This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 ROME 003249 
 
SIPDIS 
 
 
STATE FOR IO/EDA WINNICK AND KOTOK 
USAID FOR CUMMINGS 
USDA/FAS FOR REICH AND HUGHES 
PARIS FOR OECD 
 
FROM FODAG 
 
    E.O. 12958:  N/A 
TAGS: AORC EAID EAGR FAO
SUBJECT:  FAO DEVELOPMENT ACTIVITIES: ACCOUNTING FOR THE 
DECLINE 
 
¶1.  SUMMARY:  VOLUNTARY FUNDING FOR THE UN FOOD AND 
AGRICULTURE ORGANIZATION'S (FAO) DEVELOPMENT ACTIVITIES 
HAS DECLINED SIGNIFICANTLY OVER THE LAST DECADE DUE TO A 
SHARP DROP IN UN DEVELOPMENT PROGRAM (UNDP) FUNDING BUT 
ALSO DUE TO WHAT FAO OFFICIALS THEMSELVES ACKNOWLEDGE WAS 
FAO'S POOR PERFORMANCE.  FAO'S ASSESSED REGULAR PROGRAM 
BUDGET MUST INCREASINGLY COVER THE LOSSES ATTRIBUTED TO 
DECLINING SUPPORT COST INCOME.  FAO ASPIRES TO REVERSE 
THE TREND AND MOVE BEYOND EXECUTING SECTORAL PROJECTS TO 
PROVIDING "UPSTREAM" POLICY ADVICE TO DEVELOPING 
COUNTRIES.  GIVEN THE DISPERSAL OF FAO'S MODEST 
DEVELOPMENT FUNDING OVER MANY FAO MEMBER COUNTRIES AND IN 
MANY SMALL PROJECTS -- AND GIVEN THE KNOWN WEAKNESSES OF 
FAO'S COUNTRY OFFICES -- IT IS HARD TO ENVISAGE FAO 
BECOMING AN EFFECTIVE POLICY PLAYER WITHOUT A RADICAL 
REORIENTATION.  THE ISSUE IS AN IMPORTANT ONE AS IT GOES 
TO THE HEART OF THE DEBATE IN FAO'S POLICY MAKING BODIES 
ON THE DESIRED RELATIONSHIP BETWEEN FAO'S NORMATIVE AND 
OPERATIONAL ACTIVITIES AND THE URGENT NEED TO IMPROVE THE 
QUALITY OF FAO'S FIELD PRESENCE.  END SUMMARY. 
 
¶2.  FAO ASSISTANT DIRECTOR GENERAL (ADG) FOR TECHNICAL 
COOPERATION, HENRI CARSALADE, AND OTHER FAO OFFICIALS 
GAVE DONORS AN OVERVIEW OF FAO'S DEVELOPMENT ACTIVITIES 
ON JUNE 5, 2003.  THE PRESENTATION COVERED TRENDS AND 
PROSPECTS AND EXPLAINED HOW FAO SOUGHT TO REVERSE THE 
    DECLINE IN VOLUNTARY CONTRIBUTIONS. 
 
BACKGROUND - EMERGENCIES UP, DEVELOPMENT DOWN 
--------------------------------------------- 
 
¶3. THE MOST RECENT FAO PROGRAM IMPLEMENTATION REPORT 
SHOWS THAT VOLUNTARY CONTRIBUTIONS FOR DEVELOPMENT 
ACTIVITIES (FROM BILATERAL DONORS AND UNDP) IN 2000-2001 
TOTALED USD 308 MILLION.  THAT AMOUNT IS EXPECTED TO 
DECLINE TO USD 280 MILLION IN 2002-2003.  VOLUNTARY 
FUNDING FOR NON-EMERGENCIES HAS, IN FACT, DROPPED 50 
PERCENT IN THE LAST DECADE.  EIGHTY PERCENT OF THAT DROP 
CAN BE ATTRIBUTED TO SHARP REDUCTIONS IN UNDP FUNDING: IN 
1992 FAO EXECUTED USD 150 MILLION IN UNDP PROJECTS; IN 
2003 THE FAO WILL EXECUTE ONLY USD 14 MILLION. 
 
