-Pon 24030 ECSSD Environmentally and Socially Sustainable Development The World Bank Working Paper No. 34 December 3, 2001 Knowledge Transfer in Agriculture and Rural Development: Four Western European and North American Case Studies A Joint ECSSD - Policy Development Publication A Study by Aron P. Goldman The ECSSD unit distributes this technical report to disseminate findings of work in progress and to encourage the exchange of ideas among IBank staff and all others interested in development issues. This paper carries the name of the author and should be used and cited accordingly. The findings, interpretations and conclusions are the author's own and should not be attributed to the World Bank, its Board of Directors, its management, or any member countries. Knowledge Transfer in Agriculture and Rural Development: Case Studies in Western Europe and North America Aron P. Goldman, Policy Development December, 2001 Abstract EU accession countries, as they start to look more like their Western European neighbors, are considering new priorities for agriculture and rural development. New inputs for this priority-setting process derive from four case studies which consider the implications of the knowledge economy for agriculture and rural development in Western Europe and North America. The studies are from Ballyhoura (Ireland), Extremadura (Spain), Umbria (Italy), and Mississippi (United States). There have been successes and failures, and no unambiguous process of knowledge transfer is found everywhere. However, the study of these four cases yields lessons that may be widely useful: * Technology and knowledge-driven industries considered for adoption should be commensurate with the local level of development. * Technology and services should be used to (a) add value to existing agricultural products; (b) establish higher-value agricultural alternatives, or (c) establish non- agricultural alternatives. * Planning for expansion of technology- or knowledge-based activities should be sensitive to effects on the environment, the quality of work, and other aspects of the quality of life. Page 1 of 25 L Introduction Background This working paper is the result of a partnership between The World Bank and Policy Development (PD). The World Bank's Environmentally and Socially Sustainable Development Sector (ECSSD) in the Europe and Central Asia Region is considering the implications of the knowledge economy for agriculture and rural development among applicants for accession to the European Union (EU). As the economies of the accession countries begin to converge with those of their Western European neighbors, knowledge about what works and what doesn't in those economies is ever more relevant. To support its clients among the accession countries, ECSSD asked PD to gather and analyze some of the experiences of knowledge transfer in agriculture and rural development in Western Europe and North America. ECSSD and PD hope that this research will provide useful input as the EU accession countries set their agriculture and rural development agendas. Findings Our investigation of knowledge transfer in rural development in four regions revealed a multitude of activities that seemed to follow no single principle, or set of principles. Indeed, the paths followed were so diverse that it is not even clear how to judge the success or failure of these initiatives. The summary table below (Table 1) demonstrates the diversity of our cases. Each of the four cases - Ballyhoura (Ireland), Extremadura (Spain), Umbria (Italy) and Mississippi (United States) has distinct initial conditions and undertook a unique developmental approach. Rewards and Risks of Globalizadon Characterized by economist Samuel Bowles as "a reduction of impediments to international flows of goods and factors of production," globalization is the essential context in which knowledge transfer in rural Western Europe and North America has taken place. "Virtual call centers"' in Ireland, globalization of truffle exports from Italy, and international tourism in rural Spain would not be feasible without the recent advances in global communication, transportation, and technology. In these cases, minimal investments in knowledge transfer have led to unprecedented opportunities for growth. At the same time, globalization is linked to the withdrawal of agricultural subsidies. For many communities, the event precipitating experimentation with alternative activities has been the reining-in of agricultural subsidies; the United States Farm Bill, the Common Agriculture Policy (CAP), and Mexico's Alianza Para el Campo (Alliance for the Countryside) are all being modified to conform to WTO and NAFTA rules. The urgency of technology and knowledge-based structural changes to agriculture and rural development in Western Europe and North America cannot be fully explained without proper emphasis on the pressures due to dwindling price supports, input supports, and Page 2 of 25 export promotion. Moreover, some see globalization as a potential threat to social welfare. Our research revealed cultural discomfort with the shift away from traditional agricultural activities that took place under some initiatives. For example, traditional truffle gatherers in Italy expressed concern that they are required to harvest only on the processor-owned tree farms, on an hourly-wage basis. Table 1 