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Summary Programme of Work and Budget, 1974–75 1

128. The Council reviewed the Summary Programme of Work and Budget 1974–75, in the light of the Director-General's opening statement, the reports of the Chairmen of the Programme and Finance Committees, and further explanations by the Secretariat concerning the additional budgetary requirements referred to in the Director-General's opening remarks. The Council noted that certain important questions involved in or possibly affecting the Programme of Work and Budget were going to be dealt with under other items of the Agenda. The present discussion was therefore concerned with general orientations in the Summary Programme of Work and Budget, and decisions on the separate items on the Agenda would have to be taken into account at a later stage.

129. The Council noted from the Director-General's statement that since the budget level of $98,891,000 had been proposed in the Summary Programme of Work and Budget, the following new developments involving additional costs for 1974–75 had arisen, of which the major items were as follows:

  1. The addition of resources needed in 1974–75 for the first phase of Chinese translation and interpretation would require an estimated addition of $1,440,000;
  2. additional rent for Building F, since Building D would not be available for occupancy during 1974–75, estimated at $215,000;
  3. the cost of cleaning the FAO premises would involve a further cost addition of $250,000;
  4. an increase in education grant pursuant to recent decisions of the UN General Assembly would require an additional $400,000; and,
  5. intensified inter-governmental consultations under UNCTAD resolution 83(III) would require an extra $169,400.

130. The Council was also informed of the contingent possibility that the Organization might be faced with further additional costs as a result of the recent recommendation by the UN Expert Committee on Post Adjustments to the effect that four classes of post adjustments should be consolidated into the professional base salary rate as of 1 January 1974, which would increase the Organization's liabilities for pension contributions and other items. This matter would be considered by the UN General Assembly later in 1973, and no provision had yet been made in the Summary Budget proposals or subsequent budget level projections for this eventuality.

131. On the other hand, the summary budget had been calculated for 1974–75 at the rate of Lire 582 to the U.S. Dollar, for the sake of comparability between the present and next biennium and because of the uncertainty of fluctuations in rates of exchange between June and November 1973. This introduced a further uncertainty regarding the final budget level for 1974–75. It was noted that the Director-General would provide a final figure based on the latest available information for consideration in November 1973 by the Council and Conference.

132. Omitting the contingent questions referred to in paragraphs 130 and 131 above, the additional items proposed by the Director-General plus some minor items would involve a programme increase of $1 632 000, which including cost increases totalled $2,587,000. This would bring the total budget level for 1974–75 to approximately $101 500 000, representing an increase of one percent in the programme level and 24 percent in total, as compared to 1972–73.

1 CL 60/2, CL 60/2-ANNEX, CL 60/2-ANNEX-Corr.1 (Spanish only), CL 60/2-Add.1; CL 60/PV/2, CL 60/PV/3, CL 60/PV/4 and CL 60/PV/18.

133. In considering the Summary Programme of Work and Budget as modified, the Council was conscious of the gravity of the world food and agriculture situation and certain present discouraging aspects of the responsibility and resources entrusted to multilateral organizations to deal with this situation. While it was necessary to pay due regard to the effects of inflation and currency changes and the need for economy, and while increased contributions would bear heavily on some Member Governments, particularly of developing countries, the Council was conscious of the need to enable FAO to respond more effectively in one way or another to the needs of the situation within the framework of a programme of work strictly geared to the priorities identified and through a policy of strict economy.

134. Bearing these points in mind, the Council considered the Summary Programme of Work and Budget in its various sections.

135. The Council endorsed the proposals of the Director-General with regard to the various adjustments and the restructuring outlined in the Summary Programme of Work and Budget and endorsed by the Programme and Finance Committees in the report of their joint meeting 1. There was however a feeling that reorganisations had an unsettling effect and should be kept to a minimum.

1 CL 60/3 paras 1 and 4.

136. The Council agreed that the procedure of having a summary budget did have the advantages set out in paragraph 2 of CL 60/2. The Council agreed that this new procedure of budgetary presentation should be continued in the future. It was suggested that in future more information might be given on the choice and content of priority allocations. It was also suggested that the content of sub-programmes as a whole was more important than additions or subtractions thereto. The Council furthermore confirmed the need to continue to have an Annex to the Programme Budget showing the budget by administrative structure, to enable governments to understand the internal structure of the Organization.

137. The Council welcomed the implementation of the unified programme concept, involving the matching of Headquarters and Regional Office resource inputs for sub-programmes, areas of emphasis and regional-problem areas. It noted that more complete and precise information would be available in the final version of the Programme of Work and Budget - in the summary work plans of each sub-programme under Chapter 2 and (for information purposes) under Chapter 3 by regional-problem areas.

138. Bearing this in mind, the Council considered both the balance of priorities in Table 6 and Area and sub-programme allocations in Tables 7 and 8. As regards Tables 6 and 7, some members of the Council considered that considerably more weight seemed to have been given to various aspects of Agricultural Policy and Planning (Area of Emphasis 2.5) than to Mobilization of Human Resources (Area 2.1) and Production and Productivity (Area 2.2), and in this connection particular concern was expressed about reductions in allocations for Area of Emphasis 2.1. It was however noted that the strengthening of the policy and planning functions applied to the major departments/divisions, and to the Regional Offices, and was orientated towards the essential integration of the technical, economic and social programmes of FAO in order to achieve a better response to the needs of Member Nations.

