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By Barry Malone
KOREM, Ethiopia, June 1 (Reuters) - Clutching an intricate bronze cross he used to dig graves during Ethiopia's 1984-1985 famine, priest Alemayu Gede prays drought and high food prices will not make him use it as a shovel again.
At the height of the famine that caused more than 1 million deaths and spawned the Band Aid project bringing dozens of top musicians together to raise money, Alemayu helped dig 200 graves a day with the symbol of his faith which he carries everywhere.
"Some used hands, some used sticks and I used this cross," said Alemayu, now in his late 80s. "There were 350 of us, digging day and night. This place was the valley of death."
Alemayu is standing at a grave for 300,000 people just outside the northern town of Korem that attracted world attention in 1985 when hundreds of thousands of people streamed down from the surrounding hills looking for food.
As survivors gathered in the town this week to unveil a memorial sculpture and lay a ceremonial cornerstone for a hospital paid for by Band Aid, the threat of deadly hunger loomed again in the Horn of Africa country.
About 70 km (44 miles) away in Nehoni, farmer Kassu Belai said seven of his cattle had died as watering holes dried up in the searing heat, forcing pastoralists to crowd their cows, goats and camels around the fast-disappearing liquid.
No rain is coming.
"Our animals are dying," he said. "And for us that means we must be ready to die."
Local doctors have already reported more than 400 children suffering from malnutrition, and the U.N. children's agency UNICEF estimates that 126,000 children are severely malnourished. Only 33,000 are receiving treatment because of what aid workers say is a lack of money.
"We are having a drought in many parts of Ethiopia," UNICEF's Ethiopia country director Bjorn Lungvist told Reuters. "And we have rising food prices compounding the problem. This global situation has affected the U.N. World Food Programme's ability to help."
The WFP has estimated that it can afford 60 percent less food than it had budgeted for, because of the rise in world food prices that world leaders will tackle at a U.N.-led summit in Rome next week.
Ethiopia, sub-Saharan Africa's second most populous nation behind Nigeria, itself needs $197 million to meet the food shortfall, the United Nations agencies estimate.
Another problem, aid workers say, is the fact that donor money is being diverted to disasters in China and Myanmar.
In southern Ethiopia, starving children are arriving daily at hospitals, health centres and churches, their emaciated bodies and desperate faces horribly reminiscent of 1985.
UNICEF says 6 million Ethiopian children under 5 may be at risk of malnutrition. The WFP estimates 3.4 million of Ethiopia's more than 80 million people will need food relief from July to September, in addition to 8 million regularly receiving assistance.
Ethiopia had been held up as an example after cutting its infant mortality rates to 123 deaths per 1,000 births from 166 per 1,000 during its last bad drought five years ago.
The record food prices have all but wiped out those gains, aid workers say.
That may spell disaster for another generation of Ethiopians born into the world's worst hunger. Tesfaye Hagdu, 24, was a baby during the last famine and is now the father of three sons.
"I don't know why I am here. God maybe. But I worry about our children. People say there is no food in some places now. We need the world to help again," he said. (Editing by Bryson Hull) (For full Reuters Africa coverage and to have your say on the top issues, visit: africa.reuters.com/)