Food and water is distributed to Iraqis.
Food and water is distributed to Iraqis. - 
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Renita Jablonski: Talk about a looming global food shortage is a big part of this week's G8. Leaders of the world's wealthiest nations are meeting in Japan this week. They're promising more money for food aid. But as rising costs dissolve global relief budgets, some are calling for changes in the way that food aid is delivered. Their first target is the famed U.S. program "Food for Peace." From the Marketplace Sustainability Desk, Sam Eaton reports.

Sam Eaton: At a refugee camp in northern Kenya, men sing as they unload white sacks of grain imprinted with the American flag. This dusty food distribution point is the final stop in a six-month journey from the American heartland -- a journey many consider to be the crowning example of U.S. good will.

But John Hoddinott with International Food Policy Research Institute sees it as a missed opportunity:

John Hoddinott: It's extraordinarily striking how clumsy and inefficient the American system is.

Hoddinott says special interests, not goodwill, are the main drivers of U.S. food aid. The U.S. is the world's largest food donor, with contributions exceeding a billion dollars a year. But there's a catch: all of that food must be purchased from U.S. suppliers and shipped on U.S.-flagged carriers. That means in times of crisis, food can take up to six months to reach recipients. And the cost of shipping on U.S. carriers is the highest in the world. So:

Hoddinott: Only about 40 percent of U.S. food aid actually goes on food.

All this has prompted calls for reform from the White House. They recently proposed funding food purchases closer to where crises occur. That protects local markets and buys more food for the money.

But Paul Green, with the North American Millers' Association, says the plan would backfire:

Paul Green: The real fear here is that we might see an unexpected and unintended outcome of far less resources rather than far more.

Green, whose members include agricultural giants ConAgra and Archer Daniels Midland, says cutting U.S. farmers out of the deal would also eliminate the food aid program's biggest supporters.

Green: I dare say that without a constituency from the agriculture community, the chances of getting those appropriations would fairly disappear.

That argument has left U.S. food aid policy virtually unchanged for decades. But the International Food Policy Research Institute's John Hoddinott says everything else has changed. Rising food prices are swelling the ranks of the hungry and crippling the budgets of relief programs. He says every dollar wasted on keeping special interests happy is the difference between a meal and starvation for the world's poorest.

I'm Sam Eaton for Marketplace.

Follow Sam Eaton at @eatonsam