Takeover target NZ Farming Systems Uruguay (NZFSU) says it has been granted tax benefits worth US$20 million ($28 million) to US$25 million under Uruguayan tax law.

The benefits would be available to offset the company's tax liability once it becomes profitable, expected to be in the 2011-12 financial year.

Company chairman John Parker said approval of the income tax concessions recognised its investment in dairy farms, including milking sheds, roading, electricity and irrigation.

The NZFSU board has advised shareholders that for now they not accept a 55c a share takeover offer from Singapore-based Olam International.