02 March 2012

Food or Cash?

Is it better to give food or cash in anti-poverty programmes?

It is a very old question with no simple answer. The context is everything. Is the food appropriate to cultural and nutritional needs? Is the food delivered efficiently? Will the food undermine the local economy? If cash (or vouchers for a cash-based alternative), is there anything in the markets to buy and if there is will the injection of demand simply raise prices leading to the traders being the major beneficiaries? Will cash empower men and disempower women? Will cash lead to more conflict? Which is the more politically palatable from the donor perspective?

This issue most recently came up in an interesting exchange between Charles Kenny of CGD and Bill O'Keefe of Catholic Relief Services in Foreign Policy. O'Keefe responded to an article by Kenny entitled "Haiti Doesn't Need Your Old T Shirt" which makes the argument that cash is what is needed in many of humanitarian contexts. O'Keefe provided a defence of the US Food Aid system, saying that it has fed millions of people and that cash is not always better, especially when markets are not functioning, to which Kenny replied, yes it does good work, but it is expensive and inefficient, being tied to US agricultural and shipping suppliers.

A lot has been written about this cash vs food issue, but rarely comparing cash and food within the same programme.

Most recently from IFPRI we have a 2009 report by Akhter Ahmed (pdf) and others on Bangladesh in the context of a number of transfer programmes in Bangladesh. They explored four transfer programmes in Bangladesh, two of which provide participants with mixes of cash and food. For these two programmes they don't attempt to isolate the relative impacts of food and cash on outcomes, perhaps because it is too difficult to get a clean "identification" of the "treatment" (what is driving the receipt of cash vs food) or perhaps because it is too difficult to match time periods with receipt of each type of transfer. (Interestingly they asked participants what they would prefer and the poorer households preferred food.)

IFPRI is currently engaged with WFP in a 5 country study where cash vs food (and various combinations) will be randomly allocated to communities with a range of impacts being assessed.

It will be interesting to finally get a clean assessment of what cash and food are best for, at least in those contexts. The real issue will be how relevant are these internally valid impacts for other contexts--in other words, how strong is the external validity? For this they will need to conduct more qualitative studies to unlock the black box.


Connell Foley said...

Greetings from Concern Worlwide.

You state in your blog on food or cash:

“A lot has been written about this cash vs food issue, but rarely comparing cash and food within the same programme”.

Do you mean high level impact assessment evidence, that RCT level being used for the systematic reviews or are you referring to any level of evidence or comparisons.

A number of Concern reports and evaluations where this issue of cash versus food was at the core of the debate or programme. You may be aware of the FACT and DECT projects in Malawi which essentially involved monthly analyses of the market situation and adjusted the balance of food and cash being provided. We also ran a programme in Zimbabwe (ZECT) where we compared areas with a) cash only and b) a combination of food and cash. These were compared against areas where food aid was being delivered.

As usual with these comparisons, context is critical and judgements based on regular assessments of markets and other economic trends are required.

Lawrence Haddad said...

Hi Connell, thanks for these comments.

I do mean comparisons that hold pretty much everything constant except the cash/food component..the ZECT report (which I will read) looks closest to what I had in mind, certainly if it has baseline and follow up and a control group matched on observable characteristics or even better randomly assigned to control for unobservable characteristics as well..

you are spot on about context..that is why I think the IFPRI study will be interesting as it is looking at this issue in at least 5 different contexts...

thanks so much for the insightful comment

Unknown said...

I visited my dentist two weeks ago cause I just go through a full mouth dental implants and we've discussed about this food and drinking water as the main source of a person's nutritional needs, well, I do agree with the point presented here cause it seems like there's an unwanted feud between the cash's value over the food. Me and my dentist both think that food will always be the most valued necessity cause without it you cannot work and you can't spend the money at all.

Renault Clarke said...

Both are not sustainable in the long run as the parable goes: Teach a man to fish rather than giving a fish. I recommend investing today in opening uk bank account and sparing some credit to the WHO and UNICEF for their livelihood programs that empowers people to be productive in poverty.