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Fonterra announces new incentives for farmers to reduce emissions
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Friday, 07 March, 2025, 15 : 00 PM [IST]
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New Zealand
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Fonterra has announced new funding designed to build a stronger co-operative and continue to grow value for its shareholders through helping farmers reduce on-farm emissions.
For the 2025/26 season beginning on June 1, the company will introduce a payment for farms that achieve certain emissions-related criteria as part of updates to its co-operative difference framework.
Meanwhile, new incentives that benefit farmers will be funded through separate agreements with Mars and Nestlé, who have been working with the company to make progress towards their individual sustainability goals by supporting farmers to reduce emissions.
Miles Hurrell, CEO, Fonterra, said, “We’re growing relationships with customers who value the hard work farmers put into producing sustainable, high-quality milk, along with the Co-op’s quality of on-farm data and ongoing commitment to improvement. This helps us make progress towards achieving our on-farm emissions target and deliver the highest returns for our farmer shareholders’ milk. Last year we confirmed six strategic choices that we believe will help grow further value in the years ahead and this is an example of how we’re delivering on two of those choices, deliver the strongest farmer offering and build on our sustainability position.”
The new funding includes: New co-operative difference payment - 1-5 cent per kgMS payment: To date, a total of up to 10 cents per kilogram of milk solids (kgMS) has been possible across all achievements within its co-operative difference framework. A new Emissions Excellence achievement will offer a further payment of between 1-5 cents per kgMS for farms that meet certain criteria. Based on last season’s data, it’s estimated that approximately 5,000 farms will be eligible for this payment next season.
New customer incentives: Funding from separate agreements with Mars and Nestlé, will be split between: On-farm solutions: Farmers who achieve the Co-operative Difference will be eligible for access to on-farm tools or services designed to further improve emissions efficiency, for example herd efficiency services from LIC and CRV. Based on last season’s achievements, 87% of farmers would’ve been eligible. Extra 10-25 cents per kgMS Emissions Incentive payment: Farmers who achieve the Co-operative Difference and have one of the lowest emissions footprints in the co-op will receive an Emissions Incentive payment of between 10-25 cents per kgMS. Based on last season’s data it’s estimated that between 300-350 farms will be eligible for this payment next season.
Amanda Davies, Mars snacking chief R&D, procurement and sustainability officer, said, “That’s why we’re working with partners like Fonterra to help remove this barrier – providing cash, tools, and technology to support farmers in making meaningful, long-term changes.”
Jennifer Chappell, CEO, Nestlé New Zealand, said, “As we strive towards achieving net zero emissions by 2050, we are committed to reducing our Scope 3 emissions. We will continue to support farmers, in partnership with Fonterra, fostering new economic opportunities and helping them lower their greenhouse gas emissions.”
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