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					                                       CHAPTER 5

The term vulnerability refers to the relationship between poverty, risk and efforts/ability to
manage risk. Risks and the inability to manage these risks effectively could force people
below the poverty line, and those already living below poverty line deeper into poverty. On the
other hand, reducing vulnerability through effective and efficient risk management would
contribute positively to economic growth.           Therefore, any effort towards poverty
eradication/reduction needs to be based upon a good understanding of the risks, constraints and
opportunities faced by the poor. Further, these efforts should help people manage risk and
prevent them from sliding into poverty.

The poor in developing counties are especially vulnerable to a wide range of shocks/risks like
natural disasters, drought, crop failure or illness that could affect individuals, households or
whole communities and lead to a reduction in their well being. Risks, if not effectively
managed, often impact to reduce the size of the asset bundle and/or change the type of living
that can be pursued. The ability of the poor to cope with and recover from shocks/risks is
central to sustainable livelihoods. To minimize the losses in such exigencies, it is necessary to
create a system for increased preparedness at all levels i.e. government, civil society and
community. The DPIP project aims at improving the ability of the poor to deal with such
shocks/risks through direct and indirect interventions. The objective of DPIP is to enhance the
ability of people to deal with such shocks both directly through interventions like Rice Credit
Line, Aasara, and FSL that improve food security and reduce exposure to the risk of food
insecurity; and indirectly, by promoting savings that can serve as insurance in time of need.

In the year 2004, the project also introduced risk mitigation programmes like comprehensive
insurance programme and development of weather-based insurance schemes. Besides, DPIP
aims at strengthening the capability of the poor to utilize various government programmes like
employment guarantee programme, PDS and other social security programmes. Clearly,
neither covariate risks like drought and cyclone nor idiosyncratic risks such as death of family
members and accident are under the control of the project; the objective is only to improve the
capacity of the poor in encountering such shocks/ risks.

The FUS-I of the DPIP, which covered the period up to December 2003, has shown that the
interventions have generated more confidence among the poor in the project area to cope with
(by resorting to borrowing, use of savings and opting for more wage employment) all distress

events - whether idiosyncratic or covariate.        This chapter will explore the nature of
shocks/risks experienced by the people and the impact of the programmes, which are intended
to improve the ability of the people to deal with such shocks/ risks. Now that a sufficient
period of time has elapsed after the project was grounded and the mid-term evaluation, the
ability of the poor to cope with such shocks/risks and the capacity to protect themselves from
food insecurity should have improved. Against this background, this chapter addresses the
following issues.

   •   What are the changes in the food security arrangements of the households who are
       participants in the project vis-à-vis non-participants?

   •   Is there any inter-seasonal variation in the number of days without food between
       participants and non-participants?

   •   What are the important factors that have led to improved food security of the
   •   What are the coping mechanisms adopted by the participants and non-participants to
       cope with shocks?

The above issues are examined through indicators such as a) number of days experienced
without food in the last 12 months vis-à-vis in year 2003 and between project and non-project
participants, b) comparing the price of food procured through various project programmes with
that procured from the open market, c) proportion of households who are able to purchase
more of their allowed ration in PDS shops, d) proportion of project households shifting from
“bad” coping mechanisms i.e. reduction in the consumption, withdrawing children from
school, selling productive assets (e.g. livestock) and changing production practices etc., to
“good” coping mechanisms such as use of savings, borrowing from an SHG etc. In addition to
this, the proportion of women that were able to borrow from their SHG for consumption
purposes will also be presented since this gives an indication of the extent to which SHGs are
used for insuring household consumption.

Household level data are used to identify different types of risks and how these risks have
affected the livelihood of the poor. The analysis relates to different economic categories of
households, covering the districts, specific events and the efforts made to mitigate the risks
both in the programme and control areas, by participants and non-participants in addition to the
scenario between mid and end terms of the project to assess its impact.

5.1 Food Security
Food security is achieved if people have physical, social and economic access at all times to
sufficient, safe and nutritious food to meet their dietary and food preferences for an active and
healthy life. Around 2 percent of the households in the DPIP area said that they went without
two square meals a day, during the Kharif season as against 8% in FUS-I. This had happened
both for participant and non-participant households, though the percentage reporting food
insecurity is less for the participant households compared to non-participant households.
Across the districts, the percentage of households reporting food insecurity is higher in
Anantapur (2.6%) followed by Srikakulam (2.5%). However, the reporting of food insecurity is
much steeper in Srikakulam. Further, the percentage of households reporting food insecurity is
slightly lower among poor households comprising the poorest of the poor and poor (hovering
around 4%) compared to the non poor covering both not so poor and non-poor (around 6%).
This gives an indication about the support extended by the programme to the targeted groups
through RCL, FSL and providing easy access to credit to overcome difficult situations. (Table

The percentage of households reporting food insecurity is lower even in the summer season
when compared to FUS-1. This is more so among the participants in DPIP. This suggests that
the access to mechanisms to smooth consumption such as internal lending, credit and informal
support by other members might have played a more important role in reducing the food
insecurity in other seasons. (Table 5.1)

Then the question arises as to what are the important factors that might have led to the
improved food security. The analysis of expenditure on food in the programme areas would
enable us to answer this question. PDS is the main source of food grains for the poor and the
budget share of quantities purchased during the period of survey is clearly at a slightly higher
level now compared to FUS-1. This leads to the inference that the people in the programme
area access PDS more regularly, perhaps due to easy access to credit. At the district level too,
in Srikakulam and Adilabad there has been an improvement in the access of PDS now as
compared to FUS-1. Among the economic category of households, the increase in the budget
share of PDS items is seen in the case of POP. All this point to the fact that the prices of food
grains in PDS are cheaper compared to open market and the programme participants are now
well aware of the safety nets provided by the government and how to avail of them, so that
more food is secured. Participants lifted 17.7 kgs per month on an average per household from
PDS as against 16.4 kgs by the non-participants. It can be construed as an indirect contribution


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