China's Ministry of Finance said Monday it is to continue subsidizing dairy companies' loan interest payments to the tune of 75 million yuan (10.97 million U.S. dollars), in a move to help them cut costs and protect the interests of dairy farmers.
The measure covers the interest on loans taken out by dairy companies to purchase raw milk from farms because of the melamine contamination scandal last year, the ministry said.
The ministry unveiled the subsidies policy in September 2008 following the contamination problems. It took effect from October to December last year, and was then extended into March this year. On July 27, the policy was further extended to year end to support dairy producers.
The subsidy covers 3.11 percentage points of the loan interest rate, the ministry said on July 27.
The country's dairy industry last year slumped after milk powder produced by Sanlu Group was contaminated by melamine, which killed six children and resulted in more than 300,000 becoming ill.