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HomePublicationsCatalogThe Impact of Rural Infrastructure and Agricultural Support Services on Poverty: The Case of Agrarian Reform Communities in the PhilippinesConclusions and Recommendations for the Project and Implications for Future Project Design

Conclusions and Recommendations for the Project and Implications for Future Project Design

Among the different ARCP interventions, it appears that rural infrastructure—roads, in particular—has the strongest impact on poverty. Developing rural infrastructure has improved commodity transfer to markets and the inflow of production inputs to farms. Improved mobility of production inputs and outputs to and from farms has decreased the prices of inputs and increased income from agricultural produce. This finding is consistent with Balisacan's 2001 contention that “public investments in infrastructure, especially rural transport, generate economic linkages and externalities critical to sustained growth and development of the economy.” Balisacan et al. (2002) also assert: “Road access can improve the well being of the poor provided they have sufficient human capital to take advantage of [such access]”.

In contrast with a 9% increase in national poverty between 2001 and 2003, project interventions in the ARCP areas resulted in a 0.8% decline in poverty in the same period. After two years of project implementation, the average annual income in the ARCP areas increased by 12%. There were significant increases in ownership of assets (household and production), and there was better access to various services brought about by increases in transport assets and services. The findings suggest that there have been significantly positive changes in the socio-economic indicators in ARCP-area households.

The economic activity that immediately benefited from the access infrastructure interventions is agriculture. Of all income sources, on-farm income increased most (39%). There was, however, limited non-farm employment generated by the project. In fact, the expansion of the agriculture sector fueled by the project appeared to have caused the shift from non-farm wage labor to farm labor, resulting in an overall decrease of 23% in total non-farm income. It is important to note that one employment opportunity for the poor, the manual carrying or hauling of agriculture products from farm to market, may have been replaced by the use of trucks or other means of mechanized transport once the rural roads were completed.

Benefits derived from the positive effects of access infrastructure were, however, disproportionately captured by the non-poor over the poor households. The non-poor households have more land, own more production assets (7% more hand tractors and 3% more threshers than the poor), have better access to credit (non-poor credit access increased by 22%, while that of the poor declined by 12%), and are generally better educated than the poor households. Therefore, the non-poor were better equipped to take advantage of the project interventions. The findings showed that the non-poor households initially owned and acquired new transport assets during the two-year period. This allowed the non-poor to gain more income than the poor based on the opportunities brought about by the project.

In contrast, the extreme poor may have lost some income-generation opportunities. This is supported by the findings on the changes in expenditures in which poor households fell below the bottom 60% income deciles and suffered decreases in expenditures. This is also consistent with the results of the Gini coefficient, which showed that income distribution deteriorated between the two periods. The poor benefited more, however, from the use of labor in the construction of the access infrastructure than the non-poor.

In conclusion, this study on the initial impact of the ARCP access infrastructure on the wellbeing of rural households confirms and reinforces the various yet similar assertions that public investments in infrastructure create opportunities in the rural areas and help reduce poverty as long as certain conditions are met. These conditions revolve around the capacity and capability of the rural households, particularly the poor, to take advantage of the benefits brought about by these investments. The results of the empirical examination show that while access infrastructure has led to improvements in the overall welfare of the rural households, non-poor households benefit more than their poor counterparts. Poor households, while on the whole benefiting from the improvements in access, tend to have lesser share in the benefits, with the poorest of the poor manifesting exclusion from the whole process.

A. Recommendations

The following recommendations are proposed:

  1. The project implementers and partners, particularly the local government units overseeing the project sites, should pay particular attention to the growing income disparity and the exclusion of the poorest of the poor from the development process since this may lead to social tensions
  2. Institute necessary processes to allow the inclusion of all the poor in community consultations and also their participation in community organizations
  3. Promote a regulatory environment for competitive transport services
  4. Improve interventions in the provision of credit and development of microenterprises by supporting local microfinance institutions' extending their services in the ARC areas
  5. Identify measures to minimize the interventions' negative impacts on the poor and women.

B. Considerations in Future Projects

The following are considerations for the design of future similar projects:

  1. The design and implementation of access infrastructure projects should include targeting project beneficiaries with special bias for the poorest of the poor
  2. Operations and maintenance of access infrastructure should be integral to the project design and operations; infrastructure users—particularly the households who hold most of the benefits (i.e., transport operators)—should be required to bear a larger share of facility maintenance and upkeep
  3. The packaging of access infrastructure projects should be accompanied by other support interventions that ensure the inclusion of the poor and help enhance their capacities and capabilities. Some of these interventions are: provision of credit, microenterprise development services, agricultural technology transfer, social capital formation, and gender integration.

In project design and operations, measures that minimize the negative impacts of access infrastructure projects on the extreme poor and women should be integral even beyond the project's construction duration. As transport infrastructure development often replaces the manual mode of transporting agriculture products with mechanized forms, attention should be paid to minimizing job displacement impact for the poor who work in hauling commodities. A development project may assist in identifying new employment opportunities for that particular group of poor wage laborers or providing a training program for them to work as mechanics in the transport sector.

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  1. Cris Sales
    (posted 10 February 2011 / 04:28:54 PM)

    In other words, CARP did in fact improve the lives of the prople in the Agrarian Reform Communities.

The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

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