Arla is introducing a Sustainability Incentive to its farmers. Two years ago, the cooperative introduced its Climate Check, which gave producers 1 Eurocent on their milk price for submitting ‘climate’ data from their farms. From 2023, in addition to this, Arla producers will be able to receive up to 3 Eurocents per kilo of milk for carrying out ‘sustainability activities’. Thus, future milk price will not only depend on fat, protein and quality, but will also depend on the environmental activities of the producer.
The cooperative will introduce a points-based model, in which activities on 19 different ‘levers’ are rewarded with points. 80 points will be available from the start and a further 20 points will be set aside for more levers, which means that a total of 100 points is expected to be available within a few years. Each point that the farmer achieves, depending on the level of environmental sustainability activities engaged in, will trigger 0.03 eurocent per kilo of milk. The cooperative is expecting the average Arla farmer to achieve 39 points or 2.17 Eurocents in the first year. For a farm with an average annual milk production of 1.2 million kg, this equates to approximately €26,000 (around £22,500 at current exchange rates). The levers with the biggest impact potential will achieve the most points.
The lever categories that farmers can score points on include:
- The ‘Big 5’
- Feed efficiency
- Fertiliser use
- Land use
- Protein efficiency
- Animal robustness
- Manure handling
- Use of sustainable feed
- Use of renewable electricity (on-farm production or purchase of certificates)
- Biodiversity & carbon farming activities
- Knowledge building
From January, there will be an online tool for producers to input their data for the first six months, with the first incentive payment being received in the August 2023 milk cheque, based on deliveries made in July.
Arla which has 8,900 members based in the UK and six other European countries, has a commitment to reduce its emissions by 30% by 2030. As it says, this is another significant step to being at the forefront of environmentally sustainable dairying. Others are likely to be playing catch-up and it shows the direction of travel all producers can expect.