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Backgrounder #626 on International Organizations

January 4, 1988

The U.N.'s Food and Agriculture Organization: Becoming Part of theProblem

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(Archived document, may contain errors)

626 January 4, 1988 THE U.N.'s. FOOD AND AGRICULTURE ORGANIZATION BECOMING PART OF THE PROBLEM IN"RODUCIT0N This once more is testimony, as it was just a few years ago, to the failure of the United Nations Food and Agriculture Organization hungry. It has n ot done so, despite over $8 billion in outlays. The sad fact is that the FA0 has become essentially irrelevant in combating hunger. A bloated bureaucracy known for the mediocrity of its work and the inefficiency of its staff the FA0 in recent years has be c ome increasingly politicized. As in the case of other U.N. agencies, the FA0 is anti-Western and obliwous, even hostile, to the role of free ente rise in development. It embraces the collectivist ideology espoused by the radical le tist nations who now do minate U.N. proceedings The specter of famine again lurks over Ethiopia and other pkts of Africa.

FA0 was created in 1945 with the lofty aspiration of feeding the world's P I The result of this is that the FAO: fails to provide effective advice to governments. whose policies actually impede agricultural development; fails to cooperate,adequately with m ember governments I I fails to account for how its budget is spent; has established a Technical Cooperation Program, which is largely a political slush fund used at the FA0 Director-General's discretion; provides erroneous, misleading famine statistics; a nd pursues personnel policies that discourage qualified specialists from working for the agency.

The full measure of FAO's problems became clear during the recent Ethiopian famine. At no time did FA0 confront the Ethiopian government with the fact that I its own economic and military policies were the principal cause of the catastrophe.

FA0 also delayed the delivery of food aid to that country, resulting in the loss of thousands of lives. The reason for the delay reportedly was that Edouard Saouma the Leba nese who has been the Director-General of FA0 since 1976, wanted to pressure the Ethiopian government to fire its FA0 representative, Tessema Negash who had fallen out of favor with Saouma. Negash was recalled, and Ethiopia at the rate of 16,000 a week Bu s iness As Usual Saouma last November was elected to his third six-year term. This is a strong signal that he and FA0 are determined to continue with business as usual and to ignore Western pleas and pressures for reforms. Only fundamental reforms can resol v e the problems that prevent FA0 from fighting- hunger If FAO, under.-Saouma refuses ,to reform, then the ..U.S. should. reconsider its participation in the organization and choose more effective ways to help the world's hungry. received its food--about th r ee weeks late--while Ethiopians were dying from hunger FA0 DISGRACE IN EIMIOPIA .t In a November 1986 Canadian Broadcasting Corporation documentary on FAO Eugene Whelan, formerly Canada's Minister of .Agriculture, a. onetime Presidentl of the World Food C o uncil, and Canada's FA0 Ambassador for many years, charged that FA0 had refused to heed his repeated urgings to deal with the 1984 Ethiopian drought and famine. Complained Whelan Why they weredt ..more concerned, why they weren't more excited about what w a s taking place with these millions and millions of people in Ethiopia and some of these other countries, I never could understand a This incident provides a recent dramatic example of FAO's seeming inability to act effectively against famine. While there m ay be some debate over whether FA0 warned the world early enough about the Ethiopian crisis, there is no question that the FA0 response was seriously flawed. In May 1984, Trevor Page, head of emergency services at the World Food Program (WFP),'nominally a n FA0 realized the enormity of the disaster in Ethiopia. He helped draw up a subsidia? request or 26,000 tons of food, which was rushed through WF'P paperwork and presented to FA0 for final approval. Having received the request on June 7, 1984 FA0 Director - General Saouma took twenty days to approve it. Charges Peter Gill in his 1986 book, A Year in the Death of Afrca Politics, Bureaucracy, and the Famine There is little doubt that the delay was deliberate." Gill cites senior officials in other agencies as b elieving the delay to "have resulted simply from Saouma's antagonism towards WFP and later Executive Coordinator of the U.N. Office for Emergency Operations in Africa, charges that for Saouma personal ambition comes before famine relief.

