WFP FOOD AID - A "FIRST CUT" ON FUTURE WFP

UNCLAS SECTION 03 OF 03 ROME 000341

SIPDIS

FROM U.S. MISSION IN ROME

UNCLASSIFIED

PAGE 02 ROME 00341 03 OF 03 291510Z
STATE FOR A/S IO HOLMES, A/S PRM DEWEY, IO/EDA WINNICK
USAID FOR AA/DCHA WINTER, D/DCHA/FFP LANDIS, DCHA/PPE
USDA/FAS FOR MCHAMBLISS/RTILSWORTH
USUN NEW YORK FOR CSERWER
NSC FOR JDWORKEN
NAIROBI FOR REDSO NESTES
TOKYO FOR USAID REP

E.O. 12958: N/A
TAGS: EAID EAGR AORC PREF EAGR AORC PREF EAGR AORC PREF EU WFP UN EUEAID WFP UN EUEAID WFP UN
SUBJECT: WFP FOOD AID - A "FIRST CUT" ON FUTURE WFP
PROGRAMMING DIRECTIONS


BOARD MEMBERS THAT THE BREADTH AND LOCATIONS OF WFP'S
ACTIVITIES MUST BE REDUCED, ESSENTIALLY NONE OF THE REGIONAL
GROUPS ON THE BOARD WANT THEIR "OX TO BE GORED." THE FIGHT
TO FOCUS AND CONCENTRATE WFP'S FOOD AID PORTFOLIO IS FAR
FROM OVER. HALL

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PAGE 01 ROME 00341 01 OF 03 291509Z
ACTION IO-00

INFO LOG-00 AF-00 AID-00 AMAD-00 CIAE-00 COME-00 CTME-00
WHA-00 SRPP-00 EAP-00 EB-00 EUR-00 E-00 UTED-00
TEDE-00 INR-00 NSAE-00 NSCE-00 OES-00 OIC-02 OMB-01
SSO-00 STR-00 TEST-00 TRSE-00 USIE-00 PRM-00 SAS-00
/003W
-------------- 2DA85F 291705Z /38
P 291436Z JAN 03
FM AMEMBASSY ROME
TO SECSTATE WASHDC PRIORITY 7851
INFO EU MEMBER STATES COLLECTIVE
AMEMBASSY OTTAWA
AMEMBASSY BERN
AMEMBASSY NAIROBI
USDA FAS WASHDC 2482
USEU BRUSSELS 3070
USMISSION GENEVA
USMISSION USUN NEW YORK
AMEMBASSY TOKYO

UNCLAS SECTION 01 OF 03 ROME 000341

SIPDIS

FROM U.S. MISSION IN ROME

STATE FOR A/S IO HOLMES, A/S PRM DEWEY, IO/EDA WINNICK
USAID FOR AA/DCHA WINTER, D/DCHA/FFP LANDIS, DCHA/PPE
UNCLASSIFIED

PAGE 02 ROME 00341 01 OF 03 291509Z
USDA/FAS FOR MCHAMBLISS/RTILSWORTH
USUN NEW YORK FOR CSERWER
NSC FOR JDWORKEN
NAIROBI FOR REDSO NESTES
TOKYO FOR USAID REP

E.O. 12958: N/A
TAGS: EAID EAGR AORC PREF EAGR AORC PREF EAGR AORC PREF EU WFP UN EUEAID WFP UN EUEAID WFP UN
SUBJECT: WFP FOOD AID - A "FIRST CUT" ON FUTURE WFP
PROGRAMMING DIRECTIONS

REF: (A) ROME 00007

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SUMMARY
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1. WORLD FOOD PROGRAM (WFP) PRESENTED "NOTES FOR A
CONSULTATION ON STRATEGIC ISSUES" IN ROME ON JANUARY 14,

