Fast Facts

Agricultural and rural transport under-represented when costing rural road upgrades

New findings show agricultural contributions and rural transport characteristics are under-represented when costing rural road upgrades.

A new study by University of New England researchers has highlighted new variables in the assessment of road upgrading projects. These variables take into account the nature of rural road use and the cost of maintaining roads subject to flooding.

The report, funded by AgriFutures Australia and entitled Research activities on rural roads, suggests that the current way new rural and regional roads and upgrades are evaluated and prioritised does not adequately capture the real value of agricultural and rural use.

Principal researcher Professor Derek Baker, Director of UNE’s Centre for Agribusiness, in collaboration with the UNE Business School’s Dr David Hadley and consultant David Anderson conducted the case study in the Moree Plains and Gwydir Shire Councils in northern NSW.

Their findings show that a new approach to assess rural road use is needed to effectively evaluate small and large-scale road infrastructure projects.

The team explained that road use prioritisation tends to be based on population – on a per use basis. This ignores factors such as the value adding potential of accessing markets that are sensitive to timing of delivery.

The network effects of road use – which offset delays due to road closures during floods – were also found to substantially boost the benefit-cost ratios of upgrading.

“Increased reliability and quality of freight infrastructure can yield big benefits for agriculture. For example, simple logistics like getting a product to market on a sealed road vs. unsealed could mean the difference between taking advantage of export opportunities and premium prices,” Professor Baker said.

“The study suggests there are substantial market benefits to be gained from rural road upgrades and new variables should be considered as part of future cost-benefit analysis.”

While the study is exploratory, AgriFutures Australia Research & Innovation Program Manager, Jennifer Medway said it highlights that there is more work to be done to examine alternative approaches to cost-benefit analysis when improving rural roads.

“Freight and roads are big ticket issues for Australian agriculture. The ability to freight input onto farms and production out is critical to growing our nation’s agricultural capacity,” Ms Medway said.

“Farmers need to understand the implications of road use and how it should be valued, but action is likely to come from local, state and federal levels. We hope this study will contribute to discussions when making investment decisions about road upgrades in rural and regional Australia.”

The report Research activities on rural roads is funded by the AgriFutures™ National Rural Issues program which forms part of the AgriFutures Australia National Challenges and Opportunities arena.

Source: University of New England

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