©FAO/Giulio Napolitano
practices. Transparency in eligibility, budget
Main effects: •
•
Beneficiaries of cash transfers may use this
allocation and responsibility, as well as
extra cash to purchase food or any other
recourse mechanisms at all levels can help
item or service thereby contributing to
minimize these risks.
increased welfare.
•
It also creates some security risks (robbery).
Exchange of food vouchers may be
•
If vouchers are only accepted by dedicated
restricted to certain types of foods
shops (public), it is likely to undermine the
determined by nutritional cost/benefit (e.g.
private food marketing and distribution system.
coarse grains) or population target (e.g. weaning foods). •
•
•
•
Depending on the size of the programme
Both can help to maintain caloric intake
and the source of funding, these measures
and dietary quality, thus helping to avoid
may have negative effects on public finance
hunger and long-term developmental
(budget deficit) with possible serious
damage to children.
macroeconomic implications.
Compared to a commodity-specific subsidy or in kind distribution (see below), a voucher
Conditions for success: Where markets are
or cash can help maintain diet quality.
present and functioning, and goods available on the
If food is not available on the market, such
market are in sufficient quantities to avoid
transfers can have an inflationary effect
inflationary effects, cash transfers are more
resulting in further increases of food prices
appropriate since these can also have positive
locally.
multiplier effects on the local economy.
In some cases, food vouchers may become a parallel currency that can be used for
•
•
• Food distribution in kind. This type of
purposes other than purchasing food. Cash
programme entails distribution of food in kind to
distribution evidently makes leakages to
beneficiaries by a dedicated distribution system.
other uses than food even easier.
Food (individual or family rations) can be
This system can be subject to leakages and
provided on the basis of free distribution to
embezzlement and encourage corrupt
everyone or to selected target groups, or be 19