1. Food insecurity is growing especially in developing countries (1.2 billion in 2009). Default response is food aid

2. Greater acceptance of cash transfers as food insecurity response by donors and operational agencies (Hunger Safety Net Program in Kenya, Mexico’s Opportunidades, SA’s Old Age Pension Scheme and Post-tsunami response are examples)

3. Cash is fungible, flexible, efficient, supports local markets; but not always a good idea due to leakage and poor market access

4. We need ex ante response analysis to tailor response to target context: Market Information for Food Insecurity Response Analysis approach is a market based approach highlighting the markets role in dealing with food insecurity

5. When food crisis occurs in an area, this analysis informs optimal food insecurity response choices by answering two key questions; 1) Are the local markets functioning well?; 2) Is there sufficient food available nearby to fill the gap?

6. This study focused on first framework question: Are local markets functioning well? Conducted in Marsabit District, a pastoral setting in arid Northern Kenya with a long history of food aid. Marsabit is characterized by high poverty levels, chronic malnutrition and repeated droughts

The point of food insecurity response analysis:

If cash transfers: When? Where? Why?If local/regional purchases: When? Where? Why?If transoceanic food aid: When? Where? Why?

April2010

The good news is …

Cash transfers can work in such a remote pastoral area! This has implications on household behavior including the terms of trade between grains and livestock during food crises. Cash transfers encourage local market development integrating remote pastoral areas further into the national economy

And the not so good news is …

Poster based on the draft paper by Andrew Mude, Robert Ouma and Erin Lentz. This work was done with financial support and collaboration from ReSAKSS ECA.

The risk environment in pastoral areas necessitates food insecurity response. It is hypothesized that this food aid has caused dependency and encouraged settlement, thereby undermining pastoral livelihoods. By showing that cash can work, we hope we can encourage electronic transfer to nomadic households.

1. Despite its remote location, Marsabit District still has a good food market in which food insecure households have easy access

2. There are NO strong preferences against cash. Most households prefer cash or a mix of cash and food. Any preferences for foodare NOT driven by food market access fears

3. Excess trader capacity and reasonable responsiveness meets the most extreme scenarios of induced demand resulting from cash transfers

4. There is NO evidence of collusion or non competitive behavior among traders; capacity effects of new entrants not considered fully.