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The Impact of Infrastructure on Agricultural Productivity

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  • Llanto, Gilberto M.

Abstract

Recent literature indicates the significant role played by rural infrastructure in improving agricultural productivity in developing economies. While the availability and quality of rural infrastructure are never substitutes to efficient macroeconomic and agriculture-specific policies and the effective implementation of such policies, inadequate infrastructure can be a significant constraint to growth and productivity. Rural infrastructure, like other public investments, raises agricultural productivity, which in turn induces growth in the rural areas, bringing about higher agricultural wages and improved opportunities for nonfarm labor. The rise in agricultural productivity, which reduces food prices, benefits both urban and rural inhabitants who are net food buyers. Thus, aside from its growth benefits, agricultural productivity has significant poverty-reduction effects. The paper`s overall empirical results indicate a significant link between rural infrastructure and agricultural productivity. Electricity and roads are significant determinants of agricultural productivity. This is consistent with a related finding on the constraints imposed on growth by inadequate infrastructure. Rural roads provide the important connectivity with growing markets adjacent to rural areas; they also lessen input costs and transaction costs of rural producers and consumers. Access to electricity creates various income-earning opportunities for rural households.

Suggested Citation

  • Llanto, Gilberto M., 2012. "The Impact of Infrastructure on Agricultural Productivity," Discussion Papers DP 2012-12, Philippine Institute for Development Studies.
  • Handle: RePEc:phd:dpaper:dp_2012-12
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    Cited by:

    1. Clarete, Ramon L. & Villamil, Isabela Rosario G., 2015. "Readiness of the Philippine Agriculture and Fisheries Sectors for the 2015 ASEAN Economic Community: A Rapid Appraisal," Research Paper Series DP 2015-43, Philippine Institute for Development Studies.
    2. Clarete, Ramon L. & Villamil, Isabela Rosario G., 2015. "Readiness of the Philippine Agriculture and Fisheries Sectors for the 2015 ASEAN Economic Community: A Rapid Appraisal," Discussion Papers DP 2015-43, Philippine Institute for Development Studies.
    3. Patalinghug, Epictetus E., 2017. "Assessment of Planning and Programming for Capital Projects at the National and Agency Levels," Discussion Papers DP 2017-37, Philippine Institute for Development Studies.
    4. Briones, Roehlano M., 2013. "Impact Assessment of the Agricultural Production Support Services of the Department of Agriculture on the Income of Poor Farmers/Fisherfolk: Review of the Evidence," Discussion Papers DP 2013-23, Philippine Institute for Development Studies.

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    Keywords

    agricultural productivity; poverty reduction; rural infrastructure; transaction costs; connectivity; regional convergence;

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