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Mr. Chairman,

Yesterday the Conference celebrated FAO's Twenty-Fifth Anniversary. That was a most notable occasion, which was devoted to consideration of the Organization's basic purposes, its past record over a quarter of a century and its future prospects for so far as we are able to see them. I think that all of us who were present at yesterday's commemorative session of the Conference will remember it in after years. I know that I most certainly will.

Today, at this opening of the Fifty-Fifth Session of the Council, we are concerned with the immediate business of the present. This is an occasion, not for philosophy but for facts. I accordingly propose to devote most of this statement to an account of some of the main features of FAO's recent activities, particularly since the last session of the Conference nearly a year ago now, and to some outside factors affecting them.

The best point at which to start is the International Development Strategy for the Second United Nations Development Decade which was adopted by the General Assembly on 24 October. We should not underestimate the importance of this Strategy which sets forth the essential goals and objectives for economic and social development which need to be attained in the course of the next ten years and also outlines the principal measures for attaining them. Most of the effort involved will have to be borne by Governments. But there is at the same time a vital role to be played by the organizations within the United Nations system. FAO is in some ways uniquely placed to assist in this process, chiefly because of the work it has carried out in connexion with the Indicative World Plan.

In the last year, we have been hard at work implementing the Resolution of the last session of the Conference which called on me to evolve the IWP into a Perspective Study of World Agricultural Development, that would include our member countries on a more up-to-date basis. The 1961–1963 base period of the IWP has been updated to 1964–1966 and the coverage increased from 64 countries to well over a hundred. We are fixing 1970 benchmarks for the Second Development Decade. Within this same 1970–1980 framework, agreement has been reached with the United Nations Centre for Development Planning, Projections and Policies and the Regional Economic Commission on postulates for economic growth, and these postulates have been fed into the new demand projections for the period which are now being run by the Commodities Division. A joint study has been established by FAO and the Economic Commission for Europe on agricultural developments in high-income countries and their likely impact on the developing world. This is scheduled to be completed around mid-1971. Gaps in the current coverage of the IWP, particularly in Indonesia and Central America, are being filled in. Work is being undertaken with the Joint Agricultural Division in Santiago and, through them, with ECLA itself, on an analysis of agricultural policies and potential in Latin America. There is much more than all this that we need to do in order to carry out the Conference Resolution to the full, and, within the limits of our resources, we shall continue to make every effort to do it.

Although we are increasingly involved in macro-economic planning - which is generally assuming greater importance in the context of the Second Development Decade - most of our work is naturally related, in one way or another, to technical matters. It might be useful if I were to give you a few instances of this, particularly with respect to what has been happening in the last year.

Let me start with the high-yielding varieties. We have been engaged in a number of projects aimed at defining the potential for their introduction into various countries or ecological regions and their adaptability to the farming patterns and practices to be found there. These projects have covered not only cereal crops, such as wheat and rice, with which the concept of the high-yielding varieties is normally associated, but also other produce such as soyabeans and tomatoes and even grasses which, through the development of better systems of pasture production, can lead to considerable increases in the production of milk.

While on the subject of high-yielding varieties, I should mention that the Administrative Committee on Coordination of the United Nations has initiated a new pattern for concerted action on major development issues by the organizations concerned. As a first step in the establishment of this pattern of action, the ACC asked me to convene a Working Group to indicate lines for inter-agency cooperation with regard to the Green Revolution, which has aspects of major economic or social concern to other agencies. At its most recent session last month, it considered a preliminary paper on the subject prepared by us. This paper aroused considerable interest, and it is expected that, with contributions from other agencies, a common strategy for action will be evolved for submission to ECOSOC and the General Assembly next year. This whole initiative is important not only because it concerns the Green Revolution, but also because it provides the ACC with the opportunity to engage in a new form of active collaboration on other major aspects of the development process such as the environment and population.

A more special instance of FAO's assistance to member countries in increasing their cereal production was the role we played in the establishment of the West Africa Rice Development Association. We were in fact requested to draft the Constitution for this Association which was adopted at Dakar in September. With eleven West African countries involved, the service which we were able to render was also a useful illustration of the role that FAO can play in fostering regional cooperation.

At a more general level, there is the technical guidance provided by the Codex Alimentarius Commission - a body in which we cooperate with WHO. In the last year, the Commission has finalized a large number of standards for sugars, fats and oils, processed fruits and vegetables, fish products, labelling and pesticide residue tolerances, together with international referee methods of analysis. Dr. Candau and I have been requesting governments to accept these standards so that, through the harmonization of national food legislation in different countries, some of the non-tariff barriers to trade can be removed and at the same time the health of consumers can be properly protected.

