The way we farm is evolving, and Fonterra’s new Co-Operative Difference initiative is a significant step toward rewarding farmers for lowering emissions while maintaining farm productivity and profitability.
Eloise Gibson, Climate Change Correspondent at RNZ, explains:
"The dairy giant has announced it will pay an extra 15 cents a kilogram of milk solids to farms that meet climate criteria, and more for some farms.
The co-operative estimates more than 5000 farms will be eligible for a bonus next season based on last season’s data.
The criteria take into account emissions from cow feed, fertiliser, animals and drained peat soils, minus any carbon removed by trees and vegetation. The farm’s emissions need to be less than the co-op’s 2017/2018 base year, Fonterra said.
An additional 10 to 25 cents a kilogram is on offer for an estimated 300 to 350 farms whose planet-heating emissions are around 30% lower than average.
The money for the 300-odd highest performers will come from incentives paid by Mars and Nestlé as part of those companies’ climate commitments. Those multinationals have been working with Fonterra to meet their targets because supply-chain emissions from ingredients make up a large part of their footprints. The company says farmers can already earn up to 10 cents per kilogram of milk solids extra for meeting other, non-climate criteria and these payments will be on top of that.
About 87% of Fonterra farmers will also be eligible for help with services such as making herds more efficient with genetics, which can also lower emissions. The co-operative said it needed to reduce emissions per kilo by 30% off 2018 levels by 2030 to remain competitive, meet market access demands and comply with increased legal and reporting obligations. Dairy is the country’s biggest-emitting sector, however, the current Government does not plan to price farming emissions until as late as 2030. Pressure from large dairy customers overseas is expected to drive some level of emissions reductions anyway, however, the Ministry for Primary Industries has said it can not fully model how much yet.
Rere ki uta Rere ki tai perspective:
By Alison Dewes
This is a great start by Fonterra, acknowledging the importance of a whole-system approach to meet growing market demands for lower-carbon milk.While the primary focus is on reducing emissions intensity by 2030, the ripple effects of this shift will drive broader efficiencies across farm systems, encouraging:
Optimised herd performance – improved nutrition and animal welfare to reduce emissions per kg of milk solids.
Improving animal health – with a focus on minimising disease, infertility, and wastage from herds, ultimately leading to more higher performance cows retained in the herd.
Healthier soils – decreasing reliance on nitrogen fertilisers and increasing precision farming techniques with incentives for some new technologies to be adopted.
Shade & shelter planning – improving animal welfare while potentially qualifying for carbon sequestration incentives funded by companies like Nestlé.
This initiative aligns with what we support at Rere ki uta Rere ki tai — helping farmers transition toward more resilient, profitable, and sustainable farming systems.
