mechanisms at the national and international level with the various public and private AKST players—that is, the building of research networks (Lindarte, 1997; Salles-Filho et al., 1997) without ignoring the demands of the sector as a whole, which in most countries features small producers.

2.3.4 Changes in approaches to mobilizing resources
In the early stages, public funding for NARIs normally came from the national government budget. The main exception to this rule was Argentina’s National Agricultural Technology Institute (INTA), whose charter allowed it to receive a direct percentage of revenues from leading agricultural exports. More recently, Uruguay’s INIA began to receive a percentage of revenues from agricultural exports, complemented with an equal sum from the national budget. Since the end of 2002, Argentina’s INTA has received a percentage of the earnings from imports coming from outside the MERCOSUR trade alliance (Piñeiro et al., 2003).

       The limited experience of these funding arrangements suggests that it is advantageous for NARIs to have an independent financing system in which funds are assigned for specific purposes. This provides security regarding the sums that can be spent and their availability in the course of the fiscal year. Both elements are essential to proper planning. They also encourage a careful use of available resources since, if unused, they remain at the disposal of the institution.

       Governments have tended to assign AKST funds as part of their overall budgets. A total annual amount has been generally allocated, divided into partial, normally monthly, payments. However, this periodicity has often not been observed, especially when it comes to operating costs, which are sometimes disbursed in random fashion. This allocation is supposed to cover: salaries, operating expenses, maintenance of infrastructure and equipment, and investment.

       The aforementioned trend of declining governmental support for AKST institutions confronts them with shrinking and untimely budgets that reduce their effectiveness and efficiency. They are forced to cover, first of all, their payroll, for which they must use part of the resources earmarked for operations, maintenance, and investment. It is common to find ratios of 90:10:0 regarding salaries, operations and maintenance, and investment. Experts consider that this ratio should be 50:35:15.

       Consequently, AKST system institutions have been forced to seek external resources to reduce their budget deficits. This has led them to diversify their funding sources through a variety of projects. It has also led them to identify and approach other financial agents they may turn to (multilateral banks, regional research funds, international cooperation), which are not necessarily a solution for AKST institutions confronting a budget deficit and a reduced capacity to cover their essential payroll, operational, and maintenance expenses.

          Recently, national AKST system institutes have made major efforts to adapt to the new conditions. In general, they have solved their budgetary problems. In some cases, they have even managed to improve their finances significantly. As a result, changes are evident in their financial structure and composition, and many now generate their own resources through the sale of non-essential assets and technological services and solutions.

       Similarly, these organizations are taking their first steps to harness the benefits derived from the intellectual property of some of their own technology packages. This has implied developing new regulatory frameworks on issues such as intellectual property legislation for seeds, genes, and other appropriable innovations that encourage private investment in agricultural R&D, as well as laws to properly regulate the appropriation of benefits in the case of joint initiatives between public institutions and private firms (based on the notion of public goods and private goods).

       Finally, it is important to note that the debt crisis of the 1980s and the effects of globalization have forced governments to rethink the administration of science and technology. In developed nations, direct government contributions have been reduced and new mechanisms have been introduced to finance innovation activities, such as competitive funds for research, contracts for the development of specific products, the purchase of new products by the public sector, subsidies for innovation activities in companies, and the formation of public-private consortia (Branscomb et al., 1999; Huffman and Just, 1999; Echeverría and Alvaro, 2000).

       These new mechanisms have not replaced the traditional financing mechanisms, but instead have complemented them. Although experts agree that funding for public research institutions should combine fixed budget allocations with variable appropriations (Huffman and Just, 1999; Echeverría and Alvaro, 2000; Huffman and Evenson, 2003), developing countries have given almost exclusive priority to the use of competitive funds.

       Gil and Carney (1999) mention that competitive funds can be an efficient mechanism if there is sufficient research capacity in the country. However, the experience of some of the larger research systems of developing countries (including Brazil and India) shows that these conditions are not always met.

       Competitive funds have been used in LAC by the World Bank and the Inter-American Development Bank as part of loans to support AKST. In Mexico, competitive funds are the preferred mechanism for allocating public resources for research and innovation. The Produce Foundations used these funds from the outset, though their implementation gradually evolved as they gained more experience. However, efforts to identify more effective mechanisms have been slow, in the absence of studies to assess these experiences.

       Given the limited AKST institutional capacity in some LAC subregions, it is essential to promote inter-institutional projects to complement and utilize the comparative advantages of each institution. A financing mechanism using competitive funds shared by two or more institutions engaged in cooperative projects is a more effective and efficient strategy. In Mexico, the Produce Foundations have used the mechanism of competitive funds through public bids but give preference to inter-institutional projects.

       The financing system using shared funds has proven to be a powerful instrument for: (1) guiding research based on pre-established priorities, so that it is possible to link the demands or needs of users with research activities; (2) enhancing the definition of project objectives and methodology, thereby helping to achieve the expected results; and (3) facilitating the development of monitoring and evaluation mechanisms for research activities.