New ‘emissions excellence achievement’ will offer a further payment for farms that meet certain criteria.
Fonterra has announced changes to its Co-operative Difference payment system to further incentivise farmers to reduce their on-farm emissions.
Beginning on June 1, the co-operative will introduce a payment for farms that achieve certain emissions-related criteria, among other updates to the system.
New incentives that benefit farmers will also be funded through separate agreements with Mars and Nestlé, which have been working with Fonterra to make progress towards their individual sustainability goals by supporting farmers to reduce emissions.
The new Co-operative Difference payment, called an emissions excellence achievement, will offer a further payment of between 1-5 cents per kg MS for farms that meet certain criteria. This is on top of the up to $0.10/kg MS that has been possible across all achievements within the framework.
Based on last season’s data, it is estimated that more than 5000 farms will be eligible for the payment next season.
Funding from separate agreements with Mars and Nestlé will be split between on-farm solutions and an additional payment.
The on-farm solutions would see farmers who achieve the Co-operative Difference being eligible for access to on-farm tools or services designed to further improve emissions efficiency. These could be herd efficiency services from LIC and CRV.
Based on last season’s data, it is estimated that 87% of farmers would be eligible.
The additional payment would be an extra $0.10-25/kg MS. To achieve this, farmers would need to achieve the Co-operative Difference and have one of the lowest emissions footprints in the co-op (around 30% lower than the average farm).
This will take into account not only emissions from farming activities, but also those associated with land use change and those released from peat soils, before subtracting any carbon removals.
Based on last season’s data it’s estimated that between 300-350 farms will be eligible for this payment next season.
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