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Home / Economics / EFFECT OF RURAL ROADS AND MARKET INFRASTRUCTURE ON THE MARKETING

OF AGRICULTURAL PRODUCE

EFFECT OF RURAL ROADS AND MARKET

INFRASTRUCTURE ON THE MARKETING OF
AGRICULTURAL PRODUCE
₦3,000.00
Category: Economics

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RESEARCH INFORMATION
✎: EFFECT OF RURAL ROADS AND
MARKET INFRASTRUCTURE ON THE
MARKETING OF AGRICULTURAL
PRODUCE
❐: Chapter 1 – 5
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This study, “EFFECT OF RURAL ROADS AND
MARKET INFRASTRUCTURE ON THE
MARKETING OF AGRICULTURAL PRODUCE”
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Keywords: EFFECT OF RURAL ROADS AND

MARKET INFRASTRUCTURE ON THE
MARKETING OF AGRICULTURAL PRODUCE

RESEARCH BODY

ABSTRACT
Technological development practices that enhance
and support entrepreneurship are essential because
they cultivate innovation which, in turn, creates new
jobs, new wealth, a better quality of life and
sustainable development. The downward trend in
Yewa North rural smallholder farmer’s income
highlights the need to examine the effect of road and
market infrastructure on their income. Specifically,
the study proceeded to describe the socio-economic
characteristics of the respondents in the study area;
assess the condition of rural roads and market
infrastructure as perceived by the respondents;
identify the different means of transportation of
agricultural produce in the study area; and determine
the effect of road condition and market infrastructure
on sales of agricultural produce in the study area.

A multistage random sampling was used to select

120farmers from the study area. Questionnaire and
interview schedule were used to collect data from the
respondents. The analytical techniques used are
descriptive statistics, and regression analysis. The
result revealed that a high percentage of the
respondents are married (90.7%) and male (88.7%)
respectively.

The regression result shows the coefficient of

determination was 78.1%, implying that the
independent variables explain at least 78.1% of the
variability in dependent variable on effect of road
condition of farming household in the study area. The
regression estimate shows that, the coefficient of
variable household size and Road condition were
significant but assumed negative signs that neglected
the a priori expectation. The coefficient of age,
household size, Farm experience, Formal educational
level significantly affect the farmers income The
coefficient of road condition although significant,
had negative effect on income made. This was as a
result of high transportation cost incurred by the
farmers. It is obvious that low quality roads impose
costs on people living far from market. But for
people facing very high transport costs arising from
inadequate roads, markets cannot be accessed except
at very high cost. Bad roads are clearly an obstacle to
attaining the potential benefits from market-based
economic reform. Hence, communities can come
together or communal effort can be applied to
develop their areas. In addition to this, local
government areas should be empowered to develop
their localities by maintaining the existing roads as
well as opening new ones to facilitate easier
movement of farm produce to the markets at a
reduced cost.

CHAPTER ONE
1.0              INTRODUCTION
1.1              Background of the Study
Agriculture provide primary means of employment
for Nigeria and account for more than one third of the
total gross domestic product (GDP) and Labour
force. Marketing is defined as a process of satisfying
human needs by bringing products to people in the
proper form and at a proper time and place.
Marketing has economic value because it gives form,
time, place, utility to products and services. The
marketing of agricultural products begins at the farm
when the farmer harvests his products. The product
when it is harvested cannot usually go directly to the
consumers. Firstly, it is likely to be located some
distance from the place of consumption in regular
and continuous manner throughout the year Secondly
storage is required to adjust supply to meet demand.
Thirdly, a product when it has been harvested is
rarely in a form acceptable to consumers. Therefore,
it must be sorted, cleared and processed in various
ways and must be presented to the consumer in
convenient quality and quantities for sale. Finally the
farmer expects payment when his produce leaves his
possession, and hence some financial arrangements
must be made to cover all the various stages until the
retailer sells the products to the final consumer.

According to Olukosi and Isitor (1990), marketing

includes packaging, storage, transportation, pricing,
financing, risk bearing and even product design.
They also observed that agricultural marketing
involves all those physical, legal and economic
services, which are necessary to make products from
the farm available to the consumers. Thus creating of
form, place, time, and possession utilities is derived
from agricultural marketing.

Olukosi and Isitor (1990) defined agricultural

marketing as the performance of all activities which
direct the flow of goods and services to the consumer
from the producers (farmers) in order to accomplish
the producer’s objectives. Many people consider
marketing as equivalent to selling or transferring the
product to another person for a price. Selling is
central on the micro concept of marketing but it is
only part of it.

