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Commission Wants to Cut Contribution to World Food Program - UN Finance - Global Policy Forum
Commission Wants to Cut
Contribution to World Food ProgramEuropean Report
April 24, 2002The European Commission would like to reduce its current level of contribution to indirect costs of the United Nations' World Food Programme (WFP). The current level of 7.8% is too high, the Commission says. The WFP's executive board is expected to approve a reduction in the EU's payment at its May meeting.
An agreement between the United Nations and the Commission, which came into force on August 9, 1999, fixed the EU's contribution for indirect costs as "a lump sum calculated as a percentage of the direct costs" on the basis of a scale between 3% and 7%, with a maximum amount of Euro 132,500 per project. However, the Commission and the UN agreed on a flat rate of 7.8%, without a ceiling. This was adopted by the WFP's Executive Board for the EU's contribution for the period 2000-2001. This exception expired at the end of 2001. However, the WFP is still applying the same flat rate for contributions to indirect costs by its donors (exceptions are granted to developing countries). The 7.8% flat rate exception for the WFP was extended in January 2002, but the Commission said it expected the WFP Executive Board to "fix a new, substantially lower rate by October 2002", to be applied immediately to all new contracts between the WFP and the Commission. The World Food Programme said the decision would be taken much sooner.
The United States, which funds the largest proportion of the World Food Programme's total budget, also supported this position at the WFP plenary session on February 11. At a co-ordination meeting after the plenary session, EU Member State representatives agreed unanimously on this position.
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