The level and quality of services available to farmers – particularly small farmers – in LDCs is generally held to be a major constraint on agricultural development; but there is less agreement on the implications of shortcomings in services such as extension and research, credit provision and the supply of production requirements such as fertiliser, pesticides and seed. One view is that there has been insufficient investment in agricultural services, particularly in research and extension, and insufficient concern with the efficiency in the delivery of services. But a contrary view of is that there has already been too much investment in the public provision of agricultural services and that the poor returns to such investment point to the need for a new approach, in which ultimately services are re-requested and paid for on a commercial basis, with the private sector undertaking the major role in inputs supply and also providing technical advice to its customers and appointed agents.

The nature of this debate is clouded by the poor empirical base of the issue of agricultural service provision. This study is designed to identify and clarify some of the commonly held assumptions on the performance of publicly provided agricultural services and examines these against the evidence of two small areas in Orissa. The study uses the term 'public provision to include both co – operatives and private dealers when operating in collaboration with government controlled subsidy and credit schemes.