Transport is regarded as an important factor involved

in agricultural development all over the world. It is
the only means by which food produced at farm site
is moved to different homes as well as markets.
Transport creates market for agricultural produce,
enhances interaction among geographical and
economic regions and opens up new areas to
economic focus.Agricultural production is very
important to the economy of developing nations as a
whole and Nigeria in particular.

Generally, for a nation to develop there is need to

construct and maintain roads both in urban and rural
areas. With particular reference to the rural areas, a
key element in rural development is the ability of the
nation to overcome infrastructural constraints,
especially that of rural roads in our rural areas. One
of the major constraints on the growth of smallholder
agriculture in African countries is high transaction
costs (Machethe, 2004), largely attributable to poor
infrastructure. This situation is no different in
Nigeria. A large proportion of rural households
continue to lack access to basic services (Stilwell and
Makhura, 2004). Government initiatives to improve
the quality and quantity of infrastructure in the rural
areas through programmes such as the construction
of small dams and boreholes for rural water supply
and the clearing of feeder roads for the evacuation of
agricultural produce and the supply of electricity to
rural areas from large irrigation Dams, the
establishment of nine River Basin Development
Authorities (RBDAs) in addition to the two existing
ones (Sokoto and Rima RBDAs); DFRRI, the
Poverty Relief and Infrastructure Investment Fund
and the Comprehensive Agricultural Support
Programme, have registered limited impact on the
lives of many rural people (World Bank, 2006). The
presence of an adequate, reliable and efficient
transport system is a critical factor in local economy
development. A well-developed transportation
infrastructure provides adequate access to local
communities, which in turn is a necessary condition
for the efficient operation of manufacturing, retail,
labour and housing markets. Transportation is a
wealth creating industry on its own as well as the
life-line of an economy. By “lifeline”, it means that
transportation is extremely important for the survival
of the economy (Olubomehin, 2012).

Road transportation opens up new areas of economic

activities, increases agricultural production, and
revitalizes trading activities and impacts positively on
urbanization process. Although, there are other
means of transportation such as air, rail and water,
these means of transportation would have been
greatly incapacitated but for the complementary role
played by road transport in the economy. Road
transportation is indeed the lifeline of the economy in
the local regions (Olubomehin, 2012). In developing
countries, the rural poor often live in isolated areas.
Being far away from the market, the poor are more
likely to rely on self-sufficient subsistence farming to
survive.

Generally, rural areas server as the base for the

production of food and fibre, the major sources of
capital formation for a country, and a principal
market for domestic manufactures (Olayiwola and
Adeleye, 2005). In general terms, the rural areas
engage in primary activities which form the
foundation for any economic development. Despite
this level of contribution to economic development,
rural areas have been neglected in terms of
development which has made it non- attractive to live
in and also increase poverty level in the rural areas.
This is justified by the high correlation that exists
between rural living and poverty with this situation
particularly exacerbated in developing countries
(World Bank, 1994). Hence, Balogun (1991)
identified that these constraints relate to the acute
shortage and lack of basic infrastructure and social
amenities such as shelter, portable water,access roads
electricity, and education, among others. Sustainable
rural development is a function of a number of
factors in which transportation is of importance.
Efficient and effective rural transportation serves as
one of the channels. In Nigeria, the issue of rural
transportation development has continued to be of
national importance. For instance, most of the rural
roads are in poor condition, and this has imposed
significant cost on the national economy especially to
the agricultural activities due to increased vehicle
operating costs and travel times (Akintola, 2007).

The Federal Government of Nigeria (FGN) has

embarked on various programmes at one time or the
other to ensure the provision of adequate transport
facilities to meet the needs of the rural population but
these programmes have not been able to achieve
hundred percent successes. Aderamo and Magaji
(2010) noted that transportation constitutes the main
avenue through which different parts of the society
are linked together. Ajiboye and Afolayan (2009)
noted that road transport is the most common and
complex network. It covers a wide range, physically
convenient, highly flexible and usually the most
operationally suitable and readily available means of
movement of goods and passenger traffic over short,
medium and long distances. It is obvious that low
quality roads impose costs on people living far from
market centres. This is nowhere more apparent than
in the study area. For historical reasons, roads in
many rural areas remain badly maintained or even
non-existent. Because the poorest people often reside
far from urban centres, this means that these people
are the most disadvantaged by the high transport
costs resulting from bad roads. For these rural areas,
markets cannot be accessed except at very high cost.
Bad roads are clearly an obstacle to attaining the
potential benefits from market-based economic
development.

