FAO DEVELOPMENT ACTIVITIES: ACCOUNTING FOR THE

UNCLAS SECTION 01 OF 03 ROME 003249 SIPDIS STATE FOR IO/EDA WINNICK AND KOTOK USAID FOR CUMMINGS USDA/FAS FOR REICH AND HUGHES PARIS FOR OECD FROM FODAG E.O. 12958: N/A TAGS: AORC EAID EAGR FAO SUBJECT: FAO DEVELOPMENT ACTIVITIES: ACCOUNTING FOR THE DECLINE ¶1. SUMMARY: VOLUNTARY FUNDING FOR THE UN FOOD AND AGRICULTURE ORGANIZATION'S (FAO) DEVELOPMENT ACTIVITIES HAS DECLINED SIGNIFICANTLY OVER THE LAST DECADE DUE TO A SHARP DROP IN UN DEVELOPMENT PROGRAM (UNDP) FUNDING BUT ALSO DUE TO WHAT FAO OFFICIALS THEMSELVES ACKNOWLEDGE WAS FAO'S POOR PERFORMANCE. FAO'S ASSESSED REGULAR PROGRAM BUDGET MUST INCREASINGLY COVER THE LOSSES ATTRIBUTED TO DECLINING SUPPORT COST INCOME. FAO ASPIRES TO REVERSE THE TREND AND MOVE BEYOND EXECUTING SECTORAL PROJECTS TO PROVIDING "UPSTREAM" POLICY ADVICE TO DEVELOPING COUNTRIES. GIVEN THE DISPERSAL OF FAO'S MODEST DEVELOPMENT FUNDING OVER MANY FAO MEMBER COUNTRIES AND IN MANY SMALL PROJECTS -- AND GIVEN THE KNOWN WEAKNESSES OF FAO'S COUNTRY OFFICES -- IT IS HARD TO ENVISAGE FAO BECOMING AN EFFECTIVE POLICY PLAYER WITHOUT A RADICAL REORIENTATION. THE ISSUE IS AN IMPORTANT ONE AS IT GOES TO THE HEART OF THE DEBATE IN FAO'S POLICY MAKING BODIES ON THE DESIRED RELATIONSHIP BETWEEN FAO'S NORMATIVE AND OPERATIONAL ACTIVITIES AND THE URGENT NEED TO IMPROVE THE QUALITY OF FAO'S FIELD PRESENCE. END SUMMARY. ¶2. FAO ASSISTANT DIRECTOR GENERAL (ADG) FOR TECHNICAL COOPERATION, HENRI CARSALADE, AND OTHER FAO OFFICIALS GAVE DONORS AN OVERVIEW OF FAO'S DEVELOPMENT ACTIVITIES ON JUNE 5, 2003. THE PRESENTATION COVERED TRENDS AND PROSPECTS AND EXPLAINED HOW FAO SOUGHT TO REVERSE THE DECLINE IN VOLUNTARY CONTRIBUTIONS. BACKGROUND - EMERGENCIES UP, DEVELOPMENT DOWN -------------- ¶3. THE MOST RECENT FAO PROGRAM IMPLEMENTATION REPORT SHOWS THAT VOLUNTARY CONTRIBUTIONS FOR DEVELOPMENT ACTIVITIES (FROM BILATERAL DONORS AND UNDP) IN 2000-2001 TOTALED USD 308 MILLION. THAT AMOUNT IS EXPECTED TO DECLINE TO USD 280 MILLION IN 2002-2003. VOLUNTARY FUNDING FOR NON-EMERGENCIES HAS, IN FACT, DROPPED 50 PERCENT IN THE LAST DECADE. EIGHTY PERCENT OF THAT DROP CAN BE ATTRIBUTED TO SHARP REDUCTIONS IN UNDP FUNDING: IN 1992 FAO EXECUTED USD 150 MILLION IN UNDP PROJECTS; IN 2003 THE FAO WILL EXECUTE ONLY USD 14 MILLION. ¶4. FAO'S REGULAR PROGRAM BUDGET, FUNDED FROM ASSESSED CONTRIBUTIONS, IS PRIMARILY FOR NORMATIVE AND STANDARD SETTING ACTIVITIES, ALTHOUGH ABOUT 14 PERCENT (USD 95 MILLION OVER