* UN World Food Programme faces major funding shortfall

* Needs $4.1 billion for 2009 budget

By Sharon Lindores and Katie Nguyen

LONDON (AlertNet) - Funding for food aid is at a 20-year low despite the number of critically hungry people rising this year to its highest level ever, the U.N. World Food Programme said on Wednesday as it announced more cuts in assistance to millions of the most vulnerable.

Appealing to donors for more money, the head of WFP, Josette Sheeran, said tackling the growing problem of hunger was critical for the peace, stability and security of many regions already hit hard by the economic downturn.

"In the week that marks the first anniversary of the financial crisis there are more hungry people in the world and less food aid than ever before," Sheeran told a news conference in London.

High food prices pushed the number of chronically hungry people to more than 1 billion this year for the first time, she said, adding that WFP has barely a third of the funding it needs to feed 108 million people this year.

To date WFP has confirmed $2.6 billion in funding towards its $6.7 billion budget for 2009.

It would take less than 0.01 percent of the global financial crisis bailout package to plug the gap in WFP's budget, she said.

Sheeran plans to take her message of the urgent need for funding to the G20 meeting in Pittsburgh on Sept 24 and 25 and to the U.N. General Assembly.

"We would like to see a bold vision," she said, adding that the hunger crisis can be solved. Even last year the world produced enough food to feed everyone - the question is getting it those who need it.

"We need a commitment that emergency needs during the next two years will be met," Sheeran told Reuters/AlertNet in an interview, adding WFP expects it will need another $6.7 billion next year to tackle the crisis.

REACHING OUT WHILE CUTTING BACK

WFP helps feed those deemed most desperate -- about 10 percent of the total in need. In this year's best case scenario the organisation will only reach 8.5 percent of those in need, Sheeran said.

The funding shortfall means that WFP is preparing to reduce rations in Kenya, where the government says 10 million people need food aid due to a combination of drought, high food prices, and recession.

"It used to cost one goat to buy a 90 kg sack of grain. It now costs four goats," Sheeran said.

From next month WFP will have to stop rations to 100,000 malnourished under-fives in Guatemala and 50,000 pregnant women and children. A sharp drop in remittances is partly to blame for the rising numbers of people without enough food in the Central American country.

In Bangladesh, WFP reaches barely 1 million of its targeted 5 million people who can't afford to buy food for their families.

Of particular concern are the needs of pregnant and lactating women and children under the age of two, Sheeran said.

She also cited Kyrgyzstan as an emerging concern for WFP with 600,000 people in need of food support.

Ninety-percent of WFP's funding is directed by donors who want their money spent on particular programmes, Sheeran said, adding that Sudan's western region of Darfur would not face severe funding cuts.

War-ravished Darfur is the site of the world's biggest international humanitarian aid operation.

"Pakistan and Afghanistan right now are not fully funded but are getting priority funding, but the Horn of Africa is in very difficult shape," she said.

WFP's biggest champions have been the United States, Canada, Australia, Britain and Europe.

"What we really need is for them to stay the course," Sheeran said, adding that the United States has "stepped up" to boost its emergency food aid funding this year.

Britain has put $70 million towards WFP so far this year, compared with $169 million in 2008, a Department for International Development (DFID) spokesman said.

Last year the WFP received $5 billion in funds.

Reuters AlertNet is not responsible for the content of external websites.