Bill Gates joined forces with the United Nations yesterday to unveil a $76m (£41m) initiative to haul hundreds of thousands of small farmers out of poverty by buying up their surplus production to feed the world's hungriest.

"The world's poor are reeling under the impact of high food and fuel prices, and buying food assistance fromdeveloping world farmers is the right solution at the right time," said Josette Sheeran, executive director of the UN's World Food Programme (WFP), which is spearheading the scheme.

The scheme, known as Purchase for Progress, will be implemented in 21 countries in sub-Saharan Africa and Latin America, initially aiming to increase the incomes of up to 350,000 farmers. Lead participants at a New York press conference yesterday said that the WFP would purchase directly from small farmers – who are mainly women – and will also offer improved access to technology, fertilisers and seeds.

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The Bill & Melinda Gates Foundation is contributing the lion's share of the funding, $66m over five years. The rest will come from the Howard G Buffett Foundation and the Belgian government – which is to pay farmers in Democratic Republic of Congo.

"Purchase for Progress is win-win. We help our beneficiaries who have little or no food, and we help local farmers who have little or no access to markets," said Ms Sheeran.

The WFP has recently been overhauling its purchasing system to source more emergency food regionally.