US embassy cable - 03ROME2620

UNCLAS  ROME 002620 
 
SIPDIS 
 
 
AIDAC 
 
FROM U.S. MISSION IN ROME 
STATE FOR AS/PRM, PRM/P, EUR/WE, EUR/NE AND IO/EDA 
USAID FOR A/AID, AA/DCHA, AA/AFR, DCHA/FFP LANDIS, PPC/DP, 
PPC/DC 
USDA/FAS FOR CHAMBLISS/TILSWORTH/GAINOR 
GENEVA FOR RMA AND NKYLOH/USAID 
BRUSSELS FOR PLERNER 
USUN FOR MLUTZ 
NSC FOR JDWORKEN 
OMB FOR TSTOLL 
 
E.O.  12958:  N/A 
TAGS: EAID, EAGR, AORC, PREF, KUNR, WFP, UN 
SUBJECT:  ANNUAL SESSION OF THE WORLD FOOD PROGRAM EXECUTIVE 
BOARD, ROME, MAY 28-30, 2003 
 
REF: (A) 02 Rome 05308, (B) 02 Rome 05226, (C) Rome 02269 
 
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SUMMARY 
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1. The WFP Board annual session took place against the 
backdrop of an unprecedented level of emergency needs 
(particularly in Africa where 38-40 million people face 
starvation). The modalities of WFP assistance to Iraq, which 
will represent one-third of WFP's worldwide efforts in 2003, 
was widely discussed. The Board considered a policy paper 
further outlining WFP policy on donations of foods derived 
from biotechnology. Considerable attention was devoted to 
reviewing the interim WFP Financial Results for 2002, 
information and analysis relative to cash and investment 
management issues and information on projects closed to 
date, with explanation of the process followed in the 
disposition of closed project balances. 
 
2. Overall, WFP's needs are projected to increase from 3.7 
million tons delivered in 2002 to 7.7 million metric ton 
requirements estimated for 2003. 2003 is proving to be a 
daunting year with WFP already extended to the maximum, and 
with "worst case" scenarios currently unfolding in both the 
Horn and parts of West Africa. End summary. 
 
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Annual Report of the Executive Director 
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3. In 2002, WFP food assistance reached 72 million of the 
world's poorest by effectively delivering 3.7 million metric 
tons of food aid to 82 countries. Donors contributed USD 1.8 
billion through WFP in 2002, with the United States topping 
the list at USD 930 million (51.4 percent). Of the USD 1.8 
billion, USD 1.36 billion constituted cash (75 percent) and 
USD 448.5 million was contributed in-kind (25 percent). The 
value of in-kind contributions exceeding USD 10 million were 
as follows: U.S., USD 356.4 million; European Commission, 
USD 19.5 million; Australia, USD 17.1 million; Kenya, USD 
12.1 million; and the Republic of Korea, USD 10.7 million. 
Six key donors, namely the United Kingdom, Japan, Germany, 
The Netherlands, Denmark and Sweden (whose donations 
collectively amounted to USD 381.6 million) contributed only 
cash to WFP. Norway announced its intention to shift its 
donations (presently 14 percent in-kind to WFP) exclusively 
to cash by 2007. 
 
4. In his remarks to the Executive Board, WFP Executive 
Director Jim Morris discussed Iraq, Ethiopia, southern 
Africa, Afghanistan, West Bank/Gaza, private sector 
initiatives, financial management, and the appointment of 
two new Assistant Executive Directors - in addition 
to Policy and Operations - deputy slots have been created 
for Fundraising and Administration. 
 
5. Morris noted that as the result of Iraq, WFP foresaw a 
2003 programming level of around USD 5 billion. He ran a 
brief film clip from ABC News about the immediate and 
worsening crisis in Ethiopia and Eritrea and called upon 
donors to do more and promptly fulfill their pledges. 
Regarding southern Africa, Morris estimated that the serious 
food crisis there will end by next year but the impact of 
HIV/AIDS will leave the region vulnerable.  In Afghanistan 
and West Bank/Gaza, access, not resources, is the major 
problem for WFP.  With a heavy sigh, Morris described access 
issues in West Bank/Gaza as "very challenging" in WFP's 
effort to feed 570,000 Palestinians.  Morris summarized 
 
 
private sector initiatives over the last year, including a 
collaborative volunteer and fundraising campaign with the 
Dutch shipping and transportation company TPG which will net 
WFP around USD 5 million for its school feeding activities, 
as well as advertisement campaigns with Toyota and Benneton. 
Note:  Benneton's "Food for Life" publicity donation is 
valued at USD 15 million. End note.  Regarding financial 
management, Morris implicitly acknowledged that more needs 
to be done to speed up WFP's disbursements and said he hoped 
to have better news on progress in this area by the October 
Board meeting. 
 
