Evaluation Report of FOOD CRISIS CASH TRANSFER PROJECT (FCCTP), Expansion Stage (June 2009 June 2010)

Transcription

1 Food Crisis Cash Transfer Project - Mercy Corps Nepal Final Report Annex 3: External Evaluation Report Evaluation Report of FOOD CRISIS CASH TRANSFER PROJECT (FCCTP), Expansion Stage (June 2009 June 2010) Gopi K Sedhain, Ph D Freelance Consultant Shankhamul, Kathmandu Submitted to: Mercy Corps Nepal, Lalitpur, Nepal. June 2010

2 List of Abbreviations and Acronyms ADB Asian Development Bank CBO Community Based Organization CFW Cash for Work CPA Comprehensive Peace Agreement DDC District Development Committee EC European Commission EMPOS Emergency Management Organization Management FCCTP Food Crisis Cash Transfer Project FFW Food for Work FGD Focused Group Discussion GFFP Global Food Facility Project GFP Guiding Future Project HDI Human Development Index IDP Internally Displaced Person IWM Improved Water Mills KII Key Informant Interview LGA Local Government Act MC Mercy Corps MHP Micro-hydro Plant NGO Non-Governmental Organization NPR Nepalese Rupees NRCS Nepal Red Cross Society PDME Program, Design, Monitoring and Evaluation PRA Participatory Rural Appraisal PRROs Protracted Relief and Rehabilitation Operation UC User Committee UK United Kingdom UNDAF United Nation Development Aid Fund US United States VDC Village Development Committee WFP World Food Program Project Evaluation Report- FCCTP Page ii

3 Table of Contents List of Abbreviations and Acronyms...ii EXECUTIVE SUMMARY... v 5.1 Conclusion... viii 5.2 Lessons Learned... xi 5.3 Recommendations for Guiding Future Projects... xii 1. INTRODUCTION Background Food Crisis Cash Transfer Project (FCCTP) Overall Project Goal Project Purpose Purpose of the Evaluation LITERATURE REVIEW Country context Food for Work (FFW) Cash Transfer Programs in Nepal Cash for Work (CFW) METHODOLOGY Briefing about CFW Program Review of Project Documents and Reports Literature Review Finalization of Work Plan and Data Collection Tools Field Trips Data Collection Focus Groups Discussions Key Informants Interviews Direct Observations Data Compilation and Analysis Organization of Evaluation Report Limitation of Study MAJOR FINDINGS Relevance of CFW for Nepal Effectiveness of cash transfer programming for facilitating post-crisis recovery Effectiveness of CFW for Mitigating the Effects of Food Crisis Increased Food Purchasing Capacity of Food Insecure Households Impacts of CFW on Food Security of Target Community Household Level Community Level Project Evaluation Report- FCCTP Page iii

4 4.4 Availability and Food Prices in Local Markets Recovery from the Effects of Increased Food Insecurity and Natural Disaster Mitigating harmful coping strategies for food insecurity by households Sustainability of Community Assets Created in the Community Implementation Process and Collaboration with other Stakeholders Replicability of CFW Approach in Future REFERENCES ANNEXES Project Evaluation Report- FCCTP Page iv

5 Background EXECUTIVE SUMMARY Mercy Corps has been working in Nepal since Mercy Corps is working in 9 districts in Nepal with the goal to strengthen, protect and expand access to productive livelihoods for the poor. Mercy corps Nepal focuses on the sectors of Agriculture & Food Security, Microfinance, and Disaster Risk Reduction with the inclusion of youth and disadvantaged groups as a crosscutting theme. Mercy Corps designed a Global Food Crisis Response (GFCR) program in Kailali, Baitadi and Dadeldhura districts in which "Cash for Work" (CFW) was one of the components that provided cash transfers to highly food insecure households through wage labor opportunities for 2213 extremely vulnerable households, including 992 households affected by the September 19th flood of the Mohana river in Kailali district and an additional 1,221 chronically food insecure households in Hilly VDCs of Kailali, Dadeldhura, and Baitadi districts. After the successful implementation of CFW under GFCR, an expansion stage termed as "Food Crisis Cash Transfer Project" (FCCTP) has been implemented with financial support from WFP covering about 15,295 food insecure households in 27 VDCs of Kailali, Dadeldhura and Baitadi districts with the goal of providing immediate relief for food insecure households affected by rising food prices, while supporting projects that improve longer-term food security prospects. This project was implemented in partnership with the Nepal Red Cross Society and community-based User Committees, with some additional inputs provided by local government agencies. The evaluation report pertains to the expansion stage only, and not to the pilot stage, which was evaluated earlier by Mercy Corps using Participatory Impact Assessment methodologies. Food Crisis Cash Transfer Project (FCCTP) Mercy Corps implemented the 13 month FCCTP expansion stage (hereinafter referred to as FCCTP ) in three districts of Far-western region from June 2009 through June The project was implemented in two phases capturing two agricultural lean seasons prevalent in the project districts. Mercy Corps used a Cash for Work approach to transfer the cash to the needy vulnerable households of the selected project VDCs. The beneficiary households were provided employment opportunities for 50 days and paid Rs. 140 per day, arriving at a total transfer of Rs 7,000 for each beneficiary household. Mercy Corps and WFP jointly conducted the Mid-term Assessment of the project after completion of phase-i and reported that FCCTP was highly successful in achieving its stated goal and purpose in terms of transferring the cash to food insecure target households and creating productive community infrastructures with active participation of target community mostly the women and disadvantaged groups in the project areas. Evaluation Methodology Although the overall performance of FCCTP was found to be successful in meeting its basic goal, objectives and targets, Mercy Corps intended to carry out a final evaluation of project by hiring an external consultant. Detailed Terms of References was prepared by the Project Team of Mercy Corps to carry out the evaluation exercise. The evaluation consultant used participatory Project Evaluation Report- FCCTP Page v

