Enhancing Sustained Adoption of Innovations UM Conference Devaluation by mikeholy



                Dr. Linda M. Penalba
              Dr. Merlyne M. Paunlagui
              Dr. Rowena dT. Baconguis

         University of the Philippines Los Baños
              College, Laguna, Philippines



                 in collaboration with the

  International Development Research Centre, Canada

        Asian Institute of Technology, Thailand

                                    TABLE OF CONTENTS

List of Tables

List of Figures

List of Acronyms


1.0 Introduction                                                              1

    1.1 Rationale                                                             1

    1.2 Objectives                                                            2

2.0 Methodology                                                               2

    2.1 Theoretical Framework                                                 2

    2.2 Data Collection and Analysis                                          5

3.0 Social Dynamics and Institutional Processes in Innovation System Domain   5

    3.1 Innovation process                                                    6

    3.2 Technology Diffusion and Promotion                                    9

4.0 Technology Adoption                                                       16

    4.1 Attribution of Innovation                                             16

    4.2 Socio-demographic Characteristics of Adopters and Non-Adopters        17

    4.3 Barriers to Technology Adoption                                       19

5.0 Conclusions and Recommendations                                           20

    5.1 Conclusions                                                           20

    5.2 Recommendations                                                       21

References                                                                    22

                                     LIST OF TABLES

Table No.                                    Title                          Page

    1        Comparison of technology development and promotion             11

    2        Comparison of the attributes of Bio-N, Biocon/BioSpark and
             Vital N, 2010.
    3        Socio-demographic characteristics of Bio-N adopters and Non-
             adopters, 2010.                                                18

    4        Non-adopters’ perception about use of Bio-N, 2010              19

                                     LIST OF FIGURES

Figure No.                                   Title                          Page

    1        Marketing channels of Vital N                                  15

                LIST OF ACRONYMS

AIT    Asian Institute of Technology

BAR    Bureau of Agricultural Research

BMP    Bio-N mixing plant

CSO    civil society organization

DA     Department of Agriculture

FPA    Fertilizer and Pesticide Authority

IDRC   International Development Research Centre

IAA    Indole3-acetic

MOA    Memorandum of Agreement

MRC    Modified Rapid Composting


            By Linda Peñalba, Merlyne Paunlagui and Rowena Baconguis
           University of the Philippines Los Baños, College, Laguna, Philippines
                 Email: lmpenalba@yahoo.com, lmpenalba@gmail.com


In line with the government’s policy to promote organic agriculture, several kinds of
organic fertilizer have been approved for commercial use in the Philippines. These
include three types of bio-fertilizer. Despite the promised benefits of these innovations,
adoption is still low.
Objective: This paper discusses the social dynamics and institutional processes in the
innovation system domain of the bio-fertilizers, the adoption constraints and the
recommendations to enhance the sustained adoption of the innovations.

Methodology: The primary data used in this study were collected through key
informant interviews with technology developers, policymakers and entrepreneurs and
focus group discussions with farmer-adopters and non-adopters. Secondary data were
gathered from intermediaries’ report and government records.

Results: Results of the study show that farmer’s lack of awareness on its efficacy
compared to their tried and tested inorganic fertilizer, lack of knowledge and skills
about its correct application and their inherent resistance to innovation, the limited
capacity of the entrepreneurs to mount massive marketing and their inability to
compete with the well established inorganic fertilizer industry are some of the factors
that constrained the smooth transition from inorganic to organic fertilizer adoption.
Conclusions: Good technology and positive policy environment were found to be not
enough to guarantee its sustained adoption. Socio-technical interactions are important
considerations to sustain adoption of innovations. System innovation for bio-fertilizer
has to be enhanced to make farmers appreciate the economic and environmental values
and change their attitude and behavior towards this innovation.

Key words: bio-fertilizer, sustained technology adoption, Philippines


           By Linda Peñalba, Merlyne Paunlagui and Rowena Baconguis
          University of the Philippines Los Baños, College, Laguna, Philippines
                Email: lmpenalba@yahoo.com, lmpenalba@gmail.com

1.0   Introduction

1.1    Rationale

The energy crisis and the Philippine peso devaluation in the early 1980s caused the
price of imported fertilizer, particularly nitrogen to increase significantly beyond the
reach of small poor farmers. These observations prompted some scientists and civil
society organizations (CSOs) to search for alternative inputs. The use of bio-fertilizer
was seen as a main option to address the rising concern on agricultural and
environmental sustainability. This move was supported by government through
research grants to public research and development institutions. In line with this policy
to promote organic agriculture, several kinds of organic fertilizer have been approved
for commercial use in the Philippines. These include three types of bio-fertilizer. Two
of these are organic/microbial inoculants which contain two species of the nitrogen
fixing bacteria Azospirillum isolated from the roots of a local grass. The other type is
also a microbial inoculant and consists of three different species of Trichoderma that
were isolated from Philippine forest and is mass produced using pure organic matter.

Bio-fertilizer has the potential to increase crop yield, to reduce production cost and
improve soil condition. Innovation is needed for economic growth, progression of
human well-being, and for better returns (Cohen, 2010). Adoption of innovations is
expected after successful diffusion and promotion. However, adoption of these bio-
fertilizers is low despite the institution of government policies to promote its use since
the 1990s and strong advocacy by the civil society. Less than one percent of rice, corn
and vegetable farmers are using bio-nitrogen fertilizer.

The efficacy and income effect of Bio-N application have been proven by many field
trials and impact assessment studies (FNCA, 2007, Chupungco and Paunlagui, 2004). Its
equity and poverty alleviation potentials can be harnessed if it will be adopted by the
more than five million rice and corn farmers who cultivate about seven million hectares
or about 60 percent of the total agricultural land in the Philippines. Despite all the
promised benefits from bio-fertilizer, farmers’ adoption is still low. In fact, adoption
rate of genetically modified corn is said to be much faster than Bio-N fertilizer despite
the biosafety concerns raised by various sectors.

At this point in time, policymakers have not yet identified the factors that constrain the
bio-fertilizers’ acceptability, accessibility and availability particularly to the small poor
farmers. It is hypothesized that social and institutional factors affecting technology
promotion as well as the social dynamics and arrangements within and across the
domains of this bio-innovation system are central to this problem.
It is also interesting to find out if the Bio-N promotion principles are consistent with the
agricultural innovation system framework which places emphasis on the importance of
learning processes as a way of evolving new arrangements specific to local contexts.
An understanding of the social and institutional factors that constrain the promotion
and adoption of Bio-N is important to guide decision-makers in formulating appropriate
actions to ensure that farmers benefit economically from this technology and for the
country to harness its poverty alleviation potentials.