¶4.  FAO'S REGULAR PROGRAM BUDGET, FUNDED FROM ASSESSED 
CONTRIBUTIONS, IS PRIMARILY FOR NORMATIVE AND STANDARD 
SETTING ACTIVITIES, ALTHOUGH ABOUT 14 PERCENT (USD 95 
MILLION OVER THE BIENNIUM 2002-2003) IS EARMARKED FOR THE 
TECHNICAL COOPERATION PROGRAM (TCP).  TCP PROJECTS ARE 
SMALL, AD HOC PROJECT AVAILABLE TO ALL DEVELOPING 
COUNTRIES (AND COUNTRIES WITH ECONOMIES IN TRANSITION) ON 
A FIRST COME, FIRST SERVED BASIS WITHOUT ANY NEEDS-BASED 
OR PERFORMANCE-BASED CRITERIA.  FAO ALSO ALLOCATES ABOUT 
USD 10 MILLION ANNUALLY FOR PILOT FOOD SECURITY PROJECTS 
UNDER ITS SPECIAL PROGRAM FOR FOOD SECURITY (SPFS).  THE 
REGULAR BUDGET ALSO SUPPORTS FAO'S FIELD PRESENCE AND 
ABSORBS INDIRECT PROJECT SUPPORT COST CHARGES NOT COVERED 
DIRECTLY BY CONTRIBUTIONS.  IN CONTRAST TO THE DECLINING 
TREND IN VOLUNTARY CONTRIBUTIONS, FAO'S REGULAR PROGRAM 
    BUDGET HAS INCLUDED INCREASES FOR TCP, SPFS AND FOR 
COUNTRY OFFICES WITH EACH BIENNIUM (PRIMARILY AT THE 
INSISTENCE OF THE G-77). 
 
¶5.  INCLUDING SPFS, FAO SPENDS ABOUT USD 200 MILLION 
ANNUALLY FOR OPERATIONAL ACTIVITIES FROM VOLUNTARY AND 
ASSESSED CONTRIBUTIONS. 
 
WHAT HAPPENED TO UNDP FUNDING 
---------------------------- 
 
¶6.  ACCORDING TO FAO, REDUCED UNDP FUNDING IS A RESULT OF 
THE SHIFT FROM PROJECT TO PROGRAM FUNDING AND A 
SIGNIFICANT INCREASE IN NATIONAL EXECUTION. (FAO ALSO 
STATED THAT DONOR RESOURCES FOR UNDP DECLINED OVERALL "AS 
A RESULT OF QUALITY OF ASSISTANCE.")  ACCORDING TO FAO 
OFFICIALS, "UNDP SUCCESSOR ARRANGEMENTS" WERE INTENDED TO 
INCLUDE THE SPECIALIZED AGENCIES AS PROVIDERS OF 
"UPSTREAM POLICY ADVICE AND ASSISTANCE." THIS DID NOT 
HAPPEN WITH FAO BECAUSE: 
 
-- FAO DID NOT HAVE EFFECTIVE AND COLLABORATIVE TIES AT 
 
ROME 00003249  001.2 OF 003 
 
PMENT ACTIVITIES 
HAS DECLINED SIGNIFICANTLY OVER THE LAST DECADE DUE TO A 
SHARP DROP IN UN DEVELOPMENT PROGRAM (UNDP) FUNDING BUT 
ALSO DUE TO WHAT FAO OFFICIALS THEMSELVES ACKNOWLEDGE WAS 
FAO'S POOR PERFORMANCE.  FAO'S ASSESSED REGULAR PROGRAM 
BUDGET MUST INCREASINGLY COVER THE LOSSES ATTRIBUTED TO 
DECLINING SUPPORT COST INCOME.  FAO ASPIRES TO REVERSE 
THE TREND AND MOVE BEYOND EXECUTING SECTORAL PROJECTS TO 
PROVIDING "UPSTREAM" POLICY ADVICE TO DEVELOPING 
COUNTRIES.  GIVEN THE DISPERSAL OF FAO'S MODEST 
DEVELOPMENT FUNDING OVER MANY FAO MEMBER COUNTRIES AND IN 
MANY SMALL PROJECTS -- AND GIVEN THE KNOWN WEAKNESSES OF 
FAO'S COUNTRY OFFICES -- IT IS HARD TO ENVISAGE FAO 
BECOMING AN EFFECTIVE POLICY PLAYER WITHOUT A RADICAL 
REORIENTATION.  THE ISSUE IS AN IMPORTANT ONE AS IT GOES 
TO THE HEART OF THE DEBATE IN FAO'S POLICY MAKING BODIES 
ON THE DESIRED RELATIONSHIP BETWEEN FAO'S NORMATIVE AND 
OPERATIONAL ACTIVITIES AND THE URGENT NEED TO IMPROVE THE 
QUALITY OF FAO'S FIELD PRESENCE.  END SUMMARY. 
 