THE BIENNIUM 2002-2003) IS EARMARKED FOR THE TECHNICAL COOPERATION PROGRAM (TCP). TCP PROJECTS ARE SMALL, AD HOC PROJECT AVAILABLE TO ALL DEVELOPING COUNTRIES (AND COUNTRIES WITH ECONOMIES IN TRANSITION) ON A FIRST COME, FIRST SERVED BASIS WITHOUT ANY NEEDS-BASED OR PERFORMANCE-BASED CRITERIA. FAO ALSO ALLOCATES ABOUT USD 10 MILLION ANNUALLY FOR PILOT FOOD SECURITY PROJECTS UNDER ITS SPECIAL PROGRAM FOR FOOD SECURITY (SPFS). THE REGULAR BUDGET ALSO SUPPORTS FAO'S FIELD PRESENCE AND ABSORBS INDIRECT PROJECT SUPPORT COST CHARGES NOT COVERED DIRECTLY BY CONTRIBUTIONS. IN CONTRAST TO THE DECLINING TREND IN VOLUNTARY CONTRIBUTIONS, FAO'S REGULAR PROGRAM BUDGET HAS INCLUDED INCREASES FOR TCP, SPFS AND FOR COUNTRY OFFICES WITH EACH BIENNIUM (PRIMARILY AT THE INSISTENCE OF THE G-77). ¶5. INCLUDING SPFS, FAO SPENDS ABOUT USD 200 MILLION ANNUALLY FOR OPERATIONAL ACTIVITIES FROM VOLUNTARY AND ASSESSED CONTRIBUTIONS. WHAT HAPPENED TO UNDP FUNDING -------------- ¶6. ACCORDING TO FAO, REDUCED UNDP FUNDING IS A RESULT OF THE SHIFT FROM PROJECT TO PROGRAM FUNDING AND A SIGNIFICANT INCREASE IN NATIONAL EXECUTION. (FAO ALSO STATED THAT DONOR RESOURCES FOR UNDP DECLINED OVERALL "AS A RESULT OF QUALITY OF ASSISTANCE.") ACCORDING TO FAO OFFICIALS, "UNDP SUCCESSOR ARRANGEMENTS" WERE INTENDED TO INCLUDE THE SPECIALIZED AGENCIES AS PROVIDERS OF "UPSTREAM POLICY ADVICE AND ASSISTANCE." THIS DID NOT HAPPEN WITH FAO BECAUSE: -- FAO DID NOT HAVE EFFECTIVE AND COLLABORATIVE TIES AT ROME 00003249 001.2 OF 003 PMENT ACTIVITIES HAS DECLINED SIGNIFICANTLY OVER THE LAST DECADE DUE TO A SHARP DROP IN UN DEVELOPMENT PROGRAM (UNDP) FUNDING BUT ALSO DUE TO WHAT FAO OFFICIALS THEMSELVES ACKNOWLEDGE WAS FAO'S POOR PERFORMANCE. FAO'S ASSESSED REGULAR PROGRAM BUDGET MUST INCREASINGLY COVER THE LOSSES ATTRIBUTED TO DECLINING SUPPORT COST INCOME. FAO ASPIRES TO REVERSE THE TREND AND MOVE BEYOND EXECUTING SECTORAL PROJECTS TO PROVIDING "UPSTREAM" POLICY ADVICE TO DEVELOPING COUNTRIES. GIVEN THE DISPERSAL OF FAO'S MODEST DEVELOPMENT FUNDING OVER MANY FAO MEMBER COUNTRIES AND IN MANY SMALL PROJECTS -- AND GIVEN THE KNOWN WEAKNESSES OF FAO'S COUNTRY OFFICES -- IT IS HARD TO ENVISAGE FAO BECOMING AN EFFECTIVE POLICY PLAYER WITHOUT A RADICAL REORIENTATION. THE ISSUE IS AN IMPORTANT ONE AS IT GOES TO THE HEART OF THE DEBATE IN FAO'S POLICY MAKING BODIES ON THE DESIRED RELATIONSHIP BETWEEN FAO'S NORMATIVE AND OPERATIONAL ACTIVITIES AND THE URGENT NEED TO IMPROVE THE QUALITY OF FAO'S