Transcript LRP…What is it?

LRP
What is it?
Who is promoting LRP initiatives?
How’s it being used?
What are the advantages?
Challenges?
Examples?
Do No Harm – Food Aid
Potential negative impact of food aid on local markets
• Food aid displaces commercial food sales
• Food aid deliveries increase supply faster than they increase
demand, thus depressing the food prices received by producers and
traders
• Low prices translate into a disincentive for producers to invest in
improved technologies or for marketing agents to bring in
commercial supplies or invest in storage and transport capacity
• The receipt of food aid may cause households to reduce their labor
supply, discourage household investment in agricultural production
and crowd out private transfers and community level safety nets.
Do No Harm – Cash/vouchers
Potential negative impact of cash/vouchers on local
markets
• If the increase in demand is not matched by
increased supply, prices will increase, affecting both
beneficiaries and non- beneficiaries
• Reinforcing non-competitive market structures
Main reasons for LRP
1. Reduce delivery costs, delays
and market distortion.
2. Increase procurement flexibility
while providing economic
opportunities for small
farmers/cooperatives.
Mechanisms for Implementation
of Local Purchase
Tenders
Vouchers
Cash for Work
Vouchers for Work
Food for Work
Food Coupons
Others?
• Cash transfers – the provision of cash to food
insecure beneficiaries who lack economic access
to food stocks that are readily available in the
local markets of the affected country. Key is
functioning market system.
• Food vouchers - the provision of vouchers that
are redeemable for food to food insecure
beneficiaries who lack economic access to food
stocks that are readily available in the local
markets of the affected country.
History of Local/Region
Procurement
• World Food Program
• 2008 Food Conservation and Energy Act or
Farm Bill (Authorizing legislation for US food aid)
• USDA LRP Pilot Program
• GAO Study (2009)
• USAID/EFSP Program
CRS Local/Regional Purchases
2000-2008
• 20 Countries
• Over $9.8 million
• Over 22,400 metric tons
• Over 114 transactions
Donors: CRS-HQ, USAID/PEPFAR, USAID/OFDA
USDA/FFE, Church of Jesus Christ of Latter Day Saints
Various CARITAS members, Government of UK (DFID)
Government of Ireland, Government of Germany
World Bank, MCC, Concern Universal
Recent US Funded LRP
for CRS
• 8 Projects
- Guatemala, Nicaragua, Benin, Burkina Faso,
Niger (2), Mali, Afghanistan
• Total value of approximately $18 million
Trends, Current Status of C&V
• Food for Peace
– Overall budget: $1.2 billion
– LRP, C&V: $300 million (25%)
• ECHO
– 2007: 2% food assistance budget on C&V, 12% projects
– 2010: 20% food assistance budget on C&V, 42% projects
• WFP
– 2009: $54 million in cash and voucher programs
– 2010: $123 million in cash and voucher programs
• USDA
– LRP Pilot: $60 million over 4 years
– LRP and vouchers, no cash
USDA LRP Pilot
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4 Phases - Study, Guidelines, Projects, Evaluation
$60 Million over 4 years
3 Goals - Emergency, Development, Do No Harm
USDA LRP Development Interventions
GAO Study – May 2009
• GAO = Government
Accountability Office (US)
• Why GAO did the study
• What GAO found
• GAO Recommendations
USAID Emergency Food
Security Program (EFSP)
• FY 10/11 Congressional Budget Justification
• Request for Emergency Food Security funding
• Included LRP – food vouchers/cash transfers
- April 2010 – APS
- April 2011 – APS that requested a response
with Title II resources, LRP (vouchers/cash) or
a combination of both
Comparing Cash and Vouchers
Benefits of Vouchers
• Gives beneficiaries varying levels of choice,
while still having some control over how the
transfer is used.
• Vouchers can be targeted within the
household, so it can potentially give more
decision-making power to females
(Sustainability?)
• Ability to learn more about
consumer/beneficiary preferences and
demand. This information can be used in
future programming.
Comparing Cash and Vouchers
Disadvantages of vouchers vis-à-vis cash
• Higher administrative costs for vouchers than
cash
• More decisions on programmatic design, e.g.
number of vouchers/distribution, voucher
denominations, criteria for and number of participating
vendors
• Vouchers can be exclusionary, particularly with
respect to small vendors that are difficult to
include in voucher schemes. Do no harm
principles.
