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ESC Auto-evaluation report

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ESC Auto-evaluation report Powered By Docstoc
					of programme entities 223S1, 224P4 and 224P5

Final Version, March 2005
Acknowledgements
The auto-evaluation Task Force was established in 2004 by Mr. Alexander Sarris, Director of the
Commodity and Trade Division to coordinate the auto-evaluation. The task force consisted of Paul
Pilkauskas (coordinator), Miles Mielke and Ramesh Sharma. Later Concepcion Calpe took over as
coordinator. It was assisted in its work by two consultants, Cora Dankers and Jim Greenfield.
Invaluable support was also provided by numerous ESC staff who spent time and effort in filling
out the questionnaire, participating in interviews and round tables, and providing detailed written
observations and suggestions. Special thanks are offered to Sabrina Lozzi, Sheila Donohoe, Rita
Ashton, Sylvia Ripani and Carina Glendening for their help. Furthermore, thanks are offered to the
staff of AFHS and GILW for the provision of useful data.




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Summary and conclusions
Background
This is the first auto-evaluation report prepared by the Commodity and Trade Division (ESC) and
explores three of the Programme Entities run by the Division, namely 223S1 that covers ESC
inputs into servicing the Committee on Commodity Problems (CCP) and its Intergovernmental
Groups (IGGs) and into multidisciplinary activities under the Priority Areas for Interdepartmental
Action (PAIAs); 224P4 that covers the substantive work of the CCP, IGGs and other international
action on commodity and trade issues; and 224P5 that covers measures to enhance commodity and
trade development mainly through work on projects for The Common Fund for Commodities
(CFC). The auto-evaluation was undertaken by staff in ESC assisted by external consultants and
drawing on the views of Member governments and partners engaged in these activities. The
objective is principally to seek improvements in the areas covered by these Programme Entities.

Programme design
Regarding the design of the three Programme Entities they all seem fairly clear-cut addressing
separate activities, although it is difficult to assess Servicing Entities without examining the
substantive work that the bodies being serviced undertake. As a whole there is a good
correspondence between these Entities and the objectives of the Organization except that it should
be recognized that 224P5 contributes to Objective C2 (Adoption of appropriate technology to
sustainably intensifying production systems…) in addition to what is stated now in the Mid-Term
Plan.

Relevance and Addressing Member priorities
These three Entities continue to be highly relevant to Member countries especially to the
developing Member countries. Agricultural commodities including their processed products
continue to make an important contribution to developing economies while the availability of food
and agricultural products is relevant to consumers everywhere.

Because of the new round of international trade negotiations, the PAIA on Assistance for WTO
negotiations remains highly relevant. The intergovernmental mechanism of CCP and IGG system
will retain its relevance as long as governmental policies will continue to have a considerable
effect on trade. For the moment this is certainly the case. The non-IGG commodity consultations
and conferences do respond on a more ad-hoc basis to information requests and analytical
demands, and a high relevance is therefore assured. Proposals for projects sponsored by the
Common Fund for Commodities come from member countries and therefore these projects do
respond to their needs.

The activities under these entities reflect their needs because they are largely determined by
Members themselves. All the three Programme Elements are examined by the CCP and its IGGs
before, during and after implementation. This is in addition to the normal FAO programme review
procedure. The Secretariat of the CCP or of the IGGs prepares the agenda on the basis of the
recommendations by the last meeting and with regard to recent developments in commodity
markets. The consultation mechanism for the setting of the agenda could however be strengthened.

It is not feasible to predict the changes that may be required in the future. However, it does appear
likely that negotiations at the WTO could cause some changes in what is done in the CSSD, a
subsidiary body of the CCP that is directly mentioned in the WTO Agreement on Agriculture.

Efficiency of implementation


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The implementation of these three Programme Entities is undertaken efficiently. Under Entities
223S1 and 224P4 the CCP/IGG system was totally revamped in the late nineties and there seems
to be little or no scope for further efficiencies there. The rest of 223S1 concerns collaboration with
other Divisions in the PAIAs at relatively little cost for the non-substantive part of this activity. As
regards 224P4 the output is extremely large. Most of the expansion in activities has been in the
holding of non-IGG commodity consultations, much appreciated by Members. The stand-alone
conferences tend to be funded by extra-budget sources while those that are held together with the
IGG meetings come at only the extra costs of staff time together with some meeting room charges,
resulting in a high benefit/cost ratio. For 224P5, the benefits to commodity development from
CFC projects are generally considered to be high, but the view of staff is that the costs of their
inputs are inadequately compensated for by the CFC; and that the Memorandum of Understanding
with the CFC should be re-negotiated.

Effectiveness
The outcome of these Entities on Member countries is of course hard to assess. The Umbrella
Training Programme organized under this PAIA trained over 800 people from 162 countries.
Advice to countries has been incorporated in official negotiating positions at the WTO. The PAIA
on organics has also been active in organizing expert meetings and preparing basic materials on
this, relatively new, area.

Meetings are organized for Members so that they can discuss and eventually take decisions on
matters of common interest. On several occasions in the past, inter-governmental negotiations on
commodity agreements were undertaken at Geneva after a preliminary discussion had taken place
at Rome. In other areas the Groups take decisions that go beyond recommendations and lead to
action. The IGGs on Jute and on Hard Fibres made operational recommendations on price ranges,
the IGG on Tea instituted a Tea Mark, the Subgroup on Hides and Skins effectively proposed
changes to the International Trade Classification and decisions were taken in connexion with CFC
projects that led to action by other external bodies to invest in new technologies. Generally it is felt
that the CFC projects have “delivered the goods” and that the CFC itself presses for FAO to do
more on project formulation and cover what they call orphan commodities. The other activity that
has been highly effective is the work of the PAIA on support to WTO activities.

Gender
Under the Umbrella Training Programme the percentage of female trainees has varied from 10%
to 37% depending on the region. It must, however, be said that the bulk of the work on
international commodity policy, i.e. the organization of IGG meetings and commodity
conferences, does not have a gender dimension. Projects for CFC funding do have as one of their
criteria regard for gender issues and so this should to some extent be reflected in the project
portfolio, but the CFC does not report on this.

Partnerships
Working with partners is a strong feature of all the three Entities reviewed. Under 223S1 the very
nature of the PAIAs is collaborative with other FAO Divisions and in the case of the PAIA on the
WTO negotiations there has been close contacts with academia and regional bodies. The servicing
of CCP/IGGs closely involves GI, and occasionally technical Divisions. As regards 224P4, there
are close links with other international organizations in the commodity area particularly the
International Commodity Councils and private sector commodity organizations. However, for
some commodities there seems to be a lack of collaboration with technical departments. Entity
224P5 is by its nature strongly collaborative mainly of course with the CFC but also with the
national and international organizations that act as project executing agencies.


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Strengths and weaknesses
An analysis of the strengths and weaknesses of these three Entities suggests that it is appropriate
for the Division to be involved with these Entities. It has a critical mass of commodity expertise.
This facilitates consultations and collaboration among Members and provides an independent
unbiased source of information. The activities are delivered efficiently and are in demand. The
CCP/IGG system has proved itself highly flexible in responding to new exigencies. The global
scope of expertise and participation from members in these entities makes FAO’s services unique,
not available from other organizations.

The weaknesses are to do with the nature of the decisions taken, which are not binding on
Members. (Decisions taken on the use of FAO’s own resources or staff time are, of course,
binding.) This may result in a lack of debate. However, tough negotiations often take place on the
substance of the report of the meeting. Another weakness felt by some IGGs is the relative lack of
involvement by non-governmental participants, which has become more urgent given the
decreased direct role of governments in trade.

Recommendations:
ESC may want to consider membership of the PAIA on Biosecurity, which contributes to the
Standards and Trade Development Facility.

To increase the participation of the private sector and ensure the active involvement of
governmental commodity experts in the CCP/IGG system ESC should/could: continue organizing
informal meetings back-to-back with IGG and CCP meetings; organize IGG meetings away from
Headquarters whenever possible; improve the consultation mechanism for agenda setting;
experiment with presentations by delegates and round-table discussions. Some argue that more
provoking ideas should be presented to enhance the analytical debate.

To keep momentum between the meetings, the level of communication with delegates and
activities between meetings should be increased. For example by regular reporting on follow-up
activities from the last meeting and/or the establishment of special panels or mixed-membership
working parties to report to the IGG on topical issues.

Some participants to the meetings are of the opinion that the agenda of the meetings should be
better focussed and that ESC staff should increase its collaboration with the technical divisions in
FAO.

The relationship between the CCP and the IGGs could be strengthened. IGGs could forward issues
for CCP’s consideration.

ESC should of course continue organizing the highly appreciated conferences and expert
consultations on commodities not covered by the IGGs.

ESC should formulate priorities for its involvement in CFC projects, e.g. to give projects that are
close to ESC’s core activities more attention. Furthermore negotiations with the CFC should be re-
opened to obtain compensation for assistance in project formulation and staff time spent on
supervision activities.




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Table of Contents
Acknowledgements...................................................................................................................... 2
Table of Contents ........................................................................................................................ 6
Acronyms and Abbreviations ..................................................................................................... 8

PART I: SCOPE AND PROGRAMME DESIGN ..................................................................... 9
1. Introduction............................................................................................................................. 9
2. Background and Context ...................................................................................................... 10
   The Commodity and Trade Division........................................................................................ 10
   Choice of programme entities to be evaluated.......................................................................... 10
   Scope and methodology of the Evaluation ............................................................................... 11
3. Assessment of Programme Entity Design, Relevance to Priorities and Needs of Member
Nations....................................................................................................................................... 12
                                                                   s
   The place of the programme entities in FAO' work programme.............................................. 12
   Short description of the programme entities............................................................................. 13
   Clarity, consistency, realism, developments over the years ...................................................... 15
   Contribution to FAO strategic objectives................................................................................. 15
   Targeted beneficiaries and needs of Member Nations in the area of commodity and trade ....... 16
4. Resources, processes and management ................................................................................ 16
   Financial and human resources................................................................................................ 16
   Management 18
   Internal partnerships and external institutional relationships .................................................... 18
5. Analysis of web-use statistics ................................................................................................ 19
6 Conclusions on programme design........................................................................................ 22

PART II: TECHNICAL SUPPORT TO MEMBER NATIONS AND THE FIELD
PROGRAMME (223S1)............................................................................................................ 23
7. Collaboration within PAIAs ................................................................................................. 23
8. Assistance with the WTO negotiations ................................................................................. 24
9. Conclusions on 223S1............................................................................................................ 25

PART III: INTERNATIONAL ACTION ON COMMODITY AND TRADE ISSUES (224P4)
................................................................................................................................................... 26
10 The Committee on Commodity Problems ........................................................................... 26
11. The Consultative Subcommittee on Surplus Disposal ....................................................... 28
12. The Intergovernmental Commodity Groups...................................................................... 29
   History and mandate................................................................................................................ 29
   Institutional Arrangements ...................................................................................................... 30
   Organizational developments during 1998 -2003..................................................................... 31
   Substantial development 1998-2003 ........................................................................................ 32
13 Views from ESC staff regarding the IGGs and CCP.......................................................... 32
   Organizational issues............................................................................................................... 33
   Content                34
14 Results of a survey of CCP and IGG participants .............................................................. 35
   Organizational aspects and format........................................................................................... 36
   Content                36
15. Other conferences, expert consultations and activities for non-IGG commodities........... 38
16. Discussion and conclusions ................................................................................................. 40

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   Programme design................................................................................................................... 40
   Changing trade environment.................................................................................................... 40
   Different commodities, different IGGs .................................................................................... 41
   Strengths and Weaknesses of the CCP/IGG system ................................................................. 41
   Opportunities and threats......................................................................................................... 43
   Conclusions and recommendations.......................................................................................... 43

PART IV: MEASURES TO ENHANCE COMMODITY AND TRADE DEVELOPMENT
(224P5)....................................................................................................................................... 45
17. The Common Fund for Commodities................................................................................. 45
18. ESC’s role in CFC projects................................................................................................. 46
19. Portfolio analysis ................................................................................................................. 47
20. Views from ESC staff regarding the involvement in CFC projects................................... 50
  Role of ESC staff in the projects.............................................................................................. 50
  Benefits for ESC ..................................................................................................................... 54
  Impact of CFC projects ........................................................................................................... 54
  Procedural issues..................................................................................................................... 55
21. Lessons from three case studies .......................................................................................... 55
  Introduction 55
  Roles of the IGGs and the Secretaries in formulation............................................................... 56
  ESC Role in supervision.......................................................................................................... 57
  Other roles of the IGGs and the IGG Secretaries ..................................................................... 58
  Output and outcomes of the projects........................................................................................ 59
22. Relative importance of CFC projects for IGG participants .............................................. 59
23. Discussion and conclusion on 224P5................................................................................... 59
  Priority setting 59
  Working arrangements with the CFC....................................................................................... 60
  Benefits for ESC staff.............................................................................................................. 60
  ESC’s ‘comparative advantage’............................................................................................... 61
  FAO as Project Executing Agency .......................................................................................... 61
  Gender .................................................................................................................................... 61
  Conclusions............................................................................................................................. 62
OVERVIEW OF RECOMMENDATIONS ............................................................................. 63

   Appendix 1: Terms of Reference for the ESC auto-evaluation ............................................. 64
   Appendix 2: Output table for programme entity 223S1 ........................................................ 64
   Appendix 3: Output table 224P4 .......................................................................................... 64
   Appendix 4: Staff questionnaire........................................................................................... 64
   Appendix 5: Results of staff survey on IGGs ....................................................................... 64
   Appendix 6a: Questionnaire for IGG participants ................................................................. 64
   Appendix 6b: Questions for telephone interviews .................................................................... 65
   Appendix 7b: Aggregate results of various surveys................................................................ 65
   Appendix 7c: Results of telephone interviews........................................................................ 65
   Appendix 8: Non CFC projects in which ESC staff is involved ........................................... 65
   Appendix 9: Output table 224P5 ......................................................................................... 65
   Appendix 10: Overview of CFC project for which IGGs serve as Supervisory Body.............. 65
   Appendix 11: Case study, Tea and Health Project .................................................................. 66
   Appendix 12: Case study, West African Groundnut Germplasm Project ................................ 66
   Appendix 13: Case study, Abaca Project................................................................................ 66



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Acronyms and Abbreviations
AWTO      Assistance to WTO negotiations (PAIA)
CCP       Committee on Commodity Problems
CFC       Common Fund for Commodities
CIRAD     Centre de Coopération Internationale en Recherche Agronomique pour le
          Développement
CSSD      Consultative Subcommittee on Surplus Disposal
ESC       Commodity and Trade Division
ESCB      Basic Foodstuffs Service
ESCG      Global Information and Early Warning System (GIEWS) Service
ESCP      Policy and Projections Service
ESCR      Raw materials, Tropical and Horticultural Products Service
FIDA      Fibres Development Authority (Philippines)
ICB       International Commodity Body
IGG       Intergovernmental (Commodity) Group
IGG-OOF   IGG on Oilseeds, Oils and Fats
LDC       Least Developed Country
MoU       Memorandum of Understanding
NGO       Non-Governmental Organization
OECD      Organisation for Economic Co-operation and Development
ORGA      Organic Agriculture (PAIA)
PAIA      Priority Area for Interdepartemental Action
PBEE      Evaluation Service
PE        Programme Entity
PEA       Project Executing Agency
SB        Supervisory Body
SPS       Sanitary and Phytosanitary
TCP       Technical Cooperation Project
UMR       Usual Marketing Requirement
UNCTAD    United Nations Conference on Trade And Development
UNIDO     United Nations Industrial Development Organization
URAA      Uruguay Round Agreement on Agriculture
WFP       World Food Programme
WTO       World Trade Organization




                                                                                  8
PART I: SCOPE AND PROGRAMME DESIGN
1. Introduction
In 2002 two new complementary evaluation processes were introduced by the Director-General:
annual assessment and auto-evaluation. The annual assessment monitors work plans and outputs
produced during the previous year. Auto-evaluation reviews programme achievements over a
longer period - generally six years - and looks at a broader scope, including outcomes and
objectives.

Evaluation exercises typically pursue the following three goals:
a) Programme improvement: analyzing the strengths, weaknesses and opportunities of a
   programme leads to a set of recommendations on how to strengthen it and the volume of
   resources it should receive.
b) Learning: evaluations may yield lessons that are valid over and beyond the programme
   evaluated, thus helping in the planning and management of future projects or programmes;
c) Accountability: public institutions and projects funded with public money must review and
   report openly on the contribution to the public welfare within their mandate.

Typically, donors tend to place greater emphasis on accountability, while programme staff and
partners are more interested in programme improvement and learning.

The Director-General’s bulletin of August 2002 regarding the new evaluation processes placed a
strong emphasis on programme improvement and learning. By their nature, auto-evaluations tend
to be weaker on the accountability side and stronger on the improvement and learning side. All
technical projects and continuing programme activities as well as all Priority Areas for
Interdepartmental Action (PAIAs) will be subject to auto-evaluation during the six-year period
2003-2008.

In 2004, the Commodity and Trade Division (ESC) has embarked on an auto-evaluation of three
programme entities: 223S1, 224P4 and 224P5. Data were collected during July and August
through a staff questionnaire, staff interviews, screening of archives and a questionnaire to
participants in Intergovernmental Group Meetings. Some data were requested from other
departments such as the human resource statistics (AFHS) and web use statistics (GILW).

This report was written by the consultants that were hired by ESC. The report is meant as a
discussion document for the Division to complete its auto-evaluation and draw conclusions for the
future.