FIELD PRESENCE. END SUMMARY. ¶2. FAO ASSISTANT DIRECTOR GENERAL (ADG) FOR TECHNICAL COOPERATION, HENRI CARSALADE, AND OTHER FAO OFFICIALS GAVE DONORS AN OVERVIEW OF FAO'S DEVELOPMENT ACTIVITIES ON JUNE 5, 2003. THE PRESENTATION COVERED TRENDS AND PROSPECTS AND EXPLAINED HOW FAO SOUGHT TO REVERSE THE DECLINE IN VOLUNTARY CONTRIBUTIONS. BACKGROUND - EMERGENCIES UP, DEVELOPMENT DOWN -------------- ¶3. THE MOST RECENT FAO PROGRAM IMPLEMENTATION REPORT SHOWS THAT VOLUNTARY CONTRIBUTIONS FOR DEVELOPMENT ACTIVITIES (FROM BILATERAL DONORS AND UNDP) IN 2000-2001 TOTALED USD 308 MILLION. THAT AMOUNT IS EXPECTED TO DECLINE TO USD 280 MILLION IN 2002-2003. VOLUNTARY FUNDING FOR NON-EMERGENCIES HAS, IN FACT, DROPPED 50 PERCENT IN THE LAST DECADE. EIGHTY PERCENT OF THAT DROP CAN BE ATTRIBUTED TO SHARP REDUCTIONS IN UNDP FUNDING: IN 1992 FAO EXECUTED USD 150 MILLION IN UNDP PROJECTS; IN 2003 THE FAO WILL EXECUTE ONLY USD 14 MILLION. ¶4. FAO'S REGULAR PROGRAM BUDGET, FUNDED FROM ASSESSED CONTRIBUTIONS, IS PRIMARILY FOR NORMATIVE AND STANDARD SETTING ACTIVITIES, ALTHOUGH ABOUT 14 PERCENT (USD 95 MILLION OVER THE BIENNIUM 2002-2003) IS EARMARKED FOR THE TECHNICAL COOPERATION PROGRAM (TCP). TCP PROJECTS ARE SMALL, AD HOC PROJECT AVAILABLE TO ALL DEVELOPING COUNTRIES (AND COUNTRIES WITH ECONOMIES IN TRANSITION) ON A FIRST COME, FIRST SERVED BASIS WITHOUT ANY NEEDS-BASED OR PERFORMANCE-BASED CRITERIA. FAO ALSO ALLOCATES ABOUT USD 10 MILLION ANNUALLY FOR PILOT FOOD SECURITY PROJECTS UNDER ITS SPECIAL PROGRAM FOR FOOD SECURITY (SPFS). THE REGULAR BUDGET ALSO SUPPORTS FAO'S FIELD PRESENCE AND ABSORBS INDIRECT PROJECT SUPPORT COST CHARGES NOT COVERED DIRECTLY BY CONTRIBUTIONS. IN CONTRAST TO THE DECLINING TREND IN VOLUNTARY CONTRIBUTIONS, FAO'S REGULAR PROGRAM BUDGET HAS INCLUDED INCREASES FOR TCP, SPFS AND FOR COUNTRY OFFICES WITH EACH BIENNIUM (PRIMARILY AT THE INSISTENCE OF THE G-77). ¶5. INCLUDING SPFS, FAO SPENDS ABOUT USD 200 MILLION ANNUALLY FOR OPERATIONAL ACTIVITIES FROM VOLUNTARY AND ASSESSED CONTRIBUTIONS. WHAT HAPPENED TO UNDP FUNDING -------------- ¶6. ACCORDING TO FAO, REDUCED UNDP FUNDING IS A RESULT OF THE SHIFT FROM PROJECT TO PROGRAM FUNDING AND A SIGNIFICANT INCREASE IN NATIONAL EXECUTION. (FAO ALSO STATED THAT DONOR RESOURCES FOR UNDP DECLINED OVERALL "AS A RESULT OF QUALITY OF ASSISTANCE.") ACCORDING TO FAO OFFICIALS, "UNDP SUCCESSOR ARRANGEMENTS" WERE INTENDED TO INCLUDE THE SPECIALIZED AGENCIES AS PROVIDERS OF "UPSTREAM POLICY ADVICE AND