Under the plan, state-owned companies will be set up to produce seeds and fertilisers.

The government aims to safeguard biodiversity and protect native foodstuffs, as well as ending dependence on foreign seed companies.

Early this year, there were violent protests across the country, sparked by food shortages and spiralling prices.

The recent rise in global food prices forced many Bolivians to abandon their indigenous staples, such as quinoa, in favour of cheaper, imported products.

The government plans to invest $5bn (£3.1bn) over 10 years, with generous credits to small farmers, in order to bring about what it calls a food revolution to ensure Bolivians can feed themselves for generations to come.

"My comrades, when we act as players in the production, we are going to improve this production," President Morales told a crowd of supporters.

Bolivia is home to thousands of native varieties of crops, including potato and corn.

The Morales government wants to improve genetic stock through natural selection.

It rejects what it describes as an invasion of genetically-modified seeds, fearing they will contaminate indigenous species, and prove to be too expensive for small farmers to buy.

Lisa Panades, the Bolivian representative of the United Nations Food and Agriculture Organisation, said the legislation was a step in the right direction.

"The law aims and is creating the conditions to boost food production, especially among small farmers who are the most vulnerable. Of course, the law on its own is not enough, but I think that - with the government's backing - if the law is applied well, there are excellent conditions for Bolivia to guarantee its food sovereignty."

Bolivia has been far from immune to the recent volatility in food prices. Sugar prices doubled earlier this year.

Some highland communities have taken to eating rice and pasta instead of their traditional crops, such as quinoa, because of price rises.

In February, President Morales abandoned a public appearance in the mining city of Oruro, in the face of an angry protests over food shortages and price rises.

There were violent demonstrations in a number of Bolivian cities.