The document discusses the privatization of agricultural extension services in India, highlighting the increasing need for private extension due to limitations in the public sector. It covers the origins, rationale, advantages, and disadvantages of private extension services, along with various models and approaches employed. A case study on Dehaat exemplifies a successful private extension initiative connecting farmers to essential agricultural resources and services.

2. Credit Seminar
On
PRIVATIZATION OF AGRICULTURAL EXTENSION
SERVICES
Ayush Mishra
2019A56M
Extension Education
ayush96.mishra@gmail.com
CCS Haryana Agricultural University, Hisar

3. • Introduction
• Origin of Private Extension
• Rationale For Private Extension in India
• Elements of Private Extension System
• Services Rendered by Private Extension agencies
• Approaches for PAES
• Farmers Willingness to pay for PAES
• Privatization: International Experiences
• Advantages of private extension services
• Disadvantages of private extension services
• PAES Providers in India
• Favourable Factors For Paes In India
• Extension strategies for 21th century
• DeHaat: A Case Study
• Conclusion
Flow of Seminar

5. Introduction
• Extension services have been traditionally funded, managed and delivered by
government all over the world. In the beginning of 21st century 81% of world’s
extension service were delivered by civil servants, while the contribution of NGOs
and private for profit sector was less than 10% (World Bank 1997). Public sector has
an undisputed monopoly over extension services.
• With an increase in commercialized farming in 21st century, production system
became market oriented which demanded a technically sound & client accountable
extension service which is not just limited to input supply and advisory services but
also seek processing and marketing of the produce.
• The public extension system, facing financial & technical constraints couldn’t fill this
gap (generated by demand driven farming system) & the need for private extension
emerged.

6. Private Extension
• 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 (Savas, 1987).
• Process of funding and delivering the extension services by private individual or
organization is called Private Extension.
• It involves personnel in the private sector that delivers advisory services in the area
of agriculture and allied fields. Farmers are expected to share the responsibility for
this service & pay all or part of cost (Van den Ban & Hawkins, 1996)

7. Origin of Private Extension
• This system was first tested in chile in 1978, as
a part of general economic liberalization of
Chilean economy.
• It was suggested by Milton Friedman as a
“shock treatment” to cut down public
expenditure and bring down inflation.
• This later spread to North America, Western
Europe, Australia & New Zealand where public
extension system were either phased out or
effectively privatized.

8. PRIVATIZATION OF AGRICULTURAL EXTENSION SERVICES
Privatization of agricultural extension service (PAES) refers to the
services rendered in the area of agriculture and allied aspects by
extension personnel working in private agencies or
organizations for which farmers are expected to pay fee (or
share cost) and it can be viewed as an alternative or
supplementary to public extension services (Sarvanan & Gowda,
1999).

9. Extension System in India
In India, Four major organizational streams devoted to extension
work are:
1. First line extension system of ICAR and SAUs.
2. Extension system of Ministry of Agriculture and the State
Departments of Agriculture.
3. Extension system of the Ministry of Rural Development and
the State Development Departments.
4. Development work by the Voluntary organizations, business
houses etc.

10. Rationale For Private Extension in India
 Increasing inability of govt. to adequately fund extension machinery
 Growing dissatisfaction with the quality of extension services available.
 Wide extension workers to Farmers ratio in India (1:1000)
 Gradual change in technology from being largely a public good to
private good
 Commercialization of Agriculture
 Increasing involvement of input companies and product marketing
companies in transfer of technology.
 Inability of public extension system to reach the large target client
system.

11. Contd.
 Disappointing performance and loss of credibility in the existing
extension system
 Rise in the no. of NGOs, ready to implement rural development
programmes
 Changing cropping patterns and emergence of contact farming
 Shift in production system from supply driven to demand driven

12. Elements of Private Extension System
1. Objectives
2. Target Groups
3. Mandates
4. Extension Personnel
5. Funding
6. Extension Method

13. OBJECTIVES
I. Maximum possible profit.
II. To become more efficient and effective
Primary Objective of Private extension is to get maximum possible
profit to the clients (by increasing their income) through advisory
services because their survival depends upon nature of their
performance. This motivates them to become efficient & effective.

