CL 116/3-Sup.1


Hundred and Sixteenth Session

Rome, 14-19 June 1999


Additional Information


Table of Contents

I. Introduction

1. As requested by the Programme and Finance Committees at their Joint Meeting of 5 May 1999, the prime purpose of this supplementary document is to outline a Zero Nominal Growth (ZNG) scenario for the 2000-2001 biennium1. In response to another request2 from the same Committees, it also illustrates in tabular form how the new priorities had been reflected in the Zero Real Growth (ZRG) scenario presented in the Summary Programme of Work and Budget 2000-01. Finally, in the light of the introduction of Oracle-based systems in replacement of FINSYS, the Director-General has decided to bring forward the implementation of related adjustments to administrative procedures and organizational structures. These are proposed to be implemented irrespective of the eventual budget level of 2000-01 and the full details are still being worked out. While, therefore, not contingent on a ZNG "scenario" per se, some anticipation of the impact of this decision is made in the present document.

II. ZNG Scenario

A. Financial parameters

2. By definition, ZNG implies that the budget Appropriation for the next biennium should remain at the same total level as that voted by the FAO Conference for the present 1998-99 biennium, i.e. US$ 650 million. It, therefore, entails the full absorption of anticipated cost increases.

3. Whereas a preliminary estimate of US$ 34.7 million for these cost increases was indicated in the SPWB document – at the current budget rate of exchange of Italian Lire 1,690 to US$ 1 – the Committees requested the Director-General to take account of the latest developments affecting the likely cost increases for the next biennium, and the impact of current Italian Lira/US$ exchange rate.

4. In recent months, this rate of exchange has been fairly consistently above 1,800 Lire to US$ 1. Therefore, in the development of a ZNG scenario, a budget rate of 1,800 Lire has been assumed and the estimate for cost increases revised accordingly. In particular, this higher rate has a favourable impact on standard costs for Rome-based staff, thereby reducing budgetary requirements to meet salary costs. It also permits a reduction in the US dollar-denominated provisions for non-staff costs incurred in Lire. Coupled with other minor adjustments, this favourable impact leads to a reduced estimate for cost increases that should range from US$ 10 to 15 million.

5. Hence, the ZRG scenario "recosted" on the basis of the lower range of the revised cost increase estimate, would imply a budget level in the range of US$ 660 to 665 million, and in order to reach ZNG, it is necessary to identify reductions which will result in a budget of US$ 650 million.

B. Approach

6. In the first instance, the principle of full protection was upheld for a number of key areas of the programme of work. These are as follows:

7. The same principle of protection was applied to the two "windows" of the Regular Budget which fund direct operational activities in countries, i.e. the Technical Cooperation Programme (TCP) and the central provision for the Special Programme for Food Security (SPFS) under Programme 2.5.6.

8. The full protection afforded to the above areas entailed that proportionately higher reductions were required to be identified under the other programmes of the Organization. Regrettably, it was not feasible to avoid cuts to valuable programmes within Chapter 2 of the Programme of Work and Budget (i.e. other substantive programmes than those listed above). In the search for the least damaging course of action, the capacity to attract extra-budgetary support was borne in mind, to compensate for eventually reduced resource levels under the Regular Budget.

9. A paramount factor was the need to minimize, to the extent possible, negative impact on serving staff. Given the substantial reduction of 584 posts experienced in the recent past, it was deemed especially pertinent to minimize post abolitions. For those abolitions of encumbered posts which might still prove necessary, and in order to avoid extra-ordinary separation costs, use will be made to the extent possible of attrition and redeployment opportunities. Where incremental separation costs need to be incurred, it is proposed that these be funded from arrears payments as in 1998-99.

10. The ZNG scenario would imply the elimination of a certain number of posts in the Professional category, presently estimated at 30 to 40. Although not an absolute criterion for decision-making in this regard, the incidence of vacant posts was taken into account, again to minimize hardship on staff and avoid separation costs.

11. In addition, cuts would be necessary under other budget components such as consultancies and travel. In many areas, this would lead to reductions in the budgetary provisions under these components by as much as 20 percent.

