Ethiopia’s Productive Safety Net Programme

John Hoddinott, IFPRI

(drawing on co-authored work with Daniel Gilligan, Neha Kumar and Alemayehu Seyoum Taffesse)

• Ethiopia has long been one of the largest recipients of emergency food aid in Africa

– The emergency appeals approach has been costly, yet has had limited impact in terms of protecting productive assets and mitigating drought shocks

• In 2005, the Government of Ethiopia revised its strategy of distributing food aid

– Emergency appeals were replaced with a standing safety net in areas suffering from chronic food insecurity

– Focus was to provide more reliable and timely support to chronically food insecure households in more than 260 woredas across Ethiopia

– Funding for complementary programs to foster asset accumulation was increased

Page 2

Historical Context

• Starting in 2005, the Productive Safety Nets Programme (PSNP) has been implemented as part of a broader Food Security Program (FSP)

1. Productive Safety Net Program (PSNP)• Labor intensive public works (PW) building productive community

assets• Transfer payments in cash rather than food in some areas to

encourage market development• Direct Support (DS): unconditional transfers to labor-scare households

including elderly and disabled

2. Other Food Security Programs (OFSP)• Makes available packages of services such as: fertilizer, credit, other

inputs or assets

3. Resettlement to other locations with more productive land

Page 3

The Food Security Program and the PSNP

• The objective of the PSNP is to improve food security while preventing households from being forced to sell assets

• The objective of the OFSP, combined with the PSNP, is to increase productivity and promote asset accumulation

The PSNP seeks to address the malign consequences of chronic poverty in the short term while laying the platform for longer term income and asset growth

• The PSNP reaches more than 7 million people and operates with an annual budget of nearly 500 million US dollars. Outside of South Africa, it is the largest social protection programme operating in sub-Saharan Africa.

Page 4

How is the PSNP supposed to work?

• Working in partnership with the Central Statistics Authority, the Food Security Coordination Bureau and donors, we collectively designed, and CSA implemented, a longitudinal (panel) quantitative household and community level survey

• The survey was fielded in 68 woredas served by the PSNP in 2006; approximately 3,700 households were interviewed. These are found in Tigray, Amhara, Oromiyaand SNNPR

• These households were re-surveyed in 2008 and the survey was extended to woredas in Amhara covered by USAID contributions to the PSNP.

Page 5

Impact of the PSNP: Data

• A series of local administrative structures – “Food Security Task Forces” - have been established to assist in the selection of public works projects, to liaise with programme staff, to keep records, monitor implementation and identify households who should receive benefits

• There has been a relatively high level of beneficiary involvement in the PSNP; between 20 and 30 percent of households report being involved in the selection of public works activities.

• Between 85 and 90 percent of households perceive that their community has benefitted from the construction or rehabilitation of roads, schools and soil and water conservation

Page 6

How well has it worked? Successes

• Controlling for household location, as household wealth increases, the likelihood of participation in public works declines.

– Ownership of two oxen reduces the probability of participation by 10 percent points.

– Compared to a household with no land, land holdings of one hectare of land per person reduces the probability of participation by 16.9 percentage points.

• Demographic characteristics dominate the likelihood that a household receives Direct Support.

– Consider two households. Household A has a female head aged 70; Household B has a male head aged 40. In all other respects, they are identical.

– The probability of receipt of Direct Support by Household A is 22.9 percentage points higher than Household B.

Page 7

Successes: Targeting

• Using quasi-experimental methods (difference-in-differences matching estimators) we find that program impacts on asset accumulation are greatest when higher levels of transfers are received and when participants have access to both the PSNP and the OFSP.

• High levels of transfers and access to the OFSP improved food security between 2006 and 2008 by 0.45 months.

• Households receiving high levels of transfers had a 14.3 percent higher growth rate in the value of their livestock holdings.

• Growth in yields of maize and wheat was highest when both PSNP transfers and OFSP services were received

Page 8

Successes: Impact

• Payment for at least 10 days work per month in the three months prior to the 2008 survey improved food security, even though food prices were rising dramatically at the time. These households experienced, relative to control households, a 19.2-percent higher growth rate in caloric acquisition and higher growth in livestock holdings.

• The PSNP does act as a safety net. Households that received at least 10 days work per month in the three months prior to the 2008 survey and reported being affected by drought had growth rates of caloric acquisition 30 percent higher relative to non-beneficiaries, while increasing livestock holdings by 0.62 TLU.

Page 9

Successes: Impact

• Analysis of the 2006 survey data suggested that there was a considerable problem with wage arrears.

• The 2008 data suggests that wage arrears have been reduced. In some parts of the country (SNNPR), timeliness of payments has been impressive. But there is still room for improvement

• Apart from Tigray, there was limited overlap with the OFSP in 2006. By 2008, coverage of the OFSP has expanded

• Providing cash became problematic during a period of rapidly rising food prices

Page 10

Challenges

Page 11

Ratio of PSNP Cash Wage to Maize Prices, SNNPR

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

January, 2007

March, 2007 May, 2007 July, 2007 September, 2007

November, 2007

January, 2008

March, 2008 May, 2008

Cas

h w

age:

Pri

ce o

f 1

kg,

mai

ze

• Ethiopia’s Productive Safety Nets Program is one of the largest social protection programs in Africa

• After several years of implementation, the program has had success in modestly reducing food insecurity, facilitating asset creation and protecting households from price and drought shocks

• Further improvements to implementation have the potential to lead to further improvements in these outcomes

Page 12

Summary