Do high food prices warrant a cash response?

Experts say many of the right conditions are in place across West Africa to make cash distributions work in the current global food price crisis.

Michael O’Donnell, head of hunger reduction for non-governmental organisation (NGO) Save the Children, said “the current food price crisis could be an opportunity for governments to work with NGOs and UN agencies to provide cash transfers to build up stronger social protection systems for the chronically poor.”

While agencies have been handing out cash in the form of vouchers for food and other items, straight cash, or through cash-for-work schemes for many years – WFP has been distributing vouchers as far back as 1994 in Pakistan – many are considering larger-scale targeted distributions over the coming year.

Providing cash in urban settings

Many of the West Africans who are most vulnerable to high food prices live in urban areas such as Ouagadougou, Conakry and Douala, according to numerous assessments, and providing cash rather than food can work well in these settings.

“In cities agencies can use new mechanisms to get cash to people for instance through bank or post office accounts, or by using vouchers in local shops… this can sometimes be logistically easier than handing out food,” O’Donnell said.

Further, towns tend to have large existing food markets, which means providing cash in this context is less likely to disrupt the market by driving down prices as it may do in smaller markets. “People have to be able to use the cash,” said Vanessa Rubin, Africa hunger adviser for NGO CARE International UK. “They must make sure they’re not going to reduce supply and so increase food prices.”

O’Donnell reiterates this. “There is rarely a case in a large town or city when you wouldn’t have enough food in the market for cash to work.”

Finally, though high food prices mean cash will not go as far as it used to, distributing cash can help boost markets for local foods which has been highlighted as an important means of avoiding skyrocketing import prices for staples such as rice.

Cash in slow-moving crises

While cash distributions have been used in rapid-onset emergency responses, such as in Sri Lanka after the tsunami, they work particularly well in slow-developing crises to reduce people’s vulnerability to shocks.

For this reason Rubin says cash transfers could work well in West Africa in the face of food price hikes. “This is a slow-moving crisis, and it is in these situations where cash can be most useful. We give cash in Niger for instance, to prevent the problem of food prices turning into a potential acute malnutrition crisis.”

CARE International started distributing cash in the region of Tahoua in southern Niger earlier this year, giving US$100 in the ‘transition season’ from January to April, and a further US$40 directly following the harvest in September and October in the hope that when food stocks are high, families will invest the cash.

“If we give the money at the right time and in the right way they can use it to support their livelihoods,” Rubin said.

Challenges

Experts cite a number of other advantages to cash transfers over food. They allow people to make their own choices with no conditions, according to Rubin, giving recipients dignity. “We assume they know best and trust them to reduce their own vulnerability. We can step back and learn from them.”

However, the oft-cited challenges associated with cash distributions apply equally to the current West Africa food crisis as they do elsewhere. For instance there are potential security concerns involved in distributing cash, particularly in cities prone to social unrest; cash may be more likely to be corrupted, and it is difficult to monitor and evaluate its impact, according to Paul Harvey, research fellow at the London think-tank the Overseas Development Institute.

When it comes to West Africa, while many vulnerable people live in urban areas, others live in remote villages with poor access to markets. “This doesn’t mean [cash] is inappropriate for this region, it just means agencies have to be more cautious and selective at where they target it,” Harvey pointed out.

He continued, “We need strong answers to allay all these fears. But what people often do is compare the risks of cash with other types of interventions and cash is often held to a higher standard than other interventions.” 

"Shifting a tanker"

Despite persistent challenges, donors and agencies are clearly interested in cash in the West African context and others. The World Food Programme (WFP) is considering a cash distribution through NGO partners to 30,000 people in Burkina Faso, in the capital Ouagadougou and in Bobo-Dioulasso in the coming months, and is currently assessing the feasibility of distributing cash or cash vouchers in Liberia, Ghana and Senegal according to Ugo Gentilini, WFP policy analyst in Rome.

“The variety of contexts in which we work means we need to explore new tools,” Gentilini told IRIN, adding, “WFP receives half of its donations in cash rather than food, which gives us more flexibility in how we distribute our aid.”

Meanwhile the UK department for international development (DFID) funds cash programmes in Zambia, Kenya and Ethiopia and says Harvey, “there is a genuine commitment for DFID to get involved in cash on a wider scale.” And the EU humanitarian fund ECHO has recently completed a big review of cash distributions.

“Donors are changing quite quickly,” said Harvey. “Cash still remains quite new and if you look at how the debate has shifted over the past four years, it’s been quite rapid… remember, we’re shifting a tanker, not a yacht.”

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