The federal government will extend until June next year a subsidy that helps exporters deliver fresh food to countries around the world.

Trade Minister Dan Tehan said an additional $260 million would be contributed to the International Freight Assistance Mechanism (IFAM), which was due to end in the middle of 2021.

The latest funding announcement brings the government's contribution to the scheme to more than $1 billion over the life of the program.

"Our government's support for Australian producers has ensured they have maintained their reputation as high-quality, reliable suppliers," Mr Tehan said.

"Australia is a trading nation and trade creates jobs, drives innovation, and underpins our economic growth."

What scheme does

The IFAM was introduced in April last year when Australia closed its borders, restricting the number of flights in and out of the country.

Almost overnight, flights dropped by more than 90 per cent.

Farmers and exporters who had relied on passenger flights to deliver fresh produce into overseas markets lost access to their customers and had damage bills that ran into the millions. 

"The program has [also] been critical to ensuring the flow of vital imports, such as medical supplies and other essential items, as Australia continues its economic recovery," Mr Tehan said.

Destinations covered

Since IFAM was introduced in April 2020, it has helped to connect flights between nine Australian ports and almost 60 international destinations.

Mr Tehan said the IFAM remained a temporary, emergency measure.

He said 35,000 jobs and 120,000 indirect jobs relied on the air freight industry and more than 13,000 flights had benefited from the subsidy.

The IFAM has proved popular with exporters who claim they could not afford to send produce overseas otherwise.

The Export Council of Australia had previously called on the government to continue the program.