This paper contends that the exclusion of millions of poor from agricultural development gains is inexorably linked to the innovation system features that have evolved over time. An oft repeated lament of the Government of India about the inadequacy of reforms in agricultural research and extension, is used to explore the structure and institutions of agricultural innovation. Three main components of the agricultural innovation system, are the agricultural research and extension actors, the farming communities, and policy making agencies.

Globalization, urbanization and new market demands - together with ever-increasing quality and safety requirements - are putting significantly greater pressures on agrifood stakeholders in the world. The ability to respond to new challenges and opportunities is important not just for producers but also for industries in developing countries. This paper aims to present what "innovation response capacity" entails, especially for natural resourcebased industries in a developing country context.

There are divergent views on what capacity development might mean in relation to agricultural biotechnology. The core of this debate is whether this should involve the development of human capital and research infrastructure, or whether it should encompass a wider range of activities which also include developing the capacity to use knowledge productively. This paper uses the innovation systems concept to shed light on this discussion, arguing that it is innovation capacity rather than science and technology capacity that has to be developed.