Programmes proliferate but vast majority of rural poor remain uncovered by social protection

Social protection is emerging as a critical tool in the drive to eradicate hunger, yet the vast majority of the world’s rural poor are yet to be covered.

The State of Food and Agriculture 2015 published by FAO on 13 October finds that in poor countries, social protection schemes – such as cash transfers, school feeding and public works – offer an economical way to provide vulnerable people with opportunities to move out of extreme poverty and hunger and to improve their children’s health, education and life chances.

Such programmes currently benefit 2.1 billion people in developing countries in various ways – including keeping 150 million people out of extreme poverty.

Expanding such programs in rural areas and linking them to inclusive agricultural growth policies would rapidly reduce the number of poor people, the report says.

The report was released on the eve of World Food Day (16 October), whose focus is on social protection’s role in breaking the cycle of rural poverty.

“It is urgent that we act to support the most vulnerable people in order to free the world of hunger,” said FAO Director-General José Graziano da Silva.

“Social protection programs allow households to access more food – often by increasing what they grow themselves – and also make their diets more diverse and healthier. These programs can have positive impacts on infant and maternal nutrition, reduce child labor and raise school attendance, all of which increase productivity,” he said.

Breaking out of the hunger trap

Only about a third of the world’s poorest people are covered by any form of social protection. Coverage rates dip even lower in South Asia and sub-Saharan Africa, regions with the highest incidence of extreme poverty, the report said.

Without such assistance, many poor and vulnerable people will never have the opportunity to break out of the poverty trap – in which hunger, illness and lack of education perpetuate poverty for future generations, according to the report.

Most countries – even the poorest – can afford some kind of social protection program. FAO estimates that globally, some $67 billion a year in income supplements, mostly provided by social protection programs, would – along with other targeted pro-poor investments in agriculture – allow for the eradication of hunger by 2030. That is less than 0.10 percent of world GDP.

Understanding social protection

Currently many extremely poor households are forced to sell off productive assets, put children to work, over-exploit their small landholdings unsustainably, or settle for badly paid jobs.

Yet basic social transfer schemes offer the poor an opportunity to improve their own productive potential. They also have positive spillover effects on local economies, increasing business opportunities, raising rural wages, and allowing the poorest to acquire or invest in assets.

In Zambia for example, a pilot cash-grants program led recipient households to greatly increase livestock ownership as well as land under cultivation, input use and ownership of tools such as hoes, sickles and axes, leading to a 50 percent jump in the overall value of locally produced agricultural commodities.

Beneficiaries also spent more on food, clothing and health-and-hygiene – an amount 25 percent greater than the value of the initial transfer. The wider community also benefited through the increased demand for locally produced goods and services generated by the transfer-every dollar transferred generates an additional 79 cents in income, often for non-beneficiaries providing these goods and services.

At least 145 countries today provide one or more forms of social assistance, including unconditional cash transfers, meaning outright grants for eligible recipients, conditional cash transfers, usually linked to school attendance or health checkups and, public-works programs that offer guaranteed employment. Other forms include in-kind transfers, including food distribution and school feeding programs.

Cash means more than spending

The report stresses that the notion that social protection reduces people’s work effort is a myth. Rather, recipients often respond to social protection positively, including improving the nutrition and education of their children, relying more on home production rather than poorly paid wage work and also increasing their participation in existing networks such as funeral societies, a common form of risk management in many traditional communities.

Social protection schemes can also be transformative over time. One well-designed Bangladeshi programme gave poor rural women livestock and other productive assets, as well as a monthly stipend to cover the period until recipients were able to earn additional incomes.

The FAO report also cites other successful examples of social protection programs in Ethiopia, Ghana and Lesotho.

Such findings show how social protection is an investment, rather than a cost. It is also clearly illustrated by Brazil’s Bolsa Família, a well-integrated scheme that reaches a quarter of the country’s population and costs only 0.5 percent of GDP.

Still, the report stresses how social protection alone cannot sustainably eradicate hunger and rural poverty. It therefore underscores the importance of combining and coordinating public investment in social protection with public and private investments in the productive sectors of agriculture and rural development. Such actions will ensure inclusive economic growth as a sustainable way to break the cycle of rural poverty.

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Key messages

• Social protection programmes reduce poverty and food insecurity. Effective targeting and adequate transfers are important determinants of success. Social protection contributes to higher incomes and food security not only by ensuring increases in consumption, but by enhancing a household’s ability to produce food and augment income. Programmes targeted at women have stronger food security and nutrition impacts. Programmes that are gender-sensitive, reduce women’s time constraints and strengthen their control over income enhance maternal and child welfare. This is especially important because maternal and child malnutrition perpetuate poverty from generation to generation.

• Programmes targeted at women have stronger food security and nutrition impacts. Programmes that are gender-sensitive, reduce women’s time constraints and strengthen their control over income enhance maternal and child welfare. This is especially important because maternal and child malnutrition perpetuate poverty from generation to generation.

• Social protection stimulates investment in agricultural production and other economic activities. Social protection enhances nutrition, health and education, with implications for future productivity, employability, incomes and well-being. Social protection programmes that provide regular and predictable transfers promote savings and investment in both farm and non-farm activities, and encourage households to engage in more ambitious activities offering higher returns.

• Social protection does not reduce work effort. But it does give beneficiaries greater choice, and many shift time previously dedicated to casual agricultural wage employment of last resort to ownfarm work or non-agricultural employment. Taken together with the increase in farm and non-farm production activities, social protection strengthens livelihoods instead of fostering dependency.

• Social protection has virtuous impacts on local communities and economies. Public works programmes can provide important infrastructure and community assets and, when designed and implemented properly, contribute directly to the local economy. Cash transfers increase the purchasing power of beneficiary households, who demand goods and services, many of which are produced or provided in the local economy by non-beneficiary households. Complementary programmes may be necessary to reduce production constraints to prevent inflation and maximize the real-income and production impacts of the programme.

• Social protection, by itself, is not enough to move people out of poverty. As poor households typically face multiple constraints and risks, joint, coordinated and/or aligned social protection and agricultural programmes are likely to be more effective in helping poor households move out of poverty in a sustainable manner.

• There are clear opportunities to leverage social protection and agriculture programmes to further rural development. Developing synergies is an opportunity and also a necessity because of constrained government budgets. It is imperative to help the poorest meet basic consumption needs, especially when they are unable to work. Such help can itself become a foundation for gradual improvement of the livelihoods of the poor. Given that the majority of the rural poor depend largely on agriculture, agricultural interventions are needed to overcome structural supply-side bottlenecks holding back growth. Leveraging public expenditures on agriculture and social protection programmes in support of each other not only furthers this transformation, but also serves to strengthen agricultural and rural development.

• A national vision is needed of how agriculture and social protection can gradually move people out of poverty and hunger. National vision and commitment, supported by permanent domestic resource mobilization, must support coordinated action at the national and subnational levels. Policy and planning frameworks for rural development, poverty reduction, food security and nutrition need to articulate the role of agriculture and social protection in moving people out of poverty and hunger, together with a broader set of interventions. The type of agricultural interventions combined with social assistance depends on the context and constraints, but must also consider issues such as local implementation capacities and available resources. In all cases, interventions must be designed to address a range of constraints to allow the poorest to transform their livelihood strategies to escape and remain out of poverty.