C.   Impact

12. As intimated to the Programme and Finance Committees, a complete and fully substantiated ZNG scenario is to be provided in the full PWB document to be issued in August 1999. All concerned FAO units would investigate the impact of the above staff and non-staff reductions on their planned activities for the next biennium. It is clear that the attendant weakening of technical capacity and the lower provisions for consultancies and travel will translate into downward adjustments to the programme entities included in the Summary Programme of Work and Budget – technical projects, continuing programme activities and technical service agreements – along with the necessary reduction and/or elimination of outputs. The details will be illustrated in the Programme of Work and Budget 2000-01 in a similar manner as the impact of ZNG was described in the current Programme of Work and Budget document.

III. Adjustments to Organizational Structures
in the Administrative Areas

13. At present, administrative workload in support of the Organization's activities at Headquarters is shared between central units in the Administration and Finance Department (which primarily ensure overall consistency and guidance) and Management Support Units (MSUs) in the various departments (which prepare and post the bulk of administrative transactions in corporate systems).

14. The introduction of Oracle-based and associated systems in replacement of FINSYS – and in a second phase of PERSYS – represents a major development, which, it was foreseen, would significantly affect working arrangements in the administrative area. In particular, the easier access by non-specialized staff and the enhanced reporting capacities which are key features of the Oracle system are expected to lead to a different distribution of administrative tasks, and provide an opportunity to make significant economies. This was planned to be put into effect progressively, in the light of experience with the new computerized systems.

15. Given prevailing budgetary constraints, the Director-General has decided to bring forward the implementation of related adjustments to administrative procedures and organizational arrangements. This involves the transfer of much of the Headquarters MSU staff to a central servicing structure, subject to resources availability and the concurrence of the Council, with a view to full implementation by 1 January 2000. The full details are still being worked out, but it is possible to tentatively estimate that these new arrangements could lead to savings in the order of US$ 6 million.

16. Subject to the same conditions, a similar approach of bringing together servicing functions into a single unit and thus maximising synergies will also be pursued where the possibility of merging the MSUs and existing operating structures would, where appropriate, allow the consolidation of all service functions.

17. These savings will permit the correction of a number of instances of serious under-budgeting which remained even under the ZRG scenario (e.g. improved language coverage, communication costs with decentralized offices, etc.) – corrections which will necessarily be reflected also under the ZNG scenario.

18. The above operation is not devoid of risks, in view of the lack of operational experience with the Oracle system so far. Ideally, it would have been preferable to wait until the Programme of Work and Budget 2002-03 before making adjustments to structures and capturing the anticipated savings. However, in view of present budget guidance, the Organization would have no other choice but to take the risk of accelerating a programme which, under normal circumstances, would have required a carefully phased implementation.

IV. Reflection of Priorities under ZRG

19. The Summary Programme of Work and Budget document included a table following paragraph 30, listing a number of priority activities worthy of additional resources beyond ZRG. These were consistent with recommendations from FAO Governing and Advisory Bodies. While the attendant incremental costs were thus indicated, the document did not elaborate on how and to what extent the same priorities were already addressed in the ZRG proposals.

20. Therefore, the following table is provided in the same sequential order. In the last column, the scope of work under ZRG is explained (and wherever pertinent, why resources at that level are deemed to be insufficient).


Extent to Which the Priority is Already Addressed Under ZRG


Programme Reference

US$ in ZRG


AnGR Programme and the Intergovernmental Mechanism for AnGR (CGRFA-ITWG-AnGR) 213A5


  • Funding for preparation and holding of one meeting of the ITWG.
  • Core work to develop the Report on the State of the World's Animal Resources which relies also substantially on extra-budgetary funds. The ZRG provision represents a minimal input to preparing the report, and covers the staff time which is also necessary for preparation of the Report, as an element of the Global Strategy.
  • No provision for work on DAD-IS system can be made under ZRG.
Monitoring Land and Freshwater Resources: Quality and Utilization 211P7


Covers data collection and the establishment of the integrated land and water information system, consisting of three components (Land and Water Information System, Land DataBases and Statistics and AQUASTAT). To ensure fast completion and global coverage of the system, additional resources beyond ZRG would accelerate the data collection, completion and updating of the system.
Support Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade 212P2


Covers minimal basic functions of the FAO obligations of the joint UNEP/FAO Secretariat (not sufficient to support the implementation of the Convention fully).
    1 Non-Staff Human Resources
Strengthening Plant Biotechnology Activities 212A1, 212A2, and 215A1


