US embassy cable - 05ROME1742

UNCLAS  ROME 001742 
 
SIPDIS 
 
 
FROM THE U.S. MISSION TO THE UN AGENCIES IN ROME 
 
STATE FOR IO/EDA KOTOK AND BEHREND, NEA/ENA, OES/ENV 
USAID FOR DCHA, OFDA GOTTLIEB, MMARX 
USDA FOR FAS HUGHES AND REICH 
GENEVA FOR NKYLOH/USAID 
 
E.O. 12958:  N/A 
TAGS: AORC, EAID, EAGR, SENV, XI, XY, UN, FAO, IRAQI FREEDOM 
SUBJECT: FAO FINANCE COMMITTEE: FAO ACTIVITIES IN IRAQ 
 
 
1. Summary: At a May 11, 2005, FAO Finance Committee 
meeting of the UN Food and Agriculture Organization (FAO), 
Henri Carsalade, Assistant Director General for Technical 
Cooperation, provided an overview of current FAO 
activities in Iraq. US Deputy Permrep, coordinating with 
Kuwait as Near East Group chair, had requested the 
briefing after Iraqi Permrep requested our assistance in 
achieving more transparency in FAO's use of funds 
earmarked for Iraq.  FAO, Carsalade noted, is implementing 
six programs approved by the United Nations Development 
Group (UNDG) Iraq Trust Fund valued at $60 million to 
rehabilitate the irrigation sector, restore 
veterinary/livestock services and introduce small scale 
income-generating activities. Another $60 million tranche 
of projects is expected to be approved in September.  A 
detailed description of these projects follows. End 
Summary. 
 
2. Carsalade elaborated that in Iraq FAO is implementing 
six projects under the UN Strategy for Assistance to Iraq, 
coordinated by the United Nations Assistance Mission to 
Iraq (UNAMI), through the newly established UN "Clusters" 
framework that fosters a new way for UN agencies to 
collaborate together on joint programming to help Iraq. 
Project proposals and funding are approved by the Cluster 
and performance is judged as a whole. Out of the 11 
Clusters, FAO has been designated as the lead UN agency 
for Cluster 5--Agriculture, Water Resources and 
Environment--in partnership with UNESCO, UNIDO, UNDP, WFP, 
UNEP, UNICEF and ILO.  FAO provides the Cluster Manager, 
who oversees all operations carried out by Cluster 
members. Due to the security situation in Iraq, the 
Cluster Manager and his five international staff are based 
in Amman, Jordan, where program operations are managed 
with rotations by FAO staff from Rome.  (The FAO Technical 
Cooperation Program's Special Emergency Programmes 
Division remotely manages projects in countries such as 
Iraq, North Korea, Palestine, and Somalia where FAO has no 
representation.  Generally, these projects deal with the 
transition from an emergency situation phase to long-term 
rehabilitation.) 
 
3. FAO is implementing six projects approved by the United 
Nations Development Group (UNDG) Iraq Trust Fund valued at 
$60 million. To date, FAO has received $36.3 million of the 
resources allocated for these projects. As of May 11, 
approximately $23 million has been spent and committed, 
with another $11 million of new tenders under preparation 
and $2.2 million worth of training under implementation. 
The projects and their respective costs are listed below: 
 
A) Improvement of Drainage Conditions in Major Agricultural 
Areas ($5.4 million); 
B) Improvement of Water Supply and Drainage Provision 
through the Rehabilitation of Pumping Stations ($13.4 
million); 
C) Assessment, Emergency Maintenance and Rehabilitation of 
Community Irrigation Schemes and Restoration of Water 
Supply in Rural Areas ($16.9 million); 
D) Restoration of Veterinary Services ($l0.5 million); 
E) Restoration and Development of Essential Livestock 
Services ($8.5 million); and 
F) Promotion of Cottage Industry in Rural and Urban Areas 
($5.0 million jointly implemented by FAO and UNIDO). 
 
Of the $60 million, Projects A-E ($55 million) are funded 
directly via FAO, while project F is funded via UNIDO. 
 
-------------------- 
A) Improvement of Drainage Conditions in Major Agricultural 
Areas 
-------------------- 
 
4. This project aims to widen and deepen drainage canals in 
order to improve agricultural production around the 
Euphrates watershed. It was originally set to begin in 
August 2004 in Fallujah, but the failure of Iraqi 
authorities to provide the technical dossier for the 
contract forced a relocation of the project to Hillah. 
Despite the delay, a feasibility study currently underway 
will be completed on June 25, with tenders to be issued to 
the Iraqi contractor on July 20. The project will be 
completed by its original end date in June 2006. 
 
-------------------- 
 
B) Rehabilitation of Water Pumping Stations 
-------------------- 
 
5. Approximately 175 antiquated (> 30 years old) water 
pumping stations across the country are slated for 
rehabilitation. FAO originally targeted to rehabilitate 12 
stations, but, due to the high cost of repairing such 
outdated pumps, it will only be able to repair six.  The 
first to be rehabilitated is in Kirkuk, with the contract 
to be issued on May 20. However, FAO reports the supplier 
may delay services due to the current security situation. 
The project completion date is set for July 2006. 
 