1.2    Objective

This paper presents the partial results of a study that was conducted under the Enabling
Bio-innovations for Poverty Alleviation in Asia program of the International
Development Research Centre (IDRC)-Canada and the Asian Institute of Technology
(AIT), Thailand. It discusses the social dynamics and institutional processes in the
innovation system domains involving the three kinds of biological fertilizer that have
been approved for commercial use in the Philippines, the barriers that constrain bio-
fertilizer adoption and the recommendations to enhance the sustained adoption of
these innovations. The discussion focused on the innovation processes, technology
diffusion and promotion, technology adoption processes, and barriers to technology

2.0    Methodology

2.1    Theoretical Framework

Diffusion of innovations is one of the most studied social phenomena spanning various
disciplines such as anthropology, rural sociology, medicine, education and marketing
(Rogers, 1983). Technology was seen as a positive force that leads to increase in
productivity and income. Early studies on the diffusion of agricultural innovations
centered on analyzing the role of socio-psychological factors as determinants to
individual adoption patterns giving rise to the much studied variables on innovation
decision, attributes of innovations, rate of adoption and adopter categories following
the study of Ryan and Gross (1943). The influence of economics likewise impinged on
the analysis of diffusion of agricultural innovations centering on the belief that farmers
are rational and therefore profit maximizers. This led to a study of psychological factors
affecting risk aversion and of factors affecting it such as access to information and

Rogers states that potential adopters judge an innovation based on their perceptions in
regard to five attributes of the innovation. These attributes are: 1) trialability; 2)
observability; 3) relative advantage; 4) complexity; and 5) compatibility. It is
hypothesized that the rate of adoption will increase (with the exception of complexity,
for which a decrease is hypothesized to increase the rate of adoption). Relative
advantage is the perceived improvement over whatever currently exists that the
innovation will replace or enhance; the greater the perceived relative advantage is, the
faster it will be adopted. Compatibility is the measure of how well the innovation aligns
with the experiences, values, and needs of whomever is adopting the innovation; as a
result, the greater the compatibility, the faster the adoption. Complexity relates to ease
of understanding and use of an innovation; more simple ideas are adopted faster than
more complex ideas. Trialability is the level at which an innovation adopter can test and
asses the innovation before fully adopting and implementing; the more trialability, the
less uncertainty, and the faster the adoption. Finally, observability is how visible the
innovation is to others; and when an innovation is readily observable by those
considering adoption, it is adopted faster.

The socio-economic attributes of adopters and non-adopters are also an area of concern
by this research since human capital is a critical input into the adoption and production
process (Benhabib and Spiegelt, 2002).

Rogers (www.wikepedia.org) classified adopters into five categories depending on age,
willingness to take risks, financial lucidity, social status, opinion leadership, education,
and contact with other scientific sources and innovators. These are: 1) innovators; 2)
early adopters; 3) early majority; 4) late majority, and 5) laggards.

Innovators are “the first individuals to adopt the innovation, willing to take risks,
youngest in age, have the highest social class, have great financial lucidity, very social
and have closest contact to scientific sources and interaction with other innovators”.

Early adopters is “the second fastest category of individuals who adopt an innovation,
have the highest degree of opinion leadership among the other adopter categories,
typically younger in age, have a higher social status, have more financial lucidity, have
advanced education, and are more socially forward than late adopters”.

Early majority “adopts an innovation after a varying degree of time, which is
significantly longer than the innovators and early adopters, tend to be slower in the
adoption process, have above average social status, have contact with early adopters,
and show some opinion leadership”.

Late majority “adopts an innovation after majority of the society members has adopted,
is typically skeptical about an innovation, have below average social status, have very
little financial lucidity, in contact with others in late majority and early majority, and
have very little opinion leadership”.

Laggards are “the last to adopt an innovation, show little to no opinion leadership,
typically have an aversion to change-agents and tend to be advanced in age, tend to be
focused on “traditions”, have lowest social status, lowest financial fluidity, oldest of all
other adopters, in contact with only family and close friends, and very little to know
opinion leadership”.

According to Rogers (www.wikepedia.org), there are five stages in technology adoption
process, namely: 1) awareness/knowledge stage – an individual is exposed to an
innovation but lacks complete information on the innovation; 2) interest/persuasion

stage– an individual got interested in the innovation and actively seeks
information/details about the innovation; 3) evaluation/decision stage – an individual
evaluates the concept of the innovation, weighs the advantages/disadvantages of using
it and decides whether to adopt or reject the innovation; 4) trial/implementation - the
individual tries/tests the innovation to find out for himself its advantages and
application; and 5) adoption/confirmation stage- the individual confirms/finalizes his
decision to continue using the innovation to its fullest potential.

Adoption of an innovation is also influenced by the availability and accessibility of
information and the innovation itself. Providing this access is usually the task of
agricultural extension workers. According to Sulaiman et. al., (2006), agricultural
extension should play a wider role: 1) beyond technology dissemination; 2) beyond
price/market information plus group formation; and 3) include addressing vulnerability
and poverty, environmental issues, enterprise development, dealing with markets and
farmer organizations and building relations with actors.

The rate of technology diffusion varies depending on two factors (Comin and Hobjin,
2008): 1) those due to differences in the range of technologies used; and 2) those due to
non-technological factors that affect the efficiency with which all technologies and
production factors are operated.
According to Rogers (1962), diffusion is the process by which an innovation is
communicated through certain channels over time among the members of a social
system." The key elements in diffusion research are: the innovation, types of
communication channels, time or rate of adoption, and the social system which frames
the innovation decision process. An individual might reject an innovation at anytime
even during or after the adoption process (www.wikipedia.org).

The enabling environment is critical in the innovation and adoption processes and
policies are integral to forming an enabling environment. A set of reinforcing policies is
needed to shape innovation and there is no single “innovation policy”. However, policy
interventions to create an enabling environment for innovation may remain ineffective
unless they are accompanied by efforts to change prevailing attitudes and practices
(Rajalahti et al., 2008). They further stressed that to improve the effectiveness of the
enabling environment, it has to be combined with activities that strengthen innovation
capacity, particularly the patterns of interaction among the main actors. Efforts to
improve the enabling environment should also focus on identified needs for innovation
and address the need for sector coordination.