ASSISTANCE." THIS DID NOT HAPPEN WITH FAO BECAUSE: -- FAO DID NOT HAVE EFFECTIVE AND COLLABORATIVE TIES AT ROME 00003249 002.1 OF 003 ¶7. BILATERAL, DONOR-FUNDED DEVELOPMENT ACTIVITIES HAVE ALSO GONE DOWN -- BUT LESS SUBSTANTIALLY -- FROM ABOUT USD 100 MILLION/YEAR TO USD 80 MILLION/YEAR. UNILATERAL TRUST FUNDS (WHERE A COUNTRY ITSELF PAYS FAO TO EXECUTE A PROJECT) HAVE INCREASED SLIGHTLY. BILATERAL DONORS (INCLUDING THE UNITED STATES),HOWEVER, CONTINUE TO PUT MORE FUNDS INTO EMERGENCY FIELD ACTIVITIES. ¶8. THE U.S. IS NOT A MAJOR DONOR TO FAO NON-EMERGENCY EXTRA-BUDGETARY ACTIVITIES. THE U.S. CONTRIBUTION WAS LESS THAN USD 1 MILLION IN 2002. THE MAJOR DONORS ARE EUROPEAN UNION COUNTRIES, WITH THE NETHERLANDS AND ITALY IN THE LEAD. PROBLEMS IN DECENTRALIZATION -------------- ¶9. IN LOOKING AT THE OVERALL DECLINE, FAO READILY ACKNOWLEDGED THAT INTERNAL FACTORS LED TO LESS MONEY BEING CHANNELED TO FAO. ACCORDING TO CARSALADE, "FAO DECENTRALIZATION RESULTED IN CAPACITY AND MANAGERIAL PROBLEMS IN COUNTRY OFFICES." ¶10. FAO ACKNOWLEDGED THAT MANY FAO COUNTRY OFFICES (FAORS) DID NOT HAVE THE EXPERIENCE TO TAKE ON PROJECT EXECUTION: TRAINING FOR FAO COUNTRY OFFICES IS CURRENTLY ONGOING IN ORDER TO ENSURE THAT THE OFFICES ARE ABLE TO HANDLE THE 46 PERCENT OF PROJECTS NOW BEING EXECUTED DIRECTLY THROUGH FAORS. FAO HAS ALSO EMBARKED ON A FULL- SCALE EVALUATION OF DECENTRALIZATION, AND IS COMPLETING AN "IN-DEPTH REVIEW" OF ONE OF THE REGIONS, LOOKING AT THE RELATIONSHIP BETWEEN HEADQUARTERS, REGIONAL OFFICE AND COUNTRY REPRESENTATIVES. ¶11. FAO ALSO ACKNOWLEDGED MANAGERIAL INEFFICIENCIES AT HEADQUARTERS. ANDREW MCMILLAN, DIRECTOR OF FAO'S FIELD OPERATIONS DIVISION STATED, "FAO IS TRYING TO IMPROVE THE REPUTATION OF THE ORGANIZATION WHICH WAS SERIOUSLY DAMAGED IN THE PAST AS A DELIVERER OF TECHNICAL ASSISTANCE." ¶12. LOOKING TO RETURN TO HIGHER LEVELS OF UNDP FUNDING, FAO WILL WORK TO COMMUNICATE, "ITS ADDED VALUE, ITS SERVICES, AND ITS PRODUCTS" ACCORDING TO ADG CARSALADE. FAO HAS MADE A POINT, ACCORDING TO CARSALADE, OF IMPROVING FAO PRESENCE IN THE UN COUNTRY TEAM, STRESSING ITS CONTRIBUTION TO THE UN DEVELOPMENT GROUP (UNDG) AND COMMITMENT TO THE POVERTY REDUCTION STRATEGY PAPERS (PRSP'S). DONOR FOCUS ON FIELD PRESENCE AND DEMAND -------------- ¶13. THE NETHERLANDS, ONE OF THE LARGEST DONORS TO FAO'S DEVELOPMENT ACTIVITIES, STATED THAT THE NETHERLANDS CAN "ENDORSE THIS APPROACH AND EMBRACE IT." THE NETHERLANDS WANTS FAO TO SEEK MORE "UPSTREAM" APPROACHES, AND GUIDE COUNTRIES ON POLICIES. HOWEVER, THEY STATED THAT THEIR OWN FEEDBACK INDICATED THAT FAO WAS NOT INVOLVED IN POLICY AND THAT INVOLVEMENT WITH PRSPS "WAS MINIMAL." THE NETHERLANDS STRESSED THE LINKAGE BETWEEN NORMATIVE WORK AND DEVELOPMENT PROJECTS. (NOTE: THE NETHERLANDS IS SHORTLY TO RELEASE A STUDY ASSESSING THE IMPACT OF DUTCH CONTRIBUTIONS CHANNELED THROUGH FAO FROM 1985-2000). ¶14. FRANCE QUERIED WHETHER FAO HAD "SOLVED ITS PROBLEMS IN THE FIELD OFFICES" AND ARGUED THAT LACK OF COMMUNICATION WITH DONORS WAS A SERIOUS ISSUE. HE NOTED THAT "SOMETIMES DONORS LACK VISIBILITY IN FIELD PROGRAMS, WHICH IS A PROBLEM." ¶15. BELGIUM STATED THAT MEMBERS NEEDED TO SPEND MORE TIME DISCUSSING THE OVERLAP BETWEEN REGULAR BUDGET AND EXTRA-BUDGETARY ACTIVITIES. IF FAO IS TO PLAY A ROLE IN ROME 00003249 002.2 OF 003 ¶7. BILATERAL, DONOR-FUNDED DEVELOPMENT ACTIVITIES HAVE ALSO GONE DOWN -- BUT LESS SUBSTANTIALLY -- FROM ABOUT USD 100 MILLION/YEAR TO USD 80 MILLION/YEAR. UNILATERAL TRUST FUNDS (WHERE A COUNTRY ITSELF PAYS FAO TO EXECUTE A PROJECT) HAVE INCREASED SLIGHTLY. BILATERAL DONORS (INCLUDING THE UNITED STATES),HOWEVER, CONTINUE TO PUT MORE FUNDS INTO EMERGENCY FIELD ACTIVITIES. ¶8. THE U.S. IS NOT A MAJOR DONOR TO FAO NON-EMERGENCY EXTRA-BUDGETARY ACTIVITIES. THE U.S. CONTRIBUTION WAS LESS THAN USD 1 MILLION IN 2002. THE MAJOR DONORS ARE EUROPEAN UNION COUNTRIES, WITH THE NETHERLANDS AND ITALY IN THE LEAD. PROBLEMS IN DECENTRALIZATION -------------- ¶9. IN LOOKING AT THE OVERALL DECLINE, FAO READILY ACKNOWLEDGED THAT INTERNAL FACTORS LED TO LESS MONEY BEING CHANNELED TO FAO. ACCORDING TO CARSALADE, "FAO DECENTRALIZATION RESULTED IN CAPACITY AND MANAGERIAL PROBLEMS IN COUNTRY OFFICES." ¶10. FAO ACKNOWLEDGED THAT MANY FAO COUNTRY OFFICES (FAORS) DID NOT HAVE THE EXPERIENCE TO TAKE ON PROJECT EXECUTION: TRAINING FOR FAO COUNTRY OFFICES IS CURRENTLY ONGOING IN ORDER TO ENSURE THAT THE OFFICES ARE ABLE TO HANDLE THE 46 PERCENT OF PROJECTS NOW BEING EXECUTED DIRECTLY THROUGH FAORS. FAO HAS ALSO EMBARKED ON A FULL- SCALE EVALUATION OF DECENTRALIZATION, AND IS COMPLETING AN "IN-DEPTH REVIEW" OF ONE OF THE REGIONS, LOOKING AT THE RELATIONSHIP BETWEEN HEADQUARTERS, REGIONAL OFFICE AND COUNTRY REPRESENTATIVES. ¶11. FAO ALSO ACKNOWLEDGED MANAGERIAL INEFFICIENCIES AT HEADQUARTERS. ANDREW MCMILLAN, DIRECTOR OF FAO'S FIELD OPERATIONS DIVISION STATED, "FAO IS TRYING TO IMPROVE THE REPUTATION OF THE ORGANIZATION WHICH WAS SERIOUSLY