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Mr Chairman,
Distinguished Delegates and Observers,
Ladies and Gentlemen,

May I extend my traditional welcome to all attending this 91st Session of the Council, and in particular to the members participating for the first time.

Turning first to some broad global issues we discern, after a long time, a ray of hope appearing on the horizon. Agreement although limited on nuclear armaments which could hopefully lead to a reduction in global tensions seems feasible. Dare we hope again that the vast sums and human resources expended on weapons of destruction will be redirected to improving the basic quality of life on this planet, as a whole.

Although not fully shaped, prospects for improvements in the world economic system, are appearing first of all in international trade. The Uruguay Round is of special interest to FAO because inter alia, contracting parties to GATT are committed to making the first major effort toward greater liberalization of international agricultural trade. The Council cannot but welcome the promises held out by the Venice Summit. The leading world economies appear increasingly prepared to face in a more concerted fashion the major global economic ailments: slow economic growth, trade imbalances, unstable currencies, soaring protectionism, intractable debt, ever-increasing marginalization of the poor.One can only hope that these promises will soon be translated into effective follow-up actions.

Mr Chairman,as we survey the world food situation we see paradox piled upon paradox.

The world continues to achieve new records in the output of staple foods. It is gratifying to note that food production in developing countries is keeping ahead of population growth. However, this welcome advance is unfortunately not shared by all and the fact remains that millions are suffering from food deprivation and their number is still increasing.

Indeed,economic crisis and programmes of structural adjustment have together resulted in marked declines in levels of nutrition in certain areas since we completed our Fifth World Food Survey. At the same time, food stocks have been building up with an apparently relentless momentum. In the course of this year, we are expecting carryover stocks of wheat to reach twice the level of annual trade in wheat. Coarse grain stocks will be at a level no less than three times current annual trade. In the cases of butter and sugar, stocks will be about one-and-a-half times higher than the world trade figures. Thus, the process of polarization in the global food system is continuing.

These vast quantities of surplus food have been generated mainly as a by-product of programmes to support farm incomes. Yet - and this is another paradox - the farm community in many industrialized countries is increasingly facing economic hardships. High indebtedness and falling prices are taking a heavy toll, particularly in cereal exporting countries.

Global policymakers thus face a dual challenge. Measures must be taken to ensure access to food by the vulnerable groups in countries affected by economic crisis and undergoing the often extremely painful process of structural adjustment. At the same time, the industrialized nations must find the elusive formula which will enable them to align agricultural production with commercial requirements while protecting farm incomes, minimizing the burden on the taxpayer, and safeguarding the countryside.

A brief regional review, Mr Chairman, will most naturally start with Africa. The roots of the deep economic crisis of Africa and the way to recovery and development are most faithfully synthetized in the UN Programme of Action for African Economic Recovery and Development (UN-PAAERD). I do not need to dwell here on FAO’s cooperation with and assistance to Africa. The facts are well known to all of you. Further details on the follow-up action by FAO on the UN-PAAERD can be found in the document CL 91/INF/17.

The year 1986 showed a most encouraging increase in food production in Africa. Some countries, such as Morocco, Mauritania, and Mali achieved increases of over 10 percent. The Sahel as a whole registered a gain of over 6 percent. But, of course, these high rates are compared with performance in the previous disastrous drought years. In some countries, such as Nigeria and Zaire, per caput food production in fact declined. Of 37 sub-Saharan countries, only 10 were able to maintain or exceed their calorie consumption levels of the early 1980s. Moreover, in countries where exceptionally good weather resulted in temporary surpluses, local prices collapsed; thus future production may have been jeopardized. The donors have responded well to appeals for swap and triangular arrangements, but the problem has not been fully resolved.

It appears to me that the international community should have a built-in capacity for arranging swap facilities and triangular transactions on a greater scale than has been customary in the past. The World Food Programme could very well be the vehicle for this. Food aid could thus serve as a balancing factor, compensating for deficits when they arise and helping to cope in a orderly way with occasional surpluses.

