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Programme of Work and Budget, 1974–751

- Form of Presentation

82. The Council was of the opinion that the format of the Programme of Work and Budget 1974–75 conformed in general with the recommendations of the Governing Bodies, and felt that the improved form and content of programme narratives and the new unified programme presentation provided a much more useful basis for assessment of the Director-General's proposals for the coming biennium.

- Director-General's Economy Measures in 1972–73

83. The Council noted that during the 1972–73 biennium the Director-General had been obliged to take drastic economy measures to meet the serious financial situation facing FAO as a result of the devaluation of the US dollar, continued inflationary pressures and a significant reduction in Agency Cost earnings from the UNDP field programme, and that he had managed the situation without recourse to the Working Capital Fund. The Council recognized that the severe reductions required had decreased the level of programme delivery in 1972–73 by some $7 million, but that the Director-General had taken the opportunity to effect major changes in priorities for implementation in the Programme of Work and Budget for 1974–75.

- Cost Increases and Full Budgeting

84. The Council was reminded of its support for the principle of full budgeting, previously expressed by the Governing Bodies, emphasized the importance of presentation of full estimated costs of the programme to Member Nations, and stressed the need to maintain the integrity of the programme approved by the Conference. It was informed that, in accordance with this principle, the Director-General had included in his budgetary proposals for 1974–75 all estimated expenditures - both programme and cost increases - and noted that the additional cost increases of $4.8 million included in the Supplementary Programme and Budget 1974–75 2 were involved in preserving the programme level endorsed at the Sixtieth Session of the Council.

85. With respect to the specific items of cost increases, it was noted that the provision of $1.19 million for the effect of recalculation of the budget level at Lire 563 = $1 was unavoidably tentative. It would however be for the Conference to determine at what rate the budget should be calculated. In the event that the average rate at which lire was acquired by the Organization during the 1974–75 biennium should be more favourable than that used in the computation of the Budget, the major portion of the resulting credit - to the extent that the profit related to staff costs - would show up in the staff cost variance account. Any favourable balance in that account arising from this factor would be used only after appropriate Finance Committee recommendations and Council approval. Unfavourable variations from the rate determined by the Conference could be met from the proposed Suspense Account.

1 CL 61/3, CL 61/3-Corr. 1, C 73/3, C 73/3-Annexes. C 73/3-Corr. 1, C 73/3-Corr. 2, C 73/3-Sup. 1, C 73/3-Sup. 1-Corr.1, C 73/3-Sup. 2, C 73/3-Sup. 2-Corr. 1, C 73/3-Sup. 3, CL 61/PV/4 and CL 61/PV/9.

2 C 73/3-Sup. 3

- Suspense Account

86. The Council noted that in the Supplementary Programme and Budget 1974–75 the Director-General proposed that, pending the results of the Survey on General Service Salaries, the Suspense Account be increased to $5.66 million to provide a reserve to cover possible additional Wage Index adjustments. It recalled that the draft resolution establishing the Suspense Account provided that withdrawal of funds therefrom was “subject to prior Finance Committee review and Council approval” and that “at the end of 1975 the Suspense Account shall be closed and the unused portion of this account transferred to cash surplus”.

- Programme Additions

87. The Council expressed concern that the additional programme increases proposed in the Supplementary Programme and Budget 1974–75 had not been available earlier and had not been considered by the Programme and Finance Committees. They were informed of the factors which in his opinion had not enabled the Director-General to present these supplementary proposals earlier.

88. Reservations were expressed about the need for these programme provisions, but it was generally recognized that in terms of priority they should not be considered in isolation but together with the main programme proposed in C 73/3.

89. The Council recalled that it had recognized at its Sixtieth Session that the support given by UNEP to FAO activities in environmental questions under the terms of FAO/UNEP cooperation would require infrastructure support from the Regular Programme; subsequently it appeared that financing of these infrastructure expenditures would not be available from UNEP funds. It was recognized that the provision for Food Security depended on the Conference's consideration of the Director-General's proposals in this regard.

