US embassy cable - 03ROME4556

UNCLAS  ROME 004556 
 
SIPDIS 
 
 
STATE FOR IO/FO, IO/EDA BEHREND AND KOTOK 
STATE ALSO FOR E, EB, OES 
USAID FOR AA/EGAT SIMMONS, OFDA FOR MENGHETTI 
USDA/FAS FOR REICH, HUGHES AND CHAMBLISS 
PARIS FOR UNESCO 
NAIROBI FOR UNEP 
USUN FOR AMBASSADOR NEGROPONTE, LUTZ AND TAMLYN 
GENEVA FOR AMBASSADOR MOLEY 
 
SENSITIVE 
 
FROM FODAG 
 
E.O. 12958:  N/A 
TAGS: AORC, EAGR, ABUD, EAID, ETRD, SENV, KUNR, FAO 
SUBJECT:  FAO: TIME FOR A REASSESSMENT 
 
 
Sensitive but unclassified -- please protect accordingly. 
Not suitable for Internet posting. 
 
1.  (SBU)  The UN Food and Agriculture Organization (FAO) 
serves US national trade, economic development and 
humanitarian interests in a wide range of important areas 
relating to food and agriculture, where national or 
regional action could never be as effective as FAO-led 
action.  If FAO did not exist, we would have to invent 
it.  Our contribution -- 22% of the organization's 
assessed budget -- is leveraged by the contributions of 
other countries.  Poor management at FAO in the 1980s led 
to considerable USG mistrust and ambivalence -- an 
attitude that persists despite significant (though still 
incomplete) reforms undertaken since 1993.  US Mission 
believes it is time to take a fresh look at FAO.  We 
recommend initiation of a discussion among US 
stakeholders to identify top USG priorities for FAO and 
outline a strategy to achieve them.  To launch that 
reassessment, we offer the following discussion paper for 
consideration by Washington agencies.  End summary. 
 
------------ 
"Fiat Panis" 
------------ 
 
2.  (U)  Founded to "raise levels of nutrition, improve 
agricultural productivity, better the lives of rural 
populations and contribute to the growth of the world 
economy," the Rome-based FAO has grown to become one of 
the UN's largest specialized agencies. 
 
3.  (U)  Consistent with its broad mandate, FAO is 
engaged in a wide range of activities: printing manuals 
on organic farming, booklets on food ethics and reports 
on animal genetic resources; providing satellite imagery 
of weather conditions; distributing seeds and tools in 
emergencies; promoting development of school gardens; 
forecasting availability of agricultural commodities and 
monitoring implementation of UN fish stocks agreements; 
creating models of carbon sequestration and providing 
technical support for the World Bank's Consultative Group 
on International Agricultural Research (CGIAR); promoting 
adoption of interntional food safety standards and 
fostering reseach on sterile insects for pest control. 
 
4.  (U) What does FAO do best?  The U.S. and other major 
donors have long stressed the importance of FAO's 
normative and standard-setting activities.  Hostig the 
WTO-recognized food safety and plant healt standard 
setting bodies is unquestionably one o the most 
important functions of the FAO.  US inerests are 
strongly served by having international agreement on 
these issues.  The importance of tese bodies to US trade 
and consumer safety can be measured in the millions, if 
not billions, of dollars.  Similarly, FAO is the only 
body with a global mandate for fisheries.  The profound - 
- possibly irreversible -- depletion of the world's fish 
stocks is ever more apparent: coordinated international 
action is clearly the only solution. 
 
5.  (U)  FAO produces the only world-wide compendia of 
statistics on agricultural production and natural 
resources.  Decision makers need this kind of 
information, whether the subject matter is global 
warming, deforestation or commodity forecasting. 
 
6.  (U)  FAO's emergency activities -- emergency inputs 
to get agricultural production up and running after 
natural and man-made disasters, livestock vaccinations to 
prevent devastation of herds -- are critical.  The USG is 
impressed enough with FAO's emergency operations that 
USAID now provides almost $10 million in voluntary 
contributions to this important work.  FAO deserves 
credit for helping to ensure that the right agricultural 
 
inputs were in place in Afghanistan, allowing farmers to 
take advantage of good growing conditions this year and 
produce a bounty crop.  In Iraq, the FAO has been 
implementing the agricultural component of the Oil-for- 
Food program for years.  Since the defeat of Saddam 
Hussein's regime, FAO has been mobilizing over $1 billion 
in agricultural inputs and equipment, playing a vital 
role in reconstruction of Iraq's agriculture, water 
resources and food security systems. 
 
7.  (U)  FAO representatives have done outstanding work 
in other areas of crisis and underdevelopment, although 
this has not been the case everywhere.  But in DR Congo, 
for example, a team led by Ambassador Hall found the FAO 
rep to be performing outstandingly, in close cooperation 
with WFP and USAID, in confronting one of the most severe 
humanitarian crises on the planet. 
 
