Document(s) 12 of 17

Policy agenda for agriculture 

• Making S&T progress a high priority in the development of agriculture and the rural economy; 
• Integrating agricultural science with education (popularizing the achievements of agricultural S&T) and improving the integration of R&D with industry; 
• Strengthening the quality and relevance of S&T in agriculture and improving the scientific training, equipment, and personnel policies of the research staff; and 
• Promoting S&T in TVEs to accelerate the use of modern agricultural S&T management and helping them to develop new technology-intensive industries that also broaden the opportunities for employing surplus rural labour. (Such technologies should also be extended as rapidly as possible to help the farmers in rural areas where poverty is endemic.) 

Progress in implementing S&T reforms 
in agricultural R&D 

The general impression of the impact of the reforms on agricultural research and technology was positive, and the staff of the research institutes interviewed at state and provincial levels agreed that the reforms had improved the research environment. This has occurred through the provision of new research opportunities, increased devolution of responsibility to the research institutes, and greater mobility of the staff, although this was largely restricted to the younger well-trained scientists. 

Links with the market economy 

Another reason is that many farmers and farm organizations are not prepared to pay or are not in a position to pay for technology. In some cases, where high-quality seed or propagation material of perennial crops, such as fruit trees, is offered, payment is less of a problem, but where the advice or technology is related to an activity regarded as public-good research, there is an expectation, from past experience, that it should be provided free of charge. 

An exception to this generalization is the payment received by research institutes for assisting farmers involved in the TVEs based on agricultural enterprises under the Spark Program. Spark Program enterprises receive funding for specialized training and assistance with developing and using technology for the production or processing of agricultural products. At present, these funds are largely provided by grants from the state or the provinces, but in time this practice could become institutionalized as an integral service provided by the Spark Program corporations, and it could provide a valuable means of technology transfer for the research institutions and an important input in framing their research priorities. 

The development of spin-off enterprises by agricultural research institutions has been quite restricted to date, in contrast to the use of this approach by the much larger group of engineering research institutes. At the same time, there is good evidence from the experience of the Shanghai Academy of Agricultural Sciences that this means of commercializing agricultural technology can be highly profitable. The Academy has several enterprises developed by its research institutes; however, the most successful is the Shanghai Mushroom Company, whose exports of edible fungi to Japan are worth 32 million CNY per year. Individual agricultural research institutes in other state and provincial academies in the country are only beginning to exploit this opportunity. Many of these have the information, improved plant or animal material, or special technology arising from their research that could be developed for both rural and urban markets. 

Although the ability of the agricultural research institutes to participate in the market-orientated reforms to date has been limited, there is evidence that some of the actions being taken are having a positive outcome, including the exploitation of special products and some restructuring of research institute programs to focus on research topics that can support the research needs of the expanding rural TVE programs in their regions. 

Other S&T policy initiatives 

Other research initiatives developed by SSTC over the last 10 years, such as the Torch Program (to assist in the development of NTEs), the National Key Laboratory Program, and NNSF grants for strategic (basic) research, are available to institutes engaged in agricultural research, but relatively few awards have been made. This is partly because of the applied nature of the research in agriculture, which may discourage applicants, and possibly because it is easier to obtain funds from the R&D grants administered by the Ministry of Agriculture or from provincial sources. 

A recent evaluation of the National Program for Tackling Key Technology Problems in the Eighth Five-Year Plan (1990­95), a program administered by SSTC, was undertaken by the Chinese authorities (Government of China 1996). About 25% of the topics in this program are in agriculture, and the review provides some insights into the problems experienced in the management of research grants of this nature. The review commented on the difficulty of coordinating this type of program, which has too many levels of management and relies on other ministries and agencies to implement the program. Other problems involved reporting and serious delays in the provision of funds, which were severely reduced by inflation, poor management at the project level, and the lack of responsiveness of the program to the demands of the market. Moreover, many of the long-term projects lacked a clear focus within the major priorities of their particular areas of research. If these problems are common to other funding programs, such as the general grants that fund most of the agricultural research in the national academies (agriculture, forestry, and fisheries), it is urgent to address them. 

Transfer of research technology 

The Spark Program is achieving one of the primary objectives of the agricultural policy, to stimulate and modernize the rural economy and improve the living standards of the farmers and their families. Further details of the program and its achievements over the first 8 years are given in the proceedings of a recent conference (SSTC 1994). 

Observations by the review team, reports, and discussions with officials of the Spark Program suggest that a number of factors have contributed to the success of the program. The program is flexible -- farmers can select from a wide range of well-developed technologies (projects) to suit their particular region or district -- and is well linked to the local agricultural and industrial market systems. Consequently, the nature of the resulting TVEs in a given region or province varies considerably. In general, across the country there is an east to west increase in the number of enterprises that produce or process agricultural commodities. 

