Dominican Republic seeks funds to produce more food

NEW YORK (Reuters) - The Dominican Republic is seeking some $1 billion in external financing to boost food production and increase exports to neighboring Caribbean countries that are struggling with high prices of agricultural commodities, especially grains.

Foreign Minister Carlos Morales Troncoso told Reuters on Tuesday that the Dominican Republic needs financing from multilateral banks to become a steady supplier of grains to the Caribbean, helping mitigate the impact of a global food crisis.

"The Dominican Republic could become the Caribbean's granary if the United Nations and the industrialized countries agree to finance it," Morales Troncoso said during a telephone interview after meeting U.N. Secretary General Ban Ki-moon in New York.

"We're talking about $800 million to $1 billion to prepare the Dominican Republic, because we already have the land, the water resources," he added.

A sharp rise in the price of grains has increased inflation globally and sparked hunger among the poorest countries in Asia, Africa and Latin America.

Haiti, which shares the same Caribbean island with the Dominican Republic, last month saw deadly clashes between its population and security forces during protests over food prices and the cost of living.

U.N. officials have called on the United States and Europe to cut the production of biofuels, which they blame as one of the sources of higher food prices.

But the Dominican minister said the increase in food prices is mainly a result of "market speculation." He claimed that the country has enough land to produce biofuels without compromising food production.

(Editing by Christian Wiessner)