. In addition to financing research directly, national and multinational private enterprises also carry out their own research in some countries; the exact share of private-sector involvement in agricultural R&D in LAC, however, is difficult (if not impossible) to measure.
Beintema and Pardey (2001) stated that the most worrying trend in agricultural R&D in LAC was the apparent bifurcation of agricultural research. More recent data to 2006 confirm that the gap between the region’s low- and middle-income countries has in fact widened. Some of the poorer, agriculturedependent countries—such as Guatemala, El Salvador, and Paraguay—experienced sharp cuts in their agricultural research expenditures and intensity ratios over the past decade, while some of the more economically advanced countries (such as Argentina and Mexico) experienced growth. It is becoming increasingly clear that the region’s low-income countries are slipping behind in their ability to generate new technologies and varieties. Moreover, most of the region’s poorest and technologically most challenged countries are in tropical zones, putting them at a disadvantage compared with their more advanced neighbors in temperate zones, which gain large benefits from the spillover of technologies and varieties generated in high-income countries with similar agroclimatic conditions.
Sustainable financial support for agricultural R&D is crucial in all countries of the region, not only in support of revenue-generating export crops, but also in support of much-needed food crops and, more generally, development initiatives to alleviate rural poverty. If the region is to achieve food security, reduce poverty, and compete in an increasingly competitive global market, strong political support for agricultural R&D is called for in addition to financial support, as is greater integration of agricultural R&D systems both within and among countries.