Embattled dairy farmers will receive a $579 million federal support package after milk prices were slashed by processors Fonterra and Murray-Goulburn.
The plan, announced on Wednesday by Nationals leader and Agriculture minister Barnaby Joyce, includes $555m in concessional loans as well as $20m for an upgrade of irrigation infrastructure in Nationals-held seat of Gippsland.
"I was pleased to meet dairy farmers in Victoria last week and the Coalition wants to send a clear message that the Coalition stands shoulder to shoulder with them," Joyce said in a statement.
"The Coalition values the contribution our dairy farmers make to their regional communities and the nation as a whole and we are proud to support them throughout good times and bad."
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The government will make $55 million in dairy recovery concessional loans available to suppliers affected by the Fonterra/Murray Goulburn price cuts this year, as well as access to $500 million in concessional loans over the 2016/17 and 2017/18 financial years.
The Coalition will also spend $2m to establish a commodity milk price index, while $1.8m will be provided for business advice and financial counselling.
Minister for Human Services, Alan Tudge, said the action was being taken to ensure farmers have fast-tracked access to support.
Australia's largest dairy processor, Murray Goulburn, announced it would retrospectively cut the price it was paying farmers, a move that effectively wipes out profits for some suppliers.
Following the move, Fonterra slashed its milk solids payments from $5.60 a kilogram of milk solids to between $4.75/and $5, citing a slump in global prices.
Coles last week announced a new milk brand that will pay 20 cents a litre from sales to an independent fund aimed at supporting 2,600 dairy farmers in the Murray Goulburn area affected by last month's sudden drop in payments.
However both Coles and Woolworths were reportedly faced with shoppers furious that they were unable to buy alternatives to supermarket milk brands.
Shoppers took to the Facebook pages of both supermarkets, flooding them with photos of shelves empty of other brands of milk while bottles of Coles and Woolies-branded milk are fully stocked.
Coles also issued a statement saying it was not holding back branded milk.
"Coles has not made any changes to the way we replenish our milk range," a Coles spokesperson said.
"Our goal is to provide our customers with choice at prices they can trust. That's why we sell a number of brands of milk across Australia."Suggest a correction