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2. Background and Context

The Commodity and Trade Division

The Commodity and Trade Division (ESC) is one of the four Divisions of the Economic and
Social Department. The functional statement of the Division from May 1997 is as follow:

       The Division maintains a constant watch on the world market situation and outlook for all
       the main agricultural commodities and is responsible for servicing the arrangements of
       early warning of food shortfalls. The Division services one standing committee of the FAO
       Council: the Committee on Commodity Problems, as well as eleven Intergovernmental
       Commodity Groups. It identifies specific commodity problems and proposes international
       action to mitigate them. It is responsible for the Global Information and Early Warning
       System (GIEWS). The Division also advises individual developing countries on formulating
       and implementing their national commodity policies. The Division provides a
       comprehensive information and intelligence service on agricultural commodities and
       monitors continuously the world supply/demand outlook for basic foods. The Division
       contributes to and is user of information assembled by ESS under WAICENT. Based on its
       review of the world food situation and of commodity problems and policies at country,
       regional and international levels, the Division provides support for FAO’s programme of
       work on world food security analysis.

Of the eight programme entities (PE) covered by the Division, the following programme entities
were chosen for the auto-evaluation:
223S1 – Technical Support Services to Member Nations and the Field Programme
224P4 – International Action on Commodity and Trade Issues and
224P5 – Measures to Enhance Commodity and Trade Development.

The programme entities under evaluation are executed by three services:
ESCB – Basic Foodstuffs Service
ESCR – Raw Materials, Tropical and Horticultural Products Service and
ESCP – Policy and Projections Service

In addition, some of the outputs under these entities fall directly under the responsibility of the
office of the Director (ESCD)


Choice of programme entities to be evaluated

The international commodity environment has been changing rapidly in recent years. The roles of
governments and International Commodity Councils in commodity markets have changed and a
new international legal framework under the World Trade Organization (WTO) has been
developed. Commodity fundamentals have also been evolving quickly. New niche markets have
developed, e.g. for single origin or organic products. There have been concerns over Sanitary and
Phytosanitary (SPS) issues and food safety, leading to increased demands for traceability. The role
of supermarkets in the supply chain has changed.




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As a result, the nature of demands on the Division’s agricultural commodity competences have
been changing while the Division’s financial and human resources have decreased. It was
therefore decided to review 3 inter-related programme entities that have a bearing on the services
provided to Member governments in the agricultural commodity area- international action on
commodity issues (224P4), support to commodity development (224P5) and servicing of FAO’s
machinery providing this assistance to Members (223S1). Some work under 223S1 is closely
related to services provided under programme entity 224A2; therefore, reference to this entity is
made where necessary to give a full understanding of activities under 223S1.

Furthermore, this evaluation serves to preserve some institutional memory in the light of recent
staff and management changes.


Scope and methodology of the Evaluation

According to the terms of reference for this auto-evaluation exercise (see appendix 1 for more
details), the evaluation seeks to:
    • evaluate the program design for consistency, clarity and relevance to the needs of Member
        countries;
    • review the portfolio of supervised Common Fund for Commodities (CFC) projects and
        assess the general relevance of these projects;
    • assess how demands within the scope of the programme entities have evolved during the
        past 6 years and what effect this may have on divisional priorities and examine ESC
        procedures for setting priorities;
    • review the contribution of ESC to PAIAs and the relationships with external institutions;
    • assess outputs and their contribution to planned outcomes and objectives
    • assess whether gender and social equality have been considered
    • assess whether the programme entities are cost-effective

An ad hoc Task Force was established. According to the terms of reference, which was drafted by
the Task Force and approved by the Evaluation Service (PBEE), the task force was formally
composed of the three Service Chiefs and the Division Director. The service chiefs delegated this
task to senior officers. The composition of the task force has undergone several changes during the
evaluation. The task force recruited two consultants and coordinated and reviewed their work.
Some of the work was delayed due to encountered difficulties in finding a senior consultant.

The evaluation has been implemented as follow:

July – August 2004:
    • collection and review of background information, including CFC annual reports,
       Programme of Work and Budget, work measurement surveys, reports of Intergovernmental
       Commodity Groups and the Committee on Commodity Problems.
    • design of staff questionnaire focussing on the IGGs and CFC projects for staff of ESCB
       and ESCR and analysis of the response
    • staff interviews of around 1 hour with the Secretaries of Intergovernmental Commodity
       Groups and staff responsible for the supervision of CFC projects.
    • preparation of an output table for the programme entities, with help of administrative
       archives of documentation, meetings and staff travel. The draft output tables were sent to
       the respective services for additional information.
    • collection of ESC human resource statistics

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   •     collection of web use statistics
   •     development of a questionnaire for participants in Intergovernmental Commodity Group
         meetings, with suggestions and comments from ESC staff. The Questionnaire was sent to
         all Members of the CCP and to all participants of IGG meetings of whom an e-mail address
         was known.
   •     screening of archives of two CFC reports

September- October
   • Analysis of IGGs – participants survey results
   • Drafting of the report
   • Two meetings with management and staff to discuss preliminary findings.


3. Assessment of Programme Entity Design, Relevance to
Priorities and Needs of Member Nations

The place of the programme entities in FAO's work programme

Descriptions and details of the entities have changed over the years. Most information below was
obtained from the Mid Term Plan for 2002-2007, covering the last biennium under evaluation
(2002-2003).

The programme entities 223S1, 224P4 and 224P5 fall within Major Programme 2.2: Food and
Agriculture Policy and Development.

This Major Programme consists of:
2.2.1:        Nutrition, Food Quality and Safety
2.2.2:        Food and Agricultural Information
2.2.3:        Food and Agricultural Monitoring, Assessments and Outlooks
2.2.4:        Agriculture, Food Security and Trade Policy

The entities evaluated fall within programmes 2.2.3 and 2.2.4, which are organised as follow with
the main responsible division in brackets

2.2.3. Food and Agricultural Monitoring, Assessments and Outlooks

223A2:         Global Food and Agricultural Perspective Studies (ESA)
223P2:         The State of Food and Agriculture (ESA)
223P3:         Market Assessments for Basic Food Commodities and Impact on Global Food
               Security (ESC)
223P4:         Projections and Global Commodity Market Assessments (ESC)
223P5:         Market Assessments of Tropical, Horticultural and Raw Material Commodities and
               Impact on Food Security (ESC)
223P6:         Global information and Early Warning System (GIEWS) (ESC)
                      223S1: Technical Support Services to Member Nations and the Field
               Programme (ESC)

2.2.4. Agriculture, Food Security and Trade Policy


                                                                                               12
224A1:        World Food Summit monitoring and follow up (ESA)
224A2:        Commodity and Trade Policy Support to Developing Countries for Trade
              Negotiations (ESC)
224A3:        Mid-term Review in 2006 of Progress towards WFS target (ESA)
224P1:        Agricultural adjustment and policy reforms (ESA)
224P2:        Agriculture, poverty alleviation, rural development and food security: analysis of
              linkages (ESA)
224P3:        Economics of Natural Resources and Environmental Sustainability (ESA)
                     224P4 International Action on Commodity and Trade Issues (ESC)
                     224P5 Measures to enhance Commodity and Trade development (ESC)
224S1:        Technical Support Services to Member Nations and the Field Programme (ESA)


Short description of the programme entities

Programme entity 223S1 Technical Support Services to Member Nations and the Field Programme
                                                                     Budget 2002-2007: 1,684,000
On-demand advisory services to other FAO and non-FAO users.
This technical service agreement entity also covers some contributions to the servicing of the
Committee on Commodity Problems (CCP) and its subsidiary Inter-governmental Commodity
Groups (IGGs) and to studies undertaken by UN system and non-UN organizations in the technical
areas addressed by the programme.

During the biennium 2002-03 it also catered for the participation of the Commodity and Trade
Division in five Priority Areas for Interdisciplinary Action (PAIAs):
   • Assistance for WTO negotiations (AWTO)
   • Biotechnology (BIOTECH) and Ethics (ETHI)
   • Organic agriculture (ORGA)
   • Disaster prevention, mitigation and preparedness for relief and rehabilitation (REHA)

According to the Mid-Term Plan 2002-2007, this entity is contributing to the following strategic
objectives:
   • A3: Preparedness for, and effective and sustainable response to, food and agricultural
        emergencies
   • B1: International instruments concerning food, agriculture, fisheries and forestry, and the
        production, safe use and fair exchange of agricultural, fisheries and forestry goods
   • E1: An integrated information resource base, with current, relevant and reliable statistics,
        information and knowledge made accessible to all FAO clients
   • E2: Regular assessments, analyses and outlook studies for food and agriculture

Programme entity 224P4: International Action on Commodity and Trade Issues
                                                                      Budget 2002-2007: 13,007,000
Rationale: There is considerable interest in the membership for analysis and studies on emerging
issues affecting international trade and food security including the effects of new technologies and
scientific developments. There is also interest in making full use of consultative mechanisms to
strengthen understanding and interaction with regard to the complex factors affecting trade in food
and agriculture. At the same time, there is a desire for consensus on policies to enhance
commodity development and trade, and achieving food security through fair and market-oriented
world trade system



                                                                                                   13
Objective: To assist countries in maximising benefits from trade in agricultural commodities and
processed and semi-processed food products

The focus of this entity is on trade policy. This includes analyses of emerging global and regional
trade issues and policies, as they relate to agricultural trade and individual commodities, and
advice on strategies to maximise benefits obtained from trade. Under this entity, methodologies to
assess the impact of changes in commodity and trade policies and on international trade flows and
food security are developed. The entity also supports a variety of consultative mechanisms
(including Intergovernmental Commodity Groups (IGGs), the Consultative Subcommittee on
Surplus Disposal (CSSD), multi-commodity and multi-disciplinary outlook conferences and inter-
disciplinary linkages with government, non-governmental, academic and private sector
stakeholders) for promoting international understanding and consensus regarding the evolving of
agricultural trade commodity issues. In addition, this entity includes assessments of the impacts of
emerging developments, such as new technologies, eco-labelling and fair trade, and organic
agriculture, on trade and on the competitiveness of agricultural commodities.

224P4 is contributing to strategic objectives:
   • B1 (main): International instruments concerning food, agriculture, fisheries and forestry,
       and the production, safe use and fair exchange of agricultural, fisheries and forestry goods
   • C2: Adoption of appropriate technology to sustainably intensifying production systems and
       to ensure sufficient supplies of food and agricultural, fisheries and forestry goods and
       services

Indicators:
    • Uptake of reports/ assessments and methodologies via quotations in policy statements,
       enquiries, reader surveys, references in the media etc.
    • Participation (in qualitative and quantitative terms) in consultative mechanisms
    • Ability to attract extra-budgetary resources

224P5 Measures to enhance Commodity and Trade Development
                                                                            Budget 02-07: 4,433,000 $
Rationale: Members’ requirements (particularly developing countries and countries in transition)
for assistance in formulating appropriate commodity and trade development strategies (including
for diversification) and introducing related institutional measures to attract investment to the
commodity and trade sector. There is complimentary need to assist with formulation of commodity
development proposals to mobilise resources for their implementation

Objectives: To enhance national capacity to develop the commodity sector through improvements
in productivity and increased competitiveness, an assist countries in taking full advantage of
trading opportunities in the globalized world economy.

This entity includes assistance in the formulation of national commodity and trade strategies and
advice and support to the design of specific commodity development programmes, in collaboration
with funding bodies, including the Common Fund for Commodities (CFC).

224P5 is contributing to strategic objective:
   B2 National policies, legal instruments and supporting mechanisms that respond to domestic
   requirements and are consistent with the international policy and regulatory framework

Indicators:
    • Number of requests for assistance

                                                                                                  14
   •   uptake of project ideas and proposals by funding institutions
   •   evaluation of completed projects.


Clarity, consistency, realism, developments over the years

At first glance, the entities are well organised. 223S1 for services on demand and in-house services
for PAIAs, 224P4 for the CCP, IGGs and other conferences and trade policy analysis and 224P5
for project support. Other entities not under evaluation include the collection and analysis of trade
statistics and market intelligence, projections, the WTO training programme of ESCP and analysis
of linkages between trade and food security.

In practice the activities are not so clear cut. Work undertaken under the other entities is naturally
presented during IGG sessions, such as commodity outlook and projections work. Furthermore, a
market analysis is bound to look at policy developments and a policy analysis is bound to look at
market developments. Linkages with food security are mentioned in relation with trade policy
under 244P4 as well as under other entities not under evaluation. The same is true for analysis of
emerging developments such as biotechnology.

One particularity is the support to the CCP under 223S1, whereas the main activities are
undertaken under entity 224P4. Furthermore, 223S1 services the PAIAs, but due to the nature of
the PAIAs as an umbrella mechanism, much related work is done under other entities.

When it comes to biennial work plans with output titles and budget codes, the planning gets very
detailed. One budget code per study or meeting. Because officers tend to be ambitious, there are
generally more studies, publications and meetings planned than feasible. It is hardly a surprise that
funds get carried over to the next biennium to print a publication with a year delay. At the same
time, such detailed planning makes it more difficult to respond to emerging issues, because there is
no room for re-allocation of funds within one budget code. Changes in the work plan during the
course of the biennium therefore require changes in budget code titles or they lead to discrepancies
between titles and executed activities.

The service chiefs are the lowest level in the divisional hierarchy with programme and budget
overview. Most staff members are hardly aware of output titles and oracle codes. They of course
know what activities they are doing, but know them often under another name than the one that
appears in the work plans, and consequently do not know under which budget code their expenses
are booked. They have therefore little knowledge of how much money is available to them or for
what type of expenditure (travel, consultants, printing etc.), except for the IGGs, which have clear
budgets. According to some staff members they had a better overview in the past, before the
Oracle system was introduced.

One clear development over time is the content of emerging issues. In the biennium 1998/99 there
was still quite a lot of attention to the environment, whereas that has gradually shifted towards
biotechnology and GMOs and to a lesser extent to organic agriculture.


Contribution to FAO strategic objectives

It is hard to assess the extent to which these three programmes contribute to achieving the
objectives of the Organization in a precise way. Servicing Entities such as 223S1 mainly
contribute indirectly whereas the other two contribute directly. In general, however, it can be said
                                                                                                     15
that there is a good correspondence between these Programme Entities and the objectives they set
out to meet.

The contribution of 223S1 to Objective A3 (Preparedness for, and effective and sustainable
response to, food and agricultural emergencies) may be not so clear that it justifies mentioning in
the Mid Term Plan. By contrast, PE 224P5 pretty clearly contributes to Objective C2 (Adoption of
appropriate technology to sustainably intensifying production systems and to ensure sufficient
supplies of food and agricultural, fisheries and forestry goods and services) and this relationship
should be spelled out in future programme exercises. Many of the commodity development
projects undertaken with the Common Fund for Commodities are directed at improving production
systems.


Targeted beneficiaries and needs of Member Nations in the area of
commodity and trade
In nine of the interviews officers were asked who ESC’s clients were. Four staff said ‘member
countries or member governments’ as their first answer, and two others ‘policy makers in
developing countries’. Other answers and additional remarks included ‘the people who come and
buy from you’, ‘anyone who has anything to do with our commodities’ and ‘the people who pay
the bills’.

For the programme entities under consideration, the targeted beneficiaries are quite diverse. The
PAIA-AWTO is designed to help developing countries at the WTO negotiations, whereas the
PAIAs on organic agriculture, biotechnology and ethics are of interest to all countries. The
Committee on Commodity Problems and the Intergovernmental Groups are primarily organised
for government officials from member countries. The growing number of more informal side-
events or stand-alone conferences are specifically meant to attract the private sector - i.e.
producers and traders -, as well as academics and NGOs, in addition to the government
representatives.

The projects that are supported under 224P5 have each their own specific target group, but in
general one can say that they are more directly targeted to benefit the poorer stakeholders of the
specific commodity, often small producers in developing countries


4. Resources, processes and management

Financial and human resources

The development of financial resources over time is presented in figure 1. In 1998/99 the budget
for 224.20 was 42% of the total ESC budget. In 2000/01 the total for the three programme entities
was 29% of the total budget. In 2002/03 this was 35 % with 224P4 alone counting for 26% of the
total budget. Percentage of staff salaries accounted for under these programme entities, which
reflects time spent on these entities by staff, was 31% in 2000/01 and 38% in 2002/03.

The budget for 98/99 was higher because upon introduction of the Oracle system some items
included in the old category 224.20 went to other programme entities not under evaluation.


                                                                                                     16
The slight increase from 2000/01 to 2002/03 was less then the increase in costs due to inflation
and currency movements, so the budget was reduced in real terms in 02/03 and from 2004 ESC
was forced to cut posts.




Sources: Financial statements 98/99, 00/01, 02/03 and Programme of Work and Budget 04/05

Figure 1. Development of financial resources for programme entities 223S1, 224P4 and 224P5


The development of the number of staff working for the three services involved in the programme
entities under study is presented in Figure 2.


                             ESC staff numbers
                    At January of each year, excluding ESCG


   35
   30
   25                                                                    D
   20                                                                    PROF
   15                                                                    APO
   10                                                                    GS
    5
    0
          '98      '99      '00     '01      '02      '03     '04

D=Director and chiefs, Prof = Professional, APO = Associate Professional Officer, GS = General Service staff

Figure 2. Development of ESC human resources 1998 - 2004




                                                                                                               17
Management

ESC has undergone a number of management changes, see figure 3.


                                 Management changes in ESC


     Director   Greenfield          v             Fortucci               v     Sarris




  Chief ESCB              Lamade           v                    Gurkan




  Chief ESCR          Fortucci                               Hallam




  Chief ESCP Konandreas      v                         Thomas


                  1998           1999      2000      2001         2002       2003


Figure 3. Management changes in ESC 1998-2003

In 1999 and 2000, in the course of one and a half years the director and all 3 service chiefs
changed. However, staff indicated that because Ms Fortucci came from inside the Division and
followed more or less the course of her predecessors, this was not very disruptive. The arrival of a
new director in 2003 from outside FAO brought more changes. Some staff indicated that this
brought uncertainties about the course the division was taking and of what was expected of them.
However, they were well aware that as the new director came from outside FAO he needed time to
form an opinion himself about priorities and the future of the division.


