Rewarding Sustainable Thinking in Dairy
Learn how Fonterra is encouraging sustainable thinking on dairy farms with the 'Co-operative Difference Payment'.
04 Sep 2020
Farms that focus on quality and sustainability will benefit from an innovative reward system launched in the 2019/20 season.
Fonterra is changing the way it’s paying farmers, placing sustainability at the forefront of everything it does. With up to 10c/kgMS of its farmgate milk price to be known as a ‘Co-operative Difference Payment’.
Launched in 2019, this initiative recognises farmers that produce high-quality sustainable milk, whilst preparing them for challenges facing the future of dairying. The new payment scheme will make it easier for farmers to know what is expected of them, whilst recognising those who go above and beyond.
Farmers have made tremendous progress on farm to date and The Co-operative Difference will help us take that good work to the next level so we can continue to create goodness for generations to come
Mike Cronin | Managing Director, Co-operative Affairs
This payment initiative comes at a time where the dairy industry is faced with changing consumer requirements and standards. Customers of all scales are demanding increased levels of security and transparency around the products they are consuming. For Fonterra, this payment ensures that customers continue to choose New Zealand milk and enjoy dairy as a sustainable and nutritious choice.
'The Co-operative Difference Payment’ reflects Fonterra's commitment to delivering the innovation, sustainability and efficiency necessary to stand out on the global stage. Financially rewarding sustainable farming practices is part of the Co-op’s wider strategy of adding value to New Zealand milk.
How it works
“The total Farmgate Milk Price will remain the same across the Co-operative, but the amount that each individual farm is paid will vary depending on their contribution under The Co-operative Difference, in addition to the other variables, like fat and protein, which affect the amount that’s paid”, says Fonterra CEO Miles Hurrell.
The payment scheme has been developed alongside farmers, for farmers, ultimately recognising high-performing farms in a way that aligns with the Co-op’s values.
Supporting the Co-ops emerging strategy direction
The Co-operative Difference is part of Fonterra’s wider effort to reflect and acknowledge changing drivers of value in the global dairy sector.
This involves recognising farmers who are proactively surpassing minimum environmental requirements, whilst supporting others who show a willingness to improve. Building stronger relationships can help us plan and progress towards achieving shared ambitions, ultimately driving demand for the products that customers and consumer value most.