The grants, of up to $100,000 each, will be for innovation projects aimed at increasing efficiency, sustainability and resilience on farms.

Applications will open tomorrow for the Woolworths Dairy Innovation Fund, with the project expected to run for the next three years.

Woolworths said it expects to help about 60 businesses through the grants, which are open to all dairy farmers in the Woolworths supply chain, including those supplying vendor brands.

“Our Dairy Innovation Fund will help Australian farmers invest in projects that increase farming efficiency and modernise their operations with new technology,” Woolworths Director of Buying, Paul Harker said in a statement.

“Dairy farmers have faced tough conditions in recent years through droughts and bushfire. The Dairy Innovation Fund will help farmers invest for the future, while also increasing resilience to withstand these types of challenges.

Chairman of the NSW Dairy Committee, Colin Thompson said the grants would provide much-needed help for dairy farmers.

“This is a welcome initiative by Woolworths and acknowledges the need for investment in on-farm efficiencies to boost the profitability and long term sustainability of dairy farms, including those in NSW recovering from the impacts drought and bushfires, on top of low farm gate returns in recent years,” Mr Thompson said.

The grants come after Woolworths committed earlier this year to continuing its 10 cent levy on Home Brand milk.