Food Aid Agency Feels the Crunch

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David Silverman / Getty

A Palestinian schoolgirl distributes vitamin-enriched snacks provided daily by the World Food Program to her classmates. The WFP announced that it has begun to cut food provisions of some of the world's poorest children.

When there's a food emergency in the world, the World Food Program (WFP) is the agency called in to handle it, feeding everyone from flood victims after the 2004 tsunami to schoolchildren in Nairobi slums.

But as world food prices soar, leaving millions of the world's poor unable to afford staples they lived on just one year ago, the world's stopgap measure against extreme hunger also finds itself short of food. The WFP, the U.N.'s food-aid agency, headquartered in Rome, had budgeted $2.9 billion this year to buy food and distribute it to more than 70 million people worldwide. By late March, however, high food and fuel prices meant that those same planned operations were expected to cost an extra $500 million. Just one month later, says WFP executive director Josette Sheeran, the funding gap has now widened to $755 million. And that's before factoring in new programs that the WFP would like to launch, boosting aid in new places where food shortages suddenly loom. "I think that with what we're facing, all over Africa, cuts are on the way," says John Aylieff, WFP head of programs.

That could mean a number of things. "These are very heartbreaking kinds of decisions to make," Sheeran told reporters in London on Tuesday, in between meetings with U.K. officials. Already the WFP has started reducing the amount of food given in rations to many of the 20 million children it feeds in schools. Rations in Darfur where the WFP feeds millions of displaced people were cut this month after bandits attacked trucks delivering them and killed the drivers. But the very last service that the WFP would cut, Sheeran says, is in rations for pregnant and nursing mothers and for toddlers. "If children under two go even for a number of months without vital nutrition, this will be with them for a lifetime."

Why the crunch? Prices for rice, wheat, corn and soybeans have soared in the last ten months as rising oil prices drove up food production costs: from the fuel to power farm machinery, to the hydrocarbon-based fertilizers, to the gasoline needed to transport food to stores. At the same time, demand for grains has grown as developed countries produce more biofuels from food-crop feedstocks, and as people in China and India take advantage of their rapid income growth and start eating more meat (which requires more grain to feed more animals). Add to that a few short-term weather shocks, like drought in Australia, and emergency stores get depleted leaving prices to skyrocket. Fearful of food shortages, some large producer nations, including India, Vietnam and Kazakhstan, have limited exports. That can keep prices lower at home, but drives up costs further for people who people in import-dependent nations.

In the short term, the WFP has issued an emergency appeal to the world's governments, urging them to cover its substantial budget shortfall. Britain, Germany and Spain have already pledged extra funds, and Sheeran says she is hopeful Japan, Canada and the U.S. will approve new donations as well. What's more, Sheeran says, "I would say over the medium to long term I am an optimist because the world knows how to grow enough food." The U.N. Food and Agriculture Organization predicts that cereal production will once again increase in 2008, and bring at least a modest reduction in food prices. "As always, if you take [all the world's] food and divide it by the world's population, there's more than enough for everyone," says Steve Wiggins, an agricultural economist at the U.K.-based think tank Overseas Development Institute, and author of a recent report, Rising food prices: a global crisis. It's just a question of how to get it to the people who need it most.