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Soaring food and fuel prices threaten to widen the funding gap faced by the United Nations food aid agency this year, prompting officials to intensify their plea for last-minute donations they hope will preclude cuts to assistance for needy nations.
The World Food Program, the Rome-based UN agency, has been canvassing donor nations in recent weeks to help fill its $500-million shortfall for donations planned for 2008. But needs have only increased since Josette Sheeran, WFP's executive director, visited Washington late last month as part of the tour aimed at cobbling together the half-billion dollars it requires to feed 73 million people this year.
Since then, Sheeran said in a letter to donor countries on March 20, "food prices have increased another 20 percent and such increases show no sign of abating any time soon." Crops generally represent a third of WFP's operational costs.
The price increases have ballooned WFP's 2008 costs from an original calculation of $2.9 billion to at least $3.4 billion today - and that doesn't include new, unanticipated needs as sky-rocketing food prices squeeze the world's poor.
WFP's quandary sheds light on the underbelly of a historic boom on world commodity markets, which have been a windfall for exporters in the United States and elsewhere.
Prices for wheat, corn, and soybeans have all hit record highs in recent months - fuelled by growing biofuel production and surging demand in countries like China - but remain vulnerable to shocks shadowing the overall global economy. The trend is compounded by record oil prices that make it more expensive to ship or truck aid to hungry people.
This "dramatic market challenge" marks the first time WFP has gone back to donors to ask for extra funds based solely on exploding prices, Sheeran told reporters by phone on Monday. She said stepped-up donations must come by May to avoid disrupting donations months into the future. It can take five months, for instance, to get aid to Sudan's Darfur region.

Copyright Reuters, 2008

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