its positive impacts on the development of rural communities and on the economy as a whole, depends in great measure on the systematic incorporation of innovations, since the current possibilities of increasing the cultivated area are fairly limited. Although there are still opportunities to expand the agricultural frontier in some LAC countries, the main way to increase the growth of the food supply and farmer income is by increasing the productivity of the land. Similarly, most of the studies carried out in LAC, and in other regions, show that the rates of return on investment in agricultural research and development are extremely high (Alston et al., 2000; Ávila et al., 2002) (Table 2-8).
     Despite the points mentioned above, starting in the mid- 1980s and especially during the 1990s public investment in agricultural research and development declined in LAC. As a result of their fiscal and public debt problems, most countries in the region implemented profound reforms in their macroeconomic, trade, sectoral and public investment policies with the aim of limiting state intervention and reducing public spending. These policies also restricted agricultural credit, making it more expensive, and reduced the budgets allocated to investments in rural infrastructure, and those corresponding to agricultural research and extension and other programs and services to support rural development.
     This less favorable context of macroeconomic and sectoral policies was reflected in lower growth rates of agricultural production in LAC countries—both in terms of the cultivated area and average productivity—for the period 1982-2001, compared with those recorded for the period 1962-1981. The average growth of production for the main agricultural commodities was 3.05% annually in the 1960s and 1970s, and fell to 1.98% in the last two decades. But there are significant differences in the growth patterns of the different LAC subregions. In the Andean countries, Central America and the Caribbean, growth rates declined. By contrast, growth rates increased in the Southern Cone countries, influenced mainly by increases in the productivity of the land both for crops and livestock.
     When analyzing public investment in agricultural research and development in most LAC countries, it can be seen that it was always low compared with international standards, but the situation has worsened in recent decades. Thus, while research spending for the period 1970-75 in
industrialized countries amounted to 2.5% of GDP, the average for LAC was 0.65%; and it fell to 0.5% during the period 1975-85, and to a range of 0.10 to 0.40% during the period 1985-95 (Ardila, 1997).
     The aforementioned reductions in public investment in agricultural research have not been homogeneous throughout the region. At present only a few countries (Brazil, Mexico, Argentina, Colombia and Venezuela) can boast of large organizations that have maintained significant levels of investment. Hertford (2004) underscores that in the mid 1990s more than half the investment in agricultural research corresponded to Brazil. If Mexico is added, both countries accounted for nearly two-thirds of the region’s total. Only the other three countries mentioned spent over US$100 million annually each. In most countries, instead, public investment was very low, and in recent years fell to such extremes that it has given rise to a serious erosion and decline in the installed capacity of official specialized institutions. More

 Moreover, these have not been replaced by equivalent investments
in the private sector.20
     In the least developed countries, the lack of public investment in agricultural research constitutes a major threat, in terms of responding to a growing demand for knowledge to ensure the sustained growth of food production, which should essentially be based on innovation and on increased productivity of the land. In many of these countries, the availability of farmland per capita will tend to fall in the coming decades, leading to a high probability that they will be unable to produce enough food to be self-sufficient. This will not only have negative repercussions on their balance of trade, but will also result in higher food prices for the poorest segments of the population, who depend to a large extent on personal consumption.
    Even in the five LAC countries that have relatively strong public research institutions, the decline in public funding has had a significant effect on their productivity. In most of these institutions the ratio between operating costs and personnel costs has deteriorated, thereby reducing their efficiency and the possibilities of implementing the necessary institutional changes required by the broader contextual transformations that have occurred in last two decades. This has implied, among other things, implementing different types of agreements between public institutions and the private sector to develop technologies that can be appropriated by companies. The lack of public resources has shifted the focus of research in NARIs, which is now conditioned by the contributions and demands of companies, mainly
suppliers of agricultural inputs. But it also affects producers, agroindustries and other social organizations.
     These changes in the public policy context call for the establishment of a new institutional framework that goes beyond that of the traditional public AKST system institutions. In other words, it is necessary to redefine the roles and scope of the public and private spheres, with regulatory frameworks that allow for effective links between both sectors. Among other aspects, this implies rethinking the NARIs, with the aim of incorporating new management systems that contemplate strategic planning for the implementation of partnerships and cooperation mechanisms at the national and international level with different public and private stakeholders of the AKST system. In other words, a high priority should be given to the formation of research networks (Lindarte, 1997; Salles-Filho et al., 1997).      The restrictions imposed on public budgets for AKST in recent decades have come precisely at a time when LAC’s producers have faced growing pressure to improve their productivity in order to compete at the international level—all this in the context of free trade policies stemming from the reforms implemented by the countries of the region, as well as those resulting from the multilateral
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trade negotiations in GATT and the WTO, those corresponding to the different sub-regional integration initiatives (CARICOM, CAN, MERCOSUR, NAFTA) and a growing number of bilateral agreements signed by some of the countries, especially Mexico and Chile. The agenda of future or imminent multilateral 20 It should be noted that in LAC private investment in AKST is even less significant than that of the public sector.