Rural infrastructure improves quality of village life

The link between infrastructural development and crop production in villages is worth noting. Access to paved roads and electricity has a bearing on crop sector as procurement of inputs and disposal of marketed outputs are influenced by such developments. Especially, one can explore to what extent the level of infrastructure development impacts on cropping intensity, coverage of irrigation and modern varieties and yield levels of paddy. 

Cropping intensity is estimated to be higher in developed villages - with better road network -- compared to semi-and under-developed villages. Due to paved roads, villages could get inputs in right time and at right prices. Besides, the same kinds of benefits are likely to be derived from opportunities created for marketing of output and extension networks. Second, the proportion of irrigated land should increase in villages due to better infrastructure. Again, developed villages surpass all in terms of adoption of modern technology, timely availability of inputs, marketing opportunities and extension services. And finally, over time, yield of paddy is reported to increase than others. Therefore, it appears that rural infrastructure, such as paved roads and electricity, has a close link with productivity. 

The welfare of rural households also depends on accumulation of assets over time. Such an accumulation may take place in both agricultural and non-agricultural sectors. It has been observed in empirical research that endowment of fixed agricultural asset is relatively low in developed villages, even when the accumulation there seems to have decreased. But in case of non-agricultural fixed capital, the rate of growth seems to be relatively very high in developed villages. In other words, where infrastructure is developed, the need for and accumulation of non-agricultural capital also remain high. On the other hand, as infrastructure has developed, the share of households accessing credit has also vastly increased over time. 

Let us now take up the issue of human capital.  The households in developed villages are ahead of other villages in terms of accumulation of human capital (number years of schooling by household members). It is very significant since infrastructure has enabled the laggards of the past to move ahead while the relatively advanced ones in the past are falling behind due to infrastructural bottlenecks. It proves that better infrastructure helps educational access. And finally, the share of workers engaged in non-agricultural occupations increases with the development of infrastructure. It is quite likely that paved roads and electricity help credit facility and strengthen the linkage between farm and non-farm impacts. Maybe, this is the reason why non-agricultural activities are more widespread in developed villages.

Accumulation of assets is just a necessary condition in enhancing welfare of households; the sufficient condition is the productivity level of assets so accumulated. If productivity - also called output per unit - goes up, the households can enhance welfare by economising the use of scarce resources.  It is being argued that compared to semi-  or an under-developed village, the average per capita income in developed village is 1.5 times larger than others, and over time, the rate of increase in per capita income in developed villages stands at 7.0 per cent per year as against only 3-4 per cent in non-developed villages. The reasons are not far to seek. Infrastructural facilities create opportunities for income generation, deepen market access and develop social indicators. Therefore, from a policy point of view, there is apparently no substitute of infrastructural facilities in raising income in rural areas.

One of the primary impacts of infrastructure may fall on the occupational mobility of the workforce in villages. Roads and electricity are supposed to enable the workers to work for more hours, help undertake productive pursuits and above all, increase information available about work opportunities. The most important effect, however, is the expansion of non-farm activities where surplus labour from agriculture can be absorbed.

As in other societies, infrastructural development seems to inject pace in rural transformation. For example, developed villages are reported to lean more on non-agriculture than semi- or under-developed villages. Again, within agriculture, the proportion of workers engaged in cultivation and wage labour is relatively low and has fallen over time.  Thus, the more the access to paved roads and electricity, the more visible becomes the occupational mobility from cultivation and agricultural wage labour to trade/ business and to other non-agricultural activities. The findings seem to be in consort with that observed in other countries, especially in India and China. Second, in terms of multiple occupations, we observe that the degree is relatively low in developed villages. In fact, under-development of infrastructure forces people to seek multiple occupations. It is not surprising as at lower level of income, people tend to be engaged in a number of occupations. On the other hand, infrastructure helps to get satisfactory level of income and given a satisfactory income, the substitution effect gets stronger. Thus, infrastructure not only helps raise income of the households but also enhances the opportunity for leisure for the workforce.

It is quite natural that infrastructure impacts on consumption in rural areas through influencing income. In this context, the famous Engel's Law of economics may be effective. We observe that in bad or good times, households in developed villages consume relatively less of rice and more of wheat, fish and meat. Besides, expenses on education, housing and others are also relatively high. However, due to paucity of data, we have considered observations of only 2000 and 2008. But definitely, the trend is not likely to be different for other years. That is, access to better infrastructure leads to higher per capita income of developed villages which, in turn, leads to higher consumption of non-rice items. 

To reiterate, the main benefits of infrastructure come from marketing of inputs and outputs. Market orientation has increased over time more in developed villages than in other villages.  For example, the share of marketed paddy in 1988 was 44 per cent in developed villages. But by 2008, the share shot up to 56 per cent. On the other hand, distress sales in developed villages have drastically gone down. The reason may be the factors that fuel distress sales have weakened in developed villages, possibly due to infrastructural development. 

The writer is a Professor of Economics at  Jahangirnagar University.

abdulbayes@yahoo.com