DAMAGED IN THE PAST AS A DELIVERER OF TECHNICAL ASSISTANCE." ¶12. LOOKING TO RETURN TO HIGHER LEVELS OF UNDP FUNDING, FAO WILL WORK TO COMMUNICATE, "ITS ADDED VALUE, ITS SERVICES, AND ITS PRODUCTS" ACCORDING TO ADG CARSALADE. FAO HAS MADE A POINT, ACCORDING TO CARSALADE, OF IMPROVING FAO PRESENCE IN THE UN COUNTRY TEAM, STRESSING ITS CONTRIBUTION TO THE UN DEVELOPMENT GROUP (UNDG) AND COMMITMENT TO THE POVERTY REDUCTION STRATEGY PAPERS (PRSP'S). DONOR FOCUS ON FIELD PRESENCE AND DEMAND -------------- ¶13. THE NETHERLANDS, ONE OF THE LARGEST DONORS TO FAO'S DEVELOPMENT ACTIVITIES, STATED THAT THE NETHERLANDS CAN "ENDORSE THIS APPROACH AND EMBRACE IT." THE NETHERLANDS WANTS FAO TO SEEK MORE "UPSTREAM" APPROACHES, AND GUIDE COUNTRIES ON POLICIES. HOWEVER, THEY STATED THAT THEIR OWN FEEDBACK INDICATED THAT FAO WAS NOT INVOLVED IN POLICY AND THAT INVOLVEMENT WITH PRSPS "WAS MINIMAL." THE NETHERLANDS STRESSED THE LINKAGE BETWEEN NORMATIVE WORK AND DEVELOPMENT PROJECTS. (NOTE: THE NETHERLANDS IS SHORTLY TO RELEASE A STUDY ASSESSING THE IMPACT OF DUTCH CONTRIBUTIONS CHANNELED THROUGH FAO FROM 1985-2000). ¶14. FRANCE QUERIED WHETHER FAO HAD "SOLVED ITS PROBLEMS IN THE FIELD OFFICES" AND ARGUED THAT LACK OF COMMUNICATION WITH DONORS WAS A SERIOUS ISSUE. HE NOTED THAT "SOMETIMES DONORS LACK VISIBILITY IN FIELD PROGRAMS, WHICH IS A PROBLEM." ¶15. BELGIUM STATED THAT MEMBERS NEEDED TO SPEND MORE TIME DISCUSSING THE OVERLAP BETWEEN REGULAR BUDGET AND EXTRA-BUDGETARY ACTIVITIES. IF FAO IS TO PLAY A ROLE IN ROME 00003249 003.1 OF 003 EFINED." HE NOTED PROBLEMS WITH THE QUALITY OF FIELD REPRESENTATIVES AND THE QUALITY OF PERSONNEL IN GENERAL, COMPARING FAO'S PERFORMANCE EVALUATION UNFAVORABLY TO THE WORLD FOOD PROGRAMS (WFP) SUPERIOR "360 DEGREES PERFORMANCE EVALUATION." ¶16. THE UK, SWISS AND EC REPS RAISED THE "DEMAND" SIDE, QUESTIONING WHETHER COUNTRIES THEMSELVES WERE ACTUALLY SEEKING ADDITIONAL ASSISTANCE FOR AGRICULTURAL AND RURAL DEVELOPMENT. FAO RESPONSE - POLICY IS A PROBLEM -------------- ¶17. DIRECTOR OF FAO'S POLICY ASSISTANCE DIVISION, SANTIAGO FUNES, RESPONDED THAT FAO WAS INDEED INVOLVED IN SOME "POLICY" WORK, CITING FAO'S EXPERIENCE IN MOZAMBIQUE WHERE FAO WAS CONTRACTED BY THE GOVERNMENT TO DEVELOP A COMPREHENSIVE RURAL DEVELOPMENT PROGRAM IN PARTNERSHIP WITH THE WORLD BANK. THAT BEING SAID, FUNES ACKNOWLEDGED THAT "THE FAO BUDGET WAS NOT LARGE ENOUGH TO DEAL WITH THE CHALLENGES OF RURAL AND AGRICULTURAL DEVELOPMENT." HE POINTED OUT