Comparing Cash and Food Transfers: a Cost-Benefit Analysis from Rural Malawi

The Cash and Food for Livelihoods Pilot (CFLP) project was a cash and food-for-assets scheme implemented in southern Malawi over the eight months from October 2008 to May 2009, benefiting 11,100 households. CFLP was designed to prevent acute hunger and invest in disaster prevention and preparedness measures by providing cash, food and mixed cash/food transfers in exchange for participation in the construction of community assets, in line with food-for-assets (FFA) activities under a regular protracted relief and recovery operation (PRRO).

By randomly selecting target beneficiaries for the different transfer types, the project aimed to identify how cash can help WFP and similar agencies achieve their food security goals. Although previous studies of cash transfers in Malawi have demonstrated that cash can be an effective tool for both generating investments in human capital (Miller, 2009) and responding to humanitarian needs (Devereux et al., 2007), few have used a randomized method to compare the use of cash with that of food. By taking this unique approach to cash in humanitarian contexts, the CFLP project attempted to produce learning and best practices for guiding appropriate integration of cash into the WFP response toolkit.

This chapter describes the context and design of the cash pilot and discusses the preliminary effects on cost efficiency and effectiveness of the food, cash and food/cash mix employed in Malawi. Baseline and interim survey data give insights into the short-term effects of these different transfers on the food security of beneficiary households.

Owing to the absence of follow-up data, crucial aspects such as non-food spending, nutrition, gender dynamics and livelihood outcomes cannot yet be discussed.