Strong reports tha t a senior member of Saouma's personal staff mounted one of the most effective airlifts to Ethiopia and received "a tremendous amount of world attention and acclaim--and as a result, he was fired by Saouma And because of political friction with the Ethiop i an FA0 representative Tessema Negash, Saouma reportedly delayed the food relief, pending Negash's recall home Ambition Before Relief. Maurice Strong, former Canadian FA0 Ambassador I -3 Whatever the details of the Ethiopian relief fiasco,..FAO has never, e ither before or after the famine cesis, criticized the Ethio ian government's policies that clearly were principally to blame in that tragedy d ese policies, pursued for the past.twelve years since the Marxist regime led by Mengistu Haile Mdsiam took powe r , have collectivized agriculture, channeled some 90 percent of agricultural investment into inefficient state farms that produce only 6 percent of the nation's grain, confiscated rural ,property, and required farmers to accept low ,payments for their crop s from state buying agencies.l With the material incentives to increase production thus cut, Ethiopian peasants predictably produced less food. This contributed considerably to the famine. Yet FA0 never objected to these policies or criticized them. FA0 is unwilling-and probably unable--to condemn the political decisions that cause disastrous food and agriculture policies. This..is FAO's fatal flaw 8 I t.T;*s FA0 BEGINNINGSANDBREAKDOWN The FA0 was founded, on October 16, 1945, in Quebec City, Canada, by 42 n ations. It had an initial-biennial budget of $8.3 million Today F.AO boasts 158 members with a biennial budget of over $1.6 billion, including both assessed and voluntary funds. As such, it is the U.N.'s largest specialized agency. A mere eleven nations p r ovide over 76 percent of ,the FA04-regular budget, 25 percent from the United- States alone. As in the rest of the U.N. system, member! nations who pay FAO's bills often have little to say on how FA0 funds are spent. Those decisions are made by the 125 or so Third World countries; which together pay less than 10 percent of the FA0 budget. The major donors, in fact, have voted aFainst or abstained on budgets since 19

77. The budget has been the source of growng controversy because it fails to give a clear i dea of where the money'goes, which makes accountability or evaluation almost impossible The Mandate a In the preamble to the FA0 constitution, the member nations pledge themselves to raise the levels of nutrition and'standards of living of their peoples i mprove the production and distribution of all food and agricultural products, and improve the condition of rural populations.

The first decade of FA0 saw a number of accomplishments to' fit these aspirations. In 1947, FA0 established a council whose functi on was to review the status of food and agriculture in the world. A year later, the first agricultural surveys were made in the Far East and Latin America, and the International Rice Commission was established. And in 1950, FA0 conducted the .first postwa r World Census of Agriculture.

One of FADS first major operational activities was the 1948 establishment of the Extended Program of Technical Assistance, a precursor of the U.N.

Development Program. In 1948 and 1949 a special FA0 mission made proposals 1. Roger A. Brooks, "Africa is Starving and the U.N. Shares the Blame Heritage Foundation Backgrounder No. 480, January 14, 4986. -4 for the development of fisheries in Thailand; a horticulturist worked for a year in China; an entomologist helped Guatemala and Costa Rica imtheir anti-locust campaigns.

Other FA0 accomplishments 'include Development .of the International.,Plant Convention on prevention of the spreading of plant disease across national borders Establishment of the International Board for Plant Genetic Resources Creation of a joint project with the International Atomic Energy Agency involving a Division on Isotope and Radiation Applications of Atomic Energy to Food and Agriculture, based in Vienna. This coordinates international policy on food r a diation and pioneering techniques for producing sterile male flies for integrated pest management Creation of an interpational technical training program in food and agriculture Food Emergency Fdures Hans Jorgen Kristensen, Chairman of the Danish National FA0 Committee and Deputy Secretary of the Danish Ministry of Agriculture; charges that "over the past twenty years FA0 has moved into a rather weak position in the international set I For nearly a quarter century, however, FA0 has become increasingly irre levant up?

During the 1960s and 1970s, for example, the world witnessed a number of massive crop failures and subsequent famines--notably the 1966 Indian famine and the tragic African drought in the Sahel desert in 1973-19

74. Between 1950 and 1960, the r ate of increase in per capita food production worldwide was 1.6 percent a year, declining to .6 percent annually between 1960 and 1970, then to .4 percent annually during the following decade. The FA0 response was typical: more consultants, lengthy studie s , and conferences. According to Denmark's Kristensen agricultural technology specific to problems in the field and unwilling to give up any bureaucratic turf FA0 is "an unwilling partner in international cooperation"--unwilling to develop Falling cereal P roduction. The end result was no real help for the hungry.

Indeed, even FAO's own assessments find a worsened world food situation since 19

45. By 1972 world cereal production even declined for the first time by a drastic 33 million tons? The followng year, the oil embargo worsened the world economic situation, prompting the U.N. to call for a World Food Conference in 19

74. In 2. 77ie Future Role of FA0 in the U.N. System (Horsholm, Denmark The Institute for Food Studies and Agroindustrial Development, 1986 p. 5 3 The Origin, Role and Work of the WFC staff paper (Rome: World Food Cound, 1981 1981, only 31 of 85 developin g countries for which data were available had managed to meet their domestic food demand I Following the 1974 conference, and because many countries still were making little progress in improving food production, other multinational. organizations were est a blished to take on some .of the tasks originally meant to be fulfilled by FAO The World Food Council! and the.hternational Fund for Agricultural Development for example, were established by the U.N. in 1974 and 1977, respectively, as a response to FAOs in s ufficient response to the world food crisis. Other U.N.-related organizations, including the World Bank, the U.N. Development-Program, and the U.N. Conference on Trade ahd Develo ment, have become increasingly involved in food-related issues. In fact, FA0 has E ecome redundant. Its costs and the ,policies it advocates are shortchanging the hungry in underdeveloped countries I FA0 and the Rivate Sector FA0 has been oblivious to private enterprise approaches to agricultural development, and it has balked at c ooperating with private industry. To be sure, a mandate in 1965 established .a cooperative program between private industry and FAO, in the form of an Industry Co-operative Program. This program for a decade provided a direct link between government and i ndustry. A wide range of useful working groups involving FA0 and private companies was organized, dealing forl example with standardized pilot milk plants, meat processing plants, and the use of pesticides.

