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Roads and farming: the effect of infrastructure improvement on agricultural intensification in South-Western Kenya

ABSTRACT Combining new longitudinal and geo-referenced road map data with household panel survey data targeting rural smallholder farmers in South-Western Kenya, we implement a fixed effect (FE) estimation with other controls to assess the causal impact of the change in road access from 2004 to 2012 on the change in farming practices such as hybrid seed adoption, fertiliser intensification, high value crops adoption and market participation for milk and cereals. We construct effective time distance indicators which measures the shortest driving time to the nearest market and nearest large town. We find evidence of diversification into high value crops farming, fertiliser intensification and milk market participation in areas experiencing improved roads. It suggests that the recent road infrastructure investment in South-Western Kenya foster agricultural productivity and market participation by rural smallholder farmers. Also, it implies that the investment has the pro-poor effect since the road improvement occurred in more remote areas.