Disaster Relief Aid: Cash or Food?

Recent news about victims of the recent floods in Pakistan selling their rations have once again ignited the debate over the best approach to  providing disaster assistance…..and development assistance. Are victims better off receiving cash or should relief aid be strictly limited to food items?

Some aid groups have argued that giving money to those recovering from disasters or war is often cheaper, more effective and efficient than giving out  food or other  relief items  such as housing materials, seeds or agricultural tools. The Associated Press quoted one victim who sold part of his rations from a World Food Programme warehouse as saying that he has “other needs” too. “Each time we get just flour and oil and this bunch of tasteless biscuits.”

“We prefer the cash. Because whenever this stuff comes – whether it is food or anything else -the distribution is not very good. Undeserving people get things that other people truly need” said another victim.

Critics argued that it is preferable to give victims food, clothes, and medicine instead of money because it could be misused – that recipients would spend it on cigarettes, alcohol or drugs etc. Cash transfers can also cause inflation and fuel corruption. These concerns are the primary reasons why some humanitarian organisations like the World Food Programme (WFP), the food aid agency of the United Nations, uses food to respond to urgent humanitarian need and to support economic and social development projects.

The ideal response is one that has both food and cash components in it. This, however, would be very expensive. Standardizing responses is much more cost effective than having a variety of responses. However, going by what victims say, it is hard to ignore the cash component of aid. The beauty of cash transfers is that it puts money into the pockets of those who need it most and allow them to prioritise their needs. It also opens up a whole lot more opportunity to victims. In order for the cash to be utilized efficiently, however, part of it should go to female members of a household. Quite simply, money in the hands of women is better utilized than in the hands of men.

This is the idea that sparked the microfinance revolution. The revolution has its roots in the recognition that poor people needed credit and, more importantly, that they could use loans productively and responsibly. When rural women were given the opportunity they proved that poor people were a good risk and efficient users of credit. A book by Joseph Hanlon, Armando Barrientos, and David Hulme titled Just Give Money to the Poor challenges the current approach to doling out aid and made the following proposal:  bypass governments and NGOs, give money to the poor, and let them decide how to use it. This argument was founded on four observations:

1. Cash programmes are affordable
2. Recipients use the money well and do not waste it
3. It is an efficient way to directly reduce current poverty, and
4. There is the potential to prevent future poverty by facilitating economic growth and promoting human development.

Disaster relief aid must evolve with the times. For far too long, humanitarian aid organizations  have been preoccupied with what they think the victims needed. It is now time to listen to what the victims say they need.