ON THE EVE OF FAO COUNCIL AND CONFERENCE

UNCLAS ROME 005176

SIPDIS


FROMTHE AMBASSADOR FOR
STATE FOR IO AS HOLMES AND DAS MILLER
STATE FOR IO/EDA BEHREND AND IO/S ABRAHAMS
USAID FOR CUMMINGS, OFDA FOR MENGHETTI
USDA/FAS FOR REICH AND HUGHES, USDA FOR MARY CHAMBLISS
PARIS FOR UNESCO
NAIROBI FOR UNEP

SENSITIVE

FROM FODAG

E.O. 12958: N/A
TAGS: AORC KUNR ABUD EAID EAGR ETRD KUNR FAO
SUBJECT: ON THE EVE OF FAO COUNCIL AND CONFERENCE


1. Summary. As we prepare for the FAO Council and
Conference meetings later this month, I am sharing our
thinking on two themes: (1) fine-honing our interventions
during the FAO Council and Conference deliberations, and
(2) how we should approach the institutional issues now
on the agendas. As a deliverable, I believe we should
seek and get a mandate for an independent blue-ribbon
n
assessment of the organization's strengths and
weaknesses. End Summary.

Themes for General Statements
--------------


2. I plan to emphasize a number of themes in my remarks
to the Council. I recommend that our USDel interventions
include them, as well:

-- Continued reform the FAO personnel policy in the field
to include an annual performance appraisal of FAO staff.
We should call for a swift implementation of an
performance appraisal system .

-- Reaching an FAO-U.S. Peace Corps partnership
agreement. To us, this initiative should allow for an
increase in AmCit employment in FAO, although we need not
say that publicly.

-- FAO is to be applauded for its efforts to date in Iraq
and needs to continue to prioritize its food-security and
agricultural rehabilitation programs there.

-- Collaboration among UN agencies. We should applaud
the good cooperation, among FAO, WFP, and other
organizations, that we have seen in certain countries,
such as the Congo. At the same time we call for more of
the same thing.

-- We should look at food assistance as a tool to
leverage other aspects of development.

-- We will look for greater FAO involvement with U.S.
efforts in The President's Initiative Against Illegal
Logging and The Congo Basin Forest Partnership
Initiative.

Institutional Issues
--------------


3. Institutional issues will greatly dominate the
conference discussions due to FAO's relatively weak
financial position and the number of important
institutional decisions now on the agenda: the budget,
split assessments, After Service Medical Costs, Term
Limits, etc.


4. Budget and Prioritization Another ZNG budget for
FAO will have wide ramifications. ZNG, in a split
assessment world, can mean different things from our
point of view: ZNG in terms of our own contribution, or
ZNG in the organization's expenditures. In enforcing
fiscal discipline, we need to keep our eyes on long-term
goals, weighing benefits against the costs of the belt-
tightening exercise. Cutting the organization completely
to the bone may serve no one's interest. Too stringent a
budgetary stance is likely to disrupt what FAO is doing,
forcing inordinate attention onto the exercise rather
than objectives of achieving greater productivity.
Taking too tough a stand, moreover, could weaken our
ability to achieve a united position on a tight budget
among our OECD partners (and, at present, we are not
totally isolated either among OECD or G-77 countries in
calling for a tight budget). We should also recognize
that FAO's financial position is relatively weak, for one
reason because we and the Japanese are slow in paying our
annual contributions. Funding outstanding After-Service

Medical Costs is an issue that should no longer be kicked
further down the road.


5. In any and all discussions about the budget, we have
every reason to insist on value for money. As suggested
by a recent Netherlands-FAO Trust Fund Co-operation
evaluation, FAO needs to focus on the areas where it has
a "comparative advantage," notably in supranational work,
normative activities and regional projects. (FAO would be
well served to strengthen and reinforce its partnerships
with regional organizations such as IICA (Costa Rica) and
the Southern Africa Development Community (SADC).)

Independent Assessment of FAO Strengths and Weaknesses
-------------- --------------


6. The question begging everyone's attention, however,
is what are FAO's strengths and weaknesses? What does
FAO do well and poorly? To approach mount such an
inquiry, I recommend a Blue Ribbon study commissioned to
provide independent assessment of the organizations major
strengths and weaknesses. The results could form a non-
politicized basis for prioritizing programs when budget
constraints require cuts. The findings might also give
FAO leadership political coverage for cutting,
restructuring, or reducing programs in a way that
otherwise might be controversial among the member states
or staff. We expect there might be resistance to such a
call in the DG's office. However, the with the
organization now especially worried and vulnerable over
what level of budget it will get out of this conference,
it may be willing to accept this study in return for
budget flexibility on our part (say, if we support ZNG on
FAO expenditures adjusted via the split assessment). The
assessment could also be seen as a prerequisite for the
medium-term strategy exercise that is scheduled for fall
of 2005.

Comment
--------------


7. The upcoming sessions will deal with an organization
whose performance is neither altogether bad nor good. In
fact it is probably better run and organized that it was
a decade ago. But it could and should be better. The
thrust of our positions should focus on this imperative:
how to help the organization continue to reform and
relate to the crucial needs of today's world. FAO should
see us, the biggest donor, as an uncompromising partner
not out to undermine the organization, but out to help it
achieve progress toward excellence. My feeling is that
we need to fine-tune our positions on budget, priorities,
and performance to ensure it moves in that direction.

Hall


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2003ROME05176 - Classification: UNCLASSIFIED