Foodbank says its Key Staples program - which makes sure essential supplies like rice, bread and vegetables get to needy people - is at risk with federal government funds dropping from $750,000 to $427,000 a year.

The government's total funding remains the same, but from next year will be split between three providers rather than two.

Social Services Minister Paul Fletcher is awaiting urgent advice from his department after Foodbank raised concerns over its lost funding.

"Foodbank has particularly highlighted its concern that the competitive selection process resulted in it being notified of the decision only a few weeks before the busy Christmas season," he said in a statement on Monday.

"I share that concern.

"I have sought urgent advice from my department as to why that happened and for options to provide additional funding to Foodbank to assist in managing the transition to the new arrangements."

The minister last week announced three charities would now split $4.5 million over four-and-a-half years.

"OzHarvest is receiving funding for the first time and SecondBite has had an increase of $100,000," he reiterated in a statement on Monday.

Foodbank's $1.9 million share of the grant was more than any other organisation over the next four-and-a-half years, he added.

OzHarvest said the funding will support the national roll-out of a mobile app connecting food donors with local charities in areas where OzHarvest can't reach.

"The technology will save 1.8 million kilos of food, which will provide an extra 5.6 million meals in the first year," OzHarvest founder Ronni Kahn said.

However, Foodbank's chief executive Brianna Casey says spreading funding across more organisations will hurt her charity's work as grants are already "woefully inadequate".

"We know that so many children are affected by food insecurity, they don't deserve this outcome. We need the prime minister to intervene," Ms Casey told the ABC.

The charity says this latest cut - the third since 2014 - may mean the end of the Key Staples program.

Despite growing demand, Ms Casey said government funding had gone down from $1.5 million a year three years ago, to $427,000 a year from January 2019.

Under the Key Staples program, food manufacturers produce items using spare production capacity and suppliers donate or subsidise ingredients, packaging and delivery.

"Extremely modest" government funds are leveraged into more than $8 million of essential foods for 2600 charities across the country, Ms Casey added.

Foodbank provides 67 million meals a year to charities across the country, and is Australia's largest food provider to schools for breakfast programs.

If the coalition doesn't make up the $323,000 funding shortfall then a Labor government will, Opposition Leader Bill Shorten has pledged.

Australian Associated Press