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Summary Programme of Work and Budget 1978–79 1


128. The Council welcomed the brevity and clarity of the document, which formed a satis- factory basis for discussion by the Council pending receipt of the detailed Programme of Work and Budget. The structure of the programmes, which the Council had previously approved at its Seventieth Session, was recognized as a substantial improvement. The Council further noted that the full Programme of Work and Budget should show further details, particularly on posts, extra-budgetary funds, and on programmes on a regional basis. The Council, therefore, agreed that the practice of providing a Summary Programme of Work and Budget to its summer session in the Conference year should continue. The Council appreciated the full and detailed analysis of the Summary Programme of Work and Budget carried out by the Programme and Finance Committees.

General Strategy

129. The Council fully supported the main lines of the programme proposals. It was a realistic, well-conceived and action-oriented programme. It clearly followed not only the decisions adopted by the Council at its Sixty-Ninth Session, when it examined the Director-General's review of the programmes, structures and policies of the Organization, but also the views of the Eighteenth Session of the Conference and the recommendations of the main Council Committees and of the Regional Conferences.

130. The Council confirmed both the policy directions and programme priorities in the Summary Programme of Work and Budget, in particular the Technical Cooperation Programme, decentralization to the country level, support to UNCTAD's integrated commodity programme, integration schemes, economic cooperation between developing countries, food security, and the emphasis on investment and direct action programmes for increased food production, as being in line with the objectives of the NIEO and the decisions of FAO's Governing Bodies.

131. The Council agreed that the above components of the strategy would enable FAO to play a more positive role in world agricultural development, which was even more vital owing to the failure to reach the target of 4 percent annual growth in food production set for the Second United Nations Development Decade.

Organizational Changes

132. The Council agreed with the Director-General and the Programme and Finance Committees that organizational changes should be kept to a minimum and supported the minor consolidations proposed for fertilizers, remote sensing, evaluation and investment.

Main Priorities

(a) FAO Representatives

133.The proposals for the new FAO Representatives' offices reflected the decisions of the Council on decentralization at its Sixty-Ninth Session. The Council was pleased to note the progress which had already been made and the high degree of interest expressed by individual Member Governments. At the time of its Session, 47 official requests plus 12 other enquiries had been received and 12 agreements had already been concluded. A request was made for additional information on the financing of the scheme.

134. Some members enquired about the pace of implementation, bearing in mind the problem of finding staff of a suitable calibre. The Council generally agreed, however, that, considering that it was planned to have a phased implementation of 10 offices in 1977 and 37 in 1978–79, the provisions were realistic. Even so, many countries would still suffer from lack of any representaion, since UNDP support for SAA/CRs would not be extended.

135. The Council noted with appreciation that full consultation was taking place with UNDP on the phasing out of the present arrangments of SAA/CRs and that close cooperation with UNDP Resident Representatives would be pursued.

136. There was general support for the proposed modest increase for Regional Offices in order to enable them to be in a better position to cooperate in the technical backstopping for the FAO Representatives. A number of members, however, felt the need for more clarification of the relationships between the Regional Offices and the FAO Representatives and Headquarters before agreeing to increases for the Regional Offices in addition to the large increase for FAO Representatives.

137. The Council welcomed the planned increase in the utilization of and cooperation with national institutions under all programmes with the aim of strengthening the institutions, and stressed that this should remain an essential component of the overall policy of decentralization.

(b) Technical Cooperation Programme 2

138. The Council noted that as of the end of May 1977, 88 TCP projects had been approved for a total value of $6.9 million. Fifty-six percent of the funds had been concentrated in least developed or most seriously affected countries. The projects approved covered all the four categories of assistance agreed by the Council - training, emergencies, investment and other short-term, urgent actions. The programme areas of greatest concentration were seeds, land and water, plant protection, animal health, and training of extension workers. All segments of FAO - technical and operational units at Headquarters, regional and country offices and field staff - were actively involved in these projects. The Council requested that the information provided to it on the implementation of th TCP be updated for the Conference. Some delegates requested more information on the TCP.

