IFPRI organized a two day workshop on “Agricultural Extension Reforms in South Asia – Status, Challenges, and Policy Options” to be organized at Committee Room 3, NASC, Pusa, New Delhi on February 17-18, 2015. IFPRI has been conducting research related to agricultural extension reforms in India and collaborating with researchers in other south Asian countries for the past five years through various projects. For understanding extension reforms in India, a major consultation was held in NAARM in 2009 during which policy makers called for development of evidence for spreading extension reform process in India. Since then several research papers have been produced on various aspects of Indian extension system. While they are presented in various forms including several discussion papers, there is a need to pull all the research result together to present it in form that could be used by the policy makers to further guide them in the reform process. South Asian countries such as Bangladesh, Nepal, and Sri Lanka are going through similar challenges in getting knowledge to farmers. Several experiment shave been conducted to test new approaches to extension by the public, private and NGO sectors. Learning from each country experiences will bring collective understanding and knowledge for the policy makers who are attempting to bring changes in the reform process. The purpose of this workshop is to bring together a groups of researchers, analysts and policy makers to present the issues, constraints and challenges facing agricultural extension reforms that are being implemented in South Asian countries.

1. IMPACT OF INFORMATION ON
FARM INCOME
Pratap S Birthal
National Institute of Agricultural Economics and Policy Research
New Delhi
IFPRI Workshop on “Agricultural Extension Reforms in South Asia –
Status, Challenges, and Policy Options”
New Delhi
February 17-18, 2015

2. BACKGROUND
 Technological changes in agriculture with massive investments in irrigation,
infrastructure and institutions (credit, extension, input delivery) have propelled
India from a syndrome of food insecurity to a food self-sufficient economy
 The growing population, however, keeps the challenge of producing more food
as significant as in the past from Limited resources (land, water and energy),
 Increasing competition for resources from non-agricultural uses
 Climate change is a big threat to sustainable production
 Changes in consumption patterns, away from low-value staples towards high-
value food products
 Consumer preferences for safe and quality food
 Markets (domestic and global) are changing- stringent food safety standards
Agriculture is becoming information-intensive: weather forecasts and advisories,
inputs, agronomic practices, pest management, markets and prices to:
 Produce more efficiently from the limited resources
 Conserve natural resources
 Adjust their production portfolio with changing market preferences for food
 Comply with food safety standards

3. STATUS OF INFORMATION SYSTEMS
 Government extension system has been one of the important channels for
information dissemination for farmers in India
 Its outreach has remained limited to only about 6% of the farm households It
alone cannot provide all the information that a farmer currently needs, and
to all the farmers
 Extension agents are typically not accountable to the farmers (who are
actually the best judges of extension agents’ relevance and effectiveness), and
are not strongly motivated to exert themselves.
 Extension agents’ limited effort to interact with farmers in the field, little
willingness to learn from farmers’ experience, low-quality and generic advice
offered, and weak incentives to invest in updating their knowledge or to
acquire skills for effective dissemination of knowledge
 The public extension system in India has not been able to keep pace with the
changes in global technological and economic environment.
 India’s agricultural information dissemination system has been changing
 Mass media *radio, TV, Newspapers
 Mobile
 Internet

4. ISSUES?
 Importance of information is widely recognized but a
rigorous analysis of its impact is lacking
 Information search and acquisition involve fixed costs, small
farmers and socially-disadvantaged may be disadvantaged
in access to and use of information
 What are the information sources for farmers?
 What is the impact of information on farm income?
 Is there a bias in access to information?
 Farm size; Social status/caste
Data :
 Situation assessment survey of farmers 2002-03
 Nationally representative : 51,770 households spread over
6,638 villages
 access to and use of information
 costs and returns in crop production
 Policy and institutional variables

5. Information sources
40% households access information, 75% of them or 28% of
the total use information
Government Mass media Private Social networks
 Extension workers
 Government
demonstrations
 Krishi Vigyan
Kendras
 Participation in
trainings
 Farmers’ study
tours
 Radio
 Television
 Newspaper
 Mobile/internet
 Input dealers
 Output buyers
 Para-
techicians/NGOs
/private agency
 Progressive
farmers
 Primary
cooperative
societies
 Village fairs
13.7% 33.8% 23.4% 29.1%

