Tyler, 2006). Social science researchers in Asia are increas­ingly realizing that these questions are not about research but about innovation. Conceptually innovation signifies the process of change when knowledge (including technology) is generated and used in economically productive ways in agricultural or rural societies (Douthwaite, 2002; Biggs and Matsaert, 2004; Hall et al., 2004; Raina, 2004). In order to enable innovation systems to emerge many Asian countries are emphasizing the need for institutional change within the formal agricultural research organizations, especially their capacity to work effectively in partnership with other organizations.
     Despite well-intentioned recommendations (based on agricultural innovation systems analysis in four developing countries) to facilitate or strengthen the relationship of agri­cultural R&D with a range of relevant partner organizations (IDRC, 2006; World Bank, 2006c), developing countries in ESAP are not likely to follow the recommendations made. Future trends in innovation are likely to be bolstered by some recent decisions, such as increasing investments in rural infrastructure, attention to increasing access to rural credit and other services for the rural poor, investments in new networks and relationships to address specific develop­ment concerns such as HIV/AIDS, pollution, biotechnology, and markets for rural value added products. Active institu­tional reform within public sector AKST organizations for innovation and development in ESAP looks remote, given the institutional inertia and the overwhelming euphoria of the green revolution that refuses to wear off despite evidence of rural poverty. There is also the deeply entrenched tech­nological determinism that drives public sector funding of R&D worldwide and the relative reluctance of R&D policy makers to learn lessons from past experiences (Raina and Sulaiman, 2007b).
     The diversity of the ESAP region demands that inno­vation strategies have different goals and occupy different geopolitical niches and ecological systems within developed countries, and different domestic concerns in developing countries (ranging from poverty reduction to reclamation of degraded land, controlling arsenic pollution in water and increasing phytosanitary innovation capacity to meet inter­national trade regulations). Even in the largely globalized food system of today, agricultural and food systems adapted to local cultures and ecosystem carrying capacities can be developed and function fruitfully (Hendrickson and Heffer-nan, 2002). It is likely that with increasing donor interest (World Bank, IDRC, GTZ, AKF and Japanese Government among the major ones) the ESAP agricultural R&D, exten­sion, industry, farmers, rural banks, rural service providers, input suppliers, environmentalists and other local markets actors will pay more attention to building locally relevant innovation capacity.

4.2.7     Natural resources—land use and water use, land cover change
Sixty percent of ecosystems are degraded or used unsus-tainably and could further degrade significantly until 2050 (MA, 2005). There are a number of natural resource man­agement concerns that are likely to affect the ESAP region in future. They include conversion of forest and coastal lands for agriculture and aquaculture, flood control and loss of

natural fish habitat, increased use of fertilizers and pesti­cides and their impacts on the natural environment, overex-ploitation of inland and marine fisheries, land degradation, competition between urban and agricultural water supplies, and degradation of water bodies/wetlands, water pollution and loss of biodiversity. These degradation processes will affect agricultural productivity and livelihoods, especially in marginal and vulnerable areas. Expansion of agriculture in developing countries could lead to 10-20% of current grass­land and forestland lost by 2050 (MA, 2005).
     Fragmentation as a result of inheritance, population pressures or land scarcity inhibits efficiency in agricultural management efforts. Land and ownership fragmentation poses a problem since irregular farm shapes and diverse ownership structures make it difficult to approve and imple­ment large scale technologies such as irrigation. Irrigation requires large up front costs to purchase fixed capital such as control units and water pumps. Extending irrigation net­works is considerably cheaper since extensions use existing fixed capital. Evidence from China and South Asia indicates that land fragmentation is detrimental to land conserva­tion and economic gain, thereby discouraging farmers from adopting agricultural innovations (Niroula et al., 2005) and have negative impacts on land productivity (Nguyen et al., 1996; Jha et al., 2005; Niroula et al., 2005).
     Over the recent decades the agriculture sector provided services to reduce hunger and poverty in many parts of the ESAP region, especially in South and Southeast Asia. De­spite successes in food grain production, the agriculture sec­tor has recently been facing a large number of problems as natural resources have come under serious pressure from competing sectors. Rapid urbanization and industrial ex­pansion are creating huge and increasing demands for land and water.
     Globally, there is enough land, soil and water and enough potential for further growth in yields for increased production to be feasible. At present some 1.5 billion ha of land is used for arable and permanent crops and a further 2.8 billion ha are suitable for rainfed production. A signifi­cant fraction of potential land is either locked up in other valuable uses or unsuitable for cultivation due to low soil fertility, high soil toxicity, high incidence of human and ani­mal diseases, poor infrastructure, and difficult terrain. Land expansion is expected to account for 20% of production growth with the remaining 80% resulting from intensifica­tion practices such as higher yields, increased multiple crop­ping and shorter fallow periods (Bruinsma, 2003).
     In South Asia, almost 98% of suitable land is already in use. Thus, there is little capacity for expansion in area and it is projected that more than 80% of the increase in produc­tion will have to come from yield increases. Furthermore, about a third of the harvested area in developing countries in 2030 is expected to be irrigated land. However, by 2030, East Asia is expected to use 75% of their irrigable area and South Asia (excluding India) is expected to exploit almost 90%. This will result in a 14% increase in water withdraw­als for irrigation in developing countries by 2030 and hence 20% of developing countries are expected to face water shortages (FAO, 2002).
     A future policy environment is needed that promotes sustainable farming methods and reduces environmental