Food aid or cash transfers?

Though Malawi has, since 2006, been achieving food sufficiency at national level, some households still remain food insecure.

For instance, almost two million people in 2012 were identified by the Malawi Vulnerability Assessment Committee (Mvac) as missing their food entitlements.

Last year’s Mvac report indicated that 1.9 million people in 24 districts of the country were food insecure.

In fact, Mvac reports covering the period between 2005 and 2012 indicate that an average of 30 percent of the population were food insecure.

And Jonasi Kimu from Ngabu in Nsanje is one of the1.9 million people that were food insecure in 2012.

“We experienced a dry spell in our area. All the crops that we grew wilted. We were left with nothing,” he says.

Apart from dry spells, reports also indicate that production in food insecure districts is mostly affected by rain patterns—delayed onset, early cessation or erratic. It may also be caused by prolonged dry spells and flooding.

To survive, Kimu and others like him require humanitarian relief. Over the years, government—through the Department of Disaster Management Affairs (Dodma)—has relied on distributing maize and other food items to hunger victims. The package would usually include: 50kg of maize, 5kg of soya blend, two litres of oil and 10kg of pulses.

However, over the years there has been a global shift in managing humanitarian relief. For instance, in January 2013, countries made a commitment that apart from food aid; they could also assist victims through cash and vouchers. This policy shift accepts cash as an important tool for humanitarian response. In fact, according to the Overseas Development Aid (ODA) reports of 2008, development aid funding to cash transfer programmes has increased from $23 million in 2007 to $150 million in 2010, while humanitarian aid spent on cash transfer programmes has increased from $1.8 million in 2007 to $52 million in 2010.

The philosophy of cash transfers emanates from research which shows that ‘food insecurity is often associated with food availability and entitlement failures’.

Indian economist Amartya Sen, in his ground breaking study of food insecurity in Ethiopia, found that although food was available in some of the markets in the areas, access to it was a challenge. Access, he noted, was usually hampered by factors such as lack of money, high food prices, distance to the nearest market, illnesses and old age. That is why cash transfers were seen as a way of improving access to the available food.

Malawi piloted the use of cash transfer as a response to food insecurity between 2005 and 2008. The first national response that used cash to respond to food insecurity at a large-scale was carried out in 2012/2013, and then in 2013/2014.

According to a government report, 1 843 298 people received food aid while 146 244 received unconditional cash transfers during the 2012/2013 response. The report also noted that in the 2013/2014 response, 1 614 744 received food aid and 235 526 received cash transfers. The worth of the cash transfers are dependent on the market value. The cash is disbursed through various means such as bank accounts and Airtel money.

So, should cash transfers replace food aid?

Beneficiaries hold different views. For instance, Kimu prefers food aid to cash transfers.

“Money is tempting. One may end up spending it on other needs and for poor people, that means they will continue to be hungry . I think it is better to give out food items,” he says.

On the other hand, Margaret Chikuni from Chikowi in Zomba argues that having cash in areas where food is available is better than food aid.

“It allows us to have a choice over the type of food we want to eat. Again, there is little corruption during disbursement. You know what you are supposed to get and you get it,” says Chikuni.

She says it also helps people who have products to find a ready market.

Last month, Dodma released a study which shows that there is ‘no straightforward answer regarding the question whether to use cash or food aid as a response tool to food insecurity’.

Conducted by Stern Kita, the study supports the argument that in areas where markets are functioning and there is adequate infrastructure and partners to support cash-based response, cash transfers would work better than food aid and should be prioritised.

“Apart from the traditional advantages of cash transfers over food aid, there are two peculiar issues to the Malawi case: the first is the availability of food in strategic grain reserves when needed and the second issue relates to logistical challenges in transferring food to the affected communities during rainy season when most roads are impassable.

“Both issues were major challenges that affected provision food aid during both the 2012/2013 and 2013/2014 response programmes. Use of cash transfers during sudden onset disasters such as floods might not be very effective, unless the response is long-term and markets have normalised,” Kita notes.

He, however, notes that Malawi has also shown that it takes time for the system to start working effectively, especially in areas where it is just being introduced.

He also observes that the Malawi case—where funds are disbursed using technology—is unique in that those targeted are people with low literacy levels, mostly the elderly and the chronically ill.

“Such a target group takes time to adapt to technology and new ways of doing things. Appropriate systems should be built as well as capacity of the targeted vulnerable groups to use the technology,” he says in the report.

As a way of promoting long-term recovery and resilience, the study recommends the use of conditional cash transfers in recovery and risk reduction programmes, such as cash for work.

“The Public Works Programme (PWP) could be considered as a learning point where conditional cash transfers have been used over time for community-based development projects,” he says.