139. The Council noted the statements of.several members whose countries had already benefited from TCP projects, on the relevance, promptness and lack of duplication in FAO's response through the TCP, from which it was evident that the TCP was indeed fulfilling the important function for which it was created, namely to provide a quick and effective response from FAO to countries',requests for urgent, small-scale technical assistance.

140. The Council recognized that it was too early to evaluate the effectiveness of the TCP . since few projects had yet been completed. It noted with approval the intention of the Director-General to arrange for an evaluation which would assess performance, adherence to approved criteria, procedures and results. The Director-General was requested to submit his report on such an evaluation to the autumn 1978 session of the Council. Some members suggested that the Director-General advise the Seventy-Second Session of the Council of his detailed planning for this evaluation which should also cover, in their view, the relationship between the TCP and the overall developmental effort.

141. The large majority of the Council endorsed the proposed budget and provisions for the TCP in 1978–79. Many members regretted the relatively small increase in the TCP budget, which would in effect maintain it only at the same level as 1977. Some members expressed their reservations pending an adequate evaluation to the continuation of the TCP beyond the 1978-79 biennium. Their concern stemmed mainly from the increase in the number of sources of funds for technical assistance, which in their view might create coordination problems in the UN system.

(c) Investment

142. Some members were concerned about the financial arrangements between FAO and IFAD, suggesting that IFAD should pay for the full cost of all services and facilities provided by FAO.

143. The Council noted that negotiations were still under way and agreed that it was not possible at this stage to predict in full the actual modalities of cooperation with IFAD. It considered however that IFAD should make the greatest possible use of FAO and that it was essential for the Regular Programme to provide for support to IFAD as well as to other new and emerging funds and cooperation with the regional development banks. A number of members referred specifically to the need for full cooperation with the African Development Bank.

144. The Council welcomed the trend to increase direct investment assistance to countries in cooperation with national institutions,

145. The Council fully endorsed the proposed priority to be given to investment and the consequential rationalization of the structure of the Investment Centre.

Other Priorities

146. There was general support for the other main priorities in the Summary Programme of Work and Budget, namely post-harvest losses,trypanosomiasis, seeds, fertilizers, fisheries, forestry, rural development, nutrition, commodities and food security,

147. The Council appreciated that in several of these areas, such as nutrition, commodities and some rural development activities, work would be considerably reoriented along the lines of the overall strategy without any increase in resources and that even in areas with modest increases, considerable reorientation of existing resources was also proposed.

148. Within the Rural Development Programme, the Council stressed the priority of increasing the level of participation of rural people, especially women and the most underprivileged members of the population, in development activities. It also emphasized the need for education, training and extension services for rural people. In this context, it approved the increased emphasis on training under all programmes. The Council further stressed the need for transfer of approriate technology from more developed to less developed countries, and also within developing countries themselves. The emphasis on small farmers and related policies in areas such as credit was also welcomed. The Council hoped that this programme would now be given greater vitality and relevance. The development of cooperatives was also considered as a useful means of improving agricultural productivity and a helpful instrument, in certain areas, in stabilizing prices at levels remunerative to producers and reasonable to consumers.

149. The Council reaffirmed the primary objective of the Nutrition programme to assit devel- oping countries to improve the nutrition of their rural and urban poor. It suppported the proposal of the ACC to establish a Sub-Committee on Nutrition and to replace the Protein- Calorie Advisory Group of the UN System by and Advisory Group on Nutrition,, It recognized the necessity to postpone the Second Session of the Committee on Food and Nutrition Policies and requested that it should be held as soon as possible in 1978. 3 It also stressed that FAO should assume leadership within the UN System for action in the nutrition field and requested the Director-General to bring this to the attention of the World Food Council. The hope was also expressed that the abolition of the second nutrition post in the Regional Office for Africa would not result in any reduction in the efforts to improve nutrition in this region.

150. The Council concurred in the shift of emphasis of the Fisheries programmes from data collection and planning activities towards direct assistance in fish exploitation and utilization, and the development of full potentials particularly for small-scale fisheries, aquaculture and inland fisheries.

