US embassy cable - 03ROME2589

UNCLAS  ROME 002589 
 
SIPDIS 
 
 
FROM FODAG 
 
STATE FOR IO/S LISA JACOBSON AND IO/EDA WINNICK AND KOTOK 
USDA/FAS FOR REICH AND HUGHES 
ATHENS FOR CLEVERLEY 
PARIS FOR UNESCO 
 
E.O. 12958:  N/A 
TAGS: AORC, KUNR, ABUD, FAO 
SUBJECT:  REPORT OF FAO PROGRAM COMMITTEE AND JOINT 
FINANCE AND PROGRAM COMMITTEE 
 
1.  Summary.  This cable reports on the outcomes of the 
Joint Session of the UN Food and Agriculture 
Organization's (FAO) Finance and Program Committees and 
the FAO Program Committee.  Important outcomes from the 
Program Committee include full support for the 
International Plant Protection Business Plan "under any 
funding scenario" and FAO Secretariat assurance that 
FAO's "Food Chain" activities for the next biennium were 
"not related" to the draft "Food Chain" strategy 
submitted to the last Committee on Agriculture.  The 
Program Committee will continue to discuss the question 
of priority setting -- in principle and practice -- at 
the next session in September.  The Joint Session also 
briefly discussed the recently released JIU Report on 
Administration and Management at the FAO. End Summary. 
 
"Aren't we doing everything we were asked to do?" 
--------------------------------------------- -- 
2.  The Joint Session of FAO's Program and Finance 
Committee met May 7, 2003.  FAO Director General (DG) 
Jacques Diouf opened the session with a plea for a real 
growth budget for the next biennium, arguing that member 
economies had grown, that member demands on the FAO had 
increased, but that FAO continued to be the "hardest hit" 
in the UN system by budget constraints.  DG Diouf noted, 
in fact that staffing reductions in the Finance Division 
had, in the view of the outgoing External Auditor, put 
the organization at risk in terms of internal financial 
management controls.  DG Diouf stated that members asked 
for more activities, but did not prioritize activities. 
He added that this was not the secretariat's job. 
 
3.  The DG ran through a list of FAO accomplishments, 
including FAO's food security strategies for various 
regions, FAO's statistics work, the 33 million "hits" a 
month received by FAO's web-site, FAO's role as a 
platform for international negotiations, its role in 
advocating rural development at the World Summit on 
Sustainable Development in 2002 and it's "pro-active role 
on GMO's."  Concerning GMO's, DG Diouf hastened to add 
that work was also being done on "precautionary measures" 
and "labeling."  Turning to FAO's Special Program for 
Food Security (SPFS), DG Diouf noted that the program -- 
launched at USD 35 million -- was now worth USD 500 
million and was a stellar example of south-south 
cooperation, and country ownership (in many SPFS 
projects, close to half of the costs are borne by the 
host government).  In closing, the DG asked, "What's 
missing?  Aren't we doing everything we were asked to do? 
Do you want to help the 800 million hungry?  Give them 
the tools to help themselves." 
 
Report of Program Committee -- some agreement on Standard 
Setting... 
--------------------------------------------- ----------- 
4.  The Chair of the Program Committee (Blair Hankey of 
Canada) ran through the Program Committee's (PC) 
discussion of the 2004-2005 Summary Program of Work and 
Budget.  He noted that the conclusions of the technical 
committees (e.g., the Committees on Agriculture, 
Forestry, Fishery and Commodity Problems) had not yet 
been reflected in the budget, but would be in the next 
version. 
 
-- On priority setting in general, PC members agreed that 
"methodological tools", such as application of criteria 
and weighting methods could be useful; nonetheless, they 
should not substitute for the "political process."  The 
PC will continue to discuss improving the priority 
setting process at its next session in September 2003. 
 
-- On the priorities for the SPWB for 2004-2005, G-77 
members felt that a real growth budget was the only way 
to meet all of the needs; OECD members of the Committee 
felt that areas of highest priority "should be adequately 
resourced, irrespective of budget levels." 
 
-- The PC agreed that the "scope and funding of some 
entities and PAIA's be adjusted in the full PWB, based on 
guidance received from the last Committee on Agriculture, 
including for work on Biotechnology, Biosecurity, Ethics, 
 
 
and Good Agricultural Practices."  In this regard, the PC 
also noted that the entity on the Food Chain in the SPWB 
was, according to the Secretariat, "not related to the 
draft strategy document on a food chain approach to food 
safety and quality discussed at COAG." 
 
-- While not identifying any activities to cut, the PC 
did agree that the International Plant Protection (IPPC) 
"Business Plan" should be funded under any budget 
scenario. 
 