90. The Council noted the view of the Director-General that the posts proposed for transfer from Agency Costs to the Regular Programme were indistinguishable from similar Regular Programme posts, that the projected level of the 1974 UNDP Agency Cost establishment was at least 13 percent below 1972, and that the Regular Programme had been supporting field programmes for many years. Nevertheless, at this stage a number of Members expressed reservations about the proposed transfer of $1 million. They objected as a matter of principle to the shifting of posts funded by extrabudgetary means to the Regular Programme.

- Budget Level for 1974–75

91. Some members expressed concern about the increase in the size of the budget. They indicated that they would have substantial difficulties in accepting the budget level. It was suggested that the Organization should absorb some essential programme increases by eliminating lower priority activities. A number of suggestions were made as to how the Secretariat should go about bringing the budget within acceptable limits. Some members reserved their position on the budget level for 1974–75, pending further considerations during the coming session of the Conference.

- Proposal for Examining Items 9, 10 and 11 in Commission II

92. There was general endorsement of a proposal regarding “Item 9 - Review of FAO Field Programme 1972–73”, “Item 10 - Medium-Term Objectives”, and “Item 11 - Programme of Work and Budget 1974–75”, of the Agenda of Commission II of the Conference, which was designed to avoid overlapping and duplication in discussion of the impact and trend of extrabudgetary programmes which arose under all three items. This proposal appears as Appendix E to this report.

Medium-Term Objectives1

93. The Council agreed with the Programme Committee that the document C 73/10 followed closely the recommendations made at its Fifty-Ninth Session and that it provided ample material and a good basis for discussion of policy issues and objectives for Member Nations and FAO.

1 CL 61/3, CL 61/3-Corr. 1, C 73/10 and CL 61/PV/5.

94. The Council noted a statement by the representative of ILO that ILO was cooperating with FAO and Unesco in medium-term planning, especially with regard to general economic and social problems such as education, employment, cooperatives and other rural institutions and integrated rural development.

95. In its discussion the Council confined itself primarily to broad matters concerning the form of presentation of the document, its general content, the basic functions of FAO as a basis for consideration of the document, and possible future improvements which might be considered by the Director-General, in particular as regards the final section on the programme implications for the Organization. It felt that matters of detail could be better considered by the Conference which provided more time for a full consideration of all aspects of the subject.

96. The Council agreed that the initiative in tackling agricultural development problems must be primarily the responsibility of Member Nations and that FAO had a vital role to play in assisting them toward the achievement of their objectives. In this connection, it noted that detailed medium-term objectives were dealt with at the sub-programme level in the Programme of Work and Budget. As regards the main Medium-Term Objectives document, the Council suggested that it should be more selective in clarifying the main objectives and policies for the medium term and should indicate a broad order of priorities among the Organization's proposed activities. In this connection, it was also suggested that more account could be taken of country programmes and of country perspective studies.

97. The Council noted, however, that the outcome of the World Food Conference in 1974 might well imply the necessity for a new framework for the next Medium-Term Objectives document; also that the UN Joint Inspection Unit was currently studying the question of harmonization and coordination of medium-term planning in the various organizations in the UN family and that the findings of this study could possibly be at variance with the current directives of FAO's Governing Bodies.

98. Concerning the general content of the document, it was felt that the World Outlook section, to be called “The Current Situation and World Outlook”, was generally well presented but that certain paragraphs were open to criticism or misunderstanding.

99. On Section III (Medium-Term Objectives) a number of problems were singled out for increased emphasis in the medium term, e.g. fluctuations in trade and production costs resulting from the introduction of synthetics to replace natural products, shortages of chemical fertilizers, possibilities of further developing aquaculture and timber resources, marginal land utilization, tariff barriers to trade, agricultural adjustment, education, training and extension, agrarian reform, land management, agricultural processing, employment and farm mechanization, commodity groups and research.

100. The Council agreed with the Programme Committee that consideration should be given to including in the next document the policies and actions required in the context of the world food situation; the reconciliation of production and other requirements at the national level; the probable trends (level, shifts of emphasis) of field programmes and their impact on the Regular Programme; the comparative emphasis to be given to FAO's four major functions; the balance of scientific, technical, economic, social and other activities in FAO's Regular Programme within the total resources likely to be available and their different sources.

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