-------------------- 
C) Rehabilitation of Community Irrigation Schemes 
-------------------- 
 
6. This project to assist farmers with rehabilitating or 
replacing water systems and provide complementary 
agricultural inputs began with feasibility studies in 
January 2005. Nearly $300,000 has been spent on surveying 
equipment to allow for better feasibility studies on 
irrigation schemes covering areas from 300-400 hectares to 
over 50,000 hectares. Contracts will be issued in summer 
2005. 
 
7. Approximately $1 million has been dedicated for training 
local staff to manage the three aforementioned 
rehabilitation projects.  USAID, Japan International 
Cooperation Agency (JICA) and UNESCO are conducting similar 
training in water resources management, and FAO has agreed 
to take the lead on coordinating training to avoid a 
duplication of efforts and focus on filling in gaps. 
 
-------------------- 
D) Rehabilitation of Veterinary Services 
-------------------- 
 
8. With the aim of rebuilding capacity to combat and 
control animal diseases, according to FAO, this has been 
the most successful project to date. It has fostered 
cooperation among several regional donors, including 
Kuwait.  These donors consider rehabilitating veterinary 
services a priority due to the north-south migratory 
patterns of livestock and the risks posed to spreading 
disease at trading posts, affecting not only Iraq but the 
rest of the Arabian Peninsula. Veterinary equipment has 
been procured and training workshops have begun. Of the 
$8.5 million allocated, $5 million has been received. 
 
-------------------- 
E) Rehabilitation of Livestock Services 
-------------------- 
 
9. This project aims to rehabilitate Iraq's national 
breeding capacity through the procurement of equipment and 
training for artificial insemination of cattle.  On May 17, 
FAO will begin its first artificial insemination training 
seminar for Iraqi nationals. Of the $10.5 allocated, $3 
million has been received. 
 
-------------------- 
F) Promotion of Cottage Industry 
-------------------- 
 
10. Funded mainly by the Italian Government, FAO and the 
United Nations Industrial Development Organization (UNIDO) 
are jointly implementing this project to support the 
cottage industry in Nassiriyah. FAO is concentrating on 
developing small-scale income-generation activities 
relating to food (dairy and fresh fish, for example), while 
UNIDO is concentrating on non-food activities. On May 14, 
FAO began hosting a three-week "Train-the-Trainer" course 
in Morocco for 23 Iraqi nationals who will return to 
Nassiriyah to act as focal points. FAO plans to provide the 
beneficiaries with equipment to jumpstart the industries, 
and is currently in discussions with authorities on the 
roll out plan. 
 
------------------- 
Other Projects in the Pipeline 
-------------------- 
 
11. In support of Iraq's own National Development Strategy, 
FAO is collaborating on developing a series of new 
 
projects: 
--Rehabilitation and Development of the National Seed 
Industry ($5.1 million), which is highest on the Iraqi 
Ministry of Agriculture's list of priorities; 
--Restoration and Modernization of Fish Production ($6.5 
million); and 
--National Water Resources Master Plan ($6 million) 
 
12. In addition, two employment generation projects are 
being formulated: 
--Creation of Date Palm Nurseries; and 
--Local Cleaning and Repair of Irrigation Canals. Over 
1,000 kilometers worth of canals need to be cleaned by 
hand; project costs could skyrocket to $20 million due to 
the vast area to be covered; thus, FAO is determining how 
to limit the proposal. 
 
-------------------- 
Implementation of Projects and Associated Issues 
-------------------- 
 
13. FAO has a presence of six staff, the Cluster Manager 
and five international staff, based in Amman, Jordan (ref. 
Para 2), where it remotely manages all its projects in 
Iraq. The UN has set a cap of 250 UN personnel in Amman. 
FAO believes its six personnel are not sufficient to deal 
with the magnitude of agricultural and water projects, and 
shifts staff from Rome to Amman so as not to go above the 
allotted six.  FAO staff report there is momentum in the UN 
to reduce the number of Clusters and redistribute their 
respective number of personnel. 
 
14. To minimize procurement costs, procurement services are 
conducted by FAO in Rome. To minimize other project cost 
risks, FAO uses a consulting firm based in Amman to verify 
proposals and analyses conducted by suppliers who are 
bidding to render services.  Additional problems affecting 
implementation include security-related delays or 
inabilities to conduct site visits (ref. Para 5); frequent 
revisions by Iraqi authorities on the technical 
requirements; and difficulty in recruiting local staff of 
an acceptable professional level. 
 
15. Lastly, a specific implementation problem relates to 
the non-release by the UNDG Iraq Trust Fund of resources 
required for implementing approved veterinary and livestock 
projects. On May 17, FAO Special Emergency Programmes staff 
wrote to the UNDG Iraq Trust Fund to release these funds, 
otherwise there is a risk of a pipeline break in services. 
 
-------------------- 
Future Funding 
-------------------- 
 
16. Additional funding for rural development is expected to 
be available from the European Community. A significant 
replenishment of the UNDG Iraq Trust Fund - Carsalade 
estimated another $60 million -- is also expected following 
the next donor meeting in July or September 2005. In the 
interim, FAO is seeking support from other donors for 
projects already formulated. 
 
17. Baghdad on minimize considered. 
 
HALL 
 
 
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 2005ROME01742 - Classification: UNCLASSIFIED