JOINT MEETING

Table of Contents

Introduction

Project Design and Appraisal

Progress in the Restructuring of the Technical Cooperation Department (TC)

Evolution of the Field Programme 1998-2000

Delivery Projections 2001 and Prospects for the Future

Delivery projections 2001

Project approvals under the Government Cooperative Programme (GCP) and through the Unilateral Trust Fund (UTF) modality

Policy Aspects: FAO Participation in the Operational Activities of the United Nations System

Introduction

1. The Council, at its One Hundred and Twentieth Session in June 2001, in stressing the importance of a reinvigorated field programme, welcomed the intent of the Programme Committee to keep the evolution of FAO's field activities under regular scrutiny and requested to be apprised of the results of these periodic assessments.¹

2. The present report summarizes the evolution of FAO's field activities since 1998 with particular emphasis on non-emergency projects funded from voluntary contributions, as indicated by the Council, and looks into the future prospects of the field programme as a whole. The document focuses on facts and data available as of end July 2001 and reports on other related issues identified by the Programme Committee at its Eighty-Fifth Session in May 2001 - specifically, progress in improving project design and appraisal, and the on-going process of restructuring of the Technical Cooperation Department.

3. This document should be read in conjunction with documents PC 85/6 "Follow-up to the Synthesis of Recent Field Project Evaluations" and PC 85/7 "The Level of FAO's Field Programme - A Progress Report". In particular, document PC 85/7 provides the strategic context for FAO's field activities and an assessment of the causes of the decline of non-emergency projects, which are still valid and therefore will not be repeated here. In addition, a report on the decentralization of project operations to the country level will be presented to the Committees for information closer to the date of their Joint Meeting.

4. This item has been included in the agenda of the Joint Meeting in view of the significant implications of the Organization's field activities for its programme of work, including its normative aspects, as well as for the assessment of trends of extra-budgetary financial resources in the years ahead.

Project Design and Appraisal

5. In its consideration in May 2001 of the progress report on the "Synthesis of Field Project Evaluations", the Programme Committee noted in particular the importance of improving the quality of project design in order to enhance the Organization's competitiveness. The Committee had agreed to return to this question once the appropriate mechanisms were in place and the re-organization of the TC Department completed.

6. This matter is reported here in response to the request of the Committee to be kept informed of future developments in these areas², although the re-organization of TC Department is not yet complete and new mechanisms established to improve project design and appraisal are still at the early stages of development. It therefore constitutes "work in progress" in the direction indicated by the Committee. Actual improvements to the design and appraisal of projects will only be seen through the outcome of future project evaluations.

7. Among the existing appraisal mechanisms, the Programme and Project Review Committee (PPRC), established by the Director-General in June 1999 at the policy level (and expanding upon the functions of the Special Programme Policy Committee set up in December 1996), ensures adherence of new projects to the mandate of the Organization, highlighting its comparative advantages, and taking into account, inter alia, issues of food security and gender. In the light of experience gained, the Committee's Terms of Reference and operating procedures were reviewed and formally issued through the Director-General's Bulletin 2000/17. The PPRC procedures include a comprehensive review of the project document, intended project outputs and sustainability through its Project Review Sheet, which is prepared by the Lead Technical Unit.

8. The criteria by which the PPRC appraises a project document have been recently strengthened to include the following:

1. ensure continuing interaction between the Organization's normative and operational activities so that these are mutually supportive;
2. draw maximum benefit from the Organization's comparative advantage and intervene where such advantage is known to exist;
3. have a tangible impact in improving the food security of the least privileged populations and contributing to sustainable rural development.
4. build and/or reinforce national capabilities to ensure continuity of action, promote sustained self-reliance and support the sustainable use and management of natural resources;
5. promote gender equality and equity through the systematic compliance with FAO's stated commitment to and policy on mainstreaming a gender perspective into its normative work and field activities; and
6. promote broader partnership, alliance and participation.