¶2.  FAO ASSISTANT DIRECTOR GENERAL (ADG) FOR TECHNICAL 
COOPERATION, HENRI CARSALADE, AND OTHER FAO OFFICIALS 
GAVE DONORS AN OVERVIEW OF FAO'S DEVELOPMENT ACTIVITIES 
ON JUNE 5, 2003.  THE PRESENTATION COVERED TRENDS AND 
PROSPECTS AND EXPLAINED HOW FAO SOUGHT TO REVERSE THE 
    DECLINE IN VOLUNTARY CONTRIBUTIONS. 
 
BACKGROUND - EMERGENCIES UP, DEVELOPMENT DOWN 
--------------------------------------------- 
 
¶3. THE MOST RECENT FAO PROGRAM IMPLEMENTATION REPORT 
SHOWS THAT VOLUNTARY CONTRIBUTIONS FOR DEVELOPMENT 
ACTIVITIES (FROM BILATERAL DONORS AND UNDP) IN 2000-2001 
TOTALED USD 308 MILLION.  THAT AMOUNT IS EXPECTED TO 
DECLINE TO USD 280 MILLION IN 2002-2003.  VOLUNTARY 
FUNDING FOR NON-EMERGENCIES HAS, IN FACT, DROPPED 50 
PERCENT IN THE LAST DECADE.  EIGHTY PERCENT OF THAT DROP 
CAN BE ATTRIBUTED TO SHARP REDUCTIONS IN UNDP FUNDING: IN 
1992 FAO EXECUTED USD 150 MILLION IN UNDP PROJECTS; IN 
2003 THE FAO WILL EXECUTE ONLY USD 14 MILLION. 
 
¶4.  FAO'S REGULAR PROGRAM BUDGET, FUNDED FROM ASSESSED 
CONTRIBUTIONS, IS PRIMARILY FOR NORMATIVE AND STANDARD 
SETTING ACTIVITIES, ALTHOUGH ABOUT 14 PERCENT (USD 95 
MILLION OVER THE BIENNIUM 2002-2003) IS EARMARKED FOR THE 
TECHNICAL COOPERATION PROGRAM (TCP).  TCP PROJECTS ARE 
SMALL, AD HOC PROJECT AVAILABLE TO ALL DEVELOPING 
COUNTRIES (AND COUNTRIES WITH ECONOMIES IN TRANSITION) ON 
A FIRST COME, FIRST SERVED BASIS WITHOUT ANY NEEDS-BASED 
OR PERFORMANCE-BASED CRITERIA.  FAO ALSO ALLOCATES ABOUT 
USD 10 MILLION ANNUALLY FOR PILOT FOOD SECURITY PROJECTS 
UNDER ITS SPECIAL PROGRAM FOR FOOD SECURITY (SPFS).  THE 
REGULAR BUDGET ALSO SUPPORTS FAO'S FIELD PRESENCE AND 
ABSORBS INDIRECT PROJECT SUPPORT COST CHARGES NOT COVERED 
DIRECTLY BY CONTRIBUTIONS.  IN CONTRAST TO THE DECLINING 
TREND IN VOLUNTARY CONTRIBUTIONS, FAO'S REGULAR PROGRAM 
    BUDGET HAS INCLUDED INCREASES FOR TCP, SPFS AND FOR 
COUNTRY OFFICES WITH EACH BIENNIUM (PRIMARILY AT THE 
INSISTENCE OF THE G-77). 
 
¶5.  INCLUDING SPFS, FAO SPENDS ABOUT USD 200 MILLION 
ANNUALLY FOR OPERATIONAL ACTIVITIES FROM VOLUNTARY AND 
ASSESSED CONTRIBUTIONS. 
 
WHAT HAPPENED TO UNDP FUNDING 
---------------------------- 
 
¶6.  ACCORDING TO FAO, REDUCED UNDP FUNDING IS A RESULT OF 
THE SHIFT FROM PROJECT TO PROGRAM FUNDING AND A 
SIGNIFICANT INCREASE IN NATIONAL EXECUTION. (FAO ALSO 
STATED THAT DONOR RESOURCES FOR UNDP DECLINED OVERALL "AS 
A RESULT OF QUALITY OF ASSISTANCE.")  ACCORDING TO FAO 
OFFICIALS, "UNDP SUCCESSOR ARRANGEMENTS" WERE INTENDED TO 
INCLUDE THE SPECIALIZED AGENCIES AS PROVIDERS OF 
"UPSTREAM POLICY ADVICE AND ASSISTANCE." THIS DID NOT 
HAPPEN WITH FAO BECAUSE: 
 