In 1976, however, responding to leftist anticorpo rate pressure, Saouma ended this FAO-private sector cooperation. Walter Simons, then director of the program and currently Executive Director of the Industry Council for Development, a private nonprofit organization, observes that FA0 currently has few ac t ive links with industry and "has a bias against multinationals cooperates with private industry on many projects, including pesticides, locust control the Codex Alimentariw-a project intended to coordinate international regulation of food additives--and " aid in kind projects, this cooperation is sporadic and dwindling.

The Codex Alimentarius, for example, is almost completed, having furnished commodity standards for nearly all major food products; many of its committees already have adjourned While FA0 Inf ormation Division Director Richard Lydiker insists that FA0 FAO. FAKING To PROMOTE FREE ENTERPRISE In its publications describing what it is and what it does, FA0 explains that one of its four principal functions is to be "an adviser to governments Accord i ngly, FA0 advises governments "to upgrade their planning and administrative machinery to develop and manage their agricultural sectors This is the root of FAOs erroneous approach to agricultural policy. Instead of promoting private sector agriculture, whi c h recently has invigorated even comniunist China's countryside, FA0 stresses government management of farming. Explains Harvard economist Peter Timer governments request FA0 advice, from which they seek -6 support. FA0 in turn does hot wish to make govern ments 'unhappy. There is therefore a built-in bias in FA0 to support government policies."

FAO's remedy for hunger is based on government planning According to the World Security Compact published .by FA0 in 1986 governments .carry the primary responsibili ty for ensuring the food security of. their peoples The Compact" em hasizes that, industrialized countries in particular beardhe .primary they are...to continue providing emergency food aid to less fortunate countries the usual FA0 panacea. Heritage Found a tion Visiting Scholar Doug Bandow, however in a 1985 monograph US. Aid to the Developing World: A Free Market Agenda argues that such policy advice is often wrongheaded. For example wheat shipments to Guatemala following the 1976 earthquake brought ruin t o local'farmers by undercutting. the -demand for .theivdomestically -produced..wheat Similarly, regular and lar e shipments of food 'to India throughout the 1950s .and 1960s bankrupted Buffer Stocks Fallacy. ,Government planning and subsidies, rather than f ree enterprise; is the FA0 blueprint for progress In its World Food .Report 1986, .for example, FA0 deplores devqloping countries' balance of payments problems because these financial constraints make it increasingly difficult for poorer countries to cont i nue their price support and investment programmes designed .to boost food production." Countries whose pricing policies involve price controls that keep food prices low, however, discourage production. This is clear. from the experiences of dozens of coun t ries, including Egypt, Tanzania, Togo; Ghana; Mali; Malawi India and Paki~tan responsibility P or fighting world hunger, and accordingly, tells these governments that native B armers thereP I In the same 1986 report, FA0 urges.10~ income countries "to beg i n to build their own cereal stocks This policy, promoted by FA0 for decades, also has distressing results and is criticized severely by economists. According to Graham Donaldson of the World Bank, the FA0 I'want[s] to build buffer stocks so large that in some countries they would be bigger than the total amount of grain traded.

That means that the stuff will have to be purchased and imported and then because stores spoil and have to be replenished every year, the grain will. have to be resold on the world markets.'I6 Undermining Private Farmers. Not only are large buffer stocks..quite expensive to operate, they also are a financial liability because the stored grain deteriorates and by the time it is resold, its quality is inadequate for human consumption. What is. worse, since the stocks are government operated, their very existence further undermines the strength of the private sector 4. For more examples, see Melanie Tammen Inspector General Audits Reveal Foreign Aid Failures and Boondoggles," Heritage F oundation Backgrounder No. 618, November 23, 1987 5. World Bank, World Development Report 1986, pp. 64-65 6. AM Crittenden Donor Nations Challenge Food Agency's Activities The New Ypk rimes November 9, 1981.

