Hows it being used What are the advantages Challenges Examples Do No Harm Food Aid Potential negative impact of food aid on local markets Food aid displaces commercial food sales ID: 754250
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Slide1
LRPSlide2
What is it?
Who is promoting LRP initiatives?
How’s it being used?
What are the advantages?
Challenges?
Examples?Slide3
Do No Harm – Food Aid
Potential negative impact of food
aid
on local markets
Food aid displaces commercial food sales
Food aid deliveries
increase supply faster than they increase demand, thus depressing the food prices received by producers and
traders
Low
prices translate into a disincentive for producers to invest in improved technologies or for marketing agents to bring in commercial supplies or invest in storage and transport
capacity
The
receipt of food aid may cause households to reduce their labor supply, discourage household investment in agricultural production and crowd out private transfers and community level safety nets. Slide4
Do No Harm – Cash/vouchers
Potential negative impact of cash/vouchers on local markets
If the increase in demand is not matched by increased supply, prices will increase, affecting both beneficiaries and non- beneficiaries
Reinforcing non-competitive market structuresSlide5
Main reasons for LRP
Reduce delivery costs, delays and market distortion.
Increase procurement flexibility while providing economic opportunities for small farmers/cooperatives.Slide6
Mechanisms for Implementation of Local Purchase
Tenders
Vouchers
Cash for Work
Vouchers for Work
Food for Work
Food Coupons
Others?Slide7
Cash transfers
– the provision of cash to food insecure beneficiaries who lack economic access to food stocks that are readily available in the local markets of the affected country. Key is functioning market system.
Food vouchers
- the provision of vouchers that are redeemable for food to food insecure beneficiaries who lack economic access to food stocks that are readily available in the local markets of the affected country. Slide8
History of Local/Region
Procurement
World Food Program
2008 Food Conservation and Energy Act or
Farm Bill
(Authorizing legislation for US food aid)
USDA LRP Pilot Program
GAO Study (2009)
USAID/EFSP ProgramSlide9
CRS Local/Regional
Purchases
2000-2008
20
Countries
Over
$9.8
million
Over
22,400 metric tons
Over
114
transactions
Donors:
CRS-HQ, USAID/PEPFAR, USAID/OFDA
USDA/FFE, Church of Jesus Christ of Latter Day Saints
Various CARITAS members, Government of UK (DFID)
Government of Ireland, Government of Germany
World Bank, MCC, Concern UniversalSlide10Slide11
Recent US Funded LRP
for CRS
8 Projects
- Guatemala, Nicaragua, Benin, Burkina Faso, Niger (2), Mali, Afghanistan
Total value of approximately
$18 millionSlide12
Trends, Current Status of C&V
Food for Peace
Overall budget: $1.2 billion
LRP, C&V: $300 million (25%)
ECHO
2007: 2% food assistance budget on C&V, 12% projects
2010: 20% food assistance budget on C&V, 42% projects
WFP
2009: $54 million in cash and voucher programs
2010: $123 million in cash and voucher programs
USDA
LRP Pilot: $60 million over 4 years
LRP and vouchers,
no cashSlide13
USDA LRP Pilot
4 Phases - Study, Guidelines, Projects, Evaluation
$60 Million over 4 years
3 Goals - Emergency, Development, Do No Harm
USDA LRP Development InterventionsSlide14
GAO Study – May 2009
GAO = Government Accountability Office (US)
Why GAO did the study
What GAO found
GAO RecommendationsSlide15
USAID Emergency Food
Security Program (EFSP)
FY 10/11 Congressional Budget Justification
Request for Emergency Food Security funding
Included LRP – food vouchers/cash transfers
- April 2010 – APS
- April 2011 – APS that requested a response with Title II resources, LRP (vouchers/cash) or a combination of bothSlide16
Comparing Cash and Vouchers
Benefits of Vouchers
Gives beneficiaries varying levels of choice, while still having some control over how the transfer is used.
Vouchers can be targeted within the household, so it can potentially give more decision-making power to females (Sustainability?)
Ability to learn more about consumer/beneficiary preferences and demand. This information can be used in future programming.Slide17
Comparing Cash and Vouchers
Disadvantages of vouchers vis-à-vis cash
Higher administrative costs for vouchers than cash
More decisions on programmatic design,
e.g. number of vouchers/distribution, voucher denominations, criteria for and number of participating vendors
Vouchers can be exclusionary, particularly with respect to small vendors that are difficult to include in voucher schemes. Do no harm principles.
