Social Protection in Rural Areas

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1 Rural Development and Agriculture Briefing Note Social Protection in Rural Areas The background Social protection is a human right. Social protection systems guarantee a minimum living standard for all population groups and provide protection from major risks such as illness, incapability to work, poverty in old age or in case of death. Social protection thus contributes to the reduction or prevention of extreme poverty. At the same time social protection systems increase the productivity of the population as well as its readiness to take risks and to make investments. Social protection systems also promote people s potential and ability to help themselves. Although social protection systems play a crucial role in the process of development, more than three quarters of the population of developing countries have no access to appropriate social protection, which is almost exclusively restricted to employees in the formal sector. This means the majority has no or only restricted opportunity to participate in economic and social development and to lead a good quality life. In addition to social and economic functions, social protection systems also have a significant political relevance as they contribute to improved social cohesion and political stability and promote social equity within a society. Social protection systems are relevant to rural development in several aspects: They provide targeted support to population groups in crisis situations; they contribute e to improved food and nutrition security and support the structural reduction of poverty. They also make an important contribution to growth and development. Instruments of social protection Direct social transfers: Regular cash transfers on a general basis or according to needs as well as conditional cash transfers (Cash Transfers and Conditional Cash Transfer) In-kind transfers such as food or supplies, fortified food, vouchers for benefits in-kind or social services School feeding programmes as a special kind of food assistance Cash- or Food-for-work-Programmes: i.e., public employment programmes with a guaranteed minimum period of employment Indirect social transfers: Subsidies for food and supplies (fertilizer, seeds, fuel) Insurance systems: Social insurance systems on a national level funded by contributions or taxes Micro-insurance schemes: Mutual beneficial insurance schemes providing assistance in the event of illness or death (e.g. community based and cooperative approaches); subsidised market-based approaches Index-based weather or crop insurance policies Social transfer programmes are tax-funded social assistance programmes which provide targeted support by directly transferring food, cash, or vouchers to population groups that are poor or at risk of poverty Applied in the short term, these measures can contribute to providing relief during acute crises such as natural disasters, famines, war, or when food prices increase significantly. In such situations, Food- and Cash-

2 for-work programmes, for example, may help to improve food access. At the same time, they support the restoration and improvement of rural infrastructure. Given long-term orientation, reliability and adequate transfer amounts, these instruments can reach their full and sustainable effect and contribute to structural poverty reduction and lasting food and nutrition security in rural areas. Furthermore, social protection systems facilitate the handling of future crises and thereby increase food and nutrition security. Socio-political practice and effects Social transfers prevent that people at the minimum subsistence level are forced to eat less and worse in crisis situations or to sell their livestock and land, thus losing their means of production. In addition, their children can continue to attend school and doctors can still be visited if necessary. The provision of cash transfers over longer time periods increases the readiness of poor people to take risks and to make investments. Experience shows that recipients of social transfers can consolidate their income by making investments in alternative income sources, such as, for example, small animal husbandry. This is an important additional protection mechanism against crises. By increasing household incomes, cash transfers also function as important catalysts for local economic cycles and have positive effects on local employment. For households that do not profit from the benefits of conventional measures geared at rural development due to their limited or non-existent production potential, cash- and in-kind transfers play a particularly important role. By directly improving access to food and other consumption goods, social transfers reduce poverty. In the long term, they improve the food and nutrition security of those households. Conditioned social transfers are cash transfers that are subject to the recipients participation in health and education or training measures. Especially for children, they guarantee improved health and education status and thereby support the creation of human capital and the increase of productivity in the long term. In this manner, they contribute to structural poverty reduction. Like Cash- or Food-for-Work-programmes, in-kind transfers such as seeds, fertilizer or breeding animals have a direct effect on the improvement of agricultural productivity and back the restoration of economic infrastructure. Restoring irrigation systems, roads or markets are typical measures of such programmes. Like terracing or reforestation, they improve the agricultural production and marketing conditions and thereby promote access to social services in rural areas too. For crop and livestock farmers alike, protection against risks arising from natural disasters and crop failures is crucial. In this respect, micro-insurance schemes are becoming increasingly important. As a protection against risks such as poverty in old age, death or illness, micro-insurance schemes are important, as well. This is particularly true for women and rural workers employed in the informal sector who are excluded from public social protection systems and who often have only low incomes. However, insurances are a relatively weakly developed subsector which usually lacks competition in developing countries, particularly so in rural areas. To ascertain social protection, programmes require a sustainable design. This includes their institutional and legal incorporation and, as a result, the right to claim access to them. Sustainability, however, also refers to the programmes required high-quality design, e. g., in terms of a precise identification of target groups or the programmes costs for administration and transactions. Sustainable funding is particularly important but so are professional design, efficient management and transparency. Directly linking social protection measures with instruments of rural development can create important synergetic effects, particularly on improved food and nutrition security. For example, agricultural training measures can be combined with input transfers. Farmers are then enabled to use the received seeds or fertilizer in a more effective and efficient manner. In the past decade, numerous countries have established social transfer programmes to reduce poverty and to increase food and nutrition security. Many have also developed ambitious agricultural strategies that are primarily geared at improving the competitiveness of smallholder agriculture. But agricultural and social strategies are not always interlinked with each other.

