It also provides some practical guidance for the design and set up of cash-based interventions and outlines future directions for cash-based interventions within ACF.
Commodity distributions, in particular food aid, are still the predominant relief response. In recent years, however, these have been subject to increasing criticism with a growing awareness that commodity distributions may not be the most appropriate response (see e.g. Levine, S. & Chastre, C., 2004). Food aid, by far the largest response, has been questioned due to its inefficiency as well as its negative side-effects (e.g. Clay, E., 2005; Barrett, C. & Maxwell, D., 2005; Oxfam, 2005, ACF, 2005). More especially in-kind or tied food aid has been criticised. Additionally, the revised Sphere Minimum Standards for Disaster Response state that food aid may not be appropriate when adequate food supplies are available in the intervention area or when a lack of food availability can be addressed through support of market systems (The Sphere Project, 2004).
Although still under-utilised in the humanitarian sphere, cash-based interventions are increasingly recognised by donors and humanitarian actors as an alternative or a complement to commodity-based emergency responses, to meet immediate food or other basic needs, as well as to enhance the recovery of livelihoods. From the donor or agency perspective, these are an increasingly cost-efficient and rapid way of addressing a wide variety of needs, if adequate pre-conditions exist. Studies show that the overheads associated with cash-based interventions as compared to commodity distributions are remarkably smaller (see e.g. Ali et al, 2005; Harvey, 2005). From the beneficiary perspective, they enhance beneficiaries’ dignity and empowerment, enabling them to take control of the relief themselves and adapt it to their individual needs in a timely manner.