The Asian Development Bank is extending a $200 million loan to improve crop output and farming productivity in some of China's most important grain producing regions.

The program aims to increase grain yield in the nation's main granaries, Heilongjiang, Jilin and Henan provinces, by 30 percent from 2009 levels by 2020. It expects 1.2 million rural people in about 500 villages will benefit from the improvement.

Yaozhou Zhou, Senior Water Resources Specialist with ADB's East Asia Department said: "China's future food security hangs on using scarce water resources more efficiently and making farming more productive."

Funds for the agricultural project will mainly improve irrigation and drainage for the regions involved, which contributed more than 28 percent of the nation's total grain output in 2008.

An outdated irrigation system is the major threat to the nation's grain security. Experts estimate half the cropland is suffering from both rare and poor maintenance.

Along with irrigation upgrades, the project will also finance measures such as land leveling, soil testing, fertilizer applications and the planting of windbreak trees to reduce soil degradation and increase fertility.