U.N. food aid funds growing, but needs growing too

WASHINGTON (Reuters) - The World Food Program, facing an unprecedented surge in the price of food it buys for the world's hungry, has secured about 60 percent of the extra funds it needs to cover planned aid donations this year, the head of the United Nations agency said on Tuesday.

"We put out an extra appeal for $755 million and we're about 60 percent of the way there," WFP Executive Director Josette Sheeran said in a speech at a Washington think tank.

But the agency has already been forced to cut some of the food rations it provides and its $755 million gap does not include new, emerging hunger needs that will require an additional $418 million to $430 million this year.

Sheeran, a former Bush administration official, said the world's food delivery system was "groaning under the strain of skyrocketing demand, the soaring cost of inputs, depleted stocks, crop loss due to drought, floods and severe weather."

The surge in global prices for staples such as bread, rice and milk over the last year has pushed the world into a deepening crisis that Sheeran said could well be the first truly globalized humanitarian emergency.

World leaders are calling for urgent steps to ease costs, create a larger cushion of food across harvests and diffuse the food panic that has triggered protests and even riots across the developing world.

"It is said that a hungry man is an angry man," Sheeran said.

Through March 2008, global food prices jumped an annual 43 percent, U.S. officials say, and many experts believe the higher prices will linger for at least two to three years.

TIME IS OF THE ESSENCE

The trend is believed to be deepening poverty, especially for food-importing nations like Nicaragua, pushing more people into hunger as buying power shrinks for food aid budgets.

"We estimate an additional 130 million (people) will be unable to adequately meet their food needs because of high prices," Sheeran said.

She also called on exporter nations to relax restrictions on crop sales -- which some countries have imposed in a desperate bid to control prices at home -- to ensure that the U.N. agency is able to procure food when it goes to the world marketplace.

Donor nations like Canada, Australia and Britain have stepped up pledges to help WFP cope with soaring costs. The United States, the world's largest food aid donor and WFP's top supporter, last month released 260,000 metric tons of wheat from an emergency crop trust.

Last week, U.S. President George W. Bush announced plans, which must be approved by Congress, to spend an additional $770 million on food aid and agriculture development in the fiscal year beginning October 1.

For countries where people spend up to three-quarters of their income on food, time is likely to be of the essence.

The Bush administration already has requested $350 million in last-minute food aid funding for this fiscal year, a perennial addition to annual budgeted funds.

On Tuesday, Democratic leaders in the U.S. House of Representatives announced they would try to add another $500 million for emergency food aid.

Rep. David Obey of Wisconsin, chairman of the House Appropriations Committee, said the money would be attached to a massive Iraq war funding bill that could be debated on the House floor on Thursday.

It was unclear whether Bush would veto the spending bill if it contained too much extra spending.

The administration also is seeking flexibility to buy more food overseas for aid programs, in hopes of making aid dollars go further.

(Additional reporting by Richard Cowan; Editing by John O'Callaghan)