PWB 2006-07 - FAO

Table of Contents Director-General's Introduction v Context for a Streamlined Programme of Work and Budget 1
Application of Results Based Management and Complementarity among Documents
1
Risk Assessment 2
Overview of Resource Scenarios 6 Strategic Considerations 7
Millennium Development Goals 7
Follow up to the Independent Evaluation of Decentralization 8
Regional Dimensions 8
Adherence to FAO's Strategic Framework 9
Enhancing Inter-disciplinarity 11
Partnerships 13
Communicating FAO's Messages 14
Human Resources Action Plan 15
Extra-budgetary Resources 16
Efficiencies and Productivity Improvements 19 Financial Framework 25
Proposal for an FAO Security Expenditure Facility and Related Draft
Conference Resolution 25
Draft Resolution for Adoption by the Conference 28
Capital Budgeting 29
Overview of Cost Increases 30
Financial Analysis of the General and Related Funds and Related Draft
Conference Resolution on Miscellaneous Income 34
Draft Resolution for Adoption by Conference 37
Funding of the Budget 38
Draft Resolution for Adoption by the Conference 39 Overview of Proposals 40
Approach to Priority Setting 40
Definition and Import of Resource Scenarios 41
Overview of Total Resource Availability 49
Summary Tables 51 Annex I: Programme Narratives Chapter 1: General Policy and Direction
57
Major Programme 1.1: Governing Bodies 57
Major Programme 1.2: Policy, Direction and Planning 58
Major Programme 1.3: External Coordination and Liaison 60 Chapter 2: Technical and Economic Programmes 62
Major Programme 2.1: Agricultural Production and Support Systems 62
Major Programme 2.2: Food and Agriculture Policy and Development 70
Major Programme 2.3: Fisheries 77
Major Programme 2.4: Forestry 81
Major Programme 2.5: Contributions to Sustainable Development and Special
Programme Thrusts 85 Chapter 3: Cooperation and Partnerships 91
Major Programme 3.1: Policy Assistance 91
Major Programme 3.2: Support to Investment 94
Major Programme 3.3: Field Operations 95
Major Programme 3.4: FAO Representatives 97
Major Programme 3.5: Cooperation with External Partners 98
Major Programme 3.9: Programme Management 100 Chapter 4: Technical Cooperation Programme 101 Chapter 5: Support Services 104
Major Programme 5.1: Information and Publications Support 104
Major Programme 5.2: Administration 105 Chapter 6: Common Services 108 Chapter 7: Contingencies 110 Chapter 8: Capital Budgeting 111 Chapter 9: Security Expenditure 114
Major Programme 9.1: Headquarters Security 114
Major Programme 9.2: Field Security 114 Chapter 10: Transfer to Tax Equalization Fund 116 Annex II: Regional Dimensions 117
Africa 118
Asia and Pacific 120
Europe 123
Latin America / Caribbean 126
Near East 129 Annex III: Detailed Programme Budget Tables 133 Acronyms 147 Director-General's Introduction I have the honour to submit to the Conference proposals for the Programme
of Work and Budget (PWB) 2006-07. These were developed in the first
instance from the Medium Term Plan (MTP) 2006-11, which was endorsed by the
Council in November 2004. They also aim to respond to fast evolving
contexts and to the collective guidance on programme priorities, budget
levels, content and format of the PWB received from the Programme and
Finance Committees and the Council during their deliberations of the
Summary Programme of Work and Budget (SPWB) 2006-07. The advice from the
Technical Committees has also been reflected, which was not possible to do
in a comprehensive manner in the SPWB. Following the general principles of avoiding repetition of information in
various documents, greater use of the FAO Web site and improved focus, this
PWB satisfies the desire of the governing bodies for a considerably shorter
document than its predecessors. I welcome the initiation of a broader
discussion in the Committees, which was supported by the June Council, to
go beyond the question of document length and initiate a dialogue to
streamline FAO's overall programme budget process. The Secretariat is very
committed to supporting this renewed effort, to achieve the common goal of
rationalising FAO's planning documents and better linking budget decisions
with the formulation of the corresponding programme of work. Some FAO processes are virtually unique within the United Nations system,
including the presentation of detailed resource estimates in the rolling
six-year MTP, the preparation of, and extensive discussion on the SPWB as
an analytical preview of the PWB, and the seemingly entrenched practice of
preparing two or more budget scenarios in the PWB. In fact, we have now an
unprecedented situation of no less than four scenarios having been
requested by the last Council. The governing bodies may wish to examine
whether these onerous administrative practices facilitate a rational
matching of the demands Members place upon the Organization with the