Internal partnerships and external institutional relationships

These three Programme Entities involve a great deal of working with other units in the House and
with external bodies.

Thus Programme Entity 223S1 is by its very nature largely collaborative in servicing the CCP and
its subsidiary bodies. Involvement with PAIA s involves active collaboration with a wide range of
other Divisions as well as external organizations in undertaking the substantive work under the
PAIAs.

PE 224P4 is the substantive face of many of the activities serviced under 223S1 (e.g. the work of
the CCP). The Division works closely with GI (conference services, translators, publications and
information), AF for human resource mobilization and several technical Divisions for inputs into
papers and occasionally to respond to enquiries by delegates at meetings. This applies equally
                                                                                                 18
whether the meeting takes place at Headquarters or elsewhere. This Programme Entity involves
the maintenance of close contacts with Member governments and the private sector so as to keep
the IGGs’ agendas relevant and up-to-date. Officers value the chance to discuss policy issues
raised in connection with the IGGs with Member governments and most would welcome the
chance to strengthen these contacts. The running of IGGs and other commodity consultations
involves close working with other international bodies (e.g. UNCTAD, OECD, WTO, World Bank
and the International Commodity Councils). This involves joint activities, sharing of information
and staff visits, all contributing much to the staff’s commodity expertise.

PE 224P5 evolves around the collaboration with the Common Fund for Commodities and the
Project Executing Agencies, which can be national or international technical/scientific bodies.
These activities also involve close collaboration with funding institutions and draw on financial,
legal and administrative expertise from elsewhere in the House. Altogether, officers appreciate
these contacts as they help deepen their commodity knowledge and improve their networking.


5. Analysis of web-use statistics
Outputs and achievements are discussed below in part II to IV for each programme entity
separately. The use of information provided by ESC on the web is discussed here as it was
impossible to analyse them separately for each entity.

Web use statistics were analysed for the whole Division (except GIEWS). In the summer of July
2003 the ESC web-site underwent an overhaul. Therefore the twenty most visited subject-matter
pages (ESC homepage excluded) are presented in Figure 6 for the first and the second half of the
year separately.

These statistics should be analysed with caution. For example, they do include visits from people
inside FAO Headquarters, and therefore also visits from the people who post these sites on the
web. Sites that require high maintenance to update them, like price monitors, receive therefore
automatically more visits.

Furthermore, the listed pages in the second half of 2003 were mostly re-direct pages, i.e. they are
not proper pages in themselves. However, the commodities to which they refer could be traced and
these re-direct pages most likely represent visits to commodity main pages. Re-direct pages for the
first half of 2003 were not taken into account, because the proper pages to which they referred
were already present in the statistics and this would have led to double-counting.

The programme entities under evaluation hardly feature, because of the nature of those activities.
Thus there is no information on the web regarding the supervision of the CFC projects. Meeting
information is typically relevant for only a short period and only for the relative small group of
participants, who will receive that information personally by e-mail or normal mail. Furthermore,
publications that relate to the PAIA ‘Assistance for WTO negotiations’ are usually posted on
another website (www.fao.org/trade/) and therefore were not counted.




                                                                                                     19
             20 m ost visited ESC page Jan-Jun 2003                                        20 m ost visited ESC pages Jul-Dec 2003


                                                                                                                                 ## of visits
                                                  ## of visits
                                                                                                                        0   500 1000 1500 2000 2500 3000
                                          0   1000 2000 3000 4000 5000
                                                                                              Rice market monit or                                     2529
                CM R main page (e)                                    4496
                                                                                                           Bananas                              1796
              Banana main page (e)                             2933
                                                                                                               Rice                          1499
       Tropical f ruit s main page (s)                  1993
                                                                                                             Wheat                           1426
               Cit rus main page (e)                    1864
                                                                                             Fruit s and veget ables                    1210
              Cott on main page (s)                   1625
                                                                                                 Cof fee and cocoa                    1122
                Sugar main page (e)                  1477
                                                                                                           Oilcrops                   1118
            CM R t ropical f ruit s (e)              1436
                                                                                                              Sugar                   1113
       Tropical f ruit s main page (e)               1411
                                                                                                     Tropical fruit s                 1039
            CM R t ropical f ruit s (s)           1337
                                                                                               Cross commodities                     999
                CM R main page (s)               1266
                                                                             Commodit y specific studies (pub list)                  997
          Banana M eet ings Info (e)             1217
                                                                                                               Dairy              927
                 Rice main page (e)              1211
                                                                                                               M eat              916
                 M onit or-prices (e)            1182

  Review of Basic Food Policies (e)              1114                               M eet ings and events (all com.)              912

                                                 1098                             CM R 2000-2001 highlight (cc)                   893
          Price & stock monit or (e)

  Organic Fruits and veget ables (e)            1092                                                        Cot ton             792

                M eat main page (e)             1080                                                          Citrus            773

                  CM R bananas (e)              1014                                                 Coarse grains              773

                Dairy main page (e)             1010                                                            Tea             718

                    CM R cot t on (s)          835                                       M edium term project ions             691



CMR= Commodity Market Review

Figure 4. Most visited ESC websites in the year 2003

Other interesting statistics to analyse are the most downloaded documents. However, more and
more documents for downloading originate from the document repository. These have no ‘ESC’
addresses and therefore statistics of the number of downloads from the repository were not
available. For those documents that were posted on the web as a PDF file under the ‘ESC’ website,
the top twenty of downloaded files are presented in Figure 7. Because sometimes files are
downloaded in pieces, with each piece counted as a download, the number of visits is a more
reliable figure for the real number of downloads. Also here downloads from within FAO are
included in the figures.




                                                                                                                                                              20
                              most downloaded files

                                                    number of visits
                                               0   200         400          600         800

        Commodity Market Review 99 (e)                                            659

       Jute statistical bulleting dec 02 (e)                          459

                   Dairy world special (e)                           433
    Agricultural commodities: profiles and
                                                                     426
        WTO negotiating issues 2002
                    Cocoa projections (s)                       375
         Background on socially and
                                                                363
      environmentally rsponsible banana
                   Citrus bulletin 2002 (e)                    334
           IGG-BA/TF: Banana Statistical
                                                               332
              Compendium 2001 (e)
              Citrus Symposium 2001 (s)                    321

                    Coffee Projections (s)                 311

        Banana Information note 2003 (e)                  289
                Sugar Cuba conference:
                                                          273
                  Comercialization (e)
     The marketing potential of date palm
                                                         264
               fruits 2002 (e)
           Rice Market Monitor_Sept. 03                  262

             Rice Market Monitor_Nov. 03                 259
          IGG-OOF: Biotechnology
                                                         248
     developments in the oilseeds sector,
     Medium term projections to 2005 (e)                 247

      The marketing potential of dates (f)               243

      Tropical Fruits Statistics?part V. (s)         218

              Rice Market Monitor_May03              216



Figure 5. Most downloaded websites in the year 2003




                                                                                              21
6 Conclusions on programme design
The three programme entities are linked in that the servicing of the international action on
commodity and trade issues undertaken by the CCP/IGGs, (programme entity 224P4) is accounted
for under 223S1 and the CFC projects under 224P5 are approved and reviewed by the IGG system.
Thus the entities complement each other, although each entity has a component that is independent
e.g. PAIAs under 223S1, non-IGG commodity conferences under 224P4, and non-CFC activities
under 224P5.

Thus the choice for auto-evaluation of these three entities makes good sense. However, there are
difficulties in evaluating 223S1 because part of the substance is accounted for under other entities
not under review e.g. the work done under the PAIAs. The entities are relevant to the strategic
objectives of the FAO although some minor tidying up could be considered e.g. entity 224P5
makes a direct contribution to Objective C2 (Adoption of appropriate technology….) and this
should be mentioned.

The targeted beneficiaries vary with the activities. The PAIA-AWTO is designed to help
developing countries at the WTO negotiations whereas the PAIAs on organic agriculture,
biotechnology and ethics are of interest to all countries. Activities under the CCP/IGG system are
being addressed to policy makers and projects under 224P5 are generally to the benefit of small
producers in developing countries.

The budget for these entities has been declining over the past few years but there have been
considerable efforts to mobilize extra resources through working with external partners on
organizing commodity conferences and through harnessing a wide variety of donors for the
running of the Umbrella training programme for WTO negotiations.

The three entities have intensive relationships with external and internal partners. Thus 223S1 is
by its nature collaborative. Substantive work under 224P4 involves close contacts with
International Commodity Councils and other actors both public and private. Activities under
224P5 are mainly with the CFC and many research institutes. Overall, staff members find great
value in these contacts and external partners are always asking FAO to intensify their
collaboration.




                                                                                                     22
PART II: TECHNICAL SUPPORT TO MEMBER NATIONS AND
THE FIELD PROGRAMME (223S1)
This Entity provides on-demand advice on commodity matters to others in FAO, other
organizations and Member countries. It caters for the participation of ESC staff in a number of
PAIAs and for servicing of the CCP and the IGGs. The substantive work on the CCP and the IGGs
is covered under the auto-evaluation of PE224P4 and hence is not covered under this chapter. The
substantive work covered by the PAIAs also belongs to other PEs but as these are not being
evaluated at present, some brief discussion of their activities is provided below so that this PE can
be evaluated.

Outputs under this entity for the period 1998-2003 are presented in Appendix 2.


7. Collaboration within PAIAs
The Division is involved with five Priority Areas for Interdepartmental Action (PAIAs). The PAIA
on Disaster prevention, mitigation and preparedness for relief and rehabilitation involves mainly
the GIEWS service (ESCG) and falls outside the scope of this evaluation. By far the largest
involvement of ESC is with the PAIA on Assistance with WTO negotiations, which is discussed in
more detail in the next Chapter.

The Basic Foodstuffs Service is represented in the two related PAIAs on Biotechnology in food
and agriculture (BIOTECH) and in Ethics in food and agriculture (ETHI). In relation to these
PAIAs Biotechnology has been discussed in several IGG meetings (Oilseeds, Oils and Fats,
Bananas and Rice). Furthermore an international symposium on biotechnology and international
trade of basic foodstuffs was organized in July 2001 in conjunction with the joint meeting of the
IGGs on Grains, Rice and Oilseeds, Oils and Fats.

The chief of the Raw Materials, Tropical and Horticultural Products Service (ESCR) is also the
chair of the interdepartmental working group that coordinates the PAIA on organic agriculture.
ESCR produced a publication on the markets for organic fruits and vegetables and a conference in
the Caribbean. ESCR also facilitated an ad hoc working group on environmental and social
standards, certification and labelling (including organic); organized three expert meetings; and
produced a technical paper on the subject. In 2003 a project was prepared to link organic and fair-
trade certified producers in West Africa to European markets, which is currently being
implemented with funds from the German Government.

Furthermore, developments in organic markets were addressed in the IGGs on Bananas and Citrus.
The IGG on Tea has endorsed a proposal for a project on organic tea to be funded by the CFC. The
Secretariat of the IGG on Meat and Dairy organized a multi-stakeholder dialogue on developments
in the market for Organic Meat and Dairy Products in conjunction with the IGG meeting in August
2002.

The interaction with other divisions on these cross-cutting issues is highly appreciated by staff.
ESC also profits from the special thematic web pages these PAIAs have developed, directing users
interested in these subjects to relevant ESC pages they may otherwise not have visited. The PAIA
on organic agriculture has also developed a set of fact sheets which include a fact sheet on organic
trade and activities of ESC in this area.


                                                                                                    23
More recently staff in ESC feels the need for more collaboration on technical product standards
and their implications for trade. ESCR for example has sought contacts with technical divisions on
good agricultural practices and environmental and social standards. ESCB has recently developed
collaboration with technical divisions on product standards in the livestock sector. With the
increasing requirements from supermarkets on traceability, these issues may become more
important in the near future. This may bring the need for another PAIA or the issue may be
accommodated in existing PAIAs, such as the AWTO, ORGA and Biosecurity. For example, the
AWTO could pay more attention to the Technical Barriers for trade Agreement (TBT). ESC may
want to consider membership of the PAIA on Biosecurity which focuses on food safety, and
addresses inter alia animal health, plant health and food safety risks of biotechnology. Traceability
is a key issue addressed under this PAIA and the PAIA also contributes to the Standards and Trade
Development Facility.


8. Assistance with the WTO negotiations
The PAIA on assistance with the WTO negotiations (AWTO) is chaired by the Assistant Director
General of the Economics and Social Department. The Secretary is the Chief of the Policy and
Projections Service (ESCP). There are fifteen collaborating divisions, among which FAO’s liaison
office in Geneva.

The main objective of the AWTO is to support Members, particularly the developing countries and
countries in transition, in the Doha Round of Multilateral Trade Negotiations. Regular analyses
and an improved flow of information together with direct assistance to Members in their related
policy formulation have been provided by FAO prior to the setting up of this PAIA through the
already existing inter-departmental working group.

Activities of the PAIA have concentrated on a number of key issues: the improvement of
information systems; the preparations for the various WTO Ministerial Conferences; the provision
of a wide range of technical assistance; and the development of a new framework for financing
related project activities. The FAO Trade web site has been completely overhauled giving a
sharper focus to the Organization’s information to Members and the wider international
community on the developments taking place at the Multilateral Trade Negotiations. The site
provides ready access to FAO’s studies on Doha related issues and trade information. It provides a
window to FAO’s technical assistance activities.

FAO had a significant representation at the Cancun Ministerial Conference. Fact sheets covering
the broad range of FAO’s activities on trade related matters were prepared. In addition an FAO
stand was organized and a symposium held. Generally, FAO’s multidisciplinary approach was
well received and its information was widely distributed.

Trade related technical assistance included advice to Geneva based delegations through staff
contacts and the organization of symposia. The assistance provided to Geneva based delegations
has been widely praised and several of FAO’s papers have been used in formulating the
negotiating position of countries at the WTO. There were also a number of regional level training
activities, workshops and studies. In addition, several national level technical assistance missions
were undertaken.

Many of these activities were financed by the Umbrella I Programme (1999-2001), see figure 6.
This proved very popular with Member countries, but it became increasingly clear that a new
programme – Umbrella II – would be required if the requests for assistance were to be met.

                                                                                                   24
                                       AFRICA
                                  50     47                              LATIN                                                AFRICA
                                                                                                                        300
 Number of particpant countries

                                                                       AMERICA /                                                269                             LATIN
                                                                      CARIBBEAN                                                                               AMERICA /
                                  40            ASIA and the                                                            250
                                                                          35                                                                                 CARIBBEAN




                                                                                               Number of participants
                                                  PACIFIC                                                                              ASIA and the EUROPE       170    NEAR EAST
                                                     29      EUROPE                NEAR EAST                            200              PACIFIC      143
                                  30                                                                                                                                    and NORTH
                                                               24                  and NORTH                                               134                            AFRICA
                                                                                     AFRICA                             150                                                 132
                                  20                                                   17
                                                                                                                        100

                                  10                                                                                                                37.1%       33.5%
                                                                                                                         50
                                                                                                                              12.6%       18.4%
                                                                                                                                                                         10.6%

                                   0                                                                                      0

                                                                                                                              (% figures in second graph is % of women participants)

Figure 6: Number of countries and participants in Umbrella 1 programme workshops

The fundamental raison d’être for this programme remains the same given that the WTO
negotiations are still underway and developing countries and countries in transition still require
FAO’s assistance in participating in and profiting from the Multilateral Trade Negotiations. New
threats to the multilateral system continue to emerge and the longer the negotiations continue the
greater is the chance that new issues will emerge.

Staff in ESCP is positive about the accomplishments of the PAIA-AWTO. The synergies from
bringing together specialists from various disciplines are considerable, basically because all
policies that have a bearing on production or consumption may and usually do affect - or are
affected by - trade.


9. Conclusions on 223S1
ESC has undertaken many activities in relation to the PAIAs on Biotechnology and Organic
Agriculture and involvement in these PAIAs is appreciated for developing synergies with other
divisions and the joint information products developed under these PAIAs such as web sites and
fact sheets.

ESCP dedicates a large part of its work to assistance on WTO negotiations under the umbrella of
the PAIA-AWTO. However, the substantive part of this work falls under programme entity 224A2
which is not being evaluated. The PAIA maintains the FAO Trade web site. Activities under the
PAIA such as the assistance provided to Geneva based delegations have been widely praised. It is
hoped that the level of activities can be maintained under the Umbrella II programme.

When it comes to judging the adequacy of coordination machinery on commodity trade related
matters in FAO it must be recalled that many FAO activities have a bearing on trade and are dealt
with by other PAIAs, e.g. Biosecurity or are embedded in programmes to do with food security.
ESC involvement in the PAIA on Biosecurity could be considered.




                                                                                                                                                                                    25
PART III: INTERNATIONAL ACTION ON COMMODITY AND
TRADE ISSUES (224P4)
Under this programme entity, ESC carries out analyses of emerging global and regional trade
issues and policies. ESC provides advice on strategies to maximise benefits obtained from trade in
agricultural commodities. It develops methodologies to assess the impact of changes in commodity
and trade policies on international trade flows and food security.

This entity supports a variety of consultative mechanisms, including intergovernmental
consultations, expert consultations and outlook conferences. It aims to promote international
understanding and consensus about agricultural trade commodity issues.

Outputs under this entity for the period 1998-2003 are presented in Appendix 3.



10 The Committee on Commodity Problems
The responsibility of the Committee on Commodity Problems (CCP) is to keep commodity
problems of an international character under review. Membership in the CCP is for the biennium
only. Interested members of FAO need to apply formally for membership each biennium. Its
functions are enumerated in Rule XXIX of the General Rules of the Organization, see box 1.


