The Ministry of Finance in China recently announced flexible subsidies and financial support for farmers who plant energy crops. The subsidies will be tied to the price of crude oil. When oil prices go down substantially and biofuel prices in tandem, farmers would loose money. Farmers will receive up to $400 per hectare planted with forest products for biofuels and up to $360 per hectare for crops planted for biofuels.

China has announced the abandonment of ethanol projects that use foodstocks, excepting existing plants and those already under construction. China is the third — largest ethanol producer, behind Brazil and the United States.

The expansion takes place under the auspices of China’s Green Poverty in Reduc­tion program (www. undp. org. cn/modules), which was launched in 2006. The $8.5- billion project is a joint venture between the UNDP, China’s Ministry of Science and Technology, and the Ministry of Commerce. The project aims to develop biofuels and other ecofriendly projects in China’s poorer western provinces. The previously mentioned Jatropha nurseries in Hainan are also cultivated under a UNDP program.

The Chinese government has implemented various favorable policies and pro­vides incentives to agricultural companies. Jatropha plantations qualify for gov­ernment grants from China’s State Forestry Administration, State Administration of Taxation, National Development and Reform Commission, Ministry of Agri­culture, and Ministry of Finance.

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