THAT SIX YEARS AGO, A NEW BUDGET LINE HAD BEEN ADDED (IN THE REGULAR BUDGET) ON "PROVISION OF POLICY ADVICE." FUNES ADDED, "EVERY DAY WE ARE URGING FAO REPRESENTATIVES TO PROVIDE POLICY ADVICE!" ¶18. ADG CARSALADE WELCOMED THE COMMENTS ON FIELD REPRESENTATIVES AND PERSONNEL ISSUES RAISED BY BELGIUM AND FRANCE, AND NOTED THAT A NEW FAO COMMITTEE HAD BEEN FORMED ON THE SUBJECT. HE ALSO AGREED ON THE NEED TO IMPROVE PERFORMANCE EVALUATION. COMMENT -------------- ¶19. BUDGET ISSUES: THE DECLINE IN EXTRABUDGETARY FUNDING CREATES A CONTINUING DRAG ON FAO'S REGULAR PROGRAM BUDGET AND HAMPERS EFFORTS TO CURB FAO BUDGET GROWTH. DEVELOPING COUNTRIES -- COGNIZANT OF THE DECLINE IN VOLUNTARY FUNDING -- ROUTINELY REQUEST LARGER ALLOCATIONS FROM THE REGULAR PROGRAM BUDGET FOR OPERATIONAL ACTIVITIES. THIS IN TURN PUTS PRESSURE ON THE OVERALL BUDGET LEVEL. FURTHERMORE, IN THE CURRENT BIENNIUM, THE REGULAR PROGRAM WILL HAVE TO COVER AN ESTIMATED SHORTFALL OF USD 6.2 MILLION TO COMPENSATE FOR DECLINING SUPPORT COST INCOME. THE FAO FINANCE COMMITTEE HAS REGULARLY REQUESTED THE FAO TO TAKE ACTION TO REMEDY THIS SITUATION; ABSENT RAISING SUPPORT COST CHARGES (WHICH THE DG HAS RULED OUT),IT IS NOT CLEAR HOW FAO WILL RESOLVE THIS PROBLEM. ¶20. PROGRAM ISSUES: NORMATIVE AND OPERATIONAL ACTIVITIES SHOULD COMPLEMENT EACH OTHER; FURTHERMORE, PUTTING INTO PLACE A FIRST-RATE FAO FIELD LEVEL PRESENCE IS CRITICAL TO SUPPORTING BOTH NON-EMERGENCY AND EMERGENCY ACTIVITIES. FAO MEMBERS NEED TO CONSIDER WHAT KIND OF DEVELOPMENT ACTIVITIES FAO CAN PERFORM BEST AND URGE THE ORGANIZATION TO MAKE THE CHANGES NECESSARY TO DO SO. THE NEED TO IMPROVE FAO'S FIELD PRESENCE IS CLEAR. CURRENTLY, FAO PROJECTS ARE AD-HOC, SECTORAL, WIDELY DISPERSED AND POORLY COORDINATED WITH OTHER DONOR ACTIVITIES. DONORS WHO SUPPORT FAO MOVING "UPSTREAM" TO BECOME AN EFFECTIVE POLICY PLAYER RECOGNIZE THAT FAO WILL NEED A RADICAL REORIENTATION -- NOT JUST REASSURANCES - - TO TAKE ON THAT NEW ROLE. HALL ROME 00003249 003.2 OF 003 EFINED." HE NOTED PROBLEMS WITH THE QUALITY OF FIELD REPRESENTATIVES AND THE QUALITY OF PERSONNEL IN GENERAL, COMPARING FAO'S PERFORMANCE EVALUATION UNFAVORABLY TO THE WORLD FOOD PROGRAMS (WFP) SUPERIOR "360 DEGREES PERFORMANCE EVALUATION." ¶16. THE UK, SWISS AND EC REPS RAISED THE "DEMAND" SIDE, QUESTIONING WHETHER COUNTRIES THEMSELVES WERE ACTUALLY SEEKING ADDITIONAL ASSISTANCE FOR AGRICULTURAL AND RURAL DEVELOPMENT. FAO RESPONSE - POLICY IS A PROBLEM -------------- ¶17. DIRECTOR