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Road Infrastructure Improvement for Efficient Utilisation of the Agricultural Potential: a Case Study of Morogoro, Tanzania

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Road Infrastructure Improvement for Efficient Utilisation of the Agricultural Potential: a Case Study of Morogoro, Tanzania Road Infrastructure Improvement for Efficient Utilisation of the Agricultural Potential: A Case Study of Morogoro, Tanzania by Emmanuel Fungo Dissertation Presented for the Degree of Doctor of Philosophy in Transport Economics Faculty of Economic and Management Science Stellenbosch University Supervisor: Prof. Stephan Krygsman Co-supervisor: Prof. Johanna H Nel March 2018 Stellenbosch University https://scholar.sun.ac.za Declaration By submitting this dissertation electronically, I declare that the entirety of the work contained therein is my own, original work, that I am the sole author thereof (save to the extent explicitly otherwise stated), that reproduction and publication thereof by Stellenbosch University will not infringe any third party rights and that I have not previously in its entirety or in part submitted it for obtaining any qualification. February 2018 Copyright © 2018 Stellenbosch University All rights reserved i Stellenbosch University https://scholar.sun.ac.za Abstract The Morogoro region in Tanzania is endowed with diverse sources of water, fertile land and a good climate, suitable for crop cultivation. Only 29 percent of the arable area, however, is used for agricultural purposes. Inadequate and poor rural transport is partly to blame for the underutilisation of the agricultural potential. Rural transport provides assurance for the supply of the agricultural inputs and facilitates for the delivery of the farm outputs to the markets. Improved rural road infrastructure and transport services stimulate the increase in agricultural production through lowering of the transport price of farm inputs and outputs. Little is known, however, about the extent of agricultural production improvement following the road improvement. The conventional road economic evaluation tools such as Highway Development and Management (HDM-4) and Roads Economic Decision (RED) do not address this issue. These tools concentrate on the direct road user cost savings. Due to the low volume of traffic on rural roads, these savings are not substantial. However, rural road improvement and improved accessibility may result in a substantial impact on price and production of agricultural products. This research illustrates the impact of the road condition and trip distance on the transport price and transport cost of agricultural products. The research also establishes the relationship between transport price and agricultural production. Using the data collected from transport operators and road agencies, statistical relationships between transport price, trip distance and transport cost were established. The results show that transport price per ton-km decreases as the trip distance increases, reflecting factors such as economies of distance. However, the very high transport price over short distances can be attributed to the poor condition of rural roads and low vehicle utilisation. Transport price decreases with transport cost, indicating a competitive transport market. Longer distance trips are expected following rural road improvement, resulting in higher vehicle utilisation. Competition within the transport market is also expected to increase. Furthermore, the Tanzania National Panel Survey (NPS) data of 2012/13 was used to establish the relationship between transport price, access to the market and crop yield. Reduction of the transport price shows a positive impact on crop yield with an elasticity of -0.291. It was also found that farmers who have access to the bigger markets are associated with higher crop yield. When comparing agricultural benefits and road user cost savings for the low volume rural road, the results show that agricultural benefits were roughly three times higher than the road user cost savings. Finally, the research developed a low volume rural road economic appraisal ii Stellenbosch University https://scholar.sun.ac.za framework which takes into account agricultural benefits, the effect of the trip distance as well as the effect of transport price. iii Stellenbosch University https://scholar.sun.ac.za Opsomming Die Morogoro-streek in Tanzanië het verskeie waterbronne, vrugbare grond en 'n goeie klimaat wat geskik is vir gewasverbouing. Slegs 29 persent van die bewerkingsarea word egter vir landboudoeleindes gebruik. Onvoldoende en swak landelike vervoer is deels te blameer vir die onderbenutting van die landboupotensiaal. Landelike vervoer is behulpsaam met die voorsiening van landbou-insette en fasiliteer die lewering van plaasuitsette na die markte. Verbeterde landelike padinfrastruktuur en vervoerdienste stimuleer die toename in landbouproduksie, deur