APPENDIX D

STATEMENT BY THE DIRECTOR-GENERAL

Excellencies,
Distinguished Delegates and Observers,
Ladies and Gentlemen,

There are times when the course of history moves so fast that mankind cannot keep up and would like to mark time to draw breath. We are currently experiencing such a moment, and there is no need for me to recall the extraordinary events that have shaken the world during the six months that have elapsed since the last session of the Council. Back in November I shared with you the hopes and fears that the new situation had instilled in me, and those feelings have only been confirmed by what has occurred since.

Famine is threatening the lives of millions of human beings in Africa. Third World countries, and particularly those in Latin America, are collapsing under the weight of their cumulative debt. The mounting and successive tragedies in the Near East, Africa and Asia are inflicting untold suffering on entire populations. The industrialized world is suffering in the throes of recession, inflation, unemployment and the aftermath of the Gulf War.

As things stand, one would need a crystal ball to determine whether our grounds for hope outweigh our reasons for concern. In the short term, there are no hints that circumstances are about to improve. The developing countries are, as always, the first to suffer and - despite the generous efforts of certain creditors - are unable to shed their debts as the prices of raw materials, their main source of exports, remain desperately low. The GATT talks have so far not led to agreement and official aid to development is not increasing.

Whatever the case, the need to counter the dangers that threaten us is blindingly clear, and it is also clear that in today's world, all problems assume an international dimension. As a result, the role of the United Nations is increasingly recognized by its Member Nations: the UN system stands ready to review situations, to organize consultations, to propose solutions and to help with their implementation. In particular, FAO's vital role in averting potential dangers and preparing for a brighter future has never been so apparent. Whenever international action needs to be conceived, undertaken and seen through effectively and impartially within its areas of competence, our Organization is irreplaceable as the following examples clearly show.

A first example of this is a scourge, previously restricted to the New World, which has now emerged in North Africa. I refer to the screwworm fly which, as you know, attacks livestock and even human beings and causes terrible harm. A number of poor countries were directly endangered and the threat might well have spread to Europe. FAO alerted the international community of the peril and successfully mobilized donors. Our information campaign bore fruit and funds were made available. We designed a programme and sought technical and scientific assistance where this was most advanced - that is to say, particularly in the United States of America. In this way, we were able to implement the most up-to-date approach: the sterile male technique, a biological and non-polluting method which requires no pesticides. The operation - the first to be mounted on such a scale - demanded massive logistics, as the treated insects - the sterile males - have to be shipped over huge distances in specially chartered aircraft. Now that the work is nearing its conclusion, it is clear that only FAO could have organized such an operation.

Among the natural calamities afflicting the Near East is an insect, endemic throughout the region, known as the sunn pest. This pest, indifferent to political or military considerations, is particularly active in Iraq where it affects some 800 000 hectares of wheat and barley in the northern part of the country. This region, with current problems familiar to us all, normally accounts for 80 percent of the country's cereal output. Under present circumstances, the only effective means of controlling this infestation, which was seriously threatening harvest output and quality, was to spray insecticides from the air, but Iraq was unable to undertake aerial operations north of the 36th parallel. Despite the tension reigning in the region, we were able to get all the interested parties to agree to have the necessary operations carried out under FAO supervision using aircraft piloted by international civilian crews. We recruited Polish pilots and mechanics for six helicopters and sent experts to the field to direct operations. I am pleased to report to the Council that the operation is now over and that more than 100 000 hectares have been successfully treated. (We would have treated an even larger area, but we ran out of insecticide). We made sure that the operation would not affect the other humanitarian actions being conducted in the region and were particularly careful to avoid creating psychological barriers for the return of the refugees to their villages. A solution to this extremely delicate problem was made possible by the trust that all the parties concerned invested in FAO.

Unfortunately, these have not been our only causes for concern, for the food and agriculture situation in other regions has taken a truly disastrous turn during recent months.