-- FAO DID NOT HAVE EFFECTIVE AND COLLABORATIVE TIES AT 
 
ROME 00003249  002.1 OF 003 
 
¶7. BILATERAL, DONOR-FUNDED DEVELOPMENT ACTIVITIES HAVE 
ALSO GONE DOWN -- BUT LESS SUBSTANTIALLY -- FROM ABOUT 
USD 100 MILLION/YEAR TO USD 80 MILLION/YEAR. UNILATERAL 
TRUST FUNDS (WHERE A COUNTRY ITSELF PAYS FAO TO EXECUTE A 
PROJECT) HAVE INCREASED SLIGHTLY.  BILATERAL DONORS 
(INCLUDING THE UNITED STATES), HOWEVER, CONTINUE TO PUT 
MORE FUNDS INTO EMERGENCY FIELD ACTIVITIES. 
 
¶8.  THE U.S. IS NOT A MAJOR DONOR TO FAO NON-EMERGENCY 
EXTRA-BUDGETARY ACTIVITIES.  THE U.S. CONTRIBUTION WAS 
LESS THAN USD 1 MILLION IN 2002.  THE MAJOR DONORS ARE 
EUROPEAN UNION COUNTRIES, WITH THE NETHERLANDS AND ITALY 
IN THE LEAD. 
 
PROBLEMS IN DECENTRALIZATION 
----------------------------- 
 
¶9. IN LOOKING AT THE OVERALL DECLINE, FAO READILY 
ACKNOWLEDGED THAT INTERNAL FACTORS LED TO LESS MONEY 
BEING CHANNELED TO FAO.  ACCORDING TO CARSALADE, "FAO 
DECENTRALIZATION RESULTED IN CAPACITY AND MANAGERIAL 
    PROBLEMS IN COUNTRY OFFICES." 
 
¶10.  FAO ACKNOWLEDGED THAT MANY FAO COUNTRY OFFICES 
(FAORS) DID NOT HAVE THE EXPERIENCE TO TAKE ON PROJECT 
EXECUTION:  TRAINING FOR FAO COUNTRY OFFICES IS CURRENTLY 
ONGOING IN ORDER TO ENSURE THAT THE OFFICES ARE ABLE TO 
HANDLE THE 46 PERCENT OF PROJECTS NOW BEING EXECUTED 
DIRECTLY THROUGH FAORS.  FAO HAS ALSO EMBARKED ON A FULL- 
SCALE EVALUATION OF DECENTRALIZATION, AND IS COMPLETING 
AN "IN-DEPTH REVIEW" OF ONE OF THE REGIONS, LOOKING AT 
THE RELATIONSHIP BETWEEN HEADQUARTERS, REGIONAL OFFICE 
AND COUNTRY REPRESENTATIVES. 
 
¶11.  FAO ALSO ACKNOWLEDGED MANAGERIAL INEFFICIENCIES AT 
HEADQUARTERS.  ANDREW MCMILLAN, DIRECTOR OF FAO'S FIELD 
OPERATIONS DIVISION STATED, "FAO IS TRYING TO IMPROVE THE 
REPUTATION OF THE ORGANIZATION WHICH WAS SERIOUSLY 
DAMAGED IN THE PAST AS A DELIVERER OF TECHNICAL 
ASSISTANCE." 
 
¶12. LOOKING TO RETURN TO HIGHER LEVELS OF UNDP FUNDING, 
FAO WILL WORK TO COMMUNICATE, "ITS ADDED VALUE, ITS 
SERVICES, AND ITS PRODUCTS" ACCORDING TO ADG CARSALADE. 
FAO HAS MADE A POINT, ACCORDING TO CARSALADE, OF 
IMPROVING FAO PRESENCE IN THE UN COUNTRY TEAM, STRESSING 
ITS CONTRIBUTION TO THE UN DEVELOPMENT GROUP (UNDG) AND 
COMMITMENT TO THE POVERTY REDUCTION STRATEGY PAPERS 
(PRSP'S). 
 