9. A number of improvements have been made recently to enhance the role of PPRC in project appraisal and ensure expeditious clearance of projects. In January 2001, the PPRC Secretariat moved to the Technical Cooperation Department in order to integrate the PPRC review with the various phases of project preparation.

10. Specific issues related to project design, which fall outside the mandate of the PPRC, will be addressed by a Project Design and Screening Group, internal to the Technical Cooperation Department (TC), that will review project documents prior to their submission to the PPRC by the ADG/TC. The Group will be co-chaired by the Directors of TCA and TCO, and be comprised of participants from TCO, TCA, TCI, TCDM, TCOT, and TCOM. Its Terms of Reference are currently in the approval process.

11. In the case of complex projects (e.g. large UTF or other TF projects), project formulators and donor liaison units will bring the project idea/proposal to the TC Project Design and Screening Group's attention both at an early stage and throughout the project design process in order to benefit from suggestions from different areas of expertise and perspective: operational, donor, policy.

12. For country projects, the central role of the FAORs in project appraisal will be strengthened to take account of their new functions as budget holders with responsibilities for project resources and operations in their countries of assignment. In order to further improve the quality of project design, the In-Country Appraisal form will be revised, and the new TC Group will ensure that it is systematically available as part of the approval process and that it contains the required information on local conditions, project feasibility, relevance to Government priorities and consistency with the country programme, etc. to permit an all-round assessment of objectives, activities and outputs in the light of project resources. A similar initiative will be taken with regard to regional and inter-regional projects for use by the respective operating units, i.e., Regional Offices and Technical Departments.

13. The recent reorganization of the Field Operations Division and in particular the establishment of a new Field Programme Monitoring and Coordination Service (TCOM) will provide, when fully staffed, systematic support to the introduction of adjustments and improvements in the project formulation process, including design and appraisal, and the issuance of new procedures as may be required. Noteworthy in this connection is the recent establishment of a Standing Working Group on Administrative and Operational Procedures within the framework of the reconstituted Field Programme Committee. This Group, led by TCOM, has carried out an inventory of procedures in the areas of financial matters, personnel, the project cycle, and the procurement of inputs, noting those that require revision, updating, deletion - as well as new procedures required due to the new arrangements for the implementation of the field programme.

14. The design of the web-based FAO Project Formulation Tool Kit is in a second phase to enhance its functionality and expand its coverage. It will facilitate the process of project formulation for FAO Regular Programme and extra budgetary sources of funding. Among other elements, the Kit contains normative frameworks for the design and formulation of projects drawing on FAO's technical, legal and policy expertise and field experience; "best practice" project examples; common elements frequently used in project documents (Terms of Reference of experts by technical disciplines, contract and reporting arrangements, etc.); and preparation guidelines to meet the specific requirements of the potential funding source.

15. With regard to the issuance of guidelines and training, further to the progress reported to the Programme Committee in May 2001 (PC 85/6, para. 5) an up-to-date Project Cycle Overview training course for FAO staff is being developed by the Staff Development Group in AFPO.

16. The course introduces participants to FAO's strategic planning processes, the changes under re-organization and decentralization, development concepts of sustainable development and participation, as well as covering methodological aspects such as project identification, logical framework analysis, appraisal, monitoring and evaluation, etc. Included as separate sessions are specific guidelines relating to Trust Fund, TCP, SPFS, UNDP, and emergency projects. It is expected that this overview course will further encourage field programme development, and provide one of several mechanisms aimed at improving project design and appraisal.

17. The course will be offered in field offices and at Headquarters, and is particularly geared to mid- and entry-level staff. Several pilot sessions are envisaged in a few locations in the last quarter of 2001 from which feedback would be incorporated before making the course more widely available. Three courses in the decentralized offices and two at Headquarters are forecast for 2002.

