CHAPTER 3: COOPERATION AND PARTNERSHIPS

(All amounts in US$ 000)

638. This chapter covers a wide range of activities, undertaken in collaboration with a number of essential partners - funding sources for technical cooperation, international financial institutions, civil society organizations, etc. Therefore, it is retitled "Cooperation and Partnerships". It involves several organizational units at Headquarters, as well as field offices, in direct support to Members' development efforts. It includes policy advice and support to programme and project formulation, with particular emphasis on those with investment potential, as well as operational services for the execution or implementation of country programmes. The budgetary provision for FAO country offices and other activities in support of external cooperation and resource mobilization are also included.

639. This chapter is heavily dependent on external income, besides the Regular Budget appropriation. In several areas, reductions in income are anticipated. For Major Programme 3.2 (Support to Investment) expenditure and related reimbursement have been reduced to reflect more realistic targets, in particular for the World Bank (WB). In the case of Major Programme 3.3 (Field Operations), lower levels of administrative and operational support cost income are foreseen, with the consequent necessary reductions in expenditure in support of field operations.

MAJOR PROGRAMME 3.1: POLICY ASSISTANCE

(All amounts in US$ 000)

640. This major programme supports policy formulation in Member Nations, particularly in relation to food security and sustainable agriculture and rural development. The Rome Declaration of the World Food Summit clearly stated that a peaceful, stable and enabling political, social and economic environment is the essential foundation for food security. The underlying commitments were to: 1) ensure an enabling political, social, and economic environment designed to create the best conditions for the eradication of poverty and for durable peace; 2) implement policies aimed at eradicating poverty and inequality and improving physical and economic access by all, at all times, to sufficient, nutritionally adequate and safe food and its effective utilization; 3) pursue participatory and sustainable food, agriculture, fisheries, forestry and rural development policies and practices in high and low potential areas; and 4) strive to ensure that food, agricultural trade and overall trade policies are conducive to fostering food security for all through a fair and market-oriented world trade system.

641. The major programme aims, therefore, to assist Members in generating an enabling environment conducive to food security, sustainable agriculture and rural development. This implies policies and programmes which empower both producers and consumers to operate in an environment which is guided by competitive market forces, and assist those who are unable to participate in/or benefit from the market to acquire the capacity to do so through enhanced livelihood and productive capacity. Besides the formulation of national sectoral strategies and programmes, the major programme addresses related institutional capacity building, as well as strengthening the legal framework and instruments. It also takes account of rehabilitation programmes in the aftermath of complex emergencies and the programming and coordination of resources made available from internal and external sources.

642. The major programme covers primarily the work of the Policy Assistance Division (TCA), with units in the Regional and Sub-regional Offices having the implementation responsibility in the field, and Headquarters units ensuring coordination of these decentralized activities and training support. The legal aspects are covered by the Development Law Service of the Legal Office. Necessary collaboration with other FAO units and external partners is ensured, as appropriate.

Programme 3.1.1: Coordination of Policy Assistance and Related Capacity Building

(All amounts in US$ 000)

643. The objectives of this programme, through enhanced country focus, are: 1) to ensure that the policy and programme support provided to Members, through the decentralized units and specialized technical division/units, is consistent with national and international development frameworks, and that it is geared towards eradicating poverty, enhancement of food security and sustainable agriculture and rural development; and 2) to provide training and support to build up national capabilities to formulate, implement and evaluate policies and programmes.

644. Capacity-building priorities, in particular, will be in the areas of: policy formulation and implementation for rural poverty alleviation and sustainable livelihoods; national policies and regulatory frameworks including international trade; sector and sub-sector policies to improve food production, processing and marketing; and policy formulation, planning and implementation for conservation and rehabilitation of natural resources.

645. The programme contemplates six entities based on the new model, three continuing activities and three for technical services in essential areas.

311P1 - Coordination of Policy Assistance and Advice

Rationale and Objective

646. Assisting Members in formulating policies and programmes in areas of FAO's mandate, especially aimed at eradicating poverty and inequality and improving physical and economic access to food is a major function of the Organization. As the policy advisory function is largely decentralized, there is a need to ensure consistency and coherence. This continuing programme activity (CP) is designed for this purpose. The objective is, therefore, to ensure that FAO support and advice on sectoral policy reforms for agricultural development and food security is well coordinated, effectively delivered by the decentralized units and adequately supported by other technical units.

