Last-Minute Compromise May Rescue U.N. Farm-Help Agency

ROME — The International Fund for Agricultural Development, facing collapse after a long-running dispute over funding, got a last-minute reprieve Friday when the United States and other member nations tentatively agreed to a sharply reduced approach to financing the organization.

With a reputation as one of the few U.N. specialized agencies that works efficiently and can actually demonstrate benefits to poor farmers and landless Third World peasants, the Rome-based agency has been caught without fresh funds since 1983 in a disagreement between the United States and members of the Organization of Petroleum Exporting Countries over who should pay what share of its costs.

After six futile meetings to resolve the dispute over the past 18 months, the fund’s president, Idris Jazairy of Algeria, announced “tacit agreement” at the end of what had been feared might be the seventh and last meeting.

Envoy’s Confidence

Although the agreement fell short of a full resolution of the funding dispute, the U.S. delegate, Ambassador Millicent Fenwick, expressed confidence that the tacit accord worked out by the delegates would be accepted by member governments.

“IFAD is still holding its breath,” she said, noting that the new formula for funding the organization still must be approved by Washington and the OPEC and European governments concerned. “I am very optimistic,” she said. “I consider IFAD to be the most American of all types of programs because it tries to make men independent. We’re dealing here with one of the really worthwhile organizations.”

The agency was founded in 1977 and was explained to Congress as an aid program whose costs would be evenly split between the then-oil-rich OPEC countries and the United States and other industrial nations.

Share of Burden

Since then, it has provided a little more than $2 billion for direct, self-help programs in the Third World, but the industrial countries have carried about 58% of the financial burden. When the now-troubled OPEC countries asked that their share be further reduced, the effort to replenish the IFAD fund with another $1 billion ran aground on U.S. insistence that the shared burden should become more, rather than less, equal.

Friday’s tentative agreement sharply reduced the amount of the expected replenishment, setting it between $500 million and $650 million, and set the division of the burden at 40% for OPEC and 60% for the Western industrial nations. The United States is expected to approve the tentative arrangement, which would provide that U.S. funds cover 17% of the total, mainly because of the much lower level of funding.

Jazairy said the agency could operate at about its present level on the proposed funding because the money would come in strengthened U.S. dollars and because programs had already been cut back somewhat when the replenishment effort ran into trouble.