U.S. touts wheat shift as win-win for food aid

By Missy Ryan

WASHINGTON (Reuters) - The Bush administration has sold the last wheat stocks in an emergency food aid trust and is holding on to $294 million in cash so it can respond more quickly when food crises strike, a senior Agriculture Department official said on Tuesday.

"We've taken ourselves one step closer to providing food aid," said Deputy Agriculture Secretary Chuck Conner.

"I hope people understand here that we've actually increased the speed at which we can respond ... This was just a win-win for everyone," he said in an interview.

USDA officials confirmed on Monday they had sold the last of the wheat sitting in the Bill Emerson Humanitarian Trust, a safety net for food aid programs that at the beginning of 2008 contained 915,000 metric tons of wheat and $117 million in cash.

The trust, designed to help the government act quickly when food aid is urgently needed abroad, had gone untapped since 2005.

But the Bush administration has dipped into the trust several times since April, as it reacts to the deepening global food crisis, in which soaring commodity prices have unleashed worries about rampant hunger.

Officials have committed more than $20 million from the trust to provide aid to North Korea, which experts warn is on the brink of a famine, and another $44 million to Afghanistan, Ethiopia, Kenya and Zimbabwe.

Conner said the remaining $294 million would be used when the U.S. Agency for International Development, which directs emergency food aid, decides it is needed.

It's unclear if that money will be used this year, while Bush is still in the White House, or years down the road.

"We feel this was a good move for us," Conner said, noting that shifting from wheat to cash would save the government $10 million a year in storage costs.

The United States is the world's top donor of food aid.

Administration officials objected to characterizations of the sales from some onlookers, who urged USDA to act quickly to add more cash or wheat to the trust.

Tom Harkin, the Iowa Democrat who chairs the Senate Agriculture Committee, scolded the department for not sharing its future plans to restore crop or cash to the trust.

"This move represents a significant change in the way the Emerson Trust is operated. Regardless of the reasons for doing so, the Administration should have alerted Congress that they were taking this step," Kate Cyrul, a spokeswoman for Harkin, said on Tuesday.

In Conner's eyes, though, the decision to convert wheat to greenbacks was simply "maximizing food aid dollars," taking advantage of high wheat prices.