14. Target Groups
I. Only those who can pay
II. More committed
III. Highly careful
IV. Actively participating
Private extension mostly concentrate on big farmers, farmers growing
commercial crops, areas having favourable environments like irrigated
area, fertile soil etc. Clients are more committed and careful about
extension services, because they are paying for this.

15. Mandates
a) Technologies
• Location specific
• Demand driven
• Timely
• Profitable
b) Input supply
• Quality, timely and adequate

16. Extension Personnel
1. Accountable to farmers
2. Highly professionals
3. Highly motivated

17. Funding
• Clients contribution
• Development agencies

18. Extension methods
• Advisory in nature through personnel communication
• Participatory approach to generate new income
• Less use of group and mass contact
Private consultants mostly adopt personal contact method, as the
group approach will reduce their chances of getting consultancy fees.

19. Mode of Payment By Farmers In PAES
1. Farmers can pay a fee for each visit an extension agent makes to their
farm, or for any service the extension agent provides.
2. A levy can be charged on certain agricultural products from which
agricultural research are financed.
3. Costs are met by membership fees paid to farmers association.
4. The extension agent can receive a specified portion of extra income a
farmer earns as a result of advice from extension agent.
5. Custom service can be offered by the way of providing machinery
during the season for sowing, harvesting and marketing etc.

20. Services Rendered by Private Extension agencies
1. Information
2. Input supply
3. Infrastructure
4. Technical service
5. Marketing service
6. Enterprises
7. Consultancy
8. Other Services

21. Contd.
1. Information:- relating to availability of good quality seeds and planting
material, sources of credit, package and practices for crops, market
intelligence, e-commerce, training etc.
2. Input Supply: Private extension can supply different production input
like seeds, seedlings, fertilizers, pesticides, credit, labour etc.
3. Infrastructure: Different infrastructure facilities like transport, cold
storage, storehouse machineries, processing, packaging etc.
4. Technical Service: Arrangement of soil testing, diagnosis of diseases
and pests, water analysis, fertilizer testing etc.

23. Contd.
5. Marketing Services: Private extension service providers may acts as
buying and selling agents.
6. Enterprises: Contract farming, seed production, procurement, packing
& marketing, organic farming.
7. Consultancy: Project planning and implementation for individual
farmer or group or organizations.
8. Other Services: Crops, Livestocks and life Insurance agents

24. Approaches for PAES
 Share cropping system: The extension worker provides advisory and
inputs. Farmer uses his land and labour. Extension worker share the
crop with farmer for a profit. Hired labour and other costs are shared.
extension worker has a personal stake, it motivates him to put
maximum effort
 Extension contract system: Agricultural consultant / firm will provide
advisory and inputs to individual farmer or group. The cost of input is
recovered after the harvest. The extension worker / firm is
compensated by the farmer with some percent of the value of the crop
above the agreed target.

25. Contd.
 Village extension contract system: An agricultural advisory committee
consisting of representatives of farmers at village level hire consultancy,
which work for the village as per the requirements. The committee
collect money from villagers based on some criteria like area / crop and
pay for consultancy.
 Contract farming: The agri-business firm provides all inputs and
technology. It also supervises production process. As per the MOU’S the
farmer has to sell his product, as quality specified to the firm only, for a
premium price. The firm process and sell the product. Here the farmer
gets input, technology and market support. The firm gets quality
products at reasonable price by eliminating the middlemen.

26. Contd.
 Public extension through private delivery: Depending on extension
service providing capacity, extension services are awarded to
competitive bidders at different levels i.e. state, district, block / village
Panchayat. The service cost is shared between government and clients
i.e. farmers in different proportions.
 Service for vouchers: Farmers are not provided with public extension
service but given vouchers depending upon the size of the land, type of
crop and type of information needed for certain years generally 5-10.
Farmers can use those services trading the vouchers to any agricultural
consultant / firm, whether public or private, but after the period he has
to pay for all the services fully, as and when he receives.

