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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.

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