In the recent years, discourse focuses on system innovation, socio-technical systems
and transition to sustainable development. Transitions to sustainable alternative
development pathways are critical to human welfare (IT-APN, 2010). This development
pathway, known as system innovation, requires essential social, institutional and
technological change. In addition, it needs to be systematic in the sense of affecting
behaviors and structures. It involves the destabilization of existing systems and the
reconfiguration by new technologies, actors, behaviors and rules.

Furthermore, previous research show that system innovation arises through a quasi-
evolutionary interaction between innovations emerging in place and opportunities for
change opening-up in socio-technical systems. According to Stamboulis and
Papachristos (2008), socio-technical system is a relatively stable configuration of
institutions, technologies, rules, practices and networks of cooperation that determine
the evolution and use of technology. It includes production, diffusion and use of
technology. The main concern is whether interaction between niches that generates
sustainable alternatives and emerging socio-technical system that could transform
development pathways can be identified.

2.2    Data Collection and Analysis

The study covered three kinds of bio-nitrogen fertilizers that were available in the
market, namely: Bio-N; Biocon/BioSpark and Vital N. These three kinds of bio-fertilizer
were chosen for this study because of their poverty alleviation potentials, efficacy and
distinct innovation process that greatly fits the innovation systems framework.

The various domain actors were identified and information on their social and
institutional arrangements was gathered. Various modes of data collection were
employed. The key informant interview method was employed to collect data and
information from policymakers and the technology developers. FGDs were conducted
with the producers of Bio-N and individual interview with farmers were done to gather
information on their socio-demographic characteristics as well as attitudes and
perceptions and practices with respect to bio-nitrogen fertilizer.

A total of 150 farmers were individually interviewed. This was comprised of 75 Bio-N
adopters and 75 non-adopters in the areas where the Bio-N mixing plants (BMPs) were

Data collection on Biocon/BioSpark and Vital N was slightly different from the above.
The technology developer, manager of BioSpark and active users and intermediaries of
the products were interviewed for this research.

Secondary data on the BMP operation, the roles and responsibilities of the various
domain actors and other relevant information were gathered from secondary sources
such as from intermediaries’ report as well as BIOTECH and DA records.

3.0    Social Dynamics and Institutional Processes in Innovation System Domain

This section discusses the processes involved in the development of the technology and
the production, promotion and marketing of the bio-fertilizer products.

Information gathered show that there are similarities in the circumstances surrounding
the development of the three kinds of bio-fertilizer that were studied. For instance,
initial research activities were done by the technology developers while they were
working with public research and development (R&D) institutions. These experimental
works were supported with public funds. The provision of funds for R&D works was in
line with the policy to promote organic agriculture and develop affordable, efficacious
and environment-friendly alternatives to chemical fertilizer.

The technology development process of the three bio-fertilizers differs particularly with
regard to technology improvement. There is a marked difference in the extent of the
researchers’ follow-through activities to further improve the utility and product quality.
This difference maybe partly attributed to the entrepreneurial capability of the
intermediaries. For instance, R&D works for Biocon/BioSpark and Vital N to improve
shelf life and find out their other uses (e.g., as pest control agent) were undertaken with
the funds provided by the private sector. Meanwhile, limited further research was done
to improve the quality of Bio-N. Efficacy trials were also undertaken with public fund
support which was provided until the commercialization phase. Their promotion was
supported by government at some point in time in connection with its organic
agriculture program.

3.1    Innovation Process

The Philippine government launched an organic agriculture program in response to the
increasing cost of imported nitrogen fertilizer in the 1980s and the CSOs clamor for the
innovative agricultural practices to curb the worsening environmental effects of
intensive chemical fertilizer application associated with the green revolution.

In the 1960s and 1970s, the Philippine government promoted the intensive use of
chemical fertilizers, one of the key inputs in rice production. In the early 1980’s,
evidence gathered by CSOs revealed the adverse environmental impacts of heavy use of
chemical fertilizers, which has serious implications on sustainable agricultural

CSOs and scientists pushed for the formulation of organic agriculture policies, and in
2005, Executive Order 481 (Promotion and Development of Organic Agriculture in the
Philippines) was launched. Guided by this policy, the government promoted the use of

Various kinds of organic fertilizer were promoted under this program. The idea is to
provide farmers with a broad range of alternatives and give them the freedom to choose
the kind that suits their needs. Free samples of these organic fertilizers were included in
the certified rice seed package that is sold to the farmers at subsidized price. Farmers
are expected to try this sample fertilizer on their farms and there after decide to choose
which of these fertilizers to adopt from among those that they have tried. In connection
with this policy, the three kinds of bio-fertilizer that were the subject of this study were
promoted by government one after the other.

3.1.1 Bio-N

Bio-Nitrogen or Bio-N, an organic/microbial inoculant-fertilizer for rice and corn was
developed by the National Institute of Molecular Biology and Biotechnology (BIOTECH)
of UPLB in the early 1980s. It contains two species of the nitrogen fixing bacteria
Azospirillum isolated from the roots of a local grass talahib (Saccharum spontaneum L.).
It can fix and transform atmospheric nitrogen into a form usable by crops, enhance
shoot growth and root development, make plant resistant to drought and pest attack,
reduce incidence of rice tungro and corn earworm and corn borer infestation and
increase yield and milling recovery of rice and corn (FNCA, 2007).

Bio N was developed by Dr. Mercedes Garcia while working as a researcher of BIOTECH,
a research unit of UPLB. BIOTECH produces the inoculant concentrate. Through further
research, the shelf life of Bio-N was improved from three months to six months.
However, further improvements on product quality were constrained by the lack of
research funds.

3.1.2 BioSpark

BioSpark Trichoderma (formerly BioCon) is a microbial inoculant which consists of
three different species of Trichoderma (T. parceramosum, T. pseudokoningii, and
Ultraviolet irradiated strain of T. harzianum). These three different species are isolated
from Philippine forest and is mass produced using pure organic matter
(www.hrdc.pcarrd.dost.gov.ph). The fungus is beneficial and is an effective biological
control agent of soil borne pathogens (Cuevas et. al., 2005), and bio-fertilizer as it
enhances growth of plants (Cuevas et al., 2005; Cuevas, 2006; Cuevas and Bul-long

The inoculant is recommended as seed coating for palay, corn and vegetables before
planting to enhance seed germination. Seeds treated with Biocon grow fast, develop
longer roots and absorb more nutrients (www.hrdc.pcarrd.dost.gov.ph). As
Trichoderma decomposes soil organic matter, it makes possible the absorption of
needed nutrients such as calcium, potassium and nitrogen for plant use. Thus, it
reduces the need for inorganic fertilizers and increases crop yield, therefore, reducing
cost of production and increasing farmer’s income.

