Investing in Agricultural Extension: the Case of Albania

The purpose of this study is to provide a policy framework for designing an effective agricultural extension service in support of the market orientation of small farmers in Albania. The main findings and policy implications of this study can help guide the establishment of an agricultural extension service and define appropriate roles for the public and private sectors in providing extension services to Albanian farmers.

A case study was conducted by interviewing researchers, extension specialists and university staff in Albania to identify the problems and constraints encountered in establishing extension service. Data from secondary sources, including surveys and case studies conducted by Tirana Agricultural University, were used to analyze the country's agricultural sector performance during the transition period.

A three-part procedure is used to develop a policy framework for agricultural extension in Albania. The first part underscores the need for the many facets of extension and its goals to be viewed from a systems perspective, by examining its place within the matrix of support services and agricultural knowledge information system (AKIS). The second part emphasizes the need for an extension strategy and analyzes the main elements of a formal extension policy. A comparative analysis of the most eminent extension systems worldwide is provided to help design an appropriate extension system for Albania. It is argued that Albania needs an extension system that is "demand" as well as "supply-driven". Such an extension system needs to be designed based on the following basic principles: situation specificity, financial sustainability, system flexibility, and systemwide participation. A conceptual framework with respect to public goods and externalities is used in the third part to evaluate the incentive structure of private and public sectors for providing extension services to farmers. Two groups of factors that affect the private sector supply of extension are analyzed: (i) demand and supply-side factors that affect the profitability of the service and (ii) factors arising from the public good nature of extension output that affect the appropriability of returns of the service. It is concluded that a public-private extension balance should be achieved. The role of the public extension service to correct for undesirable effects of extension privatization is emphasized.