Two of the biggest European dairy companies, Arla and FrieslandCampina, want to pay more ‘sustainability’ or ‘climate friendly’ bonuses to milk suppliers.
This would reduce the proportion of farmgate milk price that comes from a value on fat and protein. Arla wants to pay up to 3c/l if a farmer ticks all the boxes from a menu of sustainability options. Friesland wants to improve the bonuses already on some of its green initiatives. Both companies will pay farmers a lower milk price if sustainability measures are not met.
Arla suggests it will allocate a total of €500m more for these proposed bonuses to it’s almost 9,000 suppliers. Friesland has not announced how much money it will allocate to improved bonuses. It will look to increase the bonuses it already pays for outdoor grazing, and other initiatives that limit stocking rate and use native proteins rather than imported proteins.
Some Irish co-ops have started ‘sustainability’ type bonuses to the tune of 0.5c/l compared to the Arla proposal up to a maximum of 3c/l.