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negative perceptions of public and private players, unre­solved issues of risk and liability, high transaction and op­portunity costs act as barriers against the development of public-private partnerships (Spielman, 2004; Spielman and Grebmer, 2004).
Each of these funding mechanisms has advantages and disadvantages. In developing countries where governance structures are still weak, the advantages may not be appar­ent during initial stages of the funding options (Box 8-3).

8.3.4 AKST governance and changes in the larger institutional environment
So far we have considered only the institutions directly governing AKST investments. However the broader insti­tutional environment encompassing the ownership of rights over land, water, and other common property resources would also influence indirectly the governance of AKST in­vestments. The institutions under this category can include land reform, water management, forest protection, interna­tional standards related to food products and agricultural imports, international law of the seas, global agreements on climate change and so on. These institutions that set the rules for managing natural resources locally, nationally and internationally would have a direct bearing on the effective­ness, nature and content of AKST investments. Similar is the impact of emerging organizational forms in the trade of agricultural and related commodities. For example, con­tract farming for export-oriented horticultural crops is ex­panding in many developing countries, and this will have a bearing on how AKST is generated and used, and conse­quently how investments are made for this purpose (Porter and Phillips-Howard, 1997; Haque, 1999). It is not only that the effectiveness of AKST investments is influenced by institutions governing natural resource management and use, but, increasingly AKST investments are also seen as so­lutions, albeit partially for sustaining the natural resource base. This is especially important in a context where urban and environmental interests in resources such as land and water compete with farming interests (Farrell, 2004). AKST investments and the institutions of natural resource manage­ment are in turn influenced by the wider political and eco­nomic institutions of countries and the world. The market expansion in developing countries,13 changes in world trade regime,14 structural adjustment policies in many countries, and others are going to influence not only natural resource management but also investments in AKST.
         In addition to these institutions, the way human con­sumption especially that of food and agricultural commodi­ties changes in the future would have a strong influence on the nature of AKST investments. Though economic vari-
13 Poorly developed market infrastructure can influence the distri­bution of gains from agricultural research (Dasgupta and Stiglitz, 1980).
14 The opening up of an economy may result in having less farm­ers influence prices; hence they may become less capable of being the major beneficiaries of agricultural innovations. Changes in trade regime may have a greater potential in changing the distribution of direct benefits of agricultural research in a country than other routes such as better targeting of agricultural research expenditure (Voon, 1994; Sexton and Sexton, 1996).


Box 8-3. Experience of new funding options in African countries.

Many African countries have implemented new governance enhancing strategies such as separation of policy mak­ing, funding and service provision, decentralization of pub­lic administration, deconcentration of service provision, and empowerment of communities and farmers organizations. Experience from Tanzania and Benin (Heemskerk and Wen-nink, 2005) have shown that local R&D funding schemes have contributed significantly to financial diversification for agricul­tural innovation. However, real and substantial empowerment of farmers' organizations in controlling financial research for adaptive research and pre-extension is still low. Although downward accountability has improved, real client control of funds has stagnated and farmers' representation in manage­ment teams of competitive grant schemes remains weak due to traditional top down attitudes of researchers and research managers.
         Decentralization and deconcentration of local innovation development funds have been more successful in technology generation, and in fostering the competitive element, which has enhanced the quality of research and the sense of owner­ship. Nonetheless, other concerns such as developing more viable mechanisms for client representation, priority focus and pro-poor focus of available funds, level of co-sharing and cost sharing are all yet to be resolved. In addition, some of the competitive grants and commodity based innovation de­velopment funds are insufficiently integrated into the national financing system.
         In terms of effectiveness and efficiency, there is evidence that more adaptive technologies are flowing to farmers under competitive funding, but there is no effective mechanism to systematize the information on the innovation adoption pro­cess. There has also been improvement in priority setting, planning and implementation, but not as much in monitoring and financing. Competitive grants tend to spread resources too thinly. Experience in Tanzania showed that effectiveness of competitive grants could be improved by focusing on a single theme using the value chain approach. Another dis­advantage in the African context is that competition may be limited due to insufficient numbers of competent researchers. In addition, competitive funds in African have been dependent on donors, whose pledges by donors have sometimes not been forthcoming. Cofinancing from local sources has also been unpredictable. Competitive funds are also expensive to operate due to high transaction cost especially for monitoring and evaluation (Lema and Kapange, 2005ab).

ables such as income play an important role, social, cultural and ideological factors do have significant influence on the evolution of human food and consumption systems. There need not be a linear evolution from traditional and home-based subsistence consumption to a full reliance on globally integrated markets for commodities produced with factory-