6. USDEL's Lauren Landis recognized the extraordinary 
efforts of WFP during this past year in responding to the 
southern Africa drought emergency which threatened the lives 
of 14.4 million in Lesotho, Malawi, Mozambique, Swaziland, 
Zambia and Zimbabwe. In particular, USDEL singled out WFP's 
extensive linkages with both international and local non- 
governmental organizations (NGOs). She emphasized our 
serious concern with the overall food insecurity situation 
in sub-Saharan Africa, with some 38-40 million Africans in 
2003 living with the threat of starvation and another 156 
million who suffer quietly this year from chronic hunger. 
She noted that the Evian (France) G8 Summit presented a 
unique opportunity to cement a broader political commitment 
on the issue of African hunger. Finally, she commented that 
the 2002 "U.S. Farm Bill" authorized the new "George 
McGovern-Robert Dole international food for education and 
child nutrition program" for the next seven years and 
favorably noted that the Canadian International Development 
Agency (CIDA) had also decided to provide Canadian dollars 
75 million (over a period of three years (2003-2005)) to 
support WFP school feeding efforts in five African 
countries. 
--------------------------------------------- -------------- 
WFP Policy on Donations of Foods derived from Biotechnology 
revisited 
--------------------------------------------- -------------- 
 
7. The Board discussed a paper that further outlined WFP 
policy on donations of foods derived from biotechnology. 
(This policy was initially discussed at the October 2002 
Board session - refs A and B.)  The Director-Generals of the 
World Trade Organization (WTO), Food and Agricultural 
organization (FAO), and World Health Organization (WHO) - 
were independently consulted on this paper and expressed no 
objection to it. Note: treatment of WHO's position is 
further discussed ref C. End note.  This paper reaffirmed 
that WFP essentially acts as a broker in food aid shipments, 
with the policies of the governments involved prevailing. In 
order to function, WFP must operate on the assumption that 
governments exercise due diligence in setting national 
regulations with regard to exports and imports of food. 
 
8. Despite considerable "posturing" from several European 
donors, the Board was generally satisfied that WFP's job was 
to "provide food and not food policy" to needy people. 
 
--------------------------------------------- - 
Ambassador Hall's intervention on Biotech food 
--------------------------------------------- - 
 
9. Ambassador Hall highlighted the following for the WFP 
Executive Board: 
 
-The U.S. position on foods derived from biotechnology is 
clear. People around the world have been eating biotech food 
for years. Biotech foods help nourish the world's hungry 
population, offers tremendous opportunities for better 
health and nutrition and protects the environment by 
reducing soil erosion and pesticide use. This position is 
fully endorsed by the recently issued joint biotech report 
from the national science academies of the United Kingdom, 
the United States, Brazil, China, India, and Mexico; 
 
-All of the food donated by the United States has passed our 
rigorous food safety and environmental impact testing, and, 
in fact, is eaten daily -- and has been for years -- by 
millions of Americans; 
 
-Our common goal should be to work closely with all food- 
insecure countries to better understand the facts and 
science of biotech foods so that misunderstandings and 
misperceptions do not lead to delays and blockages which 
endanger the lives of millions of people; 
 
-On the Cartagena Protocol, USDEL agreed fully with WFP's 
statement that World Food Program "does not have the legal 
mandate to impose unilaterally any of the Protocol's 
provisions upon transactions involving other parties." 
 
10. In conclusion, Ambassador Hall quoted former President 
and Nobel Laureate Jimmy Carter: "if imports like these 
biotechnology crops are regulated unnecessarily, the real 
losers will be the developing nations. Their countries could 
suffer for years to come. It is crucial to reject the 
propaganda of extremist groups before it is too late." 
 
