Australia said Wednesday that going to be the plan of loans in A$555 million ($400 million) to dairy farmers affected by cuts in milk prices. The measure is a response to the Central problem in rural areas during the campaign period on the eve of Federal elections.

The world's largest exporter of dairy products, Fonterra Co-operative Group Ltd, the largest processor of milk in Australia, Murray Goulburn, reduced producer prices of agricultural products to a maximum of 15% in recent weeks due to the global oversupply.

Dairy farmers warned that the cuts will force them to send the cattle for slaughter to make money, which threatens the long-term decline of production in the fourth world exporter of dairy products. The Australian dairy industry is worth approximately A$2.4 billion.

Deputy Prime Minister Barnaby Joyce announced that the government will provide A$555 million, which can be used for loans to farmers for 10 years at preferential rates, as well as approximately A$20 million for services such as counseling on financial matters.

The dairy industry demanded soft loans, the government made concessions, said Joyce, who is also the Minister of agriculture.

Source: Thomson Reuters