Prospects for 1987 are not yet clear - in the Sahel, for instance, the rainy season is still in its very early stages. In southern Africa, where the main cropping season is over, harvests have in general not been good. Fortunately some countries had large carryover stocks from, 1986,but in Mozambique the food situation is extremely serious. Disquieting news about the deteriorating food situation as a consequence of unfortunate weather and aggravated in some cases by foreign intervention are received daily from Angola, Sudan, Somalia, Ethiopia, Botswana and Zambia.

The menace of grasshoppers and locusts still remains. Elaborate preparations have been made this year, and we are confident that outbreaks can be kept under control.

Just a brief reference to the feasibility study on stepping up the provision of agricultural Inputs as aid-in-kind. The work is well under way. Contact points for the collection of information have been designated by many governments, both in Africa and among the donor community, as well as by interested organizations. Detailed case studies have been made in Ghana, Niger, Senegal and Zambia, and a study of Zimbabwe’s policies regarding inputs has been carried out. We shall be making an oral report to the Council, because the exercise is not yet sufficiently advanced for an interim document dealing with substance.

Finally, in the context of Africa I am obliged to give you a brief account on our Agricultural Rehabilitation Programme for Africa (ARPA). ARPA resulted in the approval of over 260 projects, involving commitments of nearly $190 million. In the next few months we shall be carrying out an internal evaluation of the programme.

From Asia and the Pacific, the news of the situation for 1986 at first seemed good, and some countries, notably China, India, Pakistan and Malaysia did well at least in some respects. But the latest information discloses a troubling trend downward in food production in the region. The main paddy harvest in Sri Lanka fell by no less than 20 percent, the food situation in Bangladesh remains worrying, and some of the smaller countries of the region are facing food production difficulties.

For 1987, the overall prospects are patchy and uncertain. Some of the larger countries have had to draw down their grain stocks quite heavily and they may have to increase imports. Thailand may experience a fall in rice production.

The region has achieved extraordinary progress in per caput food production and nutrition in recent years. We know that the countries of this region will spare no effort to maintain progress, but ensuring access to sufficient supply for their teeming humanity will remain a daunting objective both for their policymakers and their farmers.

Before passing on to another region, I should like to refer to the important work FAO continues to do in many other areas, particularly in forestry and fisheries.

With regard to the Tropical Forestry Action Plan I am pleased to inform you that in Asia and the Pacific we have already organized formulation or review missions or round tables in several countries, including India, Indonesia, Laos, Nepal, Malaysia, Pakistan and Sri Lanka, in collaboration with a wide range of multilateral, bilateral and national organizations and agencies. We will ensure that these are followed up.

Asia has been a pioneer in aquaculture development and there is much for other regions to learn from the Asian experience. At the same time there is further work to be done in this field in the region. Aquaculture therefore remains of high priority in our regional concerns.

Trade and indebtedness are the most pressing issues for Latin America and the Caribbean and are having far-reaching effects on the life of the region.

Latin America was savagely hit by the overall 10 percent deterioration in terms of trade of developing countries between 1985 and 1986. Exports increased dramatically in volume but without any corresponding increase in earnings. With a crippling burden of debt, the result was a fall in imports, including imports of much needed foods. One could say that the region has a veritable import crisis.

Put this together with the following facts - a 5 percent fall in food production, 17 percent fall in non-food, mainly coffee, and over 2 percent fall in per caput food production in 1986. Furthermore, the price of coffee slumped as well. Consider that food production managed to keep pace with population growth in only four countries of the region, Argentina, Chile, Colombia and Uruguay, while it fell seriously in Brazil, Bolivia, Ecuador, El Salvador and Nicaragua. Even the overall increase in fish catches did not help much, because it consisted mainly of fish suitable only for fishmeal production.

