REPORT OF FAO PROGRAM COMMITTEE AND JOINT

UNCLAS ROME 002589

SIPDIS


FROM FODAG

STATE FOR IO/S LISA JACOBSON AND IO/EDA WINNICK AND KOTOK
USDA/FAS FOR REICH AND HUGHES
ATHENS FOR CLEVERLEY
PARIS FOR UNESCO

E.O. 12958: N/A
TAGS: AORC KUNR ABUD FAO
SUBJECT: REPORT OF FAO PROGRAM COMMITTEE AND JOINT
FINANCE AND PROGRAM COMMITTEE


1. Summary. This cable reports on the outcomes of the
Joint Session of the UN Food and Agriculture
Organization's (FAO) Finance and Program Committees and
the FAO Program Committee. Important outcomes from the
Program Committee include full support for the
International Plant Protection Business Plan "under any
funding scenario" and FAO Secretariat assurance that
FAO's "Food Chain" activities for the next biennium were
"not related" to the draft "Food Chain" strategy
submitted to the last Committee on Agriculture. The
Program Committee will continue to discuss the question
of priority setting -- in principle and practice -- at
the next session in September. The Joint Session also
briefly discussed the recently released JIU Report on
Administration and Management at the FAO. End Summary.

"Aren't we doing everything we were asked to do?"
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2. The Joint Session of FAO's Program and Finance
Committee met May 7, 2003. FAO Director General (DG)
Jacques Diouf opened the session with a plea for a real
growth budget for the next biennium, arguing that member
economies had grown, that member demands on the FAO had
increased, but that FAO continued to be the "hardest hit"
in the UN system by budget constraints. DG Diouf noted,
in fact that staffing reductions in the Finance Division
had, in the view of the outgoing External Auditor, put
the organization at risk in terms of internal financial
management controls. DG Diouf stated that members asked
for more activities, but did not prioritize activities.
He added that this was not the secretariat's job.


3. The DG ran through a list of FAO accomplishments,
including FAO's food security strategies for various
regions, FAO's statistics work, the 33 million "hits" a
month received by FAO's web-site, FAO's role as a
platform for international negotiations, its role in
advocating rural development at the World Summit on
Sustainable Development in 2002 and it's "pro-active role
on GMO's." Concerning GMO's, DG Diouf hastened to add
that work was also being done on "precautionary measures"
and "labeling." Turning to FAO's Special Program for
Food Security (SPFS),DG Diouf noted that the program --
launched at USD 35 million -- was now worth USD 500
million and was a stellar example of south-south
cooperation, and country ownership (in many SPFS
projects, close to half of the costs are borne by the
host government). In closing, the DG asked, "What's
missing? Aren't we doing everything we were asked to do?
Do you want to help the 800 million hungry? Give them
the tools to help themselves."

Report of Program Committee -- some agreement on Standard
Setting...
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4. The Chair of the Program Committee (Blair Hankey of
Canada) ran through the Program Committee's (PC)
discussion of the 2004-2005 Summary Program of Work and
Budget. He noted that the conclusions of the technical
committees (e.g., the Committees on Agriculture,
Forestry, Fishery and Commodity Problems) had not yet
been reflected in the budget, but would be in the next
version.

-- On priority setting in general, PC members agreed that
"methodological tools", such as application of criteria
and weighting methods could be useful; nonetheless, they
should not substitute for the "political process." The
PC will continue to discuss improving the priority
setting process at its next session in September 2003.

-- On the priorities for the SPWB for 2004-2005, G-77
members felt that a real growth budget was the only way
to meet all of the needs; OECD members of the Committee
felt that areas of highest priority "should be adequately
resourced, irrespective of budget levels."

-- The PC agreed that the "scope and funding of some
entities and PAIA's be adjusted in the full PWB, based on
guidance received from the last Committee on Agriculture,
including for work on Biotechnology, Biosecurity, Ethics,


and Good Agricultural Practices." In this regard, the PC
also noted that the entity on the Food Chain in the SPWB
was, according to the Secretariat, "not related to the
draft strategy document on a food chain approach to food
safety and quality discussed at COAG."

-- While not identifying any activities to cut, the PC
did agree that the International Plant Protection (IPPC)
"Business Plan" should be funded under any budget
scenario.

