Chapter 4


3.4.2 Impact on food security of vulnerable groups

In order to assess the final outcome of a currency devaluation on household food security,
we trace the main lines of impact down to the factors which determine household food
entitlement, or, in other words, on a household's ability to obtain the food it needs. The
crucial factors are the changes induced in the monetary and real household income,
constituting the major determinant of household food demand.

There are gainers and losers, depending on the sources of income and the share of tradables
in household expenditures. Some will gain in one respect, and lose in another. Table 4.9
summarises the likely short-run effects on the main population groups who have been
recognized as vulnerable to food insecurity.


Table 4.9: Impact of a devaluation on food demand and food security of vulnerable groups


 Impact on volume offood demand, due to Compound impact on
 Vulnerable group nominal income changes price changes household food security
 Rural vulnerable groups
 Unskilled landless + / ? ? / ? /
 Deficit subsistence farmers ? / -* ? ? / -
 Small-scale food-crop farmers + / ? + / ? / -
 Small-scale cash-crop farmers + + +
 Pastoralists ?/-
 Remote area dwellers ? ? ?
 Urban vulnerable groups
 Informal sector/self employed
 Unemployed
 General
 female-headed households

 Explanations:
 + likely positive impact, + + strong positive impact
 likely negative impact, - strong negative impact
 ? little impact or undetermined
 / different impact on subgroups, depending on conditions
 negative impact refers to possible loss of access to land (loss of household assets)

 The hardest hit will be those who suffer, as result of devaluation, a monetary as well as a real
 income decline. This applies specifically to the urban poor. They are affected by the
 depressing impact on informal sector income and employment on the one hand, and, on the
 other, by price increases in imported food commodities which make up a major share in
 urban food consumption.

 Among the rural population, the small-scale farmers producing cash crops for export or a
 marketable surplus of importable food crops will directly benefit from a devaluation. The
 income gain from increased sales revenues may be partly offset by a real income decline,
 resulting from price increases of tradable consumer goods purchased by a household. This


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