Developmental responses to the food price crisis: evidence on the role of social transfers UNICEF Workshop Bangkok 11 November 2008 Michael Samson

Food prices have risen sharply in the past year… Source: United Nations Food and Agriculture Organisation * April 2008

…precipitating a wave of sometimes violent protests around the world Source: United Nations World Food Programme

… food price inflation eroded social protection measures aimed at protecting the poor… Baseline value in March 2006 Consumption purchasing power in March 2008 Basic grains purchasing power in March 2008 SOURCE: EPRI based on data provided by Statistics South Africa and SOCPEN

The greatest vulnerability is concentrated in Africa and South Asia Source: United Nations World Food Programme

African agricultural productivity growth has significantly lagged the rest of the world Source: United Nations Food and Agriculture Organisation USA Africa

African agricultural productivity growth has significantly lagged the rest of the world Source: United Nations Food and Agriculture Organisation USA Africa WHY? Risk Scale Investment

Impact of social cash transfers

Most cash transfers buy predominantly food SOURCE: IFPRI

Social transfers also foster developmental education and health outcomes

Human capital development promotes pro-poor growth

South Africa Increase wages % more than the cost of transfers

Social transfers in South Africa support economic growth along multiple dimensions  Sub-Saharan Africa’s oldest social transfer programme  Costs 3% of GDP  Substantial impact on poverty reduction  Extensive studies of growth outcomes –Human capital –Labour markets –Macroeconomics South Africa

South Africa’s social pension reduces poverty and destitution substantially

The distribution of social benefits in South Africa SOURCE: South African National Treasury and Statistics South Africa

 n=3462 n=1795 Social protection improves labour market participation and employment

Propensity score matching techniques provide ex post evidence on agricultural resilience Propensity score 13% agricultural attrition 8% agricultural attrition

Lesotho demonstrates how social pensions build human capital for children  The world’s newest universal social pension, implemented in 2004  Formal evaluations still in progress  Costs 1.4% of GDP  Supports children increasing living with older people Lesotho

Social protection promotes better risk management and encourages investment

Social protection supports local economies  A transformed pension system since democracy in 1990  Near-universal take-up (85%)  Costs 0.7% of GDP  Supports labour market participation, particularly for women Namibia

Mauritius Social protection reinforces social cohesion, facilitating economic reforms that promote pro-poor growth EXAMPLES  Mauritius  Botswana  Nepal  Papua New Guinea