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close this bookOvercoming Global Hunger (WB)
close this folderAppendixes
View the document(introduction...)
View the documentAppendix 1 - overcoming global hunger: an issues paper
View the documentAppendix 2 - addressing hunger: a historical of international initiatives
View the documentAppendix 3 - lessons of experience: twelve case studies
View the documentAppendix 4 - ending hunger soon: concepts and priorities
View the documentAppendix 5 - hunger and the world bank: an NGO perspective

Appendix 3 - lessons of experience: twelve case studies

Introduction

The twelve case studies presented in this paper represent only a few of the broad range of public policy interventions available to governments and other actors that could effectively reduce poverty and hunger. Some obvious interventions are not represented here, such as those addressing food insecurity. Many different types of interventions are available to reduce the burden of hunger and poverty; the choice depends on country and regional conditions. The success of the examples cited here illustrates the enormous scope for expanding the use of such interventions globally, particularly employment guarantee schemes, credit and microenterprise programs, nutrition programs for women and children, and food subsidy and food coupon schemes targeted at the poor. Despite the diversity of the examples selected, all the case studies illustrate several basic conditions for success, namely:

· Political awareness and a willingness to commit resources
· Multisectoral collaborations from the ministerial to the district level
· Community participation and ownership of the program.

Obviously, in some areas and some countries these elements play a stronger role than in others. Four important features of successful interventions emerge from these case studies:

· Targeting. The Tunisian food subsidy program and the Maharashtra employment guarantee scheme both underscore the meets of self-targeting mechanisms. In the former, targeting has been achieved by directing subsidies at "inferior goods" that are bought disproportionately by the poor. In the latter, self-targeting occurs because of the manual nature of the work and the low wage rates. In both cases the interventions are designed as a safety net for the very poor. The Honduras food coupon program illustrates how geographical and anthropometric criteria can be used for targeting. In this case, in schools with an incidence of malnutrition of more than 60 percent all mothers automatically receive food coupons.

· Focusing on women. Today development practitioners increasingly accept that in many respects women are the most important actors in improving the health and nutrition of their children, and thus that investments in education' health, and nutrition for women have a strong multiplier effect. Virtually all the case studies show that programs directed at women work effectively, and that women are central players in reducing hunger and poverty. Moreover, far more women than men are below the poverty line. In the rural areas of South Africa, for example, 80 percent of the population live below the poverty line, and of those, 80 percent are women. For this reason, many of the credit and microenterprise schemes focus on providing credit to women, for, example, Freedom from Hunger's credit with education scheme, the Foundation for International Community Assistance village banking program' and the Aga Khan Rural Support Program. High repayment rates, successful development of microenterprises, increases in income and savings, and the social empowerment of women characterize all these projects. Programs do not have to be exclusively focused on women for them to participate fully, as illustrated by the Maharashtra employment guarantee scheme, where between a third and half of the participants are women.

· Achieving sustainability. A major objective of all programs to assist the hungry must be to promote sustainable improvements in income capacity so that poor communities can become more self-reliant In many communities the key to this is providing people with small Loans to purchase productive assets and support microenterprises. A remarkable expansion of village banking is occurring across the developing world, in part inspired by the remarkable achievements of the Grameen Bank in Bangladesh, whose methods are now being replicated elsewhere. This paper cites several other examples. These credit programs show that poor communities can successfully use and repay loans at market rates of credit. Programs can be low-cost and sustainable if they build pragmatically on existing community structures, as illustrated by the international Fund for Agricultural Develop meet's income-generating project for marginal farmers and the landless in Indonesia. A common element is the reliance on the solidarity of small groups, which ensures a high repayment rate. As the Freedom from Hunger credit programs show, village banking can go well beyond the provision of credit to Compass and facilitate a range of public education and community development activities that are mutually reinforcing.

· Doing better with what one has. The case studies illustrating targeted health and nutrition interventions underscore the considerable possibilities for improving families' nutritional status at existing levels of household income or food consumption. This is achieved primarily by reducing the burden of infection, improving feeding and care patterns for infants and young children, and enhancing basic knowledge about nutrition.

The purpose of this paper is merely to be indicative. There is a wealth of experience to draw on. Although few programs have been as rigorously evaluated to determine their cost effectiveness as decision makers might wish, enough has been done to show the way. We hope that the case studies will be an inspiration for new initiatives, but we should remember that the success of any scheme depends largely on adapting a promising design concept to specific local social, political, and cultural circumstances. Experimentation and structured learning from pilot schemes, accompanied by rigorous evaluation and effective dissemination of the findings, must be encouraged.

Indonesia: Economic Growth, Equity, and Hunger

Indonesia's remarkable success in reducing the incidence of hunger and poverty during the past fifteen years stems from policy objectives to ensure that the population at large shared the gains of rapid economic growth.

The Strategy

Between 1976 and 1990, the number of Indonesians in poverty defined as those unable to purchase about 2,100 calories per day and a minimum amount of essential nonfood goods—fell sharply from 54 million (roughly 40 percent of the population) to 27 million, just over 15 percent of the population. These figures reflect success in reducing poverty in both rural and urban areas. The percentage of poor people in rural areas fell from more than 40 percent in 1976 to roughly 14 percent in 1990, and in urban areas from just under 40 percent to about 17 percent. Moreover, since 1978 severe malnutrition among preschool children has fallen substantially.

Development practitioners generally agree that Indonesia's success in reducing hunger and poverty is rooted in the following:

· Policies that have fostered rapid economic growth During the oil boom of the early 1970s the economy grew at an annual rate of more than 11 percent, but growth dropped to roughly 5 percent per year between 1982 and 1987 because of oil shocks and global economic crises. Since the introduction of structural reforms in the late 1980s the economy has grown at an average rate of 75 percent per year. Consequently, per capita income has increased more than tenfold during the past two decades, from US$50 per year in 1967 to US$570 per year in 1990.

The high priority given to increasing agricultural and food output. Not only has agriculture been a prune contributor to the economy's growth— agricultural output grew at an average annual rate of 3.7 percent between 1969 and 1990- but Indonesia's success in keeping food output ahead of the population growth rate of 2.1 percent means that today Indonesia boasts the highest daily calorie supply 2,675 calories per capita per day of all low-income countries. Yet until the late 1970s Indonesia was the world's largest rice importer, spending a quarter of its foreign exchange revenues on rice imports. Rice self-sufficiency was one of the primary goals of the country's economic development plan, and this was successfully achieved in 1985, when rice imports [elf from 2 million tons to only a few thousand tons.

· "Pro poor" policies, such as the heavy subsidies placed on rice for consumers. The government held rice prices constant in real terms for about twelve years, from 1974 to 1986. As a result, with rising incomes rice consumption per person increased by about 30 percent, from 100 kilograms per person per year in the late 1960s to around 145 kilograms in the late 1980s.

This mix of policies has been effective in sharply reducing the number of hungry and poor. Today hunger is concentrated in particularly vulnerable households. Chief among these are households that rely on seasonal wage labor and suffer from shortfalls during the slack period, and poor households that are especially susceptible to hunger during periods of drought other factors that lead to low agricultural output.

Despite the large gains made in raising incomes and reducing hunger, however, infant mortality rates remain high and childhood malnutrition is still widespread This reflects the persistent burden of diarrhea! diseases, acute respiratory infections, malaria, micronutrient deficiencies, and suboptimal breastfeeding and weaning practices. Vitamin A deficiency has been eliminated as a public health problem in all but two of the fifteen provinces, but iron and iodine deficiencies remain widespread. The country infant mortality rate of 64 deaths per 1,000 live births is well above that of other Association of Southeast Asian Nations countries and of such low-income countries as China and Sri Lanka.

Lessons Learned

Indonesia's development policies combining growth, increased food availability, and poverty reduction have been central to the substantial reduction in severe malnutrition However, continuing high rates of moderate and mild malnutrition, both of which have serious developmental implications for young children, and the persistence of micronutrient deficiencies, indicate that economic growth is necessary, but not necessarily sufficient by itself to eliminate malnutrition as a hindrance to development.

Despite its remarkable achievements in recent years, Indonesia still faces huge challenges: it is a low-income country, living conditions need to be improved for the 15 percent of the population that lives below the nationally-defined poverty line, pockets of hunger persist in some regions, and large public investments are needed to improve health and nutrition standards.

El Salvador: Village Banking

In El Salvador, the Foundation for International Community Assistance (FINCA) has been developing an extensive network of village banks since l991. The program has evolved into the largest credit program for the poor in Central America. The village banking network provides small loans to self employed borrowers, 95 percent of whom are women.

Background

The peace process in El Salvador has only just begun after nearly twelve years of civil war. While large portions of the population are excluded from full participation in the national economy, the country cannot aspire to lasting peace Today, tens of thousands of Salvadoran families remain trapped in severe poverty with their children threatened by malnutrition and disease In the aftermath of the civil war, FINCA has sought to build a national credit program that could contribute to the reconstruction of the country.

FINCA is a network of nongovernmental organizations (NGOs) that operate village banking programs in Latin America and Africa.

April 1994 the FINCA network comprised 2,058 village banks worldwide These banks, which are entirely managed by the borrowers, process more than 2.2 million loan payments a year at an average repayment rate of 97 percent.

In El Salvador, FINCA's Centro de Apoyo a la Microempresa (CAM) began its village banking operations in June 1991 with a seven-year grant from the U.S. Agency for International Development. The objective of the village banking program is to provide extremely poor families with self-employment loans ranging from US$50 to US$300 CAM, which is an affiliate of FINCA international, was created as an independent NGO whose board of directors comprises representatives from El Salvador's private sector and local NGOs.

Operations

By April 1994, after less than three years of operations, CAM was operating 975 village banks serving 29,550 families, or more than 150,000 people The program has encountered a seemingly limitless demand for village blanking services among poor communities. CAM now offers village banking services in all 14 geographic departments, including 45 of 109 municipalities within the former war zone. It is currently expanding its coverage at a monthly rate of 48 new village banks, or 1,250 borrowers. El Salvador has an estimated 600,000 extremely poor people, and by 1998 CAM aims to provide services to more than 90 percent of them.

In April 1994, CAM's village banking portfolio totaled US$2.7 million, with an average loan size of US$90. The repayment rate was 99.4 percent. Borrowers are charged interest and training fees at a flat monthly rate of 3 percent of the loan. Savings deposits in the village banks amounted to US$1,140,917 At the dose of the first quarter of 1994, CAM was operating at 102 percent self sufficiency.

Program Design

The borrowers' participation in managing the credit system is one of the most important features of FINCA's village bank model. Village banks, whose membership ranges from twenty to fifty individuals, function as autonomous informal credit associations that manage all loan transactions A democratically appointed management committee governs each village bank. At the outset, the membership determines the by-laws for the operation of the bank using guidelines pro vided by FINCA. The bank's members meet weekly to conduct loan transactions, discuss business matters, and give each other moral support. FINCA "promoters" or extension workers visit weekly to provide training to both the management committee and the borrowers and to oversee operations.

Village banks have two sources of capital. The first source is from outside the community. Local FINCA intermediary institutions extend group loans to the village banks in four-month loan cycles. Borrowers make weekly installment payments that are collected at village bank meetings. The installments are calculated as a quota or lump sum that comprises payment on loan principal and interest and a savings deposit. In the case of CAM, the first group loan is equivalent to US$50 multiplied by the number of borrowers. In subsequent loan cycles CAM increases the line of credit to the bank in direct proportion to the accumulated savings deposits.

A village bank's second source of capital is community savings. The membership deter mines how it will use the savings deposits Most village banks decide to keep an emergency reserve and on-lend the balance of their savings to bank members. This practice allows community net savers to finance net borrowers at interest rates that the membership sets. These rates are generally higher than those FINCA charges Savers thus realize a substantial dividend on their deposits.

CAM's delivery system is organized as follows. Each CAM promoter typically services ten village banks Promoters work as members of a field office team. The team services from 60 to 240 banks Regional bank offices, of which four now operate in El Salvador, supervise the field offices. The central office in San Salvador is charged with overseeing management, training, and administrating the flow of funds through the system CAM collects cost and revenue data at each organizational level.

Impact

According to CAM sample surveys, most borrowers are single mothers, many of whom lost their husbands in the civil war. A borrower typically supports four or five dependents and has less than three years of education. Most borrowers live in a one-room dwelling without electricty. Water is usually head-carried for distances of up to a kilometer. At the outset of the project, the family income of most participants was less than US$2.33 a day.

According to a recent external evaluation survey of 386 borrowers conducted by the US Agency for International Development, the average increase in sales and income was 160 percent and 145 percent, respectively, among borrowers who had participated in the program for more than one year More than 70 percent of surveyed borrowers reported that they had increased their purchases of medicines and food since joining the program, and 60 percent reported that they were making significant contributions to family decisionmaking.

In the words of Franciscan Rajas, one borrower. "When you have been as poor as I have been, there is a lot of shame. Even when I was a child, people wouldn't look at me I guess they were afraid I would ask them for something I feel safer now I sleep calmly at night because I am not so worried about how to pay back a moneylender. I don't have to prostrate myself to anyone.”

Lessons Learned

Some of the key issues that FINCA faces in developing CAM and other village banking programs can be summarized according to the different organizational levels of its program.

Borrowers. Impact evaluation data show that average village bank borrowers substantially increased their income and empowerment from participation in the program FINCA programs need, however, to analyze better how borrowers can continue to grow The issue of integrating nonfinancial services such as marketing and production assistance needs more scrutiny as the number of borrowers expands and borrowers increase the level of sophistication of their businesses.

Village banks. There are areas where the bank operation model can be improved. Techniques for helping members manage their savings need to be constantly reviewed and refined The evolution of the banks as they mature after several years of operations needs to be more clearly defined so that they can adapt their services to the changing needs of their membership.

Intermediary organizations. The most important challenge FINCA intermediary organizations such as CAM face is balancing their need to promide quality service with their need to expand CAN' experienced the most rapid expansion of services in the history of microenterprise institutions in Latin America Such an expansion places extraordinary pressure on internal management and financial control systems. The growth in CAM's portfolio has sometimes outpaced its development of such systems. CAM's management has now reamed to strike the right balance between expanding its services and introducing adequate systems to support the expansion.

Also, as FINCA intermediary organizations expand, they need to identify new sources of capital at a time when bilateral foreign assistance is decreasing. For this reason, FINCA intermediaries are increasingly accessing loan capital from commercial banks and international financial institutions. FINCA intermediaries need to develop new systems and skills to manage lines of credit from such sources.