6 tools and techniques for collection of relevant information and data both from secondary and primary sources. Primary data was collected mainly through PRA tools and techniques. The study was conducted from 11 May through 04 June The evaluation team visited sample project sites in three project districts and physically observed some of the community infrastructures rehabilitated and or constructed in the VDCs visited. Information was collected mainly through FGDs and Key Informants' interview with concerned stakeholders, project partners, field staffs, of beneficiaries and members of the sample Users' Committees. Altogether, 8 FGDs were held, about a dozen schemes observed and about 20 Key Informants were interviewed during field study. Key Findings The key findings of the present evaluation study are briefly summarized below: Implementation Process The FCCTP was implemented in partnerships with respective district chapters of Nepal Red Cross Society (NRCS) of the project districts. A comprehensive baseline survey was conducted to assess the socio-economic conditions, especially focusing on food security status of the target households so that comparison could be made with end-line data and control groups in the project VDCs. The 27 VDCs (11 in Kailali, 8 VDCs each in Dadeldhura and Baitadi) were selected based upon the PRRO priorities and other indicators like presence of other WFP funded agencies, feasibility of cash delivery, loss of wheat crop due to winter drought in 2008/09, and presence of disadvantage groups etc in the VDCs. After selecting the VDCs in the project districts, wards/clusters were further prioritized to implement the project activities. An orientation program was organized in each project ward/cluster to create awareness to target groups about the project goals, purpose, processes of identification and prioritization of community schemes supported by the FCCTP, implementation process, and monitoring of the program activities undertaken by the communities. The project schemes were identified and prioritized based on the community needs by the users themselves, with a focus on schemes that supported agricultural livelihoods. However, technical feasibility and financial resources available with the project were also taken into consideration while finalizing the schemes. Formation of Users' Committees It was reported that altogether 178 Users Committees (UCs) have been formed and over 350 different schemes completed under the FCCTP in two phases. Formation of Users' Committees (UC) was mandatory to implement the project activities under the FCCTP. The Cash for Work implementation process explicitly defined the procedure of formation for Users' Committees in each project ward/cluster. The process of formation of UCs should be transparent, democratic, and inclusive and there should be 50 per cent women members in the UC and at least two women members in decision making positions (Chairperson, Vice-Chairperson, Secretary or Treasurer of the committee) to ensure women participation in the decision making process in the groups. Interactions with members of sample UCs showed that considerable women members had served as Chairperson or Secretary in the Users' Committees. Targeting and Selection of Households Project Evaluation Report- FCCTP Page vi

7 Mercy Corps used a blanket coverage approach for selecting the target households in the project wards/clusters. It was argued that given the short period of project and vulnerability of the households toward food insecurity and food price volatility in the selected project areas, every household was allowed to work in the community schemes. Interactions with participants of FGDs held at 8 sites showed that more than 90 percentage beneficiary households in the project wards/clusters, except few clusters, in Kailali are vulnerable to food insecurity and the blanket approach used by FCCTP may be justified. The study also reveals that blanket approach adopted by Mercy Corps has been appreciated and the communities had equally participated in the schemes selected by the community in all VDCs visited; however, the evaluation also found that blanket coverage may not be the best targeting methodology for projects longer in duration than FCCTP given the need to allocate scarce resources among the most vulnerable. Impact of CFW Program Impacts of CFW program could be viewed from two perspectives namely: i) Providing immediate relief to food insecure target communities by transferring cash through fixed days of employment opportunities; ii) Support vulnerable communities to improve their food security situations in the medium term through rehabilitation and or creation of productive community infrastructures using local resources. FCCTP achieved impacts at both of these levels to varying degrees, as described below. Individual Household Level The present study shows that the FCCTP had immediate impacts on the individual households as the majority of these households earned considerable cash through working in various community schemes for 50 days. Interactions with sample beneficiaries present in the FGDs reported that more than 80 per cent target households purchased food for at least 3 months from the Cash for Work program during the critical period of time when the people normally had no access to wage employment in the villages, particularly for women. Considerable households would have to adopt other harmful coping strategies to purchase foods if the project had not provided this employment opportunity in the village. About two-thirds of the households participating in FGDs were of the view that due to opportunity for working in the Cash for Work program, at least one male members of the family did not go to India this season. Many households would have had to sell their livestock, or sell other assets such as ornaments or utensils to buy foods if they had not obtained these employment opportunities in the village. Some of the community members also reported that their bargaining power has increased with foods grains suppliers in the villages, and that they were able to buy foods at lower prices than they would have had to pay if purchasing the same food items on credit. Community Level The study also reveals that overall women's participation in community development activities has improved as a result of the project. They have gained considerable experience while working together in group, and while handling cash (cash transfers were provided to females only whenever possible), which has increased their confidence levels. It could be expected that provision of providing the cash to the women and control over cash by the women has increased and women are expected to make better use of the cash for managing households' Project Evaluation Report- FCCTP Page vii

