This latest multi-million-pound cash injection followed an £8.9m booster payment to dairy farmers last April and adds to the £66m given in support for farmers across the last year.
Of the £6m investment, £4.3m will go towards giving farmers an additional fixed 1p per litre for milk on top of the independently calculated cost of production price that the retailer currently pays to farmers.
Sainsbury’s has also committed £1.7m for sustainability bonuses, with farmers rewarded for helping the retailer achieve its ‘Plan for Better’ targets – specifically carbon reduction – through activities such as using sustainably sourced feed and using the correct amount of fertiliser, in the right way.
Gavin Hodgson, director of agriculture, aquaculture and horticulture at Sainsbury’s, 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.”
Farmers leaving the industry
Investment in the dairy sector comes as new reports show factors such as rising costs have led to 5% of dairy farmers leaving the industry last year, with one in 10 admitting they will leave the sector by 2025.
The increased volatility of input costs, as well as the high level of capital investment required by dairy farmers, sparked a year-long review by Sainsbury’s – with support of its Dairy Development Group farmer steering group – into how it paid its farmers for milk.
With the likes of the Environment Act putting pressure on farmers to make expensive updates to their farms, Sainsbury’s hoped this additional support would give farmers confidence and desire to invest in these long-term changes.
Meanwhile, last month saw Morrisons launch a new trial to support farmers with the cost of growing crops.