3 However, an example from Brazil shows the positive effects of such interlinkage. (See box) The Bolsa Família Programme Interlinking socio-political measures and measures to promote smallholder agriculture has resulted in innovative approaches. This was especially the case when demand was selectively stimulated. The Bolsa Família programme in Brazil serves as an example. This Conditioned Cash-Transfer Programme is aimed at the poorest of the poor and serves approximately 52 million people. Among the recipients of the monthly cash transfers, women are the vast majority. The programme contributes immediately to the reduction of poverty and to covering basic needs. The national school feeding programme is directly aimed at smallholders market integration. The programme buys food from local smallholder producers and thus supports local value chains. Thereby it also creates market access for very poor groups of farmers. At the same time, the programme provides important support to the food and nutrition security of pupils and their families in rural regions. The Brazilian example shows that the reduction of rural poverty requires a reorientation of policies and guidelines. They should be innovative and include coordination across multiple sectors and resorts. In addition to an improved inter-ministerial cooperation, partnerships with nongovernmental organisations, civil society and the private sector networks and actors are also meaningful. Involving them in planning, implementation and monitoring is important to reduce rural poverty successfully. Furthermore, multi-sector policies and guidance requires strengthening of local administrative structures, since they are largely responsible for implementing, administering and monitoring such measures. Our position Against this background, GIZ advocates the following positions: 1. Social protection is a human right Social protection is a human right and is therefore the foundation for sustainable development. Social protection measures can contribute in crucial ways to the reduction of poverty, hunger and malnutrition 2. Social protection supports crisis management and poverty reduction Direct social transfers play an important role in the provision or fulfilment of basic needs and food and nutrition security; in the long as well as in the short term. Furthermore, Cash- and Food-for- Work Programmes contribute to improving the productive infrastructure of rural areas and the sustainable use of natural resources. Social protection plays an important role in structural poverty reduction in rural areas. It protects people from negative risk management strategies and advances the diversification of livelihood. Social protection systems can also protect smallholders against weather- and climate-related risks. When smallholders can insure against externally caused crop failures, they are more likely to adopt new technologies that allow for higher yield and income in a long-term perspective. 3. Social protection enables agricultural development Linking approaches of agricultural support such as market integration, improved production and / or sales guarantees with socio-political measures such as school feeding programmes or cash transfers, provides an opportunity to reach people who cannot benefit from rural development programmes otherwise. 4. Social protection also serves business promotion Social protection mechanisms are an important contribution to the improvement of incomes, for example, by transferring cash or means of production or by subsidising the latter. They thus support the purchasing power of the poor and promote more dynamic local economy cycles and the stimulation of rural markets. 5. Social protection improves the situation of women and girls Social transfer programmes often consciously address women in their role as family care takers. The programmes thus provide them with the right

4 to dispose of resources, which they usually use for the benefit of the family. If linked to school attendance and preventive healthcare, conditioned social transfers can add to the positive effects on girls and children. School feeding programmes, too, can directly assist in ameliorating the poverty situation of girls. 6. Social protection can strengthen political and institutional frameworks Implementing social protection measures raises the standards expected of the local and centralised administration s efficiency and transparency. This poses an opportunity as well as a challenge. The capacities of administrative structures and institutions in rural areas can be supported within this framework. 7. Social protection is the partner country s concern Instruments promoting social protection are discussed, preferably in partnership with civil society actor, and implemented context-sensitive in the partner country within very different political constellations. Our recommended actions In GIZ s view, the key recommendations for action are as follows: 1. Improve interlinkage of rural development and social protection Improving the interlinkage and integration of rural development measures with those geared at social protection is recommended. There is evidence that rural poverty and nutrition and food insecurity can thus be reduced more successfully 2. Expand social protection systems and make them inclusive In many countries, social protection is undeveloped, particularly so in rural areas. Establishing comprehensive social protection systems is indispensable to guarantee that the demands of vulnerable population groups can be met. They also provide ample protection against individual risks. Improving access to existing social protection programmes for particularly vulnerable population groups is often required, too. Special attention should be given to the needs of marginalised population groups, such as women, ethnic minorities or people with low human resources (e.g. elderly, chronically ill or physically impaired people). 3. Make social protection systems gender equitable To improve the nutrition and food security of women and girls and to support them in their various roles as, e.g., mothers, farmers or traders, social protection systems need to be better aligned with their living circumstances and the special risks and vulnerabilities they are exposed to. At the same time, this strengthens their voice and participation in families and communities. 4. Advance innovative agricultural-political measures with a social component International cooperation can advise partner countries on the development and consolidation of innovative measures such as agricultural insurance policies or guaranteed markets/social markets within the frame of school feeding programmes. An effective combination of agricultural policy instruments and socio-political instruments results risk reduction and social protection for the rural population. At the same time, it contributes to food and nutrition security by promoting sustainable production and employment. With these approaches, rural poverty can be reduced. 5. Initiate multi-sectoral dialogue, promote cooperation and coherence. Implementing and developing innovative measures require increased multi-sectorial dialogue. In addition to agriculture, the health, education and social protection sectors should be included in this dialogue as well as nongovernmental actors, civil society, private sector and research institutions. International cooperation can give a hand in supporting national processes in partner countries. Decentralised and local actors who are usually responsible for the implementation of measures need to be included in this policy dialogue, as well.

5 @ Foto: Guenay Ulutuncok/laif Cooperation across sectors, aiming at improved interlinkage of rural development and social protection should also receive more attention from German development cooperation in order to support above mentioned synergies and mutually reinforcing Foto: Guenay Ulutuncok/laif Contact Annette Roth E T I Published by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Registered Offices Bonn und Eschborn Dag-Hammarskjöld-Weg Eschborn T F E I Division Rural Development and Agriculture / October 2015

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