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Food prices bring aid agencies to their knees

By Clarisse Douaud, 15-Apr-2008

Related topics: Financial & Industry

If governments do not step up to the plate and increase funding to food aid projects in light of global commodity price hikes, aid agencies say the effect will cripple them.

"There is a genuine risk that the effectiveness of response may be compromised or reduced," John Hoddinott, a researcher with the International Food Policy Research Institute, told FoodNavigator-USA.

The UN World Food Programme in March called on donors to fund an additional $500mn to help them respond to an approximately 55 percent increase in food and fuel prices around the world.

"It would be very desirable if Canada and the US showed leadership on this issue, but I am not optimistic that will be forthcoming given the pressure on their budgets," said Hoddinott.

According to aid agencies, it is the world's poor who will suffer the consequences of these prices.

The Food and Agriculture Organization of the United Nations (FAO) forecast Friday that the cereal import bill of the world's poorest countries will rise by 56 percent in 2008 over 2007 - hitting a hard blow following a 37 percent increase between 2006 and 2007.

"They're feeling the full brunt of the increase in commodity prices," Jim Cornelius, executive director of the Canadian Foodgrains Bank, told FoodNavigator-USA.

The Canadian Foodgrains Bank collects grain and financial funding to, in turn, ship to international projects, and use to buy grain locally in developing countries. But it says shortfalls this year will likely have a strong impact on their ability to help.

"If we work with the same budget as last year we'll be providing at least 25 percent less," said Cornelius. "This is at a time when there is more need for food aid, but because prices are high, we have less."

The problem, according to Hoddinott, is that while governments have been saying they will spend more on food aid, the rise in food prices mean this spending does not actually result in more food tonnage.

"Governments are trying to walk a careful line" with their commitments, he said.

In March, WFP's deputy executive director hunger solutions, Sheila Sisulu, traveled to Canada to urge officials there to increase the government's international food aid.

However, in a written response to FoodNavigator-USA, the government's aid arm - the Canadian International Development Agency (CIDA) - downplayed any real threat of a decreased donation.

"Thus far in 2008, Canada has already provided WFP with over C$82mn and continues to be one of WFP's top donors. It is therefore premature to conclude that Canada's contributions are decreasing.

To increase the efficiency of its food aid, Canada's current policy allows for

up to 50 percent of Canada's food aid to be purchased least developed and lower income countries. The previous policy only allowed for 10 percent."

Following the latest incidence of food riots and the deaths of four people in Haiti last week, WFP once again urged governments and donors to contribute at what has become a critical time.

"What we see in Haiti is what we're seeing in many of our operations around the world - rising prices that mean less food for the hungry," said WFP executive director Josette Sheeran. "A new face of hunger is emerging: even where food is available on the shelves, there are now more and more people who simply cannot afford it."

Members of the international food aid community are likely watching for any developments at this week's International Food Aid Conference in Kansas City. The US Department of Agriculture and the US Agency for International Development (USAID) are hosting the conference, which they say is to be the largest food aid conference held in the US.