The product development of BioSpark was a result of government funding from the DA
and UPLB. Initially developed as a composting agent, the product was further
strengthened to become a bio-fertilizer and bio-control agent.

BioSpark is a product of decades of research of Dr. Virginia Cuevas of UPLB. The
government through the Bureau of Agricultural Research (BAR) and UPLB provided
research grants and supported the product development of Biospark which spanned
more than two decades of laboratory and farmer field experimentation.

In 2002, the Trichoderma series was registered with the Fertilizer and Pesticide
Authority (FPA) under the brand name BioCon and now under the brandname BioSpark

Trichoderma. Dr. Cuevas holds the Intellectual Property Rights of the technology and
equally share royalty rights with the University of the Philippines (UP) System.

The product has evolved from primarily being known simply as Trichoderma (bio-
composting agent) to BioCon (bio-fertilizer and biocontrol agent) to BioSpark
(enhanced product with longer shelf life).

   A. Trichoderma (biocomposting agent)

The Department of Agriculture (DA) through the Bureau of Soils and Water
Management (BSWM) promoted the use of Trichoderma as a composting agent in the
1990s. It trained government technicians in the production and use of Trichoderma and
set up laboratories in the Regional Field Units of DA nationwide in an attempt to
facilitate accessibility of Trichoderma. BSWM promoted the use of BioCon by using it in
demo farms in its promotion of modified rapid composting program which seeks to
address reduction of chemical use.

However, the main constraint was the lack of quality control on the production process
which partially affected the effectiveness of the Trichoderma as a composting agent.
Since Trichoderma production is about production of microbials, quality control in the
production process is very important. However, not all of those in-charge in the
laboratory have technical background and understands the characteristics of
micorobials. Ultimately, some were unknowingly culturing contaminants instead of

   B. BioCon (bio-fertilizer and biocontrol agent)

UPLB through the technology developer entered into partnership with a private firm
(Tribio) to market the product which was named Biocon. During this partnership, the
product underwent further innovations which eventually led to the increase in its shelf
life from six months to one year.

   C. BioSpark Trichoderma (longer shelf life)

The UPLB-Tribio partnership was dissolved when the latter ran into problems with the
distributors of the chemical fertilizer products that they carried. The right to produce
and market Biocon was bought by BioSpark. Again, with the partnership between the
technology developer and BioSpark, the product was further enhanced in terms of
production process and packaging, thereby prolonging the shelf life from one year to
two years.

3.1.3 Vital-N

Vital N is an organic bio-fertilizer registered with the Philippine FPA. It is a powder
formulation that induces extensive growth in roots of crops like corn, rice, banana,
garlic, orchids, and onion. It contains Azospirillium, a beneficial bacterium that enhances
root development and helps the plant increase its soil nutrients uptake and more
importantly, produce plant growth substances such as indole3-acetic acid (IAA)
resulting in healthy and sturdy plants, higher yield, and more solid grains
(www.bar.gov.ph). It also produces substances that help dissolve nutrients within the
soil, allowing these to be more readily available to the plant. This results in greater
nutrient absorption and increased fertilizer efficiency (www.scribd.com).

Vital N is a bio-fertilizer that (www.vitaln.com; Halos, 2010):
     increases yields from 15 to >100 percent;
     reduces fertilizer cost by as much as 50 percent;
     is reliable plant-growth enhancer;
     is user-friendly and sustainable agriculture technology for increasing farmers'
        incomes at a lower cost;
     is the first product in the world containing dried Azospirillum in a dry wettable
        powder form for seed treatment;
     helps save environment because it is organic and it also reduces inorganic
        fertilizer use;
            o a pack of Vital N, which consists of 100 grams, is good for one hectare;
     is easy to use and store; and
     has longer shelf life (three years) than other bio-fertilizers.

The developer started working on Vital N when he was a research fellow with the
Philippine Rice Research Institute, a government corporation attached to DA. It took
him less than two years to preserve the Azospirillum. After working with the
government, the developer continued to experiment on Vital N. Other ingredients were
added to Vital N formulation to protect the Azospirillum and keep it viable; to help it
stick to the seeds and plant roots; to extend shelf life; and a dye to serve as indicator
that the bio-fertilizer has already been applied to the plant (www.scribd.com). Further
research has also led to the use of Vital N to other crops including onions, tomatoes,
tobacco, banana plantlets, orchids, garlic cloves, and shallot bulbs. Vital N can now also
be applied to grass in golf courses.

Vital N is also claimed to reduce fertilization requirement as much as one half of the full
recommended fertilization rate. Testimonies from scientists and farmers alike added
that the use of Vital N has resulted to better seedling vigor, and protects rice from
bacterial leaf blight and from soil-borne diseases.

3.2    Technology Diffusion and Promotion

DA actively promoted the three bio-fertilizers that were studied, at various time periods
together with other kinds of agricultural innovations. For instance, three packets of bio-
fertilizer samples were provided free to farmers who bought certified rice seeds. This is
DA’s way of introducing the bio-fertilizer to the farmers to raise their awareness and
draw their interests on the products. It is also expected that the farmers would be able
to compare the bio-fertilizers with their inorganic counterparts and learn for
themselves their advantages and disadvantages. These steps are expected to result in
the eventual adoption of their chosen bio-fertilizer type, as Roger’s diffusion theory has
In promoting these innovations, DA purchased fertilizers from the different producers
(e.g. Bio-N from BMPs, Biocon from Tribio and Vital N from Arnichem) following a
bidding process. Producers were asked to bid and the winning bidder is supposed to be
the product supplier. However, there are some technical issues in the bidding process.
In the case of Bio N, the big producers have a great advantage over the small ones while
in the case of Biocon and Vital N, there were only single suppliers and so bidding
principle would not apply.

