Mission said it had signed the contract with an Indian district-controlled authority that had formed a producer company, owned by farmers and jatropha growers, but managed by the agency.

Under the contract, the first of its kind in India, Mission has agreed to provide technical input and know-how to the jatropha farmers, establish nurseries, and provide a primary processing centre in the district.

The company said this would enable it to gain exclusive access to all jatropha seeds harvested in the district, minimising the price Mission would pay for jatropha seeds purchased from the producer company.

Mission said the agreement had put the company on target to achieve its aim of 100,000 acres (40,468 hectares) of jatropha plantings for 2007, and that it would continue efforts to increase this acreage further.

The jatropha plantings should yield 25,000 tonnes of low-cost feedstock per year from 2008 to help underpin the company’s biodiesel operations in Malaysia and China, Mission said.

Earlier this year Mission placed $A50 million worth of shares to fund the construction of its second Malaysian biodiesel plant.

Jatropha is a fast-growing, drought-resistant oilseed plant that can grow in poor soil, meaning it does not deprive the use of arable land for food production, Mission said.

Jatropha yields up to 10 times more energy than corn. It can be cultivated on substandard land and help restore eroded areas.

This could give it the additional roles of helping reduce carbon dioxide emissions and revitalising local ecosystems, various biodiesel producers have said.