May 2, 2008 / 12:42 PM / 11 years ago

WFP unsure if Bush food funds will cover aid gap

ROME (Reuters) - The World Food Programme said on Friday it was not yet sure if a proposed $770 million (390.2 million pounds) in extra U.S. food aid would help it feed the poor and close a budget gap caused by soaring food prices.

The U.N. food agency, seeking to cover a $755 million budget shortfall, said Washington must still decide how to divide up the funds to organisations around the world.

“We will have to wait to see how this money is going to be allocated to the different agencies responsible for responding to the impact of global food prices,” said WFP spokesman Gregory Barrow.

“But clearly this is a major step for all of us who are engaged in addressing this problem.”

Still, the U.N. Food and Agriculture Organisation said the proposed U.S. aid along with expected increases from other donors should “enable the countries affected to overcome the constraints resulting from high market prices”.

The U.S. Congress still needs to approve the funds that President George W. Bush called for on Thursday — they would become available on October 1.

The Rome-based WFP, which aims to feed 73 million people in 80 countries this year, says the cost of feeding the world’s hungry has jumped nearly 55 percent since it set its 2008 budget in the middle of last year.

It has been hard hit by sharp rises in the prices of basic foods like grains. Asian rice prices have almost tripled this year and prices on the Chicago Board of Trade have risen more than 80 percent.

With the global food crisis threatening to spread social unrest, the WFP appealed to donors in late March to help it offset a $500 million hike in aid costs to maintain its already scheduled programmes for this year. It later raised that figure to $755 million.

Thanks to pledges from countries including Canada, Australia and Britain, the WFP said it was closing the gap.

“We were around about 70 percent on our way towards that 755 figure before the Bush announcement,” Barrow said.

He said Canada had nearly increased its pledge by $45 million, or nearly the 30 percent target the WFP had asked of top donors. Australia increased its pledge by $27.5 million while Britain increased its pledge by $60 million.

Germany doubled its basic annual contribution to the WFP of 23 million euros ($35.57 million) over the past several weeks, Germany’s development ministry said.

French President Nicolas Sarkozy said in April his country was doubling its food aid budget in 2008 to almost $100 million. Normally the WFP would receive 70 percent of France’s food aid budget, but negotiations are still underway to establish whether this proportion will apply to the recently announced increase.

(Additional reporting by Madeline Chambers in Berlin and Crispian Balmer in Paris)

Writing by Phil Stewart; Editing by Jon Boyle

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