A range of options exist for public sector research and extension (R&E) institutions to alleviate growing financial constraints. Those that seek to make more effective use of existing resources, by making them more user-oriented and demand-responsive, are at least as important as those which seek to reduce the scope of state financing in areas where the private sector may be willing to participate or beneficiaries to pay. Most can have a positive impact in terms of fiscal, efficiency and distributional objectives. An important finding is that the scope for increased private or user financing of R&E is probably much greater than is widely recognised, although those removed from mainstream markets subsistence farmers in particular will remain largely reliant on public R&E services.
In defining the most appropriate nature of the relationship between the public and private sectors, economic and institutional analysis have much to offer. The paper has policy conclusions to offer:
there is considerable scope for the public sector to diversify the sources of funding of research and extension through selective privatisation, user contributions and the levying of fees
there is less scope for such changes where natural resource management problems are severe, where the majority of farms are small and low-resource, or where the institutional and physical infrastructure conditions do not favour private sector involvement
the efficiency of public expenditures can be increased by improved priority setting, competitive bids for funds, stronger client orientation, and improved R&E methodologies and management practices