West Africa: Credit with Education for Women

Freedom from Hunger's review of formal research studies and program experience shows that a combination of financial resources and nutrition and health education provided to very poor women has the most direct impact on chronic hunger and malnutrition among women and children) Credit with Education is a program strategy designed to provide integrated financial and educational services to bolster the self-help capabilities of women in very poor rural areas. Because of the high levels of food insecurity and malnutrition, most programs supported by Freedom from Hunger are in West Africa.

Program Design

Credit with Education uses a village banking approach, which is a decentralized version of poverty lending well suited to reaching dispersed communities in rural areas. Credit is provided to self-managed credit associations of approximately thirty women as a four-month group loan that can be rolled over and increased in proportion to members' savings The women take out individual loans to carry out income generating activities of their choice to increase their personal and family incomes and savings. Weekly meetings of these credit associations provide a forum to address credit association management, basic microenterprise development problems, and hunger related issues Learning sessions on health and nutrition address five important issues: (a) birth spacing, (b) breast-feeding, (c) infant and child nutrition, (d) management and prevention of diarrhea, and (e) immunizations. Baseline surveys, focus group studies, and the nonformal problem solving techniques used during the weekly learning sessions draw attention to specific barriers to change Field staff provide credit association members with information and counseling as they facilitate problem solving.

Impact

In early 1989 Mali became the first field program site in which the Credit with Education strategy was introduced In the last four years, the program has lent approximately US$300,000 to poor village women living in two arrondissements southeast of Bamako, the capital city. In 1991 the program's 99.9 percent loan recovery rate and clientele of more than 1,000 poor rural women convinced the Banque Nationale de Developpment Agricole to provide loan capital to the program at a concissionary interest rate of 6 percent without requiring a reserve fund. As of June 1993, 1,762 members were organized in 65 credit associations with an outstanding loan portfolio of US$51,413 and an average loan size of US$34. The small average loan size reflects the extremely low per capita incomes of the households reached by this program.

Nutritional assessments in the Mali program area indicated a widespread tendency for late introduction of weaning foods and high levels of malnutrition among weaning-age children For this reason, the nonformal health and nutrition learning sessions facilitated at credit association meetings have stressed good infant and child feeding practices, particularly during weaning.

Evaluations of the Mali program have demonstrated a positive impact on the participants' quality of life. Figure 1 provides summary results from a survey conducted in conjunction with an independent evaluation that highlight the program's diverse benefit. Credit Association members indicated that their incomes and savings had increased, that they had learned about the appropriate timing of weaning, and that they were empowered and enjoyed greater bargaining power in their families. Eighty-five percent of the members felt that the health and nutrition of their preschool children had improved.

A Credit with Education program that started in Honduras in 1990 produced similar results Other Freedom from Hunger Credit with Education programs are operating in Bolivia (1990), Burkina Faso (1993), Ghana (1992), and Thailand (1989).

Figure 2 presents survey results using a larger sample conducted by Freedom from Hunger in the Credit with Education program in Thailand Credit association members demonstrated superior knowledge and adoption of steps to prevent and manage diarrhea! episodes. Program participation also seemed to provide some protection during a recent drought, because credit association members were less likely to report a deterioration in their families' diets, and per person weekly food expenditures were greater in members' families than in nonmembers' families despite their comparable socioeconomic status.

In 1993 Freedom from Hunger and the Credit Union Network of Burkina Faso started to replicate and extend the model developed in Mali. Credit with Education is being added to the services provided by existing financial institutions (credit unions) to achieve quick, cost-effective implementations as well as a network for rapid expansion. Figure 3 shows the organizational structure of the programs in Burkina Faso and Mali for comparison. Note that existing financial institutions (not guaranteed by Freedom from Hunger) are the sources of credit for all Credit with Education programs currently operating in West Africa.


Figure 1. Results from the Mali evaluation.


Figure 2. Results from the Thailand survey.

Lessons Learned

Freedom from Hunger is demonstrating that Credit with Education can be scaled up to a high performance level, creating an increasingly self-financing mechanism that cost-effectively serves growing numbers of people. Credit with Education is designed to cover expenses with revenues from the interest and fees collected Table 1 shows the projected expenses and revenues for a single credit union (caisse populaire) in the Credit Union Network in Burkina Faso and the regional office that supports a cluster of credit unions.

Financial self-sufficiency can be achieved using realistic growth scenarios for the number of credit associations and borrowers, the volume of loans, the service fees collected, and the costs of operating the program. Projections indicate that each participating credit association will become self-financing within four years and that each regional office will cover its costs with in six years. Similar projections for the Mali program show much slower approach to self-financing, reflecting the difference between working with an NGO focused solely on delivering Credit with Education versus a financial institution that adds Credit with Education to its services.

The self-financing feature of the Burkina Faso program allows the Credit Union Network (and its funding partners) to start up Credit; with Education in many credit unions around the country without accumulating a massive fiscal burden. By becoming financially self-sufficient, each field unit relieves the regional office and the central office of the responsibility for endless funding of recurrent costs.

Pakistan: The Aga Khan Rural Support Program and the Empowerment of Rural Women.

The mountainous northern regions of Pakistan, populated by about 1 million people, are climatically extreme, ecologically fragile, and scarce in natural resources. The population is of mixed ethnic and religious origin and speaks a variety of languages, ranging from Wakhi, an archaic Iranian dialect, to Balti, a Tibetan dialect. The people of the region are farmers who depend on glacial melt to irrigate their small fields carved out of the mountainsides. Until the 1970s the region was ruled by small, princely states that survived largely by levying taxes on the farmers or on caravans traveling the Silk Route.


Figure 3. Credit with education partnerships in Burkina Faso and Mali.

Background

In 1982, a time when the old social order was in disarray, the Aga Khan Rural Support Program (AKRSP) was established in northern Pakistan The AKRSP's objective was to file the institutional vacuum created by the dissolution of dozens of tiny states by mobilizing rural populations into village level organizations These have since been instrumental in helping communities plan their own development Today the AKRSP has almost 3,000 village and women's organizations in its program area, covering a population of more than 90,000.

For the women of northern Pakistan, the AKRSP has changed their lives significantly The women of the region have a difficult life, bearing up to 10 children, often working harder than the men both on and off the farm, and with only 3 out of every 100 being able to read and write Women's lives revolve either around the household or the village. Cultural constraints prevent women from being able to sell produce in the region's few markets or from owning property Consequently, they have little power in making decisions pertaining to land use and financial resources.

The AKRSP's aim is not only to help women increase their agricultural and related production, but, perhaps more important, to enable them to realize their strengths and capacities by participating in women's organizations. Members of the 600 women's organizations feel that the AKRSP's most significant contribution has been the saving program initiated for women Having their own money has increased their status, and has led to increased personal pride and power.

Village women form women's organizations to save money and to learn skills from the AKRSP in agriculture and related fields. The program's provision of agricultural and livestock inputs has led to improvements in women's nutritional status as well as in their incomes. In northern Pakistan women's diets depend not only on the seasonal availability of food, but also on cultural practices prevalent in the region Although women are responsible for all activities related to food, they are also the last to eat meals, having served the children and men first Food taboos for women are common Women are often anemic because of frequent child bearing, and a large percentage of women consume Less that 70 percent of the recommended daily nutrition requirement The opening up of the region to the rest of the country through the Karakoram Highway and the resultant expansion of local markets has also meant that farmers place more emphasis on selling produce than on producing the food necessary.

Table 1 Burkina Faso Credit with Education program, financial summary and six-year projections at two organizational levels, fiscal 1994 -99.

Level

Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Fiscal 1998

Fiscal 1999

Caisse Populaire







Total credit associations

10

25

40

55

70

70

Total borrowers

300

750

1.200

1,650

2.100

2,100

Loans made each year

16,092

90,767

180,391

299,680

458,451

624,060

Loans outstanding end of year

12,372

36,988

69,750

113,357

171,397

728, 130

Interest income

372

6,616

14.763

25,609

40,041

56,733

total costs

6,020

14,772

21,178

25,025

26,538

29,191

Net surplus(deficit)

(5.648)

(8.156)

(6.415)

584

13,503

27542

Expenses covered by income

0 06

0.45

0.70

1.02

151

1.94

Cost per dollar lent

037

0.16

0.12

0.08

0.06

0.05

Total caisses populaires

3

6

12

18

24

24

Total credit associations

30

105

255

495

825

1,140

Total borrowers

900

3,150

7,650

14,850

24,750

34,200

Loans made each year

48,276

320577

910,026

2.081,367

3,997,893

6,672561

Loans outstanding, end of year

37,1 16

148,110

394.506

845,601

1,569,102

2.519,391

Interest income

1,116

20,964

66,369

163,044

327,456

572,250

Total costs

18,060

62,376

181.905

288,189

431.840

560.901

Net surplus deficit

(16.944)

(41.412)

(115.536)

(125,145)

(104.384)

11349

Expenses covered by income

0.06

0.34

0.36

0 57

0.76

1.02

Cost per dollar lent

0.37

0.19

0.20

0,14

0.11

0.08.

Source: Freedom from the data. for a balanced diet This reflects both women's lack of knowledge about nutrition and the pressure they face in meeting household requirements through their incomes.

Two major activities that the AKRSP emphasized are training women in vegetable cultivation and poultry rearing, including the provision of improved inputs. In the past ten years the cultivated land area has increased a total of 6 percent, with an increase of more than 100 percent in the amount of land under vegetable cultivation The land has been developed by the construction of water channels built by the village organizations.

Poultry rearing is also a traditional women's activity and is increasingly becoming the region's main source of meat Women's organization members have been trained in poultry disease control and improved management practices. Ten years ago the average number of poultry birds per farm was 5 1. During the past ten years this number has increased to 12.3, representing an increase of 141 percent.

One of the most significant changes in the lives of members of women's organizations is that they are now eating many more varieties of vegetables and consuming more poultry products than they were ten years ago. Whereas they only used to grow two vegetable varieties, they now grow more than fifteen types of vegetables. Similarly, the increase in the number of poultry birds has meant that they are consuming more than double the amount of poultry and eggs.

Impact statistics do not capture the essence of the AKRSP's message and its success, which is a result of the strength of the women's organizations There are simpler and perhaps more efficient ways to increase consumption and improve nutrition. However, the AKRSP's investment is not only in vegetable seeds or in poultry birds, but in the 600 women's organizations of northern Pakistan. More than 10,000 village specialists trained by the AKRSP are independently providing services to villagers, with more than 90 percent of them being paid by the villagers themselves Women have set up poultry enterprises and are contributing to the education and improved health of their children through increased household incomes They hold regular meetings of their organizations and they are saving money. Real per capita incomes of the region show a 94 percent increase since the inception of the program compared to 26 percent for the rest of Pakistan. Over the year's the women's organizations have saved PRs 19 million. Today women are much more involved in making decisions relating to land use and the allocation of financial resources. They are realizing their strength by being members of women's organizations and experiencing significant personal and collective growth.

Illustrative of the change in society’s attitude toward women are the shifting distinctions and boundaries in occupations traditionally viewed as male The transfer of accounting skills to women and the fact that women are managing the affairs of their organizations are positive signs of their enhanced capabilities and their potential to plan for their own development.

Lessons Learned

The change in the status of women in traditional areas such as northern Pakistan is not rapid. The program has encountered resistance by men to the concept of organizing women into strong and vocal groups The women's organizations of northern Pakistan still have a long way to go before they develop capacities that will enable them to make decisions completely independently of men. Income generation has been the first step toward women's empowerment. In most women's organizations participants are using their money for productive activities, and are thus increasing their capital However, women are also demonstrating an increasing awareness of investments in the social sector and are paying for education and health services for their daughters.

The large village-level network of community based development organizations has lent a form of cohesion to activities undertaken by the villages of northern Pakistan. Villagers' increased capacity to design and implement their plans in a democratic manner has been the strength of these organizations. The "development partnership" that the AKRSP offered to the people of northern Pakistan leas given them the confidence to tackle many of their problems on their own The goal must be to invest in building up the capacities of poor communities. Then village organizations will be able to carry on the process.

Indonesia: Rural Credit for Marginal Farmers and the Landless

The objective of the Rural Credit for Marginal Farmers and the Landless Project is to increase the incomes of the rural poor in six provinces of Indonesia It is also intended to provide the rural poor with a mechanism and institutional framework for accessing available government and other services, such as the agricultural extension system and the formal rural banking sector, by organizing them into groups.

After three years' operation, the project has succeeded in the following.

· Increasing the incomes of the poor by 41 to 54 percent.

Training and building up groups to enable them to gain access to credit, services, and the means for self-reliant development.

· Forging an institutional structure capable of continuing the poverty alleviation program on a cost-effective and sustainable basis

· Linking groups of the poor to a bank with a wide network of rural branches and providing credit on terms that are both replicable and sustainable

· Providing a cost-effective model, methodology, and institutional framework for poverty alleviation that can be replicated nationwide

· Increasing the beneficiaries' empowerment, confidence, and self-reliance.

Roughly 2,000 villages from 53 districts in the 6 provinces were selected to participate in the project More than 15,00{) groups of the poor have been formed with an average membership of 10 or 11 households each, which amounts to a total of 160,000 families in just three years. Given the project's strong performance, it is likely to meet its target of forming 32,750 groups within the next two years, covering around 327,500 households or approximately 2 million rural poor people.

Project Design and Implementation

The project's aim is to form small groups that are socioeconomically homogenous. These are used as focal points for training, credit, and income generating activities It has been successful in creating relatively strong groups with internal dynamics and personalities of their own. Most women were found to prefer women's groups to mixed groups.

Thus, while the project had envisaged that 20 percent of ale groups would be women's groups, in practice the figure is 35 percent.

Above all the project has succeeded in targeting the poor Rigorous targeting of the beneficiaries has been undertaken to ensure that no household with an income equivalent of more than 320 kilograms of rice per person per year (the poverty yardstick) is included. This is verified by a survey of preselected poor villages and households. These screening processes have succeeded in identifying the poor, although not always the most severely impoverished.

The project's intent was that group members should undertake one common income-generating activity, although up to three are allowed. Although this has raised practical difficulties in some Locations, working together on a common enterprise has induced greater group confidence and cohesion, and has facilitated economies of scale in input supply, production, and marketing The members of 83 percent of the groups undertook a common activity, but carried it out on an individual household basis, while the remaining 17 percent of groups used their access to credit for joint enterprises Many of the groups also undertook social service activities as a group, which has advanced their standing in their communities.