 Box 1: Rule XXIX, paragraph 6:
 ‘The Committee shall:
    (a) keep under review commodity problems of an international character affecting
        production, trade , distribution, consumption and related economic matters;
    (b) prepare a factual and interpretative survey of the world commodity situation, which
        may be available directly to Member Nations;
    (c) report and submit suggestions to the Council on policy issues arising out of its
        deliberations. The reports of the Committee and its subsidiary bodies shall be made
        available to member Nations for their information.’

Currently the CCP has 88 members out of a total of 188 FAO Members. During 1998 – 2003
membership and attendance at sessions remained more or less constant, see figure 9. The number
of observers attending the meeting doubled between 1999 and 2001, including non-member
countries as well as other UN or intergovernmental organizations and non-governmental
organizations (NGOs). The number of NGO observers, including private sector organizations,
increased from 2 in 1999 to 9 in 2003.




                                                                                                26
                        CCP membership and attendance

   120
                                                                         CCP Member
   100                                                                   Nations
                                                        *
    80                                                                   Member
                                                                         delegations at
    60                                                                   meeting
                                                                         Observers at
    40
                                                                         meeting
    20
                                                                         Total Attendance
     0
           1998-99      2000-01      2002-03      Oct-04*

Figure 9 CCP membership and attendance 1998 – 2003
* Membership for the biennium 2003-2004 may still increase ahead of the meeting in March 2005

Recurring items on the CCP agenda are
   - The State of World Agricultural Markets and Outlook (or review of world commodity
       situation and outlook).
   - Trade policy developments
   - International Action / Activities of subsidiary bodies: the CSSD and IGGs
   - Activities of other bodies (Including the Common Fund for Commodities)
   - Follow-up to conference resolution 2/79 on Commodity Trade, Protectionism and
       Agricultural Adjustment.

Under Conference Resolution 2/79, which was updated and revised in 1983, the CCP is requested
to assess the impact of the results of the Multilateral Trade Negotiations, review developments in
protectionism and examine the scope for promoting trade between developing countries. The CCP
reviewed its reporting activities on this Resolution in 2001 in light of the Uruguay Round
Agreements and other developments since 1979. Although some paragraphs were dated, it was
concluded that many issues were still relevant.

Specific issues discussed during the period 1998-2003 are presented in Table 1.

Table 1: Non-standard agenda items of past CCP meetings:
1999:                         2001:                                      2003:
Projections to 2005           Policy issues: tariff peaks                Projections to 2010
Mandate of IGGs               Review of IGG system                       Tariff escalation
Trade issues facing Small     Technical assistance related               Trade-distorting support
Island States                 to Uruguay round                           policies
Review of FAO technical       Organic agriculture,                       Private sector standards
assistance related to Uruguay biotechnology and
round                         obligations under the TBT
                              and SPS agreements.
Environment and trade,        Review of reporting activities             Food import trends, import
biotechnology and the impact under Conference resolution                 surges and food security
of SPS measures               2/79



                                                                                                      27
11. The Consultative Subcommittee on Surplus Disposal
The Consultative Subcommittee on Surplus Disposal (CSSD) was established by the FAO in 1954
to monitor international shipments of surplus agricultural commodities used as food aid in order to
minimize the harmful impact of these shipments on commercial trade and agricultural production.
Over the years, members of the CSSD have developed a comprehensive set of rules and
procedures designed to assist aid-supplying countries to account for and identify the flow of food
aid shipments. These rules, endorsed by the major suppliers of commodity assistance, are
embodied in the handbook entitled Principles of Surplus Disposal and Consultative Obligations of
Member Nations.

The Principles were subsequently given a legal edge when they were specifically mentioned in
Article 10 on the Prevention of Circumvention of Export Subsidy Commitment of the Uruguay
Round Agreement on Agriculture (URAA). Furthermore, a group of countries have become parties
to the Food Aid Convention. Initially signed in 1967, the Convention has last been renegotiated in
1999 and specifies the general conditions under which food aid is to be provided, which
specifically take into account not only the URAA and FAO Principles of Surplus Disposal, but
also the recommendations contained in the World Food Summit Plan of Action set in 1996. The
grains group normally represents FAO at Food Aid Convention meetings.

The FAO Principles set out detailed procedures for reporting food aid to the CSSD by aid-
supplying countries including notification of the various categories of food aid, prior consultation
with other exporters and the establishment of usual marketing requirements (UMRs). The UMR is
a commitment by food aid recipients to maintain a “normal” level of commercial food imports in
order that food aid not does displace commercial trade. In practical terms, the UMR is
operationalized as the average of the preceding five years’ commercial imports for the particular
recipient country and commodity in question, but it also can take into account other special
circumstances.

The reporting obligations of aid-supplying countries vary according to the type of food aid
supplied and whether governments, private charitable organizations or multilateral agencies are the
vehicles for distribution. Meetings of the Subcommittee are held on a quarterly basis to keep track
of the continual flow of food aid reported to the CSSD. Much of the work of the Subcommittee is
done in bilateral consultations between formal meetings.

The CSSD is located in Washington DC and is serviced on a part time basis by the staff of FAO'   s
liaison office (one P5 officer plus 1 support staff). The budget of the CSSD has remained at the
same level in dollar terms during the entire evaluation period, meaning a de facto budget
reduction. However, the number of organised meetings has not been reduced.

ESCB provides the CSSD with statistics on trade in some basic foodstuffs, which are relevant to
establish the levels of the Usual Marketing Requirements. In addition, the grains group maintains a
food aid database and makes forecasts of food aid shipments and import bills. The CSSD also
obtains information from the International Grains Council and information on food aid shipments
from the World Food Programme (WFP). In addition, the FAO liaison officer in Geneva does keep
the CSSD informed on WTO discussions of relevance to the CSSD.

The agenda for CSSD meetings typically includes a review of new food aid notifications, follow-
up on action items from the previous meeting and the presentation of statements by members. The
CSSD occasionally invites guest speakers involved in food aid. When required, the CSSD sets up


                                                                                                  28
temporary working groups or convenes ‘brainstorming sessions’ to discuss certain topics in greater
depth.

During the 1998-2003 period, membership of the CSSD has remained constant at 41 members, 16
observer countries and 7 international observer organizations. However, the percentage of food aid
which has been subject to consultation reported through the CSSD has dropped since 1996, see
table 2.

Table 2 - CSSD Notification as compared to Global Food Aid Deliveries (000 MT)
                                  1996 1997 1998 1999             2000      2001
Total food aid shipments          7,228 7,322 8,375 14,985 11,339           11,021
                   1
according to WFP
% of total food aid subject to    63.2% 44.5% 51.5% 52.4% 50-51%2 50-51%2
consultation through CSSD
Source: CSSD: 39th report to the CCP,
1
    Food Aid Monitor, WFP (INTERFAIS), May 2002.
2
    Communication with CSSD Secretariat

In 2003, the CSSD reported to the CCP that several CSSD members have expressed concern over
the drop in food aid notifications since 1996 as it prevents the Subcommittee from fulfilling its
mandate. Several CSSD delegates also referred to discussions related to food aid that took place
between WTO members in the context of the agricultural negotiations.

Negotiations on food aid were included in the Framework for Establishing Modalities in
Agriculture, adopted in August 2004 by the WTO General Council. Thus, the outcome of the
negotiations in the Doha Round may well influence the future of the CSSD. Also the Food Aid
Convention is under renegotiation by its Members. In view of these developments, the CCP
session in 2005 will discuss the progress of these international negotiations concerning food aid
and the role of the CSSD.


12. The Intergovernmental Commodity Groups
History and mandate
Since its inception in 1949, the CCP has established subsidiary bodies only in response to the
emergence of particular problems in commodity markets and to findings regarding the need and
usefulness of such bodies. It established only 11 Intergovernmental Groups (IGGs) between 1955
and 1970. More recently, it abolished two IGGs and a number of sub-groups and approved
intergovernmental machinery for two commodity groupings in the form of sub-groups and the
extension of the mandate of existing IGGs.

Guidance to the IGG’s work was provided by Conference Resolution 2/79, which requests the
IGGs to assist the CCP to assess the impact of the results of the Multilateral Trade Negotiations
and developments in protectionism for trade in the main agricultural commodities with special
regard to the exports of the developing countries. Other guiding principles are those associated
with the development and facilitation of agricultural trade, as provided for under Commitment
Four of the Plan of Action of the World Food Summit. This commitment calls upon the
international community to promote financial and technical assistance to improve agricultural
productivity in developing countries and calls upon FAO to monitor developments in world food
prices and stocks and to assist developing countries in preparing for multilateral trade negotiations.


                                                                                                    29
Under its constitution, FAO is also required to collect, analyze, interpret and disseminate
information and to promote and recommend inter alia scientific, technological, social and
economic research; the improvement of processing, marketing and distribution of food and
agricultural products; and the adoption of international policies with respect to agricultural
commodity arrangements.

Initially, the emphasis in international agricultural policy was the quest for solutions to problems
of commodity market instability. Most of the IGGs thus included in their terms of reference the
objective of providing fora to consider the feasibility and desirability of some form of international
commodity arrangements. In addition, they aim to deal with “special difficulties” through
consultations between producing and consuming countries. Beginning in the late seventies,
commodity policy gradually shifted to the search for ways to improve the functioning of markets
to benefit particularly developing countries. As a result, greater emphasis in the work of the IGGs
was given to the problems associated with protectionism, especially as follow-up to Conference
Resolution 2/79.

Guidelines for national and international action have been approved by the IGG on Rice in 1971,
the IGG on Meat in 1986 and the IGG on Oilseeds, Oils and Fats in 1980. These typically include
guidelines for production, trade and environmental policies. These IGGs continue to monitor
policy developments in their member countries against the set guidelines.

Often the CCP and IGGs have served as technical bodies to examine ideas that subsequently found
their way into international negotiations. For example the early work on Producer Support
Estimates; the discussion of decoupled instruments; international cereal reserves; the Integrated
Programme for commodities with the United Nations Conference for Trade and Development
(UNCTAD) that led to the establishment of the Common Fund for Commodities; and the
rebalancing of the EU’s oilseed regime..


Institutional Arrangements
ESC senior commodity officers have been given the role of Secretaries of the IGGs. Some officers
are Secretaries of two IGGs or Sub-Groups. The Secretary is responsible for the organizational
matters of the IGG meetings. Furthermore, the Secretary, assisted by other staff in the group,
usually prepares a substantial amount of the background documentation, and oversees papers
prepared by external experts. All papers for IGG meetings are reviewed by the Secretary, the
Service Chief and the Division Director and - in the past - some also by the Assistant Director
General.

The Bureau of the IGG, consisting of the Chair and Vice-Chairs of the last meeting, makes
decisions whenever necessary in between sessions, for example to endorse projects for funding by
the Common Fund for Commodities. They are also consulted on the draft agenda of the next IGG
meeting. Any Member may send the Secretary suggestions for topics to be discussed at the next
meeting.

Documents are presented in English, French, and Spanish for all IGGs. In addition, about half of
the IGGs provide documents also in Arabic and the joint meeting of the IGGs on Grains and Rice
also in Chinese. For meetings held at headquarter simultaneous interpretation is provided standard
for English, French and Spanish and increasingly for Arabic as well. Elsewhere, delegates are
requested to indicate their interpretation needs when registering and simultaneous interpretation is
provided accordingly. It would be worthwhile to explore whether this system could be applied for
meetings at headquarters as well, which could lead to considerable cost savings.

                                                                                                   30
The estimated overall costs per biennium, including staff charges for an IGG session, held once a
biennium, have been reduced to about US$250,000. In comparison with international commodity
organizations these budgets are modest, though some organizational overhead costs are absorbed
by other parts of FAO. In addition, outside commodity organizations maintain their own statistical
services, while ESC’s statistical work and commodity monitoring, outlook and projections are
charged against the budget of other programme entities.


Organizational developments during 1998 -2003

In 1997 the Conference adopted Resolution 13/97 calling for the abolition of selected statutory
bodies. As a result, the CCP abolished the following IGGs and sub-groups in 1999:

Intergovernmental Group on Cocoa (reconfirmation of decision of 1997)
Intergovernmental Group on Wine and Vine Products
Sub-group on Rice Grading and Standardization
Sub-Group on Statistics of the IGG on Oilseeds, Oils and Fats
Sub-Group on Cocoa Grading
Sub-Group on Statistics of the IGG on Bananas
Sub-Group of Exporters of IGG on Bananas
Sub-Group of exporters of IGG on Tea
Sub-Group on promotion of IGG on Tea

The in 1998 installed IGG on Tropical Fruits was merged with the IGG on Bananas. The IGGs on
Jute and Hard Fibres hold joint meetings as a standard procedure.

In addition, a major reform of the IGG system took place between 1997 and 1999, to increase its
efficiency. Changes included a shift from annual to biennial meetings, a reduction in the length of
meetings and of the report, and joint meetings of some IGGs. Experience with some of these
changes was less positive and created dissatisfaction among staff and member countries. Thus the
CCP endorsed the requests of the IGGs on Grains, Rice, Meat and Oilseeds to hold their meetings
separately in future after the difficulties experienced in their experimental joint meeting. The IGGs
on Grains and Rice, however, continue to convene joint meetings.

The changes introduced in the period 1997-1999 provided ESC staff with time to do other things.
One staff member recalls: “Before [these changes] we finished one meeting and started
immediately organizing another one.” These other activities fall mainly under other programme
entities not under evaluation.

The CCP opened the possibility to adopt the report within two weeks after the meeting, but some
IGGs prefer to adopt the report at the meeting, as before. The CCP endorsed the increasing use of
e-mail and internet for disseminating regular information, but urged that these media should
supplement rather than replace more traditional means of communication.

In some IGGs, part of the more technical programme was shifted to more informal and open
meetings prior to the official IGG. The holding of informal consultations or symposia in
conjunction with regular meetings of the Groups gave the chance for greater contacts with private
sector operators and more informal contacts with governmental delegates. The CCP welcomed
these innovations and the increasing involvement of the private sector in the IGG activities.


                                                                                                  31
Substantial development 1998-2003
In 1996 the value of world exports covered by IGGs was US$225 billion, or 45% of total trade in
agricultural (excluding forestry and fishery) products. By comparison with earlier periods, this
coverage had declined slightly. In this light, the CCP asked the IGGs to include greater coverage
of processed products and/or extension of their mandate to related commodities.

As a result, the IGG on Grains adopted pulses and roots and tubers and the IGG on Meat included
dairy products in its coverage. This extension of mandates, the creation of a (sub)group on
Tropical Fruits and the abolition of others significantly changed the commodity coverage of the
IGGs. This meant also the expansion (and sometimes the creation) of databases and projections
and analysis of new issues.

Following the Uruguay Round of Multilateral Trade Negotiations, the IGGs played an active role
in assessing the impact of resultant agreements on trade and of the various commodities and on
food security. These discussions have heightened awareness among countries of the need for
adequate preparation for future rounds of negotiations.

Examples of action and of discussions feeding into to international negotiations by IGGs during
the period 1998-2004:
    • The IGGs on Hard Fibres and Jute continued recommending indicative price ranges at each
        meeting.
    • -The IGGs on Rice, Meat and Oilseeds, Oils & Fats continued to evaluate policy
        developments against their own guidelines.
    • -The Subgroup on Hides and Skins developed a proposal for a revision of the Standard
        international Trade Classification, which was submitted to the World Customs
        Organizations. As a result, the classification was changes in January 2002.
    • -In its meeting of 2003 the IGG on Tea decided to collect scientific information on
        Maximum Residue levels for validation at the Joint FAO/WHO Meeting on Pesticide
        Residues and subsequent submission to the Codex Pesticide Residue Committee, with the
        purpose to contribute to the harmonization of MRLs in tea.
    • The IGG on Bananas in 2003 discussed the imminent changes to the EU banana import
        regime, which many delegates used to express their views on the proposed regime. The
        discussion will likely continue in the next IGG meeting and under the framework of the
        WTO.

Other new areas of analysis included the impact of production and trade of commodities in
combating poverty and food insecurity, und Agreements on food security, environmental issues,
biotechnology and markets for certified organic products.


13 Views from ESC staff regarding the IGGs and CCP
A survey under staff was conducted with the help of a questionnaire on the IGG system and the
CFC projects, see appendix 4. For an overview of results of the staff survey with respect to the
IGG system, see appendix 5. Additional information was obtained from 16 interviews, which
lasted between 30 minutes and one-and-a-half hour and two staff meetings




                                                                                                   32
Organizational issues
The changes to the IGGs outlined above have been initiated by both the CCP and ESC and out of
budget considerations as well as in response to the changed commodity and trade environment.

There is a consensus among staff that the organization of IGG meetings is done very efficiently
and very little can be improved here. Holding joint sessions saves time for some staff members
who contribute to organizational matters, but not for all. Joint sessions also save money. Overall it
was felt that the IGGs cannot be merged further nor broaden their scope further, because this
would lead to a loss of focus, erode the common ground of the membership and hamper the
functioning of the groups.

It was agreed that a strength of the IGGs is that they can draw on expertise from across FAO.
However, technical divisions not always understand what the function of the IGGs is and both they
and ESC do not realize sufficiently that it is FAO as a whole that is the IGG Secretariat. To
underline the importance of the IGGs it may help if requests for technical assistance from other
divisions are communicated at Service Chief or Director level.

It was also agreed that it would be beneficial to increase non-governmental participation, both as
part of delegations and as observers. If they are accredited to be part of delegations, they are bound
to speak on behalf of their government. If they are observers they may speak on their own behalf.
Obtaining observer status for just the scope of the IGG is straightforward for international non-
governmental organizations that do work related to the IGG.

Informal meetings that are held back-to-back with formal IGG sessions are believed to
considerably increase the attendance at IGG sessions. The extra workload was felt to be more or
less in proportion with the extra attendance, although there was some variation in the answers. In
interviews, most staff felt that the extra workload was certainly worth it, especially to increase
attendance but also for the quality of the discussions and the positive feedback from participants.

