The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as the slow-down of the global financial markets and its impact on economic growth in general, the competition in the fertilizer industry and the impact of such competition on pricing, revenues and margins, the weather conditions in the areas where our customers are based, the cost of attracting and retaining highly skilled personnel, the prospects for future acquisitions, and the factors set forth elsewhere in this report, our actual results may differ materially from those anticipated in these forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this report will in fact occur. You should not place undue reliance on the forward-looking statements contained in this report.

The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of this report and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as of such date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.

Unless the context indicates otherwise, as used in the following discussion, "Company", "we," "us," and "our," refer to (i) China Green Agriculture, Inc. ("Green Nevada"), a corporation incorporated in the State of Nevada; (ii) Green Agriculture Holding Corporation ("Green New Jersey"), a wholly-owned subsidiary of Green Nevada incorporated in the State of New Jersey; (iii) Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. ("Jinong"), a wholly-owned subsidiary of Green New Jersey organized under the laws of the PRC; (iv) Xi'an Jintai Agriculture Technology Development Company ("Jintai"), wholly-owned subsidiary of Jinong in the PRC, (v) Xi'an Hu County Yuxing Agriculture Technology Development Co., Ltd. ("Yuxing"), a wholly-owned subsidiary of Jinong in the PRC; (vi) Beijing Gufeng Chemical Products Co., Ltd., a wholly-owned subsidiary of Jinong in the PRC ("Gufeng"), and (vii) Beijing Tianjuyuan Fertilizer Co., Ltd., Gufeng's wholly-owned subsidiary in the PRC ("Tianjuyuan").

Unless the context otherwise requires, all references to (i) "PRC" and "China" are to the People's Republic of China; (ii) "U.S. dollar," "$" and "US$" are to United States dollars; and (iii) "RMB", "Yuan" and Renminbi are to the currency of the PRC or China.

We are engaged in the research, development, production and sale of various types of fertilizers and agricultural products in the PRC through our wholly-owned Chinese subsidiaries, Jinong, Jintai, Yuxing, Gufeng and Tianjuyuan. Our primary business is fertilizer products, specifically humic-acid based compound fertilizer produced by Jinong and compound fertilizer, blended fertilizer, organic compound fertilizer slow-release fertilizers, highly-concentrated water-soluble fertilizers and mixed organic-inorganic compound fertilizer produced by Gufeng and Tianjuyuan. In addition, through Jintai and Yuxing, we develop and produce agricultural products, such as top-grade fruits, vegetables, flowers and colored seedlings. For financial reporting purposes, our operations are organized into four business segments:
fertilizer products (Jinong), fertilizer products (Gufeng), agricultural products (Jintai) and research and development (Yuxing).

Jintai and Yuxing also serve as a research and development base for our fertilizer products. The fertilizer business conducted by Jinong and Gufeng generated approximately 97.7% and 97.2% of our total revenues for the three months ended September 30, 2011 and 2010, respectively.

Fertilizer Products

As of September 30, 2011, we had a total of 460 different fertilizer products, of which 147 were developed and produced by Jinong and 313 by Gufeng.

For the three months ended September 30, 2011, we sold approximately 81,720 metric tons of fertilizer products, as compared to 86,463 metric tons for the three months ended September 30, 2010. For the three months ended September 30, 2011, Jinong sold approximately 16,846 metric tons of fertilizer products, as compared to 10,641 metric tons for the same period of last year. Gufeng sold approximately 64,874 metric tons of fertilizer products for the three months ended September 30, 2011 as compared to 75,822 metric tons of fertilizer products during the 2010 period. While the sales volume of fertilizer products sold by Gufeng decreased by 10,949 metric tons for the three months ended September 30, 2011 from the three months ended September 30, 2010, the average selling price per metric ton fertilizer products sold by Gufeng increased substantially. For the three months ended September 30, 2011, the humic acid based fertilizer, the fertilizer products with higher selling price, accounted more weight in Gufeng's sales mix of fertilizer products than for the three months ended September 30, 2010. In addition, the selling price for certain fertilizer products of the same nutrient formula sold by both Gufeng and Jinong, has increased for the three months ended September 30, 2011 as compared to the price for the three months ended September 30, 2010 due to the price increase in the raw material market. For the three months ended September 30, 2011, the top five provinces of our total fertilizer sales accounted for 30.4% of total fertilizer revenues. The five provinces and their respective percentage contribution to total revenues were Hebei (11.7%), Shaanxi (5.4%), Beijing (5.1%), Shandong (4.7%) and Anhui (2.9%).