Initial Development Status Approach Short Term Results Long Term Results The region is sparsely In general, IT and new Residents have begun populated with sma'l, Ballyhoura entrepreneurial ideas to find niche t primitive fanns. Computers emphasized higher were foreign to agricultural activities, g and internet technology were value commodities, residents. Traditions exploit tourism c very rare and unfanmiliar to adding value, seemed too deeply potential, and S residents. No tourism. service sectors, and ingrained to allow for develop IT X Declining EU subsidies. IT solutions. adaptation. enterprises. The long-term prospects are good. Landlocked, rural, and Extremadura Leadership in markets It is not clear whether historically dependent on emphasized for cherries and enough " cherry production. Little or expanding cherfy cherry products has diversification has X no IT or biotech in use. production, but also been maintained, taken place. The g Minimal tourism. Declining diversified into region may be partly E EU subsidies. processing and new relying on product marketing. monopolization for continued market dominance. Sparsely populated, primitive One corporation has Increased production Tedious factory Y agricultural methods, expanded and sales. processing jobs minimal tourism. Declining production using threaten to replace a EU subsidies. new technologies. traditional, independent gathering. Poverty, large farms, high Low Value Technical success. Implementation subsidies, research extension Production disaster. .1 services infrastructure. enhancements. t Declining federal subsidies. Methodology Sources This qualitative survey was conducted using primary and secondary sources. Primary sources included community members, both participants and non-participants in the rural development initiatives under study. Secondary sources included scholarly and mainstream literature and interviews with regional experts as well as academic experts and practitioners in knowledge transfer and rural development. Dozens of interviews were also conducted with international funding agencies such as the EU, the OECD, the Page 3 of 25 World Bank, and the local companies and agencies operating the local development projects, including Ballyhoura Development and Urbani. Definitions There are many interpretations of "knowledge transfer." In a narrow interpretation, it sometimes refers to the activities of agencies specifically established with "knowledge transfer" as their mandate. This may include agricultural extension services at publicly funded universities as well as activities of other publicly funded agencies. These services were established specifically to help ensure the transfer of technology and pure research to applications within the economy. In a broader interpretation, knowledge transfer may refer to the local adaptation of knowledge from outside the community, regardless of its source or by what means it arrived. For example, the adoption of information technology in a rural village previously unexposed to technology would be "knowledge transfer" in this sense. For the purposes of this exploratory study, all definitions of knowledge transfer were acceptable. This decision was made early on because it allowed us to learn more about - rather than determine - how communities and experts are thinking about this concept. The examples we researched, therefore, reflect a variety of interpretations. Case Studies Agriculture. In each rural development case study, we looked for innovations in agricultural cultivation, harvesting, and processing technology involving computers, mathematical modeling, genetic modification, and marketing. We also looked for the means by which the knowledge transfer took place. Was it a deliberate and formal transfer facilitated by a government agency responsible for such activities? Or was there a private market response by individual investors or a company? Tourism. We quickly learned that tourism has proved a popular alternative to agriculture, and observed that development of tourism involved knowledge transfer. People undertook the shift from the demands of farming to those of tourism, the latter requiring a need for local knowledge and skills in hospitality, marketing, and management. In some cases, these skills were self-taught. In other cases local and non-local agencies provided brochures reminding residents of their own heritage and natural resources, or provided training in hotel management. Information technology was another popular alternative to traditional livelihoods. Young entrepreneurs from urban centers usually spearheaded knowledge transfer in this field. The EU's "Computer Driving License" initiative was the most ambitious example of computer training knowledge transfer we found. The dissemination of new IT skills and their application to economic activity was a clear case of knowledge transfer. Page 4 of 25 II. Case Study - Agriculture, IT, and Tourism in Ballyhoura (Ireland) Introduction The story of Ballyhoura is that of a community that found itself in an economic slump and took innovative steps to reverse the trend. A region of smallholding farmers, Ballyhoura was dependent on dwindling subsidies and had no ready economic alternative. Today, with some outside help, Ballyhoura has discovered opportunities in the same globalized knowledge economy that formerly threatened