April 15, 2008 / 12:39 AM / 12 years ago

Aid sector sees lingering woes in food aid crunch

KANSAS CITY (Reuters) - A deepening global food crisis requires not only greater funding for food aid going to hungry nations, but long-term investment to improve agriculture productivity, especially in the developing world, officials and aid groups said on Monday.

“This is an increasingly difficult time. We need to get the right food to the right people at the right time,” Jeffrey Borns, director of the largest U.S. food aid program, said at the U.S. government’s annual conference on global food aid.

But as important, Borns said, are steps that might ease the dangerous toll that soaring food and fuel prices are taking on the most fragile nations — greater investment to support farm sectors, to improve yields, and to lower trade barriers.

The revolution on commodity markets, which pushed up global food prices by almost 40 percent last year, cast a pall on the discussions in Kansas City, deep in American wheat country.

Not only are crop producers, shipping companies, and aid groups — all of whom have a stake in the world’s largest national food aid system — making their perennial requests for larger aid budgets, they are warning that the price crunch squeezes donations at the worst possible time.

U.S. aid officials have already said they might be forced to cut back donations this year after their commodity costs jumped by more than 40 percent in the first half of fiscal 2008, adding around $200 million to the program’s cost.

The United Nations’ food aid agency is seeking an extra $500 million for its programs, and has given backers until May or June to provide enough new support to keep donations on track.

At the same time, need is growing in the developing world, where record prices for wheat, corn, rice and other crops make it harder to put food on the table.

From early 2006 to early 2008, global prices for wheat rose by at least 180 percent, the World Bank noted in a recent report. Wheat has climbed even more since then.

For countries that import the bulk of their food staples, the effects can be devastating.

In recent weeks, food-related riots have broken out in a growing list of countries, including Egypt and Pakistan.

The prime minister of Haiti, the poorest country in the Americas, was fired over the weekend amid allegations he failed to rein in soaring costs for struggling Haitians and to foster greater food production at home.

“This perfect storm has hit with a speed and intensity that very few predicted,” said Michael Usnick, director of U.S. relations at the U.N.’s World Food Program.

The problem is compounded by the growing cost of shipping U.S. crops overseas. For food aid programs run by the Agriculture Department, average freight costs jumped by $30 to $50 a ton from 2006 to 2008.

Many experts predict high prices will linger through 2009 before farmers worldwide can adjust supplies.

Major donors like the World Bank are turning anew to agriculture, which had fallen out of vogue for many years in development circles, as a focus of their support.

The World Bank will double agriculture lending to Africa in 2009, bringing it to $800 million. It also wants to refocus the global debate on using food crops to make biofuels, which many people blame for the price surge.

But aid officials say much more is needed.

“These investments will reap high returns including peace and stability,” said Frank Orzechowski, an official at Catholic Relief Services, a U.S.-based charity.

Aid groups are also clamoring for help in the short run, asking for a major increase in funding for this year and next.

The Bush administration generally spends about $2 billion a year on overall food aid — providing an average of 4 million tons of commodities — through several different programs.

On Monday, the White House announced a $200 million release from a crop trust.

Editing by Braden Reddall

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