In Africa, an already troubled agricultural and economic sector has also been subjected to the consequences of the ruthless civil wars that are afflicting Ethiopia, Somalia, the Sudan and Mozambique, not to mention conflicts in Angola, Liberia and many other countries. There is a desperate need to come to the assistance of the droves of refugees that have been routed from their lands and villages and whose nightmarish wanderings are continually stalked by hunger, disease and death. As if this were not enough, the humanitarian assistance sent for their relief is very often unable to reach its destination because of the insane logic of war.

Nature has unleashed its furies on Bangladesh, with huge loss of life. And what shall we say about the physically and emotionally battered survivors? They will find it extremely difficult to feed themselves as all crops (particularly rice) as well as livestock and fisheries have been extensively damaged and depleted. In coordination with the United Nations, we have fielded a mission to assess the damage to agricultural production and the resultant food and rehabilitation needs. Under our Technical Cooperation Programme, whose importance for quick and effective action cannot be overemphasized, we immediately set about purchasing animal vaccines, vegetable seeds, and supplies for the fishing population, most of whom have lost their craft and equipment.

In collaboration and certainly not in competition with WHO, we also have a role to play where people are threatened by epidemic disease. Thus, we have responded to the cholera outbreak currently rampant in Latin America and the Caribbean and, at the request of the Government of Peru, have formulated a TCP project to strengthen the control of food products and to try to check contamination in that hard-hit country. Other national and sub-regional projects are in the pipeline, focusing on the formulation and reinforcement of regulatory measures to enhance consumer protection and improve safety controls for marketed foods.

In Europe itself, a number of Eastern European countries require economic, technical and even food assistance as their stocks have fallen so low. The international community is mobilizing itself and the European Community, in particular, is preparing to direct the necessary funds towards these countries. In this connection, I should like to herald the creation of the European Bank for Reconstruction and Development (EBRD). Within the tight limits of its resources FAO is also playing its part, for we send experts to these countries to analyse the agricultural situation, to examine the production systems and to envisage feasible new farming models calling upon cooperatives, the private sector, etc. We are compiling dossiers with realistic and up-to-date data on the agricultural sector in all the Eastern European countries.

So many disasters have befallen so many countries that we may fear a degree of fatigue and indifference on the part of international public opinion and the donors. Such a disengagement would run counter to the human solidarity on which the whole value system of our international community is based. I therefore subscribe to the pleas of national and international, political, moral and spiritual leaders.

This brief overview of the current issues of concern must necessarily touch on the environmental issue. For us, the main question is how to get the land to produce enough to cover our current and foreseeable needs without compromising future productive capacity and upsetting the ecological balance. This issue finds expression in the concept of sustainable agricultural development.

The major international Conference on Agriculture and the Environment, jointly organized by FAO and the Netherlands last April, represented a historical landmark. FAO had prepared some fifteen papers on sustainable development for examination by the Conference, at which I had the honour of making the inaugural address. Particularly noteworthy was the fact that a number of non-governmental organizations actively participated alongside the representatives of governments and inter- governmental organizations. In its final declaration, the Conference recommended that FAO launch a framework programme for international cooperation dealing with the essential aspects of sustainable agriculture and rural development. This umbrella programme, whose main orientations are now submitted for your consideration, should consolidate and reinforce our field programmes in these areas and, together with the FAO/Netherlands Conference, should constitute a major input for the preparation of the United Nations Conference on Environment and Development to be held in Brazil in 1992.

I should like to point out that these new elements are squarely in line with the efforts that FAO has been making for years to ensure that our projects pay due attention to ecological considerations. We will therefore be able to counter certain criticisms and to demonstrate the force and scope of our action and the priority which our Member Nations attach to it. Subject to your approval, we shall have a "horizontal" environmental and sustainable development programme which will extend in practice to all of FAO's activities, in accordance with the views of the Programme Committee and to the satisfaction of those who would still doubt our commitment in this area. It is up to our Governing Bodies - up to you - to tell us whether we are on the right course. Given the regrettably limited resources that we can make available, the bulk of the funds needed for this major field programme will have to come from extra-budgetary sources.

