The potential for public private sector partnerships is likely to grow. However, despite a number of high profile success stories, promoting partnerships has proved more difficult than many assumed. This paper argues that such partnerships need to be viewed in the framework of an innovation system and a development scenario where networks of agro-enterprises and intermediary organisations will underpin rural development and poverty reduction. This view helps reveal the importance of embedding public research organizations within these local networks and highlights that constraint to building partnership is usually institutional in nature – i.e. it relates to habits practices and patterns of trust. The paper concludes by suggesting that efforts should be focused on building social capital in agricultural innovation systems and cautions that this should be done in contextually relevant ways.