The Hindu : Opinion / News Analysis : Giving cash to fight hunger in Africa

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Thursday, Nov 17, 2005

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Giving cash to fight hunger in Africa

John Vidal

OVER THE next few months, more than 10 million hungry people in six southern African countries will need Western help to stay alive after their crops failed disastrously earlier this year. A massive humanitarian effort is getting under way, led by the United Nations World Food Programme (WFP). Ships full of American and Canadian grain will soon be crossing the Atlantic, lorries of maize will thunder up from South Africa to Malawi and Zimbabwe, and desperate people will be queueing everywhere for handouts of maize, wheat and beans.

But in southern Zambia, one of the worst hit of the regions most affected by this year's unreliable rains, some families will not get food. A pilot project funded by the Department for International Development and run by Oxfam has just begun to hand out to households the equivalent of about $20 in cash a month — roughly the price of a 50kg bag of maize and some beans. With this they will be able to buy the food that they want from local traders, or use it to stimulate their economies. As the food crisis grows, Oxfam expects people will be given more money and the programme will be expanded to about 86,000 people by the end of March. It is expected to be one of the biggest "cash transfers" ever tried in a humanitarian crisis.

The world's largest food-exporting nations such as the U.S. and Canada, the WFP, and many non-governmental groups will be watching closely to see how well the Zambian experiment works. The idea of giving money rather than food or other commodities is still politically and socially controversial. Give people cash, say the sceptics, and you risk increasing insecurity and corruption, upsetting local economies, fuelling conflicts and excluding the most needy. Because of these and other fears, the overwhelming form of help by the West in Third World emergencies for the past 30 years has been "in kind" help with commodities.

Inherent dangers

The WFP, which traditionally delivers food aid, says it is not convinced by the cash arguments. "We're not against the transfer of cash per se, but there are inherent dangers," says Neil Gallagher, WFP communications director in Rome. "If donor agencies have a hard time controlling cash given to governments, how can they be confident they will get it to poor people? Why we like food `in kind' is that we can target the isolated and the vulnerable, especially the women."

But Oxfam, based on its own experiences and those of others handing out cash to Ethiopian, Somalian, and tsunami-hit people, is pretty confident that the money will get to the right people. "We have worked out who are the poorest and most vulnerable and we are assuming that most people, if they're hungry, will spend money on food," says Ric Goodman, Oxfam country director in Zambia. "Giving cash gives people the flexibility to pay for other things, such as tea and oil, or they can keep their children in school, and retain their access to credit. They have a whole range of options."

Potentially, Mr. Goodman says, it is a lot cheaper. WFP food deliveries cost about $7 a unit a month. Oxfam reckons it can get the price down to about $4, but will be watching very closely to see if food prices rise as a result of cash injections.

A growing body of evidence suggests that most of the sceptics' fears are myths, and that people given cash or vouchers overwhelmingly spend it on basic essentials, says Paul Harvey, a research analyst at the Overseas Development Institute in London. He says there is a growing move to give money rather than food and that it has the potential to help development as well as relieve suffering. He says: "Cash approaches remain largely under-utilised in the humanitarian sector, which still largely provides people with food, seeds, plastic sheeting and water containers, rather than giving them the money to buy these items themselves."

Mr. Harvey, who underlines that cash transfers work only if there is food to be bought in the region and the market can respond, says that almost a third of the money spent on getting food to the needy goes on transport, and that there are many vested and cultural interests in keeping food aid. Besides, he says, many people receiving food handouts sell it on to the open market at a price less than it cost to get it to them. "Many governments tie emergency aid to their own goods," he says.

"Organisations such as the U.N. can be institutionally incapable of delivering cash, and people find cash threatening. It implies a loss of control and power. Cash provokes this visceral response. People say it might create dependency."

— © Guardian Newspapers Limited 2004

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