During this bio-fertilizer promotion period, the three kinds of bio-fertilizer were
promoted one after the other and DA placed huge purchased orders from the producers.
For instance, in 2007-2008, DA promoted Bio-N. In crop year 2008-2009, BioSpark and
Vital N were promoted. This policy created the wrong impression to some of the
producers who thought that huge purchase orders will come from DA year after year.
Many of them, particularly the BMP operators were frustrated when purchase orders
were stopped and promotion programs shifted to other fertilizer types.

The concept behind the government technology promotion policy is to inform the
farmers about the broad range of technology that are available and have been proven
efficacious. Technology dissemination is done mainly through the LGUs because
agricultural extension delivery is a function that was devolved to the LGUs under the
Local Government Code of 1991. The government is cautious not to endorse a particular
brand, say Bio-N, to avoid being charged with favoritism and bias. The farmers are
given the freedom to choose which from among the technologies that were introduced
to them by government they will adopt.

Aside from information dissemination on the different technologies, government
provided free samples to farmers. In the case of the Bio-N, free packets of fertilizers are
included in a package of certified rice seeds that are sold at subsidized prices. In
addition, LGUs and DA-RFUs are required to set-up demonstration plots to showcase
the beneficial effects of bio-fertilizer compared to other treatments. Part of this
demonstration is harvest festival wherein farmers are invited to witness the different
yield performance between treatments.

The technology development and promotion of the three bio-fertilizers can be
summarized as follows:

Table 1. Comparison of technology development and promotion.

                              Government         Government
                                                                    Private Sector
                   Product     Support in         Support in                              Promotional
 Bio-fertilizer                                                     Role in product
                  Developer     Product            Product                                 Strategies
                              Development         Promotion

 Bio-N            UPLB        Funding           Part of             BMPs (which          Some BMPs
                  Professor   support, use of   technology          received funding     include Bio-N in
                              laboratory        package             from government      the package
                                                together with       for establishment    services to
                                                certified seeds     of production        farmer clients
                                                distributed for     centers) produced    (e.g. loan,
                                                free to farmers     Bio-N as ordered     technical
                                                selected by         and purchased by     assistance,
                                                local leaders       provincial           Setting up of
                                                                    government           Techno-Demos,

 BioSpark         UPLB        Funding           As single           Production and       Engaging in
 Trichoderma      Professor   support, use of   trichoderma-        promotion of         government
                              laboratory        setting up of       BioCon and           bidding, use of
                                                laboratories for    BioSpark             farmer
                                                production and      Trichoderma to       intermediaries
                                                distribution as     different markets    as marketers,
                                                decomposer          like the             direct selling to
                                                                    government,          individuals and
                                                As bio-fertilizer   individual           other companies
                                                and biocontrol      intermediaries,
                                                agent –             and farmers
                                                distribution to
                                                farmers for
                                                demo sites for
                                                the modified

 Vital-N          UPLB        Funding           Part of             Direct Promotion     Setting up of
                  Professor   support, use of   technology          of Vital-N via       Techno-Demos,
                              laboratory        package             different            engaging in
                                                together with       marketing            government
                                                certified seeds     channels like        bidding, online
                                                distributed for     private dealers,     marketing
                                                free to farmers     on-line marketing,
                                                selected by         and cooperatives
                                                local leaders for
                                                limited time

3.2.1 Bio-N

In recognition of its potentials to increase corn and rice production and improve the
socioeconomic condition of poor farmers, DA and UPLB forged an agreement for Bio N
promotion and conducted information and education campaigns to inform and educate
farmers on the advantages and application of Bio-N. To make the product accessible
and available to farmers, its regional distribution was also promoted through the
establishment of BMPs in collaboration with local government and non-government
organizations. The local government units (LGUs), people’s organizations (POs), schools
and private businesses were tapped as product distribution channels and given the
opportunity to generate earnings from Bio-N production enterprise.

BMP operation and the institutional arrangements between UPLB, which produces the
inoculants and holds the Intellectual Property Rights (IPR) on the innovation; DA, which
will provide financial support for the procurement of Bio-N equipment and the BMP
operators (LGU, cooperative, or state university) which will operate the BMP and
provide building facilities were covered by a MOA. The MOA specified the duties and
responsibilities of the partners. The BMP operator is supposed to take over Bio-N
promotion after the promotion period wherein DA introduced Bio-N to the farmers.
However, some BMP operators were not able to carry out promotion activities and just
waited for DA’s purchase orders. On the other hand, some operators (e.g. LGU and
cooperative) which were extending loan to their clients/members made Bio N part of
the loan package. In effect, farmers who would borrow from the operators are required
to use Bio-N.

To further improve the availability and accessibility of Bio-N, the government
democratized the production and marketing of the various kinds of Bio-N. BMPs were
set-up in various rice/corn producing provinces and interested entrepreneurs were
invited to participate. Under this policy, LGUs, SCUs and private businesses who could
put-up a building to house the equipment and human resources to manage the
production and marketing systems could participate. The government provided the
equipment necessary to produce the Bio-N.

Unfortunately, the desired promotion was not realized apparently due to misconception
about the role of the government vis-a-vis the BMP regarding technology promotion and
misunderstanding by BMP and farmers about government’s policies. The BMPs thought
that DA’s bio-fertilizer promotions will continue forever and that they could depend on
DA’s purchase orders for the continuous operations of the BMP.

3.2.2 BioSpark

The marketing of BioCon was initially taken care of by Tribio, Inc., a private company
engaged in selling fertilizer and pesticides. In 2005, UPLB, through Dr. Virginia Cuevas,
technology developer of BioCon, entered into a MOA with Tribio to mass produce and
market BioCon. The MOA grants a licensing agreement to Tribio for the production and
marketing of BioCon. Tribio is a joint ownership of a Chinese and a Filipino which sells
agricultural chemical pesticides and fertilizers. As technology developer, Dr. Cuevas
assumes the role of technical consultant by giving lectures on how to use the product in
various technical briefings, conferences, seminars, radio and television interviews.

BioCon was promoted as activator for composting, bio-fertilizer and as biocontrol agent.
TriBio retained BioCon’s traditional market – the government – which continued to
purchase orders for BioCon as a composting agent. BioCon comes in a 250 g sachet.

The movement of BioCon, however, remained limited despite being marketed by private
professional agents. The users of BioCon were small scale farmers who were identified
as recipients of the technology packages of the government.

