China to subsidize biofuel feedstock producers

China’s Ministry of Finance has finalized a subsidy plan for farmers and firms involved in planting feedstock for the domestic biofuel industry, which will be implemented in early 2008, a senior official with the ministry’s tax department said. Firms which plant crops for biofuel on land not intended for food will be given subsidies of 200 yuan (US$26.9) per metric unit (mu) or the equivalent of US$403.5 per hectare a year, while those that grow these crops in forested areas will receive a lower subsidy of 180 yuan (US$24.2) per mu or US$360 per hectare, said Liu Yonglu, deputy director of the Ministry of Finance’s Tax Department. The Chinese government has adopted a policy recently to grow biofuel feed stock on land not intended for food crops to lower the risk of reducing China’s food production capabilities. (October 25, 2007)