Impacts of rural infrastructure

In assessing the impacts on the livelihoods of rural people, we have categorised sample households and their villages into three groups: (a) 'developed' - where both paved roads and access to electricity exist; (b) 'semi-developed' with either paved road or the access to electricity, and (c) 'under-developed' having access to none of the facilities. Thus defined and during the last two decades, the share of developed villages appear to have more than tripled. Conversely, it can be argued that the share of semi or under-developed villages has decreased during the same period. In other words, access to infrastructure has increased over time in rural areas. This is quite obvious as rural areas are reported to have witnessed significant development of road networks in the 1980s and the 1990s. But disconcertingly, the development has been at snail's pace. Our survey shows that, as of now, only one-thirds of households have access to both the services and more than one-thirds have access to either good roads or electricity. By and large, one-thirds of rural villages are still under-developed - devoid of any access to paved roads or electricity. Keeping in mind that these two inputs are prerequisites for increasing income and employment, we can expect a faster expansion of these facilities in rural areas. Infrastructure and crop production: We can look at the link between infrastructural development and crop production in sample villages. It is obvious that access to paved roads and electricity would affect the crop sector as procurement of inputs and disposal of marketed outputs are affected by such developments. Especially, we shall explore whether or to what extent, the level of infrastructure development impacts upon cropping intensity, coverage of irrigation and modern varieties and yield levels of paddy. Cropping intensity is estimated to be higher in developed villages compared to semi- and under-developed ones. In fact, two decades back, just the reversed happened when these villages were falling behind in terms of cropping intensity. The reason may be that, due to paved roads, developed villages could get inputs in right time and at right prices. Besides, the same kinds of benefits have been derived from opportunities created for marketing of output and extension networks. Second, we notice that the proportion of irrigated land has doubled in developed villages due to better infrastructure. But such mentionable increase could not be the case in other villages. Again, developed villages surpassed all in terms of the adoption of modern technology. Needless to mention, infrastructural development in those villages has facilitated timely availability of inputs, marketing opportunities and extension services. And finally, over time, yield of paddy has increased by 69 per cent, which is much higher than others. Therefore, it appears that rural infrastructure, such as paved roads and electricity, has a close link with productivity. Infrastructure and access to assets: The welfare of rural households also depends on the accumulation of assets over time. The accumulation may take place in both agricultural and non-agricultural sectors. We observe that endowment of fixed agricultural asset is relatively low in developed villages, even the accumulation there seems to have decreased. But in the case of non-agricultural fixed capital, all villages witnessed positive growth but the rate of growth is relatively very high in developed villages. In other words, where infrastructure is developed, the need for and the 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. In fact, the change is evident in other villages but not as remarkably as in developed villages. Again, taking per-household credit availability as a criterion in our analysis, we observe no major deviation in the trend. That means, credit availability per household is relatively high in developed villages. Let us now take up the issue of human capital. The households in developed villages are ahead of other villages, in terms of the 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, obviously the share of workers engaged in non-agricultural occupations remains to be an increasing function of 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. May be this is the reason as to why non-agricultural activities are more widespread in developed villages. Infrastructure and productivity of assets: We should remember that accumulation of assets is just a necessary condition in enhancing welfare of households; the sufficient condition is the productivity levels 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. We note that, compared to a semi- or under-developed village, the average per-capita income in developed village is 1.5 times larger than others. But this is not the only good news. Over time, the rate of increase in per-capita income in developed villages stood at 7.0 per cent per year as against only 3.0-4.0 per cent in other villages. What is even more interesting, the per-capita income of developed households was lower than others in the base year; but the access to roads and electricity has tremendously raised the per-capita income of non-agricultural labor. 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, presumably there is no substitute of infrastructural facilities in raising income in rural areas. Infrastructure and rural occupations: One of the primary impacts of infrastructure may fall on the occupational mobility of the working force 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 labor from agriculture can be absorbed. We observe that, and as has been said before, agriculture has lost its importance as primary occupation irrespective of developed or under-developed villages. The space has been occupied by the non-agricultural activities. Existing studies on rural development provide some insightful observations on this 'transformation' and we have already dealt on this in different contexts and in different chapters. But what is new to us is the observation that, as in other societies, infrastructural development seems to inject pace in this 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 labor is relatively low and has fallen over time. Thus, the more is 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, it increases with under-development of infrastructure. It is not surprising either 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. Abdul Bayes is a Professor of the Department of Economics at Jahangirnagar University. He can be reached at e-mail: abdulbayes@yahoo.com