Friday, March 29, 2024

Rewarding farmers’ environmental efforts

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Fonterra farmers will be paid according to their environmental performance from the middle of the year.
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From June 1, up to 10 cents of each farm’s milk payment will be determined by the farm’s sustainability credentials and milk quality.

“Fonterra farmers are already among the world’s best in these areas and we’re really proud of that,” Farm Source group director Richard Allen said.

“The Co-operative Difference payment is another way we can recognise farmers, while also supporting our strategy to grow the value of our New Zealand milk by responding to increasing demand around the world for sustainably-produced dairy.”

“The new payment recognises farmers who are already going above and beyond because they’ve innovated and invested early, and it also offers farmers more encouragement for taking the steps required to meet the changing expectations of customers and communities, both today and into the future.

Allen says they want to reward the on-farm efforts that demonstrate the co-op’s care for the environment, animals, people and communities.

“It’s these actions which help ensure we’re the dairy company of choice for customers around the world and for NZ dairy farmers, for generations to come,” he said.

The 10c co-operative difference payment is made up of:

–7c per kgMS for achievement under the Environment, Co-op & Prosperity, Animals, and People & Community focus areas.

Once these have been achieved:

–3c per kgMS for milk that meets the ‘Excellence’ standard under the Milk Quality framework.

While the co-operative difference framework was introduced in 2019, the milk payment is new to farmers.

Current Farm Source rewards dollars in the co-operative difference will be replaced with the co-operative difference payment.

The amount and targets will be set annually by the board.

The total amount available to be paid to farmers does not change, but a proportion of the farm gate milk price will be available to be redistributed between farmers to better reflect individual farm’s achievement against the co-operative difference framework.

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