The project has also been effective in training both beneficiaries and project staff Field-level extension workers train the beneficiaries in the skills they need to manage their groups and microenterprises, while the extension workers are themselves specially trained for this purpose The mid-term evaluation of the project found that the training was quite strong in all fields except nonfarm, microenterprise development, in which the field-level extension workers lack expertise.

Another major factor accounting for the project's success is its institutional foundation The field-level extension workers set up the groups and train them, while their parent agency, the Ministry of Agriculture, is responsible for project management At present, only 21 percent of the extension workers in the project locations have been drawn into project work, and they are supposed to devote only 30 percent of their time to such activities. This decision to base project staffing on the pattern of an existing agency with a vast field network (Indonesia has more than :30,000 field-level extension workers) implies that project activities can be expanded and replicated at relatively low cost. Moreover, as project credit is provided through the normal banking system, project expansion or replication is unlikely to face any great costs or difficulties.

Project Impact

An important achievement of the has been its ability to instill a sense of self-reliance among the members of poor rural groups and to demonstrate their creditworthiness. They have already accumulated Rp 700 million in compulsory savings. Moreover, all of them have accumulated additional voluntary savings totaling more than Rp 300 million.

Credit is provided by the Bank Rakyrat Indonesia, the largest rural bank in the country As the executing bank, it lends to the groups without demanding collateral at the near-market rate of 21.15 percent per year. Lending packages and procedures have been tailored to the poor, while staff have been trained by the project for banking with the poor The repayment rate of 99-5 percent (after three loan cycles) makes this the most successful credit program in the country, if not the region.

The groups and individual beneficiaries are given assistance in microenterprise development to boost their economic activities. Here the results have been mixed. While many groups have set up profitable enterprises, especially in trading, agroprocessing, and handicrafts, many are still stagnating in low-paying activities such as fattening livestock One reason for this is that the field-level extension workers trained in agriculture are not equipped to help the groups with their nonfarm activities. Another obvious reason is the difficulty of finding profitable nonfarm income learning activities in poor rural areas with an undifferentiated economy.

Of the groups receiving credit, 367 have formed associations This two-tier system seems to evolve more naturally in areas with high concentrations of the poor, where many groups are formed in a single village, as m West and East Java and on the island of Lombok. The main reason for the emergence of the associations seems to be to implement particular activities that exceed the capacity of the groups Such functions fall into three main categories: (a) financial intermediation, (b) purchase and supply of inputs, and (c) marketing Despite their recent origin (all of them are less than one or two years old), the success of these associations, especially in the field of financial intermediation, has been impressive. For example, many of the associations collect the loan repayments of their member groups in advance and re-lend the funds to members mainly as short-term loans at interest rates of up to 5 percent per month, chiefly for petty trading. This has resulted in high rates of profit and savings. Thus the Association Sinar Harapan in Lombok—in existence for only one year—has already generated internal savings of more than Rp 1,088,500, and through profits from loans for petty trading has accumulated a fund of Rp 2.5 million For reasons of institutional viability and economies of scale, these associations may well develop into the main service organizations of the poor, providing the institutional base for credit, for services, and for self help activities.

In heavily populated poor villages, where in some cases more than 90 groups have been formed in a single village, each with a membership of more than 1,000 people, the social and institutional impact on the community is bound to be strong over time, especially in those villages where associations have been formed. Thus, the project may be said to be empowering the rural poor to a significant extent.

In terms of its socio-psychological impact, the beneficiaries claim that for the first time they are recognized by the community, are approached rather than overlooked by local government functionaries, and, most important, feel that they can improve their lives through their own efforts as a group The individual and group saving of the poor have helped to give them this greater sense of confidence as well as collateral for credit in the future. Indeed, the Bank Rakyat Indonesia has confirmed that it would be prepared to continue lending to the groups without collateral (at market rates of interest) even after the project was over.

The project envisaged that credit would be disbursed only for activities approved in the group business plans. However, in practice the loans have been used to finance a number of other small income generating activities, and even for consumption purposes. The beneficiaries have also been using their second and third loans to additional new activities, thereby adding to and diversifying their income streams. Although loan repayments are being made in full and on time, they do not necessarily originate from the activity financed by the loan. Thus in practice the project is financing a portfolio of activities by the poor (including consumption), but with excellent results in terms of credit repayment and increased incomes. Consequently, the project may switch to portfolio lending for the poor based on their actual cash flow and their 99.5 percent loan repayment rate.

Similarly, project credit has tended to flow mainly into nonfarm- or nonland-based enterprises, mainly because the beneficiaries have little or no land. When credit is targeted to the rural poor, they will inevitably channel the funds to those activities that are the most feasible and profitable for them Hence, when the poor are accurately targeted, the credit activities also seem to be automatically targeted. In this case, 97 percent of the activities financed by project credit are of a nonfarm nature (We have included livestock rearing by the landless, with the livestock fed from fodder cut from the commons, and the few cases of sea fisheries as nonfarm activities ).

Some 82 percent of the groups claimed that they had increased the volume of their production as a result of project credit, while 65 percent said that the quality of their production had improved In some cases these changes were accompanied by diversification, differentiation, expansion, and modernization of production. Moreover, 79 percent of the groups noted indirect effects on production through improved input supply and marketing There are also some cases of a change in production relations. Many respondents stated that whereas prior to the project they had been wage laborers, they were now' self-employed.

Given the difficulties in measuring improvements in income, the data reported here must be viewed as a rough approximation. The midterm evaluation estimated income increases per household at 41 to 54 percent This is a significant increase considering that project credit has only been available for three years. The extent of the increase in incomes has varied according to the different locations.

With regard to institutions, the project has had a profound impact at three levels:

· The project has pioneered an essential institutional building block for poverty alleviation programs in Indonesia at a time when government interest in such programs is high by means of its creation of groups of the rural poor

· The project has shown that an agricultural extension agency can, with some training, provide a widespread institutional network to sustain a countrywide poverty alleviation program. This also implies that the program can be doubled or tripled at short notice, and at little additional cost.

· The project has had an institutional effect on the largest rural bank in the country, which has changed its attitudes toward and rules and procedures for lending to groups of the poor, and has now accepted that lending to the poor at market rates of interest is both feasible and profitable.

Concerning the project's economic sustainability, many of the microenterprises are still at a stage of low productivity, but many others are profitable and have obtained access to higher levels of technology and higher value markets. It is in the area of microenterprise development, however, that the project still has a long way to go. Other technical resources will have to be brought in to ensure better performance in this field.

With respect to financial sustainability, the cost per beneficiary is estimated at only US$1 per month. This cost will decrease as the number of groups increases and they become more self-sustaining The estimate excludes credit costs, but given that credit is to be at market rates of interest (at the conclusion of the project), this will not pose a financial problem for replication or sustainability.

As a result of the groups' excellent credit performance, the executing bank is now prepared to expand credit to groups of the poor in other areas on the same terms. It is also prepared, m the future, to continue providing credit to the groups (without collateral) at the market rate of interest prevailing at that time Credit should, therefore, he sustainable, because the poor have proved that they can operate under these conditions.

Lessons Learned

The project's organizers learned a number of valuable lessons First, it is possible, and indeed necessary, to organize the poor into groups to help themselves and receive services. Second, these groups can be financed by providing credit without the need for expensive handouts Third, the poor are creditworthy and have a better repayment record than other credit recipients, and therefore credit is sustainable Fourth, existing institutional structures can be used to provide a low-cost and effective means to organize and train the poor Finally, the means are available to make such a program of poverty and hunger alleviation relatively cost effective, replicable, and sustainable.

India: Maharashtra Employment Guarantee Scheme

Among developing countries, the best known and by many accounts the most successful example of direct public efforts to reduce absolute poverty in rural areas is the Employment Guarantee Scheme (EGS) in the Indian state of Maharashtra.

Overview

Initiated in response to the severe drought in Maharashtra in 1972-73, since the mid-1970s the EGS has aimed at providing unskilled rural employment on demand, as embodied in its slogan magel tyala kam (whoever asks for work will get it) EGS projects create or maintain rural infrastructure through small-scale irrigation, soil conservation, reforestation, and rural road building. Wages are set in the form of piece rates stipulated for a number of specific tasks, such as digging, breaking rocks, shifting earth, and transplanting.

Given the attention it has received in development policy debates, it is surprising that the common perception of the EGS as a successful poverty alleviation program is backed up by relatively little careful research The basis for this perception is perhaps to be found in several distinctive and promising features of the scheme as described in the following paragraphs.

First, the scale of the EGS is impressive: average monthly participation during 1975 89 was about 500,000 people. In an average year during the latter half of the 1980s, at a cost of about US$1 per day, it provided about 130 million person days of employment in a state with a rural work force including cultivators- of about 20 million (see table 2) Another notable achievement is that with the exception of the last few years, the scheme's scale has been sustained for nearly two decades. Since 1990, the EGS has been substantially reorganized to focus on integrated development at the village level It is also being coordinated with other programs on watershed development, horticulture, and well construction. However, little is known about the effects of these recent changes, and this account refers mostly to the period up to about 1990.

Second, EGS projects are designed to be highly intensive in their use of unskilled labor. Labor costs have typically accounted for more than two thirds of variable costs, even higher than the stipulated minimum of 60 percent (see box 1).

Third, the EGS has also been an important avenue of employment for women Their share in total participation has ranged from about one third to a half, with a median of about 40 percent Several factors have contributed to this, including the close proximity of work sites to villages, the provision of basic child care (often employing an elderly woman from among the participants), and the fact that EGS piece rates do not discriminate between the genders (although differentials in time wages remain because of differences in the type of work and because women often work fewer hours than men).

Fourth, and perhaps We most striking feature or the EGS is its guarantee of employment, although the legal guarantee is restricted to the provision of unskilled manual work within the district (see box 2). The district covers a large area: apart from Greater Bombay, Maharashira has twenty-nine districts with an average area of about 10,000 square kilometers. In general though, the EGS has sought to locate work sites within the same panchayat samrti area (typically a small cluster of contiguous villages).

Table 2. Summary data on the EGS, 1978/79-1990/91.

Yeara

Employment (millions of person cloys)

Share of female labor attendance (percent)

cost per person day (RS at 1990-91 prices)

Share of wages in total costs (percent)

1978-79

163.5

43.3

11.11

79.6

1979-80

205.9

41.0

11.54

8.9

1980-81

17.15

37.3

14.20

75.9

1981-82

156.0

37.1

13.37

77.7

1982-83

128.0

36.9

17.48

76.2

1983-84

164.5

39.3

17.11

75.3

1984-85

178.0

37.9

19.26

63.7

1985-86

189.5

42.1

20.55

66.9

1986-87

187.6

52.9

17.36

63.4

1987-88

133.3

43.0

17.49

66.3

1988 89

8.3

35.0

23.62

72.4

1989-90

77.7

33.1

23.27

72.4

1990-91

61.6

-

24.00

70.6.

- Not available

a Refers to the financial year, April to March.

Source: Compiled from monthly progress reports on the EGS published by the Planning Department of the Government of Maharashtra. Bombay. .

Finally, the employment guarantee is closely linked with another attractive feature of the EGS, namely, its ability to operate as a self-targeting scheme. This avoids the costly, and in some instances infeasible, alternative of means testing. Self-targeted schemes work on the general principle that the benefits net of costs of participation are such that only the poor would wish to participate. In the EGS self targeting works by combining a low wage rate and a manual work requirement. Breaking rocks or performing similar physical labor for a low wage is unlikely to be attractive to anyone but the poor.

Impact: The EGS and Poverty Alleviation

Since the mid-1970s absolute poverty in Maharashtra has declined more rapidly than in India as a whole. While this may be consistent with expectations, how much of the decline in poverty in Maharashtra can be attributed to th. EGS is not known. The critical issue in assessing the performance of the EGS is its cost effectiveness in alleviating poverty- relative to alternative policies supported by the same gross budget. Even within the narrow dimension of income or consumption poverty, this is a difficult question and one that the literature has not addressed adequately. However, some evidence is available.

Box 1. How the EGS works: the main provisions

All adults living in villages and small municipal towns of Maharashira arc guaranteed employment under the EGS The guarantee is only for unskilled manual work within the district. Transport facilities or expenses are to be provided if the worker must travel more than 8 kilometers There is also provision for on-site facilities such as potable water, creches, and first-aid.

Those looking for employment must register for work under the EGS with the locally designated official. Employment is to be provided within fifteen days of demand, failing which the state is obligated to pay a nominal unemployment allowance New works can be started at the authorization of the district collector if at least fifty laborers become available [or work and they cannot be absorbed by any ongoing works.

With the exception of some canal works involving rock cutting, EGS works arc required to have an unskilled wage component of at least 60 percent.

The EGS is financed in large part through a number of special taxes levied mainly on the urban sector, including a professions tax, an additional tax on motor vehicles, an additional tax on sales tax, a surcharge on land revenue, a tax on irrigated agricultural land, and a tax on nonresidential urban lands and buildings Additional funding comes from a matching contribution by the state government equal to the net collection from the special taxes

Box 2 Does the EGS guarantee employment?

The statutory guarantee is for unskilled manual work within the district. At the district level the guarantee has probably been honored, but given the size of most districts, this does not imply that EGS employment is necessarily accessible to all those who need it More challenging for the EGS is to accommodate the demand for locally accessible employment, for which travel costs (pecuniary and nonpecuniary) are not prohibitive. One cannot assume that this Stronger, and ultimately more meaningful, form of guarantee has always been met Indeed, there are several documented instances of laborers' organizations having to agitate (with varying success) for the initiation of EGS projects in specific areas.

In recent years the guarantee aspect seems to have come under particular pressure This is in the context of the doubling of the piece rates paid by the EGS in May 1988 in line with a doubling of statutory minimum wage rates in agriculture During the year following the wage increase, employment actually fell by about one-third, even one might have expected higher wages to draw more laborers to the EGS Careful econometric modeling of monthly labor attendance during the preceding thirteen years revealed that contrary to official claims, the good crop year of 1988-89 accounted for only a small fraction of the fall in employment More than 80 percent of the decline could be attributed to the rationing of EGS employment, and in the twelve months following the wage increase the EGS met only two fifths of the demand for local employment. Statutory wage increases can be politically attractive, but without an accompanying commitment of the necessary budgetary resources to sustain assured employment, they may not be in the interests of the poor.