8 consumption requirements. Another important contribution of the FCCTP in the project districts is equal pay for women. It was reported that women are generally paid less for the similar types of work performed by them in the village. Equal pay for the similar jobs performed by men and women in the schemes supported by the Cash for Work program should have positive impacts on other stakeholders using similar approach for community infrastructures in the project districts. Another important impact of the Cash for Work program in the project districts was the creation of a wide range of productive community assets in a very short period of time. Review of cumulative project information sheet shows that over 350 community-based schemes were completed with project supports within a 13 months period. It was reported that the project has supported communities to expand irrigation facilities for about 500 ha area in the three districts. This will definitely help improve food security of more than 2,000 target households as both the cropping intensity and productivity of crops, mainly cereals will increase considerably due to construction or rehabilitation of irrigation facilities. Studies have proven that just by expanding irrigation facilities, food production generally increases by more than 30 per cent. Moreover, the Cash for Work program has indirectly helped communities to improve access to safe drinking water (37 Schemes), electricity (3 MHPs & 2 IWMs), access to markets by rehabilitating agricultural roads/trails (about 430km) and construction of Community/Cooperative Marketing Centers (59 Numbers) in most of the project VDCs. The FGD participants expressed the views that by working together for 50 days in the group, level of understanding among the households has improved in the village and they had been feeling togetherness and interested to take the ownership of the schemes constructed in the community. Although community members demonstrated commitment to, and ownership of completed schemes, the implementing partner representatives opined that additional time after the project period is required to gauge whether communities maintain and expand assets without external support. It is also clear that while an impressive number of schemes were completed in a short period of time, which was appropriate for a community-based and relieforiented project such as FCCTP, a similar approach is unlikely to be appropriate for larger-scale, higher-quality infrastructure development projects requiring complex construction and comprehensive operations and maintenance requirements. 5.1 Conclusion A comprehensive evaluation of Cash for Work program implemented by Mercy Corps with financial assistance from World Food Program in two phases from June 2009 to June 2010 for 13 months was conducted from 11 May through 04 June 2010 by the external consultant. The field study was conducted in 7 sample VDCs of three districts namely: Kailali-3, Dadeldhura-2, and Baitadi-2. Based on the review of relevant project documents, reports and field assessments, following conclusion have been drawn and recommendations made for future projects: Relevance of CFW Programming Cash for Work program is relatively a new approach in Nepal to provide emergency relief for food security affected by natural disasters and food price volatility and help improve Project Evaluation Report- FCCTP Page viii

9 food security situations of the vulnerable communities in medium term. Interactions with project beneficiaries and concerned project stakeholders, including implementing partners, reveals that among similar programs implemented by other agencies in the project districts, CFW program implemented by Mercy Corps is more transparent and effective in mobilizing additional resources for creating small-scale productive infrastructures in the communities and addressing the food needs in a time of food security crisis. Cash for Work program implemented by Mercy Corps for providing emergency relief to the vulnerable communities affected by natural disasters and food price volatility could be equally effective to improving the food security situations in the Hills and Mountain regions of Nepal provided the areas are accessible by road transport, and schemes selected by community directly contribute to improve food security situation of vulnerable communities through increased productivity and production of agricultural crops in the medium and longer terms. Implementation Process and Beneficiary Households Selection Despite many advantages of blanket coverage of households, it could be considered less effective for longer-term projects as other more vulnerable households in other wards/clusters in the same project VDCs might have been excluded due to limited resources available with the project. The present evaluation also shows that about 10 per cent beneficiary households in the communities were less vulnerable to food security, and would have been excluded from the project had household-level targeting been applied. The experience of FCCTP shows that despite the possibility of exclusion of more vulnerable households in the neighboring VDCs, the blanket coverage approach to a great extent reduced conflicts among the communities and insured participation of every household irrespective of socio-economic status of the users in creating productive infrastructures in the community. Effectiveness of the FCCTP Cash for Work program is relatively a new approach in Nepal to provide emergency relief for food insecure households affected by natural disasters and food price volatility, and to help improve the food security situation of the vulnerable communities in the medium term. Interactions with project beneficiaries and concerned project stakeholders, including implementing partners, reveals that among similar programs implemented by other agencies in the project districts, CFW program implemented by Mercy Corps was more transparent and effective in mobilizing additional resources for creating productive infrastructures in the communities and also in addressing food security needs in a time of food security crisis. Observations of sample community schemes constructed in project areas and interactions with beneficiaries shows that communities were happy with what has been done with project supports and contributed extra labor to accomplish the selected schemes in the community. This indicates that communities were fully involved in selecting the schemes and the selected schemes were based on community needs. Project Evaluation Report- FCCTP Page ix

