I. PROGRAMME FRAMEWORK

INTRODUCTION

1. This budget is punctuated by two key influences. The first is that the biennium is seen as one of consolidation after the rather difficult period of the last three biennia involving restructuring and downsizing at the same time. Even in the biennium underway, the institution has had to face the abolition of a substantial number of posts and, inevitably, the separation of many long serving staff (about 120) and the loss, through attrition, of many more. The Director-General is strongly of the view that 2000-01 should be used to consolidate the streamlining of the Organization, to reinforce the integration of the programmes of Headquarters with those of the decentralized offices and to complete the enhancement of its administrative and financial systems

2. The second factor is that this budget reflects, at least on a preliminary basis, the major changes which are underway in the Organization's approach to planning and programming. While the Strategic Framework is not yet an approved source of Governing Body policy for the Organization, there is no question that the process by which it is being developed has led to significant re-evaluation of the external environment which the Organization needs to address. When combined with the new programme model, we find that the programmes of the Organization are being restated in much more specific terms echoing a clear definition of what Members expect of FAO.

MEDIUM-TERM OBJECTIVES AND PRIORITIES

3. At the beginning of each Major Programme, under the technical chapters, there is a section on Medium-Term Objectives and Priorities. This section has been redeveloped as a part of the process described above and reflects the departments' re-statement of objectives in the absence of a published Medium-Term Plan which, it will be recalled, was suspended by the Council until the next version for the period 2002-07 which will be published in the year 2000.

4. The table below provides an overall programme framework showing how the key priorities for 2000-01 for each Major Programme would relate to the five corporate strategies currently under consideration by Members in the draft of the Strategic Framework. The illustrative chart contains much abbreviated summaries of the priorities which are explained more fully under each Major Programme in Part IV, Programme Budget.

NEW PROGRAMME MODEL

5. This document reflects the new programme model for all technical programmes under Chapter 2 and Major Programme 3.1 of the budget. These are expressed in terms of three types of entities:

Regular Programme Technical Projects (numbered 2XXA1 to 2XXO9)

6. These have the following general characteristics:

• a duration of up to six years;
• precise time-bound objectives (which contribute to one or more of the department's medium-term objectives) defined in terms of the use to which outputs will be put by target users;
• definition of the major outputs;
• statement of effectiveness criteria and indicators;
• statement of target users - who are the outputs intended for; and
• the linkages with partners - both internal and external - that will be necessary to achieve these objectives.

Continuing Programme Activities (numbered 2XXP1 to 2XXR9)

7. These vary from technical projects primarily because they are continuing activities of an ongoing nature that are not amenable to time bound objectives (e.g. collection of statistical time series). The following characteristics apply to this type of programme entity;

• defined in terms of contribution to the strategic objectives;
• with the time bound aspect being limited to the delivery of annual or biennial outputs;
• otherwise, the same approach concerning effectiveness criteria, user focus and linkages applies.

Technical Service Agreements (numbered 2XXS1 to 2XXZ9)

8. This is the final type of entity which is designed to cover demand oriented services such as advisory services to Members or technical support services to projects and can include servicing regular meetings.

Application of Criteria

9. One of the key aspects of the new programme model is the need to systematically apply criteria to the determination of priorities. Each Regular Programme technical project and continuing programme activity is rated on a scale of one to five where five is the optimum score.

10. These criteria are based upon those originally established by the Council at its One-hundred and eleventh Session bearing in mind the practical guidance subsequently given by the Programme Committee. The criteria used by all technical departments in developing the entities listed in the document are as follows:

• contribution to departmental and corporate medium-term objectives;
• conformity of interest/usefulness to broad segments of the FAO membership or special groups;
• FAO's comparative advantage and avoidance of duplication with other organizations;
• quality of programme entity design;
• likelihood of achieving substantive and sustainable impact in terms of benefits to Members;
• likely cost efficiency of programme entity in terms of mode of operations and obtaining the maximum from partnerships; and
• clarity and feasibility for implementing the effectiveness criteria and indicators (i.e. the extent to which the achievement of objectives can be evaluated).

