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The main aim of food-for-work was to make use of surplus labor in poor

areas to build infrastructure, such as roads, water conservancy and drinking

water facilities, whilst at the same time providing poor farmers with job

opportunities and income sources, thus raising both short-term income and

longer-term development prospects. The central feature of the scheme was

the payment of project costs in kind. The relevant project implementation

institutions (such as the traffi c bureau for roads or the water conservancy

bureau for water projects) received coupons to be exchanged for grain,

cloth and daily necessities. These project agencies would make the exchange

and obtain the goods that would be made available to project participants.

Materials to be used on the projects were allocated by state-run commercial

departments. In some cases food coupons could be exchanged for cash

through the banking system and this allowed some direct cash payment

to participants.

Initially, poor areas were required to secure state-allocated materials

from coastal and other more developed areas and then distribute them

to the project implementation agencies, which in turn would sell the

materials in local markets or give them directly to the project participants.

Due to the cost of transporting materials from coastal to poor areas, in

the 1990s such materials began to be sold in their places of origin and

the cash thus obtained was remitted to the poor areas, where the relevant

planning committee offi ce would distribute it among project implementation

units. Beginning in 1997, however, all the funds used for such schemes

came from the government budget rather than from the sale of grain or

industrial goods. Offi cial policy dictated that the resources provided by the

central government for the food-for-work scheme were to be augmented

by the provincial, prefecture and county governments. But in reality, due

to the strain on local fi nancial resources, the matching funds from local

governments were often very limited.

Implementation procedures depended on the scale and nature of the

projects. Large-scale projects, such as roads connecting counties and

townships, were usually implemented by specialized county government

bureaus (such as the traffi c bureau), while small-scale, community-based

projects were usually implemented by village committees and township

governments. Specialized construction teams were hired for the construction

work of large-scale projects, and wages or lump sum construction fees were

paid to workers on construction teams. For community-based, small-scale

projects, village committees and township governments usually mobilized

compulsory labor to carry out the construction; wages in kind or in cash

might or might not be paid to these workers depending on the budget of

the projects. Where no wages were paid, the involvement of workers became

a form of informal tax in kind.

An argument in favor of food-for-work programs has been that because

the funds bypass local budget bureaus, to date relatively few funds have

been diverted for other uses, which has been common for many earmarked

budgetary items, especially in poor counties (Park et al., 1996). However,

there was also a concern that expanding the scope of food-for-work would

make it more diffi cult to monitor and would increase the incentives for local

governments to divert the funds to other uses, by substituting food-forwork

projects for other funds that would have gone towards infrastructure


Provincial poverty offi cials have reported that in addition to poverty

status, other criteria used in allocating these funds have included the quality

of project design, the ability of local leaders, and past performance. In some

provinces, such as Henan, before 1994 some projects were awarded to nonpoor

counties (though often with poor townships), but since then all funds

have been allocated to national or provincial poor counties. Some county

offi cials, however, report that amounts awarded to different counties depend

more on project feasibility and quality than on poverty status. This is likely to

be even more true within counties. Zhu and Jiang (1995) report that villages

that have greater population, favorable environmental conditions, more

surplus labor, and are more remotely located are more likely to be involved

in these projects, which, if accurate, suggests not unreasonable targeting.

One important issue in assessing the poverty alleviation role of foodfor-

work projects is the cost borne by local residents in the form of

uncompensated labor effort. Because funds are limited, in many areas funds

are used to pay for material supplies, while as we have noted labor is supplied

through yiwugong (essentially a labor tax). In some areas with these projects,

the amount of yiwugong may surpass regulated limits (usually a maximum

of 30 labor days per year). These costs to the poor in the form of foregone

leisure or other income-earning activities must be weighed in assessing how

well the programs were targeted and how much they benefi ted the poor.

Zhu and Jiang (1995) report that 40 per cent of households in their sample

(in Sichuan, Ningxia and Shandong) worked without receiving any pay.

Older, male workers with less land and more education were more likely to

participate in such projects. They also found that for most workers (78 per

cent), time spent working on these projects did not detract from incomeearning

activities, but rather decreased leisure only, which suggests a high

degree of labor surplus.