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The recent debate around school meals in the UK sparked the re-emergence of the " #cash vs #inkind food" dilemma.
Here are some reflections based on global evidence. Hint: cash is better; but there is more nuance than often assumed.
7-point thread
Here are some reflections based on global evidence. Hint: cash is better; but there is more nuance than often assumed.
7-point thread
1. Choose what to buy or what to receive?
Cash is king: it empowers people by providing choice.
But people my prefer food in cases of high inflation or where existing inkind programs work well. Mistrust + risk aversion may lead to refuse theoretically-superior alternatives.
Cash is king: it empowers people by providing choice.
But people my prefer food in cases of high inflation or where existing inkind programs work well. Mistrust + risk aversion may lead to refuse theoretically-superior alternatives.
2. The impact of cash and inkind food on *food security* is on average similar. Much depends on initial conditions (marginal propensity to consume) & design (diversity of food basket).
But it's not just about food: there are challenges that inkind can *not* meet, eg paying rents
But it's not just about food: there are challenges that inkind can *not* meet, eg paying rents
3. Cost-efficiency is generally in favor of cash.
In some (rare) cases, economies of scale in large bulk food procurement can offset its logistics costs. Such gains are difficult to attain when dealing with a large number of smaller-scale retailers, which is the case for cash.
In some (rare) cases, economies of scale in large bulk food procurement can offset its logistics costs. Such gains are difficult to attain when dealing with a large number of smaller-scale retailers, which is the case for cash.
4. National food subsidies pursue 3 goals: a) farmer support (floor price); b) price stabilization (reserves); c) income support
Debate on "cash vs food" only relates to (c), while (a) & (b) entail many actors + political economy
Need for systemic approach, not ignore (a) & (b)
Debate on "cash vs food" only relates to (c), while (a) & (b) entail many actors + political economy
Need for systemic approach, not ignore (a) & (b)
5. Cash sparks economic multipliers!
Food (via procurement) can too... but effects occur in upstream food systems, hence benefiting larger actors.
Cash has more localized effects & benefit communities more directly.
Local food procurement & vouchers are somewhere in between.
Food (via procurement) can too... but effects occur in upstream food systems, hence benefiting larger actors.
Cash has more localized effects & benefit communities more directly.
Local food procurement & vouchers are somewhere in between.
6. Space for complementarities: countries have both, issue is optimal balance.
Can be combined for malnutrition (cash + therapeutic foods), over time (seasonality), & where markets don't work.
But:
- define & measure a 'working' market
- managing multiple modalities can be hard
Can be combined for malnutrition (cash + therapeutic foods), over time (seasonality), & where markets don't work.
But:
- define & measure a 'working' market
- managing multiple modalities can be hard
7. When used judiciously & appropriately, tech (biometrics, blockchain, etc) underpinning both cash & food can facilitate their possible linkages & coordination
Where e-vouchers are given via debit cards usable in large outlets, their difference with cash exists, but is blurring
Where e-vouchers are given via debit cards usable in large outlets, their difference with cash exists, but is blurring
Footnote: for more info, here is a cross-country reviews which will be updated shortly https://openknowledge.worldbank.org/bitstream/handle/10986/24593/9781464809101.pdf?sequence=2&isAllowed=y