• Tradeoff between increased consumer
benefit/vendor inclusion and administrative costs,
Delivery Mechanisms
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Cash/paper voucher distributions
Microfinance Institutions/Banks
Barcodes
Smart cards
Mobile phones
Opportunities of new methodologies
• Provide more choice and dignity to the
beneficiaries that we serve
• Respond quicker and more efficiently
• Support local market actors and local production
• Integration of emergency food security
responses with longer-term food security
programming, e.g. increasing agricultural
productivity, linking farmer groups to markets,
improving food quality standards, support to
small traders and businesses
Advantages of LRP
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Timeliness
Cost
Management
Adaptability to local tastes and conditions
Empowerment of Beneficiaries
Priming Markets for Smallholder Farmers
Link from Producers to Markets
Challenges with LRP
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Better Understanding local/regional markets, Market analysis
Food Quality and Safety Issues (Do No Harm)
High Level of Monitoring required
Timeliness in following agency procedures
Unfamiliarity of sellers with agency buying procedures
Timeliness of delivery
Market distortion concerns
Local government regulations/taxes
Price fluctuations/budgeting
Limited supply base (food insecure areas)
Co-ordination with other agencies in the market
Food Quality and Safety Testing
• Testing of Mycotoxins - Lab or field test? Cost?
• Conform to laws and standards in each country
at minimum
• Only 14 African countries have standards for
aflatoxins
• Moisture meters/REVEAL tests for outlying areas
• Capacity of National Laboratories
• WFP’s Blue Box (P4P)
Group Exercise – Case Studies
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Context – Why do we need a response?
Target beneficiary group(s)
Size of grant/procurement (MT)
Mechanism used for response
(cash, voucher, FFW, etc.)
• Results/Sustainability
• Other important elements to note?
Case Study 1 – CRS Guatemala
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Response to drought and tropical storm Agatha
3,000 HH / 18,000 Individuals (EFSP)
Corn, Black Beans, Incaparina
Semi-competitive bids accepted from farmerbased and commercial organizations
• Agreement signed 9/20/2010
• First distribution to beneficiaries in Santa Rosa
on 10/25/2010
Case Study 2 – Burkina Faso
• Response to food insecurity among school
aged children in target zone (Development)
• Students, Producers (Coops and CFGs), PTAs
• One year pilot for $985,965 (USDA)
• Vouchers, Tender
• Cost and Time efficient, increased capacity of
local producers, boost in local economy
• Video
Case Study 3 – CRS Niger
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1st voucher program in Niger (USAID EFSP)
Followed up by USDA LRP Emergency program
Total of 300,000 beneficiaries and $8 million
25% Female Head of Household
Vouchers for 6 commodities (added gari and
sugar in second project) for approved vendors
• Wholesalers and Retailers
• Consumers not covered under voucher
program may have paid more due to delays?
Cost Comparison – CRS MALI
Commodity
PRICE/Kg - $
MT
Cost
Millet
$0.41
35.14
$14,522
Rice
$0.82
2.5
$2,060
Cowpeas
$0.74
7.53
$5,593
Locally Procured
TOTAL
$22,175
Imported from US
Corn Meal
$1.88
35.14
$66,063
Rice
$2.26
2.50
$5,650
Split Peas
$2.67
7.53
$20,105
TOTAL
$91,818
Cost Savings
$69,643
Percent Savings
76%
Cornell Component
• Benefit of partnership between development
organizations and universities
• Lead role in developing tools for data
collection and analysis
• Increased evidence base
• Better data to analyze impact/raise awareness
of issues
• Improved advocacy efforts for LRP
Focus of Cornell Analysis
• Pilot tools for monitoring and collection of
market price data that enable uniform data
processing and analysis that will ensure high
quality results reporting, review and analysis
of overall results for all programs.
Price Impact Timeliness
CostRecipient
Effectiveness Satisfaction
Tools to Design Interventions
• MIFIRA – Market Information and Food
Insecurity Response Analysis (Cornell)
• EMMA – Emergency Market Mapping Analysis
• EFSA – Emergency Food Security Assessments
• LEGS – Livestock Emergency Guidelines and
Standards
• SSSA – Seed System Security Analysis
LRP Leaning Alliance
LA Goal
• To coordinate monitoring of price data to
ensure that LRP programs do not negatively
affect local and regional markets, and to
coordinate data analysis among the various
programs.
LRP LA Main Activities
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Trainings (online and regional)
Database development
Database management
Data analysis
Reporting
LRP LA Meeting Nairobi
• Closer Look at Global Indicator Framework
(monitoring, pre/post procurement, post
distribution indicators)
• Future activities
• Advocacy Day in DC for partners/donors
• Presentations to influence next Farm Bill
LRP – Way Forward
What could be next steps for advancing this topic?
Examples:
• LRP Programs have positive food security impacts
for the duration of the program. But how can we
improve the sustainability of these impacts?
• Strengthening the evidence base
• New donor policy
• Task force/Working Groups
Recommended LRP Reading
• GAO Study (May 2009)
• CARE White Paper (2006)
• WFP’s “Revolution: From Food Aid to Food
Assistance”
• 2006 OECD Study “The Development
Effectiveness of Food Aid: Does Tying
Matter?”
• Michigan State University – “Local and
Regional Food Aid Procurement”