Covers: minimum number of Expert Consultations on international cooperative research for root crops breeding and multiplication; basic guidelines on application of biotechnologies and exchange of in vitro propagated materials; methodologies and standards for the production of high quality and safe horticultural produce. None of the activities relating to plant germplasm DNA fingerprinting are included under ZRG.
Enhancing the implementation of FIVIMS at the national and international levels 222A1


Entire FIVIMS activity described in SPWB (paragraphs 202 and 203).
GIEWS Crop and Food Supply Assessment Missions 223P6


Country-level assessments of foodcrop and food supply and demand situations. This amount would cover only 20% of the total cost (including funds from all sources) for those missions likely to be required in the biennium.
Study of the impact of sanitary and phyto-sanitary measures on international food trade 221P5


Case studies in six countries (one in each FAO region). More would be covered if additional resources were available.
National Systems of Food and Agricultural Statistics 222P3


Entire activity described in SPWB (paragraphs 212 and 213), comprising methodological support for national systems of agricultural statistics, preparation of guidelines, studies of integrated systems and training to upgrade statistical capacity at national level.
Technical Assistance on Trade Policy 224P4


Included as part of more comprehensive work in entity 224P4 in SPWB (paragraphs 242 and 243).
Enhancing technical support to member countries for the implementation of Codex standards on veterinary drug residues in foods 221P5


Technical support to five developing countries to enable them to meet the Codex standards on veterinary drugs.
Implementation of the Plans of Action on Sharks, Seabirds and Capacity 233A1, 231S1, 232S1, 234P3, 234A1, and 231A1


  • Limited normative work to assist countries to develop national plans of action on birds;
  • watching brief on sharks fisheries management;
  • one new post for work on capacity. Normative work to assist countries to develop national plans of action on capacity;
  • collection of information on subsidies to fisheries;
  • part of the work to develop a FIGIS module on fishing fleets and vessels authorized to fish on the High Seas.
Code of Conduct for Responsible Fisheries 234A1


Most of the 234A1 entity is to monitor and report on the implementation of Code of Conduct, facilitating few regional training and other workshops, disseminating up-to-date information, producing limited technical guidelines.
Small Island Developing States Programme 233A2, 234A1


Activities to support safely extending the range of small-scale fishing operations, disaster preparedness and mitigation in coastal areas and capacity building for local participation in the management of fishing ports and fisheries resources in SIDS.
Support to meetings and consultation on key issues (COFI Sub-committee on Aquaculture, ACFR sessions, Eco-labelling) 234S1


Not possible to fund these additional meetings under ZRG.
Work on CITES Listing Criteria 232A4


Only for keeping a watching brief of CITES work and looking for extra-budgetary resources.
More appropriate Ecosystem Approaches to Fisheries Development 232S1


Minimal watching brief, monitoring and answering requests for information from Members.
Forestry Information System 244P1


Project 244P1 is to expand the scope of the global forestry information system to incorporate new databases and to expand linkages with decentralized offices, FAO member countries, other international organisations, and key forestry organisations including NGOs.
Strengthen International Forestry Policy 244P2


Project 244P2 is to continue to support post-UNCED initiatives on forests, mountains, deserts, biodiversity, and climate change (but more resources are needed to carry out this work adequately).
Management and Coordination of the ACC Network on Rural Development and Food Security 253P1


Limited implementation, not covering adequate management and help-desk functions to provide assistance and coordination amongst 20 UN partners and National Thematic Groups.
Statistical Analysis of Gender Specific Constraints and Issues in Socio-Economic and Development Contexts 251A1


Reports and analysis on gender specific constraints and issues arising from socio-economic development.
Strengthening the inter-departmental coordination for the follow-up of the UN Commission on Sustainable Development (CSD) 251P2


Provision does not match effective requirements for inter-departmental coordination for the follow-up of the UN Commission on Sustainable Development (CSD).
Sub-regional Office for Central Asia  


It has not been possible to provide for this under ZRG in the SPWB.
Sub-regional Office for Central America  


It has not been possible to provide for this under ZRG in the SPWB.
Strengthening Regional and Sub-regional Offices in Africa  


It has not been possible to provide for this strengthening under ZRG in the SPWB.
TCP Chapter 4


It has not been possible to provide for this increase under ZRG in the SPWB.
Improve language balance  


It has not been possible to provide for this range of improvements under ZRG in the SPWB.

1 CL 116/4, para. 19

2 CL 116/4, para. 21