REWARDING PARTICIPANTS ON PUBLIC WORKS PROGRAMMES: CASH OR FOOD - PowerPoint PPT Presentation

Motala, S., Ngandu, S., Masvaure, S., Hart, T., & Gwenhure, Y. (2016). Rewarding participants on public works programmes: Cash or food transfers? Pretoria: Human Sciences Research Council Policy Brief 7. URL: http://www.hsrc.ac.za/en/research-outputs/view/7920 REWARDING PARTICIPANTS ON PUBLIC WORKS PROGRAMMES: CASH OR FOOD TRANSFERS Stewart Ngandu & Shirin Motala Human Science Research Council (HSRC) 7 June 2016

1. INTRODUCTION 2. BACKGROUND AND CONTEXT 3. EPWP WAGE TRANSFER MODES 4. KEY FINDINGS • POVERTY OUTCOMES • FOOD & NUTRITION OUTCOMES 5. RECOMMENDATIONS

• Evaluation of EPWP Phase 2 (2009 – 2014) in KwaZulu- Natal (KZN) • The study profiled 16 EPWP projects across all four EPWP sectors • Projects located in four provincial districts: Zululand, eThekwini, uMzinyathi and Ugu. • Key question: What is the best way for PEPs to remunerate participants so that they can achieve improved socio-economic status? • Why is this important? • Wage transfers are one of three direct developmental dimensions through which PEPs transmit their impact to beneficiaries

These three vectors/dimensions of EPWP impact are implicit in the programmes theory of change …. • Impacts from wage transfer to the unemployed • Impacts from labour market exposure (work experience and skills development) • Facilitate pathways into the labour market • Impacts from assets created and services delivered in poor and vulnerable communities • PEP's based on the notion that employment provision will directly improve household livelihoods through access to wages • As such, we need understand the efficacy of the two wage- transfer mechanisms – ‘wages’ in cash or as in-kind payments in the form of food parcels

• Link between poverty, inequality, unemployment and household level food insecurity • Although impact of triple challenges is felt by both adults and the youth • Food and nutrition insecurity is more severe for young children • Food insecurity in South Africa arises from a relative dependency on wages for food access • Low participation in subsistence agriculture (Census 2011)

• Of the 16 projects profiled, 15 used cash payments as transfers to programme beneficiaries • One project, the Siyazenzela , Food for Waste Programme implemented in the Hibiscus Coast Municipality (HCM) , Ugu District , used in-kind payments in the form of food parcels • Study examined the comparative performance of cash versus food transfers with respect to household poverty, quality of life and food security in terms of EPWP benefits for participating households

• Predominant mode of wage transfer in EPWP Phase 2 were wages in the form of cash payments • The Siyazenzela Food for Waste Programme, introduced in KZN in 2006 combines food for work with waste removal • The mode of wage transfer is food parcels (rather than cash) • The in-kind transfers are equivalent to 12 days’ paid labour per month at the minimum EPWP Phase 2 wage rate as at 2013, or R71 per workday

• The programme targets informal settlements • Specifically communities underserved in respect of municipal solid-waste removal • Evidence showed that at least 8 000 households were unserviced (DPW 2013) • The programme provides a food parcel valued at R900 per month , amount slightly above the minimum EPWP2 wage rate of R71 per day. • Waste picker working three days per week is expected to deliver five bin bags of garbage per week . • Participants are not given a choice of cash or food payment, and only receive the food parcel.

• Strong rationale for this mode of wage transfer (DPW 2013): • Expected to address the food security needs of the household • Minimises misuse and abuse of funds • Reduce alcohol and substance abuse

• It provides regular and consistent employment over a 12-month period. • Participants would have free time to pursue other economic activities , such as waste recycling. • Focus of benefit is on the household

• EPWP aims to alleviate poverty through the wages that are paid to beneficiaries • The assumption is that the wage transfer will deliver positive poverty outcomes • Poverty outcomes can be measured by money metric indicators defined relative to a poverty line during programme participation • Findings show that Siyazenzela had the highest number of beneficiary households living below the lower bound food poverty line R443 (StatsSA, 2011) compared with other EPWP beneficiaries

Total 58% 42% ZUL - NONG - P49 84% 16% ZUL - NONG - LDC 50% 50% ZUL - IAS 33% 67% ZUL - CCG 28% 72% UMZ - UMV - C&G 73% 27% UMZ - CCG 53% 47% UMZ - BWS 33% 67% UGU - VCP 61% 39% UGU - UMUZ - IAS 70% 30% UGU - SIYA 15% 85% UGU - NOMN 50% 50% ETH - TOU 86% 14% ETH - KRG 79% 21% ETH - ECD 65% 35% ETH - DSW 71% 29% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Above R443* Poverty Line Below R443* Poverty Line

• This indicator shows that poverty objective has not been achieved through the Siyazenzela programme • This result is consistent with the wage transfer mechanism • Mean income for current Siyazenzela households is the second lowest (at R975) as well as the second lowest maximum income (R 2 001) across all EPWP projects • Programme is expected to deliver its impact via improvements in nutrition and food security

• Food and nutritional outcomes were measured using the Household Food Insecurity Access Scale (HFIAS) • It’s a set of 10 indicators which • assess food consumption patterns, • nutrient availability and • household food intake, etc • A summative food index was created to assess the performance of payment as food parcels versus cash • Findings show that Siyazenzela offers food and nutritional outcomes that are among the lowest of all the projects

10.0 11.0 12.0 13.0 14.0 15.0 16.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 13.0 ETH - KRG 12.7 UGU - VCP 11.9 UMZ - UMV - C&C 11.7 ETH - ECD 11.6 UMZ - CCG 11.6 ETH - TOU 11.4 UMZ - BWS 11.0 ZUL - NONG - P49 10.9 UGU - UMUZ - IAS 10.5 ZUL - CCG 10.1 UGU - SIYA 10.1 ETH - DSW 9.8 UGU - NOMN 9.4 ZUL - NONG - LDC 8.2 ZUL - IAS

 Siyazenzela fails on both social protection counts : income poverty alleviation , and food and nutrition security improvement  Not only does Siyazenzela fail to push people out of poverty , it also fails in an area where it is supposed to excel , that of improved food and nutritional outcomes • Another finding from a cost of delivery point of view: • Only global costs of procuring the actual food parcels • No costs for administrative or the management of procurement • Not possible to assess whether or not this transfer mode was cost-effective

• Change the wage-transfer mechanism from food to cash • Work for food can be made optional • Open up beneficiary consultations to discuss wage- transfer mechanisms • To understand and assess perceptions and preferences • Establish an effective M&E system to track outcomes of the different wage transfer forms • Baseline data on food and nutrition status would have highlighted that the assumptions about the value of food parcels had not been realised

• Undertake a cost-benefit analysis of the delivery of food as a wage transfer compared to cash • Costs of delivery of food parcels are hidden and may be leading to leakages in the system • Findings question the efficacy of in-kind transfers; • As a measure of social protection • Ability to achieve their objective of reducing food insecurity