Sales was purely reliant on government purchases as technicians concentrated on
selling inorganic fertilizers and pesticides. Promoted as bio-fertilizer and bio-control
agent that allows reduction of inorganic fertilizer by as much as 50 percent, it was
perceived by the marketing agents of Tribio as a threat to the main products that they
carried (e.g. chemical fertilizer and pesticide). The byline of BioCon which promises
reduction in inorganic fertilizer and pesticide use did not bode well with the technicians
whose goal is to reach their sales quota on the inorganic products.

Believing that BioCon was not receiving the needed marketing thrust, UPLB decided to
open up marketing of the technology to other interested companies as the contract with
Tribio was not exclusive. The contract with Tribio to sell Biocon was terminated in
December 2009.

For the year 2010, marketing rights of BioCon was eventually bought by a new start-up
company, BioSpark Inc,. BioSpark, Inc. is 100 percent owned by a Filipino. Previously, a
partner of Tribio, the Filipino investor bought all of the machineries to set up BioSpark ,
which immediately resumed mass production and marketing of the product in January
2010. The product was renamed BioSpark Trichoderma which is the company’s main
product. BioSpark has a licensing agreement with UPLB to process, produce and market
the product.

BioSpark currently sells to existing independent users of BioCon and is expanding sales
to other markets by using its adopters as intermediaries. BioSpark currently enjoys a
small subsidy from UPLB in terms of in building rentals for promoting a product
developed by UPLB.

The company follows a bottom up marketing strategy which relies on farmer demand
rather than marketing push. Biospark currently does not have sales people but relies
mostly on current users who have entrepreneurial skills to act as intermediaries of
Biospark Trichoderma. BioSpark is likewise open to marketing partners who would
want to sell the Trichoderma product using another name but will sell it at the same
price. Currently, BioSpark is working with vegetable growers in the Northern
Philippines and is eyeing Region IV B as immediate expansion area. The owner has faith
in the utility, economic and environmental benefits of Trichoderma and sincerely
believes that farmers are still in a transition phase but will eventually convert to using
the product.

The application for the patent is facilitated by the University of the Philippines, Los
Baños. In the processing of the patent, UPLB is the applicant, with the technology
developer listed as the inventor. Hence, UPLB and the applicant both share ownership
of the product. Based on the existing policies, UPLB, the inventor and UP system get
equal shares from three percent of the net sales of the company who has an existing
licensing agreement with UPLB on the production and sales of the product.

The product is currently produced and marketed by a private company, BioSpark, Inc.,
which enjoys the Technology Business Incubation services of UPLB. This licensing
agreement is good for three years, with options for renewal. However, diffusion of
BioSpark has been slow despite direct government intervention in the promotion of the

In the second cropping of 2007 and first cropping of 2008, BioCon became a program of
BSWM through the Agrikalikasan Tipid Abono--Modified Rapid Composting (MRC)
program. BSWM set up clusters of contiguous farms owned by various farmers to serve
as techno-demo sites for the project. A total of 48,855 BioCon sachets were purchased
for use as inoculants. Farmer feedback on BioCon was good. However, the project was
not renewed and farmers do not know where to buy BioCon.

3.2.3 Vital N

Vital N is marketed by the Arnichem Corporation, a family-owned corporation that
produces the Vital N. It is registered with the Philippines Fertilizer and Pesticide

To showcase the effects of Vital N, Arnichem established technology demonstration
farms (techno demo farms) in several parts of the country. Vital N was first introduced
in the Ilocos Region and Cagayan Valley and later in Northern Mindanao. Vital N is also
marketed in the provinces of Visayas, specifically Iloilo and Bacolod.

The technology developer and producer adopts an aggressive marketing strategy
wherein all possible means of advertising their products are explored including
distributors, online marketing and trade fairs (Figure 1). It has created a network of
independent dealers in Northern Luzon and Northern Mindanao within a year of its
launching and continues to expand this network throughout the country. In areas,
where there are no dealers, orders via email are accepted.

The orders are shipped via commercial couriers, the cost of which is already included in
the quoted price. Another marketing strategy adopted by the company is to give the
dealers reasonable terms and conditions to settle their accounts such as grace period
and payment terms. Transactions are also facilitated through the use of modern
communication technology such as online banking and shopping. Individual orders
through email or text messages are also accepted but products are shipped only once
payment has been confirmed by the recipient bank.           Similar with the otherbio-
fertilizers producers that transact business with the government, Arnichem participates
in the public bidding called by the DA.

 Figure 1. Marketing Channels of Vital N

The company also partners with farmers’ cooperatives to market Vital N. In particular,
the Rice Growers Multipurpose Cooperative in Calamba, Laguna is a distributor of Vital
N. The company has also penetrated the international market. Their accreditation in
Dubai has already been approved while their application for accreditation in Australia is
still in process.

The company makes strategic investments to promote Vital-N in domestic and
international markets. It places paid advertisements in agriculture-related magazines
and local newspapers, and maintains a website (http://www.vitaln.com) as means to
reach various types of consumers. In an issue of the Agriculture Monthly Magazine
published by the Philippine Manila Bulletin, Vital N is featured in its entire back cover. It
also sends company representatives to participate in local and international trade fairs
to expand the market for Vital N.

Vital N is also marketed in several on-line marketing websites including
http://www.xpshou.com; http://www.alibaba.com; http://15341053.en.frbiz.com; and
in the social network site (e.g., Facebook). The publication of articles about Vital-N in
agriculture-related webpages such as www.philrice.gov.ph, www.bar.gov.ph,
www.bic.searca.org, somehow contributed to its promotion. Moreover, the testimonials

from scientists and farmers on the positive effects of Vital N that are posted in the
webpages to a certain extent, have contributed to its popularization.

The technology developer obtained significant support from the government,
particularly, through Philippine Rice Research Institute (PhilRice) – DA during the
technology development phase. Moreover, for a limited time, Vital N was promoted by
PhilRice through its Tindahan Online.

4.0    Technology Adoption

This section is a discussion of some of the factors that were identified by Rogers (1962)
to affect adoption of innovations such as attributes of innovation, characteristics and
perceptions of adopters and the barriers to sustained adoption.

These data show the interaction of innovation system domain actors, the processes
involved in technology diffusion and promotion and the enabling environment under
which these processes take place affect the farmers’ decision whether or not to adopt
the technology. Farmers’ attitudes, knowledge and skills and product availability are
also important adoption influencing factors.