"Limited resources"... During the course of my speech I have often referred to the modest dimensions - to put it mildly - of our financial resources. My address would be incomplete without a few remarks on our budgetary situation which, as you already know, is difficult. The falling value of the dollar results in sizeable losses for us - losses which for the 1990-91 biennium we estimate will eventually amount to US$ 26 million. And the impact of such losses on our activities cannot be dismissed lightly. The Special Reserve Account could cover US$ 19 million. We would therefore have to absorb the US$ 7 million shortfall.

Moreover, the sums earmarked to cover cost increases will not be sufficient, particularly because some US$ 16 million have had to be found, essentially to cover the salary increases decided by the International Civil Service Commission and the General Assembly.

The declining dollar combined with the delays in payments of contributions meant that we had to borrow. For the first time in our history, we had to contract an external commercial loan in October 1990. The payment of a major contribution enabled us to repay this loan of US$ 22 million at the end of the same month, but of course we still had to pay more than US$ 100 000 in interest. We had previously resorted to all the possible internal sources - the Working Capital Fund, the Special Reserve Account, the Terminal Payments Fund - for a total of US$ 46 million. We were subsequently able to clear this debt at the end of March 1991 with the contribution payments we received, but this meant reducing, postponing or even cancelling some of our activities.

This is not a healthy situation. On 22 May 1991 total monies owed to the Organization actually amounted to an alarming US$ 313.8 million - US$ 200 million by one Member Nation alone. You can well imagine our despair when faced with such a situation. Unless we soon receive substantial payments from at least one of our major contributors, we shall have to take out another loan - and this time not in October but in July.

Some Member Nations advise us to base our expenditures on our revenues. This is indeed a bitter irony! On the one hand we do not know how much we are going to receive; and on the other, how can we make major savings when our main expenditures are fixed, as they are principally staff costs? Are we to dismiss officers whose services are vital to us merely because soma nations fail to meet their obligations or else fulfill them in an unpredictable manner? Governments should at least let us know approximately when we can expect to receive their contributions.

The situation is straightforward: if we are to accomplish what is expected of us and to tackle the enormous problems facing us, then we need the funds which have been approved by the Conference. We are not short of programmes, we are short of resources.

In the light of this, the main issue requiring your attention is clearly the Programme of Work and Budget for 1992-93, for this is the only area where the Conference's decision binds the Member Nations and obliges them to pay their budgetary contributions. This decision is just as binding on the Director-General who is obliged to execute it, it constitutes our instructions for the next two years.

The priorities have been selected with the utmost care on the basis of preferences expressed by governments at the Conference of FAO, in the various committees, at the regional conferences, etc., and also on the basis of instructions from the United Nations General Assembly. The Programme of Work and Budget is a synthesis of hundreds of meetings and the result of a great team effort. The first draft and subsequently the Summary Programme of Work and Budget have been scrutinized at successive stages by various committees which have made observations and recommendations that we have borne in mind. It is now the Council's turn to examine the Summary, and we will pay careful attention to its comments before we produce the definitive and complete Programme of Work and Budget, which will be submitted to the Programme and Finance Committees in September, then to the 100th Session of the Council in November, and finally placed before Commission II of the Conference.

The Programme of Work and Budget is therefore shaped by the Member Nations. As in the past, we can see that there is on the whole a consensus on the proposed programmes and priorities, even though there are, here and there, requests that tend to give greater emphasis to one activity or the other. I hope that this will also apply to the medium-term programme that we shall be presenting in November.

