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Published on Tuesday, March 25, 2008 by The Los Angeles Times

World Food Program Issues 'Emergency Appeal' For Funds

by Tracy Wilkinson

ROME -- With food and fuel prices soaring, the United Nations agency charged with feeding the world's hungry has launched an "extraordinary emergency appeal" to cover costs and avoid having to cut aid, a senior official said Monday.

The World Food Program called on donor nations for urgent help in closing a funding gap of more than $500 million by May 1. If money doesn't arrive by then, Executive Director Josette Sheeran said in a letter to donors, the WFP may be forced to cut food rations "for those who rely on the world to stand by them during times of abject need."

The poorest face hunger as people around the world are being "priced out of the food market," Sheeran told reporters Monday in a conference call.

Citing food prices that had ballooned 55% since June, the WFP disclosed a $500-million shortfall Feb. 25, and the gap has continued to grow ever since, Sheeran said.

WFP officials declined to put a figure on the current shortfall, saying it was a moving target, but experts estimated it in the range of $650 million.

The Rome-based WFP feeds at least 73 million people in nearly 80 nations with an annual operating budget of $2.9 billion.

"We've never quite had a situation where aggressive rises in food prices keep pricing operations out of our reach," Sheeran said.

The WFP has issued emergency appeals in the past for natural disasters or wars, but never for a market-generated crisis, she said.

Letters to donors containing the new appeal for an "emergency allocation" were dated March 20 and sent over the weekend. Copies were made available to journalists.

Although the WFP has been sounding an alarm for a couple of months, the appeal to the donors made the warning a stark reality.

In the letter, Sheeran noted that the WFP had attempted to reduce its costs by turning to local and regional markets to buy up to 80% of the food it disburses, a share that grew by 30% over the previous year.

"This not only saves on food and transport costs but is a win for local farmers, helping to break the cycle of hunger at its root," she wrote. "But even with our mitigation efforts, the cost of our food purchases has risen 55% since June 2007" and an additional 20% since Feb. 25. "Such increases show no sign of abating any time soon."

In addition to being hit by spiraling costs of grains and other staples, WFP operations have been hurt by record-high fuel prices and other transport costs.

Food commodities are becoming more expensive because of rising demand in developing countries, natural disasters and climate change, and the shift of millions of tons of grains to the production of biofuels.

The United States is the largest single contributor to the WFP, accounting for about 40% of the agency's food and money donations, followed by the European Union. U.S. officials have already warned that it is likely they will be cutting donations to global humanitarian organizations because of higher costs.

Sheeran said that the people at greatest risk are those who live on $1 a day or less, but that officials are also bracing for what the U.N. is calling the "new face of hunger." These are people who may have access to food but can no longer afford to buy it.

The shortfall does not take into account the anticipated swelling in the number of people in need. Eventually, if prices continue their ascent, the WFP crisis will grow even more critical.

Thus far, only one nation, Afghanistan, has made a formal request for additional assistance.

President Hamid Karzai in January asked the WFP to help feed an additional 2.5 million people.

Numerous countries, however, have inquired, Sheeran said.

"We have yet to speak to any country that does not have concerns," she said.

wilkinson@latimes.com

2008 The Los Angeles Times

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