The latest news, trends, analysis, interviews and podcasts from the global food and beverage industry

Arla Foods is expanding its FarmAhead Incentive programme, introducing six new action areas and increasing the financial reward for farmers taking steps to reduce emissions from milk production.

The updated scheme, which will be introduced in stages from 2027, will increase the number of available points from 84 to 111 and raise the value of each point by one-third, from €0.03 to €0.04 per kilogramme of milk.

The changes mark the largest update to the programme since it launched in 2023. Arla said the expansion aims to accelerate on-farm emissions reductions by giving its farmer owners more opportunities to take climate action and receive financial rewards.

Under the FarmAhead Incentive model, farmers earn points for documented actions that are scientifically linked to reducing greenhouse gas emissions. These points directly influence the price they receive for their milk, with up to €550 million annually allocated to incentivising climate action.

Arla said its farmer owners have reduced absolute emissions from raw milk production by 1.2 million tonnes of carbon dioxide equivalent (CO₂e) since 2020.

The expanded programme will introduce six new action areas covering forage, manure treatment, biofuels, low-carbon fertiliser, methane reduction in grazing cows and breeding.

Existing measures will also be adjusted, including those relating to feed efficiency, fertiliser use, protein efficiency and grazing.

The update draws on the latest farm data, scientific knowledge and developments in on-farm technology, with the aim of rewarding practices that deliver the greatest climate impact.

Since the programme's launch, Arla's farmer owners have increased their average incentive score by six points. According to the cooperative, its data shows a strong link between higher scores and lower on-farm emissions.

Hanne Søndergaard, executive vice-president of agriculture, sustainability and communication at Arla Foods, said: “With FarmAhead Incentive, we link actions to reduce the climate impact of milk production on farm directly with the milk price paid to our farmers. That is a powerful way for a farmer-owned cooperative to drive change.”

She added that the expansion would provide more opportunities for farmers to act and increase the reward for every point earned, with the ambition of translating new technology and knowledge into practical emissions reductions.

The update was approved by Arla's board of directors.

Jan Toft Nørgaard, chair of Arla Foods, said: “Farms differ, and so do the opportunities to reduce emissions. With this update, we are giving more farmers more options to move forward in ways that fit their farms.”

The programme also supports Arla's work with customers through its FarmAhead Customer Partnerships initiative. These partnerships enable customers to support farmer-led climate action and access primary carbon footprint data that can be used to substantiate sustainability claims.

As food and beverage companies seek measurable year-on-year reductions across their value chains, Arla said the strengthened incentive model would help it demonstrate progress at farm level.

Søndergaard said customers wanted measurable reductions in the footprint of the dairy they purchase and closer collaboration to achieve them.

By expanding the actions available to farmers, Arla aims to strengthen the connection between on-farm emissions reductions and the sustainability progress customers can deliver across their own value chains.

The revised model will retain the existing framework of up to €0.03 per kilogramme of milk redistributed through the FarmAhead Incentive, despite the increase in the value of individual points.

The first payments under the updated scheme will take effect from 1 January 2027.