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

insecure access to food and poor nutrition outcomes

• Food price volatility affects the poor as consumers (for this group food is large part of the budget)

• They are likely to have spells of food insecurity or sacrifice proper nutrition

• Consequences of interrupting adequate access to nutrition are irreversible for mother and young children (first 1000 days of life)

4

Globally more than 1 out of every 3 child deaths (<5) are associated with undernutrition

Malnutrition reduces school performance:

Well nourished children stay in school

1.2 years longer

Well nourished children have 17%

better reading comprehension

Low birth weight children 2.6 times less

likely to attain higher education

Malnutrition reduces productivity:

Well nourished children had wages in

adulthood 34-47% higher and incomes

14-28% higher than malnourished

Anemia (low iron) = 5-17% lower adult

productivity

Overall, an estimated 10% of individual

lifetime earnings and 2-3 % GDP lost

to malnutrition

Individual

Food

Security

Household

income Gender

and intra-

household

Water/Sanitation

and Hygiene

Child caring

practices

National

Food

Security

Nutrition

outcomes

Access to

health services

Income

Security

National (and global) food

security does not guarantee it

for all

Demand

Supply

Market Volatility

Food prices

5 Every forth child is stunting (165 mln children under 5 yo)

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:

1. Improving income (cash

transfer , conditional on

unconditional) leads to

greater affordability of proper

nutrition …and SSN facilitates household investments

in agricultural productivity;) rehabilitates

degraded natural environments and results in

more effective extension services, and

availability of inputs promoting productivity

2. Promoting access and

delivery of health services:

micronutrient supplements,

nutritional counseling, health

and hygiene education.

3. Targeting nutritionally

vulnerable populations, e.g.,

pregnant women and young

children.

Improvednutritional status

Improved diet Less infectious diseases

Better care Improved health services

Possible Components of SP programs

Cash/In-kindTransfer

Nutritional counseling

Health education

Health services

MicronutrientSupplements

Better access to food

Targ

eti

ng

win

do

wo

f o

pp

ort

un

ity

12

3

123

Transfers

Links with health

Targeting the vulnerable

Social safety nets are non-contributory transfers

designed to provide regular and predictable

support to targeted poor and vulnerable people.

Promotion Protection

Helping households

manage risk

Protecting against

destitution, mitigating

poverty

Building human

capital, assets of the

poor

Public Works Cash Transfers In-kind Transfers Access to

Services

A Framework for Nutrition

Sensitive Social Safety Nets

Prevention

• Targeting Provide regular transfer to the poor households and vulnerable members.

Nutrition Sensitive Safety Nets

• 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.

* Counts CTs with clear start dates only; green countries have had or currently have a CT

2000 2012 9 countries,

25 programs* 41 countries,

245 programs

There has been a surge in activity in launching

safety nets, even where they were missing

2010 35 countries

123 programs

9

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Percent population below national poverty line, %

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Brazil

Uruguay

Dominican Rep.

Madagascar Burundi

Haiti

St. Lucia

Swaziland

At country level huge spread in coverage of

safety nets

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AFR EAP ECA LAC MENA SA

Averag

e

1.6%

% of GDP

Sub-Saharan

Africa East Asia &

Pacific

Eastern Europe &

Central Asia

Latin America &

Caribbean Middle-East &

North Africa

South

Asia Latin America &

Caribbean

Spread is reflecting spending (SSN to GDP),

but globally comparable to poverty gap

Are Safety Nets Up to the Challenge of Protecting the

Poor against Food Price Shocks?

…but glass ‘one-third full’

870

299

479

93

345

674

99 79

74

315

278

173

Non-extreme poor covered

Extreme poor covered

Extreme poor not covered

Total Low income

countries

Lower-middle

income

countries

Upper-middle

income

countries

1.2 Billion extreme

poor people (living

on less than

$1.25/day)*

1 Billion

people

covered by

social safety

nets

*note: based on 2005 PPP; new World Bank poverty estimates based on 2011

PPP under elaboration

Challenge of targeting and adequacy

15

Figure 4: Percent of Poorest Quintile Covered by Safety Nets, by Income and Region