2003. WFP REITERATED ITS INTENT TO INTENSIFY ITS FOCUS IN
COUNTRIES WITH THE GREATEST NEED - WHICH IT DEFINED AS THOSE
WITH A PER CAPITA GROSS DOMESTIC PRODUCT (GDI) OF LESS THAN
USD 885 AND A RATE OF UNDER-5 CHILD STUNTING GREATER THAN 30
PERCENT. THE TARGET WOULD BE TO DEDICATE 75 PERCENT OF WFP'S
DEVELOPMENT RESOURCES TO THESE 29 COUNTRIES BY THE END OF
THE 2004-2005 BIENNIUM. WFP FURTHER PROPOSED FOUR PROGRAM
WORK OBJECTIVES: A) SUPPORTING UNIVERSAL PRIMARY EDUCATION
AND REDUCING GENDER DISPARITY IN ACCESS TO EDUCATION; B)
SUPPORTING IMPROVED HEALTH OF CHILDREN AND VULNERABLE GROUPS
THROUGH NUTRITION EDUCATION; C) SAVING LIVES IN CRISIS
SITUATIONS; AND D) PRESERVING LIVELIHOODS IN CRISIS
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SITUATIONS. THE NOTES RECOGNIZED THAT WFP RISKS LOSING ITS
EFFECTIVENESS IF ITS RESOURCES AND CAPACITY ARE SPREAD TOO
THIN. END SUMMARY.

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BACKGROUND
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2. THESE NOTES FORM PART OF A WORK IN PROCESS LEADING UP TO
A STRATEGIC FRAMEWORK TO BE SUBMITTED FOR EXECUTIVE BOARD
APPROVAL IN MAY 2003. THE NOTES REFLECT THE WFP
SECRETARIAT'S RECOGNITION THAT WFP'S DEVELOPMENT PORTFOLIO

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HAS PRECIPITOUSLY FALLEN OVER THE PAST DECADE - FROM ALMOST
U.S. DOLLARS 1 BILLION A DECADE AGO TO U.S. DOLLARS 273
MILLION THIS PAST YEAR, WITH THE CLEAR IMPROBABILITY THAT
THIS TREND WILL BE REVERSED IN THE FUTURE. DESPITE THE
ISSUANCE OF THE WFP FOOD FOR DEVELOPMENT POLICY (FAAD) IN
1999, THE REALITY IS THAT A NUMBER OF MAJOR DONORS (EC,
SWEDEN, JAPAN, THE NETHERLANDS) HAVE MADE A POLICY DECISION
NOT TO CONTRIBUTE TO WFP'S DEVELOPMENT PROGRAM. MOREOVER,
THE UNITED STATES HAS REPEATEDLY ASKED THAT BOTH WFP AND THE
EXECUTIVE BOARD REFOCUS ON THE KEY RECOMMENDATION OF THE
1994 TRIPARTITE EVALUATION OF WFP (NORWAY, THE NETHERLANDS,
AND CANADA) WHICH SUGGESTED THAT WFP REDUCE THE NUMBER OF
COUNTRIES IN WHICH IT FUNCTIONS TO ABOUT 50.

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WHAT WFP PROPOSES FROM THIS POINT ONWARD
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3. WFP'S SECRETARIAT SUGGESTS GENERALLY PURSUING THE UN'S
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FIRST MILLENIUM DEVELOPMENT GOAL(MDG),I.E., THE ERADICATION
OF HUNGER AND POVERTY. SPECIFICALLY, IN CRISIS
(CONFLICT/DISPLACEMENT, NATURAL DISASTER, DROUGHT/FLOOD,
HIV/AIDS, ECONOMIC SHOCKS) - WFP WOULD CAST ITS FOOD
ASSISTANCE AS PREVENTING VULNERABLE PEOPLE FROM SLIDING INTO
CHRONIC HUNGER. WFP SEES ITSELF WELL POSITIONED TO
CONTRIBUTE TO MEETING THE MDG BOTH IN EMERGENCIES AND IN
MORE STABLE SITUATIONS AND IS THEREFORE NOT LIMITED TO
ACTIVITIES SUPPORTED THOUGH ONE FUNDING MECHANISM I.E.,
DEVELOPMENT.


4. WFP LISTED FOUR PROGRAM WORK OBJECTIVES: A) SUPPORTING
UNIVERSAL PRIMARY EDUCATION AND REDUCING GENDER DISPARITY IN
ACCESS TO EDUCATION; B) SUPPORTING IMPROVED HEALTH OF
CHILDREN AND VULNERABLE GROUPS THROUGH NUTRITION EDUCATION;
C) SAVING LIVES IN CRISIS SITUATIONS; AND D) PRESERVING
LIVELIHOODS IN CRISIS SITUATIONS. TWO THEMES DESCRIBE
HUMANITARIAN OBJECTIVES. GENDER CONSIDERATIONS WOULD APPLY
TO ALL THEMES AS A CROSS-CUTTING ISSUE.


