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

Allow me first of all to welcome you to this Ninety-fourth Session of the FAO Council My good wishes are indeed even warmer than usual, a whole year has passed since your last session, and this year has been marked, for the world and for FAO, by many events that will have repercussions on your debates. The Council has always approached its tasks with remarkable wisdom and energy. What is more, its proceedings are traditionally conducted in an atmosphere of friendly dialogue, even when opinions diverge and the debate becomes lively. Today’s circumstances require that you bring into play not only the resources of your intelligence and determination but also those of your heart. Solidarity, enthusiasm and friendship are more necessary now than ever, hence the very special cordiality with which I welcome you today

Your agenda includes a discussion of the state of food and - agriculture. I do not wish to anticipate your debates; I shall, therefore, mention only one problem, which cannot fail to influence decisively the climate in which the present session opens. I mean of course the drop, for the second year running, in the world cereal harvest, the first time in forty years that such a thing has happened. As a result, consumption has exceeded production. It has therefore been necessary to draw on the surpluses held mainly in North America and which has brought reserves down below what FAO considers the bare minimum needed to ensure world food security. At the same time, prices have soared; a rise of 40 to 50 percent is more than enough to put a brake on imports by the poor countries. Cereal production must increase next year if the balance is to be re-established, particularly if reserves are to return to a level of security, which is around 18 percent of annual consumption.

This year has also been marked by a series of horrendous natural disasters - not to mention all the man-made disasters - Bangladesh springs to mind, and the floods that have devastated the Sudan, terrible hurricanes that have swept the Caribbean, Central America and the Philippines, the cataclysmic earthquake that has shaken southern China and the huge desert locust infestations now covering the Maghreb countries, the Sahelian Zone of Africa and the Near East - they have even reached the Caribbean.

With regards to this last scourge, the campaign against it, which just has to succeed, is expected to cost 240 million dollars. The generosity of donors is indeed praiseworthy; FAO for its part has been playing a unique and altogether indispensable role as a centre for information, consultation, organization, coordination, and mobilization of resources. Our Emergency Centre for Locust Operations has been intensely active for, when donor countries want to harmonize their policies and action, they turn to FAO. We have held no less than 17 such meetings of various groups and bodies, and the work which has begun so well must be vigorously pursued, since unfortunately the danger is not over yet.

Not only the locust threat but also the other disasters I have just mentioned call for action from our Organization in its fields of competence. This situation could not have arisen at a worse moment.

First of all, the resources of the International Emergency Food Reserve - IEFR, as we call it - are now almost exhausted. Many emergency operations had to be conducted in 1988; most of them covered relief for refugees. It is essential that the Reserve be replenished very quickly, and I appeal here to donors to get the Reserve back into a position to fulfil its appointed task.

Secondly, the services FAO provides to its Member Nations have been restricted by the fact that its cash resources were cut by 20 million dollars in 1988. It had already, as you will recall, suffered a reduction of 25 million dollars in 1987. Over the last two years, therefore, we have been short of 45 million dollars, needed for the execution of our programmes. Since 1987, we have had to leave many vacant posts empty, pare down travel, cancel more than 50 meetings and 25 percent of the total number of publications, etc. Despite this effort, the reserve of 35 million dollars accumulated through careful management has melted away, and we began 1988 with a deficit of 47 million dollars. This led to new cuts, new savings, abolition or freezing of posts, additional reductions as regards consultants, travel, etc., elimination of another 50 meetings and more than 80 publications. When all is said and done, it is our basic programmes that are affected by these cuts: technical study or consultancy missions, training programmes, etc. Even locust control is coming up against staffing problems The reviews that used to spread technical knowledge and carry the message of the Organization - including Ceres, Unasylva and the World Animal Review - are disappearing from ministries of agriculture, universities, business establishments and decision-making centres.

Yes, it has been a hard year, a bad year, in which we have had to make harsh but unavoidable decisions, some of which have inevitably led to unrest among our staff. This was the case with the elimination of the language courses, which affected hundreds of our colleagues, or the fifty percent reduction in the number of telephones, a measure which obviously complicates their work. We are constantly having to make difficult choices.

