Sector News

Arla introduces €500m sustainability reward scheme for farmers

October 8, 2022
Food & Drink

Arla Foods has introduced a €500 million sustainability incentive scheme that will pay farmers more for their milk if they reduce emissions on their farms.

The scheme is designed to support and motivate actions required to hit the company’s 2030 emission reduction target.

The new incentive system earmarks up to 3 euro cents per kilo of milk for sustainability linked rewards, in addition to the 1 euro cent for submitting Climate Check data. Based on the cooperative’s current milk volume, this could amount to an annual total of €500 million.

In the first full year, at least €270 million is expected to be distributed through the monthly milk price that is based on farmers’ sustainability activities.

Arla chairman, Jan Toft Nørgaard, said: “The sustainability incentive model is a historical milestone in Arla’s transition to more sustainable dairy. 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.”

Peder Tuborgh, CEO of Arla Foods, added: “The sustainability incentive will be an effective tool for driving further improvements. Arla has some of the most climate-efficient farmers in the world. However, they also recognise that they need to accelerate their efforts to be at the forefront of environmentally sustainable dairy.”

From 2023, the system will allow farmers to collect points based on their activities in relation to 19 different levers, which include, for example, feed efficiency, fertiliser use, land use, protein efficiency and animal robustness.

Activities with bigger improvement potential for climate and nature will lead to the most points and bigger financial incentives.

Climate Check – a tool developed for farm owners to identify their carbon footprint and reduce their farm’s emissions – will be the foundation for calculating the individual farmer’s incentive under the voluntary scheme.

By Phoebe Fraser


comments closed

Related News

March 25, 2023

FrieslandCampina names Jan Derck van Karnebeek as next CEO

Food & Drink

Currently chief executive of GreenV – an international group of companies active in the horticultural sector – van Karnebeek spent a large portion of his career at Heineken, working in commercial, marketing and general management positions. He served as chief commercial officer at the Dutch brewer from 2015 until 2021.

March 25, 2023

Kerry opens innovation centre in Barcelona

Food & Drink

The facility combines the existing Kerry office in Barcelona with a new customer suite and application labs. It will enable the company to work more closely with its customers in Southern Europe to develop food and beverage solutions.

March 25, 2023

IFF expands Europe innovation hub with new flavor creation labs in Denmark

Food & Drink

The sweet and culinary flavor creation labs are the latest addition to the company’s expansive campus that has been in operation since 1964, spanning more than 312,150 square feet in Brabrand, Denmark. The innovation hub is home to more than 400 employees engaged in research, application development, ingredient and flavor creation.

How can we help you?

We're easy to reach