UN food aid agency's gap grows

By Missy Ryan

WASHINGTON (Reuters) - Surging crop prices have helped widen the World Food Program's funding gap to around $750 million this year, and the U.N. food aid agency warned it may have to cut rations for hundreds of thousands of schoolchildren if new donations don't materialize soon.

In February, WFP announced it needed extra donations to help cover a $500 million shortfall, driven by soaring food and fuel costs, and avoid cutting back food aid deliveries in 2008.

Since then, costs have spiked even more even as tight crop supplies and high food prices intensify hunger, WFP Executive Director Josette Sheeran said on Friday, bringing the total shortfall for this year to $755 million.

World prices for rice, wheat and other staple crops have soared to historic highs in recent months; the price the agency pays for rice jumped 70 percent in the last six weeks.

The crop crunch is compounded by high fuel prices -- U.S. crude oil hit a record $117 a barrel on Friday -- that make it more costly to transport food.

"The world's misery index is rising," Sheeran warned in a speech that laid out a grim portrait of global food insecurity: The most vulnerable people in already poor countries, many of them overall food importers, skipping meals or choosing less nutritious meals for their children.

The run-up in commodity prices, rooted in growing biofuel output, rising incomes, and poor weather, has been simmering for several years, but exploded in the past nine months.

Most poor people "don't know what hit them," she said.