Mention of trade leads me on to our commodity work. In the last year, there has been the conclusion and implementation of an informal export quota arrangement for tea achieved under the auspices of the Consultative Committee on Tea, although much remains to be done before a formal agreement can be reached. In addition, the recent creation of a Study Group on Meat as one of the CCP's commodity bodies marks a major step forward by Governments toward a concerted policy for international trade in meat.

Among the other aspects of our work in the last year which deserves mention is that concerned with fisheries, in which FAO has for some years been recognized as the leading intergovernmental body. Probably the most important new venture has been the launching of an international fishery survey and development programme under the auspices of the Indian Ocean Fishery Commission which is one of FAO's regional fishery bodies, and with the financial support of the UNDP. When this programme becomes operational next year, it will be the first time in the history of international fishery development that an attempt will be made to combine all the various national and regional projects related to the fisheries of an entire body of the world's oceans and to mobilize investment capital for their development.

The technical work of FAO is of course ultimately aimed at the betterment of the human condition. One example of this is our concern about the problem of the environment. Last December I established an Inter-Departmental Working Group on Natural Resources and the Human Environment in order to strengthen our activities in the face of the growing threat to conditions of life on this planet. One of the tasks that has been assigned to this Group is to coordinate FAO's contribution to the United Nations Conference on the Human Environment which is to be held in Stockholm in 1972. And it is clear from preliminary consultations that have been held that FAO's contribution is going to be a major one.

To look at the other side of the picture, we also seek to involve individual human beings as much as possible in our efforts. And this is of course the whole purpose of the Freedom From Hunger Campaign, whose activities have been steadily expanding, particularly as regards its work with young people. One of the more striking of the Campaign's recent successes has been the organization of its walks for development. In the last year, it has been possible for the first time to organize walks in countries as far apart as Guatemala, India, Italy, Kenya and Zambia. During this period, these walks - and others held in countries where they had previously taken place - raised about $6 million for development purposes.

I should now refer to some of the more important conferences and meetings in the last year. Firstly, of course, there was the Second World Food Congress in the Hague last June. I shall be making a separate statement about the Congress when it comes up as an item on the agenda, so there is no need for me to say much about it now. Very broadly speaking, there were two kinds of reaction to the Congress - firstly, that it was a highly successful occasion, infusing a new spirit into the Organization; and secondly, that there were some disturbing features, tending to divert FAO from its real interests and functions. While I agree that there may be some truth in the second of these reactions, I find myself far more in agreement with the first.

Shortly after the World Food Congress came the World Conference on Agricultural Education and Training in Copenhagen which we held jointly with Unesco and ILO. According to the opinions that have reached me, this has been regarded as a highly effective technical conference and an outstanding example of inter-agency cooperation. Again, I do not think I need to say more, since you have a paper about the Conference before you.

Next came the round of the five Regional Conferences. The first thing I should like to point out here is that, on this occasion, we arranged to hold them all well in advance of the present session of the Council. This will, I hope, give you a clearer idea than in the past of what the different Regions regard as their most important problems and what they feel that FAO should be doing about them.

One of the documents to be considered by you is a Summary of the Recommendations formulated by the Regional Conferences. There are many of these on which I could comment if I had the time. But I will just mention three of them which struck me as being of particular interest - all connected with the mobilization of human resources for human development.

One of them emerged from the Near East Conference is Islamabad. Among several points listed in a Recommendation on the integration of development services in selected local centres, the Conference recommended that Member Governments of the Region should plan the policies and incentives appropriate for the comprehensive development of selected market towns. I consider this Recommendation to be of tremendous potential importance in connexion with the disastrous problem of unemployment in the developing countries. On the one hand, you have the vast pools of idle or under-employed labour stagnating on the land. And on the other, you have the masses of jobless people in the cities, whose numbers are being swelled all the time by those that flee from the land and who are ready at any moment to burst into violence. Both in the cities and on the land, the situation is made perilously worse by the rising tide of population growth.

Many solutions have been proposed to this urgent and desperate crisis which threatens whole societies in the developing world with chaos. Among these, the most comprehensive and potentially most effective, in my judgement, is precisely that for building up networks of intermediate cities and market towns in rural areas. Besides providing other benefits, they could absorb the rural unemployed and, by draining off the flood of these people to the present overcrowded cities, help to relieve the pressure there. It is for this reason that I was particularly struck by this particular Recommendation of the Near East Regional Conference.

