(Adds Bush, Annan quotes)

By David Clarke

LONDON, June 16 (Reuters) - The world's richest nations are falling short on pledges to double aid to Africa by 2010 at a time when soaring food prices risk destroying decades of economic progress on the continent, a watchdog said on Monday.

The Africa Progress Panel, set up to monitor commitments made at the Group of Eight (G8) summit in 2005 at Gleneagles in Scotland, said in a report rich nations would be $40 billion shy of their pledges based on current plans.

During a visit to London, U.S. President George W. Bush said he would push, along with British Prime Minister Gordon Brown, at the G8 summit in Japan next month for more African aid.

"My message at the G8 is: 'looking forward to working with you, thanks for coming to the meeting, just remember that there are people needlessly dying on the continent of Africa today'," he told a joint news conference with Brown.

"We expect you to be more than pledge-makers, we expect you to be cheque writers," Bush said.

Former U.N. Secretary-General Kofi Annan chairs the panel, which includes former British Prime Minister Tony Blair, former International Monetary Fund chief Michel Camdessus and leading anti-poverty campaigner Bob Geldof.

At a news conference in London, Annan also urged Europe's leaders and G8 members to back their pledges with action.

"We are once again at a defining moment (for Africa)," Annan said. "The only promises that matter are the ones you keep."

The report, "Africa's Development: Promises and Prospects", said debt relief agreed at the 2005 summit had been significant because poor countries had boosted spending on health and education, over and above the amount of relief.

But unless rising food prices were halted and reversed, there would be a significant increase in hunger, malnutrition, and infant and child mortality in Africa.

"The food crisis is a major setback which is creating a major humanitarian emergency," the report said.

GLOBAL LOTTERY

Steps to halt the surge in oil and food prices will be high on the G8 agenda in Japan, partly because they are contributing to an economic slowdown in rich nations and a backlash from disgruntled voters.

But the Africa Progress Panel said it was increasingly clear the pressure on government finances in rich countries meant they would not meet their aid pledges to Africa.

It said they should come up with innovative funding mechanisms for increased aid, such as taxes on foreign exchange trades, carbon taxes, levies on air travel and freight transport -- or even a global lottery.

The report said there was a critical need for a rethink of trade policies to give Africans more access to markets and fair trading rules so they could generate enough income to buy food.

It said the market for fertilisers should be liberalised as part of multilateral trade talks so more were produced in a bid to boost agricultural output worldwide.

Developed nations should review subsidies for biofuels as the growth of crops as an energy source may be hurting food production and contributing to global food price rises.

Also, with climate change likely to hurt food production in Africa more severly than other parts of the world, rich nations should spend more on renewable energy sources on the continent. (Editing by Janet Lawrence)

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