The price of rice at the central market in Katmandu, Nepal, seen here on Wednesday, has risen sharply this year. (Emilio Morenatti/Associated Press)

Amid rising food prices and dwindling supplies worldwide, Ottawa announced Wednesday it will pledge an extra $50 million to combat the global crisis.

International Co-operation Minister Bev Oda said the additional money will mean Canada will contribute a total of $230 million to the UN's World Food Program in 2008.

Of the $50 million, $45 million will go to the UN program, with $10 million of that specifically earmarked for Haiti.

Another $5 million will go to the Canadian Foodgrains Bank, an organization of church-based agencies that provides food and development assistance to countries around the world.

"This is a significant contribution which will have a real impact in helping starving people around the world," Oda said.

Oda also announced that Canada will "untie" aid, meaning the donated food will no longer have to be purchased in Canada. She said studies show tied aid represents a "major efficiency loss," as much as 30 per cent.

Oda said that earlier in the decade, 90 per cent of food had to be purchased in Canada, which was reduced to 50 per cent in 2005. But starting this year, all food aid will be untied, she said.

"By enabling the food aid to be purchased where it is less costly, has reduced transportation costs and from sources closer, will speed delivery and will increase the effectiveness of our food aid dollars," she said.

The announcement comes a day before the UN deadline for emergency aid contributions from donor countries in what the World Food Program is calling the worst food crisis in 40 years.

The World Food Program is seeking an extra $755 million in food aid from donor countries, a 30 per cent increase in its overall budget.

Canada, which has been considered one of the world leaders on this front, has been put under intense pressure from the UN to make an announcement on how much it will pledge.

In 2007, Canada was the second-largest donor to the UN program, behind only the United States.

A global surge in food prices — brought on by rising fuel costs, biofuel production, drought in Australia, market speculation and increased demand from China and India — has sparked violent riots in the Caribbean, Africa and Asia, and rationing in some parts of the United States.

A number of countries, including Germany and Switzerland, have already committed additional money to the UN program.

With files from the Canadian Press