Australian dairy farmers will receive a $579 million support package from the federal government after milk prices were slashed by processors Fonterra and Murray-Goulburn.

The plan, which includes $555 million in concessional loans up to June 30 and $20 million to upgrade the Macalister irrigation system in Gippsland, aims to help embattled farmers in the dairy industry survive amidst the worsening nationwide crisis.

Agriculture Minister Barnaby Joyce announced today that $900,000 will fund additional rural financial counselling services and $900,000 to Dairy Australia will provide business advice through the Tactics for Tight Times program.

“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,” Mr 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.”

The government will allocate an extra 18 staff to speed up processing of farm household allowance claims.

It will also establish a commodity milk price index to enable farmers to follow price trends.

– with AAP