VZCZCXRO9389
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHWR #0387/01 1001329
ZNR UUUUU ZZH
R 101329Z APR 09
FM AMEMBASSY WARSAW
TO RUEHC/SECSTATE WASHDC 8153
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUEHBS/USEU BRUSSELS
INFO RUEHKW/AMCONSUL KRAKOW 2267
RUCNMEM/EU MEMBER STATES

UNCLAS SECTION 01 OF 02 WARSAW 000387 
 
SIPDIS 
 
USDA FOR FAS OCBD/PSHEIKH, GGROVES, RCROUSHORN, JPHILLIPS; 
OCRA/SNENON, JKOWALSKI; OFSO DYOUNG 
BRUSSELS PASS AG MINISTER COUNSELOR; 
KRAKOW FOR CG 
EUROPEAN POSTS FOR AGR/ECON 
 
UNCLASSIFIED 
 
E.O. 12958:  N/A 
TAGS: EAGR ECON ETRD PGOV PL
SUBJECT:  LEGACY USDA LOCAL CURRENCY FUNDS 
 
WARSAW 00000387  001.4 OF 002 
 
 
¶1.  Summary.  The cable requests approval from FAS/W for use of 
zloty-denominated funds remaining from a series of Section 416(b) 
commodities' grants from 1989-1993.  U.S. Department of Agriculture 
commodity assistance from that period totaled roughly $194 million, 
and some $62 million in zloty equivalent was collected on sale of 
the commodities.  Today, just $320,000 remains and the Polish 
Ministry of Agriculture and Embassy Warsaw have agreed on procedures 
to fund long term market development to drawdown the account fully 
by 2012. USDA Warsaw is being reduced from two Americans to one in 
July 2009.  More oversight is beneficial and Embassy FMO can step in 
to provide needed coverage.  End Summary. 
 
¶2.  From the 1990's local currency funds were disbursed with the 
establishment of a Joint Commission and continued with a broad range 
of USDA technical assistance projects.  Funds created the Bronisze 
wholesale market for fruits and vegetables, the Warsaw Commodity 
Exchange, development of the infrastructure for Poland's Extension 
Service, support for 4-H Clubs, and a World Bank Agriculture 
Structural Adjustment Loan that capitalized major rural banks.  The 
funds represented a major commitment from the people of the United 
States to assist the transformation of Polish agriculture from 
communism to the market.  There remains widespread appreciation and 
contacts from the vast list of technical assistance projects funded. 
 
 
¶3.  The bulk of funds were disbursed by 1999.  Projects ground to a 
halt as Poland's EU accession plans began in 2001 that culminated in 
its full membership in 2004.  Wit h diverging policy goals, the fund 
was used rarely until 2006 when Embassy Warsaw took greater 
financial control of funds and approved projects on an exchange of 
letters with the Ministry.  The Ministry of Agriculture continued to 
approve proposed projects regularly until January 2009, when 
conversations began between the Ministry and Embassy about final 
goals to close the account.  The Agriculture Ministry wishes to be 
consulted about projects by written request from Embassy Warsaw. 
The Ministry is still actively requesting programming.  The Polish 
Veterinary Service has asked to have an expert in U.S. food safety 
teach risk assessment principles at a seminar this fall.  Embassy 
Warsaw disburses funds in accordance with all U.S. government 
proscribed regulations for management of funds abroad in supporting 
travel, making grants, and procurements.  The Ministry is content 
for funds to be used in the mutual interest of Poland and the United 
States, but declines to fund direct marketing activities like food 
shows.  It is willing to fund projects that will eventually lead to 
enhanced U.S. exports, but only if they bring a win-win benefit to 
Poland.  Embassy Warsaw USDA office evaluates proposals for their 
potential to positively impact U.S. goals for long range market 
development and their benefits to Poland and will inform FAS/W OCBD 
of projects. 
 
¶4.  Recently, funds disbursed financed Poland's participation in 
USDA's Scientific Borlaug Fellows Program.  Funds supported a U.S. 
visit by 28 Agrarian Chamber representatives on a biotechnology 
review trip to the United States.  USDA and Ambassador Victor Ashe 
have awarded distinguished Poles for their contributions to global 
agriculture.  Professor Henryk Jasiorowski was granted an award in 
2008 for his role in the 1978 feeding trial that proved the 
superiority of U.S. Holstein genetics and founding the Heifer 
Project International in Central Europe.  In July 2009, the position 
America Attache position is eliminated with the departure of the 
incumbent and USDA will be represented in the Mission by one 
American Agricultural Counselor and four local staff.  It is 
beneficial to provide additional Post oversight of the funds by 
involving State FMO in Warsaw in approval of funds. 
 
¶5.  Action Requested.  Embassy Warsaw requests FAS/W authorization 
for Embassy Financial Management Office to undertake financial 
oversight of the funds, presently residing at Citibank Handlowy in 
Warsaw, disbursing funds with guidance from USDA Warsaw in 
accordance with U.S. government procurement and authorization.  The 
Ministry of Agriculture has consented that their oversight will be 
to request consultations on projects sent to them in writing from 
the Embassy.  At the time of disbursement, purpose and recipient of 
the funds will be reported to FAS/W stakeholders.  USDA Warsaw 
collects and maintains records relating to the appropriateness of 
funded programs.  USDA FAS/Compliance Review staff should examine 
the account on their next scheduled visit to Warsaw. 
 
¶6.  Comment.  The Agriculture Ministry has lately been flexible in 
providing approval for travel and training on issues of relevance to 
the United States' trade agenda for Europe.  The account should not 
be immediately liquidated due to the willingness of Poland to allow 
 
WARSAW 00000387  002.2 OF 002 
 
 
the account to evolve in the mutual interest of both sides.  End 
comment. 
 
QUANRUD