27. Some other forms of PAES
 Scientists working at national institutes and Agricultural Universities may be
encouraged to take up consultancy assignments with Agribusiness companies.
 Government can take up training Agricultural graduates in agricultural consultancy.
Trained consultants will be certified by a government agency. Certified consultants
can form a professional body at national level in the lines of Indian Medical Council
(Shekara, 2010)
 Technologies developed at government research stations can be sold to certified
consultancy firms. They can in turn find the market and sell to the clients. This is
suitable to hi-tech agriculture.
 A seed company, a fertilizer company, a pesticide company, a agri-machinary
company, a agro-processing company can come together & carryout extension
activity, ultimately benefiting themselves in saving cost and farmer by providing a
package.

28. Farmers Willingness to pay for PAES
• Farmers willingness to pay is the degree of desirability of farmers to pay
for extension service (Sarvanan, 2008).
• In a study conducted among 720 farmers in Maharashtra, Rajasthan &
Kerala, Sulaiman and Sadamate (2000) found that 48 % of farmers are
willing to pay for agricultural information. Farmers having higher area
under non-food grains are more willing to pay for agricultural
information.
• Sarvanan (2003) conducted a study in 3 districts of Karnataka revealed
that more than one third of public extension clientele were willing to
pay for private extension services. The clientele were more willing to
pay for cultivation practices of fruit crops, plant protection, new
varieties, post harvest technologies and land development.

29. PRIVATIZATION: INTERNATIONAL EXPERIENCES
 Cost Recovery Approach in UK & Mexico
The Agricultural Development and Advisory Services (ADAS) in UK was commercialised
and operates on partial cost recovery basis since 1987. The agency receives 50% of its
income from commercial fees. Similarly , Mexico has developed a fee based system
among large scale farmers in north west region (Wilson, 1991).
 Voucher System in Chile
Chile has replaced public extension delivery systems with vouchers distributed by
govt., for farmers to use in hiring private extension consultants.
 Mixed Approach in Germany
It uses different models like completely privatized, semi privatized, subsidized farmer
association & voucher systems in different states.

30. Contd.
 Agricultural Consultants In Japan
The private extension services are provided by agricultural consultants on production,
marketing & selling of produce. Emergence of large sized farms have diminished the
role of their public extension system.
 Gradual Privatization in Netherlands
Netherland privatized one half of its public extension service by transferring field
extension personnel to farmer associations.
 Chambers of agriculture In France
Extension in France are carried out by chambers of agriculture & private sector
companies. The chambers of agriculture are considered private institutions operating
on farmer fees for membership and services.

31. ADVANTAGES OF PRIVATE EXTENSION SERVICES
• More demand - driven rather than supply – driven
• High quality of services in terms of satisfying information needs of
clientele, trained manpower, sustained finances and resource allocation
• Provides for an information mix and choices available to farmers
• Enhanced efficiency of staff
• Assure continuous supply of quality agricultural products
• More effective as it allows farmer to select an adviser who is best
suitable to his/her needs
• Healthy competition among service provider will lead to better quality
and lower costs for service

32. DISADVANTAGES OF PRIVATE EXTENSION SERVICES
• Concentrate on area having favorable physical environment
• Privatization may hamper free flow of information
• Farmers may be less interested to disseminate technologies to other
farmers that they have learnt from private extension (by paying fees)
• No educational role, the focus will only be on profit making enterprises
• Deprivation of small farmers as private extension agencies tend focus
more on commercial & big farmers
• The commercial interest of these private agencies may jeopardize the
efforts of research & extension of eco friendly & sustainable agriculture

33. PAES Providers in India
• Agricultural Consultants & Firms
• Farmers Associations
• Producers cooperatives
• Krishi Vigyan kendra
• Input Companies
• Non Government Organizations
• Private firms
• Agro-processing & trading firms
(Contract Extension)
• Mass Media

34. Agricultural Consultants
• It emerged in India after mid 90s when various agri-clinics were setup in
different parts of the country to provide testing facilities, diagnostic and
control services on a fee for service basis (Sarvanan, 1999)
• The PAN Horti-Consultancy firm (in Coimbatore) is among the first
consultancy agency providing agricultural extension services to farmers.
• Green Plus Agro Laboratories established in 1995 in Nasik (Maharashtra)
provides services like soil & water analysis, sells pesticides & irrigation
equipment and provide consultancy on plant protection.

