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Overview of Programme Budget Proposals

257. The proposed allocations under the two scenarios (RG and ZRG) are indicated in the detailed tables below, while the outputs listed under individual entities, correspond to RG resources. The impact of the lower level of resources inherent in ZRG is illustrated in "boxes" placed at the end of each section. To provide more detail of the impact of ZRG, affected outputs are marked as reduced or eliminated.

RG Scenario – Proposed Programme of Work

258. It needs to be recognized that an RG Scenario represents an opportunity for FAO units to address most pressing problems – those which they could not accommodate within the existing budget. In the case of technical units, this implies allocating the additional resources to the areas of highest priority, as will be seen from the narratives provided below.

259. The preceding Table 3 gives the distribution of resources under the major budgetary headings for the RG scenario – firstly, at the level of the Programme of Work (i.e. the gross budget, including resources from other income) prior to the addition of anticipated cost increases; and secondly, at the level of the Appropriation at the same exchange rate adopted for the PWB 2002-03. The following is a summary explanation of the main movements in each budgetary chapter. These are explained in greater detail under the respective sections.

Chapter 1 – General Policy and Direction

260. The increase is necessary in particular so as to regularize a number of temporary General Service posts, and also to establish a P-3 Liaison Officer post in SAD on a firm footing, replacing hitherto temporary arrangements. SAD includes the unit in charge of coordinating FAO's participation in the UN System’s Chief Executives Board for Coordination (CEB) machinery. It is confronted with a growing number of UN system initiatives, implying a heavy workload of analysis and follow-up. This is partially offset by the removal of the one-time budgetary provision for the development of PIRES in the PWB 2002-03.

261. As reflected also in Table 3, the former separate heading 1.9 Programme Management has been eliminated, and the corresponding resources distributed to the other Major Programmes in this Chapter. Thus, the cost of the small administrative unit supporting a number of independent offices in the Office of the Director-General (ODG) lato sensu is now more closely related to the pertinent programmes, in consistency with the approach taken with the Management Support Service of AFD, which carries on similar functions for the other HQ offices.

Chapter 2 – Technical and Economic Programmes

262. In line with the substantive thrusts and priorities summarised at the beginning of each major programme narrative, this chapter benefits from significantly increased resources, albeit at a lower level than that indicated for the biennium 2004-05 in the MTP. Particular attention has been paid, at the major programme level, to Fisheries and Forestry which show increases of 8.1% and 7.5% respectively. Major Programme 2.1, Agricultural Production and Support Systems, also shows an increase of 7.2%, including significant additional resources for the IPPC and the Joint FAO/WHO Meeting on Pesticide Residues (JMPR), as well as for CGRFA acting as the Interim Committee for the International Treaty on Plant Genetic Resources for Food and Agriculture. Major Programme 2.2, Food and Agriculture Policy and Development, includes significant additional resources for Codex and other work on food safety. Regrettably, to make room for the above increases, it was necessary to reduce provisions under Major Programme 2.5, Contributions to Sustainable Development and Special Programme Thrusts, particularly Programmes 2.5.1, Research, Natural Resources Management and Technology Transfer, and 253, Rural Development.

Chapter 3 – Cooperation and Partnerships

263. As clearly conveyed by Table 3, additional resources are provided for:

  1. the policy assistance work carried out by TCA, including its outposted teams in Regional and Sub-regional Offices;
  2. increased activities of the Investment Centre, under the World Bank Cooperative Programme reflecting anticipated higher requests from this key partner financial institution, which needs to be matched by an increase under the Appropriation; regrettably, provision for the Investment Support Programme dealing with other partners needs to be compressed;
  3. the reinforcement and consolidation of the FAO Representatives network, including training.

264. The increases under 3.3 Field Operations and 3.5 Cooperation with External Partners reflect in the first case primarily expected higher resources for TCE, responsible for field emergency work and support to post-emergency rehabilitation (the resources for which stem primarily from charges on projects it executes), while in the second case, the need to absorb under the Appropriation, the cost of posts hitherto funded from support cost reimbursement resources (cf. below explanations for the ZRG scenario).

