Feed the Future
This project is part of the U.S. Government's global hunger and food security initiative.

The Role of Markets and Infrastructure in Supporting Sustainable Food Systems in Nepal

This post is written by Gerald Shively, Purdue University.

Food insecurity typically begins at the household level, when people are either unable to grow nutritious food, unable to buy nutritious food, or both. Although in many places throughout the developing world people rely on their own agricultural production to sustain them, it is frequently the case that households supplement their own production with food that is grown elsewhere, bought with income earned through work or agricultural sales, and transported to a local market via roads and bridges constructed at government expense. How well households can manage to supplement their own production through purchases depends acutely on availability and cost. Furthermore, when income is earned through agricultural sales, the effectiveness of the market plays a doubly-important role – both in getting surplus or commercial production to market and in getting a wider variety of nutritious and affordable foods into the local mix.

Grain network flows in Nepal. Source: WFP/FAO (2007) World Food Programme and Food and Agricultural Organization of the United Nations. 2007. Food and Agricultural Markets in Nepal. Final Report of the World Food Program. Kathmandu: United Nations Food and Agricultural Organization.

Nowhere is the importance of market access to the local food system more evident than in Nepal, a country similar to Switzerland in terms of topography and population density, but with a fraction of Switzerland’s road density (14km/100km2 vs. 173 km/100 km2 in 2010). In fact, according to the World Bank (2010) a majority of low-income countries have road densities below 15 km/100 km2, far less than one finds in middle- and high-income settings. As one might expect, transportation challenges continue to undermine the performance of food systems in these countries. Although the government of Nepal has been boosting investments in road and bridge construction in Nepal’s hills and mountains, many remote districts remain inaccessible. For example, as recently as 2010, fifteen of seventy-five districts in the country were not connected by roads, and in many locations, several hours or days of road travel are still required to reach the nearest population center. In remote locations, goods must often be carried by mules or porters, adding substantially to the price of final goods, especially during some periods of the year, and limiting the availability of perishable food items. How important is transportation infrastructure to agricultural markets in a place like Nepal? As part of research conducted for the Feed the Future Innovation Lab for Nutrition, we found roads and bridges to be especially important for moderating price levels and price volatility in Nepal’s rice and wheat markets. In fact, the density of roads and bridges explained roughly half of the spatial and temporal variation in price mark-ups between regional and local markets over the period 2002 to 2010 (Shively and Thapa, 2017).

Building on this evidence, one might also expect to see a relationship between roads and short-run and long-run child nutrition outcomes in Nepal. In follow-up research (Thapa and Shively, 2018), we constructed a quality-weighted road index for each of the 75 districts in Nepal. We then studied the relationship between this index and nutrition indicators for children. Not surprisingly, we found a positive relationship between road infrastructure and short-term and long-term nutrition outcomes for children below age five. We also found that district-level improvements in road networks over time have been clearly associated with improvements in child weight-for-height z scores, an indicator of acute food shortages amongst the most vulnerable. The mechanisms for these associations likely include improved access to agricultural inputs, higher incomes through enhanced economic opportunities, and improved access to medical care. But prices for food-buyers and food-sellers also matter, and improved transportation infrastructure is key to supporting low, stable and predictable food prices – a feature that helps a local food system provide better nutrition over time. For example, in related work we found that higher milk prices were negatively associated with both short-term and long-term child nutrition outcomes (Thapa and Shively, 2016). Moreover, we found that higher rice prices were negatively correlated with nutrition outcomes in food deficit districts, but positively associated with outcomes in food surplus districts, underscoring the importance of higher producer prices among those households that are sellers of rice.

When a region’s or nation’s food system is taken as a whole, it is clear that infrastructure, especially transport infrastructure, is essential to creating and sustaining a food system that supports food security and nutrition goals. Where individuals live in isolation, nutritional status will be tightly wedded to local food availability, which itself will be driven by the environmental conditions (such as rainfall and temperature) that influence crop growth. Where infrastructure combines with the food system to mitigate this isolation, nutrition outcomes will be better. This relationship was underscored by another piece of evidence resulting from Feed the Future research in Nepal and Uganda (Shively, 2017), where linear growth and weight gain was studied among nearly 12,000 children below the age of five years, testing the hypothesis that child growth is sensitive to precipitation during key periods in a child’s early life. Associations between child growth and rainfall were generally positive, suggesting that good crop growing conditions support child nutrition, but – importantly – patterns differed across location and ecology. For example, nutrition sensitivity to rainfall was greater in Nepal, where rainfall is lower on average and wider ranging, than in Uganda. A key driver of outcomes was health and transport infrastructure, which were found to help to buffer a child’s nutritional status from the deleterious nutritional effects of precipitation shortfalls. These findings underscore the important role of broadly-based economic development in promoting child nutrition, and highlight the key aspect of infrastructure in promoting and sustaining local food systems that connect buyers and sellers, and ultimately the individuals in agricultural households, to markets and the benefits they bring. 

The work reported here was supported by the Feed the Future Innovation Lab for Nutrition, which is funded by the United States Agency for International Development (USAID, Grant No: AID-OAA-10-00005).

Shively, Gerald (2017) Infrastructure mitigates the sensitivity of child growth to local agriculture and rainfall in Nepal and Uganda. Proceedings of the National Academy of Sciences of the United States. doi:10.1073/pnas.1524482114.

Shively, Gerald and Ganesh Thapa (2017) Markets, transportation infrastructure and food prices in Nepal. American Journal of Agricultural Economics. 99(3):660-682. doi:10.1093/ajae/aaw086.

Thapa, Ganesh and Gerald Shively (2018) A dose-response model of road development and child nutrition in Nepal. Research in Transportation Economics 70: 112-24. doi.org/10.1016/j.retrec.2018.11.002.

Thapa, Ganesh and Gerald Shively (2017) Child nutrition and local food prices in Nepal. Nepalese Journal of Agricultural Economics.

World Bank (2010). World development indicators. Washington DC: The World Bank.