139. Concern was expressed by some members that the increase in the sub-programme for agrarian reform was insufficient. Other members expressed concern about reductions in resource provisions for certain sub-programmes as set out in Table 8 of the Summary Programme of Work and Budget, in particular those concerned with education and training, Basic Food Crops, Fertilizers, Library, Fellowships, Fisheries, Forestry and Junior Professional Training, in view of their importance to developing countries. Reservations or objections were also expressed by some members on the allocation of resources for certain sub-programmes, in particular the UN Staff College.

140. In this connection, the Council noted that:

  1. the sub-programme figures contained in Chapter 2 of the Summary Programme of Work and Budget did not include the inputs of the Regional Offices to the Areas of Emphasis and the sub-programmes, but that the final Programme of Work and Budget would do so, thus giving a clearer picture of the overall content of sub-programmes and the resources allocated thereto;

  2. the allocation of Regular Programme budgetary resources was based on certain criteria. These included not only relevance, urgency and feasibility but also, as set out in paragraph 18 of CL 60/2, recognition that national priorities would find expression in country programmes financed by extra-budgetary funds and not necessarily directly reflected in the Regular Programme; on the other hand, it was noted with concern that UNDP resources available to Member Nations for agricultural development had declined in real terms, due to inflation and currency changes.

  3. In general, it was not possible to reach final conclusions until the full programme proposals could be seen in the sub-programme narratives in the final version of the Programme of Work and Budget.

141. The Council stressed the need for more decisive action in the field of fertilizers, as the most important input necessary to achieve increased agricultural production. The cost of fertilizers had increased in recent months by as much as 50 percent and supplies were difficult to obtain. It was suggested that the Director-General should strengthen the capacity of the Organization to deal with this subject 1.

142. The Council expressed concern about the proposed upgradings in the higher posts together with a decrease in the number of lower posts, and the long-range effect of this on the grade structure of the Organization and costs. The Council recognized the importance of career prospects for FAO staff, but it was felt by some that a reduction in lower-grade posts (P-4 and below) was not conducive to action at the field level, and that it would not be desirable or economic to proceed in the direction of inverting the “pyramid”. In reply, the Director-General maintained that FAO had never had a perfect pyramid structure; Member Governments increasingly required better quality; the need for well qualified officers had become even more evident as high priority activities were emphasized and the size of the establishment was reduced; and merit and long service required recognition. He regarded the choice of upgradings to be a part of his managerial responsibility, but he would of course exercise this with due care and modesty, and without inverting the structure.

143. The Council generally endorsed the proposal of the Director-General substantially to increase budgetary provisions for consultants for 1974–75, particularly bearing in mind the large portion of these assigned to the regions. It was recognized that this move was not dictated by financial stringency but by the need to obtain short-term, high-level expertise, and maintaining flexibility in preference to the addition of posts to the establishment.

144. The Council was concerned about the problems of considerably increased costs. The Council commended the Finance Committee for its study of cost increases as reported in CL 60/3, noting the comments in paragraph 127 of that document. It stressed the need for continued economy, and noted the intention of the Director-General to pursue this although it would not in his view have a material effect on the proposals he was making.

145. The Council generally concurred in implementing the principle of full budgeting, although some members expressed reservations on this.

1 See paras 42–43 above.

146. The Council noted that no change was expected in the cost-sharing arrangement between FAO and UNDP as regards Senior Agricultural Advisers/FAO Country Representatives in 1974, and that the problem of repayment of advanced drawings of overhead costs prior to the introduction of the new reimbursement system on 1 January 1972 was under study by a special consultant The Director-General indicated, however, that the size of the UNDP field programme in prospect for FAO was expected to decrease and that, as a result, a deficit of agency overhead funds of $1 million in 1973 and even more in 1974 would arise unless urgent action were taken. It was noted that the Director-General had taken action to meet this situation by introducing a 6 percent cut in UNDP agency cost allocations as from 1 July 1973 (3 percent on an annual basis), and a projected reduction of an additional 10 percent for 1974. These reductions were linked with the consideration the Director-General was currently giving to restructuring FAO's “operations” activities, on which proposals would be presented to the Autumn 1973 sessions of the Programme and Finance Committees, Council and Conference. They would also affect the number of reductions in the establishment estimated in the Summary Programme of Work and Budget, after certain additional posts (mainly for interpretation and translation into Chinese) had been provided.

147. The Council did not debate the substance of the matter of operational structure, but some members indicated from different view-points their concern about the form which the proposals might take. It also noted that the proposals would deal also with the role of the Development Department, and might for example affect the current disposition of staff dealing with fellowships and evaluation. In regard to the latter, the Council stressed the importance of this function and its use in shaping priorities to respond to the needs of Member Governments.

148. In view of the uncertainty due to various factors about the final budget level to be presented to the Conference in the final Programme of Work and Budget 1974–75, most members were not in a position to commit themselves at this stage. There was however considerable sympathy and support generally for the proposals presented by the Director-General. A number of members expressed satisfaction with a planned programme level approximately equivalent to that originally authorized for the 1972–73 biennium. Other members were concerned that the Programme of Work could not be increased significantly to deal with urgent world agricultural problems.

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