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WFP Evaluation Top 10 Lessons: Cash and Vouchers

WFP Evaluation Top 10 Lessons: Cash and Vouchers

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Published by Jeffrey Marzilli
WFP Evaluation's Top 10 lessons on cash and vouchers as instruments for food assistance programming.
WFP Evaluation's Top 10 lessons on cash and vouchers as instruments for food assistance programming.

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Published by: Jeffrey Marzilli on Apr 05, 2013
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Cash and Vouchers
Introduction
Most of WFP's resources these days are in cash. Over 90% of this goes to cover costs of food or foodtransport. Only about 2% is currently used for cash or voucher distribution, but the amount is expectedto rise. By the end of 2009 WFP had used cash transfers or vouchers in 20 pilot activities. The Top 10Lessons here are synthesized from 18 WFP evaluations since 2001 of WFP operations across the globethat included a cash and voucher component, as well as 2 assessments conducted by others that included WFP operations, and other internal sources. These lessons are provisional: the empirical base is limited
and WFP’s involvement in the cash and voucher
component was also often indirect.
Background
 WFP is primarily a cash organization, from a
resources perspective. The major part of WFP’s
resources these days (and since well over adecade) is in cash, rather than in the form of in-kind foodstuffs. Most of this cash is used to pay for food transport and logistics costs,international, regional and local foodprocurement and various operational support andoverhead costs. Very little (less than one percentof total WFP resources
1
) is currently used fordirect cash or cash voucher distributions to beneficiaries, although the amount may beexpected to rise in the future. According to the most recent data (March 2009), WFP has had or has a total of 24 past, current and
1
 
According to the Annual Performance Report for 2007,WFP resources for that year were US$2.7 billion. TheAnnual Performance Report for 2008 was not yet availableat the time of writing this paper.
planned cash transfer and cash voucher initiativesin 18 countries and most of these were or aremodest in size and short term, being typically of three months to a year in duration
2
. Of the 24initiatives, eight initiatives (in six countries) have been completed, four are ongoing, one is about tostart, four are at the design stage, two areundergoing a feasibility study and five are underconsideration. Countries with more than oneinitiative are: Bangladesh, Georgia, Malawi andNepal. Total beneficiaries listed against these 24operations are less than a million people, thoughnot all caseloads have been specified, many proposals being still at the feasibility orconsideration stage.
2
 
The exception is the Pakistan cash-based food voucherprogramme which has been running for some 14 years,from 1994 to date. The shortest was in Myanmar and wasabandoned after two weeks, at government request.
 
The 'Top 10 Lessons' series is intended to be of practical value, primarily to field staff, in planningand implementing WFP operations. Drawn from evaluations of past operations, they summariseways to tackle 10 key challenges that have been encountered by others before on a selected topic.They are not policy directives, but have been compiled within the current policy framework and arein line with WFP's mission and mandate.
 
Evaluation Top 10 Lessons
 - Cash and Vouchers, September 2009 
2
 
 Although the overlap between the 12 completed orongoing WFP cash initiatives in eight countriesand OEDE evaluations is limited to just twocountries (Malawi and Sri Lanka), OEDEevaluations have examined the cash issue in othercountries or regional operations where the optionhas been considered (e.g. Aceh/Indonesia) or where other partners are involved (e.g. Ethiopia).Eighteen OEDE evaluations undertaken in theperiod 2001 to 2009 have some mention of the
“cash” debate, though the coverage is sometimes
cursory and empirical findings are limited. This ispossibly because WFP was not usually directly involved in such initiatives and the cash issue wasnot usually a major focus of the evaluation
mission’s Terms of Reference
3
.
 A Technical Meeting on “Cash in emergencies andtransition” held in Addis Ababa, Ethiopia, in 2006
provides a useful insight into the debate, at thattime, on the issue. Seven WFP country casestudies were presented at the meeting, of whichfour (Georgia, Malawi, Pakistan and Sri Lanka)had direct WFP involvement and three(Bangladesh, Ethiopia and Zambia) had cashtransfers in which they were part of a broaderresponse in which WFP provided food.Following this meeting, a Cash and Food wasissued by WFP in 2007 and aPolicy paperthe
3
 
These 22 OEDE evaluations are listed at the end.
subsequent year. WFP is currently preparingoperational guidelines on cash transferprogramming
4
.
Current work on enhancing WFP’s capacity for
cash and voucher transfer programmes includessignificant resources to enhance the evidence baseto inform decision making processes regardingcash and vouchers. In addition, future OEDEevaluations will focus on cash interventions inoperations where these are a feature and a
strategic evaluation of WFP’s experience with
cash interventions may follow.Since its creation in the early 1960s, WFP has been involved with some cash operations in thefield, although these have been of a differentnature to the current approach. Past operationshave included direct or indirect monetization of imported foodstuffs to support nationaldevelopment objectives
5
or food entitlementprogrammes and programmes, where WFP hasprovided food aid to labourers, as a counterpartor supplement to their cash wage
 
44
 
ICRC-IFRC, Oxfam/GB and ACF have already producedcomprehensive guidelines on cash programming.
5
 
For example, the large “Operation Flood” 
programme inIndia in the 1970s and 1980s which funded national dairydevelopment through sales of reconstituted liquid milkproduced with imported dried skimmed milk and butteroil.
 
