Economics of Paid Extension: Lessons from Experience in Nicaragua

Public Agricultural Extension (Extension) faces major changes and challenges, resulting from less available public resources and from changes in demand for extension. Structural changes in extension provision and financing alternatives have been one type of response to the changes in conditions under which extension operates. Some new mechanisms, all modifications to traditional public extension, include: private extension, commercialized extension, and co-financed extension, will be called hereafter paid-extension. Several experiences of paid-extension around the world are reported in the literature (see Keynan, Olin and Dinar for details). Most of them provide information on the structure and operation of the different paidextension arrangements and, in some cases, some anecdotal results on the costs and benefits associated with these operations. This article offers, in the next section, a framework to evaluate economic performance of paid-extension, and demonstrates its application, in the third and fourth sections, using two types of paid-extension programs in Nicaragua. The article is concluded with a discussion on policy implications.