Many officers consider it very helpful to organize IGG meetings away from headquarters. This is
believed to increase participation from governmental representatives most involved in the specific
commodity. When the IGG meeting is held in Rome, many governments are presented by the
permanent representative to the FAO. Developing countries can not afford to send additional
commodity specialists from the capitals. Furthermore, organizing the IGG in turn in different parts
of the world may better distribute travel costs and time. An added advantage is that the host
country is often prepared to pay for extra events such as field trips or to support travel costs from
participants from developing countries.

Sending out invitations well in advance to allow for lengthy visa application procedures may
attract more commodity policy makers from capitals. These invitation should include explanatory
notes on the agenda items to explain the importance or interest of the meeting.

Four staff members proposed to shorten the official IGG sessions to short business meetings for
endorsement of CFC projects and other matters for which an intergovernmental formal setting is
required. All the substantial papers could be discussed during a more informal meeting prior to the
official part, in which the private sector and NGOs should have a prominent role.
Recommendations from the informal meeting could be made for consideration by the formal
sessions. Some IGGs already work this way. Because in the informal part governmental and
private/non-governmental organizations have a more equal status (in contrast to the delegate-
observer division in formal IGG meetings) this model would enhance FAO’s ability to facilitate
dialogue between governments and the private sector.

                                                                                                   33
A disadvantage of this model is that it requires all the formal arrangements for a very short session
only, for which it may not longer seem worthwhile. Furthermore, as these open informal meetings
will still need the same level of documentation, translation and interpretation, this model will not
lead to savings and should not be considered as such. The informal meeting should be seen as an
integral part of the whole IGG system.

Other proposals were to set up special panels to report to the IGG on topical issues; to establish
mixed membership working parties of the parent IGG; and/or to invite speakers with controversial
views. Member countries could be encouraged to present “non-papers” i.e. papers that do not bind
countries and which are presented to stimulate reactions. Different countries could present
contrasting “debating” papers, again without commitment.

Meetings that need to provide translation and interpretation in many languages face constraints in
introducing some of these innovations, such as break-away discussion groups or consultations on
the draft agenda.


Content

According to staff, the main benefit member nations derive from the IGGs are unbiased
information and a platform for discussion on commodity policies (especially for developing
countries). These IGGs are often the only intergovernmental mechanisms to discuss the issues
specific to individual commodities. The IGG on Grains exists alongside the International Grains
Council, but the membership of the two bodies is considerably different and the agenda of the IGG
is much broader. However, overlap may occur in the discussions on trade and food security, a
subject that is discussed prominently in the IGGs on basic foodstuffs but also in the Committee on
Food Security (CFS).

Most respondents to the questionnaire felt they had enough knowledge of the needs and priorities
of the members of the IGGs. Some, however, would welcome more direct communication with
delegates in between sessions to better assess needs and priorities with respect to recent
developments.

According to the survey results, the content of the IGG agenda is mostly influenced by decisions
of the ‘former IGG meeting’ (95%), ‘recent events’ (86%) and to a lesser extent by ‘interest of
staff members’ (33%) and ‘available material within the division’ (24%). Some officers are of the
opinion that, in addition to the Bureau of the IGG, Member Governments should be given the
opportunity to comment on the draft agenda. One IGG organises inter-sessional meetings. Some
IGG’s designate a working group that meets after the plenary to set out priorities for the next
meeting and whose members may be consulted later should the Secretariat wish more guidance to
respond to recent events.

According to staff, agenda items were most appreciated as a result of being ‘topical’ or when they
‘led to a lively debate’. ‘Good presentation skills’ and for some items the fact that ‘FAO is the
only source of such information’ were also seen as important factors in the success of the meeting.
If staff felt certain agenda items had not been appreciated they attributed this to 1) ‘a duplication of
information/analysis also provided by other organizations’, 2) ‘not being topical’, 3) ‘leading to a
hostile atmosphere due to strong disagreement by participants’ or 4) ‘being too difficult’.



                                                                                                     34
The seventeen staff members who commented on their own latest paper for the IGG, rated them all
quite interesting or very interesting.

Staff members interviewed considered ‘active participation’ by delegates in the meetings the most
important aspect by which to rate the success of a session. ‘Active participation’ meaning not only
asking questions about the papers presented, but also contributing to the discussion and making
suggestions for activities and strategies. Many staff members also felt that delegates could be
given a more active role in the meetings, for example through making their own presentations.

Ideally the meeting would also reach some conclusions, for example in the form of suggestions
for intergovernmental action to solve commodity problems or for further analysis by the
Secretariat. At the same time, staff acknowledges that IGGs are not decision making bodies in the
sense that they do not have any enforcing mechanism to ensure that decisions are implemented by
the members. This in turn reduces the pressure to find consensus and take decisions at all, although
tough negotiations often take place on the report of the meeting.

Those IGGs, the members of which have more shared interests, have more incentives to decide on
collective action. These IGGs are generally considered to function better.

Some Secretaries felt it essential that the Secretariat should always follow-up on any suggestions
or decisions from the meeting. If not, this would discourage participants to make suggestions or to
try to reach consensus for action. Others however signalled that some wishes from the meeting
were unrealistic given ESC’s financial and human resources or so vague that it left ample scope
for different interpretations.

To enhance follow-up to the meeting, the IGG on meat will experiment with a ‘virtual IGG’, an
internet site on which delegates can post messages. Contributions can be made in the language of
choice of the contributor, but they will not be translated.

Furthermore, staff was of the opinion that the relation between the IGGs and CCP should be
strengthened. The IGGs could forward challenging papers that have significance beyond the
specific commodity with their own comments and recommendations for CCP’s consideration.

However, CCP sessions are too infrequent to keep momentum and an officer suggested holding
annual CCP meetings. CCP meetings could also be strengthened by holding them back-to-back
with multi-commodity outlook conferences. This would require extra resources to be made
available for the CCP. Some staff members also called for more policy analysis and provoking
ideas to be presented to the CCP to enhance the analytical debate.


14 Results of a survey of CCP and IGG participants
A questionnaire was sent to all Members of the CCP through the official channels, see appendix 6.
In addition, all participants of former IGG meetings of whom an e-mail address was known were
sent the same questionnaire via e-mail. In total 30 replies were received. An overview of results is
presented in appendix 7a. Some of the questions were the same as earlier evaluation surveys of
the CCP meeting of 2003 and the IGGs on Hides and Skins (Dec. 2003), Rice (2004) and Meat
and Dairy (June 2004). All surveys together have an aggregate response of 127 replies, see
appendix 7b. Where appropriate, these combined results are also discussed.

Furthermore, telephone interviews were held with representatives of partner organizations who
had attended CCP or IGG meetings as observers. These interviews were semi-structured and

                                                                                                 35
consisted of open questions, which are presented in appendix 6b. The results can be found in
appendix 7c.


Organizational aspects and format

The duration and frequency of meetings seems to be about right, although 7 respondents wished to
see more frequent meetings. Half of respondents preferred the IGG meeting to be organised in a
host country, whereas 20% preferred FAO Headquarters and 30% had no preference. Of the six
respondents who preferred FAO Headquarters four had participated in at least 1 meeting in a host
country and only 1 was a representative based in Rome, although three others were based
elsewhere in Europe.

On average the respondents rated the facilitation of the discussion and drafting of the report as
good. However, the facilitation of the discussion was rated “poor” by two respondents, the highest
number of ‘poor’ ratings of all questions. All persons interviewed by telephone rated the
organization of the meetings as good or very good.

Informal events such as field trips and informal, open, and back-to-back meetings were
appreciated. All who had participated in such informal side-events would like to see them
organised in the future as well. Of the thirteen respondents who had not yet participated in an
informal back-to-back meeting, ten would like to see the organization of such events in the future.
It should be noted here that many participants of the Rice conference complained that many
documents were available in English only. Several respondents of surveys on the IGGs on Hides &
Skins, Grains & Rice and Meat & Dairy called for more time for discussions.

Many participants would also be happy to play a more active role in the meetings. Twenty three
out of twenty five respondents would like to participate more actively in discussions, e.g. in round-
table discussions. Sixteen would like to contribute to the agenda and 14 respondents would even
like to give a presentation.

Nine respondents would like to see more communication in between sessions in one form or
another.

One delegate from Latin America wrote: “Maintain a more active exchange among member
       countries and between them and the Secretariat in between sessions.”
One respondent from Africa wrote: “Create groups for reflection around themes between sessions;
       those reflections will feed the debate in the session.”

In this light it is interesting to note that sixteen out of thirty respondents normally are not in
contact with the Secretariat in between sessions. The fact that they nonetheless took the effort to
return the questionnaire indicates a real opportunity for the Secretariat to involve the IGG
participants more actively in the meeting, its preparation and follow-up. However, the
implementation of some of these ideas may require changes in the operating rules for these bodies.


Content

Meeting documentation was rated useful to very useful by participants. Only one participant did
not share the documentation with colleagues while 63% of respondents did share all
documentation. The documentation was especially appreciated for its “presentation & readability”

                                                                                                  36
and the “relevance of the topics”. It was least appreciated, although still positively, for the
“validity of the conclusions” and the “clarity of the recommendations”. The combined results of
the five surveys show almost the same pattern with the “presentation & readability” scoring
highest and “comprehensiveness of coverage” and “validity of conclusions” scoring lowest,
although still “good” (The question about the relevance of topics was not asked in the other
surveys).

Overall, the IGG meetings were rated useful to very useful for the work of the participant. The
IGGs are especially appreciated for the “information provided”. They are also much appreciated
for the “opportunity to collaborate with other countries/organizations in activities to solve
commodity problems” and for the “analytical insights for policy development”. However, it should
be noted that all eight benefits suggested were selected regularly by respondents. Thus the IGGs
fulfil all these functions, including “influence on the work programme of ESC”, “insights that can
be used in other negotiations”, “promotion of commodity projects’ and ‘to promote/defend once
own policies’.

Representatives from partner organization interviewed by telephone also found the meetings useful
and often stressed they appreciated ESC statistics, market reviews and short-term outlook for their
neutrality, credibility and global scope. The most important aspect for them was to physically meet
people to discuss developments and to coordinate their work to avoid duplication.

Many respondents made suggestions for further improvement of the IGGs. Six called for more
involvement of the private sector. Six respondents would appreciate the meetings to focus more on
specific themes instead of trying to cover everything in an omnibus agenda. Among them, two
called for a halt to joint meetings, another to organise break-out groups so you could select the
theme of most interest.

In addition, five respondents would like to improve the action-oriented functions of the IGGs, such
as the discussions on CFC projects. Suggestions in this area included more solution-oriented
proposals from the Secretariat and setting deadlines for action, followed-up by a monitoring group.

A suggestion from another survey was to distribute the list of meeting delegates and their contact
details to enable participants to get in touch with each other after the meeting.

The need for a better focus of the meeting was also mentioned in the telephone interviews.
Observers from technical institutions who came mainly to discuss CFC projects often felt the
political and trade discussions were not of interest to them and they also thought that the technical
project issues were of no interest to representatives of countries not involved in the project.

Some interviewed observers noted the lack of commodity specific knowledge of some of the
delegates. Others noted the lack of collaboration within FAO. “Two years ago I was invited to
FAO to see all officers dealing with [this commodity] and I was surprised that some did not even
know each other.” One thought FAO’s competitive advantage in relation to other organizations
was its presence in so many countries, but that FAO did not use it well.

A specific focus of the telephone interviews was the potential duplication of work between the
different organizations. However, 11 out of 14 respondents were of the opinion that the work was
complementary and two even found their work so far apart that there were hardly any areas of
common interest.



                                                                                                   37
 Potential duplication with the World Bank is no longer an issue since the World Bank has reduced
its number of commodity experts to 3, who have to cover everything, including metals and
fertilizers. For specific IGGs there may be duplications with some OECD meetings, although
OECD membership to OECD is restricted. Especially issues and commodities that are mainly of
relevance to developing countries do not get discussed in OECD meetings. Furthermore,
duplication is avoided by the current joint work on the Commodity Simulation Model (COSIMO).

For ‘big’ commodities like grains, rice, meat and bananas there are furthermore many research and
private sector meetings. But these other meetings do not always attract many government
representatives. Duplication in content is or can be avoided by concentrating the IGG meeting on a
global market review and outlook, governmental issues (policies) and issues of particular interest
to developing countries.

Special attention should be given to coordination with UNCTAD to avoid too much overlap.
Because of UNCTAD’s mandate on trade and FAO’s mandate on agriculture, work on trade in
agricultural commodities is bound to be done in both organizations. However, UNCTAD does not
have an intergovernmental body on agricultural commodities that meets regularly, like the CCP.
ESC staff has reported that UNCTAD sometimes has entered commodity specific work that is
clearly within the mandate of ESC and for which UNCTAD relies heavily on ESC data and
publications. On the positive side, there may be opportunities to join forces, like the current
collaboration on commodity financing and the International Task Force on the Harmonization of
Organic Guarantee Systems. Duplication may occur on analysis of market structures and the value
chain and this should be better coordinated. Work on WTO related issues is already coordinated
through the FAO liaison office in Geneva.

Persons interviewed were not of the opinion that IGGs had become irrelevant due to the changed
commodity environment and WTO. Some said that the CCP/IGG system had already changed with
it. However, some warned that if the IGGs continued with ‘old activities’ such as indicative price
setting or if they did not involve the private sector (according to private sector representatives),
they may become irrelevant in the near future. They did see a function of the IGGs to bring the
public and private sectors together.

There is room for the IGGs and CCP next to the WTO because in the WTO there are only
negotiations on tariffs and trade rules, whereas there is a need to discuss market developments and
analyse the impact of government policies and WTO rules. Some considered FAO the only
organization that could bring together all relevant stakeholders. FAO has the background
information necessary to start analysis and discussion. In CCP/IGG it is easier to express views
than in the WTO.


15. Other conferences, expert consultations and activities for
non-IGG commodities.
During the period 1998 - 2003 various commodity conferences and expert meetings have been
organised, see Table 3.




                                                                                                 38
Table 3. Conferences and expert meetings organized outside the IGG-system
Conference                                         year               FAO role
China International Cotton Conference              1999,              Co-organizer,
                                                   2001, 2003         Support
International Prospects for Dairying in the next   1999               Support
WTO round, Argentina
Internet conference on prospects for dairying in   Sept-Dec 1999      Organizer
next WTO round
Advisory Consultation on Sugar Policy and Trade 1999                  Co-organizer
of ACP countries, Swaziland
FAO/Cuba International Sugar Conference            1999               Co-organizer
FAO Mozambique International Sugar Conference 2002
School milk conferences in South Africa, UK,       1998 - 2003        Support
Australia, Thailand, Austria, Czech Republic,
Colombia, Canada, China, Lebanon, Finland,
Uruguay, Sweden, Mexico, USA.
Global Cassava Strategy Validation Forum           2000               Co-organizer
Diversification of Exports in the Caribbean/LA     2001               Main organizer
region through Organic Horticulture
China Citrus conference                            2001               Main organizer
Expert consultation on tea market issues, USA      2002               Co-organizer
Consultation on commodity price problems           2002               Organizer
Consultation on policies and international action  2003               Organizer
for commodity development
Expert meetings on social and environmental        2000, 2001, 2003 Organizer
responsible horticultural production and trade,
Rome, Costa Rica and Germany
Symposium on the state of research and future      2003               Organizer
direction in agricultural commodity markets,
Rome

These conferences often involve a close collaboration with other international organizations such
as the International Sugar Organization, World Bank, UNCTAD and the UNCTAD/WTO
International Trade Centre, IFOAM and national commodity organizations.

Most of these conferences and expert consultations have been realised with help of external
funding. For example, the successful cotton conferences cost ESC only staff travel. The
conferences were organized by the Chinese government with technical support from FAO.
Because China is the world largest cotton producer and consumer, but is not a member of the
International Cotton Advisory Council, this now two-yearly conference fills a gap in international
information exchange and analysis. The number of participants to the conference have gone up
steadily, from around 100 participants in 1999 to 450 participants in 2003.

Another example are the school milk conferences, for which FAO has co-operated with a number
                                  s
of national organisations. FAO' role in these conferences is principally in the area of planning the
technical programme and serving as a central contact point. Topics covered depend on the
particular interests of the region; however, typically, these include an international overview of
school milk programmes, the role of milk in child nutrition, and the administration and financing
of school milk programmes.



                                                                                                  39
Furthermore, the ESC Director was the FAO focal point for the UN ad hoc Interagency Task Force
on Tobacco Control and in that capacity held consultations with the World Health organization,
WTO & UNCTAD and led a multidisciplinary tobacco adjustment study mission in China in 2000.
In this context ESC also executed a study project paid by Sweden to develop a model to project
tobacco supply and demand and analyse the potential economic effects in producer countries of a
weakening demand for tobacco.

In addition, ESC staff has been invited to many conferences and consultations organised by other
organizations, in many cases to present papers. Indeed, interest in ESC expertise has been so high
that many invitations had to be turned down, even in cases where the organizers offered to pay
travel costs.

Staff welcome the conferences as they enable them to improve their contacts with the trade and
respond to needs of Member Countries. They built up contacts and improve collaboration with
other international organizations involved in the sector.


16. Discussion and conclusions
Programme design
Programme Entity 224P4 has a wide remit, covering all agricultural products up to a certain degree
of processing. The role of the CCP, the IGGs and other commodity conferences is to provide
members with authoritative, independent information and to offer them a forum for discussion
based on carefully prepared documentation, which draws on FAO’s wide range of expertise.

Much of the information presented at the CCP, the IGGs and the other commodity conferences
comes from work done on other Programme Entities on market outlook and on assisting Members
with their WTO commitments. At the same time, work under this Entity assists the market
assessment via the added technical knowledge and wider contacts/ networks that this Entity
involves. Cross-fertilization with the work under 224A2 has been significant with the assessments
of the impact of trade liberalization on commodity markets and explorations of options on sugar
reform.

