FAO LAUNCHES SPECIAL FUND FOR EMERGENCY AND

UNCLAS ROME 002298

SIPDIS


USAID FOR AA/EGAT SIMMONS, AA/DCHA WINTER,
OFDA FOR HALMRAST-SANCHEZ
STATE FOR IO/FO, IO/EDA BEHREND AND KOTOK;
STATE ALSO FOR E, EB, OES
USDA/FAS FOR REICH, HUGHES AND CHAMBLISS

FROM U.S. MISSION TO THE UN AGENCIES IN ROME

E.O. 12958: N/A
TAGS: EAID AORC EAGR KUNR ABUD FAO
SUBJECT: FAO LAUNCHES SPECIAL FUND FOR EMERGENCY AND
REHABILITATION ACTIVITIES, SEEKS DONOR CONTRIBUTIONS

REF: (A) ROME 1370, (B) ROME 1372


1. Summary: In April 2004, FAO completed arrangements
to establish a Special Fund for Emergency and
Rehabilitation Activities. The aim of this Special Fund
is to enable FAO to respond rapidly to emergency
situations, ensuring ready access to funds at the onset
of an emergency, before agreements have been finalized
with interested donors. The Special Fund will allow FAO
to participate in UN-wide needs assessment mission
immediately following a crisis, to establish quickly an
emergency coordination unit for agricultural, livestock
or fisheries assistance, and to prepare a program
framework taking into account causes and effect of the
crisis. The Fund will enable immediate deployment of
essential logistic equipment, and to advance funding for
procurement of inputs after a donor has confirmed a
contribution, thereby saving the 4-6 weeks it normally
takes for governments to transfer funds. FAO has issued
an appeal for contributions to the Special Fund, with a
target of $2 million. U.S. Mission Rome views the Fund
as an important step in shortening FAO's response time at
the onset of emergencies, and recommends that the USG
contribute to this mechanism. End summary.


2. As reported in reftels, FAO has taken steps to
strengthen its emergency operations aimed at protecting
and restoring agriculture-based livelihoods and lessening
dependence on food aid following crises. A 2002
evaluation recognized the quality of FAO's emergency
interventions, but stressed the need to improve the
timeliness of its response. (Such operations depend on
voluntary contributions from donors that may take weeks
or months to negotiate and finalize.) In June 2003 the
FAO Council endorsed the proposal to establish a Special
Fund as a mechanism to reduce response time. The FAO
Secretariat completed arrangements to set up the Special

SIPDIS
Fund in April 2004. On April 21, U.S. Mission received a
letter from Anne Bauer, Director of Emergency Operations
and Rehabilitation, outlining the characteristics of this
new financial mechanism and soliciting contributions.
The text of this letter is reproduced below. Further
information on FAO emergency operations is available at
www.fao.org/reliefoperations/.

TEXT OF FAO LETTER
--------------

The Special Fund for Emergency and Rehabilitation
Activities: a Rapid Response Mechanism

I have the honour to refer to donor funding for
FAO's response to emergencies, which covers a wide range
of activities aimed at supporting the protection and
rehabilitation of agricultural-, livestock- and fisheries-
based livelihoods. FAO's emergency response has
multiplied tenfold over the last decade, from
US$7 million in 1993 to US$70 million in 2002. In part,
this upward trend reflects an increase in the number of
people affected by natural and human-induced disasters
but it is also indicative of the increasing confidence of
donors in the relevance and capacity of FAO's relief and
early rehabilitation activities.

In 2002, FAO conducted an evaluation of
"Preparedness for, and effective and sustainable response
to, food and agricultural emergencies", which constitutes
one of the Strategic Objectives of the Organization. The
evaluation recognized the quality of FAO's emergency
interventions but highlighted the need to improve the
timeliness of its response by various means, including
the need for a financial mechanism to ensure ready access
to funds at the onset of an emergency. Specifically, the
evaluation proposed the establishment of a Special Fund
for Emergency and Rehabilitation Activities to enable FAO
to respond rapidly to emergency situations, even before
agreements had been finalized with interested donors. In
June 2003, the Council endorsed the proposal for the
establishment of the Special Fund.


The Special Fund will enable FAO to participate from
the outset in the inter-UN agency needs assessments
missions following a crisis, to establish rapidly an
emergency coordination unit for agricultural, livestock
or fisheries assistance and to prepare a programme
framework taking into account the causes and effects of
the crisis. Furthermore, the Special Fund will allow for
immediate deployment of essential logistic equipment and,
as soon as a donor has confirmed a contribution in
writing, to advance funding for procurement of inputs
rquired to protect or restart agricultural production,
thereby saving the four to six weeks it normally takes to
transfer funds to FAO's bank account.

Procedures have been established to ensure
appropriate financial monitoring and reporting to donors.
Contributions to the Special Fund will be credited to the
Fund by the Finance Division. These contributions will
enable the Emergency Operations and Rehabilitation
Division (TCE) to take immediate action and make advances
in accordance with the approved purposes of the Special
Fund. The Special Fund includes four types of accounts
to record the following:

i) receipts of contributions;

ii) advances against a donor commitment;

iii) refunds from a project to the Special Fund; and

iv) amounts that are not refunded where either:

(a) funds advanced on the basis of expected donor
contributions exceed the total amount received from
donors; or

(b) funds are used for purposes that are not
intended to be financed by a donor.

The target set for the Special Fund is US$2 million
and will be maintained through replenishment from
contributions by donors, by transfer from the TCE Direct
Operating Cost Recovery account and from interest earned.
Donors contributing to the Special Fund will be provided
with an annual report on the use of the Fund. The
Special Fund will be included in the Financial Statements
of FAO and be subject to the examination and opinion of
the External Auditor. The following account has been
established for the Special Fund:

FAO/UN Trust Fund US Dollar Account
Account No. 490650/67/72
Banca Intesa S.p.A.
Bank code: ABI 03069, CAB 3356
Swift code: BCIT IT MM700
FAO Branch
Via delle Terme di Caracalla
00100 Rome, Italy

Contributors are kindly requested to quote on the
bank advice "SFERA - OSRO" and to notify the Emergency
Operations and Rehabilitation Division of funds
deposited.

The Special Fund will not be sustainable without
participation and support from the donors. I would
greatly appreciate therefore any contribution that your
Government may provide.

I would also be thankful to donors if they would
allow the transfer of balances of completed projects to
the Special Fund, either automotically or on a case-by-
case basis.

Your Government's support to the Special Fund will
enhance the FAO's capacity to respond rapidly to breaking
emergencies and the need for quick-start/quick-impact
post-conflict rehabilitation activities that will


contribute to the consolidation of peace.

U.S. MISSION COMMENT
--------------


3. As we have noted in reftels, FAO's emergency
assistance has played an important role in crises around
the world. In recent years, the USG has found FAO to be
an effective partner in numerous emergencies, and we have
contributed about $6 million annually to FAO emergency
activities. FAO's proposal for a Special Fund for
Emergency and Rehabilitation is a sound concept -- one
that other UN agencies have already put into practice
(e.g., the World Program's Immediate Response Account and
the UN Development Program's Central Emergency Reserve
Fund). A USG contribution to the FAO Special Fund would
help ensure a more rapid response and more timely and
effective use of donor resources by the organization in
future emergencies.

HALL


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2004ROME02298 - Classification: UNCLASSIFIED