Other features of the Spark Program that have contributed to its success are the following: 

• The choice of a particular project within the program lies with the participants; 
• The incentive to join the program is the prospect of a greater income; 
• The technologies used in the Spark Program are in general already proven in practice; 
• The selection of the leader of a Spark Program project is in the hands of the participants (subject to approval); 
• Financial support is provided (from the state) for training the participants and for technical advice, usually from the local research institutes; 
• The enterprises are funded almost entirely from bank loans and from capital raised by the participants and not from government grants, which tend to include more bureaucratic requirements; and 
• A considerable effort is made to ensure that market outlets are available for the products of the enterprises. 

The response to these new opportunities that the Spark Program provides for the research institutions has been disappointing. Apart from the inputs mentioned above (technology and farmer training for the enterprises), there is little evidence that the research institutes are exploring new research opportunities in partnership with the more-advanced enterprises. Such partnerships would allow new technologies to be evaluated under realistic commercial conditions and, if successful, to be extended to similar enterprises. If the research institutes are to give effective leadership in S&T in the rural community, they will have to be more proactive, developing and evaluating new technologies before the demand arises. 

Extension -- There has been a major emphasis in the policy reforms on the transfer of research technology through a market-driven process. This works well in the industrial research sector, where technology is a merchantable commodity. In the natural sciences this approach has relevance and is being applied, but in general there are fewer opportunities. It will take longer to change the attitudes of the scientists and their clients toward selling and buying information and technology. This is particularly true in agriculture, where much of the research is of a public-good nature and the returns are reflected in the improved economy of the rural sector. 

Another tradition in agriculture is that the transfer of research technology has been the responsibility of the extension service. Although this system has not, in general, been very successful, the system is in place in China and has a role to play in the new policy environment. The principal extension agency at the national level is the National Agricultural Technical Extension Centre, which is concerned largely with the formulation of government policies, whereas at the provincial level, the extension is organized under the departments of Agriculture and Forestry. In the past, institutional boundaries and fragmentation led to competition for resources and duplication of effort between research and extension, which was not productive. Another problem facing the extension service as a result of the market reforms and the decentralization of production units through the responsibility system is the need to service a very large number of individual farming families rather than the collective production teams of the former commune system. 

To improve this situation, the state and provincial governments are funding large collaborative programs in which research and extension personnel undertake major development and extension projects, such as SEdC's Liaoyuan Program in Guangdong. The Bumper Harvest Program, developed by the Ministry of Agriculture, uses a similar approach and has been taken up by a number of the provincial academies of agricultural sciences. 

Factors constraining the implementation of 
the S&T policy reforms 

Goal 1: Develop a modern, effective agricultural research service 

If China's agricultural research is to become a pacesetter in the world's advanced S&T, it will be necessary to overcome the constraints mentioned above and encourage greater integration of research and technology within the rural economy by reorganizing the structure and management of existing agricultural research and, through consolidation and integration, developing a more qualified service with a modern systems orientation. 

The organization of research in the natural sciences in industrial countries has moved away from single-commodity or single-discipline research institutes toward a multidisciplinary model, located, where possible, in major agricultural ecoregions so as to address the special problems and opportunities presented by the commodities (plant, animal, or both), resources, and environments in the region. Such regional research centres are usually well equipped with a critical mass of scientists in the major relevant commodity and disciplinary areas. They are responsible for both the strategic and the applied research in the region. In China, collaboration of the national research institutes (CAAS, agricultural universities) with provincial research institutes located in the same region is essential to prevent duplication and to obtain assistance with provincial problems that form part of the regional research priorities. 

In China, this model is one that might help with a number of problems that were discussed repeatedly during the Mission's visit, including 

• Lack of interaction and the resulting duplication among research institutes and agricultural universities and colleges at national and provincial levels; 
• The strong commodity or disciplinary focus at all levels of agricultural research; and 
• The need for a more comprehensive set of research priorities, including new research to support the needs of farmers and agricultural TVEs in the different regions. 

Goal 2: Strengthen scientific research and technology development 

These second-order problems will require a more strategic (basic) multidisciplinary research approach, which in turn will require well-trained scientists with more sophisticated laboratory and field equipment and facilities. Some examples of these problems include the decline in factor productivity of the more intensively cultivated cropping soils, the need for better biological solutions to the problems of new pests and pathogens, and the search for improved quality and marketability of many of China's agricultural products. 

With some notable exceptions, China's agricultural research has been slow to make the changes that began in the more industrial countries in the late 1960s. Providing advanced training for many people in China's agricultural research community will be a considerable task: as of 1990, only 0.2% of agricultural researchers had doctoral degrees. The agricultural research approach is changing; however, with such a large and extensive research system, the changes may not be fast enough to keep pace with the demands of the rural sector unless a much greater effort is made. 