The other two recommendations that I want to refer to both emerged from the Technical Committee on Agrarian Reform at the Latin American Regional Conference and were subsequently adopted by that Conference in the form of Resolutions. I will not deal with the substance of these Resolutions, since at least one of them goes into quite considerable detail. But, so important is this question of agrarian reform and so forceful is the manner in which the Latin American Conference dealt with it in these Resolutions, that I earnestly commend them - and the report of the Technical Committee - to the attention of the Council.

This particular subject leads me to mention what is probably the most important new body that we have set up in the course of the last year. That is the Special Committee on Agrarian Reform, which held its first meeting only last week under the distinguished Chairmanship of Mr. Lleras Restrepo, the former President of Colombia - a country which has taken a leading role in matters in land reform. The members of the Committee will be making a number of visits to countries in coming months before presenting their final Report in the course of 1971. These visits will enable them to gain information at first-hand of progress and problems under a wide range of conditions. Even more important, I am sure that, with the prestige and experience of the members of the Committee, these visits will be an excellent opportunity for them to assist governments in identifying the real obstacles that have hitherto stood in the way of vigorous action and in finding means to overcome them.

I should now, Mr. Chairman, like to turn to our field projects. Expenditure under the Special Fund sector in 1970 will be of the order of $60 million. This figure is about 50 per cent higher than two years ago. There is also the fact that the UNDP will be submitting to its Governing Council next January the largest programme of projects for FAO execution so far presented to any individual session. In the preparation of all these projects FAO has been actively engaged. All this clearly demonstrates FAO's ability to expand its capacity for planning and handling an increasing number of projects. This is important at a time when the capacity of the United Nations system has been questioned in the Jackson Report.

There has also been an expansion in our cooperation with bilateral programmes where there are now about 100 national, regional or inter-regional projects formulated by FAO and financed by Governments. I am in favour of further strengthening our cooperation with bilateral programmes, since it is in the interest of both recipients and donors that the limited resources available should be handled in such a way as to achieve maximum effect and avoid duplication of efforts.

Another encouraging sign has been the increase in the amount of investment in agricultural development of our cooperation with the World Bank Group, Regional Banks and industry. In addition, we have in the course of the year started a programme of cooperation with private banks. As an illustration of what is involved in all this, I might mention that, of the $400 million total of loans and credits from the World Bank Group for agricultural projects in fiscal 1970, the FAO/IBRD Cooperative Programme has been involved in the identification, the preparation or appraisal of 21 of these projects, accounting for loans and credits totalling about $275 million.

Mr. Chairman, a few moments ago, I referred to the Jackson Report. Although this only appeared after the last session of the Conference, I am sure that the Members of the Council are familiar with it and with the ensuing discussions that have taken place in the Inter-Agency Consultative Board, the Governing Council of the UNDP and ECOSOC. There is no doubt that, in some respects, the Report is controversial. You will, however, be aware that, from the outset, we in FAO have taken a constructive attitude toward it. Our only real fundamental disagreement with it has been over the almost monolithic centralization of operations which Sir Robert appeared to be advocating. We fully accept the idea of UNDP leadership, but we conceive of this in terms of partnership.

The discussions which I have mentioned led to conclusions in the Governing Council and ECOSOC which have been embodied in a lengthy Consensus which is being submitted for approval by the General Assembly. We feel that the Consensus is workable and we shall do our best to make it work. We are glad, in particular, to see that it emphasizes our idea of partnership.

I should perhaps refer to one particular paragraph in the Consensus which calls on all executing agencies to review their organizational structures with a view to adapting these to their increased operational activities financed by the UNDP. In this connexion, may I say that the setting-up of our operations offices has been an important features in increasing the efficiency with which projects are handled, and we are now reviewing the performance of these offices to see how further possible improvements can be made in the working arrangements of our operational structures.

Returning to the Jackson Report itself, there is one specific aspect which will have a very great impact on our field programmes. This is the idea of country programming, which we fully endorse. The effect of country programming is that there will be a gradual shift from the present system of ad hoc submission and approval of projects to a process of joint identification by governments and the UNDP - together with the agencies - of sectors or sub-sectors where UNDP support would be of the greatest value to the objectives set forth in national development plans. It would be following this process of identification that projects within the chosen sectors or sub-sectors would be drawn up and executed.

