05.01.2016

The underlying idea is that all services are paid by those users who have a particular interest in the services. RAS dealing with public interest is financed from public funds, while RAS catering to private interests is financed privately. Current RAS systems don’t fully reflect such market-based ideas. Instead, in today’s RAS systems,

  • publicly financed RAS often serve private interests, mainly of better-off farmers;
  • overseas development assistance (ODA) tends to expect private RAS stakeholders to finance services that also serve public interests, such as catering services to small-scale farmers in remote areas;
  • benefits of RAS are not reliably attributed to the services, thus agricultural producers are reluctant to pay for RAS although they derive benefits from the services.

These market dysfunctions have two implications for RAS systems. On the one hand, they induce a lack of public finances where these were needed to serve public interests, e.g. for poverty reduction or sustainable resource management.