Once the research system is effectively restructured, attention should turn to the next most common factor constraining the delivery of research results, which is the management and performance of the staff of the individual research institutions. The criteria considered necessary for the development of an effective and creative research institute are 

• A critical mass of high-quality and well-trained research scientists; 
• Experienced support staff, with adequate equipment and facilities; 
• Good leadership, delegation of authority, regular communication within the i
• Incentives in the form of more enlightened personnel policies, better living conditions, training, overseas travel opportunities, promotion on merit, and greater flexibility in employment; and 
• Special funding to develop collaborative research activities for mutual benefit and to provide access to new skills, equipment, and facilities. 

• Strengthening the training and research skills of new young scientists, which should not be restricted to the graduates from agricultural universities, as many of the new skills required are from related disciplines; 
• Providing modern equipment to permit a more in-depth approach to solving the more complex second-order (systems) problems that constrain agricultural production; 
• Creating greater opportunity to undertake research-leadership training, to develop methods for setting priorities, and to open up new research in fields such as postharvest technology, food processing, biotechnology, resource management, development of livestock feed and fodder, and utilization of hilly land for wood, fruit, and animal production; 
• Providing improved salaries and conditions to discourage the most able young scientists from moving to the private sector and out of strategic research -- the quality of these people and their willingness to remain in publicly funded research positions long enough to develop successful technologies will be critical to meeting the growing demand for such research outputs; and 
• Encouraging collaborative research as an important mechanism to overcome institutional and administrative barriers between complementary groups in different research institutes, university departments, and industry -- this has proven to be an efficient means of undertaking multidisciplinary research while ensuring the relevance and ease of transfer of the technology resulting from such research. 

Goal 3: Improve the process of research and technology transfer 
to stimulate the economic development of the rural sector 

The new S&T policies offer a new dimension for future extension activities in agriculture through the introduction of market-driven technology transfer, which de facto is becoming the norm in many developed countries. The adoption of this approach in the agricultural research institutes has been slow, but with the training of staff and the growth of agriculturally based TVEs, this approach will expand. One modification of the current structure of the research institutes that might help the process would be to group those staff members interested in extension, together with staff of the provincial extension services, in a special research division within the research institutes. This group's responsibility might include the design, evaluation, and extension of research technologies. Such a group would be closely associated with the research divisions but would be clearly responsible for evaluating the technology and moving it out to the end-users as rapidly as possible. To ensure equity in the sharing of the returns from the commercialization of research, a proportion of all funds derived from the sale of information and technology could be shared with the entire research staff of the institute as an incentive for both developing and transferring the technology. 

In this respect the development of the new rural enterprises under the Spark Program provides a valuable new opportunity for agricultural research and extension activities. The Spark Program enterprises represent a useful framework against which the research programs can be better orientated and research priorities can be developed to service the current and likely future needs of the TVEs and the regional farmers in general. This, for example, would also develop a better balance between production and postproduction research activities, which is urgently needed to respond to the growth in the value-adding food-processing industries throughout China. 

Research funding 

Research-project funds are allocated in accordance with the national priorities as set out in the five-year plan by SSTC in association with the respective ministries. National and provincial research institutes submit projects for funding on a competitive basis. The allocation is based on the quality of the research institute and the project and the funds available in the budget. Additional project funds are allocated to new research initiatives, including research of interest to agribusinesses. Part of the funds generated by institutes from the sale of their services or of produce can be used for research, but in most cases these funds represent a relatively minor component of the research budget. 

The total funding for agricultural research in recent years has not been reduced. If anything, it has increased in real terms, especially at the provincial level; however, owing to the increase in total staff in recent years, the funds available per researcher have declined. 

Because agricultural research institutes, along with research institutes in the other natural sciences, have a limited ability to profit from the market economy, they have not suffered from a loss of core funding, as has occurred in the engineering and industrial research institutes and in the physical sciences generally. Despite this, additional funds will be required to develop a high-quality agricultural research service with the capacity to undertake high-quality strategic and applied research, to provide advanced training, and to procure the equipment and facilities needed for modern research. One way to achieve this, although it would probably be difficult, would be to significantly reduce the large number of agricultural research scientists and research institutes, which would result in a major reduction in overhead, infrastructure, and operational costs. If these savings were spent in creating fewer but more comprehensive and better staffed and equipped laboratories, the current investment would be much more effective. 

The imposition of levies on agricultural production is one potential source of additional funds for agricultural research. In many Western countries, levies charged on agricultural commodities and, in some cases, on manufactured products provide a significant source of revenue for agricultural research. The government negotiates the size of the levy with the industries and is responsible for collection at the point of sale. In many cases, the government also contributes funds on a one-for-one or some lower proportionate basis. The resultant research funds are allocated by an appropriate authority on the basis of research priorities jointly decided by the S&T authorities and the producers. This type of research tax on production is especially appropriate for many agricultural commodities, such as rice, wheat, and livestock, that are the beneficiaries of public-good research. 

Document(s) 12 of 17