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Cash-based transfers

Cash-based transfers

FAO’s cash-based programmes support smallholder farmers and other vulnerable men and women, who are particularly exposed to the impacts of climate change, natural hazards, economic shocks, conflict and protracted crises.

Cash and vouchers play a critical role in FAO’s response to shocks and crises when farmers, pastoralists and fishers can no longer buy food or the productive inputs they need. FAO’s cash-based programmes provide immediate relief to farmers, while also contributing to strengthening the resilience of livelihoods to future shocks, increasing agricultural production thus improving food security and nutrition. They support the transition from humanitarian assistance to development, including through enhanced linkages with social protection systems that can be leveraged to respond to shocks and crises.

FAO is committed to using cash and vouchers as its preferred method of assistance, including in emergencies, as they allow for recipients to choose for themselves, enabling farmers to purchase the goods and services they need most in local markets.

FAO’s cash-based programmes are important for:

 

Recipients’ dignity and choice

Food security

Agricultural production

Risk management

Recipients’ dignity and choice

Food security

Agricultural production

Risk management

Cash empowers men and women by allowing them to prioritize and address their own needs

Cash increases household expenditures on food and basic goods

Cash increases investment in inputs and ownership of productive assets, and encourages the adoption of improved agricultural practices

Cash-based programmes can reduce the risk of resorting to negative coping mechanisms during crises and mitigate the impacts of shocks

 

 

 

 

Economic multipliers

Transparency

Cost efficiency

Financial inclusion

Economic multipliers

Transparency

Cost efficiency

Financial inclusion

The injection of cash stimulates local markets and economies thus benefiting communities as a whole

When disbursed through electronic payments, cash-based programmes are easier to track reducing the risk of misappropriation of funds

Compared with in-kind assistance, administrative and overhead costs to implement cash-based programmes are often significantly lower

Providing cash-based assistance (through mobile money, smart cards, etc.) facilitates beneficiaries’ access to financial services (credit, savings and transfers) and payment systems, allowing them to become active participants in financial systems

FAO’s cash and voucher portfolio

FAO’s cash and voucher programmes are grounded in the Organization’s wide-ranging technical expertise in agricultural production, seed security assessments, land management, climate change adaptation, disaster risk reduction and rural development. Since the first voucher-based project implemented in Mozambique in the early 2000s, FAO has reached over 19.1 million people (3.4 million households) with cash and voucher programmes in 58 countries. In 2019, FAO has transferred a total of USD 39.5 million to 1.8 million beneficiaries through 58 operational cash-based projects in 27 countries.

Types of cash-based programmes

FAO implements a broad variety of cash-based interventions based on the specific objective and context:

Cash transfers

Cash+

Cash for work

Voucher programmes

Input trade fairs

FAO’s cash-based programmes are implemented to support vulnerable populations, only in cases where (i) local markets are functioning and are physically accessible to both men and women, (ii) basic goods and services are locally available, and (iii) risk of inflation is limited.

Capacity development programme

To ensure the success and continuing technical improvement of its cash-based programmes, in 2014 FAO launched a capacity development programme on cash and vouchers. This now consists of both webinars and face-to-face trainings, covering: (i) the principles of cash and voucher programmes; (ii) managing cash-for-work schemes; (iii) implementing unconditional and conditional cash transfers; (iv) FAO’s approach to cash+; and (v) agricultural voucher schemes and input trade fairs.

In 2017, the capacity development programme benefited 165 FAO staff and partners from 22 countries.

Guidelines

FAO Guidelines for Public Works (cash-, voucher- and food- for- work) and Guidelines for input trade fairs and voucher programmes provide practical guidance to design and implement selected cash-based programmes.

FAO is a signatory of the Grand Bargain, a member of the Cash Learning Partnership (CaLP), CaLP’s Technical Advisory Group, CashCap Steering Committee since its creation, and a member of the Social Protection Inter-agency Cooperation Board, among others.

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