A significant portion of our revenues are derived from sales in other countries. Gufeng exports blended fertilizer through contracted distributors to other countries including India. The export revenues accounted for 69.5% of Gufeng's fertilizer revenues for the three months ended September 30, 2011. In addition, we export humic-acid based compound fertilizer products via contracted distributors. Jinong exports its humic-acid based compound fertilizers to other countries, including India. However, the revenues from Jinong's export products account for less than 1% of our fertilizer revenues for the three months ended September 30, 2011.

As of September 30, 2011, we had a total of 850 distributors covering 22 provinces, four autonomous regions and three central government-controlled municipalities in China. Jinong had 677 distributors in China. Jinong's sales are not dependent on any one or group of distributors. Its top five distributors accounted for approximately 3.0% of Jinong's fertilizer revenues for the three months ended September 30, 2011. Gufeng had 173 distributors, including some large state-owned enterprises. Its top five distributors accounted for 17.1% of Gufeng's revenues for the three months ended September 30, 2011.

Agricultural Products

Through Jintai and Yuxing, we develop, produce and sell high-quality flowers, green vegetables and fruits to local marketplaces and various horticulture and planting companies. We also use certain of Jintai's and Yuxing's greenhouse facilities to conduct research and development activities for our fertilizer products. The five PRC provinces, which accounted for 100% of our agricultural products revenue for the three months ended September 30, 2011, were Shaanxi (93.2%), Ningxia(4.6%), Sichuan (1.4%), Zhejiang (0.5%) and Shanxi (0.3%).

Recent Developments

During the three months ended September 30, 2011, Jinong launched the sale of four new humic-acid based liquid and powder fertilizer products, including two liquid fertilizers and two powder fertilizers. These new products generated approximately $414,436, or 1.9%, of Jinong's fertilizer revenues for the three months ended September 30, 2011. Jinong also added 50 new distributors during the three months ended September 30, 2011. Jinong's new distributors accounted for approximately $1,398,985, or 6.3%, of Jinong fertilizer revenues for the three months ended September 30, 2011.

During the three months ended September 30, 2011, Gufeng launched the sale of two new compound fertilizers. These new products generated no revenues for the three months ended September 30, 2011. Gufeng also added three new distributors during the three months ended September 30, 2011, which accounted for approximately $4,191,838, or 14.2%, of Gufeng's fertilizer revenues.

Results of Operations
 
The following table shows the operating results of the Company on a consolidated
basis for the three months ended September 30, 2011 and 2010.
 
                                                Three months ended September 30,
                                                    2011                  2010          Change           % change
Net Sales                                     $      53,102,594       $  39,482,921       13,619,673           34.5 %
Jinong                                               22,242,251          16,571,293        5,670,958           34.2 %
Gufeng                                               29,613,091          21,801,034        7,812,057           35.8 %
Jintai                                                1,198,887           1,110,594           88,293            8.0 %
Yuxing                                                   48,365                   -           48,365          100.0 %
Cost of Goods Sold                                   34,193,862          26,343,594        7,850,268           29.8 %
Jinong                                                8,110,130           6,853,787        1,256,343           18.3 %
Gufeng                                               25,269,670          18,900,513        6,369,157           33.7 %
Jintai                                                  748,830             589,294          159,536           27.1 %
Yuxing                                                   65,232                   -           65,232          100.0 %
Gross Profit                                         18,908,732          13,139,327        5,769,405           43.9 %
Selling Expenses                                      2,490,474           1,415,985        1,074,489           75.9 %
General and Administrative  Expenses                  3,138,695           2,098,187        1,040,508           49.6 %
Income from Operations                               13,279,563           9,625,155        3,654,408           38.0 %
Total Other Income (expense)                            (84,416 )          (123,627 )         39,211          -31.7 %
Income Before Income Taxes                           13,195,147           9,501,528        3,693,619           38.9 %
Provision for Income Taxes                            2,463,511           1,713,743          749,768           43.8 %
Net Income                                           10,731,636           7,787,785        2,943,851           37.8 %
Jinong                                               10,429,495           7,295,318        3,134,177           43.0 %
Gufeng                                                1,817,896           1,307,706          510,190           39.0 %
Jintai                                                   10,501             437,473         (426,972 )        -97.6 %
Yuxing                                                  (40,331 )           (53,731 )         13,400          -24.9 %
Parent                                               (1,485,925 )        (1,198,981 )       (286,944 )         23.9 %
Basic net earnings per share                               0.40                0.30              0.1           33.0 %
Basic Weighted Average Shares Outstanding            26,857,338          25,922,880          934,458            3.6 %
Diluted Weighted Average Shares Outstanding          26,857,338          26,035,426          821,912            3.2 %
 

