September 2011

A rural road can radically change the lives of farmers and their families. A new road not only makes it easier for farmers to deliver their products to markets, it also makes it easier for family members to reach doctors and for children to get to school. IFPRI’s research program on public investment in agriculture and rural areas has found that public investments in infrastructure—such as investments in rural roads—and in agricultural research and development (R&D) and education can significantly reduce poverty and generate income in rural areas.

In India, IFPRI’s research on public investment played a key role in public debates over rural road investment, leading to the creation of the Prime Minister’s Rural Roads Program in 2000. The Program directed huge sums toward the construction of all-weather roads connecting large numbers of previously unserved villages, with subsequent positive impacts on agricultural profitability, agricultural wages, rural nonfarm employment, and overall poverty reduction.

An assessment of the positive impacts from these road investments indicates that IFPRI research played a substantial role in lifting tens of thousands of individuals out of poverty and increasing agricultural GDP by billions of rupees. Although estimating any direct attribution of these benefits to IFPRI is fraught with difficulties, even highly conservative assumptions suggest IFPRI’s research on India helped lift between 18,000 and 90,000 people above the poverty line from 2005 to 2009 and increased real agricultural GDP by between Rs. 16 billion and Rs. 82 billion during the same period.

In China, IFPRI’s work in public investment helped contribute to an increase in rural spending on education and agricultural R&D—and to the allocation of an increasing share of rural spending to the more impoverished Western regions of the country.

For more information, see the related Impact Assessment Discussion Paper.