FA0 consistently chides, developing countries fo r not subsidizing agriculture sufficiently. This is clear from the World Food Reprt 1986 It states Agriculture often receives less than 10 percent of public expenditure, even where it provides This statement strongly implies that more public monies should be devoted to agriculture. The argument evidently ignores the fact that in most socialist countries Public expenditure is not only no guarantee of production, it is in many cases a hindrance. In the People's Republic of China, for example, Sichuan provinc e has fields? Food output there consequently has been soaring. more than 50 percent of gross domestic product, foreign exchange and .employment i it .is the..Yery-small. private-sector in agriculture that produces most of the food. a: I "q been transformed over the past decade into a showcase of privatized rice and .wheat Pleasing Third World Nations Throughout its history, FA0 has; stressed .food I I 1 aid to developing countriewrather than1 .free+market :.approaches to agricultural reform as the solution t o agricultural problems. In one important document Agriculture: Toward 2000 the FA0 Director-General. calls for what he terms the reasonably equitable distribution of [world] income and output" through the establishment of a global food system.8 According to the FAO, this "equitable distribution'' is .achieved, among other ways by requiringdeveloped nations, to provide an additional 22 million tons of food assistance (a near. doubling by 1990 over 1979 levels) to less developed countries.

Today FA0 continues to stress food aid to developing. countries, rather than improvement of these countries' agricultural practice. In a speech before Catholic.

University of America last May 16, Director-General 4aouma noted 'that, while-.the main thrust of the battle ag ainst malnutrition must be to increase food production in developing countries, "their efforts must be su ported by a substantial increase in continuous emphasis on aid only through governments may please many Third 'World nations, but it imposes a very h i gh cost. Former World Food Council Executive I Director Maurice Williams explains Countries tend not to turn down anybody who brings gifts, whether or not they are applicable to their problems Instead] FA0 should be encouraging, even 'compelling, them .to develop policies, and,. to look at the tough options." This is exactly what FA0 does not 'do Reflections on Food and Agricultural Progress dealing with the relative importance of various factors likely to influence agricultural development in developing c o untries, cites "population growth" as the principal "negative effect" on development followed closely by "debt-se&cing problems There is near total silence on one of when price policies are cited by the FA0 report, it is in reference to "developed countri e s It appears that FA0 considers price controls in developing countries an irrelevant factor in agricultural development C I the flow of resources from developed countries P rom North to South This It I Total Silence. In its 1986 World Food Report, for exa m ple, a table entitled the key factors influencing food output: agricultural price policies. The one time I 7. Neal R. Peirce Lessons for U.S. Farmers from Fertile Sichuan National Journal, August 15, 1987 8 Agriculture: Toward uww Rome: FAO, 1981 p. vi. Q u oted in Georges Fauriol, The Food and Agricultuw Organizarion: A Flawed Strategy in the War Against Hunger (Washngton, D.C The Heritage Foundation, 1984 8 FAUS Field Programs For the past two decades, FA0 has turned its attention increasingly to advocacy. of programs in the field, rather than advice on government :policies. From 350 million by 1981, then leveled off to $300 million in 1985 and $315 million in 1986 A large portion of this money--ranging from one-third in 1976. and 1985 to as much as one-hal f in 1981--involves contributions from the U.N. Development Program (UNDP Voluntary trust funds (earmarked contributions for specific agricultural projects) by member governments have ranged from $80 million in 1976 to $150 million in 1985. about $200 mill i on spent by FA0 on field .programs in 1976, the amount rose to The U.S. traditionally has favored channelin its voluntary ,contributions to FA0 through 'UNDP Other. countries; ;particular f ywnaller Europeanrstates, have preferred the trust funds, which o f fer them greater. visibility Denmark, for example supports many seed production and dairy projects, Finland concentrates on forestry and fisheries development, the Netherlands has been involved in the Associate Professional Program, which offers assistanc e with assigning junior experts to U.N Questioning Trust Fund Projects. Among the principal beneficiaries of FA0 field program money in 1985 were: Mozambique, $7.5 million;..Tanzania 12 c million; Somalia 5 million Niger, $7.1 million; India 5 million; and ..Libya, $2.4 million The Palestinian People" received nearly $250,000 from FAO4n 1985 while Saudi Arabia received over $26 million--by far the.-largest

4. FA0 field: program I support. By comparison, Ethiopia received $6.4 million I technical assistance p rojects Several Nordic representatives to FA0 have told The Heritage Foundation that there is increasing concern over FAO's administration of trust fund projects. And according to a March 1987 Nordic Working Paper, 'Ithe Nordic countries should establish a closer cooperation in working out better and more standardized reporting routines for Trust Fund activities No Independent Evalwition. The FA0 indeedbdoes;not provide a comprehensive, independent evaluation of its field programs. Writes Rosemary Righter, former diplomatic correspondent for the London Times In the field, FA0 has become a byword for bad planning, poor coordination, and irrelevance. to the rural 'poor She notes that one FA0 Assistant Director-General, Jacques de Meredieu, told colleagues tha t he was appalled to discover how poorly FAO's field programs had come to be regarded FA0 field projects are shrouded in much mystery, in part because Director General Saouma has kept them that way. On January 6, 1983, for exiunple, a directive was issued to FA0 representatives offices not to release information about the agency's field projects wjthout approval from FA0 headquarters.

