Chapter 6


Box 6.3: Relief and FFW Rations in Ethiopia and the Issue of Informal Monetization

The standard relief rations in Ethiopia consists of 0.5 kg of cereals (mainly wheat) per person and day and some
supplementary food such as vegetable oil and sometimes pulses, providing an energy supply of about 1750
kcal. Wheat is, in most cases, not a local staple food but distributed because of availability. The standard FFW
rations per working day is 3 kg of grain and 120 grams of oil. This is supposed to cover the daily subsistence
requirements of an average household of six persons, supplying some 1800 kcal. per person and day.

Sales of relief and FFW rations by the beneficiaries on the market are a common phenomenon. There are
various reasons for this fact, such as:

* The recipients of the relief or FFW rations have urgent cash needs, e.g. to pay school fees, health care,
 funerals, or credit repayment.
* The recipients need or want to buy other commodities, other than the food distributed, such as salt, sugar,
 soap, clothing, etc.
* Preference for other commodities than those distributed, for price or taste reasons, e.g. local type of grain.
* The relief and FFW rations sometimes exceed requirements, as the households may apply other coping
 strategies and/or due to the fact that food distribution is not targeted at the most needy.
* The market prices of the commodities distributed may encourage sale in exchange for cheaper local
 substitutes.
* The distance between the distribution centre and home: if the recipients live far from the distribution centre
 without easy access, they are inclined to sell the rations and take the cash home.

It was estimated that about 25 to 30 % of the relief rations, and 30 to 50 % of the FFW wages are monetised by
the recipients.

Source M. Metz, unpublished survey results.

In areas with large-scale relief or FFW operations, informal monetisation of relief or FFW
rations by the beneficiaries can significantly increase local market supplies, with substantial
implications for the local market structure and market prices (see dashed lines in Figure 5.7,
Chapter 5). Such effects need to be taken into consideration when food aid operations are
planned and must be closely monitored during implementation, in order to avoid major
market distortions. Informal monetisation of relief and project aid needs also to be taken into
account when the scope for programme aid is assessed. As informal monetisation means an
increase of market supplies, it leads to a corresponding reduction of the potential of the
market to absorb formally monetised programme aid.

2.5.3 Food aid to stabilise supplies and prevent temporary food shortages

Food aid can play an important role not only in alleviating existing food deficits once they
occur, but also in preventing temporary food shortages. Major approaches to reduce the risk
of temporary food shortages resulting from supply instabilities are early warning and
immediate response mechanism, multi-annual programming and/or food aid contributions to
buffer stocks and emergency food security reserves (see section 2.2.2 of Chapter 5 on the
latter issues). These measures apply, in principle, to all types of food aid supplies:
programme, relief and project food aid.


- 234 -