Liberia has declared a state of emergency over a plague of caterpillars that has destroyed plants and crops and contaminated water supplies, threatening an already fragile food situation.

Tens of millions of marching caterpillars have invaded at least 80 towns and villages in central and northern Liberia, preventing some farmers from reaching their fields and causing others to flee their homes. The inch-long pests – the caterpillar life stage of the noctuid moth – have spread to neighbouring Guinea and are threatening Sierra Leone, which has set up monitoring teams along its border.

Liberia's president, Ellen Johnson-Sirleaf, said in a televised speech on Monday night that the country's worst plague of caterpillars in three decades had "the potential to set back our progress in the production of food and export crops".

She appealed to the international community for financial and logistical help in dealing with the problem, which her government said could cause tens of thousands of people to go hungry. The UN's Food and Agricultural Organisation (FAO), whose experts are working out the best way to contain the invasion, has described the situation as a "national emergency" that carries regional food, health and environmental risks.

Liberia, which is struggling to recover from years of civil war, is especially sensitive to food security issues after being hard hit by the global food price rises last year. About 90% of the local staple, rice, is imported and sharp price increases have made local cereal production even more important. Now the caterpillars are threatening one of the country's most productive food growing areas.

"We already had a food crisis here," said Winfred Hammond, an entomologist who heads the FAO's Liberia office in the capital, Monrovia. "But this damage to domestic food production has the potential to make it much worse."

The outbreak began in central Liberia and is attributed to a longer than usual rainy season. Hordes of army worms, regarded as one of the most destructive agricultural pests in the world, were first spotted in forest plantations but soon spread to farms, devouring banana, coffee, cassava, rice and other vegetable crops.

After completely destroying a particular crop – often within days – the pests march to another field during the night, making infestations difficult to monitor. While the creatures present no direct threat to humans, the scale of their invasion has caused panic among villagers.

"This is becoming a no-go area," Bendu Jabateh told Associated Press in the town of Shankpala. "We cannot go to our farms and we can't have our children play around the town any longer. [The caterpillars] crawl and come into the house."

Besides the damage to crops, the huge volume of faeces dropped by the caterpillars has contaminated wells and waterways, causing a shortage of drinking water. Johnson-Sirleaf said in her speech that emergency water and food supplies were being sent to the worst affected areas.

Aerial spraying is one way to contain the spread of the caterpillars, though the FAO has cautioned against it due to the danger of further contaminating water supplies. Hand spraying has so far proved ineffective, however.

But Hammond warned that unless a quick solution was found, Liberia's problem would soon be a regional one. "The caterpillar larvae are going into the pupa stage, and will then emerge as millions of moths that can fly vast distances across the region," he said. "Each female can lay up to 1,000 eggs – our target is to prevent that explosion from happening."