For a detailed discussion see Martin Ravallion, Gaurav Datt, and Shubham Chaudhuri "Does Maharashtra's Employment Guarantee Scheme Guarantee Employment? Effects of the 1988 Wage Increase," Economic Development and Cultural Change 41 (2) (1993).

The poverty alleviation impact of the EGS depends on (a) the scheme's success in screening the poor from the nonpoor among potential participants (targeting), (b) the size and distribution of net income gains to the participants, and (c) indirect benefits.

Self-targeting. Recent evidence on the scheme's performance in reaching the rural poor is available from the National Sample Survey for 1987-88 The survey asked whether or not anyone in the household had participated in a rural public works project (mainly, but not restricted to, the EGS) for sixty days or more in the last year, and asked a similar question about participation during the previous five years in the Integrated Rural Development Programme, a scheme of subsidized credit targeted to the poor on the basis of an income means test Figure 4 plots participation in public works and the credit program against consumption per person Consistent with previous information about the EGS, it shows that participation in rural public works in Maharashtra tends to be greatest for the poor. Self-targeting seems to work for the EGS (while the means-tested credit program is strikingly untargeted).

Net income gains to participating households. Net income gains to participating households are more difficult to measure than the scheme's targeting performance Foregone income is the main cost involved, which may be significant even in situations of relatively high unemployment. It depends on how participation in the EGS displaces other more or less productive household activities. Evidence from a detailed study of two villages in the Sholapur and Akola districts of Maharashtra found that foregone incomes are positive, although quite low. The bulk of the displacement in time allocation is in unemployment for men and leisure or domestic work for women. The net gains to participants represented about the-quarters of their gross wage receipts. Factoring in other costs, notably materials and supervision, the study found that about half of the gross budget disbursement directly reaches the participants, most of whom would be deemed poor by any reasonable standard. However, the impact on poverty is no greater than what could be expected from the same gross budget disbursed as uniform (untargeted) cash handouts to all households .

Indirect benefits. The evidence cited above suggests that in the case of the ESG poverty alleviation depends on the indirect benefits The same study cited above estimates that indirect benefits equal to about 40 percent of cost, if uniformly distributed across all households, would be enough to tilt the scale in favor of the public works scheme over untargeted uniform transfers Thus, conventional benefit-to-cost ratios well below unity would still ensure that the EGS was relatively cost-effective in alleviating poverty.

The two most important sources of indirect benefits from the EGS are through asset creation and induced effects on agricultural wages Since its inception until March 1991, a staggering total of 195,000 EGS works had been completed To date their benefits have not been systematically quantified. A 1980 study by the Programme Evaluation Organization of the Planning Commission, Government of India, and the Directorate of Economics and Statistics, Government of Maharashtra, did provide some information about a range of benefits from the assets created by sixty-six completed works spread over four districts of Maharashtra It listed a total of 2,051 households, or 31 households per completed work, who benefited in different ways from EGS assets, including 1,427 households who reported an increase in their farm production, 335 who repaid outstanding loans, and 558 who were able to create new assets from increased earnings. The study also reported an enhancement of the employment potential of the area around the completed works, with farming households reporting greater use of both family and hired labor. It is, however, difficult to say how far these findings can be generalized (see box 3).


Figure 4. Participation in public works versus subsidized credit programs, Maharashtra, 1987-88.

During the mid-1970s to the mid-1980s, the real wages of agricultural laborers in Maharashtra increased substantially, with increases ranging from 50 to more than 100 percent depending; on the region Again, how much of this can be attributed to the EGS is not known However, even if the EGS's contribution was relatively small, the overall benefits could be enormous, because a wage increase benefits not just the 500,000 EGS participants, but the entire work force of 8 million agricultural laborers. Note that maintaining the scheme's guarantee aspect is an important factor in the realization of these benefits: assured employment allows workers to make credible threats during wage bargaining in local labor markets.

Stabilization benefits. The EGS can claim a certain measure of success in stabilizing the incomes and consumption of the poor, both within a year and across good and bad years. The evidence here is indirect, and is based mainly on the pattern of labor attendance at EGS projects (figure 5) First, EGS attendance seems to be responsive to the seasonally of labor demand in agriculture. Monthly labor attendance typically peaks during March to May and is at its lowest during September to November. This is consistent with Maharashtra's crop calendar The major food crops (jowar, rice, bajra) are grown in the kharif (monsoon) season, with sowing in June to August and harvesting in October to December. Even the rabi (post-rainy season) food crops (sown in September through November and cotton, the principal nonfood crop (sown in June. through September), are harvested by about March.

Similarly, some evidence indicates that EGS attendance responds positively to shocks in the agricultural sector. For example, during 1979 80, when Maharashtra was hit with a drought in the central and western (Madhya Maharashtra and Marathwada) region end later a flood in the eastern (Vidharbha) region, labor attendance increased sharply. The same happened during 1985 87, when drought conditions led to a roughly 30 percent drop in food grain output.

Lessons Learned

Despite its popularity, the EGS remains controvelal in some respects. The scheme has often been criticized, with some justification, for creating low-productivity assets with poor subsequent maintenance and little complementary investment Some people also argue that while the EGS provides short-term income supplements to the rural poor, it has not unproved their long-term income earning capacity to the extent at they no longer need the EGS. According to this view, a truly successful EGS should have been self-liquidating. Several considerations are relevant when assessing the merits of this argument First, there is scattered evidence of long-term income gains in some areas. Also, the success of the EGS needs to be judged against alternative antipoverty programs or policies. In general, targeted poverty alleviation programs cannot substitute for a sustained broadly based growth process, but they can often be a useful component of an overall development strategy to help the poor. In that context, there will arguably he scope for public works employment programs such as the EGS, particularly in a settings of surplus labor, unstable incomes, and poor infrastructure.

Box 3. Induced income effects of EGS assets: Ralegaon Shindi.

One of the best known examples of induced income gains from the EGS is that of Ralegaon Shindi, a village in the drought prone district of Ahmandagar in central Maharashtra. In this village, EGS funds (supplemented with other public funds) have been successfully used to harness scarce water and to develop social forestry. As a result, the village harvests two or three crops a year and has enough wood or biomass fuel. Ralegaon Shindi claims to have eradicated unemployment, and the EGS is no longer needed in this village.

Source Sarthi Acharya, The Maharashtra Employment Guarantee Scheme: A Case Study of Labor Market Intervention (New Delhi: International Labour Office, Asian Regional Team for Employment Promotion, 1990).


Figure 5. Average monthly attendance at EGS projects, 1975-89 .

Tunisia: From Universal Food Subsidies to a Self-Targeted Program

Through the Caisse Grale de Compensation (CGC), the Tunisian government has subsidized the consumption of basic foodstuffs and a variety of other items since 1970 The benefits have been available to anyone who chooses to purchase subsidized commodities in whatever quantity they desire.

Overview

While CGC subsidies made a substantial contribution to the level of consumption by the poor, by the 1980s it was apparent that the universal subsidy program had become too costly for the government. The government was faced with a common policy dilemma in reforming its universal subsidy program how to reduce budgetary costs in a politically acceptable way while protecting the poor. A central theme of the Tunisian reform program, which was introduced into the Eighth Development Plan (1991-96), has been its reliance on existing institutions. Rather than switching to an entirely different method of transferring income to the poor, the government has sought to fine-tune the existing framework of price subsidies by shifting subsidies to those food products that are primarily consumed by lower income groups. With this approach, a type of self-targeting, subsidized products are still available to all, but the subsidized commodities selected are of the kind that the rich choose not to consume For a summary of the program and selected indicators, see table 3.

Impact of the Universal Subsidy Program

Since its inception, the central objectives of the CGC subsidy program have been to redistribute income in favor of the poor and to purchasing power and nutritional status of low-income groups. To some extent, the universal subsidy program succeeded in meeting these goals. It was progressive in relative terms, contributing some five times more to the purchasing, power of the poor than of the rich as a share of total expenditures. This is not surprising because the bulk of CGC subsidies were on food products that generally constitute a larger share of total spending by lower-income groups than by the more well-to-do. Indeed, subsidies on food items covered by the program have been very important to the poor. In 1990 they contributed more than 11 percent to the total expenditures of the lowest income group. More than 74 percent of total caloric intake by the poor and close to 44 percent of their protein consumption were derived from subsidized products.

Despite these benefits, by the mid-1980s it was clear that the universal subsidy program was inefficient and costly. It was inefficient because it subsidized a broad range of products available to all Tunisians regardless of need. The wealthiest income group actually benefited twice as much from the program as the poorest income group in absolute (per capita) terms. The program was costly because it claimed a large share of government resources: by 1984 outlays on subsidies hovered at around 4 percent of GDP and 10 percent of total government expenditures.

Alternative of Reform

The program's high and rising costs combined with inefficiencies and substantial leakages to the nonpoor made an overhaul of the universal subsidy system an urgent priority. In the early 1980s Tunisian policymakers began exploring ways to reform the program. An initial attempt to reduce the CGC's budgetary costs was made at that time, and subsidies on several food items were eliminated, effectively doubling their prices. However, the violent riots that erupted in response to these efforts forced officials to rescind the measures and delayed the adoption of significant reforms until the end of the decade.

Rather than eliminating the transfers, which was no longer politically feasible, or continuing with the costly existing program of universal pro vision, Tunisian policymakers examined several alternatives for better targeting of transfers to the poor. In practice, correctly identifying eligible people can be difficult because of incomplete information about individuals' economic status This problem has plagued assistance programs begun in Tunisia in 1986 to ease the pressures of structural adjustment on the poor. These programs rely on individual assessment (means testing) to screen potential beneficiaries. However, administration of these programs has proved to be difficult and eligibility Lists are rarely updated. As a result, the direct assistance programs have suffered from substantial leakages to the nonpoor and have excluded eligible beneficiaries. For these reasons the Tunisian government has not considered individual assessment schemes, such as food stamps, to be feasible replacements for the food subsidy program.

The government has also explored other targeting approaches, but these have not proved to be suitable for reforming the food subsidy program either. For example, the authorities rejected geographic targeting, because in many areas distinctions between neighborhoods are too obscure to make it effective.

Reform Program: From Universal Subsidies to Self-Targeting

Given political, economic, and administrative constraints, reforms that reduce costs and improve the equity of subsidies are obviously preferable to those requiring an entirely new institutional structure. In this context, a reform program was incorporated into the Eighth Development Plan (1991-96) with the primary goal of reducing CGC expenditures while protecting lower-income groups The primary components of the reform program include (a) improving the targeting of the CGC intervention, (b) adjusting prices gradually to reduce and eliminate subsidies on certain product and (c) reducing unnecessary production and distribution costs for subsidized products.


Table 3. consumer subsidy reform and selected indicators, selected years.

A particularly innovative aspect of the Tunisian reform program is its reliance on self-selection mechanisms to improve the targeting of subsidies. Self-targeting occurs when benefits are available to all, but the program is specifically designed so that the nonpoor elect not to participate. While other targeted programs require some sort of explicit screening mechanism (such as individual or group assessment) to determine eligibility, with self-targeting the decision to participate is made by individuals themselves rather than by social workers or other government agents.

The principal device used to promote self-targeting in Tunisia is quality differentiation Designing a self-targeted food subsidy program using quality grading involves examining household expenditure data to determine whether significant differences exist in consumption across income groups. If the poor consume a different basket of goods than higher-income groups, this basket can be targeted for subsidies. Using existing survey data to identify goods for subsidies allows self-targeted programs to economize on information costs by avoiding the cumbersome task of assessing individuals' income levels to determine eligibility. In practice, however, consumption patterns may not differ significantly across income groups. This does not mean that self-targeting is not feasible, but that it may require some creativity to invent "inferior" subsidized goods that are unattractive to higher-income groups and to encourage unsubsidized high quality alternatives to siphon off demand by the rich.

As a first step in improving the targeting accuracy of the Tunisian program, the government eliminated subsidies on goods clearly consumed disproportionately by the rich Efforts were then extended further to include two additional methods of self-targeting in the cereals, milk, cooking oil, and sugar subsectors.

The first method, the superior goods approach, involves easing government controls to allow the private sector to market high quality, unsubsidized products that appeal to high-income consumers as alternatives to their subsidized counterparts In general, the quality of the subsidized products is reasonable, but not exceptional. Because markets have been tightly controlled by state marketing boards in the past, the subsidized product has often been the only quality available on the market. To reduce subsidy costs while maintaining benefits to the poor, the authorities have liberalized the sale of higher quality versions of these goods, which are sold at cost-and are bought by wealthier consumers, who then consume less of the subsidized products.

The second method for extending self-targeting, a variation of the inferior goods approach, involves differentiating goods within a particular product line through different types of packaging and the use of generic ingredients. The products packaged in the lowest quality cartons or containing generic ingredients are subsidized. These perceived inferior features discourage consumption by upper-income groups, although the intrinsic quality of the subsidized products remains good.

Impact of the Reform

The two mutually reinforcing techniques for self-targeting described above have been successfully implemented in Tunisia. Data on CGC spending indicate that the reforms have reduced costs significantly outlays on the subsidy program were cut from over 4 percept of GDP and close to 10 percent of government expenditures in 1990 to 2 and 6 percent, respectively, in 1993 While data for an extensive quantitative assessment are not yet available, anecdotal evidence suggests that the rich are indeed shifting consumption toward superior goods in each subsector, whereas the inferior goods created under the reform program appear to be well targeted toward the poor (To analyze the results of self-targeting efforts more rigorously, data are being collected in a small scale survey currently under way in Tunisia and the results will be available in an upcoming study.) Despite these evident successes, analyzing the impact of price increases on lower-income groups reveals mixed results: simulations show that any increase in the real prices of subsidized goods has an adverse effect on the welfare and nutritional intake of the poor Targeted price adjustments, which reduce or eliminate subsidies on products consigned disproportionated) by the rich, dampen these effects. However, price increases on such products still hurt the poor because even these goods are consumed to some extent by low-income groups. This dilemma reflects a genuine tension between the goal of reducing the CGC program's budgetary costs and that of protecting the poor.

Lessons Learned

Political considerations, imperfect information, and the importance of food subsidies to poor limit the tools available to Tunisian policymakers in reforming the universal subsidy program. The three pronged reform program adopted by the Tunisian authorities makes use of available information and existing institutions developed by the universal subsidy system This approach has also proved to be a politically acceptable way to cut budgetary expenditures while protecting the consumption of the poor. While the results of the reform efforts since 1991 are impressive, particularly their successful reduction of budgetary costs, there is still scope to improve the effectiveness of the reform program.