it. Background Ballyhoura is an agricultural region of 57,264 people in the south of Ireland, encompassing 50 villages in County Limerick and County Cork.' Ballyhoura relies largely on small-scale livestock farming.2 Sixty-seven percent oftotal employment in Ballyhoura is within the agricultural sector, that of processing produce, and services to agriculture.3 Ballyhoura had reached an economic low point in 1990. There were dozens of derelict buildings in the town of Kilfinane alone - a town of 766 people.4 Small farms were closing down as large farms struggled to compete in European and international markets and to take advantage of the EU's diminishing Common Agricultural Policy (CAP) subsidies. As in other parts of Europe and North America, agricultural employment as a percentage of total employment had fallen to a fraction of what it was fifty years before. Although agricultural output had risen in recent years, this rise in productivity of inputs was unaccompanied by increased employment. Community solidarity was down and the pubs were empty. l Ballyhoura occupies only parts of counties Limerick and Cork, and does not include the cities of Limerick or Cork. The major towns of Ballyhoura are Kilfinane, Kilnallock, HospitaL Ballylanders, Mitchelstown and Charleville. (The Irish Times, 8/11199) 2 While average fann size in the Mississippi Delta region is 3,0004,000 acres, average farm size in Ireland is 75-80 acres. 3According to Sonny Ward, Chainnan of Ballyhoura Development, as reported by The Iish Times, "Local agency secures 344 jobs," August 11, 1999, City Edition 4O¶Faolain, Nuala, "Naturally Efficient," The Irish Times, Pg 9, August 15, 1996 Page 5 of 25 EMPLOYMENT IN AGRICULTURE AS PERCENTAGE OF TOTAL CIVILIAN EMPLOYMENT * 1985 * 1997 18.3 Source: OECD, Economic Accounts for Agriculture, 1999 EdItion Figure 1 Map 1 11.2,~ ; 3. -, . usEs45 pan Irln A * UK Fra*c Germanyti Source: OCD, ,Eco'hic . . Ag., : Edso ' * ~~~~~~~- )flsh.Sca. i14fF*tti N; . . . §z ^ . * ;S$sst l t.3 *l uil4n c'rtr *$7uAbo4F:ltztI>iaw , TAJC OCA A;3w... .. .,.r ..3 V^5~ 'KPRht.;shJ * . S e . 1; 8.§4sW6e,3g,n* *~a.t ;;.,S , t^:3rtteXr~rt~ 1i-? .11^ S eJ F igure I lirelan ~ ~ ~~~ly 1~4 eti e p Pt~Q~ttwr.A2W YtHLlrr IR 4 7r~~~~~~~~~~~~~~~~Pg f2 Table 2 AGRICULTURAL OUTPUT AT CURRENT PRICES Converted using PPPs Millions of US dollars 1991 1997 % Change US 183,704 230,771 26 EU (15) 36,885 234,699 -1 Spain 1,677 35,957 14 Ireland .706 4,914 4 taly 42,353 42,439 0 UK 21,233 20,683 -3 France 48,927 47,613 -3 Gernany 32,580 32,207 -1 Source: OECD, Economic Accounts for Agriculture, 1999 Ed. The Initiahve It was at this time that Ballyhoura residents combined efforts to change things. Local initiatives to attract tourism with farm study tours and rural tourism based on outdoor activities led to the formation of local development groups. A Community Consultative Committee was formed to address concerns about the future of the region in light of agricultural stagnation, the stepping down of CAP subsidies, quota restrictions, and the outflow of Ballyhoura's people to cities. The Community Consultative Committee conducted a comprehensive "skills audit" of 21,777 adults. This showed that very few residents had the training necessary to adapt to service-sector labor market demands. But the survey itself was a community building exercise, an experiment in knowledge transfer, and a call to action, as Ballyhoura successfully drew on resources from outside the community. More than 300 voluntary groups and 500 volunteers, with technical advice from University College of Dublin, undertook assessment of needs and launched remedial action. In the succeeding years, local development groups pursued and eventually acquired large scale EU LEADER funding, matched by Irish government and private sector investment.5 In Ireland, £13.9 million from the Irish government and additional private sector investments matched £20.8 million in EU funds. £2.88 million of these funds went to LEADER projects in the Ballyhoura region, where they were used for vocational re- training, rural tourism development, IT sector development, SME development, agriculture innovation and diversification, environmental protection, and international knowledge sharing.6 5 LEADER stands for "Liaison Entre Actions de Developement de l'Economie Ruale." The EU created LEADER and has funded three rounds: LEADER I (1991-1993), LEADER 1I (1994-1999), AND LEADER + (2000-2006). Most useful examnples of LEADER projects are from LEADER II. 6Ballyhoura Development, Ltd., "LEADER Progress Report," Monitoring Comnuittee, 12/00 Page 7 of-25 -::....... ........ ...