A thorough ODI review of the literature on the link between infrastructure and agricultural trade and poverty reduction, published in September 2013, “confirms that rural roads are important for poverty reduction, and can increase agricultural productivity and market access”. But it also finds “little evidence that roads have a direct impact on the poorest communities”. Written with an eye on the changing priorities of ‘aid for trade’ donors, the analysis suggests that to optimise both the trade creation and poverty reduction effects, investment in “hard infrastructure” (roads, communications and energy supply) should be combined with soft infrastructure (services related to transport, extension and standards) and should also be selected with the direct involvement of the private sector.

The review points out that although a positive relationship has often been assumed between rural infrastructure, agricultural production, trade and poverty reduction, it has been hard to demonstrate it empirically. This is partly because each infrastructure project has unique characteristics that affect its impact. For example, priority has often been given to roads that tap into areas with high agricultural potential, making problematic inferences concerning the effect on less favoured areas. In addition, it is always hard “to accurately capture the impacts on a diffuse beneficiary group and account for substantial differences in road quality”. Nevertheless, the review of 73 studies, many of them recent undertaken, using new econometric methodologies, has enabled the report to isolate some important findings.  

These include a USAID finding of “steep price gradients along trade corridors in the Economic Community of West African States (ECOWAS)”. The USAID report revealed that the “transport and logistics costs of moving maize and livestock along key trading corridors between Burkina Faso, Ghana and Benin account for approximately 59% and 18% of the respective end-market prices.” It also cites a “consensus in the literature” that investment in transport corridors has little effect on smallholders and agricultural production compared to rural feeder roads. It demonstrates the importance of complementary investment in transport services, agricultural extension services, storage capacity, and sanitary and phytosanitary (SPS) institutions to maximise the benefits of investments in hard infrastructure.