Progress in the Restructuring of the Technical Cooperation Department (TC)

18. The re-organization of the Field Operations Division has been completed and the Division now consists of four services in addition to the Office of the Director (TCOD): Field Programme Monitoring and Coordination Service (TCOM), Special Relief Operations Service (TCOR), Special Programmes Coordination and Monitoring Service (TCOS), Technical Cooperation Programme Service (TCOT).

19. Since the last report, the restructuring of the TC Department has proceeded to subsequent phases, with the major thrust of the changes aimed at providing more emphasis to the development of the field programme, with the concomitant enhancement of mechanisms and procedures for its implementation and monitoring. In this connection, the functions of the Policy Assistance Division (TCA) and its decentralized Policy Assistance Branches and Units have been modified to promote that Division's increased responsibilities for field programme development, including pipeline development, as well as reaffirming its mandate to provide a country focus within the Organization.

20. Among the tools the Division is developing to implement its enhanced mandate, two in particular should be noted:

• a Field Programme Development Strategy designed in close collaboration with the Regional and Sub-Regional Offices, which includes the strengthening of two key mechanisms to ensure improved formulation and processing of projects: Country Task Forces and multidisciplinary programming and formulation missions.
• the development of a Web-based Country Information System, which provides information on the agriculture sector and rural development policies to guide FAO staff in field programme development.

21. The TC restructuring process will continue with a review of the Units attached to the office of the ADG. This phase, once implemented, will be followed by the review of the Investment Centre (TCI).

Evolution of the Field Programme 1998-2000

22. The Programme Committee, in its report to the Council (CL 120/14), had expressed serious concern at the continuing decline of extra-budgetary resources for non-emergency technical cooperation, resulting in the loss of approximately half of the field programme volume funded from these resources since 1996. This document updates and supplements the data provided to the Committee, focusing on the evolution of the field programme from the year 1998 to 2000 by categories of projects, sources of funds and geographical distribution.

Table 1 - Total Delivery 1998-2000 (including support costs, in US$000)

23. In quantitative terms, the trend reported for the period 1996-99 is confirmed for the period 1998-2000 with slight variations:

• Total expenditure has increased by 21% from US$292 million in 1998 to US$353 million in 2000 (See Table 1).
• The growth in expenditure is due to developments in the area of Emergency and Humanitarian Assistance (from US$88m in 1998 to US$180m in 2000), including recovery and rehabilitation. The Oil-for-Food Programme in Iraq alone accounted for 73% of emergency delivery in the year 2000 (US$130m).
• Non-emergency Technical Cooperation, including RP funding through TCP and SPFS, declined from US$204m to US$173m between 1998 and 2000 (15%, or 8% per year).
• Donor Funded Technical Cooperation (DFTC) decreased from US$176m in 1998 to US$146m in 2000. Of the two years, the decline was lower between 1999 and 2000 (5% as compared with a 10% annual average between 1996 and 1999).
• Delivery from Regular Programme sources (TCP and SPFS) also showed a slight decrease (although budgeted amounts remained constant), possibly due to the adjustments required by the introduction of the new financial accounting systems and the decentralization of project operations to the country offices and technical units.

24. The decline in non-emergency technical cooperation was most pronounced in Africa. The only region that registered a net increase was Latin America. Delivery in the other regions also decreased in varying degrees (see Table 2) .

Table 2 - Technical Cooperation (non-emergency) by Region (including support costs, in US$000)

25. In terms of project distribution the data confirms the tendency towards concentration on fewer donors and fewer recipient countries which had given rise to concern in previous reports. It is noteworthy that only 6 countries in Africa (which has 42 LIFDCs) registered a delivery level above US$1 million.

• Two donors (NET, ITA) provided 51% of all GCP project delivery. Delivery in the UTF category dropped from US$25m in 1998 to US$19m in 1999 but recovered to US$22m in 2000 (see Table 3). Delivery under this category is also driven by a few large projects.
• The share of regional projects in field programme delivery also declined from 18% in 1998 to 15% in 2000. Inter-regional projects, mainly normative ones, increased from 17% to 21% over the same period (See Table 2).
• The share of UNDP-funded projects decreased further during the period (see Table 3). New policy orientations point to the exclusion of specialized agencies in UNDP project execution and implementation. UNDP funds can be expected to become an insignificant part of FAO's programme in the near future.
  

