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TOYAKO, Japan, July 9 (Reuters) - The head of the European Union executive sought to soothe concerns within the bloc about a plan to use about 1 billion euros ($1.6 billion) in unspent European Union farm subsidies to help African farmers.

European Commission President Jose Manuel Barroso told Group of Eight rich country leaders this week the leftover subsidies would be used to buy seed and fertiliser for Africa in 2008 and 2009, helping to address the global food crisis.

But German leader Angela Merkel said on Tuesday the funds -- which are provided by EU member states and usually go back to them when not spent -- were not for the European Commission to redistribute and she would "talk it over again" with Brussels.

Merkel and European Commission President Jose Manuel Barroso discussed the proposal at a summit of world leaders in Japan on Wednesday, Commission spokeswoman Pia Ahrenkilde Hansen said.

"The president has spoken to Mrs Merkel and has provided her with the necessary information about what we are going to propose," she said. The idea was praised by some development campaign groups -- usually critics of Europe's farm policies -- and on Wednesday it was applauded by the leaders of some developing countries attending the summit and by World Bank President Robert Zoellick, an EU source said.

The proposal will be drawn up in the next two or three weeks by the European Commission and then be put to EU member states and the European Parliament.

The EU source said the Commission was surprised that Germany had raised objections to the proposal, because EU leaders asked the EU executive in June to come up with plans for a new EU fund to support agriculture in developing countries.

"Does any member state really want to go back on European Council commitments?" the source said. "Where else would the money come from?"

Europe's Common Agricultural Policy eats up more than 40 billion euros a year in subsidies and other farm spending.

Critics say the CAP hurts farmers in developing countries because they cannot compete with subsidised European farm goods. But EU officials say the system has been reformed to be less trade-distorting than in the past. (Reporting by William Schomberg; Editing by Hugh Lawson)

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