151. It also concurred in the emphasis within the Forestry programme on integration of forestry projects into overall community development, small-scale forestry operations, stimulation of investment, improvement of technology and increase of trade in tropical forest products while not neglecting appropriate technology for equatorial forestry, rural employment, and agri-silviculture to permit the integrated production of food and permanent forest crops and to reduce the degradation of soil resources through shifting cultivation.

152. A few members expressed the view that the Food Standards programme should preferably be financed by voluntary contributions.

153. The Council agreed that the Natural Resources programme should be orientated as far as possible to provide direct benefits to countries and that priority should be given to improving irrigation schemes. The need for regular supplies of fertilizers at reasonable prices was also stressed.

153. The Council agreed that the Natural Resources programme should be orientated as far as possible to provide direct benefits to countries and that priority should be given to improving irrigation schemes. The need for regular supplies of fertilizers at reasonable prices was also stresssed.

154. Within the Crops programme, support for the priority of reducing post-harvest losses was reiterated and the need for a coordinating unit was agreed. The priority given to seed industry development was also appreciated. It was also urged that agro-industries development and mechanization should be given sufficient emphasis.

155. Priorities within the Livestock programme were considered to be placed correctly on the integrated development of tropical pastures, trypanosomiasis, for which it was hoped substantial extra-budgetary funds would be found, and the meat and dairy development schemes, which it was hoped would be useful vehicles for inter-country cooperation.

156. It was stressed that the Research Support programme should concentrate on the use of. national institutions in developing countries, promoting cooperation among these institutions and providing effective links between research and extension. Some members reserved their views on CARIS and AGRIS pending study of the evaluation report which it was hoped would be available well in advance of the Conference. The report should give specific. attention to the extent to which the information provided was useful to and used by development personnel and institutions.

157. With respect to the Food and Agriculture Policy programme the Council recognized the need to assist countries in planning and policy development for the agricultural sector and also for FAO to participate in the preparation for the Third United Nations Development Decade through the study "Agriculture: Towards 2000." Concern was expressed that the provision for the latter study should be kept under close control of volume and cost and that there should be further efforts to reduce theoretical studies.

Level of the Budget

158. There was full support for the Director-General's general approach in arriving at a reasonable and balanced programme package, taking account of the fact that the larger part of the total increase was a reflection of inflation, substantially offset by favourable exchange rates. It was noted in this connexion that the rounded figure of Lire 900 per dollar, while adequate for the Summary Programme of Work and Budget, would be subject to review and final decision of the Conference on the appropriate rate of exchange for 1978–79. Some members considered that the programme increase should have been larger in order to meet adequately the requirements of developing countries. A few pointed out that, in view of the efforts at financial stringency which their own countries had to make, it would be advisable also to limit the growth rate of the budgets of international bodies; consequently, they expressed the wish that the Programme of Work and Budget should be reviewed from this point of view. A few others whished to examine the full Programme of Work and Budget before expressing their views on the budget level.

159. There was however widespread support for the proposed level of $206.8 million (at Lire 900 to the US dollar) and practically unanimous endorsement of the Summary Programme of Work and Budget as the basis for completion of the final Programme of Work and Budget, in the light of the views expressed by the Council.

Structure and Content of the Review of Field Programmes (including section on Technical Cooperation Amongst Developing Countries) 4

160. The Council agreed with the Programme Committee that the Outline for the 1976–77 Review of Field Programmes represented an acceptable balance between a broad sweep over the entire spectrum of field activities carried out by the Organization in the current biennium and a critical examination of carefully selected segments for more substantive discussion by the Conference. The Council also noted with satisfaction that the Review would attempt to bring into focus the relationship between the Regular Programme and extra-budgetary activities in relation to training, investment promotion and the Technical Cooperation Programme.

