Tens of millions of the world's poor will have their food rations cut or cancelled in the next few weeks because rich countries have slashed aid funding.

The result, says Josette Sheeran, head of the UN's World Food Programme (WFP), could be the "loss of a generation" of children to malnutrition, food riots and political destabilisation. "We are facing a silent tsunami," said Sheeran in an exclusive interview with the Observer. "A humanitarian disaster is unrolling." The WFP feeds nearly 100 million people a year.

Food riots in more than 20 countries last year persuaded rich countries to give a record $5bn to the WFP to help avert a global food crisis brought on by record oil prices and the growth of biofuel crops. But new data seen by the Observer show that food aid is now at its lowest in 20 years. Countries have offered only $2.7bn in the first 10 months of 2009.

The US, by far the world's biggest contributor to food aid, has so far pledged $800m less than in 2008; Saudi Arabia has paid only $10m in 2009 compared with $500m in 2008; and the EU has given $130m less. Britain's promise of $69m (£43.5m) this year is nearly $100m (£63m) less than 2008, and, if nothing more is given, will be its lowest contribution since 2001.

"Even under our best scenarios, we will end the year $2bn short," said Sheeran. "Many of our funders do not feel that they need to give on the level of last year. They think the world food crisis is over, but in 80% of countries food prices are actually higher than one year ago."

World food supplies are under increased strain this year following a succession of droughts, typhoons, floods and earthquakes that have destroyed crops in Africa and south-east Asia. But human needs are also greater because the financial crisis has led to widespread unemployment. In addition, the remittances from foreign nationals living in rich countries to their families at home are 20% lower than last year.

Last month the UN said that the number of hungry people in the world had increased by more than 150 million in a single year to more than one billion. Aid agencies last week warned of severe food shortages in southern India after heavy floods damaged hundreds of millions of dollars' worth of crops.

"There is a silent tsunami [of hunger] gathering. You cannot see or hear it, but it's in all these villages, killing people just as hard. This is the worst food crisis since the 1970s. We will lose a generation. Children will never recover," said Sheeran.

More than 40 million people could be affected by the WFP's enforced scaling back of its food rations. Countries most likely to be hit include Bangladesh, where the budget is likely to be cut by as much as 50%, and Kenya, where similar cuts will worsen the plight of millions of extra people made destitute by a long drought.

The new rations, which are reserved for people who have no access to food, will fall below what aid agencies consider a survival ration and will provide, at most, one meagre meal a day. "We are making hard choices over who to feed. We are very aware that as we dismantle [feeding programmes] it may take out the underpinning of society and leads to political destabilisation," said Sheeran.

Aid agencies last night urged rich countries to pledge more. "We are very concerned about the large budget shortfall faced by WFP, which means the programme has to cut the food rations to millions of people who rely on this assistance for their very survival," said Fred Mousseau, Oxfam's humanitarian policy adviser. "This will translate into more child deaths, with more than 16,000 children already dying from hunger-related causes every day."