Lesson 1:
Food and cash interventions can complement each other in anational assistance programme.
 Experiences from the field:
The 2007evaluation of theEthiopia PRROnoted how WFPfood aid supported the larger Government of Ethiopia Productive Safety Net Programme(PSNP), where the major part (70%) of resources was in the form of cash from other donors(FullReport of the Thematic Review of Targeting in WFP Relief Operations)
6
. According to the report,
6
 
Although actual programming levels of cash in recentyears may have been lower than indicated by this figure of 70%. According to theWFP Cash and Food TransfersPrimer,as of late 2006 the cash-food split was around 50-
 Summary:
Cash and food aid resources can complement each other successfully and be mutuallyreinforcing. Criteria used to decide on whether cash or food is more appropriate and to find theoptimum balance must be responsive to geographic, livelihoods and seasonal factors as well asmarket conditions.
 
Evaluation Top 10 Lessons
 - Cash and Vouchers, September 2009 
3
 
all donors and government informants agreedthat the debate was no longer about cash or food, but rather about finding the optimum balance to best fit local livelihood and market realities andhow this might change seasonally and annually,according to the wide socio-economicenvironment. There was a need for a moresystematic decision making to inform such cash-food programming and a framework for decisionmaking based on objective analysis of empiricalevidence needed to be developed, with WFPinvolvement. The phased replacement of food aid by cash was expected to gradually improve marketelasticity and to impact on the duration of theinitial lag period on local markets (in whichsupply fails to adequately reflect demand). Moreresearch was needed, however, on this aspect, as well as on the role of WFP local purchases withinthe PSNP and on the differing effects of food andcash injections on market supply and prices,depending on size of distributions, time of yearand market linkages. An earlier (2001) evaluation of theEthiopiaCountry Programmehad put forward an
argument for continued “food for work”, based on
the fact that per capita domestic food productionin Ethiopia continued on a downward trend andthat the average family ran out of self-producedfood months before a new crop was available. It
also observed that when “cash for work” is
provided in ways that target only the poorest of the poor, daily wage rates have to be set below prevailing market wages, with the result beinginadequate income for enabling the purchase of sufficient food, as the food is usually transportedfrom food surplus areas, with high transportcosts. The 2004 evaluation of the AfghanistanPRROreported that the interim government anddonors had criticized the large volumes of relief food aid and expressed a preference for cash- based interventions. The evaluation missionrecommended that joint cash-food interventions be field tested, and that cash interventions would be appropriate among households in food surplus
50, with several
woredas
switching from cash to food andvice versa (section 3.4, page 15).
 
areas and on the fringes of major cities.TheSouthern Africa PRROevaluation of late2006 concluded that in most cases of acute andchronic food insecurity, food aid was a suitablemeasure, but that cash or a combination of cashand food could be more appropriate in somecircumstances, where internal food markets arefunctioning well. At that time of the evaluation anumber of cash interventions were being initiatedin the southern Africa region, but the results werenot yet known.TheMadagascar PRROevaluation of 2008 notedthat cash for work and food for work could beemployed in the country, in different zones,according to levels of remoteness and access, withfood aid being more appropriate in the remoteareas.
Other sources:
 According to the Addis AbebaTechnical Meeting reportof 2006, mentionedearlier, little was then understood about if andhow cash and food transfers might beproductively combined. Such a combination could be in the context of a particular initiative
i.e. blending in both space and time
or it mightoccur in phases within the context of long-termsocial protection strategies featuring sustainablesafety nets. There were strong theoreticalarguments and partial empirical evidencesupporting the notion that rather than beingcompetitive alternatives, food and cash might becomplementary and mutually reinforcinginstruments for addressing food and nutritioninsecurity. It observed that progress in resolvingcontroversial operational issues likely depended
on enhanced understanding of such “middleground” options.
According to theWFP Cash andFood Transfers Primer,cash transfers are moreappropriate (and to generate maximum benefit)right before and during harvests, conversely, foodtransfers are preferred during the period whenhousehold food grain stocks have been consumedor sold and grain must be purchased from themarket. This and other factors (some mentionedfurther in this paper, such as geographic location

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