Chinese authorities will create a fund worth 38 billion yuan (1.27 billion U.S. dollars) by 2015 to develop water-efficient farms in northeast China's grain-producing areas.

The fund will be used to develop 38 million mu (2.53 million hectares) of water-efficient farmland in four northeastern regions, according to a work conference jointly held by the Ministry of Finance, the Ministry of Water Resources and the Ministry of Agriculture on Tuesday.

The four regions include Heilongjiang, Jilin and Liaoning provinces, as well as the Inner Mongolia autonomous region. The four areas together produce one-fifth of the country's grain.

The central budget will allocate 22.8 billion yuan, or 60 percent of the fund, while the rest of the money will be raised by local governments and farmers.

The funds will be used to promote efficient irrigation technology in the four regions over the next four years in an effort to ease water shortages and increase grain production.