Unless member states demand their money back in some other way, the money – worth almost £795m – is going spare, from the agriculture budgets for 2008 and 2009, because a world shortage of food has cut the amount of subsidy the EC has to pay out, to underwrite export prices.

The EC proposal is to put the money into a new "rapid response" fund, additional to existing international development funds, for interventions to encourage better productivity in countries which are suffering from hunger, particularly in Africa.

It hopes to fast-track the proposal through to agreement in November, and then to spend the money over two years – some as donations, some as loans. It could be used for such as subsidising seed and fertiliser supplies or to guarantee minimum prices for products.

The money would be channelled through existing aid agencies and EC offices around the world.

José Manuel Barroso, President of the EC, said: "The impact of high food prices may exacerbate tensions in poor countries, namely in Africa. This is an act of solidarity with the world's poorest but also a responsible measure to promote stability."

An EC briefing document said: "Rising food prices have resulted in riots, unrest and instability in several countries, risking the gains of years of political, developmental and peacekeeping investments."

The EC proposal coincided with a National Farmers' Union announcement of a fundraising drive for African farmers – the Africa 100 Appeal. The NFU leadership said it was happy with the EC idea but its own effort was still important.

A spokesman said: "There is an urgent need to help develop third world agriculture, so it might better feed third world populations. Any projects that can help improve the situation are more than relevant."