Arla farmers who take “the most action on climate” will receive a higher price for their milk as of today (Monday, August 8) according to the co-op.
For the first time Arla today paid out a monthly incentive to farmers which rewards them for “climate activities and other sustainability efforts” on their farms.
Last year the co-op, which is owned by more than 8,900 farmers from Denmark, Sweden, the UK, Germany, Belgium, Luxembourg and the Netherlands, introduced a new Sustainability Incentive model.
The model takes into account on-farm measures that could make the largest environmental and climate impact including feed and protein efficiency, manure handling, sustainable soya, renewable electricity and land use and awards points to farmers.
Today, based on that model, Arla has started paying out the highest price for milk to farmers who “do the most for climate and environment”.
Arla’s chief executive, Peder Tuborgh, said he has been looking forward to the day that the co-op started paying out a higher milk price.
Tuborgh said: “The Sustainability Incentive is a large step towards linking economy and climate and nature improvements on farm.
“Arla’s unique point system makes it possible for us to reward our owners and thus contribute to their large investments in sustainability.
“At the same time, we strengthen the farmers’ motivation to implement the initiatives necessary for our cooperative to reach its ambitious climate goals for 2030.”
The co-op has estimated that it could pay out in the region of €2.2 billion until the end of 2030 to farmers who commit to “sustainability activities”.
It is also betting on its farmer owners to “raise the bar significantly higher” and has earmarked a bigger amount than the €2.2 billion for the monthly incentive scheme.
Last year, according to the co-op’s own data, Arla farmers across seven countries reduced their carbon dioxide (CO2) equivalent (CO2e) emissions from their milk by more 2%.
Arla has set a target of reducing CO2e emissions by 30% by end of 2030.