10 Review of FCCTP information sheet indicates that about half of project funds were spent for rehabilitation and or creation of community assets which will directly contribute to increase foods production through protecting agricultural lands, increasing access to irrigation, and improving market access in the project VDCs. It could be expected that in the medium term, food security situations of about 50 per cent beneficiary households who would have access to irrigation and marketing facilities due to project interventions. Interactions with senior officials and field staffs of implementing partners and other project stakeholders, and review of infrastructures constructed and or rehabilitated with project supports reveals that project outcomes could have benefited from additional training at community level on construction and scheme operations and maintenance, although it is understood that the structure of the project (350 varied schemes over 13 months) would have made this challenging. Efficiency of the Project Analysis of allocated budgets for CfW clearly shows that FCCTP is efficient project as more than 80 per cent of project budget has been spent for providing wage employments and purchase of construction materials for selected schemes. Despite adequate technical manpower provisioned, the structure of the project (350 schemes involving over 15,000 unskilled labors over short 50-day implementation periods) allowed only for basic community infrastructure but not more sophisticated infrastructure schemes. From this, it can be said that scheme quality could have been improved if the project had focused on a lower number of more focused schemes. Impact of FCCTP on Mitigating Food Crisis at Household Level The Cash for Work program supplemented incomes for more than 80 per cent target households to purchase foods for at least 3 months during the critical period of time when the people normally had no access to wage employment in the villages, particularly, for the women. Interactions with participants of FGDs reveals that the majority of the beneficiary households used the cash earned through working in community schemes for purchasing basic food items mainly coarse rice and wheat flour and limited amount for pulses, oils, potatoes, spices etc. The study shows that provision for making payment to women member of the beneficiary households had helped better utilization of cash for fulfilling the family priority needs and control over cash by women has also increased in most of the communities. The CFW program directly helped to mitigate many harmful coping strategies for purchasing foods by the target households in the project VDCs such as selling fixed assets, livestock, removing children from school, migrating temporarily for wage employment outside village if the Mercy Corps had not provided this employment opportunity in the village. Mandatory provision of 50 per cent women members in the Users' Committees has contributed to the empowerment of women in general and increased self confidence of the women in the project VDCs as considerable women also served as Chairperson and Secretary of the Users' Committees. Project Evaluation Report- FCCTP Page x

11 5.2 Lessons Learned Beneficiary Households Selection The experience of FCCTP shows that despite possibility of exclusion of some more vulnerable households in the neighboring VDCs, the blanket coverage approach seems to facilitate reduced conflict among the communities and insure participation of every household irrespective of socio-economic status of the users in creating productive infrastructures in the community. This will further develop a sense of ownership of the community assets and increase the sustainability of the assets provided the community is well mobilized prior to implementation of the programs. Community Participation Review of implementation process adopted in CfW program and interactions with concerned stakeholders and beneficiaries during field visits reveals that transparency in operation is a pre-requisite to ensure peoples' participation in the community development schemes. Despite its relatively wide geographic scope, the project maintained transparency systematically. Among other approaches adopted by different development agencies, the CFW approach could be considered one of the most effective and efficient for mitigating the harmful coping mechanisms and improving the food security situations of the vulnerable communities in the medium term. Suitability and Replicability of CFW Programming The concept of cash for work is relatively a new approach for developing productive infrastructures through peoples' participation in Nepal. The present study clearly indicates that the CFW program could be replicated widely in other accessible districts of Nepal where there is potential for improving food security situations through improved access to productive infrastructures such as irrigation, marketing centers and rural access roads. Under the present situation of Cash for Work program implementation guidelines of Mercy Corps, larger schemes requiring external inputs such as skilled labor, technical manpower to design and supervision of works done by communities and purchased materials such as cements, steel, and asbestos sheet etc. are not feasible under CFW. It was observed that the simpler community-based schemes may be more appropriate for the community, and more sustainable in terms of community management in the longer term. If larger schemes are the community needs then alternative sources of funds should be ensure before approval of the schemes, and an alternative implementation methodology must be utilized. The evaluation study indicates that CfW program could be replicated widely in other accessible districts of Nepal where there is potential for improving the food security situations through improved access to productive infrastructures such as irrigation, marketing centers and even rural access roads. Project Evaluation Report- FCCTP Page xi

