Dairy giant Fonterra announced it would lend up to NZ$15 million to its 50% owned subsidiary, rural retailer RD1 Limited, so that RD1 can extend interest-free terms for farmers for "essential dairy supplies." The Fonterra loan to RD1, which is interest bearing and due to be fully repaid by April 30 next year, will be to assist farmers under financial pressure due to the current lower payout environment, Fonterra Director of Milk Supply Barry Harris said. "It's a tough time for our farmers and we have been looking at every avenue we can to help them, particularly in finding ways to cut costs and manage cash flows while continuing to keep their farms productive," Harris said. "This opens up another option and some flexibility for farmers needing essential supplies to keep their farms running in what is going to be a difficult season for many," he said.

RD1 CEO John Lea said RD1 would be "promoting the details of the offer to farmers over the coming months, and continuing to offer practical advice about managing farm input costs." "We have a real partnership with our dairy farmer customers, and it's great to be able to offer this additional flexibility at a time when things are so tight. The other good news is that we're seeing international prices come back for major inputs like fertilisers, which will flow through to farmers as we go through this season," Lea said. RD1 is New Zealand's largest retailer of agricultural services to dairy farmers. It is 50% owned by Fonterra, with the other 50% owned by Australia's Landmark Rural Holdings Limited. Fonterra's Barry Harris is also a director of RD1 Limited.