DONOR FOCUS ON FIELD PRESENCE AND DEMAND 
---------------------------------------- 

¶13. THE NETHERLANDS, ONE OF THE LARGEST DONORS TO FAO'S 
DEVELOPMENT ACTIVITIES, STATED THAT THE NETHERLANDS CAN 
"ENDORSE THIS APPROACH AND EMBRACE IT."  THE NETHERLANDS 
WANTS FAO TO SEEK MORE "UPSTREAM" APPROACHES, AND GUIDE 
COUNTRIES ON POLICIES.  HOWEVER, THEY STATED THAT THEIR 
OWN FEEDBACK INDICATED THAT FAO WAS NOT INVOLVED IN 
POLICY AND THAT INVOLVEMENT WITH PRSPS "WAS MINIMAL." THE 
NETHERLANDS STRESSED THE LINKAGE BETWEEN NORMATIVE WORK 
AND DEVELOPMENT PROJECTS.  (NOTE: THE NETHERLANDS IS 
SHORTLY TO RELEASE A STUDY ASSESSING THE IMPACT OF DUTCH 
CONTRIBUTIONS CHANNELED THROUGH FAO FROM 1985-2000). 
 
¶14.  FRANCE QUERIED WHETHER FAO HAD "SOLVED ITS PROBLEMS 
IN THE FIELD OFFICES" AND ARGUED THAT LACK OF 
COMMUNICATION WITH DONORS WAS A SERIOUS ISSUE.  HE NOTED 
THAT "SOMETIMES DONORS LACK VISIBILITY IN FIELD PROGRAMS, 
WHICH IS A PROBLEM." 
 
¶15.  BELGIUM STATED THAT MEMBERS NEEDED TO SPEND MORE 
TIME DISCUSSING THE OVERLAP BETWEEN REGULAR BUDGET AND 
EXTRA-BUDGETARY ACTIVITIES.  IF FAO IS TO PLAY A ROLE IN 
 
ROME 00003249  002.2 OF 003 
 
¶7. BILATERAL, DONOR-FUNDED DEVELOPMENT ACTIVITIES HAVE 
ALSO GONE DOWN -- BUT LESS SUBSTANTIALLY -- FROM ABOUT 
USD 100 MILLION/YEAR TO USD 80 MILLION/YEAR. UNILATERAL 
TRUST FUNDS (WHERE A COUNTRY ITSELF PAYS FAO TO EXECUTE A 
PROJECT) HAVE INCREASED SLIGHTLY.  BILATERAL DONORS 
(INCLUDING THE UNITED STATES), HOWEVER, CONTINUE TO PUT 
MORE FUNDS INTO EMERGENCY FIELD ACTIVITIES. 
 
¶8.  THE U.S. IS NOT A MAJOR DONOR TO FAO NON-EMERGENCY 
EXTRA-BUDGETARY ACTIVITIES.  THE U.S. CONTRIBUTION WAS 
LESS THAN USD 1 MILLION IN 2002.  THE MAJOR DONORS ARE 
EUROPEAN UNION COUNTRIES, WITH THE NETHERLANDS AND ITALY 
IN THE LEAD. 
 
PROBLEMS IN DECENTRALIZATION 
----------------------------- 
 
¶9. IN LOOKING AT THE OVERALL DECLINE, FAO READILY 
ACKNOWLEDGED THAT INTERNAL FACTORS LED TO LESS MONEY 
BEING CHANNELED TO FAO.  ACCORDING TO CARSALADE, "FAO 
DECENTRALIZATION RESULTED IN CAPACITY AND MANAGERIAL 
    PROBLEMS IN COUNTRY OFFICES." 
 
¶10.  FAO ACKNOWLEDGED THAT MANY FAO COUNTRY OFFICES 
(FAORS) DID NOT HAVE THE EXPERIENCE TO TAKE ON PROJECT 
EXECUTION:  TRAINING FOR FAO COUNTRY OFFICES IS CURRENTLY 
ONGOING IN ORDER TO ENSURE THAT THE OFFICES ARE ABLE TO 
HANDLE THE 46 PERCENT OF PROJECTS NOW BEING EXECUTED 
DIRECTLY THROUGH FAORS.  FAO HAS ALSO EMBARKED ON A FULL- 
SCALE EVALUATION OF DECENTRALIZATION, AND IS COMPLETING 
AN "IN-DEPTH REVIEW" OF ONE OF THE REGIONS, LOOKING AT 
THE RELATIONSHIP BETWEEN HEADQUARTERS, REGIONAL OFFICE 
AND COUNTRY REPRESENTATIVES. 
 
¶11.  FAO ALSO ACKNOWLEDGED MANAGERIAL INEFFICIENCIES AT 
HEADQUARTERS.  ANDREW MCMILLAN, DIRECTOR OF FAO'S FIELD 
OPERATIONS DIVISION STATED, "FAO IS TRYING TO IMPROVE THE 
REPUTATION OF THE ORGANIZATION WHICH WAS SERIOUSLY 
DAMAGED IN THE PAST AS A DELIVERER OF TECHNICAL 
ASSISTANCE." 
 
