By Missy Ryan
WASHINGTON, May 8 (Reuters) - U.S. lawmakers unveiled a five-year global food aid plan on Thursday, snubbing White House demands for significantly greater flexibility when buying food for the world's poor.
The final House-Senate compromise on the 2008 farm bill, if approved, would spend a mandatory $60 million over four years on a pilot program to test overseas purchases of food aid -- a step away from the traditional reliance on U.S. farmers.
The pilot provides far less, though, than what the Bush administration had asked be freed, up to about $400 million a year based on recent budgets, for purchases abroad.
But the program does reflect lawmakers' growing concern over the skyrocketing food prices that have pitched much of the developing world into a greater unrest.
Even as lawmakers hailed the $300-billion farm bill as a model of smart policy, the Bush administration pledged a veto.
Both chambers are expected to vote on the final bill as early as next week before it is sent to the White House.
The bill's crop supports have typically dominated debate in farm country, but the often-overlooked food aid provisions have received greater attention in recent months as the Bush administration vows to help fight a deepening food crisis.
Prices for staples such as wheat, corn, and rice have gone wild in recent months, increasing global food prices by 43 percent in the 12 months ending in March.
The price surge is typically blamed on a potent mix of growing demand in developing countries such as China, poor harvests, increased investment and biofuel production.
It is also, according to the World Food Program, growing the ranks of people grappling with hunger worldwide.
Against that backdrop, U.S. food aid programs, the world's largest, may be called on more than ever.
The programs, while generous, are also seen as inefficient, with about 65 cents of every dollar that Food for Peace, the largest aid program, spends on food aid going to overhead.
Advocates of buying food in and around the countries that need aid, instead of shipping U.S. crops, argue it will save money and deliver assistance more quickly.
"Congress failed to meaningfully address the crisis of rising food prices overseas and the need to increase the efficiencies of our food aid programs," Oxfam America said in a statement.
But crop producers, shipping companies, and their allies on Capitol Hill have resisted the change for years, fearing it will undermine the bedrock of support for aid programs and even making things worse in countries with fragile food markets.
House Speaker Nancy Pelosi, a California Democrat, said the bill should have contained greater subsidy reform, but urged President George W. Bush to sign it.
Bush has expressed growing concern about the world food situation, and last week announced a package of new food aid and farm development worth $770 million.
Congress could also vote soon on a major increase in last-minute food aid funding for this year.
"The administration and Congress are stepping up to the plate," said Robert Zachritz of the aid group World Vision, which is pleased overall with the bill.
Lawmakers are also expected to provide about $84 million in mandatory funding for a program that provides meals to school children overseas.
Supporters of the McGovern-Dole program, which has not had mandatory funding since 2003 but is typically budgeted $100 million a year, had hoped the final bill would adopt the House's plan for $840 million over five years.
Former presidential candidate and Sen. George McGovern, for whom the program is named, said the $84 million was "better than nothing," but was disappointed there wasn't more.
"There are too many hungry kids out there," he said. (Additional reporting by Charles Abbott; Editing by Marguerita Choy)