OF FAO'S POLICY ASSISTANCE DIVISION, SANTIAGO FUNES, RESPONDED THAT FAO WAS INDEED INVOLVED IN SOME "POLICY" WORK, CITING FAO'S EXPERIENCE IN MOZAMBIQUE WHERE FAO WAS CONTRACTED BY THE GOVERNMENT TO DEVELOP A COMPREHENSIVE RURAL DEVELOPMENT PROGRAM IN PARTNERSHIP WITH THE WORLD BANK. THAT BEING SAID, FUNES ACKNOWLEDGED THAT "THE FAO BUDGET WAS NOT LARGE ENOUGH TO DEAL WITH THE CHALLENGES OF RURAL AND AGRICULTURAL DEVELOPMENT." HE POINTED OUT THAT SIX YEARS AGO, A NEW BUDGET LINE HAD BEEN ADDED (IN THE REGULAR BUDGET) ON "PROVISION OF POLICY ADVICE." FUNES ADDED, "EVERY DAY WE ARE URGING FAO REPRESENTATIVES TO PROVIDE POLICY ADVICE!" ¶18. ADG CARSALADE WELCOMED THE COMMENTS ON FIELD REPRESENTATIVES AND PERSONNEL ISSUES RAISED BY BELGIUM AND FRANCE, AND NOTED THAT A NEW FAO COMMITTEE HAD BEEN FORMED ON THE SUBJECT. HE ALSO AGREED ON THE NEED TO IMPROVE PERFORMANCE EVALUATION. COMMENT -------------- ¶19. BUDGET ISSUES: THE DECLINE IN EXTRABUDGETARY FUNDING CREATES A CONTINUING DRAG ON FAO'S REGULAR PROGRAM BUDGET AND HAMPERS EFFORTS TO CURB FAO BUDGET GROWTH. DEVELOPING COUNTRIES -- COGNIZANT OF THE DECLINE IN VOLUNTARY FUNDING -- ROUTINELY REQUEST LARGER ALLOCATIONS FROM THE REGULAR PROGRAM BUDGET FOR OPERATIONAL ACTIVITIES. THIS IN TURN PUTS PRESSURE ON THE OVERALL BUDGET LEVEL. FURTHERMORE, IN THE CURRENT BIENNIUM, THE REGULAR PROGRAM WILL HAVE TO COVER AN ESTIMATED SHORTFALL OF USD 6.2 MILLION TO COMPENSATE FOR DECLINING SUPPORT COST INCOME. THE FAO FINANCE COMMITTEE HAS REGULARLY REQUESTED THE FAO TO TAKE ACTION TO REMEDY THIS SITUATION; ABSENT RAISING SUPPORT COST CHARGES (WHICH THE DG HAS RULED OUT),IT IS NOT CLEAR HOW FAO WILL RESOLVE THIS PROBLEM. ¶20. PROGRAM ISSUES: NORMATIVE AND OPERATIONAL ACTIVITIES SHOULD COMPLEMENT EACH OTHER; FURTHERMORE, PUTTING INTO PLACE A FIRST-RATE FAO FIELD LEVEL PRESENCE IS CRITICAL TO SUPPORTING BOTH NON-EMERGENCY AND EMERGENCY ACTIVITIES. FAO MEMBERS NEED TO CONSIDER WHAT KIND OF DEVELOPMENT ACTIVITIES FAO CAN PERFORM BEST AND URGE THE ORGANIZATION TO MAKE THE CHANGES NECESSARY TO DO SO. THE NEED TO IMPROVE FAO'S FIELD PRESENCE IS CLEAR. CURRENTLY, FAO PROJECTS ARE AD-HOC, SECTORAL, WIDELY DISPERSED AND POORLY COORDINATED WITH OTHER DONOR ACTIVITIES. DONORS WHO SUPPORT FAO MOVING "UPSTREAM" TO BECOME AN EFFECTIVE POLICY PLAYER RECOGNIZE THAT FAO WILL NEED A RADICAL REORIENTATION -- NOT JUST REASSURANCES - - TO TAKE ON THAT NEW ROLE. HALL NNNN 2003ROME03249 - Classification: UNCLASSIFIED