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Mr. Chairman,

The year now coming towards a close has been a very remarkable one indeed. It has taken the world an important stage forward in the realization that the resources of this planet are not unlimited. It has been marked by increasing threats of shortages and unhappily, so far as food is concerned, by worse than mere threats for millions of human beings. People the world over have begun to think much more seriously and deeply about how they are to react as rapidly as possible to the immense changes which are taking place and which will have a profound and far-reaching influence on what happens in the years to come.

The search for new directions in this increasingly compressed world of ours has been strikinly evident in the great international conferences that have been held this year. In the spring, there was the Special Session of the United Nations General Assembly with its call for a New International Economic Order. In the summer, there was the Law of the Sea Conference in Caracas and the Population Conference in Bucharest. And now, in these last two weeks, there has been the World Food Conference here in Rome.

The World Food Conference must be seen, first and foremost, in the context of this search for new directions. Although the world food situation has got worse in the last two years, fundamentally speaking the world food problem has not greatly changed. What has changed is the way in which governments now seem to be prepared to cooperate in tackling it. And this is, above all, a political change - and one of potentially historic dimensions.

I have always felt, Mr. Chairman, in my long years with FAO, that what the Organization has been lacking has been sufficient political support for all its many endeavours. This is why, from the outset, I very strongly welcomed the idea of the World Food Conference, which was clearly inspired by the realization that, today, even such a basic human problem in the world as food can only be surmounted by a concerted effort of political will by all nations. The Conference has in fact been the first major test of whether the governments which, in the United Nations last May, adopted the Declaration on the Establishment of a New International Economic Order are really prepared to take the political implications of this Declaration seriously.

In my view, the results of the Conference - and thus of the test itself - were, generally speaking, positive. In some ways, indeed, the outcome of the Conference exceeded my expectations. This is not to say of course that it accomplished everything we might have hoped. Far from it. But it made certain policy decisions of great importance - notably the establishment of the World Food Council. And it laid the foundations for what may hopefully prove to be decisive advances in assistance to the agriculture of developing countries. Here I have the new International Fund for Agricultural Development very much in mind.

It has not of course been possible for me, in the single day that has elapsed since the end of the Conference, to consider the results in detail. The subject will come up on your agenda on Friday, and at that time I hope to be able to give you a more complete statement of my views - although there is no doubt that it will take much longer than a few days for us all to weigh up the full implications of what has happened in the last two weeks. I should, however, like to mention now some of my general, preliminary reactions.

To begin with, I think some words of appreciation and tribute are due. Firstly, to the Government and people of Italy for having hosted the Conference. This is no mere formality. As we in FAO have good reason to know, Italy has been for many years a generous champion of international understanding in matters of food and agriculture. Its invitation to the World Food Conference confirms Rome as the capital of the world's fight against hunger and malnutrition. On behalf of FAO, I would ask the distinguished representative of Italy to accept our most sincere thanks on behalf of his country.

Secondly, I would like, if I may, to pay tribute to what I would call the general spirit of the Conference, which was so strikingly illustrated in the principles set forth in the Declaration which it adopted. And, speaking of declarations, I should also mention the eloquent one drawn up by the non-governmental organizations, and, more generally, express my appreciation to these organizations for the fine, free and constructive role they played throughout the Conference.

Thirdly, a special word of thanks is of course due to the Secretary-General of the Conference, Mr. Sayed Marei, who not only infused it with his own bold vision and enterprise, but followed the preparations steadily through over the months to bring it to the conclusion for which he must take so much credit. I would not like to forget, either, the staff of the World Food Conference Secretariat, particularly the FAO staff members who worked so hard and long on the substantive preparations without which, I think it is fair to say, the Conference would hardly have been possible at all.

And, last but certainly not least, Mr. Chairman, I should like to thank the many members of the Council who saw to it that FAO's role, past and future, in the matters concerning the Conference was not overlooked. I can assure them that I regard their contribution as having been of crucial importance.

Now, as to the results of the Conference. From what I have already said, you will have gathered that I have been greatly encouraged by what took place. I believe, apart from anything else, that FAO has been given a new impetus and that we can all derive a new enthusiasm from the Conference. As I have said, we shall need a little time to work out what the results mean in practical terms for the Organization. But certain broad lines are, I think, already clear.

For one thing, the role of FAO in the exercise of what is often described as its harmonizing function has been undoubtedly strengthened by certain resolutions adopted by the Conference, notably that concerned with food security.

Secondly, we have in recent years been constantly preoccupied, as you know, by the question of priorities in our work. Never before, I believe, have we been given so much general guidance in this matter of priorities as by the World Food Conference. I will deal with these in the discussion next Friday, when I hope that the Council will be able to give us some useful indications for the next Programme of Work and Budget for subsequent consideration by the Committees of the Council. I will have a little more to say on this in a minute when I come to the question of the budget level for the next biennium. At this stage, I would only like to say that the importance which the World Food Conference attached to a number of priority activities will inevitably mean that, if we are to respond effectively, there will have to be a considerable strengthening of the financial resources available to us. Indeed, if we are to respond sufficielty fast, we shall need to initiate some activities in the present biennium, and I shall ask the Council later in this session for authority to spend such resources as may be necessary for these. I would not, however, like the Council to think that I automatically equate a new pattern of priorities solely with additional resources. It may well involve cutting down on some existing activities and in addition further decentralization to our Regional Offices when something of particular importance to one or more regions is at stake.

