Translating Growth into Poverty Reduction: Beyond the Numbers

Chapter 10 - Taking the Plunge on Social Assistance in Rural Tanzania—Assessing the Options

Chapter 10 Taking the Plunge on Social Assistance in Rural Tanzania— Assessing the Options Andrew Shepherd, Flora Kessy, Lucy Scott and Eliab Luvanda Introduction Poverty barely reduced in Tanzania between 2000/01 and 2006/07, especially in rural areas, despite economic growth. A large number of households lived just below the poverty line and there was a widely perceived decline in living standards, according to the results of the Household Budget Survey. During the period, many people depended on agriculture and the poorest had the least diversifiedlivelihoodportfolios.Averageproductiveassetownership,including of livestock, was low and declining. This suggests significantly increasing vulnerability, as livestock represents savings which act as buffers against shocks. The major improvement in quality of life came through enhanced access to education, including for the poorest, as a result of continuous high levels of public investment. This is a large achievement, although there is still a way to go in terms of achieving quality education as well as health services. In 2006, the major correlates of avoiding poverty included the possession of many assets and the monetisation of economic activities through involvement in markets, credit society membership and access to bank loans. Farming was generally associated with poverty, with two caveats. First, the quantity of land owned could mitigate this association. Second, farm households engaged in commercial crops have done better than others: there has been a big increase in the production of commercial crops compared with stagnation in food crops.1 Additional important determinants of poverty status include age and education level of the household head, and of spouses in urban areas; household size and dependency ratios; and being on the electricity grid. Our qualitative research in Mwanza, Rukwa and Mtwara, combined with the evidence from national Household Budget Surveys, suggests that persistent poverty is the overwhelming issue for most Tanzanians. The critical issue is how to promote more pathways out of poverty. We know that escaping poverty involves taking risks, such as educating children, investing in a business, diversifying and so on. Having some protection against destitution, such as through social protection, would make it easier to take such risks. 188 TRANSLATING GROWTH INTO POVERTY REDUCTION The Kagera Health and Development ten-year panel survey (1991– 4/2004) compared people who escaped poverty with those stuck there.2 Each additional year of education was associated with significant additional assets, which were the survey’s welfare measure. The same effect was obtained by having a migrant child remitting. On-farm diversification was critical to income growth, and lack of it was associated with stagnation and/or decline. The biggest success stories included off-farm diversification, especially through trading. Social networks, which include apprenticeships, were also important, and relatively independent of a person’s starting position. However, network-based options were not accessible in remote areas. Poor markets, with exploitative buyers, and poor infrastructure also prevent income growth, especially in remote areas.3 There are also broader influences. In the 1990s, stagnant crop prices led to sales of smallholdings and a scramble for non-farm work, pushing wages down to bare survival level.4 Many are trapped in casual labour and unable to re-enter the land market, given high land prices—a consequence of population growth and income inequality. While the supply of labourers has increased, demand has not, as a result of the low level of private sector job creation.5 It is extremely important to support agriculture and fishing, since income growth in these sectors will have the biggest effect on poverty, Insecurity and vulnerability are widespread in Tanzania. While there is ‘generalised insecurity’,6 with vulnerability to shocks stretching far up the income distribution, there is significant regional variation in the incidence of shocks, and also among households in terms of their ability to cope. Fieldwork recorded a number of common covariant and idiosyncratic shocks which had impoverishing effects across the communities studied. Idiosyncratic shocks are widespread, but not yet well addressed through policy. In particular, women have to cope with property-grabbing, male alcoholism and serial polygamy. Table 10.1 presents the principal reasons behind moving into poverty over the course of people’s life histories. Divorce was cited the most often (nearly all women reported this, as did many men). Failure of non-farm business was the next most prominent. Any social protection response would need to be able to address these vulnerabilities.7 TAKING THE PLUNGE ON SOCIAL ASSISTANCE IN...