¶12. LOOKING TO RETURN TO HIGHER LEVELS OF UNDP FUNDING, 
FAO WILL WORK TO COMMUNICATE, "ITS ADDED VALUE, ITS 
SERVICES, AND ITS PRODUCTS" ACCORDING TO ADG CARSALADE. 
FAO HAS MADE A POINT, ACCORDING TO CARSALADE, OF 
IMPROVING FAO PRESENCE IN THE UN COUNTRY TEAM, STRESSING 
ITS CONTRIBUTION TO THE UN DEVELOPMENT GROUP (UNDG) AND 
COMMITMENT TO THE POVERTY REDUCTION STRATEGY PAPERS 
(PRSP'S). 
 
DONOR FOCUS ON FIELD PRESENCE AND DEMAND 
---------------------------------------- 

¶13. THE NETHERLANDS, ONE OF THE LARGEST DONORS TO FAO'S 
DEVELOPMENT ACTIVITIES, STATED THAT THE NETHERLANDS CAN 
"ENDORSE THIS APPROACH AND EMBRACE IT."  THE NETHERLANDS 
WANTS FAO TO SEEK MORE "UPSTREAM" APPROACHES, AND GUIDE 
COUNTRIES ON POLICIES.  HOWEVER, THEY STATED THAT THEIR 
OWN FEEDBACK INDICATED THAT FAO WAS NOT INVOLVED IN 
POLICY AND THAT INVOLVEMENT WITH PRSPS "WAS MINIMAL." THE 
NETHERLANDS STRESSED THE LINKAGE BETWEEN NORMATIVE WORK 
AND DEVELOPMENT PROJECTS.  (NOTE: THE NETHERLANDS IS 
SHORTLY TO RELEASE A STUDY ASSESSING THE IMPACT OF DUTCH 
CONTRIBUTIONS CHANNELED THROUGH FAO FROM 1985-2000). 
 
¶14.  FRANCE QUERIED WHETHER FAO HAD "SOLVED ITS PROBLEMS 
IN THE FIELD OFFICES" AND ARGUED THAT LACK OF 
COMMUNICATION WITH DONORS WAS A SERIOUS ISSUE.  HE NOTED 
THAT "SOMETIMES DONORS LACK VISIBILITY IN FIELD PROGRAMS, 
WHICH IS A PROBLEM." 
 
¶15.  BELGIUM STATED THAT MEMBERS NEEDED TO SPEND MORE 
TIME DISCUSSING THE OVERLAP BETWEEN REGULAR BUDGET AND 
EXTRA-BUDGETARY ACTIVITIES.  IF FAO IS TO PLAY A ROLE IN 
 
ROME 00003249  003.1 OF 003 
 
EFINED."  HE 
NOTED PROBLEMS WITH THE QUALITY OF FIELD REPRESENTATIVES 
AND THE QUALITY OF PERSONNEL IN GENERAL, COMPARING FAO'S 
PERFORMANCE EVALUATION UNFAVORABLY TO THE WORLD FOOD 
PROGRAMS (WFP) SUPERIOR "360 DEGREES PERFORMANCE 
EVALUATION." 
 
¶16.  THE UK, SWISS AND EC REPS RAISED THE "DEMAND" SIDE, 
QUESTIONING WHETHER COUNTRIES THEMSELVES WERE ACTUALLY 
SEEKING ADDITIONAL ASSISTANCE FOR AGRICULTURAL AND RURAL 
DEVELOPMENT. 
 
FAO RESPONSE - POLICY IS A PROBLEM 
---------------------------------- 
 
¶17.  DIRECTOR OF FAO'S POLICY ASSISTANCE DIVISION, 
SANTIAGO FUNES, RESPONDED THAT FAO WAS INDEED INVOLVED IN 
SOME "POLICY" WORK, CITING FAO'S EXPERIENCE IN MOZAMBIQUE 
WHERE FAO WAS CONTRACTED BY THE GOVERNMENT TO DEVELOP A 
COMPREHENSIVE RURAL DEVELOPMENT PROGRAM IN PARTNERSHIP 
WITH THE WORLD BANK.  THAT BEING SAID, FUNES ACKNOWLEDGED 
THAT "THE FAO BUDGET WAS NOT LARGE ENOUGH TO DEAL WITH 
THE CHALLENGES OF RURAL AND AGRICULTURAL DEVELOPMENT." HE 
POINTED OUT THAT SIX YEARS AGO, A NEW BUDGET LINE HAD 
BEEN ADDED (IN THE REGULAR BUDGET) ON "PROVISION OF 
    POLICY ADVICE." FUNES ADDED, "EVERY DAY WE ARE URGING FAO 
REPRESENTATIVES TO PROVIDE POLICY ADVICE!" 
 
