Sainsbury’s is investing £6m to pay its dairy farmers more from next month and to support farms for the future.
The move comes as almost 5% of dairy farmers left the industry last year and one in 10 believe they will have left the sector by 2025.
As a result of this, Sainsbury’s undertook a year-long review with the support of its Dairy Development Group into how it pays farmers for milk.
Of the investment, £4.3m will go towards giving farmers an additional fixed 1p per litre of milk on top of the independently calculated Cost of Production price that the supermarket currently pays to farmers.
With the typical volume of milk produced per farm being roughly 2.7m litres annually, the average farm could receive around £27,000 extra each year.
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Alongside this investment into the new price model, Sainsbury’s has committed £1.7m for sustainability bonuses.
Farmers will be rewarded for helping the grocer achieve its Plan for Better targets, specifically carbon reduction, through activities such as using sustainably sourced feed and the correct amount of fertiliser in the right way.
This comes as Sainsbury’s has paid over £66m of support to British farmers, including increased pay for milk over the past year.
Sainsbury’s director of agriculture, aquaculture and horticulture, Gavin Hodgson, said: “The dairy farming industry is becoming increasingly challenging and we recognise the responsibility we have as a retailer to support farmers and the need for continuous investment in this sector.
“We proud of our continued investment into the Sainsbury’s Dairy Development Group and are confident our £6m annual investment will help farmers to plan for a long-term and sustainable future. In turn, we hope this will also provide surety of supply for our customers as we continue to champion British milk now and for the future.”