A senior FA0 official, who insists on anonymity, alleges that some FA0 project officers "compiled reDorts that contained doc tored rates of return in an effort to make the projects ap'pear ~iable 9. Christopher Winner Official Maintains FA0 Rigs Bank Projects, DuiZy Amencun, January I 16, 1983. -9 The result is considerable waste of resources. In 1971, for example, FA0 started a scheme for commercial cotton production in southern Nepal for people settled in a remote area of virgin forest, miles from any market. Ten years later by which time the costs of the project had doubled, there had been no FA0 assessment of the economic fe a sibility of the scheme. What had become clear however was that farmers preferred other crops to cotton representative in Africa with over twenty years of experience in development, who has just joined the World Bank, saw the roblem first hand. She told Th e Heritage outright inconsistent Example: FA0 requested a training school where no housing was available. UNDP staff often has to rewrite completely projects submitted-by U,*,p Angling for Pemioxk This project is typical. One former UNDP Foundation that mo s t FA0 projects in At ica are "technically questionable, at times FA0 consdtants A Another widespread problem; illustrated by the Nepal case, is that projects are not completed on deadline but often drag on and on. Part of the reason seems to be that five y ears of employment with FA0 as a consultant guarantees pension eligibility. Understandably, this encourages consultants to extend a I project's life to at least five years No Penalties. The same UNDP representative adds that in many cases an FA0 field pro j ect, which may have been useful at the time it was originally funded becomes either politically unwelcome or otherwise obsolete by the time it is actually carried out The FAO of course, has no incentive to move fast. No performance criteria are in place, n o penalty for late or otherwise inadequate performance According to one African Ambassador; to the FAO, the field programs involve too many experts from outside, who know very little about local conditions, and by the time they learn, the project is over. The projects then have little if any effect on the economy. Danish FA0 representative John Glistrup told The Heritage Foundation that such field projects "may have had some value years ago but are now of little use Jobs for Cronies. In an interview with t h e Canadian Broadcasting Corporation broadcast on November 4, 1986, Joshua Muthama, the former Kenyan Ambassador to FAO, charged that many of FAO's field projects involve money that "doesn't reach the beneficiaries these are jobs for the boys FA0 boys. Peo ple who have longstanding connections and, you know, they're waiting at the door."

One current FA0 representative, for example, whose job is to oversee FA0 projects in a Central African country, has had no training 111 agriculture and reportedly had no ide a,' even after six months on the job, to what projects he was assigned. The case is evidently not atypical, for according to the FAO's own Report on the Evaluation of the FA0 Technical Cooperative Programme published on July 12, 1985, not all FAO's repres e ntatives in the field, for instance are fully conversant with when and how they can approve" small grant requests, even though such an activity is one of their principal functions.1 Colombian Ambassador to the 10. S. Linner, W. M. Johnson, and T.E.C. Palm e r Report on the Evaluation of the FA0 TCP Rome: FAO, July 12, 1985 10 FA0 Gomalo Bula Hoyos confirms that FA0 jobsin the field are often handed out as political plums. In any event Bula Hoyos opposes FAO's ''piecemeal projects approach on the basis that " t hey do not meet the real needs of developing nations FA0 BUDGITANDA~UNTABILITY One of FAO's principal problems appears to be its loss of direction, purpose priorities, and accountability. In a working paper distributed at the March 12-13 1987, meeting of the Camberley Group,ll the top agenda item was "the question of priorities and priority setting 1 in FAO There is little disagreement among Western contributors to FA0 that there is no systematic priority setting in the organization.

Nor is -it clear -wher e .FA0 money goes Lack. of .budget "transparency U.N jargon for visibility) has been of increasing concern, particularly to Western nations for over a decade. As the U.S. in this past year became dismayed with the U.N system as a whole, the U.S. Congress w ithheld funds for the U.N., including those for FAO. It received only $5 rmllion of the $50 million expected from the U.S. for November. the regular FA0 budget at the beginning of 1987, and another $20 million last Canadian Criticisms. Many FA0 delegates w elcomed the U.S. congressionally ordered withholding of funds from FAO, hoping that at-last FA0 would respond to demands for improved performgce. The Canadian delegation to FA0 was the most vocal in demanding fiscal responsibility. .George ,Henry Musgrove , Canada's s Representative to the FAO, charged that some $100 million in FA0 outlays is essentially unaccounted for. While FA0 has contested this figure, the Canadians still are not satisfied that they are.being.told the truth I' I The Scandinavian countr i es on several occasions have protested the.?lack of transparency in FA0 budget documents. They have charged that the review reports of regular and field programmes [do not] make it possible with reasonable efforts for member countries to form a clear pict u re of how the resources have been spent and how the expenditures have contributed to achieving.,the main aims of FA0 in the budget period Rude Response. Because it is not clear just how FA0 money is spent, its officials can manipulate budget figures loose l y. One example, angering the US involves FAO's claim that its personnel costs are decreasing as a proportion of its overall budget. This June 19, the U.S. charged that "we do not believe the Secretariat's claim" and pointed out that FA0 lists its extensiv e use of consultants under "Goods and Services" rather than under "Personnel" in order to prove its claim of lowered costs FA0 deals rudely with questions about its budget. When the U.S. and Britain, at the June FA0 Executive Council meeting; requested tha t budget reform 11. A group consisting of representatives to FA0 from Australia, Britain, Canada, Denmark, West German Japan, the Netherlands, Norway, Sweden, Switzerland,.and the US which was organized for informa?dscussion of such roblems. It was so name d because of the location of its fmst meeting in the suburb of London de B Camberley 11 be put on the agenda for last November's FA0 General Assembly meeting, they were ruled out of order. U.S. Ambassador to FA0 Fred3 Eckert demanded an immediate meeting w i th Saouma and protested such "shabby treatment Budget reform then was placed on the agenda. But the U.S. proposal to set up a system whereby all .budget .and programming decisions are made by consensus was rejected resoundingly by the Third World majority .