¶18. ADG CARSALADE WELCOMED THE COMMENTS ON FIELD 
REPRESENTATIVES AND PERSONNEL ISSUES RAISED BY BELGIUM 
AND FRANCE, AND NOTED THAT A NEW FAO COMMITTEE HAD BEEN 
FORMED ON THE SUBJECT.  HE ALSO AGREED ON THE NEED TO 
IMPROVE PERFORMANCE EVALUATION. 
 
COMMENT 
------- 
 
¶19. BUDGET ISSUES:  THE DECLINE IN EXTRABUDGETARY FUNDING 
CREATES A CONTINUING DRAG ON FAO'S REGULAR PROGRAM BUDGET 
AND HAMPERS EFFORTS TO CURB FAO BUDGET GROWTH. 
DEVELOPING COUNTRIES -- COGNIZANT OF THE DECLINE IN 
VOLUNTARY FUNDING --  ROUTINELY REQUEST LARGER 
ALLOCATIONS FROM THE REGULAR PROGRAM BUDGET FOR 
OPERATIONAL ACTIVITIES.  THIS IN TURN PUTS PRESSURE ON 
THE OVERALL BUDGET LEVEL.  FURTHERMORE, IN THE CURRENT 
BIENNIUM, THE REGULAR PROGRAM WILL HAVE TO COVER AN 
ESTIMATED SHORTFALL OF USD 6.2 MILLION TO COMPENSATE FOR 
DECLINING SUPPORT COST INCOME. THE FAO FINANCE COMMITTEE 
HAS REGULARLY REQUESTED THE FAO TO TAKE ACTION TO REMEDY 
THIS SITUATION; ABSENT RAISING SUPPORT COST CHARGES 
(WHICH THE DG HAS RULED OUT), IT IS NOT CLEAR HOW FAO 
WILL RESOLVE THIS PROBLEM. 
 
¶20. PROGRAM ISSUES:  NORMATIVE AND OPERATIONAL ACTIVITIES 
SHOULD COMPLEMENT EACH OTHER; FURTHERMORE, PUTTING INTO 
PLACE A FIRST-RATE FAO FIELD LEVEL PRESENCE IS CRITICAL 
    TO SUPPORTING BOTH NON-EMERGENCY AND EMERGENCY 
ACTIVITIES. FAO MEMBERS NEED TO CONSIDER WHAT KIND OF 
DEVELOPMENT ACTIVITIES FAO CAN PERFORM BEST AND URGE THE 
ORGANIZATION TO MAKE THE CHANGES NECESSARY TO DO SO.  THE 
NEED TO IMPROVE FAO'S FIELD PRESENCE IS CLEAR. 
CURRENTLY, FAO PROJECTS ARE AD-HOC, SECTORAL, WIDELY 
DISPERSED AND POORLY COORDINATED WITH OTHER DONOR 
ACTIVITIES.  DONORS WHO SUPPORT FAO MOVING "UPSTREAM" TO 
BECOME AN EFFECTIVE POLICY PLAYER RECOGNIZE THAT FAO WILL 
NEED A RADICAL REORIENTATION  -- NOT JUST REASSURANCES  - 
- TO TAKE ON THAT NEW ROLE. HALL 
 
ROME 00003249  003.2 OF 003 
 
EFINED."  HE 
NOTED PROBLEMS WITH THE QUALITY OF FIELD REPRESENTATIVES 
AND THE QUALITY OF PERSONNEL IN GENERAL, COMPARING FAO'S 
PERFORMANCE EVALUATION UNFAVORABLY TO THE WORLD FOOD 
PROGRAMS (WFP) SUPERIOR "360 DEGREES PERFORMANCE 
EVALUATION." 
 
¶16.  THE UK, SWISS AND EC REPS RAISED THE "DEMAND" SIDE, 
QUESTIONING WHETHER COUNTRIES THEMSELVES WERE ACTUALLY 
SEEKING ADDITIONAL ASSISTANCE FOR AGRICULTURAL AND RURAL 
DEVELOPMENT. 
 