8.  (U)  In terms of advocacy, FAO speaks for farmers, 
the rural poor, and the hungry all over the world.  FAO's 
DG has repeatedly taken the world's stage to plead the 
case of the hungry, and to seek to mobilize donor 
support.  FAO has also contributed to informed 
international discussion of the impact of international 
agricultural trade policy on food security in the 
developing world.  It has also been an active contributor 
to international discussions on sustainable development. 
 
--------------------------------------------- 
Director General Diouf and the Saouma Legacy 
--------------------------------------------- 
 
9.  (SBU)  Any discussion within the FAO concerning the 
state of the organization and the performance of the 
current Director General (DG), Dr. Jacques Diouf 
(Senegal), begins by comparing Diouf to his predecessor. 
Diouf was elected in 1993 after the 18-year, three-term 
tenure of Edward Saouma (Lebanon).  Diouf inherited an 
organization virtually devoid of modern features, such as 
computer systems.  The FAO's ability to attract first- 
rate professional staff was greatly diminished; payroll 
costs of a hugely bloated General Service Staff were 
high.  Under Saouma, Director General term limits had 
been abolished and FAO's Technical Cooperation Program 
(TCP) established -- considered cynically by some donors 
to be no more than a "slush fund" with which to run re- 
election campaigns.  Saouma had also presided over a 
bitter feud with World Food Program (WFP) Director James 
Ingram (Australia) over Ingram's (fully justified) 
efforts to gain more autonomy for WFP. 
 
10.  (SBU)  DG Diouf, by contrast, launched a reform 
program to slim down and re-focus FAO -- a restructuring 
that, according to some observers, was as sweeping as 
that undertaken by any major UN agency.  Diouf introduced 
modern computer systems, embarked on an ambitious 
decentralization program, and put in place good senior 
management.  He presided over 3 biennia of Zero Nominal 
Growth (ZNG) in which FAO staff (primarily General 
Service) shrank by close to a third.  Most FAO staff 
admit that ZNG has been, in fact, "healthy" for the 
organization.  Key FAO programs, to hear most people, 
haven't been seriously compromised by frozen budgets and 
dropping staff numbers-- but senior officials warn that 
continued erosion of the budget in real terms will start 
cutting into muscle, not fat. 
 
11.  (SBU)  With members' urging, a Strategic Framework 
was adopted in 1999, more transparent program and budget 
documents formulated, and a serious effort made to 
improve monitoring and evaluation and a move towards 
putting results-based budgeting into place.  Members have 
played an important role in pushing the reform process: 
US efforts to have FAO meet Helms-Biden benchmarks have 
resulted in improvements in the organization's internal 
 
oversight operations. 
 
12.  (SBU)  Under Diouf, US relations with the FAO, which 
had deteriorated significantly during the Saouma regime, 
improved, and the US regained the Deputy Director General 
position (lost to the UK during a particularly low period 
in U.S./Saouma relations).  We recently also regained one 
Assistant Director General position.  While we may have 
been disappointed in the failure of US candidates to get 
some top posts, we have been satisfied with the quality 
of the candidates ultimately chosen. 
 
13.  (SBU)  FAO personnel practices have been one of the 
last remnants of what the incoming Director of Human 
Resources called "the dark ages."  Partly at FODAG 
urging, the FAO finally starting advertising D-level 
(senior) positions in 2001.  (Formerly, the FAO would 
advise selected countries privately as to openings.) 
This "no-advertisement" policy still holds true, however, 
for FAO country and regional representatives.  US 
representation on the FAO international staff remains an 
area of concern.  The American citizen presence in 
professional positions continues to hover at 12-13%, 
below the 16-22% desirable range).  Between 2000 and 2002 
the number of Americans in senior (D-1 and above) 
positions increased from 19 to 23, but the percentage of 
Amcits out of the total senior staff is still too low. 
Although the low level of US representation may be due at 
least in part to a dearth of interested, qualified US 
candidates with the requisite language skills and 
attrition for economic and family reasons, the FAO has 
taken few proactive measures to rectify the problem of 
under-representation. 
 
------------------- 
When did it go sour? 
------------------- 
 
14.  (SBU)  The Diouf "honeymoon" was probably over by 
1999 when he orchestrated G-77 opposition to a US/UK 
effort to have term limits inscribed on the FAO Council 
Agenda.  A similar effort to have the World Food Summit: 
Five Years Later held at the Head of State level (over 
the objections of donor countries) reinforced the 
uneasiness of donors about Diouf's operating style.  The 
message on world hunger was important, and Diouf's 
tireless advocacy for the world's hungry was genuine and 
timely, but where was the substance?  At the same time as 
the Saouma-era TCP fund was increasing each year, Diouf 
inaugurated a new call on the Regular Assessed Budget: 
the Special Program for Food Security (SPFS).  Heralded 
as a groundbreaking step towards food security, SPFS 
projects are small-scale pilot projects.  An in-house 
evaluation in 2002 found design and monitoring problems 
with SPFS and noted that Phase II (sustainability) was a 
still a distant goal. 
 
