Arla Foods introduces €500 sustainability incentive for farmers

By Michelle Perrett

- Last updated on GMT

The new incentive is for Arla farmers
The new incentive is for Arla farmers

Related tags Supply chain Sustainability

Arla Foods has introduced a €500m (£438m) sustainability incentive for its farmers to help them hit emission reduction targets by 2030.

The initiative, which covers 8,000 farms across seven European countries, will mean that from next year, the milk price that the individual Arla farmer will receive from the dairy cooperative will depend on his or her activities related to environmental sustainability. 

The co-operative is introducing a point-based Sustainability Incentive model to reward current and future sustainability activities on farm.

Point-based system

The model is a point-based system, in which the farmers can collect points based on their activities on the model’s 19 different levers e.g. feed, protein and fertilizer efficiency, manure delivery to biogas, biodiversity, carbon farming and use of renewable electricity and deforestation free soy.

There will be 80 points available from the start of 2023 and further 20 points for new levers are expected to be built into the model within a few years, leading to a total of 100 points. For each point that the farmers are able to achieve, they will receive 0.03 eurocent per kilo of milk. This is in addition to the one eurocent that farmers will receive for submitting their Climate Check data. 

Historical milestone

“The Sustainability Incentive model is a historical milestone in Arla’s transition to more sustainable dairy. We are introducing an advanced and ambitious sustainability incentive, which is a fundamental change to our milk price model. 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,” ​said Arla chairman Jan Toft Nørgaard.

“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.” 

It is voluntary but 95% of Arla’s farmers, representing 99% of Arla’s owner milk pool, have already registered their data in the 2022 Climate Check. 

Related topics Dairy

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