Another outcome of the World Food Conference to which I want to draw your attention at this stage is the need for speedy action to set up the two Committees on World Food Security and on Food Aid. I would, for instance, urge that this session of the Council take whatever steps it considers necessary for the establishment of the Committee on World Food Security, which, you will recall, the Conference recommended should be a standing committee of the FAO Council.

I would also like to say that, for my part, I propose to move ahead immediately to initiate consultations with the Secretary-General of the United Nations and the executive heads of other agencies concerned on all those issues which have been singled out by the Conference for inter-agency action.

I cannot leave the subject of the World Food Conference without reminding you that, although I regard the results for the long-term as extremely promising, there is still a very grave problem affecting the food supplies of millions of people over the next few months. You all know of the initiatives I took on this during the Conference itself and of the meeting which is to take place on 29 November. All I can say now is that it is my earnest hope that, as a result of the spirit generated by the Conference, these intiatives will help in producing effective results that will avert the dangers that now threaten some hunger-stricken countries.

Mr. Chairman, in concentrating today, as was inevitable, on the World Food Conference, let me assure you that I have not forgotten our regular activities. As your agenda will show you, we have had, apart from the Conference, a very full year. But, on this occasion, I can only refer very briefly to two or three high-lights.

Firstly, as I have said on many past occasions, I would like to stress how much importance I attach to our Regional Conferences. The series this year was, in my view, particularly valuable. We shall make every effort - especially in view of the World Food Conference - to see that the resolutions adopted are applied as fully as possible in the interests of the different regions concerned.

Secondly, there have been our special efforts this year with regard to the problem of fertilizers. Since there is a document on the subject, I will not go into any detail. I would only say that I believe that the way in which we have got the International Fertilizer Supply Scheme off the ground is some evidence of how FAO may be able to respond to the new demands that will now be made of it.

Thirdly, there is the remarkable progress being made by the Consultative Group on International Agricultural Research. The pledges made less than a month ago by its donor members of nearly $45 million for support of international agricultural research activities in 1975, contrasted with the $33 million pledged for 1974, strikingly illustrate the rapid expansion that has taken place in support of research efforts to help meet the world's food needs.

Mr. Chairman, I turn now to my proposals for Programme and financial adjustments for 1974–75, as set out in document CL 64/28 and Supplement 1 to it. These were dealt with by the Programme and Finance Committees at their recent sessions.

As indicated in the documents I have mentioned, a number of the adjustments have been made necessary as a result of decisions or requests by the Council itself or by other bodies, including the United Nations General Assembly and ECOSOC. These account for a sizeable proportion of the total. They include such major items as the sessions of the Council and the Commission on Fertilizers that have already been held this year, the third session of COAG next April, the establishment of the Joint Division of FAO and the Economic Commission for Western Asia in Beirut, assistance to liberation movements and the use of Arabic at Council sessions. Such items make up $ 550 000 of the total. Unbudgeted costs account for a further $ 600 000. The remaining adjustments concern new or expanded programmes which I judge to be unavoidable or essential at present.

The reason why these proposals have been submitted to the Programme and Finance Committees and to the Council is that I am requesting finance for the items concerned from currency savings accumulated during 1974.

You will recall that the Conference specifically approved the budget on the basis of 592 lire to the dollar. Since early this year the rate has in fact been notably higher. At one point it reached 669. The current rate is 665. The average over the year so far has been 650. We shall thus have accumulated some $ 2 million in currency savings by the end of 1974.

It was understood at the Conference that I would not use currency savings as and when they accumulated but only after review by the Finance Committee. I recently concluded that the time has come to use some, though not all, of the 1974 currency savings on the items set forth in the documents I have mentioned.

As you will have seen from the Reports of the Programme and Finance Committees, they conducted an intensive review of all these items. The problem that now arises as a result of the review by the Finance Committee is the extent to which they should be financed from currency savings on the one hand and what are called “normal” savings on the other. What the Finance Committee recommends, in effect, is that, out of a possible total of expenditures of $ 1.9 million - including, that is, a contingent liability of $ 300 000 for the Fertilizer Unit - $ 1.2 million should come from currency savings and the remaining sum of between $ 400 000 and $ 700 000 should be covered by savings on the already approved and budgeted programme.

I hope that this recommendation will be considered against the background of certain relevant facts. The Council will recall that there was a sizeable cut in our real programme in 1972–73 and only a small programme increase in 1974–75. Moreover, some of our resources under the Regular Programme in 1974–75 have had to be diverted in support of the World Food Conference. There was not only the direct contribution to the Conference of $ 500 000. Indirect support from the Regular Programme involved additional costs of more than $ 600 000.

