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Funding mechanisms

As part of RAS implementation, POs are also involved in funding mechanisms. Many producers – both individually and through their organisations – contribute towards the cost of the RAS they receive (via the introduction of member fees or levies collected on all services). However, the internal income of POs rarely matches the costs of provision, though the use of farmer-extension workers is one solution used to help save costs.

Generally, RAS are financed through a variety of mechanisms and partnerships. These include public or private sector funding. Embedded services – where the funding and delivery  of RAS are associated with a business transaction in a value chain – are also increasingly common. Advice is linked to the sale of agricultural inputs, with the cost built into the price of the input when it is sold, or to the procurement of agricultural products by a processor or trader.

Some POs complain about a lack of strategy and consistency in building their RAS because of different donors wanting different approaches. This makes attempting, at least partially, to self-finance their mechanisms became a priority. POs have varying positions on this principle. Some POs consider RAS to be inherently public and therefore feel it should be funded by public resources. Others accept the idea of contributions by POs (either via sectors or directly by the POs), but not by individuals.

Box 2: Key factors for effective RAS

For RAS to be effective, three key issues have to be taken into consideration: 

  • Pluralism and coordination: Coordination among the various suppliers of RAS is key for successful implementation and to avoid overlapping provision of services and unnecessary competition. 
  • Demand-driven services: In order to face multiple challenges regarding environmental, economic, or social issues, each farmer needs a specific mix of support services, such as accessing knowledge, technologies, or credit. Demand-driven services ensure that services meet the expressed needs of farmers so that effective changes in their livelihoods occur. 
  • Knowledge-oriented services: Knowledge is increasingly considered a key resource for rural development. Farmers have to continuously evolve, successfully solve new and complex problems, and respond to external expectations and development opportunities. More attention thus has to be paid to the production and sharing of knowledge for, with, and between farmers.