All this stems from one and the same cause, namely the delays in paying contributions - particularly those of the major contributor. In September 1988, unpaid contributions amounted to 152 million dollars, of which 107 million were due from that country alone.

This situation would, moreover, have been far worse but for the fact that many of our Member Nations have taken exceptional measures to help us. Some of them have foregone their share in the cash surplus for the 1984-85 biennium. Yes, we had a cash surplus in 1984-85, and in 1987-88 we are deep in a cash flow crisis. Many have settled their contributions to the last cent. I am pleased to state that, with one exception, the eleven major contributors have all met their obligations. I should like to thank them.

Our very special gratitude goes to our host country, Italy, which, on top of all else, has transferred to our Technical Cooperation Programme an additional contribution of 30 million dollars for the current biennium, of which 15 million have already been paid in 1988. I am sure that the other 15 million will be paid in 1989, very soon. Moreover, we have just received 2 million dollars from the Italian Government, representing a reimbursement of the rent due for the buildings we occupy. I should like to thank the Ambassador of Italy for this too.

These efforts and this generosity are helping us to cope with the crisis and to do our work as well as possible under the circumstances. But the situation remains very serious and may even become still worse in the next few months. In the end, our core activities may well be threatened. I shall return to this point during the discussion of agenda item 12.

There is one simple remedy for this situation; to put everything to rights and to allow us once more to perform our mission in full, all that is needed is that Member Nations pay their contributions without delay and without unnecessary complications. A little goodwill, that is all. I urge them with all my heart to do so, on behalf of the hundreds of millions of poor peasants for whom our help is essential if they are to make any progress in development.

We are convinced that developing countries need FAO now more than ever. The most serious of the evils besetting them is undoubtedly indebtedness. At meetings of the International Monetary Fund and other organizations, many developed countries have expressed their concern and repeatedly declared their goodwill. Some of them have gone further in attempting to find solutions and have already taken concrete measures. Despite this, developing countries continue to totter under the weight of the debt burden, which entails a serious threat to agricultural development.

To service their debts, these countries can only rely on their export earnings. The latter, however, come mainly from primary products. The price of raw materials is therefore of paramount importance to these countries; it may be said that their lives depend on the price of these commodities. With very few exceptions, as you know, there has been a downward trend in real prices for nearly three decades; for most basic commodities, they are lower today than in 1960. This decline is particularly marked for agricultural commodities, even if a slight temporary rise can be seen here and there, as happened recently with cereals, as I mentioned earlier, with sugar, or again with soybeans, because of falling production in the United States, and also with vegetable oils, It is obvious that countries depending on exports of one or two commodities for which the prices are very depressed - cocoa, for example - can no longer meet their obligations. At present debt servicing alone absorbs more than 40 percent of the export earnings of many Third World countries.

Faced with this untenable situation, many countries in distress are forced to try to obtain rescheduling of their debt. They also need fresh money to keep their economies going. And so they ask for help from agencies such as the World Bank or the IMF. These agencies, which cannot, of course advance money on a grant basis, make a point of protecting their loans with highly specific guarantees. They demand that countries receiving loans reduce their expenditure and practice austerity, in what are called structural adjustments. This means that in countries with agriculturally- based economies (as is the case virtually throughout the Third World) the State is forced to reorganize and retarget its policy on agricultural development, credit, prices, social services and so forth as part of an overall effort to modify the pace. Frequently this sort of overhaul is a real necessity, but the operation is all too often launched headlong without sufficient prior examination of the ensuing social repercussions. This is what happens when a country is obliged to pare costs for health and education and forego subsidizing inputs such as fertilizers. It is almost always the little people, poor peasants, who bear the brunt. In any case, we have witnessed the birth of a completely new phenomenon in the history of development; in countries whose economies are primarily based on agriculture, the de facto expression of structural adjustment is the radical redefinition of agricultural policy under the influence of the financing agencies.

To become more efficient whilst avoiding the harmful consequences mentioned above, the structural adjustment process must bow to the following imperatives: consideration of social factors and human resources; equitable distribution of both the costs and the benefits of adjustment; and an effort to educate the entire community to understand and accept the terms and options of adjustment programmes.