die verlaging van die vervoerkoste van plaasinsette en -uitsette. Min is egter bekend oor die mate van verbetering van landbouproduksie as gevolg van die padverbetering. Die konvensionele pad-ekonomiese evalueringsinstrumente soos die “Highway Development and Management” (HDM-4) en die “Roads Economic Decision” (RED) programme, bespreek nie hierdie probleem aan nie. Hierdie instrumente konsentreer op die kostebesparings vir direkte padgebruikers. As gevolg van die lae volume verkeer op landelike paaie, is hierdie besparings minimaal. Landelike padverbetering en verbeterde toeganklikheid kan egter 'n wesenlike impak op die prys en produksie van landbouprodukte tot gevolg hê. Hierdie navorsing illustreer die impak van die padtoestand en reisafstand op die vervoerkoste en vervoerprys van landbouprodukte. Die navorsing bepaal ook die verhouding tussen vervoersprys en landbouproduksie. Met behulp van die data wat van vervoerders en padagentskappe versamel is, is statistiese verhoudings tussen vervoerprys, reisafstand en vervoerkoste vasgestel. Die resultate toon dat die vervoerprys per ton-km afneem namate die reisafstand toeneem, wat faktore soos afstandsekonomieë weerspieël. Die baie hoë vervoerkoste oor kort afstande kan egter toegeskryf word aan die swak toestand van landelike paaie en lae voertuigbenutting. Vervoerprys daal met vervoerkoste, wat 'n mededingende vervoermark aandui. Langer vervoerroetes word verwag as gevolg van landelike padverbetering, wat lei tot hoër voertuigbenutting. Mededinging binne die vervoermark sal na verwagting ook toeneem. Verder is die Tanzanië Nasionale Paneelopname (NPS) se data van 2012/13 gebruik om die verhouding tussen vervoerprys, toegang tot die mark en oesopbrengs vas te stel. Vermindering van die vervoerprys het 'n positiewe uitwerking op die opbrengs met 'n elastisiteit van -0.291. Daar is ook bevind dat boere wat toegang tot die groter markte het, met hoër oesopbrengste geassosieer word. By die vergelyking van landbouvoordele en kostebesparings vir padgebruikers vir die lae volume landelike paaie, toon die resultate dat die voordele vir die landbou ongeveer drie keer hoër is as die koste van die padgebruiker. Ten slotte het die navorsing 'n lae volume landelike iv Stellenbosch University https://scholar.sun.ac.za ekonomiese evalueringsraamwerk ontwikkel wat landbouvoordele, die uitwerking van die reisafstand sowel as die effek van die vervoerprys in ag neem. v Stellenbosch University https://scholar.sun.ac.za Acknowledgements I would like to acknowledge the following people and institutions for their support to accomplish this dissertation. My supervisor, Prof Stephan Krygsman, for his guidance, support and encouragement throughout this PhD journey. My co-supervisor, Prof Johanna H Nel, for her assistance, especially with the statistical aspect contained in this dissertation. The Graduate School of Economic and Management Science at Stellenbosch University for the scholarship they provided to me. Dr Jaco Franken, the manager of the Graduate School of Economic and Management Science for his support in administrative matters. My employer, University of Dar es Salaam, for financial assistance during my field work and granting me a study leave to pursue this PhD. My wife Aretha, my daughter Noreen and my son Norbert for their encouragement and bear with me for such a long period away from them. Lastly but not least, my fellow PhD students for encouraging each other during this period. vi Stellenbosch University https://scholar.sun.ac.za Table of Contents Declaration ............................................................................................................................. i Abstract ................................................................................................................................. ii Opsomming .......................................................................................................................... iv Acknowledgements .............................................................................................................. vi Table of Contents ................................................................................................................. vii List of Figures ....................................................................................................................... xi List of Tables ....................................................................................................................... xiv List of Abbreviations .......................................................................................................... xvii Chapter 1 : Introduction ............................................................................................................. 1 1.1. Background .............................................................................................................. 1 1.2. The importance and
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