12 The study shows that provision for making payment to women member of the beneficiary households had helped better utilization of cash for fulfilling the family priority needs and control over cash by women has also increased in most of the communities. 5.3 Recommendations for Guiding Future Projects Based on the findings of the evaluation study and on our own experience following recommendations have been made to improve the performance of the similar projects and programs implemented in the future: Effectiveness and Efficiency of CFW Programming In order to cover both landless poor and other members in the community, community infrastructures should be categorized into two broad categories namely: i) Those directly contributing to increase production like construction of irrigation canals, ponds, marketing centers, rehabilitation of agricultural lands etc.; and ii) Another improving the basic services such as drinking water, road, electricity, flood control, forest conservation etc. to the community as a whole. In each project ward/cluster, at least two users committees may be formed based on wealth rank order of the households. The households with some cultivable lands (5 Ropani (0.25 ha in Hills and 10 Kattha (0.33 ha in Tarai) in the target ward/cluster should be organized in one Users' Committee and provided necessary supports to develop productive assets so that their food security situation could be improved through increased productivity and marketing facility in the village. A separate Users' Committee may be formed with households having smaller landholding size or landless and provided wage employment opportunity for about 90 days for developing community infrastructures which are not directly helpful to increase production. This approach would improve the access to basic services to the community and effective to developing sense of ownership of the community assets created through project interventions in the community. Although Mercy Corps has its own CfW implementation guidelines and wage rates are often kept 5-10% lower than prevailing wage labor rates in the area to avoid distorting labor markets, it is recommended that the wage rates may be revised based on prevailing rates in district for skilled and unskilled labors and also for cost of living differentials between the Hills and Plains regions. Sustainability of the Impacts Some of the schemes observed during field visits have already utilized Operation & Maintenance funds for purchasing materials and skilled labors necessary for completion of the selected schemes. Therefore, it is recommended that either the schemes requiring more skilled labors and purchased materials should not be approved or the project should provide adequate budget to complete the schemes as per estimates. The initial maintenance fund contribution from beneficiary households is not sufficient. Therefore, it is recommended that each User Committee should be encouraged to develop a suitable strategy and mechanism to generate necessary funds from the real users of schemes based on "users to pay principle" before the schemes are approved for its Project Evaluation Report- FCCTP Page xii

13 sustainability; however, it is recognized that this is more feasible in a longer-term project than in a relief-oriented project. Given the geo-climatic conditions in the Hills and Mountain regions of Nepal, the majority of the households cannot achieve food self sufficiency even in long term with existing cropping pattern and agricultural infrastructures. In order to help them improve the food security situations in the permanently food deficit region, one or more agricultural commodities needs to be identified and promoted with all necessary infrastructures for developing the value chain as well. Majority of the food insecure families were also suffering from nutritional deficiency throughout the country. Therefore, there is an urgent need for changing food habits of the food insecure communities through targeted awareness and educational programs. It is advised that Mercy Corps design a comprehensive nutritional awareness and educational packages either through separate Cash for Kitchen Gardening or integrated with on-going livelihood development program. Project Evaluation Report- FCCTP Page xiii

14 1. INTRODUCTION 1.1 Background Mercy Corps is an international, non-governmental humanitarian relief and development agency. Mercy Corps works in 40 countries across the globe Mercy Corps has long experience of using cash transfer approach to provide emergency relief and improving longer term food security for the vulnerable communities. Mercy Corps has been present in Nepal since 2005 focusing on agriculture and food security, microfinance, and disaster risk reduction, with inclusion of youth and disadvantaged groups as a cross-cutting theme. MC works primarily to strengthen, protect, and expand access to productive livelihoods for the poor in Nepal. Food security situation over the past few years has been worsening in Nepal due to various reasons. Nepal has been ranked 144th position on human development index (HD I- 2009). The national food statistics indicates that annual production at par with annual population growth resulting the country a net food importer. Furthermore, Nepal has been facing severe food insecurity situations in the recent past due to devastating effects of natural disasters such as drought, earthquakes, landslides, fire, epidemics, etc. due to geo-climatic conditions and human factors. The international disaster database shows that about 311,000 peoples have been affected by floods in Nepal from 2002 to The Three-Year Interim Development Plan was also linked to its peace building agenda. The Interim Plan put its emphasis on relief, reconstruction, and reintegration; the creation and expansion of employment opportunities; infrastructure; governance; basic social services with a focus on basic education and health services. In 2008 and 2009, Nepal was high on the list of countries where rising food and commodity prices was expected to have a huge impact on the population. According to the Nepal Development Research Institute (NDRI) and WFP, approximately 2.5 million people in rural Nepal were in immediate need of food assistance at the time and a further 3.9 million were at risk of becoming food insecure due to higher food prices (NDRI/WFP Unpublished Report, 2009). Among other agencies, WFP is the major UN organization providing support to cope with emergency needs for the population facing food insecurity in Nepal. According to the WFP 2000 Country Strategy Outlines the main activities included: school feeding, assistance to rural infrastructure which evolved over time from food for work to community asset creation, and support to Bhutanese refugees. The Outline identifies three main priorities for the new Country Program: Increased focus on areas most vulnerable to food security (Hills and Mountains); Increased focus on nutrition intervention for mothers and infants; and Increased attention to synergies and decentralization of implementation. WFP has been working with government of Nepal and other bi-lateral donors, I/NGOs/CBOs to provide both emergency supports and improve longer term food security for the vulnerable rural communities, mainly in the Hills and Mountain regions which are considered permanent food deficit. Project Evaluation Report- FCCTP Page 1

