Fonterra sees huge interest in interest-free loans
Approximately 1,300 New Zealand dairy farmers have applied to Fonterra for its interest-free loan initiative within the first three days.
Fonterra farmers can now apply for Fonterra Co-operative Support, a loan to help them deal with the current challenging conditions.
Farmer shareholders can apply for an interest-free loan of 50 cents for every kilogram of share-backed milk solids produced from June 1 to December 31, 2015. The loan will be interest-free until May 31, 2017, after which Fonterra may charge interest.
Farmers can repay all or part of the loan at any time and no security is required over their shares or any other assets. The loan will be repayable directly from milk payments, and automatic repayments will occur when Total Advance Rate Payments exceed $6.00.
Chairman John Wilson said Fonterra is well placed to help its farmers because of the Co-operative’s underlying strength.
“Being able to help our farmers is all about standing together as a Co-operative and using our collective strength to get through these tough times,” said Wilson.
“We have had a lot of interest from farmers who appreciate what the Co-operative is trying to do for them to assist them with their farming businesses in a tough financial climate, and we are anticipating a large number of applications.”
Fonterra Co-operative Support for the first half of the season (June to December) will be funded by one-off savings generated by changes the business is making, such as improving working capital.