-- The PC also reaffirmed that the FAO should provide its 
share of the additional resources required for the 
recommendations of the joint FAO/WHO Evaluation of Codex 
Alimentarius.  Furthermore, activities originally 
programmed under the "Food Chain" program entity for 2004- 
2005 (in the real growth scenario) could be cut and 
corresponding savings reallocated to Codex and Codex 
related work (Comment: This is a positive outcome, 
however, those "savings" will only accrue if the FAO 
Conference agrees to a real growth budget." End comment.) 
 
-- The PC stressed the "desirability" of providing 
increased resources for Fisheries and recommended that 
the budget for Forestry be "restored to at least the same 
level as in the current PWB 2002-2003. 
 
-- On FAO country representatives, the PC reiterated the 
importance of appointing qualified FAO representatives 
and of their performance appraisal. 
 
-- The PC requested that more information on FAO's 
Technical Cooperation Program (TCP) be provided in the 
SPWB.  Developing country members of the PC also argued 
that FAO's Technical Cooperation Program (TCP) needed 
more resources. 
 
-- The PC also agreed that there should be an HIV/AIDS 
Priority Area of Inter-Disciplinary Action (PAIA).  The 
Committee called for a review of the existing PAIA's at 
some time in the next biennium. 
 
-- Concerning SPFS, while noting that developing 
countries argued that the SPFS was "the most effective 
international program bringing practical assistance to 
farmers", the Chair noted that there were questions from 
other members as to whether the program targeted the 
poorest, and as to why there were no SPFS projects at 
Phase II (i.e. self-sustainable). 
 
...but not at the expense of technical cooperation 
programs 
--------------------------------------------- ----------- 
5.  Taking the floor in response to the PC Chair's 
presentation, PC member Malaysia agreed that developing 
countries also sought results based programming, that 
quality of programs was important, and that developing 
countries very much wanted standard setting and capacity 
building to implement those standard.  However, 
increasing food production and food security was "a 
priority" that came ahead of "food safety."  He stated 
unequivocally that standard setting activities, however, 
useful, must not be increased to the detriment of TCP or 
SPFS. 
 
Report of the Finance Committee: no agreement on Split 
Currency or Budget Level 
--------------------------------------------- ----------- 
6.  Finance Committee Chair Humberto Molina took the 
floor briefly to state that the Finance Committee (FC) 
had not come to any agreement on the budget level or on 
the proposal for a split currency assessment. 
 
Joint Session of Program and Finance Committees: Members 
present budget positions 
--------------------------------------------- -------- 
 
7. Members of the Finance Committees and Program 
Committees took the floor to present general budget 
positions.  The U.S., Japan and Australia supported zero 
nominal growth (ZNG). USDel noted that FAO was years 
 
 
behind in spending its current TCP allocation therefore 
increasing the TCP allocation did not make sense; 
furthermore, in an effort to assist in prioritizing, the 
U.S. was one of the few countries that had consistently 
suggested activities of low priority to be terminated. 
 
8.  Australia noted that the widely-supported activities 
of the Interim Commission on Phytosanitary Measures were 
not protected in the ZNG or Zero Real Growth (ZRG) 
scenarios.  From this he could only conclude: "either the 
Secretariat is unresponsive, or else members are being 
 
SIPDIS 
held to ransom by the Secretariat over the budget issue." 
 
9.  The Netherlands, Switzerland and the Latin American 
members of the Program Committee (Dominican Republic, 
Paraguay) supported Zero Real Growth (ZRG).  Pakistan 
stated (in response to the DG's presentation), "if the 
FAO is going to link world hunger to its budget, then the 
Program of Work and Budget should have those indicators." 
 
Independence and Location of the Evaluation Service 
--------------------------------------------- ------ 
 
10. PC and FC members discussed the report -- a follow-up 
to a recommendation of the External Auditor -- concerning 
independence and location of the FAO's Evaluation 
Service. Members generally did not support the suggestion 
to merge the audit and evaluation function.  Developed 
and developing countries did support, however, increasing 
the independence of the Evaluation Unit.  Some members 
recalled that at the International Fund for Agricultural 
Development (IFAD) a similar process had taken place just 
this year, and the Evaluation Unit now reported to the 
Executive Board rather than to the President.  The next 
Joint Session will discuss the proposal in further detail 
based on an options paper to be prepared by the FAO 
Secretariat. 
 
SIPDIS 
 
JIU Report on FAO Management and Administration 
--------------------------------------------- -- 
 
10.  Those members who spoke (U.S., Netherlands, 
Switzerland) called attention to the important 
recommendations of the JIU report and called for 
implementation and monitoring of follow-up.  It was 
agreed that certain items which came under the purview of 
the Finance and Program Committees would be divided up by 
those Committees for further consideration at the 
September session. Hall 
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	2003ROME02589 - Classification: UNCLASSIFIED