161. The discussion on Technical Cooperation Amongst Developing Countries (TCDC) centred around the substantive clauses of a resolution which was proposed by Argentina and co-sponsored by all Latin American countries on the Council, The Council unanimously supported the resolution. While welcoming the initiative taken by the Government of the Republic of Argentina in hosting the proposed UN Conference on Technical Cooperation Amongst Developing Countries in 1978, the Council noted with regret that the current arrangements with regard to the organization of the Conference, might restrict a more substantive participation by FAO and other specialized agencies in the preparation of basic documents for the Conference, Considering the highest priority which agriculture, forestry and fisheries must receive at the Buenos Aires Conference, the Council urged the Director- General to take every possible step to try to redress this situation. The Council specifically requested the Director-General to bring operative paragraph 2 of Resolution 1/71 to the attention of the Second Session of the Preparatory Committee of the UN Conference on Technical Cooperation Amongst Developing Countries which was scheduled to be held in New York on 12 September. The Council also agreed that the matter should be brought to the attention of the UNDP Governing Council and of the Administrator of UNDP in the latter's capacity as Secretary-General of the UN Conference.

162. The Council noted with satisfaction the Director-General's firm commitment to the promotion of Technical Cooperation Amongst Developing Countries. The Council welcomed the Director-General's assurance that a separate section in the Review of Field Programmes would outline the specific measures, policies and programmes which the Organization would be pursuing to accelerate TCDC in the fields of agriculture, forestry and fisheries. The Council agreed to include a specific item in the Provisional Agenda of the Nineteenth Session of the Conference to discuss TCDC in the field of agriculture and food. 5

163. Considering the expanding concept of evaluation which would henceforth encompass Regular Programme as well as Field activities, some members suggested that the Director-General augment the resources available for evaluation work through some transfer of funds, in particular to permit greater use of outside consultants. This would ensure that the review of field programmes and the intended review of Regular Programme activities would attain the desired coverage and effectiveness.

164. The Council adopted the following resolution;

Resolution 1/71




Noting the important remarks and suggestions made during the discussion,

Aware of the importance of the United Nations Conference on Technical Cooperation amongst Developing Countries (TCDC) which will be held in Argentina at the beginning of 1978,

Bearing in mind resolutions 2974 (XXVII) of 4 December 1972, 3251 (XXIX) of 4 December 1974, 3461 (XXX) of 11 December 1975 and 31/179 of 21 December 1976, which requested, inter alia. coordination of the activities of the organizations of the United Nations system with respect to technical cooperation amongst developing countries,

  1. Expresses its gratitude to the Government of Argentina for its offer to host the forthcoming United Nations Conference on Technical Cooperation amongst Developing Countries;
  2. Requests the Director-General to ensure active and substantial participation in the preparations for the Conference in order that due account be taken of agriculture and food aspects;
  3. Requests the Director-General to bring paragraph 2 of this resolution to the attention of the Second Session of the Preparatory Committee of the UN Conference on Technical Cooperation amongst Developing Countries;
  4. Further requests the Director-General to submit to the Conference at its Nineteenth Session through the Council at its Seventy-Second Session, a report regarding FAO participation in the above Conference, and FAO's programme of action on TCDC including measures taken or contemplated to make appropriate adjustments in policies, procedures and programmes of the Organization to accelerate TCDC in all its aspects;
  5. Invites the Conference to give priority consideration to the report of the Director- General mentioned in paragraph 4 above and for this purpose to include in its Provisional Agenda an item entitled: "Technical Gooperatlon amongst Developing Countries in the Field of Agriculture and Food".

Other Programme, Budgetary, Financial and Administrative Matters: Work of the Thirty-Second Session of the Programme Committee, and Thirty-Ninth Session of the Finance Committee

Programme and Budgetary Adjustments 6

165. The Council took note of the budgetary transfer of $221 480 from the Office of the Assistant Director-General, Agriculture Department, to the Land and Water Development Division in that department. Under this adjustment, the activities of the Fertilizer Programme and the International Fertilizer Supply Scheme were now centralized in one Unit, in accordance with the recommendations of the Commission on Fertilizers which the Council had subsequently endorsed at its Seventieth Session.

166. The Council noted the two transfers of funds effected from Contingencies for the purpose of covering FAO's participation during 1976 in the work of the Conference on International Economic Cooperation and the assistance provided in 1976 to the IFAD Preparatory Commission.