35. Farmers Association & Producer Cooperative
• Many farmer organizations, commodity growers association, farmer
interest groups and producer cooperatives are playing a significant role
in providing extension services to their member farmers.
• Some successful farmer associations & producer cooperative involved in
PAES are:
a) Kerala Mushroom Growers Association (KMGA)
b) Maharashtra Grape Growers Association
c) Horticultural Producers' Cooperative Marketing and Processing
Society (HOPCOMS)
d) Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF)

36. Input Companies
Many of the agro-input companies perform extension functions to varying degrees.
These are generally Seed companies & Fertilizer companies.
 Bayer Crop Sciences - “Better Farms, Better Lives”
It has provided 4,00,000 smallholder farmers, immediate access to basic agri-inputs and
crop advisories in 204 districts across 17 states, spanning key crops such as rice, corn,
vegetables and millet to support their critical livelihood needs.
 Indian Farmers Fertilizer Co-operative Ltd (IFFCO)
It undertakes demonstration on fertilizer use, cultivation practices, conduct farmers
meetings, seminars & arrange soil testing facilities. It also adopt villages under its village
adoption programme.

37. Non Government Organization
The NGOs role in extension was first seen in 1980s under various
watershed development programmes. Some of NGOs involved in
Agricultural Extension services are:
• Professional Assistance for Development Action (PRADAN)
• Action for Welfare & Awakening in Rural Environment (AWARE)
• BAIF Development Research Foundation
• Society for Advancement of Village Economy (SAVE)
• Self-Employed Women’s Association (SEWA)

38. Private Firms
 TATA Kisan Sansar by TATA Chemicals Ltd.
It offers end-to-end agri solutions including the
latest agro services and specialized input products.
Their help farmers from agro input planning to crop
procurement, assist them in decision making
process to increase their yield and align them to
market demands.
 e-choupal by ITC
It uses internet kiosks to link directly with rural
farmers for procurement of agricultural and
aquaculture products like soybeans, wheat, coffee,
and prawns. It is one of the largest ICT based Pvt.
extension service provider in India.

39. Contract Extension by Agro Processing Firms
• A number of agro processing firms are involved in delivering extension
servives starting from supply of high quality seeds & other inputs to the
final procurement. For example,
• Global Greens Pvt. Ltd is involved with farmers growing tomatoes, sweet
corns, red paparika in AP, Telangana, Karnataka & TN.
• PepsiCo is involved in contract farming with potato growers in Punjab,
Gujrat & Maharashtra.

40. PAES by Mass Media
• Almost all vernacular newspapers are providing various information to
farmers on daily or weekly basis.
• Magazines like Agriculture Today and Just Agriculture are playing
important role in dissemination of agricultural information.
• ‘Annadata’ a daily educational program of ETV network based on
farming has gained huge popularity in southern states.

41. FAVOURABLE FACTORS FOR PAES IN INDIA
• 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
• Adoption of protected cultivation & modern techniques like
hydroponics
• Inability of the public extension system to reach the large target
clientele population.

42. Extension strategies for 21th century
• Commercialization of extension services
• Introducing Contract Extension System.
• Introducing share capital system
• Giving Partnership Rights and More Responsibility to Private sector and NGOs
• Selective withdrawal of Public Extension Services
• Creative and Strengthening Farmers Groups and Co-operatives
• More emphasizes on HRD

43. Dehaat: A Case Study
• DeHaat™ is one of the fastest-growing start-ups in the Agri Tech sector and one of
the very few companies providing end-to-end solutions and services to the farming
community in India.
• DeHaat is an ICT based platform which connects small farmers to their various needs
– seeds, fertilizers, equipment, crop advisory & market linkage through network of
trained micro entrepreneurs.

