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Humanitarian Charter and Minimum Standards in Humanitarian Response


Food security - cash and voucher transfers standard 1: Access to available goods and services

Cash and vouchers are considered as ways to address basic needs and to protect and re-establish livelihoods.
 

Key actions (to be read in conjunction with the guidance notes)

Key indicators (to be read in conjunction with guidance notes)

Guidance notes

  1. Cash and voucher transfers are a tool: Cash and vouchers are mechanisms to achieve desired goals, not interventions in themselves. A careful comparative assessment should indicate whether cash and/or vouchers are appropriate or not, and whether they should be used on their own or combined with other responses, such as in-kind support. Cash and voucher transfers can be used at different stages of a disaster. The response should be determined not only by the expected efficiency and effectiveness in meeting beneficiaries’ basic needs or re-establishing livelihoods, but also by an expected lower level of associated risks. Cash and vouchers can offer greater choice and flexibility than in-kind responses and this may give recipients a sense of greater dignity. Cash and vouchers may also create positive multiplier effects in local economies, which should be considered during assessments. Cash and vouchers can be used as follows:
    • cash grants – conditional or unconditional transfer of cash in either one or several instalments to meet a range of needs
       
    • commodity or value-based voucher– transfer of paper or electronic vouchers to be exchanged for specific goods or a range of goods according to the value of the voucher
       
    • cash for work – transfer of cash as income earned by participating in specified activities (usually activities requiring physical labour).

    Planning, implementation and monitoring should involve local stakeholders such as governments, local authorities, community structures and representatives, cooperatives, associations, local groups and beneficiaries. This will help ensure relevance and sustainability. An exit strategy should be planned with key stakeholders from design onwards.
     
  2. Impact on local economies and market systems: Market assessment should analyse the situation before and after the disaster, and the competitiveness and integration of the market to respond to current needs. Analysis should also show the roles of different market actors, availability and price of commodities (livelihoods assets, shelter materials, food and others depending on objectives), seasonality and physical, social and economic access by different groups of vulnerable people. Cash and vouchers can be appropriate when markets are functioning and accessible, and when food and other basic items are available in the required amounts and at reasonable prices. Such transfers may stimulate the local economy to a quicker and more sustainable recovery. Market responses can promote local procurement and better use of the capabilities of existing market actors. Cash and vouchers used when the context is inappropriate can distort markets and may have negative effects such as inflation. Market monitoring is essential to understand the impact of cash and vouchers on local economies and people.
     
  3. Cash and voucher delivery mechanisms: Cash and vouchers can be delivered through local banks, shops, traders, local money transfer companies, remittance companies and post offices. They can be delivered physically or through technologies such as mobile banking and mobile phone networks. Banks are usually efficient and effective but may be less accessible to vulnerable people; if banks are accessible, perhaps through mobile banking, they can be a more secure option. The choice of delivery mechanism requires an assessment of options and consultation with recipients. Issues to consider are costs for recipients (bank charges, travel time and costs, time at collection points), costs for the organisation (charges and set-up costs of provider, staff time to set up and administer, and transport, security, education and training of recipients), efficiency and effectiveness (reliability, resilience, accountability, transparency, monitoring, flexibility, financial control, financial security and access by vulnerable people). An approach that may appear costly may still be the most appropriate transfer mechanism.
     
  4. Considering risks: Common concerns on the risks of cash and voucher transfers include fears that cash and vouchers could contribute to price inflation (leaving disaster-affected people, and others, with less purchasing power), the use of cash and vouchers for anti-social purposes (e.g. alcohol and/or tobacco abuse) and differential access of women and men to cash compared with in-kind resources. Other concerns are that transporting cash may create security risks for implementing staff and for the affected population (see Protection Principle 1) and that the attractiveness of cash may make it more difficult to target recipients and may increase the risks of corrupt diversion or seizure by armed groups. However, in-kind distributions also have risks (see Food security – food transfers standard 4 and standard 5). The risks for cash and vouchers can be minimized through good design, thorough risk analysis and good management. Decision-making should be through evidence-based consultation: unfounded fears should not influence programme planning.
     
  5. Setting the value of the cash or voucher transfer: The value set for transfers is context-specific. Calculations should be in coordination with other agencies and based on the disaster-affected population’s priorities and needs, prices for key goods expected to be purchased in local markets, other assistance that has been and/or will be given, additional related costs (e.g. travel assistance for people with restricted mobility), method, size and frequency of payments and timing of payment in relation to seasonality, and objectives of the programme and transfer (e.g. covering food needs based on the food basket or providing employment based on the daily labour rate). Price fluctuations can reduce the success of cash and voucher transfers. Budget flexibility is essential to adjust the value of the transfer or add a commodity component, based on market monitoring.
     
  6. Choosing which type of cash or voucher transfer: The appropriate type of transfer depends upon the programme objectives and local context. A combination of approaches may be appropriate, including with in-kind assistance and seasonal variations. Agencies should find out what disaster-affected populations consider the most appropriate form(s) of transfer through informed consultations (see Food security – livelihoods standard 2).
     
  7. Targeting in cash and voucher transfer programmes: The challenges can be as significant for in-kind commodities and services, but due to the attractiveness of cash and vouchers, particular attention is needed minimize exclusion and inclusion errors. People can be reached either by direct targeting (to the disaster-affected households or population) or by indirect targeting (e.g. local traders or service providers). Insecure conditions may require an indirect targeting approach (see Protection Principle 1). Gender affects decisions on the household member registered to receive cash or vouchers, as with in-kind transfers (see Food security– food transfers standard 5). Coordination with stakeholders, including government welfare and social protection programmes providing cash transfers, is essential for targeting (as for in-kind transfers).
     
  8. Monitoring of cash and voucher transfers: Baseline information is required, with monitoring before, during and after transfer programmes, taking into account the direct and indirect impacts of cash and vouchers in the market. Changes in the intervention should respond to the changes of the context and market situation. Monitoring should include prices of key goods, multiplier effects in local economies and price fluctuations. Key questions are: What are people buying with the cash and vouchers provided? Can people receive and spend cash safely? Are cash and vouchers being diverted? Do women influence how the cash or voucher is spent (see Core Standard 5)?