Canada pledges extra C$50 mln in food aid

OTTAWA (Reuters) - Canada pledged an extra C$50 million ($49.5 million) for international food aid on Wednesday and said it would also allow its money to be used to buy food abroad and not tie it to purchases of Canadian produce.

Responding to a U.N. plea for extra help to offset a dramatic rise in world food costs, Ottawa promised to bring its total food aid in the 2008-09 fiscal year to C$230 million.

"With today's announcement of an additional C$50 million and the untying of our food aid, Canada is responding to the terrible impact that rising food costs are having on the world's most vulnerable people," International Co-operation Minister Beverley Oda said in a statement.

The untying of aid means that it can be purchased outside Canada. Previously, half of all the food shipped to poorer countries had to be bought within Canada but Oda said such a condition meant the aid was about 30 percent less efficient.

Oda said Ottawa would put a special emphasis on buying food in developing countries.

Of the additional C$50 million, C$45 million will be channeled through the U.N. World Food Program, and C$10 million of that amount will be earmarked for Haiti.

The remaining C$5 million will go to the Canadian Foodgrains Bank, a nonprofit group that collects donations of grain and cash for programs overseas.

It was not certain that the new aid would actually lead to an increase in food being provided over last year. Oda said Canada's increase was 28 percent, and she hoped this would boost the amount of tonnage provided, but this depended on the price of food and fuel.

WFP official Terri Toyota said that untying the aid would allow greater flexibility and increase the chances of providing more actual food to the needy.

Also unclear was how much food aid would now be sourced in Canada after the untying of the aid money.

Oda said she was confident Canada would continue to be a source of food bought for aid, as its produce was of high quality.

Asked whether the government was concerned about the impact of biofuel production on higher food prices, Oda pointed out that in Canada 95 percent of the agricultural land was used to grow food for people so this had a limited effect.

($1=$1.01 Canadian)

(Reporting by Randall Palmer; writing by Louise Egan; editing by Rob Wilson)