This latter figure is not so far off the total of the additional savings which the Finance Committee now wants me to make in the Regular Programme. Thus, leaving aside the question of whether I have not in practical terms done this already, it seems a little unfair to suggest in addition, as some have done, that I was in some way remiss in not having again opened a forced savings campaign as soon as the biennium started. It is clearly my duty to try and carry out the programme voted by the Conference as far as it is possible and appropriate to do so.

On the other hand, it is also true that there are many elements in the present Programme of Work and Budget that, often for reasons beyond our control, cannot be carried out as originally planned, whether in full or in part. Thus, there will be some normal savings available for use in 1975. Moreover, I also told the Finance Committee that there might be some important new commitments which you might wish us to undertake in 1975. That these are necessary is now evident from the recommendations of the World Food Conference which involve immediate initiatives on my part. I therefore accept that it would be desirable to have the largest possible amount of currency savings available.

In principle, therefore, I am ready to accept the recommendation of the Finance Committe and will accordingly make every effort to trim down or slow down the proposed adjustments and to use normal savings to cover items above the level of $ 1.2 million. I would, however, ask that I be allowed some flexibility with regard to the Fertilizer Unit. If income from the Trust Fund proves insufficient and I am unable to obtain the full $ 700 000 from normal or forced savings that the Finance Committee recommends, then I feel I should be free to use currency savings to meet any shortfall in financing the costs of this extremely important Unit. I trust that this situation will not arise - or at least only to a limited extent. But I think it is only prudent to make allowance for it.

There remains the question of the disposal of the remaining currency savings in 1974 - that is, a possible $ 800 000 and of those which may occur in 1975. In my view, this question should not be linked at this stage to the question of projecting the next Programme of Work and Budget against currency instabilities.

I now come to the question of the budget level for the next biennium. I am frankly reluctant to enter into this subject at the present time. Not only is there the problem of what cost increases are likely to occur over a period stretching three years ahead from now. I also need further time to consider the effects of the World Food Conference on FAO's priorities in the next biennium.

In particular, we have to consider closely how much more money will be available for investment in agriculture through the new International Fund for Agricultural Development, the World Bank, UNDP and new or additional multi-bilateral arrangements - and, through them, to FAO as an executing agent.

In recent years, the money available to FAO from extra-budgetary sources has been much greater than that which has been available under the Regular Programme, Extra-budgetary funds may in future form an even greater proportion of the total resources available to the Organization. This would have a proportionately greater impact on the Regular Programme in all sorts of ways, but especially the financial.

Thus, in this context, the problem is not what should be done, but how much of it can best be undertaken by FAO and what are the best ways of managing and financing it.

It is nevertheless clear - especially after the recent containment of programme increases which I mentioned a few minutes ago - that the time has come when the Regular Programme must be boldly strengthened.

But these are matters which require careful assessment. I think therefore that you would agree that it would be not only misleading but a positive disservice to Governments if I were to jump to conclusions at this stage about the programme level for 1976–77.

There is also the question, which I have mentioned, of cost increases over a period of three years from now. In the past it was possible to make an assessment of these without running the risk of being seriously wrong in financial terms or seriously embarrassed in political terms. In these days, however, of monetary instability and rampant inflation in many countries of the world, it is extremely difficult for an international organization, with no responsibility for the economic environment in which it lives, to assess government policies or even to appear to express opinions about their likely success or failure.

Even on what might be called fairly neutral assumptions, it would scarcely be prudent to estimate cost increases totalling less than, say, $ 35 million. The figure could, of course, be less or more, depending on what progress is made in a number of sensitive fields, including international monetary negotiations.

It seems to me that, with cost increases of this order, we must do some further thinking about full budgeting and the question of additional protection against the effects of unbudgeted cost increases and currency fluctuations. We must find better safeguards to protect the agreed level of programme activity while satisfyinf Member Governments' interests. This might be done in various ways, including some mechanism similar to the establishment of a Suspense Account as in the current biennium.

All in all, I hope the Council will appreciate that I do really need further time to consider the various issues involved before coming to you with any estimate, however provisional and indicative, for the total budget level for the next biennium. I know that it has become established practice in recent years for the Director-General to indicate a figure at the session of the Council a year ahead of the next session of the Conference. This is true, but, for the reasons I have given, I hope you will agree that this would be better postponed till the next session.

Before I close, Mr. Chairman, I should like to formally introduce to the Council the two new Assistant Directors-General who have joined us this year - Dr. Dieter Bommer of the Federal Republic of Germany, who has taken over the Agriculture Department and Dr. Kenneth King of Guyana, who is now in charge of the Forestry Department. Both these gentlemen are well-known in FAO circles, so that I need not provide you with their life-histories. Nor will I embarrass them with compliments. I would only say that I think myself very lucky to have obtained the services of two such first-class men.

I have now, Mr. Chairman, said all that I chiefly wanted to say today. I will end, as I began, with the World Food Conference. The main thought that I should like to leave with you at this stage is that I believe that the results of the Conference provide this Council with an opportunity as never before to help shape this Organization to meet the challenges of the future. It will now have new possibilities to help bring about the changes which the world seeks of FAO on the morrow of the historic international conference that has just taken place. I look forward to sharing with the Council the exciting prospects that derive from being in at the start of such a great new venture.

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