Often the CCP and IGGs have served as technical bodies to examine ideas that subsequently found
their way into international negotiations. In the mid/late nineties there was much activity on
assessing the impact of the Uruguay Round on commodity markets as well as a lot of fresh work
on environmental-commodity linkages. Today the emphasis has shifted to examining options for
future negotiations and to undertaking studies on biotechnology and organics.


Changing trade environment
The CCP and its IGG-system have had to adapt to profound changes in the commodity and trade
environment. First and foremost, the interest in International Commodity Agreements waned.
Instead, the international negotiations affecting agriculture, including commodity trade, gained
importance in the WTO.

Second, partly as a result of the WTO negotiations, the direct role of governments in commodity
trade has decreased. Tariffs, quota and other measures directly influencing trade have been
reduced and some governmental marketing organizations have been privatised.



                                                                                                   40
Thirdly, developments in communication technologies have increased the exchange of data and
expanded the sources of commodity information outside the meetings.

Considering the past six years, one has to conclude that the IGG system has been flexible and
changed both form and content to adapt to these changed circumstances. The IGG system was
however still considered useful to analyse the impact of these changes, the impact of government
policies in the new trade environment and the impact of WTO on commodity production and trade
and its relation with development. Furthermore, because of the decreased direct involvement of
governments in trade, many members and partner organizations see a role for the CCP/IGG system
to bring public and private sector actors together.


Different commodities, different IGGs

The political and trade environments are not the same for all commodities, therefore also the IGGs
differ in nature.

The IGGs on Hard Fibres; Hides & Skins; and Tea offer a truly unique opportunity for actors in
the commodity to meet and are characterised by an active participation of delegates and a high
sense of ‘ownership’ in the meetings. FAO is the only organization that does any significant work
on statistics and on market and policy analysis for these commodities. The IGGs on Grains, the
IGG on Oilseeds, Oils and Fats; the IGG on Meat and Dairy and the IGG on Tropical Fruits do
cover a variety of commodities. For some of their ‘sub-commodities’, these meetings are also
unique occasions, although they may not be the central focus of the meeting.

For the other commodities covered by the IGGs some of the presented information and analysis is
still exclusively discussed at the IGG meetings, especially relating to developing countries.
However, for part of the information there are alternative sources and there are other meetings
with overlapping agenda’s. It is not that these IGGs duplicate other meetings, but congresses
organised by the private sector or research institutes often include a market review in their
meetings (for which they may invite an ESC staff member). Technical issues that are discussed
elsewhere may also be discussed in the IGGs, but then with the focus on their impact on trade,
making the meetings more complementary rather than duplicating.

For these IGGs the nature of the meeting differ highly from meeting to meeting, depending on
such factors as timing, agenda, recent developments in the commodity and the location of the
meeting. For example, the latest meetings of the IGGs of Rice and Grains have been in Rome
because of the growing difficulties to find government prepared to host the meetings. As a
consequence, the meetings were mainly attended by Rome-based representatives.

Furthermore, IGGs on basic foodstuffs may have relatively more attention for production policies
whereas the other may have relatively more attention for trade rules. But again, this may vary from
meeting to meeting.


Strengths and Weaknesses of the CCP/IGG system
One has to ask the basic question about the need and function of the IGGs. Reasons for
maintaining the IGG system can be summarised as follow:

   •   The global scope of the information presented, including data that are not available
       elsewhere, and the neutrality and credibility of the analysis by ESC.
                                                                                                41
   •   They are the only intergovernmental mechanism to discuss commodity specific issues for a
       large number of agricultural commodities. An indication of this importance has been
       demonstrated by the IGGs on Jute and Hard Fibres that hold intersessional meetings since
       the CCP reduced the frequency of IGG meetings. Especially in times of problems or
       changes regarding the commodity, interest in and appreciation for the IGGs increase. In the
       past, interest in the IGGs on basic foodstuffs was intense during the various crises that have
       affected the world, the last in the early 90’s. Recently this has been observed in the IGG on
       meat during the BSE crisis and the last IGG on bananas ahead of the change in the EU
       import regime, to name two examples.

   •   The discussion of issues that are of specific interest to developing countries, and the
       platform these meetings provide to developing countries. Other fora for agricultural
       commodities do not provide this opportunity. This is highly appreciated by developing and
       developed countries and by the private sector.

   •   FAO can draw on both economic and technical expertise from its various divisions to
       present delegates with an appropriate technical analysis. For example, in various IGG
       meetings staff from the Nutrition Division and the Plant Protection Division has been
       invited to present on SPS related issues and staff from the Sustainable Development
       Department has been involved in debates on environmental aspects of trade. The IGGs
       offer a platform to discuss a specific commodity from a multidisciplinary standpoint.

   •   FAO is in a unique position to bring together governments, the private sector, NGOs and
       academia.

Apart from these strengths, the IGGs have also proven to be flexible in adapting to the changed
trade environment and are organized smoothly and efficiently.

A weakness of the system is the limited involvement of the private sector and non-governmental
organizations and more importantly the limited participation of commodity experts and decision
makers from member governments. It is also unfortunate that the United States and China often do
not send delegates, even for these commodities for which they are an important producer or
importer.

In addition, there is little communication with delegates in between sessions and sometimes IGG
meetings are stand-alone events, especially in those cases where governments do not send the
same representatives to consecutive meetings. Some IGGs have a very broad mandate or the
meeting tries to cover a too wide area of topics in one session.

Another weakness has to do with the nature of the decisions taken. In recent years the IGGs have
decided on various stages of CFC projects. It must, however, be said that the bulk of decisions
taken at the IGGs have been recommendatory. The limited decision making role of the IGGs may
result in a lack of debate. However, tough negotiations often take place on the substance of the
report of the meeting and on sensitive issues governments take care over the wording of the
recommendations.




                                                                                                  42
Opportunities and threats

Opportunities and threats are external developments that may influence the functioning of the
CCP/IGG system.

One continuing development is the decreased importance of direct export restrictions or import
quotas and tariffs, and the growing relative importance of technical barriers to trade. This should
be seen as an opportunity. Analysis of the impacts of technical barriers on trade requires a
combination economic and technical expertise. FAO, with its economic and technical departments,
is in a unique position to assist countries in this analysis. For some commodities, this would
require an increased collaboration between ESC and the technical divisions.

Another recent trend is the increase in the number of regional trade agreements, which make the
analysis of national trade policies more complicate. This would indicate an increased need to
analyse and discuss commodity specific trade policies at intergovernmental meetings.

Recently, there is a growing number of questions coming to ESC in relation to ongoing trade
negotiations. These questions not only show the continued relevance of ESC expertise but could
also guide agenda setting for CCP and IGG meetings.

Furthermore, many questions remain about the impact of trade on food security and livelihoods, a
theme that is at the core of FAO’s mission, and may be further explored in the framework of the
CCP and IGGs.

The decreased direct involvement of governments in commodity trade could be a threat. But there
are still a lot of government policies that have an impact on trade. Therefore intergovernmental
mechanisms to discuss these impacts are not likely to become irrelevant soon. However, because
of this diminished role of governments, there are also less commodity experts in governments to
contribute to these intergovernmental discussions. The increased importance of the private sector
could also be seen as an opportunity, with FAO as a neutral party being one of the very few
organizations that can bring the public and private sectors together for analysis and discussion.

The budget cuts for FAO form a clear threat to the CCP/IGG system. The meetings are already
efficiently organised and the IGGs have merged or hold joint meetings where possible and no
further savings can be made without decreasing the quality of the meetings. Some respondents to
questionnaires/interviews even said FAO should spend more money on the IGGs, especially to
sponsor delegates from poor countries to attend and to follow up on ideas generated at the meeting.

Not a real threat but more a point of attention should be a potential duplication of work between
ESC and UNCTAD, which may be easily avoided through regular coordination.


Conclusions and recommendations
Over the years the programme has evolved in line with changing requirements of Members.
Because there is the continuous feedback from Members of the CCP/IGGs there is little chance of
these programmes getting out of line even though not all requests can be met. The Entity is
considered as valuable and efficiently delivered by Members and the quality of the papers is
generally considered to be good by recipients.

The CCP and IGG system will retain is relevance as long as governmental policies will continue to
have a considerable effect on trade. For the moment this is certainly the case. To fully realise the
                                                                                                    43
potential of the CCP and IGG system, it is essential to ensure the members are represented by
those who take decisions on commodity issues and that these representatives actively participate in
the meetings to ensure a real dialogue between members. It is furthermore necessary to increase
the involvement of technical divisions, the private sector and other non-governmental
organizations in the IGGs, but not at the cost of government involvement. On the contrary, the
private sector representatives are interested in these meetings because of the dialogue with
governments, and this reinforces the need for active participation of government representatives.
ESC should therefore continue to organise informal thematic meetings in conjunction with IGG
and CCP sessions to increase the involvement of non-governmental stakeholders. The Groups
could also forward challenging papers with their own comments raising issues for CCP’s decision.

There is scope to give government representatives a more active role in the meetings, through
consultations on the agenda and round-table discussions during the meeting. Countries could be
encouraged to take more ownership of ideas for discussion at the IGGs either by having countries
themselves present what are known as non-papers at the WTO i.e. papers that do not bind
countries and which are presented to stimulate reactions. Different countries could be invited to
present contrasting “debating” papers again without commitment. Further, speakers could be
invited to address the meeting with controversial views. The presumption is that all these
proposals would have a greater effect if meetings were held away from FAO Headquarters, even
though not all Members support this proposal.

Other innovations could include setting up special panels to report on topical issues or establishing
mixed membership working parties of the parent IGGs (more informal than the sub-groups that
existed in the past). It should be recognised however that such innovations may bring extra costs,
especially if an IGG has to operate in many languages.

The current strengths of the meetings seem to be in FAO’s neutrality; the global scope and
credibility of the data and analysis presented at the meetings; the intergovernmental dialogue, e.g.
between exporting and importing countries; its focus on issues of interest for developing countries;
and its ability to draw on expertise from across FAO. Any innovation should preserve these
aspects.

It is not possible to set priorities for the future content of the meetings, as they should change with
the developments in the commodity markets. In general. however, many members and partner
organizations see a role for the IGGs to bring together public and private actors. In addition, more
analysis seem required on the impact of technical barriers to trade, which are often very
commodity specific. Also the impact of the increasing number of bilateral and regional trade
agreements may require further attention from the IGGs as well as issues that are currently debated
in the DOHA round of negotiations. The impact of trade on food security and livelihoods remains
relevant. Current topical issues are the developments in China, biotechnology and organic
agriculture, but it is difficult to foresee for how long.

It would be beneficial if CCP and IGG Secretaries discuss annually with each other to learn from
experiences with such innovations and to formulate joint recommendations for consideration by
the CCP on the functioning of the IGGs.

ESC should continue its work on other commodities and organise commodity conferences and
expert consultations on commodities not covered by the IGGs and to respond to emerging issues.




                                                                                                    44
PART IV: MEASURES TO ENHANCE COMMODITY AND TRADE
DEVELOPMENT (224P5)
This Project Entity is designed around Members’ requirements, particularly developing countries
and countries in transition, for assistance in formulating appropriate commodity and trade
development strategies, including for diversification, and introducing related institutional
measures to attract investment to the commodity and trade sector. It also supports the formulation
and monitoring of commodity development projects, mainly from the Amsterdam-based Common
Fund for Commodities (CFC).

The major body of work under this entity is related to projects funded by the Common Fund for
Commodity. The work with the CFC began in the early 1990s, when the FAO was designated as
the International Commodity Body (ICB) for a range of basic and tropical commodities. From a
slow start the work involving ESC has grown to the point where almost 50 projects have been
developed together with project sponsors to the CFC, which involves substantial inputs from ESC
staff, and then supervision of the projects during the 3-5 year implementation phase.

In addition, ESC staff has contributed to other projects, such as technical backstopping missions to
Trust Fund projects. Although they fall in administrative terms under other programme entities,
they are presented here in Appendix 8.

Other outputs under this entity for the period 1998-2003 are presented in Appendix 9. They
include several publications such as the ‘Market impact of Biotechnological Developments
affecting Basic Food Commodities’; the proceedings of the 1999 China Cotton conference
(organized under 224P4); ‘World markets for organic fruits and vegetables’; and ‘supply-side
issues on trade facing developing countries’. Furthermore a conference on organic horticulture was
organized and several presentations were made in different meetings.

In the rest of this section the discussion concentrates on the work related to CFC projects.


17. The Common Fund for Commodities1
The Common Fund for Commodities (CFC) is an autonomous intergovernmental financial
institution established within the framework of the United Nations. The Agreement Establishing
the Common Fund for Commodities was negotiated in UNCTAD and became effective in 1989.
The first project was approved in 1991.

The Common Fund for Commodities forms a partnership of 106 Member States plus the European
Community, the African Union and the Common Market for Eastern and Southern Africa.

                      s
The Common Fund' mandate is to enhance the socio-economic development of commodity
producers and to contribute to the development of society as a whole. The Fund operates two
accounts. The capital of the First Account is an endowment fund not to be used directly. Currently,
the Fund concentrates on commodity development projects financed through the Second Account
and voluntary contributions. Whereas voluntary contributions can be used for either grants or
loans, the capital of the Second Account can only be applied for loan-financing of projects.

1
    Source: Common Fund for Commodities

                                                                                                 45
The Common Fund operates under a commodity focus to enable the replication of project results
across many countries. The activities of the Fund mainly comprise:

‘• commodity development measures aimed at improving the structural conditions in markets and
enhancing the long-term competitiveness and prospects of particular commodities. They include
research and development; productivity and quality improvements; transfer of technology;
diversification and processing; improvement of marketing and market access; and,

• commodity market development activities which assist developing countries and, in particular
least developed countries (LDCs), to function effectively in a liberalised global economy. Projects
in this field include physical market development; enhancement of market infrastructure;
facilitation of private sector initiatives; and commodity price risk management.’

The governing bodies of the Fund are its Governing Council and the Executive Board. The
Executive Board is advised by a Consultative Committee, composed of thirteen independent
experts, on technical and economic aspects of projects submitted to the Fund. The Governing
Council meets once a year, and the Executive Board and Consultative Committee, biannually.

The new Action Plan 2003 to 2007 of the Common Fund includes inter alia the following aspects:
   • The supply chain concept will be an essential element in project design, implementation
      and monitoring;
   • The dissemination component of projects will be strengthened including and exit strategy;
   • Reconfirmation that the Common Fund will get more involved in project design in close
      contact with beneficiaries and country representatives;
   • The Common Fund will strive to facilitate access by Member Countries to reliable sources
      of information on developments and forecasts in the commodity sectors


18. ESC’s role in CFC projects
The Commodity and Trade Division is involved in CFC projects because the division serves as the
Secretariat to FAO’s Intergovernmental Commodity Groups (FAO IGGs). Formally, the CFC
makes grants and loans available to International Commodity Bodies (ICBs) to carry out projects.
Since the early 1990s almost all FAO-IGGs have been designated as International Commodity
Bodies. Their functions are to propose and endorse project proposals for CFC funding and to act as
Supervisory Body (SB). Currently, only the IGG on Jute, Kenaf and Allied Fibres does not have
ICB status.

In the early nineties substantive discussions were held in the IGG meetings on project proposals to
be presented to the CFC. Some IGGs formulated proposals, while most invited and received
proposals from prospective executing agencies. CFC procedures and criteria were still evolving
and the role of FAO as the Secretariat of the IGGs as well as a technically competent body in its
own right was not clear. The time it took to get projects prepared and approved was longer than
originally expected. Moreover, he CFC had foreseen that the designated International Commodity
Bodies would sign agreements with the Fund and with a Programme Executing Agency (PEA) and
that the CFC would make the funds available through the ICBs. However, the FAO IGGs’ legal
status did not permit them to conclude such agreements.

In order to clarify matters, a Memorandum of Understanding (MoU) between the CFC and FAO
was signed in 1998. This requires the FAO and CFC to hold consultations early in the project
                                                                                                 46
cycle on short project profiles to minimise the cost of project formulation and speed up the
process. In addition, ‘ FAO and CFC shall undertake joint efforts to mobilize co-financing for
projects sponsored by FAO-IGGs. To this effect the FAO shall use its good offices in the
framework of its contacts with financial institutions and donors.’ Thus, the MoU assigns
considerable responsibility for project formulation and fund raising to FAO, without any financial
compensation. It also states that FAO is eligible to be a PEA, in which case the supervision would
be delegated to another institution.

On FAO-IGGs supervisory role: ‘[...]
2. The role, functions and rules of procedure governing a SB shall be agreed upon between the
CFC and the FAO-IGG for each project and shall be set forth in the Project Agreement between
the CFC, the SB and the PEA.
3. The interim arrangement made to allocate to FAO-IGGs US$ 15,000 per project per year for a
maximum of five years for project supervision shall continue to apply pending a permanent
agreement. Within this financial limit the two organizations shall examine, on a case by case
basis, the appropriate budgetary support that may be provided for project supervision based upon
an agreed work plan.’

Thus, the MoU does not explicitly restrict the use of the US$15,000 to travel, DSA and external
consultants, as is currently the practice. However, in an evaluation report by PBEE of 1998 it was
already signalled that the US$15,000 ceiling was not sufficient to cover the cost of staff time
dedicated to CFC projects. The MoU maintains that the supervision role lies with the IGG, even if
in practice it is the FAO that signs the agreement on behalf of the IGG.

The MoU does not discuss Intellectual Property Rights. Because this issue was heavily debated in
some early projects such in the Tea and Health project, legal experts of the CFC and FAO held
lengthy discussions, which finally culminated in an agreement in 1999 on a standard project
agreement. This standard agreement includes a very detailed intellectual property clause. Any
intellectual property emanating from projects shall be property of the CFC, but the CFC will
consult with the Supervisory Body before making it public or taking out intellectual property right
protection. When the intellectual property is made public, this will be made available free of
charge to Least Developed Countries and to other Developing Countries at the cost of
dissemination, unless otherwise agreed between the CFC and the SB.

