98 CHAPTER 5


• Restricting exports • Liberalizing imports • Removing sales taxes • Releasing stocks • Inducing supply response by scaling up fertilizer subsidies and other quick impact agricultural programs


• Scaling up existing safety net programs


Only the last of these items is conventionally thought of as social protection, although in the absence of existing social protection programs and the high costs and long delay in setting up new ones, it is understandable that devel- oping country governments resort to the more indirect means of protecting consumers. However, some of these alternative means of protecting consumers are less desirable than others. Export restrictions were a major cause of the rice price crisis, and a fairly significant cause of the rise in wheat prices. In light of this problem some authors have proposed that social safety net programs should be scaled up. The rationale here may be threefold. First, if social protection programs are in place, then governments need not resort to costly export restrictions. This argument is feasible, but the first country to impose significant export restrictions on rice was India, and India has many large social safety net programs, such as the National Rural Employment Guarantee Scheme, the Food for Work Scheme, and the Public Distribution Scheme for food grains. None of these schemes stopped the Indian govern- ment from imposing an export ban, and the Public Distribution Scheme perhaps contributed to sluggish growth in the production of wheat and rice in India. A second rationale for such programs is that they contribute to produc- tive capacity by building up human capital and assets. Productive safety nets therefore seem to hit two targets with one instrument (Alderman and Hod- dinott 2006). Over the long run there is good evidence that productive safety nets could indeed achieve some growth in productivity, but the productivity impacts are likely to be small relative to strictly agricultural investments. And as a means of responding to the current crisis they are largely irrelevant. Instead their main benefit is in making poor people less vulnerable to future crises.


Finally, social safety nets are argued to be more poverty efficient than the indirect alternatives suggested above. Wodon et al. (2008) note that the targeting efficiency of social protection policies in Sub-Saharan Africa is much better than that of other economywide policies (such as tax cuts, tariff reduc- tions, and subsidies). Bhaskar, Ahmed, and Shariff (2009) also review social protection programs in response to the food crisis and compare programs in four Asian countries.


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