Net Sales

Our net sales for the quarter ended September 30, 2011 were $53,102,594, an increase of $13,619,673, or 34.5%, from $39,482,921 for the three months ended September 30, 2010. The increase was largely due to the strong sales of fertilizer products for each subsidiary during this period.

For the three months ended September 30, 2011, Jinong's net sales increased $5,670,958, or 34.2%, to $22,242,251 from $16,571,293 from the three months ended September 30, 2010. This increase was mainly attributable to the sales of more humic acid fertilizer products including our liquid and powder fertilizers during this period as a result of our increased distributors and the aggressive marketing.

For the three months ended September 30, 2011, Gufeng's net sales increased $7,812,057, or 35.8%, to $29,613,091 from $21,801,034 for the three months ended September 30, 2010. For the three months ended September 30, 2011, Gufeng's sales volume of fertilizer products decreased by 10,949 metric tons to 64,873 metric tons from 75,822 metric tons for the three months ended September 30 2010. The increase in Gufeng's net sales was mainly due to higher selling price for the same product for the three months ended September 30, 2011 than the price for the three months ended September 30, 2010, and higher percentage of more expensive humic acid-based fertilizers in Gufeng's product sales mix in the three months ended September 30 2011 comparing to the corresponding period a year ago.

Jintai's net sales, which include sales of agricultural products, increased by $88,293, or 8.0%, to $1,198,887 for the three months ended September 30, 2011 from $1,110,594 for the same period in 2010.

Yuxing achieved net sales of $48,365 for the three months ended September 30, 2011. For the three months ended September 30, 2010, Yuxing segment had no revenues.

Cost of Goods Sold

Total cost of goods sold for the three months ended September 30, 2011 were $34,193,862, an increase of $7,850,268, or 29.8% from $26,343,594 for the three months ended September 30, 2010. This increase was mainly due to the production and sale of Gufeng's products, which accounted for 73.9% of total cost of goods sold. The total cost of goods sold without including Gufeng's cost of goods sold for the three months ended September 30, 2011 was $8,924,192, an increase of $1,481,111, or 19.9%, from the same period a year ago.

Cost of goods sold by Jinong for the three months ended September 30, 2011 were $8,110,130, an increase of $1,256,343, or 18.3%, from $6,853,787 for the same period in 2010. As a percentage of total net sales, cost of goods sold by Jinong accounted for approximately 15.3% and 17.4% for the three months ended September 30, 2011 and 2010, respectively. The increase in cost of goods sold was primarily attributable to the increase in raw materials and packaging materials as a result of our strong sales of fertilizer products.

Cost of goods sold by Gufeng for the three months ended September 30, 2011 were $25,269,670, an increase of $6,369,157, or 33.7%, from $18,900,513 for the same period in 2010. As a percentage of total net sales, cost of goods sold by Gufeng accounted for approximately 47.6% and 47.9% for the three months ended September 30, 2011 and 2010.

Cost of goods sold by Jintai for the three months ended September 30, 2011 were $748,830, an increase of $159,536, or 27.1%, from $589,294 for the same period in 2010. As a percentage of total net sales, cost of goods sold by Jintai accounted for approximately 1.4% and 1.5% for the three months ended September 30, 2011 and 2010, respectively.

Cost of goods sold by Yuxing was $65,232 for the three months ended September 30, 2011 as compared to $0 for the same period last year.

Gross Profit

Gross profit for the three months ended September 30, 2011 increased by $5,769,405, or 43.9%, to $18,908,732 as compared to $13,139,327 for the three months ended September 30, 2010. Gross profit margin was approximately 35.6% and 33.3% for the three months ended September 30, 2011 and 2010, respectively.

