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Food Voucher Project June 2002

Food Voucher Project June 2002. Promoted by: Womens Development Business Investment Holdings Disability Employment Concerns Trust Accor S.A. Progress to date. We have met ministers of the following government departments in the past year: Social Development Public Enterprises Labour

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Food Voucher Project June 2002

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  1. Food Voucher ProjectJune 2002 • Promoted by: • Womens Development Business Investment Holdings • Disability Employment Concerns Trust • Accor S.A.

  2. 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

  3. 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

  4. 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

  5. Solutions proposed • Basic Income grant • Extension of child and other social development grants • Food vouchers

  6. 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

  7. 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

  8. 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

  9. 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 Brazil’s 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

  10. 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

  11. Household Size Recommended monthly food Expenditure Actual average monthly food expenditure Food Expenditure Gap 1 286.50 424.55 -138.05 2 573.00 762.53 -189.53 3 859.50 818.16 41.34 4 1146.00 892.14 253.86 5 1432.50 879.62 552.88 6 1719.00 803.57 915.43 7 2005.50 810.91 1194.59

  12. 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

  13. 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

  14. 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

  15. 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 government’s aim of assisting the poorest sectors of society

  16. 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

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