Self-targeting. Self-targeting efforts in Tunisia should be reinforced Liberalizing government controls on superior goods and allowing unsubsidized goods to enter the market through private channels to siphon off the demand of wealthier consumers should tee intensified in all subsectors The inferior goods approach should also be strengthened by further tailoring the selection of subsidized goods to the consumption patterns of the poor.

Price increases. In general, price increases should be gradual, but should at least keep pace with inflation to control budgetary costs. These increases should be focused on goods consumed disproportionately by higher-income groups. While targeted price increases are not as detrimental as indiscriminate subsidy cuts, the government needs to pay close attention to their impact on the poor. It should simultaneously introduce compensating measures where feasible.

Data requirements and monitoring. The information necessary to design a self-targeted subsidy program includes household expenditure data. The government should seek to collect this information regularly to monitor the progress of the ongoing reform program. This could be done using frequent small-scale surveys as opposed to the larger, five-year surveys currently being used. In addition, marketing studies that consumer acceptance of self-targeted products should be conducted prior to widespread introduction of new targeted goods Moreover, policymakers should seek to establish an explicit, consistent definition of the target group, and then coordinate monitoring of the standard of living of this group.

The Tunisian case provides a useful example for other countries that are contemplating similar reforms, but that are concerned about the practicalities of implementing self-targeting reforms Note that Tunisia's self-targeting efforts are part of a reform program. Self-targeting via quality differentiation is appropriate in Tunisia precisely because a system of food price subsidies was already in place. The aims of the self-targeting component are to modify existing institutions to reduce leakages to the nonpoor, to cut the scope of the program, and to protect the welfare and consumption of the poor. Self-targeting may not be suitable in cases where the institutional framework of food subsidies did not previously exist In cases where self-targeting does seem appropriate, the technicalities of the program, such as the particular quality features of the targeted products, are likely to be specific to the region or country in question The Tunisian experience offers an example of one way in which such reforms were implemented, and provides the information necessary to design an effective self-targeting reform program.

Honduras: Food Coupons

Widespread poverty in Honduras was aggravated during the economic crisis of the late 1980s, resulting in a significant increase in the incidence of undernutrition, particularly among young children The proportion of children under five years of age exhibiting symptoms of severe and moderate malnutrition increased from 38 percent in 1987 to 46 percent in 1990 according to the Ministry of Health's national health survey Chronic malnutrition (stunting or low height-forage) among school-age children averaged 40 percent in 1986 Nutrition deficiencies among poor pregnant women was a factor behind the hi&in incidence of infant mortality (50 per 1,000), low birth weights, and high rates of maternal mortality that reached 221 per 100,000 in 1991.

The traditional nutrition assistance programs that existed in Honduras prior to the creation of the Family Assistance Program (PRAF) involved distributing food though various channels. All these traditional programs carried high overhead costs and suffered from serious logistical problems. Limited coverage and faulty targeting contributed to their failure to reach those most in need. Weaknesses in their education efforts included failing to communicate adequately information about breastfeeding, weaning practices, or adequate diets for children and women. Neither did they provide incentives for the poor to use existing health care and education facilities Reliable evaluations of program outcomes were not conducted, and a policy framework for integrating and consolidating nutrition assistance efforts was missing.

To address these issues, the government decided to test a new strategy of income transfers in the form of food coupons targeted to the most vulnerable groups. It created the Family Assistance Program in July 1990 to expand the coverage of nutrition assistance while improving targeting and reducing the administrative costs of program implementation Operated initially through the primary school system in the poorest departments, the authorities introduced a pilot program in 1991 to test delivery of food coupons through the basic health network The pilot program proved effective, and implementation of an expanded PRAF program with improved targeting and parallel strengthening of preventive health care and primary education services began in early 1993.

Implementation

Under the first PRAF food coupon program (Women Head of Household Coupon Program) coupons are distributed through the schools to poor mothers and their children attending grades one through three in primary school and shown to be at risk of malnutrition. Expansion of this program covers children entering the first grade of primary school at risk of malnutrition as identified by the annual nutrition census (height/age). In addition, at participating schools where the results of the annual nutrition census show an incidence of malnutrition equal to or higher than 60 percent, all first graders become beneficiaries of the program The food coupon, distributed three times a year, is equivalent to US$37 per year, and is estimated to cover 20 percent of the value of the individual food basket of the beneficiaries. As of October 1993, approximately 205,000 mothers and children were benefiting from this program in eight departments. To maintain eligibility, children have to attend school.

The coupons for the Maternal Child Coupon Program are administered through health centers targeted to low-income children under five and pregnant and lactating mothers. This program currently benefits approximately 104,000 poor mothers and children in ten departments. The program provides coupons every month equivalent to US$45 per year for each eligible child and mother. The intervention is concentrated on the earliest stages of infancy and childhood, and includes assistance to pregnant women to improve the chances of reaching children before malnutrition causes permanent damage To maintain eligibility, beneficiaries must meet health surveillance requirements Together with the coupon, beneficiaries receive information on breastfeeding, weaning practices, and adequate diets for women and children Intensive supervision at both coupon delivery sites ensures against leakage to noneligible individuals.

The private sector is involved in all stages of the program with the commercial banking network participating directly by distributing coupons and redemining them from local merchants Local merchants participate by accepting the coupons in payment for food and other basic goods. Successful communication about the program has resulted in dose to 100 percent acceptance of coupons by merchants. Potential problems of corruption on the part of shopkeepers have been avoided by the willingness of local commercial banks to redeem coupons directly, leaving no room for merchants to demand "servicing fees" for redemption of the coupons against goods.

Beneficiaries can redeem the food coupons through commercial establishments (including private banks) within four months of their issue, with redemption not contingent upon the purchase of food In practice, beneficiaries use the bulk of the coupons (88 percent) at local stores to purchase food, and spend the remainder on essential items such as school supplies, shoes for their children, and medicine Commercial banks redeem the coupons at the Central Bank of Honduras. Used coupons are canceled at the Controller's Office The authorities have not adjusted the coupons' face value because inflation rates have declined, but they reviewed this issue in early 1994, and plan to make an adjustment in 1995 The costs of using health care staff and primary school teachers for distributing coupons to the beneficiaries has not been systematically measured, but the PRAF intends to do this as part of its monitoring and evaluation activities.

PRAF's food coupon expenditures amounted to US$7.2 million equivalent in 1992, including 3.4 percent administrative costs. These costs are lower than those programs that distribute food in-kind generally incur. PRAF's success in reaching target groups has convinced the government that the food coupon program should be continued over the medium term.

Program Impact

An evaluation of the pilot experiments indicated that the program was cost-effective in alleviating poverty and was more efficient than other nutrition assistance programs There is widespread acceptance and support of the program by beneficiaries, implementing agencies, participating retailers, and banks, leading other donor agencies to consider monetizing existing in-kind food aid programs as they reach their completion, particularly as the food coupon programs have not had inflationary effects.

In addition, the PRAF program provides its beneficiaries with incentives to use preventive health services and primary schools Enrollment in participating primary schools rose by 12 percent, while the number of consultations at participating health centers increased by 131 percent during 199091.

Lessons Learned

The key elements contributing to the PRAF's success are (a) the use of coupons as opposed to in kind nutrition assistance; (b) the simple and standardized eligibility criteria for beneficiary selection, (c) the high frequency of coupon distribution (in the case of the Bono Materno Infantil Program), which increases the probability of coupon use to purchase food; (d) the simple coordinating mechanisms between PRAF the Central Bank, private banks, the Ministry of Health, the Ministry of Education, and merchants; (e) the annual recertification of beneficiaries, that is, the existence of clear exit criteria; and (f) the direct linkage with primary health and primary education services.

Chile: Targeting and Decentralizing Health and Nutrition Programs

Ensuring that subsidies and services meant for the poor actually reach them and are not diverted to the less needy requires a constant effort Targeting and decentralizing programs to alleviate poverty is essential to make the most of scarce resources, butts an extraordinarily complex institutional, administrative, and political task Existing programs and institutions often have to be restructured, complex legal issues have to be addressed, and targeting and decentralization faces considerable resistance from powerful groups that in the past have captured much of the subsidies.

Chile's innovative reforms in the social sector during the 1980s and early 1990s in education, health and nutrition, housing, and social security—represent a success story of effective, well-targeted reforms that have broad and relevant lessons for other countries These reforms have produced record gains in social indicators such as life expectancy, nutrition, infant and child mortality rates, and birth weights.

Background

From 1960 to 1991, Chile's infant mortality rate fell from 1195 to 146 per 1,000 live births; the child mortality rate dropped from 9 1 per 1,000 to only 0 8; the percentage of low birth weight new barns declined to 5.7 percent, a decease of around 45 percent since 1976; and life expectancy at birth increased by more than 13 years, a world record gain. The greatest reduction in infant and maternal mortality has taken place in poorer rural areas, where mortality rates were the highest The decline was achieved by improving access to health services, potable water, and sewage disposal systems.

This remarkable improvement in social indicators in Chile during the last three decades occurred in a highly unstable and difficult economic situation for the country as a whole. As shown in table 4, GDP growth was highly unstable, even negative, in some years, unemployment was high during the early 1980s; inflation was extraordinarily high during the early 1970s; and government real expenditures on health programs declined. Given these circumstances, why did the social indicators continue to improve at rates even faster than in the past?

Chile a long history of combined health and food distribution programs, the most important of which are the Complementary Feeding Program (CFP), the School E ceding Program, and the Day Care Food and Education Program The food distribution programs that gave birth to the CFP started as early as 1936 with the distribution of milk to children from birth to age two . Since then, the CFP has constituted an important part of Chile's welfare system, lasting through many different political regimes The reason why these programs have survived numerous and radically different political regimes is that they were initiated to ameliorate malnutrition from a technical perspective, and were not perceived as part of the political platform of a specific party. Since their initiation both government analysts and university academics have participated in the debate about the design and implementation of the health and nutrition programs.

Table 4. Growth rates in GDP and government spending, 1970-90.

Government expenditure


Growth in GDP per capital

Unemployment rate

Inflation


Health Social of 1988

Year

(percent)

(percent)

(percent)

(millions expenditures dollars)

(as percentage of GDP)(b).

1970

0.5

34.9

341.5

13.0

1973

-7.1

508.1

553.6

17.0

1974

-0.7

375.9

429.5

1 5.8

1975

-14.4

14.7

340.7

311.7

14.7

1976

1.8

12.7

174.3

262.1

14.2

1977

8.0

11.8

63.5

301.7

1 5.0

1978

6.4

13.8

30.3

314.9

14.5

1979

6.5

10.4

38.9

298.4

13.1

1980

7.8

10.5

31.1

384.1

14.6

1981

5.5

11.4

9.5

406.5

13.2

1982

-14.1

19.6

20.7

384.3

22.4

1983

-0.7

14.7

23.1

317.3

21.9

1984

6.3

13.9

23.0

3137

22.3

1985

2.4

12.0

16.4

281.1

21.6

1986

5.7

8.8

17.4

261.6

20.8

1987

5.7

7.9

19.9

259.0

-17.4

1983

7.4

6.3

14.7

270.3

16.5

1989

10.0

5.3

17.0

262.9

13.9

1990

2.1

5.7

26.0

—.

— Not available

a. October through December each year.

b. Social expenditures include health social welfare social security education, regional development and housing

Source Central Bank of Chile.

With the creation of Chile's National Health System in 1952, the authorities redefined the food distribution programs, integrated them with the provision of health services, and expanded the CFP to coyer children under six and pregnant and lactating women. As a result, the entry point into the integrated health and nutrition programs was during pregnancy, and continued until the child was six years old. In primary school, the school lunch program provides on-site food rations for lowincome school children linked to school attendance.

The main objectives of the redefined CFP were to prevent malnutrition among the most vulnerable groups and to promote health through regular visits to health clinics, immunization, and education on the use of health services among low-income families. Food distribution involved not lust providing tree food, but was used as a device to attract beneficiaries to health and nutrition services This was accomplished by channeling the distribution of milk through health clinics and rural health posts.

Because the food distribution program was conditional on the beneficiaries having regular health check-ups, this required a nationwide infrastructure of health clinics to meet the increased demand for preventative and curative services. Consequently, during the 1960s the government expanded its investments in physical as well as human resources.

Reform of the Social Services' Delivery System

During the 1970s the government reoriented its efforts to improve the targeting of health services and food distribution to the needy To increase efficiency in the provision of services, service delivery was decentralized to the local level (municipalities), and the responsibility for manufacturing milk products was transferred to the private sector. In this way, the government was able to expand and improve primary health services, giving priority to mothers and children of low-income households, and to expand coverage in rural areas. Better food presentation was emphasized, and industries that produced the milk for the program were required to sell the same product they sold m the supermarkets, thereby eliminating the image of "a product for the poor" For the preschool population (children age two to six), the authorities. introduced milk-cereal mixtures instead of powdered milk to increase the children's intake of vitamins and minerals, diminish food leakages within the family, and use cheaper raw materials (for example, soybeans). Finally, as a preventive measure, in 1983 the government initiated a reinforced program that provides additional food and more frequent health care for low-weight pregnant women, undernourished children, and those nutritionally at risk. A scale that measures weight increments is used to identify the children nutritionally at risk.

Tables 5, 6, and 7 present various quantitative indicators on coverage and government expenditures on health and nutrition programs. Table 5 shows coverage and the implicit income transfer from the three principal programs, table 6 presents the annual cost per beneficiary of the same programs, and table 7 shows the coverage of potable water and sewerage services.

In October 1993, based on the results of a recent evaluation of the criteria for targeting the reinforced program (see table 6 for an explanation), the program directors decided to use weight-forage and weight-for-height as key indicators in defining the target population. These changes are expected to reduce the population participating in the reinforced program by some 30 to 40 percent This result shows the need for constant review of the targeting criteria and the operation of the health and nutrition programs, so that adjustments can be made in accordance with the current situation and are not historically based.

Some Features Underlying the Social Reforms

A common principle underlying the orientation of social reforms in Chile during the 1980s was that government spending should subsidize the demand for and not the supply of social services. That is, subsidies should be given directly to beneficiaries rather than to providers, and should be given in the form of direct subsidies (vouchers) rather than indirect subsidies (such as subsidizing the price of commodities).