FAO has acted as Project Executing Agency for a few regular projects, the last being on coffee,
which was approved in 1998 and started in 2000 and for which the International Coffee
Organization is the Supervisory Body. Since then no new projects with FAO as PEA have been
approved, due to negotiations over intellectual property rights, procurement and auditing rules.
These negotiations have been concluded in October 2004 and FAO can be Project Executing
Agency again in the future.


19. Portfolio analysis
For an overview of projects submitted by FAO-IGGs that were executed or approved in the past
six years, see appendix 10. The projects in this list form the basis of the analysis below. In this
analysis each project is assigned an equal weight and attributed to the different phases in the
supply chain on the basis of project descriptions in the CFC annual reports.

Most projects cover more than one phase in the supply chain. Post-harvest and processing
activities make up 32% of the portfolio (see figure 10). This category includes very technically

                                                                                                      47
oriented projects such as research into specific processing technologies as well as activities more
related to marketing, such as grading.


                  35.0%

                  30.0%

                  25.0%
  % of projects




                  20.0%

                  15.0%

                  10.0%

                   5.0%

                   0.0%
                          breeding   production + pest   post-harvest and   marketing
                                          control          processing
                                                project focus



Figure 10. FAO-supervised CFC projects by focus on phases in the supply chain.
(Data from projects under implementation during the period 1998-2003.)

The geographic distribution of projects is presented in figure 11. In case a project was executed in
more than one region, its ‘weight’ was divided in proportion to the number of countries involved
from that region.

Just over half the project activities are executed in Africa, which may be explained by the high
amount of Least Developed Countries. However, within Africa, the West Africa region seems to
be somewhat over-represented. Asia, especially South and Central Asia, with large countries such
as India and China and many Least Developed Countries, seem under-represented. A particularity
is that Central Asian countries (from Kazakhstan to Pakistan) and the Middle East do not benefit at
all from CFC projects under supervision by IGG secretariats. Overall, 45% of the projects are
executed in Least Developed Countries.

Another issue is that FAO membership is broader than CFC membership. Therefore, IGG member
countries that are not a member of the CFC can not benefit from these projects.

The number of regular projects approved by the CFC up till 2003 and their total budget per IGG is
given in Figure 12. It should be note that the IGG on Tropical Fruits was designated ICB only in
1999. IGGs that cover more than one commodity (Grains, Oilcrops, Fibres) tend to have more
projects.




                                                                                                  48
                                                                CA +
                                                              Caribbean,
                            S-East Asia +
                                                                10.8%
                            Pacific, 15.6%
                                                                    South America,
                                                                        4.7%
                      rest of Asia,
                         12.4%
                                                                       West Africa,
                      North Africa,                                      24.8%
                         2.8%



                               East and South
                                Africa, 28.2%




Figure 11. Distribution of FAO-supervised CFC projects over regions.
(Data from projects under implementation during the period 1998-2003)



                                          projects approved      total budget
                                                                  approved
                                      0     2      4        6


                         Bananas                                  19,752,967

                            Citrus                                10,266,645

                            Grains                                14,039,474

                       Hard Fibres                                12,128,519

                        Hides & S.                                10,777,772

                              Meat                                11,374,101

                          Oilcrops                                26,399,116

                              Rice                                3,336,468

                               Tea                                12,048,284

                       Trop. Fruits                               17,788,117


                                                       approved before 1998

                                                       approved 1998-2003

Figure 12. Number of regular projects approved by IGG up till 2003 and their total budget.

                                                                                             49
Figure 13 shows that in 2002 suddenly many projects were approved, but with on average a lower
project budget and CFC grant per project. Consequently in 2003 many new projects started
implementation.


                                 Budgets and grants approved per year

                  30,000,000
                  25,000,000
                                                                                           total budget
                  20,000,000
                                                                                           CFC grants
                  15,000,000
                  10,000,000
                   5,000,000
                  US$        0
                                  1998     1999     2000    2001 2002          2003
                                   (3)      (4*)     (3)      (2) (10**)       (5**)
                                                         year
                                               (# projects approved)
* 1 project approved in 1999 was later cancelled
** 2 of the projects approved in 2002 and 2 of the projects approved in 2003 did not yet start.

Figure13. Approved CFC grants and total project budget of IGG sponsored projects during the
period 1998-2003


20. Views from ESC staff regarding the involvement in CFC
projects
Role of ESC staff in the projects

Role before implementation
IGG Secretaries do receive many proposals that never make it to the implementation phase. A
rough indication of the number of proposals relative to approvals is given in Figure 14. Some
arbitrary choices had to be made in compiling Figure 14. Proposals were sometimes revised so
fundamentally that they may count as a new proposal, or proposals were subsequently merged or
split up. Figure 13 should therefore be considered a very rough indication only. Furthermore,
proposals have only been counted when they were discussed in IGG documentation. The
Secretaries may receive many more proposals that are sent back directly to the originators with
some comments. Proposals that have been discussed in the IGG but have not been officially
submitted to the CFC usually had been discussed informally with the CFC and received a negative
evaluation. Rarely were proposals not endorsed.




                                                                                                          50
                                                   98-03
          considered and submitted projects by IGG '
                 0    2        4      6       8        10     12      14


    Bananas


       Citrus


      Grains*


  Hard Fibres


     Hides&S


         Meat


         OOF


        Rice*


          Tea


  Trop. Fruits


         considered       submitted   total approved    regular app



Figure 14. Rough indication of number of proposals discussed by IGGs and number of
submissions and approvals by CFC for the period 1998-2003

The extent of individual involvement in project formulation differs considerable among officers.
Some are of the view that project formulation is not their responsibility and ESC is not reimbursed
for it. Therefore they function mainly as a ‘mailbox’ for proposals. They forward them to the IGG
for endorsement and then forward them to the CFC.

Others are of the view that this could lead to rejection of in principle good project ideas. This
would not affect ESC or the CFC, but it would affect ESC’s clients. Most officers in this group
comment on proposals, explaining to originators where and how it could be improved. Only very
few officers actively help with proposal writing, and then only rarely.

Active involvement, whether in the form of advising or writing, occurs mainly when officers feel
that it fits into the rest of their work programme and/or has the potential to become a success
and/or when the CFC has given a favourable preliminary reaction. It has also been reported that
sometimes FAO management (e.g. the Director General’s office) requests an officer to help with a
proposal.

During the last six years, there seems to have been a decline in active involvement in project
formulation for several reasons. ESC officers realised it absorbed a lot of their time while they
were not compensated for it by the CFC. In addition, approval procedures could be very long and
CFC priorities changed within the formulation period. Apart from officially communicated
changes in CFC priorities, other reasons led sometimes to unexpected decisions by the CFC. In
                                                                                                 51
some cases where ESC staff was of the opinion that projects were not well conceived, they were
nonetheless approved and this occasionally gave rise to “problem projects”.

According to some officers, the CFC has now more clearly communicated its priorities and
requirements. This has enabled a quicker assessment of the incoming proposals and better advice
to the originators. In addition, the CFC has opened the possibility for an early assessment of
project outlines by CFC staff, before a full proposal is written.

Officers interviewed were all of the opinion that decisions on how much time they spend on
proposals should be left to them. Many felt that giving some advice how to improve the proposal
was appropriate and enough in most cases. But in some cases there could be compelling reasons to
get more actively involved, especially when the project was related to ESC’s other work.

Most of the staff was of the opinion that ESC should renegotiate its MoU with the CFC, to include
compensation for time spent on project formulation. However, a minority would not like to see
this, because they preferred not to spend any time on it. But they would not object to a new
agreement if they still could choose to keep out of project formulation altogether.

Role in supervision
The roles ESC staff assume in supervision are quite uniform, apart from staff servicing the IGG on
grains. As a standard procedure, the grains group hires consultants to do the supervision for them.
So far, they have been faced with technical projects only and found people from the technical
divisions who were eager to do the supervision. Secretaries of the other IGGs do the supervision
mainly themselves, but may occasionally hire a subject matter specialist or seek advice from
technical divisions. These officers undertake at least one trip per project per year, which is
reimbursed. Furthermore they write 6 monthly supervisory reports, which are based on reports
from the Project Executing Agency and the project visit. One officer, however, only submits one
report every two years in conjunction with the IGG meeting.

The extent to which officers get involved in administrative and financial monitoring seems to
depend mostly on the activities of their CFC counterparts and capabilities of the PEA. Some CFC
counterparts are very active and ESC officers do not have to contribute on these points. Capable
PEAs can also deal with the demands of the CFC themselves, while others need some help.

The supervisory role consists therefore in monitoring whether project activities are correctly
implemented. When problems arise between different organizations, staff sees themselves as there
to ensure the different parties come to terms. (It should be noted that because implementation takes
place in several countries there are often several institutes and organizations involved in one
project.) They also function as a neutral party between the PEA and the CFC.

Overall, costs for tickets and per diem that can be claimed by ESC for the supervision trips are less
than the maximum supervision budget of US$15,000, and therefore these funds are partly
unutilised. Only when consultants are hired is the full budget used. Figure 15 shows the total
supervision budget available per project (average), and the used funds for periods that all projects
have been completed. The main cost, i.e. staff time, is not reimbursed. Supervision budget could
alternatively be calculated as a percentage of the total budget for a project. Therefore, as a
reference, 3% of the total project budget is given. (The lowest rate FAO charges for project
servicing costs is 6%, but these are to cover indirect costs for project execution)




                                                                                                  52
       140,000
                                                                                         average claimed
                                                                                         supervision costs/pr
       120,000                                                                           average supervision
                                                                                         budget per project
       100,000                                                                           3% of average total
                                                                                         project budget

        80,000
                                                                                     group 1 = projects started
        60,000                                                                       in the period 1994 - 1997
                                                                                     group 2 = projects started
                                                                                     in the period 1998 - 2000
        40,000
                                                                                     group 3 = projects started
                                                                                     in the period 2001 - 2003
        20,000                                                                       group 4 = projects started
                                                                                     in 2004
       US$
              0                                                                      For group 3 and 4
                                                                                     claimed supervision
                     group 1         group 2        group 3          group 4
                                                                                     costs are not yet
                    (7projects)    (9projects)    (13projects)     (6projects)
                                                                                     available

Figure 15. Used supervision funds and maximum supervision budget for projects started in
different periods of time.
Source: CFC (total project budget) and FPMIS (supervision funds).
Note: Some of the oldest projects are not represented in the FPMIS system. Projects implemented after 2000 generally
have not completed, so the used supervision funds are not yet known. Total project budgets include CFC grants and
loans, counterpart funding and co-financing.

Another alternative would be to charge supervision services on the basis of actual the costs
incurred, including staff time. Staff time could be charged at internal secondment daily rates.

Example: Supervision by 1 P4 officer with 1 supervision mission of 10 days:
        • mission days + preparation and report: 13 days
        • commenting on half-yearly progress reports: 2 days
        • follow-up on project correspondence and misc.(0.5 day/month): 6 days
Total staff time: 21 * US$ 675 (P4) = US$ 14,175

Information from another international organization involved in a supervision role in projects from
another donor organization indicates a normal fee of US$60,000 – US$70,000 per project. This
includes supervision of the financial management of the project and a supervision mission by a
two persons. On the other hand, these projects are usually implemented in only 1 country, making
them less complex than CFC funded projects. The same organization indicated they could not
undertake supervision for CFC projects for only US$15,000 per project per year.

Role of ESC management
During the past six years, management has been minimally involved in CFC projects. Staff would
like management to set priorities on the type of projects that should receive more or less attention,
subject to endorsement by the IGGs for these choices should be sought. Management should then
communicate these priorities to the CFC. Management should also support staff when substantial
input is given for projects that do address ESC’s priorities. If necessary, management should
defend decisions to put in the minimal time when projects do not address such priorities.



                                                                                                                  53
Benefits for ESC

Technical projects, such as on processing techniques or varietal breeding were often cited by staff
as projects that do not fit with ESC’s other work. Such projects yield fewer benefits for ESC staff
who also feel they have little competence to have meaningful input in such projects. However,
others feel that even if they do not fully understand the technology, in general they are able to
judge whether the project runs well. For example, if a laboratory shows few signs of activity, it is
pretty clear there is a problem, without understanding the tests to be carried out.

                                                                               s
Projects on market linkages were viewed to be much closer to the rest of ESC' work. These could
focus on generic promotion, on quality standards or value addition. Projects that focus on
processing have often both a technical component and a marketing component.

Officers who do supervision themselves all claimed this was of benefit to them and to their service
as a whole. The most important benefits derived from supervising CFC projects are field
experience/reality check (reported by 9 out of 9 officers), increased knowledge of their commodity
(8 out of 9) and an increased network (6 out of 9).

However, there seems to be little spread of this knowledge to other staff not involved in the
projects. 10 out of twelve staff members claimed they were only slightly informed about (other
than their own) CFC projects, knowing which commodities were covered and who worked on
them, but no more. The other two staff members that answered this question claimed they were not
informed at all.

Still, many officers who were only slightly informed about the projects still claimed that the
service benefited from an increased knowledge of the commodity. Only two staff members
claimed the service did not benefit at all. Other benefits for the service were said to be an increased
network, a reality check and more visibility. Some officers thought that it had increased interest in
the IGG meetings.

Apart from the paid travel there are no other financial benefits. On the contrary, any time spend in
the office on proposals or ongoing projects is not reimbursed and for each project an account has
to be opened to handle the supervision funds.


Impact of CFC projects

Some ESC staff members consider a project a success when activities are carried out in a timely
way and planned outputs have been delivered. Others would also like to check that the objectives
are met; and that the output makes a difference to the intended beneficiaries.

Asked about the impact on beneficiaries of their best project, an increase in knowledge was cited
most frequently (6 out of 8), followed by increased market access and increased income. One
officer was of the opinion that the projects were too small to be able to have a real impact, what
was important was that the project started developments for which other funds could be attracted
after the project was finished.

From interviews it became clear that an ineffective Project Executing Agency was the most
frequent cause of a lack of output. However, sometimes external factors were to blame, such as


                                                                                                    54
staff changes within a Project Executing Agency, bad weather or an unstable political situation in
the countries of implementation.

Although not systematically asked for, some staff members mentioned spontaneously that projects
lacked impact because of limited dissemination efforts. Both the CFC and the IGGs could play a
more active role. Sometimes a follow-up project would be desired to focus on extension activities.

It can not be predicted beforehand whether a project would be successful, but building on
previously successful project was recommended. This could be in the form of disseminating
previous results, if the first project had developed a technology or produced promising new
varieties. If the first project already focused on extension activities or market linkages, the entire
project could be duplicated in another region.


Procedural issues

Staff have encountered many procedural problems with the CFC in the past six years, causing
much frustration among staff and project sponsors alike. Fortunately, procedures seem to have
improved, although some problems remain.

Procedures on project formulation were already dealt with above. After approval of the proposal
by the CFC Executive Board, it still can take years before a project starts. Problems seem to arise
mainly from a mismatch of internal guidelines of Project Executing Agencies and the CFC. For
example, UN agencies have different auditing and procurement rules from those of the CFC. This
is also the reason why the FAO can not be a PEA. Another area of disagreement is over
intellectual property rights. For example a PEA may insist on distribution of project results free of
costs to its entire membership, which may include countries not members of the CFC. Because
intellectual property rights normally remain with the CFC, the CFC wants to restrict such free
distribution to its own membership and LDCs.

For smaller institutions acting as PEAs, the requirements on accounting and other financial rules
may be cumbersome. Furthermore, reporting requirements are very demanding. Even FAO faces
detailed requirements to account for spending for its supervision, which involves only a maximum
of US$ 15,000 a year.

Staff members report that loan financing makes projects usually more complicated (6 out of 9
responses). CFC poses high demands on loan guarantees and who could issue them. This is
another factor that contributes to long delays between project approval and the start of activities.
When a PEA has already completed a previous CFC project, the time between approval and start
of implementation can be shortened dramatically.


21. Lessons from three case studies
Introduction

Three CFC projects have been reviewed in more detail: The Tea and Health project, the West
African Groundnut Germplasm Project and the Abaca Project.

The selection of the case studies was made on the following grounds:

                                                                                                         55
   •   completed, so that evaluation reports were available and some idea of results and outcome
       would be possible
   •   at least one project supervised by ESCR and one by ESCB
   •   projects be as different as possible: different continent of project execution, addressing
       different phase in the supply chain etc.

The disadvantage of selecting completed projects was that this resulted in selected projects that
were formulated and started before the Memorandum of Understanding was signed. All three
projects were among the first proposals endorsed by the particular IGG and so they still had to
decide how to take up their role as sponsoring ICB and Supervisory Body. It can be assumed that
the drafting of project agreements with respect to FAO’s role has now become a routine, as
opposed to the lengthy discussions on details that took place at the time.

The ‘Project to Create an Increased Demand for Tea through a Generic Promotion Campaign
based on Human Health Benefits of Black Tea Consumption’ (or the ‘Tea and Health Project’) was
accepted by the Executive Board of the CFC on 25 July 1993.. The total budget was US$
4,770,000 of which US$2,093,193 paid for by the CFC and the rest in counterpart and co-
financing contributions. The projects main components were to provide solid research information
on the health effects of black tea and to demonstrate the cost effectiveness of a health-based
generic promotional campaign The project was executed by the UK Tea Council from 1996 to
2000. The project is described in appendix 11 with a short analysis of the roles of the IGG and
ESC.

The ‘West African Groundnut Germplasm Project’ was approved by the Executive Board for
funding of US$ 2,963,469 in March 1995. The main components were the evaluation of collected
groundnut germplasm and selection/breeding of improved varieties. The total project budget was
US$ 4768469, with the additional funds coming from counterpart and co-financing. The project
was executed by the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT),
with the Centre de Coopération Internationale en Recherche Agronomique pour le Développement
(CIRAD) and National Agricultural Research Institutes (NARS) as partner organizations. The
project was implemented from 1996 to 2002, but was temporarily suspended for 6 months in 1999.
More information is provided in annex 12.