Annual Report of Budgetary Performance, 1976 7

167. The Council took note of the Director-General's Tenth Annual Report of Budgetary Performance to Member Nations as attached to the Report of the Thirty-Ninth Session of the Finance Committee. It was noted that approximately 40 percent of the overall biennial budget had been spent or obligated in 1976, since implementation of the Technical Coopera- tion Programme and the establishment of FAO Country Offices was able to be started only late in 1976.

168. The Council noted that in 1976, currency savings amounting to $5.9 million had been transferred to the Suspense Account in accordance with Conference Resolution 35/75.

Financial Position of the Organization 8

(a) Status of Contributions and Contributions in Arrears

169. The Council noted that the status of contributions at 10 June 1977 was as follows:

at 1 January 1977
10 June 1977
Current 1977 contributions82 094 28342 187 90639 906 377
Arrears of contributions6 243 9435 549 309694 634
88 338 22647 737 21540 601 011 9
Instalments to be paid in 1978 and future years159 416159 416
88 497 64247 737 21540 760 427

9 See Appendix E.

170. The Council noted with satisfaction that the percentage of current year's assessments collected as of 10 June 1977 was 51.41 percent compared to 30.64 percent in 1976 and 36.77 percent in 1975.

171. The Council recalled the appeal it had made at its Seventieth Session (29 November- 9 December 1976) to all Member Nations to make adjustments, as necessary, to their appropriation patterns so that the Organization might receive contributions when due, and expressed the hope that those Members with amounts presently outstanding would settle their obligations at the earliest possible moment.

172. The Council noted with concern that amounts payable by Dominican Republic, Haiti and Paraguay in accordance with Conference Resolutions 39/75, 25/71 and 26/71 respectively were overdue. In these resolutions 'the Conference accepted the proposal of each Member that it liquidate its arrears of contributions over a ten-year period while at the same time paying its current contributions in the year of assessment.

173. The Council appealed to these Member Nations to remit the amounts overdue ($44 112, $24 297 and $38 881 respectively) as soon as possible before the Nineteenth Session of the Conference.

174. The Council further noted that as the arrears of the Central African Empire, Congo, Democratic Kampuchea, Lao and Mauritania exceeded the contributions due from them for the two preceding calendar years, they risked losing their vote at the forthcoming Session of the Conference in accordance with Article III.4 of the Constitution.

175. The Council appealed to these Member Nations to regularize their positions before the Nineteenth Session of the Conference so that the question of their right to vote would not arise.

176. In respect of Lao, the Council urged the Government to respond to the Director-G eneral's invitation, taken in accordance with the request of the Eighteenth Session of the Conference, to formulate a proposal for the settlement of its Outstanding financial obligations over a period of years.

177. The Council noted that as a result of the improved inflow of contributions the Organiza tion's cash flow had been satisfactory and that income received had exceeded expenditure ever since April 1976.

178. The Council also noted that Miscellaneous Income received, receivable and accrued for the period through 31 March 1977 of $5,348,428 10, had already exceeded the budgeted amount for the biennium of $3,820,000. The Council was informed that the main factor involved in the increase in Miscellaneous Income was the rise in interest income due to the improved inflow of contributions, which enabled the Organization to maintain larger sums of money on deposit.

179. Noting that UNDP Overhead reimbursement earned during the period January through March 1977 was lower than expenditure on overheads, the Council was informed that past experience indicated that overhead earnings for the year as a whole normally accrued at a higher rate than in the first quarter of the year.

(b) Applications for Membership

180. The Council was informed that Angola, Comoros, Korea (Democratic People's Republic of), Mozambique, Sao Tome & Principe and Seychelles had applied for membership of the Organization. It noted that the 1977 UN assessment rate (or theoretical rate) for these Nations, with the exception of Korea (Democratic People's Republic of), was 0.02 percent, the minimum, and that the same minimum rate applied in FAO in 1977. The Council noted that the contributions due for the last quarter of 1977 from these five States would be $4 080 each in accordance with the established procedures and practice. The advance due from each to the Working Capital Fund would be $1 300.

