Food Voucher Project June 2002

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Food Voucher ProjectJune 2002

• Promoted by
• Womens Development Business Investment Holdings
• Disability Employment Concerns Trust
• Accor S.A.

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Progress to date

• We have met ministers of the following government
  departments in the past year
• Social Development
• Public Enterprises
• Labour
• Agriculture
• as well as senior officials of the departments of
  Finance Health

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Social Development Committee

• A multi-party delegation comprising members of
  this committee visited Brazil during the past
  year
• The general consensus was that the system could
  work in South Africa

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Issues emerging

• Something must be done to alleviate poverty
• Lack of delivery infrastructure
• banking sector not geared for poor people
• - an unacceptably high percentage of the budget
  is spent on delivery of social benefits
• Malnutrition is a serious problem among families
  and children

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Solutions proposed

• Basic Income grant
• Extension of child and other social development
  grants
• Food vouchers

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The Food Voucher Platform

• Government can use the platform created by a food
  voucher program to deliver social aid to the
  poorest sections of the community
• The department of Social Development has a
  countrywide network which can identify areas of
  greatest need
• A food voucher delivery platform offers
  government a cost effective and efficient
  delivery mechanism

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Why Food Vouchers?1. Technology

• Only proposal which will create competing
  nationwide delivery infrastructures
• Infrastructures created by private sector at no
  cost to government
• Voucher companies will collaborate with
  government in setting technology standards
• Competing infrastructures created by voucher
  companies will enable government to deliver
  social payments by competitive tender

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Why Food Vouchers?2. Cost Effective

• Assume R250 of food vouchers given to 1 million
  people every month
• Additional food consumption R2,5 bn
• Tax cost to government R750 million p.a.
• Cost to government net of additional revenue
  generated R370 million

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Why Food Vouchers? 3. Supported by all sectors

• The president of the Brazilian trade union
  federation describes food vouchers as the most
  successful social program in Brazils history
• French government calculates 37 000 jobs in
  France depend on the voucher program
• We have received written support for the concept
  from unions in countries as diverse as Britain
  and Rumania

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Why Food Vouchers?4. Informal Social Security
Network

• The average household in South Africa has 5
  members
• The average household has one wage earner
• 40 of South Africans live in households of 7
  people or more
• The larger the family, the greater the
  nutritional deficiency (next slide)
• Food vouchers directly address this problem

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Why Food Vouchers?5. Complementary to other
initiatives

• The food voucher infrastructure can be used as a
  delivery platform to service and extend existing
  programs such as child support grants
• In the long term vouchers can be used as part of
  a comprehensive social security system as
  envisaged by the Basic Income Grant

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The Brazilian Experience

• 10 million workers, particularly the low paid
  benefit
• No other social program has the social reach of
  the Worker Feeding scheme
• The food voucher infrastructure is used at
  municipal government level for poverty relief,
  particularly among the unemployed

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Infrastructure government could use

• Accor, in co-operation with South African
  partners (banks, supermarkets, terminal
  providers) will roll out a countrywide network of
  card readers to implement the food voucher
  program
• The infrastructure will be a mixture of existing
  card readers and new machines ensuring
  comprehensive nationwide coverage
• The infrastructure of low cost card technology
  (already used in other countries) can be
  developed quickly in South Africa
• The network can be used to dispense a range of
  benefits including food, medicine, electricity,
  transport as well as payments in cash

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A platform for other social payments

• Food vouchers initially target family feeding via
  employed workers
• The platform can be used to distribute food and
  cash benefits to others including the unemployed
• In both Brazil and France, local governments use
  food vouchers in this way
• Vouchers are complementary to governments aim of
  assisting the poorest sectors of society

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Conclusion

• Food vouchers address a fundamental problem of
  inadequate family nutrition
• Implementation of a food voucher program is cost
  effective for government and is a proven social
  benefit in over 30 countries
• The program will create an infrastructure which
  can be used for other social payments whether in
  cash or kind