Policy Responses to Food Insecurity: A US and Brazil Comparison

 

Public policy experiences with a similar ground: social and food security in Brazil.

Rural Insurance (Previdência Rural).

Brazil's historical experience with establishing its social security system (Sistema de Previdência Social) stretches back to the 1930s. Between that time and the adoption of the 1988 Constitution, Brazil pursued, in various ways, the sequential inclusion of critical groups of urban employees in contributory social security: railway, dock, industrial and commercial workers, banking, etc. Rural workers were excluded for two structural reasons: (a) a general lack of formal contractual wage agreements for the economically active rural population; and (b) the nature of labor relations dominant in rural areas, with a predominance of family self-employment in the south, a significant amount of subsistence farming in the northeast, and forestry producers in the north. Up to 1988, these groups had limited prospect of being incorporated in the contributing social security system.

During the military regime, there was one explicit initiative to include family farming in the social protection system: a non-contributory assistance program called the Fund for Social Security and Assistance to Rural Workers (Fundo de Assistência ao Trabalhador Rural e Programa de Assistência ao Trabalhador Rural, or FUNRURAL), established by Complementary Law No. 11 of May 1971. FUNRURAL addressed heads of households by offering a single benefit for older and disabled rural residents at half the minimum wage. Its administrative structure was unrelated to the social security system outlined above.

The 1988 Constitution established a social security system that includes public systems for health insurance, social insurance, and numerous social assistance programmes. Previdência Rural, a permanent rural insurance sub-system, was then established as a component of this social security system, with its own regulations governing recipients and funding:

Foreword

Decent jobs and social protection are increasingly regarded as useful tools for reducing food insecurity. With about one billion people suffering from chronic hunger worldwide, as well as the present trend of rising food costs, which is compounding income disparities and increasing poverty, hunger, social discontent, and political instability, the need to act is urgent.

The Social Protection Floor Initiative was approved by the United Nations System Chief Executives Board in April 2009. The 100th International Labour Conference, attended by the governments, employers, and workers of the ILO's 183 member states, recognized the role and importance of social security in reducing and preventing poverty and inequality, as well as contributing to mitigating the economic and social impact of economic downturns, enhancing resilience, and achieving a faster recovery toward inclusive growth. The Conference reached firm conclusions on the expansion of social security to all through nationally defined social protection floors under progressive social security systems. The 101st International Labour Conference will meet in June 2012 to consider the approval of a potential Recommendation that will help countries build their social protection floors.

National social protection floors strive to ensure that everyone in need has access to basic health care and financial security, which combined ensure effective access to products and services. Implementing national social protection floors as part of social protection systems can have an immediate impact on food production and consumption. According to evidence from developing nations, regular cash transfers are primarily used for food and livestock or agricultural investments. Increased consumption boosts agricultural demand for local services, which directly benefits agricultural production.

On December 6, 2011, as part of the 2011 Global South-South Development (GSSD) Expo at FAO headquarters in Rome, the ILO organized a Solution Exchange Forum on Social Protection and Food Security.

Dr. Guilherme Delgado1 wrote this article as a basis for his presentation at the forum. Dr. Delgado, who has worked for the Institute for Applied Economic Research (IPEA) in Brazil for 30 years, described two successful Brazilian schemes that demonstrate the virtuous relationship between social security and food security through significant and empirically provable consequences. Brazil's example is especially significant for other South American countries grappling with the difficulty of expanding coverage to a large rural population, including non-wage labor relations such as small farmers operating in their family businesses, while simultaneously offering additional protection for women.

From December 31, 1991 until the end of 2010, the impacts of Previdência Rural's 105% expansion were combined with the valuation of the benefit floor, affecting practically all rural beneficiaries. The floor valuation was 607 percent (311.8/44.1), a sevenfold rise in minimum wage units in current US dollars, or double that value if the computation is based on the FUNRURAL amount of half the minimum wage up to 1991. Over a 20-year period, there is a cumulative effect from the real expansion of the "estoque de benefícios em manutenção" (105%) and the valuation of the social security floor (607%). The implications for increased family monetary income are obvious and require no more explanation. Other factors appear, however, when comparing points in time over time. This report does not incorporate dollar inflation or the substantial rise in the Real against the dollar. These marginally lower the buying power of the minimum wage if basic wage baskets available in Brazil throughout the period are treated as units of equivalent worth. However, the conclusions are unaffected by these omissions.

It is vital to note that this is a social protection floor strategy that has shifted from FUNRURAL's fragile and limited response to ensuring that social basic needs are addressed, including food security, which is recognized as a social right protected by constitutional provisions.