Conference on Food Price Volatility, Food Security and Trade Policy Social Safety Nets Ruslan Yemtsov Ugo Gentilini Social protection and labor practice September 18, 2014
Outline 1. Defining Food security Food price shocks and their impact on nutrition Safety nets and their impacts 2. Why and how food security and nutrition are important? 3. How social protection, social safety nets and nutrition are linked? 4. Inventory of social safety nets. What are the most promising policies and programs in social protection to achieve better nutrition and improve resilience to food price shocks? 5. Concluding remarks 2
Food Security Definition: “all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs, and food preferences for an active and healthy life” This international definition has four dimensions: • Food availability • Access to food • Stable access to food • Safe use of food Vulnerability to Food Insecurity (WFP’s VAM approach): • Risk exposure (e.g. natural disaster) • Capacity to address food insecurity (e.g., incomes, access to basic services) • Current situation as part of a historical trend (e.g. past malnutrition and poverty) 3
Why global food crisis was so worrysome? • Poor already have Globally more than 1 out of every 3 child insecure access to food deaths (<5) are associated with and poor nutrition undernutrition outcomes Malnutrition reduces school performance: • Food price volatility Well nourished children stay in school affects the poor as 1.2 years longer consumers (for this group Well nourished children have 17% food is large part of the better reading comprehension budget) Low birth weight children 2.6 times less • They are likely to have likely to attain higher education spells of food insecurity or sacrifice proper Malnutrition reduces productivity: nutrition Well nourished children had wages in • Consequences of adulthood 34-47% higher and incomes interrupting adequate 14-28% higher than malnourished access to nutrition are Anemia (low iron) = 5-17% lower adult irreversible for mother productivity and young children (first Overall, an estimated 10% of individual 1000 days of life) lifetime earnings and 2-3 % GDP lost to malnutrition 4
National (and global) food security does not guarantee it for all Demand Water/Sanitation and Hygiene National Individual Nutrition Supply Food Food Child caring outcomes Security Security practices Access to health services Market Volatility Food prices Income Household Gender Security income and intra- household Every forth child is stunting (165 mln children under 5 yo) 5 More than 2 billion people worldwide suffer from micronutrient deficiencies (iron, zinc, vitamin A)
The three main pathways through which social safety nets can impact nutrition are: Social safety nets are non-contributory transfers 1. Improving income (cash designed to provide regular and predictable transfer , conditional on support to targeted poor and vulnerable people. unconditional) leads to 1 Transfers greater affordability of proper 2 Links with health 3 nutrition Targeting the vulnerable Improved …and SSN facilitates household investments 3 nutritional status in agricultural productivity;) rehabilitates degraded natural environments and results in more effective extension services, and Targeting window of opportunity availability of inputs promoting productivity Improved diet Less infectious diseases 2. Promoting access and delivery of health services: micronutrient supplements, Better access to food Better care Improved health services nutritional counseling, health and hygiene education. 3. Targeting nutritionally vulnerable populations, e.g., pregnant women and young Cash/In-kind Micronutrient Nutritional Health Health Transfer Supplements counseling education services children. 1 2 Possible Components of SP programs
A Framework for Nutrition Sensitive Social Safety Nets Prevention Protection Promotion Protecting against Building human Helping households destitution, mitigating capital, assets of the manage risk poverty poor Access to Public Works Cash Transfers In-kind Transfers Services Nutrition Sensitive Safety Nets • Targeting Provide regular transfer to the poor households and vulnerable members. • Coordinated with health programs, micronutrient supplements, counseling, hygiene • Examples Include: Conditional cash transfers, Public works, School Feeding, Disaster response
Why safety net is the first best response to food price shocks? SSNs • Targeted to those most in need, who tend to use it on essentials (food consumption) • Essentially pure income transfers, do not create distortions of markets (unlike price/food market interventions/subsidies no substitution effects by lowering prices to everyone, including the well-off) • Multiple design options (conditional, unconditional, PWs) • Flexibility • Performance/evaluation track record Food versus cash: new wave of robust IEs (new SPL paper) • Similar average impacts on a range of food security measures • Cash at least twice more efficient than in-kind food. • Better cost-effectiveness methods are a key priority Hence the choice has to be informed based on cost-benefit analysis and multiple co-existing channels need to be coordinated: 1. Improving income: which form of transfer does it with minimum cost, does not create perverse incentives and enhances productivity? 2. Which form is promoting access and delivery of health services/ change behavior or control over resources within a household? 3. Targeting nutritionally vulnerable populations, e.g., pregnant women and young children.