We believe that UN agencies should, in meeting requests by interested countries, pool their vast body of data and experience, and offer these services to help countries with their policy formulation and operations, in accordance with the above considerations.

Allow me to stress one significant aspect of this kind of concerted action. There is one institution whose specific function is to advise governments on their agricultural policy and that institution is FAO. In the review of FAO’s activities requested last year by the Conference and which I will get back to in a minute, much stress is laid on the need to reinforce this advisory role and give greater prominence to studies on agricultural policies. So it would seem reasonable, in envisaging structural adjustments in agricultural economies, that the Bank and interested governments have systematic recourse to FAO for independent opinions backed by long years of experience. And yet, this is not at all the case. Surprisingly, FAO is hardly ever asked to intervene in this process.

Concrete studies on agricultural policies are currently underway by the World Bank in over 35 countries, Unless there can be an overlap between parallel FAO and World Bank work in this domain, such efforts on our part will remain platonic, theoretical and without real impact. Common sense demands that the World Bank and interested governments enlist FAO as a partner in these reviews, offering advice on pending decisions. The Organization would be particularly well-qualified to conduct one-time micro-economic studies on, say, the marketing of a specific commodity, agricultural credit, and the like. Perhaps one reason why such services are rarely solicited of FAO is because it is the finance and not the agriculture ministries which normally deal with the Bank. In any case, governments should insist that FAO be associated with the formulation of new policy guidelines in this domain.

These problems along with many other major issues were raised at the FAO Regional Conferences this year, all five of which turned out successfully. In preparing the Programme of Work and Budget for 1990-1991, I shall be giving the fullest consideration to the views expressed at these meetings.

In 1988 other important meetings were held, particularly the sessions of the Committee on World Food Security and the Committee on Forestry, the reports of which are before the Council. You will have the opportunity to examine these at your leisure. But, with your permission, I should like to elaborate further on the work of the Programme and Finance Committees.

The most important of the tasks before these Committees was unquestionably the preparation - I repeat: the preparation - of a review of certain aspects of the Organization’s goals and operations, in order to enhance the Organization’s efficiency, as recommended by Conference Resolution 6/87. The two Committees, working jointly, were authorized to be assisted by experts selected for their professional competence and experience, with due consideration for balanced geographical distribution. In parenthesis, the Conference requested the two Committees to conduct a review of FAO activities; it decided they should be assisted by experts. The Conference awaits presentation, through the Council, of the report of the two Committees. Responsibility for this lies with the two Committees, In the course of the session you will be hearing a detailed progress report on this work. I am happy to be able to announce forthwith that the Committees, who have certainly taken their task to heart, have arrived at convergent views and unanimous decisions on the main points: the choice of experts, the definition of their terms of reference, working methods, organization of the review, and so forth.

The experts got right down to work. They came here in July to learn the facts, to talk to my colleagues, to observe our work, and to contact the organizations with whom we cooperate. Some of them are here now. The Secretariat, which I had placed entirely at their disposal, has been happy to supply information, to answer questions and to open its books to these experts. I should mention that several Member Nations have made contact informally with the experts, meeting them for lunch or on various other occasions. This is altogether normal, since the experts are free to do as they please. They informed us that they had been contacted several times by Member Nations and that many of them had received documents. So we cannot say that the experts have had any difficulty in hearing the opinions of delegates who wished to meet them. This is just to let you know that the experts have been able to make contact with the delegates; they have not been obstructed. The experts are not of course under the authority of the Secretariat; they are under the authority of the members of the Programme Committee and the Finance Committee; they were appointed by those Committees and will report to them.

The work is therefore going ahead as planned. I must, however, point out to the Council that the scope of the review has gone a bit beyond that determined by the Conference.

Indeed, as the Conference had perceived the review, it was only to cover “certain aspects” of the goals and operations of the Organization. I have said more than once that our FAO is not a soulless machine but a living organism in which all parts work together. It therefore seemed obvious to me that with this narrow scope the review was bound to be incomplete. I therefore took it upon myself to suggest to the Programme and Finance Committees that the review be broadened to include FAO field operations and administrative questions as well, The Committees interpreted this proposal as the expression of a sincere desire to take a fresh look at, to review and, where necessary, to reform the full spectrum of FAO’s operations with the goal of enhancing efficiency. Considering this objective to be in line with the spirit if not the letter of the Conference Resolution 6/87, the Committees agreed to expand the scope of the review.