In general, the desired level of adoption of bio-fertilizer innovations has not yet been
attained despite the efforts of DA to introduce the products to potential users. Adoption
was very slow and influenced by factors other than those identified by Rogers (1962).
The farmers have become aware and acquired knowledge about the product, have
expressed interests, evaluated and tried the products but have not yet reached the
adoption stage. Based on Roger’s classification of adopters, these farmers may be
considered as late majority adopters but their socio-economic characteristics where not
consistent with those described by Rogers.

4.1    Attributes of Innovation

In general, based on the attributes of innovation enumerated by Rogers, all the three
bio-fertilizers have positive features. All three bio-fertilizers were easy to use and
assessment of efficacy was also easy and can be done in small scale trial plots. For
example, trials were made on techno demo farms where farmers can observed the
effects of using these bio-fertilizers. It was noted that effects on plant growth and pest
control can be easily observed but effects on soil fertility cannot be observed easily and
immediately. Available accounts on scientists’ and other farmers’ observations about
the use of Vital N can be easily accessed in the company website (e.g. www.sribd.com).
However, despite these attributes, adoption rate of these bio-fertilizers was low.

The low adoption rate may be due to the reason that farmers still believe that inorganic
fertilizer is superior to bio-fertilizer. Thus, farmers are careful not to reduce the amount
or replace the inorganic fertilizer used because they have been thought to believe that
the use of inorganic fertilizers and pesticides leads to increase production. The use of
these bio-fertilizers would mean the transformation of farm practices used by farmers.

In addition, the method of application was found by farmers as cumbersome and

The diffusion and adoption would have proceeded smoothly as the products have
obvious economic and environmental advantages over the inorganic inputs that they
currently used. This slow diffusion of the products may mean the reconsideration of
factors that affect adoption to go beyond the benefits of the technology itself.

Table 2.Comparison of the attributes of Bio-N, Biocon/BioSpark and Vital N, 2010.
 Attributes of
                           Bio N                       BioSpark                        Vital N
Relative          Not clearly understood        Not clearly                 Not clearly
advantage          by farmers                     understood by                understood by
                  Farmers still believe          farmers                      farmers
                   inorganic fertilizer is       Farmers still believe       Farmers still believe
                   superior to bio-               inorganic fertilizer is      inorganic fertilizer is
                   fertilizer                     superior to bio-             superior to bio-
                  Shortest shelf life 6          fertilizer                   fertilizer
                   months                        Longer shelf life two       Longest shelf life
                                                  years                        three years
Compatibility     Farmers find seed            Farmers find seed            Farmers find seed
                   coating process                coating process              coating process
                   cumbersome                     cumbersome                   cumbersome
Complexity        Efficacy is not easily       Efficacy is not easily       Efficacy is not easily
                   understood by                  understood by farmers        understood by farmers
                   farmers                      Easy to use                  Easy to use
                  Easy to use
Trialability      Easy                         Easy                         Easy
                  Can be done in small         Can be done in small         Can be done in small
                   scale trial plots             scale trial plots             scale trial plots
Observability     Effects on plant             Effects on plant             Effects on plant
                   growth easily                 growth easily                 growth easily
                   observable                    observable                    observable
                  Effects on soil fertility    Effects on soil fertility    Effects on soil fertility
                   not immediately and           not immediately and           not immediately and
                   easily observable             easily observable             easily observable
                  Effectiveness as pest        Effectiveness as pest        Effectiveness as pest
                   control easily                control easily                control easily
                   observable                    observable                    observable

4.2 Socio-demographic characteristics and perceptions of adopters

There is not much difference in terms of socio-demographic characteristics between
adopters and non adopters of Bio N. Adopters and non adopters have the same age. The
adopters have slightly higher level of educational attainment with a difference of only
one year but non adopters have a slightly longer years of experience in farming.

On the other hand, the Biocon key informant is young, highly educated and familiar with
scientific method and entrepreneurship. The respondent came to know of BioCon in one
of the technical briefings of the PAO of Laguna in 2006. The respondent managed the
family’s four hectare rice farm land of which 3,000 sq. m. were devoted to vegetable,
fishpond and livestock raising.

Both the key informant of Biocon and Vital N had learned the bio-fertilizer from the
training they attended. The Vital N respondent is a member of a cooperative who also
had an experienced in using Bio N. Through DA’s bio-fertilizer promotion program, he
learned about Bio N and Vital N and received free samples of these products. He had
tried both Bio N and Vital N but has sustainably adopted Vital N.

Table 3. Socio-demographic characteristics of Bio-N adopters and Non-adopters,
             Socio-economic indicators                  Adopters         Non-adopters
 Average age (years)                                       51.0               51.0
 Gender (%)
  Male                                                     77.8               94.3
  Female                                                   22.2                6.7
 Average educational attainment (years)                     9.0                8.0
 Average number of years in farming                        23.0               24.0
 Average farm size (ha)                                     2.7                3.6

The non adopters who were interviewed are already aware and have knowledge on Bio
N but have limited understanding about the beneficial effects of Bio N. About one third
of them believed that Bio-N is a growth enhancer. An average of about 11% believed
that Bio N will make plants healthier, greener and bigger and increased crop yield.
There’s a lot of room for Bio-N promotion that was not explored by BMPs.

The Biocon key informant, who attended the training and briefing, became interested to
try the product when he learned that it will reduce fertilizer and pesticide use by up to
50%. Thus, the key informant experimented and found out that the plot with 25%
Biocon fertilizer has the highest yield. From then on, he has been continuously using
and promoting.

The Vital N key informant stated that Vital N is better than Bio N because it yielded
heavier grains. He shared these learning with his co-farmers through the demonstration
plot that his cooperative put up upon his request. According to the key informant, it is
very important that the effect of new technologies be demonstrated to convince other
farmers about the technology being promoted. However, the key informant was quick
in saying that the increase in production can be attributed to Vital N as well as better
crop production management.

The cooperative also sells Vital N. The key informant reported that the longer shelf life
is an important factor that convinced his co-farmers to try Vital N. Longer shelf life is
also important for the cooperative as product distributor because it enables the
cooperative to store unsold packets in the succeeding cropping season.

He also stated that it is very difficult to convince rice farmers, particularly the older
ones, to change production practices. Moreover, farmers consider the use of Vital N as
added expense because they still apply the same amount rather than reduce the
inorganic fertilizer usage. This practice clearly shows the farmers’ lack of understanding
about the use of Vital N.

