"In the commission's opinion, this is the most efficient and most rapid instrument that could be used."

The bloc's agricultural budget comprises of €750 million earmarked for 2008 and the remainder for 2009.

This year's amount could be given retrospectively from mid-June.

Legality doubted

However, at least eight EU member countries, including the UK, Sweden and the Netherlands, have questioned the legality of the scheme but have not challenged the merit of the idea.

EU ministers and the European Parliament, which has also voiced doubts about using unspent EU farm funds, will have to agree to the plan before it can happen.

If approved, the money will be channelled to developing countries through international or regional organisations, such as the UN and World Food Programme.

Four areas of financial support are envisaged, with the main two being to improve access to farming "inputs" like fertilisers and seeds and ways to improve agricultural capacity and production.

But the most difficult debate has yet to be tackled - how to set eligibility criteria for recipient countries and how much cash will be allocated by country.

Those negotiations should be concluded by December, the commission said.

Criteria are expected to include how much food a country produces to feed itself, its political stability and social vulnerability, its level of food price inflation and reliance on food imports - including shipments of food aid.

Heavily underspending

The EU has been heavily underspending within the 2008 budget on export subsidies, intervention in public purchases of staple commodities and subsidised private storage, EU officials say.

Agriculture eats up more than 40 per cent of the EU's annual budget, which for 2008 is planned at €120.7.

Kofi Annan, the former UN chief who now chairs the Alliance for a Green Revolution in Africa that helps small-scale African farmers, said the proposal was an important step to improving food security across Africa.

Robert Zoellick, the World Bank president, who has warned that the global food price crisis could drive 100 million people into extreme poverty, urged EU member countries to quickly approve the proposal.

"Millions of people are at risk because of the food and fuel crisis.

"I urge the European Council and European Parliament to support this proposal as soon as possible in order to provide relief to those most at risk from hunger and malnutrition."

Advocacy group, Data, which campaigns to eradicate extreme poverty and Aids in Africa, welcomed the proposal as a way for the EU to help struggling African farmers.

Jamie Drummond, Data's executive director, said: "This proposal is significant and is a serious downpayment by Europe to help smallholder farmers in Africa fight back against hunger and poverty."