"Before this programme we could only eat twice. In the hungry time before the harvest perhaps we would only have one meal. The children suffered. Sometimes I could not keep them in school or pay for medicines when they were ill. Of course life is difficult—but at least now I have something to get us through the hard times. Now we eat better food, I can keep my nine-year-old in school, and I am saving to buy a calf."

These are the words of Debre Wondimi, a 28-year-old woman with four children living in Lay Gant woreda (district) of South Gondar, Ethiopia. Like millions of people across the country, her life is a struggle to cope with the lethal interaction of drought and poverty.

Today, she is a participant in Ethiopia's Productive Safety Net Programme (PSNP), a bold attempt to tackle the food security threats posed by an uncertain climate. That programme could provide important lessons for countries addressing the risk management challenges posed by climate change.

When the rains fail in Ethiopia the well-being and even the lives of people like Debre Wondimi and her children are put at risk. Droughts and famines have recurred throughout the country's history. Since 2000 alone, there have been three major droughts, including a devastating episode in 2002–2003.

These emergencies are superimposed on high levels of chronic deprivation. Ethiopia ranks 169 out of the 177 countries covered by the Human Development Index (HDI). 23 percent of its population survives on less than US$1 a day, and nearly two in five (38 percent) of its children are underweight for their age.

Food insecurity is thus an integral part of poverty in Ethiopia. Traditionally, the response to food insecurity has been food aid. Every year, donors and government have estimated the amount of food aid needed to cover chronic deficits, topping up that amount through emergency appeals.

The PSNP is an attempt to break with this humanitarian model. It is an employment-based social transfer programme. Targeting people facing predictable food insecurity as a result of poverty rather than temporary shocks, it offers guaranteed employment for five days a month in return for transfers of either food or cash—US$4 per month for each household member.

The aim is to extend coverage from 5 million people in 2005 to 8 million by 2009. Unlike the food aid model, the PSNP is a multi-year arrangement. Financed by government and donors it will operate for 5 years, shifting the mode of support away from sporadic emergency aid towards more predictable resource transfers.

Predictability is one of the foundations of the PSNP. The programme was prompted partly by concerns in the Ethiopian Government and donor community that emergency appeals were regularly falling short of their targets, or providing late and erratic support. For poor households, delayed support during a prolonged drought can have devastating consequences in both the short and longer term. In 1983–1984 it led to the death of thousands of vulnerable people.

Another distinction between the PSNP and humanitarian food aid is in its level of ambition. The objectives include not just smoothing household consumption by bridging production deficits, but also protecting household assets. Cash transfers are seen as a vehicle for building assets, increasing investment and stimulating rural markets, as well as for preventing the distress sales that push people into destitution.

How successful has the programme been? Independent evaluations give grounds for optimism on several counts. There is strong evidence that the transfers are reaching large numbers of poor people and making a difference to their lives.

The following are among the findings of a household survey on the impacts of PSNP transfers during the programme's first year:

• Three-quarters of households reported consuming more or better food than in the previous year; 60 percent also reported that they had been able to retain more of their own food to eat rather than selling for other needs;

• Three in five beneficiaries avoided having to sell assets to buy food—a common 'distress' response—with over 90 percent attributing this directly to the PSNP;

• Almost one-half of beneficiaries stated that they used healthcare facilities more than in the previous year; over one-third of households enrolled more of their children in school and almost a half kept children in school for longer;

• Around one-quarter of beneficiaries acquired new assets, with 55 percent directly attributing this to the PSNP.

The PSNP faces a number of challenges. Around 35 million of Ethiopia's people live below the national poverty line, suggesting many potential beneficiaries are currently excluded. The 'graduation' targets—the percentage of recipients 'passing out' of the programme after 3 years—may also be over-ambitious.

It is not clear that the PSNP will equip people with the assets and resources needed to escape deprivation and poverty for good. However, the programme's early implementation phase does demonstrate the potential of well targeted interventions to support household coping strategies.

This report is excerpted from the UN Development Programme's Human Development Report 2007/2008.