Public Investment on Rural Road Transport and its Effect on Agricultural Crop Production: Evidence from Ethiopian Living Standard Measurement Survey (LSMS)
Keywords:Rural Road Investments, Access to Road, Mode of Transport, Cobb-Douglas Production Model, Fixed Effect, Random Effect
Public investment on rural road transport system is an important factor affecting the growth and transformation of agriculture. Considering this fact, Ethiopia has made relatively massive investments in the development of roads to tackle isolation and improve the welfare of the rural poor. However, despite such efforts, rural road development indicators show that Ethiopiaâ€™s rural road transport has still remained low. As a result, close to 70 per cent of the rural population in Ethiopia still travels about six hours to reach all-weather roads. Besides, most rural roads are dry weather roads that cannot be passable by any formal transport modes during the wet season. Against this background, we investigated the effect of rural transport (access and mobility) on crop production in Ethiopia using a unique panel data from rural Ethiopia. We used both descriptive statistics and Econometric model to understand the effect of rural transport on crop production. The result of the analysis revealed that there exist low utilisation of modern mode of transport for agricultural activities and by far foot is still largely dominant mode of transport for agricultural purposes. On the other hand, the Econometric analysis revealed an interesting result. That is, while access to all-weather roads has a positive but insignificant effect on crop production, the effect of mode of transport was found to be positive and significant. The policy implication is improving rural roads to a level of all-weather road standards and provisions, and transport facilities should still be a priority for policymakers.
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