Greed behind food price rises - development bank head

By Ingrid Melander

BRUSSELS (Reuters) - The food price crisis is caused largely by greed and speculation rather than food shortages, the head of Southern Africa's development bank said on Tuesday.

Spiralling food costs -- called a "silent tsunami" by the World Food Programme -- have ignited fury and a rash of protests from Haiti to Somalia to Bangladesh. Exporting countries have curbed shipments to ensure domestic supplies and tame inflation.

"These increases in food prices are not the consequence of food shortages, it's the consequence of human greed that is putting at risk the lives of millions of men, women and children," Jay Naidoo told Reuters.

"There are companies that are making super profits on this issue."

The root causes of the more than 40 percent rise in food prices in the last year are disputed. Experts point to strong demand from Asian emerging markets, adverse weather in some producer countries and increased use of biofuels.

The Asian Development Bank (ADB) said it would give up to $500 million in emergency loans to regional economies hardest hit by the crisis and double investment in the farm sector to $2 billion in 2009.

After four days of talks in Madrid, governments remained split on whether they should use export bans and market intervention to ensure 1 billion poor Asians living on less than $2 a day do not slip back into hunger and malnutrition.

"Trade measures or price controls are not efficient ways to combat the food crisis or food price inflation. It distorts the market and could exacerbate the situation in the international grain market," ADB President Haruhiko Kuroda told Reuters.