Rural roads are somewhat unique in terms of their

capacity to literally pave the way for other
investments, such as schools, health services, and
security services (Fan, 2008). In agriculture, better
roads can drastically reduce the cost of inputs such as
fertilizers, seeds, and extension services (Gregory
and Bumb, 2008; Derconet al, 2008). On the output
side better roads increase the scope of profitable
trade, which in turn encourages on-farm investments
to raising agricultural production (Khachatryanet al,
2005). This in turn should raise rural incomes, lower
food prices (and hence raise disposable income in
urban areas), reduce spatial disparity in food prices,
and reduce dependence on food imports. Hence,
better rural roads increase net returns to other worthy
investments in both the farm and non-farm sectors. It
is obvious that low quality roads impose costs on
people living far from market centers. This is
nowhere more apparent than in the study area. For
historical reasons, roads in many rural areas remain
badly maintained or even non-existent this is because
the poorest people often reside far from urban
centers, this means that these people are the most
disadvantaged by the high transport costs resulting
from bad roads. For these rural areas, markets cannot
be accessed except at very high cost. Bad roads are
clearly an obstacle to attaining the potential benefits
from market-based economic development.
1.2       Problem Statement
Generally Poor road conditions, high transport costs
and distant markets have been identified as factors
that hamper improved market access for emerging
farmers in rural areas (Makhura and Mokoena, 2003;
Nieuwoudt and Groenewald, 2003), and also
contribute towards the problem of missing markets.
Factors that determine access to input and output
markets include distance to the markets, the state of
the roads, the cost of transportation and the frequency
of visits to these markets. Rural services centres and
nearby towns and cities are often important sources
of inputs for farmers, and also provide a market for
farm produce.

Paul et al.  (2009) pointed out that the impacts of road

infrastructure on agricultural output and productivity
are particularly important in Sub-Saharan Africa for
three reasons. First, the agricultural sector accounts
for a large share of gross domestic product (GDP) in
most Sub-Saharan countries (Paul et.al  2009).
Second, poverty is concentrated in rural areas.
Finally, the relatively low levels of road
infrastructure and long average travel time’s result in
high transaction costs for sales of agricultural inputs
and outputs, and this limits agricultural productivity
and growth.
Infrastructure directly affects human welfare and
equity across community and income groups. Urban
and rural households in Nigeria experience widely
different access to basic infrastructure services. The
lowest household income groups have no or
extremely limited access to infrastructure (Bogetic
and Fedderke, 2005). Physical infrastructure, such as
irrigation and transport and road systems, together
with institutions such as banks and markets, make
possible a range of production options that are
translated to higher agriculture productivity through
technology adoption (Pinstrup and Shimokawa,
2006). This means that investment in infrastructure
has the potential to reduce poverty and income
inequality between different geographical locations.
The role of infrastructure is complex and its effects
are indirect. Consequently development economists
have not focused on infrastructure as much as they
have on directly productive activities such as
agriculture and industry.

1.3       Research Questions

This research work tends to provide answer the
following questions;

i.            What are the socio-economic characteristics

of the rural farmers?

ii.            What factors determine the effect of road

condition on the income made by farmer?

iii.            What is the Impact of rural road

infrastructure on the productivity of households’
farmers?

iv.            What are the different modes of

transportation of agricultural produce in the study
area?

1.4        Objectives of the Study

The broad objective of the study is to determine the
effect of rural roads and market infrastructure on the
marketing of agricultural produce in Yewa North
Local Government Area of Ogun State.

The specific objectives are to;

i.            describe the socio-economic characteristics

of the respondents in the study area;

ii.            assess the condition of rural roads and

market infrastructure as perceived by the
respondents;

iii.            identify the different means of

transportation of agricultural produce in the study
area;

iv.            determine the effect of road condition and

market infrastructure on sales of agricultural produce
in the study area:

1.5  Justification of the Study

Transport plays a significant role in the structure of
food production and marketing.  Easy transportation
of agricultural produce to market can make all the
difference in the level of rural incomes, more so
improved transportation will encourage farmers to
work harder in the rural areas for increase in
agricultural production. The aim of this study is to
determine the role of road transportation mode in
marketing of agricultural produce in Yewa north
local government in Ogun state. The results will
enhance a quicker, clearer and more comprehensive
understanding of the impact of road network in the
marketing of agricultural produce.The importance of
transport facilities in rural areas can be justified from
both social and economic perspectives. Socially, a
significant proportion of the population lives in the
rural areas and demands various forms of transport to
facilitate socio-political interactions. Secondly, the
rural areas are indispensable in the supply of food,
raw materials to urban centres and the country’s
economic growth as a whole

Keywords: EFFECT OF RURAL ROADS AND

MARKET INFRASTRUCTURE ON THE
MARKETING OF AGRICULTURAL PRODUCE
 

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Keywords: EFFECT OF RURAL ROADS AND

MARKET INFRASTRUCTURE ON THE
MARKETING OF AGRICULTURAL PRODUCE

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