There is no escaping the fact that our operations are going to cost more; for 1992-93, we shall have to reckon on a cost increase of 15 percent, or 87 million dollars. These are externally caused increases tied to events in 1990-91 such as inflation, salary raises and higher prices for equipment and supplies, in addition to United Nations General Assembly decisions concerning certain benefits. Also, these are very modest - and I stress the word "modest" - estimates and may well be exceeded in 1992-93 as has happened in previous biennia. We underestimated the cost of increases for this and the previous biennium - I mentioned earlier an underestimation of US$ 23 million. I expect the costs I am proposing for 1992-1993 will also fall short. We shall see if this is confirmed when we meet in two years' time. Nonetheless, the economic situation, the delays in payment of contributions and above all the certainty that we would face heavy cost increases led me in January to propose only a symbolic increase of 0.3 percent, some US$ 2 million.

The Joint Meeting of the Programme and Finance Committees in January clearly brought out the fact that consensus could only be rallied for a budget with no growth. Prompted by a sense of realism, I made new recommendations which would allow the Committees to reach a consensus, this being of greater value to the operations of the Organization than the albeit essential sum of two million dollars. My hope is that this attitude on my part will induce member countries to pay their contributions promptly and in full. I hope that the Council will understand this approach and approve these proposals which I have reluctantly, but with realism, put forward.

The situation is further complicated by new demands made by some for whom zero growth means zero growth plus maximum absorption of non- discretionary cost increases.

The zero growth hypothesis has never been accepted by our Governing Bodies. Logic tells us that zero growth plus absorption of costs in effect produces real regression. I would even go so far as to say that this is planned negative growth, if the effect is applied over several biennia.

Acceptance of this approach would be tantamount to forcing a reformulation of our Programme of Work. My proposed budget is in reality a net reduction of the order of 0.4 percent, as the Programme Committee is well aware. To go below this threshold would undermine the consensus already reached on our programmes. I hope that the spirit of solidarity will prevail. The Organization has been subjected to a series of heavy, energy-sapping cuts in recent biennia. We need to consolidate PAO, not to make it even more fragile.

To carry out our mission as stipulated by the Programme of Work each biennium, we have a task force of men and women whose effectiveness stems not only from the professional competence of each individual but also, and perhaps primarily, from their diverse origins, languages, cultures and backgrounds. For nearly half a century, our staff has worked to solve humanity's most pressing problems to come up with the food vital to its survival. Our constant concern and duty have been to identify the best qualified people to carry out this mission, to recruit them into the Organization, and to ensure that they stay with us.

It has never been easy to find men and women of the calibre we seek. For some time now, however, the problem of recruitment has been aggravated by competition from a number of international agencies. Some have the same membership as FAO, others have a different makeup, but ail are able to offer more attractive remuneration. And thus a part of our precious technical and intellectual capital is lost to us. In this regard, it is both deplorable and paradoxical to see that some Governments offer subsidies to their own citizens who are high-ranking international civil servants, and yet oppose any readjustment of the remuneration we are able to offer.

As for the pension scheme, the decline of the dollar has had a destabilizing effect. As you know, interim measures for staff members aged 55 or over were taken to buffer the effects of this trend, but they are only effective up to March 1992. The staff members concerned must either leave before that date or face heavy losses. Yet, these are precisely the people, with 20, 25 or more years of service behind them, and approaching the pinnacle of their careers, who have the greatest experience and maturity. We, like other UN organizations, face the imminent threat of a veritable exodus and brain drain which stands to affect over 100 of our very best staff, including many in the higher categories. The ACC was concerned by this situation and recommended to the competent bodies that they devise interim arrangements and, for the longer term, a system to ensure a decent pension to retired United Nations staff. This would inevitably entail some increase in the contributions to the Pension Fund by both staff members and their employing organizations.

I have dwelt at length on personnel matters precisely because they are of such capital importance. FAO could not exist without a body of highly qualified, competent, upright and dedicated people to staff it.

It will not have escaped your notice that the site for the Headquarters construction project is open and that work is in full swing. We regret the inevitable inconvenience to you and to the Secretariat, but I must warn you that this work is scheduled to continue for some time. However, temporary inconvenience and constraints are the price we have to pay for the more effective operations and greater savings which grouping our services will unquestionably entail. I take this opportunity to express again our profound appreciation to the authorities of our host country who are underwriting the full cost of these works. I hereby pay tribute to the understanding and generosity of the Italian Government to whom we are wholly indebted for this substantial improvement in our working conditions.