Decentralizing service provision was another Important component of the reforms based on the view that municipalities and the private sector rather than the central government should provide social services Local governments or institutions are closer to the beneficiaries, resulting in improved quality of services, better targeted programs, increased enrollment of low-income households, and more effective administration.

The authorities gave high priority to the development of an effective information system, which was seen as key for planning the reforms and introducing targeting One of the main instruments for targeting social programs was the poverty map, prepared in 1974, and later complemented by a living standards measurement instrument called the Committee for Social Action Index System The latter has become a useful tool to help the local authorities (municipalities) identify the target population for a wide variety of social assistance programs, such as subsidies for housing and pension assistance.

The CFP uses health and nutrition information gathered monthly at the health clinics to make decisions at the local, regional, and central levels. The regularity of the information permits the local staff to assess health and nutrition trends, thereby permitting timely modifications of ongoing programs and assessments of the short-term needs for a new intervention.

Table 5. Coverage and implicit income transfer from the principal food distribution programs Implicit income transfers.

Programs

Coverage

Implicit income transfer as a percentage of household income

Complementary Feeding Program

71% of total population under 6'

16% for the poorest decile
6.7% for the second poorest decile

School Feeding Program

80% of the expenditure allocate to poorest quintiles the program covers
52% of the children in quintile 1 and
26% In quintile 2(b)

32.0% for the poorest decile
13.3% for the second poorest decile.

Day Care Food and Education Program

40.000 children in the two poorest quintiles in 1978 and 72.000 in 1991.


—Not available

a. Actual coverage by the public health system is 78 percent of the population between one and less than two years old and 70 percept of the population between two and five.

b. Of children attending primary school in urban and rural areas.

Source: Isabel Vial, Rosa Cahmi and Carlos Castilo and Isabel Vial and Antonio Infante, From Platitudes co Practice: Targeting Social Programs In Latin America, ed. M. Grosh (Washington, D.C: World Bank, 1992);.

Table 6. Annual cost per beneficiary for the basic and reinforced CFP and the school feeding program, 1990 (U.S. dollars).

Beneficiary

Bask CFP

Reinforced CFP

Children age 0-< 1

81

107

Children age 1-<2

32

105

Children age 2-5

27

80

Pregnant women

44

78

Benefit

Cost

Breakfast

20.2

Lunch

51.4

Total

71.6.

Table 7. Coverage d urban and rural potable water and sewage services, selected years (percentage of all household).

Year

Urban Potable water

Sewage

Rural potable water

1960

9.5

1965

54

25

1 2

1970

67

31

34

1975

74

45

35

1930

91

67

44

1985

95

75

65

1990

97

83

86

— Not available

Source: Secretario de Desamollo y Asistencia Social. .

Another information system designed to measure the redistributive impact of social spending is the Living Standards Measurement Survey, a comprehensive national household survey, that contains information on all the subsidies programs the government currently runs. It covers a representative sample or approximately 20,000 households at was first obtained in 1985 and subsequently studied in 1987, 1990, and 1992. These surveys have provided reliable information on the efficiency of the targeting in the various programs, presenting information an the subsidies the different income groups have received, and allowing planners to make corrections where needed.

Developing the informations systems has been costly, and at the beginning they represented an additional burden for the municipalities, particularly during the first stages of the decentralization process However, because of technical advances and strengthened institutional capacity, the local governments have been able to improve the systems while decreasing their costs.

Aside from the issue of targeting, an important current issue concerning social programs in Chile is how to reorient the subsidies from the supply side to the demand side and the extent to which this should be done. This is particularly complex in the provision of health, where a large percentage of the target population depends on a centralized national health system Discussions are currently oriented to the design of mixed service provision, whereby the beneficiary will be allowed to select where to seek service, which will be paid (totally or partly depending on the beneficiary's income level) directly to the institution providing the service.

A major reason for the effectiveness of the government's social programs is the presence of a leading institution for policy change Chile's National Planning Office, which took the leadership role in designing the implementation of the economic and social principles and policies applied by the new government Such leadership included developing methodologies for cost effectiveness analysis to be followed by all public agencies and designing and implementing an information system for targeting social assistance programs Targeting to the poor and improving the coordination of social projects implies the use of two types of information systems: one to identity beneficiaries and the other to evaluate the social programs. The latter is a key instrument for designing policy and for establishing priority needs and programs.

Another important feature of the reforms has been the training of senior and mid-level officials. The authorities achieved this by creating a scholarship program to send students abroad to study in several disciplines and by developing well designed training programs in Chile. They also provinced training to municipal officials of the twelve regions. the result was a core of well professionals, distributed nationwide, that facilitated the governments preparation, planning and implementation of the reforms.

Lesson Learned

In summary the main lessons that have emerged from Chile's experience are as follows:

· Strong leadership is needed that can articulate a clear set of objectives and a strategy. To achieve the objectives requires a solid blend of economics and technical skills so as to be able to communicate effectively with the government's economic team. For effective targeting the government must be able to identify and capitalize on the complementarities among the various programs

· The design and implementation of targeting takes time. Decentralization and "municipalization" requires legal changes and budgetary adjustments. Efficiency and equity problems cannot be resolved with quick, superficial fixes. Instead they often require large institutional changes that result in new roles for central government bureaucracies and changes in the way social services are financed and operated

· In primary health care, the authorities should emphasize linking maternal and child health programs with growth monitoring and food supplementation measures, paying special attention to the group at risk. These interventions, coupled with a significant increase in the coverage of potable water and sewage handling facilities, were key factors behind Chile's record declines in infant mortality and morbidity, undernutrition, and maternal mortality.

· Continuity in the reform process is important. Chile's success is a result of strong government commitment to overcome setbacks and pressure exerted by interest groups Reforms are difficult and in Chile's case required considerable negotiation, trial and error, and corrections.

· Targeting of social programs and decentralizing their implementation is bound to raise strong resistance among those currently employed by the system and will probably involve higher fiscal costs in the short term Some employees will be made redundant; others will be asked to relocate; and many will become employees of a municipality, facing an uncertain future with a totally new set of employers at the local level. The government might have to pay for early retirement by many employees and for the relocation costs of others

· Local institutions like municipalities and the private sector can play a significant role in poverty alleviation strategies by providing health and nutrition services in coordination with other programs. This will avoid the duplication of programs and benefits.

· Two types of information systems are needed for targeting and for improving the coordination of social projects, one to identify beneficiaries and another to monitor the impact of social programs. The latter is key for designing policy and for establishing priority groups and programs.

Zimbabwe From Relief Feeding to Food Production

Zimbabwe, while able to show improvements in children's nutritional status since the 1980s despite economic setbacks and drought, remains a country with unacceptably high levels of stunting (low height-for-age) This is particularly disappointing given its earlier status as a food exporter in normal agricultural years Factors contributing to the continued levels of malnutrition include individual household poverty, seasonal food shortages and concomitant preharvest increases in infectious disease, a decline in per capita maize production, heavy work loads for women, lack of exclusive breast-feeding among infants six months and younger, and lack of knowledge about optimal feeding patterns for young children.

In response, two of Zimbabwe's most important nutrition initiatives have been the national Children's Supplementary Feeding Program (CSFP) and the Community Food and Nutrition Program (CFNP) The government started the Children's Supplementary Feeding Program in 1981 to provide emergency relief to children in drought prone areas. The CSFP attempted to avoid some of the dependency-creating aspects of most supplementary feeding programs by using locally grown food and including nutrition education. In an even larger step in this direction, the phasing out of the CSFP and its replacement by a program designed to enhance local growing of the supplementary foods, the CFNP (originally called the Supplementary Food Production Program), was started by 1982. However, during the 1992 drought the authorities reinstated the CSFP on a much larger scale than before.

Children's Supplementary Feeding Program

The CSFP was a cooperative effort between governmental and nongovernmental agencies operating under the umbrella and direction of the Ministry of Health A national working group was set up with representatives from relevant ministries and voluntary organizations. In the provinces the provincial medical officers of health set up committees with intersectoral representation from within the Ministry of Health (for example, environmental health, health education, maternal and child health, nursing, and nutrition) and other relevant sectors, such as lands, agriculture, and water development, and NGOs operating in the area. At the district and village levels, the CSFP relies heavily on community participation, with local committees composed of health workers, school teachers, community development workers, and women's advisors. Parents in the villages where feeding points are established select a feeding point communittee to run the program, with the committee responsible for developing a duty roster to ensure that feeding occurs on a daily basis an that the work load is shared During the 1992 drought the authorities developed a manual to enable extension workers (particularly village health workers) to help the community implement the program.

Implementation. Following the selection of high-need areas based on a variety of nutrition surveillance data, one- to five-year-olds are chosen for supplementary feeding using mid-upper arm circumference measurements (circumference of less than 13 centimeters). Meals are based on local foods—maize meal, beans, groundnuts, and oil—and are planned so as to provide approximately one-half of the daily energy requirements of the one to two-year-olds and one-third of the daily energy needs of the three to five-year-olds. The cost per beneficiary per month is approximately US$1.45.

During the 1992 drought, the country was divided into three zones based on clinical malnutrition and crop forecast data. This categorization facilitated the early targeting of assistance resources to the most needy areas. The program rapidly reached more than 1 million beneficiaries because of the existence of CSFP intersectoral committees at the national, provincial, and district levels. The authorities further streamlined the work of these committees by establishing a task force of relevant ministers under the chairmanship of the vice president and creating a full time secretariat to oversee the day-to-day running of the program. Six working groups were established to facilitate program planning and implementation that were responsible for the following activities: (a) nutrition program monitoring and evaluation; (b) training; (c) community mobilization; (d) information, education, and communication; (e) procurement and resource mobilization; and (f) transport and logistics.

Impact. Evaluation of the feeding program in 1981 documented a weight gain by children in the program twice that of children in a control group, and with children that obtained thirty or more supplementary meals having a threefold weight increase when compared to their contemporaries. Perhaps more important, the number of [amities who stated their desire to grow groundnuts for home consumption in the following agricultural season almost doubled, from 45 to 80 percent of families In addition, the establishment of the Community Food and Nutrition Program minimized growth faltering after the feeding program was terminated.

More recent evaluation of the program's impact during the 1992 drought indicated that while the incidence of malnutrition in children under five increased in 1992, six months after the feeding program began the levels of malnutrition had decreased in all the provinces. In October 1992, 2 percent of children had severe malnutrition and 5 to 7 percent had moderate malnutrition based upon mid upper arm circumference measurements. When the survey was repeated in April 1993, a non drought year, the levels remained the same. More than 70 percent of children under five were receiving supplementary meals at the time of the second survey.

Among the strengths of the program is its progression from a focus on relief efforts to an emphasis on education, along with its capacity to reach even the most remote areas and feed children at, or dose to, their homes Structurally, (he flexibility of building upon grassroots organizations at the district level provided the greatest degree of personal commitment and management responsiveness.

Lessons Learned

Experience with the CSFP demonstrated that the following program elements are required to Implement emergency relief activities successfully:

· Ensuring political commitment and being willing to mobilize resources
· Implementing intersectoral collaboration and coordination using existing structures.

Encouraging community participation in and ownership of the program.

Providing clearly defined program implementation guidelines and training and orientation for all key implementors at all levels.

· Instituting appropriate collection and use of food security and nutrition status data for targeting purposes

· Incorporating community coping strategies into future preparedness plans

· Recognizing the crucial role of village community workers in mobilization, program implementation, community training and program monitoring

· Communicating the basic message about local availability of food commodities for providing children with adequate nutrition.

Community Food and Nutrition Program

The authorities implemented the CFNP to address chronic malnutrition by mobilizing villagers to grow nutritious foods (groundnuts, beans, and vegetables) in community gardens and rain fed plots or by raising poultry or rabbits in areas where water is a constraint In many cases, projects are linked to day care, growth monitoring, and special feeding sessions for children identified as malnourished The authorities have initiaded more than 3,000 CFNP projects, with 10 to 200 participants per project.

The CFNP effectively makes more land available to the poorest farmers and places them in working contact with more successful farmers for the transfer of fanning techniques The government extension service is attracted to the community plots because working with existing cohesive groups is efficient Community decision making and collective self-reliance are two primary foci of the program, with the long-term objective being to develop a village - level capacity to identify and correct the causes of malnutrition, particularly among children age five and younger.

Program Management

A major emphasis of the program has been close attention to project management. Chaired by the Ministry of Agriculture Extension Service, the intersectoral National Steering Committee for Food and Nutrition provides leadership for the program At provincial, district, and ward levels, similarly composed food and nutrition management committees are responsible for managing the program At all but the national level, these committees have been institutionalized as development subcommittees, and serve as an entry point for placing nutrition on the development agenda, at least in the provinces.

These committees have run well because of an early definition of the roles of each sector in the program A management handbook describes these agreed roles, and is used as the basic tool for intersectoral training of the committees As it is now viewed as an integral part of each sector's work plans, the CFNP does not disrupt other duties At the ward level, contact with villages is maintained through a nutrition coordinator.

No development committee exists at the national level, although the State Planning Agency may eventually fulfill this role In the meantime, the National Steering Committee for Food and Nutrition lacks executive powers and must depend upon the good will of each sectoral ministry and the personal commitment of the committee members.

Project Implementation

The authorities use data from clinic-based nutrition surveillance (weight-for-age) and other nutrition surveys and reports and information from other sectors to identity communities with high levels of malnutrition and poor household food security. Extension workers discuss the situation with the leadership of each community and explain the program's objectives and how the villagers can actively participate in addressing malnutrition. The community, with the technical advice of the agricultural extension worker, decides on the project it wishes to undertake. The request for inputs is transmitted through the district to the province.

Families in the village work together to produce food communally, primarily to be fed to children under five. The production package consists of groundnuts and beans for rainfed plot and gardens and small stock The families appoint a committee that plans the work roster and manages the group's activities. Parents organize the group feeding of children under five in the project and those referred by the clinic or outreach sites five times a week.

The key messages communicated to project participants are as follows:

· The importance of food preparation, hygiene, and storage.

· The importance of using energy dense food m each meal.

· The group feeding meal is a supplement to, not a substitute for, other meals provided at home.

· The child needs to be fed at least four times a day with cereals, beans, groundnuts, oil, and vegetables.

· The mother should continue breast-feeding until the child is at least eighteen months old.

· The child should be fed during illness.

· The child with diarrhea should be given salt and sugar solution and continue to be fed

· The child should eat from his or her own separate plate.

