Hard-hit Fonterra dairy farmers have the ability to get an extra NZ$0.50/kg milk solids (0.3c/litre) through an interest-free loan.

The co-op’s chairman, John Wilson, said Fonterra was uniquely placed to help farmers because of its underlying strength. He added that the co-operative was providing support for farmers in the form of a loan to help them deal with the present challenging conditions.

Fonterra will give all its share-backed farmers the opportunity to apply for the Fonterra Cooperative Support for milk produced this season.

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The payment is interest free for two years and can be paid back when the milk price goes above NZ$6/kg (25c/litre).

A first payment will be made in October for June to December milk and will continue until May.

If fully taken up, the loan will cost the co-op an estimated NZ$430m for the first six months.