5. IN GENERAL, THE TIGHTENED WORK OBJECTIVES IMPLY MORE
DIRECT FEEDING ACTIVITIES, ESPECIALLY FOR CHILDREN. ON FOOD-
FOR-WORK, THERE WOULD BE INCREASED CONCENTRATION ON
PRESERVING LIVELIHOODS DURING CRISES; THERE WOULD ALSO BE A

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PAGE 01 ROME 00341 02 OF 03 291510Z
ACTION IO-00

INFO LOG-00 AF-00 AID-00 AMAD-00 CIAE-00 COME-00 CTME-00
WHA-00 SRPP-00 EAP-00 EB-00 EUR-00 E-00 UTED-00
TEDE-00 INR-00 NSAE-00 NSCE-00 OES-00 OIC-02 OMB-01
SSO-00 STR-00 TEST-00 TRSE-00 USIE-00 PRM-00 SAS-00
/003W
-------------- 2DA883 291705Z /38
P 291436Z JAN 03
FM AMEMBASSY ROME
TO SECSTATE WASHDC PRIORITY 7852
INFO EU MEMBER STATES COLLECTIVE
AMEMBASSY OTTAWA
AMEMBASSY BERN
AMEMBASSY NAIROBI
USDA FAS WASHDC 2483
USEU BRUSSELS 3071
USMISSION GENEVA
USMISSION USUN NEW YORK
AMEMBASSY TOKYO

UNCLAS SECTION 02 OF 03 ROME 000341

SIPDIS

FROM U.S. MISSION IN ROME

STATE FOR A/S IO HOLMES, A/S PRM DEWEY, IO/EDA WINNICK
USAID FOR AA/DCHA WINTER, D/DCHA/FFP LANDIS, DCHA/PPE
UNCLASSIFIED

PAGE 02 ROME 00341 02 OF 03 291510Z
USDA/FAS FOR MCHAMBLISS/RTILSWORTH
USUN NEW YORK FOR CSERWER
NSC FOR JDWORKEN
NAIROBI FOR REDSO NESTES
TOKYO FOR USAID REP

E.O. 12958: N/A
TAGS: EAID EAGR AORC PREF EAGR AORC PREF EAGR AORC PREF EU WFP UN EUEAID WFP UN EUEAID WFP UN
SUBJECT: WFP FOOD AID - A "FIRST CUT" ON FUTURE WFP
PROGRAMMING DIRECTIONS

CORRESPONDING DECREASE IN FOOD-FOR-WORK FOR ASSET CREATION,
NATURAL RESOURCES ACTIVITIES IN THE DEVELOPMENT PORTFOLIO.

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IN HOW MANY COUNTRIES SHOULD WFP WORK?
--------------


6. WFP FLOATED A "BALLON D'ESSAI" ("TRIAL BALLOON") TO FOCUS
ITS DEVELOPMENT RESOURCES ON 29 COUNTRIES WHOSE PER CAPITA
GROSS DOMESTIC PRODUCT (GDI) IS LESS THAN U.S. DOLLARS 885
AND WHOSE RATE OF UNDER-5 CHILD STUNTING IS GREATER THAN 30
PERCENT. THE TARGET WOULD BE TO DEDICATE 75 PERCENT OF WFP'S
DEVELOPMENT RESOURCES TO THESE 29 COUNTRIES BY THE END OF
THE 2004-2005 BIENNIUM. NOTE: WFP PRESENTLY IMPLEMENTS
DEVELOPMENT ACTIVITIES IN 54 COUNTRIES. END NOTE. THERE WAS
CONSIDERABLE REACTION TO THIS PROPOSAL, PARTICULARLY FROM
ASIAN AND LATIN AMERICAN PERMANENT REPRESENTATIVES PRESENT.
CONTINUING DISCUSSIONS ARE NECESSARY NOT ONLY TO REACH
CONSENSUS ON THIS DE FACTO "DOWNSIZING" CRITERIA, BUT ALSO
TO DEVELOP SPECIFIC COUNTRY PHASE OUT TIMETABLES. IT WAS
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NOTED THAT WFP ALSO HAS EMERGENCY OR RECOVERY OPERATIONS IN
AN ADDITIONAL 12 COUNTRIES WHO FIT THE PROPOSED GDI/STUNTING
CRITERIA.