15 In order to provide immediate assistance, Mercy Corps designed a Global Food Crisis Response (GFCR) program with the goal of improving immediate and medium-term food security, while laying groundwork for longer-term solutions in vulnerable communities in Kailali, Baitadi and Dadeldhura districts. Under the GFCR, Cash for Work (CFW) was one of components that provided cash transfer to highly food insecure households through wage labor opportunities for 2,213 extremely vulnerable households, including 992 households affected by the September 19 th flood of Mohana river in Kailali district and an additional 1,221 chronically food insecure households in Hills VDCs of Kailali, Dadeldhura, and Baitadi districts. After the successful implementation of CFW under GFCR, MC designed a second Cash for Work project, the Food Crisis Cash Transfer Project (FCCTP), covering about 15,500 food insecure households in selected 27 VDCs in three project districts mentioned above. 1.2 Food Crisis Cash Transfer Project (FCCTP) Based on the success of this pilot stage, Mercy Corps and WFP expanded CFW activities from 10 to 27 VDCs: 11 in Kailali, 8 in Dadeldhura, and 8 in Baitadi district, selected with reference to WFP s Protracted Relief and Rehabilitation Operation (PRRO) rankings. Furthermore, priority was given to VDCs where wheat crop was severely affected by the winter drought of 2008/2009; and, VDCs suggested by local Government of Nepal stakeholders. FCCTP is a 13 months project implemented from June 2009 to June 2010 has targeted to cover about 15,500 households and 95,000 individuals as project beneficiaries. In addition to User Committees (UC), the CFW activities were implemented in partnership with the respective District Chapters of Nepal Red Cross Society (NRCS) of Baitadi, Dadeldhura and Kailali Districts. The feasibility of cash delivery and market access was also considered while selecting the target VDCs. As per the project document, the goal, purpose, and objectives of the FCCTP have been narrated as follows: Overall Project Goal To provide immediate relief for food insecure households affected by rising food prices, while supporting projects that improve longer-term food security prospects Project Purpose The overall purpose of the FCCTP as mentioned in the ToR is narrated as below: 1. To bolster the resilience of food insecure households to the devastating effects of rising food prices and natural disasters; and 2. To support schemes that provide opportunities for increasing food production while reducing food security shocks Purpose of the Evaluation The purpose of the consultancy is to evaluate the effectiveness, impact and efficiency of the Food Crisis Cash Transfer Project, which used cash transfers as a crisis mitigation measure. In addition, the study aimed to assess the project performance in terms of the relevance of results, sustainability, shared responsibility, and accountability. 2.3 Scope of the Work As per ToR of the evaluation, the study aims at answering the following questions: Project Evaluation Report- FCCTP Page 2

16 1. In the Nepal context, is cash transfer programming an effective means of facilitating postcrisis recovery? [Note: here communities affected by the Kailali flooding can be considered] 2. In the Nepal context, is cash transfer programming an effective means of mitigating the effects of an ongoing crisis? [Note: here communities affected by food price volatility can be considered] 3. What are the major impacts brought about by the project to the individual and community in relation to its targeted goal and objective? A. Individual level: (Equity in wages in the communities, and Women empowerment at both household and community levels) B. Community level: (Increased in production/productivity in selected crops due to irrigation facilities, Change in cropping patterns and cropping intensity in irrigated area, increase in supply/accessibility of food items due to improved road access, rustic stores, and marketing centers, protection of River bank and fencing and trenching of cultivated land etc; Change in prices of food items in local markets) 4. Does available evidence suggest that the project helped families to overcome the effects of food price volatility? 5. Does the available evidence suggest that the project helped families to recover partially or fully from the effects of increased food insecurity and/ or natural disaster? 6. Does available evidence suggest that the project helped families to avoid or mitigate harmful coping strategies that they might otherwise have adopted due to food insecurity? If so, which coping strategies and to what extent? 7. Does available evidence suggest that the project supported the creation of maintenance of productive assets at the community level, and that the community has a reasonable level of ownership over these assets? 8. Where the project implementation procedures followed sufficient to ensure sound stakeholder management: 9. Should this approach be replicated in future? If so, in which contexts? 10. What are the lessons learned? and 11. Recommendations for guiding future projects? Project Evaluation Report- FCCTP Page 3

