POSITION PAPER ACCESS TO FOOD VIA VOUCHER DISTRIBUTION

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1 AGRICULTURE AND LIVELIHOODS & FOOD AID CLUSTER POSITION PAPER ACCESS TO FOOD VIA VOUCHER DISTRIBUTION Introduction Acess to food with the commodity voucher system is simply a mechanism to provide food to beneficiaries through vouchers issued indicating the amount of food to be provided by local food vendors. The voucher system aims to increase household purchasing power and improve nutrition and has the added advantage of stimulating local markets by supporting local traders while embracing the benefits of the informal banking system i.e. money vendors. When is voucher system appropriate? Vouchers are appropriate in the following circumstances: When the market is weak and there is a risk of inflation if only cash is provided and thus a need to encourage traders to move certain commodities into the affected area. When there is availability but not access. When the affected population identifies the need for specific commodities for which local supply is appropriate and available. Who are the key factors involved? The Beneficiary Local authorities Shop keeper/vendor The Implementing organization The Money Vendor How does it work? The beneficiaries are first identified and the food requirement established based on the cost of the minimum food basket. The shopkeeper /vendor is identified by the implementing organization. The implementing organization alongside the food supplier, and with support of the local authorities, agrees on the prices of the food rations. Serialized vouchers are then printed. Beneficiaries are issued with vouchers indicating the amount of food rations they need to sustain them for month. The beneficiary then takes the voucher to the food vendor for food provision. The implementing organization records the amount of food provided on a monthly basis. The food vendor then puts the vouchers together and takes them to the money vendor to be paid. 1

2 The money vendor confirms that the information on the voucher tallies with the matrix-of-food supplied issued by the implementing organization and pays the food vendor. The money vendor then sends a request for payment to the implementing organization and forwards the matrix-of-food supplied and the vouchers. The implementing organization sends and validates the request for payment and reimburses the Money Vendor on the basis of confirmation that the beneficiaries have received food and all the documentation provided money vendor tally with quantities recorded weekly. Implementing organisation Selects beneficiaries & issues serialized vouchers Beneficiaries Reports on food supplied Validates vouchers and reimburses money vendor Submits paid vouchers Beneficiaries take the vouchers to the food vendor for food supply Money vendor (MV) Money vendor pays the food vendor for the food supplied Food vendor submits the vouchers to the MV for payment Food Vendor/shopkeeper Recommended Timeframe for Food Voucher Interventions - For WFP s recommendation Amount of cash needed to survive (For WFP s additional input) According to FSNAU 1, the minimum amount of cash which an average household needs to survive in Southern Somalia can be estimated from the Minimum Expenditure Basket (see breakdown of MEB in table below). It is possible to narrow down this basket and focus on total food commodities only. If only total food items are included in the basket, the minimum monthly expenditure ranges between US$ (see table 1) and if we include only the most basic food items (cereals, vegetable oil and sugar), an average household will need US$ (see table 2) to purchase these commodities. 1 See Concept note by FSNAU of 28 th June 2011 entitled New populations in crisis and estimating emergency cash needs in Southern Somalia to increase food access. (please note that the numbers of population in crisis has changed since the development of this document). 2

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4 Table 1: Cost of various Minimum Expenditure Baskets (all food in MEB) (in US$ terms). Monthly Minimum Cost of Living- May 2011 (USD) UNDP 2005 Total Population Rural Rural + Total cost per region for all in crisis per month Region Bakool ,627 8,000 15,833 23,833 2,025,833 Bay ,562 13,500 23,333 36,833 2,983,500 Gedo ,378 4,167 8,333 12,500 1,037,500 Hiraan ,811 5,833 32,500 38,333 3,105,000 Juba Dhexe (Middle) ,877 4,500 10,000 14,500 1,015,000 Juba Hoose (Lower) ,790 6,000 10,833 16,833 1,582,333 Shabelle Dhexe (Middle) ,901 3,333 14,167 17,500 1,015,000 Shabelle Hoose (Lower) ,651 11,667 30,000 41,667 4,166,667 Afgoye* ,167 5,044,333 Total 3,579,597 57, , ,167 21,975,167 Table 2: Cost of various Minimum Expenditure Baskets (basic food: cereal, oil and sugar) (in US$ terms). Region Monthly Minimum Cost of Living-May 2011 (USD) UNDP 2005 Total Population Rural Rural + /IDP Total cost per region for all in crisis per month Bakool ,627 8,000 15,833 23,833 1,620,667 Bay ,562 13,500 23,333 36,833 2,431,000 Gedo ,378 4,167 8,333 12, ,000 Hiraan ,811 5,833 32,500 38,333 2,070,000 Juba Dhexe (Middle) ,877 4,500 10,000 14, ,500 Juba Hoose (Lower) ,790 6,000 10,833 16,833 1,279,333 Shabelle Dhexe (Middle) ,901 3,333 14,167 17, ,500 Shabelle Hoose (Lower) ,651 11,667 30,000 41,667 3,083,333 Afgoye* ,167 5,044,333 Total 3,579,597 57, , ,167 17,851,667 Co-ordination between Food Aid Cluster and Agriculture and Livelihoods Cluster in Food Voucher Interventions It should be noted that the Agriculture and Livelihoods cluster intends to undertake food voucher interventions with the main objective of filling the gaps in areas in the South Somalia where food 4

5 distribution by WFP is currently suspended for security reasons. In the event that WFP resumes food distribution activities in the near future, as is currently the plan, the Agriculture and Livelihoods cluster will phase out food voucher activities. In the interim, the Food Aid Cluster and Agriculture and Livelihoods clusters propose to co-ordinate interventions in the following manner: Review of Food Voucher Proposals Submitted through the ERF - Food voucher proposals submitted by partners through the CHF database will be reviewed jointly by the Food Aid Cluster and Agriculture and Livelihoods clusters. - Technical review by both clusters will be undertaken within 4 days feedback provided to partners within that period. - Partners will be required to address the comments provided by both Livelihoods and Food Aid clusters. Once these comments have been incorporated, the proposal will be submitted to the CHF Unit for further review/comments/processing. Information-Sharing - The Food Aid Cluster will keep the Agriculture and Livelihoods Cluster updated on ongoing interventions and planned activities in food distribution in order to avoid duplications/overlaps. Both clusters will strive to share this information with partners on a regular basis. 5