Arla Foods has launched a new sustainability incentive as it looks to its farmer owners to help reach the businesses on-farm 2030 emission reduction target.
Beginning next year, the model will see Arla farmers receiving milk pricing dependent on their environmental and sustainable activities.
To motivate its farmers, the dairy producer has earmarked up to 0.026p per kilo of milk for sustainability activities, alongside its current incentive of 87p for submitting Climate Check data.
According to Arla, based on its current milk volume, this corresponds to a total of up to £437 million each year.
Working from a points-based system, farmers will be able to collect points based on 19 factors including feed, protein, fertiliser, efficiency, biodiversity, carbon farming, as well as using renewable electricity and deforestation free soy.
In the initiative’s first full year, £236m is expected to be distributed through the monthly milk price based on the 19 sustainability levers.
For the average Arla farmer which produces 1.2m kg of milk each year, over £22,000 could be achieved based on their sustainable activities.
“We are introducing an advanced and ambitious sustainability incentive, which is a fundamental change to our milk price model,” Arla chairman Jan Toft Norgaard said.
“Going forward, the milk price Arla farmers will receive for their milk will not only depend on fat, protein and quality, it will also depend on their activities on sustainability.
“The support from our members, even in a time of great uncertainty, is a testament to our commitment to be at the forefront of progressive dairy farming and set the standard for how to push our whole sector forward.”