Only recently has the U.S. become actively involved in the Weitern movement to reform FAO. According to Max L. Witcher, Director of International Organization Affairs at the Department of Agriculture, who has worked on U.S policy toward FA0 since 1961, t he U.S. always has regarded FA0 as one of the most efficient" international organizations, although "not everything there is good."

Witcher notes that the U.S. increasingly has pressed FA0 for better .evaluations Questioned .whether he thought ,tha t* FA0 is doing enough .to-promote free enterprise solutions to food problems, Witcher answered that the organization carries out programs requested by governments and there. is only so much flexibility FA0 can have Witcher's views typify the U.S. neglect of FA0 that, to great extent, has allowed the organization to slide into trouble. Not until last year did the U.S. withhold financial contributions to FAO--and this was under congressional directive.

Even as recently as late 1986, the U.S: was not yet amo ng the members of the Camberley Group, which met periodically throughout 1986 to consider FA0 I reforms. Several Western representatives to FA0 told The Heritage Foundation that U.S. policy on FA0 has not been at all clear-over the years The Canadians in p articular expressed frustration at U.S. reluctance to criticize FAO Saouma's Slush Fund Perhaps the 'most glaring FA0 budget irregularity is the so-called Technical Cooperation Program (TCP This essentially has become a discretionary fund for the personal use of the Director-General From. 1976, when the TCP was started, to 1985, some 2,441 TCP projects have been approved costing 164 million. This year's allocation amounts to about 13 percent of the regular FA0 budget, or approximately $25 million programs, whose titles are not even published. Nor are there any genuine evaluations of TCP projects. The FA03 1985 evaluation report admits that. "there is a striking lack of knowledge about the TCP and the way it functions Says the report it is not always known w hether the recommendations made by [TCP consultants are being made use of by the governments and if so, what the results are."