The project ‘Abaca – Improvement of Fibre Extraction and Identification of Higher Yielding
varieties’ was approved by the CFC in 1997 after a long gestation period. The total budget was
US$ 1,604,134 of which US$ 841,240 funded by the CFC and the rest by counterpart funding. The
main components were the improvement of fibre extraction through the development of improved
tools and machinery and the identification of virus tolerant and high-yielding varieties. The project
was executed by the United Nations Industrial Development Organization (UNIDO) with the
Philippine Fibres Development Authority (FIDA) as partner organization. FIDA had also
developed the first proposal. Later also an Ecuadorian producer association got involved. More
details are can be found in annex 13.


Roles of the IGGs and the Secretaries in formulation

The IGG on Tea was actively involved in project formulation. They had already been discussing
generic promotion in relation to health aspects and specifically chose to develop a project around
this theme for submission to the CFC, when the latter became operational. On the other hand, the
IGG on Oilseeds, Oils and Fats (IGG-OOF) had invited proposals from interested parties for
consideration. The project profile was endorsed together with eleven other proposals and profiles

                                                                                                  56
from various sources. The sheer number of proposals faced by the IGG-OOF prevented in-depth
discussions of each project. About 95% of world abaca production comes from the Philippines and
about 15% from Ecuador. Because the Philippines is an important member of the IGG on Hard
Fibres and an abaca project would not affect interests of the other members, the proposal was
almost automatically endorsed.

It should be noted here that most IGGs invite proposals for consideration as a standard procedure,
and normally all proposals tabled at a meeting are endorsed. The procedure of the ‘Tea and Health’
project, in which the IGG members invited experts representing several of its Members to develop
a specific proposal, is exceptional.

The Secretary of the IGG on Tea facilitated the decisions made by the IGG meetings regarding
formulation. Subsequently, he helped integrating the two proposals prepared by the Expert Group
into one project proposal. After the project was approved for funding the ESC officer assisted the
PEA to obtain additional funding.

The Secretary of the IGG-OOF first tabled the project profile and then the first full proposal by
CIRAD for the IGG to be endorsed. After the formulation of the second proposal in which
CIRAD’s role had been marginalized, the Secretary reminded the CFC of the IGG’s endorsement
of CIRAD’s prominent role in the project. Subsequently, it was thanks to a meeting by ESCB staff
and their mediation that the parties finally came to an agreement and a new proposal could be
submitted to the CFC.

The Secretary of the IGG on Hard Fibres main role in the formulation was the facilitation of
official communication between project partners and with Ecuador. The CFC insisted on the
inclusion of Ecuador, but Ecuador showed only sporadic interest and negotiations took place over
a period of 6 years and again towards the end of the project. Furthermore, The IGG Secretary was
member of the FAO Project Task Force, which met twice to further develop the proposal during
the time FAO was proposed to be Project Executing Agency.

In short, all three Secretaries played a facilitation role in project formulation on behalf of the
IGGs.


ESC Role in supervision

The Secretary of the IGG on Tea played essentially a coordinating role in the supervision, which
was executed by the Technical Advisory Committee. Furthermore he attended most Steering
Committee meetings on behalf of the IGG.

The Secretary of the IGG-OOF took on the supervisory role in person. An attempt was made to
outsource the first supervision mission, but when the results were disappointing, all supervisory
tasks were executed by the IGG Secretary. Also in this case the Secretary attended most Steering
Committee meetings on behalf of the IGG.

The Secretary of the IGG on Hard Fibres understood the supervision to be a task of the whole IGG
and viewed discussion in the IGG meetings as an important part of the supervision process. During
the first years of implementation also the Project Executing Agency had much of a supervisory
role, because the project was effectively implemented by the main partner organization. There was
no Steering Committee and the Secretary made one supervisory mission and one short visit to the


                                                                                                     57
project. Apart from IGG meetings, the supervision missions and the participation in the
dissemination workshop he spent minimal time on the project.

In the Groundnut Germplasm Project the question arose whether or not the IGG Secretary may
agree on the spot with management decisions taken in Steering Committee meetings in the
capacity of representing the Supervisory Body. The ESC officer feared that participation in
management decisions would compromise the Secretary’s obligations with respect to supervision.

Many projects have a Steering Committee, (or Advisory Committees or Co-ordinating Committee)
in particular those with the involvement of many different organizations. In such cases, the IGG
Secretary is normally invited to represent the Supervisory Body in the Committee. It should be
noted however, that the issue of the Steering Committees and FAO’s potential role in them is not
mentioned in the MoU between the CFC and FAO nor in the standard project agreement. It is also
not spelled out whether travel costs for participation in steering committee meetings should be
covered from the US$ 15,000 per year supervision budget. One could see the IGG Secretary’s
participation in the Committee discussions as part of their supervisory role, and hence there would
be no problem. In the case where the supervision is outsourced, the question may arise whether
somebody other than the IGG Secretary could attend those meetings, and if so, whether that person
would still officially represent the IGG. Because so many projects do have Steering Committees,
the Supervisory Body’s role in them may require clarification.


Other roles of the IGGs and the IGG Secretaries

The IGG on Tea remained actively involved in the project during its implementation. The IGG
approved certain outputs, such as the choice of the logo for the Tea Mark. The Secretary spent a
considerable amount of time on the management of the Tea Mark. After the IGG had decided the
Tea Mark should be owned by FAO, he had to coordinate with the legal office and assure the Mark
was registered properly in as many countries as possible. Subsequently, he facilitated discussions
on the criteria for the use of the Mark, which were held in the Steering Committee and in the IGG
meetings, including interim consultations with IGG members not represented on the Steering
Committee.

In addition, upon request by the PEA, the Secretary wrote twice to Indonesia in relation to
financial issues. He was also involved in negotiations between the PEA and the CFC to solve the
budgetary problems towards the end of the project.

In the West African Groundnut Germplasm Project, the IGG Secretary was actively involved in
the preparation of a complementary FAO Technical Cooperation Project (TCP) and attended its
closing workshop. This same project produced a proposal for a follow-up project on groundnut in
West Africa.

The Secretary wrote to the CFC to support the PEAs request to increase the Allocated Allotment
and attended an ad-hoc management meeting to get the project back on track after it had been
suspended.

The second visit of the IGG Secretary to the abaca project facilitated some discussion on a conflict
that had arisen between the Project Executing Agency (UNIDO) and FIDA the main implementing
organization over the remaining work programme and budget.



                                                                                                 58
In theory, ESC staff should not get involved in financial matters but the case studies show how
easily they get drawn in, most times in a mediation role.


Output and outcomes of the projects
For the abaca project a final completion report of the PEA was not yet available. The Secretary
presented the results based on information obtained during the final project workshop to the IGG.
No final supervision report was available and the CFC did not yet send a final evaluation mission.
From the available information it may be concluded that the project achieved part of its immediate
objectives. It is too early to know whether the results are being used by producers and thus
whether the project will contribute to its ultimate objective (i.e. ‘stable relationship between abaca
supply and demand).

For the other two project final supervision reports were available. Firstly it must be noted the great
similarity in how outputs were evaluated by the Supervisory Body, i.e. against set targets as
formulated in the original project proposal or against any revised target as decided by the Steering
Committee at a later stage. Both projects were judged to have achieved almost all their immediate
objectives.

Neither final supervision report judged whether the projects had contributed to achieve the
ultimate objectives (i.e. ‘higher consumption of tea resulting in higher farm prices’ and ‘higher
productivity of groundnut production in West Africa’), nor did they have any data available to
make such judgement. Given the ambitious nature of the ultimate objectives of both projects, this
could hardly be expected to be otherwise.


22. Relative importance of CFC projects for IGG participants
Ten out of 29 participants of IGG meetings who responded to the questionnaire found the
promotion of commodity projects one of the most useful aspects of the meeting. However, it
ranked only sixth in selected benefits after other aspects such as information, collaboration on
commodity problems, analytical insight and influence on ESC’s work programme.
One respondent was of the opinion that discussions on CFC projects were not satisfactorily. He
wrote: ‘Usually there is not sufficient time given to this agenda item or documentation is not well
prepared. [..] The findings and results of the projects [...] are not well disseminated. [..] Project
impact and lessons learned should be discussed at IGG meetings’


23. Discussion and conclusion on 224P5
Priority setting
Formally the CFC funds are made available to the International Commodity Bodies to carry out
projects. The FAO-IGGs function as these ICBs. The CFC seems to expect that the IGGs set
priorities for activities that contribute to the development of the commodity. However, in practice
all proposals are endorsed. It is not in the interest of an ICB or IGG to limit the number of
proposals forwarded to the CFC.

More projects do not add to the workload of the participants of the IGG meetings, but solely to the
workload of the Secretary. The need for more selective endorsements may become more evident


                                                                                                    59
for them if they were presented with a report on time spent on projects by the Secretary and its
financial implications in terms of staff salary versus the compensation received from the CFC.

Because IGGs have not thus far set sufficiently clear priorities for projects, ESC staff should
formulate priorities for the Division. Most IGGs did develop a commodity strategy on request
from the CFC, which should be consulted. Those strategies are generally quite broad and the
Division might wish to set more restrictive priorities. After priorities for CFC projects have been
formulated, endorsement from the IGGs and/or the CCP should be sought. If such priorities are set
and endorsed by the IGGs, it would be entirely justified to spend staff time on projects even if
ESC is not compensated for this by the CFC.

Although staff would like to be guided by clearly formulated priorities, they would like to remain
responsible themselves for the time they allocate to each individual project. This is also necessary
to ensure a high quality of supervision. Projects with a lot of problems require more time than
smoothly running projects, as illustrated by the case study on the West African Groundnut
Germplasm Project. Sometimes the quality of supervision may be greater if the supervision is
sourced out to a subject matter specialist. However, supervision of such a specialist remains
necessary, as can be learned from the same case study.


Working arrangements with the CFC
There is consensus among staff that the current arrangement with the CFC is not very favourable
for FAO. The US$ 15,000 a year for travel and DSA is a maximum and only actual travel
expenses are paid for. The CFC does not reimburse staff time spent in the office, e.g. reviewing
project reports and writing the supervision report. Furthermore, the CFC seems to expect help
from ESC officers in project formulation for which ESC does not get reimbursed at all. Many
argued that the funds for supervision are inadequate to hire good subject matter specialists. This
was confirmed by an international organization familiar with supervisory services.

It would therefore seem logical to re-open negotiations with the CFC. A new arrangement would
include both compensation for project formulation and staff time spent in the office on
supervision. Negotiations could concentrate on claiming staff time or on requesting a certain
percentage of the total project budget. It could also clarify FAO’s role in project Steering
Committees. Before starting negotiations staff should be consulted on which arrangements would
be best.


Benefits for ESC staff
Supervision work contributes considerably to officers’ commodity expertise. It provides
experience on the circumstances under which producers, processors and traders conduct their
activities. It also provides a chance to increase officers’ network among stakeholders in the
                                                                   s
commodity and to collect information, thereby improving FAO' databases. Both experience and
statistics are invaluable for good analytical work. The increased network also helps attracting
expert people to meetings. However, similar benefits may be derived from involvement in other
projects, such as TCP projects.

Although the benefits for individual officers are evident, other staff members within the division
seem to benefit less. Experience in CFC projects is not always shared. It could be useful to spread
the responsibility for new CFC projects among staff within the same group, which is already
practice in some groups. This would also prevent certain staff from being overwhelmed by a large


                                                                                                   60
number of projects. Of course, this has the disadvantage that each officer should spend time to get
familiar with the detailed CFC requirements and procedures.

Another idea, favoured by some officers, is to create a parallel post to deal with all non-
commodity-specific issues of all projects. This could range from a quick first assessment of
profiles/proposals on whether they fulfil CFC criteria and format requirements, to maintaining
relations with the legal office for clearance of project agreements and the financial reporting on
supervision expenses to be reimbursed by the CFC.

ESC’s ‘comparative advantage’
What has ESC to offer those projects? First of all, the CFC values the process of project
endorsement by International Commodity Bodies. In the case of multi-country commodity
projects, the ICB’s are the natural groups to set priorities. In that sense the role of the FAO-IGGs
and ESC as Secretariat are indispensable.

Furthermore, ESC’s commodity specialists bring unique expertise in assessing proposals. They
have an overview of global developments in the commodity and insight whether a project would
be of benefit to a narrow or wide group of stakeholders and whether it may have adverse effects on
others. (E.g. increasing productivity may be beneficial for local producers but may aggravate a
global oversupply situation)

Projects may also benefit from ESC’s network of commodity experts to identify potential project
executing agencies or subcontractors and to identify experts for (interim) evaluation missions or
other specific tasks. For example, in the case of the project on Tea and Health, the Secretary
identified two Technical Advisory Committee members for the supervision. The Secretary of IG-
OOF helped in the search for a team leader of the interim evaluation mission of the Groundnut
Germplasm Project.

Because of the indispensable role the IGGs play in the political framework of the operation of the
CFC and because of the unique expertise of its commodity specialists, ESC should be in a quite
strong position to renegotiate the MoU with the CFC.


FAO as Project Executing Agency
In the case FAO will act as Prosecuting Agency in future projects, some issues remain to be
negotiated on a case by case basis, such as the Allocated Allotment. The CFC seems to be very
reluctant to come back on earlier decisions in the face of a new situation or unforeseen
complications. Therefore, the greatest possible flexibility on the part of the CFC should be
negotiated beforehand to make sure the agreements are workable in practice.


Gender
According to the CFC manual projects “will generally aim to make an identifiable contribution to
sustainable development and poverty alleviation paying due respect to the role of the private
sector and civil society and having also regard for gender and environmental issues.”

The evaluation of the West African Groundnut Germplasm project paid attention to gender in
relation to the use of improved germplasm by farmers in Mali. The Tea and Health project’s
research activities followed protocols for medical research which differentiate between male and
female whenever necessary. The project did not lend itself for special attention to gender with

                                                                                                     61
respect to expected outcomes as these were in the nature of increased research and increased world
demand for tea.

Due to the wide variety of the projects, a general assessment of gender sensitiveness of CFC
projects can not be made. Officers’ attention to gender in its supervisory role will therefore depend
on the nature of the project and whether there are any problems encountered in this area.

Conclusions
Many CFC projects do contribute to the development of the commodities. ESC benefits from its
involvement in these projects and the project benefit from the involvement of ESC. It is therefore
worthwhile to continue contributing to these projects on behalf of the Intergovernmental Groups.
However, working arrangements with the CFC could be improved to increase the effectiveness
                      s
and efficiency of ESC' involvement.




                                                                                                  62
OVERVIEW OF RECOMMENDATIONS
Part I: Programme design
   • Entity 224P5 makes a direct contribution to FAO' strategic objective C2 (Adoption of
                                                       s
     appropriate technology ...) and this should be mentioned in planning exercises.

Part II: Technical support to member nations and the field programme
(223S1)
   •   ESC may want to consider membership of the PAIA on Biosecurity, which contributes to
       the Standards and Trade Development Facility.
   •   ESC should try to maintain the level of activities of its widely praised assistance on WTO
       negotiations under the umbrella of the PAIA-AWTO.

Part III: International Action on Commodity and Trade Issues (224P4)
Recommendations that are already implemented:
   • ESC should not merge the IGGs further.
   • Continue organizing informal meetings back-to-back with IGG and CCP meetings. -
     Whenever possible, organize IGG meetings away from Headquarters.
   • Continue organizing the highly appreciated conferences and expert consultations on
     commodities not covered by the IGGs.

Recommendations for innovations:
   • Experiment with innovations to increase the active participation of delegates. For example,
     through more consultation on the agenda, presentations by delegates and round-table
     discussions.
   • Increase communication and activities between meetings. For example by regular reporting
     on follow-up activities from the last meeting, establishing special panels or mixed-
     membership working parties to report to the IGG on topical issues.
   • Strengthen the relation between the CCP and the IGGs. IGGs could forward issues for
     CCP’s consideration.
   • Present more provoking ideas to the IGGs and CCP to enhance the analytical debate.
   • Hold an annual discussion between CCP and IGG secretaries on the experiences with such
     innovations and to formulate joint recommendations for consideration by the CCP.

Other recommendations:
   • Try to better focus the agenda of the meetings
   • ESC staff should increase its collaboration with the technical divisions in servicing the
       IGGs. It may help if requests for technical assistance are communicated at Service Chief or
       Director level to underline the importance of the IGGs.

Part IV: Measures to enhance commodity and trade development (224P5)
   •   Formulate priorities for the division of staff time spent on CFC projects, e.g. to give
       projects that are close to ESC’s core activities more attention.
   •   Re-open negotiations with the CFC to obtain compensation for assistance in project
       formulation and staff time spent on supervision activities.




                                                                                                 63
Appendix 1:       Terms of Reference for the ESC auto-evaluation




Appendix 2:       Output table for programme entity 223S1




Appendix 3:       Output table 224P4




Appendix 4:       Staff questionnaire




Appendix 5:       Results of staff survey on IGGs


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Appendix 6a:      Questionnaire for IGG participants


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                                                                   64
Appendix 6b: Questions for telephone interviews


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Appendix 7a: IGG participants survey results



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Appendix 7b:           Aggregate results of various surveys


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Appendix 7c:           Results of telephone interviews


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Appendix 8:                Non CFC projects in which ESC staff is involved


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Appendix 9:                Output table 224P5


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Appendix 10: Overview of CFC project for which IGGs serve as
Supervisory Body


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Appendix 11:          Case study, Tea and Health Project



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Appendix 12:          Case study, West African Groundnut Germplasm
Project


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Appendix 13:          Case study, Abaca Project



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                                                                     66

				
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