Table 3 - Technical Cooperation by Funding Source (including support costs, in US$000)

Delivery Projections 2001 and Prospects for the Future

26. In the light of the assessment carried out so far, the Secretariat believes that the declining trend will slow down or cease completely in 2001 and that non-emergency field activities funded from voluntary contributions will register a slight growth in the years ahead.

27. This forecast is based on two indicators:

• the budget volume of projects in operation in 2001, delivery up to May 2001 and projections to the end of the year (see Table 4).
• the level of approvals by funding sources, including the Government Cooperative Programme (GCP), the Unilateral Trust Funds (UTFs), the Global Environment Facility (GEF) and other UN organizations, private sector etc. (see Table 5).

Delivery projections 2001

28. Table 4 recapitulates delivery figures since 1998 and provides the situation as of May 2001 as well as an estimate for the entire year. This estimate is currently being refined with revised data provided by the Regional Offices and it will be possible to present a fairly accurate picture to the Committees at their September meeting.

Table 4. Annual Field Programme Delivery (including Servicing Costs)

29. These preliminary estimates can be considered encouraging insofar as they show that the non-emergency field programme is likely to reach the level of last year or even surpass it depending on the number of new projects that may come into operation in the remaining seven months. The forecast for delivery related to Humanitarian and Emergency assistance is very conservative and is likely to be exceeded.

Project approvals under the Government Cooperative Programme (GCP) and through the Unilateral Trust Fund (UTF) modality

30. In terms of approvals, the overall prospects for the year 2001 and beyond also appear promising, with estimates indicating an expected increase from US$222.5 million in 2000 to US$345.2 million in 2001. This reflects increases in both GCPs and UTFs, whereas a further significant decline is anticipated in UNDP and other extra-budgetary funding. (See Table 5.)

Table 5: Yearly Approvals 1998-2000 and Estimated Approvals 2001

31. As noted in Table 5, approvals for GCP projects are expected to more than double in 2001 over the previous year (from US$61 million in 2000 to some US$139 million in 2001). This is a result of recently approved agreements with the United Kingdom and Italy, as well as larger contributions to the GCP programme from Japan and Spain.

32. Similarly, approvals for UTF projects are predicted to rise from US$113.2 million in 2000 to US$180 million in 2001. Project preparations for a large UTF project in Nigeria (US$45.2 million) and a similar one in Venezuela (US$32 million), both related to food security, are at the final stages.

33. In conclusion, based on data available in July 2001, it is expected that delivery for the non-emergency field activities in year 2001 will be at approximately the same level as the year 2000, hopefully marking the end of the declining curve. The prospects for the next biennium appear positive, pointing to an increase in Trust Fund project delivery of non-emergency activities. While Trust Fund emergency activities are by nature unpredictable, it is nonetheless expected that the Iraq Oil-for-Food programme will continue at approximately the same level as at present.

34. FAO is doing its utmost to restructure and re-position itself to meet the challenges of those elements beyond its control. Renewed efforts are being made to make known by the most effective means its comparative advantages, to enhance and stress the importance of field programme development, to explore new means of increasing its competitiveness, and to identify potential new partnerships and financing modalities. There are, however, several elements largely beyond the control of the Organization, that will influence the future evolution of the field programme,

35. Such elements include, inter alia:

• the time lag between project approval and the commencement of project execution can be considerable, often exceeding twelve months, with a consequent need for revisions and adjustments to the project documents;
• a change in the type of collaboration with donors: there is a movement towards long-term partnerships with some of the donors under the GCP modality (e.g. The Netherlands, the United Kingdom, and the European Commission);
• changes in donors' policies and reduced budget availability;
• greater overall competition for fewer ODA resources; and
• new policy orientations of UNDP, which will de facto, imply the cessation of its role as central funding agency for the UN system.

