The Effect of Rural Infrastructure on Agricultural Productivity and Market Participation in North Central Nigeria

This study empirically examines the effects of rural infrastructure, specifically road quality, electricity access, and market facilities, on agricultural productivity and market participation in North Central Nigeria. Rural infrastructure provides the physical platform on which agricultural transactions occur, inputs are accessed, and outputs are transported to markets. Deficient infrastructure raises transaction costs and reduces the profitability of agricultural market participation, constraining both productivity and income. This study uses a panel dataset combining state-level infrastructure quality indices constructed from Nigeria Infrastructure Survey data with farm household panel data from the LSMS-ISA Nigeria survey waves. Two-stage instrumental variable estimation exploits historical administrative road network data as an instrument for current road quality. Geospatial analysis links household locations to infrastructure quality measures. Outcomes include input adoption rates, output per hectare, and household commercialisation index. Findings reveal that a one standard deviation improvement in road quality is associated with a 14 percent increase in fertiliser adoption probability and an 11 percent increase in commercialisation index. Electricity access shows independent positive effects on agro-processing enterprise participation and post-harvest storage adoption. Market facility proximity reduces marketing cost and increases price received. The study contributes original causal evidence on infrastructure-agriculture productivity linkages in North Central Nigeria and recommends prioritised rural infrastructure investment targeting the most infrastructure-deficient farming communities.

Keywords: rural infrastructure, agricultural productivity, market participation, North Central Nigeria, transaction costs.