Table 4. Non-adopters’ perception about use of Bio-N, 2010

                            Perceptions                                Percentage
 Using Bio-N will decrease the use of inorganic fertilizer                     4.46
 Bio-N is a growth enhancer                                                   31.10
 Using Bio-N will increase production                                         11.13
 Using Bio-N will make plants healthier, greener and bigger                   11.11
 Plants become more resistant to pests and diseases                            1.23
 Using Bio-N will need additional labor                                        1.23

4.3      Barriers to Technology Adoption

In contrast to Rogers’ (1962) theory which states that technology adoption is affected
by the farmers age, willingness to take risks, financial lucidity, social status, opinion
leadership, education, and contact with other scientific sources and innovators, results
of these study show that institutional processes are the critical factors that affected the
sustained adoption of bio-fertilizers. Among these processes are:

      1. Unclear government policies that sent mixed signals to bio-fertilizer producers,
         promoters and adopters. For instance, the duties and responsibilities of the
         partner producers and promoters that were allegedly specified in their
         memorandum of agreement were found to be not understood by all parties. The
         BMP operators thought that product promotion is the responsibility of DA while
         DA thinks otherwise. Moreover, DA was encouraging BMP operators to increase
         their production and Bio-N adoption but at the same time it was distributing
         free Biocon and Vital N samples to farmers.

      2. Both the end consumers (farmers) and the first enterprise producer and
         marketer thought that the government is the primary consumer of the product.
         While the initial purchases helped spread information about the product, it
         eventually backfired as the BioSpark was not able to develop loyal consumers
         who understood the environmental and economic benefits of the product.

      3. Inaccessibility and unavailability of the products in the market.

      4. Lack of information on the beneficial effects of using the technology, relative to
         the ones they are currently using.

      5. Conflicting claims about the efficacy of each of the three bio-fertilizers. Some
         scientists argue that one is more advantageous or better than the other.

      6. Farmers’ resistance to use or shift to new products which also happened during
         the introduction phase of the Green Revolution.

      7. Farmers’ misconception about the government technology promotion policy to
         give farmers the freedom to choose their preferred technology rather than
         recommend a specific brand

      8. Poor technology promotion by the government of Bio-N compared to BioSpark
         and Vital N, which have more innovative marketing strategies.

      9. Some institutional arrangements constrained technology diffusion and adoption.
         Initially, product distribution was done by DA only through the municipal
         agricultural offices. Products were available only when DA’s purchase orders
         have been served by the producers. Repeat orders by satisfied farmers who were
         ready to adopt the product were usually not served as supply of it depended on
         the purchases of DA which chose to distribute it to different municipalities to
         help spread knowledge on the product. Moreover, some farmers became
         dependent on the free samples instead of buying the product for themselves.

5.0      Conclusion and Recommendations

5.1      Conclusion

         1. Coordination between the innovation system domain actors and
            synchronization of innovation system processes are critical in the diffusion,
            promotion and adoption of innovations. Socio-technical interactions are
            important considerations to sustain adoption of innovations. The failure to
            effectively communicate the government’s technology promotion policies to
            the farmers and the other partners and the lack of coordination between the
            domain actors are partly the reason for the low adoption rate of the
         2. Good technology and positive policy environment were found to be not
            enough to guarantee its sustained adoption. Farmer’s lack of awareness on
            efficacy of the bio-fertilizers compared to their tried and tested inorganic
            fertilizer, lack of knowledge and skills about its correct application and their
            inherent resistance to innovation, the limited capacity of the entrepreneurs
            to mount massive marketing, their inability to compete with the well
            established inorganic fertilizer industry and inaccessibility and unavailability
            of bio-fertilizer in the market are some of the factors that constrained the
            smooth transition from inorganic to organic fertilizer adoption. Despite the
            aggressive marketing strategy of the producers of Vital N, it appears that its
            adoption falls short of expectations.

      3. The development of bio-fertilizer technology is consistent with the social,
         institutional and technological change that is needed in the transition toward
         alternative and more sustainable development pathways.
      4. The government sector plays an important role in the development of
         innovative products like bio-fertilizer. Hence, its support in product
         development and further improvement is crucial. However, the effectiveness
         of government support to all the three kinds of bio-fertilizer remains
         contentious. Institutional support for Bio-N to improve its product quality
         and make it competitive with BioSpark and Vital N, at least in terms of shelf
         life, is seriously lacking. The government can help promote innovative
         technologies by disseminating relevant information and developing the
         knowledge and skills necessary to use the product.
      5. Product quality and availability are important factors that affect sustained
         adoption. Farmers who were ready to adopt Bio-N and BioSPark were not
         able to do so because these products were generally unavailable in the
      6. The usual technology diffusion methods used by government (e.g., techno-
         demo farms), is effective in informing farmers and drawing their interests in
         the technology. This was shown in the cases of BioSpark and Vital N. Other
         innovative farmer-leaders conducted the same experiments in their own
         farms to demonstrate the efficacy of the products to their co-farmers.
      7. Farmers in the study areas do not easily change their practices. Such decision
         is much more difficult for resource poor farmers who are understandably
         risk averse, particularly under conditions of uncertainty. Dissemination of
         comprehensive information on the technology, its utility and applications,
         assurance of benefits and institutional support are essential inputs that could
         help farmers decide to adopt the innovation. If the effectiveness of systems
         and processes and the proven benefits from the use of technology can be
         shown, sustained adoption of bio-fertilizer can be assured.

5.2   Recommendations

      1. System innovation for bio-fertilizers has to be enhanced to make farmers
         appreciate the economic and environmental values and change their attitude
         and behavior towards this innovation.
      2. Systematize and align innovation system processes to sustain adoption of
      3. Government should institute mechanisms that will facilitate the transition
         from traditional innovation through information dissemination, skills

            development and reorientation of farmers’ decision criteria to achieve
            innovation diffusion and adoption.
         4. Public R&D institutions should continue providing institutional support to
            further improve the quality of innovations, make them competitive and
            ensure sustained adoption
         5. Active technology promotion and comprehensive information dissemination
            on government policies and technology application are needed to inform and
            benefit as many farmers as possible and enhance the products’ poverty
            alleviation potentials.

         6. The social dynamics and institutional processes in the innovation system
            domains should be coordinated and synchronized towards improvement of
            product availability to the poor farmers.

         7. Government should carefully study the implications of its policies to avoid
            confusion and to attain desired impacts and outcome.


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