44. • Currently, 80+ DeHaat micro entrepreneurs are serving more than 42,200 farmers
in Odissa, UP, West Bengal & Bihar for their various agri demands related to Input,
Information & Market linkage. DeHaat platform has listed 350+ different
agricultural inputs from companies like UPL, IFFCO, DuPont, Tata, Bayer & Yara.
More than 65 institutional buyers are also associated for their agricultural raw
material procurement directly from farmers.
• DeHaat has also launched a free farming advisory no. 1800 1036 110

45. • Currently DeHaat is focusing on 3 major agri services – Agri Input, Crop advisory &
Market linkage of farm produce. Farmers can place the order related to any of their
agri need through DeHaat help line ( 1800 270 1420), through mobile application –
DeHaat or simply they can go to their closes DeHaat physical centers. The demand
from farmers is transferred to respective DeHaat micro entrepreneurs and fulfilled
on same day. Each DeHaat micro-entrepreneur caters to 600-800 farmers in a radius
of 3-5 km radius.

46. CONCLUSION & RECOMMENDATION
• Privatization of Agricultural Extension Services has various advantages like providing
demand driven services, increasing voice of the farmers in the extension services,
more cost effective with efficient and quality services, more clientele accountable,
complement or supplement to the effort of public extension and increased staff
professionalism.
• That being said it has its own drawbacks such as, focus on big and progressive
farmers, promotion of own benefit with less attention to improve the farmer’s
condition, restricts the flow of information and increases social disparity.

47. The way Out
• While these changing times does demand greater role for private sector in agricultural
extension, it does not mean completely closing down govt. departments & handing
over extension responsibility to private players. The govt. will continue to have a
greater say in coordinating Pvt. Agencies, serving as an arbitrator (in case of dispute).
Further the role of public extension system can be changed to focus more on areas
which are not covered by private extension.
• Whenever possible these two extension systems can partner together to provide best
possible services to the farmers, as in PPP (Public-Private Partnership) model while
focussing not only on profitability but also sustainability.

48. REFERENCES
• Hansra et.al. Agricultural Extension systems Issues and Approaches. Concept publishing company New delhi-
110059.
• Kumar, B. 2018. New Trends in Extension Education; Kalyani Publishers, New Delhi.
• Mondal, S. 2016. Agricultural Extension with Global Innovations; Kalyani Publishers, New Delhi.
• Saravanan, R. 2008. Agricultural Extension: World Wide Innovation; New India Publishing Agency, New Delhi.
• Sarvanan, R. and Veerabhadraiah, V. 2003. Clientele Satisfaction and their willingness to pay for public and
private extension services. Tropical Agricultural Research Vol. 15, page 87-92.
• Swanson, B.E. and Mathur, P.N. (July, 2003). Review of the Agricultural Extension System in India. Unpublished
World Bank Report.
• Swanson, B.E. (2006). Developing a market-driven extension system to increase farm income and employment:
Lessons learned from China, India, Egypt and the United States. Journal of International Agricultural Extension
and Education, Volume 13, 2006.
• Sulaiman V. R. and A.W. Van den Ban (January 2000). Policy Brief 9; Agricultural Extension in India – The Next
Step. Available at: www.aiaee.org/attachments/222_Sulaiman-Vol-10.1-3.pdf.
• Sulaiman, V. R. and Sadamate, V. V. 2000. Privatising Agricultural Extension in India. National centre for
Agricultural Economics and Policy Research (NCAP), New Delhi.
• Wilson, M. 1991. Reducing the cost of public extension services, Initiative in Latin America. In W. M. Rivera and
D. J. Gustafson, Public Administration Review, 50(2): 141-155.