Chapter 4 – Technical Cooperation Programme

265. The increase brings the share of this Chapter to 14.7% of the Appropriation, which is a step in the right direction although still far from the expectations in Governing Bodies. Within the total provision for the Chapter, an increase is provided for the Technical Cooperation Programme (TCP) unit, which requires strengthening so as to enable it to improve analytical support to, and monitoring of the Programme.

Chapter 5 – Support Services

266. The change under Major Programme 5.1, Information and Publications Support, is for reinforcement of public information activities in the regions as well as at Headquarters, in accord with the strategy for Communicating FAO's messages.

267. The apparent decrease under Major Programme 5.2, Administration, reflects the impact of several factors: 1) it is possible to remove the one-time provision for development of the Oracle phase II project from base allocations; and 2) a technical adjustment reflecting the transfer of the unit dealing with travel and the shipment household goods from the Finance Division (AFF) to the Management Support Service (MSS), the costs of which are distributed over the budgets of all units being serviced by it. However, this is offset by an increase for AFF, to support the partial implementation of the recommendations of a reputed firm of consultants, which have advocated its needed strengthening.

Chapter 6 – Common Services

268. The apparent increase is also primarily of a technical nature, arising from revised distribution formulae for indirect costs. In particular, Chapter 6 now includes a greater proportion of computer infrastructure costs, because of the impact of the growing WAN costs in decentralized Offices.

RG Scenario – Proposed Appropriation

269. Table 3 also shows the net impact on the Appropriation before cost increases, arrived at by deducting "Other Income" from the Programme of Work which, in turn, reduces the net Appropriation. The main shifts in income are highlighted as follows:

ZRG Scenario – Proposed Programme of Work

270. The preceding Table 6 shows the distribution of resources under the major budgetary headings for the ZRG scenario for both the Programme of Work and the Appropriation, shown in comparison to the same in the RG scenario.

271. The ZRG scenario implies removal of the entire RG proposal for a net programme increase of US$ 36 million. While this returns the total budget to existing levels in real terms, it does not imply a “no change” scenario. On the contrary, the ZRG scenario involved substantial adjustment to the 2002-03 approved budget to reflect experience during 2002-03 (i.e. recognized areas of under/over budgeting), reassessment of key factors (e.g. likely levels of other income including support costs) and the priorities emphasized by the Membership for 2004-05.

272. The following brief notes summarize the impact by chapter.

Chapter 1 – General Policy and Direction

273. The ZRG scenario implies a reduction in resources for peer group reviews as part of the evaluation process and in non-staff resources for the Office of the Inspector-General negatively affecting AUD’s work plan and for GIC’s protocol activities.

Chapter 2 – Technical and Economic Programmes

274. At the level of Major Programmes, ZRG inevitably embodies a very significant reduction to all technical programmes, as these were the ones which most benefited from the proposed growth under RG. In fact, as mentioned above, real growth was applied in support of the highest priority programmes as identified by the Membership. While full details of the impact of reductions are provided in the text boxes at the end of each technical programme narrative, attention is drawn to the reduction under Major Programme 2.5, which takes this major programme well below current budget levels. This was necessary to allow the much sought after increases for IPPC, Codex, IT-PGFRA, etc.

Chapter 3 – Cooperation and Partnerships

275. ZRG generally leads to a reduction in the policy assistance and investment support services which can be provided to Members. The reduction under Major Programme 3.3 will eliminate the proposed strengthening of work on rehabilitation, whereas in the case of country offices most the planned reinforcement will not be possible.

Chapter 4 – Technical Cooperation Programme

276. In the absence of any growth overall, TCP is a major loser in that resources would revert to their 2002-03 level.

Chapter 5 – Support Services

277. The ZRG scenario will reduce the range and volume of services which the Information Division can provide in its support for the Cross-organizational Strategy on Communicating FAO’s Messages. The reductions under Major Programme 5.2 will impinge upon AFF and AFI’s system development plans whereas in AFH, they will severely curtail planned staff development in support of strategies for Ensuring Excellence and Enhancing Inter-disciplinarity.

Chapter 6 – Common Services

278. The reductions will primarily impact upon intended infrastructure improvements.

ZRG Scenario – Proposed Appropriation

279. As "other income" is not much affected by the level of the Appropriation, deduction of "other income" leads to generally identical decreases from RG allocations for the Programme of Work, and hence affecting the capacity of the Appropriation to meet recognised priorities.

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