1.1 BACKGROUND OF THE STUDY
Road conditions are an important factor in determining transport costs and prices. Hine and Ellis (2001) in comparing transport price to road roughness in Nigeria, illustrated that transport price was twice as high on a poor-quality earth road in comparison to transport price on a good-quality gravel road. A survey conducted in Nigeria found that, over a 50 km section of road, an increase in roughness of 50% would increase truck charges by 16% and increase pickup (light duty truck) charges by about twice as much (Ninnin, 1997 as cited in Hine & Ellis, 2001). The situation becomes worse during the wet season.
The African Development Bank has recognized that investment in infrastructure such as transport, power supply and telecommunication is important for supporting economic growth, reducing poverty and achieving the Millennium Development Goals (MDGs) (Kandiero, 2009). At a macro level, infrastructure investment allows for better private sector activities through lowering production cost, opening up new markets for goods and services and supporting trade (Kandiero, 2009). Road infrastructure improvements, for example, can be expected to raise the output price of the producers and lower production cost through the reduced transportation cost of goods and services (Kiprono & Matsumoto, 2014).
Poor transport infrastructure, high transport cost and missing links in the transport network pose a challenge for market integration and intra-
African trade. The level of transport infrastructure development in African countries is still low; only 30% of the rural population have access to all-weather roads (Kandiero, 2009). Transport prices in Africa are estimated to be twice as high as those of South and East Asia (Kandiero, 2009).
Despite the importance of infrastructure for economic growth in African countries, investment in infrastructures such as transport, power supply and telecommunication account for only 2 – 3% of Gross Domestic Product (GDP) (Kandiero, 2009). Comparing this to China, for instance, during the period 1996 –2005, infrastructure investment was on average 7.78% of its GDP. This investment was believed to spur a large part of its growth (Davis, 2008). In many African countries, the agricultural sector is important for economic growth.
In rural areas, among the strategies often adapted to stimulate agricultural development is the provision of proper and adequate transport. Crossley et al. (2009) state that transport is a basic component of the agricultural sector; it provides assurance for the supply of the agricultural inputs and facilitates the delivery of the farm outputs to the market. Improvement of the rural roads and transport services are essential to ensure a price reduction for agricultural inputs, improvement of market access for agricultural produce, and improvement of access to agricultural extension services.
Agricultural Policies are the instruments of action that governments employ to effect a change within the agricultural sector. Handcock (2012) stated that government’s agricultural policy is a set of decisions and actions relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural markets; some of which includes risk management and adjustment (including policies related to climate change, food safety and natural disasters), economic stability (including policies related to taxes), natural resources, and environmental sustainability (especially water supply policy),research and development; and market access for domestic commodities (including relations with global organizations and agreements with other countries).
Hancock further explained that Policy programmes can range from financial programmes, in the forms of taxation, subsidies, tariffs and other measures, sometimes meant to encourage producers to enroll in voluntary quality assurance programmes. Government policy, as described by Richard (2002), may have a direct or indirect effect on the prevalent agricultural system through increasing productivity and ensuring regular food supply in the country, improving farmers’ standards of living, stabilizing market prices at a level beneficial to farmers and reasonable for consumers through the instrument of price support policies. Some of these policies have bearing on distribution of agricultural products.
Roads and transportation are essential for the sustainability of agricultural production in Sub-Saharan Africa as it impacts positively factors such as mobility (John & Carapetis, 1991), the adoption of high yielding varieties, high productivity crops and bigger farm size (Sieber, 1999).