Crisis, Food Security, and Conditional Cash Transfers in Nicaragua

Nicaragua�s Red de Protecci�n Social (RPS), is part of a wave of conditional cash transfer programs that provide substantial cash payments to households if certain requirements are met such as school attendance, visits to health care facilities, and participation in nutritional seminars. Utilizing the experimental design of RPS we test the impacts of the program on food expenditures and variety in consumed food bundles by examining the influences of initial poverty and an exogenous shock to coffee prices on coffee producing communities. Through cash payments, RPS was able to increase food consumption and variety. Additionally, nutrition education programs provided by RPS appear to have been successful, as household expenditure share on food increased (although not significantly), while Engel�s law suggests that food share should decrease with a conditional cash monetary transfer. Results also show that coffee price shocks tended to decrease both the variety and expenditures on cereals and vegetables. Moreover, the shock to coffee prices seems to have had a greater impact on the consumption of households relatively better off pre-program. Finally, RPS impacts on food security appear to remain constant across households even when there are differences in initial poverty or the exogenous shock to coffee prices.