Agricultural extension policy in Australia: public funding and market failure

Trends in public expenditure on agricultural extension are examined for Agr iculture Departments in four States. There is little evidence that the shar e of public resources going to extension has declined. However, new demands have meant that the nature of extension has changed. A strategic approach to examining issues, such as land degradation, for the source of market fai lure may better guide the use of scarce public resources than the tradition al focus on the public goods characteristics of research and extension. The case for evaluating broad functions such as research and extension is beco ming more questionable as these functions become more diverse.