The fund, announced last week by NSW Minister for Primary Industries Katrina Hodgkinson, will free up previously unavailable industry funds to be invested into initiatives designed to grow the dairy sector.

Individuals, universities, research organisations and farmer and community groups are among those eligible to apply for the grants.

‘‘This is a great initiative – the dairy industry contributes $1.25 billion to the NSW economy each year and the projects that will now be funded will help ensure its long-term resilience, profitability and sustainability,’’ Ms Hodgkinson said.

Among the types of projects eligible for funding would be those that improved the productivity and profitability of dairy farmers; increased the value of dairy products through the creation of supply chain efficiencies or developed farmers’ confidence and capacity to grow.

However, though farmers appreciated any funding for research, attracting people into dairy farming was the biggest dilemma the industry faced, Mr Honey said.

‘‘This is not new money, it’s money that’s been held in trust,’’ he said. ‘‘And as far as individual farmers go, it will be of no direct benefit to them.

‘‘In terms of all the things being nominated for money to be spent on, most dairy farmers have been in the process of doing those things for the past 20 years already.

‘‘The main problem facing the industry is that we don’t have the personnel coming into it to take over from old blokes like me.

‘‘So this money would be better spent on encouraging young farmers to enter the industry.’’

Mr Honey’s dairy farm has been in his family since 1835, and his son is set to take over the reins but he knows he’s one of the lucky ones.

Applications for the fund will be open for seven weeks, closing on February6, 2015. Details are available at www.dpi.nsw.gov.au/agriculture/livestock/dairy-cattle.