It is widely recognized that the government lockdown in Nepal, imposed on 24 March to curb the spread of Covid-19, has hit the poorest in society the hardest. Whilst the virus was - at least initially - contained, wage laborers, petty traders and small businesses all suddenly lost their source of income. To prevent these people from going hungry, already back on 29 March the Cabinet announced various measures, including relief packages. Local governments were given the responsibility to identify and provide food to those in genuine need, taking special care of vulnerable groups such as the elderly, single mothers, orphans and disabled persons. In addition, both local and provincial governments were urged to establish and mobilize their own fund to provide relief to vulnerable individuals.
Local Governments to the Fore
As outlined in an earlier blog, local governments have been very proactive in responding to the Covid-19 crisis. They have formed coordination committees at different levels which meet regularly to discuss and manage their response. Some have also welcomed appropriate advice from external agencies. The Nepal Agricultural Services Development Program, or Prayas in Nepali is a bilateral initiative of the governments of Nepal and Switzerland, funded by the Swiss Agency for Development and Cooperation (SDC), to which Helvetas provides technical assistance. Prayas has for some time been supporting selected municipalities in provinces 1 and 6 (in the East and West of the country, respectively) in developing their agriculture sector. During the lockdown, these (urban and rural) municipalities have sought the project’s advice on innovative emergency relief responses. One idea tested by four of them - Chisankugadhi, Triyuga, Nalgad and Musikot - was the establishment of a food voucher scheme, working with local traders and using local procurement processes.
As with any such distribution scheme, it is attention to detail that is crucial for ensuring that the rightful beneficiaries receive their due, and others do not profit at their expense. Also, the scheme had to be organized in a manner that avoided crowds of people all jostling together at one time to receive their share. A sample standard regarding relief distribution to informal workers and vulnerable was made available to all Local Governments by Ministry of Federal Affairs and General Administration (MoFAGA). Prayas briefed the municipalities on the relevant legal aspects of relief distribution outlined in the sample, supported them to contextualize it and then assisted them in the development of voucher guidelines and their implementation.
Slightly Different Voucher Schemes
The way the voucher scheme worked is broadly explained by Mr. Nishant Sharma, Chairperson of Chisankugadhi rural municipality.
“Our rural municipality planned to respond [to the crisis] with a relief package. When wondering how to make it transparent, systematic, inclusive and effective, we were enlightened by Prayas on the concept of a food voucher scheme. Prayas assisted us in preparing a guideline document. As soon as the guideline document was endorsed, we applied this scheme to distribute food among 767 needy households…. One of the most striking aspects of the scheme is that it has stimulated the local economy even in this adverse situation by engaging local shops in the process. The rural municipality’s main involvement has been in regulating, facilitating and monitoring the process whilst the food distribution was done by the shopkeepers. Thus, it reduced our engagement and we had time to get involved in other equally important affairs.”
In also applying the food voucher scheme, Musikot, Nalgad and Triyuga distributed food to 425, 328 and 282 households, respectively. Musikot worked with two vendors whilst Nalgad contracted two local shops and the Chamber of Commerce and Industries. Triyuga municipality first identified the beneficiaries through an all-party selection process, then prepared vouchers and handed them over to local committees. They then selected two vendors to distribute the food to the identified individuals, and finally, the municipality paid the vendors by cheque, according to the submitted vouchers.
The Views of Those Concerned
According to Pashupati Chaudari, chairperson of ward no. 13 of Triyuga,
“This scheme has been exemplary in maintaining transparency. It helped to avoid prejudice, thus preventing a blame game. It also built trustful relationship with traders.”
Netra Bahadur Shahi, a shopkeeper involved in the relief distribution shared his experience as follows, “I find this scheme beneficial for businesspersons like us, the municipality and its needy inhabitants. It helped us to earn even during this difficult period. It shared the workload of the municipality and helped poor people to get relief support in a transparent way. The distribution time was fixed in the morning and evening, which helped in avoiding crowding. Using our own tractor, we delivered the relief material to the door of citizens living in remote areas.”
Nain Kala B.K., a beneficiary from ward 13 of Musikot also appreciated the scheme,
“It is easy to go and collect relief from the shop at the preferred time, which also controls any large gathering.”
As the quotes above indicate, the food voucher scheme was met with general appreciation. Indeed, word has spread - Bherikot municipality, which adjoins Nalgad, also sought and received Prayas’ support in preparing guidelines for a similar food voucher scheme. All the concerned municipalities are now exploring possibilities to apply a similar method for agriculture input distribution (such as pesticides and fertilizer). There was only one point of difficulty. Last year the federal government introduced a nation-wide scheme for income registration and thus taxation purposes. All enterprises, even very small ones, must be registered with a Permanent Account Number (PAN). This is yet to be fully implemented and there are reported delays in applications. Some of the shopkeepers interested in participating in the voucher scheme did not have a PAN and were thus excluded. However, the problem highlighted the need for local governments to facilitate the process of obtaining a PAN for shopkeepers within their territory.
Readers may wonder why it was not possible to organize electronic payment rather than paper vouchers. Financial transactions by mobile phone are possible in Nepal but are not accessible to the most disadvantaged members of society. In addition, organizing such forms of payment takes time and resources, which is only cost-effective for large scale programs. Thus, cash vouchers are likely to remain for some time the most practical option for municipalities to target immediate disaster relief to their most disadvantaged citizens.