36. Among the elements that induce certain optimism when looking at the prospects for the future, the following measures taken by the Organization can be noted:

• the strategy of the Director-General to promote the use of the UTF modality by developing countries as a means of taking full advantage of the Organization's technical expertise and resources, particularly in the priority area of food security.
• restructuring of the Technical Cooperation Department to enhance field programme development, pipeline management, field programme management and monitoring - this work includes design/revision of mechanisms and procedures for its implementation, as well as the redesign, improvement and maintenance of a field programme management information system;
• reinstatement of the Field Programme Committee to ensure coordinated actions, revitalize the field programme, and improve related operational and administrative procedures;
• new arrangements for the implementation of the field programme, with decentralization of operational responsibility for national projects to the FAO Representatives, thus improving accountability over project results as well as facilitating negotiations at country level with donors, and bringing the management of project operations closer to where the action is;
• strengthening of the Project Identification Facility as a tool to assist the Organization in resource mobilization through multilateral Trust Funds; and
• the availability of the Small-Scale Facility to facilitate participation by FAORs in UN programming activities, such as the preparation of the CCA and UNDAF documents.

Policy Aspects: FAO Participation in the Operational Activities of the United Nations System

37. At the time of writing this document, ECOSOC is holding in Geneva its Substantive Session, which has under consideration the Report of the Secretary-General on the "Triennial comprehensive policy review of operational activities of the United Nations system for development".

38. In this report, the Secretary-General states that "the organizations of the United Nations system should multiply their efforts to collaborate in fuller synergy and integrate their efforts to promote a common response to national development needs with joint actions and programmes. Reforms undertaken so far have covered a lot of ground in this direction, but this process needs to be extended and deepened". The report identifies as a constraint the growing preference for short-term and dedicated development funding "which do not only deny the critical mass of resources but also compromise the efficient use of contributed funds towards a more integrated approach. The future reform process should be directed towards addressing these twin issues".

39. In the light of its experience with field activities over the past few years FAO agrees with these remarks. The growth in funding to cover short-term needs, including emergency and rehabilitation, contrasts with the steady decline in resource availability for long-term agricultural and rural development which is, however, essential to the solution of hunger and poverty-related problems in the developing world.

40. FAO is an active participant in the inter-agency arrangements for operational activities and a firm supporter of the reform process initiated by the Secretary-General in this area. In March 2000 the Director-General wrote to the Secretary-General to seek membership in the United Nations Development Group (UNDG), given the "complex, multidimensional character of many persistent obstacles to development, which require more comprehensive and integrated responses". The immediate and positive reply of the Secretary-General allowed FAO to join the UNDG of which other specialized agencies (WHO, UNESCO and IFAD) also form part, in addition to several UN departments, funds and programmes.

41. Membership of the UNDG will enable the Organization to play a more active role in UN systemwide policy formulation on operational matters and strengthen its participation in the programming and planning processes at the country level, in particular the Common Country Assessments (CCA) and the United Nations Development Assistance Frameworks (UNDAF) which are increasingly recognized by recipient governments and the donor community as the frames of reference for technical assistance activities at country level.

42. The concluding observations of the Secretary General's report mentioned above open with the following paragraph:

"The greatest challenge to the United Nations development system at the present juncture is to enhance its capacity to adapt and respond with agility and flexibility to a rapidly changing global environment. The United Nations cannot be an agent of change without itself changing. It cannot confront new challenges without challenging itself".

43. FAO concurs with this conclusion, as borne out by the actions taken so far and those planned to confront development challenges through a strengthened and decentralized field programme working in close interaction with its normative activities under the Regular Programme.

1 CL 120/REP, para. 87

2 CL 120/14, para. 59