resources made available through the budgetary Appropriation. This full PWB elaborates on the three scenarios already presented in the
Summary i.e. the zero real growth (ZRG) scenario, which maintains
purchasing power by providing for estimated cost increases and establishes
the baseline for the other scenarios; the real growth (RG) proposal of
approximately 2.5% per year, as a modest collective investment to implement
a programme of work that is more in tune with Members' stated demands on
the Organization; and a zero nominal growth (ZNG) scenario, which entails a
real reduction of 5.7% including a US$ 4 million cut in the Technical
Cooperation Programme (TCP). A scenario of higher real growth (HRG) of 9.25% over the biennium was
requested by many Members in the Committees and the Council following their
review of the SPWB, to regain some of the ground lost as the result of a
prolonged period of budgetary austerity and fulfil the Organization's
valuable roles at the service of the membership. It was not possible to
finalise work on this scenario for inclusion in a single PWB document for
the September sessions of the Programme and Finance Committees which are
the first inter-governmental instances mandated to review the full PWB.
Hence, the HRG scenario is transmitted in a separate Supplement to the PWB. In applying the principle of maintaining purchasing power under ZRG, I have
acted on the wish expressed by many Members that the escalating costs of
security, over which we have no control other than just their forced
absorption, should not be at the expense of the substantive work of the
Organization. FAO has been confronted with an exceptional surge in the cost
of providing security and protection of its personnel and property in the
aftermath of the events of 11 September 2001. The related increases in
expenditures since the PWB 2002-03 was prepared have reached US$ 10.6
million on a biennial basis. To maintain purchasing power, the ZRG scenario
requires separate provision for this increase in costs, as it would not be
logical to characterise a scenario as ZRG if it includes de facto net
reductions in FAO's programmes. Providing a safe environment requires
adequate funding from Members and I trust that the membership will find an
equitable way of meeting the extraordinary costs of security, as is the
case in some other Organizations of the UN system. The full PWB maintains emphasis on the assessment of risks and
opportunities. In addressing the main risks to budgetary, financial and
operational performance in 2006-07, I continue to propose practical
solutions to the membership. One of these is to modify the treatment of
Miscellaneous Income in order to fully fund the budgetary Appropriation
until such time as the Organization returns to a stronger financial
position. The creation of a new budgetary chapter on Security Expenditure,
which has received unanimous support from the Finance Committee and
Council, and the operation for the first time of the Capital Expenditure
Facility approved by the last Conference, will also improve financial
management. Whilst unrelated to the Programme of Work of the next biennium,
an important aspect is also the needed support from the Conference to
adequately fund the amortization of the After-service Medical Coverage
(ASMC) liability. I also continue to give due attention to setting challenging but attainable
efficiency targets as a customary, ongoing management function. Current
initiatives include human resource management processes, identification of
outsourcing and off-shoring opportunities, use of new publications,
printing and distribution technologies, streamlining administrative
activities, savings in governance and more comprehensive cost recovery for
services rendered. Economies in administrative and support services, whilst
always desirable, must be implemented diligently. Indeed, the Finance
Committee has cautioned that internal financial controls should not be
weakened at any budget level and that administrative information systems
are a fundamental part of an effective organization which should be
completed regardless of the budget level. FAO has already implemented a
cumulative US$ 120 million per biennium of efficiency savings, if compared
with 1994. Several members of the Finance Committee have acknowledged the
difficulties in achieving further savings, and the Programme Committee has
requested at its May 2005 session that efficiency savings targets for 2006-
07 should be realistic. A renewed framework for realising efficiency and
productivity gains throughout the house will be developed in 2006-07, and
continued emphasis will be given to streamlining processes and operations. Important concerns as they are, managing financial risks, exploring new
efficiency gains and meeting heightened security costs are only part of the
broad strategic considerations which have presided over the formulation of
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