0%

10%

20%

30%

40%

50%

60%

LIC LMIC UMIC HIC

0%

20%

40%

60%

AFR SA MENA EAP ECA LAC

Source: State of Safety nets, 2014; www.worldbank.org/aspire

• Scale of impact of food price

shocks on households is below

typical SSN transfer generosity

(10-20% of consumption for

recipients) • =>Cash transfer will improve welfare of the

poor and the distribution

• =>Cash transfer can compensate the poor

for the loss of purchasing power, and

stabilize their demand for food

• The size of transfers in the

developing world is small

enough not to worry about

perverse effects

• Social protection is needed

anyway to protect from future

shocks

9/16/2014 16

Adequacy of transfers: big variation

0

5

10

15

20

25

30

35

AFR SAR MNA EAP ECA LAC

Social protection transfers as % of Household income

Source: ASPIRE;

www.worldbank.org/aspire

Safety nets

• Need to be adequately targeted

• Efficient, low cost, not creating perverse incentives

• Well governed and well administered

Five main questions for the effective crisis response

1) in what form provide the assistance (cash, in kind, subsidy) ?

2) whom to target? Chronic poor/transient poor

3) what is adequate level of support? Is the objective stabilize or graduate

from poverty?

4) for how long it has to be provided and how it will change over time?

5) how it has to be linked to other programs and policies?

9/16/2014 17

Key design issues

Mexico’s Oportunidades: pace of expansion

Year Beneficiaries (families) Budget

2002 300,000

2003 1,500,000

2004 2,306,600

2005 2,476,000

2006 3,116,000

2007 4,240,000

2008 4,300,000

2009 5,000,000

2010 6,500,000 US $5.4 billion

$5.4 bln. may seem a lot, but this is 0.4% of Mexico’s GDP Source: SEDESOL, Mexico 2011

18

Innovations in social safety nets design:

common platforms, better information

management, ID systems etc.

Key role of a National Social Protection Policy and

Strategy to define the fiscal and institutional

context

Improve targeting:

identification (biometrics), combination of methods

Single Registry of

Beneficiaries

and MIS

Electronic payments to

deliver benefits

New accountability

processes (feedback,

grievances), M&E

19

3 7 8

14 17

19

26

42

55

67

0

10

20

30

40

50

60

70

80

1997-2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Planned

20%

Not

reported

30%

Available

50%

More countries have social safety net

strategies and greater attention to policy

coherence…

Systems building agenda

Public works A

Public works Cash transfers

Health

insurance

An explosion of common social registries

23 countries + 10 planned

Contribute to connecting program objectives and functions

Colombia,

Philippines,

Ghana

Turkey Labor policy

Public works B

N. of impact evaluations Distribution by region

2010-2013 1999-2010 2010-2013 1999-2010

Africa 35 26 42% 17%

Latin America and the

Caribbean 30 96 36% 63%

East Asia and the Pacific 5 12 6% 8%

Middle East and Northern Africa 6 0 7% 0%

South Asia 7 13 8% 8%

Eastern Europe and Central

Asia 1 6 1% 4%

Total 84 153

A growing and tailored evidence base….

23 23

Concluding Comments

Social safety nets can provide effective response during the crisis. They are also needed during “normal times” and improve nutrition outcomes by (i) providing income security to the poor, (ii) promoting growth, (iii) influencing behavior through nutrition sensitive social

protection, (iv) assisting in delivery of nutrition specific health sector

interventions Relatively minor changes in the focus of SP programs can increase the potential to serve this function of improved food security and nutrition System-wide efforts are needed to achieve greater results with higher efficiency

Annex

9/16/2014 24

Examples of Nutrition-sensitive Safety Nets

1. Conditional cash transfers (40 countries, over 150 mln. beneficiaires),

some of them with nutrition component and even nutrition-specific

interventions integrated into the program (Mexico’s CCT model)

2. School feeding: 270 mln beneficiaries in 78 countries

3. Other feeding / in kind food transfer programs (including food

vouchers) – almost universal across developing countries, but with

widely differing coverage

4. Public works : programs in 50 countries, but only recently started to

include nutrition

5. Disaster response programs

25

26 26

Examples: Conditional transfers may

increase the resilience to food price shocks

Global Experience on CCTs for children shows:

Increased use of clinics for preventive health care of children

Significant effects on growth monitoring

Colombia: 23-33 % points

Honduras: 20 % points

Mixed results on immunization rates

No effects in Mexico

Turkey: 14 % points

Indonesia: 11%

27 27

A few conditional transfers have prioritized

pregnant women

Global Experience on CCTs for women shows:

Increased number of prenatal visits in Indonesia

Mexico’s CCT program raised birthweights and markedly reduced the share of low weight babies. Use of services did not increase but the quality did, likely due to community awareness of what they could expect.

Payments for clinic deliveries in India helped reduce infant mortality