The move comes amid a crisis in the European Union dairy sector after the existing quota scheme came to an end last month, prompting demonstrations by farmers in Portugal and several other countries.


According to a statement by the cabinet, which approved the measure at its regular weekly meeting, the loans are to help production-related investments and can have a grace period of up to one year.


The new credit line is part of the plan of action for the sector unveiled last week, and which includes campaigns to stimulate the consumption of milk, boost exports, stabilise producers' incomes and promote innovation and higher value for dairy products.