Status of Implementation

11. The implementation of the new programme model is currently in progress. To allow a coherent document to be produced which would not provide a confusing mix of sub-programmes and programme elements (i.e. the old model) and programme entities under the new model, programme managers were asked to develop a complete set of new entities for the entire programme, at least in summary. Detailed project entities and continuing programme activities have been developed for about half of the total whereas the balance remain in summary form and will be developed in more detail for the Medium-Term Plan.

12. However, in every case, an objective for the medium term has been defined and is included in the text as is a list of the main outputs to be produced during 2000-01 in support of the achievement of the medium-term objectives.

PROGRAMME STRUCTURE CHANGES

13. While the underlying detail is undergoing a major transformation, the pre-existing programme structure is largely unchanged at the Chapter, Major Programme and Programme levels.

14. Within Major Programme 2.2 Food and Agriculture Policy and Development, modifications have been proposed for two programmes. Programme 2.2.3 Food and Agricultural Monitoring, Assessments and Outlooks, which was previously entitled Agricultural and Economic Development Analysis, has been refocused on short-, medium- and long-term situation and outlook analyses of food, agriculture, commodity markets and trade, and food security at national, regional and global levels. Programme 2.2.4 Agriculture, Food Security and Trade Policy, which was previously entitled Food and Agricultural Policy, has been broadened to cover all work on policy issues in agriculture, food security and trade, identified both within and outside FAO, with partners such as the World Bank (WB), the World Trade Organization (WTO) and the International Food Policy Research Institute (IFPRI).

15. Within Major Programme 2.4 Forestry, it is proposed to create a new Programme 2.4.4 Forest Programmes Coordination and Information. The new programme will focus on information collection, analysis and dissemination both of the technical data related to forestry and of forestry related analytical information concerning the United Nations Conference on Environment and Development (UNCED) follow-up entrusted to FAO. The programme will also provide support to meetings of forestry statutory bodies and for improved coordination with decentralized offices.

16. Chapter 3 has been retitled from "Development Services to Member Nations" to "Cooperation and Partnerships" to better reflect the underlying thrust of these programmes. Similarly Programme 3.5.2, previously entitled "Private Sector, NGO's and Support to Food-for-All Fora" has been renamed "Civil Society Awareness and Partnerships".

17. Within Programme 5.1.1 Public Information and Publications Support, the sub-programme structure has been consolidated into three entities: Sub-programme 51130 Multimedia Production, Sub-programme 51140 Publishing Policy and Support and Sub-programme 51150 Media Relations. These changes align the programme structure with the new organizational structure of the Information Division (GII).

18. Programme 5.2.2 Information Systems and Technology Services (previously called Computer Services) has been broadened in scope to include telecommunications in order to bring the programme structure in line with the transfer of all telecommunications responsibilities to the Information Systems and Technology Division (AFI). This change has been accompanied by a transfer of US$ 3.0 million from Programme 5.2.2 and US$ 1.9 million from Chapter 6 into the Information Technology (IT) Pool Account, which is distributed across all programmes.

RESOURCE DISTRIBUTION

19. The tables overleaf describe the distribution of resources, firstly at the overall level of the Programme of Work (i.e. the gross budget including resources from Other Income) and secondly at the levels of the appropriation. In addition, a second scenario is introduced collecting together all of those additional requests and associated resource requirements that have been sought by the Governing Bodies, Technical Committees or Regional Conferences which were not possible to include within the constraint of the Zero Real Growth (ZRG) scenario.

Zero Real Growth (ZRG) Scenario

20. ZRG implies the maintenance of programme levels (although not necessarily the same priorities) from one biennium to another. It translates, in practical terms, into the same nominal level with the addition of sufficient resources to cover inflation and other cost increases. Part III of this document, Budgetary Framework, includes the calculation of cost increases which amount in total to an estimated US$ 34.7 million.

Overall Resource Allocations

21. The proposed overall resources allocation for the Programme of Work is shown by Major Programme and Chapter in the table overleaf. It will be recalled that the Programme of Work reflects the utilization of resources from several sources; that is not only Regular Programme assessments but also from Other Income including reimbursement for both technical and administrative support services, contributions to jointly funded activities, e.g., WB, International Financing Institutions (IFIs), World Health Organization (WHO), etc. It follows, therefore, that the Programme of Work for any one Major Programme can vary as a result of factors other than the contribution from the Regular Programme. The Regular Programme input to each programme is described under the next section entitled Distribution of the Proposed Appropriation.