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INCREASING RESOURCES TO SUPPORT WFP'S WORK
--------------


7. WFP'S EXECUTIVE DIRECTOR WANTS TO INCREASE WFP'S REVENUE
BASE FROM ABOUT 1.9 BILLION DOLLARS TO 3 BILLION DOLLARS PER
YEAR. THIS REQUIRES GREATLY EXPANDED TRADITIONAL DONOR
SUPPORT, REACHING OUT CREATIVELY TO NON-TRADITIONAL DONORS,
ENGAGING THE PRIVATE SECTOR, AND IMPROVING LEVERAGE OF
RESOURCES. FOR EXAMPLE, INDIA, AN EMERGING DONOR, HAS
AGREED TO DONATE 1 MILLION TONS OF WHEAT FOR AFGHANISTAN.
OTHER EMERGING DONORS INCLUDE ALGERIA, VIET NAM, THAILAND,
THE REPUBLIC OF SOUTH AFRICA (RSA),THE RUSSIAN FEDERATION
AND PAKISTAN. IN ADDITION, WFP IS BEGINNING TO SEEK OUT
PRIVATE SECTOR PARTNERSHIPS, COGNIZANT THAT UNICEF RECEIVES
MORE THAN 30 PERCENT OF ITS REVENUES FROM PRIVATE DONATIONS.


8. SPECIFICALLY, WFP WILL:

-ASK CASH DONORS TO ALLOW WFP TO "TWIN" THEIR CASH WITH THE
COMMODITY CONTRIBUTIONS FROM EMERGING DONORS (SEE REF A);
-ASK THOSE DONORS THAT PREFER TO HAVE THEIR CASH DONATIONS
USED TO PURCHASE FOOD TO ALLOW WFP TO PURCHASE THAT FOOD
FROM EMERGING DONORS, WHERE SUCH A TRANSACTION MEETS THE
TEST OF TIMELINESS OF DELIVERY, QUALITY OF PRODUCT AND COST
COMPETITIVENESS;
-ASK DONORS TO ESTABLISH A FUND (OR OTHER FINANCIAL
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PAGE 04 ROME 00341 02 OF 03 291510Z
FACILITY) UNDER WHICH WFP WOULD HAVE AVAILABLE CASH TO MATCH
WITH THE COMMODITY CONTRIBUTIONS OF EMERGING DONORS;
-ASK PRIVATE-SECTOR DONORS TO ALLOW WFP THE MAXIMUM
FLEXIBILITY (ALONG THE ABOVE LINES) IN USING CASH
CONTRIBUTIONS TO LEVERAGE COMMODITY CONTRIBUTIONS FROM
EMERGING DONORS.

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COMMENT
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9. SIMPLY, WAR AND DROUGHT (PARTICULARLY IN SUB-SAHARAN
AFRICA) HAVE DRASTICALLY RATCHETED UP HUMANITARIAN FOOD AID
NEEDS AND OVERWHELMED WFP'S RESOURCING CAPACITY. THE
STRATEGIC NOTES PAPER RECOGNIZES THAT THE ORGANIZATION'S
ACTUAL AND ANTICIPATED DEVELOPMENT RESOURCES ARE ABOUT HALF
OF WHAT ARE NEEDED FOR APPROVED COUNTRY PROGRAMS. WFP IS
INTENT ON FINDING WAYS OF MAXIMIZING INPUTS FROM EMERGING
DONORS, BUT THIS RUNS INTO THE CONVENTIONAL FULL COST
RECOVERY BARRIER WHERE ALL DONORS ARE OBLIGATED TO PAY ALL
COSTS, BOTH DIRECT AND INDIRECT, ASSOCIATED WITH THEIR
DONATION. CLEARLY, WFP RECOGNIZES THAT IT RISKS LOSING ITS
EFFECTIVENESS IF ITS RESOURCES AND CAPACITY ARE SPREAD TOO
THIN. AND, WHILE THERE IS CONSENSUS AMONG OECD EXECUTIVE

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2003ROME00341 - Classification: UNCLASSIFIED