Approach

647. Together with continuous guidance to, and day-to-day contacts with decentralized units, Headquarters will review and ensure technical clearance of a large number of country briefs, notes and reports prepared by them on agricultural policy issues of country, regional and interregional interest. It will also review and clear specific sectoral and sub-sectoral policy papers prepared in the regions.

Links

648. Close contacts are maintained internally with technical departments to mobilize their inputs. External partners include the World Bank (WB) and the International Food Policy Research Institute (IFPRI) for regular consultation and, at times, joint activities.

311P2 - Coordination of Field Programme Development Activities

Rationale and Objective

649. Field activities are now in large part implemented by Regional and Sub-regional Offices. They cover all aspects of agricultural development and food security, including forestry and fisheries. Due to the diverse nature of field activities, it is necessary to ensure that they have maximum impact on the core issues of agricultural development and food security and that a coherent country focus is maintained through a programme approach. The main objective of this CP is to guide and coordinate the preparation of programming framework documents for member countries and the development of programmes/projects on behalf of donors.

Approach and Links

650. Work implies wide-ranging contacts with the field, as well as Headquarters technical departments to secure their involvement where required. Constantly updated guidelines for programming of technical cooperation activities at country level will be disseminated. The CP will also be heavily involved with the constraint analysis phase of the SPFS.

311P3 - Development of Training Materials and Methods in Food and Agriculture Policy Analysis

Rationale and Objective

651. Building on its extensive experience through field projects and direct policy advice to governments and its multidisciplinary coverage, FAO is well placed to develop and disseminate training materials of an applied, hands-on type to help analyzing policy options and impacts. These materials contribute to building local capacities to improve decision-making in the various fields of agriculture and rural development policies, through the presentation of concepts, appropriate information, analytical methods and policy tools. They are also a prerequisite for many of the activities covered under the following technical service agreements (TSs), 311S2 and 311S3. These materials are oriented to an audience of working professionals engaged in planning and policy-making processes rather than to an academic public. Because of their applied nature and their grounding on actual policy advice experience, they address different needs from those of academic origin. The foreseen need of updating training materials and methods to keep up with policy developments, analytical thinking and adult education technologies, make of this a continuing programme activity.

652. The objective of developing training materials and methodologies of the requisite quality is to be seen as an intermediate objective, subsidiary to the broader objectives pursued by the whole programme.

Approach and Links

653. It is envisaged to develop and disseminate training manuals on the following subjects: Policy Reform, Poverty and Agriculture; Agricultural Strategies and Policies; Commodity Chain Analysis; Agro-Industrial Policy Reviews: Methodological Guidelines (French and/or Spanish version); Rural Finance Policies; Water Policies; Kit for Training on the Uruguay Round; Decentralization and Agricultural Development; Decentralized Development in Practice: Tools and Techniques; and Natural Resources Management and Local Development. In addition, these training materials will be disseminated among training institutions in Member Nations and the development community to be taken up in their own capacity building programmes.

654. The above work will be supported by formulation and undertaking of exercises and case studies, as well as the preparation of training-oriented computer packages.

311S1 - Direct Support to Agricultural Policy Work in the Regions

311S2 - Capacity Building Support to Member Nations in Food and Agricultural Policy Analysis

311S3 - Support to Building In-house Capacity in Food and Agricultural Policy Analysis

655. These three technical service agreements aim to ensure effective outreach to the field of the work carried out under the preceding CPs. However, they have three distinct target beneficiaries:

• 311S1 is to serve the need of the decentralized policy advisory units themselves (e.g. by participation of Headquarters staff to missions, etc.);
• the direct beneficiaries of 311S2 are the technical and senior officers and units engaged in agriculture and rural development policy-making in ministries of agriculture and related institutions, ministries of finance and planning, as well as in civil society organizations involved in policy dialogue (through training courses and workshops, in-service training and institutional advice, mostly financed by the field programme, but also partially with RP funds). By implication, the "indirect" beneficiaries are the farming community and the national economy at large;
• 311S3 is aimed at updating the technical capabilities of FAO staff (at large) involved in agriculture and rural development policies and planning by making them: learn from practical experience policy analysis and formulation - an area in constant state of flux; and aware of latest developments in policy thinking and methodologies.