In view of this move toward country programming, I think it may fairly be said, with benefit of hindsight, that the decision to appoint the corps of Senior Agricultural Advisers/FAO Country Representatives was extremely fortunate in its timing. For it is clear that the Country Representatives will have an extremely important part to play, along with the national ministries concerned, in the preparation and formulation of UNDP programmes related to food and agriculture.

On the general situation regarding the Country Representatives, let me say that this new system - which, as you will remember, was the subject of an Agreement between Mr. Hoffman and myself - is working well, despite some inherent complications. You will also recall that the Agreement stipulated that the whole situation should be reviewed toward the end of this year. In accordance with this, the Administrator of the UNDP and I have jointly agreed upon a Consultant who is already engaged on the review. As many of you no doubt know, he is a man well-versed in FAO affairs, being none other than our former Assistant Director-General, Mr. Frank Weisl.

I should now mention some questions concerning the functioning of the Organization. Although the original re-organization which I carried out in accordance with the wishes of the 1967 session of the Conference is now virtually concluded, re-organization itself, as I have had occasion to say before, is a continuing process. We have accordingly been introducing a number of management improvement measures in accordance with recommendations of outside consultant firms. These include network analysis, operational research methods for selecting and classifying field projects and an increasing use of computers for these and other activities. I might also mention that we have re-organized our secretarial arrangements in such a way that we have been able to abolish about 120 secretarial posts. This, I might add, is being done simply by relying on the normal turnover due to staff leaving the Organization and has not involved the termination of any staff member's contract.

I must now say a few words about management/staff relations, which is undoubtedly one of the most complex subjects in the contemporary world. You will certainly know that we have been, and still are, having our difficulties in FAO. By and large, I think that this is an area to which insufficient policy attention has been devoted over the years. Our eyes have been fixed mainly on the substantive tasks facing the Organization, and we have allowed a number of management/staff problems to accumulate. We are still groping our way toward appropriate solutions. A Special Committee on Management/Staff Relations was established some months ago in agreement with the Staff Council, and has been working under the distinguished Chairmanship of Ambassador Eng of Sweden. The Committee has put forward constructive reports on a number of specific problems which are being given close attention by myself and also, I know, by the Staff Council. A committee of this type is dealing with both immediate and long-term problems and must, as far as possible, be left to work in an atomosphere of serenity. I believe that it can contribute significantly toward the creation of better management/staff relations inside the Organization, but I must emphasize that this is a long-term undertaking and there is no magic formula for producing quick results.

At the same time, we have had a Joint Working Party on the Rome General Service Salary Scale chaired by Dr. Spinelli, the former Director-General of the European Office of the United Nations. Although the draft recommendations of the Joint Working Party have had a mixed reception among the staff and have not been a accepted by the Finance Committee, I believe that its achievements should not be underestimated. Here was a genuine attempt to work together with representatives of the staff in assembling the elements needed for the construction of a General Service salary scale. The difficulties which we have encountered in establishing a new salary scale are, I believe, entirely disproportionate to the size of the problem, and we have perhaps not yet found the right formula for handling this task. The Council will be considering the matter in the course of its present session, and I hope it will give due importance to the need for ensuring satisfactory participation by the staff, as well as by management, in a process which vitally affects the interests of our staff members.

As I come to the end of my account of FAO's activities in the last year, I should just like to mention two appointments that I have made at the Assistant Director General level. Following the resignation of Mr. Albert Adomakoh to take up an important appointment with the International Finance Corporation, I appointed Mr. Eric Ojala, formerly the Director of the Commodities Division, as Assistant Director-General in charge of the Economic and Social Department. In the course of the year, Dr. A.R. Sidky, the Assistant Director-General in charge of our Near East Regional Office, reached retirement age. To replace him, I am most glad to have been able to secure the services of Dr. M.A. Nour, a distinguished former Minister of Agriculture of the Sudan.

It is now time for me to turn to the question of the Programme of Work and Budget for 1972–73. Naturally the first point to consider is the effect of the current financial situation in the succeeding full biennium.

I am not in a position to give you a firm estimate of this because of certain questions about professional salaries now before the General Assembly and about General Service salaries which may require consideration at a later date. The current independent review of the arrangements for Country Representative may also have some financial consequences. In addition, we can only make a judgement based on current information about the extent of rises in the wage and cost-of-living indices in 1972–73 and continuing increases in other costs. At this moment the best estimate I can make of the full cost on non-programme increases in 1972–73 is approximately $14.6 million.

