INTERVIEW-US looking to buy food aid in poor nations

* US looking to procure more food aid locally

* US backs World Bank to distribute agriculture funds

ROME, Nov 17 (Reuters) - The United States is looking to procure more food aid locally to increase farming capacity in the developing world rather than relying on shipping U.S. grown food, the head of its development agency said on Tuesday.

The United States is the largest food donor in the world but Washington has been criticized by non-governmental organizations for shipping too much U.S.-grown food to hunger-stricken areas.

Critics say up to 65 percent of the cost of U.S. aid goes to shipping and logistics and they have called for the United States to use this money instead on paying for food produced in the developing world, increasing the impact of its aid spending.

Alonzo Fulgham, acting head of the U.S. Agency for International Development (USAID), told Reuters on the sidelines of a World Food Summit in Rome that U.S. President Barack Obama's government was re-examining its food aid strategy.

"Our country is looking at the policy and identifying where we should be buying food locally to increase capacity," he said.

"That is all part of our new strategy and the new administration is looking very strongly at it but like all rules has to be negotiated and discussed in Congress."

"There has already been some leeway in looking at where we can buy food locally in emergencies to save lives," he said.

Obama, who has nominated a new head of USAID who has yet to be approved by Congress, has said he wants to boost the agency's budget to $52 billion by 2015, from $25 billion at present.

Fulgham said the nomination this month of Rajiv Shah, a longtime development worker who now serves as chief scientist at the Department of Agriculture, came amidst a major rebuilding of the agency.

USAID has roughly 7,000 people working in 88 countries and is adding 1,000 more, he said.

Obama has pledged to double spending USAID's spending on sustainable agricultural development. His leadership was instrumental in securing a pledge from G8 leaders to invest $22 billion over three years in sustainable agriculture at a summit in Italy in July.

Fulgham reiterated Washington's position that this money would best be channeled through a fund administered by the World Bank, whose head is normally appointed by the United States.

"We support a World Bank fund," he said.

However, this proposal has raised criticism from other delegates to the Rome summit, some of whom say the World Bank is tarnished by its association with liberal economic policies which have exacerbated poverty in the developing world.

Francisco Sarmento, head of food rights at charity ActionAid, was among the delegates calling for the money to be given to a UN World Committee on Food Security, which is being reformed to include civil society groups alongside more than 120 countries.

"These resources will allow the reformed UN world committee on food security to fulfill its mandate," he said.