economic aspects and vouchers sarah levy calibre consultants
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Economic aspects and vouchers
Sarah Levy
Calibre Consultants
This presentation…
Poverty of beneficiaries
Food security of beneficiaries
Level of the benefit
Expenditure patterns of cash and voucher recipients
Problems with vouchers
Beneficiary poverty profiles were worse at final impact than at baseline
0 10 20 30 40 50 60 70 80
1
2
3
4
5
Po
vert
y ca
teg
ori
es
% of beneficiary households
Final Impact
Baseline
Food security of beneficiaries did not increase as a result of the project
0 10 20 30 40 50 60 70 80
Food secure
Food insecure
Extremely foodinsecure
% of households in poverty categories 1 & 2
Non-beneficiaries
Beneficiaries
Why did poverty worsen and food security not improve?
Benefit was too low at MK550/month owing to big increase in food prices
Benefit only lasted 1-2 weeks• MK550 would have bought 93 kg of maize in
March 2001 but only 19 kg in March 2002
There were 6-week gaps between deliveries in January-March 2002
Price of maize at Chimbiya
0
10
20
30
40
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2001 2002
MK
Expenditure patterns of cash and voucher recipients and problems with vouchers
Maize, maize milling (cash) maize flour (vouchers)SoapSugarSalt ( in hungry period)Vegetables (but not in hungry period)FishParaffin & matchesContributing to funerals ( in hungry period)Giving to church/mosque ( in hungry period)Chitenjes (post-harvest only)Blankets (post-harvest only)
Main items bought by cash & voucher beneficiaries
Vouchers (1) Distortions in purchasing patterns because:
Availability restricted in some retailers Maize flour only after December 2001 No sugar at Alinafe in February Limited choice of soap
Retailers tried to decide what and when beneficiaries bought (Muderanji)
Price differentials and/or poor quality In February, Alinafe was selling only special
cream of maize flour at MK46-MK48 per kg Chitenjes higher price; blankets worse quality
Expenditure on maize & maize flour
0
20000
40000
60000
80000
100000
120000
140000
1: 25Sep
2: 02Nov
3: 03Dec
4: 19Dec
5: 04Feb
6: 16Mar
7: 08Apr
8: 06May
9: 28Jun
10: 06Aug
Distribution (no. and date)
Tot
al e
xpen
ditu
re (
MK
)
Maize flour
Maize
Expenditure on sugar and soap
0
5000
10000
15000
20000
25000
30000
35000
1: 25Sep
2: 02Nov
3: 03Dec
4: 19Dec
5: 04Feb
6: 16Mar
7: 08Apr
8: 06May
9: 28Jun
10: 06Aug
Distribution (no. and date)
Tot
al e
xpen
ditu
re (
MK
)
Sugar
Bathing soap
Washing soap
Choosing for beneficiaries - Muderanji
133123124N =
Distribution (no. and date)
4: 19 Dec3: 03 Dec2: 02 Nov1: 25 Sep
Re
ceip
t va
lue
551
550
549
548
547
546
545
544
543
11491079
1000
1001
Vouchers (2)
Market/price distortions could be reduced by competition (Chimbiya, Veke)
But voucher scheme tends to give retailers a monopoly due to lack of retailer capacity in rural areas & unforeseen withdrawals
Two-tier retail structure
? rent-seeking by potential ‘insiders’
Conclusion
Level of benefit needs to be flexible Cash is preferable to vouchers because
it gives beneficiaries the chance to maximise their benefits
Vouchers tend to give monopoly power to retailers and lead to uneven development of retail sector
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