-- The PC also reaffirmed that the FAO should provide its
share of the additional resources required for the
recommendations of the joint FAO/WHO Evaluation of Codex
Alimentarius. Furthermore, activities originally
programmed under the "Food Chain" program entity for 2004-
2005 (in the real growth scenario) could be cut and
corresponding savings reallocated to Codex and Codex
related work (Comment: This is a positive outcome,
however, those "savings" will only accrue if the FAO
Conference agrees to a real growth budget." End comment.)

-- The PC stressed the "desirability" of providing
increased resources for Fisheries and recommended that
the budget for Forestry be "restored to at least the same
level as in the current PWB 2002-2003.

-- On FAO country representatives, the PC reiterated the
importance of appointing qualified FAO representatives
and of their performance appraisal.

-- The PC requested that more information on FAO's
Technical Cooperation Program (TCP) be provided in the
SPWB. Developing country members of the PC also argued
that FAO's Technical Cooperation Program (TCP) needed
more resources.

-- The PC also agreed that there should be an HIV/AIDS
Priority Area of Inter-Disciplinary Action (PAIA). The
Committee called for a review of the existing PAIA's at
some time in the next biennium.

-- Concerning SPFS, while noting that developing
countries argued that the SPFS was "the most effective
international program bringing practical assistance to
farmers", the Chair noted that there were questions from
other members as to whether the program targeted the
poorest, and as to why there were no SPFS projects at
Phase II (i.e. self-sustainable).

...but not at the expense of technical cooperation
programs
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5. Taking the floor in response to the PC Chair's
presentation, PC member Malaysia agreed that developing
countries also sought results based programming, that
quality of programs was important, and that developing
countries very much wanted standard setting and capacity
building to implement those standard. However,
increasing food production and food security was "a
priority" that came ahead of "food safety." He stated
unequivocally that standard setting activities, however,
useful, must not be increased to the detriment of TCP or
SPFS.

Report of the Finance Committee: no agreement on Split
Currency or Budget Level
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6. Finance Committee Chair Humberto Molina took the
floor briefly to state that the Finance Committee (FC)
had not come to any agreement on the budget level or on
the proposal for a split currency assessment.

Joint Session of Program and Finance Committees: Members
present budget positions
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7. Members of the Finance Committees and Program
Committees took the floor to present general budget
positions. The U.S., Japan and Australia supported zero
nominal growth (ZNG). USDel noted that FAO was years


behind in spending its current TCP allocation therefore
increasing the TCP allocation did not make sense;
furthermore, in an effort to assist in prioritizing, the
U.S. was one of the few countries that had consistently
suggested activities of low priority to be terminated.


8. Australia noted that the widely-supported activities
of the Interim Commission on Phytosanitary Measures were
not protected in the ZNG or Zero Real Growth (ZRG)
scenarios. From this he could only conclude: "either the
Secretariat is unresponsive, or else members are being

SIPDIS
held to ransom by the Secretariat over the budget issue."


9. The Netherlands, Switzerland and the Latin American
members of the Program Committee (Dominican Republic,
Paraguay) supported Zero Real Growth (ZRG). Pakistan
stated (in response to the DG's presentation),"if the
FAO is going to link world hunger to its budget, then the
Program of Work and Budget should have those indicators."

Independence and Location of the Evaluation Service
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10. PC and FC members discussed the report -- a follow-up
to a recommendation of the External Auditor -- concerning
independence and location of the FAO's Evaluation
Service. Members generally did not support the suggestion
to merge the audit and evaluation function. Developed
and developing countries did support, however, increasing
the independence of the Evaluation Unit. Some members
recalled that at the International Fund for Agricultural
Development (IFAD) a similar process had taken place just
this year, and the Evaluation Unit now reported to the
Executive Board rather than to the President. The next
Joint Session will discuss the proposal in further detail
based on an options paper to be prepared by the FAO
Secretariat.

SIPDIS

JIU Report on FAO Management and Administration
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10. Those members who spoke (U.S., Netherlands,
Switzerland) called attention to the important
recommendations of the JIU report and called for
implementation and monitoring of follow-up. It was
agreed that certain items which came under the purview of
the Finance and Program Committees would be divided up by
those Committees for further consideration at the
September session. Hall
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2003ROME02589 - Classification: UNCLASSIFIED