The child should be weighed regularly to assess growth The nutrition education messages are integrated into the training of all extension workers at the village level, and they are expected to relay this message to project members within the context of their sectoral activities Practical demonstrations have been encouraged as the best method of education.

An ongoing monitoring system is in place, with standardized assessment forms completed for each project that contain detailed information, including the number of recipients, the types of projects, and so on Each province submits quarterly and annual progress reports that are the basis for the disbursement of funds.

Impact

A 1989 evaluation of the previous four-year period found significant progress in developing a management system, in raising awareness of nutrition issues at all levels, and in securing community support for and participation in projects.

Further achievements of the program include the following:

· Increased awareness of the potential role of sectors other than health in alleviating malnutrition.

· Greater involvement by staff in key development sectors such as agriculture in Zimbabwe's nutrition programs.

· Enhanced integration of nutrition issues in other development activities. For example, the Water Development Program systematically promotes small-scale gardens at primary water points in rural areas, and the Agricultural Department is incorporating basic food requirements for a family of six in its land use planning exercise

· Heightened appreciation by key policy makers of the need for a national food and nutrition policy to institutionalize intersectoral coordination and collaboration.

· Increased promotion of community awardness of food and nutrition problems and the potential for addressing them using local resources and limited external assistance.

· Strengthened community self-reliance and reduced dependence on direct food aid.

India: Tamil Nadu Integrated Nutrition Project

If hunger is the worst consequence of poverty and malnutrition is the worst consequence of hunger, then according to Lipton the fight against poverty is "first and foremost a fight against nutritional risk." Projects that address hunger therefore have to steer resources to the very poor, avoiding trickle up, and ensure that their extra income is converted into calories for those at risk of malnutrition. The Maharashtra Employment Guarantee Scheme described earlier is one of the best examples of a project designed to do both However, income gains reaching the poorest families may still fail to raise the calorie intake of the two groups most vulnerable to nutritional stress: children under two and pregnant and breast feeding women The Tamil Nadu Integrated Nutrition Project (TINP) typifies a highly targeted effort to reach those in the vulnerable groups at demonstrable risk of malnutrition.

Tamil Nadu's poor nutritional profile is not commensurate with its relatively better position among Indian states in respect of many other indicators of development. Although the state has comparatively lower birth and infant mortality rates and a higher literacy rate, it is among the worst off states in terms of average calorie consumption (table 8).

In the late 1970s about twenty-five different nutrition programs were operating in Tamil Nadu at an annual cost of Rs 162 million (approximately US$15 million). However, fewer than 10 percent of the groups identified as the most vulnerable were actually receiving benefits from these programs. The reasons for the programs' limited success are as follows:

They did not reach the intended beneficiaries because feeding was done on a drop-m basis rather than aimed at those who were identified as being at risk.

Most programs did not cater adequately to the nutritionally most needy group, those under three years of age.

· The food distributed tended to substitute for rather than supplement food normally consumed at home.

· Family members usually shared take-home rations, thereby diluting the impact on the intended beneficiary.

· Most programs placed little emphasis on nutrition education even though food habits were a major determinant of nutrition status in Tamil Nadu, particularly of children being weaned, whose growth faltered dramatically across all income groups.

· Existing maternal and child health services were inadequate.

Thus the government's main concern was to design a program that would avoid these common pitfalls of nutrition programs. The large numbers to be covered and the potential difficulties of broad intersectoral collaboration necessary for a large project were daunting Project activities were confined finally to those components the government thought were likely to have the greatest impact on nutrition status: health services and nutrition education with a core of nutrition services, including growth monitoring and selective nutrition supplementation.

Project Goals

The TINP’s overall goal was to improve the nutrition and health status of preschool children, especially those under three, and of pregnant and nursing women Its objective was a 50 percent reduction in the prevalence of severe and moderate protein-energy malnutrition, estimated at about 60 percent among preschool children. In addition, the project aimed to reduce the infant mortality rate (then 125 per 1,000 live births) by 25 percent, reduce the proportion of children under five showing signs of vitamin A deficiency from about 27 to 5 percent, reduce the prevalence of nutritional anaemia among pregnant and nursing women from about 55 to 20 percent, and increase the provision of antenatal services and trained attendance at deliveries from about 50 to 80 percent.

Project Coverage

The TINP covered about 40 percent of the state's rural population, 17 million people living in 10 of the state's 22 districts. After an initial year-long trial in one block (an administrative unit with a population of about 100,000 people), the project expanded at the rate of 35 blocks per year to cover a total of 173 blocks at the end of five years. A community nutrition center housed in a rented dwelling was opened in every village of approximately 1,500 persons. A total of 9,000 such centers were opened, each staffed by a community nutrition worker and a helper. They were responsible for monitoring growth; selecting children for feeding; distributing the nutrition supplements; organizing people to participate in health activities; and providing nutrition education through demonstrations, house visits, and the organization of women's groups.

Table 8. indicators for selected states, venous years

Slate

Birth rate, 1989 (births per 1,000 people)

Infant mortality rate, 1990
(deaths per 1,000 live birth)

Female literacy rate, 1991
(percent)

Annual per capita income 1987 (Rs)

Daily pen capita calorie intake 1988 (kcal)

Andhra Pradesh

26

70

34

2,333

2,401

Gujarat

29

72

48

3,636

2,608

Kamataka

29

71

44

2,802

2.597

Kerala

20

17

87

2, 71

2.203

Orissa

30

123

34

1 .983

2,700

Tamil Nadu

23

67

52

2.980

1,910 .

Nutrition Services.

Nutrition services, the core of the project, centered around monthly growth monitoring of children. Short-term supplementary feeding was provided for those found to be malnourished, those showing signs of growth faltering, and selected pregnant and nursing women. All children under three received deworming medicines and a mega dose (200,000 international units) of vitamin A twice a year Daily iron folate tablets were provided to pregnant women for three months. Intensive counseling was given to mothers to improve the home care and feeding of children. Education on the home-based management of diarrhea with fluids and feeding was an important component of the nutrition strategy.

Children were enrolled in the supplementary feeding program only if they were at risk, that is, if they were identified as severely malnourished or if their growth pattern faltered, indicating incipient malnutrition. While children in Grades III and IV of malnourishment were admitted to feeding immediately when their malnutrition was detected, those losing weight or failing to gain weight (in Grades II, I, and normal) were admitted to feeding only after two successive weighings (thirty days) in the six- to twelve month age group, and four successive weighings (ninety days) in the twelve- to thirty-five-month age group Enrollment in feeding was accompanied by intensive education about nutrition for the mothers of these children The project provided feeding for a limited time (ninety days) only. Those who had gained at least 500 grams over three months exited from the feeding program Children who did not gain adequate weight during this period were referred for medical evaluation and treated for any illness detected.

Pregnant and nursing women were also selected for feeding on the basis of any of the following objective criteria:

· Having a child enrolled for supplementary feeding

· Lactating simultaneously with pregnancy

· Being of fourth or higher parity

· Having edema

· Being a single mother

· Carrying twins.

These women received food supplements daily during the last trimester of pregnancy and the first four months after childbirth.

Health Care

Health care was intended to back up the nutrition effort It included antenatal registration and care, tetanus toxoid immunization, deliveries by trained personnel, child immunization, and examination and medical care of children found sick or not gaining adequate weight. Coordination between health and nutrition workers was considered particularly important for malnourished children who failed to respond to therapeutic feeding.

Under the project the authorities strengthened the existing rural health system to provide improved maternal and child health services and preventive care. The supply of drugs and medicines to the block-level primary health centers was also augmented The project constructed some 1,300 sub-health centers in the villages, each with an outpatient clinic and a place for the multipurpose health worker to live Training facilities for multipurpose health workers were created or improved. As the government of Tamil Nadu had rejected the central government's community health guides' scheme, there was great potential for using community nutrition workers to improve the spread of primary care services, which were estimated to be reaching only 30 percent of villagers.

Communications

Communications were designed to familiarize families with and involve them in the project's goals, encourage them to accept services, and influence them to perform activities at home to improve the health and nutrition of mothers and young children. The interpersonal communication skills of nutrition and health staff were strengthened by training. They were provided communication materials for use in the field and encouraged to produce materials of their own A staff newsletter informed and motivated them. Mass media campaigns reinforced interpersonal communications. Films, radio spots, wall posters, advertisements, and folk theater were used.

Villages prepared to receive the project by having its objectives and design explained to village elders and opinion leaders. Communications materials were used to describe the activities. In the last week of the community nutrition workers training, joint training with the multipurpose health worker was aimed at informing the community of and involving it in initiating the community nutrition center.

A key to winning community support were the women's working groups These were groups of fifteen to twenty women identified by the community nutrition worker as progressive, capable of working together, and interested in the activities of the community nutrition center The groups met once a month at a cooking demonstration where the community nutrition workers demonstrated nutritious and easy to make weaning food recipes. The community nutrition workers gave the women health and nutrition training and some of the women became quite proficient in using flip books and flannel graphs to spread the health and nutrition messages to their neighbors. To sustain the interest of women's working group members, the project recently experimented with a community self survey and with the "adoption" of several families by each group member.

Another recent innovation in the communications effort was the formation of children's working groups The facility with which children communicate and the enthusiasm with which they learn and relay project messages through poems, songs, and skits has made this a highly successful activity.

A crucial communication strategy was the monthly growth monitoring session. Children's growth patterns were discussed and mothers were complimented for good growth In the case of faltering, the community nutrition worker would suggest the causes of and remedial actions for faltering, and would follow up with home visits to continue the mother's education. Graduation from feeding provided ample demonstration of the effect of extra feeding on growth that could actually be seen on the growth card. Selective feeding was, therefore, a key communication strategy.

Monitoring

The project design included a monitoring system, planned evaluation, and the conduct of special studies. The management information system was designed to measure project benefits in terms of improved maternal and child health and nutrition and to document the process by which these gains occurred (or did not occur).

The monitoring system was based on three important principles:

· Collect only what information is needed, not what is possible.
· Devolve responsibility for data interpretation and remedial action to the lowest possible level
· Manage by exception.

TINP's Achievements

Independent mid-term and final evaluations of the project found an impressive improvement in children's nutrition status Severe malnutrition had been reduced by 25 to 55 percent in different blocks depending upon the duration of the project There had been a corresponding shift in the proportion of children in the better nutrition grades, indicating an improvement in the entire population of children from newborns to age three. The proportion of children in feeding at any tune (children fed/children registered) declined from 40 percent to 25 percent On average, 80 to 85 percent of children entered feeding for at least one ninety-day period. Fully one-half of these required only a single period of intervention to maintain healthy growth Some 40 percent required two or more periods of supplementary feeding and a group of from 5 to 10 percent required almost constant feeding, never emerging from the lower grades of undernutrition.

Thus, each child in the community received personalized attention and supplementary feeding when required, at a cost equivalent to feeding only 25 percent of children at any one time. Some 2.4 million children participated in the TINP project. The total cost of the project, including food, salaries, construction, and administration, was US$26 per beneficiary, or roughly US$9 per child per year. Of course, this notional calculation does not consider the extensive benefits the program provided to other children in the community.

Evaluation also found the nutrition benefits of the project were long lasting. Children in the thirty seven- to sixty-month age group who had been in the project enjoyed better nutrition status than their counterparts in other communities who had not. The final evaluation estimated that the project had reached 77 percent of children. The shortfall in coverage was caused by the community nutrition workers not covering outlying hamlets in less accessible areas of their villages adequately. This error is being addressed in the follow-on project (TINP-II).

The monthly weighings had been carried out regularly with a high degree of participation. More than 90 percent of enrolled children were weighed each month, and participation in feeding was almost 97 percent of those eligible. The proportion of children participating in feeding who were actually ineligible was 2 percent. Almost all mothers interviewed stated that the food supplement was palatable and readily acceptable to their child. Most reported little sharing of the supplement or substitution of home feeding. This was probably because of the close attention paid by the community nutrition workers; the on-site feeding; and the provision of the food supplement in the form of ladoos, a traditional snack.

Among the project's disappointments was the poor enrollment of pregnant and lactating women in supplementary feeding, only 50 percent of those eligible This low enrollment has been attributed to the inconvenience of daily feeding and to the fact that the health worker was made responsible for selecting pregnant women for supplementation. Cultural factors undoubtedly also played a part. The follow-on project allows selection by the community nutrition worker and take-home feeding for eligible mothers.

Evaluation also showed that while infant mortality fell throughout the project period, this was no more significant in the TINP areas than in the rest of Tamil Nadu. There was a clear decline in hospitalization for diarrhea! illness, which seems to have been associated with earlier and better use of home sugar salt solution. Immunization levels climbed to more than 80 percent throughout the state, associated with the national Universal Immunization Program. Other health services were found to have had rather low coverage. Coverage of children with biannual deworming was estimated to have been nearly 50 percent, while vitamin A supplements reached only one-quarter of children. This too was initially the responsibility of the health worker and was plagued by an uncertain supply of the liquid vitamin. It will now be given on a regular basis by the community nutrition worker. The referral of children to the primary health care system if they failed to gain weight during supplementation was poorly implemented and remedial actions were rarely, if ever, taken.

The communications component was evaluated largely through qualitative techniques. Substantial improvements were noted in mothers' knowledge and home treatment of diarrhea as well as in their appreciation and acceptance of immunization Unfortunately, little information was collected on the frequency and timing of breast-feeding or on weaning, although child feeding practices appear to have improved throughout the project area. Workers acknowledged the usefulness of the wide range of attractive and appropriately targeted communication materials. The training of project functionaries in communication skills was particularly noteworthy.

Lessons Learned

The project demonstrated that it was possible to have a substantial impact on malnutrition within a context of low economic levels and with the assistance of community-based nutrition workers. At a cost of US$9 per child per year (and an effective transfer to the household of about US$3 on average per child per year), the relative cost-effectiveness of the project's approach as compared to direct transfers to the household may be called in question However, a number of studies have confirmed that the income elasticity of demand for calories is less than one even in the lowest income groups. Furthermore, the evaluations not find that calorie adequacy at the household level was an acceptable proxy for calorie adequacy of individual preschoolers, although it might capture major calorie deficits in pregnant and breast-feeding women. Thus programs that improve income alone may or may not adequately reduce the risk of malnutrition in vulnerable groups. The TINP approach is successful in capturing this target group, although it reaches them in households both with and without energy deficits.