15.  (SBU)  Diouf's actions -- or rather his inactions -- 
on agricultural biotechnology have also been a cause of 
concern to the U.S.  Notwithstanding FAO's positive, pro- 
science mission statement on biotech, Diouf has observed 
that member governments are divided on this issue and he 
appears to have decided that he must not take sides. This 
has resulted in a noticeable ambivalence in FAO's 
message.  That said, Diouf signed in August 2002 the 
joint WFP-WHO-FAI statement of official UN policy that 
biotech does not present a threat to human health.  FAO 
has talented and dedicated professionals working in this 
area who know the science, and are frustrated by the 
organization's political leeriness.  But there are also 
staff members who wholeheartedly endorse a strongly 
precautionary approach, such as that advocated by many 
European countries. 
 
16.  (SBU)  Diouf has been more responsive to USG 
 
concerns on other occasions, such as when he dispatched 
the ADG for Agriculture to the USDA/USAID conference on 
Science and Technology in Agriculture in June 2003, 
despite a direct scheduling conflict with the FAO Council 
meeting. 
 
17.  (SBU)  At bottom, however, the USG concern with 
Diouf's leadership is not about his stance on any 
specific issue, but his overall managerial style.  He is 
seen as an astute politician, but a poor manager.  There 
are complaints about his inability to prioritize and 
sharpen the organization's focus, though, in fairness, he 
faces a near-impossible task in trying the balance the 
conflicting aims of 185 member states. 
 
------------------------- 
How to Influence the FAO? 
------------------------- 
 
18.  (SBU)  FAO is a UN agency operating by consensus, 
where in principle all countries have an equal voice.  It 
can be frustrating to us that we do not always "get our 
way," but in reality the organization shows special 
deference to the views and concerns of the US and other 
large donors.  Nevertheless, we can do more to enhance 
our influence and realize our objectives.  Our concerns 
over the need for further improvements in efficiency and 
effectiveness are widely shared, at least among OECD 
members.  A number of key donors are already taking 
various approaches to effecting change: 
 
-- Think strategically:  The UK has taken this tack with 
fairly good success.  They have invested extrabudgetary 
resources to strengthen FAO systems and support reform 
initiatives, such as formulation of FAO's strategic 
framework.  No more a fan of the SPFS than any other 
major donor, they concluded early on that SPFS was here 
to stay, and spent money collaborating with FAO through 
money and staff aimed at improving the SPFS so that it 
supported the DFID (UK aid agency) philosophy on 
"livelihoods."  The UK "stealth" approach worked.  The 
last session of Committee on Agriculture endorsed a 
proposal for FAO to "integrate a rural livelihood 
approach into its existing programs, in particular the 
FAO's Special Program for Food Security (SPFS)." 
 
-- Pick your issue:  Australia has honed in relentlessly 
on increasing funding for the Interim Commission on 
Phytosanitary Measures (ICPM).  With one person in Rome 
working the multilateral food and agriculture portfolio 
who cheerfully ignores most other FAO activities, 
Australia has indefatigably and successfully worked this 
issue through the FAO policy-making bodies and the FAO 
Program Committee in conjunction with other like-minded 
countries. 
 
-- Pay FAO to do things your way and hope it rubs off: 
the Netherlands has adopted this softer approach.  Give 
the FAO a big check, tell them what you want it spent on 
-- in general -- and ask for accounting at the end of the 
year.  Knowing that Dutch funds are available for, say, 
projects supporting gender mainstreaming, FAO line 
officers will bring forward such projects.  At the end of 
the day, given the relatively large amount of funds 
involved, the "voluntary" projects of this nature can 
come to have formidable influence on the orientation of a 
division. 
 
-- Keep a lid on budget growth:  This probably best 
describes the U.S. approach to influencing the 
organization in recent years.  ZNG forces the 
organization to shrink -- and hopefully, in doing so, to 
prioritize.  However, ZNG for the coming biennium, 
without a mechanism for offsetting exchange rate losses, 
would have posed unacceptable costs on the FAO.DA BEHREND AND KOTOK 
STATE ALSO FOR E, EB, OES 
USAID FOR AA/EGAT SIMMONS, OFDA FOR MENGHETTI 
USDA/FAS FOR REICH, HUGHES AND CHAMBLISS 
PARIS FOR UNESCO 
NAIROBI FOR UNEP 
USUN FOR AMBASSADOR NEGROPONTE, LUTZ AND TAMLYN 
GENEVA FOR AMB 
 
According to FAO Budget Director, a pure ZNG budget -- 
one that does not take into account exchange rate losses 
-- would have forced the FAO to lay off 900 staff 
members.  Separation costs alone would cost $60 million. 
There is also a potential political cost to harping on a 
negatively perceived message of "do more with less," if 
that is not balanced by a clear, positive message on 
substance.  It is this clear and positive message that 
the US should articulate. 
 