Programme 3.1.2: Policy Assistance to Various Regions

(All amounts in US$ 000)

656. This programme covers the work of the Policy Assistance Division's decentralized units (Policy Assistance Branches and Units) which are the "implementing arm" in providing quality and consistent policy advice and programme development support to meet requests from governments and other parties concerned and play a lead role in maintaining country focus for FAO activities.

657. The hitherto region-based breakdown of resources is replaced by a more function-orientated presentation of activities to enhance understanding of the work of the above units.

312P1 - Enhancement of Country Focus

Rationale and Objective

658. Country policy work, as well as field programme development, require up-to-date knowledge of the country concerned and information on recent trends in agricultural production, food security and technical cooperation activities. Also close liaison with country authorities and dynamic monitoring of socio-economic and political changes are required. This CP is designed for these purposes. The objectives are to enhance country knowledge in order to enable FAO to provide well-tailored technical assistance for agricultural development and food security and to maintain databases of country level information on the policy situation and related socio-economic indicators for food security and agriculture.

Approach

659. The decentralized units will maintain more than 170 country briefs and databases of country of regional and inter-regional relevance (Near East/North Africa 25; Latin America and the Caribbean 24; Europe 10; Asia 32; Africa 80). They will contribute (together with FAO Representatives) to awareness in countries about FAO activities, programmes and areas of competence to assist them in their efforts for sustainable food security and agricultural developments.

312P2 - Field Programme Development

Rationale and Objective

660. Besides country focus, the TCA units in the regions are to play a key role in assessing technical assistance needs of the countries and overall field programme development. The objective is to enhance field programme activities at country and regional levels and prepare projects and programmes for support in policy and sector/sub-sector reviews.

Approach

661. It is possible to foresee the following volume of activities:

• more than 150 programming mission reports, including project ideas/briefs (depending on requests);
• nearly 100 draft projects and programme agreements (depending on requests and donors' support);
• nearly 140 technically appraised requests for technical assistance.

312S1 - Advice in Sector Policy

312S2 - Support and Training in Sector/Sub-sector and Specific Agricultural Policies

312S3 - Technical Support to Field Projects

662. These three technical service agreements regroup the direct inputs of the TCA units to country level activities.

663. Tentative indicators of activity can be given as follows:

• 312S1 - about 90 technical reports on sectoral policy issues of interest to recipient countries; about 60 workshop reports and related technical documents;
• 312S2 - more than 90 sub-sector reviews and strategies; more than 120 policy advisory missions upon request to strengthen national capacity in policy analysis and formulation;
• 312S3 - technical backstopping to approximately 90 projects (with policy dimensions); more than 90 mission or technical reports relating to specific issues; about 90 analytical reports on constraints for achieving food security on a sustainable basis.

Programme 3.1.3: Legal Assistance to Member Nations

(All amounts in US$ 000)

664. The programme is designed to improve the legal and institutional framework for agricultural development and natural resource management in Member Nations. It is concerned with devising legal regimes and structures that, in the circumstances of each country, are practical to administer, reduce conflict and facilitate decisions and actions that take account of relevant factors as dictated by the policies of the country. It acts principally by preparing legislation, agreements, and other legal instruments. The programme also collects, analyzes and disseminates information on food and agriculture legislation, undertakes research and publishes studies on legal questions, and trains officials in legal disciplines related to food and agriculture.

313P1 - Collection and Dissemination of Legal Information

665. This CP covers FAO's legal database, which is now accessible electronically and is an important and cost-effective means of assisting Members in food and agriculture legislation. Work during the next biennium will continue to concentrate on completing coverage, through inclusion of more countries and international instruments, and on improved methods of full-text retrieval and dissemination. It is expected that full texts of laws for about 50 countries will be made available on-line, as well as on CD-ROM. The completion and maintenance of the database will require increases in staff and non-staff human resources, to be compensated for by lower expenditure on publications and other activities.

313S1 - Provision of Technical Advice

666. The enhanced focus on food security in the wake of the World Food Summit is leading to demand for legal advice on food issues, such as food safety and the right to food which is regrouped under this entity. Legal work on related matters such as water and soil resources, land tenure, genetic resources, plant protection, seed certification, aquaculture, and trade in agriculture, is also expected to increase. Moreover, the combined emphasis on food production and sustainable agricultural development is likely to require at least the present level of resources devoted to forestry, responsible fisheries, and animal health. More advice and training on the implementation of national legislation and international agreements dealing with these matters will also be required.