22. The decline in the Programme of Work is entirely due to the reduction in Other Income. This is attributable to two key factors:

• decline in forecast support cost income (administrative and technical)
  consequent on the reduced forecast for field programme delivery in
  2000-01 versus the assumption in the 1998-99 Programme of Work
  and Budget (PWB) (US$ m 7.1)
• a reduction in the expected level of resources from the World Bank
  largely because the level foreseen in the 1998-99 budget did
  not eventuate (US$ m 2.5)

23. The shifts in resources between Major Programmes and Chapters are fully explained in Section IV Programme Budget. The following is, therefore, a summary of the major shifts.

a) In Chapter 1 General Policy and Direction the net increase consists of resources for the Oracle-based replacement of PLANSYS, partially offset by savings in Conference and Council.

b) In Chapter 2 Technical and Economic Programmes the small net changes hide more significant movements involving reductions because of the decline in forecast reimbursements for technical support services completely offset by the increased distribution of Information Technology (IT) services as described in the narrative for Programme 5.2.2 Information Systems and Technology Services. While the substantive priority accorded to the work in this Chapter and the importance of well recognized priorities has been maintained, the underlying programme has had to absorb a small reduction in non-staff resources (0.4 percent) in order to accommodate ZRG.

c) Chapter 3 Cooperation and Partnerships suffers most from the decline in Other Income relying as it does on such income for both Field Operations and, to a lesser extent, the programme of support to investment. Overall, income declines of US$ 8.4 million have been forecast although slightly less has been taken in the form of budget reductions.

d) Chapter 4 Technical Cooperation Programme (TCP) shows a transfer between programmes with a small overall decline which results from the increased allocation of TCP to the reimbursement of technical support services.

e) Chapter 5 Support Services has witnessed significant internal change and overall reduction of US$ 3.2 million which consists of a small increase under Major Programme 5.1 Information and Publications Support offset by a major reduction under Major Programme 5.2 Administration. Within Major Programme 5.2 there have been considerable shifts but overall, the decline is largely attributable to the shift of resources into the IT pool.

f) Chapter 6 Common Services declines because of a transfer of costs of the communications-related staff to the Information Systems and Technology Division (AFI) and to the IT Pool.

Distribution of the Proposed Appropriation

24. Whereas the previous table concentrates on the Programme of Work, the table overleaf demonstrates the changes proposed in the distribution of the Appropriation by major headings. The principal difference between the following table and the previous table on the Programme of Work is the change in income. In addition, this table shows the allocation of the inflationary or cost increase adjustment by Major Programme.

Real Growth Scenario

25. The Council, the Programme Committee, the Technical Committees and the Regional Conferences have made an unusually high number of recommendations which imply the application of additional resources to specified priorities. As always the Director-General has been attentive to such requests but has been very much influenced by the financial constraints which the Organization faces in 2000-01. In addition to the concerns of Members about the level of assessments, there is also the fact that after a period of substantive reform, there is very little flexibility in the allocation of resources.

26. Added to which is the fact that the 1998-99 budget base appears, in retrospect, to have been over-optimistic about the likely level of income. As has been demonstrated above, this has resulted in a US$ 11 million decline in the Programme of Work.

27. However, the extent to which the Secretariat has been able to accommodate the requests for additional resources does not do justice to their importance. There is a series of high priority areas where substantial additional resources would be justified but which cannot be granted unless Members decide that the importance of FAO's work justifies an appropriation beyond ZRG. The table below lists these requests and their incremental cost (i.e. beyond the amounts already included in the ZRG budget scenario).

28. The entire list totals close to US$ 22.6 million or 3.4 percent over the current appropriation of US$ 650 million. The Council may wish to indicate the priority of items and whether they should be included in the PWB. Where inclusion is recommended, Members are requested to state whether they are prepared to appropriate additional resources or alternatively to indicate the programmes from which the necessary resources can be taken.

29. The net effect of granting additional resources for all of the items listed would be as shown in the following table giving the revised breakdown of the Appropriation.

Proposed Allocation for the Appropriation after Positive Growth Adjustments
(All amounts in US$ 000)

30. The additions in the growth scenario favour the technical and economic programmes and TCP. The increases proposed are, in addition to being listed in the table overleaf, described in the text at the end of each technical programme.