China's dairy producers will see an extension of the period for subsidies on loan interest payments until the end of this year, said the Ministry of Finance in a statement on Monday.

The interest subsidies were originally extended from October to December 2008, and then prolonged to the end of March this year. The statement said the period would be prolonged again retroactively from March to the end of this year.

The subsidy to cover 3.105 percent of interest would remain unchanged, said the statement.

Loans used by dairy companies for buying milk from farms would be covered by the scheme.

The ministry did not give the cost of the interest subsidy, launched to support dairy producers after last year's melamine contamination scandal, which devastated the country's dairy industry.

Milk powder produced by Sanlu Group was found to have been adulterated with the industrial chemical melamine last September. It caused the deaths of at least six children and sickened more than 300,000 others.

(Xinhua News Agency July 28, 2009)