CASH TRANSFERS, FOOD CONSUMPTION, AND NUTRITION 125
food, on average, so 60 percent of the total additional food benefited other household members (Croome 2006; Beales 2007). The majority of the cash provided by Malawi’s DECT program was spent on
food (64 percent, on average), but this share varied over the five-month period, from 70–80 percent between December and February, the most severe months of the food crisis, to 60 percent in March and 30 percent in April, when the maize harvest began, contributing to reductions in both the prices and the demand for maize (Devereux et al. 2007, 33). The transfer was indexed to maize prices to protect beneficiaries against seasonal price fluctuations; however, this adjustment was imperfect, resulting in a disproportionate cut in the transfer value with respect to maize price variation in February. This month represented the lowest maize value relative to the DECT cash in the project period, diminishing households’ ability to purchase nonfood items such as healthcare, education, and other goods and services. Notwithstanding this drop in the level of cash, taken as a whole, the project helped house- holds cover their missing food entitlement during a difficult time (Devereux et al. 2007, 34). As in DECT, FACT beneficiaries exhibited different spending patterns over the life of the project (January–April 2006). From January to February, spend- ing on food increased from 63 to 69 percent, but in March spending on food fell to 45 percent as beneficiaries spent more of the cash on nonfood items (all compared to mean spending on food of 59 percent). The authors note that this could be interpreted as a sign of the flexibility of cash transfers, which allow beneficiaries to meet essential nonfood needs, or it could be a sign of overfunding—providing more than the minimum subsistence needs—on the part of the FACT program. However, because nonessential spending was low (less than 15 percent), it is likely that overfunding was less of a problem than the timing of the receipt of the grant (Devereux, Mvula, and Solomon 2006, 29). FACT beneficiaries reported that cash acted as an important complement
to the food package for two reasons. The food ration contained insufficient supplies to make the typical meal, so beneficiaries used the cash to purchase other necessary food items (for example, vegetables or dried fish). Beneficia- ries also used cash to cover the cost of milling maize (either purchased or provided in the food package). Milling represented a sizable share of house- hold expenditures: up to 18 percent (Devereux, Mvula, and Solomon 2006, 30). According to a cluster analysis of household spending strategies among FACT beneficiaries in Malawi, 47 percent of households were categorized as “food first,” meaning they spent their transfer almost exclusively on food. More specifically, these households spent 84 percent of their transfer on food, followed by maize milling and other groceries (Devereux, Mvula, and Solomon 2006, 33).
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