There has been a surge in activity in launching safety nets, even where they were missing 2000 2010 2012 9 countries, 35 countries 41 countries, 25 programs* 123 programs 245 programs 9 * Counts CTs with clear start dates only; green countries have had or currently have a CT
At country level huge spread in coverage of safety nets 70 St. Lucia Percent population covered by flagship SSNs, % Dominican Rep. 60 Ecuador Brazil 50 40 Swaziland 30 Haiti Uruguay 20 10 Madagascar Burundi 0 0 10 20 30 40 50 60 70 80 Percent population below national poverty line, %
0 1 2 3 4 5 6 7 Spread is reflecting spending (SSN to GDP), BENIN % of GDP e Averag ZAMBIA 1.6 GHANA CAMEROON % but globally comparable to poverty gap TANZANIA NIGER MALI TOGO KENYA Sub-Saharan BURKINA FASO GAMBIA, THE Africa RWANDA AFR MADAGASCAR MAURITANIA LIBERIA MOZAMBIQUE SWAZILAND ERITREA NAMIBIA BOTSWANA SEYCHELLES SOUTH AFRICA SIERRA LEONE MAURITIUS LESOTHO PAPUA NEW GUINEA SOLOMON ISLANDS VANUATU MALAYSIA LAO, PDR PHILIPPINES East Asia & VIETNAM SAMOA Pacific EAP CHINA CAMBODIA THAILAND INDONESIA FIJI MARSHALL ISLANDS PALAU MONGOLIA KIRIBATI TIMOR-LESTE TAJIKISTAN LATVIA AZERBAIJAN KAZAKHSTAN BULGARIA MACEDONIA, FYR BELARUS TURKEY Eastern Europe & ARMENIA MONTENEGRO Central Asia KOSOVO ALBANIA POLAND ECA SERBIA LITHUANIA SLOVAKIA MOLDOVA UKRAINE ESTONIA SLOVENIA RUSSIA BOSNIA & HERZ. ROMANIA KYRGYZ REP. HUNGARY CROATIA GEORGIA PERU HONDURAS MEXICO COLOMBIA Latin America & Latin America & EL SALVADOR URUGUAY Caribbean Caribbean ST. LUCIA ST. KITTS AND NEV. LAC ECUADOR JAMAICA ARGENTINA CHILE ST. VINCENT BRAZIL PANAMA BELIZE NICARAGUA EGYPT Middle-East & TUNISIA North Africa WEST BANK & GAZA KUWAIT MOROCCO MENA SAUDI ARABIA LEBANON SYRIA JORDAN IRAQ YEMEN, REP. BAHRAIN AFGHANISTAN INDIA South BANGLADESH Asia BHUTAN SA PAKISTAN NEPAL MALDIVES SRI LANKA
Are Safety Nets Up to the Challenge of Protecting the Poor against Food Price Shocks? …but glass ‘one - third full’ Non-extreme poor covered Extreme poor covered 1 Billion Extreme poor not covered 674 people covered by social safety nets 345 1.2 Billion extreme 315 poor people (living on less than 173 $1.25/day)* 870 79 99 278 479 299 74 93 Lower-middle Upper-middle Low income Total income income countries countries countries *note: based on 2005 PPP; new World Bank poverty estimates based on 2011 PPP under elaboration
Challenge of targeting and adequacy Figure 4: Percent of Poorest Quintile Covered by Safety Nets, by Income and Region 60% 60% 50% 40% 40% 30% 20% 20% 10% 0% 0% AFR SA MENA EAP ECA LAC LIC LMIC UMIC HIC 15 Source: State of Safety nets, 2014; www.worldbank.org/aspire
Adequacy of transfers: big variation Social protection transfers as % of Household income 35 • Scale of impact of food price 30 shocks on households is below 25 typical SSN transfer generosity 20 (10-20% of consumption for 15 recipients) 10 • =>Cash transfer will improve welfare of the poor and the distribution 5 • =>Cash transfer can compensate the poor 0 for the loss of purchasing power, and AFR SAR MNA EAP ECA LAC stabilize their demand for food Source: ASPIRE; • The size of transfers in the www.worldbank.org/aspire developing world is small enough not to worry about perverse effects • Social protection is needed anyway to protect from future shocks 16 9/16/2014
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