AUSTRALIA'S foreign food aid cash should be replaced with Australian-grown food sent directly to people in need.

That's according to federal Liberal MP Dr Sharman Stone. Countries such as New Zealand and the US had a "far more sensible win-win approach" to aid, she said.

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As an example, Dr Stone said New Zealand dairy co-operatives were paid by their government to make milk powder biscuits to send as aid. This had the dual benefit of providing employment and stimulus to the farm sector from the milk purchases, she said.

The US Government also buys produce from its farmers to send as food aid to areas in crisis.

In August last year, the US Department of Agriculture bought $170 million of pork, lamb, chicken and catfish for food banks to help drought-stricken farmers.

"There are currently 1500 tonnes of apricots about to rot in the Goulburn Valley," Dr Stone said.

"How much benefit would be gained if the (Australian) Government used our aid budget to pay our food manufacturers to produce some healthy preserved fruit and vegetable product for foreign aid donations, to keep people employed, and to sustain our farmers?"

Ms Stone raised the issue with Foreign Affairs Minister Bob Carr and "was heartened by his interest".

The National Farmers' Federation welcomed the idea, but noted the logistical challenges.

"From a surplus product point of view, you could argue that is a good idea," NFF president Jock Laurie said.

But AusAID said it was committed to the World Food Programme.

"WFP strives to purchase food as close as possible to where it is needed, so that money and time is not wasted in expensive transport costs," she said.

"Buying food locally also means that food aid will more likely be socially and culturally appropriate for the recipients."