Tradeoff between increased consumer benefit/vendor inclusion and administrative costs,Slide18
Delivery Mechanisms
Cash/paper voucher distributions
Microfinance Institutions/Banks
Barcodes
Smart cards
Mobile phonesSlide19
Opportunities of new methodologies
Provide more choice and dignity to the beneficiaries that we serve
Respond quicker and more efficiently
Support local market actors and local production
Integration of emergency food security responses with longer-term food security programming, e.g. increasing agricultural productivity, linking farmer groups to markets, improving food quality standards, support to small traders and businessesSlide20
Advantages of LRP
Timeliness
Cost
Management
Adaptability to local tastes and conditions
Empowerment of Beneficiaries
Priming Markets for Smallholder Farmers
Link from Producers to MarketsSlide21
Challenges with LRP
Better Understanding local/regional markets, Market analysis
Food Quality and Safety Issues (Do No Harm)
High Level of Monitoring required
Timeliness in following agency procedures
Unfamiliarity of sellers with agency buying procedures
Timeliness of delivery
Market distortion concerns
Local government regulations/taxes
Price fluctuations/budgeting
Limited supply base (food insecure areas)
Co-ordination with other agencies in the marketSlide22
Food Quality and Safety Testing
Testing of
Mycotoxins
- Lab or field test? Cost?
Conform to laws and standards in each country at minimum
Only 14 African countries have standards for
aflatoxins
Moisture meters/REVEAL tests for outlying areas
Capacity of National Laboratories
WFP’s Blue Box (P4P)Slide23
Group Exercise – Case Studies
Context – Why do we need a response?
Target beneficiary group(s)
Size of grant/procurement (MT)
Mechanism used for response
(cash, voucher, FFW, etc.)
Results/Sustainability
Other important elements to note?Slide24
Case Study 1 – CRS Guatemala
Response to drought and tropical storm Agatha
3,000 HH / 18,000 Individuals (EFSP)
Corn, Black Beans,
Incaparina
Semi-competitive bids accepted from farmer- based and commercial organizations
Agreement signed 9/20/2010
First distribution to beneficiaries in Santa Rosa on 10/25/2010Slide25
Case Study 2 – Burkina Faso
Response to food insecurity among school aged children in target zone (Development)
Students, Producers (Coops and CFGs), PTAs
One year pilot for $985,965 (USDA)
Vouchers, Tender
Cost and Time efficient, increased capacity of local producers, boost in local economy
VideoSlide26
Case Study 3 – CRS Niger
1
st
voucher program in Niger
(USAID EFSP)
Followed up by USDA LRP Emergency program
Total of 300,000 beneficiaries and $8 million
25% Female Head of Household
Vouchers for 6 commodities (added
gari
and sugar in second project) for approved vendors
Wholesalers and Retailers
Consumers not covered under voucher program may have paid more due to delays?Slide27
Cost Comparison – CRS MALI
Commodity
PRICE/Kg - $
MT
Cost
Locally
Procured
Millet
$0.41
35.14
$14,522
Rice
$0.82
2.5
$2,060
Cowpeas
$0.74
7.53
$5,593
TOTAL
$22,175
Imported from
US
Corn Meal
$1.88
35.14
$66,063
Rice
$2.26
2.50
$5,650
Split Peas
$2.67
7.53
$20,105
TOTAL
$91,818
Cost
Savings
$69,643
Percent Savings
76%Slide28
Cornell Component
Benefit of partnership between development organizations and universities
Lead role in developing
tools for data collection
and analysis
Increased evidence base
Better data to analyze impact/raise awareness of issues
Improved advocacy efforts for LRPSlide29
Focus of Cornell Analysis
Pilot tools for monitoring and collection of market price data that enable uniform data processing and analysis that will ensure high quality results reporting, review and analysis of overall results for all programs.
Price
Impact
Timeliness
Cost-Effectiveness
Recipient SatisfactionSlide30
Tools to Design Interventions
MIFIRA
– Market Information and Food Insecurity Response Analysis (Cornell)
EMMA
– Emergency Market Mapping Analysis
EFSA
– Emergency Food Security Assessments
LEGS
– Livestock Emergency Guidelines and Standards
SSSA
– Seed System Security AnalysisSlide31
LRP Leaning AllianceSlide32
LA Goal
To coordinate monitoring of price data to ensure that LRP programs do not negatively affect local and regional markets, and to coordinate data analysis among the various programs.Slide33
LRP LA Main Activities
Trainings (online and regional)
Database development
Database management
Data analysis
ReportingSlide34
LRP LA Meeting Nairobi
Closer Look at Global Indicator Framework
(monitoring, pre/post procurement, post distribution indicators)
Future activities
Advocacy Day in DC for partners/donors
Presentations to influence next Farm BillSlide35
LRP – Way Forward
What could be next steps for advancing this topic?
Examples:
LRP Programs have positive food security impacts for the duration of the program. But how can we improve the sustainability of these impacts?
S
trengthening the evidence base
New donor policy
Task force/Working GroupsSlide36
Recommended LRP Reading
GAO Study (May 2009)
CARE White Paper (2006)
WFP’s “Revolution: From Food Aid to Food Assistance”
2006 OECD Study “The Development Effectiveness of Food Aid: Does Tying Matter?”
Michigan State University – “Local and Regional Food Aid Procurement”