So 1988 was the year of the experts. Next year will be Council and Conference’s year for discussions and decisions. Our Organization is, as you know, no more and no less than a cooperative of Member Nations. It is therefore of the utmost importance that the major decisions shaping its future be the outcome of undivided consensus, following the good example set by the United Nations General Assembly. The good of the Organization demands a spirit of real tolerance on everyone’s part; no one group should attempt to force its viewpoint on others.

In this kind of undertaking, flexibility and pragmatism are the qualities we need. It is best to wait patiently until the experts and the two Committees have completed their mission, at which time Member Nations will have concrete proposals to examine, to evaluate, to discuss, to adopt, to reject or to modify. A waiting-period involves no danger: the Organization is not in the emergency ward.

The remaining items on the Council’s agenda really do not require any comment from me at this stage. World Food Day, as you shall be hearing, was marked by significant celebrations. Here at FAO Headquarters we had the privilege of receiving two illustrious guests and hearing their words: the President of the Republic Portugal and the President of the Council of Ministers of the Italian Republic.

You are aware - I was just speaking of it - of our host country’s generosity in the face of our present difficulties. In his speech the Head of the Italian Government announced another marvellous piece of news - the law just ratified by the Senate authorizing the construction of new buildings, which will allow us to house the full Secretariat in a single building complex. Our host country has thereby earned anew the right to our gratitude. The new Headquarters accommodations, among other advantages, will greatly facilitate contacts with the Representatives of Member Nations.

Mr Chairman, I have dealt at some length, of necessity, with certain internal FAO problems. Before concluding, I should like to return to more general matters and situate in a wider perspective the desperate problems I spoke of at the beginning of my statement the world food situation, indebtedness in the developing countries and structural adjustments

There is no question that some events in the developed countries this year are going to have a profound effect on the future of the world in general and our world in particular.

Only a few days ago, the people of the United States elected a new President, We all know that his action and that of the office-holders he will appoint cannot fail to have a decisive effect on the course o events throughout the entire world, not to speak of the effect on our own Organization.

We have all been watching with keen interest the developments in the other superpower, the USSR, where the key words today are transparency (“glasnost”) and reform (“perestroika”). If we consider that this great land is the one founding Member of FAO which so far has not taken up its right of membership, it may be legitimate to hope that our potential claim to universality may perhaps be fulfilled one day soon.

Internal changes in each of these two modern colossuses are matched by a profound transformation in their present relationship The first signs and the first fruits are already visible Further successful developments of this détente can liberate great forces of regeneration and renewal in international relations and multilateral cooperation, to the benefit of the whole world.

Meanwhile, in Europe we are witnessing the growing impetus of the move towards the targets set for 1992, and, subject to certain differences in approach and opinion, towards an even more closely united Europe. This too can have great and beneficial consequences for the entire world.

However, in the poorer countries the prospects are on the whole rather bleak. A former African Head of State recently went so far as to declare that Africa, in the depths of its profound misery, is moving backwards as the rest of the world forges ahead. Some of you may find that excessively pessimistic, but the message I take from this is that Africa’s destiny, like that of the other poor countries across the world, lies in the hands of it people and its leaders.

If these peoples’ own efforts to surmount their difficulties and to pull themselves up by their own bootstraps are matched by a spirit of openness and solidarity on the part of the developed world, then our dreams will know no bounds. This, and nothing less than this, is needed to wrench humanity from the threat of famine, wretched poverty, underdevelopment, and the inexorable destruction of the environment.

Fortunately, with the advent of new advances in biotechnology and avowed national interest at the highest levels to reconcile development with the protection of our environmental heritage, we may cherish some optimism about the future. FAO stands ready to play its full part in such endeavours.

Mr Chairman, I have finished. As I said at the beginning, the problems of the moment demand amicable and concerted action in which our hearts as well as our hands play their part. It is my most fervent wish that an atmosphere of harmony, goodwill and... will characterize the work of this Council, 'and that we may thus advance the cause of those teeming multitudes whom it is our mission to serve.

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