This is the backdrop to the request of last year’s Regional Conference for a new study of agricultural problems and prospects in the area, including the potential contribution of agriculture to overcoming the crisis. I am glad to say that this effort is well underway, in close cooperation with the other international organizations concerned about the development of the region. It will not be just another study, it is seen rather as a joint venture between countries of the region, regional and sub-regional institutions and FAO aimed at preparing a sound plan of action with options and alternatives for agriculture within an overall internal and external macro-economic context.

Whenever the world turns its eyes to the Near East Region, it tends to focus mostly on the conflicts in the region and on oil prices. However, there are other issues to be considered as well.

Perceptions tend not to notice the region’s achievements in food and agriculture. For example, in the period 1985/86, the region again achieved more than 5 percent positive change in food production and nearly 4 percent in per caput production.

The year 1986 was a particularly good one. Food production increases in Iraq and the Syrian Arab Republic were high, mostly in cereals, pulses and oilcrops. The Sudan was the only country of the region which required emergency food supplies, and that was due to special factors. Some countries of the region were affected by locust outbreaks, notably Saudi Arabia, the two Yemens and the Sultan at of Oman. Fortunately, prompt action limited the damage in these and neighbouring countries.

Meanwhile, the major oil producers were able to raise dietary energy supplies to over 3 200 calories per head per day, which is near the average for developed countries.

However, the agricultural prospects for 1987 are somewhat uncertain as yet, and decisions on long-term policies for food production in the major oil exporting countries must remain speculative as against the prospects for oil.

In the short term, Saudi Arabia is adjusting its policy following upon its extraordinary achievements in increasing domestic food production. Even bigger policy decision may have to be faced as supply situations and price relationships change in the future.

Meanwhile, FAO will continue its efforts, particularly on land and water use as well as a number of other priority areas such as grazing land, and particularly forage legumes, fodder trees and shrubs. Promotion of Technical Cooperation among Developing Countries is particularly suitable for the region, notably in the livestock sector. Crop protection and agrarian reform and credit will of course continue to remain high priorities.

I have already referred to certain European and North American problems. Weak economic growth in these regions is unfortunately not generally expected to improve much in 1987, with declining exports and prices of cereals, protectionism, and the grievances of farmers still casting their shadows forward.

In the supplement to the Council document on the Current World Food Situation, a further increase of food supplies in Eastern Europe and the Soviet Union, a larger wheat crop in the European Economic Community, but possibly lower American wheat, maize and soybean crops are foreseen for 1987.

Meanwhile, however, the developed countries in these and other regions have maintained their generous response to emergency needs. Contributions to the International Emergency Food Reserve for 1986 amounted to 485 000 tons of cereals and 31 000 tons of non-cereal commodities. For 1987, pledges so far received indicate a similar response.

Food aid shipments exceeded 10 million tons in 1985/86 and are likely to do so again in 1986/87.

In addition to their food aid, I should like in this Council to thank the donors again for their response to my appeals for help to the African countries hit by plagues of locust and grasshoppers - the European Community, the United States, Canada, China, the Netherlands, the Nordic countries, the United Kingdom, the Federal Republic of Germany, France, Italy and others too numerous to mention.

The total of international assistance provided in 1986 was about US$ 51 million and the amount already pledged for the 1987 campaigns is about US$ 35 million. More is needed but I am glad to note that FAO’s initiatives and efforts over the last year or so have met with such a favourable response from those I have mentioned as well as several other countries and organizations.

The developed regions are not of course immune from disasters, as the damage and concern aroused by the Chernobyl incident show. I am glad to report that in 1986 FAO took rapid action in conjunction with the International Atomic Energy Agency to assist member countries in dealing with such matters as soil and water decontamination. Our efforts in this field, and in the Food Standards Programme, will be continued, as well as in other aspects of environmental concern.

In this connection, I should like to underline the importance which we attach to the Report of the World Commission on Environment and Development. The Chairperson of the Commission is the Prime Minister of Norway, Mrs Brundtland, and I had the honour of welcoming her to FAO when she came here last April to present the Commission’s report to the Secretary-General of the United Nations. We are carefully studying the report, in close collaboration with the United Nations Environment Programme and other international organizations.