6. CHARACTERISTICS OF USERS OF INFORMATION IN
RELATION TO NON-USERS
The users of information :
 Have larger land holdings: fixed cost of information
access, and scale economies in its access
 Have larger endowment of labour
 Are more educated, probability increases with level of
education
 Have better access to institutional credit
 Are more informed about policies (MSP)
 Are more associated with self-help groups and farmer
organizations
 Belong to upper caste and OBC households

7. Information use by farm size (%)
Source of
information
Sub-
marginal
Marginal Small Medium Large
All
(<0.5ha) (0.5-1ha) (1-2ha) (2-4ha) (>4ha)
Mass media 30.2 33.0 36.4 35.9 37.4 33.8
Government 10.0 13.2 14.3 16.6 19.2 13.7
Private 26.6 23.9 22.0 21.3 19.3 23.4
Social
networks
33.2 30.0 27.3 26.2 24.1 29.1
Any
source
20.0 29.5 35.3 38.3 40.6 27.6

8. Information intensity
One source Two sources
Three or
more sources
Sub-marginal 51.5 30.3 18.2
Marginal 47.7 29.6 22.8
Small 43.8 29.3 26.8
Medium 40.9 26.8 32.3
Large 33.4 27.6 39.0
Total 45.9 29.2 24.8

9. Information use by caste
Source
Scheduled
tribes
Scheduled
castes
Other
backward
castes
Upper
castes
Mass media 31.5 24.9 33.2 38.4
Government 17.8 11.7 14.2 12.8
Private 20.9 28.7 22.5 23.0
Social networks 29.8 34.6 30.2 25.7
Any source 20.0 23.2 27.3 34.8

10. Net returns/ha for users and non-users
Non-users Users %
difference t-statistic
Sub marginal 12197 11680
-4.2 0.49
Marginal 8119 9352 15.2 3.49
Small 7192 8382 16.5 3.32
Medium 6934 9146 31.9 2.34
Large 5872 7541 28.4 3.28
Total 9399 9692 3.1 0.7

11. COMPARISON OF MEANS CAN YIELD BIASED RESULTS
• Observable and unobservable farmer and farm
characteristics that are simultaneously correlated with use of
information and farm income can lead to selection biases
 Selection bias due to: difference in observed characteristics of
users and non-users of information, such as farm size, age,
education and caste. These could be important in
determining income also
 Selection bias due to unobservable farmer, community or
location characteristics. E.g. smarter farmers are also more
gregarious and seek out information. The income then could
be a product of unobserved smartness
IV method to control for such biases: IV is the proportion of farm households’
within a social group using information in a locality. The idea is that if the
proportion of farmers in the neighbourhood has higher access to
information it would translate to greater availability of information for a
farmer in that group

12. Model estimated impacts of information
on farm income (%)
Full sample Diversified Foodgrains
Any source
OLS 9.6 9.1 5.2
IV 12.3 17.0 1.6
Formal
OLS 8.8 7.9 4.9
IV 12.5 14.8 -4.2
Informal
OLS 7.3 6.4 5.8
IV 6.2 9.4 1.4

13. RETURNS ON INVESTMENT IN EXTENSION
 12% higher income, equivalent to Rs1140/ha in 2002-03
 Expenditure on extension in 2002-03: Rs 29/ha
 Expenditure on R&Ed in 2002-03: Rs 157/ha
 Investment in R&D has considerable potential
for enhancing farm productivity and poverty reduction
 Ratio of expenditure on extension to R& Ed (1:5) almost
stagnant implying investment in public extension has
not kept pace with rising demand for information
 Underinvestment in extension may limit realization of
the potential increases in agricultural productivity from
spending more on agricultural research.
 Information systems that are (i) reduce cost of
information access , (ii) quality information and add
more to income, and (iii) less exclusionary, e.g. media

14. Thank you