* Foreign food aid undermines local agriculture - Oxfam
* Conflicting trade and aid policies block growth - report
* Says donors should support redevelopment plan
WASHINGTON, Oct 4 (Reuters) - A massive influx of free foreign food to Haiti after January's earthquake helped feed many displaced people, but undercut Haitian agriculture and hurt farmers' incomes, Oxfam International said on Monday.
The international community has put too much emphasis on donating food to the rebuilding nation instead of developing Haiti's agriculture-based economy, it said in a report.
"Currently, U.S. rice subsidies and in-kind food aid undercut Haitian farmers at the same time as the U.S. government is investing in Haitian agricultural development," said Philippe Mathieu, Oxfam's director for Haiti.
"The international community must abandon these conflicting trade and aid policies in order to support the growth of Haiti's fragile rural economy."
The catastrophic Jan. 12 temblor, which killed as many as 300,000 people, devastated the economy of what was already the poorest state in the Americas and turned much of the capital, Port-au-Prince, into rubble.
The U.S. Agency for International Development has a five-year, $126 million program to support the rural population outside Port-au-Prince, and in August introduced two grants to help Haitian families buy local food.
But a ban on direct assistance to industries that compete with U.S. exports -- known as the Bumpers Amendment -- and extensive exports to Haiti of rice, sugar and poultry undermined an agricultural sector that was largely ignored by foreign donors and the Haitian government even before the quake, the report said.
The aid community has also not agreed to provide resources to support a $772 million agriculture plan put forth by the Haitian government after the temblor, according to the report.
A spokesman for USAID said the organization was balancing the short-term needs of Haitians with longer-term support for agriculture infrastructure development.
"USAID is using multiple tools to provide life-saving food to Haitians in the short term, while simultaneously building and strengthening Haiti's agriculture sector in the long term," the spokesman said.
Oxfam's report calls for full support of the agricultural redevelopment plan, including enhancements that focus on building up community organizations, improving schools and healthcare and providing other services in rural areas.
"There are no schools, or poor schools, in rural areas, no jobs, very poor or no healthcare," Marc Cohen, the report's author, told Reuters. He said about 75,000 people leave rural areas and move to Port-au-Prince every year.
"Unless you invest not only in agriculture but also in rural development, you won't have people stay in rural areas," Cohen said.
The report also proposes making Haiti an exception to the Bumpers Amendment and extending duty- and quota-free access to U.S. markets to Haitian goods. (Reporting by Emily Stephenson and Simon Denyer; Editing by Todd Eastham)
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