181. With respect to Korea (Democratic People's Republic of) the Council noted that it was called upon to contribute for 1977 at a rate of 0.05 percent to those United Nations activities in which it participated and this meant an assessment rate of 0.06 percent in FAO. In accordance with established principles and practice, its contributions for the last quarter of 1977 would be $12 240 and its advance to the Working Capital Fund $3 900.

Scale of Contributions 1978–79 11

182. The Council recalled that the Conference at its Eighth Session in November 1955 decided by Resolution 42/55 that the TAO Scale of Contributions would, in future, be derived directly from the United Nations Scale of Assessments as in force during the calendar year of the Conference Session, Such Scale to be applicable to the two following fiscal years. At its Eighteenth Session, the Conference, having reviewed a thorough and detailed study made by the Finance Committee on the subject, again concurred that it would be appropriate to continue to derive the FAO Scale from that of the United Nations.

183. The Council, agreeing with the recommendations of the Thirty-Ninth Session of the Finance Committee, proposed that the Conference adopt for 1978–79 the Scale of Contributi ons given in Appendix F to this Report which was based on 'the United Nations Scale of Asses s- ments for 1977, subject however to any adjustments that may arise from the establishment by the United Nations General Assembly of the appropriate rate of assessment for Viet Nam for 1977 and from the admission of new Members at the Ninteenth Conference Session.

184. The Council accordingly recommended the following draft resolution for adoption by the Conference:




Having noted the recommendation of the Seventy-First Session of the Council,

1. Decides to adopt for use in 1978–79 the Scale of Contributions set out in Ap pendix, which is derived directly from the United Nations Scale of Assessments as in force in 1977.

185. The Council drew the attention of the Conference to the fact that differences between assessments of individual Member Nations in the FAO scale for 1976–77 and that proposed for 1978–79 were attributable to differences in the United Nations Scale for 1974–7 6 on which the FAO Scale for 1976–77 was based, and the United Nations Scale for 1977, on which the proposed FAO Scale for 1978–79 was based.

Proposal for Measures to Protect the Programme from Adverse Currency Fluctuations and Unbudgeted Inflationary Costs 12

186. The Council noted that as a result of developments in the rate of exchange of the Italian lira in the 1976–77 biennium, currency savings amounting to $8.3 million had accumulated as at 31 March 1977 in the Suspense Account established under Conference Resolution 35/75; it was expected that if the rate of exchange stayed around its present level, an amount of some $15 million would accumulate in that account by 31 December 1977. The Council recalled that the effect of the above resolution was that on that date, these funds would revert to the General Fund.

187. The Council considered the Director-General's proposal, as endorsed by the Finance Commmittee, that, in the light of persisting currency instability, inflationary tendencies and other uncertain factors, a sum of $5 million of the funds in the Suspense Account be set aside to protect the Organization's Programme of Work and Budget in the future.

188. The Council recognized that unbudgeted costs could be met in a variety of ways and noted that the DirectorrGeneral was in a much less favourable position to meet such costs than the Secretary-General of the United Nations and the Directors-General of the larger organizations in the UN system for the following reasons:

  1. Working Capital Fund

    The nominal level of $6..5 million of FAO's Working Capital Fund represented only 3.9 percen t of the 1976–77 budget and only just over 3 percent of the proposed 1978–79 budget.T his compared with current figures of 11 percent for ILO, 7.5 percent for Uriesco, 4.3 percent for WHO and 6.2 percent for UN.

  2. Borrowing Powers

    The Director-General had no borrowing powers, whilst such powers, in varying degrees, had been granted to the Secretary General of the United Nations and the Directors-General of ILO, Unesco and WHO.

  3. Budgetary Reserves

    No reserves existed in FAO (other than the funds in the Suspense Account established under Resolution 35/75, which were only to cover currency losses and which were not available beyond 31 December 1977. In the case of Unesco, a budgetary reserve of over $13 million had been voted in the Appropriations Resolution to cover inflation. The ILO budget also contained small reserve for unforeseen expenditure.

  4. Supplementary Appropriations

    Only the FAO Conference may authorize supplementary appropriations. In the case of ILO and Unesco, the Governing Body and the Executive Board respectively, may, within certain limits, approve supplementary appropriations.