Gross profit generated by Jinong increased by $4,414,615, or 45.4%, to $14,132,121 for the three months ended September 30, 2011 from $9,717,506 for the three months ended September 30, 2010. Gross profit margin from Jinong's sales was approximately 63.5% and 58.6% for the three months ended September 30, 2011 and 2010, respectively. The increase was attributed to the increase in the net sales and the higher weight of higher margin fertilizer products in product sales mix, the increase in the selling price of certain liquid fertilizers, and the decrease in the average manufacturing and labor costs per metric tons.

Gross profit generated by Gufeng increased by $1,442,900 or 49.7%, to $4,343,421 for the three months ended September 30, 2011 from $2,900,521 for the three months ended September 30, 2010. Gross profit margin from Gufeng's sales was approximately 14.7% and 13.3% for the three months ended September 30, 2011 and 2010, respectively. The increase was primarily due to Gufeng's change of product mix as a result of the increased production of the high-margin fertilizer products.

Gross profit from Jintai decreased by $71,243, or 13.7%, for the three months ended September 30, 2011, to $450,057, as compared to $521,300 for the three months ended September 30, 2010. Gross profit margin from Jintai sales was approximately 37.5% and 46.9% for the three months ended September 30, 2011 and 2010, respectively. The decrease in Jintai's gross profit margin was primary due to the increase in the price of agricultural raw materials, labors' salaries and utility fees.

Gross profit from Yuxing was a loss of $16,867 with a gross profit margin of approximately minus 34.9% for the three months ended September 30, 2011. Yuxing was in its trial production stage and its cost of goods sold exceeded its net sales for the three months ended September 30, 2011.

Selling Expenses

Our selling expenses consist primarily of salaries of sales personnel, advertising and promotion expenses, freight-out costs and related compensation. Selling expenses were $2,490,474, or 4.7%, of net sales for the three months ended September 30, 2011 as compared to $1,415,985, or 3.6%, of net sales for the three months ended September 30, 2010, an increase of $1,074,489, or 75.9%. The selling expenses of Gufeng were $843,339 for the three months ended September 30, 2011 as compared to $516,585 for the 2010 period. The increase in Gufeng's selling expense was mainly due to its increase in the shipping costs. The selling expenses of Jinong were $1,634,926 for the three months ended September 30, 2011 as compared to $892,930 for the 2010 period. The main reason for the increase in Jinong's selling expenses was its expanded marketing efforts and the increase in shipping costs.

General and Administrative Expenses

General and administrative expenses consisted primarily of related salaries, rental expenses, business development, depreciation and travel expenses incurred by our general and administrative departments and legal and professional expenses. General and administrative expenses were $3,138,695, or 5.9%, of net sales, for the three months ended September 30, 2011, as compared to $2,098,187, or 5.3%, of net sales, for the three months ended September 30, 2010, an increase of $1,040,508. The increase of general and administrative expenses was mainly attributed to the increased Gufeng's intangible assets, which resulted in the increase in the amortization expense for the three months ended September 30, 2011. The general and administrative expenses of Gufeng were $891,493 for the three months ended September 30, 2011 as compared to $552,285 for the three months ended September 30, 2010.

Total Other Income (Expenses)

Total other income (expenses) consisted of income from subsidies received from the PRC government, interest income, interest expenses and bank charges. Total other expenses for the three months ended September 30, 2011 was $84,416, as compared to total other expenses of $123,627 for the three months ended September 30, 2010, a decrease of $39,211, or 31.7%. The decrease was mainly attributable to the increased interest income of $88,155 from Jinong on its saving with the bank.

Income Taxes

Jinong is subject to a preferred tax rate of 15% as a result of its business being classified as a "High-Tech" project under the PRC Enterprise Income Tax Law ("EIT") that became effective on January 1, 2008. Jinong incurred income tax expenses of $1,840,859 for the three months ended September 30, 2011, as compared to $1,287,409 for the same period in 2010, an increase of $553,450, which was primarily attributable to our increased operating income.

Gufeng, subject to a tax rate of 25%, incurred income tax expenses of $622,653 for the three months ended September 30, 2011, as compared to $426,334 for the three months ended September 30, 2010. The increase was primarily attributable to our increased operating income.

Jintai has been exempt from paying income tax since its formation as it produces products which fall into the tax exemption list set out in the EIT. This exemption is expected to last as long as the applicable provisions of the EIT do not change.

Yuxing has no income tax for the three months ended September 30, 2011as a result of being exempted from paying income tax due to its the products fall into the tax exemption list set out in the EIT, the same treatment as Jintai receives.