Colombian Ambassado; to the FA0 Bula Hoyos refers to TCP as Saouma's political budget, to be disbursed according to the olitical support he needs from Third World delegates." Amon5 recipients of TCP K nds have been the United Arab Emirates, one of the world's nchest countries, as well as Bahrain, Libya, Iceland Venezuela, and Brazil Little is known about TCP; there is only a very g e neral description of its Not only is there little accountablilty for TCP projects, there is no independent assessment or public audit of FAO's use of its other resources. FA0 relies. almost 12 exclusively on internal mechanisms for this. Rosemary Righter d escribed a 1983 internal memorandum signed by R.S. Lignon, FA0 Assistant Director-General in charge of the development department .that referred to day-to-day monitoring as extremely unsatisfactory Information from the field, he wrote, was available only a fter long delays" .and -was usually treated at rmdom Records of spending were often in too cryptic a form to be useful for accurate monitoring and work plans were so vague that it was impossible to measure progress.12 While Lignon reportedly notes that su c h problems are "being dealt with government delegates to the FA0 disa ee. FA0 was unable to provide The Ff. Heritage Foundation with any indepen f ent assessment of s ending or monitoring its funds. According to the late Dr. Otto Matzke, a senior o icial w ith the World Food Program from 1962 to 1974 Saouma considers any request for independent 3 evaluations as a personal attack. 13 3 yi 1 FA0 STATIsIlCs THAT MIsINMlRM FA0 prides itself for being '!the world's premier source of statistics on agriculture, fi s heries, and forestry."14 Expert economists dispute this. According to an article by Nicholas Eberstadt of Harvard University and the American Enterprise Institute and by World Bank agricultural economist Clifford M. Lewis, FA0 is spreading "misinformation " about food production.15 Eberstadt land Lewis argue that FA0 has had "the tendency to dignifil assumptions about the global food or nutrition situation with undeserved decimals Meaning: FA0 claims+ far greater precision than its methodology warrants. FA0 numbers, for example, suggest that 34 million more people were malnourished in noncommunist developing countries. in 1972-1974 than in 1969-1971 In fact, the FA0 method of converting average, food availability estimates. into estimates of individual malnu t rition in any particular country has never been clarified. Such false precision about the world food and hunger situation is dangerous. Eberstadt and Lewis warn that it leads to "erratic interventions and eventually to a reluctance of political figures to commit their reputations and resources to a sustained effort to alleviate hunger systematically." That is, Third World politicians are reluctant to give up food aid for the politically unpopular measures that would increase food production at home. They h a ve .taken a calculated decision to pay farmers sometimes as much as three-quarters of the 12. Rosemary Righter, "U.N. Bureaucracy 'Makes the Hungry Hungrier London Sunday Times, August 26, 1984 13. An exhaustive, well-documented series of articles by Dr. M atzke and others concerning the financial and political crisis at FA0 was published in the Dd& Amencun FA0 Dossiers 1 and 5" December 18, 1982, and April 17, 1983, each 48 pp. I 14. World Food Report 1986 (Rome: FAO, 1986 15. "Global Nutrition and the Wor l d Food Economy," unpublished. A less technical version of this paper appeared in The Allontic, May 1986, under the title "How Many Are Hungry 13 market value of their products in order to placate urban populations with cheap food Political Statistics. In a thorough critique of FA0 statistics, Thomas T Poleman, .Professor of International Food Economics at Cornel1 University, notes that the documentation presented by the FA0 to the 1974 U.N. World Food Conference indicated a sharp and scientifically inexpli c able increase in world malnutrition. Writes Poleman My suspicion is that the fi res were derived less bureaucrats wish to admit that the problem they are relieving is a modest one, and international bureaucrats are no exception."16 Poleman also notes that food production in developing countries tends to be understated because taxation is often based on production; much backyard production is locally consumed and *never p through research than through a political decision imposed r rom on high. Few counted. I. I I I I 4 A i FAO's tendency to exaggerate Third World malnutrition, together with its need to use statistics provided by the governments involved, can bode ill for the hungry.

In 1980, for example, the Mali government, having its usual troubles procur ing grain declared-that it was facing a tremendous shortfall in grain production The FA0 accepted the official estimate and recommended that almost 100,000 tons of cereals be supplied by donors as emergency assistance. The World Bank, however, reported th a t Mali in fact had harvested an average crop, and The New YorkhTimes stated on November 9, 1981, that the "emergency" aid would enter the country after the crop was in, would depress prices, and would risk undermining the new efforts to improve producer i n centives. According to World Bank economist Graham cI Donaldson, such pessimistic assessments of the world food situation as FAO's in the case of Mali can have a destructive impact: "They have a Malthusian, crisis mentality that is defeatist, and it can ' c ost .poor countries dearly contn'buting to Hunger Crises. Permanent humanitarian aid is known to have a number of counterproductive effects. It subsidizes Third World agricultural policies that discourage domestic farming and contribute to periodic hunger crises.

Such policies include retail price controls on food and monopoly government marketing boards that pay farmers artificially low prices .for- their products.l7 By underwriting such policies, permanent aid programs reduce the accountability of contin ue to ignore self-help measures such as privatizing near-bankrupt overnment foreign governments for their own mismanagement, thereby allowing them to I marketing boards or ending state monopolies on transportation of crops. q8 16. Thomas T. Poleman, "Corn e ll/International Agricultural Economics Study--World Hunger: Extent Causes, and Cures" (Ithaca, New York A. E. Research 82-17, revised January 1984 p. 12 17. Doug Bandow, US. Aid fo the Developing Word (Washington, D.C The Heritage Foundation, 1985 pp V-X V 18. Common to many sub-Saharan African countries is the situation in which people starve in one province while grain surpluses pile 'u in another rovince because states have roved inept at traders--often part-time farmers themselves---act to round out th e market by reducing su ply and price police. See John D. de Wilde altuw, Markerin and plicing in Sub-Sahamn Africa (University of transportation and cannot maintain 8eir trucking R eets in good repair. The (iiegal) activities of private differentials betw e en provinces. Yet traders must ass on to farmers, in the price paid P or their grain the costs resulting from breakdowns, transporting s lpll 'pments in small lots, and substantial bribes to the California, Los Angeles: African Studies Center an f African Studies Association, 1984 14 Equally critical of FAO's statistical and analytical work is Maurice Williams Executive Director of the World Food Council from 1978 to 19

86. He told The Heritage Foundation that "in the early 1970s, for example, FAO's assess ment of the world food crisis was grossly exaggerated In 1984, FA0 called for 'a doubling of According to. the assessments of one donor. government, however, there were only six .countries "on the .life-and-death borderline," and in many. others, only a f r action of the requested food was needed. Some countries, such as Tanzania, have had surplus food in parts of the country, but farmers refused to sell because the official price was too 10w.19 Louis M. Goreux, currently Deputy Director of the African Depar t ment at the International Monetary Fund, left FA0 twenty years ago after eight years as head food aid and drew up a list of 24 African countries "on the brink of starvation qof the Commodities Department-because of hist increasing disillusiomqent- with it s flawed assessment of economic parameters in general You .cannot judge a country's whole economy on the basis .of agricultural indicators."