Niger Komadougou Small-Scale Irrigation Project

The objective of the Komadougou small-scale irrigation project, funded by the International Fund for Agricultural Development as part of its Special Country Program in Niger, is to reduce the vulnerability of agriculture to drought and desertification. The project has been successful in alleviating hunger This is all the more remarkable given the difficult implementation conditions of rural development projects in Sahelian countries in recent years .

Background

The Komadougou Valley Program owes its success in large part to the rapid expansion or a profitable cash crop: the Diffa green pepper. Like many other success stories in African rural development, the project builds on locally initiated development processes that have been further supported and enlarged through people's participation.

The Komadougou River, which flows from July to December and feeds a complex system of sixty ponds and secondary branches along its valley marks the border between Niger and Nigeria 150 kilometers upstream of Lake Chad. Approximately 30,000 inhabitants of the district of Diffa live along the northern bank of the Komadougou River and around the ponds, where they practice a mixed rainfed (millet and cowpeas on 1 0 to 4 0 hectares per household) and irrigated (green peppers, wheat, corn, and cowpeas on 0 2 to 1 0 hectares) agriculture.

The area has suffered from a drastic reduction in the level of rainfall, from an average of 350 millimeters per year in the 1950s to 225 millimeters per year in the 1980s. The rainfed millet, which was once the main food source of the local Manga and Mober populations, is now a highly uncertain crop. During the last twenty years the district has suffered from intermittent drought that has sometimes wiped out the millet harvest. Depending on the amount of rainfall, this crop now provides no more than 20 to 40 percent of the annual cereal requirements of farm households in the Komadougou valley A number of farmers living by the river have even gone so far as to abandon dune millet cultivation altogether. Simultaneously, a reduction in the level and duration of the river flow has also affected the traditional cultivation of floating rice Consequently the 3,000 to 4,000 hectares of small-scale irrigation is now the most important and secure {arming activity in the valley.

Irrigation permitted a major evolutionary step in the local farming system with the introduction of green pepper (Capsicum anuum) cultivation in the 1950s and its subsequent expansion in the 1980s By 1990 the area given over to green pepper production covered some two thirds of the total irrigated area. This cash crop has a large demand in the urban centers of Nigeria and Niger, and thus enjoys a good market price. As the cultivation of green peppers has spread, so farm households in the Komadougou valley have increasingly met the structural cereal deficit by purchases from Nigeria financed by the sale of the cash crop.

In this context, poverty and hunger are directly dependent on access to irrigation facilities Farmers encounter three main constraints to the development of irrigated agriculture: first, the recurrent drying up of ponds before the cud of the vegetative cycle (the river frequently dries up in December and most of the ponds dry up in January, whereas the green pepper fructification lasts until the end of February), second, the lack of credit facilities to purchase motorpumps, and third, the intermittent infestation by pests and diseases.

Project Design

Formulated in the mid-1980s, the project has aimed at countering some of the most deleterious effects of drought conditions through a twofold physical target.

· To improve forty-one natural reservoirs fed by the Komadougou River, including constructing one or more retention dikes, deepening natural feeder canals, and building inlet structures. Irrigation infrastructure around these reservoirs would include individual small pumps, shadouf (person-operated traditional water-lifting system) irrigation, and collective schemes that would irrigate a total of 870 hectares, including an incremental area of 100 hectares.

· To rehabilitate twenty irrigation schemes pumping directly from the Komadougou River and providing a complementary supply of groundwater through boreholes. These schemes would serve principally as a test to determine the feasibility of groundwater irrigation.

The total of improved or incremental irrigated areas would amount to 950 hectares. These works would be complemented by extension services and credit delivery for irrigation equipment and agriculture inputs. Altogether, estimates indicated that some 2,400 farming families (11,760 individuals) would benefit from the project.

Project Implementation

Five years after start-up and one year before completion the 35 villages where some 2,300 farmers live have directly benefited The number of indirect beneficiaries, such as traders and herders, is unknown, but is probably significant. Twenty-seven pond systems have been developed. The average unit price of the reservoir developments has been less than expected, largely because of participation by the beneficiaries in the earth moving works on a volunteer basis. The irrigated area originally covered by the reservoirs was estimated at 520 hectares of individual plots, but has increased by more than 50 percent in the last five years. The average investment cost per hectare for this increment private irrigated area (water retention concrete infrastructure provided on a grant basis small motorpumps and mobile pipes on credit) is less than US$1,800, among the lowest in Niger.

The project has delivered 350 small gasoline motorpumps and 1,960 mobile pipe elements to individuals or small groups (of between two to five members) on a three-year credit basis This credit program has allowed access to motorpump ownership by about 1,000 farmers in 26 villages. Until now, the reimbursement rate has been 100 percent, a remarkable result in the context of Sahelian Africa, and the demand for new motorpumps is still increasing.

Fourteen collective irrigation schemes with concrete covered canals, most of them pumping in the improved reservoirs, have been developed on a total of 165 hectares (average size of schemes is 12 hectares) benefiting 640 farmers with an average plot size of 0 25 hectares. These self-managed schemes are cultivated with green peppers, paddy, or wheat, depending on the soils. The management performance contrasts with that of the state-owned and cooperative schemes The average investment cost for the eleven schemes exploiting surface water in the ponds is US$3,500 per hectare, a reasonable cost for these kind of works. The cost of the pumping devices has been reduced considerably in the last two years by replacing large diesel motorpumps, which were difficult to maintain because of the lack of spare parts on the local market and which cost US$1,800 per hectare, with small gasoline pumps, which the farmers prefer and which are easy to maintain and replace, at a cost of US$300 per hectare. Given the lack of banking institutions in the area, the financial amortization of big collective pumping devices is difficult and farmers' groups have begun to buy small pumps to replace such equipment progressively.

The idea of providing a complementary supply of groundwater through the experimental boreholes has been abandoned after the building of six boreholes on three schemes because of the prohibitive investment (US$14,000 per hectare) and operating costs of this technique.

Although the potential of the reservoirs' development has not yet been fully realized, the overall effect on irrigated area expansion is, nevertheless, greater than expected. The net increase in irrigated area is estimated at 300 hectares of individual plots and 100 hectares of collective schemes This total of about 400 hectares of irrigated land expansion exceeds by far the initial objective of 180 hectares The individually irrigated area is rapidly increasing because of the net increase in water availability in the reservoirs after the fall of the water level in the river and the supply of motorpumps and pipes to individual farmers on credit.

Project Impact

A visible effect of the rapid expansion motorpump adoption is the complete disappearance of the shadouf in participating villages. The credit program for providing the small motorpumps not only permits an increase in the irrigated area, but also reduces the percentage of farmers renting pumps, the poorest category of farmers in the valley. The cash incomes of motorpump owners are actually three to four times higher than those of farmers renting their equipment (the rental charge is a third of the harvest). A survey conducted in 1990 showed that the average net cash incomes from green pepper production varied from US$911 per year for farmers that owned their pump to US$293 per year for farmers that rented their pump. As the project provided most pumps to small groups averaging three farmers, and assuming that most of the 1,000 buyers were previously renting their pumps or using a shadouf, an average cash income increase of 100 percent after credit repayment appears to be a reasonable estimate of the effect on this poorest category of beneficiaries.

In most reservoirs the duration of water availability has been increased by one to two months, irrigating some 940 hectares and allowing completion of the green pepper vegetative cycle, resulting in an in crease in yields Progress in yield terms is, however, difficult to evaluate, and is probably inferior to expectations because of the poor quality of the extension services in the area and the lack of a pest control program However, on the collective schemes rice yields are good at 4.7 tons per hectare.

In terms of food security' end given the availability of cereals on the nearby Nigerian market, green pepper production appears to be the best option for the farmers of the Komadougou valley. For example, on a single hectare of irrigated land, and given average yields and production costs, the net return for cereal production is estimated at 10 tons for wheat and 2.8 tons for paddy (1.8 tons of rice). The net cash income on the same area cultivated with green peppers amounts to US$ 1,000, corresponding to more than 4.1 tons of millet at the average Nigerian market price Estimates indicate that local households purchase at least 50 percent of their cereal requirements.

Although this small irrigation development subprogram is not yet complete, it shows the following clear signs of success:

· The beneficiaries have participated actively in the development works.

· The collective schemes are self-managed and functioning relatively well.

· The farmers are supporting full operating costs with the exception of heavy infrastructure amortization.

· The incremental irrigated area has surpassed initial objectives and has proved to be cost-effective.

· The farmers continue to demand new reservoir developments, credit facilities, and collective schemes.

· The credit provided is being fully repaid

· The farmers' cash incomes have increased significantly and could be higher still.

Lessons Learned

The project's achievements are partly due to a particularly favorable context for the development of irrigated agriculture: the quality of the water and soils, the access to a large market in Nigeria for the sale of outputs and for input purchases, the favorable relative prices, and the widespread knowledge and tradition of small irrigation in the area In this context, the willingness of local farmers, the appropriateness of the subprogram's design, the quality of the local staff, and the overall participatory and flexible approach adopted have resulted in remarkable progress toward food security and a better standard of living in the Komadougou valley.

The irrigated production systems still have plenty of potential for improvement, especially in terms of improving green pepper yields through controlling pests, improving cultivation techniques, applying fertilizer, and so on; improving marketing practices through better exploitation of the seasonal price variations by providing credit for storage and marketing,- diversifying irrigated crop production; and developing transport facilities, for example, through providing credit for ox carts and upgrading secondary rural roads.

The interim evaluation underlines three substantial issues that must be considered if a second program is to be undertaken to consolidate and build upon what has been achieved to date, namely:

The credit delivery service is still dependent on the program staff A local credit and savings institution should be developed.

· Pests and diseases, including nematodes, may continue to breed if nothing is done in terms of diversifying crops and facilitating access to pest control inputs.

· The sheer profitability of green pepper cultivation might lead to overexploitation of the water resources in existing reservoirs as the number of private motorpumps increases. Villagers should be clearly informed about the total irrigation capacity of each pond and adopt rules to avoid excess pumping.

Provided that these issues are adequately addressed in the years to come, one can conclude that this subprogram has ameliorated the food security of the poorest households and lessened the risk of hunger in the project area The project's overall rate of return and the replicabilility of such a program need to be carefully assessed before any final conclusions can be reached Furthermore, the effects of pond development on the river discharge should be monitored to avoid a negative impact on flood recession crops downstream.

Notes

1. Siddharth Dube wrote this section based on Soekirman and others, "Economic Growth, Equity and Nutritional Improvement in Indonesia" (A United Nations Administrative Committee on Coordination l Subcommittee on Nutrition (ACC/SCN) country case study for the XV Congress of the International Union of Nutritional Sciences, Adelaide, Australia, September 26 - October 1, 1993); United Nations ACC/SCN, Second Report on the World Nutrition Situation, vols. I and II (New York, 1993).

2. This section was provided by FINCA International, Inc., 901 King Street, Suite 400, Alexandria, Va 22314, U.S.A. .

3. This section was provided by Freedom from Hunger, 1644 DaVinci Court, PO. Box 2000, Davis, Cal. 95617, U.S.A.

4. Barbara Kennelly. Literature Review of the Impact of Income-Generating Activities an Household Nutrition (Davis, Cal.: Freedom from Hunger, 1988).

5. Cheryl Lassen and Barbara MkNelly, Freedom from Hunger's New Credit-Led Approach to Alleviating Hunger. Is It Working? Mid-term evaluation by the US Agency for International Development Partnership Grant, Cooperation Agreement no. OTR-0158-A-00-8147-00 (Davis, Cal: Freedom from Hunger, 1991).

6. Barbara McNelly and Chatree Watetip, Impact Evaluation of Freedom from Hunger's Credit with Education Program in Thailand (Davis, Cal Freedom from Hunger, 1993).

7. This section was provided by The Aga Khan Foundation, 8-Aga Khan Road, F-614, Islamabad, Pakistan.

8. The International Fund for Agricultural Development provided this section.

9. Gaurav Datt prepared this section.

10. Martin Ravallion and Gaurav Datt, "Is Targeting through a Work Requirement Efficient? Some Evidence for Rural India," Public Spending and the Poor; incidence and Targeting, ads. D. van de Walle and K. Nead (Washington, D.C.: World Bank, forthcoming).

11. Laura Tuck and Kathy Lindert wrote this section.

12. Population is ranked by expenditure per capita per year, which is used as a proxy for income throughout the analysis. In 1990, the poorest income group, with annual per capita expenditures of less than D 250, represented 13 percent of the population, while the richest included those 13 percent with an annual per capita expenditure greater than D 1,200.

13. Institut National de la Statistique, Household Expenditure Survey (Tunis: Institute National de la Statistique, 1985). Intake is derived from purchased subsidized products only and excludes on-farm consumption.

14. Direct assistance schemes include the Needy Families Program and the Union Tunisienne de Solidaritociale, which is responsible for low-income food ration programs and cash transfers to the elderly and handicapped These programs are small compared to the CGC program and could not compensate the poor for an elimination of food subsidies.

15. Anna Sant'Anna and Jean Jacques De St. Antoine wrote this section.

16. Isabel Vial and Alberto Valdes wrote this section.

17. For information about these programs see T. Castaneda, Combating Poverty: Innovative Social Reforms in Chile during the 1980s (San Francisco: ICS Press, 1992).

18. Julia Tagwireyi wrote this section.

19. Michael Lipton, Poverty, Undernutrition and Hunger, World Bank Staff Working Paper no 597 (Washington, D.C: World Bank, 1985).

20. Jayshree Balachander wrote this section, which is reproduced in part from Jayshree Balachander, "Tamil Nadu's Successful Nutrition Effort," Reaching Health for All, eds. Jon Rohde, Meera Chatterjee, and David Morley (Delhi: Oxford University Press, 1993).

21. Severe malnourishment corresponds to Grades III and IV in the classification of the Indian Academy of Pediatrics, which uses the Harvard weight-for-age standard, that is, 81 percent and above is median to normal 71 to 80 percent is Grade 1, 61 to 70 percent is Grade II, 51 to 60 percent is Grade III, and under 50 percent is Grade IV.

22. Children younger than 24 months received a food ration containing approximately 140 calories and 6 grams of protein a day. Those between 24 and 36 months, severely malnourished children, and mothers received double this amount daily.

23. This section was provided by the International Fund for Agricultural Development.

24. It is worth mentioning in this respect the recent decision by the U.S. Agency for International Development to help the Government of Niger meet its counterpart funding obligations.