In principle, this increase in 1972–73, however large it may be, is exactly in the same category as past mandatories. That is to say, it is the direct or indirect effect of a rise in prices for which I have no responsibility.

In a situation like this, I am not in the same position as a national government, which bears the responsibility for its domestic economic and fiscal policies and can choose whether to pursue an inflationary or deflationary course, whether to rely on direct or indirect taxation, and whether to run a budget surplus or a budget deficit. I have no such freedom of manoeuvre, nor even the comfort which national treasuries have of knowing that inflation results automatically in an increase in revenue from taxation. Nor do I have the freedom of governments to cut back on capital programmes.

Even in that small area in which I have some responsibility for working out conditions of service, this is done in accordance with established international principles. I have of course a duty to my staff who are adversely affected by inflation and are indeed likely to suffer hardship as a result of it. Wage settlements in several of our member countries, providing for large increases of the same order as we are faced with here, are not unknown. The fact has to be faced that the greater part of the cost of this Organization arises from the salaries of persons whose terms and conditions of service are protected under an international system applying to all the United Nations agencies. Nevertheless, I recognize that it is also my duty to avoid placing too heavy a burden of contributions on our member countries, particularly the smaller ones to whom a small absolute increase can represent a heavier load in terms of foreign exchange than larger amounts do in the case of the bigger countries.

Thus, I have been managing my programme for the last few months in such a way as to hold back expenditure. In doing this, I have made every effort to ensure that the programme will not suffer, but inevitably some tasks which ought and need to be done - and have been approved by the Conference - will have to be deferred. This will involve disappointment not only for Member Governments, but also for loyal and hardworking staff who have your interests at heart.

On the other hand, there are many tasks which must be carried on and even intensified. There are also new activities which are given high priority by Member Governments and by myself for which new resources must be found. This is fully evident from the requests put forward at the Regional Conferences. Many of these were proposed in the medium-term context, but some called for more immediate action, at least on a preliminary basis. I consider that I must respond to the more essential and urgent needs in the Programme of Work and Budget for 1972–73. For this, I estimate that I need a minimum of $3.5 million.

This cannot be found simply by absorbing all the cost increases, without any addition of new resources. On the other hand, I realize that, in the current situation, not all of this can be simply added on to the total of the last budget, plus mandatories. I therefore propose to endeavour to shift resources amounting up to about $1.5 million from within the current Programme to those new higher priorities. The new money to be found would thus amount to $2 million.

I have said in the past that the Organization must grow. In the circumstances then prevailing, I spoke of a growth of 5 per cent per annum. The new money for expansion for which I am now asking is much less than half that figure. I realise that the impact of the total budget in the next biennium of the contributions of Member Governments is a matter of concern to them all. The case for a real and substantive growth, however, remains. It is not a question of growth for its own sake. Nor do I conceive of growth only in terms of increased Regular Programme staff at Headquarters. Indeed, in the next biennium the addition of new Regular Programme posts will be kept to the minimum and, as far as possible, alternative means will be found, within the flexibility available to me, of carrying out our tasks as efficiently and effectively as possible.

Some programmes will in fact undergo a cut-back on posts or other expenditure. The resources of others will be at a standstill. Only comparatively few will be allotted extra resources. In all cases, I intend to ensure that the available resources will be shifted from lower priority to higher priority activities. This will call for understanding and discipline in expectations and pressures, not only within the Organization, but also from those outside who have a special interest in the specific sectors affected.

We must all - you, my colleagues and myself - face the fact that we cannot satisfy all expectations. At the same time, I cannot take wholly on my own shoulders the consequences of economic factors over which I have no control. I must make my best judgement of what is essential and reasonable. Taking all the factors into account so far as is possible at this moment, the best indication I can give you is a provisional figure of $87 million for the total of the Programme of Work and Budget for 1972–73.

Mr. Chairman, this brings me to the end of my review of FAO's activities and the current outlook. There are both positive and negative features. I hope you will agree that the outline of the more important activities that I have given you today shows that the Organization continues to expand and intensify its work in the service of its member countries. On the other hand, it is undeniable that we are going through a rather difficult period at present due to forces almost entirely beyond our control. I am confident, however, in this twenty-fifth anniversary year, that we shall overcome the difficulties and that the Organization will move progressively forward to realize the ideals and vision of those who founded it in 1945. That, I believe, was the whole meaning of the celebration which took place yesterday.

Thank you.

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