FAO RESPONSE - POLICY IS A PROBLEM 
---------------------------------- 
 
¶17.  DIRECTOR OF FAO'S POLICY ASSISTANCE DIVISION, 
SANTIAGO FUNES, RESPONDED THAT FAO WAS INDEED INVOLVED IN 
SOME "POLICY" WORK, CITING FAO'S EXPERIENCE IN MOZAMBIQUE 
WHERE FAO WAS CONTRACTED BY THE GOVERNMENT TO DEVELOP A 
COMPREHENSIVE RURAL DEVELOPMENT PROGRAM IN PARTNERSHIP 
WITH THE WORLD BANK.  THAT BEING SAID, FUNES ACKNOWLEDGED 
THAT "THE FAO BUDGET WAS NOT LARGE ENOUGH TO DEAL WITH 
THE CHALLENGES OF RURAL AND AGRICULTURAL DEVELOPMENT." HE 
POINTED OUT THAT SIX YEARS AGO, A NEW BUDGET LINE HAD 
BEEN ADDED (IN THE REGULAR BUDGET) ON "PROVISION OF 
    POLICY ADVICE." FUNES ADDED, "EVERY DAY WE ARE URGING FAO 
REPRESENTATIVES TO PROVIDE POLICY ADVICE!" 
 
¶18. ADG CARSALADE WELCOMED THE COMMENTS ON FIELD 
REPRESENTATIVES AND PERSONNEL ISSUES RAISED BY BELGIUM 
AND FRANCE, AND NOTED THAT A NEW FAO COMMITTEE HAD BEEN 
FORMED ON THE SUBJECT.  HE ALSO AGREED ON THE NEED TO 
IMPROVE PERFORMANCE EVALUATION. 
 
COMMENT 
------- 
 
¶19. BUDGET ISSUES:  THE DECLINE IN EXTRABUDGETARY FUNDING 
CREATES A CONTINUING DRAG ON FAO'S REGULAR PROGRAM BUDGET 
AND HAMPERS EFFORTS TO CURB FAO BUDGET GROWTH. 
DEVELOPING COUNTRIES -- COGNIZANT OF THE DECLINE IN 
VOLUNTARY FUNDING --  ROUTINELY REQUEST LARGER 
ALLOCATIONS FROM THE REGULAR PROGRAM BUDGET FOR 
OPERATIONAL ACTIVITIES.  THIS IN TURN PUTS PRESSURE ON 
THE OVERALL BUDGET LEVEL.  FURTHERMORE, IN THE CURRENT 
BIENNIUM, THE REGULAR PROGRAM WILL HAVE TO COVER AN 
ESTIMATED SHORTFALL OF USD 6.2 MILLION TO COMPENSATE FOR 
DECLINING SUPPORT COST INCOME. THE FAO FINANCE COMMITTEE 
HAS REGULARLY REQUESTED THE FAO TO TAKE ACTION TO REMEDY 
THIS SITUATION; ABSENT RAISING SUPPORT COST CHARGES 
(WHICH THE DG HAS RULED OUT), IT IS NOT CLEAR HOW FAO 
WILL RESOLVE THIS PROBLEM. 
 
¶20. PROGRAM ISSUES:  NORMATIVE AND OPERATIONAL ACTIVITIES 
SHOULD COMPLEMENT EACH OTHER; FURTHERMORE, PUTTING INTO 
PLACE A FIRST-RATE FAO FIELD LEVEL PRESENCE IS CRITICAL 
    TO SUPPORTING BOTH NON-EMERGENCY AND EMERGENCY 
ACTIVITIES. FAO MEMBERS NEED TO CONSIDER WHAT KIND OF 
DEVELOPMENT ACTIVITIES FAO CAN PERFORM BEST AND URGE THE 
ORGANIZATION TO MAKE THE CHANGES NECESSARY TO DO SO.  THE 
NEED TO IMPROVE FAO'S FIELD PRESENCE IS CLEAR. 
CURRENTLY, FAO PROJECTS ARE AD-HOC, SECTORAL, WIDELY 
DISPERSED AND POORLY COORDINATED WITH OTHER DONOR 
ACTIVITIES.  DONORS WHO SUPPORT FAO MOVING "UPSTREAM" TO 
BECOME AN EFFECTIVE POLICY PLAYER RECOGNIZE THAT FAO WILL 
NEED A RADICAL REORIENTATION  -- NOT JUST REASSURANCES  - 
- TO TAKE ON THAT NEW ROLE. HALL 
 
NNNN 
 2003ROME03249 - Classification: UNCLASSIFIED