667. This will entail some shift of staff time from other areas, such as environmental protection and assistance to countries in transition. In addition to the services of one or two associate professional officers, it is expected that extra-budgetary resources will be available, in particular, for fisheries and water law through new or renewal of existing field projects. Demand from the World Bank for legal services in connection with investment projects is expected to continue.

MAJOR PROGRAMME 3.2: SUPPORT TO INVESTMENT

(All amounts in US$ 000)

668. Investment is vital to the achievement and maintenance of national-level food security. While most of the investment in agriculture and rural development in the years ahead is likely to consist of private commitments by farmers, public investment will continue to play a key role in creating and maintaining the conditions for profitable private sector investment. Public investment will support the development of adequate infrastructure including: transport systems, water control, human resource development, agricultural research and extension, environmental management, and the transfer of knowledge and appropriate technologies.

669. Developing countries and countries in transition need to generate viable and well prepared investment projects and programmes that respond to their own development priorities and which meet the lending criteria of multilateral financing agencies, as major sources of external investment for agriculture. Although some countries have succeeded in enhancing their capacity for project preparation, many, particularly the poorest, still need assistance to formulate investment projects and programmes to the standards required by the financing institutions and donors. FAO's Investment Centre Division (TCI) is an impartial source of such assistance and technical expertise.

670. The Investment Centre operates under a series of cooperative agreements with the main international financing agencies that lend to the agricultural and rural sector. Joint activities under these agreements are carried out under cost-sharing arrangements so that, on average, only about 40 percent of the total costs of FAO's investment support work is met by the Regular Budget Appropriation. Cooperation with the World Bank began in 1964, followed by other agreements with the African Development Bank (AfDB), the Asian Development Bank (AsDB), the European Bank for Reconstruction and Development (EBRD), other major regional and sub-regional development financing institutions, the International Fund for Agricultural Development (IFAD), the UN Capital Development Fund (UNCDF), the UN Development Programme (UNDP) and the World Food Programme (WFP). FAO has a standing Memorandum of Understanding (MOU) regarding collaboration with the World Bank for the promotion of rural development and food security in Africa, as well as the African Development Bank and the Islamic Development Bank (IsDB). In the current biennium, FAO signed MOUs with the Inter-American Development Bank (IDB) and with IFAD to enhance cooperation particularly in the areas of household food security and rural poverty alleviation in Africa.

Cumulative Achievements

671. By the end of 1998, 1,135 projects in 137 countries, identified or prepared with the assistance of the Investment Centre, had been approved for financing. Total investments in these projects amount to US$ 63 billion. Of this total, supporting loans from financing institutions represented US$ 34.7 billion, with the balance provided by the recipient countries and the beneficiaries themselves. During 1998, 45 projects prepared with the Investment Centre's assistance were approved for financing, for total investments of US$ 3.1 billion, including supporting loans from the financing institutions of US$ 2.2 billion. Twenty of the World Bank's agricultural projects approved for financing during the Bank's fiscal year 1998 were prepared with FAO assistance. These account for 42 percent of the Bank's agricultural projects approved that year.

New Thrusts for 2000-01

672. Cooperation will be expanded with sub-regional funding institutions, and selected national development banks. Major areas of emphasis will be investment projects in the rural sector, alleviating rural poverty, making better use of water resources with an emphasis on small-scale low-cost water control, improving land and natural resources management and enhancing soil fertility, as well as increasing the effectiveness of agricultural services, including research and extension. A significant feature will continue to be TCI's support to the Special Programme for Food Security (SPFS). In Low-Income, Food-Deficit Countries (LIFDCs), where activities under the SPFS are not already underway, the Division will be supporting the programme formulation process that will be led by national staff and consultants. Opportunities for expansion or replication of Phase I activities and the initiation of Phase II are expected to feed into the investment-directed efforts of the World Bank and other partner financing institutions. Maximum use will be made of participatory approaches in the design and implementation of projects to encourage local ownership and project sustainability. Environmental aspects will be carefully monitored and attention given to gender issues.

673. A programme of support to national banks and development funds, which began in 1997 with the objective of strengthening the role of these banks and increasing domestic resource mobilization for investment in agriculture and rural development, is expected to continue in the new biennium. In collaboration with the Agricultural Support Systems Division (AGS), the Investment Centre will continue to offer to selected institutions services falling under three main headings: (i) rural financial systems reviews, analyzing the enabling environment for rural financial services; (ii) business plan development, aimed at assisting institutions to develop plans for expanded services in rural areas; and (iii) assistance in processing complex projects, whereby TCI would respond to requests for help in preparing or appraising projects requiring objective and/or specialized expertise. TCI will also continue to collaborate with the Development Law Service (LEGN) in providing sound assistance to governments on policy and legal issues concerning agricultural and rural development, and natural resources management, including the legal reforms that are often needed as pre-requisites for new investments.