FAO is also continuing its work on the less favoured areas, part-time farming and pluriactivity in Europe. We shall prepare the new study as a background document for the forthcoming FAO Regional Conference for Europe, in which the United States, Japan and Canada normally participate as well. Various sources have been drawn upon: the material used in the revision of “Agriculture: Toward 2000”, prepared for the FAO Conference; the OECD studies, on which the Committee on Food Security was recently given a report; as well as studies by many other institutions.

Mr Chairman, the Council will be much preoccupied at this session with internal matters, both because of our financial difficulties in this biennium and also the preparation of our next Programme of Work and Budget for 1988/89. I would like to say something first about staff matters, which were discussed by the Finance Committee at its last session, and were also taken up by the Administrative Committee on Coordination when it met here in Rome last April.

Like the heads of other United Nations organizations, I am deeply concerned about the erosion of the terms and conditions of staff. It is becoming increasingly difficult to attract, and even to retain, good staff members. Hardly a month goes by without one meeting staff who intend to take early retirement due to the deteriorations in salary and employment conditions.

Next Sunday, I shall be attending a brief meeting of the Administrative Committee on Coordination in Geneva. The Committee intends to forward a statement on this subject to the International Civil Service Commission. The matter is one which, I believe, should be of deep concern to all our Member Nations. Therefore I shall ensure that they are kept Informed of the latest developments.

There is a myth circulating that United Nations personnel are overpaid. Our task, therefore, with the Finance Committee, is to convince people this prejudice is unfounded. Indeed, some countries actually subsidize officials seconded to the United Nations, thus proving the myth to be groundless. This is not the same as saying they are badly paid - but what worries me is that it is becoming increasingly difficult to attract qualified personnel. Nor is recruitment made any easier by the measures adopted by the Fifth Commission of the United Nations General Assembly and we are no longer able to hold on to staff. Allow me to expand on this. FAO has no army at its command; our main resources are human ones and our staff are missionaries, not mercenaries.

Employment conditions have deteriorated. In the coming weeks, the International Civil Service Commission will be discussing the education grant and whether to reduce the number of days leave allowed to United Nations personnel. This shows how real the threat to benefits and conditions of employment is.

This is the reason for the Geneva meeting. The final decision rests with the United Nations General Assembly, but its composition is not very different from that of our own legislative bodies. I should add that I have given these explanations largely for the benefit of FAO staff.

As regards the financial situation of FAO, the Council has before it document CL 91/17 and the separate and joint reports of the Programme and Finance Committees. I need not therefore go into detail at this stage. However, certain points should be stressed from the outset of your discussions.

We are undoubtedly dealing with a grave problem but it is not a fundamental crisis. Nor is it a problem concerning FAO alone: it is affecting the whole UN system.

It is not a crisis, because no adverse decisions which are of principle or are irrevocale about contributions are involved. On the contrary, we are promised that member countries, in particular the largest contributor, will live up to their constitutional obligations. No country is attempting to deny its liability to pay the full amount of its assessed contributions.

The real problem and its causes are not hidden and ambiguous: they are clear and straightforward - late payment of contributions, dollar depreciation, lower interest rates - all of these affect our income. Their combined impact is unprecedented in its gravity, duration and magnitude.

At its last session, in November 1986, I proposed and the Council decided on a package of programme adjustments amounting to IJS$ 16.4 million in view of the serious liquidity problems affecting the implementation of the Programme of Work approved by the Conference. The Council also authorized me to undertake further adjustments, If required.

As I informed members of the Council and of the Programme and Finance Committees, through a Note Verbale of 4 February 1987, in view of the continuing decline in the US Dollar I was obliged to enact further adjustments up to an amount of US$ 5 million.

I reported to the Programme and Finance Committees at their recent sessions in May that I have now set the target for adjustments at a total of US$ 25 million - negative adjustments unfortunately.

