Remittances are sums of money or goods transferred between migrants and their places of origin. Remittance flows are particularly significant for the world’s poorest countries and are central to millions of households’ livelihood strategies.
Migrants make transfers through banks or companies such as Western Union. But the bulk of remitters worldwide rely on informal hand delivery (home visits, friends or relatives, transporters) and cash transfers through businesses, microfinance institutions and migrant associations. Humanitarian crisis and conflict that disrupt remittance flows can profoundly impact vulnerability. In other cases, remittances that remain stable during crisis can serve as insurance, allowing a household to meet basic consumption needs and playing an important part in survival and recovery. Research shows that remittances are often counter-cyclical – increasing during periods of crisis in response to need. Understanding the significance of remittances in pre-crisis livelihoods and how they are affected by disaster is an oft-neglected but essential component of needs assessments.
Sources of income may vary according to season and are likely to have changed as a result of the crisis or shock. Changes in sources of household income as a result of the crisis and their relative importance need to be assessed. See below for a sample format.
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Example: In recent years, run-away inflation and exchange rate controls in Zimbabwe have made remitting money nearly impossible: an entire industry of ‘transporters’ has risen up to facilitate in-kind transfers from South Africa. The closure of the border between Sudan and Libya has dramatically cut down access to international remittances in Darfur, making domestic transfers from Khartoum and elsewhere increasingly important.
Reference: K. Savage and P. Harvey: Remittances during crises: implications for humanitarian response. ODI, HPG Policy Brief 26, June 2007.
Income source Reference period (PP score) Current (PP score) Own Production
• Livestock (live animal, milk, butter, honey, hides, ox rental)
• Fishing (fish, crab, shrimp) • Crop (Cereals, Pulses, Oil seeds
& Vegetables) Self-employment (small business) Petty trade
Sale of charcoal/ firewood Casual labour
Remittance Loan …
Table 13: Sample format for changes in sources of household income by % 1. How many household members currently
earn income for the household?
2. How many different sources of income does your household currently have?
3. How many different sources of income did your household have in an earlier reference period?
4. What is each of these income sources? How much did each source contribute to total household income in the last month, and in the earlier reference period? [Use proportional piling to represent the contribution of each source. Record score below. Note incomes that are purely seasonal or temporary.]
N.B. Information on changes to sources of income normally provides sufficient insight into the household economy without quantifying actual income levels. It is generally not recommended to use the household questionnaire to gather information on income levels, as this data is likely to be biased and unreliable. If income data is desired, trusted key informants in the local community can provide general information on wage and price levels for the most common occupations and types of commodities that provide revenue in the community.
Example: Change in income sources following civil conflict/displacement in N Kivu, DRC
Many families have been forced to flee their villages, where they had practiced subsistence agriculture. This population now mainly relies on daily agricultural labour. The resident population has diminished access to their fields due to civil disturbance. Sale of cash crops on local markets, previously an important source of income, has diminished. Daily wage rates have declined as a result of the rise in labour supply and the decline in demand for waged labour. Increasingly, families are resorting to credit to cover basic food needs – although moneylenders are hesitant lend to displaced households who they do not know, heightening the vulnerability of this group.
Methods
Household-level information on sources of income is gathered using the household questionnaire. Proportional piling and ranking exercises are useful tools to support the data collection. Understanding the changes in income sources for various groups who rely on the market (e.g. producers of cash crops, waged labourers, charcoal producers), together with information on food sources and market prices, allows ACF to identify the specific risks and vulnerabilities linked to the livelihood strategies of different groups.
4.5.3 EXPENDITURES
Information on changes in patterns of household expenditure can be gathered in the same way as for income sources, using ranking and proportional piling. Expenditures commonly reflect the same patterns of change as do income sources. See below for a sample format.
N.B. Collection of quantitative expenditure data (amounts spent on different expense categories) is not considered necessary.
Items Reference period
(PP score) Current (PP score) Food* Fuel Water Education Health Transport
Purchase of productive assets Community obligations …
1. Of total household expenditure, what was the share of each item in the last month, and in the earlier reference period? [Use proportional piling to represent the share of each item. Record score below. Note expenditures that are seasonal or exceptional.]
* Within food expenditure, differentiate and rank: staple cereal/tuber, pulse, oil, animal product Table 14: Sample format for changes in patterns of household expenditure by %
4.5.4 CREDIT AND DEBT LIABILITY
The availability of credit from formal or informal moneylenders, community or family members is particularly important to analyze, as accessing credit can be an essential coping strategy for households whose sources of income are constrained and whose home production is insufficient to meet consumption needs. Regarding credit, it is important to gather information on:
• Sources of available credit • Who has access to it
• Uses of credit e.g. primarily for consumption purposes • Average debt liability by livelihood group
• Seasonality
• Impact of the crisis on sources of credit and debt load
Table 15: Sample format for changes in debt liability by % 1. Does your household currently have any outstanding food
or money debts?
If yes, to whom do you owe money or food? (tick all that apply) a. Bank/ other formal financial institution
b. Informal money lender c. Local shop
d. Landlord
e. Family, friends or community members
2. Of these sources, are there any who will no longer lend to you? If so which ones? (note the letter of the source)
3. What are the primary uses for the credit? (tick all that apply) a. Food
b. Health c. Water d. Other (specify)
4.5.5 TERMS OF TRADE
In communities that trade without cash or depend on mixed economies, it will be important to record the terms of trade between essential commodities. A local standard may already exist in areas where it is common practice to track terms of trade, for example between a sac of sorghum and a male goat expressed as a ratio 1:1.
Terms of trade is the ratio between the value of a key commodity which is sold by a household e.g. a small ruminant, and the value of a key commodity purchased by a household e.g. kilograms maize flour. Income data on various groups allows for the identification of major sources of income in the surveyed area, e.g. herding, groundnut or sesame production, casual labour markets. Price data allows for the calculation of changes in the terms of trade for the major commodities exchanged by different livelihood groups (see 4.3).
Terms of trade are a useful indicator of changes in household purchasing power. This data may already have been gathered in the framework of the market survey.
See Appendix 19 for a more detailed discussion of Terms of Trade calculations.
4.6 FOOD CONSUMPTION
Measures of food consumption reflect the energy and nutrient intake of individuals and households. Household level food consumption patterns are generally considered a proxy indicator of food access; while individual level consumption is considered a proxy for food utilisation, as measures are more closely correlated with nutrient adequacy of the diet.