There is virtually universal agreement that FA0 Director-General Saouma's personnel policies are a key factor in the current problems faced by the organization. Several ambassadors to FA0 called Saouma's style "dictatorial."

Dissent is not encouraged nor is it tolerated. The result is rampant mediocrity There is no unequivocal figure of the FA0 staff size. Some expert s, notably Otto Matzke, have estimated that it may be as high as 10,00O--about 3,000 more than FA0 claims officially. Former Kenyan Ambassador to FA0 Joshua Muthama e lains that Saouma is "very fond of promising jobs Muthama himself was FA0 head. o ered a job in 1981, contingent on his report of Saouma's second I reelection as Tid Liaisons Yet FA0 continues to want to increase the number of its representatives" in the field--currently at least

80. This is opposed by the U.S. and other Western nations. The se representatives provide mainly a "liaison" role, of limited value in practice, because of FAO's timidity in promding useful advice to governments Danish representative to FA0 John Glistrup finds FAO. personnel policies to be "outrageous." There are no s taff evaluations, he says, and the management system is medieval Saouma absolutely does not believe in organization, only in individuals says Glistrup Promotions are political, particularly at the highest level As a result, Glistrup believes that "FA0 has totally lost its direction, and is radually losing its position in the world. It is a very good thing that the U.S. has started to reform long ago."

The Heritage Foundation was forbidden to contact FA0 employees individually. All f inally become tough on FAO, but it's probably too late now. FA0 should have At FA0 in Rome, everything is centralized around Saouma. For this reason 19. See Rudolf Grosskopf, Hannoversche Affgemeine Zeihsng, November 13, 1981 15 substantive questions had to be answered by FA03 - Information Director, Richard Lydiker appeasement and venality ,have been rampant at FAO, even among .delegates from the funding democracies One reason is that Saouma promises jobs to those who support him Several government delegates obtained lucrative p o sitions with FA0 as a result of support for Saouma and his policies. The current FA0 representative in Washin ton, Roger A. Sorenson, for example, them U.S. representative to FA0 in At his office in Washington Sorenson is currently providing space to the n ewly formed Friends of FAO, a group that urges its members "to take part in a letter writing campaign aimed at members of Congress This action violates UIS.'law According to Raymond Lloyd, an FA0 official'from 1961 to 1980 8 Rome B rom 1979 to 1983, now p r esents FA0 in a rather, positive light in the U.S which prohibits -lobbying :by :international .organizations I I CONCLUSION FA0 has become discredited .as a source .of .reliable statistical-..information, and its policy advice--increasingly limited thoug h it may be--is- usually ignored Louis Goreux of the International Monetary Fund observes that FA0 has declined increasingly in importance, until "today FA0 is. largely irrelevant: I People in the field of agricultural development simply don't care about F A O It has become a huge bureaucracy." From its inception, moreover, FA0 advice has shunned free 1 enterprise approaches to agricultural reform, opting instead for government .I.I regulation FAO's Demise. Edouard Saouma has exacerbated .the deterioration at lFA0 since his election as Director-General in 19

76. His dictatorial and inefficient management practices, his use of the Technical Cooperation Program as aslush fund to further his own future in the agency, the lack of accountability in the FA0 budget, all have contributed the regular FA0 budget from 50 million to $5 million; and $20'million more frozen until the end of the year, which has recently been paid. Since nothing has changed at FAO, the U.S. should completely cut off funding for. the. agency, a nd serve notice of withdrawal--particularly as Saouma was reelected head of FAO. on November 9 the virtual demise of the agency. c Accordingly, the U.S. Congress decided to reduce. the -1987; U.S contribution to I The interests of the developing world are not well served by an agency whose principal solution to agricultural problems is foreign handouts that discourage the development of poor nations' agricultural resources. At a time of .fiscal reorganization throughout the U.N. system, moreover, FA0 is re sisting reform. The U.S. and other Western nations should strengthen their help to the world's poor through bilateral programs or alternative means of development assistance, and allow FA0 to die a well-deserved death.

Juliana Geran Pilon, Ph.D.

Senior Po licy Analyst All Heritage Foun&tion papers cue now available elecmnically to subscribers to the "NEXS" on-line data retrieval service. The Heritage Foundation's Reports (HFRPTS) can be found in the OMNI, CVRRW MTm, and GVT pup fires of the NEXIS libray an d in the GOVT and OMNI pup fires of the GOVNWS libmy.

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