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World Food Programme (WFP)

The effects, comparative advantages and limits of cash transfers in lieu of food transfers in districts worst hit by food insecurity in Malawi:

A Case Study for Nsanje and Chikwawa Districts

Blessings Mwale

World Food Programme (WFP)

February 2006

SARPN Regional Workshop on Cash Transfer Activities in southern Africa.
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Executive summary

This pilot programme has generated initial useful insights of effects of cash transfers and how they can enhance household food and nutrition security. The assessment key findings are summarized below:

  • Cash transfer disbursed just after harvest were seen by beneficiaries as more beneficial because it enables them buy sufficient food when prices are still low than during the lean period when food is scarce.

  • The impact of cash transfers on household food and nutrition security can also be enhanced if markets are well integrated. Where markets fail to function efficiently and effectively, food prices tend to rise to levels that make food unaffordable and if no mechanisms are put in place to protect the poor, direct food transfers would be a better option than cash transfers.

  • A key lesson also learnt from this pilot programme was that cash transfers have much greater effect on household nutrition and food security if combined with other productive assets such as irrigation. The cash transfer serves a dual purpose- meeting the immediate food needs whilst building on the long term food security needs.

  • In terms of who should get the cash in the household, it was observed women are less prone to divert cash for other non essential items than men. However, with proper training, and sensitization for both women and men, household decision in allocating cash for food expenditures can be improved.

  • Given that NGOs that collaborate with WFP have put low consideration of cash options in their normal programmes and that cash based programmes need different skill and mind-set, capacity building for NGOs' staff should be given highest consideration in designing cash based programmes. This was also recommended by the NGOs themselves.

  • The communities, the donor and government counterpart staffs were all satisfied with the programme. The beneficiaries asked for a second phase of the programme, specifically linking it to irrigation development and there is interest shown by the donor in expanding the initial pilot with WFP/JEFAP partnership.

  • It is the conclusion of this assessment that there is also an opportunity to combine cash transfers with food transfers in an emergency situation in a manner that it does not jeopardize the beneficiaries' food and nutrition security. Issues of seasonality of food production, market forces as well as inflation effects of the cash need to be taken into account.

  • Further exploration and testing of cash transfers in lieu of food transfers would give WFP a much more in-depth understanding of its effects on household food and nutrition security and how it can best be adapted in an environment that is fast changing.

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