Your agenda includes an item entitled "Report by the Secretariat regarding Possible Forms of Membership for Regional Economic Integration Organizations in FMO, including Possible Amendments to the Basic Texts". This title designates the study which the Council asked me to undertake following the expressed desire of the European Economic Community to become a member of our Organization.

The issue inevitably raises a number of complex questions. The proposals before you have been formulated by the Committee on Constitutional and Legal Matters (CCLM) on the basis of a legal and technical review prepared by the PAO Secretariat. It is now up to you, Member Nations, to take a political decision on the form of membership status. This decision would be applicable not only to the BEC, but also to all regional economic integration organizations meeting the criteria established by the Council.

As Director-General of FAO I should like to point out that I see in the potential presence of the EEC a possible additional source of funding for our field projects. At my request the Commission has already expressed its receptiveness with respect to this matter.

I thus proposed a framework cooperation agreement to the Commission whereby FAO. would participate in the design and execution of certain of its technical assistance projects, especially in countries other than the ACP States. I am happy to report that such a framework agreement has just been signed between our two organizations. It will certainly constitute a vital instrument for reinforcing our mutual cooperation; in particular, it can strengthen FAO's capacity to act and could be highly useful at a time when FAO is ever harder pressed to find sources of funding.

And since we are talking about the Community, I must mention the Lomé IV Convention, which is the major source of aid to agriculture in the 68 ACP countries of Africa, the Caribbean and the Pacific. In addition to the financial and technical assistance the EEC provides, most of which goes to the rural and agricultural sector, the Lomé IV Convention ensures duty- free access for ACP country exports into the SEC countries. The Community has thus become the primary importer of agricultural commodities from the ACP States, which also benefit from the Stabex compensatory mechanism. Lomé IV has further improved this exemplary system by ensuring that all compensatory payments to the ACP countries, to offset falling raw material prices, are henceforth to be made in the form of donations. Nor could I possibly omit to mention, as well, the fact that the aid to structural readjustment programmes has a built-in social protection components a truly rare and valuable feature.

At this juncture it seems appropriate to dwell briefly on our relations with the United Nations Development Programme. As we had already informed you, UNDP wishes to reconsider its relations with the executing agencies. This in itself is not unusual, but FAO continues to be concerned about the trend because the proposed changes would have repercussions on our commitments at the field level and could reduce our capacity to provide the Third World with effective access to our accumulated capital of operational expertise, experience and information. At the same time, FAO could find itself with less ready information on the real situation in the field, and the Regular Programme would suffer as a consequence.

This is why FAO has been active in proposing amendments, transitory measures, and the like. We intervened vigorously at the UNDP Governing Council in New York in February, and are ready to resume our interventions in the coming months if necessary.

To avoid any possible misunderstanding, I hasten to point out that we are wholly in favour of gradually handing over responsibility, where possible, to the beneficiary countries for the execution of UNDP-funded projects. This is indeed the aim of technical assistance. FAO's cooperation would, of course, still be available to those countries that requested it.

Another area of special attention concerns our relations with the World Food Programme. We find that the new Headquarters Agreement signed with the Italian Government satisfactorily ensures the full protection of the Programme and its staff, as well as upholding in general the status of international organizations of the United Nations system in Italy. In this connection, let me again acknowledge the generosity and spirit of cooperation of the Italian Government, which has agreed to reimburse the full costs of the premises rented by FAO and WPP.

The Council is being asked to give its views on the proposed amendment of the General Regulations of WPP, which provides for administrative autonomy for the Programme and empowers the CFA to adopt separate financial regulations. At the same time the amendment stipulates WFP's continued reliance on FAO's technical services where the Organization has special fields of competence and capacities not possessed by WPP. This primarily concerns the assessment of food needs and the Global Information and Early Warning System. The CFA has stressed the need to take care to avoid overlapping and duplication of effort and to maintain the flow of information exchanges. The Finance Committee, in the report before you, reiterates this and reaffirms FAO's paramount responsibility in the assessment of food needs. I believe that it has been useful to spell out these considerations in the interests of avoiding any possible misunderstanding.