17 2. LITERATURE REVIEW The Consultant collected available relevant literatures on cash transfer in general and Nepal specific programs in particular. However, due to limited scope for the assignment detailed literature review was not possible. The relevant literatures reviewed during the course of this study and its key issues are briefly described below: 2.1 Country context Nepal has a population of 28.6 million 1, increasing every year by more than 2 per cent. The landscape of the country is divided in to three ecological regions: Mountains, Hills and Plains, of which the latter, the Tarai makes up 23 per cent of the total area. The geography of the country renders access to market and services very challenging. The ratio of population to arable land is one of the highest in the world estimated about 8:1 (8 person per hectare of arable land). The majority of people are subsistence farmers highly dependent on rain-fed agriculture. About 31 per cent of the population is living below the poverty line 2. Natural Disasters Nepal is considered highly vulnerable to various types of natural disasters such as drought, earthquakes, landslides, fire, epidemics, etc. due to geo-climatic conditions and human factors. Among above disasters occurrence, floods is more common and considerable people have been affected annually. The EM-DAT shows that the floods in Nepal were unpredictable in the current decade. In addition, the recent years have seen a combination of winter drought (2006 and ) with extensive summer flooding. The number of people affected by category of natural disasters is summarized in Table-1: Poverty Level Table 1: Main natural disasters and estimation of people affected Year Natural disasters People affected 2009 Epidemics 52, Flood 180, Flood 641, Flood 200, Flood 30, Flood 800, Flood 60, Flood 266,000 Source: EM-DAT: The OFDA/CRED international disaster database Nepal is a low-income, food deficit country, ranks 144th on the 2009 Human Development Index (HDI). According to UNICEF 4, the gross national income per capita was US$ 340 in on Nepal WFP, 2009, The cost of coping: a collision of crises and the impact of sustained food security deterioration in Nepal. 4 Project Evaluation Report- FCCTP Page 4

18 According to the Asian Development Bank (ADB) 5, An emerging concern is the sharp rise in inequality - in terms of the Gini coefficient, inequality increased from 0.34 in 1995/96 to 0.41 in 2003/04. Inequalities have many sources of explanations, according to the latest national human development report 6, Nepal s wide differences in the living conditions of its population are mainly due to unequal gender relations, caste differentials due to social stratification, caste and ethnicity differences, linguistic discrimination, religious differences, spatial exclusion, and geo-political discrimination. Food Security 7 Nepal has been hit by a collision of crises since more than a decade and confronted with a declining food security. The country is now facing repeatedly food deficits due to combination of population growth, stagnating food production and a declining proportion of public expenditure in agriculture. The ability of households to purchase food has become significantly more difficult due to impact of high food price crisis. The proportion of the undernourished population is about 22.5 per cent both in urban and rural areas. Populations in the Hills and Mountain districts of the Far and Mid-Western regions are the ones who suffer most from food insecurity. The rate of underweight in children under 5 is estimated at 39 per cent with an average rate up to 48 per cent in the mountain areas. Compared with neighboring countries Nepal has been particularly hit by the global food crisis and experienced steep food price inflation from the end of 2007 through There is wide variation in food prices between three ecological regions of the country. Study has shown that the average food prices in the Hill and Mountain Regions are estimated three times more than in the Tarai. High food prices, combined with drought and winter crop losses, limited access to food of almost 3.4 million people during the first quarter of 2009 (WFP Project Report, 2010). Study has also shown that during 2006/07 to 2007/08 migration rates of people from rural areas was increased by about 13 per cent and the remittances contributed nearly 17 per cent of the National Gross Domestic Product. A further risk that might affect food security and the way in which people cope with their situation is the potential drop in remittances due to the global financial crisis 8. Government Strategy 9 The Three-Year Interim Development Plan was totally linked to its peace building agenda. The Interim Plan put its emphasis on relief, reconstruction, and reintegration; the creation and expansion of employment opportunities; infrastructure; governance; basic social services with a focus on basic education and health services. 5 ADB, DFID, ILO, 2009, Highlights. Nepal: critical development constraints 6 UNDP, 2009, Nepal Human Development Report State Transformation and Human Development. 7 WFP, 2009, The cost of coping, Nepal Food Security Monitoring system. WFP, 2009, A sub-regional hunger index for Nepal, Nepal Food Security Monitoring System. 8 FAO/WFP, 2009, State of food insecurity in the world Government of Nepal, National Planning Commission, 2007, Three-Year Interim Plan. Project Evaluation Report- FCCTP Page 5