189. A number of members felt that inadequate time had been available for the problem to be looked into thoroughly and that it was impossible for them to adopt a decision at this Council session. Whilst fully recognizing that the Director-General's Programme of Work and Budget for 1978–79, once approved by the Conference, should be protected against demands stemming from exchange rate fluctuations and inflation in excess of that budgeted for and that such developments could not be foreseen, they were of the opinion that the problem should be considered further by the Finance Committee, that additional justification should be given, and that the matter should be further discussed at the Council's next session.

190. The majority, however, supported the Director-General's proposal as endorsed by the Finance Committee, considering that in the light of events in the prior biennium it was both logical and realistic, and bearing in mind sub-paras. (a) to (d) of para. 188 above.

191. The Council accordingly decided to transmit to the Conference the following draf t resolution for final consideration and decision:




Recalling its Resolutions 6/73 and 35/75,

Conscious of the need to ensure that adequate cash resources are available to the Organization to finance the Programme of Work approved by the Conference for 1978–79,

Recognizing that extra costs due to unbudgeted inflationary trends and currency fluct u- ations may have a serious impact on the Organization's Programme of Work and Budget for 1978–79,

Having considered the recommendations of the Council at its Seventy-First Session on measures to ensure the financing of such unbudgeted extra costs as may have to be met,

  1. Authorizes the Director-General, notwithstanding the provisions of Financial Regulation 6.1(b), to transfer, as of 31 December 1977, funds not to exceed $5 million from the Suspense Account established under Resolution 35/75 to a Special Reserve Account to cover unbudgeted extra costs due to adverse movements of currency exchange rate, unbudgeted inflationary costs, and such other eventualities as the Council may determine;
  2. Further authorizes the Director-General to use the funds in the Reserve Account:

    1. whenever the Working Capital Fund is insufficient to finance budgetary expenditure pending receipt of contributions from Member Nations to the budget; such advances to be reimbursed from subsequent receipts of contributions as soon as feasible;
    2. to finance unbudgeted extra costs due to movements of currency exchange rates;
    3. subject to prior Finance Committee review and Council approval, to finance unbudgeted extra costs due to unforeseen inflationary trends, to the extent that such costs cannot be met through budgetary savings, or such other purposes as the Council may decide;

  3. Decides that any balance of monies in the Reserve Account shall be carried forward from year to year until the Conference decides otherwise.

Personnel Matters

(a) Amendments to the Staff Regulations and General Rules of the Organization 13

192. The Council noted the reports of the Finance Committee and of the Committee on Constitutional and Legal Matters on the proposal by the Director-General to remove from the Staff Regulations a sentence referring to the funding of post adjustments applied to salaries of the Professional and higher categories, and include it in the General Rules of the Organization, where it properly belongs.

193. The Council endorsed the amendments recommended by the two Committees. It approved the amendment to Staff Regulation 301.133 and recommended to the Conference the adoption of the draft amendments to Rules XXIV and XXVII of the General Rules of the Organization, as set forth below 14.

"Staff Regulation 301.133. Post Adjustments. In order to preserve equivalent standards of living at different duty stations, the Director- General shall adjust the basic salary rates provided in Staff Regulation 301.131 by the application of non-pensionable post adjustments, the amount of which shall be determined by the International Civil Service Commission on the basis of relative costs of living, standards of living and related factors at the duty stations concerned.

[The Director-General shall report such adjustments for Headquarters and propose the funding thereof to the next following session of the Council.]"

Rule XXIV.3 (k)
"The Council shall

(k) consider any observations of the Finance Committee on decisions taken by the International Civil Service Commission in accordance with its Statute, including the funding of post adjustments applied to salary rates."

Rule XXVII.7 (s)
"The Finance Committee shall assist the Council in exercising control over the financial administration of the Organization and shall have, in particular, the following functions:

(s) to consider reports by the Director-General on decisions taken by the International Civil Service Commission in accordance with its Statute, including the funding of post adjustments applied to salary rates, and to submit any observations thereon to the Council."

