BEIJING, China (Reuters) — China’s Jilin province will issue subsidies to soybean processors and feed makers this year, the provincial grain bureau said Feb. 28, to promote development of the northeastern region’s grain processing sector.
No details about the size of the subsidy were included in the notice.
“In order to further promote the market-oriented reform of the purchasing and marketing of corn and soybeans, further expand the capability of local processors to handle new crop corn and promote the development of the soybean industry, the province will promulgate the subsidy policy for feed processing enterprises and soybean processing enterprises,” the notice said.
Beijing is trying to spur more processing of its primary crops to reduce huge stockpiles and support the local economies in the northeast.
Last year, northern provinces also offered subsidies to feed makers but it is the first time soybean processing subsidies are being issued.
The move is likely part of efforts to shift planting away from corn and boost production of soybeans, said Yang Linqin, analyst at Cofco Futures.
Jilin, northeast of Beijing, is China’s second largest corn-producing province, estimated to produce almost 28 million tonnes in 2017-18 crop year, according to the China National Grain and Oils Information Center, an official think-tank.
It is also a major growing area for soybeans.
Companies eligible for the subsidies include feed makers that produced more than 50,000 tonnes of feed in 2016 and soybean processors with annual capacity of 5,000 tonnes and holding a food production licence, said the document.