Following the remarkable success of performance testing in the commercial sector, the Agricultural Research Council's Animal Improvement Institute (ARC–AII) initiated a beef cattle performance testing scheme for smallholder farmers in 1996. The scheme, which became known as Kaonafatsho ya Dikgomo (Sotho for animal improvement), has been running well in the Northern and North West Provinces and is set to spread gradually to the rest of the country.

This paper develops a quantitative, graph-theoretic method for analysing systems of institutions. With an application to the agricultural innovation system of Azerbaijan, the method is illustrated in detail. An assessment of existing institutional linkages in the system suggests that efforts should be placed on the development of intermediary institutions to facilitate quick and effective flow of knowledge between the public and the private components of the system.

The paper explores the implications of rural livelihood diversity for agricultural innovation policies. It summarises literature on the nature of rural poverty, with particular emphasis on the relative roles of farm and non-farm income. It also reviews the various roles, direct and indirect, that agricultural innovation can play in rural poverty reduction. Finally, it uses an agricultural knowledge and information systems (AKIS) perspective to argue for a differentiated approach to targeting agricultural innovations, based on an analysis of rural assets.

In times of market liberalization and structural adjustment, the agricultural sectors of developing countries face profound changes. To seize new market opportunities, farmers need to innovate. In order to innovate, farmers need new technologies and information on how to access and manage them, as well as better support services for the delivery of inputs and knowledge, and better infrastructure for delivering produce to the market.

The private sector dominates biotechnology research in industrialized countries, but there are major market failures in developing countries in accessing the new tools and technologies. The public sector, national and international, will have to play a major role in filling this gap. This paper provides an overview of options that countries of different sizes and capacities can employ to gain access to the research tools and technologies that they need to address issues of relevance to poor producers and consumers.