Environmentalists urge Latam bank to end biofuel loans

By Michael Christie

MIAMI (Reuters) - Environmental groups urged the Inter-American Development Bank on Saturday to stop lending money to big companies piling into the booming ethanol business that some critics say is partly to blame for soaring food prices.

As riots over the cost of living broke out in impoverished Haiti, the IADB prepared to announce increased funding of ports, sugarcane mills and other biofuel ventures throughout Latin America, citing plant-based fuels as a crucial counterweight to climate change and rising energy prices.

"The bank's aggressive promotion of biofuels may be good for corporations, but it's a bad deal for farmers, indigenous people and the environment in Latin America," Kate Horner of Friends of the Earth-U.S., said at the bank's annual meeting in Miami.

World food prices have jumped due to what the U.N.'s World Food Program says is a mixture of high energy prices, which are boosting transportation costs, increased demand for food by developing countries, erratic weather and competition between biofuels and food for land and investment.

The cost of food is threatening millions of people with hunger and raising the risk of political instability.

Four people were killed when crowds ransacked and burned stores in the southwestern Haitian town of Les Cayes on Thursday night and looted food containers at a U.N. compound.

DIETARY SHIFT CITED

Friends of the Earth and other environmental groups say a U.S. law that aims to almost quintuple the amount of biofuel used in the United States by 2022 has led to a spike in production and investment in the Americas.