traditional knowledge, which they seek for use in creating new products (such as pharmaceuticals or plant-based insecticides), cosmetics, and nutraceuticals.

3.4.3.2.2 AKST systems
R&D resources remain scarce in LAC. As a rule, R&D is largely channeled to ensuring food supplies and economic efficiency. Priority is given to increasing productivity in agriculture or reducing production costs or both, in order to ensure that the commodities produced are competitive. In the larger countries of the region, environmental sustainability, differentiation, and the quality of products are on the public sector’s research agenda.
     The different LAC countries still have varying capacities to incorporate the advances in formal knowledge into agriculture. Some, like Argentina, Brazil, and Mexico, even apply their advances in biotechnology and nanotechnology
to the most dynamic agribusiness production chains. Poorer countries, with limited resources and R&D infrastructure, are confined to adapting or importing technology. Countries with the capacity to generate technologies incorporate traditional knowledge in this creative process.
     Public R&D organizations in the countries of the region with a long tradition in scientific research are better able to manage strategic R&D tools, because they coordinate the research effort. In these countries, a new generation of researchers replaced the former one and there was an increase in technical and management capacity in the public R&D system. By the end of this period, the gap in scientific and technological capacity existing among the LAC countries and between them and developed countries, such as Japan, Germany and the United States, is narrowed.
     Brazil, Mexico, and Argentina invest more public and private resources in R&D than the other countries, but investments in the region are proportionally lower than in the other regions of the world. In specific export production chains and in countries with legislation to protect innovation, private investment in research is comparable to public investment.
     Despite the persistence of scarce financial resources and competition with other areas of government, such as health and security, governments of the region gradually increase public investment in science, technology, and education. There are financial resources for international assistance to help solve problems related primarily to environmental sustainability, social inclusion, and biosecurity.
     In the few LAC countries that do not have more institutionalized public AKST structures, there are technology transfer and adaptive research programs. In countries with more institutionalized AKST public structures, there is competition for work space between the public and private sectors. This is focused mainly on generating the technology for more dynamic production chains. This competition between public and private organizations is driven by the economic return on investment in AKST, derived from knowledge protection legislation.
     In the region’s commodity exporting countries, the technologies generated by public and private AKST systems are oriented more to intensive export agriculture, large and medium-sized agricultural producers, agroindustry, and input suppliers. There are programs directed to adding value

 to family agricultural production and developing differentiated products.
     Due to continued pressure by world public opinion, in all countries, and especially in those with fragile, threatened ecosystems like the Amazon, or with water-stressed areas, such as the semiarid or arid regions found in Brazil, Peru, Ecuador and Mexico, research programs on environmental protection and conservation and on recovery of formerly degraded areas are developed. The technologies generated are therefore adapted to these conditions and take into consideration the most vulnerable social groups, such as peasants, subsistence farmers or indigenous communities.

3.4.3.2.3 Agricultural production systems
Fluctuating economic growth affects the region’s production chains differently. Large corporations form extensive, well-coordinated production chains, which incorporate everything from the production and sale of inputs, including technology, to the production and sale of the end products Know-how is automatically incorporated into them, as part of the process. Competition on the international market is the determining factor for including innovation in these chains.

The most vulnerable production systems that do not participate in these chains seek diverse sources of technology to solve efficiency and quality problems, which is critical to gain market access. There are public credit resources for incorporating any innovations that are available. Throughout the region, commodity-producing systems made up of large capitalist companies are established to produce for the external market and for mass domestic consumption.
     A considerable proportion of small commercial producers is linked to large production chains, such as the ones that participate in the highly fragmented but efficiently coordinated poultry chain. Others are able to participate in market niches, producing products with a high value added in their own country or in wealthier countries.
     Many of the problems related to inclusion of farmers displaced by production chains, without access to factor markets (water, land, and other inputs) and product markets, are solved by persistent efforts and an improvement in public policy results. More open markets and borders and
greater availability of public resources lead to an increase in investment in agriculture, the economic sector that contributes the most to the economies of the region.
     Investment in agribusiness still fluctuates on the basis of export commodity prices, but the fluctuations smooth out due to better coordination between stocks, production management and commodity prices. Agribusiness gains strength as the primary source of income for most LAC countries.
     In the performance of productive systems, the focus is on increasing productive efficiency, based on increases in productivity and lower production costs. The large corporations integrate all the agricultural productive processes, agroindustrial processes, production of inputs and the wholesale trade, leaving to third parties only the retail trade. Highly competitive and increasingly national and multinational production chains are strengthened, driven by the demand for biofuels, such as biodiesel from soybeans and African palm and ethanol from sugarcane. Productive chains for meat and fruit become part of the economic portfolio of the region.