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WFP Financial Issues 
-------------------- 
 
11. WFP reviewed its present financial management practices 
(finding them cumbersome) and recommended that individual 
contributions be controlled at the project level rather than 
the individual cost component level to permit increased 
flexibility of resource use under existing policies. 
Enhancing the number of emerging donors through twinning was 
mentioned, as was tapping private sector resources using as 
a framework the "Guidelines on Cooperation between the 
United Nations and the Business Community" launched by the 
UN Secretary-General in 1999. Given accelerating emergency 
needs, revisions to the Immediate Response Account and the 
General Fund were touched on - with concrete proposals to be 
presented to the October 2003 Board. Finally, a strategy for 
regularizing Host Government Cash Contributions (GCCC) was 
propounded. 
 
12. The Board viewed the Financial Policy review and the 
Comprehensive Financial report as works in progress and 
supported the incorporation of future reviews of these 
policies in WFP's strategic and management planning 
processes (which are slated for presentation at the October 
2003 Board). 
 
13. USDEL commented that the Secretariat's recommendation 
that individual contributions be controlled at the project 
level rather than the individual cost component level, 
needed to be taken up on a case-by-case basis with 
individual donors. U.S. law governing food aid donations is 
quite precise on what budget items funds can be spent. USDEL 
suggested that there needs to be more aggressive monitoring 
of budgets at all levels within WFP and that Headquarters 
should institutionalize monthly budget reviews of land-side 
 
 
transport, shipping and handling (LTSH), direct support 
costs (DSC) and other direct operational costs (ODOC) 
requirements and actual expenditure for each country office. 
Further, USDEL looked forward to the further elaboration of 
WFP's strategies on twinning and "retooling" (modernization) 
of its cash advance facilities, such as the Immediate 
Response Account (IRA) and the Operational Reserve. The 
formidable challenge remains whether and where additional 
funds can be found to meet the needs of sharply rising 
humanitarian aid requirements. Finally, on the issue of Host 
Government Cash Contributions (GCCC), USDEL noted that WFP 
management has seriously neglected this vital source of 
program funding, where developing countries need to pay 
their "fair share" of program support. 
 
14. On the vital issue of sizable cash balances, USDEL 
pointed to a comment by the UN's Advisory Committee on 
Administrative and Budgetary Questions (ACABQ) (February 
2002), which underlined that, to the extent that WFP carries 
out its mandate efficiently, there should be no accumulation 
of sizable cash balances. USDEL further commented that WFP 
management had assured us that these balances were not in 
fact U.S. donations, so that USDEL was making its 
intervention on behalf of all WFP's cash donors. 
 
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Other issues 
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15. The Board approved the WFP office of evaluation work 
plan for 2003-2004 and took note of an information paper on 
Results-Based Management. Note: Michael Usnick (Amcit) has 
been put in charge of the Result-Based Management portfolio. 
End note. 
 
16. WFP presented its strategy paper on "Food Aid and 
Livelihoods in Emergencies."  The proposed strategy notes 
that while saving lives is WFP's first priority in an 
emergency, it must also focus on how to accommodate 
livelihoods into its emergency operations (EMOPs), mitigate 
disruption to the local economy, and strengthen partnerships 
with FAO, UNHCR, UNICEF, other international organizations 
(IOs), and non-governmental organizations (NGOs).  Donor 
remarks were largely positive, calling upon WFP to 
coordinate more effectively with its partners and host 
governments, building local capacity, and cautioning from 
the USG reference "targeting" efforts. 
 
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Comment 
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17. Through May 2003 contributions to WFP total USD 1.4 
billion, compared with USD 631 million at this time last 
year. Canada's stepped up contributions this year -already 
USD 65 million - have reversed a half-dozen years of 
declining support. The Russian Federation announced a first 
time ever cotribution of USD 11 million (in cash) - USD 10 
mllion for DPR Korea and USD one million for Angola.While 
the Iraq and Afghanistan food assistance oerations for the 
present appear under control, the situation in the Horn 
(Ethiopia and Eritrea) remains exceedingly worrisome. All in 
all, needs have reached unprecedented levels (from 3.7 
million tons delivered in 2002 to 7.7 million metric ton 
requirements estimated for 2003). A number of European 
donors question how WFP will be able to cope with huge 
volume increases, while at the same time remaining focused 
on executing programs aimed at lessening the recurrence of 
such crises in the future. 2003 is proving to be a daunting 
 
 
year with WFP already extended to the maximum, especially 
with "worst case" scenarios currently unfolding in both the 
Horn and parts of West Africa. Hall 
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	2003ROME02620 - Classification: UNCLASSIFIED