UPDATED 12:15pm: The Government is satisfied with the rules and regulations governing Fonterra.

It comes as the dairy giant's recorded a 123 percent increase in its profit at a time when farmers are struggling with dairy pay outs that are below their break even point.

Minister for Primary Industries Nathan Guy said the Government is satisfied with the legislation that governs Fonterra, but said the regulations will be reviewed later this year.

"Fonterra have had a good result on their 6 monthly update announced today, they're supporting farmers through this, they've already done quite a bit with their interest free loan, but times are pretty tough on the farm right now."

Despite a volatile global dairy market Fonterra has lifted its first half net profit to $409 million on the comparable period.

Normalised earnings before interest and tax rose 77 percent to $665 million.

There's some good news for shareholder farmers - a 20 cent per share dividend has been declared, to be paid next month.

Fonterra is forecasting total dividend for the current financial year to be 40 cents per share.

Chairman John Wilson said they intend declaring the remaining 20 cents per share in two dividends of 10 cents in May and 10 cents in August.

He said it's to help support farmers at a time when cash flows are extremely tight.

Fonterra left its 2015/6 farmgate milk price unchanged at $3.90 per kg of milksolids, which compares with the average breakeven point of $5.25 a kg.

Mr Wilson also addressed criticism of Fonterra's payments to vendors, asking 15 percent to wait 90 days for payment.

"Fonterra does have a huge impact on our communities, our intention was never to treat any vendors unfairly, it is about ensuring that we run the business as prudently as possible and get the best return to our farmers."

Meanwhile a Taranaki farmer is welcoming Fonterra's announcement to pay a dividend to shareholders.

Farm Owner Ian Armstrong said bringing the dividend forward certainly helps the cash flow heading into a new season.

However, he says it doesn't help share milkers who are crucial for the survival of dairy farms.

"It the responsibility I think of the farm owners to actually look after the sharemilkers ad make sure that they are ok, and if not give them assistance."