19 International Assistance After signing the Comprehensive Peace Agreement (CPA) between the major political alliance and Maoist in 2006, international assistance increased considerably (by more than 40 % between 2005 and 2007) to support the country s peace building and development efforts. The main donors are the ADB, United Kingdom (UK) and Japan. The UNDAF, extended until 2012, prioritizes peace consolidation, quality of basic services, sustainable livelihoods, human rights, gender equality, and social inclusion. However, the humanitarian assistance represents less than 10 per cent of total aid, it is regularly increasing reflecting needs in the food security sector due to combination of national and international issues confronting the country as discussed above. Donor funding seems to prioritize food security and nutrition over other humanitarian requirements 10. The main external donors in the humanitarian sector are the United States (US), the European Commission (EC), and the UK. In 2008 and 2009, Nepal was high on the list of countries where rising food and commodity prices was expected to have a huge impact on the population. This is because Nepal relied heavily on food and oil imports and had a high level of chronic food insecurity (41% population is under-nourished) and poverty (31%). Moreover, on an average, the Nepalese population spent more than half its income on food, a situation exacerbated by increases of 20 to 30 per cent in food prices. As a result, food intake among the poor households was decreasing, a situation that would quickly lead to higher malnutrition rates. According to the Nepal Development Research Group and WFP, approximately 2.5 million people in rural Nepal were in immediate need of food assistance at the time and a further 3.9 million were at risk of becoming food insecure due to higher food prices. 2.2 Food for Work (FFW) WFP is present in Nepal since 1963 with 51 operations for a total budget of about US$400 million to date. More than US$ 252 million (63 % of the total) have been budgeted over the last eight years. According to the WFP 2000 Country Strategy Outlines the main activities included: school feeding, assistance to rural infrastructure which evolved over time from food for work to community asset creation, and support to Bhutanese refugees. The Outline identifies three main priorities for the new CP: Increased focus on areas most vulnerable to food security (Hills and Mountains); Increased focus on nutrition intervention for mothers and infants; Increased attention to synergies and decentralization of implementation. WFP Portfolio in Nepal Review of WFP Portfolio activities undertaken between 2002 and 2009 in Nepal shows that WFP undertook 15 operations investing about US $ 348 million. The review shows that of the total portfolio about one-third was spent on different development programs followed by UN-OCHA, 2009, Humanitarian transition appeal mid-year review. Project Evaluation Report- FCCTP Page 6

20 per cent in Relief and Recovery operations, 27 per cent in Relief and Recovery of Bhutanese Refugees, and 7 per cent in five emergency Operations during the reporting period. Objectives and Activities of WFP The objective-wise distribution of WFP activities outlined in the strategic plans shows that it operates under main four strategic objectives namely: 1) Save lives and protect livelihoods in emergencies; 2) Prevent acute hunger and invest in disaster preparedness and mitigation measures; 3) Restore and rebuild lives and livelihoods in post-conflict, post disasters or transition situations; and Reduce chronic hunger and under nutrition. Distribution of WFP Portfolio in Nepal The main activities are GFD (39%) mainly in EMOPS and PRROS for refugees and FFW/FFT (30%) mainly through the CP and PRRO for conflict affected population. Nutrition issues are recurrent across the portfolio mainly through FFE (14%), MCHN (11%), supplementation act (5%), and retention package (1%) ( WFP projects documents) Access to food is a major issue in Nepal. The most food insecure areas are also the least accessible. Population is scattered, which represents major logistic challenges for WFP operations and therefore extremely variable. Landside transport storage and handling cost per metric cost varying from US$ 24 per metric ton to US$ 594 metric ton according to the operations. To support local markets WFP s first option is local purchase and therefore local markets are closely monitored. Local procurement is however a challenge especially when natural disasters, such as the recent drought, strike and prices increase. In this context, timely delivery or adequate rations constitute a major challenge for the efficiency and effectiveness of the portfolio activities. Resource Flows Annual allocation of WFP funds by program categories in Nepal shows that funding for development activities in Nepal has consistently decreased since 2004, while funding for relief and rehabilitation programs has dramatically increased since 2006 following the peace agreement (WFP, Directed multilateral contributions ). Geographical Focus WFP has been operating across the entire country. However, the volume of WFP operations shows that almost half of the volumes of business is concentrated in the Eastern region (45%) followed by Mid-west (24%), Far-west (19%), Central region (11%) and one percent in Western region. The WFP focus indicates most of the food has been delivered in the Eastern Region (mainly due to support to refugees in two Districts (Jhapa and Morang). The other main regions where WFP is active are the Far and Mid Western Hills and Mountains districts (WFP CO). 2.3 Cash Transfer Programs in Nepal The concept of cash transfer programming is not new for Nepal although it is not clearly spelled out in the development literatures in the past. Analysis of Local Governance Act -1992, clearly says that the community shall be involved in local development projects implemented by VDCs, Municipality and DDC. This is a broader legal framework to directly involve the community for Project Evaluation Report- FCCTP Page 7