We cooperate intensively with a number of other organizations of the United Nations family. One essential feature of our agencies is that they do not operate in isolation. In addition to the links with our partners here in Rome, we maintain close and productive relations with many other agencies of the system.

These relations take various forms. First, the joint divisions which link FAO to the World Bank, to the IAEA, and to the UN Economic Commissions for Africa, Latin America and the Caribbean, and the Near East. I am sure that FAO is the only UN organization to have joint divisions linking it to other agencies. So, when I hear it said that FAO falls short on coordination, my answer is that in some cases, as with the World Bank, the Atomic Agency, the Commissions and WHO, we even have a single joint unit. Surely this goes well beyond mere cooperation! With WHO, we run a joint programme, the Codex Alimentarius, and we are preparing together the International Conference on Nutrition. We work constantly with ILO, Unesco, WHO, UNDP and other UN programmes and organizations. We participate actively in many inter-agency working groups, which meet on a regular basis, and which, among their other activities, prepare major international conferences, such as those on the climate in 1990 and on water in 1992, and on the environment, also in 1992. I think we are already at the third session of the Preparatory Committee of the World Conference on Development and the Environment. A number of our staff is participating and the session is scheduled to take place over a four to five week period in Geneva. The second session was also held in Geneva and I think the first was held in Nairobi. There are many such inter- institutional meetings in which we have to participate which take up a lot of time and involve many of our staff.

This cooperation makes heavy demands on our services and entails extra expense at a time when both staff and funds are in very short supply. At the same time, I believe our work could not be satisfactorily conducted without this constant and synergistic pooling of efforts with our sister agencies.

The importance of our relations with the intergovernmental organizations, particularly those within the United Nations system, should not be allowed to overshadow our cooperation with a great many non- governmental organizations. There is certainly no need to remind you of FAO's pioneering role in this domain, particularly within the context of the Freedom from Hunger Campaign, launched over thirty years ago.

The Review of Certain Aspects of FAO's Goals and Operations in 1988-89 suggested that we strengthen our relations with the NGOs. We welcomed this idea, particularly in view of the new dimensions that have recently shaped NGO activities. There are a great many NGOs today. Some intervene solely in the developing countries, others only in the developed countries, and the scope of still others is worldwide. They receive part of the official aid for development provided by states and by the EEC, which entrust them with specific tasks and funding. There is a clear link between the people's participation programmes and the NGOs, for which the latter can provide leadership. Some NGOs have even come to constitute a sort of alternative political force. I have in mind certain ecological movements which have intervened politically, protesting government land-use planning decisions concerning roads, railways, settlements and the like, and have a vigorously interventionist stance with respect to international organizations.

NGOs constitute a valuable link between local communities and government authorities and can offer innovatory forms of intervention which round out already existing types of action. We only wish to stress that such cooperation must respect the established structures. NGOs may act as observers, be consulted, participate constructively in the preparation of major meetings such as the International Conference on Nutrition or components of specific programmes such as the Tropical Forestry Action Plan and in this way make a positive contribution. But the Member Nations, and they alone, are FAO's masters and the final arbiters of its actions.

I have not touched upon every item on your agenda, far from it. Not because I underestimate their importance, but because I wished to highlight those matters which concern us most strongly.

Had I to sum up all the items on your agenda in a single formula I should say that they all fall under the heading of solidarity and cooperation - with the developing countries, and those struck by disasters, with the major economic integration organizations, which will proliferate and which, together with our sister agencies and NGOs working for development, are the wave of the future. The work of the Ninety-ninth Session of the Council, which is called upon to take decisions of far- reaching importance, is part and parcel of this vast movement.

With all my heart I wish you full success in your work.

Thank you.