Funding will be rolled out over three years through the Supply Chain Efficiencies scheme. The main beneficiaries are expected to be dairy farmers, who will be offered support and information on issues such as energy efficiency and maximising profits. Project partners include DairyCo and Coleg Sir Gâr.
The cash would help farmers achieve the objectives set out in the Strategic Action Plan for the Welsh Dairy Industry and support environmental, animal health and welfare, supply chain and production targets, the government said.
It also wanted to see more collaborative working and the sharing of best practice among farmers, said Rural Affairs Minister Elin Jones. "Through co-operation we will be able to secure a sustainable and innovative dairy sector."