In terms of numbers, over 70 posts have been left unfilled; over 50 meetings have not been held; and some 100 publications not produced.

The impact goes much beyond these figures. Frozen posts mean an absence of qualified people to implement the important programmes and activities. This in turn means inevitably a reduction of advisory services to governments who ask for our help. It means less technical backstopping to field projects.

The effects are pernicious, not limited to this biennium, and difficult to quantify. They will affect us for some time to come.

Mr Chairman, I would like to make some remarks now about the next Programme of Work and Budget, as presented to you in the Summary.

My proposals have inevitably been influenced by the current economic and political situation: It could not be otherwise.

I have borne in mind the effects of de facto negative programme growth in this biennium - down by almost 5% - but I have resisted the temptation simply to replace and add to what has been lost. I have reviewed the whole programme in the light of current and new substantive requirements. Once again, I have devoted as many resources as possible to the technical and economic substance of the Organization’s work, intensifying priority selection and the pursuit of tenable cost cutting.

Once again, therefore, I have cut judiciously wherever possible in order to make room for increases in the technical and economic programmes. I would stress that this is a policy I have always vigorously and diligently applied. On this occasion a small but, in these circumstances, appreciable increase In these programmes is proposed the full Impact of which is offset in other sectors.

As recognized by the Programme and Finance Committees, the guidance of the appropriate FAO bodies has been followed in selecting priorities. I have continued to streamline management and support activities, for example by cutting General Policy and Direction by no less than 4.5 percent. The estimation of cost Increases has been very strictly controlled.

All the calculations are, as required, valued at the US Dollar/Lire rate adopted for the current PWB. No one can confidently forecast now what the rate might be in the next biennium.

I have however, as always, made it my central objective to try to minimize the burden on Member Governments and to have the budget approved by consensus. Moreover, I will if called for be ready and have the capacity to take any corrective measures that may be necessary to meet unexpected developments, and report my actions to or seek any authority required from Governing Bodies.

Before I conclude, Mr Chairman, I would like to say a brief but cheerful word on our relations with the Host Government. I am pleased to be able to report that in December last, I concluded an exchange of letters with the Italian Minister of Foreign Affairs, the Honourable Giulio Andreotti, on the interpretation and application of the Headquarters Agreement. Is is not a question of drawing up a new Agreement, but simply of interpreting an existing one. As members of the Council may recall, we have experienced some difficulties in this area for the past few years, but I consider that the exchange of letters provides a satisfactory solution.

We have also had correspondence, reviewed by the Committee on Constitutional and Legal Matters whose report you have before you, which I hope now provides a practical solution to the serious problems which faced the Organization concerning its immunity from legal process in Italy.

I should like to extend my warm thanks to the Permanent Representative of Italy, Ambassador Elio Pascarelli, for his role in bringing about these welcome developments.

Mr Chairman, I have tried in this statement to draw attention as far as possible not only to the threatening clouds and damaging economic storms, which are so much part of our lives today, but also to the brighter side of world economic prospects. However, it is not easy to find more than intermittent rays of promise and it is difficult to discover therainbows of success.

The world is faced with enourmous and terrifying challenges to terrestrial survival and human well-being. Any day now a birth will occur somewhere that brings the world’s population to 5 billion. Every minute there are 150 more mouths to feed, every day 220 000, every year 80 million more. The challenge of feeding this population, providing it with non-food primary products, including fuelwood, while saving the environment from destruction and handing down to posterity a productive but unpoisoned inheritance is truly daunting.

It must however be done. And, I believe it can only be done by fuller, and not by less, multilateral and bilateral cooperation.

We must and will maintain our faith that our Member Nations will overcome the constraints which bind them so tightly now; that the UN system will emerge strengthened from the trials to which it is now exposed; and that FAO will sail successfully through its current troubles with the full support of all its Member Nations and with a renewed commitment to its basic humanitarian mission. I pledge myself to this end.

Thank you, Mr Chairman, Ladies and Gentlemen.

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