Investment in Rural Roads: Willingness-to-Pay for Improved Gravel Road Services in Freight Transportation

Transport of commodities in rural areas is an important issue and an area where research is needed. As trends for rural road funding decrease, the need for improvements and maintenance of rural roads used for rural freight transportation increase. Although rural roads are in need of improvements, uncertainties exist about what type of improvements road users think are most important and whether or not they would pay more for bettering services to these roads. The objective of this report is to develop a profile of rural road users’ opinions of rural road services. More specifically, what are rural agricultural producers willing to pay for local road service improvements and what financing methods would they be most agreeable to? Local government decision makers have limited budgets for roads, and thus are faced with difficult allocation decisions. Data about what producers think is important in rural road services can help determine options for these roads and assist in forming conclusions beneficial to rural road users. This data will be helpful in local government budget decision making and appropriation decisions, state DOT planning, and economic development strategies. Survey data for this research was collected in a case study analysis. The survey included questions about producers’ perceptions of roads used to haul commodities to market. Although the participants of this survey were restricted to producers from the state of North Dakota, results are applicable to other rural states. To define a specific farm to market route, surveys were mailed to producers who haul or have hauled product to two facilities in Enderlin, North Dakota: the Plains, Grain, and Agronomy grain elevator shuttle facility and the ADM Northern Sun oilseed processing plant. The survey questions were divided into three sections including farm operation description, rural road usage, and rural road services perceptions. The two rural road service issues that appear predominant from response analysis are rural road surface quality and vehicle weight limits. These services show up frequently in survey responses. Producers are concerned about, want improvements to, and are willing to pay for these services. Load limits stand out as especially important to producers. When asked about willingness to pay for improving various road services, the greatest number of participants indicates they would pay for improvements that would increase load limits (36 percent). Gravel road surfaces are an area producers would like to see money used for in rural road improvements. Other areas where producers indicate they would like to see money spent for improvements include paved road surfaces and signs & safety. Survey respondents also say they are most willing to use cost participation, fines, or sales tax to finance rural road improvements when questioned about innovative financing methods.