-:: A Ericulture | l l | t § M § X . collaborated to support smallholder l | | t | i |~~~~~~ SeedPolato/ Iniiaiv. Th seed .... . .... ..hecane.tatweeune.aen. Thmember of Ballyhoura Garlic trials at the Organic College in Dromcollogher. Development's board of directors, who also represents the large Dairygold Co-operative, suggested the cultivation of seed potatoes, for which there was already a local demand, then being met by imports. Today, Dairygold advises on market demand, output levels, and quality standards. The Department of Agriculture provides quality control and disease testing with Teagasc training farmers. The community and farmers groups have helped coordinate cultivation practices and seed purchasing procedures. Farmers have organized a small co-operative of their own and are planning the purchase of a refrigeration unit. The Organic College. A highlight of the initiatives is an t-Ionad Glas, which translates to "Organic College" in Gaelic, a newly founded institution in the town of Dromcollogher.eo Founded in 1991, the College is affiliated with the local community college. Students come from all over Europe to pursue one- or two-year certificates and diploma programs in organic horticulture, organic farming, or organic enterprise. These programs are now recognized by the Irish Organic Farmers and Growers Association and the National Council for Vocational Awards. The College recently began a "Sustainable Development" program focusing on sustainable agricultural projects, debt repayments, bio-patenting, fair trade, agri-business and transnational companies.11 The College also conducts research on organic crop suitability. Tests, like the one depicted above, have been conducted on organic varieties of garlic, clover, amaranth and quinoa. A summer program for children ages five to twelve was also set up within the College. The program, "Greenfingers," filled a need for childcare, but also helped educate children to foster an interest in agriculture and the environment. 7bTeagasc is the iish Department of Agricultre's research and training arm: http://www.teagasc.ie/ 9 www.shannon-dev.ie/ ohup://ww.orgsarchollege.com/ " http://ww.organiccolvege.com/courses.htm Page 8 of 25 Goat Cheese. Other new farm-based enterprises include a new goat cheese facility. Tom Biggane and his family have saved their farm by making cheese themselves rather than selling the milk to a cheese-making facility in Galway. The Biggane family learned that the best markets are gourmet purveyors like Neal's Yard in England, and that the market preference is for aged cheese. The Bigganes had to plan for the extra time required for cheese making and aging, but the value-added is beginning to pay off. Now in operation for two years, the Bigganes have seen many of their neighbors abandon farming for factory jobs. They are glad to have found a way, with support from LEADER and Ballyhoura Development, to keep their farm viable. IT The Glenroe-Ballyorgan and Kildorrery communities were considered to be at the greatest risk locally of losing agriculture sector jobs; Ballyhoura Development calculated that the changing economic and policy context of agriculture would cost 2,500 agriculture jobs. And so when fifteen public and private, non-profit, and commercial entities came together to assess and address Ballyhoura's IT needs, investments were made in helping residents develop their IT skills in order to pursue non-agricultural economic activities. A number of initiatives are now underway. * The Irish government's Training and Employment Authority now provides £45,000 annually for a mobile IT training program called "Computrain," which has trained 800 residents in 14 communities in basic computer skills since its inception in its first year. 12 Subsequent to that program, participants take 12-hour courses on e- commerce and web site design geared toward SME development in the service sector (e.g., tourism) and manufacturing (e.g., crafts). * A new centralized computer training facility, specializing in TQM (Total Quality Management), has been established in Dromcollogher. * The Irish telecom Eircom is installing 500 high-speed telephone lines (a 34Mb asynchronous transfer mode link) in the village of Churchtown in County Cork. This in-kind contribution is estimated to be worth at least £50,000. Initially, 2Mb will support a proposed telemarketing job creation initiative led by the Churchtown Village Renewal Trust and funded by Ballyhoura Development Ltd. The high-speed lines will be available to subscribers who reside within one kilometer of the unit, expected to be in place in the summer of 2001.'3 * "Virtual call centres" and data processing enterprises are being planned. A virtual call centre is a-facility to which major international companies such as Lufthansa and Dell can route their customer service calls. This service to European and international companies can be a good opportunity to outsource services from cities 12 http://www.fas.iel 13 Churchtown Development Association newsletter, Jan. 2001, http://www.churchtown.net/newsletter-01- O1.htm Page 9 of 25 where wages and cost of living are higher. Such facilities already exist in the urban centers of west central Ireland, but are new to its more remote areas. mnternational a Business DellCustomer Serice Center in Dey Ired linsuData processing is an industoy that 4 25 iB z ^: ^ l ^ S ml X | M M Mhas raybegun to thnve beause w w Q ! | S 11 | W | | S | ~~of thie Intemet In India for example, Local service agencies are5also working to develop nthere is a lnofarket in meeical ^ 1 | z tmnsv~~~~~~~~~Uwqciption. Hospitals in the U.S. in the informatics industry even when the jobs do and elsewhere scan their doctors' skils.nSptemer999 TRL (Technhand-written notes and e-mail them abroad in the evening, just as the assistance in recruitment of people to work on temporkday begins w ith TRrL in De Computr Comonents- Limrick. RW ofered worsupply trnsorte (25 mscies from ag ,, . . + 44vjH ~~~~~~~~input electronically, or coded as ilmallock to Limerick) and to pay employeeswhileindata, and e-mailed back to tDe Officers