----------- 
First Steps 
----------- 
 
19.  (SBU)   In order to achieve our objectives in FAO, 
we must first be clear as a government and as a nation 
about what it is that we want from the institution and 
what it can do for us.  Our current mantra -- ZNG, term 
limits, Amcit representation, support for standard 
setting and biotech -- is the starting point, but now may 
be the time to articulate a broader, forward-looking 
substantive agenda.  To that end, it may be useful to 
bring together stakeholders from government (at minimum 
USDA, State [IO, EB, OES], AID, Commerce/NOAA, EPA, and 
HHS), industry, land-grant universities, and the 
humanitarian/NGO community to develop an integrated 
vision of what we expect from FAO.  A discussion paper 
prepared by the National Academy of Sciences or other 
appropriate body might be a useful fresh look, 
unencumbered by the Saouma legacy and other historical 
baggage that may no longer be relevant today.  We need a 
focused set of thoughts and priorities if we want FAO to 
have its own focus and priorities.  For example, FAO 
could play a major role in mobilizing additional support 
and research for the Congo Basin Forest Partnership, a 
major USG priority involving FAO competencies. 
 
20.  (SBU)  An issue that must be decided soon is what 
position we will take on a possible third term for DG 
Diouf.  Although the current DG has yet to announce his 
intentions, there is a widespread belief that he will run 
again.  The USG must conduct a careful cost/benefit 
analysis of whether to support him or not.  We have made 
it clear -- without personalizing the issue -- that we 
believe that two terms are sufficient for the head of a 
UN agency.  Aside from the principle of a limited term, 
we must consider whether the organization can continue to 
function, reform and succeed under Diouf.  If we decide 
to oppose Diouf, we will need to ensure a graceful exit, 
to begin an immediate search for possible successors, and 
to identify a candidate who can garner G-77 support. 
If, on the other hand, it emerges that strong G-77 
support makes Diouf unstoppable, there may be a high cost 
to be out front trying to block his candidacy.  We at 
least would need a non-US champion and a strategy for 
achieving significant G-77 support for a change. 
 
----------------- 
Some Suggestions 
----------------- 
 
21.  (SBU)  In order to jumpstart internal discussions, 
this Mission proposes the following list of issues for 
priority attention: 
 
-- Reform of FAO personnel in the field.  For the FAO to 
be effective, FAO personnel in the field must be selected 
and evaluated on merit.  The effectiveness of field 
operations is the clearest measure of FAO success. 
 
-- Scrutiny of what is happening in the field with an eye 
toward improving FAO's performance.  Washington may 
consider tasking embassies/AID missions in selected 
countries to report on the strengths and weaknesses of 
FAO's presence in their host countries. 
 
-- An FAO stance on biotech that reflects the scientific 
consensus on benefits and risks, and the potential for 
new technologies to address food security issues in ways 
that protect the environment.  This connects well with 
USDA Secretary Veneman's agricultural S&T initiative. 
 
-- Continued action in addressing food-security needs in 
Iraq.  FAO needs to understand that success in Iraq 
requires sending its best and brightest.  FAO 
demonstrated results in Afghanistan, as a result of US 
carrots and sticks.  Second-best efforts are simply not 
enough. 
 
-- Increased staffing with Americans.  This will entail 
continued pressure on FAO's leadership from senior USG 
officials, but also intensified efforts to recruit 
suitable US candidates, including expanded support for 
Associate Professional Officer positions for talented 
young professionals.  Ambassador Hall is personally very 
involved in brokering an agreement between FAO and the 
Peace Corps to contribute to this objective.  A 
memorandum of understanding is nearing completion now. 
 
-- Encouragement of an independent outside evaluation of 
FAO (along the lines of the evaluations being performed 
at neighboring UN agencies IFAD and WFP. 
 
-- Potential synergies between FAO field activities and 
US bilateral and regional projects (AID, Peace Corps, 
Central African Regional Partnership for the Environment, 
Inter-American Institute for Cooperation on Agriculture). 
 
-- Closer dialogue between FODAG and OECD and G-77 
permanent representations in Rome on FAO issues. 
 
-- Stronger emphasis on the interconnections between 
FAO's work and that of WTO, UNDP, UNEP and the 
international financial institutions. 
 
-- Consideration of the impact of late payment of USG 
assessed contributions on US ability to influence FAO. 
 
Hall 
 
 
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 2003ROME04556 - Classification: UNCLASSIFIED