The Productive Safety Net Programme

A response to food crisis

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The Productive Safety Net Programme

The PSNP was created in 2005 and provides regular, predictable cash and/or food transfers to 7–8 million rural and food-insecure households (approximately 10% of the population) in roughly half of Ethiopia’s c. 600 woredas. It operates for six months in a year, bridging a period of predictable food needs. 85% of beneficiaries take part in public works in exchange for the support, while the remaining 15%, who are unable to work, receive free direct support.

Themes

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Insights from Kenya

Since 2005, the Kenyan government has invested heavily in a range of social protection schemes, including safety nets, as a key part of its poverty reduction strategy. Prior to 2005, the main form of safety net support offered to poor and vulnerable populations was traditional humanitarian relief, usually in the form of food aid, mobilised by the government and the international community in response to crises such as drought and floods. However, between 2005 and 2010 spending on social protection programmes in Kenya rose by almost 75%, and spending on safety nets doubled.

A recent review of Kenya’s Social Protection Sector highlights the importance of a system-wide approach to social protection, emphasising the complementary nature of different social protection schemes such as safety nets, social security and health insurance. The report states that, “combining safety net support with investments in livelihoods and employment can move households rapidly out of poverty”.
Further studies associated with Ethiopia’s PSNP have found that households accessing other packages of agricultural support in addition to the PSNP were more likely to be food secure than those which did not, reinforcing the idea that social protection schemes should not be viewed in isolation.

The PSNP’s response to the Horn of Africa crisis clearly demonstrates that more effective alternatives to the traditional humanitarian response to a food crisis do exist. Yet for a social protection scheme to fulfill its potential, both political and financial support are essential. Where a full range of social protection interventions are not available, cash transfers and voucher-based programmes appear to provide better protection against crises than commodity distribution.

However, whilst the use of cash programmes is steadily increasing, they remain under-used, primarily due to concerns amongst donors about the associated risks. These include the potential for the diversion of funds to terrorist or militant groups in conflict-affected areas and the possibility that a large influx of cash into local markets may lead to inflation. Recent experiences in the Horn of Africa, however, suggest that such fears are relatively unfounded.

More importantly, for cash transfer programmes to be fully effective in a crisis situation, the necessary financial support must be readily available at the point of need (as is the case with the PSNP’s RFM).

GHA Report 2012

An evaluation of Ethiopia’s PSNP and its ability to respond to the 2011 crisis is provided in GHA Report 2012, which was launched last month. To order a copy, please contact Dan Sparks: dan.sparks@devinit.org

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The PSNP has two main aims:

• to provide households with enough income (in cash or food) to meet their food gap, thereby protecting assets from depletion and enabling recipients to be lifted out of long-term food insecurity
• to build community assets.

Crisis response

1) PSNP
The PSNP has inbuilt mechanisms enabling it to scale up its response in times of increased acute food needs through a contingency budget and a Risk Financing Mechanism (RFM). In August 2011, as the extent of the Horn of Africa food crisis became apparent, the RFM was triggered. This allowed the PSNP to extend the duration of its support to 6.5 million of its regular recipients, as well as to provide three months of support to an additional 3.1 million people, bridging the food gap until the November 2011 harvest. With a total of 9.6 million beneficiaries throughout the 2011 food crisis, the PSNP’s response to the crisis came to an estimated US$53 per beneficiary (including extra costs associated with the RFM).

2) Emergency humanitarian response

Areas not covered by the PSNP have relied on traditional humanitarian actors, including UN agencies and NGOs, to meet emergency food needs. The emergency humanitarian assistance provided by the World Food Programme (WFP) and Joint Emergency Operation Plan (JEOP) in response to the 2011 food crisis benefitted a combined maximum total of 2.5 million beneficiaries. This was at an estimated cost of US$422 million (based on the 2011 Humanitarian Requirements Document’s funding summary), giving an estimated cost per beneficiary of US$169.

An even clearer picture of the PSNP’s cost-effectiveness emerges if we consider the as yet uncalculated value of the public works carried out by 85% of recipients, as well as the lives and livelihoods saved by beneficiaries’ long-term participation in the programme. This is particularly the case when compared with the cost of a more traditional emergency humanitarian response.

Further benefits of the PSNP

In areas not covered by the PSNP, the time lag between identifying and assessing the 2011 crisis, mobilising funding and responding to humanitarian needs was up to eight months. Moreover, not all of the funding required for the humanitarian food aid response was forthcoming, and agencies had to distribute half-rations in some distribution rounds. In contrast, where the PSNP RFM was activated, the response time was reduced to as little as two months in some areas.
As an established programme with predictable requirements, the PSNP can benefit from the best deals when procuring commodities; it also uses established distribution networks, and is therefore more cost-effective.

Shock protection

A recent report by the Institute of Development Studies investigates the degree to which the PSNP has been successful at protecting beneficiaries from recent shocks such as the 2011 food crisis.
Key findings include the following.

• The PSNP has a positive impact on the food security and wellbeing of beneficiary households, irrespective of whether or not they have been affected by shocks. However, PSNP recipients exposed to shocks have lower food security and wellbeing indexes than PSNP recipients who were not exposed to shock.
• Whilst the PSNP does contribute to protecting households against the level of impact caused by a shock, the positive effects are not sufficiently robust to shield recipient households completely (a finding which is supported by another recent evaluation of the PSNP).

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Cost

In its first year (2005) the PSNP cost US$225 million. It supported 4.83 million people, with a cost per beneficiary of US$46.6. The budget has since increased to include scaling-up mechanisms for times of increased need (see below), and to support greater numbers of people. The 2010 budget is estimated to have been US$347 million. That same year, the programme supported 7.4 million people, with a cost per beneficiary of US$47.


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