A new data point in the debate, prompted by an Atul Gawande New Yorker article, over whether it was the U.S. Department of Agriculture's extension service or private innovation that was reponsible for productivity increases in American agriculture: The Economist has an article on the situation in India, where the private sector, including suppliers to McDonald's, is taking over in driving farming improvements:
State governments once took it upon themselves to spread know-how, market intelligence and the fruits of agricultural research to smallholders. But the agricultural extension system is now in some disrepair. Public investment in agriculture has stagnated over the past few years as the government's subsidy bill for food, fertiliser and fuel has risen.
In the absence of public investment, Indian agriculture is increasingly dependent on private outlays, which now account for three-quarters of total investment in the sector. ... And in the absence of government extension services, some private companies are finding alternative ways to let farmers know what the customer expects, and how to meet that expectation.
It seems to be working pretty well, at least according to the Economist's account. What the lesson is for health care, where Dr. Gawande and the Obama administration argue that federal experimentation can increase productivity as it did for agriculture, is another question.
