China will subsidize major agriculture areas with 5.5 billion yuan (665 million US dollars) in 2005 to encourage farmers to increase grain production, Chinese Vice Finance Minister Zhu Zhigang said late Wednesday.

Counties that produced 200,000 tons and sold 5,000 tons of grain per year between 1998 to 2002 are eligible for the subsidies, Zhu said, adding that some counties that yield less grain but sustain a region's food supply will also be eligible.

Zhu said nearly 800 major agriculture counties grow 60 percent of China's gain. These counties gain little profits from farming and have serious financial problems, he said.

He warned that the subsidies should not be used by local officials to buy cars, to build offices or training centers or to spend on "useless projects solely aimed at showing off government achievements."

The subsidies, he said, should be used "to lift farmers' financial burdens and to boost their enthusiasm in farming."

He also said the ministry would deliver the money to county level governments, leaving no chances for officials to appropriate these funds.

In late January, the Chinese central authorities issued a document designed to strengthen work in rural areas and raise overall agricultural production capacity.

The document said China will "further implement the relevant policies reducing or abolishing agricultural taxes, granting subsidies for certain crops and financing farmers for the use of good seed strains and farming machinery."