Net Income

Net income for the three months ended September 30, 2011 was $10,731,636, an increase of $2,943,851, or 37.8%, compared $7,787,785 for the three months ended September 30, 2010. The increase was attributable to the increase in gross profit. Net income as a percentage of total net sales was approximately 20.2% and 19.7% for the three months ended September 30, 2011 and 2010, respectively.

Discussion of Segment Profitability Measures

As of September 30, 2011, we were engaged in the following businesses: the production and sale of fertilizers through Jinong, Gufeng and Tianjuyuan, and the production and sale of high-quality agricultural products and research and development on new fertilizer products by Jintai and Yuxing. For financial reporting purposes, our operations were organized into four business segments:
fertilizer products (Jinong), fertilizer products (Gufeng), agricultural products (Jintai) and research and development (Yuxing). Each of the segments has its own annual budget with regard to development, production and sales.

Liquidity and Capital Resources

Our principal sources of liquidity include cash from operations, borrowings from local commercial banks and net proceeds of offerings of our securities consummated in July 2009 and November/December 2009 (the "Public Offerings").

As of September 30, 2011, cash and cash equivalents were $71,333,911, an increase of $5,727,498 from $65,606,413 as of June 30, 2011.

We intend to use some remaining net proceeds from the Public Offerings (approximately $15.0 million) to acquire new businesses, upgrade production lines and complete the greenhouse facilities for agriculture products of Yuxing located on 88-acres of land in Hu County, 18 kilometers southeast of Xi'an city. We believe that we have sufficient cash on hand and positive projected cash flow from operations to support our business growth for the next twelve months to the extent we do not have further significant acquisitions or expansions. Notwithstanding the foregoing, we may seek additional financing for expansion purposes, which may include additional equity financings. There can be no assurance that any additional financing will be available on acceptable terms, if at all. Any equity financing may result in dilution to existing stockholders and any debt financing may include restrictive covenants.

The following table sets forth a summary of our cash flows for the periods indicated:

                                                                 Three months ended September 30,
                                                                     2011                  2010
Net cash used in operating activities                          $      (2,008,969 )     $  (3,697,231 )
Net cash used in investing activities                                   (919,666 )        (7,639,193 )
Net cash provided by financing activities                              8,010,765           2,240,468
Effect of exchange rate change on cash and cash equivalents              645,368             707,613
Net increase (decrease) in cash and cash equivalents                   5,727,498          (8,388,343 )
Cash and cash equivalents, beginning balance                          65,606,413          62,335,437
Cash and cash equivalents, ending balance                      $      71,333,911       $  53,947,094
 

Operating Activities

Net cash used in operating activities was $2,008,969 for the three months ended September 30, 2011, a decrease of $1,688,262 from the $3,697,231 net cash used in operating activities for the three months ended September 30, 2010. The decrease was mainly due to an increase in the advancement to suppliers from Gufeng.

Investing Activities

Net cash used in investing activities in the three months ended September 30, 2011 was $919,666, which was mainly used to Yuxing's ongoing construction and also to Gufeng's old production lines improvement. The net cash used in investing activities for the same period in 2010 was $7,639,193, most of which was used to the acquisition of Gufeng in 2010.

Financing Activities

Net cash provided by financing activities in the three months ended September 30, 2011 totaled $8,010,765, mainly due to the short-term loans borrowed by Gufeng with its local banks. The net cash provided by financing activities for the same period in 2010 was $2,240,468.

Accounts Receivable

We had accounts receivable of $24,095,094 as of September 30, 2011, as compared to $17,517,625 as of June 30, 2011, an increase of $6,577,469, or 37.5%. The increase was primarily due to the increase in sales during the period ended September 30, 2011, including Gufeng's sales.

Our allowance for doubtful accounts was $375,745 of September 30, 2011, as compared to $337,801 as of June 30, 2011, an increase of $37,944, or 11.2%.

Inventories

We had an inventory of $36,197,625 as of September 30, 2011, as compared to $23,732,404 as of June 30, 2011, an increase of $12,465,221, or 52.5%. The main reason for this increase was that we increased our raw material reserves in the non-peak season and our finished fertilizer products for export to meet the large quantity export delivery requirement.

Accounts Payable

We had accounts payable of $7,359,982 as of September 30, 2011 as compared to $5,981,703 as of June 30, 2011, representing an increase of $1,378,279, or . . .