New Modalities of International Food Assistance: A Review of the

EvidenceJoanna B. UptonErin C. Lentz

Christopher B. BarrettCornell University

Presentation at AAEA Annual MeetingsPittsburgh, PA

July 2011

Based on chapter in forthcoming volumeC. Barrett, A. Binder and J. Steets, eds.,

Uniting on Food Assistance: The Case for Transatlantic Cooperation(London: Routledge, 2011).

Expanding choices for food assistance: No longer just shipment of bulk food aid from a donor country.

Evolving donor policies: 1. Local and regional procurement (LRP):

LRP increased in value from 13% of all food aid in 1995 to 50% in 2009. WFP spent >$1.2 bn on LRP in 2010.

2. Increased use of cash and vouchers:

Address access and use, not just availability issues.

3. Recent expansion of USAID prepositioning program

New partners: Middle-income countries now providing food assistance.

Motivation

Backup table

New Food Assistance Modalities

New Modalities of Food Assistance: Form of Transfer PROVIDED and RECEIVED

RECIPIENTS RECEIVE:

Specific FOODS

sourced in donor countries

Specific FOODS sourced

locally or regionally

A variety of FOODS sourced locally

CASH

CASH LRP Vouchers Cash

Prepositioned Aid

Direct AidFOOD

DONOR PROVIDES:

Modality choices differ in implications for different sub-groups

Recipients: women, children, acutely malnourished…

Non-recipients: neighboring food-insecure populations, producers, traders…

Advantages and disadvantages depend on objectives and priorities…and program objectives are expanding.

Cost, timeliness, security, consumption, nutrition, asset protection/creation, recipient preferences, price and market impacts

Shortcomings in available evidence:Limited scope and scale of many new toolsAbsence of rigorous counterfactuals limits how

sure we are of apparent differences in performance.

Motivation

Key Food Assistance Program Objectives:

1) Cost Effectiveness

2) Timeliness

3) Security

4) Consumption and Nutrition

5) Assets and Welfare

6) Recipient Preferences

7) Price Impacts

Motivation

Key findings 2

1) CostBroadly, from most to least costly:

prepositioned>transoceanic>LRP> vouchers > cash

But, we need to take into account specific objectives

Prepositioning entails additional storage costsRelative costs of LRP depends on sourcing region;

but LRP can entail significant cost savingsEvidence from East Africa:

CFGB: regional procurement 65-87% of the cost of importing Canadian

grainsUSAID: local procurement 54-77% of the

cost of importing U.S. grainsConsider start-up costs of identifying buyers and

verifying local quality standardsCosts of voucher and cash distributions vary

Key findings 2

2) TimelinessKey comparisons (on average):

Transoceanic versus prepositioned: Eastern Africa: time savings of up to

75% Pakistan: 2-3 weeks for pre-positioned

food from Djibouti (≥ 3 months for U.S. food)

Transoceanic versus LRP: Varies by region, commodity, and

timing… US GAO: 10-country averages in sub-

Saharan Africa, 21 weeks for U.S food, 7-8

weeks for LRP CFGB: Kenya, Ethiopia, & Afghanistan, 11-19 weeks for Canadian food, 4-6 weeks for LRP

Prepositioned versus LRP? Unknown

Cash/vouchers versus prepositioned/LRP? Unknown

Key findings 2

3) Security

Two dimensions: 1) loss due to corruption2) risk of harm to recipients

Each modality has trade-offs for safety considerations

Visibility: is it a vice or a virtue…?

Evolving technologies can circumvent some security problems

Key findings 2

4) Consumption and Nutrition

Percentage of transfer consumed as food increases as one moves from cash to vouchers to food

But: Most cash (60-90%) is spent on food,

and

Food transfers are not necessarily consumed as food; sales to meet other needs are common

Cash recipients consume more diverse diets, but other modalities allow for targeting of specific nutritional objectives

Key findings 2

5) Assets and Welfare

Transfers can have asset effects:

Human capital effect on nutrition and health of recipients

Food aid in Ethiopia has been known to protect assets, by allowing recipients to avoid selling land and livestock

A portion of food assistance transfers is sometimes used to build assets

Key findings 2

6) Recipient Preferences

Recipients tend to prefer greater flexibility…but not always

The form of transfer may affect the balance of power within the household

Voucher and cash recipients may not be shielded from price increases

Key findings 2

7) Price Impacts (and implications for welfare, markets and agricultural production)

Deliveries of in-kind aid (whether from donor country or from a source market regionally or locally) represent a supply shock. Price effect ≤ 0.

LRP procurement or provision of cash or vouchers, represents a demand shock. Price effect ≥ 0.

Food assistance interventions can move local market prices, with varied production and welfare impacts.

The food price dilemma: There are always winners and

losers, so need to be very explicit about priority sub-population(s).

The importance of “Response Analysis”

Given multiple available modalities options and the lack of generalizable findings, choices must be considered on a case-by-case basis.

A combination (or sequence) of modality options is commonly preferable in any given setting.

There is as yet no generally accepted response analysis practice, but several frameworks have been developed (e.g., MIFIRA: Barrett et al., Food Security, 2009).

Motivation

CoordinationDonors have varying constraintsImplementing agencies varying capacities and experiencesLack of coordination runs — perhaps significant—risks:

Quite possible that different agencies are monetizing food and procuring food

simultaneously in the same marketing systemOpportunities for coordination at several levels:

Regional (e.g., C-SAFE, the Consortium for Southern African Food Security Emergency)

National (e.g., the Kenya Food Security Steering Group)

Sector (e.g., the USDA LRP Learning Alliance)

Motivation

Summary

There is not (and is not likely to be) a generalizable ordering for which modality choices work best for providing food assistance to food insecure peoples.

The right response depends on context and specific program objectives

Systematic Response Analysis is needed to ensure that expanded toolkit leads to improved performance.

Improved coordination is likewise essential so that agencies aren’t working at cross-purposes to one another.

Motivation

Thank you for your time and interest

Special thanks to Cheryl Christensen of USDA-ERSfor organizing this session and

kindly presenting on our behalf!

Motivation