VZCZCXRO6489
OO RUEHRN
DE RUEHRN #0060/01 2821003
ZNR UUUUU ZZH
O R 091003Z OCT 09
FM USMISSION UN ROME
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1171
INFO RUEHC/USAID WASHDC
RUEHRC/USDA FAS WASHDC
RUCNDT/USMISSION USUN NEW YORK 0385
RUEHRN/USMISSION UN ROME 1245

UNCLAS SECTION 01 OF 02 UN ROME 000060 
 
SENSITIVE 
SIPDIS 
 
IO/FO FOR ANDERSON/COOK, USDA FOR DOUVELIS 
 
E.O. 12958: N/A 
TAGS: EAGR EAID PREL FAO UN
SUBJECT: FAO 137TH COUNCIL:  IMPASSE OVER PROPOSED BUDGET LEVEL 
 
REF: A. USUN ROME 54 
     ¶B. STATE 96467 
 
¶1.  (U) This message is sensitive but unclassified.  Please 
handle accordingly. 
 
 
 
Summary and Action Request 
 
------------------- 
 
 
 
¶2.  (SBU) Members at the September 28-October 2 meeting of the 
FAO Council could not reach consensus on the level of the 
organization's budget for the 2010-11 biennium, and whether the 
entire cost of the Immediate Plan of Action (IPA) reform program 
should be included in the regular budget financed by assessed 
contributions or partly through voluntary contributions, as 
proposed by FAO Management.  Members agreed to an informal 
"Friends of the Chair" process to attempt to resolve outstanding 
budget issues before the FAO Conference in November (18-23) at 
which the budget will be approved.  Mission will continue 
advocating strongly for lower expenditures in the budget, but 
unfortunately has found very little support for the U.S. 
position of zero nominal growth (ZNG) for the budget.  Action 
request:  Mission recommends instructions that would allow 
flexibility in negotiations permitting us to commit up to a 
maximum of 7.1 percent increase in the regular ("net 
appropriation") budget that must also include all the IPA reform 
costs.  Mission would seek the lowest possible budget level. 
End summary and action request. 
 
 
 
No Consensus on 2010-2011 Budget 
 
------------------------------ 
 
 
 
¶3.  (SBU) The 49-member FAO Council met in Rome September 
28-October 2 to debate key governance issues, in particular the 
FAO's proposed biennial Program of Work and Budget (PWB), 
including how to fully fund far-reaching reforms agreed to by 
Conference last November.  Members debated extensively the 
merits of the biennial draft PWB that proposes cost increases of 
7.1 percent above the current biennium, with an additional 
increase in assessments of 3.6 percent for financial health 
issues (e.g., After Service Medical Coverage, and replenishment 
of a Special Reserve Account).  The draft PWB only included 50 
percent of the IPA costs, with the remaining USD 19.1 million to 
be funded through Core Voluntary Contributions.  If these IPA 
costs were to be added to the regular budget, the total increase 
in assessed contributions would be almost 13 percent.  Mission 
urged during open plenary a ZNG budget that included all IPA 
costs.  While many delegations noted general concern over 
Management's proposed increase in assessments, only a handful 
joined us in favoring ZNG, even after our strong advocacy both 
here and in capitals through demarches.  All but Mexico told us 
privately that they would readily agree to a modest increase in 
their assessments.  Most delegations spoke in favor of the draft 
budget with Brazil and China advocating an even higher budget 
level.  It seems clear that most members, as well as Management, 
are willing to reluctantly postpone to another biennium the 
financial health items contained in the draft PWB. 
 
 
 
Next Steps 
 
------------ 
 
 
 
¶4. (SBU) Given the lack of consensus on the key budget issues, 
members agreed to establish a Friends of the Chair Group that 
would meet before the November Conference in an attempt to forge 
a consensus on the PWB.  Mission will also meet with FAO 
Management to obtain more detailed information on the 
assumptions used to calculate the proposed cost increases in the 
draft budget, especially since Management did not provide this 
information requested by members of the Finance Committee, 
including the United States, during the July and September 
meetings.  We will also coordinate closely with our Geneva Group 
and OECD colleagues to press for reductions in the proposed 
budget and continue to insist that all IPA reform costs be 
included in the regular budget. 
 
UN ROME 00000060  002 OF 002 
 
 
 
 
 
Comment 
 
--------- 
 
 
 
¶5.  (SBU) Recognizing the possibility that the November Summit 
may result in calls by some for even greater increases to the 
FAO budget to deal with food security, we hope to reach early 
consensus on an acceptable budget figure that includes 100 
percent of the costs of reform.  Based on our conversations 
here, we believe we can help shape consensus around a budget 
level increase, including all IPA costs, that would not exceed 
7.1 percent. 
COUSIN