(b) Emoluments of the Director-General 15

194. The Council noted the report of the Finance Committee, It recalled the recommendations of the International Civil Service Commission relating to the scale of salaries and conditions of service of staff in the Professional and higher categories as approved by the United Nations General Assembly.

195. The Council agreed that action should also be taken which would bring the emolum ents of the Director-General and his conditions of service in line with those of Executive Heads of other agencies.

196. The Council accordingly recommended the following draft resolution for adoption by the Conference:




Recalling that it had fixed the salary and allowances of the Director-General at its Eighteenth Session in accordance with operative paragraphs 2 and 3 of Resolution 40/75,

Noting that the General Assembly of the United Nations, at its Thirty-First Session, approved certain recommendations of the International Civil Service Commission affecting the salaries and allowances of staff in the Professional and higher categories,

Noting further that the Council, at its Seventieth Session, authorized the Director-G eneral to amend the FAO Staff Regulations to give effect to the recommendations of the International Civil Service Commission, in the form in which they had been approved by the General Assembly of the United Nations and with the same effective date, and that this effective date was 1 January 1977,

Considering that the changes in entitlements of staff in the Professional and higher categories which were introduced in FAO with effect from 1 January 1977 should be applied retroactively to the Director-General,

Decides that:

1. The annual salary of the Director-General be retroactively adjusted from 1 January 1977 to the following amounts: gross salary US $99,350; net salary US $53,200 at the dependency rate, or US $48,080 at the single rate; post adjustment for one class US $2,200 at the dependency rate, or US $1,988 at the single rate;

2. The system of allowances and benefits applicable to the Director-General be amended from 1 January 1977 in the same way as that of staff in the Professional and higher categories.

Appointment of External Auditor 16

197. The Council agreed to :reappoint the Comptroller and Auditor-General of the Unit ed Kingdom for a further period of two years commencing with the audit of accounts for the year 1978. Whilst expressing appreciation for the work of the External Auditor in the past, the Council requested the Director-General to formulate and submit for its consideration alternative proposals for future appointments.

198. The Council then adopted the following resolution;

Resolution 2/71



Noting that the Finance Committee recommends the reappointment of the Comptroller and Auditor-General of the United Kingdom as External Auditor of the Organization,

Recognizing the effective services of the External Auditor,

Decides to reappoint the Comptroller and Auditor-General of the United Kingdom as External Auditor of the Organization for a further period of two years commencing with the audit of accounts for the year 1978.

1 CL 70/REP paras. 91–101, CL 71/3, CL 71/4 paras. 1.1–1,3, 2.6–2.92 and 3.4–3.28, CL7I/4-Corr.1 (E only),CL 71/4-Corr.2 (F only), CL 71/PV/8, CL 71/PV/9, CL 71/PV/10, CL 71/PV/17.

2 CL 71/INF/7, CL/INF/7-Corr.1.

3 See para. 127 above.

4 CL 71/4 paras. 2.93–2.98, CL 71/INF/8 - Rev.1, CL 71/PV/U, CL 71/PV/15.

5 See para. 199 below.

6 CL 71/4, CL 71/4-Corr.1 (E only), CL 71/4-Corr.2 (F only), CL 71/PV/10.

7 CL 71/4, CL 71/PV/10.

8 CL 71/4 paras. 3.47–3.63, CL 71/4-Corr.3, CL 71/LIM/1, CL 71/PV/10.

10 Corresponding figure as of 31 May 1977: $5,913,400.

11 CL 71/4 paras 3.64–3.68, C 71/4-Corr.3, CL 71/PV/1J3, Gl 71/PV/17.

12CL 71/4 paras 3.125–3.135 and App. E, CL 71/PV/10,CL 71/PV/15, CL 71/PV/18.

13CL 71/4 paras. 3.87 - 3.88, CL_71/5 paras. 56–59, CL 71/PV/10, CL 71/PV/17.

14Deletions in square brackets [ ], additions underlined

15 CL 71/4 paras. 3.89–3.90, CL 71/PV/10.

16 CL 71/4 paras. 3.121–3.124, CL 71/PV/10.

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