674. In its project preparation work, TCI will continue to emphasize capacity-building of national agencies to implement investment projects on a sustainable basis. In its project formulation work, the Division will provide assistance to national project preparation teams with a view to their assuming full responsibility for the work. In all appropriate cases, environmental impact will be thoroughly assessed, with mitigation proposals included as judged necessary.

675. Use of national consultants and teams, while enhancing local "ownership" of projects, is expected to help contain the costs associated with Investment Centre missions. Reliance on senior TCI staff outposted to the various regions, and utilization of Associate Professional Officers (APOs), National Professional Officers (NPOs) and the various partnership programmes will also help contain costs. Utilization of trust funds, such as those already established with Belgium, the Czech Republic, France and Sweden, partially offsets non-staff human resource costs, and opportunities for establishing additional trust funds will be explored. Rationalization of work among the TCI Services and between geographic areas will be pursued. A Management Information System, installed in 1997 that permitted close monitoring of the costs associated with Investment Centre activities, was expanded in 1999 to include updated indicators taking into account new trends and practices in agricultural and rural development.

676. Main indicators of activity for the next biennium will include about 800 missions fielded with some 50 to 60 Project Implementation Completion Reports prepared.

Resources

677. Whereas the overall volume of activities of the World Bank Cooperative Programme is expected to continue at the same level over the next two years, it may be recalled that the 1998-99 Programme of Work and Budget foresaw additional expenditure and related cost reimbursements from the WB (amounting to US$ 1 million) which did not materialize and which, therefore, need to be reversed in 2000-01. The programme of work for 2000-01 is consequently adjusted downwards to bring the budgetary allocation precisely in line with the provisions of the governing Memorandum of Understanding between FAO and the World Bank, where FAO covers 25 percent of the costs of the programme.

678. The reduction in resources under the Investment Support Programme (ISP) is a needed correction to reflect the allocation of staff time to support the programme formulation process of the SPFS, hence not pertaining to Programme 3.2.2 per se. The overall provision for the major programme is also affected by the MSU restructuring.

Programme 3.2.1: FAO/World Bank Cooperative Programme (CP)

(All amounts in US$ 000)

679. A major share of Investment Centre activities will continue to be directed towards helping Members to formulate investment projects for subsequent financing by the World Bank, including the International Development Association and the International Bank for Reconstruction and Development. World Bank management is expected to continue to assign priority to agriculture and rural development, so that demand for Investment Centre services should remain strong.

680. In addition to the SPFS work indicated above, a number of core programmes will continue to receive special attention in the Africa region. They include small-scale irrigation, soil fertility, agricultural statistics development, forestry and fisheries. Numerous countries have made formal requests and are participating in other activities made possible under MOU arrangements.

Programme 3.2.2: Investment Support Programme (ISP)

(All amounts in US$ 000)

681. The Investment Support Programme, covering financing institutions other than the World Bank, operates mainly in the poorest countries. In the light of the MOU on food security and rural development in Africa, signed in 1997 by FAO and the African Development Bank, investment support activities with AfDB will continue to increase.

682. Cooperation with IFAD will cover a range of upstream and downstream activities related to investment in agriculture and poverty alleviation. Similarly, cooperation with the Asian Development Bank is expected to remain at a strong level. Cooperation with the Inter-American Development Bank was strengthened in 1998 and it is expected that the general level of work on field projects will increase in the next biennium. Cooperation with the Asian Development Bank and the Inter-American Development Bank is facilitated by the presence of outposted Investment Centre senior staff members. Investment support activities with the Islamic Development Bank are expected to increase in view of the strong emphasis and priority being given to food security and rural development in the least-developed member countries (LDMCs) of the Bank.

683. The Investment Centre expects to field approximately 200 missions under the Investment Support Programme (ISP) in the next biennium, as well as in support of nationally-executed formulation studies for countries involved in the SPFS. Mission activities will range from support for initial investment project-pipeline development, through project formulation, to assistance in investment project supervision and evaluation.